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2025 MarsdenLR 100
HIGH COURT MALAYA KUALA LUMPUR
TADMANSORI HOLDINGS SDN BHD & ORS – Appellant
Versus
DANCOM TELECOMMUNICATIONS (M) SDN BHD & ORS – Respondent
[Writ Summons No: WA-22NCC-332-05/2024]]
The court upheld that claims rooted in illegal activities or sham agreements are non-justiciable and must be dismissed to maintain judicial integrity.
Headnote:(A) Rules of Court 2012 - Order 18 r 19 - Principles of 'Ex turpi causa non oritur actio' and in pari delicto - Suit struck out as a consequence of the plaintiffs' own admissions of entering into sham agreements to mislead financial institutions - Court held that the plaintiffs cannot take advantage of their own wrongdoing. (Paras 1, 60, 101)
(B) The court emphasized that the principles governing striking out applications necessitate careful analysis and that such applications should be granted only in plain and obvious cases, especially when misrepresentation is evident. (Paras 61, 100)
Facts of the case:
The plaintiffs filed a suit alleging that a share sale agreement was a sham intended to defraud financial institutions, which was dismissed by the court for lack of credible evidence. (Paras 45-101)
Findings of Court:
All striking out applications were allowed, the plaintiffs admitted to creating sham agreements, and no evidence was provided to support the claims of illegality. (Para 101)
Issues: The primary question addressed was whether the share sale agreement was a sham and the legitimacy of the plaintiffs' claims. (Paras 54, 100)
Ratio Decidendi: The court reasoned that claims based on illegal contracts are unsustainable and reiterated that the court would not assist a party seeking remedy for a wrong they have committed. (Paras 66-69, 100)
Result: Striking out applications allowed with costs. (Para 101)
| Table of Content |
|---|
| 1. principle of striking out suits due to illegality (Para 1 , 2 , 3) |
| 2. procedural background of the case (Para 4 , 5 , 6 , 7 , 8) |
| 3. identity of parties involved in lawsuits (Para 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17) |
| 4. ownership and management structure of companies (Para 18 , 19 , 20 , 21 , 22) |
| 5. impact of allegations on ongoing proceedings (Para 26 , 36 , 37 , 88 , 89 , 100) |
| 6. plaintiffs' claims of sham transactions (Para 54 , 55 , 56 , 57 , 58 , 59 , 60) |
| 7. judicial scrutiny in striking out cases (Para 61 , 62 , 63 , 64 , 65 , 66 , 67 , 68 , 69 , 70 , 72) |
| 8. burden of proof on plaintiffs regarding sham claims (Para 74 , 75 , 76 , 77 , 78) |
| 9. liability of directors in corporate law (Para 94 , 95 , 96 , 97) |
| 10. final decision on striking out applications (Para 101) |
[Striking Out Of Suit]
Introduction
[1] Courts will strike out a suit based on the principles of "let the loss lie where it falls" and in pari delicto when the parties are equally at fault in an illegal or immoral transaction. The courts act on the Latin maxim "Ex turpi causa non oritur actio", which states that no action arises from a dishonourable cause.
[2] The maxim in pari delicto ("in equal fault") can be displaced or moderated by three considerations commonly referred to as the "trio of considerations" first propounded in the English Supreme Court case of Patel v. Mirza [2016] UKSC 42 ["Patel"] and accepted by our courts.
[3] The above maxim and principles are relied on by the defendants in five separate applications filed by the five defendants here to strike out the plaintiffs' Writ and Amended Statement of Claim [Enclosure 6] pursuant to O 18 r 19(1)(a) and/or (b), (c) and (d) of the Rules of Court 2012 [" ROC 2012"]. [See encls 31 to 35].
[4] The Amended Statement of Claim [Enclosure 6] concerns a dispute in relation to a Share Sale Agreement.
[5] The three plaintiffs are all represented by Messrs Satha & Co The five defendants are all represented by Messrs Mohana Krishnan. The plaintiffs filed one common written submission and one common reply written submission. The defendants filed one common written submission and one common reply written submission.
[6] On 21 April 2025, I allowed all five striking out applications with costs of RM6,000.00 for each defendant subject to allocatur.
[7] Consequent to my striking out decision, I also set aside an ad-interim injunction [Enclosure 7] granted earlier by consent in favour of the plaintiffs with costs of RM10,000.00 subject to allocatur.
[8] On 15 May 2025, the plaintiffs filed six Notices of Appeal to appeal to the Court of Appeal against my striking out of their writ and Amended Statement of Claim and the setting aside of the ad-interim injunction. These are my grounds of judgment.
Background Facts
Parties
[9] The 1st plaintiff Tadmansori Holdings Sdn Bhd ["Tadmansori"] is a private limited company incorporated under the Companies Act 1965 having its registered address at Lot 6.06, 6th Floor, Semua House, Jalan Bunus 6, 50100 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur and business address at 23-2 Jalan Setiawangsa 9, Taman Setiawangsa, 54200 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur. Tadmansori is involved in the business of investment holding and provision of management services.
[10] The 2nd plaintiff Datuk Seri Utama Tengku Adnan Bin Tengku Mansor ["Tengku Adnan"] is the majority shareholder of Tadmansori. Tengku Adnan has held significant political and governmental positions, including being the former Secretary General of the United Malay National Organisation ("UMNO") political party and the former Treasurer General of the Barisan Nasional political alliance or coalition. Additionally, Tengku Adnan has been the former Member of Parliament for Putrajaya and had previously served as the Minister for Federal Territories from 16 May 2013 to 9 May 2018 and Minister for Tourism from 14 February 2006 to 18 March 2008 within the Government of Malaysia.
[11] The 3rd plaintiff
