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2025 MarsdenLR 5784
HIGH COURT (PULAU PINANG)
AZIZAN MD ARSHAD, J
Dynasty Palace Sdn Bhd – Plaintiff
Versus
Shahrizat Rashid & Lee (Didakwa sebagai satu firma guaman) & Ors – Defendant
SUIT NO PA-22NCvC-84-04 OF 2021
Julinder Sarjit Daliwal (Aznil Naziah Juli & Praba) for the plaintiff.
Toh Xin Yi (with Nik Aimi Nabilah bt Nik Rasli) (Shahrizat Rashid & Lee) for the first, fourth to 13th defendants.
Saravanan a/l K M Veerappan (Saravanan Veerappan & Co) for the second defendant.
Mureli Navaratnam (with Loh Jia Chun) (Mureli Navaratnam) for the third defendant.
Summary judgments cannot be granted when factual disputes exist; the court must conduct a full trial to resolve allegations of breach of fiduciary duty and fraud.
Headnote:(A) Rules of Court 2012 - Order 14A, Order 33 - High Court's dismissal of the Plaintiff's application for summary judgment regarding the refund of RM1.8 million for breach of fiduciary duty - The Court found disputes of fact precluded determination without a full trial, emphasizing that the Plaintiff's claims involved factual issues relating to the actions of the Defendants. (Paras 19-80)
(B) Summary Judgments - The principles under Order 14A do not apply where disputed facts exist, as the court cannot separate legal from factual determinations efficiently. (Paras 52-60)
Facts of the case:
The Plaintiff sought refund of a stakeholder amount based on claims of breach and fraud relating to a Joint Venture Agreement involving several Defendants. The 2nd Defendant admitted mishandling funds without consent, raising questions of liability for the remaining Defendants. (Paras 4-18)
Findings of Court:
The Court held that the Plaintiff's application for summary judgment could not proceed due to material disputes of fact, leading to a full trial being necessary. (Paras 60-80)
Issues: Whether the Defendants were liable for refunding the stakeholder sum and whether admissions in a statutory declaration constituted proof against the Defendants. (Paras 19-23)
Ratio Decidendi: The Court resolved that conflicting factual matters must be resolved through trial rather than summary judgment due to the complexity of the disputes and the nature of allegations involving fraud and professional misconduct. (Paras 55-66)
Result: Application dismissed with costs.
Azizan Md Arshad J:
GROUNDS OF JUDGMENT
[ENCLOSURE 89]
Introduction
[1]This is the Appellant’s (Plaintiff/Dynasty Palace) application to dispose of the claim by way of Order 14A/ Order 33 Rules of the Court 2012 vide Enclosure 89. This application was opposed by the Defendants. This Court after considering parties contentions and hearing the application has dismissed Enclosure 89 with costs in the cause.
[2]The Appellant however is dissatisfied and has appealed to the Court of Appeal against the decision which was delivered on 14.03.2025. The parties are referred to as they were in the High Court.
Cause papers
[3]The Plaintiff and Defendants (First Defendant – D1, Second Defendant – D2, Third Defendant – D3 and Forth to Thirteenth Defendant
– D4 to D13) filed the following documents in the said Application:
(i)Affidavit in Support affirmed by Ooi Bak Heng dated 2 Februari 2024 (Encl. 90);
(ii)Affidavit in Reply affirmed by Lim Mook San dated 29 Mac 2024 (Encl. 97);
(iii)Rebuttal Affidavit affirmed by Ooi Bak Heng dated 26 April 2024 (Encl. 99)
Background facts (Undisputed facts)
[4]This Court scrutinised the summary of facts that has been presented by parties as the background of this case.
[5]D3 was the managing partner of D1’s (the firm) branch in Penang. One of the partners in the Penang Branch, D2, had prepared a Joint Venture Agreement between the Plaintiff and the landowners of Lot 1188 held under Hakmilik 452, Lot 1189 held under Hakmilik 454, all situated at Mukim 9, Teluk Kumbar, Daerah Barat Daya, Pulau Pinang (“the Lands”). The Joint Venture Agreement was dated 4.5.2011 and stamped on 5.5.2011 (“the original JVA”).
[6]The Plaintiff alleged that they have deposited with D1 the consideration sum of RM1.8 million (“the stakeholder sum”) based on the original JVA to be held as stakeholder. The Plaintiff had been liaising with the 2nd Defendant throughout the transaction and the landowners were represented by Messrs. Rosnah & Partners.
[7]It was agreed between parties that the condition precedent to the original JVA is that the landowners must make the necessary application to obtain Letters of Administration or Probate within nine (9) months from the date of the agreement. However, nothing had been done since the original JVA was signed.
[8]In the 2nd Defendant’s Statutory Declaration affirmed on 23.11.2018 (“the said SD”) the 2nd Defendant admitted that he had paid out from the stakeholder sum:
RM500,000.00 to the landowners, RM660,000.00 to Puan Rosnah (the partner from Messrs Rosnah & Partners, the land owners’ solicitors), and RM783,200.00 to the agents involved in the original JVA, Mr. Mahenthiran & Mr. Rosli.
The admission made by the 2nd Defendant in the said SD is within the knowledge of the Plaintiff.
[9]The present claim arises from the Plaintiff’s allegation that the 3rd Defendant, being the partner of 1st Defendant, together with the 1st Defendant D1 and the 4th to the 13th Defendants, are liable for the fraudulent act of the 2nd Defendant, have breached their fiduciary duty as the solicitors for the Plaintiff, and have breached their duty as stakeholders.
[10]Prior to this Suit the landowners had initiated an action under Civil Suit No. PA -22NCVC-19-01/2017 (“Suit 2017”) against their solicitors, Messrs Rosnah & Partners, claiming, among other things, that their solicitors had breached their duty to the landowners and had been unjustly enriched in the transaction. The landowners requested that Messrs Rosnah & Partners provide accounts for the transactions involved in the JVA.
[11]Subsequently, three of the land owners initiated another suit against the Plaintiff, the 1st, 2nd, the 3rd under Civil Suit No. PA -22NCVC-176- 11/2018 (“Suit 2018”), claiming, among other things, that the Defendants have been unjustly enriched in the transaction and had acted dishonestly, committed negligence, and professional misconduct. The landowners also alleged that the 1st Defendant had breached its stakeholder duties and is vicariously liable
