JUDGMENT

Edgar Joseph Jr. SCJ:

Broadly stated, the question which arose for decision in this appeal was whether the learned Judge in the High Court (Mr. Justice V. C. George) was right in refusing to strike out the action against the appellant, the First Malaysia Finance Bhd. (formerly known Central Malaysian Finance Bhd.), although the respondent's action against it was one for discovery alone. The application to strike out was made under the provisions of Order 18, r. 19 of the Rules of High Court, 1980, and also under the inherent jurisdiction of the Court, on the ground that the statement of claim, insofar as it involved the fifth defendant, did not disclose a reasonable cause of action and also because it was frivolous, vexatious or an abuse of the process of the Court.

It would be more convenient, if we referred to the appellant and the respondent, as the plaintiff and the fifth defendant respectively.

The case for the plaintiff may be taken in substance from his statement of claim and is as follows:

At all material times, the plaintiff was and is a businessman and the beneficial owner of 11,979,333 ordinary shares of RM1 each in the fifth defendant ("the shares").

The first and the second defendants, Dato' Chen Lip Keong and Dato' Haji Abdul Rahman Hamzah, respectively, are business associates while the third and the fourth defendants Kemajuan Holdings Sdn. Bhd. and First Holdings Sdn. Bhd., respectively, are incorporated companies related to the first and the second defendants.

By several sale and purchase agreements in writing ("the Agreements") the plaintiff had contracted with the first, the second, the third and the fourth defendants, to sell the shares to them.

The mode of making payment of the purchase price of the shares to the plaintiff stipulated in the Agreements was that the first, the second, the third and the fourth defendants had the option of paying the moneys to the account of several companies under the control of the plaintiff and which had obtained loans from the fifth defendant, particulars whereof appear in Annexure K to the Agreements. Each of these loans were loans to related persons, and so contrary to s. 133A of the Companies Act and therefore illegal.

By reason of the purchase aforesaid, the first to the fourth defendants had taken over the management and control of the first defendant.

On 9 August 1990, the plaintiff had issued the writ herein against the defendants. The plaintiff's claim against the first, the second, the third and fourth defendants was for the purchase price of the shares.

By their Defence, the first, the second, the third and the fourth defendants claimed to have paid the purchase price towards the Annexure K loans for the benefit of the Annexure K borrower companies.

The plaintiff's claim as against the fifth defendant, was for certain information, that is to say, that, if, as alleged by the first, the second, the third and the fourth defendants, the purchase price had been paid by them into the Annexure K companies, then, the plaintiff wished to have discovery of the relevant accounts.

Before the learned Judge, it was contended on behalf of the fifth defendant, that there was no cause of action for information, especially since the information could be obtained by subpoena.

The learned Judge referred, first of all, to the principle that the right to discovery or inspection must have some foundation and must depend on some other right for which the authority is Shaw v. Smith [1986] 18 QBD 193 CA. But, he then added, that in the House of Lords case of Norwich Pharmacal Co. v. Customs and Excise Commissioners [1974] AC 133, it was held that in the special circumstances of that case an action for discovery alone can exist.

For the effect of the Norwich Pharmacalcase the learned Judge referred to the following passage in the 1988 White Book at para 24/1/4 -

An action for discovery alone does not lie against a defendant who is not himself a wrongdoer and has no co