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2013 MarsdenLR 778

HIGH COURT MALAYA IPOH
NG CHEE CHOY – Appellant
Versus
BETTER SYMBOL SDN BHD & ORS (ENCL 5) – Respondent
[Civil Suit No: 22NCVC-202-08/2012]



The court held that commencing proceedings under the Companies Act 1965 by writ instead of an originating summons constitutes substantial non-compliance with procedural rules and is an abuse of court process.

Headnote:(A) Rules of Court 2012 - Order 18 r 19(1)(d) - Companies Act 1965 - Section 181 - Writ action filed by plaintiff to wind-up company deemed abuse of court process due to substantial non-compliance with rules requiring originating summons for such matters - Defendants argued improper commencement and hybrid nature of action. (Paras 1, 2, 15)

(B) Legal implications of procedures - Court emphasized mandatory provisions of O 88 r 2, RC 2012 must be adhered to, and exceptions for hybrid petitions noted under CA 1965. (Paras 10, 16)

Facts of the case:
Defendants sought to strike out plaintiff's writ and claim alleging oppression from a fellow director, seeking winding-up of the 1st defendant company. Plaintiff filed a writ action instead of originating summons as mandated.

Findings of Court:
Court determined that substantial non-compliance with RC 2012 rendered the plaintiff's action abusive; therefore, the claim was struck out with costs awarded.

Issues: The court addressed whether the plaintiff's action constituted abuse of process due to improper filing method and hybrid nature of claims under CA 1965.

Ratio Decidendi: The court concluded that mandatory procedures must be followed, and the plaintiff failed to show that the adopted writ action was permissible under the contours of the applicable rules, rendering the suit abusive.

Result: Plaintiff's suit struck out with costs assessed.

Table of Content
1. application to strike out claim based on abuse of process. (Para 1 , 3)
2. factual background regarding directors and claim under ca 1965. (Para 2 , 12)
3. critical analysis of filing procedures under rc 2012. (Para 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 13 , 14)
4. conclusion supporting striking out of plaintiff's action. (Para 15)
5. rejection of hybrid action argument based on case law. (Para 16 , 17)

[1] By way of Encl 5, the defendants are seeking to strike out the plaintiff's writ and statement of claim under O 18 r 19(1)(d) Rules of 2012 ("RC 2012") on the ground of abuse of the Court process.

[2] The background facts leading to the application can be stated as follows.The plaintiff is a director of the 1st defendant company, together with the 2nd defendant. The 3rd defendant was subsequently made a director of the 1st defendant as well.The plaintiff has now filed this action alleging that the 2nd defendant had acted against the interests of the plaintiff and the 1st defendant company, the particulars of which were set out in the statement of claim.The plaintiff is seeking for an order that the 1st defendant be wound-up and a liquidator appointed and in the alternative, for orders as provided under s 181(2)(a) and/or (b) Companies Act 1965 ("CA 1965") as the Court may deem fit as well as costs.

[3] The defendants have now filed the instant application in Encl (5) to strike out the claim on the ground that the suit is an abuse of Court process.Two grounds for abuse of Court process were raised. It was argued that:-

(1) commencing the action by way of writ in an action based on the CA 1965 is a substantial non-compliance of the Court rules, and

(2) commencing a hybrid action, whereby the plaintiff prayed for the winding-up of the company and also sought relief under s 181 of the CA 1965, is not allowed.

[4] On the first ground, it is noteworthy that the new RC 2012 provides for only two modes for the commencement of proceedings in Court, namely, either by writ or origination summons (O 5 r 1, RC 2012). The Rules provide that proceedings in which a substantial dispute of fact is likely to arise shall be begun by writ (O 5 r 2, RC 2012).Proceedings by which an application is to be made to the Court or a Judge thereof under any written law shall be begun by originating summons (O 5 r 3, RC 2012).

[5] Proceedings are also appropriate to be begun by originating summons in which:-

(a) the sole or principal question at issue is or is likely to be one of the construction of any written law or of any instrument made under any written law, or of any deed, will, contract, or other document, or any other question of law; or

(b) there is unlikely to be any substantial dispute of fact (O 5 r 4, RC 2012).

[6] It is also provided in O 28 r 8, RC 2012 that where, in the case of a cause or matter begun by originating summons, it appears to the Court at any stage of the proceedings that the proceedings should for any reason be continued as if the cause or matter had been begun by writ, it may order the proceedings to continue as if the course or matter had been so begun and may, in particular, order that pleadings shall be delivered or that any affidavits shall stand as pleadings.

[7] In the instant action, the plaintiff is clearly praying for remedies provided in the CA 1965 and in particular s 181 1965 for the 1st defendant company to be wound up. Now O 88 RC 2012, which deals with the 1965, has provided in O 88 r 2 that except for the proceedings specified in Appendix C relating to the winding up of companies and capital reductions under the 1965, proceedings under the 1965 shall be commenced by originating summons. The defendants therefore contend that by filing a writ action instead of an originating summons, there has been substantial non-compliance of the Rules.

[8] The plaintiff, in response, argued that a writ action was filed as it was anticipated that triable issues would be raised.Even assuming that an originating summons had

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