Public interest immunity in document disclosure must be properly justified by statutory bodies, and the courts may inspect requested documents to balance justice against public interests.

[1] This appeal raises conflicting policy issues in relation to the right of discovery, including what we were told are novel questions of law in Malaysia pertaining to the application of the doctrine of public interest immunity in so far as disclosure of documents is concerned.

[2] The appeal arose as a result of the order of the Kuala Lumpur High Court dated 1 November 2017. The learned judge had dismissed the appellant's ("EY") application for discovery filed pursuant to O 24 r 3 and/or r 7 of the Rules of 2012 ("ROC 2012") ("Discovery Application"). In that Discovery Application, EY had sought for documents and information which were made available to the Securities Commission ("SC") during SC's supervisory assessment of the 1st respondent, SJ Asset Management Sdn Bhd ("SJAM").

[3] We heard the appeal on 5 September 2018. After hearing the parties and taking into consideration the written submissions, we allowed the appeal and set aside the order of the High Court. Our reasons for doing so now follow and will constitute the judgment of the Court.

Background

[4] The background facts leading to the Discovery Application are not disputed and can be stated as follows. SJAM was a small private company which carried on business as licensed fund manager. In that role, SJAM administered, managed and invested clients' funds in various investments in the global markets. The funds managed by SJAM were held at all times by reputable third party custodian banks.

[5] In August 2009, as part of increased scrutiny of asset management companies, the SC conducted an examination of SJAM ("2009 SC Examination". In April 2010, the SC appointed BDO Consulting Sdn Bhd ("BDO") to attend at SJAM and examine its books, accounts and records ("2010 BDO Examination"). The 2010 BDO Examination led to an admission by SJAM of certain regulatory breaches.

[6] As a result of SJAM's admission, the SC revoked SJAM's fund manager licence on 23 July 2010. BDO was later appointed as liquidator, and in that role reported an alleged discrepancy between the trust assets that had been reported to SJAM's clients and the trust assets held by custodians. SJAM was then wound up in October 2010.

[7] After learning on the discrepancy in trust assets, separate suits were instituted against SJAM and EY. CIMB Investment Bank Berhad ("CIMB"), who had advised its own clients to invest through SJAM, commenced Civil Suit No: 22NCC-422-03-2012 (Suit 422) and various other individual investors ("Investors"), who used SJAM's services, commenced Civil Suit No: 22NCC-431-03-2012 (Suit 431).

[8] CIMB and the Investors, for convenience referred together as the plaintiffs, alleged in those suits that the discrepancy in trust assets arose as a result of fraud committed by three defendants, namely:

(a) Tan Whai Oon, the Managing Director of SJAM during the relevant time period;

(b) Annalong Corporation Ltd., a company allegedly associated with SJAM; and

(c) SJAM, the fund manager.

[9] The plaintiffs also pursued a claim against EY, SJAM's auditor, on the basis that EY failed to detect the alleged fraud. EY has denied the plaintiffs' allegations and contended, among other things, that the fraud was not reasonably discoverable.

The Discovery Application

[10] The Discovery Application, the subject matter of the instant appeal, was filed by EY vide Enclosure 179, to seek disclosure of the following documents (collectively referred to as the "Discovery Documents"):

(i) Details and/or documents relating to all investigations and/ or examinations by the SC on SJAM, including but not limited to the SC's investigation and/or examination in the 2009 SC Examination);

(ii) All reports issued by BDO pursuant to its appointment as independent auditor by the