Ewe Beng Leong (No. KP:690829-07-5073) 1. Ewe Hoo Chye (No. KP:651204-07-5581) 2. Teng Lai Beng (No. KP:660918-07-5596) 3. Duaria Sdn Bhd (No. Syarikat: 302601-M)

Ewe Beng Leong (No. KP:690829-07-5073) 1. Ewe Hoo Chye (No. KP:651204-07-5581) 2. Teng Lai Beng (No. KP:660918-07-5596) 3. Duaria Sdn Bhd (No. Syarikat: 302601-M)

The court held the second set of orders seeking to vary the consent judgment (discharging named auditors, appointing new auditors, and specifying financial year end dates) were impermissible and an abuse of process; however the auditors' consideration of a Market Approach was a material departure from the agreed scope and therefore that part of the valuation was not binding — the court ordered the auditor to revise the report excluding the Market Approach; allegations of partiality and incomplete due diligence were rejected on the evidence and cross-examination; enclosure 109 was stayed/permanently stayed after a revised report was served.

Citation
PA-22NCvC-235-11/2017 (Mahkamah Tinggi)
Parties
Plaintiff: Ewe Beng Leong; 1st Defendant: Ewe Hoo Chye; 2nd Defendant: Teng Lai Beng; 3rd Defendant: Duaria Sdn Bhd
Court
High Court
Jurisdiction
Malaysia
Judgment Date
15 December 2020
Case Number
PA-22NCvC-235-11/2017 (Mahkamah Tinggi)
Procedural Posture
Civil Litigation Application to Set Aside Auditor's Report Arising From Consent Judgment / Hearing on Interlocutory Application and Judgment (application Filed 23 01 2020; Judgment 12 03 2021)
Outcome
Application partly allowed in respect of challenge to use of Market Approach; application to vary consent judgment and replace auditors refused as an abuse of process
Legal Topics
Consent Judgment, Expert Determination, Share Valuation, Auditor's Report, Variation of Consent Order, Cross Examination of Expert
Source Language
Malay/English
Company Law Contract Law Civil Procedure Evidence (expert Evidence) Consent Judgment Expert Determination Share Valuation Auditor's Report +2 more

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Parties

Ewe Beng Leong

Plaintiff

Ewe Hoo Chye

1st Defendant

Teng Lai Beng

2nd Defendant

Duaria Sdn Bhd

3rd Defendant

Procedural Posture

Civil Litigation Application to Set Aside Auditor's Report Arising From Consent Judgment / Hearing on Interlocutory Application and Judgment (application Filed 23 01 2020; Judgment 12 03 2021)

Legal Issues

  1. 1 Whether the court may set aside or vary an auditors' valuation made pursuant to a consent judgment
  2. 2 Whether the auditors materially departed from their agreed scope by adopting an unagreed Market Approach
  3. 3 Whether allegations of partiality or incomplete due diligence vitiate the auditors' valuation

Ratio Decidendi

The court held the second set of orders seeking to vary the consent judgment (discharging named auditors, appointing new auditors, and specifying financial year end dates) were impermissible and an abuse of process; however the auditors' consideration of a Market Approach was a material departure from the agreed scope and therefore that part of the valuation was not binding — the court ordered the auditor to revise the report excluding the Market Approach; allegations of partiality and incomplete due diligence were rejected on the evidence and cross-examination; enclosure 109 was stayed/permanently stayed after a revised report was served.

Court Disposition

Application partly allowed in respect of challenge to use of Market Approach; application to vary consent judgment and replace auditors refused as an abuse of process

Orders

  • Second set of orders seeking discharge of named auditors, appointment of new auditors and specification of financial year end dates refused
  • Market Approach excluded from valuation: auditor Teh Eng Aun & Co ordered to prepare and serve a revised auditor's report recalculating share value using only the agreed Asset and Income Approaches