LEE QUAN YOONG 1. KOH HENG JIN HOLDINGS SDN. BHD. 2. WONG NYET FAH 3. KOH PENG CHYE 4. DAN 4 YANG LAIN

IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR (COMMERCIAL DIVISION) ORIGINATING SUMMONS NO. WA-24NCC-382-08/2020 In the matter of Koh Heng Jin Holdings Sdn. Bhd. (Company No.: 52510-X) And In the matter of Section 346 of the Companies Act 2016 And In the matter of Order 7 and 88 of the Rules of Court 2012 BETWEEN LEE QUAN YOONG (NRIC No.: 770825-14-5986) [As Executor and Trustee of the Estate of the late Koh Peng Guan] …PLAINTIFF AND 1. KOH HENG JIN HOLDINGS SDN. BHD. (Company No.: 52510-X) 1 2. WONG NYET FAH (NRIC No.: 430520-10-5624) 3. KOH PENG CHYE (NRIC No.: 660926-10-6559) 4. WONG NYET FAH, KOH SIEW LOON [As Executors and Trustees of the Estate of the late Koh Heng Jin] 5. KOH SIEW PECK (NRIC No.: 621016-10-7438) 6. KOH SIEW MEE (NRIC No.: 630914-10-8138) 7. KOH SIEW LOON (NRIC No.: 650610-10-7492) …DEFENDANTS BEFORE YA ADLIN BINTI ABDUL MAJID JUDICIAL COMMISSIONER 2 JUDGMENT (Enclosures 6, 8) A. Introduction [1] The applications before this court were filed by the 2nd Defendant. They are: a. A striking out application in Enclosure 6 (“Striking Out Application”). This application was filed due to the fact that in the originating summons, the 2nd Defendant is also named as the 4th Defendant, in her capacity as the executor and trustee of the estate of her husband, the late Koh Heng Jin (“Estate”). She is seeking for the action against her in her capacity as the executor and trustee of the Estate to be struck out, and for her to be removed as the 4th Defendant. b. A conversion application in Enclosure 8 (“Conversion Application”). The 2nd Defendant is seeking to covert the originating summons into a writ action. [2] After considering the applications, the affidavits filed and submissions of the parties, I allowed both applications. B. Background facts [3] The parties to this action are members of the same family. They are: 3 a. The late Plaintiff, Koh Peng Guan, the eldest son in the family; b. The 2nd Defendant, Wong Nyet Fah, the mother of Koh Peng Guan and his siblings; and c. The other siblings, namely: i. The 3rd Defendant, Koh Peng Chye (brother); ii. The 5th Defendant, Koh Siew Pek (sister); iii. The 6th Defendant, Koh Siew Mee (sister); and iv. The 7th Defendant, Koh Siew Loon (sister). [4] The 2nd and 7th Defendants are also named as the 4th Defendant, in their capacity as the executors and trustees of the Estate. [5] The late Plaintiff, Koh Peng Guan, filed the originating summons, seeking, inter alia, a declaration that the 2nd and 3rd Defendants, his mother and brother, had conducted the affairs of the business of the family (the 1st Defendant, Koh Heng Jin Holdings Sdn Bhd) in a manner that is oppressive and prejudicial to his interest as a shareholder of the 1st Defendant. [6] Koh Peng Guan passed away on 2 December 2020. He is now represented by his estate. 4 [7] The 1st Defendant was established by the late Koh Heng Jin in 1979. Koh Heng Jin passed away on 4 February 2018. At that time, the shareholding of the 1st Defendant was as follows: a. Koh Heng Jin held 40% equity interest; b. The 2nd Defendant held 40% equity interest; and c. Koh Peng Guan held 20% equity interest. [8] Upon the demise of Koh Heng Jin, and pursuant to Koh Heng Jin’s will, there was a change in the shareholding of the 1st Defendant. The shareholding was then as follows: a. The 2nd Defendant held 61% equity interest; b. Koh Peng Guan held 20% equity interest; c. The 5th, 6th and 7th Defendants held 1.46% equity interest each; d. The 3rd Defendant held 1.47% equity interest; and e. Koh Peng Guan, the 2nd Defendant and the 7th Defendant held 13.15% equity interest on trust for 9 beneficiaries (Koh Heng Jin’s and the 2nd Defendant’s grandchildren). 5 [9] Koh Peng Guan claims that: a. He and his late father Koh Heng Jin were responsible for the expansion and success of the 1st Defendant and other family companies. b. Upon Koh Heng Jin’s demise: i. The 2nd Defendant, who inherited the majority shareholding from Koh Heng Jin, took control of the 1st Defendant and ousted Koh Peng Guan from the management of the 1st Defendant; ii. The 2nd and 3rd Defendants had carried out a series of oppressive and prejudicial acts against Koh Peng Guan. This resulted in his rights and interests as a minority shareholder of the 1st Defendant having been unfairly prejudiced; and iii. The 2nd and 3rd Defendants had conducted the affairs of the 1st Defendant in total disregard of the interests of the 1st Defendant. [10] The 2nd Defendant challenged Koh Peng Guan’s allegations. She highlighted the fact that the business of the 1st Defendant had been collectively built up by Koh Heng Jin and her, even before Koh Peng Guan’s involvement in the business. She also alleged that her husband had on many occasions expressed reservations about Koh Peng Guan’s 6 character, and that Koh Peng Guan’s wrongdoings had caused him to be disinherited from Koh Heng Jin’s will. [11] The 2nd Defendant also contended that Koh Peng Guan started demonstrating recalcitrant behaviour and abandoned his duties with the 1st Defendant, once he learnt that he had been disinherited from his father’s will. He expressed his anger and bitterness to the staff and customers of the 1st Defendant, and to friends. The 2nd Defendant asserted that this is contrary to Koh Peng Guan’s allegation that the 2nd Defendant, upon learning that she has become the majority shareholder of the 1st Defendant at the reading of Koh Heng Jin’s will, had effectively taken control of the 1st Defendant and ousted Koh Peng Guan from management. C. Considerations The Striking Out Application [12] The Striking Out Application is filed pursuant to Order 18 Rule 19(1)(a) of the Rules of Court (“ROC”), which provides that: “(1) The Court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement, of any writ in the action, or anything in any pleading or in the endorsement, on the ground that that – (a) it discloses no reasonable cause of action or defence, as the case may be; 7 … (3) This rule shall, as far as applicable, apply to an originating summons as if it were a pleading. (emphasis added) [13] Learned counsel for the 2nd Defendant, Ms. Fiona Bodipalar, also referred to Bandar Builder Sdn Bhd v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36, where the Supreme Court held that the power of the court to strike out under Order 18 Rule 19(1) should only be exercised when it can clearly be determined that a claim or answer is prima facie obviously unsustainable: “The principles upon which the court acts in exercising its power under any of the four limbs of O 18 r 19(1) of the RHC are well settled. It is only in plain and obvious cases that recourse should be had to the summary process under this rule (per Lindley MR in Hubbuck & Sons Ltd v Wilkinson, Heywood & Clark Ltd 7, and this summary procedure can only be adopted when it can be clearly seen that a claim or answer is on the face of it 'obviously unsustainable' (see AG of Duchy of Lancaster v L & NW Rly Co 8). It cannot be exercised by a minute examination of the documents and facts of the case, in order to see whether the party has a cause of action or a defence (see Wenlock v Moloney & Ors 9).” (emphasis added) 8 [14] As Order 18 Rule 19(1)(a) is relied on by the 2nd Defendant, the sole issue for determination in the Striking Out Application is whether there is a cause of action against the 2nd Defendant in her capacity as the executor and trustee of the Estate (i.e. as the 4th Defendant). [15] Learned counsel for the 2nd Defendant argues that there is no cause of action against her in that capacity. Ms. Bodipalar referred to the following cases which explain what constitutes a “cause of action”: a. Distillers Co (Biochemicals) Ltd v Thompson (by her next friend Arthur Leslie Thompson) [1971] All ER 694, at page 701: A “cause of action” is: “… the act (which must include omission) on the part of the first defendant which has given the plaintiff a cause of complaint in law”. b. Government of Malaysia v Lim Kit Siang; United Engineers (M) Bhd v Lim Kit Siang [1988] 2 MLJ 12, at page 19: “"A cause of action" is a statement of facts alleging that a plaintiff's right, either at law or by statute, has, in some way or another, been adversely affected or prejudiced by the act of a defendant in an action. Lord Diplock in Letang v Cooper [1965] 1 QB 232 at P 242 defined "a cause of action" to mean "a factual situation, the existence of which entitles one person to obtain 9 from the court a remedy against another person". In my view the factual situation spoken of by Lord Diplock must consist of a statement alleging that, first, the respondent/plaintiff has a right either at law or by statute and that, secondly, such right has been affected or prejudicated by the appellant/defendant's act.” (emphasis added) c. Philip Morris Products Inc v Power Circle Sdn Bhd [1999] 1 SLR(R) 964, at page 965: The concept of “cause of action” has two dimensions: “… First, it means the legal basis which entitles the plaintiff to succeed. Next, it signifies the factual situation which entitles one person to obtain from the court a remedy against another person. [6] The importance of the second limb lies in its purpose: there must be ample and clear allegations to inform the opponent and the court in advance of the case the opponent has to meet and settle the defence and prepare for the trial…” [16] It is important to again highlight the following: That the 2nd Defendant is sued in her capacity as a director of the 1st Defendant, and also in her capacity as an executor and trustee of the Estate. 10 [17] With this in mind, the basis of the filing of originating summons must be considered. The originating summons is filed pursuant to section 346 of the Companies Act 2016, relating to alleged oppressive conducts by the 2nd and 3rd Defendants. The alleged oppressive conducts are carried out in their capacity as directors of the 1st Defendant. [18] Section 346(1) of the Companies Act 2016 provides that: “Any member or debenture holder of a company may apply to the Court for an order under this section on the ground – (a) that the affairs of the company are being conducted or the powers of the directors are being exercised in a manner oppressive to one or more of the members or debenture holders including himself or in disregard of his or their interests as members, shareholders or debenture holders of the company; or (b) that some act of the company has been done or is threatened or that some resolution of the members, debenture holders or any class of them has been passed or is proposed which unfairly discriminates against or is otherwise prejudicial to one or more of the members or debenture holders, including himself.” (emphasis added) [19] The parts emphasised are important, as they relate to the cause of action arising pursuant a claim filed under the section. These parts 11 reflect that a claim may be made against persons having control over the affairs of a company, which may include the directors, members and debenture holders of a company. It is precisely for this reason that action is taken the 2nd and 3rd Defendants in their capacity as directors of the 1st Defendant. [20] Thus, the role of the 2nd Defendant as a director of the 1st Defendant and her role as the executor and trustee of the Estate must be differentiated. A claim under section 346 of the Companies Act 2016 in relation to the 1st Defendant, can arise against the 2nd Defendant in the former capacity (as a director of the 1st Defendant), but not in the latter capacity (as the executor and trustee of the Estate). [21] However, learned counsel for the Plaintiff, Mr. V Kalearasu took the view that suing the 2nd Defendant in her capacity as a director of the 1st Defendant would not be sufficient. He pointed out that the prayers sought in the originating summons include orders for Koh Peng Guan’s shares to be purchased. This includes the shares that he holds as the trustee of the Estate. Mr. Kalearasu relied on cases in which courts have held that all interested and necessary parties should be named in an oppression action. These cases are Datuk Kasi KL Palaniappan v Menara Embun Sdn Bhd & Ors [2018] 1 LNS 1607; Auspicious Journey Sdn Bhd v Ebony Ritz Sdn Bhd & Ors [2021] 1 LNS 302 and Saujana Resort (M) Bhd v Chin Cheen Foh & Ors and another appeal [2021] 3 CLJ 71. [22] Further, quoting New Straits Times (Malaysia) Bhd v Kumpulan Kertas Niaga Sdn Bhd & Anor [1985] 1 MLJ 226 and Serac Asia Sdn Bhd v Sepakat Insurance Brokers Sdn Bhd [2013] 5 MLJ 1, 12 Mr. Kalearasu cautioned that the power to strike out under Order 18 Rule 19(1)(a) must be exercised sparingly, with due regard being given to the quality and circumstances surrounding the plea, and the interest of the parties named in the action. [23] While I do not disagree that all interested and necessary persons must be made a party to an action, this must surely be dependent on the existence of a valid cause of action against the person. In this case, the cause of action under section 346 of the Companies Act 2016 would only arise as against the 2nd Defendant in her capacity as a director of the 1st Defendant. There is no cause of action against her under section 346 of the Companies Act 2016, in her capacity as a trustee of the Estate. [24] Learned counsel for the 2nd Defendant also referred to Order 15 Rule 1 of the ROC which provides as follows: “(1) Subject to rule 5(1), a plaintiff may in one action claim relief against the same defendant in respect of more than one cause of action – (a) … (b) if the plaintiff claims or the defendant is alleged to be liable in the capacity of executor or administrator of an estate in respect of one or more of the causes of action and in his personal capacity but with reference to the same estate in respect of all the others”; or 13 (c) …” (emphasis added) [25] I am of the view that naming the 2nd Defendant in her personal capacity as well as in her capacity as the executor and trustee of the Estate is inconsistent with Order 15 Rule 1(1)(b) of the ROC. Order 15 Rule 1(1)(b) allows a plaintiff to make a claim against a defendant who is sued in his capacity as an executor or administrator of an estate as well as in his personal capacity based on different causes of action. However, where the defendant is sued in his personal capacity under rule 1(1)(b), the cause of action must be with reference to the same estate. This is not so in this case, as the cause of action is not related to the Estate, but to the management of the 1st Defendant. [26] Further, it is also unprecedented and unusual to name the 2nd and the 7th Defendants as “one collective defendant” (i.e. the 4th Defendant). This falls foul of Order 15 Rule 1 of the ROC, and also impedes the manner in which the 2nd and 7th Defendants are represented or can defend themselves. [27] Based on the above, I find that it is legally indefensible and unsustainable for the 2nd Defendant to also be named in this action as the 4th Defendant, in her capacity as the executor and trustee of the Estate. [28] As such, the Striking Out Application is allowed. 14 The Conversion Application [29] The Conversion Application is made pursuant to Order 28 Rule 8(1) of the ROC, which provides 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 cause or matter had been so begun and may, in particular, order that pleadings shall be delivered or that any affidavits shall stand as pleadings, with or without liberty to any of the parties to add thereto or to apply for particulars thereof.” (emphasis added) [30] Order 5 Rule 4(1)(b) of the ROC provides that proceedings in which there is unlikely to be any substantial dispute of fact are appropriate to be begun by originating summons. [31] Pursuant to the above provisions, it is clear that where an action was commenced by an originating summons but it appears to the court that it would be more suitably tried by way of writ action due to serious disputes of facts, the court has the power to order the proceedings to be continued as if begun by writ (see HSBC Bank Malaysia Bhd v Wong Thien Boon & Ors [2008] 6 CLJ 381; Ting Ling Kiew & Anor v Tang Eng Iron Works Co Ltd [1992] 2 MLJ 217; Salim bin Ismail & Lain-Lain v Lebbey Sdn Bhd (No 2) [1997] 2 MLJ 4; and Yebet bt Saman & Ors (sued on behalf of himself and 76 other people of Semaq Beri as listed in Appendix A) v Foong Kwai Long & Ors [2015] 2 MLJ 498). 15 [32] The Plaintiff contests the Conversion Application on four grounds: a. That Order 88 Rule 2 of the ROC requires all proceedings under the Companies Act 2016 to be commenced by way of originating summons; b. That even cases that involve complicated and disputed issues of facts have been disposed by way of originating summons; c. That the disputes of facts in this case can be sufficiently determined by way of affidavit evidence; and d. That with the passing of Koh Peng Guan, the conversion of the originating summons into a writ action would cause prejudice to the Plaintiff. [33] On the first ground, I am of the view that Order 88 Rule 2 of the ROC must be read together with Order 28 Rule 8(1) of the ROC. Order 28 Rule 8(1) is clear, in that it grants power to the court in a matter that was commenced by originating summons, to continue proceedings as if begun by writ. This power is exercisable if it appears to the court that the proceedings “for any reason” should be continued as if begun by writ. [34] I am also guided by ISM Sdn Bhd v Queensway Nominees (Tempatan) Sdn Bhd & Ors [2016] 2 CLJ 294, which was referred to by the learned counsel of the 2nd Defendant. In that case, it was held that although a claim for minority oppression is statutorily prescribed to be 16 commenced by way of an originating summons, the nature of the minority oppression as alleged by the plaintiff in that case is one which involves various conflicting facts or disputed facts. Thus, the application for conversion of the originating summons into a writ action was allowed by the learned Judicial Commissioner. I find the case before me to be of the same nature. [35] The second contention of the Plaintiff is that even cases that involve complicated and disputed issues of facts have been disposed of by originating summons. In this regard, learned counsel for the Plaintiff referred to Syed Ibrahim Bin Syed Abdul Rahman v Liew Su Chin (f) [1984] 1 MLJ 160; Tuan Haji Ishak bin Ismail v. Leong Hup Holdings Bhd and other appeals [1996] 1 MLJ 661; and WTWT Sdn Bhd v Chew Meu Jong & Ors and another appeal [2018] MLJU 1360. [36] In my view, it is incorrect for the Plaintiff to rely on these cases as a basis to persuade this court that the Conversion Application should be dismissed. Each case is premised on its own set of facts, and the extent to which these facts can be determined by way of affidavit evidence as opposed to oral evidence, will only be obvious by considering the averments made in the affidavits. If documentary evidence is in fact sufficient to address the factual issues arising, which was the finding of the learned Judge in WTWT Sdn Bhd (supra), then the matter can be continued by way of originating summons. [37] It is not in every case that this is so, and certainly in this case, I do not find that affidavit evidence would be sufficient to address the issues of facts arising. Following from this, I cannot agree with the third argument 17 of the Plaintiff, that the dispute of facts in this case can be sufficiently addressed by way of affidavit evidence. [38] Some of the issues raised by the Plaintiff which are the subject of factual dispute between the parties, are as follows a. That Koh Peng Guan was ousted from the management of the 1st Defendant. Actions allegedly taken by the 2nd Defendant include removing Koh Peng Guan as a co- signatory of cheques of the 1st Defendant, and denying him access to records, accounts and accounting systems of the 1st Defendant. b. That monies of the 1st Defendant were removed in an authorised manner, and placed in fixed deposits in the name of the 2nd and 7th Defendants. c. That the 2nd and 3rd Defendants have been using the 1st Defendant’s funds for their personal expenditure, including to make personal claims. d. That false and fictitious payments for renovation works had been created by the 2nd Defendant. e. That it is the intention of the 2nd Defendant to run the 1st Defendant as her sole proprietorship as opposed to running it as a company. 18 [39] It is clear to me when considering the allegations raised above that there exists substantial conflicting and disputed facts which render it impossible for these facts to be determined by way of affidavit evidence. Oral evidence of individuals involved in the events alleged to have happened is required, to determine the accuracy of the allegations. This is especially crucial as some allegations concern the 2nd and 3rd Defendants’ characters and interactions with third parties, which would be premised on oral evidence, as opposed to documentary evidence. [40] The final contention raised by the Plaintiff is that with the passing of Koh Peng Guan, the Plaintiff would be prejudiced if oral evidence is required. However, I am in agreement with the 2nd Defendant’s argument that the passing of Koh Peng Guan has fortified the necessity for conversion of the originating summons into a writ action. With the passing of Koh Peng Guan, oral evidence from third parties is necessary. This is because Koh Peng Guan can no longer be cross-examined on the averments made in his affidavits. Thus, evidence from third parties is required to test his averments. [41] After considering the arguments of the parties, I find that with the existence of factual disputes that cannot be determined by way of affidavit evidence, it is in the interest of justice that this action be disposed of by way of a writ action. Thus, the Conversion Application is allowed. D. Decision [42] Taking into account the findings set out above, the Striking Out Application and the Conversion Application are both allowed. 19 Dated 6 July 2021 sgd Adlin binti Abdul Majid Judicial Commissioner High Court of Malaya Commercial Division (NCC6) Kuala Lumpur Counsel: Plaintiff : V. Kalearasu (together with Shoba Murugiah) of Diedra Sharina & Co 1st Defendant : Simon Hong of Simon Hong 2nd, 3rd, 4th and 5th Defendants : Fiona Bodipalar (together with Khor Heng How and Sundradevan Ramachandran) of Bodipalar Ponnudurai De Silva 7th Defendant : Tan Tiea Chua (TC Tan & Co) Legislation referred to: Companies Act 2016, section 346 Rules of Court 2012, Order 5 Rule 4(1)(b), Order 15 Rule 1, Order 18 Rule 19(1)(a), Order 28 Rule 8(1), Order 88 Rule 2 20 Cases referred to: Auspicious Journey Sdn Bhd v Ebony Ritz Sdn Bhd & Ors [2021] 1 LNS 302 Bandar Builder Sdn Bhd v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36 Datuk Kasi KL Palaniappan v Menara Embun Sdn Bhd & Ors [2018] 1 LNS 1607 Distillers Co (Biochemicals) Ltd v Thompson (by her next friend Arthur Leslie Thompson) [1971] All ER 694 Government of Malaysia v Lim Kit Siang; United Engineers (M) Bhd v Lim Kit Siang [1988] 2 MLJ 12 HSBC Bank Malaysia Bhd v Wong Thien Boon & Ors [2008] 6 CLJ 381 ISM Sdn Bhd v Queensway Nominees (Tempatan) Sdn Bhd & Ors [2016] 2 CLJ 294 New Straits Times (Malaysia) Bhd v Kumpulan Kertas Niaga Sdn Bhd & Anor [1985] 1 MLJ 226 Philip Morris Products Inc v Power Circle Sdn Bhd [1999] 1 SLR(R) 964 Salim bin Ismail & Lain-Lain v Lebbey Sdn Bhd (No 2) [1997] 2 MLJ 4 Saujana Resort (M) Bhd v Chin Cheen Foh & Ors and another appeal [2021] 3 CLJ 71 Serac Asia Sdn Bhd v Sepakat Insurance Brokers Sdn Bhd [2013] 5 MLJ 1 Syed Ibrahim Bin Syed Abdul Rahman v Liew Su Chin (f) [1984] 1 MLJ 160 Ting Ling Kiew & Anor v Tang Eng Iron Works Co Ltd [1992] 2 MLJ 217 Tuan Haji Ishak bin Ismail v. Leong Hup Holdings Bhd and other appeals [1996] 1 MLJ 661 21 WTWT Sdn Bhd v Chew Meu Jong & Ors and another appeal [2018] MLJU 1360 Yebet bt Saman & Ors (sued on behalf of himself and 76 other people of Semaq Beri as listed in Appendix A) v Foong Kwai Long & Ors [2015] 2 MLJ 498) 22