CIVIL PROCEDURE: Striking out - Application for - Writ of summons and statement of claim - Whether plaintiff's solicitors lacked authority to act on behalf of plaintiff - Plaintiff's Directors' Circular Resolution authorising commencement of suit passed one year after issue of statement of claim - Whether resolution invalid

CIVIL PROCEDURE: Affidavits - Affidavit in reply - Application to strike out writ and statement of claim - Opponent's failure to serve affidavit within 14 days - Whether contravened O. 32 r. 13(2)(b) Rules of Court 2012 - Whether affidavit excluded from consideration - Perbadanan Nasional Insurans Sdn Bhd v. Pua Lai Ong

[SUIT NO: 22NCC-392-03-2012]
12 JUNE 2013

The first defendant filed an application vide encl. 25 to strike out the writ of summons and the statement of claim (`SOC') filed by the plaintiff, essentially, for breach of fiduciary duties. The first defendant contended, inter alia, that: (i) the plaintiff's solicitors (`Messrs Syong Wee') lacked authority to act on behalf of the plaintiff when it filed the writ of summons and the SOC; (ii) the plaintiff's Board of Directors' Circular Resolution (`resolution') authorising Messrs Syong Wee to commence the suit was passed one year after the date of the issue of the SOC; and (iii) the plaintiff's resolution was invalid and had no effect as it was not signed by all the directors. The plaintiff submitted that by a circular resolution dated 20 May 2013, the authority of Messrs Syong Wee was further confirmed and ratified and that this circular was annexed to an affidavit. The first defendant, however, objected to the affidavit as it was filed out of time and contravened O. 32 r. 13(2)(b) of the Rules of Court 2012 (`ROC').

Held (allowing encl. 25 with costs):

(1) The plaintiff's resolution was merely to confirm the appointment of Messrs Syong Wee as solicitors in the conduct of the present case and therefore, did not address on the authority to initiate the suit in the first place. Thus, it could not be said to be a valid ratification of the acts of Messrs Syong Wee in initiating the suit. The resolution also fell short of the requirements in Danish Mercantile Co Ltd and Others v. Beaumont and Another where (i) it did not state that the company had approved the acts of initiating the suit; and (ii) it had instructed Messrs Syong Wee to continue with the action. (paras 15 & 17)

(2) It is crucial, for the purpose of rectification, that a Board Resolution had resolved that the suit be initiated, in order to cloth the solicitor with the necessary authority to initiate the suit. However, there was none in the plaintiff's resolution. Hence, there was no rectification of the acts of Messrs Syong Wee in initiating the action by filing the suit on 21 March 2012 and the suit must, therefore, be struck out for want of authority (Hi-Summit Construction Sdn Bhd & Ors v. Konsortium Lapangan Terjaya Sdn Bhd & Ors; refd). (para 18)

(3) Order 32 r. 13(2)(b) of the ROC provides that an affidavit in reply must be served within 14 days from the date the sealed application and the affidavit in support were served on him. The plaintiff's affidavit was served two days out of time. Since the 14 days period in O. 32 r. 13(2)(b) is mandatory, the plaintiff's affidavit must be rejected and excluded from consideration (Perbadanan Nasional Insurans Sdn Bhd v. Pua Lai Ong; foll). (paras 19 & 20)

Case(s) referred to:

Danish Mercantile Co Ltd and Others v. Beaumont and Another [1951] 1 All ER 925 (foll)

Hi-Summit Construction Sdn Bhd & Ors v. Konsortium Lapangan Terjaya Sdn Bhd & Ors [2011] 1 LNS 555 HC (refd)

Perbadanan Nasional Insurans Sdn Bhd v. Pua Lai Ong [1996] 3 CLJ 321 CA (foll)

Syawal Enterprise Sdn Bhd & Anor v. Dayadiri Sdn Bhd [1990] 2 CLJ 297; [1990] 3 CLJ (Rep) 165 HC (refd)

Williams Jacks & Co (M) Sdn Bhd v. Chemquip (M) Sdn Bhd & Anor [1991] 2 CLJ 1309; [1991] 1 CLJ (Rep) 492 SC (refd)

Legislation referred to:

Rules of Court 2012, O. 32 r. 13(2)(b)


For the plaintiff - Ben Chen (Lewis Lim with him); M/s Shyong Wee & Danny

For the 1st defendant - Tan Hock Chuan (Michelle Lai & Vincent Quek with him); M/s Tan Hock Chuan & Co

For the 2nd & 3rd defendants - YL Chong; M/s YL Chong & Assocs

Reported by Shah Saharudin

BANKRUPTCY: Capacity of bankrupt - Claim against bankrupt - Whether leave of bankruptcy court required - Whether claim contractual or tortious in nature - Whether leave required to proceed with claim when case tortious in nature - Bankruptcy Act 1967, s. 8(1)

EVIDENCE: Witness - Non-calling of witnesses - Names mentioned in statement of claim not called - Whether explanation given on why attendance of witnesses not secured - Evidence Act 1950, ss. 101 & 118

TORT: Inducement of breach of contract - Interference with contractual relations - Incitement towards other purchasers not to pay maintenance fees of apartment - Non-payment of maintenance - Claim for - Whether claim contractual or tortious in nature - Whether claim proven

[SUMMONS NO: 52-1552-08]
29 MARCH 2012

The first plaintiff was a joint management body (`JMB') of Permai Lake View Apartments (`the apartments') while the second and third defendants were the purchasers of one unit of the apartments. The first defendant, who was also a bankrupt, was the spouse of one of the purchasers. Pursuant to s. 5 of the Deed of Mutual Covenant (`DMC'), all the purchasers were required to pay a maintenance fee of RM50 per month. However, the plaintiffs alleged that the first defendant incited all the purchasers not to pay the said maintenance fee. As a result, as at 31 March 2008, there was no payment for maintenance. The plaintiffs claimed against the defendants for damages for breach of contract and special damages for the sum of RM93,377.03 being the amount of unpaid maintenance fees. To prove their claims, the plaintiffs relied on the details laid out in their statement of claim where an umpteen number of names were mentioned. In denying the allegations levelled against them, the defendants contended, inter alia, that (i) they were never given any opportunity to read the DMC; (ii) the first plaintiff did not have any authority to increase the fees; and (iii) the purported JMB was not properly established and had no locus standi to initiate the present action against the defendants. A preliminary issue was raised on the first defendant's position as a bankrupt and whether the leave of the bankruptcy court was required.

Held (dismissing claim with costs):

(1) Section 8(1) of the Bankruptcy Act 1967 (`the Act') states that on the making of the receiving order, the creditor to whom the debtor is indebted in respect of any debt provable whether against a property or person, shall not commence or proceed with any action or other legal proceedings unless with the leave of the court. Although the plaintiffs failed to show that they had obtained any pre-requisite consent from the bankruptcy court, the instant case was not based on any contract or agreement, but one of tort. Therefore, there was no need for the plaintiff to apply for leave of the bankruptcy court. (paras 7 & 9)

(2) The plaintiffs need to prove that there was interference for inducement to breach the contract. Section 101 of the Evidence Act 1950 states that whoever desires any court to give judgment as to any legal rights or liability, dependent on the existence of facts which he asserts, must prove those facts exists. The burden of proof fell squarely on the plaintiff. If there was no evidence at all given, the claim would fail. (paras 15 & 16)

(3) The plaintiffs only produced three witnesses while all the other names mentioned in the statement of claim were not called to testify against the defendants. There was no explanation given on why they could not secure the attendance of the other witnesses. None of the names mentioned could fit into the situations in s. 118 of the Evidence Act 1950. Hence, there was no evidence at all to support the plaintiffs' case against the defendants. (paras 13, 14 & 20)

Case(s) referred to:

Greig v. Insole [1978] 1 WLR 302 (refd)

IZA Construction Co Sdn Bhd v. Law Fatt Choon [2011] 1 LNS 1726 CA (refd)

Kelang Pembena Kereta2 Sdn Bhd v. Mok Tai Dwan [2000] 2 CLJ 132 CA (refd)

Loh Holdings Sdn Bhd v. Peglin Development Sdn Bhd & Anor [1984] 2 CLJ 88; [1984] 1 CLJ (Rep) 211 FC (refd)

Tanavanus Sdn Bhd v. Simon Jingking Pingguan [1996] 2 CLJ 534 HC (refd)

Torquay Hotel Co Ltd v. Cousins [1969] 2 Ch 106 (refd)

Legislation referred to:

Bankruptcy Act 1967, ss. 8(1), 40(1)

Evidence Act 1950, ss. 32, 101, 102, 118


For the plaintiffs - JS Chandra

For the defendants - MS Raman

Reported by Najib Tamby