JCW

[Quia timet Anti-suit injunction to prevent any Court proceeding and/or injunction proceedings to prevent the calling of an Extraordinary General Meeting of the society “Dong Zong” from deregistration by the Registrar of Societies, implied terms when the Constitution of the Society is silent] The plaintiffs filed an originating summons to obtain a protective order by way of a ‘quia timet’ injunction as they feared that the first defendant (‘D1’) might obtain an injunction to restrain the holding of the Extraordinary General Meeting (“EGM”) of the United Chinese School Committee’s Association Malaysia (‘Dong Zong’) scheduled to be held on 23 August 2015. The purpose and agenda of the EGM was to solve the leadership crisis by conducting a re-election of committee members. According to the plaintiffs, the EGM was to facilitate a re-election to be carried out so that central committee (‘CC’) members may be elected afresh and for a fresh central executive committee (‘CEC’) to be elected by the CC. According to the plaintiffs, the leadership crisis has had a crippling effect on the Dong Zong and placed the UEC examination which is traditionally held in the month of October of each year, in jeopardy. Apparently, the leadership crisis has also caused much confusion and consternation amongst the Chinese community in Malaysia. The leadership disputes have also led to a physical stand-offs between the parties and police reports have been lodged by the parties concerned. Meanwhile, the Registrar of Societies have issued a notice to deregister Dong Zong. The Court held inter-alia that :- (i)When the Dong Zong’s Constitution is silent, the legal basis on which a term may be implied into the rules or constitution of a society was no different from the test applicable when considering whether a term should be implied to an ordinary contract. The test for implying a term is the business efficacy test and the officious bystander test. After all, the relationship between a society and its members is contractual in nature. Thus the rules or constitution or by-laws constitute the contract and these are to be construed in accordance with the laws of contract. (ii)It was entirely consonant with business efficacy to imply a term in the rules of Dong Zong that the supreme body ie the EGM may deal with and resolve the leadership crisis by conducting a re-election of the committee members which as a collective body would in turn appoint the office bearers of the Dong Zong. A term may also be implied on the basis of the officious bystander test as the members of Dong Zong, if asked, would undoubtedly agree that there should be such a term to allow the EGM to resolve the leadership crisis. (iii)There was no basis for the complaint that the plaintiffs are guilty of subterfuge. They obtained a quia timet injunction on an ex parte basis which way the only way to do it. Given D1’s propensity to injunct meetings (whether rightly or wrongly), the plaintiffs could not be faulted for proceeding on an ex parte basis. In any event, once the ex parte order was served, all cards were on the table and D1 could have taken immediate steps to set it aside, so that he could make whatever application he wanted to injunct the EGM which was to be held on 23 August 2015.

[Application for inspection of account and records of the company under Section 167(6) of the Companies Act 1965] Justin was the counsel for the plaintiff. In allowing the plaintiff’s application to inspect the accounting books of the company pursuant to Section 167(6) of the Companies Act, the High Court held inter alia that:- (i)The onus was on the defendants to prove mala fides and unless the burden was discharged, it must be assumed that the plaintiff would exercise the right for the benefit of the company; (ii)A director who does not take part in the management remains liable as a director with fiduciary and statutory duties and for the discharge of these duties, the plaintiff must hold the right to inspect; (iii)There was no clear proof that the plaintiff intended to exercise her right of inspection as a director for an ulterior or improper purpose; and (iv)When there is suspicion and lack of co-operation, a director is all the more entitled, perhaps even obliged, to inspect company’s accounts to protect the interests of the company and its shareholders.

[Pre-condition for filing of a suit for malicious prosecution] Justin was counsel for the defendants and assisted by Chooi Peng. In allowing the Defendant’s application under Order 18 Rule 19(1)(a) Rules of Court 2012 to strike out the suit by the Plaintiff for “malicious prosecution” with costs, the High Court held that as it was clear that the plaintiffs had no cause of action against the defendant as the precondition for such a suit is not met where the suit by the Plaintiff has not ended in favour of the Plaintiff and therefore the filing of the suit by the plaintiffs against the defendant could not be maintained in law.

[mearing of “vacant possession” and “predominant purpose” in a lawful means conspiracy] Justin was the counsel for the respondent/plaintiff and assisted by Chooi Peng. The Court of Appeal whilst allowing the appellants’ appeal against the finding of conspiracy by the High Court found that the predominant purpose of the Tenancy Agreement was the lawful promotion of the lawful interests of the defendant. The Court also held that the term “vacant possession” means the actual and empty possession as would allow a party to occupy and use the property transferred without impediments.

[striking out of Pleadings on illegality] Justin was the counsel for the defendants. In striking out the plaintiff’s claim with costs, the High Court held that the defendants were correct in their position they take that the plaintiff’s claim must fail on the ground of illegality. A plaintiff cannot found his cause of action on an illegal act. Note : This case has been subsequently overturned by the Court of Appeal which found “triable” issues.

[Whether a Joint Management Body can co-exist with the establishment of a Management Corporation] Justin was the counsel for the appellants. In dismissing the appeal, the Federal Court bench which consisted of Chief Justice Tun Arifin Zakaria (as he then was) in dismissing the appeal held that the Joint Management Body (“JMB”) was an interim body established for the purpose of carrying out the functions of the Management Corporation(“MC”) pending the establishment of the MC and once the MC is established, the JMB was automatically dissolved.

[Doctrine of functus officio and consequential orders to give effect to the to the decision of the Court] Justin was the counsel for the defendants in this application by the defendants under Enclosure 45. Enclosure 45 was dismissed by the High Court with no order as to costs on the grounds that the court was functus officio. However, the dismissal of Encl 45 did not preclude the court from giving consequential directions to give effect to the terms. The court may, pursuant to its inherent powers, make consequential orders or directions to give effect to its decision, “when its working out might involve matters on which it might be necessary to obtain a decision of the court”. The doctrine of functus officio does not take away this inherent power of the court.

[Contempt of Court – issue of tampering with documents, issue of mens rea] Justin was the counsel for the Respondents. The Appellant’s appeal was dismissed and the Court of Appeal had amongst others ruled as follow (summarized in the Head Note of no. (5) of the law report) :- “(5) The first Form 75 and statutory declaration was material as well as an important documentary evidence in the applicants' removal application. Hence, the conduct of the appellant in tampering with material documentary evidence clearly amounted to an interference with the due administration of justice and constituted contempt of court. The appellant had not just acted in a manner which was likely to interfere with the proper administration of justice but had actually directly interfered with it by the positive act of amending the first Form 75 by way of lodging the second Form 75 and affirming the second statutory declaration. (paras 20, 25 & 26)” The Court of Appeal further held that although mens rea was not a necessary element of contempt, there was clear cut mens rea in the conduct of the Appellant here.