[OS-24-25-2007]

- 1 -
MALAYSIA
IN THE HIGH COURT IN SABAH AND SARAWAK AT SIBU
ORIGINATING SUMMONS NO. 24-25-2007

BETWEEN 5

DATO TING CHECK SII
No. 203, Jalan Tun Abang Haji Openg
96000 Sibu Sarawak PLAINTIFF
10
AND

SANYAN WOOD INDUSTRIES SDN BHD
Level 26, Wisma Sanyan
No. 1 Jalan Sanyan 15
P.O. Box 841
96008 Sibu Sarawak DEFENDANT


BEFORE THE HONOURABLE 20
MR. JUSTICE DATUK LINTON ALBERT IN CHAMBERS

GROUNDS OF DECISION

The management of the Defendant was the subject of protracted 25
disagreements between its respective directors and shareholders. The
Plaintiff commenced proceedings against the Defendant in Originating
Summons No. 24-96-2006 and on 15.11.2006 obtained an order which
required the Defendant to produce for inspection by the Plaintiff the
accounting and transaction records of the Defendant as will sufficiently 30
explain its true financial position. The whole exercise following the order
to produce made on 15.11.2006 was just as protracted and acrimonious to
boot, replete with charges and counter charges as to whether there was
compliance or non-compliance with the order and in the midst of this
controversy a resolution was passed by the Defendants Board of 35
Directors to hold its 15
th
Annual General Meeting on 27.4.2007 at which
[OS-24-25-2007]
- 2 -
there was a real prospect that the Plaintiff, who was a minority
shareholder, would not be re-elected a director. That would in effect put
an end to the controversy relating to the production and inspection of the
accounting records because the Plaintiff would then be reduced to a mere
shareholder and stripped of his right as a director to have the documents 5
produced for his inspection. Such was the contention of the Plaintiff
which led to these proceedings commenced on 25.4.2007 where the
Plaintiff is asking the court for a declaration that the Defendant has failed
to comply with the court order made on 15.11.2006 in Originating
Summons No. 24-96-2006. The Plaintiff had also on 25.4.2007 filed a 10
Summons in Chambers seeking to restrain the Defendant from convening
its 15
th
Annual General Meeting on 27.4.2007. In the event an interim
injunction was granted to restrain the Defendant by itself or its servants or
agents or otherwise from convening or holding the Defendants 15
th

Annual General Meeting on 27.4.2007 or before 18.10.2007 unless 15
otherwise ordered. The Defendant has appealed against the granting of
the restraining order and I now give the grounds therefor.
The Plaintiffs case for the injunctive relief was grounded on the
imminent danger of not being re-elected as a director of the Defendant
which would in turn deprive him of the accrued right as a director for the 20
production and inspection of the accounting documents under the order of
the court made on 15.11.2006.
It cannot be gainsaid that the Plaintiff was not precluded from
seeking the declaratory relief sought because the right to production and
inspection of the accounting documents under the order dated 15.11.2006 25
was a right accorded to the Plaintiff as a director of the Defendant under
Section 167 (6) of the Companies Act 1965 and the question whether
[OS-24-25-2007]
- 3 -
there was full compliance with the order constituted a bona fide issue to
be tried because non-compliance would impinge on the right (see
LADANG TAI TAK (KT) SDN BHD v SUPPIAH A/L ANDY TAHVAR
[1999] 5 MLJ 257. It might well be that the order in question expired on
9.2.2007 as alleged by the Defendant nevertheless it was neither useful 5
nor appropriate for the court at this stage of the proceedings to embark on
an exhaustive scrutiny of the conflicting affidavits before the court to
determine whether there was full compliance with the order made on
15.11.2006. (See JACOB RENNER & ORS V SCOTT KING,
CHAIRMAN OF BOARD OF DIRECTORS OF THE 10
INTERNATIONAL SCHOOL OF KUALA LUMPUR & ORS [2000] 3
CLJ 569. The Defendants contention that the Plaintiffs application was
premature and ill-founded because whether or not he will be re-elected a
director could only be determined at the 15
th
Annual General Meeting on
27.4.2007 and that there was no obligation on the part of the Defendant or 15
its majority shareholders to confirm he would be re-elected before the
15
th
Annual General Meeting was held was of no consequence because it
would be utterly useless for the Plaintiff to lock the stable door after the
horse had bolted; the Plaintiff would stand to rue the consequences if the
15
th
Annual General Meeting went ahead and he was not re-elected as a 20
director and consequently lost his accrued right as director for the
production and inspection of the Defendants accounting records. In the
light of the Defendants refusal to respond to the Plaintiffs queries on his
prospects for re-election as director and the animosity engendered by the
exercise for the production and inspection of documents consequent upon 25
the order made on 15.11.2006 it was inconceivable that the Plaintiff
would be re-elected director. In the circumstances the only sensible
course for the Plaintiff was to restrain the Defendant from going ahead
with the 15
th
Annual general Meeting on 27.4.2007.
[OS-24-25-2007]
- 4 -
The Defendant had not demonstrated the efficacy of putting
forward the 15
th
Annual General Meeting to 27.4.2007 when admittedly it
was not due before 18.10.2007 nor has it been suggested that some
prejudice or disadvantage would befall the Defendant if the relief sought
was granted. Therefore, the justice of the case laid in granting the 5
restraining order because unless the Defendant is restrained the Plaintiff
was faced with a real prospect of losing the accrued right for the
production and inspection of the Defendants accounting documents.
That right could not be readily compensated by damages nor was
damages easily quantifiable. 10
I could find nothing in the affidavits suggesting prevarication on
the part of the Plaintiff or being blameworthy in any shape or form which
would militate against the exercise of the discretion to grant the relief
sought.
The Court of Appeal in KEET GERALD FRANCIS NOEL JOHN 15
v MOHD NOOR BIN ABDULLAH & ORS [1995] 1 MLJ 193 laid
down the following guidelines for a judge hearing an application for
interlocutory injunction at pp 206 207:
(a) He must ask himself whether the totality of the facts presented
before him disclosed a bona fide serious issue to be tried. If he 20
finds that no serious question is disclosed, the relief should be
refused. If however, he finds that there are serious questions to
be tried, he should move on to the next step of his inquiry;
(b) Having found that an issue has been disclosed that requires
further investigation, he must consider where the justice of the 25
case lies. He must take into account all relevant matters,
including the practical realities of the case before him and
weigh the harm the injunction would produce by the grant,
against the harm that would result from its refusal; and
[OS-24-25-2007]
- 5 -
(c) The judge must have in the forefront of his mind that the
remedy that he is asked to administer is discretionary, intended
to produce a just result between the date of the application and
the trial proper and to maintain the status quo.
Applying these principles to the matters set out above, I 5
accordingly allowed the Plaintiffs application aforesaid.



LINTON ALBERT, J. 10


Date: 5
th
August, 2008

For the Plaintiff: M.S. Sandhu 15
(Ting Cheng Ching with him)
Messrs Ling & Wong Advocates
Bintulu

For the Defendant: Tan Thiam Teck 20
Messrs Reddi & Co. Advocates
Kuching