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DALAM MAHKAMAH TINGGI MALAYA DI PULAU PINANG

[GUAMAN SIVIL NO. 22NCVC- 39-03/2017]

ANTARA

KL GEOTECHNICS SON BHD (790829-V) … PLAINTIF

DAN

1. WINDSOR AIMS SON BHD (586488-H)

2. WINDSOR AIMS CONSTRUCTION SON BHD (816374-K)
3. LIM KIAN ANN (KP NO: 700123-01-5171) ... DEFENDAN-
DEFENDAN

GROUNDS OF JUDGMENT

Introduction

[1] This Court was hearing the plaintiff’s Notice of Application

dated 05.11.2018 (Encl. 83) to amend the Writ dated 13.12.2016 and
Re- Amended Statement of Claim dated 23.04.2018 with the cause
papers before this Court in respect of the amendment application
being as follows:

i) Notice of Application (Encl 83) dated 05.11.2018;

ii) Affidavit in Support of Khaw Guan Lye affirmed on 5.11.2018;

iii) Affidavit in Reply of Gladys Lim Xuan Kwee affirmed on

12.12.2018;

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iv) Affidavit in Response of Khaw Guan Lye affirmed on 3.1.2019.

[2] Upon being presented with written submissions by both parties

with further oral clarifications being made, this Court decided on
31.1.2019 to allow the said application. The decision is now the
subject of an appeal by the defendants to the Court of Appeal hence
the preparation of this Grounds of Judgment.

Facts leading to the application

[3] The trial of this case was fixed on 25.09.2018 and 26.09.2018.
However, on the first day of trial the defendants’ counsel notified the
Court and the plaintiff counsel that the 1 st defendant has actually long
been wound up. This revelation has prompted this application to
amend that is Enclosure 83. The basis of this application is based
upon the reason that the plaintiff was made aware of the 1 st
defendant’s status only at the stage of the trial being already fixed and
at all material times, the 3 rd Defendant as the managing director of 1 st
Defendant had misled and/or confused the Plaintiff on the status of
the 1 st Defendant. The details of the 3 rd Defendant’s acts are as
follows:

i) At the material time, the 1 st Defendant had failed to inform the

Plaintiff in respect of its Winding Up on 18.02.2015;

ii) The 1 st Defendant had issued the payment voucher and letters
relating to the subcontract works to the Plaintiff despite the 1 st
Defendant being wound up on 18.02.2015;

iii) The 3 rd Defendant had stated in the Counterclaim that the 1 st

Defendant is an active company which is awarded with new
construction projects;

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iv) The 3 rd Defendant had also stated in the Counterclaim filed that
the 1 st Defendant has a 1 million paid up capital at the material
time; and

v) The 3 rd Defendant had also stated in his Affidavits in relation to

an earlier defendants’ Striking out Application (Enclosure 16)
that he is authorised to affirm the Affidavits on behalf of the 1 st
Defendant despite the 1 st Defendant being already wound up on
18.02.2015.

[4] Furthermore, Gladys Lim Xuan Kwee (Gladys) who is the

director of the 2 nd Defendant which is interrelated with the 1 st
Defendant and Lee Chin Kian (Lee) who is the Commercial and
Finance manager of the 1 st Defendant had also misled and confused
the Plaintiff on the status of the 1 st Defendant together with the 3 rd
Defendant (hereinafter referred as “the intended Defendants” in the
Joinder application filed as Enclosure 81)) with the details of their
actions being:

i) Gladys had stated in his Affidavit in relation to Plaintiff’s first

Amendment application in this suit (Enclosure 48) that she was
authorised to affirm the affidavit on behalf of the 1 st Defendant
despite the 1 st Defendant had already been wound up on
18.02.2015.;

ii) In the Plaintiff’s application for Mareva Injunction, Lee had also
stated in his Affidavit that he was authorised by the 1 st
Defendant to affirm his affidavit on behalf of the 1 st Defendant
and he further stated that the 1 st Defendant was not a dormant
company and it had a 1 million paid up capital; and

iii) In the transfer application filed (Enclosure 8), Lee also stated in
his affidavit that he was authorised by the 1 st Defendant to
affirm his affidavit on behalf of the 1 st Defendant.

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[5] All these have resulted in the Plaintiff being misled and
confused by the 3 rd Defendant on the status of the 1 st Defendant and
continued to finish the remaining subcontract works on or about
December 2015.

[6] The Plaintiff was only made
Defendant at very last minutes when
had informed this Honourable Court
the 1 st Defendant when the trial
25.09.2018 and 26.09.2018.
aware of the status of the 1 st
the solicitors for the Defendants
pertaining to the Winding up of
was about to commence on

[7] As a result, the Plaintiff have found it necessary to file this

application to amend the Amended Statement of Claim and also a
Joinder application (Enclosure 81) to bring an action against the 3 r d
Defendant and to now also include Gladys and Lee as parties for fraud
and conspiracy to defraud the Plaintiff.

Affidavit to oppose

[8] It is observed that the Affidavit in Reply to this application were

affirmed by the intended Defendants, Gladys and Lee to reply and
object to the Plaintiff’s Amendment application. Since this
Amendment application is only between the Plaintiff and the
Defendants, Gladys and Lee being non-parties to this action do not
have the locus standi to reply and/or object to this Amendment
application.

[9] In the case Maswin binti Ripit dan 5 yang lain v. New York
Empire Sdn Bhd & Anor [2016] MLJU 663, the Court of Appeal held
as follows:

“[24] In the instant case, it is not disputed that the

defendants/appellants have failed to specifically identify
themselves. Beside the deponent of the affidavits, none of the

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identities of the appellants were revealed. We agree that merely

filing the memorandum of appearance is insufficient for the
parties to have a right of hearing. Unless dispensed with by the
court, they must apply to be added as parties before they can
apply for any relief in the proceedings. Since there was no such
application, the defendants/appellants had no legal standing in
the proceedings. On this ground alone, the appeal must fail.”

[10] In the precedent of Ulimas Sdn Bhd v. Hi-Summit Construction

Sdn Bhd & Other Appeals [2017] 2 CLJ 636, the Federal Court also
held that:

“With respect, in our judgment, the learned Judge erred in

taking into account the views of Ms. Lim. This is because Ms.
Lim was not a party to the action and, therefore, had no locus
standi in the proceedings. And her views were only
communicated to the Court via counsel from the bar.”

[11] Grounded upon these authorities, this Court finds that Gladys
and Lee are not the rightful entity to reply or object to the Plaintiff’s
application for Amendment as they are not parties to this action at this
stage and therefore had no locus standi in the proceedings at this
stage.

[12] Hence, the Affidavit in Reply to this application is defective and

ought not to be considered by this Honourable Court in determining
Enclosure 83.

Guiding principles on Amendment application

[13] Order 20 rule 5 (1) Rules of Court 2012 provides:

“Amendment of writ or pleading with leave (0. 20, r. 5)

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(1) Subject to Order 15, rules 6, 6A, 7 and 8 and the following
provisions of this rule, the Court may at any stage of the
proceedings allow the plaintiff to amend his writ, or any party
to amend his pleading, on such terms as to costs or otherwise as
may be just and in such a manner, if any, as it may direct.”

[14] In Khairy Jamaluddin Abu Bakar v. Dato’ Seri Anwar bin

Ibrahim [2012] 6 MLJ 551, the Court of Appeal held at page 552 as
follows:

“Consideration of whether it would be unjust to grant leave to

amend required a balancing of the applying party’s need to
amend and the prejudice to the opposing party’s interest. An
application for leave to amend should generally be allowe d
provided it was bona tide and where the purpose of the
amendment would result in the true issues to be determined (see
para 13).”

[15] In the often quoted precedent of Yamaha Motor Co Ltd v.

Yamaha Malaysia Sdn Bhd & Ors [1983] 1 MLJ 213, the Federal
Court held at page 213 as follows:

“The general principle is that the court will allow such

amendments as will cause no injustice to the other parties.
Three basic questions should be considered to determine
whether injustice would or would not result (a) whether the
application was bona fide (b) whether the prejudice caused to
the other side can be compensated by costs and (c) whether the
amendments would not in effect turn the suit from one character
into a suit of another and inconsistent character ”

[16] Pursuant to those authorities, it can be discerned that the

principles with regard to an application for amendment of Writ and
statement of claim can be summarised as follows:

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a) Whether the amendment application will enable the real issues

between the parties to be determined and adjudicated;

b) Whether the amendment application causes prejudice to the

other side which cannot be compensated by costs;

c) Whether the balance of convenience favours the Plaintiff;

d) Whether the amendment application is made bona fide; and

e) Whether the amendments will have the effect of turning the suit
of one character into a suit of another and inconsistent
character.

Deliberations made upon those issues

a) Whether this amendment application will enable the real

issues between the parties to be determined and adjudicated

[17] On or about December 2016, the Plaintiff had commenced this

suit against the Defendants for the balance sum of RM 1,169,424.04
for the completed subcontract works by the Plaintiff.

[18] However, during the first of 2 days of trial fixed on 25.9.2018,

the Plaintiff was only then made aware of the 1 st Defendant’s status
after the solicitors for the Defendant informed this Honourable Court
on the Winding up of the 1 st Defendant on 18.02.2015.

[19] From this sequence it therefore is averred by the plaintiff that

the 3 rd Defendant and the intended Defendants had intentionally
misled, confused and defrauded the Plaintiff on the status of the 1 st
Defendant at all material times as stated above.

[20] As a result, the Plaintiff had continued to complete the

remaining subcontract works on or about December 2015 with the

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impression that the balance of the completed subcontract works will

be paid by the Defendants.

[21] The basis of this application is that at the material time, the 3 rd
Defendant as the managing director and majority shareholder of the
1 st Defendant ought to have and/or should have the knowledge of the
financial status of 1 st Defendant.

[22] Similarly, at the material time, Gladys and Lee, one as the
director of the 2 nd Defendant which is interrelated with 1 st Defendant
and the other being the manager of Finance and Commercial
department of the 1 st Defendant ought to have and/or should have the
knowledge of the financial status of 1 st Defendant.

[23] It is further averred by the plaintiff that it is highly

unreasonable and/or unacceptable that the 3 rd Defendant and intended
Defendants who held such position in the 1 st and 2 nd Defendants to
have no knowledge at all on the financial status especially the
Winding up of the 1 st Defendant at the material time.

[24] Even if the 3 rd Defendant and the intended Defendants had no

knowledge of the financial status of the 1 st Defendant, they ought to
and/or should check the financial status of the 1 st Defendant before
making the statements affirming the status of the 1 st defendant in their
Affidavit and Counterclaim which was filed in this Honourable Court
earlier.

[25] As such the intended Defendants and the 3 rd Defendants had also
misled and confused all party in the proceedings including this
Honourable Court on the status of the 1 st Defendant despite being
aware the Winding up of the 1 st Defendant on 18.02.2015 and this
raises the spectre of the 3 rd defendant attempting to defraud the
plaintiff into entering the sub-contract agreement with 1 st and 2 nd
defendants.

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[26] In Dato’ Tan Heng Chew v. Tan Kim Hor and another appeal
[2009] 5 MLJ 790, the Court of Appeal held at page 791 that:

“The proposed amendments should be allowed so that the true

issues in controversy between the parties could be resolved.
Since the plaintiff felt that his original statement of claim would
not lead to a decision of the real matter in controversy and the
law allows the amendment to be made to the pleadings, the
plaintiff should be allowed to have it corrected if it can be made
without any injustice to the defendant (see para 43). ”

[27] Based on the above authority, this Court finds that this
particular test pertaining to this amendment application has been
passed and ought to be allowed by this Honourable Court in order to
determine and adjudicate the true and/or real issues between the
Plaintiff and the Defendants in this action as to whether the 3 rd
Defendants and intended Defendants are directly and actively
involved in the alleged conspiracy and fraudulent acts.

b) Whether this amendment application causes prejudice to the

defendants which cannot be compensated by costs

[28] The amended facts pleaded in this Amendment application

which is in relation to the alleged fraudulent acts ought to be within
the 3 rd Defendant and the intended Defendants knowledge and thus
this Amendment application does not cause any prejudice to them.
This Amendment application together with the Joinder application are
filed by the Plaintiff as a consequence of the alleged non-disclosure of
the status of the 1 st defendant by the 3 rd Defendant and the intended
Defendants in earlier applications and affidavits filed in Court before
it was finally disclosed on the eve of trial.

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[29] The Defendants especially the 3 rd Defendant would not suffer

any prejudice as this Amendment application filed would actually give
the opportunity to present the actual position and knowledge of the
defendants.

[30] The Defendants have not shown any proof or evidence in their
Affidavit in Reply that the prejudice caused to the Defendants could
not be compensated with cost. Furthermore, the plaintiff have stated
their willingness to bear the costs of this application.

[31] In Suhaili bin Ismail v. Syarikat Sribima Sdn Bhd [2015] 6 MLJ
556, the Court of Appeal held at page 560 as follows:

“[9] Having regard to all the circumstances of the case, we

were of the view that the learned judge did not exercise his
discretion wrongly in allowing the amendments. Further, no
prejudice had been caused to the appellant and in any event this
is certainly not a case where the appellant could not be
compensated by an appropriate order of costs. It was for these
reasons that we dismissed the appeal.”

c) Whether the balance of convenience is in favour of the

Plaintiff

[32] The 3 rd Defendant and the intended Defendants is alleged to

have conspired to carry out the fraudulent acts to deceive, defraud and
misled the Plaintiff on the financial status of the 1 st Defendant so that
the Defendants may escape from their contractual obligation and
liabilities.

[33] Given this averment, in the event the Plaintiff is not allowed to
claim against the 3 rd Defendant and the intended Defendants for their
fraudulent acts, the Plaintiff can be deemed to suffer serious prejudice
which could not be compensated by cost.

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[34] On the other hand, if this amendment application is allowed the

Defendants would not suffer any prejudice as they would have the
opportunity to better state their position and they can be compensated
with cost for their endeavours.

[35] In the case of Khairy Jamaluddin Abu Bakar v. Dato’ Seri

Anwar bin Ibrahim [2012] 6 MLJ 551, the Court of Appeal held at
page 552 as follows:

“Consideration of whether it would be unjust to grant leave to

amend required a balancing of the applying party ’s need to
amend and the prejudice to the opposing party ’s interest.”

[36] Based on the above authority and the consideration made, the
Court is of the opinion that the balance of convenience is in favour of
the Plaintiff and therefore this amendment application ought to be
allowed by this Honourable Court.

d) Whether this Amendment Application is made bona tide

[37] The Court notes that this Amendment application together the
Joinder application was filed immediately after the Plaintiff was made
aware of the financial status of the 1 st Defendant during the trial date
on 25.9.2018.

[38] Hence, there is no issue of delay on the part of the Plaintiff in

filing this Amendment application and the Joinder application.

[39] Further, this Amendment application together the Joinder

application is filed by the Plaintiff due to the alleged fraudulent acts
of the 3 rd Defendant and the intended Defendants as discussed above.
Thus, based on the above reasons, this Court finds that this
Amendment application is made bona fide in order to determine and
adjudicate the real issues between the parties.

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e) Whether the amendments will have the effect of turning the

suit of one character into a suit of another and inconsistent
character.

[40] The main relief sought by the Plaintiff against the Defendants in
the Amended Statement of Claim which is for the unpaid balance sum
of the completed subcontract works by the Plaintiff still remains
unchanged in the proposed amendments.

[41] The Plaintiff is merely seeking additional damages which are

exemplary damages and aggravated damages against the 3 rd Defendant
and the intended Defendants and this is upon the averment that the
Plaintiff was misled and confused by the 3 rd Defendant and the
intended Defendants at all material times.

[42] The new causes of action of fraud and conspiracy to defraud

stated in the proposed amendments arose at the beginning of the
transaction between the Plaintiff and the Defendants which was
already pleaded in the Amendment Statement of Claim.

[43] However, given the position taken by the 3 rd Defendant and the
intended Defendant at that stage of the proceeding pertaining to the
status of the 1 st defendant therefore the facts relating to fraud and
conspiracy to defraud were not expressly pointed out in the Amended
Statement of Claim.

[44] Thus, although there are new causes of action which are for
fraud and conspiracy to defraud stated in the proposed amendments,
they do not change the character of this action from its initial stage.

[45] They are merely adding to the causes of action which concerned
the same parties and which involve substantially the same facts and
arose out of the same transaction.

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[46] In Yamaha Motor Co Ltd v. Yamaha Malaysia Sdn Bhd & Ors
[1983] 1 MLJ 213, it was held that:

“... whether the amendments would not in effect turn the suit
from one character into a suit of another and inconsistent
character. (See Mal/al’s Supreme Court Practice page 342). If
the answers are in the affirmative, an application for
amendment should be allowed at any stage of the proceedings
particularly before trial, even if the effect of the amendment
would be to add or substitute a new cause of action, provided
the new cause of action arises out of the same facts or
substantially the same facts as a cause of action in respect of
which relief has already been claimed in the original statement
of claim.”

[47] Guided by this authority, this Court opines that the proposed
amendments do not change the character of the suit.

Conclusion

[48] Based upon the stated deliberations and authorities, this Court is
of the considered opinion that Plaintiff’s application should be
allowed as the Plaintiff had satisfied all the requirements provided in
the abovementioned authorities.

[49] In the circumstances, the plaintiff’s application to amend the

Writ and Amended Statement of Claim is hereby allowe

Dated: 3 APRIL 2019

(AZMI ABDULLAH)
Judicial Comissioner
High Court of Malaya Penang

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COUNSEL:

For the plaintiff - Mureli Navaratnam & Felix Lim; M/s Mureli
Navaratnam
Advocates & Solicitors
BishopsGate, Tingkat 3,
17 Lebuh Bishop,
10200 Georgetown, Pulau Pinang.

For the defendants - Syed Afiq & John Khoo; M/s Ismail, Khoo &
Associates
Advocates & Solicitors
Level 4, Unit 9-11, Premier Centre,
No.253-G Jalan Burmah, 10350 Pulau Pinang.

Case(s) referred to:

Maswin binti Ripit dan 5 yang lain v. New York Empire Sdn Bhd &
Anor [2016] MLJU 663

Ulimas Sdn Bhd v. Hi-Summit Construction Sdn Bhd & Other Appeals
[2017] 2 CLJ 636

Khairy Jamaluddin Abu Bakar v. Dato' Seri Anwar bin Ibrahim

[2012] 6 MLJ 551

Yamaha Motor Co Ltd v. Yamaha Malaysia Sdn Bhd & Ors [1983] 1
MLJ 213

Dato' Tan Heng Chew v. Tan Kim Hor and another appeal [2009] 5
MLJ 790

Suhaili bin Ismail v. Syarikat Sribima Sdn Bhd [2015] 6 MLJ 556

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Legislation referred to:

Rules of Court 2012, O. 20 r. 5 (1)

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