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InsiderTAPS (15 May 2017)

Court of Appeal allows striking out on appeals by Neway’s former karaoke operator and its directors

Our Dispute Resolution team recently succeeded in striking out a suit for our clients, Tasik Pelangi Sdn Bhd (“Tasik Pelangi”) and five others including directors of Tasik Pelangi at the court of appeal. Tasik Pelangi, a former Neway Group karaoke operator, and its directors were sued for the tort of conspiracy by Tansco Teamworks Sdn Bhd (“Tansco”) for certain construction work carried out by the latter for Tasik Pelangi. Neway is one of the largest karaoke operators in the world with headquarters in Hong Kong.

Background

In early 2015, Tansco obtained a judgment against Tasik Pelangi vide Kuala Lumpur High Court Suit No. 22NCC-34-01/2014 (“Suit 34”). The Suit 34 judgment was enforced against Tasik Pelangi by way of, among others, a writ of seizure and sale on assets purportedly belonging to Tasik Pelangi. During the proceedings, third parties surfaced and laid claim over the assets. An interpleader summons was filed for the high court to determine the ownership of the assets (“interpleader proceedings”). While the interpleader proceedings were ongoing, Tansco commenced a fresh suit vide Kuala Lumpur High Court Suit No. 22NCC-419-12/2015 (“Suit 419”) against Tasik Pelangi and five others including two of Tasik Pelangi’s directors on the ground that the defendants had conspired to injure and/ or defraud Tansco by preventing the enforcement of the Suit 34 judgment.

High Court

In the high court, Tasik Pelangi and the other defendants applied to strike out Suit 419 on the grounds, amongst others, that Tansco had failed to disclose a reasonable cause of action for the tort of conspiracy and Tansco was in fact attempting to enter judgment in the same terms against Tasik Pelangi for the second time, leading to a duplicity of proceedings between Suit 419 and the interpleader proceedings. On 29.6.2016, the high court dismissed Tasik Pelangi and its directors’ applications with costs.

Appeal

The appeal centred on the issue of whether Suit 419 was a plain and obvious case which warrants a striking out. On 25.4.2017, the court of appeal allowed the striking out of Suit 419 wherein the court agreed with the defendants’ submission that there has been a duplicity of proceedings. In brief, the court of appeal held that there is duplicity of proceedings between Suit 419 and the interpleader proceedings as both proceedings were premised on the same set of facts and/or issues. The court of appeal was also of the view that Suit 419 was premature as there is no actual damage suffered by Tansco at this stage.

This is a considerable success for Tasik Pelangi and its directors as the Malaysian appellate court is usually slow in intervening with the findings of the court below especially in striking out cases.

Team

Our Dispute Resolution team represented Tasik Pelangi and its directors. Practice head Leonard Yeoh, led the team together with senior associate Yeoh Jit Wei. Leonard and associate Lincoln Seow, also acted as counsel for the solicitors of two of the directors.

Should you have any queries on the above or for more information on Tay & Partners Dispute Resolution Practice, please do not hesitate to get in touch with the following:

Leonard Yeoh
Partner, Head of Dispute Resolution
+603 2050 1973
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Cheah Soo Chuan
Partner
+603 2050 1987
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