The Board of Trustees of the Sabah, Seranum Sdn Bhd vs The Board of Trustees of Syed Kechik Foundation plus 10 others & Syed Salam Albukhary plus 4 others (MJLR 2009b9) David Wong,30/9/2009,SS

[K22-139-2002]

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Jurisdiction: MALAYSIA

IN THE HIGH COURT IN SABAH & SARAWAK

AT KOTA KINBALU

Parties:

1st Plaintiff: The Board of Trustees of the Sabah

Foundation

2nd Plaintiff: Seranum Sdn Bhd

11 Defendants: The Board of Trustees of Syed

Kechik Foundation plus 10 others

5 Discovery Defendants: Syed Salam Albukhary

plus 4 others

File Number:

K22-139-2002

Issue: Whether K22-139-2002 is ‘res judicata’ on account of

the outcome of the appeals to the Federal Court in

either or both K351/1979(the Zara Suit) and

K352/1979(the Banita Suit)?

Whether irrespective of the answer to (1), the claims in

K22-139-2002 are statute barred?

Whether the High Court of Sabah lacks jurisdiction to

hear and adjudicate this suit and if so whether the

High Court of Sabah is the forum conveniens to hear

and adjudicate?

Hearing Dates: 4 July 2009 and 13 July 2009

[K22-139-2002]

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Date of Decision: 30 July 2009

Judge: YA TUAN DAVID WONG DAK WAH

Representation: For Plaintiffs: Alex Decena with Wilson Lai

Messrs. Jayasuriya Kah & Co.

Kota Kinabalu, Sabah

For 1st 3rd -10th Defendants:

Sulaiman Abdullah with

Datin Sa’adah Aziz

Messrs. Lee & Aziz

Kota Kinabalu, Sabah

For 13th and 15th Defendants:

Datuk Douglas Lind

Messrs. Lind Willie Wong & Chin

Kota Kinabalu, Sabah

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GROUNDS OF DECISION

Introduction:

This suit is an offspring of Suit 351/1979(Zara Suit) and Suit 352/1979 (Banita

Suit). The backgrounds to the two suits have been set out by counsels for all

sides and I don’t intend to repeat them in my judgment. Suffice for me to say

that the cause of action in this case is premised on evidence adduced in the Zara

suit and Banita suit and they relate to events which had occurred in 1976 - 1978

Before me are applications by the 1st, 3rd to 10th defendant (represented by

Messrs Lee & Aziz) and 13th and 15 the defendant (represented by Lind Willie

Wong & Chin) to strike out the plaintiffs’ writ of summons and statement of

claim pursuant to Order 18 rule 19(1)(b) and/or (c) of the Rules of High Court

or alternatively under the inherent jurisdiction of this court. These applications

are being heard together as they involve similar issues which are these:

1. Whether this case is ‘res judicata’ on account of the outcome of the appeals to

the Federal Court in either or both K351/1979 and K352/1979?

2. Whether irrespective of the answer to (1), the claims in this case are statutebarred?

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3. Whether the High Court of Sabah lacks jurisdiction to hear and adjudicate this

suit and if so whether the High Court of Sabah is the forum conveniens to hear

and adjudicate?

Issue 3:

Whether the High Court of Sabah lacks jurisdiction to hear and

adjudicate this suit and if so whether the High Court of Sabah is the

forum conveniens to hear and adjudicate?

I shall deal with this issue first.

Counsel for the 1st, 3rd – 10th defendant contends that the court with the

jurisdiction to hear this case is the High Court of Malaya at Kuala Lumpur,

which is also the forum conveniens as all the defendants have their place of

business in West Malaysia

Counsel for plaintiff however contends that this court has the jurisdiction by

virtue of the fact the cause of action, that is the proprietary right to trace

emanating from the breach of trust by Syed Kechik, occurred in Sabah and

unless the defendants can show that the proceedings in Sabah is oppressive or

vexatious, the case should be tried in this court. As authority counsel relies on

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the case of Socite Nationale Industrielle Aerospatiale v Lee Kui Jak (1987) AC

871.

The first question which I need to determine is whether the High Court of

Sabah and Sarawak or the High Court of Malaya has the jurisdiction to hear this

matter. This requires me to look at sec 23(1) of the Courts of Judicature Act

1964 which provides as follows:

“23.(1) Subject to the limitations contained in Article 128 of the Constitution the

High Court shall have jurisdiction to try all civil proceedings where

(a) the cause of action arose, or

(b) the defendant or one of several defendants resides or has his place of

business, or

(c) the facts on which the proceedings are based exist or are alleged to have

occurred, or

(d) any land the ownership of which is disputed is situated within the local

jurisdiction of the court and notwithstanding anything contained in this

section in any case where all parties consent in writing within the local

jurisdiction of any other High Court.”

It is settled law that the paragraphs in sec 23(1) are to be read disjunctively. In

Sogelease Advance (Malaysia) Sdn Bhd v Kemajuan Tat Young Sdn Bhd &

Ors (1999) 5 CLJ 331, the court held that High Court of Malaya had jurisdiction

by virtue for paragraph (a) and the High Court of Sabah and Sarawak had

jurisdiction by virtue of paragraph (b). In the case before me I have no doubt

that the High Court of Malaya has jurisdiction by virtue of paragraph (b) as it is

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undisputed that all the defendants and their directors respectively have their

place of business and residence in Malaya. I also have no doubt that this court

also has jurisdiction by virtue of paragraph (a) as the cause of action emanates

from a breach of trust which had occurred in Sabah.

That being the case I will need to now determine the next question of ‘forum

non conveniens’ which had been alluded to by the Supreme Court in the case of

American Express Bank Ltd v Mohamad Toufic Al-Ozier & Anor (1995)1 CLJ

273 where Peh Swee Chin SCJ (as he then was) said:

As indicated, having such jurisdiction was not the end of the matter; the foreign

bank applied to set aside the leave granted ex parte earlier to issue and serve

the writ of summons out of jurisdiction. The High Court would have to consider, next,

to exercise its discretion on the doctrine of forum non conveniens as to whether to

allow or not, the application of the foreign bank, in this case, to set aside the leave to

issue and serve out of jurisdiction on the foreign bank granted earlier under O. 11 r.

1 of the RHC to the bank customers.

The doctrine of forum non conveniens appears to have originated in Scotland and has

finally found full acceptance by the House of Lords in Spiliada Maritime Corp v.

Consulax Ltd (The Spiliada) [1986] 3 All ER 843 after a series of decisions, as

described and set out so well in that very interesting and readable joint article by RH

Hickling and Assoc. Prof Wu Min Aun [1994] 3 MLJ xcvii. The main judgment in the

Spiliada was delivered by Lord Goff, who adopted the dictum of Lord Kinnear in Sim

v. Robinow [1892] 19 R (ct. of Sess.) 665, 668 as being the fundamental principle in

regard to this doctrine i.e. that “there is some other tribunal, having competent

jurisdiction, in which, the case may be tried more suitably for the interests of all

parties and for the ends of justice.” Lord Goff cautioned that the word “conveniens”

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in forum non conveniens meant suitability or appropriateness of the relevant

jurisdiction and not one of convenience. We are in entire agreement with the

fundamental principle so expressed.

I shall now apply the above principle to the facts before me.

For the 1st 3rd to 10th defendant, their main ground is simply that defendants and

directors of the same have their present places of business and residences

respectively in Kuala Lumpur. It is also submitted that the remaining witnesses

of record for the said defendants also reside in Kuala Lumpur. And if they are

required to defend this action in Kota Kinabalu they would be put to great cost,

expense and inconvenience as all of the said defendant’s witnesses (giving

evidence based on the said Defendants’ record) are based in Kuala Lumpur

and/or Petaling Jaya. This would also unfairly hamper the Defendants’ ability to

conduct a proper defence to the suit.

For the plaintiffs, counsel contends that the defendants had not shown that it

would be oppressive for the defendants to defend the case here. Furthermore it

would be more appropriate to have this action heard in the same jurisdiction as

the Zara and Banita suit.

Having weighted the evidence and submissions made by counsels, it is my

opinion that the more appropriate or convenient forum for this suit would be in

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the High Court of Malaya. My reasons are these. Though the foundation of this

suit relates to Datuk Syed Kechik’s breach of fiduciary duty which had

occurred in Sabah, the cause of action is, as counsel puts it, one of “proprietary

right to trace”. It is important that this distinction must be maintained. In

pursing this right to trace it is apparent that from the pleadings that the plaintiffs

rely substantially on the account records of the defendants. In my view there is

uncontroverted evidence that all these records are now (if they still exist bearing

in mind that the events are alleged to have happened in 1976 – 78) in the

locality of Kuala Lumpur and Petaling Jaya. None of the defendants or their

directors has any place of business or residence respectively in Kota Kinabalu.

In this regard I agree with what was stated by Lim Beng Choon J said in Sova

Sdn Bhd v Kasih Sayang Realty (1988) 2 MLJ 270:

“[Determining if the Court has jurisdiction to hear the matter] is not the end

of the matter since the defendants have also contended that this court is not the

proper or convenient forum to determine the dispute between the parties. To this

contention, I agree. It is quite obvious that in creating a branch of the High Court in

Malaya in each state, the legislature had two things in mind:

(i) to enable the parties of a civil suit to have easy access to a branch of the High

Court in Malaya located in a state where either the plaintiff or the defendant

resides. When a person is sued for breach of contract or for that matter a

tortious act when the breach or the tort was committed in the state where he

resides, it is certainly unreasonable to require him to travel all the way, say,

to Kuala Lumpur to defend himself. Apart from the expense incurred, the

defendant may have to remain in Kuala Lumpur perhaps one week to

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participate in the civil proceedings. No doubt he would be compensated in

terms of costs should he succeed in defending himself but the inconvenience

caused may outweigh the amount of costs awarded to him;

(ii) the obvious reason for the setting up of a branch of the High Court in Malaya

in every one of the 11 states is to facilitate the disposal of cases in Malaya and

to cut down, even if it is not yet possible to obliterate, the backlog of cases

pending in any one or more of the branches of such High Court.

For the reasons as stated above, I do not think that the present civil proceedings

should be dealt with by this court.”

Though the learned Judge was talking about the branches of the High Court in

Malaya, the principles are as applicable to this case as I had held that both High

Court of Sabah and Sarawak and High Court of Malaya have jurisdiction to

hear this case. As I stated earlier and also stated by counsel for the plaintiffs

during submission, the plaintiffs’ case rely substantially on the evidence of the

defendants and the discovery defendants and to require them to attend court in

Kota Kinabalu would in my view put the defendants to great costs and

inconvenience. In coming to my decision I am mindful of the fact that two of

the discovery defendants – 13th and 16th defendant – reside in Sabah. Be that as

it may they are only 2 out of the 16 defendants of the suit and in any event they

are only discovery witnesses.

What I need to decide now is the nature of the order to be made in view of my

finding that the forum conveniens is the High Court of Malaya. Counsel for the

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plaintiffs has conceded that the decision in Fung Beng Tiat v Marid

Construction Co (1997) 2 CLJ 1 is still good law and that is there is no power of

transfer of proceedings from the High Court of Sabah to the High Court of

Malaya by this court which means I have only one option and that is to strike

out the suit against the defendants.

Accordingly I allow the application of the 1st 3rd – 10th defendants and hereby

strike out the suit against them. As for costs, it is awarded to them provided that

this suit was filed after the defendants had moved their place of business to KL.

As for the discovery defendants, the case against them is automatically struck

out and as for costs, I award it to them as well but with the proviso that the

taxing master ought to take into consideration that the points raised by the

discovery defendants were not considered by the court in striking out this suit

plus the fact the issue of forum conveniens was not raised by them.

In view of my decision in issue 3, there is no necessity for me to deliberate on

whether this suit is barred by the Limitation Ordinance or affected by the

principle of res judicata.

(TUAN DAVID WONG DAK WAH)

Judge

Notice: This copy of the Court's Reasons for Judgment is subject to formal

revision.