“K” Line Logistics (Malaysia) Sdn. Bhd. v Team Décor Toolings Sdn. Bhd., 22-09-2010

• Judge: Hanipah binti Farikullah
• Judgment Date: 22 September 2010
• Court: High Court (Malaysia)
• Record Number: D-22-472-2009

IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR

(COMMERCIAL DIVISION)

SUIT NO. D-22-472-2009

BETWEEN

“K” LINE LOGISTICS (MALAYSIA) SDN BHD

(No Syarikat : 177799-U) … PLAINTIFF

AND

TEAM DÉCOR TOOLINGS SDN BHD

(No Syarikat : 526681-T) … DEFENDANT

GROUNDS OF DECISION

1. This is my grounds of decision on the plaintiff’s application (Enclosure 53) to cross-examine the deponents of the affidavits of the defendants namely, Zubeda binti Ali Hussein, the company’s Secretary of the defendant and Abu Samat bin Mohd Amin, the director of the defendant. This application is made pursuant to Order 38 rule 2(3) and/or the inherent jurisdiction of the court.

Background Facts

2. On 13.3.2009, the plaintiff obtained an ex-parte Mareva Injunction Order. On 22.6.2009, the court maintained the ex-parte Mareva Injunction Order and the defendant filed an appeal to the Court of Appeal against the said Order, which is pending hearing at the Court of Appeal.

3. The defendant’s affidavit pursuant to the Mareva Order dated 13.3.2009 was affirmed by one Zubeda binti Ali Hussein, the defendant’s company Secretary. Her affidavits states that the defendant’s assets are as follows :

1. The value of its inventory is RM18,751.10 for financial year ending 31.7.2007;

2. The defendant owns office appliances and fittings;

3. The defendant owns machines (with a list of the same attached);

4. She was unable to confirm the monies held by the defendant because “yang sama masih belum diperolehi oleh syarikat defendant”.

4. Further the defendant’s affidavit pursuant to the Mareva Order dated 22.6.2009 was also affirmed by Encik Abu Samat bin Mohd Amin, one of the two remaining directors of the defendant. His affidavit merely states that the value of the defendant’s inventory is RM18,751.10 for financial year ending 31.7.2007. In this regard, he confirmed the contents of Zubeda’s affidavit but said that the accounts cannot be prepared and that the defendant’s representative has yet to provide him with the list of assets held by the defendant.

5. Counsel for the plaintiff contends that it is necessary to cross-examine the company’s Secretary and the director of the company as the defendant failed to make full disclosure, having only disclosed its inventory as at 31.7.2007 and not as at 13.3.2009 as required by the court’s order and that the value declared was only RM18,751.10 whereas its financial statement stated that the defendant owned RM2,813,124.00 worth of assets.

6. In reply, counsel for the defendant submitted that the court has no jurisdiction to make ancillary orders as sought in the application under (Enclosure 53) as there is no express provision in the law that enable the court to do so.

Decision

7. In the case of Poly Electronic v Electrical (M) Sdn Bhd v Daewoo Corporation [2003] 6 CLJ 72 a similar issue arose. It was held in that case that the court has power under its inherent jurisdiction to make an order in support of the Mareva, for example that a defendant discloses on affidavit his assets. The reason is that without such an order the Mareva itself might be in effective because it does not bite on sufficient assets as these have been skillfully hidden from the plaintiff.

8. Further the court in the case of Poly Electronic (supra) states at page 82 :

“It should be noted that such an order is not to be used to police the Mareva to see if there has been a breach. Its purpose is to make effective the order by establishing the defendant’s assets Ackner LJ in AJ Bekhor & Co Ltd v Bilton said ([1981]) 1 QB 923 at p. 940; the better way to ensure compliance with a Mareva is to seek an order that the defendant be cross-examined on his affidavits, under Order 38, r.2, or that any...