MACRO RESOURCES SDN BHD v 1. ) TAN SHIE KHAI 2. ) HO SUE LENG 3. ) TAM AH CHAI @ TAM YOKE KEE 4. ) SAHIMI BIN AHMAD 5. ) HORNTIAN GROUP SDN. BHD. 6. ) POH CHIN CHYE (Beramal di Tetuan C C Poh & Co yang Mempunyai Pendaftaran No.AF 1415) 7. ) LIM MOI YOKE (Beramal di Skrin Corporate Services Sdn Bhd yang Mempunyai Syarikat No.636114-T)

Case Significance

Illustrates the striking out of a fraudulent-trading claim under Section 540 of the Companies Act 2016 as plainly time-barred, where the plaintiff sat on its rights and limitation was not postponed by fraud under Section 29 of the Limitation Act 1953.

This High Court decision at Shah Alam concerns the striking out of a fraudulent-trading claim against multiple defendants on the ground of limitation. The plaintiff, Macro Resources Sdn Bhd, had sued former directors, a corporate defendant, and professional advisers, including an auditor and a company secretary, alleging fraudulent trading under Section 540 of the Companies Act 2016 arising out of a joint-venture project, together with a claim in unjust enrichment. Four defendants applied to strike out the writ and statement of claim under Order 18 rule 19(1)(a), (b) and (d) of the Rules of Court 2012, and the applications were heard together. The court considered whether the claim disclosed a sustainable case of fraudulent trading, whether it was time-barred, and whether the limitation period was postponed by fraud under Section 29 of the Limitation Act 1953. In relation to the professional defendants, it examined whether the company secretary had assisted the alleged fraud through preparing resolutions for the declaration of a dividend and the change of directors, and whether the auditor had assisted through auditing the financial statements. The court held that substance prevails over form and that the voluminous affidavits and exhibits filed did not, by their bulk, establish a triable issue; what mattered was the truth of the case tested against undisputed contemporaneous documents. On the material before it, the court concluded that the plaintiff's claim was time-barred, the plaintiff having sat on its rights, and that the limitation period was not postponed by any fraud so as to save the claim. Finding it plain and obvious that the claim was unsustainable, the court allowed the striking-out applications and struck out the plaintiff's suit against the relevant defendants. The judgment is a useful illustration of a fraudulent-trading claim being struck out as plainly time-barred where limitation is not postponed by fraud.