NG KWONG FAI v 1. ) NG CHEE YEW SDN. BHD. 2. ) NG KWONG WAH @ PAUL NG 3. ) TEH PO TAN

Case Significance

Illustrates that a long-delayed shareholding claim may be struck out under Order 18 rule 19 as both time-barred under the Limitation Act 1953 and barred by res judicata, where an earlier proceeding between the same parties produced a final finding that the claim was time-barred.

This High Court decision at Seremban concerns an application by the second and third defendants to strike out the plaintiff's writ and statement of claim under Order 18 rule 19(1)(a), (b) and (d) of the Rules of Court 2012. The plaintiff had sued a family company and two of its directors, one of whom was also sued as the administrator of a deceased's estate, claiming that he was the rightful owner of a 24.75% shareholding in the company and seeking, among other things, a declaration that the transfer of those shares to others was void, having been effected through forgery and false declarations.

The defendants sought to strike out the claim on two principal grounds: that it was time-barred, the plaintiff having delayed for more than three decades in asserting his rights, so that his sleeping on his rights amounted to an abuse of process; and that it was barred by res judicata, because the plaintiff had earlier brought an originating summons for discovery which the High Court had dismissed on the footing that his substantive claim to the shares was already time-barred. The court identified the issues as whether the claim was statute-barred under the Limitation Act 1953, whether res judicata applied following the earlier decision, and whether the claim disclosed a reasonable cause of action or was an abuse of process.

The court held that the plaintiff's claim was plainly time-barred and that res judicata applied: the earlier proceeding, though nominally for discovery, had resulted in a final finding by a competent court that the plaintiff no longer had any interest in the company and that his claim was time-barred, and it involved the same parties, issues and cause of action. Commencing a fresh action in the face of that finding was an abuse of process. The court accordingly allowed the application and struck out the writ and statement of claim with costs. The judgment illustrates the operation of limitation and res judicata as a bar to a long-delayed shareholding claim.