List S.P.A. v 1. ) YONG CHEE HOW 2. ) Suruhanjaya Syarikat Malaysia (SSM)

Case Significance

A pre-action discovery order under Order 24 rule 7A over an alleged unauthorised share transfer, granted as relevant and necessary and not a fishing expedition, with a verifying affidavit directed.

This High Court decision concerns an application for pre-action discovery under Order 24 rule 7A of the Rules of Court 2012, brought by a foreign company against an individual first defendant and the Companies Commission of Malaysia as second defendant. Pre-action discovery allows a prospective plaintiff to obtain documents before commencing proceedings, so that it can decide whether it has a viable claim; it is not a licence to trawl through an opponent's papers in the hope of finding one. The applicant's concern was an alleged unauthorised transfer of shares, and it sought documents to determine whether a genuine legal claim existed.

The Court's task was to weigh the competing considerations that govern this jurisdiction. On one hand, pre-action discovery must be necessary — the documents sought must be relevant to determining whether a viable cause of action exists — and the applicant must show more than idle curiosity. On the other hand, the court guards against the procedure being used as a "fishing expedition", or in a manner that is invasive or oppressive to the respondent. Here the documents sought were confined to those bearing on the alleged unauthorised share transfer, and the second defendant, the Companies Commission, did not oppose the application, being the custodian of the relevant statutory records.

The Court was satisfied that the documents were relevant and necessary to enable the applicant to decide whether it had a viable claim, that the application was not a fishing expedition, and that it was neither invasive nor oppressive. It allowed the application and ordered the first defendant to give discovery of the documents, or those within the class described, and to file an affidavit within fourteen days verifying whether the documents were in his possession, custody or power, with costs of RM5,000 payable by the first defendant to the applicant. The judgment is a useful illustration of the boundaries of pre-action discovery under Order 24 rule 7A — the balance between enabling a prospective litigant to assess a claim and preventing an oppressive or speculative demand for documents.