XORIX SDN. BHD. (PENERIMA & PENGURUS DILANTIK) v JARDIN PHARMA BERHAD

Case Significance

Illustrates the limits of declaratory relief under section 384 of the Companies Act 2016 and the courts' reluctance to resolve genuinely disputed factual questions by affidavit on an originating summons, particularly where the declarations sought are abstract or the applicant lacks privity.

This High Court decision in the Commercial Division at Kuala Lumpur concerns an application by originating summons for declaratory relief brought by receivers and managers under section 384 of the Companies Act 2016. The plaintiff, Xorix Sdn Bhd (through its appointed receivers and managers), sought declarations touching a tenancy of business premises, the appointment of the receivers and managers under debentures, and the rights of the parties in respect of assets said to be charged, as against the defendant, Jardin Pharma Berhad, which occupied the premises under a later tenancy granted by the landlord foundation. The court considered whether the questions posed were suitable for determination by declaratory relief on originating summons. It held that several of the declarations sought were non-justiciable, being framed in abstract, hypothetical, vague and broad terms rather than raising an actual legal controversy between the parties on which the court could rule; it observed that the plaintiff had no privity with the defendant's tenancy agreement and that the disputed matters of fact, including the conduct of business operations and whether the charged assets formed part of the premises, were inappropriate to determine on affidavit evidence alone. The court also had regard to the availability of conversion under Order 28 rule 8(1) of the Rules of Court 2012 and to the risk of a multiplicity of proceedings, duplication of judicial effort and forum fragmentation, given the several related matters already before the court. Concluding that the originating summons was an unsuitable vehicle for the relief sought, the court dismissed the application, with no order as to costs. The judgment is a useful illustration of the limits of declaratory relief under section 384 of the Companies Act 2016 and of the courts' reluctance to resolve genuinely disputed factual questions by affidavit on originating summons. The court emphasised that declaratory relief is a discretionary remedy directed at resolving live disputes about legal rights, and that it should not be deployed to obtain advisory or hypothetical pronouncements or to pre-empt questions better ventilated in the substantive proceedings already on foot.