Tey Por Yee & Anor v Protasco Berhad

Appellant(s): Xxxx

Respondent(s): Protasco Bhd

• YA Datuk Ravinthran a/l Paramaguru
• Dato' Dr. Choo Kah Sing
• YA Dato' Ahmad Fairuz bin Zainol Abidin

• The respondent company alleged it was defrauded of USD27 million by two former directors (the appellants) who induced it to invest in an Indonesian oil and gas venture via two share sale agreements (SPA 1 and SPA 2) without disclosing their beneficial ownership and control of the counterparty companies and the entity providing security for the investment.
• The respondent claimed the appellants breached fiduciary and statutory duties under sections 131 and 132 of the Companies Act 1965, and conspired to defraud it by causing misappropriation of the invested funds through a web of related corporate vehicles and nominees.
• After a 42-day trial involving 14 witnesses for the respondent, the High Court found in favour of the respondent, holding that the appellants were the beneficial owners and controllers of the relevant companies and had caused the diversion of funds for their own benefit, entering judgment for RM84,643,170 (equivalent to USD27 million).

• Whether the trial judge's brief oral grounds delivered at the conclusion of trial (as opposed to the detailed written judgment issued two months later) constituted the "true" or operative judgment, and whether the later written judgment breached the functus officio principle or natural justice.
• Whether the respondent's pleadings provided sufficient particulars to support claims of fraud, deception, breach of fiduciary duty and conspiracy, and whether evidence led at trial constituted an impermissible "radical departure" from the pleaded case.
• Whether the section 112 Criminal Procedure Code statements (obtained during police investigation and previously the subject of an expunging consent order) were properly admitted and relied upon by the trial judge, and whether the High Court's findings of fact were supportable on appeal.

• The Court of Appeal held that brief oral grounds delivered at the conclusion of a lengthy, multi-issue trial are not necessarily the full or operative judgment; they may properly be followed by comprehensive written grounds without breaching functus officio, provided the oral grounds were expressly qualified as preliminary/brief, as occurred here.
• The Court found the pleadings, read holistically, gave the appellants sufficient notice of the case of fraud, non-disclosure of beneficial interests, and misappropriation to meet, and that no radical departure from the pleaded case had occurred; the section 112 statements were properly admissible given the terms of the consent order and established authority that such statements are not absolutely privileged in civil proceedings.
• The Court declined to disturb the trial judge's findings of fact, holding they were not perverse or against the weight of evidence, and unanimously dismissed both the appellants' appeal (with costs of RM150,000) and the respondent's cross-appeal for exemplary and aggravated damages (with no order as to costs).