21 June 2008
News Release
Turf Club challenges court action by businessmen over move to Batu Kawan.
PENANG (June 21, 2008): The Penang Turf Club (PTC) has moved to strike
out a suit filed against its committee members by two businessmen over
the proposed relocation of the club to Batu Kawan.
A statement of defence filed by lawyers for the club on June 19 described
the suit by Tan Sri Tan Kok Ping and Datuk Lee Ah Hoe @ Lee Choon Hoe
as without merit and asked that it be dismissed with costs.
The duo has alleged in their suit on May 23 that the nine committee
members had breached their obligations as office-bearers when they executed
three agreements with developer Abad Naluri Sdn Bhd to redevelop the
club land at Jalan Batu Gantong and build an ultra modern racecourse,
the Penang International Equestrian Centre (PIEC), in Batu Kawan.
“The plaintiffs' action is brought in bad faith and maliciously
without reasonable and proper cause, and, with the ulterior motive of
damaging the credibility and reputation of the committee members and
senior management of the PTC, rather than furthering any legitimate
interest of the PTC and its members,” the statement of defence
said.
The statement of defence also noted that Tan has lodged a police report
against the committee on May 8, this year, and claimed that the report
was an attempt to “intimidate the committee to terminate the agreement
with Abad Naluri”.
It stated that the report was lodged to enable Tan to push through his
proposal to “develop bungalow units for sale at the club land
and to use the profits from the sale to build a new racecourse at Batu
Kawan’’.
This proposal was made known to some club members at PTC's AGM on April
7.
The statement of defence noted that before the start of the AGM, Tan
met two of the nine defendants, Dato Seri Teh Choon Beng and Dato Dr
Henry Ooi Kwee Lim, to convince them of the proposal to develop bungalow
units for sale.
The statement also noted that Tan and Lee had remained silent for five
years though they were fully aware of the preliminary agreement between
PTC and Abad Naluri and that the latter had commenced initial ground
work for the construction of the PIEC.
“The plaintiffs are therefore barred by laches (delay in exerting
legal rights) from claiming the alleged or any relief against the defendants,”
it stated.
The statement of defence also stated that contrary to the plaintiff's
contention, the relevant agreements (related to the sale of the club
land) were structured so that PTC “would stand to gain financially”
in the event Abad Naluri breached its obligations.
The statement noted that the sale of the club land to Abad Naluri was
not a conventional sale transaction but involved an exchange of land
and a turnkey project in the construction of the PIEC.
It stated that the resolutions (passed at the club’s EGM on November
25, 2002) provided the committee members a general mandate to approach
and negotiate the sale and purchase agreement with Abad Naluri.
The statement also noted that the committee members and senior management
of the PTC had acted in good faith and on the advice of the PTC’s
legal advisers for the purpose of promoting the “wishes and interests
of the PTC and its members” and in accordance with the Resolutions
passed at the EGM of November 25, 2002.
The statement noted that the supplemental agreement signed on April
1 was to impose a definite time frame for the developer to complete
construction of the PIEC, failing which the PTC could terminate the
agreement.
It noted the terms of the supplemental agreement imposed, among others,
were that;
• Abad Naluri shall complete construction works of the PIEC up
to the value of RM165 million within 24 months of the date of the supplemental
agreement,
• A RM10,000 daily penalty for each day of delay after the stipulated
period of 36 months,
• Abad Naluri shall pay to PTC a sum of RM2 million within 30
days of the agreement date. (Abad Naluri has since paid up.)
• In the event Abad Naluri breaches its obligation by failing
to start work or not providing the detailed proposed building plans,
the PTC shall forfeit the RM2 million but shall grant Abad Naluri a
further six months to commence work. This is provided Abad Naluri has
paid to PTC within seven working days a further sum of RM2.5 million.
The statement contended that on the outset, the plaintiffs have no right
of action or a maintainable cause of action with the following reasons.
The plaintiffs;
• are not entitled in law to sue in a representative capacity
on behalf of all the club members,
• have failed to obtain a representation order to claim to sue
in a representative capacity,
• do not show a same interest or a common grievance with the persons
on whose behalf they claim to sue,
• The present action is incompetent as it is instituted in breach
of the indoor management rule, citing the case study of Foss vs Harbottle,
• failed to address their grievance through domestic remedies
provided by the club rules,
• have no proprietary interest in the assets of the club,
• have accepted RM20,000 paid under the preliminary agreement
and can not now object to it in law.
Background
Businessmen Tan Sri Tan Kok Ping and Datuk Lee Ah Hoe @ Lee Choon Hoe
sued nine PTC committee members over the proposed relocation of the
club to Batu Kawan on May 23. Tan and Lee, both are PTC members, have
alleged that the nine had breached their obligations as office-bearers
when they executed three agreements with Abad Naluri Sdn Bhd.
The two, who filed the suit in their own personal capacity and on behalf
of other PTC members, named club president Datuk Ong Eng Khuan and seven
of the committee's ordinary members Datuk Robert Chan Woot Khoon, Datuk
Dr Henry Ooi Kwee Lim, Oon Chong Kie, John Alexander Rodgers, Tan Phaik
Guan, Datuk Seri Teh Choon Beng and Ch'ng Chin Gee as defendants.
Former committee member Seow Chin was also named as defendant because
he was a committee member at the time of the alleged execution of the
agreements. Former club general manager and secretary Muhammed Rizal
Abdullah, who is now PTC's consultant, financial controller Tan Hock
Lim and assistant general manager and present club secretary Leow Khin
Ming were also named as defendants.