Lavania & Balan Chambers

Say ‘A’ alleges that he has been defrauded by ‘B’ and ‘C’ who have acted in concert to injure ‘A’. In essence, the allegation is one of conspiracy. However, whilst the evidence may point towards ‘B’ and ‘C’ conspiring amongst themselves, it is not always the case that “A” will succeed in recovering damages. An important issue that should be at the forefront of a prospective Plaintiff’s mind is what are the pre-requisites that one has to satisfy in framing a cause of action for conspiracy to injure. This article will highlight some of the key considerations that a prospective plaintiff ought to bear in mind per the recent High Court decision by Liza Chan JC in Tawfique Hasan Chowdhury v BWFW Medic Sdn Bhd & Ors [2022] MLJU 1246.

The Mutually Exclusive Categories of Conspiracy

There are two categories of actionable civil conspiracy; conspiracy to injure by lawful means and conspiracy to injure by unlawful means. As they suggest, these categories differ primarily on the basis of whether the acts of the co-conspirators complained of are lawful or unlawful.

Where the conspiracy alleged involves a lawful act, the plaintiff has the additional burden of proving that the predominant purpose of the co-conspirators was to injure the plaintiff. In contrast, where the acts involved are unlawful, whilst intention to injure must still be proven, it need not be the predominant purpose.

It follows that the acts involved in the conspiracy can only either be lawful or unlawful, and not both (Tekital Sdn Bhd v Sarina bt Kamaludin & Ors [2012] 8 MLJ 734 per Nallini Pathmanathan J as her Ladyship then was). Logically then, the two categories of civil conspiracy are mutually exclusive of each other. Thus, it is now fairly settled that in an action for conspiracy, the type of conspiracy must be specifically pleaded together with its respective elements. A failure to do so would render the pleadings defective and liable to be struck out as observed in Tawfique Hasan Chowdhury.

Pleading Conspiracy

An allegation of conspiracy must be substantiated with facts and all attendant particulars giving rise to such an allegation. The High Court in the oft-cited case of Repco (M) Sdn Bhd v Tan Toh Fatt & Ors [2013] 7 MLJ 408 held as follows:

“It is settled law that the assertion of conspiracy requires the strictest pleading and must be supported by full particulars. It is also settled law that parties are bound by their pleadings and shall not adduce any evidence for issues which had not been pleaded. It is trite that unless particulars of conspiracy are specifically pleaded, no evidence can be led on them”

Specifically, the claim must contain facts to satisfy every element of a cause of action in conspiracy, whether lawful or unlawful. The following must be pleaded:

1. whether the claim is founded in lawful or unlawful means conspiracy;
2. an agreement between two or more persons;
3. an agreement for the purpose and intent of injuring the plaintiff;
4. that there was a predominant purpose to injure the plaintiff (in the case of a lawful means conspiracy);
5. the acts carried out pursuant to the said agreement; and
6. the damage caused to the plaintiff as a result of such acts.

Facts vs Particulars

A unique aspect of the decision in Tawfique Hasan Chowdhury was the distinction that her Ladyship Liza Chan JC drew between the pleading of facts as against particulars in the body of a claim. Referring to the decision of the English Court of Appeal in Pinson v Lloyds and National Provincial Foreign Bank Ltd [1941] 2 KB 72, her Ladyship opined that the requisite elements and facts giving rise to a cause of action must be encapsulated within the main body of the claim and not in the particulars. The following dicta of Scott LJ in Pinson is instructive:

“The proper function of particulars is not to state the material facts omitted from the statement of claim in order, by filling the gaps, to make good an inherently bad pleading, however common that pernicious practice may have become.”

Conclusion

In light of the decision in Tawfique Hassan Chowdury, the approach of the Malaysian Courts at least in the context of civil actions for conspiracy, seem to lean in favour of ensuring all material facts giving rise to the specific category of conspiracy and the requisite elements thereunder are set out with clarity.

Having discussed the fundamental principles in mounting an action for conspiracy, in Part II of this series, “Actions in Conspiracy” we will explore actions in conspiracy vis-à-vis company disputes in particular, the concept that a company has a separate legal personality from that of its directors.

 

This article is authored by Mavin Thillainathan (Partner) and Amitaesh Thevananthan (Pupil) of the Commercial Litigation Practice of Lavania & Balan Chambers. It contains general information only. The contents are not intended to constitute legal advice on any specific matter nor is it an expression of legal opinion and should not be relied upon as such.