BPD in Court

Our top notch lawyers are trail blazers in litigating complex legal issues. They have represented clients in hundreds of cases in the High Court, Court of Appeal and the Federal Court, many of which have been reported in the law journals. Here are the summaries of some of the significant and successful cases in the practice areas of our firm.
January 20, 2017

Tengku Dato’ Ibrahim Petra bin Tengku Indra Petra v Petra Perdana Bhd and Wong Fook Heng and Tiong Yong Kong v Petra Perdana Bhd [2018] 2 MLJ 177

Landmark Federal Court case on Power of Directors vs Shareholders
January 21, 2017

Pioneer Haven Sdn Bhd v Ho Hup Construction Co Bhd & Anor and other appeals [2012] 3 MLJ 616

The Court of Appeal found that a Joint Development Agreement, in respect of the primary land of the company, coupled with a Power of Attorney to the developer, did not amount to a disposal of a substantial portion of the company’s property within the meaning of s 132C of the Companies Act 1965 (thereby requiring prior shareholder approval). The Court of Appeal ruled that the “disposal” within the meaning of the Companies Act 1965 requires transfer of beneficial ownership, and not merely ceding control of the land to the developer. The Court of Appeal also set out the test for the directors duty to act in good faith, which was later adopted by the Federal Court in Tengku Dato’ Ibrahim Petra bin Tengku Indra Petra v Petra Perdana Bhd and Wong Fook Heng and Tiong Yong Kong v Petra Perdana Bhd [2018] 2 MLJ 177. Alvin Tang was co-counsel with Tan Sri Dr Muhammad Shafee Abdullah, and acted for Pioneer Haven, the developer.
March 20, 2017

Folin & Brothers Sdn Bhd (in liquidation) & Ors v Folin Food Processing Sdn Bhd & Ors [2011] 6 MLJ 585.

Undervaluation of Property and Shares Successfully Challenged The Court of Appeal held that the consent order to obtain an independent valuation of the shares of Folin Food was not followed and therefore, a fresh valuation exercise should be commenced to determine the fair value of the shares of Folin Food.(Fiona acted for Folin Brothers and the joint liquidators)
April 20, 2017

Kumpulan Perubatan (Johor) Sdn Bhd v. Dr Mohd Adnan Sulaiman & Anor [2015] 1 CLJ 471, Court of Appeal

The Facts The first and second respondents entered into a ‘Joint Venture Agreement Incorporating Shareholders Agreement’ (‘JVSA’) with the appellant, Kumpulan Perubatan Johor Sdn Bhd (‘KPJ’), a company involved in the running of private hospitals. The JVSA was entered into as to incorporate a limited liability company (‘Hospital Penawar Sdn Bhd’) to run a private hospital, Hospital Penawar (‘HP’).
May 20, 2017

Projeck Lebuhraya Usahasama Bhd v. Majlis Perbandaran Subang Jaya [2016] 9 CLJ 238.

Local Council Has No Jurisdiction Over Federal Roads The High Court held that MPSJ did not have jurisdiction over the toll booths operated by PLUS as the toll booths were operating on land that had been declared as federal roads by the Minister of Works. (Fiona acted for PLUS)
September 20, 2018

CIMB Investment Bank Bhd vs Ernst & Young & Anor Appeal [2014] 6 CLJ 438.

Auditors’ Duty of Care Extends to Company’s Investors The Court of Appeal held that auditors owe a duty of care to a licensed fund company’s investors when they perform statutory audits. The Court found the auditors to be professionally negligent in not detecting the fund company’s fraud in the management of the client’s funds. (Fiona acted for CIMB)
September 20, 2018

Nik Mohd Zain bin Haji Omar v Hwang-DBS Securities Sdn Bhd [2010] MLJ 234.

Investor Liable for Losses Incurred from Traded Shares The High Court held that an investor who had denied authorising the Remisier to buy shares was liable for the traded shares and consequently Hwang-DBS had the right to sell of the shares pledged as security to offset the losses incurred. (Fiona acted for the Remisier)
September 20, 2018

Stamford Holdings Sdn Bhd v Kerajaan Negeri Johor & Ors [1998] 1 MLJ 607.

State Government’s Acquisition of Land Revoked For Bad Faith The Court of Appeal found that compulsory acquisition of land could be challenged on bad faith and accordingly allowed the appeal by Stamford Holdings against the acquisition of its land by Kerajaan Negeri Johor. (Fiona acted for Stamford Holdings)
September 20, 2018

Lim Nyuk Foh v Datuk Zainal Abidin bin Haji Ahmad & Anor [2018] MLJU 800

A Verbal Contract is as Legally Binding as a Written One A contract can be created based on an oral representations  and the court will take into consideration the events and background leading to the formation of the contract. Further, the Court  would look into the intention of the parties in deducing whether there was an intention to create legal relations.
September 20, 2018

Sazean Engineering & Construction Sdn Bhd v Bumi Bersatu Resources Sdn Bhd – [2018] MLJU 839

Court of Appeal Rules on Effect of a Bankrupt Director in a 2 Director Company under the Companies Act, 1965
September 20, 2018

Nur Rasidah bt Jamaludin v Malayan Banking Bhd and other appeals [2018] 3 MLJ 127 Court of Appeal

Members/Officers of Trade Unions Have Immunity from Libel The Facts Five officers/members of the National Union of Bank Employees (‘NUBE’) were separately sued by Malayan Banking Bhd (‘MBB’) in the High Court for publicly making disparaging statements about the bank in connection with an alleged unfair labour practice that had become the subject of an on-going trade dispute between and MBB.
September 20, 2018

Kesatuan Pekerja-Pekerja Bukan Eksekutif Maybank Bhd v Kesatuan Kebangsaan Pekerja-Pekerja Bank & Anor [2018] 2 MLJ 590

Federal Court Upholds Trade Union’s Right to Be Heard The Federal Court held that the Director General of Trade Unions had a duty to consult with all relevant parties before making a decision whether to register a trade union under s 12 of the Trade Unions Act 1959.
September 20, 2018

Dato’ Low Mung Hua (in his personal capacity and as representative of the members of the Eng Bee family) v Banting Hock Hin Estate Co Sdn Bhd & 8 Ors [2003] 6 AMR 245.

Minority Shareholder Fails in Bid to Prove Oppression by Majority Shareholders The High Court dismissed the interim injunction and petition by Dato’ Low Mung Hua that the Board of Directors of Banting Hock Hin Estate acted oppressively in passing certain resolutions and disregarded his legitimate expectations for management control of the company. (Alvin acted for the 2nd, 3rd, 8th and 9th respondents)
September 20, 2018

Kamuja Hartamas Sdn Bhd (formerly known as Aras Suasana Sdn Bhd) vs Bank Kerjasama Rakyat Malaysia Bhd [2017] 3 MLJ 668.

Unlawful Termination of Financing for Development Project The Court of Appeal decided that the bridging loan facility awarded by Bank Kerjasama to the developer of the project, Kamuja Hartamas (KH) had been wrongfully terminated and therefore KH was entitled to damages for the wrongful termination. (Fiona acted for KH)
November 12, 2018

Wrongdoer control: no longer just a numbers game

Overview It has long been recognised that where wrongdoers control a company and thus prevent it from bringing an action, the courts will allow shareholders to do so on the company’s behalf in order to obtain redress by way of a derivative action. While the courts have recognised a range of scenarios where wrongdoers can be said to control the company (thus preventing the company from suing for its own benefit), can this concept of wrongdoer control apply where there is a deadlock at both the board and shareholder level obfuscating any clear majority or minority in the company? The Federal Court answered this question in the affirmative in Perak Integrated Networks Services Sdn Bhd v Urban Domain Sdn Bhd.(1) This decision has provided a pragmatic solution to resolve the corporate impasses frequently faced by companies where their shareholders and boards of directors are split equally. Facts Urban Domain Sdn Bhd and Perak Integrated Network Services Sdn Bhd each held 50% of the shares in PINS OSC & Maintenance Services – a special purpose vehicle formed to construct and maintain telecoms towers. The board of directors consisted of only two directors, appointed by each of the shareholders, respectively. Disputes arose over, among other things, the entitlement to maintenance fees and other payments owed to PINS from several telecoms providers and Perak Integrated. Subsequently, Perak Integrated took control over all of PIN’s books and accounts and allegedly deprived PINS of funds to sustain its operations. As a result, Urban Domain, in its capacity as a shareholder and for the benefit of PINS, commenced a common law derivative action against Perak Integrated and its appointed director for breach of contract and fiduciary duties, respectively. Decision Urban Domain succeeded at first instance and, on appeal, a preliminary issue was raised as to whether […]
December 2, 2018

Shencourt Sdn Bhd (in liquidation) (in receivership) v Shencourt Properties Sdn Bhd (in liquidation) [2019] MLJU 31

The Court of Appeal removed both of the joint liquidators of Shencourt Properties from office since the liquidation of the company had been rendered dysfunctional due to the joint liquidators’ inability and/or unwillingness to work together for the benefit of the company.  2 Alvin Tang acted for Shencourt Sdn Bhd, the applicant contributory.
January 1, 2019

Per: Helen Seah; Ex-Parte: Ambank(M) Berhad [2011] 1 LNS 175

The High Court held that failure to prove authorisation to attest the Creditors Petition renders the Creditors Petition defective. Accordingly, the High Court set aside the Creditors Petition, Adjudication Order and Receiving Order. Shamalah Selvarajah acted for the Judgment Debtor, Helen Seah.
January 2, 2019

Dato Muhammad Hafidz Nuruddin v Ramlan Juki & Anor [2015] 1 LNS 492

The Plaintiff brought a libel action against the Defendants. The High Court held that although the statement was found to be defamatory against the Plaintiff, the Defendants were protected by defence of qualified privilege as there was a common and corresponding interest between the Defendants and to whom the statement was made. Accordingly, the Plaintiff’s claim was dismissed with costs. Shamalah Selvarajah acted for the Defendants
January 3, 2019

Tebing Aur Sdn Bhd v WWE Holdings Bhd [2012] 1 LNS 744

The High Court allowed the Plaintiff’s claim for total value of works executed at the construction site based on a written agreement executed between parties. Shamalah Selvarajah acted for the Plaintiff, Tebing Aur Sdn Bhd
February 18, 2019

Exclusion clauses – abuse of freedom of contract?

Overview It is common for large conglomerates and financial institutions to require customers to execute agreements with standard boilerplate terms and conditions. Commercial reality dictates that these standard terms and conditions are usually largely one-sided, favouring the corporations by virtue of the unequal bargaining power between the parties. The fine print of these boilerplate terms and conditions typically contains an exclusion clause which seeks to restrict or limit the liability of the corporations. Such terms, however onerous, must be accepted if the customer wishes to transact with the corporation. However, what happens when these corporations default under the agreement and then seek refuge behind the exclusion clause to disclaim liability? In the recent watershed decision of CIMB Bank Bhd v Anthony Lawrence Bourke,(1) the Federal Court struck down an unconscionable exclusion clause which placed an absolute restriction on the customer’s right to claim. In doing so, the Malaysian apex court has recognised that judicial intervention is necessary as a matter of public policy to prevent the abuse of freedom of contract. Facts In 2008 Anthony Bourke and his wife were granted a loan facility by CIMB Bank Bhd to finance their property purchase. CIMB agreed to make direct progressive payments to the developer, as and when due. In March 2014 the developer sent a notice for progressive payment to the bank. Payment was due at the end of the month. Internally, CIMB required a site inspection before payment could be disbursed to the developer. However, the CIMB informed neither the developer nor borrowers of this additional condition for disbursement. No site inspection was carried out and as a result no payment was made by CIMB to the developer. Consequently, the developer terminated the sale and purchase agreement for the property in April 2015. The couple then brought an action against […]
April 4, 2019

Silver Bird Group Bhd & Ors v Dato’ Tan Han Kook & Ors [2016] 9 MLJ 503 (affirmed by both Court of Appeal and Federal Court)

The High Court allowed the Plaintiff to recall an auditor witness for cross-examination, even after the conclusion of the defendants’ case, to introduce evidence of disciplinary findings by the Audit Oversight Board against the witness, in respect of issues to be determined at trial. Alvin Tang acted for the Plaintiff (Silver Bird Group Bhd).
April 4, 2019

Hanifah Teo & Associates v BDO Binder & Ors & Another Appeal [2013] 1 LNS 1512 (affirmed by Federal Court)

The Court of Appeal ruled that it is not a pre-requisite for a “partner” of an accounting firm to hold an audit licence, and that accounting firm partnerships can include partners who carry out non-audit related work, which does not require such licence. Alvin Tang acted for the third party, partners of the accounting firm.
April 4, 2019

Papparoti (M) Sdn Bhd v Roti-Roti International Sdn Bhd & Ors [2009] 1 LNS 683 (affirmed by Court of Appeal)

The High Court set aside an interlocutory injunction to restrain the infringement and/or the passing off of a Malaysian trade mark in South Korea by recognising the territorial limits of trademark protection in Malaysia. The High Court also ruled that the trademark protection for bakery products cannot be extended to include raw materials (such as dough and toppings) used to produce the said bakery products. Alvin Tang acted for the Defendants.
April 4, 2019

Kementerian Pertahanan Malaysia & Anor v Malaysian International Shipping Corp Bhd & Ors [2007] 5 MLJ 393

The Court of Appeal held that a private law firm appointed by the insurers were entitled to institute proceedings in the name of the Government of Malaysia and/or the Ministry of Defence, without need for authorization from the Attorney General under s 24(3) of the Government Proceedings Act 1953. The Court of Appeal found that the insurers had dominus litus of the proceedings, and are entitled to step into the shoes of the Government of Malaysia due to the doctrine of subrogation. Alvin Tang was co-counsel with M Nagarajah, and acted for the insurers/the Ministry of Defence.
April 22, 2019

Directors duty to act in company’s best interests:how much is too much?

Introduction It is well known that directors have a duty to act in good faith and in a company’s best interests. Thisduty takes centre stage, especially in times when a company’s survival is threatened. However, to what extent are directors expected to exercise such duties? When a company is in distress, are directors entitled to exploit and abuse statutory restructuring mechanisms at the expense of its creditors even though it serves the larger purpose of ensuring a company’s survival? The recent case of CIMB Islamic Bank Bhd v Wellcom Communications (NS) Sdn Bhd & Anor (1) suggests that there are limits to the way in which directors can act when taking steps to protect a company. In this case, the Court of Appeal clarified that where statutory moratorium regimes are abused, the courts will not hesitate to remedy the abuse of process. Facts The respondents, Wellcom Communications and Rangkaian Mining, applied to be placed under judicial management and for a judicial manager to be appointed. The judicial management mechanism under Section 410 of the Companies Act 2016 provides for a statutory moratorium between the filing and disposal of a judicial management application. While the statutory moratorium is in effect, no proceedings can be brought or continued against the company. Creditors are also not permitted to enforce any charges or seek any order to wind up the company without leave from the court. Thus, this statutory moratorium is a powerful weapon in a director’s arsenal to allow a company to restructure without having to withstand a barrage of attacks from creditors, which could potentially jeopardise the company’s continuance. Although the respondents had initially secured a moratorium with the filing of the judicial management application, such moratorium came to an end when the relevant high court dismissed the application. The respondents naturally […]
July 8, 2019

Caveat venditor – has the pendulum swung too far?

Overview ‘Caveat emptor’ or ‘buyer beware’ is a familiar concept. It is an age-old warning to all prospective buyers that goods are bought at their own risk. The effects and consequences of the principle of caveat emptor have been criticised over time and as a result, commercial law has slowly developed more stringent protection for consumers and buyers. This has resulted in, among other things, the growing perception that in disputes between sellers and buyers liability is almost automatically imposed on sellers. The question to be asked is whether the legal pendulum has swung too far in favour of buyers, and whether it is sellers who need to beware? The recent decision in Clariant Masterbatches (M) Sdn Bhd v Prestige Dynamics Industries Sdn Bhd(1) suggests that this may be the case. The legal ramifications of this case appear to have created an unexpected and undoubtedly unfair backlash against sellers. Facts Clariant Masterbatches supplied Prestige Dynamics Industries with a specific red masterbatch (the product) from samples and lab references provided by Clariant. The lab references specified that a hazardous substance had been used to produce the desired shade of red that Prestige had selected. Between 2004 and 2007, Prestige placed 14 orders with Clariant which were all accepted without issue. On the 15th occasion (in August 2007) Prestige ordered the product again. The difference this time was that the purchase order had a new notation that: no hazardous substance was allowed in the product; and a certification of analysis and a test report must be attached with each delivery. Clariant delivered the product under the purchase order in four separate consignments between 14 November 2007 and 1 March 2008. Prestige accepted delivery on all four occasions without protest and paid Clariant the full sale price of RM3,980. Prestige used the product […]