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.
September 26, 2020

Toralf Mueller v Alcim Holding Sdn Bhd & Ors [2019] 9 MLJ 670

Brief facts of the case Toralf Mueller (TM) filed a counterclaim in a conspiracy suit and a section 181 suit against Alcim Holding and the rest of the respondents in the case. TM filed myriad of claims/ damages against Alcim Holding and the rest of the respondents in both suits. The counterclaim was allowed and Alcim holding was wound up (in the section 181 suit). However, TM was only awarded partial damages, as TM cannot prove all the claims he made against Alcim Holding and the rest of the respondents. A party must prove that he actually suffers loss It is trite that even though an award of damages has been made in favour of the a party, the party still has the burden of proving that he/ she has suffered the losses and damages claimed as a consequence of the proven grievances. If he cannot do so, his cause of action will fail or he may be awarded only with nominal damages by the court.
September 26, 2020

Kuan Pek Seng @ Alan Kuan v Robert Doran & Ors And Other Appeals [2013] 2 MLJ 174

Brief facts of the case Rober Doran (RD) claimed he entered into a shareholder’s agreement with Alan whereby they both enter into a joint venture to recycle plastic flakes and to produce plastic staple fibre from the plastic flakes. He injected a huge sum of money into the joint venture. However, he claims that Alan breached the agreement and the fiduciary duty that is owed to him via the agreement. As a result, he suffered financial losses. Not only did he bring a claim against Alan, he also claimed damages against multitudes of individuals, claiming that (by relying on the fact that there was a breach of fiduciary duty and JVA) they had dishonestly assisted and/ or abetted Alan in breaching the JVA. The High Court ordered Alan and the rest of the individuals to collectively pay for the loss suffered by RD. However, in the Court of Appeal, only one individual (alongside Alan) was held responsible for the RD’s loss. A party must prove his claim against each individual accessory individually The Court of Appeal held that a party who pursues a claim against a group of individual accessories based on the legal doctrine of ‘knowing assistance’ must prove the loss occasioned by the group of individuals on an individual basis i.e. he must prove, one at a time, that each of the individuals is responsible for his loss. He cannot hold all of them equally liable without distinction as to whether the alleged loss of the cash injected was occasioned, and if so, to what part or portion, by the ‘knowing assistance’ of the individual accessory.
September 26, 2020

Francis a/l Augustine Pereira v Dataran Mantin Sdn Bhd & Ors and other appeals [2014] 6 MLJ 56

Brief facts of the case Dataran Mantin (DM), a property development company, was involved in building a condominium. However, the project was never completed (it was abandoned). To top it off, DM could not repay the monies that was due to OCBC Bank and other unsecured creditors. A winding up petition was presented against the DM. Whilst that was happening, a group of purchasers applied to the court for a scheme of arrangement under section 176 of the Companies Act 1965. Under the scheme, a white knight was to acquire and complete the housing project after redeeming the land from OCBC Bank and settling the debts of DM’s creditors under the housing project. This scheme excluded the rest of the secured and unsecured creditors of the company. The High Court approved the scheme. Francis and four other unsecured creditors applied to set aside the scheme. Their argument is that the purchasers cannot be constituted as a class of creditors under Section 176 by excluding the rest of the unsecured creditors of DM. They further argued that Section 176 compromise or arrangement was intended for the creditors/ class of creditors of a company and not just a particular project. The High Court accepted their argument and set aside the scheme. The Court of Appeal disagreed and set aside the High Court’s decision. Francis and the unsecured creditors appealed to the Federal Court. However, it is to no avail. Section 176 Section 176 was created with the intention to enable compromises to be made for the common benefit of the creditors as creditors, or for the common benefit of some class of creditors. In this regard, the purchasers can be recognised as a distinct class of creditors under Section 176 as their rights/ interest are similar to one another- they want to […]
September 26, 2020

Sinarlim Sdn Bhd v Medallion Builders Sdn Bhd (previously known as RC-Soils (M) Sdn Bhd and other suits [2015] 4 MLJcon247

Brief facts of the case Sinarlim entered into 3 separate contracts with Medallion Builders. Medallion Builders owes Sinarlim monies from all three contracts. Hence the current suit. Sinarlim produced myriad of evidence to back up its claim. On the other hand, Medallion Builders submitted a no claim to answer (as there were no written contract between them). The High Court favoured Sinarlim’s claim, and ordered Medallion Builders to pay their dues to Sinarlim. The double-edged sword of a submission for a no case to answer The moment a party elect to make a submission for no case to answer- he is bound by the findings of the court. If the court finds in favour of the party who elect to make a submission for no case to answer, then all is well and good, as it means that the complaining party did not establish any case in law or the evidence led by the complaining party is so unsatisfactory or unreliable that the court should find that the burden of proof has not been discharged. If the court finds otherwise i.e. the complaining party successfully proven his case, the party who made a submission for no case to answer cannot thereafter change its mind and ask to lead evidence in court. Unfortunately for Medallion Builders, they drew the short end of the stick this time round.
September 26, 2020

Kuan Shhin @ Kuan Nyong Hin v Chin Foh Trading Sdn Bhd & Anor [2015] 3 MLJ 856

In order for fresh evidence to be accepted at the appeal stage under Rules 7 (3) and (3A) of the Rules of the Court of Appeal 1994, the party who wishes to produce the evidence must show that there are special grounds to do so. This condition can be fulfilled if the party fulfills three criterias that was laid down in the Federal Court case of Lau Foo Sun v Government of Malaysia [1970] 2 MLJ 70, which is: The evidence could not have been obtained with reasonable diligence during the trial; The evidence must be such that, if given, would probably (although it need not be decisive) have an important influence on the result of the case; and The evidence must be such as presumably to be believed, it must be (although it need not be incontrovertible) apparently creditable.
September 26, 2020

Beta Tegap Sdn Bhd v Majlis Perbandaran Sepang (Attorney General of Malaysia, The Intervener) [2013] 10 MLJ 240

Section 6 of the Limitation Acts states that no legal action founded on a contract or tort can be brought against another individual/ company after the expiration of six years from the date on which the cause of action occurred. However, a cause of action for specific performance of a contract which involves or encompasses the recovery of trust property by a beneficiary is not caught by the limitation prescribed under Section 6 of the Act provided that the cause of action (under Section 22 of the Act): Involves an act of fraud or fraudulent breach of trust to which the trustee was a party or privy to the cause of action; or Is an action to recover from the trustee trust property or the proceeds thereof in the possession of the trustee.
September 26, 2020

ECM Libra Investment Bank Bhd v Foo Ai Meng & Ors [2013] 3 MLJ 35

Brief facts of the case A dispute arose between ECM and Alliance Investment Back (AIB) . During trial, ECM issued a subpoena against one of the witnesses in court, requiring him to produce certain documents. This was so ECM could prove that he had suffered loss as a result of the dispute (more specifically, loss of future earnings). The witness filed an application to set aside the subpoena claiming that: The documents were confidential and not relevant to the dispute; He does not have any personal knowledge about the dispute; and The subpoena was issued mala intent. The High Court accepted the witnesses’ arguments and set aside the subpoena. ECM appealed the decision to the Court of Appeal. The appeal was duly dismissed in the Court of Appeal. The law on subpoena Subpoena may be issued against anyone and everyone who has knowledge of a particular case; However, the onus is on the issuing party to show the court that in order to arrive at a fair and just decision in a case, the subpoena must be issued even if it means it causes a certain degree of oppression against the party objecting the subpoena; As for the objecting party, the party will have to make the above-mentioned arguments in order for the party to set aside a subpoena.
September 26, 2020

Harianto Effendy Bin Zakaria & Ors v Mahkamah Perusahaan Malaysia & Anor [2014] 6 MLJ 305

Brief facts of the case Harianto and the rest of the appellant in this case were the employees of CIMB Bank. They were also members of the National Union of Bank Employees (NUBE). Following a trade dispute between NUBE and CIMB, they decided to participate in an unlawful picket in the lobby and the banking hall of CIMB headquarters. In this regard: They barged through the side entrance door despite attempts by security personnel to prevent them from doing so; They entered the business premises with picket materials; They carried placards and balloons, noisily distracting customers and colleagues; and The balloons were released in the banking hall. They were later dismissed by CIMB for their actions. The matter was subsequently heard by the Industrial Court, where the court upheld the decision to dismiss them. Unsatisfied with the outcome, the matter was brought to the High Court, the Court of Appeal and the Federal Court, to no avail. It was in the Federal Court that Harianto and the rest of the appellant pointed out that (amongst others) in dismissing their casse, the courts below had erred in not taking in account the fact that Harianto and the rest of the appellants were long-standing employees of the bank without previous record of disciplinary problems. Can an employee without a previous record of disciplinary problems be dismissed if they were to commit a misconduct? Yes- they can be dismissed. The Federal Court held that there is no fixed rule of law to suggest that it was unreasonable to dismiss employees with unblemished records for a single instance of insolence- it all depends on the nature of their misconduct. In this case, the court held that their conduct was clearly a wilful disobedience as their action brought the bank into disrepute among customers and […]
September 26, 2020

Kesatuan Kebangsaan Pekerja-Pekerja Bank & Ors v The New Straits Times Press (M) Bhd & Ors and Another Suit [2013] 8 MLJ 199

Brief facts of the case Kesatuaan Kebangsaan Pekerja Bank & Ors, or the National Union of Bank Employees (NUBE) and the National Executive Council members of NUBE brought a libel suit against NST, its writers and one of its witnesses for publishing four defamatory articles against NUBE and its Executive Council members. The contents of the four articles were in relation to the alleged misappropriation of funds in NUBE by the Executive Council members of NUBE. All of them pleaded the defences of justification and qualified privilege. The High Court allowed NUBE and NUBE’s National Executive council members’ claim, ordering NST and the rest to pay damages to NUBE and its Executive Council members and to stop publishing those articles. How to succeed on the defence of justification and qualified privilege? In order to succeed on the defence of justification, it is incumbent for the party who publishes an alleged defamatory article to prove the truth of the allegations made in the article. In order to succeed in the defence of qualified privilege, the court held that a party who publishes an alleged defamatory article must prove to the court that they did not publish the article with malice. What are some examples of malice? In Reynolds v Times Newspapers Ltd [2001] 2 AC 127, the court held that: “Depending on the circumstances, the matters to be taken into account include the following. The comments are illustrative only. 1. The seriousness of the allegation. The more serious the charge, the more the public is misinformed and the individual harmed, if the allegation is not true. 2. The nature of the information, and the extent to which the subject matter is a matter of public concern. 3. The source of the information. Some informants have no direct knowledge of the events. […]
September 26, 2020

National Union of Bank Employees v Director of General of Trade Unions & Anor [2015] 1 MLJ 881

The power of the Director of General of Trade Union The Director of General of Trade Union must adhere to section 12 (2) and (3) of the Trade Union Act 1959 strictly before he can register a trade union under section 12 (1) of the Act.Where applicable, he is required to notified all necessary and interested parties to obtain their feedback to arrive at an opinion as to whether or not to register a trade union. This is especially so in cases where such a trade union which has similar/ identical scope of membership is already in existence. As the court puts it :“Failure to strictly comply with the statutory obligations set-out in the section will make the decision or decision making process a nullity ab initio without the need even to consider the concept and parameters of judicial review.”
September 26, 2020

National Union of Bank Employees v Noorzeela Bt Lamin And Another Suit [2014] 7 MLJ 31

As with the case of Kesatuan Kebangsaan Pekerja-Pekerja Bank & Ors v The New Straits Times Press (M) Bhd & Ors and Another Suit [2013] 8 MLJ 199, the High Court ruled in favour of NUBE for yet another libel suit. This time, the parties who are being sued for libel are Noorzeela Bt Lamin and Zayuddin bin Mohamed Yusop, who were the ex-members of NUBE and the employees of Maybank.
September 26, 2020

National Union of Bank Employees v Noorzeela Bt Lamin [2012] 9 MLJ 410

As with the case of National Union of Bank Employees v Noorzeela Bt Lamin And Another Suit [2014] 7 MLJ 31, the High Court ruled in favour of NUBE (this occurred when Noorzeela Bt Lamin and Zayuddin bin Mohamed Yusop were still members of NUBE). In this case, both Noorzeela and Zayuddin claimed that section 22 (1) of the Trade Union Act 1959 afforded them immunity from being sued as they were a member of NUBE at the time when this action was filed. Section 22 (1) of the Act states that: “A suit against a registered trade union or against any members or officers thereof on behalf of themselves and all other members of the trade union in respect of any tortious act alleged to have been committed by or on behalf of the trade union shall not be entertained by any court.” The High Court held that the immunity granted under section 22 (1) of the Act only kicks in if the members of the trade union commit a tortious act on behalf of a Trade Union. The immunity principle is not applicable if members of the trade union committed the tortious act by their own whims and fancies.
September 26, 2020

Sumatec Engineering and Construction Sdn Bhd v Malaysia Refining Co Sdn Bhd [2012] 4 MLJ 1

Overview Unconscionability is an additional exception (apart from fraud) that entitles a the court to restrain a party from calling on or demanding and receiving monies under a bank guarantee or performance bond. Brief facts of the case Sumatec was appointed by Malaysia Refining to be its contractor for a project. Sumatec was required to provide a bank guarantee, or performance bond, for the due formance of the contract (Sumatex obtained the bank guarantee from Bank Islam Malaysia Bhd for 10% of the contract value). Delays on the part of Malaysia Refining, and subsequent variation to the contract has greatly reduced the contract value and greatly delayed the completion of the project. Once the project was completed, Sumatec asked Malaysia Refining to pay them for the work done. Infact, Sumatec even tried to resolve the dispute with Malaysia Refining. However, instead of paying up, Malaysia Refining claimed for back charges without any notice of defects or opportunity given to Sumatec to rectify any such defects and despite a provisional acceptance certificate having been issued by Sumatec. This was done by making a demand to Bank Islam for payment of the bank guarantee. Sumatec applied for an injunction to restrain Malaysia Refining from getting the money. This was duly opposed by Malaysia Refining. The parties’ contention Sumatec argued that it was unconscionable for Malaysia Refining to demand Bank Islam for payment when their actions clearly show that the were acting mala fide, with the intention to enriching itself at the expense of Sumatec. Sumatec pointed out that such cases, which involves bank guarantee or performance bond, ‘unconscionability’ or unconscionable conduct can be introduced as a separate and distinct exception to the accepted exception that only in the case of a fraud could the court grant an injunction against another party. Malaysia […]
September 26, 2020

Damansara Realty Bhd v Bungsar Hill Holdings Sdn Bhd & Anor [2011] 6 MLJ 464

Brief facts of the case Damansara Realty entered into a property development agreement (PDA) with the rest of the respondents in this case. Under the agreement, Damansara Realty was given development rights to the land (which was owned by Bungsar Hill Holdings) for 15 years. However, nothing was done to the land for almost 14 years. Fed up with Damansara Realty’s shenanigans, Bungsar Hill Holdings and the rest of the respondents in this case issued a notice of termination to Damansara Realty, citing the latter’s failure to develop the development property as a material breach under the PDA and/or a repudiation of the same. The gist of the dispute between the parties is this – whether Damansara Realty was required to continuously develop the development property over the span of fifteen years or whether Damansara Realty was at liberty to commence development as and when it felt the time was right so long as it had commenced work within the 15 years period. Was time of essence? How does one determine whether time is of essence? Yes. In coming to its decision, the court held one must look at the contract in its entirety, including the conducts and dealings of the parties, in order to determine whether time is of essence in a contract. This means that, merely because there is a mention in the agreement making time as essence of the contract, it does not mean that such time is made an essence of the contract. Likewise, it follows that the absence of such a clause does not per se mean that the parties did not intend for time to be of the essence. In this case, for Damansara Realty to take its sweet time to commence and complete the development would make no commercial sense for Bungsar Hill […]
September 26, 2020

Terengganu Forest Products Sdn Bhd v Cosco Container Lines Co Ltd & Anor and Other Applications [2011] 1 MLJ 25

A special panel of five judges was set up to determine once and for all the interpretation of the provision of section 96 of the Courts of Judicature Act 1964 in relation to an application for leave to appeal to the Federal Court. Ultimately, the Federal Court held that in order for a party to apply for a leave to appeal a matter to the Federal Court, the party must observe the following points: Basic prerequisites: The leave to appeal must be against the decision of the Court of Appeal; The cause or matter must have been decided by the High Court exercising its original jurisdiction; The question must involve a question of law which is of general principle not previously decided by the Federal Court (first limb of s 96(a)); and The issue to be appealed against has been decided by the Court of Appeal. As a rule leave will normally not be granted in interlocutory appeals. Whether there has been a consistent judicial opinion which may be uniformly wrong. Whether there is a dissenting judgment in the Court of Appeal. Leave to appeal against interpretation of statutes will not be given unless it is shown that such interpretation is of public importance. Leave will not normally be given: where it merely involves interpretation of an agreement unless this court is satisfied that it is for the benefit of the trade or industry concerned; the answer to the question is not abstract, academic or hypothetical; either or both parties are not interested in the result of the appeal. That on first impression the appeal may or may not be successful; if it will inevitably fail leave will not be granted.
September 26, 2020

Phileo Allied Securities Sdn Bhd v Yong Keong Sheng & Anor [2011] 8 MLJ 834

The High Court (amongst others) held that: Whoever desires the court to give judgment as to any legal right or liability, dependent on the existence of facts which he asserts, must prove that those facts exist. If he could not, then his claim must fail; Failure to call a material witness to testify/ subpoena the witness, when the party knows where the witness lives, entitles the court to draw an adverse inference under section 114(g) of the Evidence Act 1950.
September 26, 2020

Perwaja Steel S/B v. RHB Bank Bhd and 789 others [2019] 5 AMR 342

We acted for the employees in the case of Perwaja Steel v RHB Bank. This decision provides guidance as to how a secured creditor is to deal with wages and statutory payments due to employees under section 31 of the Employment Act 1955 (“EA”) when it disposes of a security held over property which is a place of employment. Brief Facts The company, Perwaja Steel Sdn Bhd (“Perwaja Steel”) was wound up by a Court Order on 8th November 2017. Financial institutions provided Perwaja Steel with credit facilities from time to time, and in return, Perwaja Steel executed a Security Sharing Agreement in 1st June 2012 which named the financial institutions as “Debenture Holders” for four parcels of industrial land (“Charged Lands”). Prior to the winding up in November 2014, Perwaja Steel had ceased operations on the Charged Lands and had terminated the employment of its employees. As at the date of the winding up, Perwaja Steel was said to be indebted to the debentures holders for the sum of over RM1.1 billion. The receiver and manager (“R&M”) was appointed under the terms of the debentures after Perwaja Steel was wound up. The R&M took steps to sell the Charged Lands in order to satisfy the debts owed by Perwaja Steel. The forced sale value for the Charged Lands was approximately RM83 million albeit the valuation report obtained by the R&M valued the Charged Lands at approximately RM118 million at market price. Former employees of Perwaja Steel maintained that they are owed their wages by the company. They maintained that their wages should be paid out from the proceeds of any sale of the Charged Lands, in priority over the Debenture Holders by virtue of section 31 of the Employment Act 1955 (“EA”). Questions Posed to the Court Question 1 […]
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 […]
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 […]
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 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

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

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).
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 […]
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
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 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.
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.
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 […]
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)
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

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

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

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

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

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

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

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)
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)
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’).
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)
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.
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