The petitioners collectively held 21.6875% while the respondents held 74.5625% of the equity of CIN Holdings Sdn Bhd (the ninth petitioner) (`CH'). CH was an investment company, holding shares in public listed companies, including 1,346,100 shares in Polymate Holdings Berhad (`Polymate shares'). The appellant, his wife (`the second respondent') and one Kivy Holdings Sdn Bhd (`the third respondent') which the appellant controlled, collectively held 49.25% of the equity of CH. The appellant, who was the Managing Director of CH was primarily responsible for the financial management of CH. On 27 June 2002, an investigation revealed that the appellant had disposed of 446,100 of the Polymate shares without the authority of the Board or members of CH. The appellant had also committed irregular financial transactions during his tenure as the Managing Director. The trial court found that the petitioners had proved the alleged irregular financial transactions and that the purported removal of the first, fourth and sixth petitioners as directors was for an ulterior motive, namely to stifle the suit of CH against the appellant. Essentially, on those two grounds, the trial court granted, inter alia, orders that: (i) declared the purported removal of the first, fourth and sixth petitioners as directors and the appointment of a new secretary as null and void; (ii) ordered the appellant to purchase the minority interest of the petitioners at RM4.2353 per share; and (iii) ordered damages to be assessed. Damages were assessed by the same trial court who adjudged that the loss suffered by CH was the difference between the quoted value of the 1,346,100 Polymate shares as at 30 September 2009 (RM3,029,851) and the quoted value of those same said shares as at 20 March 2009 (RM209,518.03). The trial court awarded the difference (RM2,820,332.97) as the quantum of damages, to CH. At the Court of Appeal, the first to eight respondents and the appellant entered into a consent order which set aside the buyout order. The sole issue before the Court of Appeal was the quantum of damages awarded to CH. The Court of Appeal held that CH was only entitled to damages for those 446,100 Polymate shares disposed of by the appellant without authority. The rest of the damages awarded by the trial court was set aside by the Court of Appeal which held that it was not proved that CH could not deal with those Polymate shares without the concurrence of the appellant. The Court of Appeal accordingly reduced the quantum of damages awarded to CH, to the aggregate of RM1.13 for each of those 446,100 Polymate shares. Hence this appeal by the appellant. The question arising for determination was whether an award of damages can be made in a petition under s. 181(1) of the Companies Act 1965 (`the Act').

Held (allowing appeal and dismissing cross-appeal with costs)

Per Jeffrey Tan FCJ delivering the judgment of the court:

(1) A petitioner who cannot demonstrate that his name appears on a company's register of members at the date of presentation of the petition has no standing to invoke s. 181 of the Act. The petition of a petitioner without standing would be struck out. (para 14)

(2) CH had no standing under s. 181 of the Act. CH could have been but was not joined as a nominal respondent. CH could not be a nominal petitioner. Yet, CH was the ninth petitioner, to pursue what could only have been a derivative action. (para 25)

(3) Damages to members is not amongst the reliefs mentioned in s. 181(2) of the Act. Section 181(2) of the Act is a non-exhaustive list that does not limit other types of relief that the court could fashion, with the view to bringing to an end or remedying the matters complained of. Authorities do not support the argument that damages or compensation could not be awarded under s. 181 of the Act. (para 26)

(4) Since the buyout order had brought to an end all matters complained of, there was no longer any `matter complained of' to be further remedied by any order of damages, declaration or injunction. In any event, with the buyout order, the respondents could not have any further interest in the affairs of CH which would belong, after the buyout order, to the majority. However, all those circumstances were not considered in the exercise of discretion in granting the award of damages. On top of that, it was also overlooked (i) that non-members who had no standing under s. 181 of the Act were joined as the first and fourth petitioners; (ii) that CH who had no standing under s. 181 of the Act was joined as a petitioner, (iii) that the respondents had brought a common law derivative action, if that were the case, without naming CH as a nominal respondent; and (iv) that the respondents had brought a statutory derivative action, if that were the alternate case, without the requisite leave of court. (para 53)

(5) There is a limit to the extent to which s. 181 of the Act could be used to outflank the rule in Foss v. Harbottle. The order to be made must be made with a view to bringing an end or remedying the `matters complained of' under s. 181 the Act. The derivative action elements should be an incident of the matters complained of under s. 181 of the Act. It would be an abuse of s. 181 of the Act where the nature of the complaint is misconduct rather than mismanagement. (para 55)

(6) Especially with the setting aside, by consent, of the buyout order, what was left was the award of damages obtained in a defectively instituted derivative action brought under s. 181 of the Act. Given further that the order of damages should not have been granted in the first place, the order of damages could not be defended. (para 55)

Bahasa Malaysia Translation Of Headnotes

Secara kolektifnya, pempetisyen-pempetisyen memegang 21.6875% manakala responden-responden memegang 74.5625% ekuiti CIN Holdings Sdn Bhd (pempetisyen kesembilan) (`CH'). CH merupakan sebuah syarikat pelaburan, dengan pegangan saham dalam syarikat tersenarai awam, termasuk 1,346,100 saham dalam Polymate Holdings Berhad (`saham-saham Polymate'). Perayu, isterinya (`responden kedua') dan Kivy Holdings Sdn Bhd (`responden ketiga') yang dikawal oleh perayu, secara kolektifnya memegang 49.25% daripada ekuiti CH. Perayu, yang merupakan Pengarah Urusan CH secara khasnya bertanggungjawab bagi urusan kewangan CH. Pada 27 Jun 2002, satu siasatan mendedahkan bahawa perayu telah melupuskan 446,100 daripada saham-saham Polymate tanpa kebenaran Lembaga atau ahli-ahli CH. Perayu juga telah melakukan transaksi-transaksi kewangan luar aturan ketika memegang jawatan sebagai Pengarah Urusan. Mahkamah bicara mendapati bahawa pempetisyen-pempetisyen telah membuktikan transaksi-transaksi kewangan luar aturan dan bahawa tujuan penyingkiran pempetisyen pertama, keempat dan keenam sebagai pengarah mempunyai motif terselindung, iaitu untuk menyekat guaman CH terhadap perayu. Pada dasarnya, berkisarkan pada dua alasan tersebut, mahkamah bicara membenarkan, antara lain, perintah-perintah yang: (i) mengisytiharkan bahawa tujuan penyingkiran pempetisyen pertama, keempat dan keenam sebagai pengarah-pengarah dan pelantikan seorang setiausaha baru sebagai batal dan tidak sah; (ii) memerintahkan perayu untuk membeli kepentingan minoriti pempetisyen-pempetisyen pada RM4.2353 satu saham; dan (iii) memerintahkan kerugian untuk ditaksir. Kerugian ditaksir oleh mahkamah bicara yang sama yang memutuskan bahawa kerugian yang dialami oleh CH adalah perbezaan antara nilai yang dinyatakan iaitu RM1,346,100 saham-saham Polymate pada 30 September 2009 (RM3,029,851) dan nilai yang dinyatakan bagi saham-saham yang sama pada 20 Mac 2009 (RM209,518.03). Mahkamah bicara mengawardkan perbezaan (RM2,820,332.97) sebagai kuantum ganti rugi, kepada CH. Di Mahkamah Rayuan, responden pertama hingga kelapan dan perayu memeterai satu perintah persetujuan yang mengetepikan perintah belian. Satu-satunya isu di hadapan Mahkamah Rayuan adalah kuantum ganti rugi yang diawardkan kepada CH. Mahkamah Rayuan memutuskan bahawa CH hanya berhak ke atas ganti rugi bagi 446,100 saham-saham Polymate yang dilupuskan oleh perayu tanpa kebenaran. Ganti rugi selebihnya yang diawardkan oleh mahkamah bicara diketepikan oleh Mahkamah Rayuan yang memutuskan bahawa tidak terbukti bahawa CH tidak dapat berurusan dengan saham-saham Polymate tersebut tanpa persetujuan perayu. Mahkamah Rayuan seterusnya mengurangkan kuantum ganti rugi yang diawardkan kepada CH, kepada agregat RM1.13 bagi setiap saham Polymate sebanyak RM446,100. Dengan itu, rayuan ini oleh perayu. Persoalan yang timbul bagi pemutusan adalah sama ada satu award ganti rugi boleh dibuat dalam petisyen di bawah s. 181 Akta Syarikat 1965 (`Akta').

Diputuskan (membenarkan rayuan dan menolak rayuan balas dengan kos)

Oleh Jeffrey Tan HMP menyampaikan penghakiman mahkamah:

(1) Seorang pempetisyen yang tidak boleh membuktikan bahawa namanya terdapat dalam daftar ahli syarikat pada tarikh pengemukaan petisyen tidak mempunyai hak untuk membangkitkan s. 181 Akta. Petisyen pempetisyen tanpa hak akan dibatalkan.

(2) CH tidak mempunyai hak di bawah s. 181 Akta. CH mungkin boleh tetapi ia tidak disertakan bersama sebagai nominal responden. CH tidak boleh menjadi nominal pempetisyen. Namun begitu, CH adalah pempetisyen kesembilan, yang ingin mendapatkan apa yang mungkin menjadi satu tindakan terbitan.

(3) Ganti rugi buat ahli-ahli bukanlah antara relief-relief yang dinyatakan dalam s. 181(2). Seksyen 181(2) adalah senarai tidak lengkap yang tidak mengehadkan lain-lain jenis relief yang boleh diolah oleh mahkamah, dengan niat untuk menamatkan atau memberi remedi kepada hal-hal perkara yang diadukan. Nas-nas undang-undang tidak menyokong hujahan bahawa ganti rugi atau pampasan tidak boleh diawardkan di bawah s. 181 Akta.

(4) Oleh kerana perintah belian telah menamatkan kesemua hal-hal perkara yang diadukan, tiada lagi `hal perkara yang diadukan' untuk diremedikan selanjutnya oleh mana-mana perintah ganti rugi, deklarasi atau injunksi. Dalam apa jua keadaan, dengan perintah belian, responden-responden tidak lagi mempunyai kepentingan dalam urusan CH yang menjadi milik, selepas perintah belian, kepada majoriti. Walau bagaimanapun, kesemua hal-hal perkara tersebut tidak dipertimbangkan dalam menjalankan budi bicara untuk membenarkan award ganti rugi. Tambahan lagi, ia juga telah terlepas pandang bahawa (i) mereka yang bukan ahli yang mana tidak mempunyai hak di bawah s. 181 Akta telah disertakan bersama sebagai pempetisyen pertama dan keempat; (ii) bahawa CH yang tidak mempunyai hak di bawah s. 181 Akta telah disertakan sebagai pempetisyen; (iii) bahawa responden-responden telah memulakan tindakan terbitan common law, dan jika begitu keadaannya, tanpa menamakan CH sebagai nominal responden; (iv) dan bahawa responden-responden telah membawa tindakan terbitan, dan jika begitu keadaannya, tanpa kebenaran mahkamah terlebih dahulu.

(5) Terdapat had pada takat mana s. 181 Akta boleh diguna pakai untuk mengapit peraturan dalam Foss v. Harbottle. Perintah untuk dibuat mesti dibuat dengan niat untuk menamatkan atau memberi remedi kepada hal-hal perkara yang diadukan di bawah s. 181. Elemen-elemen tindakan terbitan mestilah menjadi peristiwa kepada hal-hal perkara yang diadukan di bawah s. 181. Adalah menjadi satu penyalahgunaan s. 181 Akta sekiranya sifat aduan adalah satu salah laku berbanding salah urus.

(6) Khasnya bagi pengenepian, dengan kebenaran, perintah jualan, apa yang tinggal adalah award bagi ganti rugi yang diperolehi melalui tindakan terbitan yang dimulakan secara cacat di bawah s. 181 Akta. Melihatkan selanjutnya bahawa perintah bagi ganti rugi tidak sepatutnya diberikan dari awal lagi, perintah ganti rugi tidak boleh dipertahankan.

Case(s) referred to:

A Company [1986] BCLC 68 (refd)

A Company ex p Estate Acquisition and Development Ltd [1991] BCLC 154 (refd)

A Company, Re ex parte Shooter [1990] BCLC 384 (refd)

A R Evans Capital Partners Limited v. Gen2 Partners Inc [2012] HKCU 1284 (refd)

Abdul Rahim Aki v. Krubong Industrial Park (Melaka) Sdn Bhd & Ors [1995] 4 CLJ 551 CA (refd)

Allmark v. Burnham & Anor [2005] EWHC 2717 (refd)

Annacott Holdings Ltd; Attwood v. Maidment & Ors [2012] EWHC 1662 (refd)

Arab Malaysian Finance Bhd v. Meridien International Credit Corporation Ltd London [1993] 4 CLJ 307 SC (refd)

Atlasview Ltd and Ors v. Brightview Ltd and Ors [2004] 2 BCLC 191 (refd)

Automobiles Peugeot SA v. Asia Automobile Industries Sdn Bhd & Ors [1988] 1 LNS 77 HC (refd)

Charnley Davis Ltd (No. 2) [1990] BCLC 760 (refd)

Clark v. Cutland [2004] 1 WLR 783 (refd)

Eric Lau Man Hing v. Eramara Jaya Sdn Bhd & Ors [1998] 3 CLJ Supp 126 HC (refd)

Federal Insurance Co v. Nakano Singapore (Pte) Ltd [1992] 1 SLR 390 (refd)

Fexuto Pty Ltd v. Bosnjak Holdings Pty Ltd & ors [2001] 37 ACSR 672 (refd)

Foss v. Harbottle [1843] 67 ER 189 (refd)

Gerald Mcdonald & Co v. Nash & Co [1924] AC 625 (refd)

Hawkes v. Cuddy and ors [2007] EWHC 1789 (refd)

Jager the Cleaner Ltd v. Li's Investments Co [1979] 11 BCLR 311 (refd)

Kumagai Gumi Co Ltd v. Zenecon - Kumagai Sdn Bhd &; Ors And Another Application [1994] 1 LNS 279 HC (refd)

Kumagai Gumi Co Ltd v. Zenecon Pte Ltd [1995] 2 SLR 297 (refd)

Low Peng Boon v. Low Janie [1999] 1 SLR 761 (refd)

Ng Kok Pooi v. Brunswood ID Sdn Bhd & Ors [2006] 3 CLJ 566 HC (refd)

Oates and Consolidated Capital Services Pty Ltd and Ors [2009] 257 ALR 558 (refd)

Owen Sim Liang Khui v. Piasau Jaya Sdn Bhd & Anor [1996] 4 CLJ 716 FC (refd)

Pan-Pacific Construction Holdings Sdn Bhd v. Ngiu-Kee Corporation (M) Bhd & Anor [2010] 6 CLJ 721 FC (refd)

Re a company (No 004502 of 1988), ex parte Johnson [1992] BCLC 701 (refd)

Re Bird Precision Bellows Ltd [1985] 3 All ER 523 (refd)

Re Chime Corporation [2004] 7 HKCFAR 546 (refd)

Re Crossmore Electrical and Civil Engineering Ltd [1989] BCLC 137 (refd)

Re Greenore Trading Co Ltd [1980] ILRM 94 (refd)

Re HR Harmer Ltd [1958] 3 All ER 689 (refd)

Re Irish Press plc v. Ingersoll Irish Publications [1995] 2 IR 175 (refd)

Re JE Cade & Son Ltd [1992] BCLC 213 (refd)

Re Jermyn Street Turkish Baths Ltd [1970] 3 All ER 57 (refd)

Re Jermyn Street Turkish Baths Ltd [1971] 3 All ER 184 (refd)

Re Kong Thai Sawmill (Miri) Sdn Bhd; Kong Thai Sawmill (Miri) Sdn Bhd & Ors v. Ling Beng Sung [1978] 1 LNS 170 PC (refd)

Re Little Olympian Each-Ways Ltd [1994] 2 BCLC 420 (refd)

Re McCarthy Surfacing Ltd Hecquet and Ors v. McCarthy and Ors [2006] EWHC 832 (refd)

Re Quickdome Ltd [1988] BCLC 370 (refd)

Re Shun Tak Holdings Ltd [2009] 5 HKLRD 743 (refd)

Roberts v. Gill & Co and Others [2010] 4 All ER 367 (refd)

Scottish Co-operative Wholesale Society Ltd v. Meyer & Anor [1958] 3 WLR 404 (refd)

South Johnstone Mill Ltd & Ors v. Dennis and Scales [2007] 244 ALR 730 (refd)

Verghese Mathai v. Telok Plantations Sdn Bhd & Ors [1988] 1 LNS 80 HC (refd)

Wallersteiner v. Moir (No 2) [1975] QB 373 (refd)

Yeo Hung Kiang v. Dickson Investment (Singapore) Pte Ltd & Ors and Another Appeal [1999] 2 SLR 129 (refd)

Legislation referred to:

Companies Act 1965, ss. 181(1), (2), 181A(1)(a), (b), (2), (3), 218(1)(f), (i)

Corporations Act 2001 [Aus], ss. 236, 237

Companies Code [Aus], s. 320

Companies Ordinance (Cap 32) [Hong Kong], ss. 168A(2)(b), (2C)

Companies Act 1963 [Ireland], s. 205

Companies Act [Sing], s. 216A(1), (2)(c), (7)

Companies Act 1948 [UK], ss. 210, 459, 461

Companies Act 1985 [UK], ss. 459, 460, 461(1)

Companies Act 2006 [UK], s. 996

Other source(s) referred to:

Alan Dignam & John Lowry, Company Law, 4th edn, paras 11.17, 11.42

David Kershaw, Company Law in Context, Text and Materials, p 635

Halsbury's Laws of England 4th edn, 2004 Reissue, Vol 7(1), para 930

Harry Rajak, Sourcebook of Company, 2nd edn, p 571

Margaret Chewm, Minority Shareholders' Right and Remedies, 2nd edn, p 235

Walter Woon, Company Law Revised, 3rd edn, paras 5.54, 5.81, 5.82, 5.83, pp 183 & 571

Counsel:

(Civil Appeal No: 02-83-11-2012(M))

For the 1st - 8th appellants - Wong Rhen Yen (Faizul Nasir, Hanif Idris & Chow Yen Loong with him); M/s Hanif Idris & Assocs

For the 9th appellant - Leong Kwong Wah (Norlidah A Bakar with him); M/s Leong Kwong Wah

For the respondent - Gopal Sreenevasan (Conrad Young & Lawrence Tan Boon Twee with him); M/s Lawrence Tan & Assocs

(Civil Appeal No: 02-84-11-2012(M))

For the appellant - Gopal Sreenevasan (Conrad Young & Lawrence Tan Boon Twee with him); M/s Lawrence Tan & Assocs

For the 1st - 8th respondents - Wong Rhen Yen (Faizul Nasir, Hanif Idris & Chow Yen Loong with him); M/s Hanif Idris & Assocs

For the 9th respondent - Leong Kwong Wah (Norlidah A Bakar with him); M/s Leong Kwong Wah

Reported by Amutha Suppayah