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2025 MarsdenLR 3015
HIGH COURT MALAYA SHAH ALAM
LE APPLE BOUTIQUE HOTEL (KLCC) SDN BHD – Appellant
Versus
THUM MAY YIN & ANOR – Respondent
[Civil Suit No: BA-22NCVC-500-12/2021]
Directors must act in the best interest of their company and avoid conflicts of interest; failure to do so constitutes breach of fiduciary duties.
Headnote:(A) Companies Act 2016 - Section 213 - Breach of fiduciary duties by directors - Plaintiff company alleges that both defendants, as directors, breached their fiduciary and statutory duties by filing affidavits in support of a winding up petition against the Plaintiff and opposing its claims against PGCG Assets - Summary judgment granted against both defendants for failing to establish a bona fide defense. (Paras 1-57)
(B) Directors' Duties - A director must act in the best interest of the company, avoiding conflicts of interest and not acting for collateral purposes. (Paras 20, 24-30)
(C) Test for Breach of Duty - The assessment combines both subjective and objective tests to determine whether the director acted in the company's best interest. (Paras 21, 22)
Facts of the case:
The Plaintiff, a company, claims the defendants breached their fiduciary duties by supporting a winding up petition against it while being directors. The court found the actions impeded the Plaintiff's claims against PGCG Assets.
Findings of Court:
The court found a prima facie case against both defendants for breach of fiduciary duties and granted summary judgment against them.
Issues: The main issues were whether the defendants acted in the best interest of the Plaintiff and whether their actions constituted a breach of fiduciary duties.
Ratio Decidendi: The court ruled that the defendants' actions were in blatant conflict with their duties to the Plaintiff, justifying the summary judgment.
Result: Judgment granted against both defendants.
JUDGMENT
(Enclosure 54)
[1] The Plaintiff, a company, filed this writ action against the 1st Defendant and 2nd Defendant who are directors of the Plaintiff company for breach of fiduciary duties, statutory duties and / or breach of fidelity.
[2] The reliefs sought against both the defendants is pleaded at para 19 of the Plaintiff's Statement of Claim ("SoC") which is produced below:
19. Dengan yang demikian, Plaintif menuntut terhadap Defendan-defendan seperti berikut:
Terhadap Defendan Pertama
(a) satu Deklarasi bahawa Defendan Pertama telah metanggar kewajipan fidusiarinya, kewajipan berkanunnya dan/atau kewajipan kesetiaannya yang terhutang kepada Plaintif dalam kapasitinya sebagai seorang Pengarah Plaintif;
(b) satu Perintah bahawa Defendan Pertama menanggung rugi Plaintif berhubung dengan semua kerugian, kos dan perbelanjaan berkenaan dan/atau berkaitan dengan Tuntutan Plaintif terhadap PGCG Assets dan Petisyen Penggulungan Keen Solution, yang berbangkit daripada Tindakan-Tindakan Defendan Pertama;
(c) ganti rugi umum;
(d) ganti rugi teruk dan/atau ganti rugi teladan;
(e) ganti rugi berekuiti;
(f) kos atas dasar tanggung rugi;
(g) selanjutnya dan/atau sebagai alternatif, ganti rugi yang akan ditaksirkan oleh Mahkamah Tinggi terhadap Defendan Pertama, termasuk ganti rugi yang berterusan;
Terhadap Defendan Kedua
(h) satu Deklarasi bahawa Defendan Kedua telah melanggar kewajipan fidusiarinya, kewajipan berkanunnya dan/atau kewajipan kesetiaannya yang terhutang kepada Plaintif dalam kapasitinya sebagai seorang Pengarah Plaintif;
(i) satu Perintah bahawa Defendan Kedua menanggung rugi Plaintif berhubung dengan semua kerugian, kos dan perbelanjaan berkenaan dan/atau berkaitan dengan Tuntutan Plaintif terhadap PGCG Assets, yang berbangkit daripada Tindakan-Tindakan Defendan Kedua;
(j) ganti rugi umum;
(k) ganti rugi teruk dan/atau ganti rugi teladan;
(l) ganti rugi berekuiti;
(m) kos atas dasar tanggung rugi;
(n) selanjutnya dan/atau sebagai alternatif, ganti rugi yang akan ditaksirkan oleh Mahkamah Tinggi terhadap Defendan Kedua, termasuk ganti rugi yang berterusan;
Terhadap Defendan Pertama dan Defendan Kedua
(o) satu Perintah untuk faedah pada kadar lapan peratus (8%) setahun ke atas apa-apa jumlah wang yang diperintahkan oleh Mahkamah Yang Mulia ini kepada Plaintif dari tarikh kemungkiran sehingga tarikh pembayaran penuh dan/atau penyelesaian oleh Defendan Pertama dan Defendan Kedua masing-masingnya;
(p) satu Perintah untuk faedah selepas penghakiman pada kadar lima peratus (5%) setahun ke atas hutang penghakiman dari tarikh Penghakiman ini hingga ke tarikh penyelesaian penuh dan muktamad; dan
(q) apa-apa relif lanjut dan relif lain sebagaimana yang difikirkan sesuai dan munasabah oleh Mahkamah Yang Mulia ini.
[3] By way of encl 54, the Plaintiff seeks for summary judgment to be entered against the 1st Defendant and 2nd Defendants in terms of para 19 of the Plaintiff's SoC.
[4] After considering the pleadings, affidavit evidence and submissions this Court allowed encl 54. The reasons are stated below.
Background Facts
[5] For ease of reference the facts upon which the Plaintiff relies to support its application for summary judgment is tabulated below:
[6] It is the Plaintiff's case that the Defendants have breached their fiduciary duties, statutory duties, duties of fidelity owed to the Plaintiff in their capacities as directors of the Plaintiff with the intention to impede, frustrate, interfere or obstruct the Plaintiff's Claim against PGCG Assets.
1st Defendant's Purported Breach
[7] In respect of the 1st Defendant, the instances of breach relate to the 1st Defendant's role or participation or involvement in the winding up petition filed by Keen Solution Sdn Bhd ("Keen Solution") against the Plaintiff company.
[8] At all material times the 1st Defendant is a director of Keen Solution with effect from 24 December 2013.
[9] It is contended by the Plaintiff that the 1st Defendant breached her duty as director of the Plaintiff by affirming
