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2014 MarsdenLR 1029

FEDERAL COURT PUTRAJAYA
MALAYAN BANKING BERHAD – Appellant
Versus
CHAIRMAN SARAWAK HOUSING DEVELOPERS ASSOCIATION – Respondent
[Civil Appeal No: 02(f)-79-11-2012(Q)]



A registered association can be sued by any officer-bearer in a representative capacity when no public officer is defined, according to section 9(c) of the Societies Act.

Headnote:(A) Societies Act 1966 - Section 9(c) - Legal capacity of associations - The court determined that an officer may sue on behalf of an association in the absence of a registered public officer. The appeal concerned whether the respondent's chairman could sue using the title 'Chairman, Sarawak Housing Developers' Association.' (Paras 1, 9, 26)

(B) Representative actions - The rules allow for representative claims by office-bearers of an association when no public officer is registered. The distinction between personal and representative actions is upheld, facilitating justice for members (Paras 12, 20, 28).

Facts of the case:
The appellant was sued for allegedly clearing cheques totaling RM322,007.95 signed by an unauthorized person in the Association's name. The main issue revolved around the capacity to sue (Paras 2, 3, 12).

Findings of Court:
The trial court held that the Chairman's action was validly commenced and that capacity to sue exists under the Act, even without a registered public officer (Paras 16, 26).

Issues: The primary question was whether the Chairman could sue in his position or needed to use a personal name due to the lack of a registered public officer (Paras 14, 17).

Ratio Decidendi: The court concluded that the absence of a registered officer did not invalidate the representative action, and the chairman acted on behalf of members, aligning with statutory and procedural principles (Paras 9, 26, 32).

Result: The appeal was dismissed with costs.

Table of Content
1. nature of lawsuit by chairman of association (Para 1 , 1 , 2 , 4)
2. fraudulent actions and duties of care (Para 3 , 10 , 12 , 15)
3. capacity to sue and procedural compliance (Para 11 , 13 , 14)
4. locus standi issue and legal interpretations (Para 16 , 17 , 18)
5. interpretation of s 9(c) of the act (Para 19 , 20 , 21)
6. representative action in absence of public officer (Para 22 , 23 , 25)

[1] The defendant, hereinafter referred to as the appellant, had filed a successful leave application before us in respect of the sole question of law which reads as follows:

"Whether the Sarawak Housing Developers' Association, which is a society registered under the Societies Act 1966 , can sue as "Chairman Sarawak Housing Developers' Association."

[2] The plaintiff, ie the respondent had sued the appellant for the refund of RM322,007.95 debited from its account. In the course of the hearing at the High Court, followed by an appeal at the Court of Appeal, much centered on the issue whether the respondent was right in suing the appellant under the office-bearer's capacity of 'Chairman, Sarawak Housing Developers' Association' rather than his individual name. As gleaned from above the Sarawak Housing Developers' Association (Association) is an association registered under the Societies Act 1966 (the Act).

[3] The respondent's case was that the appellant had wrongfully cleared 186 cheques encashed by the Association's Executive Secretary, ie one Nazerah Haji Obeng (Nazerah), causing the Association's account to be debited of the aforesaid sum of RM322,007.95. The respondent wanted a refund of the latter sum. In its defence, amongst others, the appellant pleaded that the respondent lacked capacity to sue.

[4] For better appreciation of this appeal, in relation to the question for our determination we reproduce the facts, with the chronology beginning with a letter dated 6 October 1992, when the Association applied to open a current account with the appellant at its branch at Wisma Satok. In support of the account application the following documents were supplied, viz:

(i) the relevant Malayan Banking application forms;

(ii) copies of the Rules and Regulations/Constitution of the Association;

(iii) a list of the current Board members; and

(iv) the Association's resolution to open the current account.

[5] The application was successful and the Association's current account supplied by the appellant bore the number 0-11113-20591-2 ("the account"). The appellant was notified of the persons allowed to operate the account. One of the Rules made known to the appellant at the time of opening the account was evident in para 9.3 of the Rules and Regulations, and reads:

"All cheques or withdrawal notices on the Association's account shall be signed jointly by the Chairman (or in his absence the Vice- Chairman) and the Treasurer. In the absence of the Treasurer the Assistant Treasurer shall sign in his place."

[6] It is pertinent to note that the appellant was forwarded a copy of the Rules and Regulations and was also furnished with the names of the office bearers and signatories of all related negotiable instruments, from the time the account was approved, together with the changes in the office bearers.

[7] Following the third Executive Committee meeting of the Association on 11 April 2002, the abovementioned Nazerah was appointed the Executive Secretary and tasked with the daily administrative duties of the office. She was also tasked with the recording of the minutes of the Executive Committee meetings. At the same time, she kept the cheque book of the account.

[8] Vide letter dated 18 May 2002, purportedly signed by the Association's Chairman, the appellant was informed that Nazerah, was named as an additional signatory of cheques subject to a limit of RM2,000.00. The letter also informed the appellant that only one signatory was required for cheques of RM2,000.00 and below. Attached to the letter was part of the minutes of the Executive Comm

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