A director's agreement that fetters fiduciary duties is illegal and unenforceable; the burden of proof lies on the claimant to establish a claim.

JUDGMENT

Mohd Arief Emran Arifin JC:

A. Introduction

[1] The plaintiff alleges that the defendant owes him a sum of RM5,000,000.00. He also alleges that the said sum is due based on the existence of an Agreement dated 3 January 2018 entered between the plaintiff and the defendant.

[2] The plaintiff alleges that the defendant had requested him to agree to be appointed to the board of directors of the company known as Kolej Universiti Linton Sdn Bhd ("Kolej Universiti Linton").

[3] He further alleges that to persuade the plaintiff to agree to be appointed as a director of the said company, the defendant had agreed that he would pay him the sum of RM25,000.00 a month from the said company as director's fees. The plaintiff however only received payment for the said director's fees from April 2009 to January 2010.

[4] Sometime in May 2016, parties met, and the plaintiff alleges that they had a discussion concerning the unpaid director's fees.

[5] The plaintiff alleges that at the said meeting, parties agreed that the defendant agreed to pay him the sum of RM1,250,000.00 as compensation for the difficulties suffered by the plaintiff due to the failure to pay the said director's allowance and is put into writing in the statutory declaration dated 1 June 2017.

[6] The plaintiff also alleges that this agreement to pay the sum of RM1,250,000.00 is separate from the director's fees outstanding to the plaintiff.

[7] Sometime in 2018, parties then met again. The plaintiff alleges that this meeting arose to discuss the issues faced by Kolej Universiti Linton and to discuss the unpaid director's fees that were due to the plaintiff.

[8] The plaintiff alleges that because of the said meeting, parties entered into an Agreement dated 3 January 2018 which contains the following clauses ("Co-operation Agreement"):

(i) Clause 1.1

1. Cooperation mode and contents

1.1 The Parties shall cooperate (and cause their respective representatives or agents to cooperate) with each other, in connection with the administrations and governance of the company.

(ii) Clause 1.2

1.2 Party A shall act at all times in the best interests of Party B in keeping with such duty, Party A shall not engage in any activity directly competitive and/ or detrimental to the welfare of Party B's interest in the company.

(iii) Clause 2.1

2.1 The parties have the right and ability to sign and perform this Agreement and have the right and ability to fulfill all the obligations stipulated in this Agreement.

(iv) Clause 2.2

2.2 Representatives of the Parties that sign the agreement have been fully and effectively authorised pursuant to appropriate and effective authorisation documents, which documents are provided by the parties and are valid and irrevocable.

(v) Clause 2.3

2.3 The Parties are authorised by their organisations, companies, government agencies, higher authorities, third-party (if required) to sign and perform this Agreement, this Agreement is legally binding and enforceable.

(vi) Clause 3

3. Fees and Payments

Party B shall pay Party A fees of Ringgit Malaysia Five Million Only (RM5,000,000.00) which is payable within 7 days upon receipt of any monies from the sale of the shares to any third party or within one (1) year from the date of this agreement, whichever is earlier, after Party B receives the sale proceeds of the Share Sales from the Purchaser or in the event where the Share Sale is terminated within 7 days after the date of the termination.

[9] The plaintiff alleges that the defendant failed to comply with the agreement dated 3 January 2018 and as a result claims that the sum of RM5,000,000.00 is to be paid to him in accordance with terms of the aforesaid Agreement dated 3 January 2018.

[10] The defendant denies that he is liable to the plaintiff's claim on the following grounds:

10.1 That the sum of RM25,000.00 was paid to the plaintiff for work done for consultancy fees by a company known as Jati Cerah Sdn Bhd and that the defendant did not make any personal commitment or agreement to pay