JUDGMENT

Raus Sharif J:

Introduction

There are three appeals before this court:

(i) Civil Appeal No. W-02-229-2001;

(ii) Civil Appeal No. W-02-247-2001; and

(iii) Civil Appeal No. W-02-265-2001.

On 3 September 2001, the above three appeals were consolidated and ordered by this court to be carried on as one appeal. The court further ordered that the appeals be heard as Civil Appeal No. W-02-229-2001, and one record of appeal be filed and used for the hearing of all the three appeals. The appeal record for Civil Appeal No. W-02-229-2001 was accordingly filed on 10 May 2001.

On 12 April 2004, Choo Chin Chye, the appellant in Civil Appeal in W-02-229-2001 withdrew his appeal. Thus, the appeals before us are the appeals by Industrial Concrete Products Berhad (ICP) in Civil Appeal No. W-02-247-2001 (ICP's appeal) and Concrete Engineering Products (CEPCO) in Civil Appeal No. W-02-265-2001 (CEPCO's appeal). There is also before us CEPCO's cross appeal to ICP's appeal in Civil Appeal No. W-02-247-2001.

Facts

ICP and CEPCO are both public listed companies. They are direct competitors in the same industry engaging in the business of manufacturers and production of prestressed spun concrete piles and poles. At the material time ICP held approximately 65% market shares of the business. CEPCO held approximately 25% market shares. Hence, combined, ICP and CEPCO held approximately 90% market shares in the manufacture and sale of prestressed spun concrete piles and poles in Malaysia.

CEPCO's founder and substantial shareholder is one Wong Kong Nam (Wong). He held the position of Managing Director in the company and was aided by a Board of Directors. The next most senior executive in the company was Mr. Ang Yeow Hua (Ang). He was in charge of production.

On 19 January 1996 one Low Thean Hock (Low) purchased a substantial shareholding of CEPCO and became a major shareholder of CEPCO. Upon completion of the purchase, Low installed one Choo Chin Thye (Choo) as his nominee director in CEPCO. Low also appointed two other nominees namely: Raja Zainal Abidin (Raja Zainal) and Dato' Mustaffa Mohd (Dato Mustaffa) to the Board of Directors of CEPCO. With the appointment of Raja Zainal and Dato Mustaffa, two of the CEPCO directors had to resign. In addition Wong has to relinquish his managing directorship in CEPCO. Wong, however, remained as an ordinary director on the Board together with two other directors of the former Board that is Tan Sri Amar Stephen Young (Tan Sri Stephen) and Encik Hamidun Masuod (Hamidun).

Sometime in March 1996 Choo met up with the Managing Director of ICP, Lim Yong Kiat (Lim). They discussed Choo's plan to sell CEPCO's core business to ICP. Lim was interested in Choo's business proposition. After consulting ICP's principal shareholder, he started negotiating with Choo. On 24 April 1996 an agreement between Choo and Lim was purportedly reached on a concept paper prepared by Lim. M/s Adnan, Sundra and Low was appointed to prepare the necessary legal documents.

On 25 April 1996, on Choo's invitation, Lim and various personnel from ICP moved into the office of CEPCO in Kuala Lumpur and within days had taken over three of CEPCO's factories and acquired CEPCO'S physical assets and core business located around the country. ICP also cancelled purchase orders given to CEPCO and requested these customers to reissue their orders to ICP.

All these events took place while Ang, the most senior executive of CEPCO, was on holiday abroad. Upon his return on 3 May 1996 he was shocked to find ICP's personnel in CEPCO's office. He also discovered a letter from Choo dated 26 April 1996 addressed to him, informing that ICP had been appointed manager for the production and marketing of CEPCO's core business. On 7 May 1996, Ang received another letter, this time from CEPCO's company secretary (Ms Chui) retrenching him as an employee of the company.

On 9 May 1996, a Board of Director's meeting of CEPCO was called. It was attended by Choo as Chairman, Raja Zainal, Dato