Minority shareholders must prove oppressive conduct under Section 181 of the Companies Act 1965 through substantial evidence of unfair treatment, not merely through allegations of lost trust.

Introduction

[1] On 29 April 2008 leave was granted to the appellant to appeal against the judgment of the Court of Appeal reversing the decision of the High Court. Five questions were posed for consideration by this Court. Having heard the appeal proper judgment was reserved to consider the points involved.

[2] For convenience and to minimize confusion in this judgment the 1st respondent is addressed as 'the company' and the appellant as 'the petitioner'. The 2nd and 3rd respondents remain the same.

[3] As this appeal is focused on the scope and application of s 181 of the Companies Act 1965 (the Act) to prove facts and circumstances, it is only appropriate at the outset to reproduce the relevant portions of the section which read:-

181. Remedy in cases of an oppression.

(1) Any member or holder of a debenture of a company or, in the case of a declared company under Part IX, the Minister, may apply to the Court for an order under this section on the ground

(a) that the affairs of the company are being conducted or the powers of the directors are being exercised in a manner oppressive to one or more of the members or holders of debentures including himself or in disregard of his or their interests as members, shareholders or holders of debentures of the company; or

(b) that some act of the company has been done or is threatened or that some resolution of the members, holders of debentures or any class of them has been passed or is proposed which unfairly discriminates against or is otherwise prejudicial to one or more of the members or holders of debentures (including himself).

(2) If on such application the Court is of the opinion that either of those grounds is established the Court may, with the view to bringing to an end or remedying the matters complained of, make such order as it thinks fit and without prejudice to the generality of the foregoing the order may:-

(a) direct or prohibit any act or cancel or vary any transaction or resolution;

(b) regulate the conduct of the affairs of the company in future;

(c) provide for the purchase of the shares or debentures of the company by other members or holders of debentures of the company or by the company itself;

(d) in the case of a purchase of shares by the company provide for a reduction accordingly of the company's capital; or

(e) provide that the company be wound up.' (Emphasis added)

Background Facts

[4] The petition was filed on 3 March 2004.

[5] In view of the cause of action relied upon it is of paramount importance that the facts and circumstances leading to the filing of the petition should be set out in proper perspective.

[6] Fortunately in this appeal the task has been made easy. There is no necessity to regurgitate the facts in this judgment since the courts below had already done so. In fact the parties had placed before the learned trial judge a Statement of Agreed Facts which was reproduced in full by the Court of Appeal in its judgment. (See:Ngiu-Kee Corporation (M) Bhd & Anor v. Pan-Pacific Construction Holdings Sdn Bhd, 2008 MarsdenLR 4174 ).

[7] Notwithstanding, there are some salient facts that should be highlighted for their implications or importance. They are as follows:-