JUDGMENT

Ramly Ali J:

Introduction

[1] The central issue in this case is the beneficial ownership of the entire shareholding in the 4th defendant company Chrysalis Contracts Sdn. Bhd. and consequently in a company known as Hitechniaga Sdn. Bhd. The issue centered around the intended acquisition of all shares in Hitechniaga by a group of persons.

[2] The plaintiffs, whilst acknowledging that the original group consisted of 5 members being the 1st and 2nd plaintiffs and the 5th, 6th and 7th defendants, claim that at a certain point of time in or around the middle of 1997, the group was reduced to 3 members with the 5th and 6th defendants opting out of the group. All the defendants, on the other hand contend that the beneficial owners of the 4th defendant company are the 1st and 2nd plaintiffs, the 5th, 6th and 7th defendants. The defendants say that the 5th and 6th defendants never opted out and that the original group of (5) remained intact. Where the parties diverge therefore is whether the 5th and 6th defendants were beneficial owners of the 4th defendant company.

Prayer Sought By The Plaintiffs

[3] The plaintiffs are claiming for the following prayers:

(a) A declaration that the plaintiffs have equitable and beneficial interest of 65% in the shares of the 4th defendant in line with the Joint-Venture Agreement between the plaintiffs and the 7th defendant to purchase Hitechniaga shares through the 4th defendant;

(b) A declaration that the 7th defendant has equitable and beneficial interest of only 35% in the shares of the 4th defendant in line with the Joint-Venture Agreement between the plaintiffs and the 7th defendant to purchase the Hitechniaga shares through the 4th defendant;

(c) a declaration that the 5th and 6th defendants do not have any equitable and beneficial interest in the shares of the 4th defendant in line with the Joint-Venture Agreement between the plaintiffs and the 7th defendant to purchase the Hitechniaga shares through the 4th defendant;.

(d) a declaration that the 1st, 2nd and 8th defendants are merely registered owners of the 4th defendant and directors of the 4th defendant as trustees and nominees for the equitable and beneficial interest of the plaintiffs and the 7th defendant;

(e) a declaration that the 1st and 2nd defendants had breached their legal and equitable duties to the plaintiffs when:

(i) they refused, failed and/or negligently transferred 65,000 shares in the 4th defendant as instructed by the plaintiffs;

(ii) they refused, failed and/or negligently pass a resolution to appoint two new nominee directors on the Board of Directors of the 4th defendant;

(iii) they reported the original share certificates of the 4th defendant as lost despite knowing at all material times where the shares were kept;

(iv) that an injunction be granted to restrain the 1st and 2nd defendants as registered shareholders of the 65,000 shares in the 4th defendant and/or their servants and/or their agents or otherwise from transferring, selling, pledging, charging, assigning, diminishing, disposing or dealing in any way with the 65,000 shares in the 4th defendant;

(v) that an injunction be granted to restrain the 1st, 2nd and 8th defendants as registered shareholders of all the shares in the 4th defendant and/or their servants and/or their agents or otherwise from reducing the paid-up capital of the 4th defendant in any way whatsoever, directly or otherwise.

(f) That an injunction be granted to restrain the 1st, 2nd and/or 8th defendants from acting or making any representation that they are the directors and/or registered shareholders of shares in the 4th defendant or make any representation that the 1st, 2nd and/or 8th defendants have authority to act for and on behalf of the 4th defendant and to restrain them from interfering with the management and affairs of the 4th defendant;

(g) that the defendants be liable to the plaintiffs to pay damages, general and special, for all loss and/or damage, including the sum of RM600,000, RM250,000