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2024 MarsdenLR 65
COURT OF APPEAL PUTRAJAYA
MARIANA YAHYA, JCA
QUEENSWAY NOMINEES (ASING) SDN BHD & ORS – Appellant
Versus
ISM SENDIRIAN BHD & ANOTHER APPEAL – Respondent
[Civil Appeal No: W-02(NCC)(W)-1220-07/2019 & W-02(NCC)(W)-1341-07/2019]
The court ruled that claims of oppression under Section 181 of the Companies Act 1965 were unfounded as the relationship was deemed commercial, not a quasi-partnership, thus no oppression existed.
Headnote:(A) Companies Act 1965 - Section 181 - Oppression of minority shareholders - Plaintiff's claims of oppression under s 181 were dismissed as the court found no oppressive conduct by the majority shareholder - The relationship between parties was held to be a commercial one, not a quasi-partnership, and thus s 181 was inapplicable. (Paras 49, 60, 89)
(B) Joint Ventures - Nature of relationship - The court determined that the parties were engaged in an unincorporated joint venture without a formal shareholders' agreement, and thus the terms of the Companies Act applied strictly. (Paras 62, 79)
(C) Damages - The court ruled that no damages or buyout should be awarded as the claims were unfounded, and the learned High Court Judge had erred in his findings. (Paras 86, 89)
Facts of the case:
The plaintiff alleged oppression as a minority shareholder in multiple joint venture companies, claiming that the majority shareholder engaged in oppressive conduct, including demands for payment and rights issues that diluted the plaintiff's shares. (Paras 28, 35)
Findings of Court:
The court found that the learned High Court Judge misapprehended the nature of the relationship between the parties and applied s 181 incorrectly, leading to an unsustainable ruling. (Paras 49, 89)
Issues: The primary issue was whether the learned High Court Judge correctly found oppression under s 181 of the Companies Act 1965. (Paras 40, 89)
Ratio Decidendi: The court held that the learned High Court Judge erred in finding a quasi-partnership and that the claims did not meet the threshold for oppression under s 181. (Paras 49, 89)
Result: Appeals allowed; the High Court decision set aside.
Introduction
[1] The present Civil Appeal No W-02(NCC)(W)-1220-07/2019 (Appeal 1220) and Civil Appeal No W-02(NCC)(W)-1341-07/2019 (Appeal 1341) are related appeals. Both appeals arise from the judgment of the High Court dated 21 June 2019.
[2] The Appellants (the Defendants) in Appeal 1220 are appealing against the whole decision of the High Court in allowing the Respondents (ISM Sdn Bhd - the Plaintiff) in 5 Civil Suits filed pursuant to s 181 of the Companies Act 1965 which were later consolidated into one suit. The 5 Civil Suits at the High Court namely:
a) WA-22NCC-68-02/2016;
b) WA-22NCC-69-02/2016;
c) WA-22NCC-70-02/2016;
d) WA-22NCC-71-02/2016; and
e) WA-22NCC-72-02/2016;
[3] Whereas the Appellant (ISM Sdn Bhd - the Plaintiff) in Appeal 1341 filed an appeal against part of the High Court 's decision that allowed only part of the damages sought by ISM in the statement of claim. ISM Sdn Bhd appeals on the remaining reliefs that were not granted by the learned High Court Judge as follows;
i. Reliefs in the Amended Statement of Claim in paragraphs 250(2), (3), & (b), 5(a) & 6 (a, b, c & d), 7 (a, b, c, d & e) and 9(c) in KLHC Suit WA-22NCC-68-02/2016 (Suit No 68) are not granted and dismissed.
ii. Reliefs in the Amended Statement of Claim in paragraphs 250(2), (3), (4)(a) & (b), 5 (a, b, c &d), 6 (a, b, c, d & e), and 8(c) in (c) in KLHC Suit WA-22NCC-69-02/2016 (Suit No 69) are not granted and dismissed.
iii. Reliefs in the Amended Statement of Claim in paragraphs 250(2), (3), & (b), 5 (a & b), 6 (a, b, c & d), 7(a, b, c, d & e) and 9(c) in KLHC Suit WA-22NCC-70-02/2016 (Suit No 70) are not granted and dismissed.
iv. Reliefs in Amended Statement of Claim in paragraphs 250(2) (a),(3) (a, b, c & d), (4)(a, b, c, d & e), and 6(c) in KLHC Suit WA-22NCC-71-02/2016 (Suit No 71) are not granted and dismissed.
v. Reliefs in the Amended Statement of Claim in paragraphs 250(2), (3), (4) (a, b, c, d & e) and 6(c) in KLHC Suit WA22NCC-72-02/2016 (Suit No 72) are not granted and dismissed.
vi. The buy-out price is to be determined by the independent firm of accountant & independent firm of valuers in accordance with Valuers, Appraisers, Estate Agents and Property Managers Act 1981.
vii. Damages, interest, and costs as mentioned in paragraphs 6 to 16 of the Notice of Appeal.
Preliminary Objection By The Respondent
[4] Before the appeals were heard, the Respondent raised a preliminary objection on two points:
i. First, the appeal is entirely based on the High Court 's decision in allowing the Respondent's claim under s 181 of the Companies Act 1965 ( CA 1965). Nothing in the Memorandum of Appeal or Additional Memorandum of Appeal mentioned about the appeal on the dismissal of the Appellants' counterclaim. The Appellants have to state dearly about the counterclaim in the Notice of Appeal and Memorandum of Appeal.
ii. Second, the damages that the learned High Court Judge awarded were made without hearing evidence from witnesses and/or parties' submissions. Therefore, the learned High Court Judge was wrong in deciding on damages.
In response to the Respondent's preliminary objection, the Appellants submitted that their appeal is on the whole decision of the High Court and it includes the dismissal of counterclaim by the learned High Court Judge.
Our Ruling On The Preliminary Objection
[5] Upon hearing submissions by the parties, it is our considered view that the Notice of Appeal only mentioned "appeals to the Court of Appeal against the whole decision in allowing the plaintiff's claim pursuant to s 181 of the Companies Act 1965 ". Our reading of the quoted words is that the Appellants have been limited to the decision in respect of the claim of the Respondent that has been allowed only. The subject of appeal is ambiguous in which case, the Respondent should not be put in a position to defend the counterclaim. Accordingly, we ruled that the decision of the High Court on the counterclaim cannot be pursued in
