The court clarified that fiduciary duties associated with directorships do not extend to individual claims by directors against one another, reinforcing that breaches must be pursued by the company itself.

[1] This is an appeal against the decision of the High Court after full trial where the learned trial Judge allowed the Appellants' claim against the Respondent in Civil Suit No. 22-14-2009 and Civil Suit No. 22-80-2010. The learned trial Judge had also allowed the Respondents' counter claim against the Appellants in both suits.

[2] After due consideration of the respective submissions by the Appellants and the Respondents, we unanimously allowed the appeal by the Appellants and dismissed the Respondents cross appeal with costs of RM30,000.00 here and below. We now give our reasons.

Background Facts

[3] The Appellants and the Respondents entered into a Sale and Purchase of Shares Agreement dated 16 May 2007 ("Principal Agreement") whereby the Appellants agreed to sell their shares in two companies, they are Excellent Bonus Sdn Bhd ("EBSB") and Ideal Task (M) Sdn Bhd. ("ITSB") (together referred to as the "2 Companies") to the Respondents. The Principal Agreement also included the sale of EBSB's wholly owned subsidiary company known as Syarikat Galas Setia (Ulu Kelantan) Sdn Bhd ("SGS") (EBSB, ITSB and SGS together referred to as "3 Companies").

[4] The total purchase price for the sale of shares in the 2 Companies was RM8,000,000.00. Clause 3.1 of the Principal Agreement specifically stipulated that the Appellants and Respondents agreed that the share purchase price shall be paid as per the tranches below:

[5] In consideration of the purchase price of RM8,000,000.00, Clauses 1 and 4 of the Principal Agreement required the Appellants to transfer all their shares to the Respondents and also to resign as directors in the 3 Companies. This consideration was fulfilled by the Appellants, and all their shares were effectively transferred to the Respondents and the Appellants had resigned as directors of the 3 Companies.

[6] The Respondents paid the Appellants the first and second tranches totalling RM5,000,000.00 as per the payment schedule. However, before the expiry of due date for the third and fourth tranches, the Appellants and the Respondents executed a Supplemental Agreement dated 16 May 2007. Amongst others it was agreed that the payment dates for the third and fourth tranches under the Principal Agreement be rescheduled as per Clause 3.1 which provides as follows:

"In consideration of the premises herein contained, the Parties hereby mutually agree that the Payment Dates of the Third and Fourth Tranches of the Share Price referred to in Clause 3.1 of the Principal Agreement is hereby varied as followed:-

[7] The Appellant filed the Civil Suit No. 22-14-2009 when the Respondents failed to pay the third tranche and subsequently filed suit No. 22-80-2010 when the Respondents failed to pay the fourth tranche.

[8] The Respondents in their Defence and Counter Claim stated that the basis of the sale and purchase of shares for the sum of RM8,000,000.00 was arrived at by taking into consideration the fundamental terms and conditions and obligations to be fulfilled by the Appellants as reflected in Clause 1 of the Principal Agreement which, amongst others, states as follows:

"1. BASIS OF SALE AND PURCHASE

1.1 The Parties hereto mutually agree that the sale and purchase of the Sale Shares herein by the Vendors to the Purchasers for the total purchase price of RM8,000,000.00 is strictly on the following