1989 MarsdenLR 395
HIGH COURT (IPOH)
PEH SWEE CHIN, J
GAN TUCK MENG
versus
NGAN YIN GROUNDNUT FACTORY SDN BHD
CIVIL SUIT NO 22-219-87
Decided On : 10-05-89
Ng Seng Lee for the plaintiffs.
VS Viswanathan for the defendants.
Solicitors: Yeoh Kian Teik & Co; Kean Chye & Sivalingam Reported by PS Ranjan
The matter before me was an episode of some bitter in-fighting among members of a family well known for producing a well-known brand of groundnuts in Perak. Since such in-fighting arose after the patriarch of the family had passed away, and because of similar past incidents elsewhere, many presumably would claim to have predicted it.
When the head of the family, viz Ngan Yin, died, he left behind, among others, four sons, a flourishing family company, viz the first defendant in this case (hereafter the 'family company') and his last will and testament. At this juncture, it would be pertinent to mention a bit about the Will.
Under the terms of the will, a short and simple one, powers were given to the executors to pay debts etc, to call in assets etc and convert the same etc with absolute power to postpone such calling and conversion and to stand possessed of the residuary estate to be distributed equally among the said four sons. The deceased further directed that the distribution of his (residuary) estate was to take place six months after the date of his death.
The executors appointed were Ngan Tack Kong, the second defendant, (hereafter called 'the defendant brother') and a daughter of the deceased (hereafter called the co-executrix').
The dispute here was confined to the family company with an issued and paid-up capital of $ 1m of which each of the four sons of the deceased had held 200,000 shares each, with the rest held by the estate of the deceased (with 199,998 shares) and two other persons (with 1 share each). At the heart of the matter was the shares held by the estate of the deceased, viz 199,998 shares which formed part of the residuary estate, which, when split into four equal portions for the said four sons, would mean approximately 49,999 shares for each son. Both parties had argued on the basis, which I thought was reasonable, that each of the four sons would inherit intact 49,999 shares in due course as a matter of time.
The executors had their names, as personal representatives of the deceased, registered as joints holders of the said 199,998 shares in the family company's share register with the name of defendant brother registered first and the name of the co-executrix immediately next. It is to be borne in mind that this had the effect that the voting rights carried by these 199,998 shares would only be exercised by the defendant brother and not the co-executrix, by virtue of a usual provision, and here it was art 59 of the articles of association of the family company in the following words:
In the case of joint holders the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders; and for this purpose seniority shall be determined by the order in which the names stand in the register of members. [Emphasis provided.]
The said 199,998 shares were registered at a time when the grant of the probate of the will of the deceased had not been extracted. The fact proved to be highly controversial between the parties hereto in its consequences.
An elder son, one Ngan Tuck Meng, the first plaintiff, (hereafter called 'the plaintiff brother') had been running the family company for many years prior to the death of the deceased, and for a few years after the death.
The plaintiff brother, holder of 200,000 shares in his own right, a sister, holder of one share (and another who had since discontinued her action against the defendants) filed the present action against the family company as first defendant and the defendant brother as second defendant claiming to the effect an injunction restraining the defendant brother from (a) exercising the voting rights relating to the deceased's 199,998 shares, and (b) from removing the plaintiff brother as managing director of the family company. Thirdly, the plaintiffs claimed an order that the family company do forthwith rectify the register of members in respect of the 199,998