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2025 MarsdenLR 4120
HIGH COURT MALAYA SHAH ALAM
LE APPLE BOUTIQUE HOTEL (KLCC) SDN BHD – Appellant
Versus
THUM MAY YIN & ANOR – Respondent
[Civil Suit No: BA-22NCVC-500-12-2021]
Directors owe fiduciary and statutory duties to their companies, requiring them to act in good faith and avoid conflicts of interest. Breaches result from actions negatively impacting company interests.
Headnote:(A) Companies Act 2016 - Section 213 - Duties of directors - Breach of fiduciary duty and statutory duty by directors in their capacities as directors of the Plaintiff company - The Defendants failed to act in the best interest of the Plaintiff, thus impairing the Plaintiff's claim against interest - The actions included affirming affidavits in favor of entities with conflicting interests. (Paras 1-2, 5, 54-56)
(B) The directors must avoid conflict of interest and should act in good faith in the company’s best interest as highlighted by precedent cases on fiduciary duties - Appellate findings established that actions taken to initiate winding up were motivated by ulterior motives that obstructed justice for the Plaintiff. (Paras 37-56)
Facts of the case:
The Plaintiff, a company, filed for breach of duties against its directors. The 1st Defendant participated in a winding up petition against the Plaintiff while acting as a director, thereby breaching her fiduciary duties. The 2nd Defendant also affirmed affidavits that conflicted with the interests of the Plaintiff.
Findings of Court:
The Court found a prima facie case that both Defendants breached their fiduciary and statutory duties towards the Plaintiff. Their actions were deemed to obstruct the Plaintiff’s claims against another entity.
Issues: The core issue was whether the Defendants’ actions constituted a breach of their duties as directors and whether they acted in good faith or in the best interest of the Plaintiff.
Ratio Decidendi: The court concluded that the Defendants’ specific actions were not in the best interest of the Plaintiff company, leading them to conflict with their fiduciary duties and responsibilities under the Companies Act 2016, thereby justifying the summary judgment against them.
Result: Summary judgment entered against both Defendants, with costs awarded to the Plaintiff.
| Table of Content |
|---|
| 1. writ action filed for breach of fiduciary duties. (Para 1 , 2 , 3) |
| 2. 1st defendant’s alleged breaches regarding winding up petition. (Para 6 , 7 , 8 , 9) |
| 3. 2nd defendant’s alleged breaches related to her roles. (Para 12 , 13 , 14 , 15) |
| 4. defendants’ arguments against breach allegations. (Para 16 , 17) |
| 5. duties of directors under the companies act. (Para 18 , 19 , 20 , 21) |
| 6. court’s detailed findings on breaches by both defendants. (Para 22 , 23 , 24 , 25 , 26 , 27 , 28 , 30 , 31 , 32 , 33) |
| 7. court's assessment of the 2nd defendant’s actions. (Para 37 , 40 , 44 , 51) |
| 8. final order for judgment against defendants. (Para 54 , 56) |
[1] The Plaintiff, a company, filed this writ action against the 1st Defendant and 2nd Defendant who are directors of the Plaintiff company for breach of fiduciary duties, statutory duties and/or breach of fidelity.
[2] The reliefs sought against both the defendants are pleaded at para 19 of the Plaintiff's Statement of Claim ("SoC") which is produced below:
19. Dengan yang demikian, Plaintif menuntut terhadap Defendan-defendan seperti berikut:
Terhadap Defendan Pertama
(a) satu Deklarasi bahawa Defendan Pertama telah melanggar kewajipan fidusiarinya, kewajipan berkanunnya dan/atau kewajipan kesetiaannya yang terhutang kepada Plaintif dalam kapasitinya sebagai seorang Pengarah Plaintif;
(b) satu Perintah bahawa Defendan Pertama menanggung rugi Plaintif berhubung dengan semua kerugian, kos dan perbelanjaan berkenaan dan/atau berkaitan dengan Tuntutan Plaintif terhadap PGCG Assets dan Petisyen Penggulungan Keen Solution, yang berbangkit daripada Tindakan-Tindakan Defendan Pertama;
(c) ganti rugi umum;
(d) ganti rugi teruk dan/atau ganti rugi teladan;
(e) ganti rugi berekuiti;
(f) kos atas dasar tanggung rugi;
(g) selanjutnya dan/atau sebagai alternatif, ganti rugi yang akan ditaksirkan oleh Mahkamah Tinggi terhadap Defendan Pertama, termasuk ganti rugi yang berterusan;
Terhadap Defendan Kedua
(h) satu Deklarasi bahawa Defendan Kedua telah melanggar kewajipan fidusiarinya, kewajipan berkanunnya dan/atau kewajipan kesetiaannya yang terhutang kepada Plaintif dalam kapasitinya sebagai seorang Pengarah Plaintif;
(i) satu Perintah bahawa Defendan Kedua menanggung rugi Plaintif berhubung dengan semua kerugian, kos dan perbelanjaan berkenaan dan/atau berkaitan dengan Tuntutan Plaintif terhadap PGCG Assets, yang berbangkit daripada Tindakan-Tindakan Defendan Kedua;
(j) ganti rugi umum;
(k) ganti rugi teruk dan/atau ganti rugi teladan;
(l) ganti rugi berekuiti;
(m) kos atas dasar tanggung rugi;
(n) selanjutnya dan/atau sebagai alternatif, ganti rugi yang akan ditaksirkan oleh Mahkamah Tinggi terhadap Defendan Kedua, termasuk ganti rugi yang berterusan;
Terhadap Defendan Pertama dan Defendan Kedua
(o) satu Perintah untuk faedah pada kadar lapan peratus (8%) setahun ke atas apa-apa jumlah wang yang diperintahkan oleh Mahkamah Yang Mulia ini kepada Plaintif dari tarikh kemungkiran sehingga tarikh pembayaran penuh dan/atau penyelesaian oleh Defendan Pertama dan Defendan Kedua masing-masingnya;
(p) satu Perintah untuk faedah selepas penghakiman pada kadar lima peratus (5%) setahun ke atas hutang penghakiman dari tarikh Penghakiman ini hingga ke tarikh penyelesaian penuh dan muktamad; dan
(q) apa-apa relif lanjut dan relif lain sebagaimana yang difikirkan sesuai dan munasabah oleh Mahkamah Yang Mulia ini.
[3] By way of encl 54, the Plaintiff seeks for summary judgment to be entered against the 1st Defendant and 2nd Defendant in terms of para 19 of the Plaintiff's SoC.
[4] After considering the pleadings, affidavit evidence and submissions this Court allowed encl 54. The reasons are stated below.
Background Facts
[5] For ease of reference the facts upon which the Plaintiff relies to support its application for summary judgment are tabulated below:
[6] It is the Plaintiff's case that the Defendants have breached their fiduciary duties, statutory duties and duties of fidelity owed to the Plaintiff in their capacities
