ABDUL MALIK ISHAK J

This is an interesting case as it involves the interpretation of s 226(3)

BETWEEN

Bruno Phillipe Fehrenbach (seorang pemegang saham minoriti bagi pihak Han Pacific Sdn Bhd No Syarikat 362403-K) Plaintiff

AND

(1) James Hamilton McPhail (2) Viva Capital Sdn Bhd (No Syarikat 419885-M)

(3) Ang Swee Hau @ Jeffrey Ang[1999] 5 MLJ 321 at 324 (4) Complete Command Sdn Bhd (No Syarikat 447504-D)

(5) Han Pacific Sdn Bhd (No Syarikat 362403-K) Defendants

In a derivative action, the name of the company itself must be named as a defendant so that the order of the court will bind the company.Thus, Han Pacific Sdn Bhd was named as one of the defendants in Civil Suit No 22 388-1998. In a derivative action, the plaintiff usually seeks to enforce a cause of action which belongs to the company and not to him personally and the court can, in its discretion, at any time after the commencement of the action order the company to indemnify him for his costs on a common fund basis (in addition to the party and party costs recoverable by the plaintiff from the defendants), and such discretion is exercisable in the plaintiff's favour whether the derivative action is eventually successful or not ( Wallersteiner v Moir (No 2); Moir v Wallersteiner & Ors (No 2) [1975] QB 373[1975] 1 All ER 845). Derivative actions have been entertained in many kindred situations. A person who is entitled to shares or an interest but is not registered as the holder of them in the company's register of members is entitled to institute a derivative action ( Bagshaw v Eastern Union Railway Co (1849) 7 Hare 114; Binney v Ince Hall Coal and Channel Co (1866) 35 LJ Ch 363; and Mills v Northern Railway of Buenos Ayres Co (1870) 5 LR Ch App 621Spokes v The Grosvenor and West End Railway Terminus Hotel Co Ltd & Ors [1897] 2 QB 124Wallersteiner v Moir; Moir v Wallers [1974] 3 All ER 217; [1974] 1 WLR 991Cook GS v Deeks & Ors [1916] 1 AC 554

But the derivative action of the applicant here moves into unchartered water. On 16 July 1998, a day after the applicant filed his writ of summons, a winding- up order was made against Han Pacific Sdn Bhd by this court as a winding-up court. The applicant is in a dilemma as he is confronted by s226(3) of the Companies Act 1965 which reads as follows:

When a winding up order has been made or a provisional liquidator has been appointed no action or proceeding shall be proceeded with or commenced against the company except —

(a) by leave of the Court; and

(b) in accordance with such terms as the Court imposes.

and in that state of bewilderment, his solicitors, Messrs Gan & Lim, rightly advised him to file an originating summons seeking a declaration in regard to the correct interpretation of that section. It is for this reason that the[1999] 5 MLJ 321 at 325 applicant files an originating summons in encl 4 which is supported by an affidavit in support of the applicant himself as seen in encl 3. Enclosure 4 seeks for the following prayers:

(1) Perisytiharan bahawa atas tafsiran sebenar s 226(3) Akta Syarikat 1965, kebenaran Mahkamah tidak diperlukan oleh pemohon, yang merupakan plaintif dalam Guaman Sivil No 22-338 tahun 1998 yang telah memulakan tindakan tersebut sebagai pemegang saham minoriti syarikat Han Pacific Sdn Bhd (No Syarikat 362403-K), untuk meneruskan tindakan tersebut, walaupun syarikat tersebut telah digulungkan menurut perintah mahkamah yang mulia ini pada 16 Julai 1998; atau (2) Jikalau mahkamah yang mulia ini memutuskan bahawa kebenaran mahkamah diperlukan, maka agar pemohon di berikan kebenaran untuk meneruskan sebagai plaintif dalam Guaman Sivil No 22-388 tahun 1998 tersebut;

(3) Lain-lain relif yang difikirkan wajar dan sesuai oleh mahkamah yang mulia ini.

and it cites the Official Receiver as a party, a wise move. In the words of Seah SCJ in Mosbert Bhd (In liquidation) v Stella D'Cruz [1985] 2 MLJ 446

… It is for this reason that application under s 226(3)

The issue that confronted the Supreme Court in Mosbert Bhd (In liquida