JUDGMENT OF GOPAL SRI RAM, J.C.A.

This is a tolerably plain case. It concerns a claim by the plaintiffs (appellants before us) against the defendants (respondents here) for the transfer of the shares owned and held by the first defendant, Boltex, in another company called Dragonbite Holdings Sdn Bhd. The claim arises out of a document (Exhibit PI) which was executed by the plaintiffs and the second to the sixth defendants. The learned trial judge has set out the document in extenso in his judgment and I am therefore spared from referring to it in any detail here. For present purposes it suffices to say that PI, to which Boltex was not a party, recites that among other things that "have been agreed in principle", all the shares of Dragonbite belonging to Boltex shall be transferred to the first plaintiff and his nominees. I must add that Boltex, for some reason that is not entirely clear raised a counterclaim against the appellants.

As a result of the way in which the case was argued before him, the learned judge held that there was no concluded agreement between the parties. He then dismissed the claim and the counterclaim. Having regard to the ambiguous and uncertain language in which Exhibit PI has been cast, I very respectfully concur with the learned judge"s finding that there was no concluded and enforceable agreement between the parties who executed Exhibit PI. But even if the learned judge and I are wrong in the view we have taken of the matter, there is, in my respectful view, another ground on which the decision of the learned judge may be upheld.

To recall, the agreement, if any, was for the second to the sixth defendants to transfer Dragonbite shares belonging to Boltex to the plaintiff. Now, I must say that I found that most odd when it was put to us by learned counsel for the appellants during argument. If the shares belonged to Boltex, it is hardly comprehensible how persons who have no ownership rights in those shares can possibly enter into an agreement dealing with their transfer. And since Boltex was not a party to Exhibit PI, any promise that may have been made by the second to the sixth defendants is not enforceable against it by reason of the doctrine of privity of contract. See, Kepong Prospecting Ltd & Ors v Schmidt 119681 1 MLJ 170.

The source of the confusion in the minds of the plaintiffs when pursuing their claim against the second to the sixth defendants is their oversight of the fundamental principle that a company is a separate entity distinct from its shareholders. The property owned by a company belongs to it and not to its shareholders.That proposition was established by the leading case of Macaura v Northern Assurance Co Ltd & Ors [19251 AC 619 where Lord Buckmaster said:

"Now, no shareholder has any right to any item of property owned by the company, for he has no legal or equitable interest therein. He is entitled to a share in the profits while the Company continues to carry on business and a share in the distribution of the surplus assets when the company is wound up."

It follows that the plaintiffs and the second to the sixth defendants had no right whatsoever to contract over the property of a third party, namely, Boltex. But, says counsel for the plaintiffs, the matter may be easily resolved by lifting the veil of incorporation of Boltex. I regret that I find myself unable to accede to this submission. It is true that at one point of time the view held by some academics and judges (including Lord Denning) was that the corporate veil could be cast aside whenever the interests of justice required it. In our jurisdiction, the high level watermark favouring this view is Hotel Jayapuri Bhd v National Union of Hotel Bar and Restaurant Workers [19801 1 MLJ 109, where Salleh Abas FJ (sitting at first instance as a High Court judge) said:

"It is true that while the principle that a company is an entity separate from its shareholders and that a subsidiary and its parent or holding company are separate e