JUDGMENT

Ambrose J:

The question raised by this appeal is whether the defendant company's appointment of itself as a director of the plaintiff company in exercise of the power purporting to be given to it by the plaintiff's articles of association is invalid.

The facts are not in dispute and are as follows. On 31 December 1925 the owners of part of the property known as Raffles Hotel, Singapore, leased it to A Sarkies and MS Arathoon for a term of 70 years. The lease provides as follows:

And the lessees hereby covenant with the lessors as follows, that is to say:

14 Not without the previous licence in writing of the lessors to assign or sublet the said premises or any part thereof such licence not to be unreasonably withheld provided nevertheless that (a) if the assignee or sublessee be a limited company no consent shall be given unless the articles contain a provision that from time to time during the continuance of this demise the lessors shall have power to appoint a director not subject to retirement by rotation, but any director so appointed shall not be a person interested in or connected with any business of a similar nature to the lessees (b) in the case of a sub-lease no consent shall be given unless the sub-lessee shall become tenant of the lessors at the rent hereby reserved.

On 11 September 1931 MS Arathoon was adjudicated bankrupt. And on 27 November 1931, an order was made for the administration in bankruptcy of the estate of A Sarkies, deceased.

By a deed of assignment dated 6 July 1933 the lease was assigned by the proper parties to the plaintiff company, subject to all the covenants and conditions contained in the lease.

The memorandum and articles of association of the plaintiff company were registered and the company was incorporated in Singapore on 28 February 1933.

Article 77 of the plaintiff's articles of association empowers the lessors and their assigns to appoint a director of the plaintiff company. The article is in these terms:

(1) The lessors to the company of part of the property known as Raffles Hotel Singapore under a lease dated 31 December 1925 and made between William Joseph Mayson and Mirza Mohamed Ali Namazie of the one part and Arshak Sarkies and Martyrose Sarkies Arathoon of the other part and the survivor of them and their or his assigns for the time being lessors of the said property may from time to time so long as the property so leased is held by the company appoint himself or one of themselves or any other person to be a director of the company and may from time to time remove any director so appointed and appoint another in his stead and John Harold Phillips, chartered accountant of Singapore, shall be deemed to have been appointed pursuant to this power.

(2)Any such appointment or removal shall be in writing served on the company and signed by the persons authorised to make the appointment or removal or by their or his agent authorised in writing.'

By a deed of assignment dated 25 June 1963, the reversion was assigned to the defendant company. And on 11 June 1964, the defendant company, purporting to act in pursuance of the power contained in art 77, appointed itself by a resolution of its directors to be a director of the plaintiff company, and by a letter of the same date served notice of the appointment on the plaintiff company.

The defendant company owns the Malayan Finance Corp. Ltd. The latter owns more than 650f the issued share capital in the Goodwood Park Hotel Ltd. The majority of the directors of Goodwood Park Hotel Ltd are directors or employees of the defendant company or the Malayan Finance Corp. Ltd or companies associated with them. The Goodwood Park Hotel Ltd carries on the business of operating and managing hotels in Singapore.

On 15 June 1964, the plaintiff company instituted this action claiming:

(i) a declaration that art 77 of its articles of association must be read in conjunction with cl 14 of the lease;

(ii) a declaration that the defendant co