JUDGMENT

(On enclosure 1)

VC George J:

At all relevant times the plaintiff held 80,000 RM1 shares in M. S. Ally Sdn. Bhd. He was anxious to sell the shares.

The Articles of Association of the Company provide the terms and conditions on which shares may be transferred and pursuant to Article 27 the plaintiff by his solicitors' letter of 21 September 1982 gave notice to the Company of his desire to sell his 80,000 shares. That letter did not specify the sale price which the Company treated as an omission and which omission was rectified by the plaintiff's solicitors' letter of 1 October 1982 which stated that the shares were to be sold at RM2.60 per share. The Court was informed that it was common ground that accordingly the effective date of the Article 27 notice was 1 October 1982.

Pre-emptive procedures laid down in the Articles of Association provide for the Company to try and obtain a qualified purchaser within 28 days of the receipt of an Article 27 notice to do which it was required to offer the shares to the persons then holding the remaining shares in the Company as nearly as may be in proportion to their holding of shares in the company, giving a time limit for acceptance so that in case the shares or some of them are not taken up, may be re-offered to such members who may be interested in them. The whole exercise was to be completed within the said 28 days. It was only when the Company was not able to find a buyer or buyers for the shares (within the 28 days) could the vendor look for a buyer (who could be an outsider) and he has 6 months from the expiry of the said 28 days to do so. After the six months if there are shares still not sold, to effect a sale of them the whole pre-emptive process has to be repeated.

The Company did not effect a sale of any of the shares within the 28 days of 1 October 1982 and it was left to the plaintiff to look for a buyer for which purpose he had 6 months from the 29 October 1982.

It would seem that some time after the expiry of that 6 months the plaintiff learnt that the directors of the Company would be interested in purchasing the shares. A written offer made by the plaintiff to the directors of the Company. That was the letter of 4 June 1983 written by the plaintiff's solicitors to the directors of Syarikat M.S. Ally Sdn. Bhd. by which the shares were offered at RM2.60 per share the purchase price to be paid as to 50% thereof "upon the sale of shares and the remaining 50% to be paid within a period of 30 days".

The directors by their solicitors' letter of 9 June 1983 made what was clearly a counter offer: They would buy the 80,000 shares the price to be "a fair value to be ascertained" to be paid by a deposit of RM40,000 "on the fair price being accepted" and the balance in monthly instalments of RM3,000 each. The Company followed the said counter offer by requiring the auditors of the Company to give their opinion of the fair value of the shares. This was purported to be done pursuant to "cl. 29 of the Articles of Association".

The solicitors for the plaintiff by their letter of 18 June 1983 obviously with the intention of removing any misunderstanding of the position obtaining at that stage reminded the solicitors for the Company (who had also acted for the directors of the Company) that the notice of 1 October 1982 had expired and was ineffective. By another letter also of 18 June 1983 the counter offer was rejected. By yet another letter of 18 June 1983 a new Article 27 notice was given. By a letter of 8 July 1983 the Company's solicitors sought the opinion of the auditors of the Company as to the "fair value" of the shares. By their letter of 9 July 1983 the auditors stated that the "Net Tangible Asset value of a share of the Company was RM1.63" and that that was based on the accounts of the Company for the accounting year that ended on 31 March 1982. By their letter of 15 July 1983 the auditors on being pressed to do so confirmed that RM1.63 in their opinion was the fair va