JUDGMENT

Haidar Mohd Noor JCA:

[1] The suit, the subject of the appeal before us, is in respect of an action by the plaintiffs against the defendants seeking, inter alia, for an order to nullify the sale of 682,500 shares of MGR Corporation Sdn Bhd to the third defendant, by the first defendant vide shares sales agreement dated 1 September 1992. The first defendant was represented by its managing director, the second defendant. The plaintiffs alleged, inter alia, that the agreement dated 1 September 1992 is not valid and is an attempt to defraud the shareholders and the particulars are set out in para 14 of the amended statement of claim. Various prayers including an injunction are sought by the plaintiffs in para 20 of the amended statement of claim.

[2] The directors of the first defendant resolved to acquire 682,500 shares of MGR Corporation Sdn Bhd (which subsequently went public) on 8 January 1992 from one Loi Lung Kiong. The acquisition was approved by MGR Corporation Sdn Bhd on 10 January 1992.

[3] The first plaintiff is a family company. The second to seventh plaintiffs are brothers, all by the same father The fifth and the seventh plaintiffs are from the same mother, the others from another mother The first defendant is a family company started by two brothers, the father of the second to the seventh plaintiffs and the father of the second defendant. So, the second defendant is a cousin of the second to the seventh plaintiffs. The third defendant who is not related to any of the parties, is the purchaser of 682,500 shares of MGR Corporation Sdn Bhd (formerly known as MGR Timber Marketing Sdn Bhd.) from the first defendant. The plaintiffs are shareholders (totaling 43.5%) of the first defendant. The second defendant has about 25.6% shares in the first defendant.

[4] After a full hearing, the learned judge dismissed the suit with costs. The plaintiffs (appellants) appealed.

[5] When the appeal came for hearing before us, counsel for the appellants applied for an adjournment on the ground that the second appellant is a bankrupt. He informed us that he could not proceed without the sanction of the official assignee citing s 38(1)(a) of the Bankruptcy Act 1967. He could not tell us when the second appellant was made a bankrupt. However, he said that he was advised of the second appellant's position in early October this year and wrote to the official assignee for the sanction. The official assignee advised that he needed time to consider and counsel produced a letter from the official assignee to that effect. At the same time counsel also informed us that the third appellant may have been declared a bankrupt as well and he needed time to check on this.

[6] Quite apart from the bankruptcy issue, counsel also informed us that he was advised by the second and the third appellants that Mr Tan Lip Gay acted for them in the Alor Setar High Court suit and there could possibly be a conflict of interest. Mr Tan Lip Gay of M/s Leong & Co, had served on counsel for the appellants a notice of change of solicitors. Counsel for the appellants said that he needed time to verify on this conflict of interest issue as well.

[7] In reply, Mr Tan Lip Gay, counsel for the first respondent admitted that he did act for the second and third appellants in the Alor Setar High Court suit as intimated by counsel for the appellants. However, according to Mr Tan Lip Gay, the Alor Setar High Court suit has no relevance to the present case - it was a banking matter and had been disposed of by the Federal Court.

[8] We regret to note that the counsel for the appellants has not been candid in that he did not disclose to us that he had earlier written a letter to the learned president of the Court of Appeal seeking for adjournment of this appeal on the ground of the bankruptcy of the second appellant. Dato' Ghazi Ishak, counsel for the second respondent, informed us of the application of the appellants to the learned president as it was objected to by the respondent