The Interest Schemes Act 2016 does not apply retrospectively to class B shares, as such an application would impair existing rights and contradict legislative intent.

Vazeer Alam Mydin Meera JCA:

Introduction

[1] There are two appeals before this court, arising from the same judgment of the High court, and they are:

(a) Appeal No W-02(NCC)(A)-2227-10-2018 ("Appeal 2227") filed by the defendant in the original action, Saujana Resort (M) Berhad ("Saujana"); and

(b) Appeal No W-02(NCC)(A)-2282-11-2018 ("Appeal 2282") filed by the plaintiffs in the original action, namely, Chin Cheen Foh, Chin Kon Meng, Lee Poi Keong, Wong Yang Kheong and Ng Hoe ("plaintiffs").

[2] The appeals arise out of an action commenced by the plaintiffs who are members of the Saujana Golf and Country Club ("Club") against Saujana, the company that owns, manages and operates the Club. The plaintiffs' complaint flow mainly from the decision of the board of directors of Saujana to increase the monthly subscription and fees imposed on the members of the Club by 100%, and their contention that the Club, ought to be, but was not registered, under the Interest Schemes Act 2016 ("the Act"), thus depriving its members of the attendant rights and benefits under the Act.

Background Facts

[3] Saujana was incorporated on 2 February 1983 to own and operate the Club. The issued and paid-up share capital of Saujana consists of 15,300 class A shares and 3,800 class B shares, which rank pari passu in all respects, except that:

(a) a class B share (but not class A share) entitles its holder to membership of the Club owned by Saujana, subject to compliance with the Club Rules;

(b) in the event Saujana is wound up, the holders of the 3,800 class B shares are entitled to the repayment of capital in priority to the holders of the 15,300 class A shares; and

(c) class A shareholders are entitled to elect six directors, while class B shareholders are entitled to elect two directors of Saujana. At the time of the filing of the originating summons, there were four class A shares appointed directors and two class B shares appointed directors.

[4] Since Saujana's incorporation in 1983:

(a) the promoters of Saujana had invested RM37 million, which Saujana utilised to acquire 140 hectares of freehold agricultural land in the Mukim of Damansara to develop an integrated two 18-hole golf course, a Clubhouse and a hotel;

(b) in April and May 1985, in compliance with provisions of the Companies Act 1965 , Saujana made restricted offers, by invitation only, to selected members of the public in Malaysia and Singapore to subscribe 1,000 class B shares pursuant to prospectuses dated 2 April 1985 and 8 May 1985 ("prospectuses"); and

(c) since after their issuance in 1985, there has been no further public issue of any class B shares, and the number of class B shares has remained at 1,000.

[5] The purposes of the offer of class B shares in 1985 were:

(a) to provide selected members of the public with an opportunity to participate in the equity of Saujana, which was intended to be a profit-making enterprise, as well as entitling the holders of such shares or their nominees to be members of the Club;

(b) to raise additional funds, estimated to amount to approximately RM34.5 million, to finance in part the development costs of projects being undertaken by Saujana, including the Club; and

(c) to pay for the acquisition of an additional 20 hectares of land adjoining the Club.

[6] In 1985, when the public offer of the class B shares were made, the Act had not been enacted. The restricted offer to selected members of the public to subscribe for and/or purchase the class B shares were made pursuant to the prospectuses in compliance with the relevant applicable provisions of the Companies Act 1965 , then in force.

[7] Since the issuance of the class B shares to the selected members of the public in 1985, there has been no further public issue of any class B shares. However, holders of the class B shares were free to transfer their shares, normally through a private sale in the secondary market, or by way of transmission. The plaintiffs had acquired their class B shares from the