Members’ remedies

Rights associated with membership

 Right to participate in shareholders’ meeting
 Right to transfer shares
 Right to basic information on company

performance
 Right to pro-rata distribution of dividends
 Right to pro- rata distribution of company

property upon liquidation

 Any other rights conferred by the Act or the

company’s constitution or a separate contract

Where damage is suffered by the
company
 Foss Harbottle
Two shareholders brought an action against
the directors of the company alleging that the
property of the company was misapplied by
the directors.
 Held: the injury was suffered by the company.

The company is distinct from its members.

The members could not maintain such a suit.
 “The proper plaintiff rule” & the internal

management rule
Members’ right to sue/personal
rights
 Tan Guan Eng v Ng Kweng Hee
 Edgar Joseph led down the exceptions to the rule in

Foss v Harbottle:
 Where the act of the company is ultra vires:

Ultra vires act section 35 (2)

 Where the act of the company requires a special

majority but passed by ordinary resolutions: the

special majority exception
 Where a members’ personal rights are infringed: the

personal rights exception sec 91 & 33 (1) : members

may sue for damages
 Fraud on minority
i. Ultra vires act:
 Parke v daily news
 A single shareholder was able to bring an

action to restrain the company from giving

gratuitous payments to employees in excess
of those to which they are entitled.
 Simpson v westminster palace hotel
 A shareholder was able to bring an action

complaining that the company was acting

ultra vires in proposing to use hotel rooms
for offices.
ii. The special majority exception
 Edward v Halliwell (1950)
 A member brought a representative action

where a union tried to alter a table

contributions payable by members without
the required two-thirds majority approval by
members.
 Jenkins LJ sets out the exception to the

principle in Foss v Harbottle.

iii. The personal rights exception
 Where the company denies a member rights
that are set out in company’s constitution
 Pender v Lushington : the right to cast vote
 Wood v odessa : right to dividend to be paid

in cash as provided by the articles, rather

than in the form of assets.

 In the above cases, the members succeeded

in their claims.
Procedure in member’s action
 Personal action and representative action
 It arises when the company deprives a member
of a personal right.
 Personal action: to enforce a right conferred
upon member individually
 Representative action: to enforce a right
conferred on members generally = class action
 A member can sue on behalf of himself and the
other members whose rights are being
infringed - Edward v Halliwell
Type of action
 Statutory action:
 Section 346 “oppression” petition
 Section 465 – winding up petition – “just and

equitable”

 Derivative action – Section 347 & 348

 member sue in its own name to enforce the

company’s right/on behalf of the company.

Statutory remedy: oppression s 346
relief
 346 (1) (a) & (b)
 Provides a remedy where affairs of the

company are conducted in the manner that is

oppressive, in disregard of the interests of
the minority shareholder or a resolution or
act unfairly discriminates against or are
prejudicial to the minority shareholder
Section 346 (1) (a)
 Application by any member/debenture
holder/minister
 346 (1) (a) oppression, disregard the

members’ interest : where the affairs of the

company are being conducted or,
 The directors’ powers are being exercised’
 In a manner oppressive to one or more of the

members including himself, or

 In disregard of his or their interests as

members or shareholders
Sec 346 (1) (b)
 OR 346 (1) (b)
 Some act has been done or is threatened or
 A resolution has been passed or proposed to

be passed
Is either
Unfairly discriminates against members
Or is unfairly prejudicial to one or more
members including himself
 Relief : 346 (2) (a)- (e)
Who can apply
 A member, even if the oppression relates to
 The members in capacity other than a

member as long as it also affects him in his

capacity as a member
 Re Chi Liung: removal of director appointed

in accordance with AOA

 Former member ? Owen v piasau jaya
 Another member in their capacity as a

member but must include the petitioner.

S 346: statutory action by members
 “oppression” is “burdensome”, harsh and
wrongful” (scottish co-operative v meyer)
 At the very least, there must be a visible

departure from the standards of fair dealing

and a violation of fair play on which every
member is entitled to rely ( elder v Elder &
watson ltd)
S 346
 “disregard” of members’ interest involves something
more than a failure to take account of the minority’s
interest: there must be awareness of the that interest and
an evident decision to override it or brush it aside (Re
kong Thai sawmill).
 “unfairly discriminates” suggest that some discrimination
can be fair (ex: a class of members enjoys certain benefit)
 “prejudice” exists when a member is detrimentally
affected by a proposed act or resolution. “ Prejudice”
defined as
 “detrimental to rights or interests”
 Re A Company (1989)
S 346 : unfair prejudice
 Re A Company (1989): “ the test of unfair
prejudice objective. It is not necessary for the
petitioner to show bad faith. It is not necessary
for the petitioner to show a conscious
intention to prejudice the petitioner. The test
is one of unfairness and not unlawfulness…if
the conduct of the respondent was for
improper purpose or with an improper motive,
that may well be relevant consideration in
determining whether the conduct is unfairly
prejudicial”
S 346
 In determining whether relief under s 346 is
available, the court look at:
1. Domination and control : apply equally
to minority and majority
 Re sin lee sang sawmill : it was shown that
the petitioners were in control even though
they were minority shareholders. They were
the MD and executive director.
S 346
2. Mismanagement : the act must be something more
than just the exercise of the dominant members’
voting power (re kong Thai sawmill) unless there is
fraud.
The court will inquire into the rationality of a business
decision (dato’ toh kian chuan v swee construction)
Re kong Thai sawmill: family owned company. Majority
of shares held by 6 brothers. Ling beng sung who
owned 2.5% of the shares sued his brothers who
owned 63.5% (siew & siong – the chairman & the
director), there were 60 claims reduced to the
following:
S 346
 A loan made by the co to the federal secretary in
Sarawak;
 the purchase and outfitting of a yatch by the co;
 Donation made to certain political of parties;
 Drawing by the 2 brothers from the co’s fund;
 Advances to an investment in JV
 Held P/C: the drawings could amount to
“oppression” and “disregard”. The amount was
repaid at the same time of the action. The
action failed-partly on lack of evidence.
S 346
3. The oppression must affect the petitioning
member qua member ( in this capacity as a
member)
The conduct complained of must have some
connection with the affairs of the company.
Re Chi Liung (1968) 1 MLJ 97
The petitioner sought relief in respect of his
removal as MD and the transfer of some of his
shares to the first respondent.
S 346
4. There must be a continuing state of affairs,
i.e. at the time the action is brought.
(Re Jermyn St Turkish Bath Ltd; Re kong thai
sawmill: P/C). Although the directors had
utilized the company’s funds for their own use,
the oppression remedy was not granted as the
money had been returned.
S 346
 However, in Owen Sim Liang Khui v Pisaujaya
Sdn Bhd: the Malaysian court has confined
the decision in Re Kong Thai Sawmills, by
saying that the decision of the Lord
Wilberforce was merely a guideline. Thus, the
prevailing view is that it does not matter
whether the conduct complained about is still
continuing so long as the effect of the
oppressive conduct still persists at the time
of presentation (1996) 1 MLJ 113
S 346
5. Relief should be sought expeditiously. A delay
in seeking relief may amount to acquiesce to the
act.

6. The burden of proof is upon the petitioner. He

must prove his allegation on a balance of
probabilities. The more serious the relief sought,
the heavier the burden would be on the petitioner
to establish a case for relief.
Ex: if the petitioner is seeking for winding up as
opposed to cancellation of a single transaction.
S 346
 Situations where relief has been granted:
 Oppression due to mismanagement
 Diversion of business
 Dominant members advancing their own interests

to the detriment of the company or other

shareholders
 Disregard of minority’s rights and interests
 Abuse of voting power
 Expropriation of members’ property
 Exclusion from management
 Depriving the minority of information.
Oppression due to Mismanagement
 Chew Sang Hai v Intan Kinabalu Sdn Bhd
The P is a minority shareholder of Intan Kinabalu. The P
alleged that there was oppression in the conduct of the
company’s affairs when there was a disposal of its assets at
an undervalue and where the disposal was made to a
company linked to the directors and shareholders of Intan
Kinabalu. The P did not attend the meeting as he was
overseas and was not informed of the meeting. The P
objected the meeting however the company convened an
EGM to approve the resolution passed by the BOD.
Held : The meeting was scheduled at a time when the P will
not be able to attend, designed so as to enable the quick
disposal of the co’s asset.
S 346
“Oppression” – diversion of business
 Scottish co-operative wholesale society ltd v Meyer
 The co was incorporated to produce cloth. The
shareholders were two individuals who owned 49% of the
shares, and the Society which owned 51% of the shares.
The co obtained supply of yarn from two individuals, while
the cloth was manufactured in the society’s mill. The
Society then sold the cloth to the company which
marketed and sold the cloth. The relationship between the
Society and two individual became bad. The Society then
ceased supply the cloth to the co, and started to obtain
yarn from other suppliers. This affected the co’s business.
The two individuals brought an action claiming that the
affairs of the co was conducted in an oppressive manner.
 Held: this amounted to oppression. The court ordered the

society to purchase the petitioners’ shares.

S 346
 “Oppression” – improper exclusion from
management
• Hogg v Dymock

P & D held equal shares in the company due to

disagreement, the P was removed as executive
director. P alleged oppression.
Held: since both have agreed to participate equally
in the management of the business, there have
been a common expectation of continuing
involvement by the P. the dismissal constitutes
oppression.
 Tan Kian Hua v Colour Imaga Scan Sdn Bhd
There was an agreement between the original
shareholders of the company that the petitioner
(Tan) would be one of the directors who played
an active role in the management of the
company. The petitioner was removed as the
director of the company. The court held that
oppression existed because with his removal, he
would not be receiving any benefits, i.e salary,
bonus, or commission which he was entitled to as
agreed by the shareholders.
S 346
 Oppressive conduct of board meeting
 John J Starr (real estate) pty ltd
 P alleged that the D refused to provide the
board with proper budgets; restricted
speaking time available to directors; made
major decisions without reference to the
board.
 Held: the conduct was oppressive.
S 346: disregard of minority’s rights
& interests
 Re HR Harmer Ltd
Harmer formed a private company (to which he
transferred his business). His sons were members
as well as the directors. However, Harmer had full
voting power. He ignored the resolutions of the
board. He set up branches abroad without consent
from members and directors. He dismissed a
fellow director on his own initiatives. He drew
from the company for his own expenses.
The sons petitioned for relief and the court
granted it.
 George Pathmanathan v Portcullis International Ltd & Ors
 The petitioner was a minority shareholder holding 25% shares of

the company, Portcullis Holdings and its subsidiaries, while the

remaining 75% was held by Chong; they were the only two
directors. The petitioner had been instrumental for the initial
setting up, development, and profitability of the company and its
subsidiaries and that the majority shareholder, Chong, had given
management powers to petitioner.
 As a result of disagreement over shareholding in the company,

steps were taken to totally exclude the petitioner from the

management and affairs of the company and its subsidiaries. The
petitioner’s shares and fund belonging to the company had been
unlawfully transferred to foreign companies owned by Chong.
 The court held that Chong had conducted the affairs of the

company and its subsidiaries in such a way as to destroy or

prejudice to the co’s businesses and disregard the petitioner’s
interests.
S 346 : abuse of voting power
 Re SQ Wong
The articles provided that the preference shares
would carry voting rights if the preference dividends
were in arrears for 6 months or more. 3 of the
shareholders requisitioned an EGM to remove the
directors. It was contended that since the preference
dividends were in arrears, the preference shareholders
could vote. They use the voting power to defeat the
resolution to remove them as directors.
 Held: the voting rights were not meant to be used as

a device to enable the preference shareholders to

retain voting control indefinitely.
S 346
Deprivation of members of right
 Since all members have the right to be informed of

company meetings to attend and vote, any

deliberate attempt to prevent members from
exercising these rights amounts to oppression. Lim
Hean Pin v Thean Seng Co Sdn Bhd (1992) 2 MLJ 10.
 Depriving the minority of information. In Guan Seng

Co Sdn Bhd vs Tan Hock Chuan - a buy out was

ordered on the ground that the minority’s interests
were being disregarded. No AGM had been held for
6 years and no audited account had been prepared
for 7 years.
 Chow Kwok Ching v Chow Kwok Chi And
other and Other Suits
 There were some evidence that at least in one

meeting the notice period was insufficient or

meeting was conducted despite the petitioner
(Ching) informing the others that he could
not attend. Meeting was also conducted via
teleconference despite Ching’s protest.
S 346
Unfairly restricting dividends
 GP : disagreement on amount of dividends is not

oppressive
 Re Coliseum Stand Car Service Ltd
 Respondent, the majority shareholder ran the

business by himself. No dividends were

declared though the company made profits. He
made loan for himself and for his son.
 Held: the respondent had conducted the affairs

of the company without proper regard to the

minority shareholder – oppression.
Irregular financial transaction and denial
of access to financial information
 Chiew Sze Sun v Cast Iron Products Sdn Bhd
 The petitioner successfully relied on several

grounds to claim relief under the oppression

remedy.
1. Delay in submitting 1981 audited accounts
to shareholders. It was only submitted in
1987
2. Failure to submit the account for the years
1981-1986 to the Dept of Inland Revenue.
S 346 (2) (a) and (b)
 346 (2) (a) and (b) are very wide in scope and
enable the court to declare that a resolution
which results in the oppressive conduct to be
cancelled. Re Chi Liung & Sons; Tong Chong
Fah v Tong Lee Hwa & Ors (1968) 1 MLJ 97.
Se 346 (2) (a) and (b)
 Chiew Size Sun v Cast Iron Products Sdn Bhd
there was mismanagement of company’s affairs,
delay in tabling the unaudited accounts, and no
proper accounting records were kept by the
company. There was also tax mismanagement
due to the delay. The company having to pay
additional assessment rates and a tax penalty.
Held : oppression and the order for a company
auditor to examine the records and prepare
reports for shareholder was granted (1994) 1 CLJ
157.
S 346 (2) (c) and (e)
 The most sought-after remedies. Where the
court makes an order for the purchase of the
shares, the issue of evaluation becomes very
important. The proper approach to evaluation
is by considering what would have been the
value of the shares at the commencement of
the proceedings had it not been for the effect
of the oppressive conduct of which the
complaint was made. Scottish Co-operative
Wholesale Society Ltd v Meyer (1959) AC 324.
S 346 (2) (c) and (e)
 Planeta Tullio v Andrea G Maoro : held that
the shares of an oppressed minority
shareholder be repurchased at the price at
which he first purchased them where at the
time of judgment, the company was inactive
and the actual net value of the shares was
much lower than the price at which the
appellant first purchased them (1994)
S 346 (2) (e)
 An order to wind up the company under
section 346 (2) (e) is a remedy of last resort
and normally the court will not make this
order if the company is a going concern and
profitable.
 Hoy Pak Kwai vs Leong Kon Fah & Ors (2005)

5 CLJ 179
The Derivative Action
 S347
 A derivative action is taken by a shareholder

who wants to enforce the company’s rights

against the person who has committed a
wrong against the company.
The statutory derivative action
 How does the court exercise its discretion?
 Section 348 of the Companies Act 1965
 In deciding whether or not to grant leave, the

court must consider whether :

 (a) the applicant is acting in good faith
 (b) the appears prima facie to be in the best

interest of the company that the application

for leave is granted.
S 347
 What is good faith?
 Pang Yong Hock v PKS contracts services

Pang and Lee held 50% shares. The remaining held

by Koh and Tan. All of them were also directors
along with another person.
Pang and Lee issued notice requiring the co’s board
to commence action against Koh and Tan for
alleged breaches of directors duties. The board
took no step. The appellants took out application
under sec 216A for leave to commence proceedings
in the name and on behalf of the company.
S 347
 Koh and Tan proposed for a winding up of
the company prior to the leave application.
 The court dismissed the application on the

basis that on the facts of the case, it would

be more sensible and desirable to wind up
the company (under just and equitable
ground-deadlock).
S 347
 What is good faith?

 Teo Gek Luang

 The best way of demonstrating good faith is to show a

legitimate claim which the directors are unreasonably

reluctant to pursue with the appropriate vigor. The
party opposing the application will seek to show that
the application is motivated by an ulterior purpose,
such as dislike, ill feeling or other personal reasons,
rather than the applicant’s concern for the company.
 In most of the application, hostility between the

parties is bound to present.

S 347
 If the opposing parties are able to show that the
applicant is so motivated by vendetta, that his
judgment will be clouded by purely personal
considerations, that may be sufficient for the court
to find a lack of good faith on his part
Swanson v pratt (2002)
 Where the applicant is a current director or officer, it

will generally be easy to show that such an applicant

has a legitimate interest in the welfare of the
company- unlike where he is a former shareholder
or officer with nothing obvious to gain directly from
the action.
 Lembaga Tabung Angkatan Tentera v Prime Utilities Berhad
The P (LTAT) held 10% shares in Prime, the D company. LTAT
also had a representative on the board of Prime on the basis
of their failure to exercise due care skill and diligence in
recovering investment made by Prime in Boston Asset
Management. The action was brought to obtain leave to sue
the directors of Prime on the basis Prime had invested a
substantial amount and was entitled to receive the profit
from the investment.

Held: The leave to sue on behalf of the company was

granted. The directors had failed to diligently pursue the
recovery of the amount due from Boston by the series of
action that were not followed through and by their failure to
file proof of debt,
 Tam Tak Chuen
The plaintiff and the defendants were partners in a medical practice
which were later incorporated. As a result of the plaintiff extra-
marital affairs with one of the nurses the defendant convinced the
plaintiff to sell his shares to the defendant at below its market
value. The plaintiff later successfully brought a court proceeding
rescinding the sale and his removal as director. Subsequent
investigation revealed that the fact that there has been breach of
fiduciary duties where the defendant had diverted the company’s
business. The defendant claimed that the action was motivated by
personal hostilities due to the defendant’s knowledge of the
plaintiff’s adultery
Held : the main motivation of the P was financial not personal as
there were real concerns about the company’s loss of income from
a breach of a director’s fiduciary duty.
The statutory derivative action
 348 (5) no compromise except with the leave
of the court
 349 effect of ratification
 350 powers of the court
 S Vignesw aran A/L M Sanasee v Maju Institute of Educational
Development (MIED)
The P sought leave of court to commence an action on behalf
of the MIED, a company limited by guarantee against the co’s
chairman and its trustees. The leave was to enable the P to sue
defendants for alleged mismanagement of MIED and breaches
of their fiduciary duties. The leave was granted and upon
getting the leave, Vigneswaran named MIED as Plaintiff and
initiated a RM100 m suit against its chairman and eight
trustees for alleged mismanagement of MICs’s education arm,
MIED.
The action was withdrawn – Vigneswaran (MIC Youth Chief) was
appointed to sit in the board as an observers, the MIED to stop
blacklisting MIED students to enable them to repay the loan,
the intrest rate to be fixed at 4% and repayment to start from
the date of their employment or 6 months after graduation.
S 350
 Orders
 Authorizing complainant or any other person

to control conduct of proceeding

 Giving directions for conduct of proceedings
 Provide assistance and information, including

inspection of books
 Pay reasonable legal fees and disbursement
 Costs, including indemnification
Mohd Shuaib Ishak v Celcom
(Malaysia) Bhd (2008) 5 MLJ 893
 Mohd Shuaib is the former member &
shareholder of Celcom. He applied for leave to
commence a statutory derivative action against
the wrongdoers of Celcom, inter alia the
directors of Celcom and Telekom Malaysia Bhd
(TM).
 The issue : whether a leave of court should be
granted against a minority shareholder who
intends to commence a statutory derivative
action against the wrongdoers of the company.
Mohd Shuaib Ishak
 April 2002 : Celcom had entered into an Amended
& Restated Supplemental Agreement (ARSA) with
DeTeAsia, one of Celcom’s shareholder holding
6.05% @158, 477, 000 shares of Celcom – Celcom
would not accept a substantial new shareholder or
merge its business without DeTeAsia’s consent.
 Failure to obtain DeteAsia’s consent, Celcom
would procure a Buy Out Offer for DeteAsia at a
price of US1.84 (RM7) per Celcom share owned by
DeteAsia/
 TM intended to takeover Celcom
Mohd Shuaib Ishak
 October 2002: As part of the takeover plan,
TM entered into a sale & purchase agreement
(SPA) with Celcom.
 Celcom agreed to acquire from TM the entire

equity interest of TM Cellular, in exchange of

TM receiving Celcom shares as the purchase
consideration.
Mohd Shuaib Ishak
 The SPA with TM was entered into by Celcom
without consent of DeTeAsia, although ARSA
requires Celcom to obtain DeTeAsia’s
consent.
 Effect of SPA: Based on ARSA Celcom had

breached the agreement:

 i by acquiring TM’s entire equity in TM

Cellular (merge business); and

 ii issuing substantial new shares to TM;

without DeTeAsia’s consent.

Mohd Shuaib Ishak
 Accordingly, DeTeAsia had commenced
arbitration proceeding against Celcom in
International Court of Arbitration of
International Chamber of Commerce (ICC) to
claim damages should be Buy Out Offer was
procured by Celcom at RM7 per Celcom
share.
 ICC found Celcom liable for breach of

agreement & damages payable by Celcom to

DeTeAsia amounted to US233 million.
S 465 (1) (h) petition
 “just and equitable” : no necessary limit to the
generality of the words.
 Each case depend on its own circumstances and
merits.
 Ebrahimi v westbourne galleries – “equitable”
consideration might include:
 1. an association formed or continued on the
basis of a personal relationship, involving
mutual confidence, which is often found where
a pre-existing partnership had been converted
into a limited company;
S 465 (1) (h) petition
 2. An agreement, or understanding that all,
or some, of the shareholders should
participate in the conduct of the business;
 3. restriction upon the transfer of the

member’s interest in the company, so that if

confidence was lost, or one member was
removed from management, he could not
take out his stake and go elsewhere.
 …per lord wilberforce
S 465(1) (h) petition
 Examples
 i. where members have lost confidence in the

management
 ii. Failure of Substratum
 iii. where business was carried out in

fraudulent manner
 iv. where members can no longer continue to

work in association/deadlock
 Lost of confidence in the management/where
minority members have been oppressed
 Loch v John Blackwood Ltd

The MD, Mc Laren held one share. Half of the shares of

the company were held by Mrs McLaren and nominee
both who were also directors. The remaining shares
were held by the petitioners.
No general meetings were held, balance sheets, profits
and loss accounts were not submitted. Held: the object
was to keep the petitioners in ignorance so as to
acquire their shares at an under value. The company
was ordered to be wound up.
Failure of the substratum
 A businessman who puts his money into a
particular business does his financial
calculations on the basis of that business.
 “Loss of substratum” – when the company

abandoned the business that the corporation

have agreed among themselves that it
should do, whatever the object clauses may
provide.
Failure of the substratum/the object
cannot be achieved
 Re German date coffee
 To manufacturer coffee substitute out of

dates. The company need to acquire a

German patent. The German empire refused
to grant the patent. Held: the company was
set up with the aim of working specific patent
and once that failed, the shareholders were
entitled to say that they were not interested
to carry on any other business. The company
was accordingly wound up.
 Re Tivoli Freeholds Ltd
Tivoli Freeholds was incorporated to carry on
entertainment business through acquisition of theatre
buildings or lands on which theatres were built and by
conducting shows or performances. After new
shareholders invested in the company and gained control
of the company, the company sold its theatre and started
investing its funds in other public companies which was
not the reason for the company’s incorporation
Held: It may be just and equitable to wind up a company
if the company engages in acts which are entirely outside
what can fairly be regarded as having been within the
general intention and common understanding of the
members.
Carrying business in fraudulent
manner
 A shareholder has a right to expect that the
business of the company will be carried out
on properly.
 Where the shareholders are misled into

investing in the company, they may have the

company wound up in order to get their
money back
Carrying business in fraudulent
manner
 Re Thomas Edward Brinsmead
 John brinsmead & sons were famous piano markers.
3 employees of the firm (all named brinsmead) set
up a company to manufacture pianos-passing off as
the product of the firm.
 John Brinsmead & sons obtained injunction against
the company restraining it from the using the name
“brinsmead”
 Held: the shareholders who had been misled into
believing that the co had the right to use the name
and goodwill of brinsmead were entitled to continue
to refuse in a business which is a fraud.
 Fraud and Misconduct

Loch v John Blackwood Ltd

The shareholders applied to wind up the company because
the directors failed to comply with statutory requirements
relating to audit and presentation of financial information.
The directors wanted to buy out the petitioner’s share but
refused to submit the value of the shares for arbitration.
Thus, the offer the minority shareholding was undervalued
and the minority shareholder did not have any means to
determine the real value of their shareholding. The Court
found that the directors intentionally concealed the relevant
information as a means to buy the shares below market
value.
Where members can no longer continue
to work in association/deadlock

 Re Yenidje Tobacco Co Ltd

 Rothman & weinberg set up the company.

They were the only shareholders and directors.

They later could not get along and later ceased
to communicate with each other. No
substantial business was being transacted. The
court ordered the company to be wound up.
 If the petitioner is the cause of the deadlock,

the court may not view his petition favourably.

 Re Semantan
Deadlock and breakdown in mutual
trust and confidence
 Abdul Ravuff Bin Datuk As Dawood
The petitioner argued that his late father and his first wife
promise to issue shares to the petitioner and member of
the family of his fourth wife and that the petitioner will be
made a director. These were not implemented and the
petitioner sought to wind up the company.
The Court found that, the petitioner has never been
involved in the management of the company, had no
control over the company, was not involved in forming the
company at the date of incorporation and did not
contribute to the capital of the company. He was the
recipient of the shares given as gifts by his late father. The
question of deadlock did not rise.
Exclusion from management
 Tay Book Choon v Tahansan Sdn Bhd
One of the directors in a company resigned and offered
the share to the petitioner (Tay). During the transfer
process, the petitioner was assured that he will be
appointed as director and chairman of the board as
long as he held one quarter of the shares of the
company. He was so appointed as a director and his
son was also appointed as the fifth director. The
company made some losses but subsequently made
some profits. The board with the disapproval of Tay his
son terminated all the powers of the ED and
subsequently removed Tay and his son from the board.