Toralf Mueller v Alcim Holding Sdn Bhd; Alcim Sdn Bhd; Jacob A/L George; Rozilah Binti Mat Tahir (W-03(IM)(NCC)-75-06/2018; W-03(IM)(NCC)-78-07/2018; W-03(IM)(NCC)-79-07/2018)

ALCIM HOLDING SDN BHD

ALCIM SDN BHD

3.

(NO K/P: 730116-14-5776) ...RESPONDEN-RESPONDEN 2 (DI DENGAR BERSAMA)

1.

(NO K/P: 730116-14-5776) ...PERAYU-PERAYU (NO. PASPORT GERMAN: C4K5CH2NK) ...RESPONDEN 3 (DI DENGAR BERSAMA)

1.

(NO K/P: 73-116-14-5776) ...PERAYU-PERAYU (NO. PASPORT GERMAN: C4K5CH2NK) ….RESPONDEN 4 [Dalam Mahkamah Tinggi Malaya Di Kuala Lumpur (Bahagian Dagang) Petisyen No: 26NCC-71-04/2012 Dalam Perkara Seksyen 181 Akta Syarikat, 1985 Dan Dalam Perkara Aturan 88 Kaedah-Kaedah Mahkamah Tinggi, 1980 Dan Dalam Perkara ALCIM HOLDING SDN BHD (No. Syarikat: 655881-K) Dan Dalam Perkara ALCIM SDN BHD. (No. Syarikat: 746474-V) Antara Toralf Mueller (German Passport No: C4K5CH2NK) ...Pempetisyen

Alcim Holding Sdn Bhd (No. Syarikat: 655881-K)

Alcim Sdn Bhd. (No Syarikat: 746474-V)

Jacob a/l George (No. K/P: 630624-10-6441)

Rozilah binti Mat Tahir (No K/P: 730116-14-5776) ...Responden-Responden] ____________________________________________________________ 5 CORAM: BADARIAH SAHAMID, JCA ZABARIAH MOHD YUSOF, JCA NOR BEE ARIFFIN, JCA JUDGMENT [1] There are three appeals before us, which are being heard together, upon the parties’ request, namely:

Appeal W-03(IM)(NCC)-75-06/2018 (Appeal 75):  which is the appeal by Toralf Mueller against part of the decision of the learned Judicial Commissioner (JC) in dismissing part of the damages claim by him;

Appeal W-03(IM)(NCC)-78-07/2018 (Appeal 78):  which is the appeal by Jacob a/l George and Rozilah binti Mat Tahir, against part of the decision of the learned JC in allowing part of Toralf Mueller’s claim for damages in items 2.1 and 2.2 in the “Petitioner’s Head of Damages”; 6

Appeal W-03(IM)(NCC)-79-07/2018 (Appeal 79):  which is the appeal by Jacob a/l George and Rozilah binti Mat Tahir against part of the decision of the learned JC in allowing part of Toralf Mueller’s claim for damages in item 4 in the “Petitioner’s Head of Damages”. [2] In this judgment, the parties will be referred to as follows:

Toralf Mueller will be referred to as “the petitioner”;

(ii) Alcim Holding Sdn Bhd will be referred to as R1;

(iii) Alcim Sdn Bhd will be referred to as R2;

(iv) Jacob a/l George will be referred to as R3;

Rozilah binti Mat Tahir will be referred to as R4. Occasionally, R1 and R2 will be referred to as “the companies”. A. BACKGROUND: A.1. The Appeals: [3] These 3 appeals arose from an assessment order granted by the learned JC, Wong Chee Lin (hereinafter referred to as “the learned JC”). [4] The hearing of the assessment on damages was pursuant to an Order dated 26.6.2015 granted by the learned K.K. Wong, JC (hereinafter referred to as “the Oppression Petition Judge”) after allowing the petitioner’s relief 7 made pursuant to section 181 of the Companies Act 1965 (CA) (Oppression Petition).The relevant part of the Order by the Oppression Petition Judge reads: “3. That the 3rd and 4th Respondents are jointly and severally ordered to personally pay compensatory damages to the petitioner as the result of the oppression, to be assessed by the Senior Assistant Registrar pursuant to order 37 of Rules of Court 2012; and……….” What is pertinent is the precise words used by the Oppression Petition Judge in granting the order for assessment of damages in his grounds of judgment which were: “compensatory damages to be paid by the 3rd and 4th Respondents, jointly and severally, to the Petitioner in respect of all loss suffered by the Petitioner which flow from the Proven Grievances …” (refer to page 338 RA Jilid 5/12). [5] In the Oppression Petition, the petitioner alleged a total of 10 Grievances. The Oppression Petition Judge held that the petitioner had not made out a case of oppression in relation to the 1st, 2nd, 7th, 8th and 10th Grievances, but had proven the 3rd to 6th and 9th Grievances as set out in the Oppression Petition. It was held that the petitioner is entitled to claim compensatory damages for all losses suffered by him as a result of the Proven Grievances. 8 [6] The petitioner filed for assessment of damages against R3 and R4 which was heard before the Deputy Registrar. The petitioner claimed damages in the total sum of RM8,181,281.32. After hearing of the assessment of damages, the Deputy Registrar allowed part of the petitioner’s claim. [7] Aggrieved by the decision of the Deputy Registrar, the petitioner, R3 and R4 subsequently filed Notices of Appeal to the Judge in Chambers. The appeal was heard before the learned JC who allowed part of the petitioner’s appeal and also allowed part of R3’s and R4’s appeals against the Deputy Registrar’s Order. [8] Dissatisfied with the decision of the learned JC on the assessment of damages, the petitioner, R3 and R4 appeal to the Court of Appeal, which are the 3 appeals before us. After considering the oral and written submissions from parties, we, unanimously:

dismiss Appeal 75 and affirm the decision of the learned JC in so far as the subject of that Appeal is concerned;

dismiss Appeal 78 and affirm the decision of the learned JC in so far as the subject of that Appeal is concerned;

allow Appeal 79 and set aside the order of the learned JC in so far as the order on the claim for damages in item 4 in the Petitioner’s Head of Damages. 9 We made no order as to costs. [9] Herein below are our full grounds for the decision. A.2. The Conspiracy Suit: [10] In 2011, R3 and R4 through the companies as their conduit filed a suit against the petitioner and 9 other defendants alleging, inter alia, that the petitioner had breached his fiduciary duties to R1 and R2 and had conspired with the other respondents to injure and cause loss to R1 and R2. The cause of action against the petitioner was conspiracy and fraud of R1 and R2. This is referred to as “the Conspiracy Suit”. [11] The petitioner filed a counterclaim against R1, R2, R3 and R4. In his counterclaim the petitioner claimed inter alia, for an order that R3 and R4 account for all the monies dissipated, benefits and advantage received from R1 and R2 to be assessed and that R2 pay to the petitioner the sum of RM1,304,875.00 for the unlawful termination and/or sacking of the petitioner as its Chief Executive Officer (CEO). [12] The learned High Court Judge then, Hasnah J dismissed R3 and R4’s claims and allowed the petitioner’s counterclaim after a full trial. A.3. The Oppression Petition: [13] Whilst the Conspiracy Suit was on going, on 25.4.2015, the petitioner filed the Oppression Petition against R1-R4. On 26.5.2016, the Oppression 10 Petition Judge ordered the winding up of R1 and R2. His Lordship also found R3 and R4 to be liable for oppressive conducts against the petitioner. [14] The Oppression Petition Judge also ordered for assessment of compensatory damages to be paid by R3 and R4, jointly and severally, to the Petitioner in respect of all loss suffered by the Petitioner which flow from the Proven Grievances. A.4. The appeal to the Court of Appeal: [15] The respondents appealed to the Court of Appeal against the decisions of the respective judges in the Conspiracy Suit and the Oppression Petition. [16] On 8.9.2016, the Court of Appeal dismissed the respondents’ appeal in respect of the main claim but allowed the respondents’ appeal against the petitioner’s counterclaim in the Conspiracy Suit. The Court of Appeal held that res judicata and estoppel applied in this case and that the Oppression Petition Judge was bound by the findings of fact by Hasnah J in the Conspiracy Suit. A.5. The Assessment of Damages: [17] The petitioner filed for assessment of damages against R3 and R4 flowing from the “Proven Grievances”, namely: 11

The 3rd grievance: when the Oppression Petition Judge agreed with the petitioner that R3 and R4 had ousted the petitioner from the management of R2 when they took control of the meeting held on 15.8.2011 and held that this was a breach of their mutual agreement;

The 4th grievance: That the appointment of additional directors was in breach of R3’s duties as quasi partners and R4’s duties as trustees;

The 5th grievance: the removal of the petitioner as CEO of R2 and director of both R1 and R2 was in breach of R3’s duties as quasi-partner and R4’s duties as a trustee;

The 6th grievance: the removal of the petitioner as a cheque signatory of R1 and R2 was a breach of R3’s duties as quasi-partner and R4’s duties as a trustee; and

The 9th grievance: that the dilution of the petitioner’s shares in R1 was commercially unfair to and oppressive of the petitioner. [18] The computation of the claim for the amount of RM8,181,281.32 by the petitioner is as tabulated below: 12 No Particulars of damages Total Amount Total Claim %

Value of the Petitioner’s 50% shares in the 1st and the 2nd Respondents. Indicative value of ALCIM Group based on the consolidated financial statement as at Financial Year End 2011 (see UHY report dated 14.12.2016) 7,909,805.00 3,954,903.00 50%

Compensatory damages for equal payment made/paid to the 3rd Respondent from Oct 2011 to July 2015.

2.1 Salary paid to Jacob as Chairman (ALCIM Sdn Bhd) – RM460,000.00

2.2 EPF paid to Jacob (ALCIM Sdn Bhd) –

2.3 Directors Fee paid to Jacob (ALCIM Holding) – RM25,000.00 per month (RM15,000.00 paid directly to Jacob and RM10,000.00 paid to Jacob’s wife and son) – RM1,141,490.00

2.4 EPF paid to Jacob directly and/or to his wife and son Holding) – 1,864,740.00 1,864,740.00 100%

Compensatory damages for equal payment made/paid to the 3rd Respondent directly to through his wife. 415,615.02 415,615.02 100%

Compensatory damages for all payment paid to and/or expenses incurred in the illegal/unlawful appointment of additional directors:

ALCIM Holding Sdn Bhd – RM85,000.00.

ALCIM Sdn Bhd – RM108,025.70. 193,025.70 193,025.70 100%

Compensatory damages for wasted and/or unnecessary and/or unjustified legal and counsel fees paid to Messrs Bodipalar Ponnudurai De Silva. 3,391,456.21 1,695,728.10 50% 13 No Particulars of damages Total Amount Total Claim %

Payment from Standard Chartered Bank – RM2,897.616.21.

Payment from CIMB Bank - RM493,840.00.

Compensatory damages for wasted, rejected and/or unnecessary and/or unjustified reports in KLHC Suit No. 22NCC-1688-10/2011:

Baker Tilly Monteiro – RM37,936.00;

Crowe Horwath – RM21,417.00;

JR Control Risk – RM48,686.00; and

Siaga Informatics – RM6,500.00. 114,539.00 57,269.50 50% TOTAL CLAIM 8,181,281.32 [19] The Deputy Registrar awarded part of the claim, i.e. RM193,025.70 in favour of the petitioner. At the appeal to the Judge in Chambers, the learned JC dismissed part of the petitioner’s claim on damages which will be elaborated in the following paragraphs. B. FINDINGS OF THE LEARNED JC IN THE APPEAL ON THE ASSESSMENT OF DAMAGES BY THE DEPUTY REGISTRAR: [20] On dismissing part of the petitioner’s claim for damages, the learned JC held that: 14

the claim under the 1st head of damages was dismissed. The petitioner’ s case is that due to the dilution of his shareholding in the companies, the value of his shares is worthless at the date of winding up of the companies. The learned JC found that the petitioner failed to prove that the dilution of his shares in the companies had resulted in a reduction in the value of his shareholding. No proof that his shares have become worthless as a result of the grievances proved by him. There was no valuation report to show what is the value of the shares at the date of winding up of the companies. The learned JC also found that by claiming the value of his shares as at December 2011, the petitioner is effectively seeking for R3 and R4 to purchase his shares at the value as at December 2011. The learned JC agreed with the Oppression Petition Judge that “the companies are dormant with no source of income. Any “buy-out” of the shares in the companies will not be meaningful”. Hence to order R3 and R4 to buy out the petitioner would be to grant the petitioner the order which the Oppression Petition Judge had expressly declined to give;

The learned JC allowed the 2nd head of damages partly. This is the claim for compensatory damages for equal payments made/paid to R3 from October 2011 to July 2015. On the appointment of R3 as R2’s Executive Chairman, the Oppression Petition Judge held that the appointment was contrary to the Mutual Agreement for the petitioner to run R2. 15 Therefore, R3 should not have been entitled to be paid the salary and EPF of RM460,000.00 and RM67,100.00 respectively as Executive Chairman. This is a wrong done to the petitioner and not to R2 hence the learned JC was of the view that the petitioner should be entitled to claim his 50% portion of that amount in the sum of RM263,550.00. However, the learned JC disallowed the other claims under this 2nd head of claim, namely the director’s fee and the EPF paid to Jacob or his wife and son. On the director’s fee the learned JC reasoned that the petitioner had never been paid director’s fee and hence he had never suffered any monetary loss in terms of director’s fee as a consequence of his removal as a director of the companies. What the petitioner suffered was the loss of his salary as the CEO of R2. However the petitioner is not claiming for that as he had already been awarded compensation by the Industrial Court when he instituted a claim in the Industrial Court against R2 where he had obtained an order for damages against R2. The learned JC in her grounds said that as R2 had been wound up, Her Ladyship presumed that the petitioner would not be paid pursuant to the Industrial Court award. The learned JC said that she would be more than willing to order R3 and R4 to pay that amount awarded to the petitioner, however the petitioner did not adduce any evidence as to the amount he would have lost as a result of his termination of his employment as CEO of R2. In the absence of such evidence in support of the loss suffered by him as a result of his termination as CEO of R2, the 16 learned JC was unable to award the petitioner anything for this item. Therefore, the learned JC only awarded a sum of RM263,550.00 under this 2nd head of claim which is the salary and EPF paid to R3 as chairman for R2;

The learned JC dismissed the 3rd head of damages, i.e. the claim for compensatory damages for equal payments made /paid to R3 directly or through his wife and son. It is the contention of the petitioner that these payments ought not to have been paid out to R3 and members of his family. This would mean that the payment was in breach of the fiduciary duties of R3 as a director of the companies and the loss is a loss suffered by the companies. This is not a loss suffered by the petitioner thus, the petitioner is not entitled to it;

The learned JC allowed the 4th head of damages which is compensatory damages for payments paid to and/expenses in relation to unlawful appointment of additional directors. The learned JC agreed with the Deputy Registrar’s decision, the appointment of additional directors is oppressive to the petitioner. The petitioner is entitled to 50% of the amount paid out in the sum of RM96,512.85; and

The learned JC dismissed the claim under the 5th and the 6th head of damages, which is unjustified legal and counsel fees and unjustified report in KLHC Suit No 22NCC-1688-10/2011. These losses were incurred by the company and not by the petitioner. 17 [21] At the end of the hearing of the appeal against the decision of the Deputy Registrar of the assessment of damages, the learned JC:

allowed the petitioner’s appeal to the extent of awarding him damages of RM360,062.85 (RM263,550.00 + RM96,512.85) and interest with costs of RM5,000.00 subject to allocator; and

(ii) allowed R3 and R4’s appeal partially in reducing the sum payable for the appointment of additional directors with no order as to costs. C. OUR FINDINGS: [22] The petitioner claimed damages under various individual heads of damages which is termed as “Heads of Claim”. For convenience, we hereby tabulate the respective decisions of the Deputy Registrar and the learned JC in the assessment of damages: Heads of Claim Petitioner’s claim Assessment of damages by the Deputy Registrar Assessment of damages by the Learned High Court Judge

Value of the Petitioner’s 50% shares in the 1st and the 2nd Respondents. Indicative value of ALCIM Group based on the consolidated financial statement as at Financial Year End 2011 (see UHY report dated 14.12.2016) [50% of RM 7,909,805.00] Not allowed Not allowed 18 Heads of Claim Petitioner’s claim Assessment of damages by the Deputy Registrar Assessment of damages by the Learned High

Compensatory damages for equal payment made/paid to the 3rd Respondent from Oct 2011 to July 2015.

2.1 Salary paid to Jacob as Chairman (ALCIM Sdn Bhd) –

2.2 EPF paid to Jacob (ALCIM Sdn Bhd) – RM67,100.00

2.3 Directors Fee paid to Jacob Holding) – RM25,000.00 per month (RM15,000.00 paid directly to Jacob and RM10,000.00 paid to Jacob’s wife and son) –

2.4 EPF paid to Jacob directly and/or to his wife and son Holding) – [100% of RM1,864,740.00] Not allowed Allowed RM263,550.00 (allowed item 2.1 and 2.2 only) (RM460,000.00 + RM 67,000.00 ____________ = RM527,000.00 ____________ 50% of RM527,000.00 = RM263,550.00).

Compensatory damages for equal payment made/paid to the 3rd Respondent directly to through his wife. [100% of RM 415,615.02] Not allowed Not allowed

Compensatory damages for all payment paid to and/or expenses incurred in the illegal/unlawful appointment of additional directors:

ALCIM Holding Sdn Bhd – RM85,000.00. 193,025.70 Allowed RM96,512.85 (allowed items 4.1 and 4.2 but only for 50% of the amount claimed) (50% of RM193,025.70) 19 Heads of Claim Petitioner’s claim Assessment of damages by the Deputy Registrar Assessment of damages by the Learned High

ALCIM Sdn Bhd – RM108,025.70. [100% = RM193,025.70]

Compensatory damages for wasted and/or unnecessary and/or unjustified legal and counsel fees paid to Messrs Bodipalar Ponnudurai De Silva.

Payment from Standard Chartered Bank – RM2,897.616.21.

Payment from CIMB Bank – RM493,840.00. [50% of RM 3,391,456.21] Not allowed Not allowed

Compensatory damages for wasted, rejected and/or unnecessary and/or unjustified reports in KLHC Suit No. 22NCC- 1688-10/2011:

Baker Tilly Monteiro – RM37,936.00;

Crowe Horwath – RM21,417.00;

JR Control Risk – RM48,686.00; and

Siaga Informatics – RM6,500.00. [50% of RM 114,539.00] Not allowed Not allowed TOTAL CLAIM RM8,181,281.32 20 [23] The Oppression Petition Judge held that the petitioner is entitled to claim compensatory damages for all losses suffered by him as a result of the Proven Grievances. To succeed in such claim, the petitioner must satisfy the threshold test that:

his claim for damages must flow from the Proven Grievances; and

(ii) his claim are actual damages suffered by him as a result of the Proven Grievances. [24] The claim for damages in addition to being pleaded, must be strictly proved as was stated by Lord Goddard C. J. in Bonham Carter v Hyde Park Hotel Limited [1948] 64 TLR 177 thus: “Plaintiffs must understand that if they bring actions for damage it is for them to prove damage, it is not enough to write down the particulars and, so to speak, throw them at the head of the court, saying, ‘this is what I have lost, I ask you to give me these damages.’ They have to prove it.” Our local case of Tan Geok Khoon & Gerard Francis Robless v Paya Terubong Estate Sdn Bhd (1988) 2 MLJ 672 sets out the importance of proving damages. Edgar Joseph Jr J (as he then was) awarded nominal damages as the plaintiff therein failed to provide any evidence to substantiate the damages claimed. He also held in Popular Industries Ltd v The Eastern Garment Manufacturing Co Sdn Bhd [1990] 1 CLJ 133 that: 21 “It is axiomatic that a plaintiff seeking substantial damages has the burden of proving both the fact and the amount of damages before he can recover. If he proves neither, the action will fail or he may be awarded only nominal damages upon proof of the contravention of a right.” [25] With that in mind we now proceed to deal with the respective heads of claim by the petitioner. 1st head of damages: Value of the Petitioner’s 50% shares in R1 and R2: [26] This claim arises from the 9th Proven Grievance wherein the petitioner claimed that:

his shares in R1 and R2 were diluted by the respondents; and

(ii) that he is entitled to claim for the loss in the value of the shares in R1 and R2 as his loss flows from the insolvency of the companies (being immediately caused by R3 and R4’s oppression). These shares are now worthless. [27] The petitioner referred to the Oppression Petition Judge’s judgment where His Lordship found that any judgment obtained would be a mere paper judgment as R1 and R2 were found to be “shell” companies. 22 [28] The petitioner submitted that he should not be left only with the satisfaction of a paper judgment and it would be contrary to the interest of justice to leave a wrong without a remedy. As a result he is entitled to be compensated for losses he suffered as a shareholder of the companies. [29] The petitioner submits that the loss in the value of the shares is a direct and personal loss by way of diminution in the value of his shareholding in R1 and R2 attributable to the depletion of the companies’ assets which was valued at RM7,909,805.00 at the start of the oppression down to only RM896,772.47 at the date of the winding up order. It was the submission of the petitioner that these are not loss reflective of R1 and R2. The petitioner submits that the factual matrix of the present appeal falls within the four corners of the exception to the “no reflective loss” principle as in Giles v Rhind [2003] Ch 618 (refer to Gardner v Parker [2004] 2 BCLC 55 at para 54 and 56 per Neuberger LJ; Townsing Henry George v Jenton Overseas Investment Pte Ltd [2008] 1 LRC 231). [30] It is further submitted that the learned JC failed to consider that the value of the petitioner’s shares reflects, correlates and corresponds with the value of the net assets of R1 and R2. [31] The petitioner also submitted that the learned JC erred in law and fact when she ruled that there was no valuation report or proof as to what was the value of the shares at the date of the winding up of the companies when the value of shares had become valueless and worthless with the insolvency of R1 and R2 as a result of the oppression by R3 and R4 (paragraph 25 of the grounds). 23 The learned JC in the assessment of damages under the 1st head of claim, erred in law and/or in fact in failing to consider that the Oppression Petition Judge in paragraphs 135-138 of his grounds of judgment in the Oppression Petition found that R3 and R4’s oppressive conduct in diluting the shares of R1 and R2 is commercially unfair and prejudicial to the petitioner as a member (refer to paragraphs 137 (d) and 138(d) of the grounds of KK Wong JC in the181 Petition). [32] As an indicative value of the Alcim Group, the petitioner tendered a valuation report by UHY FLVS Sdn Bhd based on the consolidated financial statement as at financial Year End 2011. As the substantial portion of the sum claimed comprises cash in the bank the petitioner claims for 50% of the sum of RM7,909,805.00, which is RM3,954,903.00. [33] The petitioner asserted that R3 and R4 failed to produce any evidence to question, challenge or rebut the petitioner’s claim and/or the valuation report provided by UHY FLVS Sdn Bhd . It is therefore wrong for the learned JC to rule that there was no evidence to support such a claim. Therefore, in the absence of any report to challenge the petitioner’s expert valuation report, there was no basis for R3 and R4 to stand upon criticizing or challenging the petitioner’s valuer’s report. The valuer was not even cross-examined by counsel for R3 and R4 (refer to Megat Najmuddin bin Megat Khas & Ors v Perwira Habib Bank Berhad [2003] 4 MLJ 65; Takako Sakao (f) v Ng Pek Yuen & Anor [2010] 1 CLJ 381; Sykt Telekom Malaysia v Business Chinese Directory Sdn Bhd [1996] 3 MLJ 692. 24 [34] The petitioner further submitted that the independent valuation report of R1 and R2 at that material time in 2011 was based on figures which were derived from their audited accounts. [35] Therefore, the petitioner asserted that the learned JC erred when she ruled that if she were to allow the petitioner’s claim, it would tantamount to ordering a buy-out which the Oppression Petition Judge had declined in the Oppression Petition. The petitioner submitted that both the Deputy Registrar and the learned JC in the assessment of damages failed to appreciate the reasoning by the Oppression Petition Judge in granting an order for compensatory damages instead of the usual “buy out” order which is one of the remedies asked for in an action pursuant to section 181 of the CA. The petitioner submitted that the learned JC failed to consider and/or appreciate that by claiming for the loss in the value of the shares, the petitioner is not effectively seeking for a buy-out but is essentially seeking for compensatory damages for the 50% shares which have now become valueless or worthless as a result of the oppression by R3 and R4 that resulted in the insolvency of R1 and R2. Buy out and compensatory damages are 2 separate and/or distinct remedies which the court has discretion to award in an Oppression Petition. This distinction is recognized in Kumagai Gumi Co Ltd v Zenecon-Kumagai Sdn Bhd [1994] 2 MLJ 789 and Eric Lau Man Hing v Eramara Jaya Sdn Bhd [1998] 7 MLJ 528. In Koh Jui Hiong @ Koa Jui Hiong & Ors v Ki Tak Sang @ Kee Tak Sang [2014] 3 MLJ 11 where Jeffrey Tan FCJ was in agreement with Judge Hodge QC in Re Annacott Holdings Ltd; Attwood v Maidment & Ors [2012] EWHC 1662 when he quoted Hodge QC’s ratio in approval and recognized that a buy-out will in effect put 25 the oppressed party in the same position as he would have been if not for the wrong. [36] In proving his claim for the 1st head of damages, the petitioner is relying on the UHY FLVS Sdn Bhd’s Report dated 14.12.2016 in claiming for the sum of RM3,954,903.00 which is the value of 50% shareholding in R1 and R2. His claim is based on the contention that:

this claim arose from the 9th proven grievance that his shares were diluted by the respondents; and

(ii) the petitioner suffered losses in value of the shares in R1 and R2 due to R3 and R4’s oppression which resulted in the winding up of the companies. [37] We agree with the findings of the learned JC that the valuation report adduced does not prove that the shares of the petitioner have become worthless as a result of the proven grievances, namely the dilution of the shareholding of the petitioner based on the reasons following hereto. [38] The facts in relation to the dilution of the shares started with the petitioner issuing a 218 Notice under the CA whereby the petitioner demanded for the return of the sum of RM593,700.70 which was the amount lent by the petitioner to R1 as equal partners. In this regard R3 had also lent to R1 the same amount of RM593,700.70. 26 [39] R1 did not have sufficient funds to pay the petitioner and continued to run its business. Looking at the balance sheet as at 31.12.2012, the cash and the bank balances held by R1 as at 31.12.2011 was RM1,716,230.00. The total liabilities of R1 as at the same date amounts to RM1,130,047.00. Thus the total cash available to R1 as at 31.12.2011 was RM586,183.00 (RM1,716,230.00 – RM1,130,047.00), the employee benefits and expenses for R1 in 2012 amounted to RM402,012.00. The other operating expenses of R1 as at the same date amounted to RM264,695.00. Thus the total amount of expenses for the year 31.12.2012 was RM666,707.00 (RM402,012.00 + RM264,695.00) (Refer to Appellant’s CB Vol 3 pages 409- 410). [40] As the petitioner claimed that R1 has no source of revenue, there would then be a negative cash flow in 2012 of (-)RM80,524.00. Surely there was insufficient funds in R1 to pay the petitioner the amount as demanded by him. [41] R1 had to call for an increase in the paid up capital to pay the petitioner the amount which he demanded. In increasing the paid up capital, the petitioner was asked to take up his portion of the increased share capital which he refused to do. R3 and R4 took up their portions of the increased share capital and paid RM250,000.00 into R1 for the same. Then R1 paid the petitioner the sum of RM593,700.00 while R1 still owed the same amount to R3. 27 [42] Given the aforesaid, it is clear that the petitioner did not suffer any loss as a result of the dilution of the shares in R1. In fact the petitioner stood to gain RM593,700.00 as R1 would not have been able to pay him that amount if the increase in share capital was not done. [43] The winding up of R1 was at the behest of the petitioner and not as a result of the dilution of the petitioner’s shares. It is to be borne in mind that in cases of minority oppression, the courts are tasked with carrying out a balancing exercise. Any act/misconduct on the part of the minority may result in prejudicial conduct by the majority as not being unfair. As in the present case, the dilution of the shares saved R1 from being wound up pursuant to the petitioner’s 218 Notice. [44] The learned JC was correct in her finding that there is nothing in the valuation report to show that the value of the petitioner’s shares had been reduced due to the dilution of his shares in the companies that resulted in the dilution of his shareholding. There was no proof that his shares had become worthless as a result of the Proven Grievances. The petitioner alleged that R1 is a holding company with no business whilst R2 had no creditors and if it is true that at the time of winding up, R1 and R2’s Net Assets were reduced to RM896,772.47 and (-) RM1,621,664.62 surely there must have been some cash being siphoned by the directors. However, dissipation of company’s monies does not constitute oppressive conduct against the shareholder. [45] It is to be noted that earlier, the Oppression Petition Judge had dismissed the petitioner’s relief for a “buy out” under the Oppression Petition. 28 It is not denied that the companies are dormant with no source of income and the companies are not listed on Bursa Malaysia. Therefore it is not easy to ascertain the price of the companies’ shares at any given time. There appears to be a problem to ascertain the value of the shares of the companies for the purpose of a buy out. Hence a claim by the petitioner under this heading is a back door way of circumventing the order of the Oppression Petition Judge which dismissed any suggestion of a “buy-out”. This issue had been adjudicated and the petitioner is bound to accept winding up as their final relief. [46] In addition, we also found that the reliance by the petitioner on the UHY FLVS Sdn Bhd Report is misconceived for the following reasons:

The purpose of the UHY FLVS Sdn Bhd (at page 935 of CB Vol 4 at paragraph 2): - paragraph 2 states that the report was prepared for the client’s information purpose and does not constitute a recommendation by the auditor. It is also not intended to be relied upon to address the business concerns and risks pertaining to the business.

(ii) The limitation of the UHY FLVS Sdn Bhd Report namely (at page 936 CB Vol 4 at para 4 and paragraph 7): - in arriving at the valuation of the Alcim Group, the auditors had relied on the information and data supplied to them by 29 the client. The auditors are not required to and had not carried out an audit on the information and data that were made available to them. - the Report is confidential to the client and is subject to the restrictions on use specified in the Letter of Engagement dated 16 February 2016. No other party is entitled to rely on the Report for any purpose and the auditor accept no responsibility or liability to any other whatsoever in respect of the contents of the report [47] Due to the limitations of the UHY FLVS Sdn Bhd Report relied on, we found that the learned JC did not err when she held that the Valuation Report relied on by the petitioner does not prove that the shares of the petitioner had become worthless as a result of the Proven Grievances. [48] On the issue of reflective loss, a company suffers a loss when there is a wrong done to the company, which would have an adverse impact on the value of members’ shares, which is reflective of the company’s loss. Such claim for the losses would be instituted by the company concerned. However, if the company is unwilling or unable to make a claim for these losses then the shareholders would be prejudiced unless they can bring their own claim. However, there are substantial obstacles to such claims by the shareholders. [49] The law as it stands is that a shareholder cannot use section 181 petition to obtain personal relief for himself to the exclusion of the creditors and other shareholders of a company. In this context, the proper claimant 30 would be the company. The principle is known as the rule in Foss v Harbottle [1843] 2 Hare 461. The landmark authority on this point is the English Court of Appeal decision in Johnson v Gore Wood & Co [2002] 2 AC 1. The underlying policy for this principle is that the court must ensure that the company’s creditors are not prejudiced by the action of individual shareholders and that a party does not recover compensation for a loss which another party has suffered. Primarily, this is to avoid double recovery and to protect the company’s creditors who will be prejudiced in the event the claim by the shareholders were to succeed. This was explained by Lord Millet in the judgment of Johnson v Gore Wood & Co (supra) at page 62 where he said at para F that: “ …If the shareholder is allowed to recover in respect of such loss, then either there will be double recovery at the expense of the defendant or the shareholder will recover at the expense of the company and its creditors and other shareholders. Neither course can be permitted. This is a matter of principle; there is no discretion involved. Justice to the defendant requires the exclusion of one claim or the other; protection of the interests of the company’s creditors requires that it is the company which is allowed to recover to the exclusion of the shareholder. These principles have been established in a number of cases, though they have not always been faithfully observed.” What is to be noted is the words of Lord Bingham in Johnson v Gorewood [2002] 2 AC 1, at 35F where he said: “A claim will not lie by a shareholder to make good a loss which would be made good if the company’s assets were replenished through the action 31 against the party responsible for the loss, even if the company, acting through its constitutional organs, has declined or failed to make good that loss.” [50] However, the petitioner submitted that, notwithstanding Lord Millet’s statement that the principle of reflective loss admits no discretion, Walter LJ was able to carve out an exception in Giles v Rhind [2003] Ch 618 where he ruled that: “One situation which is not addressed in [Johnson] is the situation in which the wrongdoer by the breach of duty owed to the shareholder has actually disabled the company from pursuing such cause of action as the company had. It seems hardly right that the wrongdoer who is in breach of contract to a shareholder can answer the shareholder by saying “the company had a cause of action which it is true I prevented it from bringing, but that fact alone means that I the wrongdoer do not have to pay anybody.” (emphasis ours) It was submitted by the petitioner that in such cases, the shareholder is entitled to recover reflective loss as they are not “merely reflective” and there is no risk of double recovery as can be discerned from the judgment in Giles v Rhind (supra): “Mr. Giles’s losses are not as it seems to me “merely reflective”. The shares became valueless on his case because the company’s business as a whole was destroyed. Obviously the value of his shares reflect to some extent the value of the assets of the company but in his case they also reflect what Lord Millet described as market sentiment or what would have 32 been considered their value because of the potential which the business had. Fifth, it certainly is not in my view in reality a case where Mr. Giles is seeking to recover as damages which the company could have recovered. The company’s claim for damages for breach of contract would have been of a quite different nature based on an assessment of profits lost by virtue of the confidential information being used to take the Netto contract. Mr. Giles’s loss relates to the fact that the business as a whole was totally destroyed. Indeed even if the company had recovered damages the Netto contract would never have been restored, the business would never have been the same and Mr. Giles’s share would inevitably have been devalued by Mr. Rhind’s activities. The value of the shares when Mr. Rhind obtained 300,000 pound for them in 1993 reflected not only the assets of the company but the good prospects of the company into the future and that loss of value could not be recovered by SHF in any action that it might have brought. (emphasis ours)

In Johnson v Gore Wood & Co there was no difficulty about the company having a cause of action and being able to recover on the cause of action. I also think that in the light of Lord Bingham of Cornhill’s observation, at p 36C, that it is important for the “court [to] be astute to ensure that the party who has in fact suffered loss is not arbitrarily denied compensation”, it is clear that he had the particular facts in Johnson v Gore Wood & Co in mind, i.e. that there had been nothing to stop the company continuing with its action if it had so chosen.” [51] This principle of exception was adopted by the Court of Appeal in Gardner v Parker [2004] 2 BCLC as per Lord Neuberger and the Singapore Court of Appeal in Townsing Henry George v Jenton Overseas 33 Investment Pte Ltd [2008] 1 LRC 231 where Chan Sek Keong CJ cited with approval the principles of Giles v Rhind and said that: “shareholder will….be permitted to recover damages for his loss where the wrongdoer, by the breach of duty owed to the shareholder, has actually disabled the company from pursuing such cause of action as the company had”. [52] The petitioner also referred us to a High Court case from Singapore, Hengwell Development Pte Ltd v Thing Chiang Ching [2002] 4 SLR 902 where Lew Kew Chai J at page 503 said that: “A litigant is not to be lightly turned away from bringing a genuine cause before our courts. A fortiori, if there is no risk of double recovery and there is no prejudice to the creditors or shareholders of the company which has no remedy in any event under Chinese law, the policy reasons in Johnson v Gore Wood & Co do not apply. Accordingly, the joint venture company as the sole shareholder of Quanzhou Hengwei has the right and title to bring the action to recover the claims.” [53] The petitioner submitted that the factual matrix of the present appeal falls within the four corners of the exception to the “no reflective loss” principle as in Giles v Rhind [2003] Ch 618, which we found to be misconceived. [54] It is our view that whilst the English Courts have recognized exceptions to the reflective loss principle, they have often been interpreted narrowly. In Giles v Rhind (supra) the Court of Appeal held that a 34 shareholder may be permitted to sue for what would otherwise be a reflective loss if the defendant had, by his own wrongdoing, rendered the company incapable of pursuing the claim itself. However, in Gardner v Parker (supra) the court held that it is not enough merely to show that a company chooses not to pursue a claim, or decides to settle on comparatively generous terms, or is indirectly prevented from pursuing the claim, but it must be established that the company’s inability to claim is caused directly by the defendant’s wrongdoing. [55] The English Courts have reevaluated the Giles v Rhind exception in St Vincent European General Partner Ltd v Robinson and others [2018] EWHC 1230 (St Vincent) where the English High Court cited the Hong Kong Case of Waddington Ltd v Chan Chun Hoo [2008] 11 HKCFAR (Waddington). The court in Waddington held that “Giles and Perry were wrongly decided and should not be followed in Hong Kong”. In St Vincent, the court reiterated that the “rule against recovery of reflective loss (as set down by Johnson) involves no exercise of discretion”. The court highlighted that, irrespective of the policy sensitive rationale behind the Giles v Rhind exception (to ensure that there are no wrongs without a remedy), that “where [a derivative action] is possible, the company cannot be regarded as disabled from bringing a claim to make good the director’s wrongdoing”. [56] Hence, given the aforesaid authorities, we are of the view that the Giles v Rhind exception does not apply here, as the Petitioner has not established the companies’ (via the liquidators) inability to bring their own claim which is directly caused by the wrongdoing of R3 and R4. One has to 35 read the facts of Giles v Rhind to appreciate why the exception was applied in that case. In Giles v Rhind, the company was unable to pursue an action against the wrongdoer and that inability was caused by the wrongdoer (who caused the downfall of its business and caused the company to become insolvent then fought an action brought by the company causing it to discontinue when it could not meet an order to provide security for costs). No such situation is shown to be present in the facts of the appeal before us. [57] These losses claimed by the petitioner are a reflection of the losses suffered by R1 and R2. The petitioner does not suffer any personal loss as his loss is through the companies, in the diminution of the net assets of the companies in which the petitioner has a percentage of the shareholding. It is also not correct to state that the losses suffered by the petitioner falls under the exception to the “no reflective loss” principle. The case of Prudential Assurance v Newman [1982] 1 Ch 204 at page 210 held that: What a shareholder cannot do is to recover damages merely because the company in which he is interested has suffered damage. He cannot recover a sum equal to the diminution in the market value of his shares, or equal to the likely diminution in dividend, because such a “loss” is merely a reflection of the loss suffered by the company. The shareholder does not suffer any personal loss. His only “loss” is through the company, in the diminution in the value of the net assets of the company, in which he has (say) a 3 percent shareholding.” [58] Given the aforesaid, the petitioner failed to prove the loss to his entire shareholding in R1 as a result of the dilution of his shares. The petitioner has no basis for the claim of the amount under the 1st head of claim. 36 2nd head of damages Compensatory damage for equal payments made/paid to the R3 from October 2011 to July 2015: [59] This claim flows from the findings of the Oppression Petition Judge in the 3rd Proven Grievance. The petitioner takes the position that as R3 was wrongly appointed as Executive Chairman, he is entitled to all sums paid by R2 to R3 as Executive Chairman. The petitioner submitted that as he was an equal partner with 50:50 shareholding, he is entitled to claim for the following amount:

2.1 Salary paid to Jacob as Chairman (ALCIM Sdn Bhd) –

2.2 EPF paid to Jacob (ALCIM Sdn Bhd)

2.3 Directors Fee paid to Jacob (ALCIM Holding) : – RM25,000.00 per month (RM15,000.00 paid directly to Jacob and RM10,000.00 paid to Jacob’s wife and son)

2.4 EPF paid to Jacob directly and/or to his wife and son (ALCIM Holding) [100% = RM1,864,740.00] We will consider the claim under this head of damages under the various items as stated in the table above so as to be consistent with the notice of 37 appeal in Appeal 78 which stated the precise items 2.1 and 2.2 wherein R3 and R4 are appealing against. The claim for items 2.1 and 2.2: [60] The learned JC allowed items 2.1 and 2.2 above premised on the fact that the learned trial Judge held that the appointment of R3 as R2’s Executive Chairman was contrary to the mutual agreement for the petitioner to run R2. Thus, the learned JC was of the view that R3 should not have been entitled to be paid salary and EPF as Executive Chairman as that is a wrong done to the petitioner and not to R2. [61] The respondents submitted that the petitioner is only entitled to claim for direct losses suffered by him as a result of R3’s appointment as Executive Chairman. The petitioner did not claim that he ought to have been appointed as Executive Chairman. Therefore, the respondents submitted that the petitioner did not suffer a loss of payment that he could have received as Executive Chairman as he never asked to be appointed as such. In addition the petitioner failed to list out any actions that R3 took as Executive Chairman and that has caused him to suffer any loss as shareholder of R2. Thus the petitioner failed to prove direct loss suffered by him as a result of the 3rd grievance. [62] In this regard it is pertinent to refer to the judgment of the Oppression Petition Judge where he held that the petitioner’s removal as R2’s CEO has breached the Mutual Agreement for the petitioner to run R2. The petitioner’s 38 removal as director of the companies has breached the petitioner’s equal partner’s rights in the “quasi partnership” companies. [63] As the appointment of R3 as R2’s Executive Chairman was contrary to the Mutual Agreement for the petitioner to run R2, we found that the learned JC did not err when she held that R3 should not have been entitled to be paid salary and EPF of RM460,00.00 and RM67,100.00 respectively as Executive Chairman. That is a wrong done to the petitioner and not to R2 so the petitioner is entitled to claim for his 50% portion of that amount in the sum of RM263,550.00. [64] The ruling by the learned JC was consistent with the judgment of the Oppression Petition Judge. The claim for items 2.3 and 2.4: [65] The petitioner submits that the learned JC erred when she ruled that the petitioner failed to prove that he would have been entitled to the same sum of money paid to R3 as director if he had not been removed from the companies. The claim under items 2.3 and 2.4 is for compensatory damages for equal payments made and/or paid to R3 for the period from October 2011 till July 2015. A total amount of RM1,864,740.00 was paid to R3 directly and/or through his wife or son. [66] The learned JC held that “The petitioner had never been paid directors’ fee, he has not suffered any monetary loss in terms of directors’ fee as a consequence of his removal as a director of the companies. What 39 the petitioner suffered was the loss of his salary as the CEO of R2 but the petitioner is not claiming for that because he has already been awarded compensation in his Industrial Court case against the R2 where he had obtained an order for damages against R2. Since R2 had been wound up, it stands to reason to assume that the petitioner would not be paid pursuant to the Industrial Court award. I would have been willing to order R3 and R4 to pay that amount awarded to the petitioner”. [67] The payments made to R3 as directors’ fee are the payment that was due to him as director and R3 requested that those payments that were due to him to be paid to his wife or son. The petitioner had filed a counterclaim in KLHC Suit No 22NCC-1688-10/2011 (Conspiracy Action) claiming for the sums paid to R3’s family members which was dismissed by the High Court and affirmed by the Court of Appeal. The petitioner submitted that the learned JC erred when she ruled that the petitioner failed to prove that he would have been entitled to the same sum of money paid to R3 as director if he had not been removed from the companies. [68] We are of the view that there is no basis for such submission. It is an undisputed fact that even if the Proven Grievances did not occur, the petitioner would not have received the director’s fee in any event. The reason is that the petitioner has never been paid director’s fee. There was an agreement between the petitioner and R3 that he would derive his payment from his wages as CEO and R3 would derive his payment from the director’s fee. The petitioner has never received any director’s fee and therefore there 40 is no basis to claim that he has suffered loss as a result of R3 being paid director’s fees. [69] The petitioner’s claim here is in his capacity as a shareholder. These monies were paid to R3 in his capacity as officers of the companies. Hence the petitioner is not entitled to claim these monies as they were not due to R3 as a shareholder of the companies. [70] Therefore the learned JC was not plainly wrong when she dismissed the claim by the petitioner under items 2.3 and 2.4 of this head of damages. 3rd head of damages Compensatory Damages for Equal Payments made/paid to R3 Directly Or Through His Wife Or Son: [71] The petitioner claims that R3 had withdrawn all monies amounting to RM415,615.02 from R1’s CIMB Bank Rawang Branch account and paid them to himself and his wife as “back-dated remuneration”. The petitioner asserted that these payments were based on recommendations of Crowe Howarth’s Forensic Audit report dated 27.11.2012. However this particular Report was referred to in the Conspiracy report and had been rejected by the learned Hasnah J in the Conspiracy Suit. [72] The petitioner submitted that there is no basis for such payment to be made, as R3’s wife was never an employee of R1 and that R1 is merely a holding company with no business running. The petitioner claims that the same amount ought to be made to him being 50% shareholder of the Alcim 41 Group, if not for the removal of him as director of the companies and for ousting him from the management of R2. [73] The petitioner said that the learned JC erred in law and/or fact in failing to appreciate and/or consider sufficiently that the losses suffered by the petitioner are personal losses suffered by the petitioner for the simple reason that this is a further diminution of R1’ assets. [74] The learned JC found that these payments formed the basis of the 7th grievance claimed by the petitioner which according to the learned Oppression Petition Judge, as adversely affecting the companies and do not adversely affect the petitioner as member of R1. The petitioner’s counterclaim for this head of damage was also dismissed in the Conspiracy Suit which was upheld by the Court of Appeal. Therefore the learned JC did not err when she dismissed this claim. [75] The petitioner is also claiming for the sum of RM212,060.94 under this heading. At page 1969 of AR 8/12 there is a payment of RM100,000.00 on 6.5.2013 which was a repayment of an interest free loan that R3 extended to R2 in April 2013. R2 had insufficient funds to pay staff salaries for the month of April 2013 and therefore R3 had advanced the monies for purposes of payment of staffs’ salaries. The evidence can be seen at page 2361 of AR 10/12. [76] Then there is the payment of RM112,060.94 which was compensation R3 received as retrenchment benefit that was paid to all staff as part of the retrenchment exercise (page 1971 of AR 8/12). What is pertinent is that this 42 is not a loss suffered by the petitioner as a result of the Proven Grievance. Even assuming that the petitioner had continued to be in employment as CEO of R2, he would not have received the retrenchment benefits anyway as there are no such benefits payable under his contract and his contract would in any event expired by then. [77] The petitioner failed to prove the damages suffered by him under this head. Therefore, the learned JC did not err when she dismissed this head of claim by the petitioner. 4th head of damages Compensatory damages for payments paid to and/or expenses in relation to unlawful appointment of additional directors: [78] The claim by the petitioner under this head is for RM193,025.70 which is compensatory damages for all payment paid to and/or expenses incurred in the illegal/unlawful appointment of additional directors. The details are as follows:

ALCIM Holding Sdn Bhd – RM85,000.00.

ALCIM Sdn Bhd – RM108,025.70. [Total RM193,025.70] [79] The learned Oppression Petition Judge had found this unlawful appointment of additional directors had breached the “quasi-partnership” between the petitioner and R3. The learned JC also found that R3 and R4 had breached the fiduciary duty to act in good faith towards the petitioner. 43 Thus as a result of this, the petitioner submitted that R3 and R4 must be jointly and severally liable for the monies paid to these unlawful additional directors. [80] The respondents submitted that these payments were made by the companies to the additional directors despite the learned Oppression Petition Judge had held that the appointment of the additional directors are unlawful. In any event the petitioner would not have received these monies even if the additional directors were not appointed. [81] The learned JC agreed with the findings of the Deputy Registrar where she found in favour of the petitioner. The learned JC held that: “The appointment of additional directors is oppressive to the petitioner. It is not necessarily a wrong to the companies and the companies may not able to claim the sums paid from the R3 and R4. R3 and R4 should not have paid out those amounts to the additional directors and if they did not pay those amounts out, the amount would still be in the companies and the petitioner would have been entitled to 50% of that sum. I accordingly find that the petitioner is entitled to 50% of the sum paid out, in the sum of RM96,512.85. R3 and R4 had disputed the shareholding of the petitioner in the companies but I am satisfied that the petitioner had proven that he is the beneficial owner of 50% of the shareholding in the companies. “ [82] As can be discerned from the judgment of both, the Deputy Registrar and the learned JC, payments to the additional directors were made by the companies. However, we are of the view that both the Deputy Registrar and 44 the learned JC failed to appreciate the point that the loss was to the companies, not to the petitioner personally. There was no finding by the learned Oppression Petition Judge that these expenses were paid out by R3 and R4 in breach of their fiduciary duties, although there was a finding that the appointment of the additional directors was in breach of R3’s duties as quasi-partner and R4’s duties as trustee. Hence there is nothing to show that the petitioner has suffered as a result of this Proven Grievance. In other words there is no loss suffered by the petitioner as a result of the unlawful appointment of the additional directors due to the breach of R3’s duties as quasi-partner and R4’s duties as trustee. The payment made are losses to the companies, not to the petitioner. [83] Hence, we agreed with the submission by the respondents that the total claim under this heading should be rejected totally because the payment made by the companies are the losses to the companies. It cannot be the loss to the petitioner (being a shareholder of the company), as the company is an entity of its own. [84] The Giles v Rhind (supra) exception to the reflective loss principle is not applicable here. There is nothing shown to stop the liquidator of the companies from instituting an action to recover the monies that may have been unlawfully or improperly paid out by R3 and R4. There is also no evidence to show that the liquidator will not be in a position to make any claim against R3 and R4. 45 [85] We were referred to the grounds of judgment of the Oppression Petition Judge dated 26.6.2015 to page 830 RA Vol 4/12 part C, para 123 where he held that: “123. It must be noted that the Petitioner’s 1st and 2nd attempts (on 16.8.2011 and 20.9.2011) [to register the transfer of the 4th Respondent’s Shares, appoint new directors of the companies and effect the resignation of the 4th Respondent as a director of the Companies], took place after the 2nd Respondent’s BOD Meeting dated 15.8.2011 wherein….” Also refer to para 124 of the same grounds: “124. …..the Petitioner’s 1st and 2nd Attempts had been successfully thwarted by the police reports and objections lodged with SSM and the company Secretary by, among others, the 3rd and 4th Respondents. In other words, as the Petitioner’s 1st and 2nd Attempts had failed due to the efforts of the 3rd and 4th respondents,….” [86] It appears that the 1st and the 2nd attempts by the petitioner, if not stopped by R3 and R4, would have resulted in R2 losing its Petronas license due to the violation of its bumiputera requirement set by Petronas. This loss of license by R2 due to the 1st and the 2nd attempts by the petitioner would have caused the termination and/or withdrawal of an on-going and future contracts resulting in a massive financial loss of RM22 million as stated in the petitioner’s own Risk Assessment Report (pages 2373-2387 of RA Bhg C Jilid 10/12). R3 and R4’s appointment of additional directors was essentially to prevent the petitioner from attempting for the 3rd time to undermine the Petronas 46 license of R2. In other words the appointment of the additional directors was as a result of the attempts by the petitioner to jeopardise the Petronas license. Hence the conduct of the petitioner had resulted in the “prejudicial” conduct by the majority which is not being unfair. It would be unjust to award damages under this head of damages to the petitioner based on the aforesaid. [87] Therefore, the claim by the petitioner under this head of damages should be dismissed in totality, as these are losses of the companies not the petitioner and also it would be unjust to reward the petitioner based on his attempts to injure R2 with massive losses and consequent loss of shareholder’s value. Even if there was no appointment of the additional directors, the petitioner would not be entitled to this amount any way. The learned Judge erred in finding that the petitioner would be entitled to 50% of the sum paid out under this head. 5th head of damages Compensatory damages for wasted and/or unnecessary and/or unjustified legal and counsel fees: [88] The petitioner claims for a total of RM1,695,728.10 being the legal fees paid to Messrs. Bodipalar Ponnudurai De Silva. [89] The petitioner submitted that as the Oppression Petition Judge already ruled that there was no grand plan or conspiracy to defraud by the petitioner, the commencement of the Conspiracy Suit was unnecessary, unjustified and a complete waste of funds by R3 and R4. Therefore the 47 petitioner is entitled to claim for the sum of RM1,695,728.00 against R3 and R4 as compensatory damages for the unnecessary Conspiracy Suit. [90] The learned JC rejected this claim under this heading and the 6th head of damages. The learned JC found that these losses were incurred by the companies and not the petitioner. They were losses suffered in respect of the Conspiracy Suit and did not form part of the Proven Grievances under section 181 Petition. These losses were not incurred due to the removal of the petitioner from the management of the companies or the dilution of his shareholding. As the losses were incurred by the companies and not by the petitioner, the petitioner is not entitled to claim this amount as his claim is in his capacity as a shareholder. [91] We found that the ruling by the learned JC was correct in that the petitioner is not entitled to claim under this heading as legal fees do not form part of the grievances awarded by the court. Further the petitioner had withdrawn the 7th grievance which included payments made to lawyers and experts and further the companies had to fork out those monies to defend the companies and their interest and these monies were never used by R3 and R4 personally under this head. 6th head of damages Compensatory damages for wasted, rejected and/or unnecessary and/or unjustified reports in KLHC Suit No 22NCVC-1688-10/2011: [92] Both the Deputy Registrar and the learned JC did not allow this head of damages which amounts to RM57,269.50 (50% of RM114,539.00). These 48 are claims by the petitioner for payments made for the allegedly unjustified reports prepared by the following parties and used by R3 and R4:

Baker Tilly Monteiro: RM37,936.00;

(ii) Crowe Howarth: RM21,417.00;

(iii) JR Control Risk: RM46,686.00; and

(iv) Siaga Informatics: RM6,500.00. [93] The petitioner submitted that the learned JC had erred in law and fact when she held that the petitioner should not be entitled to those heads of damages. The petitioner further asserted that a perusal of the head of damages and the proven grievances clearly shows that the petitioner’s claim under this head of damages is also part of his oppression claim in the 5th head of damages. [94] The petitioner submitted that the learned JC erred in law and fact when she failed to appreciate and/or consider that the engagement of the purported experts and their reports were in fact not produced to defend a claim but to advance R3 and R4’s hostile takeover plan in the Conspiracy Suit and that R1 and R2 were merely used as conduits. Further error by the learned JC was also made when she failed to appreciate and/or consider that the learned Hasnah J in her grounds of decision in the Conspiracy Suit had already rejected the evidence by Crowe Howarth and “JR Risk” and their respective reports as expert evidence. The petitioner further submitted that both the learned Hasnah J and the Oppression Petition Judge found no irregularities, wrongdoings or conspiracy by the petitioner. 49 [95] However, we agree with the findings of the learned JC in this respect for the following reasons: i) These are losses suffered by the companies and not by the petitioner; ii) They were losses incurred in respect of the Conspiracy Suit and did not form part of the Proven Grievances under the Oppression Petition; and iii) They were never incurred because of the removal of the petitioner from the management of the companies. [96] Whatever wasted expenditure of the companies, if any, should be claimed by the liquidator of the companies. It is not for the petitioner to claim for the losses sustained by the companies. There was no finding by the learned JC that these expenses were paid out by R3 and R4 in breach of their fiduciary duties. [97] Both Judges in the Conspiracy Suit and the Oppression Petition Suit, held that there were no irregularities, wrongdoings or conspiracy and these were decided after a lengthy full trial. It was not a case of the Conspiracy Suit being struck out premised upon a frivolous, vexatious or an abuse of process of the Court. There was also no finding by this Court that the Conspiracy Suit was wrongly instituted against the petitioner. 50 [98] Therefore such expenses which was incurred in the Conspiracy Suit are not losses flowing from the Proven Grievance. It cannot be the case that if a company commences legal action and incurs costs, the directors who caused the company to commence the legal action must in all cases and necessarily be personally responsible for indemnifying the company in respect of the costs incurred. The companies engaged the forensic experts as their reports were necessary to defend the companies as can be seen in the Conspiracy Suit, where these reports were to assist in ascertaining the extent of wrongdoing of the defendants therein. [99] Further as these experts were engaged by the companies for purposes of the companies, how can it be said that the petitioner incurred losses as a shareholder by reason of the appointment of the experts. The appointment of the experts was a decision made by the companies for the welfare and interest of the companies not for the personal interest of the respondents. In the Conspiracy Suit, the petitioner had made a claim of part of these fees in his counterclaim which the Court had dismissed. This Court had also rejected the petitioner’s claim on the payment of fees as a Grievance. [100] At the end of it all, it has not been proven how is that this claim flows from the Proven Grievances. Therefore, we found that the learned JC did not err in this respect in rejecting the claim under this particular head. Conclusion: [101] Our unanimous decision on the appeals are as follows: 51

In so far as the Appeal W-03(IM)(NCC)-75-06/2018 (Appeal 75), which is the appeal by Toralf Mueller against part of the decision of the learned JC in dismissing part of the damages claim by the petitioner; we dismiss the appeal and affirm the decision of the learned JC;

In so far as the Appeal W-03(IM)(NCC)-78-07/2018 (Appeal 78), which is appeal by the Jacob a/l George and Rozilah binti Mat Tahir, against part of the decision of the learned JC in allowing part of the Toralf Mueller’s claim for damages in items 2.1 and 2.2 in the “Petitioner’s Head of Damages”; we dismiss the appeal and affirm the decision of the learned JC.

In so far as the Appeal W-03(IM)(NCC)-79-07/2018 (Appeal 79), which is the appeal by Jacob a/l George and Rozilah binti Mat Tahir against part of the decision of the learned JC in allowing part of Toralf Mueller’s claim for damages in item 4 in the Petitioner’s Head of Damages; we allow the appeal and set aside the order of the learned JC. No order as to costs. Signed by: Zabariah Mohd Yusof Judge, Court of Appeal, Putrajaya Date: 13.9.2019 52 COUNSEL: Wong Rhen Yen & Goik Kenwayne for the Appellant in Appeal 75 and for the Respondent in Appeal 78 and 79 [Messrs Dennis Nik & Wong] Jacob a/l George (Appellant in person) for Appeal 78 and 79 and 3rd Respondent in person in Appeal 75 Rozilah binti Mat Tahir (Appellant in person) for Appeal 78 and 79 and as 4th Respondent in person in Appeal 75