CHAN TAI PING v 1. ) NING YANG PROPERTIES SDN BHD [Business Registration No.: 948710-H (WA-22NCC-567-11/2020)

Ning Yang Properties Sdn Bhd (Company No. : 948710-H)

Lee Zhen Ning (NRIC No.: 890114-14-6137)

Lee Wah Ching (NRIC No.: 500625-10-5699) …Defendants GROUNDS OF JUDGMENT Introduction [1] Enclosure 1 was filed on 10.7.2020 as an Originating Summons by the Plaintiff pursuant to Section 346 Companies Act 2016 (“Enclosure 1”) against Ning Yang Properties Sdn Bhd (“the Company”) and the majority shareholders and directors of the Company i.e. Lee Zhen Ning (“Lee Junior”) and Lee Junior ‘s father, Lee Wah Ching (“Lee Senior”) alleging that the affairs of the Company had been conducted in a manner oppressive to and/or in disregard of his interest as a shareholder of the Company. By a consent order dated 6.11.2020, Enclosure 1 is to be continued as if the matter had been begun by writ and the parties filed their respective pleadings. [2] After a full trial conducted virtually online by using the Zoom video conferencing platform where only the Plaintiff, Lee Junior and Lee Senior testified, I had on 28.4.2022 dismissed the Plaintiff’s claim with costs. [3] This judgment contains the full reasons for my decision. At the outset, I ought to say that on the facts of the present case, I am in accord with the arguments canvassed by the Defendants’ counsel and have adopted his submissions in these grounds. Background and Parties [4] The background facts are culled from the cause papers and submissions of the parties. [5] The Plaintiff at all material times was a senior project manager of Metro Kajang Holdings Berhad and its group of companies from 2005 to 2014 and was an acquaintance of Lee Senior, the 3rd Defendant. [6] The 1st Defendant Company was incorporated in 2011 as a property construction and development company with an initial authorised share capital of RM 100,000, divided into 100,000 shares of RM 1.00 each. The name of the Company, ‘Ning Yang’ originated from Lee Senior’s 2 sons – Lee Zhen ‘Ning’ and Lee Zhen ‘Yang’. [7] Lee Senior and the Plaintiff became the first directors of the Company holding 90% and 10% respectively of the shares from 2011 to 2013. Between 2011 and 2014, the Company was dormant. [8] Lee Junior, the 2nd Defendant graduated in 2013 and joined the Company as a director on 1.11.2014. [9] The Company’s authorised share capital was increased from RM 100,000 to RM 500,000 on 1.12.2014. Lee Junior subscribed for 30% of the shareholding in the Company. The parties thus held the shares in the Company from December 2014 as follows:

(i) Plaintiff - 10%

22.1 An Order that Mr. Lee Zhen Ning (the 2nd Defendant) and Mr. Lee Wah Ching (the 3rd Defendant) purchase the 10% shares of the Plaintiff in Ning Yang Properties Sdn Bhd (the 1st Defendant) for the sum of RM1,090,000.00 being the 10% shares of the profit on the Taman Unijaya Project or such sums as is ordered by this Honourable Court;

22.2 Payment of the sum of RM270,000.00 being the loan advanced by the Plaintiff to the 1st Defendant;

22.3 Unpaid salaries in the sum of RM170,240.00 or such other sums as is ordered by this Honourable Court to be paid by the 1st Defendant to the Plaintiff;

22.4 Alternatively, the 1st Defendant be wound up;

22.5 Cost;

22.6 Interest; and

22.7 Such other relief as is deemed fit and proper by this Honourable Court. [23] The Plaintiff alleged that the affairs of the Company are being conducted by Lee Senior and Lee Junior in a manner oppressive to him and/or in disregard of his interest as a minority shareholder of the Company:

23.1 Lee Senior and Lee Junior dishonestly misappropriated funds belonging to the Company as follows:

23.1.1 dishonestly causing Wisdom Y & Y Sdn Bhd (“Wisdom”) to issue progress claims for sewerage work already carried out by Perniagaan Tractor Zan Kwan (“PTZK”);

23.1.2 dishonestly causing William Aluminium Glazing Trading (“William”) to issue false claims for the supply and installation of kitchen aluminium doors without any work being carried out;

23.1.3 dishonestly causing Infra Armada Sdn Bhd (“Infra Armada”) to prepare claims for road and drainage works even though Infra Armada did not carry out those works;

23.2 Pursuant to a Letter dated 24.12.2008 (marked during trial as “ID-P1”), he is entitled to a sum RM 320,000 representing 2% of the sale price arising from a sale of Lee Senior’s land known as Lot 90396 in 2011, of which RM 50,000 was used to pay his 10% shareholding in the Company and the balance RM 270,000 was converted to a director’s “loan” to the Company and remains outstanding to-date;

23.3 His removal as director of the Company was done in bad faith;

23.4 He was not paid a monthly salary of RM 5,000 for certain periods during his tenure as director of the Company, and unpaid salaries of RM 170,240 is due and owing to him as follows:

23.4.1 for the period from 2015 to 2016, a sum of RM 58,240; and

23.4.2 for the period from November 2018 to June 2020, a sum of RM 112,000.

23.5 Lee Senior and Lee Junior refused to pay any dividends since the incorporation of the Company. Defendants’ contentions to the allegations of oppression [24] The Defendants in defending the action asserted that the Plaintiff’s complaints are untenable and frivolous as the affairs of the Company and the powers exercised by the directors in particulars Lee Senior and Lee Junior are not in any manner oppressive to the Plaintiff and/or in disregard to his interest as a shareholder:

24.1 the allegations on misappropriation of Company funds are baseless:

24.1.1 the Plaintiff’s allegations of misconduct by Lee Senior and Lee Junior in purportedly causing various contractors of the Company to issue false claims are (even if true) alleged wrongs done to the Company (not to the Plaintiff) that can only be remedied by way of a derivative action instead of an oppression action;

24.1.2 these allegations are concocted to advance the Plaintiff’s objective to “cash out”;

24.1.3 the Plaintiff failed to put its case to Lee Senior and Lee Junior and is deemed to have abandoned his case - Aik Ming (M) Sdn Bhd & Ors v Chang Ching Chuen & Ors and Another Appeal [1995] 2 MLJ 770

24.2 As for the Plaintiff’s alleged entitlement to the balance RM270,000 as loan to the Company:

24.2.1 Lee Senior did not sign the letter dated 24.12.2008 marked as “ID-P1” nor agreed to pay the Plaintiff 2% of the sale of Lot 90396 and had lodged a police report on the matter;

24.2.2 the contention that the Plaintiff’s 10% shareholding was purportedly worth RM50,000 and that it was paid out of the RM320,000 was untenable as the initial issued share capital was merely RM100,000 and it was only increased to RM500,000 in year 2014; it was Lee Senior who paid for the 10% shares;

24.2.3 the Plaintiff’s alleged entitlement to the balance RM270,000 as loan to the Company do not concern the Plaintiff’s rights as shareholder of the Company; simply because the Company was not even in existence then;

24.2.4 in addition, there is no such loan nor record in the Company of such a loan; and

24.2.5 even if there is such a loan, it is clearly time-barred and/or defeated by reason of laches or acquiescence.

24.3 As regards to the Plaintiff’s removal as director of the Company:

24.3.1 since early 2020, the Plaintiff had vacated his office in the Company;

24.3.2 due to the strained relationship prior to and following the commencement of these proceedings, Lee Senior and Lee Junior, in the best interest of the Company, decided to remove the Plaintiff as a director;

24.3.3 the removal was carried out within the powers of the majority shareholders;

24.3.4 the removal as director relates to internal management of the Company and does not affect the Plaintiff in his capacity as a shareholder of the Company;

24.4 As for the Plaintiff’s allegations of unpaid salaries as a director of the Company:

24.4.1 there is no agreement and/or employment contract between the Company and the appointed directors nor is there any agreement that the directors will be paid a fixed salary;

24.4.2 when the company is financially well, directors will be allowed to draw a monthly allowance that is akin to salary. Apart from that, directors will also be able to claim for reasonable expenses incurred i.e. travelling claims, accommodations, entertainment expenses, phone bills, disbursements etc;

24.4.3 both Lee Senior and Lee Junior were similarly not paid for the period as pleaded by the Plaintiff;

24.4.4 the allegation of non payment of salary or allowance are matters related to the internal management of the Company, has nothing to do with the Plaintiff’s rights in the capacity as a shareholder and outside the ambit of a claim made under section 346;

24.5 As for non payment of dividends to the Plaintiff:

24.5.1 no dividend was paid to the other shareholders as well;

24.5.2 it is the common understanding amongst the directors that the Company’s priority will be to fund the Taman Unijaya Project as well as to pay off the bank loan of RM 3.7 million. The Law [25] Section 181 of the Companies Act 1965 (“CA 1965”) is the predecessor of s. 346 of CA 2016. This will become relevant when considering the cases decided under s. 181 CA 1965 such as Re Kong Thai Sawmill (Miri) Sdn Bhd & Ors. v Ling Beng Sung [1978] 2 MLJ 227; Pan-Pacific Construction Holdings Sdn Bhd v Ngiu-Kee Corp (M) Bhd & Anor [2010] 6 CLJ 721; [2010] MLJU 269. [26] S. 346 CA 2016 is produced for ease of reference and for its scope. It reads: “S. 346. Remedy in cases of an oppression.

(a) that the affairs of the company are being conducted or the powers of the directors are being exercised in a manner oppressive to one or more of the members or debenture holders including himself or in disregard of his or their interests as members, shareholders or debenture holders of the company; or

(b) that some act of the company has been done or is threatened or that some resolution of the members, debenture holders or any class of them has been passed or is proposed which unfairly discriminates against or is otherwise prejudicial to one or more of the members or debenture holders, including himself.

(a) direct or prohibit any act or cancel or vary any transaction or resolution;

(b) regulate the conduct of the affairs of the company in the future;

(c) provide for the purchase of the shares or debentures of the company by other members or debenture holders of the company or by the company itself;

(d) in the case of a purchase of shares by the company, provide for a reduction accordingly of capital of the company; or

(e) provide that the company be wound up.

(a) where an act of oppression features both personal wrongs against the shareholder and corporate wrongs against the company, the court needs to consider the real injury that is complained of and the essential remedy that is sought in ascertaining whether a minority oppression claim brought is an abuse of process;

(b) director’s breach of his duty of care, skill and diligence in monitoring the management of his company’s affairs would amount to oppression only if the negligent mismanagement is sufficiently serious; and

(c) a shareholder who complains of oppression may be precluded from seeking relief under s 346 where it has an alternative remedy that is both appropriate and adequate to bring to an end the matters complained of. [49] Paragraph 113 of the Singapore Court of Appeal decision in Suying Design Pte Ltd v Ng Kian Huan Edmund and other appeals [2020] SGCA 46 is instructive in this context: ‘113. In our judgment, these baseline expectations do not provide a sufficient basis on which to find that Mr Ng has suffered a distinct personal injury which would amount to commercial unfairness. To find otherwise would, in our view, suggest that any misappropriation of moneys by a director would constitute a distinct injury to a shareholder. This would be too broad a construction of the framework the Court of Appeal set out in Sakae Holdings and make impermissible inroads into the proper plaintiff’s rule. This simply cannot be the case. Further, the breach of this expectation would be remedied by the recovery of the misappropriated moneys by the company in a corporate action. The Company Act provides s 216A for this purpose.” (emphasis added) [50] The Federal Court in the case of Rinota Construction Sdn Bhd v Mascon Rinota Sdn Bhd & Ors [2018] 1 MLJ 141 discussed the elements which differentiate between an oppression action and a derivative claim and pronounced: “[33] We shall now deal with the derivative action point. The derivative action and the minority oppression petition are not mutually exclusive and there may be circumstances which give rise to both a derivative claim and an oppression proceeding, but they remain distinct remedies with separate rationales and statutory functions (see the case of Koh Jui Hiong @ Koa Jui Heong & Ors v Ki Tak Sang @ Kee Tak Sang and another appeal [2014] 3 MLJ 10; [2014] 2 CLJ 401).” (emphasis added) [51] Applying the principles elucidated in the authorities above, the purported losses arising from the Plaintiff’s allegations of misappropriation of Company funds which I find on a balance of probability has not been proven, (even if true), are suffered by the Company and do not form a distinct injury to the Plaintiff in his capacity as a shareholder. He agreed to this under cross-examination: Cross-Examination of Plaintiff (NOP p. 115) SSM: Yes, ok. Now when you say the company’s funds were misappropriated by Lee Senior and Zhen Ning, do you agree that if at all such an allegation is true, the losses are suffered by the company. CHAN: Yes [52] The Plaintiff cited Lee Yee Wuen v Lee Kai Wuen & Ors [2020] MLJU 1902 CA to support his submission that “misappropriation of monies can constitute an act of oppression”. Lee Yee Wuen (supra) is entitled to greatest respect, it in fact discussed extensively the Rinota case but in my respectful view, on the facts here, does not advance the Plaintiff’s case one whit; far from it as the unlawful conduct of misappropriation in the present proceedings as earlier alluded to, has not been proven on a balance of probabilities. They remain bare allegations. This head of complaint falls. [53] Learned counsel for the Defendants then argued that the fall of this complaint has a crucial bearing and spells the demise of the whole claim. This argument is not unattractive. Learned counsel pointed out crisply that the Plaintiff’s “only reason” for filing the Minority Oppression Claim is that Lee Senior and Lee Junior had purportedly “misappropriated funds belonging to Ning Yang Company”. This has been:

53.1 Pleaded in the Plaintiff’s Statement of Claim: “GROUNDS FOR FILING THIS ACTION

The Plaintiff has filed this action and is praying for the various remedies and orders on the grounds that the affairs of the 1st Defendant are being conducted and the powers of the directors in particular the 2nd and 3rd Defendants are being exercised in a manner oppressive to the Plaintiff in his capacity as a member and shareholder of the 1st Defendant company and/or in disregard of his interest as a member and shareholder of the 1st Defendant company in that the 2nd and/or 3rd Defendants who are in control of the affairs of the 1st Defendant company have misappropriated funds belonging to the 1st Defendant.” (Counsel’s emphasis)

53.2 Repeated in the Plaintiff’s witness statement: “Q35: What are your ground for filing this action? A35: I have filed this action and I am praying for the various remedies and orders on the grounds that the affairs of the 1st Defendant are being conducted and the powers of the directors in particular the 2nd and 3rd Defendants are being exercised in a manner oppressive to me in my capacity as a member and shareholder of the 1st Defendant company and/or in disregard of my interest as a member and shareholder of the 1st Defendant company in that the 2nd and/or 3rd Defendants who are in control of the affairs of the 1st Defendant company have misappropriated funds belonging to the 1st Defendant.” (Counsel’s emphasis)

53.3 Confirmed by the Plaintiff during cross-examination: Cross-Examination of the Plaintiff (NOP p. 74 - 75 & 156) SSM : Yes, I'm referring to your own statement of claim. Now you said that ‘grounds for filing this action is that the Plaintiff has filed this action and is praying for the various remedies and orders on the grounds that the affairs of the 1st Defendant are being conducted and the powers of directors, in particular 2nd and 3rd Defendant, are being exercised in a manner oppressive to the Plaintiff in his capacity as a member and shareholder of the 1st Defendant company and in disregard to his interest as a member and shareholder of the 1st Defendant company in that the 2nd and 3rd Defendants, who are in control of the affairs of the 1st Defendant company, have misappropriated funds belonging to the 1st Defendant’. Now this is your only reason why you filed this action, correct? Yes. …… SSM : Yes? In conclusion, my final part, Mr Chan, yesterday you confirmed that your claim in the Court today is a minority shareholder suit because you say you had been oppressed by the majority shareholder due to misappropriation of funds by the 2nd and 3rd Defendants in connection with the three contractors, and I showed to you paragraph 32 of your statement of claim. You’ll be able to confirm that again? Yes, I confirm. [54] I agree with Counsel’s posit that the Plaintiff must be taken to have abandoned all his other allegations or none of his other allegations have anything to do with the claim of oppression. I will nevertheless, deal with the other complaints for the sake of completeness. Removal as director [55] I find this complaint bereft of merits. Firstly, it must be borne in mind that this is not the type of case where the Plaintiff has entered into association with the Defendants upon the understanding that he participates in the management of the Company in which event, equitable considerations can make it unfair for those conducting the affairs of a company to rely on their strict legal powers or rights under the articles of association. Neither is it the Plaintiff’s complaint that he has a legitimate right to participate in the management of the company based on an understanding as in cases such as Tan Kian Hua v Colour Image Sdn Bhd & Ors [2004] 6 CLJ 174; [2004] MLJU 178; Wong Kim Yoon v Cheong Kim Hong & Ors [2019] MLJU 1589 and Tob Chee Hoong v Tob Chee Choong & Ors [2017] MLJU 1303; [2017] I LNS 1256. [56] Second, it is trite law that the appointment and removal of directors belong to the internal management or affairs of the company and the Court will not interfere with the internal management of a company:

56.1 in Burland v Earle [1902] AC 83 at p 93, Lord Davey, when delivering the advice of the Privy Council expressed the proposition in the following words: “It is an elementary principle of the law relating to joint stock companies that the court will not interfere with the internal management of companies acting within their powers, and in fact has no jurisdiction to do so.”

56.2 in Owen Sim (supra), the Federal Court stated: “Traditionally, courts have been reluctant to interfere with matters relating to the internal management of incorporated companies. Through a series of decisions of the Court of Chancery in the mid-nineteenth century, they administered unto themselves a jurisdictional prohibition from entering upon domestic disputes between corporators. Two landmark decisions settled the law upon the subject for all time. The first of these was Foss v Harbottle (1843) 67 ER 190; the second was Mozley v Alston (1847) 41 ER 833.” This principle in Owen Sim (supra) was echoed by the same court in the Pan-Pacific case at [23]; [57] Thirdly, it is the memorandum and articles of association that govern the affairs of the company, including the appointment and removal of directors. In Re Kong Thai Sawmill, it was said by the Privy Council that “Those who take interests in companies limited by shares have to accept majority rule”. [58] In Tuan Haji Ishak bin Ismail v Leong Hup Holdings Bhd and other appeals [1996] 1 MLJ 66, Mahadev Shanker JCA held at p 692, that: “… if they regarded these matters as important, we think it was imperative not only that agreements on such matters should have been put into writing but also the articles of association should have been amended so as to substantiate the claim that is being made.” [59] Fourthly, s. 206 of CA 2016 and Article 69 of the articles of association of the Company allow shareholders to remove directors without assigning a reason. The Plaintiff in fact threw in the towel when he agreed during cross-examination that the resolution voting him off the Board remains valid (NOP p. 103 – 104) and added to that, accepted he can be removed pursuant the articles of association: Cross-Examination of Plaintiff (NOP p.105) “SSM : But you would agree with me that Lee Senior and Zhen Ning, as the majority shareholders of Ning Yang can and are entitled to remove you as a director of the company according to the company’s articles of association? Yes.” [60] Section 2 of the CA 2016 defines the word “member” as: “(a) in the case of a company limited by shares, a person whose name is entered in the register of members as the holder for the time being of one or more shares in the company; or

(b) in the case of a company limited by guarantee, a person whose name is entered in the register of members;” [61] That oppression under the scope of s. 346 must affect the complainant “qua member” and not “director” is made clear by the authorities, inter alia by:

61.1 the Court of Appeal decision in Hoy Pak Kwai v Leong Kon Fah & Ors [2007] 1 MLJ 508; [2007] 1 CLJ 121 which commends itself to me: “[66] As to the appellant's claim of there being a breach of fiduciary duty, I find this absurd. As correctly pointed out by the trial judge, the first and second respondents are substantial shareholders and are directors of API. They owe no fiduciary duty to the appellant in exercising their vote at board meetings and as shareholders they owe no duty to anybody as to how they exercise their vote (Tuan Haji Ishak bin Ismail v Leong Hup Holdings Bhd and other appeals [1996] 1 MLJ 661). And the 'mere use of voting power at board meetings or at a general meeting to secure the passing of resolutions which other members of the board or shareholders oppose, would not in general constitute oppression for the purpose of the section or for any other purpose. For a petition to succeed, it must be shown that there has been oppression in a real sense of members qua shareholders, and not merely a subordination of their wishes to the power of the voting majority (Re Harmer Ltd [1959] 1 WLR 62 at p 87 per Romer LJ' accepted in Dato Toh Kian Chuan v Swee Construction & Transport Company (Malaya) Sdn Bhd [1996] 1 MLJ 730.” (emphasis added)

61.2 Khor Lye Hock Anor Tan Soon Keh v Makassar Engineering & Construction Sdn Bhd & Ors [2011] 8 CLJ 476; [2010] MLJU 18: “[10] It is a principle of the law relating to the grant of relief under section 181 that mismanagement in itself is not actionable. Disputes relating to policy or management do not entitle a member to relief under the section. More significantly the oppression in question must affect the petitioning member qua member. The acts complained of must affect the member in his capacity as a member, (see Re Chi Liung & Son Ltd. [1968] 1 MLJ 97 and Re Tong Eng Sdn. Bhd. [1994] 1 MLJ 451, 457 per Selventhiranathan J. Prayer (a) This prayer relates to the removal of P1 as a Managing Director. It seeks to cancel the resolution dated 15 May 2009 that removed P1 as Managing Director. The complaint here and relief sought relates to P1's contractual position as Managing Director. It does not relate to his rights as a member. The Board of Directors, moreover is empowered under Article 91 of Table A to remove PL It is significant that he has not been removed as a director nor has any attempt been made to adversely affect his shareholding. In the matter of Tahansan Sdn. Bhd. [1984] 1 MLJ 204,211 Chan J. quoted Plowman J. in In re Lundie Brothers Ltd [1965] 1WLR105: "...In my judgment he has wholly failed to do that His main grievance is, as he admitted in the witness box, that he has been ousted as a working director. That, it seems to me, has nothing to do with his status as a shareholder in the company at all. The same thing is equally true in regard to his complaint that his remuneration as a director of the company has been reduced. That relates to his status as a director of the company, and not to his status as a shareholder of the company." Chan J. then went on to hold: The fact that the petitioner in the present case was ousted as a director and that he was deprived of his directors' remuneration relates only to his status as a director, and not to his status as a shareholder. The court, therefore is not given jurisdiction in a situation like this to make an order under section 181." See also Low Thiam Hoe & Anor v Sri Serdang Sdn Bhd & Ors [2020] 10 MLJ 137, Koh Jui Hiong @ Koa Jui Heong & Ors v. Ki Tak Sang @ Kee Tak Sang and another appeal [2014] 3 MLJ 10 at [24] and Tan Ken Meng v HSL Plastics Sdn Bhd & Ors [2019] MLJU 966. [62] Fifthly, save for what is set out in the articles of association, Lee Senior and Lee Junior as the other shareholders in the Company owe no duty to the Plaintiff how they exercise their votes - Tuan Haji Ishak bin Ismail (supra). [63] In Pan-Pacific Construction Holdings Sdn Bhd v Ngiu-Kee Corp (M) Bhd & Anor (supra), the Federal Court stated: [34] …A share is a property which its holder as of right is entitled to utilize it in any manner he may wish. (See: Pender v Lushington (1877) 6 Ch D 70; Foss v Harbottle [supra]). (See also: 'Fairness and Good Faith as a precept in the Law of Corporations and other Business Organizations by Charles W. Murdock-Vol. 36 Loyola University Chicago Law Journal 551[2004-2005]').. [64] Finally, in my utmost respectful view, sans a common understanding giving birth to a legitimate expectation, the exercise by the majority shareholders of their power under the articles to vote the Plaintiff off the board, did not contravene any prior agreement between them and was not contrary to any equitable principle of good faith, as explained by Lord Hoffmann in O'Neill v Phillips. There is no permanent right to a directorship unless it is entrenched specifically in the Memorandum and Articles of association. An illustration of this is the case of Re Chi Liung & Sons Ltd. (1968) 1 MLJ 97 where the founding director Chi Liung’s position was ensconced as a permanent director until she resigns the office or dies. Under Singapore’s s. 216, the equivalent of our s. 346 CA 2016, in the case of Re Tri-Circle Investment Pte. Ltd. (1993) 2 SLR 523, Judith Prakash J held: "the removal of the first and second petitioners as directors did not entitle them to relief under section 216. They did not have entrenched places on the board nor should they have expected to be able to remain on the board..." [65] As such, this complaint must necessarily fall. Plaintiff’s alleged entitlement to RM270,000 as loan to the Company [66] This claim was predicated on assertions that by the contents of the Letter dated 24.12.2008 (marked during trial as “ID-P1” pending cross examination of Lee Senior), the Plaintiff is entitled to a sum RM 320,000 representing 2% of the sale price arising from a sale of Lee Senior’s land known as Lot 90396 in 2011, of which according to the Plaintiff, RM 50,000 was used to pay his 10% shareholding in the Company and the balance RM 270,000 was converted to a director’s “loan” to the Company. Parties were also invited to address the admissibility of this Letter in their written submissions. I find firstly, the Plaintiff’s assertion that RM50,000 out of this RM320,000 was used to pay for his 10% shares in the Company is not borne out by the evidence. The Company’s ledgers at CBD4, p. 693 – 695 show Lee Senior paid for the Plaintiff’s shares. Secondly, his evidence in cross-examination put paid such assertion: Cross-Examination of Plaintiff (NOP p.72) “SSM : Ah. My instruction is that when you were given the 10% shares in Ning Yang, Mr Lee Senior paid it for you in return for you to help Ning Yang Company. CHAN : Yes.” [67] The Plaintiff during cross-examination was also asked of the events leading to the signing of the Letter. In his evidence (pg 27 – 29 NOP), he could not recall (i) when or where it was signed, (ii) when he counter-signed the acknowledgment, (iii) who explained the contents of the Letter to Lee Senior (who does not read or write English). He further confirmed in cross-examination that:

67.1 save for the Letter, there are no other documents to show his alleged involvement in procuring the relevant approvals for Lot 90396;

67.2 the Letter is not in the Company’s records nor was the alleged loan of RM270,000 recorded in the Company’s audited accounts;

67.3 he did not in the last 10 years issued any demand for this loan or made a request or bring the matter up in a board meeting “Because all the while for the past 10 years, Ning Yang didn’t make a profit. That’s why I see the financial statement is not healthy, that’s why I am not asking about this loan. That’s it.”

67.3 his allegations of involvement on Lot 90396 do not concern his rights as shareholder of the Company, simply because the Company was not even in existence and the Letter had nothing to do with the Company: Cross-Examination of Plaintiff (NOP p. 50) : “SSM : Now just to be clear because your suit today is for minority, as a minority shareholder and you claimed that you have been oppressed, yes. That is your suit today. Now to be clear this letter that you have produced dated 24.12.2008 has nothing to do with Ning Yang Company as the company was not even in existence in 2008. Do you agree or disagree? Agree.” [68] Conversely, Lee Senior inter alia testified that:

68.1 As early as 1997, he engaged various consultants, attended to the applications for all the necessary approvals from the relevant authorities in respect of Lot 90396;

68.2 he has never seen the Letter until it was produced in the instant proceedings when he saw it for the first time; that he had not signed it, and he lodged a police report which was produced as a part B document at CBOD 6, pg 1323. [69] Curiously, Lee Senior’s evidence was not challenged at all during cross examination and as such deemed to be accepted. Neither was the Plaintiff’s case concerning this loan to the Company put to the Defendants. Having regard to the totality of the evidence before the Court, I find that the Plaintiff has not discharged the burden of proving an agreement between him and Lee Senior to be paid for his alleged involvement in Lot 90396 and that out of such entitlement, he has loaned a sum of RM270,000 to the Company. As it is Lee Senior’s unchallenged evidence that he did not sign the letter, I am of the view that “ID-P1” cannot be admitted as evidence. [70] Even if I am wrong on not admitting “ID-P1” and marking it as an exhibit, if it is to be the foundation for the return of the alleged loan of RM270,000 to the Company, it is my respectful view that the claim is hopelessly time barred. I also fail to see what nexus it has with his rights as a shareholder. “There is authority for saying that even if the directors or majority shareholders have been guilty of improper or unreasonable conduct so that there appears to be a prima facie case for relief, it will be refused if the real purpose of the petitioners is to obtain payment of money owed by the Company” - Re Senson Auto Supplies Sdn Bhd [1988] 1 MLJ 326 at pg 332, citing with approval Re Bellador Silk Ltd [1965] 1 All ER 667 . Not only that. The loan also cannot be said to be made to the Company when the Company was not incorporated in 2008. Unpaid Director’s salaries [71] Although a ground of complaint, the Plaintiff did not address this issue of non-payment of Director’s salaries in his submissions and appeared to have abandoned this grievance. At any rate, it is to be noted that both Lee Senior and Lee Junior were also not paid for the periods claimed by the Plaintiff. I fail to see any clear or convincing evidence on how such non-payment unfairly discriminates against him. As such, I find no merits in this complaint as the Plaintiff’s allegations of unpaid salaries as a director of the Company do not affect him in his capacity as a shareholder, and in any case outside the ambit of s. 346. Non-payment of dividends [72] As for this claim, I accept the Defendants’ assertions that due to tight cash flow, no dividends were paid. This non-payment of dividends was not discriminatory of or targeted specifically at the Plaintiff as Lee Senior and Lee junior as the other shareholders, were also similarly not paid. The Plaintiff was not treated any differently from the other shareholders on the non-payment of dividends. He was aware the Company was not making profit. He maintained an elegant silence and in his own words, he even did not chase the Company for his alleged loan of RM270,000 “Because all the while for the past 10 years, Ning Yang didn’t make a profit. That’s why I see the financial statement is not healthy, that’s why I am not asking about this loan. That’s it.” [73] The Plaintiff did not do himself a favour by conceding the Company made no profits. Added to that, it is trite that it is within the discretion of the directors and an internal management decision whether to declare dividends or not. It is a general rule that the Court has no jurisdiction to interfere with the internal management of companies so long as they are being managed in accordance with the law. [74] The fact of the Company not making profits as admitted by the Plaintiff blows the Plaintiff’s claim for dividends to smithereens. At any rate, s.131(1) CA 2016 provides that dividend is to be paid out of the company's profits. Breach of s. 131(1) by officers of the Company is underscored by the criminal sanctions spelt out in s.131(2) attracting imprisonment not exceeding 5 years, a fine not exceeding RM3,000,000 or both. Not only that, s. 133(1) proscribes that the company may recover the amount of distribution received by a shareholder which exceeds the amount which could properly have been made unless the shareholder (1) has received the distribution in good faith; and (2) has no knowledge that the company did not satisfy the solvency test. Section 133(2) provides for the liability of the director and manager who wilfully paid or permitted to be paid dividends out of what they knew to be not profit. They are liable to the company to the extent of the amount exceeding the value of any distribution of dividends that could properly have been made. Suffice to say in the end, there is no merit in this complaint. [75] In summary, on the evidence adduced and assessed, I find the precise nature of the Plaintiff’s complaints as borne out by the evidence adduced is unsatisfactory and do not engage the intervention of this Court under s. 346 CA 2016. Nay, inflict violence to its express language. [76] Whilst I understand that the Plaintiff cannot work together with the 2 Lees anymore, however, I can be forgiven if I venture to say that I view with scepticism the Plaintiff’s claim as he appears to have commenced his claim of oppression for the collateral purpose of being able to exit at will. The oral and documentary evidence when considered objectively points in reality to the Plaintiff’s claim of oppression as not being genuine. This is accentuated by his own evidence: Re-Examination of Plaintiff (NOP p. 161) RSS : Ok, that’s fine. Now you were asked that in your prayer, in your claim, you have asked that the company, one of the prayers you have asked is that the company be wound up, ok? Now can you explain to the, to My Lady… in this action? Ok, My Lady, of course I don’t want the company to be wound up. At the end there or maybe the, my end objective here is to cash out. I don’t want to involve in this company any more. I just want to maybe sell my share to the company, I don’t want to bother anymore, because if I didn’t take any action here, I’m worried at the end of the day, my share worth nothing. It’s my own objective, I want to cash out only, My Lady. [77] A mere desire to exit the Company at will, will not afford a remedy under s. 346. There is no right to cash out or exit at will - O'Neill v Phillips (supra) per Lord Hoffmann at p 14. I agree with that proposition and it should be the case here. [78] In O’Neil v Phillips, after considering the question whether Mr Phillips had acted 'unfairly' for the purposes of s 459, Lord Hoffmann in his speech, turned to a submission made by counsel for Mr O'Neill to the effect that it did not matter whether Mr Phillips had acted unfairly, since even if he had not done so, trust and confidence between Mr O'Neill and Mr Phillips had broken down, and in those circumstances it would be unfair to leave Mr O'Neill locked into the company as a minority shareholder. To that, Lord Hoffmann had this to say at pg 14: 'I do not think that there is any support in the authorities for such a stark right of unilateral withdrawal. There are cases, such as Re a company (No 006834 of 1988), ex p Kremer [1989] BCLC 365, in which it has been said that if a breakdown in relations has caused the majority to remove a shareholder from participation in the management, it is usually a waste of time to try to investigate who caused the breakdown. Such breakdowns often occur (as in this case) without either side having done anything seriously wrong or unfair. It is not fair to the excluded member, who will usually have lost his employment, to keep his assets locked in the company. But that does not mean that a member who has not been dismissed or excluded can demand that his shares be purchased simply because he feels that he has lost trust and confidence in the others. I rather doubt whether even in partnership law a dissolution would be granted on this ground in a case in which it was still possible under the articles for the business of the partnership to be continued. And as Lord Wilberforce observed in Ebrahimi v Westbourne Galleries Ltd [1972] 2 All ER 492, [1973] AC 360, one should not press the quasi-partnership analogy too far: “A company, however small, however domestic, is a company and not a partnership or even a quasi-partnership”.' [79] For the reasons given, the Plaintiff’s claim is dismissed with costs. [80] It remains for me to record my appreciation to learned counsel for the respective parties for their efforts expended in their submissions. I do not propose to burden this judgment by citing at length each of the arguments and authorities relied upon by learned counsel. [81] I ought to state that I have found it necessary to discuss authorities not cited by either side both local and foreign but which I considered pertinent to the crux of the claim made and the contentions raised. This does not however in my view necessitate any further argument or detract from the basic propositions advanced and argued by both sides. Dated: 27th June 2022 -sgd- ……………………….. Liza Chan Sow Keng Judicial Commissioner High Court of Malaya at Kuala Lumpur COUNSEL: For the Plaintiff : Dato’ RS Sodhi (together with him Theng Kai Chi); For the Defendants : SM Shanmugam (together with him Hooi Chung Wai) CASES REFERRED: Aik Ming (M) Sdn Bhd & Ors v Chang Ching Chuen & Ors and Another Appeal [1995] 2 MLJ 770 (CA); Re Kong Thai Sawmill (Miri) Sdn Bhd & Ors. v Ling Beng Sung [1978] 2 MLJ 227; Pan-Pacific Construction Holdings Sdn Bhd v Ngiu-Kee Corp (M) Bhd & Anor [2010] 6 CLJ 721; [2010] MLJU 269; Kumagai Gumi Co Ltd v Zenecon-Kumagai Sdn Bhd & Ors and another application [1994] 2 MLJ 789; Re Tivoli Freeholds Ltd [1972] VR 445; Jaya Medical Consultants Sdn Bhd v Island & Peninsular Bhd & Ors [1994] 1 MLJ 520; Scottish Cooperative Wholesale Society Ltd v. Meyer [1958] 3 All ER 66; [1959] AC 324; Owen Sim Liang Khui v Piasau Jaya Sdn Bhd & Anor [1996] 1 MLJ 113; Genisys Intergrated Engineers Pte Ltd v UEM Genisys Sdn Bhd & Ors [2008] 6 MLJ 237; Looh Siong Chee v. Numix Engineering Sdn Bhd & Ors and Other Appeals [2015] 4 MLJ 561; O'Neill v. Phillips [1999] 2 BCLC 1; Re Saul D Harrison & Sons Plc [1995] 1 BCLC 14; Re R A Noble & Sons (Clothing) Ltd, [1983] BCLC 273; Letchumanan Chettiar Alagappan @ L Allagappan (as executor to SL Amameloo Achi alias Sona Lena Alamelo Acho, deceased) & Anor v Secure Plantation Sdn Bhd [2017] 4 MLJ 697; Soon Peng Yam & Anor v. Bank of Tokyo - Mitsubishi (Malaysia) Bhd [2004] 1 CLJ 532; Browne v Dunn(1893) 6 R 67; Sivalingam a/l Periasamy v Periasamy & Anor [1995] 3 MLJ 395; Waddington Ltd v Chan Chun Hoo Thomas & Ors [2009] 4 HKC 381; Koh Jui Hiong @ Koa Jui Heong & Ors v. Ki Tak Sang @ Kee Tak Sang and another appeal [2014] 3 MLJ 10; Ho Yew Kong v Sakae Holdings Ltd [2018] SGCA 33; Suying Design Pte Ltd v Ng Kian Huan Edmund and other appeals [2020] SGCA 46; Rinota Construction Sdn Bhd v Mascon Rinota Sdn Bhd & Ors [2018] 1 MLJ 141; Lee Yee Wuen v Lee Kai Wuen & Ors [2020] MLJU 1902; Tan Kian Hua v Colour Image Sdn Bhd & Ors [2004] 6 CLJ 174; [2004] MLJU 178; Wong Kim Yoon v Cheong Kim Hong & Ors [2019] MLJU 1589; Tob Chee Hoong v Tob Chee Choong & Ors [2017] MLJU 1303; [2017] I LNS 1256; Burland v Earle [1902] AC 83; Tuan Haji Ishak bin Ismail v Leong Hup Holdings Bhd and other appeals [1996] 1 MLJ 66; Hoy Pak Kwai v Leong Kon Fah & Ors [2007] 1 MLJ 508; [2007] 1 CLJ 121; Khor Lye Hock Anor Tan Soon Keh v Makassar Engineering & Construction Sdn Bhd & Ors [2011] 8 CLJ 476; [2010] MLJU 18; Low Thiam Hoe & Anor v Sri Serdang Sdn Bhd & Ors [2020] 10 MLJ 137; Tan Ken Meng v HSL Plasctics Sdn Bhd & Ors [2019] MLJU 966; Re Chi Liung & Sons Ltd. (1968) 1 MLJ 97; Re Senson Auto Supplies Sdn Bhd [1988] 1 MLJ 326; Re Bellador Silk Ltd [1965] 1 All ER 667; STATUTES/LEGISLATION REFERRED: Section 181 of the Companies Act 1965; Section 2, 131, 133, 206, 346, 347 and 348 of Companies Act 2016; Section 114 (g) of the Evidence Act 1950;