Gan Heng Wan v Yong Keng Fong (BA-24NCC-103-09/2025)

These are the grounds of my decision in respect of the Plaintiff’s

1.

The Plaintiff commenced Enclosure 1 pursuant to section 346 of the Companies Act 2016, alleging that the 1st and/or 2nd Defendants had conducted the affairs of the 3rd Defendant and/or exercised the powers of directors in a manner oppressive to the Plaintiff, in disregard of his interests as a member, or in a manner unfairly discriminatory or otherwise prejudicial to him.

The principal relief sought by the Plaintiff was a declaration of oppression and a consequential order that the 1st and 2nd Defendants purchase the Plaintiff’s 80,000 shares in the 3rd Defendant at fair value to be determined by an independent valuer. In the alternative, the Plaintiff sought an order that the 3rd Defendant be wound up.

The Plaintiff also sought ancillary orders restraining changes to the company’s officers, management structure, financial control, shareholding structure and business direction without leave of Court, together with damages, costs and further relief.

Enclosure 1 was heard together with the Plaintiff’s application in Enclosure 24, which sought conversion of the Originating Summons into a writ action. I dismissed Enclosure 24 for reasons given separately. I then proceeded to determine Enclosure 1 on the affidavit and documentary evidence before the Court.

Having considered the affidavits, exhibits, written submissions, authorities and oral submissions, I dismissed Enclosure 1. B.

The Plaintiff, is a shareholder of the 3rd Defendant.

The 3rd Defendant is a company incorporated in Malaysia. Its business concerns, among others, the ownership and management of oil palm plantation properties in Maran, Pahang.

The Plaintiff holds 80,000 shares in the 3rd Defendant, representing 8% of the issued share capital. The 1st Defendant, also holds 80,000 shares, representing 8% of the issued share capital. The 2nd Defendant, holds 100,000 shares, representing 10% of the issued share capital. The 3rd Defendant has 19 shareholders and a total issued share capital of 1,000,000 shares. It was not disputed that the 1st and 2nd Defendants are not majority shareholders of the 3rd Defendant.

The Plaintiff was formerly a director of the 3rd Defendant. The Defendants’ case was that the Plaintiff remained a director until 20 June 2025 and was removed after he allegedly failed or refused to sign documents necessary for the lodgement of the annual return and audited financial statements of the 3rd Defendant.

The Plaintiff disputed the validity and propriety of his removal. The Plaintiff’s case was that the 3rd Defendant was, in substance, a quasi-partnership involving the Tee, Yeo, Yong and Gan families. According to the Plaintiff, the family-based relationship, the 31 August 2020 shareholders’ understanding, and his involvement in management gave rise to a legitimate expectation that he would continue to participate in the affairs and management of the 3rd Defendant.

The Defendants denied that the 3rd Defendant was a quasi-partnership. They contended that the 3rd Defendant was a company limited by shares with 19 shareholders, and that the relationship between shareholders was governed by company law, the company’s constitution and the principle of majority rule. C.

The Plaintiff’s complaints may be summarised as follows.

First, the Plaintiff alleged that the 3rd Defendant was a quasi-partnership and that he had a legitimate expectation to participate in the management and financial affairs of the 3rd Defendant.

Secondly, the Plaintiff relied on the shareholders’ understanding dated 31 August 2020. He submitted that the understanding assigned him a role in relation to accounts and financial matters, and that the Defendants had breached that understanding by excluding him from accounting and management functions.

Thirdly, the Plaintiff alleged that he was excluded from management and from WhatsApp communications concerning the company’s affairs.

Fourthly, the Plaintiff alleged that he was denied access to company documents, accounts and financial records.

Fifthly, the Plaintiff complained of financial irregularities and alleged that income or funds of the 3rd Defendant had been channelled through the account of Tee Kong Peng.

Sixthly, the Plaintiff complained that his removal as director was invalid, oppressive and effected without proper notice, without any proper opportunity to be heard, and without proper corporate process.

The Plaintiff submitted that these matters, taken cumulatively, amounted to oppression, unfair prejudice and unfair discrimination within section 346 of the Companies Act 2016. D.

The Defendants denied oppression. They submitted that the Plaintiff had failed to prove any quasi-partnership or any legitimate expectation entitling him to remain involved in management.

The Defendants emphasised that the 3rd Defendant has 19 shareholders, and that the Plaintiff, 1st Defendant and 2nd Defendants hold only 8%, 8% and 10% respectively. The Defendants submitted that it was therefore incorrect to characterise the 1st and 2nd Defendants as majority shareholders exercising majority oppression.

The Defendants submitted that the Plaintiff had voluntarily left the WhatsApp group on several occasions and that the 1st Defendant had added him back. They denied deliberately excluding him.

The Defendants also contended that financial information was shared through WhatsApp communications, including income and profit calculations, and that the Plaintiff had received his portion of distributions.

As regards Tee Kong Peng, the Defendants’ evidence was that the arrangement involving Tee Kong Peng’s account was known to the Plaintiff and was done for convenience in relation to the distribution of income and payments to the company and shareholders.

As regards the Plaintiff’s removal as director, the Defendants’ position was that the Plaintiff had refused or failed to sign documents required for statutory filings, and that his removal was undertaken so that the 3rd Defendant would not be exposed to penalties and prejudice. E.

The principal issues for determination were:

whether the 3rd Defendant was a quasi-partnership or Ebrahimi-type company giving rise to equitable considerations and a legitimate expectation of participation in management;

whether the Plaintiff had proved that the affairs of the 3rd Defendant were conducted, or that the powers of directors were exercised, in a manner oppressive to him or in disregard of his interests as a member;

whether any act of the 3rd Defendant had been done, threatened or proposed which unfairly discriminated against or was otherwise prejudicial to the Plaintiff as a member;

whether the Plaintiff’s complaints, viewed individually or cumulatively, justified relief under section 346; and

whether the Plaintiff was entitled to the buy-out, winding-up or ancillary reliefs sought. F. APPLICABLE LEGAL PRINCIPLES

Section 346 of the Companies Act 2016 provides a statutory remedy where the affairs of a company are conducted, or the powers of directors are exercised, in a manner oppressive to one or more members or in disregard of their interests, or where an act of the company unfairly discriminates against or is otherwise prejudicial to one or more members.

The jurisdiction is remedial and equitable in nature. However, it does not permit every internal management dispute, commercial disagreement, or breakdown in personal relationship to be converted into an oppression claim.

The burden lies on the Plaintiff to establish, on a balance of probabilities, the elements of oppression, disregard of interests, unfair discrimination or unfair prejudice.

The conduct complained of must affect the Plaintiff in his capacity as a member. Complaints relating merely to management decisions, disagreements among directors, or dissatisfaction with how business decisions are made do not, without more, amount to oppression.

The authorities make clear that there must be a visible departure from the standards of fair dealing and a violation of the conditions of fair play which a shareholder is entitled to expect.

Where a Plaintiff relies on quasi-partnership principles, the Court must examine whether there is sufficient evidence of a personal relationship involving mutual confidence, an agreement or understanding that the shareholder would participate in management, and circumstances making it inequitable to insist strictly on legal rights.

The mere fact that a company is private, small, family-related, or closely held does not automatically make it a quasi-partnership.

Further, the Court’s powers under section 346 are broad, but the discretion to grant relief only arises where the statutory ground is first established. G. FINDINGS G1. Whether the 3rd Defendant was a quasi-partnership

The Plaintiff’s case depended substantially on his characterisation of the 3rd Defendant as a quasi-partnership.

I was not satisfied that the Plaintiff had proved that the 3rd Defendant was a quasi-partnership in the legal sense.

The 3rd Defendant is a company with 19 shareholders. The Plaintiff holds only 8% of the issued share capital. The 1st Defendant holds 8%, and the 2nd Defendant holds 10%. The 1st and 2nd Defendants are not majority shareholders.

The Plaintiff relied on the alleged involvement of four family groups. However, the evidence did not establish a pre-existing partnership that had been converted into the 3rd Defendant company. Nor did the evidence establish that all 19 shareholders entered into the company on the basis of a personal relationship of mutual confidence sufficient to displace the ordinary corporate framework.

The Plaintiff also relied on the shareholders’ understanding dated 31 August 2020. I accept that this document formed part of the background dealings between the parties. However, I did not accept that it created an enforceable or equitable right entitling the Plaintiff to permanent participation in management or to remain as a director.

The shareholders’ understanding appeared to set out operational arrangements and broad mechanisms concerning accounts, disclosure, and decisions relating to the plantation business. It did not amount to a constitutional compact guaranteeing the Plaintiff a permanent management role.

Further, the material relied on by the Defendants indicated that majority decision-making was contemplated in relation to certain matters. This was inconsistent with the Plaintiff’s submission that the arrangement displaced ordinary company law principles and created a partnership-style entitlement to veto or participate in all management decisions.

I, therefore rejected the Plaintiff’s submission that the 3rd Defendant was a quasi-partnership giving rise to a legitimate expectation that the Plaintiff would remain involved in management or financial affairs indefinitely.

I also distinguished the authorities relied upon by the Plaintiff concerning quasi-partnerships. Those authorities turned on their own facts, including equal shareholding, clear mutual confidence, express or implied management participation rights, and deliberate exclusion from management. The factual foundation was not present here. G2. WhatsApp communications and alleged exclusion

The Plaintiff relied heavily on WhatsApp communications. The Plaintiff submitted that he was excluded from WhatsApp communications and from management discussions. The Defendants denied this and contended that the Plaintiff had voluntarily left the WhatsApp group on several occasions and had been added back.

Having examined the WhatsApp communications in their proper context, I found that they showed informal discussions between the parties concerning business operations, financial matters, plantation matters, and shareholder-related issues.

However, the WhatsApp communications did not prove oppression.

They did not show a deliberate scheme by the 1st and 2nd Defendants to exclude the Plaintiff from the affairs of the 3rd Defendant in a manner amounting to unfair prejudice or unfair discrimination.

At most, the communications showed disagreements between the parties as to how the business should be conducted and how information should be shared.

The Plaintiff relied on Soon Lai Tiong v Lim Tian Fei & Ors [2026] 9 MLJ 762. In that case, exclusion from WhatsApp communications was considered in the context of a proven quasi-partnership and a broader pattern of marginalisation. The present case is materially different. I had already found that the Plaintiff had not established that the 3rd Defendant was a quasi-partnership. Further, the evidence before this Court did not prove deliberate exclusion of the same nature. The WhatsApp materials were insufficient to establish oppression. G3. Alleged denial of access to accounts and records

The Plaintiff alleged that he had been denied access to accounts, financial records and company documents.

The Defendants disputed this. They relied on materials showing that financial information, including income and profit calculations, had been communicated through WhatsApp. They also contended that the Plaintiff had received his share of certain distributions.

I accepted that the Plaintiff was dissatisfied with the manner and extent of information provided. However, dissatisfaction with the form or completeness of information is not, without more, oppression under section 346 of the Companies Act 2016.

The evidence did not show that the Defendants had deliberately concealed company records or denied the Plaintiff information in a manner amounting to unfair dealing against him as a member.

The Plaintiff’s complaint was substantially that he wanted fuller accounting documents, original records and broader inspection. That may, in an appropriate case, be pursued through specific statutory or procedural routes. It did not, on the evidence before this Court, justify the drastic relief of a compulsory buy-out or winding-up order.

The Court was not satisfied that the Plaintiff had proved a visible departure from fair dealing in respect of access to accounts or records. G4. Alleged financial misconduct and Tee Kong Peng

The Plaintiff alleged that there had been improper financial dealings and that company income or funds had been channelled through the account of Tee Kong Peng.

The Defendants’ evidence was that the arrangement involving Tee Kong Peng was known to the Plaintiff and was for convenience in relation to the receipt and distribution of income and payments.

The documents before the Court included screenshots of financial transactions and WhatsApp communications concerning income, payments and distributions.

Having considered the evidence, I was not satisfied that the Plaintiff had proved misappropriation or financial misconduct.

The screenshots showed that payments and calculations were made. They did not, without more, establish that the 1st and 2nd Defendants had diverted company funds for their own benefit or acted oppressively towards the Plaintiff.

The Plaintiff’s allegations of conspiracy, breach of fiduciary duty and misappropriation were serious allegations. Such allegations required cogent evidential support. The evidence before the Court did not reach that threshold.

The Court was therefore not satisfied that the financial complaints established oppression, unfair discrimination or unfair prejudice within the meaning of section 346.

The Plaintiff also relied on his removal as director.

The Defendants’ evidence was that the Plaintiff had failed or refused to sign documents necessary for the 3rd Defendant’s annual return and audited financial statements, and that his removal was undertaken to avoid prejudice or penalties to the 3rd Defendant.

The Plaintiff disputed the validity and propriety of the removal. He contended that he had not been given proper notice and that the process was oppressive.

For the purpose of the section 346 claim, the question was not merely whether there was a procedural complaint concerning the Plaintiff’s removal as director. The question was whether the Plaintiff had proved oppression or unfair prejudice against him in his capacity as a member.

I was not satisfied that he had.

First, the Plaintiff’s shareholding was not affected by his removal. He remained the holder of 80,000 shares in the 3rd Defendant.

Secondly, I had rejected the Plaintiff’s case that he had a legitimate expectation to remain in management by reason of a quasi-partnership.

Thirdly, the Plaintiff had not proved that his removal was part of a course of conduct designed to oppress him as a member.

Fourthly, the Defendants had provided a corporate explanation for the removal, namely the alleged failure or refusal to sign statutory documents required for company filings.

It was not necessary for this Court, in determining Enclosure 1, to decide every possible issue concerning the technical validity of the removal process. Even taking the Plaintiff’s complaint at its highest, the evidence did not establish that the removal amounted to oppression justifying the remedies sought under section 346.

If the Plaintiff seeks to challenge the technical validity of his removal as director, that is a separate matter. The present Originating Summons was an oppression claim seeking buy-out or winding-up relief. On the evidence, the statutory elements were not established. G6. Whether the complaints established oppression cumulatively

I considered the Plaintiff’s complaints both individually and cumulatively.

The Plaintiff submitted that even if individual acts did not amount to oppression, the cumulative pattern showed exclusion, denial of information, financial misconduct, and improper removal.

I accepted that the relationship between the parties had deteriorated. I also accepted that there were disagreements concerning the running of the plantation business and the management of the 3rd Defendant.

However, section 346 does not provide relief merely because parties have fallen out or because a shareholder is dissatisfied with management decisions.

The evidence before the Court showed a commercial and management dispute. It did not show conduct crossing the line into oppression, unfair discrimination or unfair prejudice.

The Plaintiff’s complaints were largely founded on:

WhatsApp communications;

screenshots of financial transactions;

disagreements over accounts and documentation;

disagreements over management decisions; and

the Plaintiff’s removal as director.

Those matters, whether taken individually or cumulatively, did not establish that the affairs of the 3rd Defendant were conducted in a manner oppressive to the Plaintiff as a member.

The Plaintiff’s case ultimately did not show a visible departure from the standards of fair dealing or a violation of the conditions of fair play which a shareholder is entitled to expect. H.

Since the Plaintiff failed to establish oppression, the reliefs sought did not arise. A buy-out order is a serious remedy. It compels one party to purchase another party’s shares and should not be granted unless the statutory basis is established.

In this case, the Plaintiff did not prove that the 1st and 2nd Defendants had acted oppressively or unfairly prejudicially so as to justify compelling them to purchase the Plaintiff’s shares.

Further, the 1st and 2nd Defendants were not majority shareholders of the 3rd Defendant. This was a relevant factor in considering the appropriateness of the buy-out relief sought against them.

The alternative relief of winding up was even more drastic. The Court was not satisfied that the evidence justified such an order.

The ancillary orders sought by the Plaintiff, including orders restricting changes to the company’s management, officers, financial control and shareholding structure, were also not warranted.

The claim for damages likewise failed as the Plaintiff had not established the underlying oppression claim. I.

For the reasons stated above, I found that the Plaintiff had failed to establish the elements required under section 346 of the Companies Act 2016.

The Plaintiff failed to prove that the 3rd Defendant was a quasi-partnership giving rise to a legitimate expectation of continued participation in management.

The WhatsApp communications and financial transaction screenshots relied upon by the Plaintiff did not prove oppression. They showed business discussions, financial communications, disagreements and deterioration in the commercial relationship between the parties.

The Plaintiff’s complaints concerning access to documents, financial transactions and removal as director did not establish oppression, unfair discrimination or unfair prejudice in his capacity as a member. The dispute was, in substance, a breakdown in the parties’ commercial and management relationship. It was not a case warranting relief under section 346.

Accordingly, I made the following order:

the Plaintiff’s Originating Summons in Enclosure 1 is dismissed;

the Plaintiff’s prayers for declarations, buy-out, winding-up, ancillary restrictions, damages and further relief are dismissed; and

costs are awarded to the Defendants in the sum of RM5,000, being costs for Enclosures 1 and 24. Dated 4 Jun 2026 -sgd-ANITA BINTI HARUN JUDICIAL COMMISSIONER HIGH COURT OF MALAYA SHAH ALAM SELANGOR DARUL EHSAN To the parties’ solicitors: For the Plaintiff : Quah Wen Jun, Hannah Yeoh Yi Han & Alliya Ysabel Anak Asri (Messrs Low & Partners) For the Defendants : Gok Chia Wen (Messrs Chia Wen & Co.)