Mohd Sudri Bin Sulong v Mahligai Resources Sdn Bhd (CA-22NCvC-50-12/2025)

MAHLIGAI RESOURCES SDN BHD (Company No:202301043782 (1537698-A))

HALIZA BINTI ZAHARI (NRIC No: 670507-06-5368)

MARIAMAH BINTI HARUN (NRIC No: 640225-8-5830)

SITI HAJAR BINTI MOHD MOHARI (NRIC No: 890512-8-6176) ...DEFENDANTS GROUNDS OF JUDGMENT INTRODUCTION [1] This is the Court's decision on the Plaintiff's Notice of Application (Enclosure 5) filed pursuant to Order 29 and Order 92 rule 4 of the Rules of Court 2012 seeking an interlocutory injunction pending the disposal of the main action. [2] By the application, the Plaintiff seeks to restrain the First Defendant, whether by itself, its directors, officers, servants, agents or any person acting on its behalf from convening any meeting or taking any step to remove him as a director of the First Defendant until the final determination of the suit. [3] The application is opposed by the Defendants, who contend that the proposed meeting to consider the Plaintiff's removal as a director forms part of the statutory corporate process under the Companies Act 2016 and ought not to be restrained pending the determination of the main action. [4] The parties' disagreement therefore extends beyond the Plaintiff's continued tenure as a director and raises the broader question of whether an alleged beneficial interest in shares is without more, sufficient to justify judicial intervention in the company's internal governance at the interlocutory stage. [5] Although framed as an application for an interlocutory injunction, the present dispute raises a broader question concerning the proper limits of judicial intervention in the internal affairs of a company. More particularly, where there exists a genuine dispute regarding the beneficial ownership of shares, the issue is whether the Court should intervene to restrain the statutory corporate process governing the removal of a director before those proprietary rights have been finally determined. BACKGROUND TO THE DISPUTE [6] The material facts giving rise to the present application are, in broad outline, relatively straightforward, although the parties sharply disagree as to their legal consequences. [7] According to the Plaintiff, sometime in or around April 2024, he paid a sum of RM100,000.00 to or for the benefit of the First Defendant. He contends that the payment was made as an investment in the company. [8] Following that investment, the Plaintiff was appointed as a director of the First Defendant. [9] The Plaintiff alleges that he subsequently entered into an agreement with one Mohamed Nohairi, a shareholder of the First Defendant, to purchase 50,000 ordinary shares in the company. According to the Plaintiff, the parties executed the necessary share transfer instrument to give effect to the transaction. [10] It is common ground that the transfer was never registered in the Plaintiff's name. Instead, the 50,000 shares were eventually registered in the name of the Second Defendant. [11] The Plaintiff disputes the circumstances surrounding that registration. He maintains that notwithstanding the position reflected in the register of members, he remains the true beneficial or equitable owner of those shares. The Defendants dispute that assertion. [12] Matters came to a head in or around November 2025 when the Second Defendant, as the registered shareholder, initiated steps to convene a meeting for the purpose of considering the Plaintiff's removal as a director of the First Defendant. [13] The Plaintiff contends that his removal as a director should not be permitted before the Court determines the parties' respective rights arising from the RM100,000.00 investment, the alleged transfer of the 50,000 shares and his asserted beneficial interest in those shares. [14] The Defendants take the contrary position. They maintain that the Second Defendant remains the registered shareholder of the shares in question and that any proposal to remove the Plaintiff as a director forms part of the statutory corporate process contemplated by the Companies Act 2016. They submit that the mere existence of a dispute concerning beneficial ownership does not justify judicial intervention to restrain that process pending trial. [15] It is against that factual and legal backdrop that the present application falls to be determined. LEGAL PRINCIPLES GOVERNING INTERIM INJUNCTIONS [16] The Court's jurisdiction to grant an interlocutory injunction is conferred by Order 29 of the Rules of Court 2012. The jurisdiction however, is discretionary and equitable in nature. An injunction is not granted merely because the parties are engaged in a genuine dispute or because a trial has become necessary. Rather, the Court must determine whether, pending the final determination of the parties' rights, justice requires the intervention of the Court. [17] The applicable principles are well established. In American Cyanamid Co v Ethicon Ltd [1975] AC 396, subsequently adopted in Malaysia by the Court of Appeal in Keet Gerald Francis Noel John v Mohd Noor Abdullah & Ors [1995] 1 MLJ 193, the Court must first be satisfied that there exists a serious question to be tried. Once that threshold is crossed, the Court proceeds to consider whether damages would constitute an adequate remedy, the sufficiency of the undertaking as to damages and ultimately where the balance of justice lies. [18] The Court does not at the interlocutory stage, determine the ultimate merits of the competing claims. It is neither appropriate nor desirable to conduct what would effectively amount to a trial upon affidavit evidence. Questions involving disputed facts, conflicting documentary evidence and the credibility of witnesses are matters reserved for the trial court after oral evidence has been tested through cross-examination. [19] Equally important is the recognition that an interlocutory injunction serves a limited purpose. Its object is not to preserve every factual circumstance existing before litigation commenced, but to minimise the risk of injustice pending trial. In performing that task, the Court must first identify the legal right that truly requires interim protection. The existence of a triable issue does not automatically justify preserving every practical consequence flowing from that dispute. ISSUES FOR DETERMINATION [20] Although the parties' submissions traversed numerous factual matters, the application ultimately raises a relatively narrow question. [21] The Plaintiff contends that because there exists a genuine dispute concerning the RM100,000.00 investment and the ownership of 50,000 shares, the Court ought to restrain the statutory process commenced for his removal as a director until those disputes are finally determined. [22] The Defendants on the other hand, submit that the existence of disputes concerning the Plaintiff's alleged proprietary interest does not justify judicial intervention in the statutory corporate process governing the removal of directors. [23] The issues requiring determination therefore are:-

whether the Plaintiff has established serious bona fide issues to be tried;

whether those issues require the Court to preserve his office as a director pending trial;

whether damages and other final remedies would adequately protect the Plaintiff's substantive rights; and

whether the balance of justice favours restraining the statutory corporate process. SERIOUS ISSUES TO BE TRIED [24] Having carefully considered the affidavits filed by both parties, I am satisfied that the Plaintiff has demonstrated the existence of genuine and substantial disputes requiring determination at trial. [25] Among the questions which plainly require full investigation are:-

the true nature of the RM100,000.00 payment;

whether the payment constituted an investment, a loan or some other commercial arrangement;

whether a valid share transfer in respect of the 50,000 shares was executed;

the circumstances in which those shares ultimately came to be registered in the name of the Second Defendant; and

whether the Plaintiff possesses any beneficial or equitable interest in those shares notwithstanding the present register of members. [26] Those issues cannot properly be resolved upon conflicting affidavit evidence alone. Their determination will likely require oral testimony, production of original documents, examination of the alleged transferor, explanation of the flow of funds and crossexamination of the relevant witnesses. [27] I therefore have no hesitation in concluding that the Plaintiff has crossed the relatively low threshold prescribed under American Cyanamid. The disputes raised are genuine and deserving of adjudication. [28] That conclusion, however, merely enables the Court to proceed to the next stage of the inquiry. It should not be misunderstood as constituting any provisional finding that the Plaintiff is likely to succeed at trial or that his alleged beneficial ownership has already been established. THE DISTINCTION BETWEEN PROPRIETARY RIGHTS AND CORPORATE OFFICE [29] In my respectful view, the Plaintiff's application proceeds upon an assumption that requires careful examination. Implicit in the Plaintiff's argument is the proposition that because he asserts an equitable or beneficial interest in the shares, he is necessarily entitled to remain a director pending the resolution of that dispute. [30] That proposition does not necessarily follow. The present dispute involves three distinct legal capacities:-

the Plaintiff's alleged investment of RM100,000.00;

(ii) his asserted beneficial ownership of shares; and

(iii) his office as a director of the company. [31] Those capacities are legally distinct and should not be conflated. [32] A person who contributes capital to a company does not automatically become a shareholder unless the statutory and corporate requirements governing the allotment or transfer of shares have been satisfied. [33] Likewise, even assuming for present purposes that the Plaintiff ultimately succeeds in establishing a beneficial interest in the shares, such proprietary interest does not, without more, confer an irrevocable entitlement to occupy the office of director. [34] Share ownership and directorship are separate legal concepts. A shareholder may possess no managerial authority whatsoever. Conversely, a director may lawfully hold office without owning any shares in the company. [35] Directorship is a corporate office created and regulated by statute and by the company's constitution. It is not merely an incident of share ownership. [36] Accordingly, while the Plaintiff may ultimately succeed in proving beneficial ownership of the shares, that issue remains conceptually distinct from whether the statutory process governing his removal as a director should presently be restrained. SECTION 206 OF THE COMPANIES ACT 2016 [37] Parliament has prescribed a statutory mechanism governing the removal of directors through section 206 of the Companies Act 2016. [38] The removal of a director is not effected solely by the unilateral wishes of an individual shareholder. It is achieved through the statutory corporate process prescribed by the Act, including the requirement of special notice and the passing of an ordinary resolution where applicable. [39] The Court should therefore exercise considerable restraint before intervening in that statutory process by way of interlocutory injunction. [40] Such restraint is particularly appropriate where the complaint is not directed at any apparent breach of the statutory procedure itself but instead concerns disputes over beneficial ownership which remain to be determined at trial. [41] The Plaintiff has not demonstrated at this interlocutory stage, any obvious non-compliance with section 206 or any other statutory provision governing the proposed meeting. [42] The Court cannot assume that the meeting will necessarily resolve to remove the Plaintiff nor can it substitute its own judgment for that of the company's members before the statutory process has run its course. ADEQUACY OF DAMAGES AND FINAL RELIEF [43] Having concluded that there are serious issues to be tried, the next question is whether the Plaintiff's substantive rights require interim protection by way of injunction or whether those rights may be adequately vindicated by the remedies available at the conclusion of the trial. [44] The Plaintiff submits that his removal as a director would deprive him of control over the affairs of the First Defendant, restrict his participation in its management and deny him access to corporate information. He argues that such consequences cannot adequately be compensated by an award of damages. [45] I am unable with respect to accept that submission. [46] It is important to identify the true subject matter of the present litigation. The Plaintiff's substantive claims concern the RM100,000.00 which he alleges to have invested, the transaction involving the 50,000 shares and his alleged beneficial or equitable interest in those shares. Those are the rights which the Court will ultimately be called upon to determine. [47] Whether the Plaintiff temporarily remains a director pending trial neither determines nor extinguishes those proprietary claims. Should he ultimately succeed, this Court possesses ample jurisdiction to grant complete and effective relief. [48] Such relief may include declarations as to the parties' respective rights, rectification of the register of members if legally justified, equitable relief recognising any beneficial interest established at trial, restitutionary remedies, monetary compensation and such consequential orders as justice may require. [49] In other words, the Plaintiff's proprietary rights, assuming they are ultimately established, are capable of full vindication notwithstanding any interim change to the composition of the board of directors. [50] Nor has the Plaintiff demonstrated, by cogent evidence, that his removal as a director would result in any irreversible transaction, dissipation of assets or other prejudice incapable of being addressed by the Court at the conclusion of the trial. The possibility that he may temporarily lose involvement in the management of the company is, without more, insufficient to establish that damages or final equitable relief would be inadequate. [51] The Court must be careful not to equate the temporary loss of a corporate office with the permanent loss of proprietary rights. The former does not necessarily result in the latter. On the facts presently before the Court, I am satisfied that the Plaintiff's substantive interests remain capable of adequate protection through the final remedies available upon the determination of the action. UNDERTAKING AS TO DAMAGES [52] I have also taken into account the Plaintiff's willingness to provide the usual undertaking as to damages. [53] Such an undertaking is an important safeguard in every interlocutory injunction. Nevertheless, it does not by itself, justify the grant of injunctive relief. The undertaking forms only one component of the Court's overall assessment. [54] If the injunction sought were granted, the practical effect would be to prevent the company and its shareholders from exercising the statutory corporate process relating to the composition of the board until the disposal of the action, a process which may extend over a considerable period. [55] The prejudice arising from such restraint is not confined to financial loss. It may affect the company's ability to organise its internal management, the relationship between shareholders and directors, the confidence necessary for effective corporate governance and the company's ability to make decisions through the statutory mechanisms established by Parliament. [56] Such consequences are not readily measurable in monetary terms. Nor am I satisfied that the Plaintiff's undertaking would necessarily provide equivalent protection against those consequences should it ultimately transpire that the injunction ought not to have been granted. BALANCE OF JUSTICE [57] The remaining question is where the balance of justice lies. This requires the Court to consider which course carries the lower risk of injustice pending the final determination of the parties' rights. [58] In undertaking that assessment, I consider it necessary to compare the practical consequences of both possible outcomes. [59] If the injunction is refused and the Plaintiff ultimately succeeds at trial, he will undoubtedly have lost the opportunity to continue serving as a director during the intervening period. Nevertheless, his proprietary claims concerning the RM100,000.00 payment, the 50,000 shares and his alleged beneficial interest will remain intact. The Court will continue to possess jurisdiction to declare those rights and to grant appropriate consequential relief. [60] Conversely, if the injunction is granted but the Plaintiff ultimately fails at trial, the consequence would be that the Court had prevented the company and its members from exercising their statutory rights throughout the period of litigation notwithstanding that the Plaintiff possessed no legal entitlement to remain in office. [61] Although framed as a prohibitory injunction, the practical effect of the order sought is substantially mandatory. It would compel the First Defendant to continue recognising and retaining the Plaintiff as a director throughout the pendency of the proceedings notwithstanding that his asserted entitlement to that office remains one of the very issues yet to be determined. [62] This is an important consideration. Courts have traditionally exercised greater caution where the interlocutory relief sought would in substance, confer upon an applicant substantially the same practical benefit as may ultimately be obtained after a successful trial. To grant such relief prematurely risks prejudging the very dispute which remains to be adjudicated. [63] I have also considered the Plaintiff's submission that the injunction merely preserves the status quo. [64] The concept of preserving the status quo however is not a rule of universal application. Its significance depends upon identifying precisely what state of affairs is sought to be preserved. [65] From the Plaintiff's perspective, the status quo is his continued occupation of the office of director. From the Defendants' perspective, the status quo includes the company's ability to regulate its own internal affairs through the statutory procedures established under the Companies Act 2016. [66] Those two competing states of affairs cannot simultaneously be preserved. Preservation of one necessarily restrains the other. Accordingly, the invocation of the status quo does not by itself, determine the application. [67] In my judgment, the greater weight must be given to preserving the statutory corporate process unless compelling circumstances justify judicial intervention. Parliament has established a comprehensive mechanism governing the appointment and removal of directors. Courts should therefore exercise considerable restraint before interrupting that process, particularly where no apparent statutory non-compliance, fraud, oppression or abuse of process has been demonstrated. [68] This is not to suggest that interlocutory injunctions may never issue to restrain meetings or resolutions concerning directors. Exceptional cases undoubtedly exist. Where there is a clear breach of statute, fraud, oppression, breach of contractual rights or a real risk that substantive rights will be irretrievably defeated before trial, judicial intervention may well be justified. [69] The present case, however, does not fall within that category. The Plaintiff's dispute is directed principally towards the beneficial ownership of shares and the consequences said to flow from that ownership. Those questions remain fully capable of determination at trial without restraining the statutory corporate process in the meantime. [70] Having weighed the competing prejudice, I am satisfied that the greater risk of injustice lies in restraining the statutory governance of the company rather than permitting the process to proceed subject always to the Plaintiff's right to pursue his substantive claims. CONCLUSION [71] My conclusions may therefore be summarised as follows:-

the Plaintiff has established the existence of serious bona fide issues requiring determination at trial;

those issues concern the Plaintiff's alleged proprietary rights and do not, without more, establish an interim entitlement to remain as a director;

the Plaintiff's substantive rights are capable of full vindication through the final remedies available at trial;

the Plaintiff's undertaking as to damages does not adequately address the potential prejudice to the company and its shareholders arising from the restraint of the statutory corporate process;

no apparent statutory non-compliance, fraud, oppression or other exceptional circumstance has been demonstrated to justify interlocutory intervention; and

the balance of justice favours allowing the statutory corporate process to proceed. [72] I emphasise that this decision expresses no concluded view on the merits of the Plaintiff's proprietary claims. Those issues remain entirely open for determination at trial upon the evidence. [73] Equally, nothing in this judgment should be taken as endorsing the validity of any resolution that may subsequently be passed. Any corporate action undertaken by the Defendants remains subject to compliance with the Companies Act 2016, the company's constitution and any other applicable principles of law. [74] The present decision simply reflects the Court's conclusion that, at the interlocutory stage, the Plaintiff has not demonstrated sufficient grounds for the Court to displace the statutory corporate process by way of equitable intervention while his substantive proprietary claims remain capable of full adjudication and effective vindication at trial. [75] Accordingly, the Plaintiff's Notice of Application at Enclosure 5 was dismissed. Costs of RM10,000.00 to the Defendant subject to allocatur. Dated: 23 July 2026 (SAMRY BIN MASRI) JUDICIAL COMMISSIONER HIGH COURT KUANTAN Counsel for the Plaintiff : Tetuan Balendran Chong Peguambela & Peguamcara No.42A, Jalan Putra Square 6 Putra Square 25200 Kuantan Pahang Darul Makmur (Ruj: VK/Vasu/sb/71665) Counsel for the : Tetuan Ravi Moorthi, Noriza, Mala & Partners Peguambela & Peguamcara A-3, Tingkat 1, Lorong Tun Ismail 10 Jalan Tun Ismail 25000 Kuantan Pahang Darul Makmur (Ruj: RMNM/L/13723/25/mk/yhx)