(e) Appointment of Corporate Representative “That Mr Kwan Hiuang @ Kwan Huang Cheng be and is hereby appointed as the Company’s Corporate Representative pursuant to Section 147(3) of the Companies Act, 1965 to attend and consent to short notice (if necessary), and to vote at all General Meetings of Zung Zang Holdings Sdn Bhd (Company No. 442629-T) (“Corporation”) and at adjournment thereof and, without prejudice to the generality of the foregoing, to exercise the same powers on behalf of the Company as the Company could exercise as if it was an individual member of the Corporation.” [25] Upon receipt of the requisition notice, the 1st respondent as a director of Zung Zang proceeded to issue the notice of EGM dated 13.6.2014 fixing the EGM to be held on 26.7.2014. This EGM (“the second EGM”) is the subject matter of the present appeal. [26] According to the 1st respondent, on the date the second EGM was supposed to take place, there was insufficient quorum and the EGM was not validly requisitioned and because of that he claimed he had no choice but to announce that the EGM was aborted. He walked out of the meeting but PW1 proceeded to chair the EGM and the majority shareholders of Zung Zang resolved, inter alia, to remove the 1st and 2nd respondents as directors of the Zung Zang with immediate effect. [27] This is the pivotal issue in this appeal - whether the resolutions 14 passed by Zung Zang at the second EGM were valid and enforceable against the respondents. The answer to this question depends on whether PW1 as a corporate representative of KCHSB (which owns 100% of Zung Zang) was vested with the authority to requisition the second EGM of Zung Zang on behalf of KCHSB. The respondents’ case was that the requisition was invalid as KCHSB was not a member of Zung Zang and therefore PW1 as a corporate representative of KCHSB had no power or authority to requisition for any EGM of Zung Zang. [28] The respondents were of course referring to section 144(1) of the Companies Act, which provides: “144. (1) The directors of a company, notwithstanding anything to the contrary, shall on the requisition of members holding at the date of the deposit of the requisition not less than one-tenth of such of the paid-up capital as at the date of the deposit carries the right of voting at general meetings or, in the case of a company not having a share capital, of members representing not less than one-tenth of the total voting rights of all members having at that date a right to vote at general meetings, forthwith proceed duly to convene an extraordinary general meeting of the company to be held as soon as practicable but in any case not later than two months after the receipt by the company of the requisition.” (emphasis added) [29] In Roxy Electric Industries (Malaysia) Bhd v Syarikat Nominee 15 Bumiputra Sdn Bhd [1989] 3 MLJ 231, Zakaria Yatim J (as he then was) said at page 233: “The next question to consider is whether the requisitionists were entitled to issue the requisition and the special notice under s 14. Under sub-s (1) members may requisition for an EGM if they are holding, at the date of the deposit of the requisition not less than one-tenth of the paid-up capital as at the date of the deposit. The word ‘members’ in sub-s (1) has been defined in s 16(6) of the Companies Act, which states: The subscribers to the memorandum shall be deemed to have agreed to become members of the company and on the incorporation of the company shall be entered as members in its register of members, and every other person who agrees to become a member of a company and whose name is entered in its register of members shall be a member of the company. Under art 12 of the articles of association of Roxy, every person whose name is entered as a member in the register of members is entitled to receive a share certificate. Therefore, a member of a company is a person whose name is on the register of shareholders. The register is the only evidence by which the rights of members to vote at a general meeting can be ascertained: Pender v Lushington [1877] 6 Ch D 70.” [30] We shall at the outset state our view on this point. Having regard to the terms of section 144(1) of the Companies Act, KCHSB being the sole and only owner of Zung Zang and therefore its member holding “not less than one-tenth of the paid-up capital” of Zung Zang, it is clear that KCHSB through PW1 as its corporate representative was vested with the authority to requisition the 16 second EGM of Zung Zang. [31] Zung Zang's contention was that the 1st respondent’s act of leaving the meeting was to frustrate the second EGM and not because of lack of quorum or that the requisition was invalid. At the trial, PW1’s testimony was that he was personally present at the second EGM as the corporate representative of KCHSB and that he chaired the EGM. The other attendees were the 1st respondent, Madam Wong Nyuk Ching, Mr Lam Chung Fatt and Mr Chung Tet Kan (as an alternative director). [32] It was Zung Zang’s case that PW1, being the corporate representative of KCHSB which owns 100% of Zung Zang, had lawfully passed the proposed resolutions, including the resolution to remove the 1st and 2nd respondents as directors of Zung Zang with immediate effect and to appoint PW1 as the governing director. [33] It was further submitted that since the corporate representative of KCHSB represented 100% of the shares of Zung Zang, by virtue of sections 152A(1) and 147(6) of the Companies Act, the minutes signed by PW1 would satisfy the requirement of the resolutions having been duly passed at the second EGM. 17 Sections 152A(1) and 147(6) of the Companies Act provide as follows: Section 152A(1) “Notwithstanding anything to the contrary in this Act or the Articles of the Company, a resolution in writing signed by or on behalf of all persons for the time being entitled to receive the notice of, and to attend and vote at the general meetings of the company shall, for the purpose of this Act and the Articles of the company, be treated as a resolution duly passed at a general meeting of the company and, where relevant, as a special resolution so passed.” Section 147(6) “Where a holding company is beneficially entitled to the whole of the issued shares of a subsidiary and a minute is signed by a representative of the holding company authorised pursuant to subsection (3) stating that any act, matter, or thing, or any ordinary or special resolution, required by this Act or by the memorandum or articles of the subsidiary to be made, performed, or passed by or at an ordinary general meeting or an extraordinary general meeting of the subsidiary has been made, performed, or passed, that act, matter, thing, or resolution shall, for all purposes, be deemed to have been duly made, performed, or passed by or at an ordinary general meeting, or as the case requires, by or at an extraordinary general meeting of the subsidiary.” (emphasis added) [34] On 23.9.2016, the High Court delivered its decision, allowing Zung Zang’s claim against the respondents with costs of RM25,000.00. In deciding in favour of Zung Zang, the learned trial 18 judge ruled that PW1 as the corporate representative of KCHSB was entitled to requisition the second EGM, given that Zung Zang is a wholly owned subsidiary of KCHSB and that the resolutions were properly passed by virtue of sections 152(A)(1) and 147(6) of the Companies Act. [35] The learned trial judge rejected the 1st respondent’s claim that he had called off the second EGM due to lack of quorum and that the EGM was not validly requisitioned by PW1 as the corporate representative of KCHSB. Learned counsel for Zung Zang submitted that this was a correct finding as the 1st respondent had no power to call off the second EGM as the proper and rightful person to chair the second EGM was the shareholder and not the director of Zung Zang for the reason that this was a members’ meeting and not a directors’ meeting. [36] It was pointed out that the 1st respondent as a director of Zung Zang was not a shareholder of Zung Zang as the shares were 100% owned by KCHSB and that the function of the BOD, which comprised the two respondents, was only to facilitate the second EGM. It was emphasized that in any event KCHSB has been restored as 100% owner of Zung Zang, as affirmed by this Court on 7.10.2013. 19 [37] It is relevant to note in this regard that in the writ action filed by Zung Zang, the respondents counterclaimed against Zung Zang for a declaration that the second EGM was invalid and ineffective. However, the respondents withdrew the counterclaim at the commencement of the trial on 14.1.2016 and they did not at any time apply to set aside the minutes of the second EGM. [38] What this means, according to learned counsel for Zung Zang is that the respondents were not challenging the validity of the minutes, and that in the circumstances the respondents are now estopped from doing so. Mr. Chung Jiun Dau for the respondents disputed this by saying that the respondents never accepted the minutes as no certificate issued under section 147 of the Companies Act was ever given to Zung Zang. [39] Mr. Norbert Yapp’s answer to the contention was that it is not a requirement of section 147 of the Companies Act that the certificate must be produced at the EGM. It was argued that when PW1 issued the requisition holding himself as a corporate representative of KCHSB holding 100% share of Zung Zang, the respondents did not dispute it. Therefore there was no need for Zung Zang to prove that PW1 was the corporate representative of KCHSB. 20 [40] It was also pointed out that when the 1st respondent (DW1) was cross-examined at the trial, he admitted that the three persons who signed the resolutions, namely Kwan Phui Ha, Wong Nyuk Ching and PW1 were the only directors of KCHSB at the material time. [41] Being dissatisfied with the decision of the High Court, the respondents appealed to the Court of Appeal. The issues that arose for the Court of Appeal’s adjudication were: