LOH TECK WAH LIM PANG KIAM & 2 ORS

LOH TECK WAH LIM PANG KIAM & 2 ORS

Leave to commence derivative proceedings was refused because the applicant failed to establish a prima facie cause of action with a likelihood of success and was not acting in good faith — the evidence (including a special audit and repayment records) showed Tian An had no outstanding liability to the 3rd Respondent...

Source-derived case information.

Citation
WA-24NCC-154-03/2021 (Mahkamah Tinggi)
Parties
Applicant: LOH TECK WAH; Respondent 1: LIM PANG KIAM; Respondent 2: YAP CHEE KHENG; 3rd Respondent / Company: PNL TRADING SDN BHD
Court
High Court
Jurisdiction
Malaysia
Judgment Date
10 November 2021
Case Number
WA-24NCC-154-03/2021 (Mahkamah Tinggi)
Procedural Posture
Originating Summons for Leave to Commence Derivative Action Under Companies Act 2016 / Application for Leave Under S.348 Heard and Dismissed at High Court (commercial Division)
Outcome
Originating Summons dismissed; leave to commence derivative action refused
Legal Topics
Derivative Action, Companies Act 2016 S.347 S.348, Good Faith Requirement, Collateral Purpose Doctrine, Business Judgment Rule, Locus Standi
Company Law Civil Procedure Corporate Governance Derivative Action Companies Act 2016 S.347 S.348 Good Faith Requirement Collateral Purpose Doctrine Business Judgment Rule +1 more

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Parties

LOH TECK WAH

Applicant

LIM PANG KIAM

Respondent 1

YAP CHEE KHENG

Respondent 2

PNL TRADING SDN BHD

3rd Respondent / Company

Procedural Posture

Originating Summons for Leave to Commence Derivative Action Under Companies Act 2016 / Application for Leave Under S.348 Heard and Dismissed at High Court (commercial Division)

Legal Issues

  1. 1 Whether applicant has locus standi to apply under s.347/s.348
  2. 2 Whether applicant acted in good faith
  3. 3 Whether a prima facie cause of action exists against Tian An with likelihood of success

Ratio Decidendi

Leave to commence derivative proceedings was refused because the applicant failed to establish a prima facie cause of action with a likelihood of success and was not acting in good faith — the evidence (including a special audit and repayment records) showed Tian An had no outstanding liability to the 3rd Respondent following a lawful transfer and repayments to PNLBS, and the application was motivated by collateral personal/competitive purposes rather than the company's interest.

Court Disposition

Originating Summons dismissed; leave to commence derivative action refused

Orders

  • Application dismissed with costs to the Respondents