LUA CHONG HOCK [NO K/P: 741204-01-6003] 1. LUA BROTHERS ENGINEERING SDN BHD [NO. SYARIKAT: 200801036288 / 837627-W] 2. LAU CHONG HUAT [NO K/P: 660519-01-5481] 3. LUA CHONG KUANG [NO K/P: 691119-01-6129] 4. LUA CHONG THING [NO K/P: 730909-01

LUA CHONG HOCK [NO K/P: 741204-01-6003] 1. LUA BROTHERS ENGINEERING SDN BHD [NO. SYARIKAT: 200801036288 / 837627-W] 2. LAU CHONG HUAT [NO K/P: 660519-01-5481] 3. LUA CHONG KUANG [NO K/P: 691119-01-6129] 4. LUA CHONG THING [NO K/P: 730909-01

The court granted that statutory notice was given but found the substantive allegations lacked merit: documentary title showed the land belonged to the Second Respondent and compensation was not payable to the company, and the challenged expenditures were reflected in audited accounts and approved at AGMs. Consequently the applicant failed to establish good faith and that the derivative action was prima facie in the company's best interests; the originating summons was therefore frivolous and was dismissed with costs.

Citation
JA-24NCC-1-01/2020 (Mahkamah Tinggi)
Parties
Applicant: LUA CHONG HOCK; First Respondent: LUA BROTHERS ENGINEERING SDN BHD; Second Respondent: LAU CHONG HUAT; Third Respondent: LUA CHONG KUANG; Fourth Respondent: LUA CHONG THING
Court
High Court
Jurisdiction
Malaysia
Judgment Date
28 July 2021
Case Number
JA-24NCC-1-01/2020 (Mahkamah Tinggi)
Procedural Posture
Originating Summons Under Companies Act 2016 (derivative Action Leave) / Leave Application Under S.348 — Dismissed at Interlocutory/leave Stage
Outcome
Originating Summons dismissed with costs
Legal Topics
Derivative Action, Leave Under S.348 Companies Act 2016, Good Faith in Derivative Suits, Board/shareholder Disputes, Alleged Misapplication of Company Funds, Land Acquisition Compensation
Source Language
Malay/English
Company Law Civil Procedure Derivative Action Leave Under S.348 Companies Act 2016 Good Faith in Derivative Suits Board/shareholder Disputes Alleged Misapplication of Company Funds Land Acquisition Compensation

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 5 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

LUA CHONG HOCK

Applicant

LUA BROTHERS ENGINEERING SDN BHD

First Respondent

LAU CHONG HUAT

Second Respondent

LUA CHONG KUANG

Third Respondent

LUA CHONG THING

Fourth Respondent

Procedural Posture

Originating Summons Under Companies Act 2016 (derivative Action Leave) / Leave Application Under S.348 — Dismissed at Interlocutory/leave Stage

Legal Issues

  1. 1 Whether the applicant complied with s.348 notice requirement
  2. 2 Whether the applicant is acting in good faith
  3. 3 Whether the proposed action is prima facie in the best interests of the company

Ratio Decidendi

The court granted that statutory notice was given but found the substantive allegations lacked merit: documentary title showed the land belonged to the Second Respondent and compensation was not payable to the company, and the challenged expenditures were reflected in audited accounts and approved at AGMs. Consequently the applicant failed to establish good faith and that the derivative action was prima facie in the company's best interests; the originating summons was therefore frivolous and was dismissed with costs.

Court Disposition

Originating Summons dismissed with costs

Orders

  • Applicant's Originating Summons in Enclosure 1 dismissed with costs