TAI MAY CHEAN (NRIC No.: 531113-10-5670) 1. UNITED EASTERN RESOURCES SDN. BHD. (Company No.: 416181-T) 2. NG PIK LIAN (NRIC No.: 320718-05-5012)

TAI MAY CHEAN (NRIC No.: 531113-10-5670) 1. UNITED EASTERN RESOURCES SDN. BHD. (Company No.: 416181-T) 2. NG PIK LIAN (NRIC No.: 320718-05-5012)

The plaintiff's application for leave to commence a derivative action was dismissed because she failed to establish that she acted in good faith and failed to show that the derivative action was prima facie in the best interest of UER given the existing deadlock, the advanced stage and legitimate grounds of the pending winding up petition, the timing of the application in the context of multiple related suits (including MHA proceedings) suggesting a collateral purpose, and the risk of futility if the MHA or share ownership challenges succeed.

Citation
WA-24NCC-340-06/2019 (Mahkamah Tinggi)
Parties
Plaintiff: TAI MAY CHEAN; 1st Defendant: UNITED EASTERN RESOURCES SDN. BHD.; 2nd Defendant: NG PIK LIAN
Court
High Court
Jurisdiction
Malaysia
Judgment Date
24 October 2019
Case Number
WA-24NCC-340-06/2019 (Mahkamah Tinggi)
Procedural Posture
Derivative Action (originating Summons Under Companies Act) / Hearing on Leave Application and Strike Out/stay Application; Judgment on Leave Granted/dismissed
Outcome
Plaintiff's originating summons for leave to commence a derivative action (Enclosure 1) dismissed; Enclosure 7 need not be considered.
Legal Topics
Derivative Action, Leave to Commence Derivative Suit, Good Faith, Best Interest of the Company, Winding Up Petition Vs Derivative Action, Constructive Trust, Stay and Strike Out, Mental Capacity of Director
Source Language
Malay/English
Company Law Insolvency and Winding Up Equity and Trusts Civil Procedure Mental Health Law Derivative Action Leave to Commence Derivative Suit Good Faith +5 more

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Parties

TAI MAY CHEAN

Plaintiff

UNITED EASTERN RESOURCES SDN. BHD.

1st Defendant

NG PIK LIAN

2nd Defendant

Procedural Posture

Derivative Action (originating Summons Under Companies Act) / Hearing on Leave Application and Strike Out/stay Application; Judgment on Leave Granted/dismissed

Legal Issues

  1. 1 Whether leave should be granted for a derivative action under sections 345/347/348 CA 2016
  2. 2 Whether the plaintiff is acting in good faith in bringing the derivative claim
  3. 3 Whether granting leave is prima facie in the best interest of the company given pending winding up petition and related litigation

Ratio Decidendi

The plaintiff's application for leave to commence a derivative action was dismissed because she failed to establish that she acted in good faith and failed to show that the derivative action was prima facie in the best interest of UER given the existing deadlock, the advanced stage and legitimate grounds of the pending winding up petition, the timing of the application in the context of multiple related suits (including MHA proceedings) suggesting a collateral purpose, and the risk of futility if the MHA or share ownership challenges succeed.

Court Disposition

Plaintiff's originating summons for leave to commence a derivative action (Enclosure 1) dismissed; Enclosure 7 need not be considered.

Orders

  • Dismissed Plaintiff's Originating Summons (Enclosure 1)
  • Costs in favour of 2nd Defendant fixed at RM 15,000.00