Malaysia Case Law: Decisions & Judgments

Topic

Good faith test

Legal area

Court

21 Jul 2025

YAP CHUNG KWAN 1. ) KHO KOK LIM 2. ) KHO CHEE KIAT

Citation

CB-24NCC-5-10/2024 (Mahkamah Tinggi)
Court

High Court
Case number

CB-24NCC-5-10/2024 (Mahkamah Tinggi)

The application for leave was dismissed because the plaintiff failed to demonstrate honest belief and that the action was prima facie in the best interest of Pink Zone Sdn Bhd: the evidence of sums allegedly owing was unverified (sales schedules and draft, unaudited accounts), material facts about the share purchase and alleged trustee relationship remained unresolved, and there was insufficient proof that the claimed amount was payable to the company; accordingly leave was refused and costs awarded against the plaintiff.
26 May 2025

LEE WAI PING 1. ) MOHD TAUFIK BIN KAMIS 2. ) SERATA HIJAU SDN BHD

Citation

WA-24NCC-453-09/2024 (Mahkamah Tinggi)
Court

High Court
Case number

WA-24NCC-453-09/2024 (Mahkamah Tinggi)

The court found the Plaintiff complied with s348(2) by serving a specific notice, acted with good faith having discovered decisive documentary evidence only in October 2023, the causes of action against the First Defendant (breach of fiduciary duty, fraud, conspiracy) are distinct from prior proceedings against A & T so res judicata and multiplicity do not apply, there was no undue delay, and the proposed derivative claim has reasonable prospects of success; accordingly leave to commence derivative proceedings was granted and the Plaintiff permitted to control them, with costs awarded.
1 Apr 2024

SHOON WUI CHIN 1. ) CHAN KIEN WOH 2. ) SANJUNG CEKAP SDN. BHD.

Citation

BA-24NCC-5-01/2023 (Mahkamah Tinggi)
Court

High Court
Case number

BA-24NCC-5-01/2023 (Mahkamah Tinggi)

The court granted leave because the plaintiff satisfied the statutory prerequisites (30‑day notice), demonstrated an honest belief backed by documentary material giving rise to an arguable case of misappropriation and misconduct by the director, and showed that pursuing the claim is prima facie in the best interest of the company; the application was not frivolous nor tainted by collateral purpose.
10 Feb 2022

KHOO SIEW HUEY 1. ) ABILITY CONSULTANCY SDN BHD 2. ) LIM BOON SIONG 3. ) FLP Realty Sdn Bhd

Citation

WA-24NCC-342-08/2021 (Mahkamah Tinggi)
Court

High Court
Case number

WA-24NCC-342-08/2021 (Mahkamah Tinggi)

The application for leave was dismissed because the plaintiff could not honestly believe a viable cause of action existed on behalf of the Company (the Company lacked contractual capacity as an unregistered estate agent and the commissions were attributable to the director personally), and the plaintiff pursued the application for a collateral purpose that risked locking company assets and causing hardship; therefore leave under s348 CA 2016 was not in the company's best interest.
21 Sept 2021

DATO' SERI TIMOR SHAH RAFIQ NAUTILUS TUG & TOWAGE SDN BHD

Citation

W-02(NCC)(A)-1980-10/2019 (Mahkamah Rayuan)
Court

NCC
Case number

W-02(NCC)(A)-1980-10/2019 (Mahkamah Rayuan)

The Court of Appeal held that the appellant satisfied the threshold for leave under s.348 by acting in good faith and showing a prima facie case in the company's best interest: independent Crowe Horwath reports raised sufficient concern that USD19.9m of shareholders' advances were unsubstantiated, auditors' unqualified reports and Shin Yang acknowledgements were not determinative, and majority management control does not immunise directors from accountability; consequently leave to commence derivative proceedings was granted and High Court order set aside.
18 May 2021

Tan Han Kwan & 2 Lagi KSCH Property Sdn Bhd & 4 Lagi

Citation

WA-24NCC-425-09/2020 (Mahkamah Tinggi)
Court

High Court
Case number

WA-24NCC-425-09/2020 (Mahkamah Tinggi)

On the balance of probabilities the court was satisfied the plaintiffs honestly believed a good cause of action existed and that the complaints were not manifestly ill-founded; there was a reasonable basis to infer potential breaches (related party rental, unexplained payments, possible secret profits) and the wrongdoers controlled the company and were unwilling to act, therefore leave under s.348(4) CA 2016 was granted as the proposed derivative action was prima facie in the best interests of the company.

Malaysia Case Law

YAP CHUNG KWAN 1. ) KHO KOK LIM 2. ) KHO CHEE KIAT

LEE WAI PING 1. ) MOHD TAUFIK BIN KAMIS 2. ) SERATA HIJAU SDN BHD

SHOON WUI CHIN 1. ) CHAN KIEN WOH 2. ) SANJUNG CEKAP SDN. BHD.

KHOO SIEW HUEY 1. ) ABILITY CONSULTANCY SDN BHD 2. ) LIM BOON SIONG 3. ) FLP Realty Sdn Bhd

DATO' SERI TIMOR SHAH RAFIQ NAUTILUS TUG & TOWAGE SDN BHD

Tan Han Kwan & 2 Lagi KSCH Property Sdn Bhd & 4 Lagi