SHAHIDA NABILA BINTI SERAT v WAN SURAYA BINTI WAN ABDUL NASIR

Case Significance

Illustrates that the oppression remedy under section 346 of the Companies Act 2016 is discretionary, so that a court may decline to make any order even where oppression is alleged or shown, having regard to the conduct of both parties in a shareholder deadlock.

This High Court decision concerns a shareholder's petition for relief from oppression under section 346 of the Companies Act 2016 in a two-member company. The company, incorporated in 2022 to provide dental healthcare services, had two equal shareholders, each a qualified dental practitioner holding 150,000 ordinary shares and having contributed RM150,000 in paid-up capital. A series of disagreements over the company's operations and decision-making affected its management. The defendant ceased work in July 2024 and offered to sell her 150,000 shares to the plaintiff for RM300,000, payable in instalments. The plaintiff regarded that price as excessive and unexplained, and treated the defendant's subsequent presentation of a winding-up petition against the company as an act of bad faith; the plaintiff's grievances centred on the defendant's asserted lack of commitment as director and shareholder and the stress this had caused. The plaintiff petitioned under section 346, contending that this conduct amounted to oppression. The court examined the legal test for oppression, the conduct of both the plaintiff and the defendant, and whether the matters complained of caused a personal loss to the plaintiff of the kind the section is designed to remedy. Emphasising that relief under section 346 is discretionary, the court relied on authority, including Nilai Lanjut Sdn Bhd v Yeng Chong Realty Bhd and the Australian decision in Campbell v Backoffice Investments Pty Ltd, for the proposition that a court is not bound to make an order under the section even where oppression is demonstrated, and may in its discretion decline relief, for example where the oppression has ceased. Weighing the conduct of the parties, the court concluded that this was a fit and proper case in which to decline relief, and dismissed the originating summons with costs of RM12,000. The judgment is a useful illustration of the discretionary character of the oppression remedy and of the court's willingness to refuse relief in a shareholder deadlock even if oppressive conduct is alleged.