AMIRELY BIN DAUD v 1. ) SYAHRUL HAFIZ BIN MD HASHIM 2. ) HASZAIDI BIN HAJI HASSAN 3. ) SYNTAX VALLEY PARKING (M) SDN BHD 4. ) Majlis Bandaraya Melaka Bersejarah (MBMB)

Case Significance

Treats the leave threshold for a statutory derivative action under sections 345–348 of the Companies Act 2016, emphasising that leave is not a mini-trial and that a shareholder cannot readily seize control of litigation the company is already conducting through its board; the originating summons was dismissed with costs.

This High Court decision concerns an application for leave to intervene and to bring a statutory derivative action under sections 345, 347 and 348 of the Companies Act 2016, set against a wider shareholder and corporate-governance dispute. The applicant, a shareholder referred to here by role, sought leave in the context of allegations of “forged share transfers” and an “alleged forged resignation of [a] director”, together with claims of “corporate mismanagement” supported by a “special audit report”. The corporate parties in the wider dispute included Syntax Valley Parking (M) Sdn Bhd and the local authority Majlis Bandaraya Melaka Bersejarah (MBMB); the individual defendants are referred to by their procedural role.

The court's task at the leave stage was to apply the statutory gateway for a derivative action: the “good faith requirement” and whether it was “prima facie … in the best interests of [the] company” for the action to proceed. A distinctive feature was that the company already had an existing suit against a local authority, so the court had to consider “whether [a] shareholder [is] entitled to control [the] company's litigation” and the “limits of derivative intervention”, including “board authority to conduct litigation” and “minority shareholder protection”. The court emphasised that the “leave stage [is] not a mini-trial” and drew a “distinction between [the] grounds of complaint and [the] relief sought”, while also examining the applicant's “standing” as a person “claiming entitlement to be registered as [a] member” by reference to Companies Commission of Malaysia records.

A subsidiary procedural issue concerned an application to expunge affidavit material under Order 41 rule 6 of the Rules of Court 2012, the requirement for a formal application rather than an “oral application from the Bar”, and the “costs thrown away” under Order 59 following the “withdrawal of [an] allegation on oath”. In the result, the “originating summons [was] dismissed with costs”.

The judgment is a useful treatment of the leave threshold for statutory derivative actions, and in particular the limits on a shareholder's attempt to wrest control of litigation the company is already conducting through its board.