1. ) MANJUNG AQUATIC SDN BHD (DALAM LIKUIDASI) 2. ) MANJUNG AQUA FARMING SDN BHD v 1. ) MOHAMAD ZAHID BIN PUTERA 2. ) HUSIN BIN YAHYA 3. ) YONG KWAI HEONG 4. ) YONG WEI JIEN 5. ) EMPEROR MARINE SEAFOOD SDN BHD 6. ) PELANTAR CERGAS (M) SDN BHD 7. ) ADIL JUTA SDN BHD 8. ) GIGIH MUDA SDN BHD 9. ) SITIAWAN HATCHERY SDN BHD

Case Significance

Sets out the principles governing an assessment of damages for breach of fiduciary duty, including that special damages must be pleaded, that reflective loss is not recoverable by a shareholder, that damages and an account of profits are alternative remedies requiring election, and that a corporate plaintiff cannot recover aggravated damages.

This High Court decision concerns the assessment of damages against a director who, under a consent judgment, had been declared to be in breach of her fiduciary duties to two companies, and the principles limiting the recovery available on such an assessment. The consent judgment had also declared the disposal of certain lands to another company null and void and held that company to be a constructive trustee, with orders for the transfer of the lands. On the assessment against the director, the plaintiff companies claimed special damages of RM698,850.00, general damages of over RM34 million, aggravated damages of RM8.5 million and exemplary damages of RM10 million. The court dismissed all of these claims. It held that special damages must be specifically pleaded and proved, and that a claim for the diminution in the value of a shareholding is barred by the reflective-loss principle, since no action lies at the suit of a member to recover a loss that is merely a reflection of the loss suffered by the company itself. It held that general damages and an account of profits are alternative remedies between which the aggrieved party must elect, so that an order granting both could not stand and the party would have to elect one or the other, though a party should not generally be required to elect until able to make an informed choice. It further held that a corporate plaintiff cannot be awarded aggravated damages, and that exemplary damages are confined to the two established categories, namely oppressive, arbitrary or unconstitutional action by servants of the government, and conduct calculated to make a profit exceeding the compensation payable. Dismissing all the claims with costs, the court left the plaintiffs to appeal. The judgment is a useful compendium of the principles governing special, general, aggravated and exemplary damages and the reflective-loss and election rules.