SUBRAMANIAM A/L MUNISAMY v 1. ) HS HEIWA PRECISION (M) SDN BHD 2. ) SANDRA SHEAGER A/L CHIDAMBARAM

Case Significance

Confirms the essentially absolute nature of a shareholder's right to inspect accounting records under section 245 of the Companies Act 2016, and the court's power under Order 92 rule 4 to perfect an inspection order and to endorse a penal notice under Order 45 rule 7.

This High Court decision concerns the scope of a shareholder's right to inspect a company's accounting records under section 245 of the Companies Act 2016 and the mechanics by which the court perfects and enforces an order for inspection. The plaintiff, a shareholder, had obtained an order permitting him and an approved company auditor to enter the first defendant company's premises to inspect its accounting records, which the Court had granted in part and then clarified. Both sides filed cross-appeals against parts of the order: the plaintiff objected to a paragraph he said gave the defendants room to avoid inspection, while the second defendant, a director, objected to a three-day period for producing copies of the records, an obligation to make a statutory declaration, and the endorsement of a penal notice. The Court treated the right of inspection under section 245 as essentially absolute, and emphasised the personal responsibility of a director to ensure that the company's records are at all times open for inspection. On the plaintiff's cross-appeal, it held that the impugned paragraph was within its inherent jurisdiction under Order 92 rule 4 of the Rules of Court 2012 to clarify and supplement its own order, and in fact strengthened the plaintiff's position through the statutory-declaration requirement. On the director's cross-appeal, it held that the three-day production window was reasonable given the director's statutory duty and the fact that the burden of identifying documents lay on the inspecting party, that the statutory declaration was consistent with the director's responsibilities and imposed no new obligation, and that endorsing a penal notice under Order 45 rule 7 was standard practice necessary to give the order practical force for any future contempt proceedings. The judgment is significant for its treatment of the section 245 inspection right and the court's power to perfect and enforce an inspection order.