CJ POLYMERS Sdn Bhd

On the court record

A company litigating the recovery of misapplied funds with Mareva relief and a minority-oppression action, testing exclusion from management and the valuation of a locked-in shareholding in a closely held company.

CJ Polymers Sdn Bhd appears in the corpus in commercial litigation that runs from the recovery of misapplied company funds to a hard-fought minority-oppression dispute, moving between the High Court and the Court of Appeal. The company appears as plaintiff, respondent and appellant.

One strand is the recovery of money said to have been wrongfully received. The company sued three defendants for the restitution and recovery of monies alleged to have been wrongfully paid out, the payments having been authorised by one of its then directors. To protect its position it sought interim relief, and the High Court considered the requirements for a Mareva freezing injunction — whether the plaintiff had a good arguable case, whether the defendant had assets within the jurisdiction, and whether there was a real risk of dissipation. A related procedural matter concerned the transfer and consolidation of proceedings between courts, engaging item 12 of the Schedule to the Courts of Judicature Act 1964 and the court's inherent powers under the Rules of Court 2012.

The other major strand is a minority-oppression action before the Court of Appeal. The court addressed whether the removal of a member from management, with that member's shares locked in, was oppressive; whether a pending suit alleging misconduct against the minority barred an oppression action; whether the sale of shares to a new investor had terminated a quasi-partnership on the facts; and whether the valuation expert should be subject to cross-examination. These are the characteristic questions of a shareholder dispute in a closely held company, in which the fairness of exclusion from management and the valuation of a locked-in shareholding are contested at trial and again on appeal. The two strands share a common concern with the integrity of a company's internal dealings: on one side, recovering funds paid out on a director's authorisation that the company says were not properly due; on the other, protecting a minority member from conduct said to be oppressive once the trust underlying a quasi-partnership has broken down.