This document outlines various statutory remedies available to company members where controllers misuse their power or breach duties, including remedies for oppressive, unfairly prejudicial, or unfairly discriminatory conduct. Section 181 of the Companies Act provides members the right to seek remedies from the court if a company's affairs are being conducted in an oppressive, unfairly prejudicial, or unfairly discriminatory manner, or if a company act is contrary to members' interests. The types of conduct that may qualify include diversion of corporate assets, inadequate dividend payments, disregard of members' interests, and controllers treating the company as their own.

1. 2.4 Statutory remedies
 There are various statutory
rights which allows members to
seek remedies where the
controllers of the companies
unfairly misuse their positions
of power or breach of their
duties.
(a) Oppressive, disregard of members’
interests or unfair conduct
 Law has developed various
remedies where the majority
act unfairly or oppressively in
order to protect the interests of
the company and its members
 2 limbs – s 181 CA
 It gives the court power to
remedy conduct where it is of
the opinion that:
i. The company’s affairs are being
conducted in a manner that is
oppressive to members
ii. Act of the company
(done/proposed), unfairly
discriminates against members
 4 grounds: ‘oppression’,
‘disregard of interests’, ‘unfair
discrimination’ or ‘unfair
prejudice’
- upon any grounds being est :
member may pursue a personal
action under s 181 either against
company or those responsible for
the acts
 S 181 - covers broad range of
conduct
- fraud on minority
- aspect under s 218(1)(i) CA – just
and equitable ground for winding
up
- s 218(1)(f) CA – directors act in
their own interests or in a manner
that appears to be unfair or unjust
to other members
 Who may apply for a remedy?
o s 181 CA – member / debenture
holder / Minister
o Niord Pty Ltd v Adelaide
Petroleum NL (1990) 8 ACLC 684

2. - F: a purchaser of shares in a
company had not been registered
as member at the time when the
proceedings were instituted.
- H: equitable interest as an
unregistered transferee is
insufficient and have no standing to
make an application under s 181
o Re Lundie Bros Ltd [1965] 1 WLR
1051
- P: Applicants under s 181 must be
members or debenture-holders of
the said company and the conduct
of the complain must affect them in
their capacity
o Re A Company [1983] 2 All ER 36
- P: Right to apply s 181 extends to
legal personal representatives of
the member and person to whom a
share in the company has been
transmitted by will or operation in
law
 GR: Applicants must be able to
demonstrate that his/her name
appears in the company’s
register of members at the date
issuance of summons - s 16(6)
 Exception: If the rule would be
unfair and unjust
o Owen Sim Liang Khui v Piasau
Jaya Sdn. Bhd. & Anor [1996] 1 MLJ
113
- P: It is unjust and inequitable to
permit Rs (Company) to assert that
the Pt (victim) has no standing to
move the court as Pt will be
estopped
- H: As the co had deprived the Pt
of his membership, the co was not
entitle to assert that the Pt lacked
standing to present the petition
*Pt = Petitioner
o Re Sin Lee Sang Sawmill Sdn. Bhd.
[1990] 1 MLJ 250
- I: Whether applicant alleging
oppression under s 181has control
over the co’s affairs.
- H: Those in control cannot allege
to have been oppressed
Reverse Oppression
o Kumagai Gumi Co Ltd v Zenecon-
Kumagai SB
-P: Not only minority SH can rely on
s 181 but also majority when they
are unable for any reason to exert
their will at a general meeting
o Re R H Harmer Ltd [1959] 1 WLR
62
(b) Conduct where a remedy may

3. be sought
i. Affairs of the company
- provides a remedy against any
person involved in the affairs of the
co
- Eg: directors, majority SH,
substantial SH and company itself
o s 181(1)(a) CA - applicant must
allege that ‘affairs of the company’
are being conducted in an
oppressive, unfairly prejudicial or
unfairly discriminatory manner
o No definition in the Companies
Act 1965.
- may refer to Australian provisions
(page 479)
o Re H R Harmer Ltd [1958] 3 All ER
689
- P: wide enough to cover
oppression by any person in a
management capacity
o Re Jermyn St Turkish Baths Ltd
[1971] 3 All ER 184
- P: the conduct complaint must be
operative and subsisting at the time
of the petition
 Example of conduct:
o Re Cast Iron Products - H: failure
to pay dividends over a prolonged
period in total disregard of the
interests of the SH when the co is
profitable may be evidence of
oppression
o Wayde v New South Wales Rugby
League Ltd
- P: Applicant may apply for remedy
regardless whether the conduct
was continuing in nature or an
isolated act
 However, a refusal by director
to allow the SH to inspect the
financial records of a co was not
‘conduct’ in the affairs of the
company//
o Re Dernacourt Investments Pty
Ltd
-H: inactivity or negative action can
only be regarded as ‘conduct’
where there is a duty at law or in
equity to act in a positive way.
ii. Acts or proposed acts

4. o s 181(1)(b) CA
- applicant may allege that an act by
or on behalf of company is contrary
to the interests of the members as
a whole, oppressive, unfairly
prejudicial or unfairly
discriminatory
o Wayde v New South Wales Rugby
League Ltd
- H: a single resolution of the board
of directors could be an oppressive
or unfair act on behalf of the co
 An applicant may also obtain a
remedy where the act is merely
proposed and has not yet
occurred
- if the conduct complain is still a
proposed resolution
o North-West Transportation Co v
Beatty
-
 S 181 may not specifically apply
to omission or proposed
omission
Exception:
o Sanford v Sanford Courier Service
Pty Ltd
- P: a co with sufficient profits
persistently refuses to pay
dividends
 Meaning of oppressive conduct
o Scottish Co-operative Wholesale
Soc Ltd v Meyer [1959] AC 324
- conduct that is ‘burdensome, hash
and wrongful’
o Re Jermyn Street Turkish Baths
Ltd [1971] 1 WLR 1042
- additional requirement: involve
‘some overbearing act or attitude
on the part of the oppressor’
Effect of such narrow
interpretation:
Remedy was not available except in
the most extreme circumstances
where controllers deliberately
abuse their power
o Ng Chee Keong v Ng Teong Kiat
Highlands Plantations Ltd
- Even the allege oppressive
conduct may be relatively trivial in
isolation, but if the cumulative
effect is that it amounts to
oppression, it will be so held
o Re A Company [1983] Ch 178
- To succeed against oppression,
applicant must have suffered harm
in his capacity as members or
debenture holders
o Verghese Mathai v Telok
Plantations Sdn. Bhd. (1988) 1
MSCLC 90, 122

5. o Re Senson Auto Supplies Sdn.
Bhd. [1988] 1 MLJ 326
-Relief willl be denied where the
applicant has acquiesced to the
conduct complain
o Re Kong Thai Sawmill (Miri) Sdn.
Bhd. [1978] 2 MLJ 227
- “there must be visible departure
from standard of fair
dealings...’disregard’ involves
something more than a failure to
take account of the minority’ s
interest. There must be awareness
of that interst and an evident
decision to override it or brush it
aside or to set at naught the proper
co procedure”
o Jaya Medical Consultants Sdn.
Bhd. v Island & Peninsular Bhd
- Ct held: it is impossible to lay
down categories of conduct
considered to be oppressive, each
case must be determine base on
facts..oppression does not
necessirily mean iilegal or
fraudulant. To be oppression there
must be a visible departure from
standard of fair dealings..’disregard
means something more than a
failure’
 Meaning of ‘disregard of
interests of the members of
debenture-holders’
- the phrase appear to allow a
single member or debenture holder
to take the requisite action under
s181
- better interpretation: court will
first examine the interests of the
members and debenture holder as
a whole
o Re Kong Thai Sawmill (Miri) Sdn.
Bhd. [1978] 2 MLJ 227
- “there must be visible departure
from standard of fair dealings..”
 Meaning of unfairly prejudicial
or unfairly discriminatory
 S 181 covers oppressive acts
and conduct that is unfairly
discriminatory, unfairly
prejudicial or is contrary to the
interests of the member as a
whole.
o Morgan v 45 Flers Avenue Pty Ltd
(1987) 5 ACLC 222 SC NSW
- P: In was in appropriate to focus
on each of these individual
elemenys. Ct held the correct
approach is to regard them as

6. ‘omposite whole’ and the individual
elemets should be considered
merely as different aspects of the
ssential criterion, namely
commercial unfairness.
o Eric Lau Man Hing v Eramara Jaya
Sdn. Bhd. & Ors [1998] 7 MLJ 528
- H: the grievances of the minority
SH should be looked at in totality to
decide if they amounted to
oppressive, prejudiacial and
discriminatory conduct by majority
SH
 The objective standard
 Unfairness is determined
objectively
- the conduct may be considered
appressive or unfair even if it is
establish that the person alleged to
have been acting oppressively or
unfairly did not intend to harm the
complaining SH
o Wayde v New South Wales Rugby
League Ltd (1985) 3 ACLC 799
-P: Reasonable man test
> a director’s condust may be
regarded as oppressive or unfair if
no reasonable director would have
acted in that way
 To determine whether a
conduct oppressive, court must
balance the conflicting interest
of majority and minority SH
- How?
> Examining the background of a co
and the reasonable expecttion of its
SH
> not necedirilly oppressive or
unfair jut because the controllers of
the co are pursuing management or
dividend policies with which a
minority SH disagrees
o Re G Jeffrey (Mens Store) Pty Ltd
(1984) 2 ACLC 421
-P: It is not necisirily unfair if
majority SH refure to buy minority’s
shares
o Low Peng Boon v Low Janie
[1999] 1 SLR 761
-
o Jaya Medical Consultants Sdn.
Bhd. v Island & Peninsular Bhd. &
Ors [1994] 1
MLJ 520
- H: the question of unfairness is
one of the fact and degree which
requires the ct to apply an objective
test

7. o Re Postgate & Denby (Agencies)
Ltd (1987) BCLC 8
- ct is not only to take the rights of
members under the co’s
constitutioninto account, but also
their legitimate expectations arising
from the agreements ot the
understandings of the members
inter se.
o Dato’ Low Mong Hua v Banting
Hock Hin Estate Co. SB
- GP applicable to s 181:
1) G
2) G
3) G
4) G
5) G
6) G
7) G
o Dato’ Oon Ah Baa @ Boon Pak
Leong v Eagle & Pagoda Brand Teck
Aun Medical Factory SB
- accept Dato Low’s decision
 Legitimate expectations
 S 181 empowers ct to
determine whether the conduct
complained is commercially fair
or unfair to take into account
informal or implied
understanding, over the above
co’s costitution
o Ebrahimi v Westbourne Gallaries
- where the majority’s assertion of
power and dominance in
accordance with the co’s
constitution conflicts with the
legitimate expectations of the
minority members, the conduct of
the majority could be challanged as
oppressive and unfair
o Jaya Medical Consultants Sdn.
Bhd. v Island & Peninsular Bhd
- the concept of unfair
discrimination or prejudice that
enables the court to take into
considereation not only the rights
of the members under the co’s
constituion but also their legitimate
expectation arising from
agreemnets and understanding of
the memebers among themselves
o Tuan Haji Ishak bin Ismail v Leong
Hup Holdings Bhd.
- it was for the petitioner to satisfy
the ct that his expectatios of
minority members are is a question
of law to be determined
objectively, considering the nature
of the co’s involved
 Examples of oppressive, and
unfairly prejudicial and unfairly
discriminatory conduct:

8.  Diversion of corporate assets
or opportunity
 Cook v Deeks [1916] AC 554
- P:Directors breach their fiduciary
duties if they divert a corporate
opportunity to themselves or their
associates
 S 181 provides remedy for
minority SH
 Scottish Co-operative
Wholesale Soc Ltd v Meyer
-
 Eric Lau Man Hing v Eramara
Jaya Sdn. Bhd. & Ors [1998] 7
MLJ 528
 Low Peng Boon v Low Janie
[1991] 1 SLR 761 & Re Elgindata
Ltd (1991) BCLC 959
- P: if controllers usesco’s fund to
pay their personal expenses >
oppression
Kumagai Gumi Co Ltd v Zenecon-
Kumagai Sdn. Bhd. & Ors [1994] 2
MLJ 789
- diverting the co’s business
opportunities to related cos
amounted to oppression
//Re Kong Thai Sawmill (Miri) Sdn.
Bhd. [1978] 2 MLJ 227
- The SH-director had not acted
oppressively by causing the co to
purchase and outfit a motor yatch
for their personal use.
- PC: did not consider it as
extravagance on the part of SH-
director as amounting to
oppression of the minority SH
 Diversion of profits
Sanford v Sanford Courier Service
Pty Ltd (1986) 5 ACLC 394
-
Re Gee Hoe Chan Trading Co Pte
Ltd [1991] 3 MLJ 137
-the directors by paying themselves
director’s fees and salaries but not
declaring dividens had acted
inequitably and this was held to
constitute a basis for an allegation
of unfair prejudice
 Directors’ failure to act in the
interest of the company
Re Spargos Mining NL (1990) 8
ACLC 1218
 Shares issued for improper
purposes; and
Hannes v MJH Pty Ltd (1992) 10
ACLC 400
 No dividend or inadequate
dividend given
Table A, art 98
Burland v Earle [1902] AC 83
- SH cannot compel a co to declare

9. a dividen and to determine the max
amount
Low Peng Boon v Low Janie [1999] 1
SLR 761
- the non paymnet of dividen
couple with misappropriation of co
funds coud amoun to oppression
Eric Lau Man Hing v Eramara Jaya
Sdn. Bhd. & Ors [1998] 7 MLJ 528
-non paymnets of dividen together
with a failure to keep proper
records amounted to oppressive
conduct in disregard of the interst
of the minority SH by majority
Re Gee Hoe Chan Trading Co Pte
Ltd [1991] 3 MLJ 137
Min amount of dividen coupled
with a generous renumeration for
the directors > oppressive or unfair
Re Sam Weller & Sons Ltd [1990] 1
Ch 682
 Dominant members run the
company as if it were their
own, disregarding the rights
and interests of the other
members
Re HR Harmer Ltd [1958] 3 All ER
689 (CA, England)
Re Coliseum Car Stand Service Ltd
[1972] 1 MLJ 109 (HC, Malaysia)
Remedies: s 181(2)

10. (d) Winding up solvent companies
 Grounds for compulsory
winding up made by members:
 s 218 (1)(f) - it is just and
equitable to do so
 S 218 (1)(i) - directors acting in
their interest rather than in the
co’s interest or acting in a way
that is unfair or unjust to
members
 Winding up a solvent company
is regarded as drastic step >
court will not make order if
applicants have some other
available remedy
Persons who can wind up:
company, creditor, contributory,
liquidator
 Directors act in their own
interests:
 s 218(1)(f) - the ct may wind up
a compan if the directors have
acted in their own interest
rather than in the interest of
the members as a whole
 Kokotovich Constructions Pty
Ltd Wallington (1995) 13 ACLC
1113
- H: co was rdered to wind up when
directors breached their fiduciary
duties when they issued shares for
the improper purpose of
manipulating the voting power to
the detriment of the minority SH
 Just and equitable ground:
 s 218(1)(i) - ct may made a
winding up order on just and
equitable ground in a number
of different circumstances:
O Breakdown of trust and
confidence
 Loch v John Blackwood Ltd
[1924] AC 783 (PC on appeal
from West Indies)
-
 Re Wondoflex Textiles Pty Ltd
[1951] VLR 458 (SC of Victoria)
-
 Ebrahimi v Westbourne
Galleries Ltd [1973] AC 360 (HL)
-
 Varusay Mohamed Shaik
Rahman v SVK Patchee Bros (M)
Sdn. Bhd. [2002] MLJ
- H: if there is convincing evidence
of the breakdown of mutual
confidence and good faith among
the parties then this would justify
the winding up on the just and

11. equitable ground
o Deadlock
 Re Yenidge Tobacco Co Ltd
[1916] 2 Ch 426 (CA, England)
 Re Davis Investment (East Ham)
Ltd [1963] 3 All ER 926
- P:SH in a company are dead
locked to the extent that the co is
unable to function properly.
Deadlocked must be clear and fully
represented or else application will
be dismissed
O Fraud, misconduct or oppression
 These grounds have been
largely incorporated in s 181.
 Re Thomas Edward Brinsmead
& Sons Ltd [1897] 1 Ch 45 (HC,
England; affirmed by CA [1897]
1 Ch 406)
O Failure of substratum
 Re Eastern Telegraph Co Ltd
[1947] 2 All ER 104
- if a SH had invested in shares to
carry out certain object, he cannot
be force against his own will to
continue adventure his money on
some quite different project
 Re German Date Coffee Co
(1882) 20 Ch D 169 (CA,
England)
 Re Tivoli Freeholds Ltd [1972]
VR 445 (SC of Victoria)
2.4.5 Procedure in Minority
Member’s Actions
(a) Personal and representative
actions
 When personal rights have
been infringed.
(b) Derivative actions
 When a wrong is done to the
company (Proper plaintiff rule) and
the minority is bringing such an
action.
 Australian Agricultural Co v
Oatmont Pty Ltd (1992) 10 ACLC
1220
2.4.6 Proceedings on behalf of a
company
 Statutory derivative action
(SDA)
 ss 181A-181E
 Salient feature of the new
statutory derivative action
Mohd Shuaib Ishak v Celcom
(Malaysia) Bhd. [2008] 5 MLJ 857
Reversed by Celcom (M) Bhd v

12. Mohd Shuaib Ishak [2011] 3 MLJ
636 (CA)
Ng Hoy Keong v Chua Choon Yang
[2010] 9 MLJ 145
 5 issues:
o Leave
o Good faith
o Reasonable notice
o Costs-indemnity order
o Interests of company