MADAM KAMALIAH SALLEH

038722
MUHAMMAD NAIM ARIF BIN ZULKIFFLY
COMPANY LAW
TUTORIAL

1. Defacto Director.
2. Nominee director. It can be define a person who is representing someone
else. He is a person who is appointed to the board of directors of a
company by a certain appointer. The nominee director shall represents
that appointers interest. They can be appointed by certain shareholders,
third parties through contracts, lending public financial institutions or
banks, or by the Central Government in case of oppression or
mismanagement.. However, nominee Directors must be particularly
careful not to act only in the interests of their nominators, but must act in
the best interests of the company and its shareholders as a whole.
Nominee Director is to be regarded as being in control or in charge of the
company and its activities. This determination ultimately turns on the
specific facts and circumstances involved in each case. According to
section 132 (1E) of Company Act 1965, ) A director, who was appointed by
virtue of his position as an employee of a company, or who was appointed
by or as a representative of a shareholder, employer or debenture holder,
shall act in the best interest of the company and in the event of any
conflict between his duty to act in the best interest of the company and
his duty to his nominator, he shall not subordinate his duty to act in the
best interest of the company to his duty to his nominator.
3. There are statutory provisions restraining certain persons from managing
companies. These persons are disqualified from taking part or being
involved in the management of a company. However there are certain
exception that can make the disqualified director to continue his service in
the board of director. First, provide in Section 130. Power to restrain
certain persons from managing companies. (1) Where a person is
convicted whether within or without Malaysia(a) of any offence in
connection with the promotion formation or management of a corporation;
(b) of any offence involving fraud or dishonesty punishable on conviction
with imprisonment for three months or more; or(c) of any offence under
section 132, 132A or 303. The exception is the person must apply to the
court if he wishes to be appointed as director or remain as a director of a
company.
4. To whom the directors owe their duties. Director owed its main duty to the
company, because under common law, the one who enforces the breaches
of directors duties is the company, applying the proper plaintiff rule. As an
effect, the corporate litigation against the directors are brought by the
company. As an example, the company itself will sue and no need for the
approval of the members or court order. According to the case of Percival v
Wright, the court held that the director do not owed duties to the
shareholders individually but only to the company however, in the case of
Brunninghausen v Glavanics the court held that the director only owes his
duty to a member when the member may be so reliant upon the director
for information and advice that a court might hold that the director owes
duties to the individual member.

5. Illustrate how the strict application of Proper Plaintiff Rule defeats the
interest of members against their directors who abused their powers.
Proper Plaintiff Rule refer to rule which specify that the company is the
proper plaintiff for the enforcement of duties owed to it. The company and
the members are not the same thing and the action could not be
maintained by the plaintiff. Under this rule, the company is to bring the
action to enforce it own rights. Members does not have locus standi to do
so. As example, the member cannot bring any action as they dont have
any right and because it is the company who have the right and it is being
controlled by the board of director.
6. 3 types of remedies that are available to protect the interests of members.
Three types of remedies that protect the interest of the members are, the
oppression remedy under s 181, winding remedy under s218(1)(f) and (i),
and injunction under s 65.
7. 3 points, differentiate the oppression remedy under S181 and the winding
up remedy under S218. Oppression remedy may choose from various
range of remedies under the oppression remedies but this relief is not
available under winding up remedy. Next, courts are reluctant to wind up a
company under s181 if the company is solvent has a future. Again this
relief is not available under s218. Lastly, the remedy under s218 requires
the party applying to come with clean hand since the ground relates to a
remedy under the concept of fairness and justice differ to s181.
8. Elaborate the test applicable under s181(1)(a) when a member alleged
that the director has acted oppressively. The test applicable under s181(1)
(a) is a test that decide whether there has been a conduct which is a
visible there has been conduct which is a visible departure from standards
of fair dealing. It may be held as an example whether the action can be
consider as burdensome, harsh and wrongful.
9. State various orders for remedies which can be granted by the court under
the oppression remedy proceeding. It is statutory injunction as it is an
order by the court to direct or prohibit any act.
10.Factors considered by the court in considering winding up as a remedy
order under the oppression remedy proceeding. The factors are if the
company has no longer serves any useful purpose. With this, member can
either choose to invoke the grounds under s 218(1)(i) or s 218(1)(f).
11.When members can initiate action to protect their personal rights and
interests. The members can initiate the action when the director or other
members attempt to deprive members from this rights. As an examples, a

member who hold at least 10% of the votes may call a general meeting
under s 144.

12.Explain the meaning of derivative action and its grounds. It mean is an

action is derivate when the person who brings the action relies not on a
cause of action which belongs to them personally but on a cause of action
belonging to someone else. The ground in which is need to be prove is the
wrongdoer controls, the wrongdoer obtained benefit at the companys
expenses, and the wrongdoer prevent the company from the suing the
wrongdoer.