CHEN, YA-LI v 1. ) CHONG SHU WEN 2. ) STEP UP PROPERTY SDN. BHD.
wa-24ncc-687-12-2025 High Court (Mahkamah Tinggi) 15 March 2026 • WA-24NCC-687-12/2025 • 17 min read
3 cases cited
(0 SG, 3 foreign)
Catchwords
Derivative Action – The core procedural mechanism used by the Plaintiff to seek leave to sue on behalf of the company - Exhaustion of Internal Remedies – Whether a director can initiate a derivative action without first attempting to resolve the dispute through internal governance, such as convening a board meeting under Section 311(3) Standing (Locus Standi) – Whether the Plaintiff qualified as a "complainant" under Section 345, specifically in her dual capacity as a minority shareholder and as an executor of her late husband's estate – Complainant – Defined under Section 345 of the Companies Act 2016; the Plaintiff’s status as a 49% shareholder gave her standing. Statutory Threshold for Leave – Whether the Plaintiff met the two-fold test under Section 348(4) of the Companies Act 2016 – Good Faith – Did the Plaintiff demonstrate an honest belief in the cause of action without an improper collateral purpose? – Best Interest – Was it prima facie in the company's interest to litigate, considering the property title had already been transferred to the company by the time of the hearing? – The first limb of the threshold test under Section 348(4)(a) of the Companies Act 2016 – Best Interest of the Company – The second limb of the threshold test under Section 348(4)(b). Remedy of Last Resort – The court's characterization of a derivative action when internal corporate governance mechanisms (like board meetings) have not been exhausted. Liquidated Ascertained Damages (LAD) – One of the financial reliefs sought for the failure to deliver vacant possession of the property. Conflict of Interest – Arising from the First Defendant’s dual role as a director in both the purchasing company (D2) and the vendor company. Actionable Loss – Whether the company suffered any actual loss justifying a derivative action given that the primary objective (acquisition of the property) had been achieved. Cost Indemnity – Whether an applicant can seek a costs indemnity from "intended defendants" (who are not yet parties) rather than the company itself under Section 348(8)
Judges (1)
Counsel (4)
Statutes Cited
Companies Act 2016 (Cap 777)
Rules of Court 2012
Cases Cited (3)
UK (1)
[1947] 2 All ER 372
MY (2)
[2000] 3 MLJ 401 [2011] 3 MLJ 636
Judgment
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Read on eJudgmentSource: eJudgment (wa-24ncc-687-12-2025)