Forged Share Certificate in Malaysia

A share certificate must comply with the requirements laid down in S. 100 and be delivered to the owner of the shares within the time stipulated in S.107(1) in order for it to constitute a valid share certificate.

 While S. 368 provides for fraud by the officers, it does not apply to a situation where a share certificate has been forged. Instead, forgery is provided for under the S. 463 of the Penal Code. It is submitted that the relevant section would be Section 264(a) in the event that the said share certificate is found to be a false document of that it has been forged.

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Withdrawal of Counterclaim

Leave of the court is required before the Defendant may withdraw their counterclaim, this is depicted in O. 21 R. 3. Halsbury’s Laws of Malaysia has a section on withdrawal by consent without leave (attached herewith). However, upon reading the case of Macedonia Maritime Co v Austin & Pickersgill [1989] 2 Llyod’s Rep 73, it is submitted that this principle does not apply to withdrawal of a counterclaim. Instead, it applies to withdrawal of an action with consent of all parties.

 The case of YONG THSU KHIN & ANOR v MMCE PROTIES & ANOR AND ANOTHER ACTION [2005] 5 MLJ 419 stated in paragraph 22 that ‘It is quite safe to say that when applications are made for leave to discontinue a case, more often than not courts will grant it. This is so as it is undesirable to compel a plaintiff to pursue any litigation against his will, so long as no injustice will be caused to the defendant (Covell Matthews & Partners v French Wools Ltd [1977] 1 WLR 876; [1977] 2 All ER 591)’. This indicates the factors that will be taken into consideration by the court in grating a leave to withdraw an action.

 

Writ of Possession in Land

Section 7 of the Specific Relief Act 1950

  1. Recovery of specific immovable property

(1) Subject to subsection (2), a person entitled to the possession of specific immovable property may recover it in the manner prescribed by the law relating to civil procedure.

(2) Where a specific immovable property has been let under a tenancy, and that tenancy is determined or has come to an end, but the occupier continues to remain in occupation of the property or part thereof, the person entitled to the possession of the property shall not enforce his right to recover it against the occupier otherwise than by proceedings in the court.

(3) In subsection (2) “occupier” means any person lawfully in occupation of the property or part thereof at the termination of the tenancy.

 

Cases referred to:

 

  1. DR. HARJIT SINGH v. SUHAIMI BIN SAMAT & ANOR [1995] 1 LNS 62
  • Conduct of defendants locking plaintiff out of the premises amounted to a breach in tort in contravention of 7, Specific Relief Act1950.
  • Defendant should obtain court order before it can recover possession of the property from the plaintiff is mandatory.
  • 7(2) of the 1950 Act imposes a pre-condition of obtaining a court order before the defendant can recover possession of the property.

For the aforementioned reasons, it is submitted that a writ of possession would be a suitable option for the recovery of the property for the situation in hand. On the alternative, Section 5 (1) of the Distress Act 1951 allows the landlord may apply to a Judge for the issue of a warrant of distress for the recovery of rent due and payable to the landlord by a tenant of any premises for a period not exceeding twelve (12) completed months of the tenancy preceding the date of the application and the Judge or Registrar may make such order accordingly. However, it is to be noted that this would only be applicable to obtain arrears in rent.

 

 

 

 

Specific Compensation Clause

What is the effect if both parties agree that a certain sum will be paid as compensation for breach?

Section 75 of the Contracts Act 1950 states that, ‘when a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for.’

 Visu Sinnadurai wrote in the 2nd Edition of The Law of Contract in Malaysia & Singapore : Cases and Commentary that, ‘It is generally said that section 75 of the Contracts Act does away with the distinction between liquidated damages and penalties as understood under English Law’.

Amongst others, the writer quoted Maniam v The State of Perak [1957] MLJ 75 where Thomson J said that, ‘This section boldly cuts the most troublesome knot in the common law doctrine of damages. In brief, in our law in every s\case if a sum is named in a contract as the amount to be paid in case of breach it is to be treated as a penalty.’

 The writer also quoted the observation of Thomson J, Abdul Aziz J in Wearne Brothers (M) Ltd v Jackson [1966] 2 MLJ 155 who stated that, ‘the distinction between liquidated damages and penalty has ceased to be of great legal importance because the result in either case is that the court must determine reasonable compensation.’

 The writer summed all these up to denote that in so holding that under Section 75 no distinction is drawn between liquidated damages and penalties, the courts have said that every fixed sum in a contract will be treated as a penalty. In effect this would mean that any stipulated sum in a contract which is meant to be liquidated damages, even though it is not a genuine pre-estimate of the damages cannot be recovered unless the court is satisfied that it is a reasonable sum. In other words, the court has to be satisfied that every sum of money payable by way of liquidated damages is reasonable.

 In Selva Kumar Murugiah v. Thiagarajah Retnasamy [1995] 5 CLJ 374 it was held that, ‘the evidence shows clearly some actual loss, damages for which could be assessed by settled rules… This is, therefore, a case where damages could be proved by settled rules. But the vendor has brought no evidence to prove damages for the actual loss as explained earlier, so that we could have awarded at least some damages as compensation for loss of use of the medical equipment from some evidence of its rental value should it be rented out. Thus the real damage cannot be quantified. In other words, the damages have not been proved. The sum of RM96,000 paid towards the purchase price, less the sum comprised therein which was paid as earnest money, would have to be refunded to the purchaser by the vendor subject to what is to be further said below about the sum representing the earnest money or the deposit. Apart from the real loss (which has not been proved), the vendor ought to be entitled, in any event, to forfeit any reasonable amount of earnest money or deposit…’

 In reaching this decision, the court considered the following: (i) a restricted or limited construction though the language used in Section 75 of the Contracts Act 1950; (ii) ‘hether or not actual damage was proved to have been caused thereby’, are limited or restricted to those cases where the court would find it difficult to assess damages; (iii) the precise attributes of such contracts in which it is difficult for a court to assess damages for the actual damage or loss, are cases where there is no known measure of damages employable, and yet the evidence clearly shows some real loss inherently and such loss is not too remote; then the court ought to award, not nominal damages, but instead, substantial damages not exceeding the sum so named in the contractual provision, a sum which is reasonable and fair according to the court’s good sense and fair play and (iv) where there is inherently any actual loss or damage from the evidence or nature of the claim and damage for such actual loss is not too remote and could be assessed by settled rules, any failure to bring in further evidence or to prove damages for such actual loss or damage, will result in the refusal of the court to award such damages, despite the words in question.

 However, in reference to the more recent case of Jayaplus Bakti Sdn Bhd v Chip Heng Development (M) Sdn Bhd [2009] MLJU 1509 the court seems to somewhat depart from the approach adopted in the above cases. In this case, the Plaintiff attempted to rely upon clause 12 of the SPA that in the event of the Defendant’s default, the defendant shall pay to the plaintiff a sum equivalent to 10% of the purchase price. The court awarded the liquidated sum as stipulated in the said clause after deducting the deposit (which was also provided for in one of the clauses) for the following reasons(i) it is difficult to quantity and compute the loss of profit that the plaintiff may suffer;

(ii) a fixed figure of damages, which is not assessed for all circumstances but is graduated to correspond with passage of time between the making of contract and its breach, is a proper estimate of the damages to be anticipated from the breach and is recoverable as liquidated damages;

(iii) in attacking the liquidated damage clause as a penalty the defendant is in fact asking the court to relieve the defendant of its contractual obligations which it had freely entered into and undertaken in exchange for good consideration. This Court would incline in favour of preserving the sanctity of the SPA which has been freely

entered into by the parties;

(iv) The terms and conditions of the SPA was finalised by the parties with the benefit of legal advice. It is an agreement between 2 commercial entities and of equal bargaining power. The parties have agreed on the formulation of the compensation to be paid in the event of a breach by either party. The compensation payable is in both cases the same liquidated sum, being an amount equivalent to 10% of the purchase price. The parties entered into the SPA freely and with full knowledge and understanding of the terms and conditions; and

(v) the court relied upon Yap Yew Cheong & Anor v Dirga Niaga (Selangor) Sdn Bhd [2005] 7 MLJ 660. To strike down clause 12 on the ground that it is a penalty clause would be a patent interference with the parties freedom of contract.

 Based on the above cited case, it appears that the court will not depart from the contract between the parties pursuant to the doctrine of freedom of contract. However, it is submitted that it is not a hard and fast rule as there are certain conditions that need to be taken into consideration, as mentioned above.

Change of Company’s Name in Malaysia

Section 23 of the Companies Act 1965 provides for change of name. S. 23(6) provides that, ‘A change of name pursuant to this Act shall not affect the identity of the company or any rights or obligations of the company or render defective any legal proceedings by or against the company, and any legal proceedings that might have been continued or commenced by or against it by its former name may be continued or commenced by or against it by its new name.’ The term ‘may’ denotes that it is not mandatory/compulsory to do so

In Lee Siew Thong & Ors v United Merchant Finance Berhad [2009] MLJU 14, the appellant’s counsel submitted that the financial institution which gave the loan facility to the Borrower is United Merchant Finance Bhd. As United Merchant Finance Bhd no longer exists it cannot continue with the claim against the appellants. In the event of any change of name, the respondent’s name will also have to be amended in the summons. In reply, the counsel for the respondent submitted that when the summons was filed on 15.5.2001 and on 18.6.2001 the date of the order the respondent was then known as United Merchant Finance Bhd. On 25.6.2001 the respondent’s name was changed to Southern Finance Bhd. The change of name is evidenced by the Form 13 Perakuan Pemerbadanan Atas Pertukaran Nama Syarikat dated 25.6.2001 (S. 23 Companies Act 1965)

 On that issue the Court found that ‘the change of the respondent’s name did not have any effect on the proceedings commenced against the appellants. A change of name does not affect the legal proceedings commenced by the respondent’s former name. The proceedings may be continued in the respondent’s former or new name (S. 23(6) Companies Act 1965). In the premises, the appellants’ contention is misconceived and groundless.’

 Whereas, Chapter 5 of the Companies Act 2006 states in S. 81 that (1) A change of a company’s name has effect from the date on which the new certificate of incorporation is issued, (2) The change does not affect any rights or obligations of the company or render defective any legal proceedings by or against it, (3) Any legal proceedings that might have been continued or commenced against it by its former name may be continued or commenced against it by its new name.

The case of Shackleford, Ford & Co. Ltd. v. Dangerfield, Shackleford, Ford & Co Ltd v Owen (1868) LR 3 CP 407 referred to this particular section in the Companies Act 1962. in this case it was held that the plaintiffs were well advised in bringing the actions in their old name of Shackleford, Ford, & Co. Reason being, until the certificate of incorporation had not been obtained; the corporation did not exist under its new name but is considered as still existing under its original name. This case was cited in Lin Pac Containers (Scotland) Ltd. v. Kelly 1982 SC 50. However, it is to be noted that both these cases focused on the technicalities of a change of name in deciding that an action brought in the company’s old/original name was a valid one.

 

 

 

 

 

Transfer of car ownership in Malaysia

Transfer of vehicle ownership is carried out under Section 13, Road Transport Ac 1987, where the State RD Direcor must be informed of any transfer of vehicle ownership within 7 days. Required Documents:-

1. PRIVATE VEHICLE (Individual Private Vehicle)

I. 2 copies of Checklist Form TM-1 (Pind.1/2012); TM-2

II. 2 copies of form JPJK3 that has been completed and signed by the new owner; Borang JPJ K3A III. Original Vehicle Endorsement Certificate (JPJK2);

IV. Copy of registered owner’s and new owner’s identification documents using TM-AB (if not present during submission of application) * for individual and sole proprietor company category only; TM-AB

V. Original and copy of identification document of representative (if application is submitted by representative).

VI. Letter/stub of ownership claim cancellation by the registered owner (other than e-Hakmilik);

VII. A valid Ownership Transfer Inspection Report by PUSPAKOM (www.puspakom.com.my) (other than motorcycles)

2. Private Vehicle of Sole/Partnership Company

I. 2 copies of Checklist Form TM-1 (Pind.1/2012); TM-3

II. 2 copies of form JPJK3 that has been completed and signed by the registered owner and the new owner; Borang JPJ K3A

III. Original Vehicle Endorsement Certificate (JPJK2);

IV. Copy of registered owner’s and new owner’s identification documents using TM-AB (if not present during submission of application) * for individual and sole proprietor company category only; TM-AB

V. Original and copy of identification document of representative (if application is submitted by representative)

VI. For partnership companies, agreement letter for the sale from all partners;

VII. Copy of sole proprietorship/partnership company registration document;

VIII. 1 Form D (Business Registration Certificate); or

IX. 2 Business Licenses issued by the local authority (Sabah and Sarawak);

X. Letter/stub of ownership claim cancellation by the registered owner (other than e-Hakmilik); and XI. A valid Ownership Transfer Inspection Report by PUSPAKOM (www.puspakom.com.my) (other than motorcycles) 

Late Payment Interest in Malaysia

Section 75, Contracts Act states that when a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for.

Selva Kumar a/I Murugiah v. Thiagarajah a/I Retnasamy [1995] 1 MLJ 817, FC
There is no distinction between liquidated damages and penalties as understood under English law, in view of s 75 of the Contracts Act 1950 which provides that in every case the court must determine what is the reasonable compensation, ‘whether or not actual damage or loss is proved to have been caused thereby’

Kok Swee Chin v General Factoring & Credit Sdn Bhd [2004] 6 MLJ 276
The plaintiff secured a loan from the defendant to part finance the purchase of a condominium unit. Both parties entered into a loan agreement cum assignment.
The interest charged by the defendants for the said loan under the said agreement were:
1. 14%pa compound interest on monthly rests on all moneys advanced or released;
2. Default interest or late payment interest at 18%pa compound interest in addition to (a) on the amount of each instalment;

The Plaintiff’s argument:
1.The rates of interest and each of them and charging the same on compound interest basis is excessive, harsh and unconscionable. The compound late payment interest charged is also a penalty;
2.The plaintiff asserts further that the defendant is not entitled to charge compound interest and compound default interest or penalty interest.

The Defendant’s argument:
1. That all agreed interest rates and late payment charges contained in the Loan Agreement Cum Assignment are agreeable by both contracting parties viz the defendant as lender and the plaintiff as borrower;
2.The plaintiff is estopped from denying the plaintiff’s obligation to pay for the agreed interest and agreed late payment charges as the plaintiff had paid agreed installments for a period of time.

Held:
The onus of showing that a specified sum was a penalty lay upon the party who was sued for his recovery. The plaintiff failed to discharge the burden of proving that the late payment charge at 18%pa was a penalty.
Even if the late payment charge was a penalty, it should not be a ground to nullify the agreement. The plaintiff simply could not rely on s 75 of the Contracts Act 1950 and allege that the late payment charge was a penalty and hence was irrevocable.
As such, in this situation the late payment charge was a liquidated damage which represented a genuine pre-estimate of the defendant’s loss for breach of contract by the plaintiff. It was by no means exorbitant, harsh or unconscionable but served as a ‘reasonable compensation’ to the defendant as per illustration (d) of s 75 of the Contracts Act.
The plaintiff had been a voluntary party to the agreement and been repaying the loan and payment of interest as well as the late payment charges for almost 12 years. Thus, the plaintiff should be treated as having waived her rights and be estopped from challenging her liability to pay the agreed interest and late payment charges; challenging the validity of the agreement; requesting for a refund for a sum of RM260,940.57 and other reliefs from the defendant

Restrain of Trade in Malaysia

Nagadevan a/l Mahalingam v Millenium Medicare Services [2011] 4 MLJ 739, Court of Appeal
This case was decided after Worldwide Rota. Referred to Polygram, Petrofina and Wrigglesworth,

-All of the above cases pointed out that any form of retraint of trade is void unless it falls under the exceptions provided in s.28 Contracts Act.

Svenson Hair Center Sdn Bhd v Irene Chin Zee Ling [2008] 7 MLJ 903

The Defendant had been employed by the Plaintiff since 24 February 1999, rose through the ranks to the position of Sales Consultant in 2001 and resigned from her last held position of Centre Manager of the Petaling Jaya branch in June 2005. Throughout her employment with the Plaintiff, the Defendant executed an Employment Agreements which contained express and specific prohibitions and strictures regarding Confidentiality, Non-Solicitation and Non-Competition.

Principles:-

-The law does not debar an ex-employee from making any use of or drawing on a fund of knowledge and experience or skills that he had acquired while working for the employer.

-That would be tantamount to depriving him of his livelihood. The law only imposes on the employee a general duty to act in good faith, such as a man of average intelligence and honesty would think proper.

-Depending on the facts and circumstances of the case, the law also imposes an obligation on the employee not to use or disclose trade secrets or to do what he has covenanted not to do — as in the instant case.

-The plaintiff’s right in law to protection of its confidential information is premised on the contractual clause, which does not have any time limit.

-As such, reading the employment agreement as a whole, it becomes patently clear that whilst there is no general restriction on the defendant from soliciting and or competing with the plaintiff after 12 months, this does not apply to situations where such soliciting and or competition is effected through the use of the plaintiff’s confidential information.

– Referred and followed to the case of Thomas Marshall (Exports) Ltd v Guinle [1978] 3 All ER 193 which stated that :
The case is not one, of course, in which the company seeks to restrain the defendant from engaging in any competing work, but one in which the company merely seeks restraints in terms of what I have called the soliciting order and the breach of confidence order.

prayers

It’s nearly end of May, 3 months more towards my completion of pupillage. The prayers below will be my prayers for the next few months.

1. Chant to become a person of unlimited self-esteem
2. Chant to awaken to your own greatness
3. Chant to appreciate your life, including flaws, accomplishments, defeats, losses, and victories and truly appreciate all that makes you a unique and wonderful person
4. Chant to make the impossible possible
5. Chant to consistently manifest your Buddha nature and rise above your basic tendencies and overcome your inherent negativities in your life
6. Believe that you are a Buddha and create all the benefits for yourself
7. Believe you are the Gohonzon
8. Trust that in the Gohonzon, (your life itself) you have the means to fulfill each and every desire to become extraordinarily happy
9. Chant to display your Buddhahood and to bring forth that strength, joy, vibrant life condition
10. And then take it to the world and change the environment.

 

Forget about the past garbage. Put it away. That will only make you feel impotent. From today on, really chant about being that man/woman of unlimited self-esteem. Really appreciate everything about your life; all the things that make you incredibly unique and wonderful. All your sufferings, problems, heartaches, will be the stuff you need, in order to share your experience, to encourage and to inspire others. Focus on really, truly awakening to your greatness. This is the opportunity (sufferings, obstacles, lack of self-esteem) you needed to go through in order to become outrageously successful – so you can fulfill your dream. If you focus on this – really valuing your life now, then everything will fall into place in a much bigger way. This is something no one can give you; the universe is showing you what you need to tackle. When you first chant this way, a lot of garbage may come out of your life, a lot of negativity, awful feelings may surface. We always bring into our lives what matches our life condition. So chant to feel incredible joy about your worth and you will feel and know self worth and greatness.


You not being able to do whatever you determine is a manifestation deep down of your feeling of fear, that you are not good enough, that you do not have it in you. You must get yourself to a place where there is the greatness of your life, then everything will be transformed. We have to believe in our Buddhahood. When we face the Gohonzon, we should say, “I am going to praise my wonderful life”. It is important to awaken to your own greatness. Your life is the Gohonzon.

Now is the time for you to start over.