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Understanding Commercial Agreements-Loans, Sale of Shares, Joint Ventures Agreement By : LEE SWEE SENG LLB.LLM,MBA Advocate & Solicitor, High Court, Malaya.

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Presentation on theme: "Understanding Commercial Agreements-Loans, Sale of Shares, Joint Ventures Agreement By : LEE SWEE SENG LLB.LLM,MBA Advocate & Solicitor, High Court, Malaya."— Presentation transcript:

1 Understanding Commercial Agreements-Loans, Sale of Shares, Joint Ventures Agreement By : LEE SWEE SENG LLB.LLM,MBA Advocate & Solicitor, High Court, Malaya Patent, Trademark & Industrial Design Agent, Certified Mediator, Notary Public

2 Introduction Some people do not mean what they say-problem with the heart. Some people do not say what they mean-problem with the head. Balancing text, truth and trust.

3 Interpretation Words are all we have to express our intention. Sometimes the infirmity is in the words we used. Sometimes we have failed to anticipate problems. Faintest ink is better than the most retentive memory.

4 Limitations to freedom of contracts Limited by statutes. Some statutes prohibit certain contracts or certain terms and conditions in contracts. Any attempt to contract out of statutes will be void unless terms are more favourable than provided for in statutes.

5 Employment Act 1955 Section 7 Any terms and conditions of a contract of service which is less favourable than provided for in the Act shall be void and the more favourable terms in the Act shall be substituted therefor.

6 Contracts Act 1950 Section 28. Agreement in restraint of trade void. Every agreement by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, is to that extent void. Exception (i) of agreement not to carry on business of which goodwill is sold; (ii) of agreement between partners prior to dissolution; (iii)of during continuance of partnership.

7 Example of restraint of trade WRIGGLESWORTH V. WILSON ANTHONY [1964] 30 MLJ 269 HIGH COURT [KOTA BHARU] The following facts are admitted:- (a) The plaintiff is an advocate and solicitor and is the sole proprietor of the legal firm of "Wrigglesworth & Company" Kota Bharu, Kelantan. (b) The defendant is an advocate and solicitor and is the sole proprietor of the legal firm of "Wilson & Company" Kota Bharu, Kelantan. (c) On 20 September 1962 the defendant entered into an agreement of service with the plaintiff's firm.

8 (d) On 7 December 1963 the plaintiff agreed to discharge the defendant from the terms and obligations of the said agreement with effect from 31 December (e) clause 8 of the said agreement stipulated that the defendant shall not for a period of two years after the termination of his engagement by the plaintiff practise as or carry on the business or profession of an advocate and solicitor within a radius of five miles from Kota Bharu Town without first obtaining the written consent of the plaintiff. (f) Such written consent has not been given by the plaintiff.

9 Franchise Act 1998 Section 18 Requirements of franchise agreement. (2) A franchise agreement shall contain but is not limited to- (a) the name and description of the product and business under the franchise; (b) the territorial rights granted to the franchisee; (c) the franchise fee, promotion fee, royalty or any related type of payment which may be imposed on the franchisee, if any; (d) the obligations of the franchisor;

10 (e) the obligations of the franchisee; (f) the franchisee's rights to use the mark or any other intellectual property, pending the registration or after the registration of the franchise; (g) the conditions under which the franchisee may assign the rights under the franchise; (h) a statement on the cooling off period as provided in subsection (4); (i) a description pertaining to the mark or any other intellectual property owned or related to the franchisor which is used in the franchise;

11 (j) if the agreement is related to a master franchisee, the franchisor's identity and the rights obtained by the master franchisee from the franchisor; (k) the type and particulars of assistance provided by the franchisor; (l) the duration of the franchise and the terms of renewal; and (m) the effect of termination or expiration of the franchise agreement. (3) Failure to comply with subsection (2) shall render a franchise agreement null and void.

12 Hire Purchase Act 1967 Section 4 Requirements relating to hire- purchase agreements. (1) Before any hire-purchase agreement is entered into in respect of any goods - (a) in a case where negotiations leading to the making of the hire-purchase agreement is carried out by any person who would be the owner under the hire purchase agreement to be entered into, or by any person, other than the dealer, acting on his behalf, such person shall serve on the intending hirer a written statement duly completed and signed by him in accordance with the form set out in Part I of the Second Schedule;

13 (b) in a case where negotiations leading to the making of the hire-purchase agreement is carried out by a dealer, such dealer shall - (i) serve on the intending hirer a written statement duly completed and signed by him in accordance with the form set out in Part I of the Second Schedule; and (ii) at any time after the service of the written statement referred to in subparagraph (i) but before the hire-purchase agreement is entered into, serve on the intending hirer a written statement duly completed and signed both by him and the prospective owner in accordance with the form set out in Part II of the Second Schedule. (4) A hire-purchase agreement entered into in contravention of subsection (1) shall be void.

14 Moneylenders Amendment Act 2003 moneylender means any person who lends a sum of money to a borrower in consideration of a larger sum being repaid to him Person here includes a body of persons, corporate or unincorporated: Interpretation Acts 1948 and 1967 (Act 388) s 3

15 Prosecution on moneylenders not entering into an agreement Moneylenders must enter into a moneylending agreement with the borrower and that agreement shall be in a prescribed form. Any moneylender who contravenes this section shall be guilty of an offence - s 10P

16 New section 10P - deals with moneylender and borrower who must enter into a moneylending agreement in the prescribed form. Contravention of this section is an offence. And if it does not comply with the prescribed form, it is void and will have no effect. New Part V – Conduct of moneylending business

17 Section 15 : Contract by unlicensed moneylender unenforceable The wording was changed from: No contract for the repayment of money lent … unlicensed moneylender… enforceable to No moneylending agreement in respect of money lent … unlicensed moneylender… enforceable

18 S 16 – Moneylender agreement to be given to the borrower Where previously the Note or memorandum of the moneylenders' contract was to be given to the borrower, now the moneylenders agreement must be signed by all parties, duly stamped and be delivered to the borrower before the money is lent.

19 New S 17A – Interest for secured or unsecured loan There is now a cap on the interest for secured loans not exceeding 12% per annum and unsecured loans not exceeding 18% per annum

20 Section 23: Prohibition of charges for expenses on loans by moneylender This was as in the previous section except the amendment to the word any agreement to any moneylending agreement. The payment of any sum on account of costs, charges or expenses other than stamp duties, fees payable by law and legal costs incidental to or relating to the negotiations for or the granting of the loan or proposed loan shall be illegal

21 Prescribed Forms – Moneylenders (Control & Licensing) Regulation 2003 Came into operation simultaneously with the Amendment Act, ie on 1 November 2003 Regulation 10 prescribes the Moneylending Agreement. For moneylending transactions without security - Schedule J form For moneylending transactions with security - Schedule K form

22 It is an offence if not in the prescribed form Any waiver, modification, change, alteration, variation, addition or omission of any provision in Schedule J or K without the prior consent of the Registrar shall render the agreement to be void and have no effect and shall not be enforceable. No moneylender shall collect any payment by whatever name called except as prescribed in the moneylending agreement – Regulation 10(4)

23 National Land Code KIMLIN HOUSING DEVELOPMENT SDN. BHD v. BANK BUMIPUTRA MALAYSIA BHD. & ORS. [1997] 3 CLJ 274 SUPREME COURT, KUALA LUMPUR The provisions of ss. 254 to 265 of the Code are designed to protect the chargor and they cannot be waived or contracted out by him. These provisions, as well as those other provisions in Part XVI of the Code setting out the rights and remedies of parties under a statutory charge over land, are exhaustive and exclusive, and any attempt at contracting out of those rights, unless expressly provided for in the Code, would be void as being contrary to public policy.

24 Different parts of a commercial agreement Designation of the parties Recitals Definitions Substantive clauses Schedules Appendices Signature section Counterparts and copies Headings and contents pages Contract numbering systems Source :- Boilerplate: Practical Clauses 3 rd Edition Richard Christou

25 Designation of the Parties Names and identifying details of each parties to the agreement are set out at the head of the contract Source :- Boilerplate: Practical Clauses 3 rd Edition Richard Christou

26 Recitals Set out the background to the transaction and the purpose for which the parties are entering into the transaction. Not legally necessary but it is customary to do so. Source :- Boilerplate: Practical Clauses 3 rd Edition Richard Christou

27 Definitions Form part of the substantive agreement because they prescribe that certain terms shall mean certain things Besides pure definitions, this section will also contain general interpretation clauses Source :- Boilerplate: Practical Clauses 3 rd Edition Richard Christou

28 Substantive Clauses Main clauses of the agreement Matters upon which the parties are agreeing Source :- Boilerplate: Practical Clauses 3 rd Edition Richard Christou

29 Schedules Consists of more detailed substantive provisions Substantive and integral part of the agreement Source :- Boilerplate: Practical Clauses 3 rd Edition Richard Christou

30 Appendices Where documents are referred to in an agreement they are often attached as appendices so that they can be easily referred to Such documents are not necessarily part of the agreement Source :- Boilerplate: Practical Clauses 3 rd Edition Richard Christou

31 Signature section Comes after the schedules and before the appendices Commercial agreements do not normally need witnesses to the signature Source :- Boilerplate: Practical Clauses 3 rd Edition Richard Christou

32 Counterparts and copies Copies of commercial documents are usually supplied for each of the parties; these are signed by all the parties and include a special counterpart clause inserted to make each of them fully signed original copies for purposes of enforcement. Source :- Boilerplate: Practical Clauses 3 rd Edition Richard Christou

33 Headings and contents pages Often introduced into long documents for ease of reference. Source :- Boilerplate: Practical Clauses 3 rd Edition Richard Christou

34 Contract numbering systems To provide a unique and easy way of referring to each part of each clause of the contract This is best achieved by using a system of arabic numerals separated by decimal points : clause 1, sub-clause 1.1, paragraph 1.1.1, sub-paragraph Source :- Boilerplate: Practical Clauses 3 rd Edition Richard Christou

35 Loans Repayable on Demand - Overdraft facility - Example of such clauses This facility is subject to periodic review and payable on demand

36 OVERSEAS UNION BANK LTD. V. MING ANN HOLDINGS SDN. BHD. [1995] 2 CLJ 287 HIGH COURT MALAYA, KUALA LUMPUR Ordinarily an overdraft is repayable on demand. If the borrower has agreed to repay on demand, the bank has a right to demand full repayment at any time without giving any reason or period of notice. That is what I understand the position to be from the passages under

37 the heading "(i) Nature of an overdraft" at pp. 182 and 183 of Paget's Law of Banking, 10th Edn., (1989), and the footnotes thereto, to which my attention was drawn by learned Counsel for the defendant. Learned Counsel for the defendant's main concern about the right to repayment on demand of an overdraft is really the unfairness to a borrower who has just used his overdraft facility to the full and is immediately asked to repay the whole amount without any reason or notice. The borrower then simply would not have any money to pay.

38 But the likelihood of such a mean and silly thing actually happening to an innocent borrower is more imagined than real. That kind of concern does not find anything to entertain it in the passages referred to. If there is such a risk, a person who goes for an overdraft, whose terms must necessarily be controlled by the bank, simply must accept the risk. Paragraph 1 of the annexure is the provision that gives to the plaintiff the right to repayment on demand. By it the defendant convenants that "the chargor(s) will on demand pay to the Bank all sums of money

39 which are now or shall from time to time or at any time hereafter be due or owing by the Chargor(s)...". It simply means that whatever may be owing to the plaintiff at any time, the defendant promises to pay all of it whenever demanded by the plaintiff.

40 HONG LEONG BANK BERHAD V. WT INDUSTRIES SDN BHD & 2 ORS [2005] 1 LNS 60 HIGH COURT [MELAKA] Para (b) at page 8 refers to defendant 1's covenant to provide further security and states : "The Bank may recall/suspend utilisation of the Facilities in the event of non - payment of the principal/interest or breach of the Borrower of any of the terms of the Facilities or upon the occurrence of any event which Bank considers an event of default."

41 In the light of defendant 1's default as alluded to in the factual background above, the natural consequence is that the plaintiff is entitled to enforce the terms and conditions pursuant to which the facilities has been given by the plaintiff to and utilised by defendant 1, i.e. to review and recall the facilities.

42 Repayable on Demand - loans/overdraft for a fixed time - example of such clause Duration:For 2 years or upon completion of the project whichever is earlier. For your information, all facilities granted by us are subject to periodical review and repayable on demand.

43 Bank Bumiputra Malaysia Bhd. Kuala Terengganu v. MAE Perkayuan Sdn. Bhd. & Anor [1993] 2 CLJ 495 Supreme Court, Kuala Lumpur We consider that the Bank was not entitled to issue the recall letter purely on the ground that interest had not been serviced by the first respondent because the first respondent is not obliged under the agreement to pay interest during the bridging period.

44 In Eushun Properties Sdn. Bhd. V. MBF Finance Bhd. [1992] 2 MLJ 137, Mohamed Yusoff SCJ qouted what Goff J. said in an unreported case of Titford Property Co. Ltd v. Cannon Street Acceptance Ltd. on 22 May 1975 – It seems to me, where a bank allows an overdraft for a fixed time for a specific purpose - whether the time be such as the parties think is required for the achievement of the purpose, or only

45 the most the bank will also allow, that time is binding on the bank; otherwise the customer might well be led into a disastrous position, as has happened here. The customer, on the faith of the bank's promise to a loan, an overdraft for a fixed term, commits himself and then finds the overdraft cut off, so that he cannot meet his liabilities, and in addition he had incurred indebtedness to the bank in respect of abortive expenditure.. (The bank) could not, in my judgment, with one hand grant a facility for a term for a

46 purpose which to its knowledge clearly involves the plaintiffs in incurring expenditure and liabilities, with a view to ultimate profit, and with the other take it away by an unqualified right to require repayment on demand at any time. In my judgment, therefore, I must modify cl 9, by reading it as subject to the provision as to the duration of this facility, or ignore it altogether.

47 Winding-up Upon petition of a winding up being presented, the bank has to immediately freeze the account. Section 293 Companies Act 1965 Undue preference. (1) Any transfer, mortgage, delivery of goods, payment, execution or other act relating to property made or done by or against a company which, had it been made or done by or against an individual, would in his bankruptcy under the law of bankruptcy be void or voidable shall, in the event of the company being wound up, be void or voidable in like manner.

48 (2) For the purposes of this section the date which corresponds with the date of presentation of the bankruptcy petition in the case of an individual shall be - (a) in the case of a winding up by the Court - (i) the date of the presentation of the petition; or (ii) where before the presentation of the petition a resolution has been passed by the company for voluntary winding up the date upon which the resolution to wind up the company voluntarily, is passed, whichever is the earlier; and

49 (b) in the case of a voluntary winding up the date upon which the winding up is deemed by this Act to have commenced. (3) Any transfer or assignment by a company of all its property to trustees for the benefit of all its creditors shall be void.

50 Example of clauses in agreement J.B. PRECISION MOULDING INDUSTRIES SDN. BHD. (DALAM LIQUIDASI) V. SIME DIAMOND LEASING (MALAYSIA) SDN. BHD. [1995] 3 BLJ 235 HIGH COURT MALAYA, JOHOR BAHRU 14. Default If during the initial term or any renewed term thereof... if: (g)... on a petition for the bankruptcy dissolution or winding-up of the lessee being presented;... the lessor may, without prejudice to any other rights and remedies the lessor may have under this agreement: (ii) by written notice to the lessee determine and end this lease and thereupon the lessee shall no longer be in possession of the equipment with the lessor's consent. The lessor may thereafter but shall not be obliged to retake possession of the equipment...

51 Example of clauses in agreement SIME DIAMOND LEASING (MALAYSIA) SDN BHD V. JB PRECISION MOULDING INDUSTRIES SDN BHD 1998] 4 CLJ 557 FEDERAL COURT, KUALA LUMPUR Clause 14.1(g)(ii) of the Agreement provided, inter alia, that in the event of a Winding-up petition being presented against the Lessee, the Lessor shall be entitled by written notice to determine and end the lease and to retake possession of the equipment.

52 However, it has been stated in the following case that this should not be encouraged ARAB-MALAYSIAN MERCHANT BANK BHD V. ORIENT APPAREL BHD [2001] 4 CLJ 572 HIGH COURT MALAYA, IPOH But I hasten to add that the approach adopted in Re Gray Inns Construction Co Ltd(1980), where banks should freeze the accounts or seize the monies of their customers facing a winding-up petition, is no longer encouraged.

53 In fact the English Court of Appeal in Re Clifton Place Garages Ltd has commented that such practices are very harsh. Finally in Hollicourt (Contracts) Ltd v. Bank of Iceland[2001] 1 All ER 281 the same Court decided that this recommendation in Re Gray Inns Construction Co Ltd is no longer applicable.

54 Presently, a company faced with a winding- up petition should be encouraged to continue business in the ordinary way, and the court should extend indulgence to any dispositions made for payment of wages to the staff and those that enable the company to carry on its business provided they are "reasonable disposition(s) and not dishonest or reckless" - Re Clifton Place Garage Ltd (supra).

55 Guarantee MALAYSIA BUILDING SOCIETY BHD. V. LIM KHENG KIM & ORS. [1988] 2 CLJ 675 HIGH COURT MALAYA, PENANG Facts : The first defendant together with the second, third & fourth defendant executed a joint & several guarantee whereby in consideration of loan facilities granted to an incorporated company (the borrower) agreed to indemnify the plaintiff the sum of RM1.5 million together with interest, costs, charges and all sums payable in event of default.

56 Held : The second letter of demand was not premature because liability of guarantee was as principal debtor and not surety according to Clause 1 and 13 of the guarantee. Even though plaintiff had entered the charge executed as security for the loan and sale of the land was still pending, specific provisions in the guarantee and case law indicates that plaintiff was not bound to proceed against the security first before enforcing the guarantee.

57 Clause 1 provides: In consideration of the Society having at the request of the guarantors agreed to make the said loan of Ringgit Malaysia One Million And Five Hundred Thousand (RM1,500,000) only to the borrowers the guarantors hereby guarantee jointly and severally as principal debtors and not merely as sureties to the Society the repayment by the borrowers of the said loan together with interest costs charges and all other sums payable by the borrowers to the Society under or pursuant to the said charge and the due performance and observance of all the agreements covenants and undertaking on the part of the borrowers therein contained.

58 But Clause 16 a notice or demand sent by registered post to that address (which, incidentally, it was not disputed was the last known address of the first defendant) "shall be deemed to have been served on and duly received by the guarantors on the second day following that on which the letter containing the same is put into the post". (Emphasis supplied.) Now, as Viscount Simons said in Barclays Bank v. IRC [1961] AC 509 when referring to the word "deemed", "I... regard its primary function as to bring in something which would otherwise be excluded."

59 Sale of shares Control of a company or purchase of a business can be effected by purchase of shares in a company New shareholders can be totally new people or current shareholders can buy over shares of other existing shareholders Some purchase are subject to FIC consent or consent of the regulators

60 Sale of shares The sellers of shares will normally resign as Directors of the Company unless required to stay on by the new shareholders. The purchasers will also normally substitute their guarantees to bank and the sellers guarantees will be cancelled.

61 Sale of shares Warranties of compliance with law encourages both parties to act in a lawful manner and provides the innocent party with a remedy, and an excuse that he did not condone the offence in the case of a breach, they also serve the purpose of imposing an obligation upon each party to obtain all necessary consents and permissions required by law to enable him to carry out his part of the bargain and, by implication, to obtain them at his own expense Source :- Boilerplate: Practical Clauses 3 rd Edition Richard Christou

62 Sale of shares Important clauses in agreement -purchase consideration The Purchase Price for the the Sale Shares shall be satisfied by the issue and allotment to the Vendors or its nominee of the Consideration in the Purchaser subject at all times to the approval by the Securities Commission of such issue and allotment.

63 Important clauses in agreement -shareholders approval The Purchaser shall as soon as practicable after the execution of this Agreement obtain the Shareholders Approval -completion Within ….months from the date this Agreement has become unconditional under Clause …, Completion of this Agreement shall, unless it is terminated earlier, take place at the Completion Venue or at such other place as the parties hereto may agree.

64 Important clauses in agreement -due diligence audit -results of due diligence audit -termination of agreement -default by the purchaser -default by the vendors -indemnity by sellers

65 Joint Ventures A joint venture is an arrangement where two or more parties enter into a contractual relationship for the purposes of forming a company or performing a project. The arrangement is akin to a partnership although the parties themselves may agree not to be able to bind one another in contracts with third parties Source :- Model Commercial Contracts and Letters Central Chambers Law Corporation

66 Types of Joint Ventures Structures Three main types -Joint venture company under which shareholders in the joint venture company agree the manner in which the company is to be managed or regulated. -Project joint venture may or may not involve the formation of a limited liability company in pursuance of the project -Joint venture partnership is essentially a partnership arrangement Source :- Model Commercial Contracts and Letters Central Chambers Law Corporation

67 Important clauses in a joint venture agreement The respective contributions of the joint venture parties, be it in capital or other types of assets The respective rights of the joint venturers on the appointments of their representatives to the board of directors (if the joint venture is incorporated) or the management committee (if the joint venture is a partnership) Source :- Model Commercial Contracts and Letters Central Chambers Law Corporation

68 Important clauses in a joint venture agreement The requirement for matters which cannot be effected or transacted without the unanimous or majority consent of the joint venture parties Share transfer provisions (including provisions under which the parties may withdraw from the joint venture) Source :- Model Commercial Contracts and Letters Central Chambers Law Corporation

69 Important clauses in a joint venture agreement Procedure to be followed when there is a deadlock between joint ventures parties or the management and measures to be taken for minority shareholder protection Dispute resolution provisions The law of which jurisdiction should govern the joint venture (for international joint ventures) Duration and termination Confidentiality Source :- Model Commercial Contracts and Letters Central Chambers Law Corporation

70 Share-holders Agreement TUAN ISHAK ISMAIL V. LEONG HUP HOLDINGS BERHAD & OTHER APPEALS [1996] 1 CLJ 393 COURT OF APPEAL, KUALA LUMPUR Facts : The nine appellants in these six appeals were respondents in the Court below. They were appealing against the judgment of the learned Judge for dismissing their application under O. 18 r. 19(1)(a) Rules of The High Court 1980 to set aside a petition filed against them by Leong Hup Holdings Berhad (Leong Hup). The facts showed that Leong Hup, Golden Plus Holdings Berhad (Golden Plus), Kenanga NomineesO. 18 r. 19(1)(a) Rules of The High Court 1980

71 (Tempatan) Sdn. Bhd. (sixth respondent) and TA Nominees Sdn. Bhd. (seventh respondent), were among the shareholders of KFC Holdings (Malaysia) Berhad (KFCM), holding 29.65%, 28.49%, 9.18% and 8.7% respectively of the equities therein. Misunderstandings arose between the Lau Brothers and the respondents, and in the upshot, the sixth and seventh respondents requisitioned for an Extraordinary General Meeting (EGM) of KFCM to remove the Lau Brothers from the Board. Leong Hup filed the petition aforesaid and by

72 that, sought to injunct the sixth and seventh respondents from proceeding with the requisition, and to restrain the shareholders of KFCM from acting in concert to vote for the resolutions. The petition alleged that prior to its acquirement of the shares in KFCM in 1993, the first and the second respondents had made representations to Leong Hup which in law gave Leong Hup a legitimate expectation to remain on the Board without any interference from the respondents.

73 Held : The Lau brothers held office as directors of KFCM by virtue of a contract with KFCM, and KFCM alone, an office to which they could only be elected by the shareholders of KFCM. Even if there was a specific agreement between the respondents and the Lau Brothers that Leong Hup would be given permanent representation on the Board such an agreement could not stop KFCM from tabling an ordinary resolution for the removal of the Lau Brothers from its Board.

74 The phrase "a public company may by ordinary resolution remove a director" in s. 128(1) means simply that a simple majority of the shareholders of the company may vote to remove a director.s. 128(1) No agreement made by the directors or the company can fetter that right and notwithstanding anything said in the articles, the company cannot contract itself out of this right. Also, the Courts will not interfere with the statutory right of shareholders to remove directors. Section 128(1) thus totally precludes Leong Hup from the relief it claimed.Section 128(1)

75 Alteration of articles Section 31 Companies Act 1965 Alteration of articles. 3) Subject to this section, any company shall have the power and shall be deemed always to have had the power to amend its articles by the adoption of all or any of the regulations contained in Table A, by reference only to the regulations in the Table or to the numbers of particular regulations contained therein, without being required in the special resolution effecting the amendment to set out the text of the regulations so adopted.

76 PANG TEN FATT & ANOR. V. TAWAU TRANSPORT CO. SDN. BHD. & ORS [1986] 1 MLJ 179 Facts : The first and second plaintiffs were the secretary and the station master respectively of the defendant company. The plaintiffs along with two other persons were also founder members of the defendant company. As founder members, the plaintiffs also enjoyed certain privileges specifically accorded to them by article 11 of the articles of association. The defendants terminated the services of the plaintiffs and also effected certain amendments to article 11.

77 In an action by the plaintiffs challenges the termination of their services and for a declaration that the amendment was null and void Held : Wan Mohamed J, granting the reliefs prayed for, dealt with the validity of the impugned amendment and said : Article 11 provides for the number, rights and privileges of founder members of the company. These rights and privileges are something given by the company to someone and they are absolute. They cannot be taken

78 away without the consent of all the persons who are beneficiaries of those rights and privileges. In this case I find that those rights and privileges cannot be modified to the disadvantages of all the founder members. Source : Company Law of Malaysia [Incorporation and Management] K.V. Padmanabha Rau

79 Interpretation Acts 1948 and 1967 (Consolidated and Revised 1989) Section 54 Computation of time. (1) In computing time for the purposes of any written law- (a) a period of days from the happening of an event or the doing of any act or thing shall be deemed to be exclusive of the day on which the event happens or the act or thing is done;

80 Interpretation Acts 1948 and 1967 (Consolidated and Revised 1989) Section 54 Computation of time. (b) if the last day of the period is a weekly holiday or a public holiday (referred to in this subsection as excluded days) the period shall include the next following day which is not an excluded day;

81 Interpretation Acts 1948 and 1967 (Consolidated and Revised 1989) Section 54 Computation of time. (c) where any act or proceeding is directed or allowed to be done or taken on a certain day, then, if that day happens to be an excluded day, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next following day which is not an excluded day; and (d) where any act or proceeding is directed or allowed to be done or taken within any time not exceeding six days, excluded days shall not be reckoned in the computation of the time.

82 Interpretation Acts 1948 and 1967 (Consolidated and Revised 1989) Section 54 Computation of time. (2) Where no time is prescribed within which anything shall be done, that thing shall be done with all convenient speed and as often as the prescribed occasion arises.


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