The Court of Appeal found that a Joint Development Agreement, in respect of the primary land of the company, coupled with a Power of Attorney to the developer, did not amount to a disposal of a substantial portion of the company’s property within the meaning of s 132C of the Companies Act 1965 (thereby requiring prior shareholder approval).

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The Court of Appeal ruled that the “disposal” within the meaning of the Companies Act 1965 requires transfer of beneficial ownership, and not merely ceding control of the land to the developer.

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The Court of Appeal also set out the test for the directors duty to act in good faith, which was later adopted by the Federal Court in Tengku Dato’ Ibrahim Petra bin Tengku Indra Petra v Petra Perdana Bhd and Wong Fook Heng and Tiong Yong Kong v Petra Perdana Bhd [2018] 2 MLJ 177.

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Alvin Tang acted for Pioneer Haven, the developer.