The High Court in Sungei Bongkoh Estate Sdn Bhd v Teoh Teik Jin & 11 Ors [2026] 1 AMR 933 considered whether members of a private company are permitted to circulate pre-approved/ pre-agreed written resolutions under sections 302 to 306 of the Companies Act 2016 (“CA 2016”).¹
 
Brief Facts
 
The plaintiff company (“company”) has 15 directors on its board of directors (“board”). As at 1 April 2025, there were seven vacancies on the board. The board issued a notice dated 1 April 2025 (“notice”) to convene a board meeting on 7 April 2025 to, amongst others, appoint additional directors to fill the seven vacancies.
 
By way of a proposed written resolution dated 6 April 2025 ("PWR") which was emailed to the company on even date, the 4^th, 5^th, and 10^th to 12^th defendants who collectively held 62% of the shares in the company ("majority shareholders") requested the company to circulate the PWR pursuant to section 302² of the CA 2016 to appoint the 3^rd to 9^th defendants as directors of the company.
 
As the PWR had been signed by the members holding 50.63% of the shareholding in the company, the defendants contended that the PWR had been duly passed pursuant to section 306(4) of the CA 2016, and thus, the 3^rd to 9^th defendants were duly appointed as directors of the company (“majority faction directors”) (the majority shareholders and the majority faction directors are collectively referred to as the “defendants”).
 
The board did not agree with the majority shareholders' stance and the appointment of the majority faction directors. On 7 April 2025, the board convened a board meeting following the notice whereupon seven individuals were appointed as directors of the company (“minority faction directors”).
 
Proceedings in the High Court
 
The company filed an originating summons seeking, among others, declarations that: (i) the PWR purporting to appoint the majority faction directors as directors of the company and any purported actions taken by the majority faction directors as directors of the company are ineffective, null and void; and (ii) all acts of the 1^st, 2^nd, 4^th to 6^th and 10^th to 12^th defendants (in their respective capacities as directors and shareholders of the company) arising from or relating to the PWR are ineffective, null and void.
 
The defendants filed a counterclaim seeking, among others, declarations that the appointments of the majority faction directors as directors of the company are valid, and the appointments of minority faction directors as directors of the company are invalid.
 
Pre-approved/ pre-agreed PWR
 
According to the learned Judge, Wendy Ooi Su Ghee, it is undisputed that the PWR was a pre-approved/ pre-agreed proposed written resolution. Though undisputed, the question is whether such pre-approved/ pre-agreed proposed written resolution is permissible under the CA 2016.
 
The Court noted that there is no specific provision in the CA 2016 which permits such an arrangement. On the contrary, section 306 of the CA 2016 sets out the procedure for signifying agreement to a written resolution, as follows:
 
“306.  Procedure for signifying agreement to written resolution
 
(1)  A member signifies his agreement to a proposed written resolution when the company receives from him an authenticated document –
 
(a) identifying the resolution to which it relates; and
(b) indicating his agreement to the resolution.
 
(2) The document shall be sent to the company in hard copy or electronic form.
 
(3) A member's agreement to a written resolution, once signified, shall not be revoked.
 
(4) A written resolution shall be passed when the required majority of eligible members have signified their agreement to the written resolution.”
 
In the opinion of Her Ladyship, if a proposed written resolution is permitted to be pre-approved/ pre-agreed, it would have been expressly provided for in the CA 2016. However, as there is no such provision in the CA 2016, the Court found that “the PWR being pre-approved and pre-signed is clearly in contravention of the Act, thus invalid, null, void and has no legal effect.”
 
Section 303(5) of the CA 2016
 
The Court also put forward an alternative reason for its decision.
 
The defendants submitted that the PWR was validly passed by relying on section 303(5) of the CA 2016 which provides:
 
“(5)  The validity of the resolution, if passed, is not affected by a failure to comply with this section.”
 
According to the defendants, although the PWR was not circulated by the board, such failure should not affect the validity of the PWR by virtue of section 303(5).
 
The Court rejected the defendant’s contention as devoid of merit. Section 303, said the Court, is a provision for the circulation of a written resolution proposed by a member. The section clearly states that the PWR shall be circulated by the directors. However, if the directors fail to circulate a written resolution, any member who has requested the circulation of the resolution under section 302 may circulate the resolution pursuant to section 303(6) of the CA 2016.
 
In view of the close similarity between sections 302 to 306 of the CA 2016 and sections 292 to 296 of the Companies Act 2006 (UK) (“UK Act”), Her Ladyship adopted the principles laid down in the English cases of Re Sprout Land Holdings [2019] EWHC 806 (Ch) and Kamenetskiy & Ors v Zolotarev & Ors [2023] EWHC 2619 (Ch) which held as follows: 

The Court added that the English Courts in Re Sprout and Kamenetskiy had explicitly rejected the contention that non-compliance with the circulation requirement could be remedied by section 293(7) of the UK Act which is in pari materia with section 303(5) of the CA 2016.
 
Section 306(4) of the CA 2016
 
The Court then considered the defendants’ contention under section 306(4) of the CA 2016 that the PWR had been passed as it was signed by members holding in aggregate more than 50% of the issued shares of the company. Section 306 has been set out verbatim earlier but to re-cap, section 306(4) reads as follows:
 
“(4)  A written resolution shall be passed when the required majority of eligible members have signified their agreement to the written resolution.”
 
The Court opined that the defendants’ reliance on section 306(4) was misconceived as there are no words in section 306(4) which provide that the subsection overrides the other provisions of sections 302 to 306(3) of the CA 2016. To adopt such an interpretation would circumvent and defeat the preceding provisions of sections 302 to 306(3) of the CA 2016. In other words, the learned Judge’s view is that section 306(4) is not a standalone provision which forms an exception to the aforesaid preceding provisions of the CA 2016.
 
Approbate and reprobate
 
The High Court noted that the defendants had taken contradictory positions. On the one hand, they contended that the PWR had already been passed by virtue of section 306(4) of the CA 2016. On the other hand, the defendants requested the board to circulate the PWR under section 302 of the CA 2016. If the defendants’ position were that the PWR had already been passed, there would be no necessity or purpose to request the company to circulate the PWR. According to the Court, such conduct is a clear case of approbate and reprobate, or blowing hot and cold at the same time to suit their case, which is an act that the law does not countenance (Dyson Manufacturing Sdn Bhd v Ketua Pengarah Kastam, Jabatan Kastam Diraja Malaysia [2024] 4 MLJ 136, and Nabors Drilling (Labuan) Corp v Lembaga Perkhidmatan Kewangan Labuan [2020] 12 MLJ 54).
 
In view of the foregoing, the Court ruled that the acts of the defendants constituted material non-compliance with the provisions in sections 302 to 306 of the CA 2016 and the PWR was thus null, void and invalid. Consequently, the appointments of the majority faction directors as directors of the company were ineffective, unlawful and void, and any acts done by them in their capacities as directors of the company are equally unlawful, null, void and of no legal effect.
 
Comments
 
It appears that the Sungei Bongkoh Estate Case is the first reported decision of the Malaysian Courts on sections 302 to 306 of the CA 2016.³ The key takeaways from this case are as follows:
 
First, the CA 2016 does not permit the circulation of pre-approved/ pre-agreed written resolutions under sections 302 to 306 of the CA 2016.
 
Second, the provisions of sections 303(5) and 306(4) of the CA 2016 relied on by the defendants are not silver bullets that cure all non-compliance with sections 302 to 306 of the CA 2016. Rather, these provisions may only be applied to validate or overcome non-compliance with the provisions within their respective sections, namely sections 303 and 306 of the CA 2016.
 
Third, members of a private company seeking to move a company to circulate a members’ written resolution pursuant to section 302 must ensure that they comply strictly with the requirements set out in sections 302 to 306 of the CA 2016.
 
 
Case Note by Tan Wei Liang (Partner) of the Corporate Practice of Skrine.
 
 

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