FAEKAH HJ HUSIN & ORS v.

MENTERI BESAR SELANGOR (PEMERBADANAN)

FACT OF THE CASE :
The appeal concerns VSS payments made to former Menteri Besar Selangor (Pemerbadanan) workers by Tan Sri
Dato' Seri Abdul Khalid bin Ibrahim (TSKI) without the Board of Directors' (BOD) consent. The plaintiff claimed that
the first and second defendants had planned the illegal payments for their unjust enrichment, accusing them of
conspiracy and violation of fiduciary responsibility. As TSKI was a statutory company sole, the High Court rejected
the claim, ruling that TSKI could authorise the payments without the BOD's approval. But the Court of Appeal
declared the payments illegal because the BOD had not approved them. It emphasised that previous rulings had
always needed BOD approval, underscoring the need for good governance.

PROVISIONS
1 Continental Tyre and
Section 3 , 4, 5 MBI
Enactment & Section 9
Malacca Enactment
plaintiff is a corporation sole
explain what corporation can
do
2 3
Daimler Company Limited v. Section 3 Minister of
Finance
(Incorporation) Act
Rubber Company
1957
Public Trustee a corporation sole.
(can sue or be sued like any other The person holding the
corporation.) post of Minister of Finance
into a corporate body.

4
5 Section 211 the Companies Act
Tebin Mostapa v. Hulba-Danyal Balia 2016
The court should not add words that are not there
a company's business must be managed
unless the law itself clearly allows it.
by its Board.

ARGUMENTS
PLAINTIFF DEFENDANTS
The MBI Enactment does not mandate the establishment
of a BOD or require the plaintiff to be governed by such a Defendants argued that the plaintiff is a statutory
body. corporation sole as per the MBI Enactment.

The absence of legal provisions establishing a BOD or
conferring power to such a board, implying that the
plaintiff operates independently under the MBI Enactment
Referred to Halsbury's Laws and Blackstone's
Commentaries, to define a corporation sole as a body
politic constituted in a single person with perpetual
succession
There is no express requirement in the MBI Enactment for
the plaintiff to have a Board of Directors (BOD).The plaintiff
asserts that TSKI, as the Menteri Besar, had the authority
to approve voluntary separation scheme (VSS) payments
without obtaining prior approval of a BOD, as conferred by
section 4 of the MBI Enactment.
Defendants contended that there was no evidence
to support the conspiracy allegation against them.
The first and second defendants acted under the
direction of TSKI and were not the architects of the
VSS payment scheme.
The third to eighth defendants were merely
recipients of the VSS payments and played no role
in the approval process.
The writing of memos to TSKI did not amount to
conspiracy, and there was no evidence linking the
other defendants to any conspiracy.

PREPARED BY : GROUP 8
FAEKAH HJ HUSIN & ORS v. MENTERI BESAR SELANGOR (PEMERBADANAN)

OPINIONS & JUDGEMENTS

The Federal Court had came into a decision after considering these 4 distinct
arguments that was brought up upon by the parties :

1. Whether the plaintiff is in law a corporation sole or corporate aggregate?

2. If the plaintiff is a corporation sole, whether the Menteri Besar have the
authority, at his sole discretion to enter into contracts on behalf of the
plaintiff?
3. Whether plaintiff’s “BOD” can execute the powers of the Menteri Besar as it is
not recognized under the Menteri Besar Selangor (Incorporation) Enactment
1994?
4. Whether the plaintiff’s employees acting under the obligation of Menteri Besar
can be charged for breach of fiduciary duty and/or breach of trust to plaintiff’s
BOD?

The Federal Court had unanimously decided to allow appeal under these
circumstances.

OUR OPINION REGARDING THIS CASE

SYAZREEN ARDINA AUFA M. IZHAR NURIN

(288529) (289280) (284335) (288487) (288304)

Agree with the In my point of view, the The ruling correctly In conclusion, there are In my opinion, the
plaintiff had failed to distinguishes judgement of the case
judgment. It several areas for by the Court of Appeal is
provide sufficient empowerment from
accountability, improvement that not acceptable and the
shows that laws evidence to
upholding Parliament's warrant attention. act of appellant to
substantiate their will. It rightly rejects appeal is relevant. The
need to be clear claims of conspiracy conspiracy claims and
Enhancing transparency,
Federal Court had
accountability, and pointed out grounds
about how against the defendants. affirms that VSS
governance practices that allowed the appeal
In legal proceedings, the payments without BOD
groups are run so burden of proof lies with consent are lawful within governmental in which the Court of
the plaintiff to establish under common entities can help Appeal had overseen in
everyone knows their case, and if they practices, thus its judgement. I believe
safeguard against such decisions should
who's in charge cannot provide supporting the
defendants' appeal and potential abuses of be made meticulously
convincing evidence, and even small details
and their their claim may be
restoring the High power and ensure the
as the status of the
Court's decree. fair and equitable
responsibilities. dismissed.
administration of justice.
company should not be
left out.

NUR SYAZREEN BT RAMLEE (288529)

PREPARED BY :
AUFA ADDNIENA ARIESHA BT AZMIR (284335)
ARDINA PUTRI SYAFEERA BT MOHD AMY AZHAR (289280)
MUHAMMAD IZHAR BIN IMZAN (288487)
NURIN ILYANA BINTI BIDIN (288304)

PREPARED FOR : MADAM MAZITA BINTI MOHAMED