Mr Gan Khong Aik

Gan Khong Aik



Apex court considers application of Prest in piercing corporate veil
Malaysia | 04 May 2021

A separate legal entity – or rather, a 'corporate veil' – exists to separate a corporate entity from its incorporators. However, the corporate veil can be lifted when the corporation is used for fraudulent, dishonest and unlawful purposes. The leading judgment of the UK Supreme Court in Prest v Prest brought a new dimension to this fundamental principle. The apex court carefully considered the application of Prest in its recent decision in Ong Leong Chiou.

No escape from paying minimum wage
Malaysia | 13 April 2021

A recent Federal Court decision has confirmed that the hotel industry cannot use a service charge to supplement employees' wages in order to meet the minimum threshold for wage requirements. While the decision may be unpopular among hoteliers and related or similar industries, it was inevitable. The long-term impact that it may have on society outweighs any likely detriment that it may cause to a particular industry.

Federal Court rules that termination clauses should be construed strictly
Malaysia | 02 February 2021

A recent Federal Court decision has breathed new life into the interpretation of termination clauses in contracts. Indeed, it sounded a cautionary note to the business community at large when the court held that termination clauses must be interpreted strictly. This decision is a warning to all contracting parties not to rush the termination of a contract. Instead, care and a meticulous reading of the entire contract are required to ensure strict compliance with the termination clauses.

De facto doctrine applies to defective judicial appointments and preserves judicial decisions
Malaysia | 22 December 2020

Pursuant to Rule 137 of the Rules of the Federal Court 1995, seven motions were filed in the apex court, requesting it to invoke its inherent power to review its decisions delivered in seven separate lawsuits. Interestingly, a common question arose from these motions premised on coram failure and further questions that were peculiar to the circumstances of each case. While the apex court dismissed all of the motions, its unanimous decision on coram failure is significant for ongoing and future cases.

Derivative proceedings: leave of court is substantive legal requirement
Malaysia | 24 November 2020

The Court of Appeal recently ruled that Sections 347(1) and (2) of the Companies Act 2016, which require leave of court to be obtained before any action may be initiated on behalf of a company and any such action to be brought in the name of the company, are substantive law and not merely procedural. Following this decision, it is clear that violations of Sections 347(1) and (2) are not mere irregularities, but illegalities.

Competing claims in curial and arbitral proceedings: recent anti-arbitration injunction developments
Malaysia | 17 November 2020

Are the Malaysian courts adopting a minimalist judicial intervention approach when considering anti-arbitration injunctions? This article discusses a recent Federal Court decision which dealt with the issue of competing claims in curial and arbitral proceedings where not all parties were before both forums, and two recent high court decisions that made reference to the Federal Court decision.

From bare trustee to chargee: does registration of a charge assure an indefeasible interest?
Malaysia | 06 October 2020

The concept of indefeasibility is the cornerstone of Peninsular Malaysia's land administration system, which is embodied in Section 340 of the National Land Code 1965. Once an interest is registered in the title of a property, it is immune against any adverse claims. While disputes on indefeasibility are not uncommon in Malaysia, the apex court recently faced another dispute involving the registered interest of a licensed financial institution and an unregistered interest of an owner.

Embassy dismisses employee: exercise of jure imperii or act of jure gestionis?
Malaysia | 18 August 2020

In a recent case, a high court faced a judicial review application filed by the United States in Malaysia. The facts leading to the application were uncommon and the court considered a novel aspect of industrial law jurisprudence in Malaysia. The high court judge's assessment of the facts in light of the sovereign immunity principle gives a fresh perspective in industrial law jurisprudence.

Apex court rules that foreign employee on successive fixed-term contract is permanent employee
Malaysia | 14 July 2020

Employers can offer fixed-term contracts to their employees (often for economic or management reasons). However, such prerogative is subject to scrutiny by the Malaysian courts so that it does not fetter employees' rights in terms of employment security. The Federal Court recently delivered a groundbreaking decision on this matter concerning a foreign employee.

Apex court rules that high court orders and decisions that do not finally dispose of litigants' rights are non-appealable
Malaysia | 23 June 2020

Section 67 of the Courts of Judicature Act 1964 sets out the right to appeal in civil suits. However, confusion commonly arises when deciding whether an order or judgment made by a high court in a civil matter is appealable. The Federal Court recently clarified this issue by affirming that a decision made during a trial that does not finally dispose of the parties' rights is non-appealable.

COVID-19: courts go online to regulate administration of justice
Malaysia | 12 May 2020

In order to curb the spread of COVID-19, the government introduced the Movement Control Order (MCO). During the MCO period, all courts and offices of advocates and solicitors are closed. However, a judicial notification of 26 March 2020 stated that parties can apply to the courts for an online hearing of civil matters via an e-review system, an exchange of emails or a video conference, subject to certain conditions.

Apex court finds controller of housing's powers to waive or modify provisions of statutory contract invalid
Malaysia | 25 February 2020

The Federal Court recently delivered a landmark decision on a pertinent issue concerning the interests of house buyers. In arriving at its decision, the court considered Parliament's intention when enacting the Housing Development (Control and Licensing) Act and held that the minister of urban wellbeing, housing and local government has sole discretion to regulate and prohibit the terms and conditions of a contract of sale under the act – a social legislation protecting and advancing the interests of house buyers.

Federal Court rules that Arbitration Act provisions do not apply to non-parties to arbitration agreements
Malaysia | 22 October 2019

The Federal Court recently held that Sections 8 and 10 of the Arbitration Act do not apply to a non-party to an arbitration agreement. The appellant in the case was granted leave to appeal to the Federal Court on two questions of law, including whether the requirements of Section 10 of the act must be met by a party litigant seeking an injunction to restrain the prosecution of an arbitration to which it is not a party but which would affect its proprietary rights.

Proper construction of Section 93(3) of Bankruptcy Act and Rule 276 of Bankruptcy Rules
Malaysia | 30 July 2019

The Federal Court recently addressed the proper construction of Section 93(3) of the Bankruptcy Act 1967 and Rule 276 of the Bankruptcy Rules 1967. In this appeal, the Federal Court was requested to decide whether, in the case of a petition presented by multiple petitioners, the bankruptcy notice and creditor's petition could be amended and the deletion of one or more petitioners could be allowed.

Attorney general's discretion is not unfettered
Malaysia | 14 May 2019

The attorney general is a public officer who has been given ample discretionary power under Article 145 of the Federal Constitution to institute, conduct or discontinue any criminal proceedings. The question is, where a public officer's decision is subject to judicial review, does this equally apply to the attorney general?

Federal Court will not condone irregularities in court orders
Malaysia | 29 January 2019

The Federal Court recently reaffirmed that where a final court order is proved to be null and void on grounds of illegality or due to a lack of jurisdiction, the court has inherent jurisdiction to set aside the order, even in the absence of an express enabling provision. However, is the rule different for winding-up orders?

Lower threshold for staying proceedings pending appeal
Malaysia | 25 September 2018

Following a recent Court of Appeal decision on staying proceedings pending appeal, the test as to whether a stay ought to be granted under Section 44 of the Courts of Judicature Act has been simplified (ie, it now focuses on whether the true purpose of the stay is to preserve the integrity of the appeal). The new threshold to obtain a stay is considerably lower than that of the special circumstances rule under Section 73 of the Courts of Judicature Act.

Dishonesty must be present before debtor in assignment can be made liable
Malaysia | 19 June 2018

A recent Federal Court decision has simply reaffirmed the position of Malaysian law in relation to breaches of trust. The majority of the Federal Court held that imputed constructive knowledge of an assignment is insufficient to hold the debtor liable to the assignee for the debt. The decision also illustrates a disinclination to depart from the established law on the requirement of dishonesty in a breach of trust.

Stricter confidentiality obligation on lawyers
Malaysia | 20 February 2018

Section 126 of the Evidence Act 1950 imposes a legal obligation on all solicitors to protect and keep confidential any information obtained from their clients, including any legal advice that has been proffered. However, as much as the importance of this privilege is understood and embraced, it may still have come as a surprise when the Federal Court decided that a breach of this privilege by solicitors could entail a legal action against said solicitors.

Court rules on applicable test in medical negligence suits
Malaysia | 05 December 2017

The Federal Court recently examined whether the Bolam test or the test in the Australian case of Rogers v Whitaker with regard to the standard of care in medical negligence should apply, following conflicting decisions by the Malaysian Court of Appeal and legislative changes in Australia. The Federal Court's decision provides a clearer legal position with regard to the distinction between diagnosis and treatment on the one hand and the duty to advise of risks on the other hand.

Applying Court of Appeal rules
Malaysia | 18 July 2017

The Federal Court recently examined whether an objection pertaining to the unlawfulness of a notice of appeal could, as a matter of procedural law, be undertaken by way of a mere preliminary objection. Further, the court assessed whether the filing of a single notice of appeal in respect of a decision on eight separate and distinct interlocutory applications complied with the procedural rules set out in the Rules of the Court of Appeal 1994.

Court rules that stay of proceedings is mandatory
Malaysia | 18 April 2017

The Federal Court recently restated the Malaysian courts' position in respect of their intervention in arbitration. The decision has clarified that once the parties agree to submit to arbitration in the event of disputes and put that agreement into writing, the courts will be less willing to allow one party to subsequently seek to depart from the arbitration agreement without sufficient justification.

Federal Court spells out restriction for notices of cross-appeal
Malaysia | 10 January 2017

The Federal Court recently set out the circumstances under which a notice of appeal under Rule 5 of the Rules of the Court of Appeal or a notice of cross-appeal under Rule 8 can be filed. In short, where the respondent wants to reverse or set aside part of a lower-instance finding, decision or judgment which was not appealed in the appellant's notice of appeal, it is incumbent on the respondent to file an independent and separate notice of appeal, rather than a notice of cross-appeal.

Courts weigh in on requirements for breach of confidentiality claims
Malaysia | 18 October 2016

The Federal Court recently upheld a Court of Appeal decision which found that a company had failed to identify with sufficient particularity what confidential information its former employee had misused. This case clarifies that despite the existence of confidentiality agreements, companies and employers must prove what confidential information has been misused, as confidentiality agreements are not meant to hinder former employees' ability to compete.

High court cannot transfer proceedings to another high court of coordinate jurisdiction
Malaysia | 17 May 2016

The Federal Court recently ruled that Order 57 of the Rules of Court 2012 does not confer power to the high courts to transfer proceedings to another high court of coordinate jurisdiction. The true position of the law is that a high court has power to transfer proceedings to another high court of coordinate jurisdiction only within its territorial jurisdiction.

Federal Court maintains wide scope of Companies Act 1965 in oppression cases
Malaysia | 02 February 2016

The Federal Court was recently invited to reconsider the applicable test for an oppression petition under Section 181 of the Companies Act 1965 in light of recent developments in the English law of oppression. The court held that there was no valid reason to redefine the test for oppression under Section 181.

Court rules on banks' rights under absolute assignment after issue of title to land
Malaysia | 20 October 2015

The Federal Court has clarified an issue which has long plagued the banking industry by holding that a bank with absolute assignment of the rights to land may realise its security under the assignment without having to create a charge, regardless of any subsequent issue of a title document. The decision will prevent future defaulting borrowers from bringing actions against banks despite no charge being created and reduce unnecessary litigation.

Solicitors cannot repudiate solicitor-client relationship unless properly ended
Malaysia | 19 May 2015

In a recent Federal Court case, appeals arose in the context of claims brought by purchasers against a solicitor for breach of fiduciary duty in a solicitor-client relationship in connection with property which the solicitor had purchased for himself instead of on behalf of his clients. The court held that solicitors cannot repudiate or negate the existence of a solicitor-client relationship merely on the contention of the absence of a retainer.

Chargee not liable to purchaser when order for sale is set aside
Malaysia | 17 February 2015

The purchase of property through statutory public auction conducted pursuant to a high court order of sale has been considered a safe and protected transaction. However, the Federal Court recently ruled that chargees need not compensate purchasers when an auction sale is set aside for non-compliance with the rules of court and the purchaser may lose the property without compensation, save for a refund of the purchase price.