in the court of appeal malaysia (appellate jurisdiction)

Thus the personal relationship between a shareholder and those
who control the company may entitle him to say that it would in
certain circumstances be unfair for them to exercise a power
conferred by the articles upon the board or the company in
general meeting. I have in the past ventured to borrow from
public law the term ‘legitimate expectation’ to describe the
correlative ‘right’ in the shareholder to which such a
relationship may give rise. It often arises out of a fundamental
understanding between the shareholders which formed the basis
of their association but was not put into contractual form, such
as an assumption that each of the parties who has ventured his
capital will also participate in the management of the company
and receive the return on his investment in the form of salary
rather than dividend. These relationships need not always take
the form of implied agreements with the shareholder concerned;
they could enure for the benefit of a third party such as a joint
venturer’s widow. But in Ebrahimi v Westbourne Galleries
Ltd ([1972] 2 All ER 492 at 500) Lord Wilberforce went on to
say:
‘It would be impossible, and wholly undesirable, to
define the circumstances in which these considerations
may arise. Certainly the fact that the company is a small
one, or a private company, is not enough. There are very
many of these where the association is a purely
commercial one, of which it can safely be said that the
basis of association is adequately and exhaustively laid
down in the articles. The superimposition of equitable
considerations requires something more. …’
Thus in the absence of ‘something more’, there is no basis for a
legitimate expectation that the board and the company in
general meeting will not exercise whatever powers they are
given by the articles of association.”
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