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c) Creditors do not have direct right to take action against the company
or directors in respect of any injury suffered by them. The proper
plaintiff in this respect is the company. 72 This case illustrated the
creditors‟ difficulties if the company refused to take action on behalf
of the creditors. It also raises question of whether creditors should
have a right to take action against directors directly, similar to a
shareholder‟s derivative action. 73 Shareholders are given rights in the
company due to the historical doctrine that they are perceived to be
the owners, while creditors are the outsiders. 74 However, as explained
before, due to the separate legal entity principle and dispersal of
ownership and control, there are no differences between shareholders
and creditors today since shareholders‟ roles have been reduced to
that of investors. 75 In addition, the emergence of stakeholders‟ theory
which promotes the interests of every stakeholder in the company
should be seen as an indication that each plays important roles in the
success of the company.
d) The court has rejected the claim by the company that directors had
purchased the property with their own money as members of the
public and stated that it was a travesty of facts. The same line of
judgment was also enunciated by the court in Regal (Hastings) Ltd v
Gulliver. 76 Based on the decisions, directors can only purchase assets
or property if the company is not interested in the transaction in the
first place. If the company withdraws its interest in the assets because
of lack of funds, directors are still subject to a fiduciary duty. In this
72 See the case of Foss v Harbottle (1843) 2 Hare 461.
73 The oppression remedy has been extended to include creditors in the Canadian Business
Corporations Act and the Malaysian and Singapore Acts.
74 Halpern, Trebilcock and Turnbull, above n32 at 135; Finch, “Security” above n9 at 641; Finch
above n32 at87.
75 Ireland above n38 at 47.
76 [1942] 1 All ER 378.
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