T3 Q1
From the case, Selera Jaya Bhd was incorporated as a company limited by share in 1995 which means Selera Jaya Bhd has lodged with the registrar and was a Memorandom of Association company. Under S22(3)Companies Act 1965, Selera Jaya Bhd have stated “Bhd” with name of company, therefore its proved that Selera Jaya is a public company. Besides, every company must have object clause and be stated in memorandom of association, means every company must specifically authorized which activities can be engaged in by company. This is to avoid ultra vires occur.
In addition, Selera Jaya Bhd’s objects clause states that its sole object is the running of restaurants and a food catering business. But recently the company ventured into cane furniture and contracted with Rotan Sdn Bhd for the purchase of cane valued at RM200,000. Refer to memorandom of asscociation company law, the company only can engage in business activities that are set out in its object clause. Under doctrine of ultra vires, if activities not specified in the object clause is void.
Selera Jaya Bhd only set running of restaurant and a food catering business as object clause, but now company were ventured into cane furniture business which is not stated in object clause of company.The act that Selera Jaya Bhd done is an ultra vires which beyond the power of company. By the case in Ashbury Railway Carriage v Riche in year 1875, an ultra vires transaction is null and void.
In conclusion, Dagang can apply to the court to set aside or restrain the performance of contract between Selera Jaya Bhd and Rotan Sdn Bhd. Because Selera Jaya Bhd is done the business activities that not stated in object clause. Besides, the ultra vires is occurred when Selera Jaya Bhd dealing a business with Rotan Sdn Bhd. Therefore, the contract between Selera Jaya Bhd and Rotan Sdn Bhd is