1. ) Ancom Crop Care Sdn Bhd v 1. ) Logix World (M) Sdn Bhd (WA-22NCvC-87-02/2018)

In this action, both parties have appealed my decision, which allowed only part of the Plaintiffs’ claim against the Defendants. In addition, the Defendants also appealed my decision to dismiss their application (Enc. 228) for a misjoinder. That would be a separate grounds of judgment for that. My reasons for the action would be the following. Background Facts

In the bustling commercial landscape of Malaysia, a significant business dispute unfolded between two companies involved in the sugar trade. The story begins in August 2017, when Hamshi Plantation Sdn Bhd (Hamshi) agreed to sell refined sugar to Citra Semerbak Sdn Bhd (Citra). This seemingly straightforward business transaction would eventually spiral into a complex legal battle involving allegations of fraud, unpaid debts, and corporate manoeuvring.

| Hamshi, acting as the seller, agreed to sell 80 containers of refined sugar to Citra at RM2,350 per metric ton. The total value of this contract amounted to RM4,700,000, with payment to be directed to the account of Ancom Crop Care Sdn Bhd (Ancom), who acted as a guarantor for Hamshi. The terms formalised in the Contract No. AH187/17 (Contract) became the cornerstone of their business relationship.

As the transaction progressed, Hamshi and Ancom claimed they delivered not just the agreed 80 containers but an additional container— 81 containers, each containing 25 metric tons of refined sugar. Ancom dutifully issued invoices to Logix World Sdn Bhd (Logix), the First Defendant for each delivery. According to the Plaintiffs, these deliveries were coordinated through Rokiyah Binti Adnan (Rokiyah), a director of Logix and Citra, who was the main point of contact between the companies.

The business relationship began to sour when payment issues emerged. While the Defendants paid RM2,056,250 for 35 containers of refined sugar, they allegedly failed to pay for the remaining 46 containers, 2 leaving an outstanding balance of RM2,702,500. The Plaintiffs claimed that despite delivering Delivery Orders (DO) for all containers, Rokiyah refused to accept or sign the DO for the 46 unpaid containers. Several meetings were held at various hotels in late 2017 to resolve the payment issue. Rokiyah allegedly admitted via email that she had received the DO and invoices for the unpaid deliveries.

In October 2017, Ancom sent a formal letter demanding payment and another legal notice in January 2018, both of which went unanswered. This continued silence prompted the plaintiffs to file a lawsuit against Logix, Citra, and the Defendants — Rokiyah, Mohd Syafiq Bin Muhammad (Syafiq), and Nur Salwani Binti Muhammad (Salwani)— who were directors of the Defendants’ companies.

The claim as such, revolves around payment for goods sold and delivered, particularly the 46 containers of refined sugar and the alleged fraudulent trading by the directors under s 540 of the Companies Act 2016 (CA 2016).

The legal battle took an unexpected turn when the Plaintiffs discovered that Rokiyah and her fellow directors (Syafiq and Salwani) had applied to the Companies Commission of Malaysia (SSM) to have Logix World struck off the register. In a statutory declaration dated 31 July 2018, Rokiyah declared that Logix had not conducted any business since 2008, had no liabilities, and was not involved in any legal proceedings. The Plaintiffs vehemently contested these deposed statements as fraudulent representations. The Plaintiffs viewed this as a deliberate attempt to avoid paying the outstanding debt by dissolving the company.

In their defence, Logix and Citra painted a different picture of events. They acknowledged the existence of the Contract, but claimed it was never properly executed, as the signed copy was never returned to them by Hamshi. Despite this, they proceeded with the transaction based on mutual understanding. They further alleged that the Plaintiffs had breached the Contract by delivering the refined sugar to Klang Port and Pasir Gudang Port instead of the agreed delivery location in Batu Pahat, Johor.

The Defendants denied receiving all 81 containers, insisting they had only received and paid for 35 containers. They claimed they had never received the demand letters sent by the Plaintiffs and denied any exclusive distribution arrangement. Rokiyah and her fellow directors denied any fraudulent intent in their application to strike off Logix, maintaining that they had acted in good faith based on their knowledge as directors. The Committal Proceedings

At the outset, the Defendants filed a counterclaim against the Plaintiffs. Vide Enc. 12 dated 25 April 2018, the Defendants applied to add Ahmad Farid bin Kamarudin (Ahmad Farid) as a party to their counter- claim and set-off. Still, they later withdrew the application on 9 July 2018. The court gave pre-trial case management (PTCM) directions on the same day, including trial dates fixed throughout the middle of 2018 and early 2019.

At that point in time, the Plaintiffs had filed their application in Enc. 8 dated 13 April 2018 to strike out the Defendants’ counter-claim. On the 4 same day, on 9 July 2018, the court had also struck out the counter-claim. This dismissal of the counter-claim occurred before the Defendants’ directors applied to strike off Logix from the SSM register.

While this action was ongoing, little did the Plaintiffs know that the directors of Logix (Rokiyah, Syafiq and Salwani) applied to the SSM on 31 July 2018 to strike off Logix under s 550 CA 2016. The application to strike off was made secretly from the court and the Plaintiffs.

Rokiyah filed a declaration to the SSM falsely claiming Logix was not involved in any legal proceedings, had not conducted business since 2 July 2008, had no liabilities, and that the information provided was accurate. The declaration was false because Logix had been issued invoices in 2017, and Rokiyah had sent WhatsApp messages around 22 August 2017 to the Plaintiffs, regarding the submission of their invoices to Logix for payment.

By the time the Plaintiffs discovered the false declaration on 8 March 2019, Logix had been struck off on 16 January 2019 based on the directors’ application. The Plaintiffs viewed this as a deliberate attempt to undermine the ongoing legal proceedings. The directors applied to strike off Logix from the SSM on 31 July 2018 while fully aware that legal proceedings were ongoing against the company for claims totalling RM2,702,500.00.

The Plaintiffs filed the application for committal against the three directors of Logix on 20 March 2019 under Order 52 rule 3(2) Rules of Court 2012 (ROC 2012) to prove how the directors had committed contempt by attempting to strike off Logix while the litigation was active, - and by making false declarations to the SSM. The court gave the committal order on 15 October 2021.

The court found that the directors’ failure to inform both the court and the Plaintiffs about their application to strike off Logix was a deliberate attempt to undermine the judicial process by eliminating the primary Defendants from the lawsuit, effectively trying to "destroy the substratum of the case.” The court found these actions constituted a serious contempt of court, reflecting bad faith, dishonesty, and disrespect for the court. Each director was fined RM10,000 to be paid by 14 November 2021, or face two weeks' imprisonment, with costs of RM15,000 payable to the Plaintiffs. The Fraudulent Transactions

The question of unpaid refined sugar deliveries and serious allegations of corporate fraud lay at the heart of the dispute. The Plaintiffs sought a declaration that Rokiyah and the directors had knowingly participated in fraudulent trading under s 540 CA 2016, making them personally liable for the debt. They demanded payment of the principal sum of RM2,702,500, plus interest at 12% per annum from October 2017 until full settlement. The Sugar Contract Dispute

The dispute arises from the Contract No. AH187/17 dated 30 August 2017 (Contract) where the Second Plaintiff (Hamshi) agreed to sell and the Second Defendant (Citra) agreed to buy 2000 metric tonnes of refined sugar at RM2,350 per metric tonne. The First Plaintiff (Ancom) was named 6 as the "guarantor" in the Contract, was designated to receive payments. Hamshi on the other hand, held the sugar trading license.

Under this arrangement, 81 containers of refined sugar were delivered to the Defendants. Payment was received for 35 containers, amounting to RM2,056,250. The present claim concerns payment for the remaining 46 containers for RM2,702,500. Parties Claims

The Plaintiffs claim that the Defendants received the 46 containers without paying them and had sold the refined sugars in the 46 containers to EHS at a higher price than they had bought from the Plaintiffs under the Contract. The evidence of the bills of lading and consignment notices, delivery orders (DO) and invoices would show their receipt of the 46 containers and their outbound delivery to Eng Hiap Seng (Rengit) Sdn Bhd (EHS).

The tacit business of the Defendants had defrauded the Plaintiffs by manipulating the Contract by utilising Logix and Citra to receive without paying the 46 containers and sell them to EHS.

The Defendants deny receiving the 46 containers and that only 35 were received from the total of 81 containers under the Contract. The 35 containers received had been paid. Therefore, they don’t owe any outstanding payments to the Plaintiffs.

The Defendants also deny of any fraudulent trading with the Plaintiffs. Issues for Determination

The key issues before this Court are: (a) Whether the First and Second Defendants received the 46 containers of refined sugar as claimed; (b) Whether they are liable for payment of RM2,702,500; and (c) Whether the Directors should be personally liable under s 540 CA 2016 for fraudulent trading. The Law on Goods Sold and Delivered

A claim for goods sold and delivered is founded upon the basic principles of contract law and commercial transactions. When such a claim is made, the Plaintiffs must establish: (a) The existence of a contract for the sale of goods; (b) The actual delivery of the goods to the defendant; (c) The agreed price or reasonable value of the goods; and (d) The failure of the defendant to pay for the goods delivered.

In commercial transactions, delivery need not always be evidenced by signed delivery notes. The courts recognise that complex commercial arrangements often involve multiple layers of documentation that, when taken together, can establish delivery beyond a reasonable doubt. The law does not require absolute perfection in documentation, especially where the conduct of the parties and surrounding circumstances corroborate actual delivery.

In Alexander Brogden v Metropolitan Railway Co (1877) 2 App Cas 666, it was established that: "Circumstances in the conduct of two parties may establish a binding contract between them, although the agreement, reduced into writing as a draft, has not been formally executed by either... A mere mental assent to the terms stated in a proposed contract would not be binding, but acting upon those terms, by sending coals in the quantities and at the prices mentioned in it, amounted to sufficient to shew the adoption of the writing previously altered and sent, and to constitute it a valid contract."

The Court of Appeal in Eckhardt Marine GMBH v Sheriff, High Court of Malaya, Seremban & Ors (2001) 4 MLJ 49 CA further held: "The act of acceptance may be either by words or by conduct or it may be partly by words and partly by conduct. Brogden v Metropolitan Railway Co (1877) 2 App Cas 666 is a case of acceptance by conduct."

In Genneva Malaysia Sdn Bhd v Tio Jit Hong & Ors (2020) 6 MLJ 703 CA, the Court of Appeal affirmed that "it is trite law that apart from writings, conduct of parties may amount to acceptance."

Written documents such as invoices, delivery orders, and statements of account can collectively form a written contract. As stated in Perangsang Dagang Sdn Bhd v Tanjung Teras Sdn Bhd & Ors (2008) 2 CLJ 199 HC: "IN cases involving goods sold and delivered, there is no one piece of agreement signed by both parties. Indeed, there is nothing of that sort. Instead, the law, through the guidance of cases, had recognised that all the documentation that accompany the day to day transactions would collectively constitute a binding contract. The documents as one would recollect from the vast number of cases are Delivery Orders, Delivery Notes, Invoices, Statement of Accounts and Debit Notes."

Similarly, in Wescourt Design Sdn Bhd v Wescourt Furnishing (M) Sdn Bhd (2015) 11 MLJ 735 HC, the court recognised that: "Generally, it is plain that the seller in a claim for payment for goods sold and delivered must prove that the order was made and the goods were received by the buyer. The proof is commonly by way of producing in court the purchase order, delivery order and the invoice for the goods (‘the key documents’)." The Directors’ Liability Under s 540 CA 2016

There are many definitions of “fraud” as society faces complex fraud crimes. Nonetheless, | would prefer the definition by Prof. Albrecht in his book, Fraud Examination, Asia 6‘ edition in 2019 where he said the common definition of fraud is the following: “Fraud is a generic term and embraces all the multifarious means which human ingenuity can devise, which are resorted to by one individual, to get an advantage over another by false representations. No definite and invariable rule can be laid down as a general proposition in defining fraud, as it includes surprise, trickery, cunning and unfair ways by which another is cheated. The only boundaries defining it are those which limit human knavery.”

S540 CA 2016 addresses fraudulent trading and imposes personal liability on directors who knowingly participate in such conduct. The provision states: "If in the course of the winding up of a company or in any proceedings against a company, it appears that any business of the company has been carried on with intent 10 to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, the Court may, if the Court thinks proper so to do, declare that any person who was knowingly a party to the carrying on of the business in that manner shall be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the Court directs."

To establish liability under s 540 CA 2016, the Plaintiffs must prove that the business of the First and Second Defendants was carried on with intent to defraud creditors or for a fraudulent purpose; and that the Second, Third and Fourth Defendants, being the persons in question, were knowingly a party to such conduct.

"/ntent to defraud" does not require direct evidence of subjective intent but can be inferred from objective circumstances. Directors who continue trading while knowing the company cannot pay its debts, make false representations to creditors, or attempt to move assets beyond creditors’ reach may be found liable under this provision.

In Tradewinds Properties Sdn Bhd v Zulhkiple bin A Bakar & Ors (2019) 1 MLJ 421 CA, the Court of Appeal explained: "The standard of proof in sub-s 304(1) of the CA 1965 is on balance of probabilities. The term ‘it appears’ is deployed in the subsection. This clearly denotes that a lower standard of proof is required to establish liability under this provision, ie on a balance of probability."

The burden is proof is again substantiated the law in Huatah Sdn Bhd v Yap Chee Kian & Ors (2020) 8 MLJ 98 HC where it held that: 11 "It was submitted for the plaintiff that whether there was intent to defraud or to carry out any fraudulent purpose is a question of fact to be inferred from the surrounding circumstances and the subsequent conduct of the defendants, especially the concealment of material facts... There need not be evidence of a scheme to defraud the company's creditors."

Notably in KHH (Puchong) Hardware Sdn Bhd v Chong Chee Onn & Ors (2022) MLJU 66 HC, the court recognised that: "The meaning of ‘carrying on of the business' or ‘business of the company has been carried on' is not limited to the ordinary course of business or trade that the company usually engages in. Any dealing by the company or the company's alter ego which is for the purpose of defrauding the company's creditors falls within the meaning of ‘carrying on of the business’ under section 540 of the Companies Act 2016.”

The Federal Court in Dato’ Prem Krishna Sahgal v Muniandy a/| Nadasan (2018) 2 MLJ 693 FC has held that a "creditor" under s 540 CA 2016 includes "contingent and prospective creditors of a company" and anyone having a monetary claim against the company who can enforce its claim by an action of debt is a creditor.

In Siow Yoon Keong v H Rosen Engineering BV (2003) 4 MLJ 569 CA, the Court of Appeal noted that "fraud" in the context of fraudulent trading connotes: "actual dishonesty involving, according to current notions of fair trading among commercial men, real moral blame... Where a person who takes part in the management of a company's affairs obtains credit or further credit for the company when he knows that there is no reason for thinking that funds will become available to pay the debt when it becomes due or shortly thereafter he may be found guilty of an offence under s 332 of the Companies Act 1948 of carrying on the company's affairs with intend to defraud creditors of the company.” 12

The meaning of "intent to defraud" was further clarified in Chin Chee Keong v Toling Corp (M) Sdn Bhd (2016) 3 MLJ 479 CA, where the Court of Appeal found the directors personally liable when: "the company was ‘not in the position to pay its creditors when the debts would fall due’... It is also true that the company's audited reports for the years 2002, 2003 and 2004 show that the company 'was experiencing cash flow problem and was in financial difficulty’ at the material time. The balance sheets show that the company had no reasonable prospect of paying its debts in 2003 and 2004... Despite knowing that it was not able to pay for its purchases, the company, under the directions of the defendants proceeded to place ‘unusual large orders of raw material from the plaintiff during the material period’."

In Re William C Leitch Bros Ltd (No 1) (1932) 2 Ch 71 it was held: "In my opinion | must hold with regard to the meaning of the phrase carrying on business ‘with intent to defraud creditors' that, if a company continues to carry on business and to incur debts at a time when there is to the knowledge of the directors no reasonable prospect of the creditors ever receiving payment of those debts, it is, in general, a proper inference that the company is carrying on business with intent to defraud.” Analysis of Evidence Documentary Evidence of Delivery

The delivery of the 46 containers is comprehensive, consisting of layers of documentation that would create an unbroken chain of custody from importation to final delivery. 13

4 separate Bills of Lading document the Plaintiffs' importation namely: (a) No. YMLUI488061198 for 12 containers (b) No. TH170800194 for 4 containers (c) No. TH170800169 for 18 containers (d) No. TH170800262 for 12 containers

These Bills of Lading would establish that the Plaintiffs imported the specific containers. The container numbers listed would match those in the subsequent delivery documentation and, crucially, appear in the Defendants' sales records to EHS.

The movement of these containers is thoroughly documented through multiple independent sources, including the transporters' Sparrow Express consignment notes, Agenda Wira delivery records, container tracking records and email correspondence regarding delivery arrangements.

The central issue is whether the Plaintiffs have proven on a balance of probabilities that the Defendants received all 46 containers of refined sugar as claimed.

The evidence establishing delivery of the containers begins with the Bills of Lading documenting the Plaintiffs’ importation of refined sugar. However, importation alone does not conclusively prove delivery to and receipt by the Defendants. The Defendants raise valid questions about the ultimate destination of these containers. 14

The Defendants’ own evidence shows they on-sold 30 out of the 46 containers to EHS as can be observed that: (a) DOissued by Logix to EHS with matching container numbers; (b) Invoices issued by Logix to EHS at RM2,425 per MT (generating profit); (c) EHS records documenting container numbers received; (d) Testimony of PW1 (Syafiga from EHS) confirming receipt.

The Defendants could not have sold these 30 specific containers to EHS without first receiving them from the Plaintiffs. No alternative source for these containers has been shown or suggested by the Defendants.

What | find more telling is that the Third Defendant admitted in their pleadings that the First and/or Second Defendant did receive the complete set of the 35 invoices and 30 DO from the Plaintiffs, where they effected payment for the 35 invoices. The Defendants did not act on the 30 DO received either to object or, if not, make payments towards the 30 DO.

They also did not act on the 30 invoices that the Plaintiffs sent. Their silence is tantamount to acceptance of the 30 invoices. The Remaining 16 Containers

However, for the remaining 16 containers, the evidence produced by the Plaintiffs is problematic since: (a) The DO were not signed by the Defendants (b) No conclusive proof of actual receipt by Defendants 15 (c) Transport documents contain discrepancies in dates (d) No independent verification of delivery (e) No witnesses directly observed delivery to end destinations Unsigned Delivery Orders

All of the DO issued by Ancom are devoid of acknowledgement of receipt by the transporter (respectively) and the Customer (Logix). | had to scrutinise all the DO further and found irregularities at pg. 126 and pg. 4-14. The identified 12 DO did not state under Remarks the information of the transporter while the remaining 24 DO bore such information.

The same defects were detected in the invoices issued by Ancom, where the details of the transporter were omitted for 12 invoices, while the information was stated for the remaining 24 invoices. The defective invoices are found at pg. 49-60.

Without the information on the transporters, | cannot link the containers with the transporters. The lack of which should be given to the Defendants for the anomaly of the business documents by Ancom.

The argument by the Defendants regarding unsigned DO cannot succeed where actual delivery is proven through multiple sources of evidence. The law recognizes that in complex commercial transactions, a complete documentary chain of custody, independent witness testimony, and the Defendants’ own actions in on-selling containers can establish delivery even in the absence of signed delivery notes. As noted in Wescourt Design (supra), in a claim for goods sold and delivered, the proof is commonly produced by producing the purchase order (PO), 16 delivery order (DO) and the invoice for the goods, but this is not the only way delivery can be proven.

Minor discrepancies in dates or descriptions do not negate proven delivery. In commercial practice, transport date variations reflect operational realities and description differences are immaterial where container numbers match. The legal principle of de minimis non curat lex (the law does not concern itself with trifles) applies here. Moreover, the Defendants raised no contemporaneous objections regarding these issues except bare denials. EHS Deliveries

The evidence establishes that EHS was their designated delivery location, that the Defendants had issued their invoices to EHS, and that EHS paid them, not the Plaintiffs. The actual transportation of the refined sugar was doubtful. The Sparrow Express Request for Transport— Consignment Note at pg. 152 and 162 show that despite the consignment being sent to NHS, the actual date and time were missing, and no alternative source for these containers has been shown. | am therefore unable to link the delivery to the DO and Invoice.

Among the DO issued by Logix, | found the DO at pg. 222 does not show proof EHS received the consignment from Logix. This is because the date of delivery was stated as 6 October 2017 but EHS acknowledged the acceptance of the delivery on 4 October 2017. DW3 was right to point out this discrepancy. Therefore, the Invoice at pg. 61 issued by Ancom on 6 October 2017 has to be rejected for one container claim. 17

The remaining one container is of the same discovery for the DO issued by Logix at pg. 155, where the delivery date was 2 October 2017, but EHS acknowledged it 1 day earlier on 1 October 2017. The cross- reference to the Transport Consignment Note on pg. 154 showed the same. Therefore, | had to deduct another Invoice from the Plaintiffs total claim for the 46 containers.

As pointed out, 16 Invoices were doubtful, with the supporting documents either incomplete or contradictory. This leaves 30 containers that Plaintiff proved to have been delivered to Defendants and, thereafter, sold to EHS.

Out of the 16 doubtful invoices, 12 invoices bore no details of the transporter or the container numbers. The irregular 12 invoices are in the list below. | could not link the containers to the transporter that would have delivered the refined sugar to the Defendants for their outbound delivery to EHS.

It is unfair to penalise the Defendants for mishandling the documents on the Plaintiff's part, and the benefit of doubt ought to be given to the Defendants. No. | Date of Invoice Relevant DO No. Relevant Amount Anomaly Invoices/ No. Pagein | Page in (RM) DO | IDB-C | IDB-C 1 4/10/2017 57715 49 57715 | 3 58,750.00 No | transporter | details 2 4/10/2017 | 57716 50 57716 | 4 58,750.00 No | transporter | details 18 3 | 4/10/2017 | 57717 51 | 57717 5 58,750.00 No transporter details 4 4/10/2017 | 57718 52 57718 6 58,750.00 No transporter details 5 4/10/2017 | 57719 53 57719 7 58,750.00 No transporter details 6 4/10/2017 | 57720 54 57720 8 58,750.00 No transporter details 7 | 4/10/2017 57721 | 55 57721 9 | 58,750.00 No | transporter details 8 4/10/2017 | 57722 56 57722 10 58,750.00 No | transporter details 9 4/10/2017 57723 57 57723 11 58,750.00 No transporter details 10 | 4/10/2017 | 57724 58 57724 a2 58,750.00 No | transporter details 11 | 4/10/2017 | 57725 59 57725 13 58,750.00 No transporter details 12 | 4/10/2017 | 57726 60 57726 14 58,750.00 No transporter | | | details

All the business transaction documents including the Defendants show sufficient evidence that these specific 30 containers reached EHS through the Defendants because the container numbers match Bills of Lading, the Defendants issued their DO to EHS, the Defendants invoiced and profited from sale to EHS, EHS confirmed payment to Defendants and that the Defendants have shown no alternative source for these containers.

The table below shows the 8 Invoices and the corresponding 30 DO issued by the First Defendant to EHS: 19) No. | Invoice No. Relevant | DO No. Relevant Container No. (from the 1 Page at (from 1 Page at (imported by the Defendant to IDB-B/ Defendant to IDB-B/ Plaintiffs) EHS) EHS) 1, T17(10)001 226 CSLW1710/001 151 YMLU3324748 2: 7T17(10)001 | 226 CSLW1710/002 149 YMLU3320655 3. T17(10)001 226 CSLW1710/003 155 YMLU3453684 4. T17(10)001 226 CSLW1710/004 159 YMLU3589990 5. T17(10)001 226 CSLW1710/005 153 YMLU3357171 6. T17(10)002 227 CSLW1710/006 161 YMLU3595734 ts T17(10)002 227 CSLW1710/007 163 YMLU3646370 8. T17(10)002 227 CSLW1710/008 167 YMMU1072240 9. T17(10)002 227 CSLW1710/009 165 YMMU1022995 10. T17(10)002 227 CSLW1710/010 157 YMLU3485059 11. T17(10)004 228 CSLW1710/014 169 YMMU1132863 ids T17(10)008 229 CSLW1710/028 171 MTMU2883920 13. T17(10)008 229 CSLW1710/029 204 MTMU2880074 14. T17(10)008 229 CSLW1710/030 185 CRSU1212680 15. T17(10)008 229 CSLW1710/031 184 CAIU3565893 16. T17(10)008 229 CSLW1710/032 183 CAIU2119958 17. 7T17(10)013 231 CSLW1710/036 190 CRSU1446251 18. T17(10)013 231 CSLW1710/037 193 FCGU2261351 19. | 717(10)013 | 231 CSLW1710/038 187 CRSU1215479 | 20. T17(10)013 231 CSLW1710/039 202 JHSU2631883 21. T17(10)013 231 CSLW1710/040 | 210 MTMU2881595 22. T17(10)014 232 | cSLwi710/041 | 196 | FCIU3841686 23. T17(10)014 232 | CSLW1710/042 207 MTMU2881208 24. | 717(10)014 232 | CSLW1710/043 199 | GESU3234115 25. T17(10)020 233 CSLW1710/048 176 ~=| ‘JHSU2629994 26. T17(10)020 | 233 CSLW1710/049 178 JHSU2658523 27. T17(10)020 | 233 CSLW1710/050 174 CRSU1215416 28. T17(10)020 233 CSLW1710/051 180 JHSU2669451 29, T17(10)020 233 CSLW1710/052 182 JHSU2672584 | 30. | 717(10)006 [IDB3/5] CSLW1710/022 [IDB3/4] MTMU2887335 Witness Testimony

| find that the Plaintiffs failed to show that the 16 remaining containers were delivered to the Defendants and were delivered to EHS. The evidence from the witnesses shows critical gaps when PW8 (Andrew) admitted never personally seeing empty containers. PW6 (Ahmad Farid) 20 acknowledged no direct knowledge of the delivery. The forwarding company witness PW4 (May Tam) and the Second Plaintiff witness PW7 (Fikri Hamshi) cannot confirm definitively the delivery for all 46 containers.

The other Plaintiffs’ witnesses are independent, and | accept their evidence to be truthful and credible, which is supported by the documentary evidence produced. Although PW1 (Syafiqa), the former clerk from EHS, provided the documents regarding receipt procedures, verification of container numbers, payment processes to Logix and record keeping systems, the documents show missing information left unexplained by the Plaintiffs. PW4 (May Tam) had arranged for customs clearance and coordinated with the transporters while PW5 (Halim) from Sparrow Express managed the transport operations. The documents of the transporter also show missing information which cannot be linked to which delivery of the refined sugar to the Defendants and subsequently to EHS. Finding on Issue 1 Unsigned Delivery Orders

The argument regarding unsigned delivery orders cannot succeed where actual delivery is proven through multiple sources of evidence. The law recognises that in complex commercial transactions, a complete documentary chain of custody, independent witness testimony, and the defendants’ own actions in on-selling containers can establish delivery even in the absence of signed delivery notes. 21

However, this is not the only way delivery can be proven. In Caltex Oil Malaysia Limited v Classic Best Sdn Bhd (2006) 7 MLJ 131 HC, the court observed: "The defendants had not alleged fraud and had even made payment based on accounts supplied by the plaintiff... The defendants had not questioned the invoices sent by the plaintiff. If indeed they have not received the goods that they ordered, or that they were invoiced for someone else's orders, it is only natural that the objection should have been raised there and then and not after this action is filed.” Document Discrepancies

In Solid Investments Ltd v Alcatel-Lucent (M) Sdn Bhd (2014) 2 MLJ 785 FC, the Federal Court recognised that "there must be evidence either of actual fraud or some conduct amounting to fraud in equity to justify the lifting of corporate veil." The Defendants have not presented any evidence suggesting fraudulent documentation by the Plaintiffs. EHS Deliveries

The Defendants' attempt to distance themselves from EHS deliveries fails on factual and legal grounds. The evidence clearly establishes that EHS was their designated delivery location, that they issued their invoices to EHS, that EHS paid them (not the Plaintiffs), and that no alternative source for these containers has been shown.

As stated in Ong & Co Pte Ltd v Foo Sae Hong (1990) 2 MLJ 85 HCS: 22 "The defendant had not denied that he received the debit notes. If in fact the purchases were contrary to instructions, one would expect an immediate protest by him. There was none... By not objecting, he had effectively affirmed that the transactions were properly carried out. He was estopped from denying the same."

| find that the Plaintiffs proved their claim on the balance of probabilities but only to the extent of the complete sale and purchase transactions of 30 containers. The remaining 16 containers remain unproven they were sent and received by the Defendants. While 30 containers are proven through EHS evidence, there is insufficient proof regarding the remaining 16 containers. Evidence of Container Delivery

The documentary evidence begins with Bills of Lading proving the Plaintiffs’ importation of 46 containers through four separate shipments. However, the critical question is not importation but delivery to and receipt by the Defendants. The evidence conclusively establishes the delivery of only 30 containers through a complete documentary chain. EHS records confirm receipt of these specific containers, supported by the Defendants’ DO to EHS and corresponding payment records. Most significantly, the container numbers match all documentation from import to final sale.

However, the documentary chain for the remaining 16 containers is incomplete. There are no signed delivery orders evidencing receipt, no witnesses who can confirm delivery, and significant gaps in the documentation trail. The Plaintiffs have therefore failed to discharge their burden of proving delivery of these additional containers to the required standard. 23

| find that the documentary evidence, witness testimony and the Defendants’ own business records establish conclusively that they received 30 containers of refined sugar and are liable for payment amounting to RM1,762,500 (30 containers x 25MT x RM2,350). The claim for the remaining 16 containers is dismissed for lack of sufficient proof of delivery. Evidence of Fraudulent Trading

The Directors' attempts to avoid liability under s 540 CA 2016 are legally misconceived. Their primary defence of having no contractual relationship with the Plaintiffs misses the point entirely. S 540 CA 2016 liability is based on fraudulent trading, not contractual obligations.

The evidence is overwhelming as adduced by the Plaintiffs through the Defendants’ witnesses where they had used Logix despite it having no assets since 2008 per their own declaration, being incapable of carrying on business since 2007 and having only liabilities and no ability to pay. Their fraudulent intent is demonstrated by their requesting the invoicing to be addressed to Logix, knowing Logix’s inability to pay, making false declarations to SSM about pending litigation, attempting to strike off Logix during litigation, failing to maintain proper records and giving inconsistent testimony amongst the directors themselves.

All three Directors were actively involved with Rokiyah as the mastermind who coordinated the scheme and gave instructions to her two children, Salwani and Syafig. Naturally, young children who become company directors would have limited knowledge in the sugar business 24 manoeuvres, and would receive instructions from their mother on almost everything relating to Logix and Citra.

Syafiqah handled documentation and payments, while Syafiq managed logistics and customs. All three directors are authorised persons under the CA 2016, where they are fit and proper to make declarations and swear affidavits for and on behalf of Logix and Citra. All of them had authorised their applications and declarations in court and with SSM. As established in Sanyan Sdn Bhd v Sanyan Lumber Sdn Bhd (2012) 10 CLJ 782 HC, "the directors of a company act collectively and not individually unless there is an express delegation or authorisation."

Their conduct falls squarely within the scope of s 540 CA 2016 which imposes personal liability on directors who knowingly participate in carrying on business with the intent to defraud creditors. The Court can infer fraudulent intent from their actions, demonstrating a clear pattern of attempting to avoid payment obligations.

S 211 CA 2016 states that "the business and affairs of a company shall be managed by, or under the direction of the Board" and "the Board has all the powers necessary for managing and for directing and supervising the management of the business and affairs of the company." Therefore, all the directors bear responsibility for their companies’ actions.

As stated in Kelapa Sawit (Teluk Anson) Sdn Bhd v Dr Yeoh Kim Leng & Ors (1991) 1 CLJ Rep 194 SC: 25 "Directors can only exercise their powers collectively by passing resolutions at board meetings, unless the articles otherwise provide and this is generally understood by those who are familiar with company law and practice.”

Similarly, in Sanyan Sdn Bhd v Sanyan Lumber Sdn Bhd (2012) 10 CLJ 782 HC, the court held: "The directors of a company act collectively and not individually unless there is an express delegation or authorisation. Section 131B of the Companies Act 1965 which provides for the powers of a company's directors refers to directors collectively as the board of directors and not individually."

In Giga Engineering & Construction Sdn Bhd v Yip Chee Seng & Sons Sdn Bhd & Anor (2015) 6 MLJ 449 FC, the Federal Court stated: "It is settled law that 'there must be evidence either of actual fraud or some conduct amounting to fraud in equity to justify the lifting of corporate veil’... Further, in a plea of fraud mere allegations is not sufficient. There must be particulars given."

Here, the particulars of fraud have been established through the directors’ actions in attempting to strike off Logix during ongoing litigation while falsely declaring to SSM that there were no pending legal proceedings.

As recognised in /ndian Corridor Sdn Bhd & Anor v Golden Plus Holdings Bhd (2008) 3 MLJ 653 CA, the directors constitute "the directing mind and will of the company". They therefore cannot escape responsibility for the company's actions. =O} 26

In commercial disputes, the Court looks to the totality of evidence rather than isolated discrepancies or technical objections. As stated in Tindok Besar Estate Sdn Bhd V Tinjar Co (1979) 2 MLJ 229 FC, itis "safer to refer and rely on the acts and deeds of a witness which are contemporaneous with the event and to draw the reasonable inferences from them."

Similarly, in Tengku Dato' Ibrahim Petra Tengku Indra Petra V Petra Perdana Bhd & Another Appeal (2018) 2 MLJ 177 FC, the court emphasised the importance of contemporaneous documents over oral testimony in determining factual questions.

About contract formation through conduct, in Genneva Malaysia Sdn Bhd v Tio Jit Hong & Ors (2020) 6 MLJ 703 CA, the Court of Appeal confirmed that: "The fact that there is no formal contract is irrelevant. It is not the defendant's case that the parties had agreed that there would be no binding contract until and unless a formal contract had been executed... Even accepting for a moment that the understanding was for a formalisation of contractual arrangements, as opined by the Court of Appeal in Charles Grenier Sdn Bhd v Lau Wing Hong at p 633, it is for the court to ‘construe the correspondence exchanged between the parties and to say on whether that is the result intended by the parties’.

Regarding admission as evidence, in Madeli Bin Salleh v Superintendent Of Lands And Surveys, Miri Division & Anor (2005) 5 MLJ 305 CA, the court recognised that: 27 "Admissions in pleadings or judicial admissions stand on a higher footing than evidentiary admissions. The former are fully binding on the maker and constitutes a waiver of proof whereas the latter are not conclusive and can be shown to be wrong.”

The court must determine the Defendants’ liability for s 540 CA 2016 by ascertaining whether there was an intent to defraud creditors based on objective evidence. The directors cannot shield themselves from the corporate veil when they knowingly participate in fraudulent trading activities.

As clarified in Sinnaiyah & Sons Sdn Bhd v Damai Setia Sdn Bhd (2015) 5 MLJ 1 FC, the standard of proof for civil fraud is now "balance of probabilities" and not "beyond reasonable doubt."

The law does not require direct evidence of subjective fraudulent intent. Rather, it can be inferred from actions such as continuing to trade while knowing the company cannot pay its debts, making arrangements to place assets beyond creditors' reach, or attempting to dissolve the company to avoid liability, as recognized in numerous cases cited above.

Based on the totality of evidence, | find that the Plaintiffs have successfully proven their case on a balance of probabilities scale. But the Defendants failed to discharge the burden shifted when they departed from their pleadings on breach of the terms of the Contract. Their evidence was mainly denials with no proof supporting their pleaded defences. Still, the most decisive was their admission to receiving the 30 DO, which is 28 fortified by the documentary evidence adduced that shows the Defendants had on-sold 30 out of the 46 containers to EHS.

The Defendants’ attempts to challenge delivery documentation or argue about unsigned delivery orders became irrelevant in the face of this evidence as they had demonstrably received and profited from the containers they claimed were never delivered.

This core contradiction and other factors fatally undermined their defence, like their directors' conduct and inconsistent testimony.

Their defence failed due to several fundamental weaknesses beyond the factual evidence. At its core, it suffered from serious procedural and evidentiary deficiencies that undermined its entire position before the court.

First, there were significant problems with how the Defendants approached their defence. Many of their key arguments were not properly pleaded in their initial defence documents. Instead of relying on their pleaded case, they frequently raised new issues as afterthoughts during the trial. This was particularly evident in their final submissions, which the court noted departed radically from their own pleaded case. This approach violated the fundamental principle that parties are bound by their pleadings.

Second, the Defendants adopted what the court called a "very selective" approach to addressing issues, avoiding what was termed the "main issues and/or elephant in the room." Rather than directly confronting the key evidence against them, they focused on peripheral 29 issues like unsigned DO and minor documentation discrepancies. The court characterised their submissions as without merit or substance and a prevarication from the real issues.

Third, when the burden of proof shifted to the Defendants (after the Plaintiffs established their prima facie case), they failed to discharge this burden. Instead of providing cogent evidence to support their position, they relied heavily on unpleaded issues and statements from the bar, which do not constitute evidence. This was particularly problematic because many of their key arguments were never properly put to the witnesses during cross-examination.

Fourth, the stark contrast in witness testimony severely undermined the Defendants’ position. The Plaintiffs produced independent witnesses who provided consistent testimony supporting the delivery of the containers. In contrast, the Defendants’ witnesses gave what the court found to be inconsistent and implausible testimony, particularly regarding their knowledge of and involvement in the transactions.

Fifth, the Defendants’ conduct throughout the case damaged their credibility. They had paid for the first 35 containers under identical arrangements, showing the established pattern of dealing. Rokiyah admitted to receiving containers during meetings (as documented in the minutes), yet later denied this. They made no contemporaneous denial of receiving the containers despite multiple correspondences. | also find damaging their attempt to strike off Logix during the ongoing litigation, which suggested an attempt to avoid liability rather than genuinely contest the claim. 30

Finally, the Defendants could not overcome the comprehensive documentary evidence against them. This included the Bills of Lading, Invoices and the DO, as well as transport documentation with their business records showing they had on-sold containers to EHS. Their inability to show any alternative source for these containers created an insurmountable problem for their defence.

In conclusion, while these factors might not have been fatal to their case, the combination of procedural failures, reliance on issues not pleaded, weak witness testimony, damaging conduct, and inability to explain key evidence created a defence the court found impossible to accept. The failure was thus not just about the strength of the evidence against them but about the fundamental flaws in how they constructed and presented their defence.

The remaining issues to be tried are all answered in the affirmative, ie, the issue of the Directors' Personal Liability on whether the third, fourth and fifth Defendants, as directors of the first Defendant, should be personally liable for the proven debts under s 540 CA 2016 for fraudulent trading.

The alter ego/corporate veil issue exists, and the corporate veil is lifted. The directors were found to be involved with the Third Defendant being the directing mind/alter ego of the First and the Second Defendant. The Third Defendant is also found to be in control of the Fourth and Fifth Defendants in controlling the First and Second Defendants. This necessitated the lifting of the corporate veil. 32

With that, the Plaintiffs’ entitlement to relief must be limited to what has been proven. The directors are found to be personally liable to the Plaintiffs as the directors are proven to have attempted to avoid liability under s 540 CA 2016.

The Defendants’ primary defence that no contractual relationship with the Plaintiffs fails as s 540 CA 2016 liability is based on fraudulent trading, not contractual obligations.

The directors knowingly carried on Logix's business with the intent to defraud creditors and are personally, jointly, and severally liable under s 540 CA 2016.

Accordingly, judgment is entered jointly and severally for the Plaintiffs against all Defendants.

Therefore, | find the Plaintiffs’ claim proven only for 30 containers to RM1,762,500 with interests as prayed for and costs. Dated 10" February 2025 Arziah binti Mohamed Apandi Judicial Commissioner - Kuala Lumpur High Court i> ~ | NCvC 8 32 S/N zna4uupHUUu80kxXrWylkA . Justin Voon & Iris Lim for the Appellant Messrs Justin Voon Chooi & Wing Advocates & Solicitors K Kandiah & Yap Li Wen for the Respondent Messrs Mohd Latip & Associates Advocates & Solicitors Cases referred: Alexander Brogden v Metropolitan Railway Co (1877) 2 App Cas 666 Eckhardt Marine GMBH v Sheriff, High Court of Malaya, Seremban & Ors (2001) 4 MLJ 49 CA Genneva Malaysia Sdn Bhd v Tio Jit Hong & Ors (2020) 6 MLJ 703 CA Perangsang Dagang Sdn Bhd v Tanjung Teras Sdn Bhd & Ors (2008) 2 CLJ 199 HC Wescourt Design Sdn Bhd v Wescourt Furnishing (M) Sdn Bhd (2015) 11 MLJ 735 HC Tradewinds Properties Sdn Bhd v Zulhkiple bin A Bakar & Ors (2019) 1 MLJ 421 CA Huatah Sdn Bhd v Yap Chee Kian & Ors (2020) 8 MLJ 98 HC KHH (Puchong) Hardware Sdn Bhd v Chong Chee Onn & Ors (2022) MLJU 66 HC Dato’ Prem Krishna Sahgal v Muniandy a/l Nadasan (2018) 2 MLJ 693 FC Siow Yoon Keong v H Rosen Engineering BV (2003) 4 MLJ 569 CA Chin Chee Keong v Toling Corp (M) Sdn Bhd (2016) 3 MLJ 479 CA Re William C Leitch Bros Ltd (No 1) (1932) 2 Ch 71 Caltex Oil Malaysia Limited v Classic Best Sdn Bhd (2006) 7 MLJ 131 HC Solid Investments Ltd v Alcatel-Lucent (M) Sdn Bhd (2014) 2 MLJ 785 FC 33 Ong & Co Pte Ltd v Foo See Hong (1990) 2 MLJ 85 HCS Sanyan Sdn Bhd v Sanyan Lumber Sdn Bhd (2012) 10 CLJ 782 HC Kelapa Sawit (Teluk Anson) Sdn Bhd v Dr Yeoh Kim Leng & Ors (1991) 1 CLJ Rep 194 SC Sanyan Sdn Bhd v Sanyan Lumber Sdn Bhd (2012) 10 CLJ 782 HC Giga Engineering & Construction Sdn Bhd v Yip Chee Seng & Sons Sdn Bhd & Anor (2015) 6 MLJ 449 FC Indian Corridor Sdn Bhd & Anor v Golden Plus Holdings Bhd (2008) 3 MLJ 653 CA Tindok Besar Estate Sdn Bhd V Tinjar Co (1979) 2 MLJ 229 FC Tengku Dato’ Ibrahim Petra Tengku Indra Petra V Petra Perdana Bhd & Another Appeal (2018) 2 MLJ 177 FC Genneva Malaysia Sdn Bhd v Tio Jit Hong & Ors (2020) 6 MLJ 703 CA Madeli Bin Salleh v Superintendent Of Lands And Surveys, Miri Division & Anor (2005) 5 MLJ 305 CA Sinnaiyah & Sons Sdn Bhd v Damai Setia Sdn Bhd (2015) 5 MLJ 1 FC Acts/Laws referred: Section 211, s 540, s 550 of the Companies Act 2016 CA 2016 Order 52 rule 3(2) Rules of Court 2012 ROC 2012 Books/Articles referred: Prof. Albrecht in his book, Fraud Examination, Asia 6" edition in 2019 w 34