Chin Kim Heong v Betatech Scientific Sdn Bhd (BA-12BNCC-15-10/2025)

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GALAXY ANALYTICA SDN BHD [Company No.: 978185D] … APPELLANTS AND BETATECH SCIENTIFIC SDN BHD [Company No.: 1133239T] … RESPONDENT [Dalam mahkamah Sesyen Di Shah Alam Dalam Negeri Selangor Darul Ehsan, Malaysia Guaman Sivil No.: BA-A52NCC-112-06/2023] ANTARA S/N vvKGuz1UfEau63lAGIcsrQ BETATECH SCIENTIFIC SDN BHD [No. Syarikat: 1133239T] …PLAINTIF

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GALAXY ANALYTICA SDN BHD [No.Syarikat: 978185D] …DEFENDAN-DEFENDAN [Diputuskan Hakim Rafiqah Hanim binti Mohd Rosli di Mahkamah Sesyen Shah Alam pada 19 September 2025] GROUNDS OF JUDGMENT

This is an appeal by the 1st Appellant, Chin Kim Heong, against the whole of the decision of the Sessions Court Judge delivered on 19 September 2025. By the said decision, the SCJ allowed the Respondent’s claim in the sum of RM150,000.00 against both the 1st Appellant and the 2nd Appellant, jointly and severally, together with costs in the sum of RM8,000.00. S/N vvKGuz1UfEau63lAGIcsrQ

On the day of the hearing of this appeal, the 1st Appellant withdrew their appeal as against the 2nd Respondent. Consequently, this judgment is confined solely to the determination of the appeal involving the 1st Appellant. Having fully evaluated and considered the Records of Appeal, the Memorandum of Appeal, the respective Written Submissions, as well as the Reply Submissions dated 2 December 2025, I now provide my grounds of decision.

The Respondent is a company engaged in the business of supplying and installing laboratory equipment and chemical products. The 1st Appellant is a director and shareholder of the 2nd Appellant, Galaxy Analytica Sdn Bhd, a company involved in the trading and servicing of equipment, as well as property and securities investment. The Respondent’s director, Mr. Siah Cheong Loon and the 1st Appellant were known to each other from prior business dealings.

On 12 June 2020, the 1st Appellant sent a WhatsApp message in a group chat that included SP1 and Mr. Low Khoon Shu (SP2), who is a director of both the Respondent and the 2nd Appellant. The message read: S/N vvKGuz1UfEau63lAGIcsrQ "Boss, Boleh pinjam RM150k to GASB? Return to u ASAP. Please help."

Acting upon the 1st Appellant’s personal request and his assurance of an immediate return of the funds, the Respondent issued a cheque for RM150,000.00. The cheque was successfully cleared into the 2nd Appellant’s bank account on 19 June 2020. It is common ground, as confirmed by both SP1 and SP2 during cross-examination, that the said loan was disbursed to and received by the 2nd Appellant and it is equally undisputed that no written loan agreement or formal written guarantee was ever executed between the parties. Prior to the clearance of the funds, on 18 June 2020, SP1 messaged the 1st Appellant stating: "Please ensure you settle this money for RM150,000.00 to Betatech Scientific Sdn Bhd", to which the 1st Appellant explicitly replied, "ok".

Then the said loan remained unpaid and between July 2020 and 24 August 2022, the Respondent issued numerous reminders to the 1st Appellant. The 1st Appellant consistently responded to these demands in the first-person singular, stating, inter alia: i. "I do it this month"; S/N vvKGuz1UfEau63lAGIcsrQ ii. "I am not. I'm so sorry"; iii. "I update soon. iv. I'm collecting payments"; and v. "I know, that's why I'm doing my job. Please gimme a break to do my job".

Crucially, at no point during this period did the 1st Appellant assert that repayment was conditional upon the completion of any project. The Appellants' baseline defence at trial, which was raised for the very first time in their pleadings, stands on a three-fold assertion: a) Firstly, that the said loan was requested strictly for the purposes of a "Herbal Science Project" and was only repayable upon the completion of the said project, which reportedly remains incomplete; b) Secondly, that there was no personal guarantee executed by the 1st Appellant; and c) Thirdly, that the 1st Appellant, having acted merely as a director on behalf of the 2nd Appellant, cannot be held personally liable for a corporate debt in the absence of pleaded and proven fraud. S/N vvKGuz1UfEau63lAGIcsrQ

In arriving at the decision, the SCJ correctly recognized the foundational principle of separate legal personality as established in the classic of Salomon v A Salomon & Co Ltd [1897] AC 22. However, the SCJ held that this principle could not benefit the 1st Appellant on the facts of this case, as the 1st Appellant had personally, consistently and repeatedly represented that he bore personal responsibility for the repayment of the said loan. This finding was anchored on the 1st Appellant’s contemporaneous WhatsApp communications with SP1, wherein he persistently utilized the first-person pronoun “I” when promising repayment and asking for indulgence.

Furthermore, the SCJ found that the 1st Appellant’s reply of “ok” to SP1’s text message dated 18 June 2020 did not merely constitute a passive acknowledgment but amounted to an explicit acceptance that the said loan was due and repayable by July 2020. Consequently, the Sessions Court held both Appellants jointly and severally liable to the Respondent for the principal sum of RM150,000.00, alongside costs of RM8,000.00. S/N vvKGuz1UfEau63lAGIcsrQ

The 1st Appellant's grounds of appeal, as particularised in the Memorandum of Appeal and elaborated in his Written and Reply Submissions, may be conveniently grouped under the following heads: i. that the 1st Appellant argues that the Sessions Court Judge (SCJ) erred by holding him personally liable under a personal guarantee, which improperly disregarded the fundamental principle that a company has a separate legal personality from its directors. Furthermore, the 1st Appellant contends that the Respondent’s case is fatally flawed by inconsistent arguments: the Respondent cannot legally maintain that the advance was a personal loan to the 1st Appellant while simultaneously treating it as a corporate debt of the 2nd Appellant that requires the court to pierce the corporate veil ii. that the SCJ erred in lifting the corporate veil in circumstances where the Respondent had neither pleaded nor proven any particulars of fraud or sham; iii. that the SCJ erred in reversing the burden of proof and in drawing an adverse inference against the 1st Appellant; iv. that the SCJ failed to have regard to the credibility of the Respondent's witnesses, including SP1's shifting position on S/N vvKGuz1UfEau63lAGIcsrQ whether the 2nd Appellant required a corporate representative; and v. that the SCJ erred in finding that the Appellants were liable to repay the said loan by July 2020 on the strength of the word "ok", there being no legal authority to treat such an expression as a formal acknowledgment of debt.

The Respondent, in contra, maintains in its Written and Reply Submissions that the 1st Appellant's personal undertaking to "return to u ASAP", his subsequent first-person acknowledgments and his reply of "ok", independently justify the finding of personal liability. In the alternative, the Respondent submits that the corporate veil was properly lifted on the pleaded facts showing the misuse of the 2nd Appellant as a mere conduit. In support of this contention, the Respondent relies on numerous case laws which will be referred and discussed below.

This Court, sitting as the appellate court, identified several key issues in determining whether the SCJ had erred in holding the Appellants liable for the RM150,000.00 loan. The central questions before the appellate court were: S/N vvKGuz1UfEau63lAGIcsrQ a) Whether this is properly a veil-lifting case requiring pleaded and proven particulars of fraud, or whether personal contractual liability arises independently from the 1st Appellant's own words and conduct. b) Whether the contemporaneous documentary evidence and course of dealings, support a finding that the 1st Appellant personally and unequivocally assumed responsibility for the repayment of the loan, independently of the 2nd Appellant's corporate obligation. c) Whether the Respondent’s failure to plead particulars of fraud or sham is fatal to the claim against the 1st Appellant and whether the competing judicial authorities on piercing the corporate veil are applicable to the facts of this case. d) Whether the SCJ impermissibly reversed the legal burden of proof and whether the Court was justified in drawing an adverse inference against the Appellants under section 114(g) of the Evidence Act 1950 for failing to substantiate the "Herbal Science Project" defence. e) Whether the SCJ erred in assessing the credibility of the Respondent’s witnesses and whether any perceived inconsistencies in their oral testimony regarding the corporate structure undermine the central documentary evidence. S/N vvKGuz1UfEau63lAGIcsrQ f) Whether the SCJ erred in fact and law by finding that the loan was due and repayable by July 2020 on the strength of the 1st Appellant’s text response "ok" and whether such an expression is capable of constituting a valid contractual acceptance and acknowledgment of debt in its proper context. COURTS FINDINGS ON THE ISSUES ISSUE 1: WHETHER THE FIRST APPELLANT’S LIABILITY ARISES FROM AN INDEPENDENT PERSONAL UNDERTAKING OR FROM A PIERCING

The 1st Appellant’s main argument is that the Respondent is trying to bypass company protections to hold him responsible for a corporate debt by lifting of the corporate veil. Relying on established legal cases like of Solid Investments Ltd v Alcatel Lucent (Malaysia) Sdn Bhd [2014] 3 CLJ 73 (FC), Tenaga Nasional Bhd v Irham Niaga Sdn Bhd & Anor [2011] 1 MLJ 752, Sinas Teknik Sdn Bhd v Tetuan Foo Hiap Siong & Co [2023] MLJU 974 and Fixus Construction Sdn Bhd v K & E Design Ideas Sdn Bhd & Anor [2024] MLJU 3165. The Appellants argue that a court cannot ignore a company's separate legal identity unless there is clear proof of actual or equitable fraud, which must be clearly stated in the pleadings. The Appellants point out that the Respondent never accused them of fraud, provided no details of fraud, and never even used the phrase "lifting the corporate veil" in their legal documents. S/N vvKGuz1UfEau63lAGIcsrQ

It is settled law, most authoritatively affirmed by the Federal Court in Solid Investments, that the corporate veil cannot be disregarded merely on the basis that it would serve the interests of justice. There must be proof of actual fraud at common law, or inequitable or unconscionable conduct amounting to fraud in equity and such circumstances must be specifically pleaded. Had the Respondent’s claim against the 1st Appellant rested solely on piercing or lifting the corporate veil of the 2nd Appellant on grounds of impropriety in its management, the absence of pleaded particulars of fraud would, in my judgment, possibly been fatal to that claim. (Mackt Logistics (M) Sdn Bhd v Malaysian Airline System Bhd [2014] 2 MLJ 518).

However, I am satisfied that this characterisation, while understandably adopted by the SCJ and frequently pressed by both parties at length in their respective submissions, does not accurately capture the true legal basis upon which the 1st Appellant's liability rests. In my view, the Sessions Court Judge arrived at the correct final decision but it should be justified on a different, narrower legal ground rather than on the basis of lifting the corporate veil for fraud.

The doctrine of separate legal personality, together with the connected concept of piercing or lifting the corporate veil, fundamentally addresses the circumstances under which a court will disregard a company's distinct legal persona to saddle a director or shareholder S/N vvKGuz1UfEau63lAGIcsrQ with its liabilities. This exercise essentially seeks to hold a natural person answerable for a debt that belongs, in law, to another entity.

On a precise analysis of the pleadings and the evidence adduced in this case, in my opinion, is not the true nature of the Respondent’s claim against the 1st Appellant. The Respondent’s case is framed in the pleadings and as drawn during the testimony of SP1 and SP2, rests on the premise that the 1st Appellant himself, personally and in his own right, solicited the said loan, personally assured its repayment and provided a distinct personal undertaking to see it being repaid. That in itself in my view quite independent of any corporate obligation on the part of the 2nd Appellant.

In addition, where a director interposes his own personal undertaking or assurance, distinct from and additional to the company’s liability, any resulting personal liability arises not from a corporate personality, but from the ordinary operation of the law of contract and estoppel. In such arrangement, the director has simply constituted himself as a promisor in his personal capacity. Consequently, no fraud need be pleaded or proven to ground liability on his own personal promise. The Salomon principle is simply not absorbed because the company's separate legal entity is neither pierced nor disregarded. The 1st Appellant is not being made liable for the 2nd Appellant’s debt and on this reasoning, he is being held liable for his own promise to settle a debt. S/N vvKGuz1UfEau63lAGIcsrQ

This analysis further disposes of the 1st Appellant's contention, raised for the first time in his Reply Submissions, that the Respondent’s case is fatally flawed by a self-contradiction. Specifically, the 1st Appellant argues that the Respondent cannot consistently maintain that the advance was a personal loan while simultaneously seeking to lift the corporate veil of the 2nd Appellant, asserting that these two positions cannot legally co-exist.

I am unable to accept that any such inconsistency arises once the claim is identified. It remains completely undisputed that the sum of RM150,000.00 was advanced to and received by the 2nd Appellant. The Respondent’s case, properly understood, is not that the funds were pocketed by the 1st Appellant personally, but that the 1st Appellant separately and additionally gave his personal word that he would see to its repayment.

Proceeding with this understanding, the correctness of the Sessions Court Judge’s conclusion does not turn upon whether fraud was pleaded or proven. The conclusive issue is whether the evidence supports a finding that the 1st Appellant did, as a matter of fact, personally and unequivocally assume responsibility for repayment of the loan, independently of the 2nd Appellant’s obligation as recipient of the funds. The question for determination, therefore, is whether the Respondent has discharged the burden of establishing that the 1st Appellant gave such a personal undertaking. S/N vvKGuz1UfEau63lAGIcsrQ ISSUE 2: WHETHER THE EVIDENCE SUPPORTS A PERSONAL

The 1st Appellant relies heavily on several undisputed facts to resist personal liability, namely: a) The RM150,000.00 loan was banked directly into and utilized by the 2nd Appellant; b) Both SP1 and SP2 admitted during cross-examination that no formal loan or guarantee agreements were executed with the 1st Appellant; and c) The initial WhatsApp request on 12 June 2020 explicitly requested a loan to the company ("Boleh pinjam RM150k to GASB").

Based on these facts, the 1st Appellant cites Alliance Connext Sdn Bhd & Anor v Wangsa Budimas Sdn Bhd [2021] MLJU 2165 and CBM Bhd v Lyanna bt Mohd Johan & Anor [2024] MLJU 319 to argue that a director executing an agreement for a company incurs no personal liability and that a formal, separate written instrument is required to establish a valid guarantee. S/N vvKGuz1UfEau63lAGIcsrQ

I find that these authorities do not assist the 1st Appellant. The 1st Appellant's liability does not arise out of a true collateral guarantee to answer for the default of another. Rather, it stems from his own original, direct and unconditional promise to the Respondent that repayment would be made. Such an independent contractual or promissory undertaking does not require a formal written guarantee instrument to be legally binding.

Crucially, the evidence does not stop at the initial loan request. The documentary record reveals a subsequent course of dealing where the 1st Appellant repeatedly issued personal undertakings to SP1 in the first-person singular namely, "I do it this month", "I update soon. I'm collecting payments". None of these messages purported to attribute the repayment obligation to the 2nd Appellant.

Under cross-examination, the 1st Appellant’s attempts to explain away his use of the pronoun “I” as a reference to the company were wholly unconvincing. When confronted with his own words, he was ultimately constrained to admit that he was speaking in his personal capacity and had acknowledged the debt. A witness who shifts his position when cornered by contemporaneous documentation severely compromises his own credibility. The SCJ was entirely justified in treating this defense as an after-the-fact construct to escape personal liability. Taken as a whole, the evidence sufficiently supports the conclusion that the 1st Appellant personally and unequivocally assumed S/N vvKGuz1UfEau63lAGIcsrQ concurrent responsibility for the repayment of the loan. This personal liability arises entirely from his own words and conduct, independent of the 2nd Appellant’s corporate identity and stands unaffected by the absence of formal guarantee documentation or pleaded fraud.

Given my findings that the 1st Appellant's liability rests entirely on his independent personal undertaking rather than the lifting of the corporate veil, the question of whether the Respondent failed to plead particulars of fraud or sham does not arise for determination. It follows that it is completely unnecessary to resolve or evaluate the parties competing legal submissions and extensive authorities regarding the doctrine of piercing the corporate veil, as none are engaged on these facts.

The Respondent’s pleadings based on the material before me allege only a possible misuse of funds and assert that the 1st Appellant, as stated by the SCJ as “hanya menggunakan taktik undang-undang penyingkap tirai korporat untuk mengalihkan liabilitinya.” Such pleadings fall short of the specific and particularised plea of actual fraud or fraud in equity required by the standars of the Tenaga Nasional Bhd v Irham Niaga and Sinas Teknik Sdn Bhd v Tetuan Foo Hiap Siong & Co [2023] MLJU 974. S/N vvKGuz1UfEau63lAGIcsrQ

The Appellants contend that the SCJ impermissibly reversed the burden of proof by requiring the 1st Appellant to prove he was not personally liable and further erred by drawing an adverse inference against him under section 114(g) of the Evidence Act 1950 for failing to produce evidence to support his "Herbal Science Project" defence. In accordance with section 101 of the Evidence Act 1950, the legal burden of proving the claim rested and at all times remained, on the Respondent. As established in Yeohata Machineries Sdn Bhd v Coil Master Sdn Bhd & Ors [2015] 6 MLJ 810, the party asserting a legal right must first make out a prima facie case before any evidential burden shifts.

However, on the facts, the Respondent successfully discharged this initial prima facie burden. Through concurrent WhatsApp messages and the oral testimonies of SP1 and SP2, the Respondent established that the 1st Appellant had personally requested the funds, personally promised to repay them and explicitly accepted via his text response "ok" that repayment was due by July 2020. The SCJ's approach in evaluating these informal WhatsApp communications through the established contractual standards of offer, acceptance and breach, relying on Bank Kerjasama Rakyat Malaysia Bhd v Kejora Pelangi Sdn Bhd & Ors [2018] MLJU 784 was legally sound and correct. S/N vvKGuz1UfEau63lAGIcsrQ

Once the Respondent made out its prima facie case, the evidential burden as opposed to the legal burden then shifted to the Appellants to contradict it and to substantiate their positive defense that the loan was tied to an incomplete "Herbal Science Project" (see Tan Kim Khuan v Tan Kee Kiat (M) Sdn Bhd [1998] 1 MLJ 697 and Tan Kah Khiam v Liew Chin Chuan & Anor [2007] 2 MLJ 445). Having raised this project-linked defense, the 1st Appellant bore the evidential responsibility to back it up. However, he produced no contemporaneous documents, called no witnesses and failed to provide any credible explanation as to why this project was never mentioned in any communication over a two-year period. In fact, during cross-examination, the 1st Appellant explicitly conceded that no such supporting evidence existed.

In these circumstances, the SCJ was fully entitled to invoke section 114(g) of the Evidence Act 1950 and draw an adverse inference against the Appellants for failing to produce evidence that should have been readily available to them had their defense been true (see Wong Kar Juat v S7 Auto Parts (M) Sdn Bhd [2015] 9 CLJ 590). This process did not constitute a reversal of the legal burden of proof, but was instead the proper legal consequence of the Appellants' failure to discharge an evidential burden that had validly shifted to them. S/N vvKGuz1UfEau63lAGIcsrQ

The Appellants contend that the SCJ erred in failing to find that SP1 and SP2 were non-credible witnesses. In support of this contention, they highlight SP2’s initial reluctance to disclose his dual role as director and accountant for the Respondent, SP1’s initial evasiveness regarding external directorships and SP1’s eventual concession during cross-examination that the 1st Appellant was acting as the representative of the 2nd Appellant when the initial loan request was made.

I have carefully reviewed these facts. Even though the Respondent’s witnesses were initially not entirely upfront about secondary matters, this does not ruin the main, undisputed text evidence supporting the Respondent's claim. That evidence consists of the WhatsApp messages written by the 1st Appellant himself, which no one has challenged as being fake or altered. Furthermore, even though one witness (SP1) admitted that the 1st Appellant originally asked for the loan on behalf of the company on 12 June 2020, this does not change the key fact that the 1st Appellant later took on personal responsibility for paying it back through his own text messages.

The SCJ, having heard and observed all three witnesses at trial, was in a far superior position to weigh these credibility points. I am not persuaded that her assessment was plainly wrong. In any event, given S/N vvKGuz1UfEau63lAGIcsrQ that this case turns principally on the 1st Appellant’s own admitted written communications rather than the oral testimonies of SP1 or SP2, any residual doubt regarding the witnesses' general credibility could not have altered the ultimate outcome of the case. ISSUE 6: THE TIMING OF REPAYMENT AND THE WORD "OK"

The Appellants contend that the SCJ erred in law and fact by finding that the loan was due and repayable on or before July 2020 based on the 1st Appellant’s WhatsApp response of "ok". They argue that, in the absence of an explicitly agreed repayment date, section 47 of the Contracts Act 1950 governs the transaction, requiring repayment only within a reasonable time. On their case, such a reasonable time has not yet arrived because the "Herbal Science Project" remains incomplete. They further maintain that no legal authority supports treating a simple "OK" as a valid personal acknowledgment of debt.

This submission is unsustainable. Having already upheld the SCJ's rejection of the "Herbal Science Project" defense for a total lack of credible evidence, that conditional repayment argument completely falls away. Consequently, the 1st Appellant’s reply of "ok" sent in direct response to an explicit message specifying settlement of the RM150,000.00 "this month" must be read together with his initial assurance that he would return the money "ASAP". Taken together, S/N vvKGuz1UfEau63lAGIcsrQ this is more than sufficient to sustain a finding that the 1st Appellant accepted and agreed to a repayment timeline by the end of July 2020.

I am also unable to accept the assertion that a simple affirmative response cannot amount to an acknowledgment or acceptance in law. The SCJ correctly relied on Wong Cheong Kai & Ors v Hongkong Bank (M) Bhd & Anor [2000] 3 MLJ 419, where the endorsement "OK" by a Senior Assistant Registrar was judicially recognized as an approval and acceptance of a request. While that case arose from a different factual background, it stands for the clear proposition that the word "OK", when deployed in direct response to a specific and unambiguous demand, is entirely capable of constituting a valid legal acceptance, with its weight determined by the surrounding context.

Applying ordinary contractual principles of offer and acceptance, consistent with the approach taken in Yam Kong Seng & Anor v Yee Weng Kai [2014] 4 MLJ 478 regarding informal debt acknowledgment, the word "ok" in this instance was an unequivocal acceptance of a demand that explicitly outlined the amount, payee and timeframe. I find no error in the SCJ's treatment of this issue. It follows that the Respondent’s claim and the 1st Appellant's consequent liability to satisfy it, was neither premature nor conditional upon the completion of any project. The cause of action was fully ripe for adjudication and was rightly allowed by the Sessions Court. S/N vvKGuz1UfEau63lAGIcsrQ

For the reasons set out above, I find no error, whether of law or fact, in the decision of the SCJ that would warrant appellate intervention. The decision below was correct and an appellate court will not interfere and therefore, the appeal is accordingly dismissed and the decision of the SCJ dated 19 September 2025, is affirmed in its entirety. Date: 6th July 2026 SGD SHOBA DORAI RAJAH JUDICAL COMMISSIONER SHAH ALAM HIGH COURT Solicitor for the Appellants: Dato Wee Choo Keong with Yeo Wei Min [MESSRS WEE CHOO KEONG & FAAIZ (KUALA LUMPUR)] Solicitor for the Respondent: Dharushini Bai A/P Sailanatan with Audrey Tan [MESSRS AUDREY TAN LAW CHAMBERS (PETALING JAYA)] S/N vvKGuz1UfEau63lAGIcsrQ