Econpile (M) Sdn Bhd v Irdk Ventures Sdn Bhd (dalam Likuidasi) (WA-22NCC-39-02/2023)

DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR DALAM WILAYAH PERSEKUTUAN KUALA LUMPUR, MALAYSIA (BAHAGIAN DAGANG) GUAMAN NO: WA-22NCC-39-02/2023 ANTARA ECONPILE (M) SDN BHD (No. Syarikat: 164265-P) …PLAINTIF DAN

1. IRDK VENTURES SDN BHD (DALAM LIKUIDASI) (No. Syarikat: 549318-U)

2. TAN SRI DATO SRI DR RAMASAMY A/L

3. MUTHUSAMY (NRIC NO: 631126-08-5259) PUAN SRI DATIN SRI DR INDRA GHANDI A/L ELAYAPPAN (NRIC NO: 660114-08-5174) …DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT Introduction

1. The Plaintiff sued the Defendants over an alleged conspiracy to deprive the Plaintiff of sums it claims were owed by the 1st Defendant (“D1”). D1 was part of the IRDK group of companies helmed by the 2nd Defendant (“D2”). The 3rd Defendant (“D3”) is 08/05/2026 15:55:45 WA-22NCC-39-02/2023 Kand. 263 **Note : Serial number will be used to verify the originality of this document via eFILING portal D2’s wife. D2 and D3 were the sole directors and shareholders of D1.

2. This action raised questions about when a claim is an impermissible attempt to reallocate corporate liability onto individuals, contrary to the principles of separate legal personality and limited liability, and when the line is crossed from legitimate defence of litigation into facilitating asset-stripping to defraud creditors. Background facts

3. D1 had awarded a contract dated 8-10-2014 to P (“Contract”) to carry out piling and cap works for a condominium project (“Project”). The Contract sum was set at RM8,730,000.00. Piling and cap works under the Contract had originally been scheduled to start on 1-10-2014 and be completed on 28-2-2015, but this was extended to 5-4-2015.

4. The Architect for the Project, YTT Architects, issued 3 notices on 3-4-2015, 10-4-2015 and 11-4-2015 raising issues like non-compliance with project staffing requirements. On 17-4-2015, the Architect issued a notice to terminate the Contract for alleged non-compliance with the Architect’s instructions (“Contract Termination”).

5. The Plaintiff had an unpaid certified claim, and final accounts were not settled. The Plaintiff later learned, through the media on 27-4- 2015 and a Bursa Malaysia announcement on 1-6-2015, that D1 **Note : Serial number will be used to verify the originality of this document via eFILING portal had entered into a Sale and Purchase Agreement dated 21-4-2015 to sell the Project and Project land to Matrix Concepts (Central) Sdn Bhd (“Matrix Concepts”) for RM95 million (“SPA”).

6. The Project land at HS(D)297055, PT 8790, Mukim Pekan Kinrara, Daerah Petaling, Selangor Darul Ehsan is the only identified asset of D1 and was, according to the Bursa announcement, valued at RM95 million. It was also announced that among the conditions precedent of the SPA was the termination of contractors and consultants appointed by D1 for the Project.

7. Since the Contract Termination, the Plaintiff had been trying to recover its unpaid claims for work done and other losses from the Project. Those recovery efforts have only been partially successful. On 18-7-2016, the Plaintiff received RM2,033,225.03 from D1, being the aggregate sum owed under a Construction Industry Payment and Adjudication Act 2012 (“CIPAA”) adjudication decision delivered on 30-10-2015 (“Adjudication Decision”).

8. The Plaintiff has failed to recover a further principal sum of RM3,841,087.81 together with accrued interest and costs awarded in a PAM arbitration. The arbitration proceeded ex parte after D1’s solicitors were discharged and D1 ceased participating. The arbitration award was published on 5-10-2018 (“Arbitration Award”). Unknown to the Plaintiff, D1 had already been wound up on 5-7-2018. **Note : Serial number will be used to verify the originality of this document via eFILING portal

9. Prior to the winding up of D1, D2 and D3 had disclaimed all liability, inter alia, because they had sold their entire 5 million shares in D1 to 2 individuals, Muthusamy a/l Sengali Gounder and Arulselvi a/p Ramasay (“Muthusamy” and “Arulselvi”) on 29-2-2016 and resigned as directors on 12-4-2016. Muthusamy passed away at some point before this trial, and Arulselvi could not be served a subpoena as her addresses in D1’s records maintained at the Companies Commission of Malaysia did not exist.

10. Having obtained leave from the winding up Court, the action commenced here on 14-7-2023 against D1, D2 and D3 to recover damages, including aggravated and exemplary damages, grounded on the tort of conspiracy between D1, D2 and D3 to injure or defraud the Plaintiff by unlawful means, namely by means of: a) breach of the Contract, i.e. non-payment and termination; and b) dishonest or unconscionable conduct to avoid payment to the Plaintiff for work done in the Project, which the Plaintiff says also amounts to fraud and abuse of the corporate personality of D1.

11. D1’s liquidator did not defend the claim and the trial proceeded with only D2 and D3. They resisted the imposition of personal liability on them for the actions of D1. **Note : Serial number will be used to verify the originality of this document via eFILING portal Analysis and findings

12. The parties drew up and agreed upon the following agreed issues for determination after full trial. This Court will deal with the issues identified in the following order: LIMITATION PERIOD a) Whether the Plaintiff’s claim against D2 and D3 for alleged conspiracy is barred by limitation ESTOPPEL BY ELECTION b) Whether the Plaintiff is estopped by the doctrine of election from commencing the action against D2 and D3; c) Whether High Court Order dated 28-7-2022 under OS No: WA-28PW-88-02/2020, in accepting the Plaintiff’s proof of debt, renders the claim against D2 and D3 unsustainable IDENTITY OF CONSPIRATORS d) Whether the corporate veil of D1 should be pierced, lifted or disregarded to impose liability on D2 and D3; and PROOF OF CONSPIRACY e) Whether the Defendants have conspired to injure the Plaintiff by unlawful means f) Whether the Plaintiff is entitled to the relief sought. **Note : Serial number will be used to verify the originality of this document via eFILING portal A. LIMITATION PERIOD

13. The Plaintiff pleaded that the Defendants had carried out unlawful acts, namely the breach of Contract by D1 in respect of non-payment and termination, and the following actions attributed to D2 and D3, as part of the conspiracy (summarized from the pleaded particulars of conspiracy and ordered chronologically): Contract Termination a) D1 had no intention to complete the Project but had always intended to sell the whole Project to Matrix Concepts; b) D1 via its Architect issued notices of default and thereafter wrongfully terminated the Plaintiff; c) The Plaintiff did not breach the Contract. Its termination was to comply with CPs under the SPA with Matrix Concepts; Non-Payment d) As a result of the unlawful termination, D1 also withheld all payments that are due to the Plaintiff for work done; Dissipation to defraud creditors e) D1 fraudulently distributed all the proceeds from the Matrix Concept sale to D2 and D3 themselves while the adjudication was pending; f) Had D1 not distributed all its monies to the shareholders in July 2015, D1 would have more than sufficient funds to satisfy **Note : Serial number will be used to verify the originality of this document via eFILING portal the debt owed to Ellipsis (M) Sdn Bhd, and D1 would not have been wound up; Delaying final determination of debt g) D1 refused to make payment on the Adjudication Decision and appealed the matter to the Court of Appeal and the Federal Court; h) D1 had on numerous times attempted to delay the arbitration proceedings commenced; Winding up of D1 i) Although D1 was fully aware of the winding up petition filed by Ellipsis (M) Sdn Bhd, D1 failed to disclose this to the Plaintiff and/or the arbitral tribunal; and j) Due to the acts and omissions of D1 to D3 above, the Plaintiff had to expend time and costs since 2015 to pursue legal actions against D1.

14. This suit was commenced on 19-5-2022. The only cause of action pleaded against D2 and D3 was unlawful means conspiracy, a tort with a 6-year limitation period from when the cause of action had accrued. The critical date was therefore 19-5-2016. It is trite that if all material facts giving rise to an enforceable cause of action already existed as at 18-5-2016, this action would be statute-barred.

15. The elements of the cause of action is well-established, and it is complete with proof of: **Note : Serial number will be used to verify the originality of this document via eFILING portal a) combination or agreement between 2 or more persons; b) with intent to injure; c)

pursuant to which combination or agreement and with that intention, certain overt unlawful acts were carried out; d) resulting in loss and damage.

16. It is thus also trite that for this tort, the cause of action is only complete when loss and damage is suffered. There was disagreement on when this occurred: a) D2 and D3 contended that damage caused by the alleged conspiracy, if any, was suffered by the Plaintiff when the Contract was terminated on 17-4-2015, or when the Project was sold to Matrix Concepts on 21-4-2015, or at the latest when D1 distributed RM68 million of the RM95 million proceeds of the SPA in dividends to D2 and D3 on 26-2-2016. b) The Plaintiff contended that until the Arbitration Award was issued on 5-10-2018, its loss and damage were only contingent or prospective, referring to the recent Federal Court decision in Julian Chong Sook Keok & Anor v Lee Kim Noor & Anor [2024] 5 CLJ 519 (“Julian Chong”).

17. The time when actual damage occurs is fact-dependent. Julian Chong is a case on solicitors’ negligence where the Court found no actual, measurable damage suffered by the plaintiff house buyer until the charge, the existence of which the conveyancing lawyers missed through negligence, foreclosed and demanded a redemption sum. The Court found on those facts, that the negligent **Note : Serial number will be used to verify the originality of this document via eFILING portal preparation of the SPA in 2004 created only a contingent risk, i.e. the possibility that the chargee might enforce its charge. Until enforcement, there was no actionable damage.

18. Based on the claim as pleaded in this case, this Court finds that for purposes of determining when the Plaintiff suffered damage, neither the date that the Arbitration Award was issued nor the date when the Contract was terminated are relevant.

19. The arbitration claim included, inter alia, claims for retention sums and uncertified work done. There was no credible substantive defence to non-payment. Even on a quantum meruit basis, the claim could only have been extinguished by a quantified counterclaim from D1, which D1 ultimately elected not to pursue.

20. The validity of the termination of the Contract or otherwise is only relevant to a counterclaim or set off to be proved by D1, and not a gauge as to whether the Plaintiff suffered actual measurable damage by reason of the termination of the Contract and/or the conspiracy. That such sums were recoverable was not prospective or contingent when the arbitration was commenced.

21. For the above reasons, the date of issuance of the Arbitration Award is not relevant as the fact of loss and damage from the pleaded conspiracy was established well before then.

22. As noted, the crux of the pleaded case is that there was a conspiracy between D1, D2 and D3, hatched sometime before April 2015, to engineer events “so as to ensure that its **Note : Serial number will be used to verify the originality of this document via eFILING portal shareholders are paid its dividends but the Plaintiff remains unpaid.” The relevant damage for purposes of the conspiracy claim is not merely the existence of unpaid contractual sums, but the impairment or destruction of the Plaintiff’s practical ability to recover them.

23. Based on the above, the relevant event that signified accrued loss and damage for the Plaintiff is when D2 and/or D3 took the defining step that made full recovery of the Plaintiff’s contractual claim impossible. It was not apparent that this occurred with the distribution of the RM68 million dividends on 26-2-2016, since D1 received in excess of RM95 million in the Matrix Concepts SPA.

24. That said, there is direct and circumstantial evidence that points to the fact that all of the RM95 million was dissipated out of D1 on or shortly after 29-2-2016 i.e. a) the transfer of shares in D1 to Muthusamy and Arulselvi on 29-2-2016 was effected for nominal consideration; b) the Adjudication Decision against D1 was later settled with monies advanced by IRDK Land Sdn Bhd to stakeholders on 13-4-2016; and c) the 2 affidavits affirmed by D2 on 17-6-2016 and 21-6-2016 to stay enforcement of the Adjudication Decision and oppose the winding up petition filed by the Plaintiff were direct admissions by D2. **Note : Serial number will be used to verify the originality of this document via eFILING portal

25. In support of D1’s application to stay enforcement of the Adjudication Decision, D2 averred that D1 had RM3,000,000.00 remaining in cash reserve. In the affidavit affirmed to oppose the winding up of D1 on 21-6-2016, D2 admitted that: “22….counsel for the petitioner has stated in court that my company has over RM95 million in cash reserves after having sold the disputed project. I verily state that this was indeed the case however all the funds in relation to the sale of the disputed project has been disbursed to the company shareholders before the dispute even arose at the adjudication stage.” The payment claim in the adjudication was served on 20-5-2015.

26. Based on the above, D2’s affidavit evidence was equivocal and tailored to suit his immediate purposes. Considering the impact of all of his statements and actions, however, this Court is of the view that the Plaintiff’s loss likely crystallised sometime in February

2016. If so, this action is prima facie beyond the statutory period of limitation.

27. In response to this, the Plaintiff argued that section 29(1)(a) and/or

28. Section 29(1)(a) of the Limitation Act 1953 above provides that if an action is based upon the fraud of the defendant, the period of limitation shall not begin to run until the plaintiff has discovered the fraud or could with reasonable diligence have discovered it.

29. In this case, it is the Plaintiff’s pleaded case that D1 fraudulently distributed all the proceeds from the Matrix Concept sale to D2 and D3 themselves while the adjudication was pending. If this is true, such conduct is characteristic of fraud on creditors or fraudulent trading under insolvency laws, even if the Plaintiff’s case was not framed in those terms.

30. Thus, there is an allegation of fraudulent disposition of assets by D1, D2 and D3 to avoid payment to a creditor, and that act of fraudulent disposition was only within the knowledge or discoverability of the Plaintiff with reasonable diligence in June **Note : Serial number will be used to verify the originality of this document via eFILING portal 2016 when the Plaintiff was put on notice that D1’s coffers had been emptied.

31. Even in non-fraud cases, the Federal Court in Julian Chong also recognized that knowledge or discoverability of the wrongdoing with reasonable diligence is material to accrual of a cause of action, following the Court of Appeal in Sabarudin Othman & Anor v. Malayan Banking Bhd & Other Appeals [2018] 1 LNS 357 (“Sabarudin”).

32. In Sabarudin, the issue centred on whether the plaintiff's third-party claim for negligence and breach of contract against the legal firms involved in the preparation of the letters of guarantee for loans was time-barred. The legal firms argued that the cause of action accrued in 2005 and 2007 when the allegedly forged letters of guarantee were signed and attested, meaning the six-year limitation period under section 6 of the Limitation Act 1953 had expired before the claim was brought in 2014.

33. However, the Court of Appeal in Sabarudin held that the cause of action only accrued when the plaintiff suffered actual, rather than prospective, damage. This occurred in May 2012, at the earliest, when the 3rd defendant served a defence and counterclaim disputing the authenticity of the signatures on the letters of guarantee. Therefore, the 2014 third-party notice was filed well within the allowable six-year period. **Note : Serial number will be used to verify the originality of this document via eFILING portal

34. On these facts, this Court finds that the earliest date upon which the Plaintiff could reasonably have discovered the possible fraudulent dissipation of D1’s assets was 17-6-2016, when D2 disclosed that D1 had only RM3 million remaining in cash reserves. This was the first revelation that should have put the Plaintiff on inquiry, and upon which reasonable inquiries could have been undertaken to uncover it. B. ESTOPPEL BY ELECTION

35. D2 and D3 argued that the Plaintiff made an election to pursue arbitration proceedings against D1 and is thereby estopped from pursuing this action for conspiracy against D2 and D3 to recover the same alleged loss and damage. By extension, the arbitration culminated in an Arbitration Award against D1, which formed the basis of a Proof of Debt that had been accepted by the liquidator.

36. D2 and D3 thus made the case that the pursuit of a conspiracy is an attempt to shift liability to them after efforts to recover from D1 via adjudication, arbitration and winding up all failed. Counsel for D2 and D3 sought to apply the doctrine of estoppel as applied by the Court of Appeal in Dato’ Sivananthan Shanmugam v Artisan Fokus Sdn Bhd [2015] 2 CLJ 1062 (“Sivananthan”)

37. Sivananthan concerns the recovery of an RM2.3 million deposit paid by one Datuk Hoe Tze Fook (“HTF”) to Cosmotine Sdn Bhd, a nominee of Sivananthan. Under a shareholders’ agreement, the deposit was payable by Artisan Fokus Sdn Bhd, of which HTF is a director/shareholder. **Note : Serial number will be used to verify the originality of this document via eFILING portal

38. HTF sued Cosmotine Sdn Bhd and obtained summary judgment for the RM2.3 million because the deposited cheque for its refund was dishonoured. It was an action on a cheque. Separately, Artisan Fokus Sdn Bhd also sued Dato’ Sivananthan under the shareholders’ agreement and also obtained a judgment. On these facts, the Court of Appeal found that there was a privity of interest in both suits and so the second suit was barred by the election despite the fact that the causes of action and the parties were different: “[17] HTF had elected to commence the HTF suit against Cosmotine which ended with the summary judgment being recorded. The continuation of these proceedings against the appellant has clearly violated the doctrine of election, the concept which is ingrained in our legal system and common law that an individual can either opt for the choice of remedies or relinquish it. It is trite law and, indeed, a fundamental tenet of law that where a person has determined to follow one of his remedies and has communicated it to the other side in such a way as to lead the opposite party to believe that he has made that choice, he has completed his election and can go no further (see the House of Lords decision in Benjamin Scarf v. Alfred George Jardine (1881-82) 7 Appeal Cases 345).”

39. Mayland Development Sdn Bhd & Anor v Tanjung Teras Sdn Bhd [2016] MLJU 901 (“Mayland”) is another authority that D2 and D3 referred to. In Mayland, the plaintiff had already sued Vistanet (the main contractor) and obtained summary judgment for sums owed in the amount RM435,685.95. They then lodged a **Note : Serial number will be used to verify the originality of this document via eFILING portal Proof of Debt in Vistanet’s voluntary winding-up and even voted in favour of the winding-up resolution.

40. After all that, the plaintiff commenced a fresh action against Mayland Development (D1) and Malaysia Land Properties (D2), seeking to recover the same judgment sum (with interest and costs) from them by alleging fraud and arguing that Vistanet, Mayland Boulevard, and the defendants operated as a single economic unit.

41. Lee Swee Seng HCJ (as His Lordship then was) held that estoppel by election operated where the plaintiff had first sued Vistanet, obtained judgment, lodged its proof of debt, participated in the winding-up process, and only thereafter sought to proceed against defendants by alleging fraud and seeking to lift the corporate veil. The Court held that estoppel would operate because there has been an election by conduct on the part of the Plaintiff.

42. In Mayland, the plaintiff alleged fraud against the defendants for filing Proofs of Debt totalling RM35 million, while the plaintiff’s debt was under the purview of the liquidator. The facts seem to suggest that the defendants and Vistanet were all part of a group enterprise and that the veil of incorporation could have been lifted at the outset. Instead, the plaintiff sued Vistanet alone. Thus, the election by the plaintiff was found to have been made and this resulted in the subsequent suit against the defendants being barred by the doctrine of res judicata. **Note : Serial number will be used to verify the originality of this document via eFILING portal

43. In this case, the Plaintiff’s contractual cause of action against D1 arose from unpaid sums for work done, and was pursued in the ordinary way through arbitration commenced on 5-4-2016. The factual basis for the present conspiracy claim only emerged subsequently, when facts pointing toward deliberate dissipation of assets became apparent.

44. As noted from the previous section on limitation period, the Plaintiff could have commenced another claim relating to possible unlawful disposition of assets to avoid creditors immediately after 17-6- 2016, but it did not do so. However, it could not have done so in the arbitration since D2 and D3 are not parties to the arbitration agreement and if this suit had been filed in parallel with the commencement of arbitration, it would probably have been fodder for satellite litigation to ensue.

45. In any case, unlike Sivananthan, this action did not arise from the same set of facts, background, issues and circumstances as the adjudication and arbitration. This action does not seek to recast the same complaint of non-payment for work done in the language of conspiracy to impose personal liability on D2 and D3. Unlike Mayland this action is not barred by res judicata because it could not, for that reason, have been brought in the prior adjudication or arbitration proceedings.

46. This Court has thus considered the facts in the present case and is of the view that the situation is not one where the Plaintiff was put to an election between 2 concurrent, alternative causes of action and elected to pursue one to the end and waive the other. **Note : Serial number will be used to verify the originality of this document via eFILING portal C. IDENTITY OF THE CONSPIRATORS

47. There is one more legal argument to contend with before dealing with the substance of the conspiracy claim, namely whether there were at least 2 conspirators in this case, considering that D2 is also alleged to be the alter ego of D1 and according to D2 and D3, they were no longer shareholders and directors from 29-6-2016 and 12- 4-2016. D3 also claims to have been a sleeping director with no meaningful participation in any of the events cited.

48. Dealing first with D3, it was argued that she participated as a director in the sale to Matrix Concepts and received proceeds as a passive director, following the treatment of a sleeping director accused of and found liable for conspiracy in Golden Plus Holdings Berhad v China Idea Development Limited & Ors [2025] CLJU 2895. The principle relied on in that case is that: “…participation in a conspiracy “can be active or passive” and “consent can be inferred if it is proved that he knew what was going on and the intention to participate in the furtherance of the criminal purpose is also established by his failure to stop the unlawful activity.”

49. In this case, no particulars of any specific conduct have been pleaded against D3. This Court could find no evidence to dismantle D3’s case that she was indeed a sleeping director in D1 who had remained passive and ignorant of any unlawful conduct by the company or board of directors undertaken in her name. No specific act had been attributed to D3, nor any basis offered why she should **Note : Serial number will be used to verify the originality of this document via eFILING portal have been put on inquiry that something was amiss in the dealings of D1 on the Project and its sale.

50. In short, there is insufficient evidence to infer a combination or agreement involving D3 at any point in time during the pleaded conspiratorial pursuit. The burden was on the Plaintiff to bring sufficient evidence and this burden was not discharged, either by the evidence led or in the cross-examination.

51. On the matter of plurality of actors in a conspiracy, the issue is all the more acute with D3 out of the picture. This is because of the ordinary rule that a company acts through its directors and their acts are therefore the company’s acts. This principle was established in Said v Butt [1920] 3 KB 497 (“Said v Butt”) where McCardie J said that: “…if a servant acting bona fide within the scope of his authority procures or causes the breach of a contract between his employer and a third person, he does not thereby become liable to an action of tort at the suit of the person whose contract has thereby been broken.”

52. In Nagase Singapore Pte Ltd v Ching Kai Huat [2007] SGHC 169 (“Nagase”), the court in Singapore explicitly discussed the rule in Said v Butt in the context of whether a director and his company can conspire together. The court reviewed Chong Hon Kuan Ivan v Levy Maurice [2004] 4 SLR(R) 801, where Woo Bih Li J applied Said v Butt to hold that a director acting bona fide **Note : Serial number will be used to verify the originality of this document via eFILING portal within the scope of his authority is protected from liability when procuring a company’s breach of contract.

53. In Nagase, counsel for the plaintiff argued that this protection should not apply because the director in that case had acted dishonestly by deliberately overcharging the plaintiff through the company. In those circumstances, the judge agreed that the Said v Butt principle did not apply. It was only meant to protect directors acting in good faith, not those who wrongfully and dishonestly cause the company to commit unlawful acts. The court concluded: “DC could not in the circumstances be said to have acted in a bona fide manner within the scope of his authority. In these circumstances, it was fair and reasonable to impose liability on DC for conspiring with D Logistics to wrongfully overcharge the plaintiff.”

54. The rule in Said v Butt similarly applies in Malaysia and there is no reason to interpret differently from how it was interpreted in Nagase, what acting bona fide within the scope of a director’s authority means. In this case, Said v Butt would similarly not give rise to any conceptual difficulty in finding that D2 would certainly be acting outside the scope of lawful authority, if he had acted unlawfully to defraud creditors. The company’s interest cannot be equated with evading lawful obligations.

55. In this case, the facts necessary to bring the case outside the usual rule in Said v Butt have been sufficiently pleaded here as it is alleged that D2 was the directing mind and will of D1 at all material times before and after he resigned as a director, that he not only **Note : Serial number will be used to verify the originality of this document via eFILING portal procured the breach of the Contract by D1, but also orchestrated the asset stripping of D1 to defraud the Plaintiff as a creditor.

56. As for D2’s contention that he and D3 had ceased to be shareholders on 29-2-2016 and as directors on 12-4-2016, these assertions are irrelevant if D2 was in fact, still the directing mind and will of D1 behind the scenes. In such a circumstance, D1 would have been used as a shield as well as a vehicle of D2’s fraud. The Plaintiff made this the central thesis of its claim.

57. In Ong Leong Chiou & Anor v Keller (M) Sdn Bhd & Ors [2021] 4 CLJ 821 @ 841, this is described as the concealment and evasion principles: “(iv) Where the wrongdoing relates to the abuse of the corporate personality as a ‘façade’, the principle to be applied is that of concealment. This principle does not entail the piercing of the corporate veil. The interposition of a company or perhaps several companies so as to conceal the identity of the real actors will not prevent the court from identifying the real actors. There is no piercing because the court is not disregarding the façade but looking behind it to discover the facts which the corporate structure is concealing.

58. According to the Plaintiff, the facts show that the controlling mind and will of D1 was indeed D2 at all material times. He participated openly in the conspiracy as such, using the corporate structure of D1 to evade responsibility, and later used D1 surreptitiously to conceal his continued personal involvement in orchestrating the actions of D1 in the conspiratorial pursuit.

59. These are the facts asserted by the Plaintiff about D1’s continued personal involvement after 26-2-2016, and after 17-4-2016: a) Instructing solicitors to act and affirming affidavits on behalf of D1 in various court proceedings in June 2016; b) Instructing an IRDK group employee and D2’s personal assistant to postpone the arbitration proceedings in May 2018; c) Inexplicably failing to lodge the notice of change of shareholders of D1 until 19-7-2018; and d) Meeting with Ng Choon Jin as potential liquidator on the winding up of D1 as mentioned in a fee quotation from SL Ng Corporate Solutions and addressed to D2 in July 2018.

60. On the face of the documentary evidence introduced to prove the above, this Court is satisfied on a balance of probabilities that they transpired as represented, and that they had been the actions driven by D2 as the continuing mind and will of D1 at the time. This **Note : Serial number will be used to verify the originality of this document via eFILING portal determination is based principally on the Court’s assessment of the credibility of D2, which this Court discusses in the next section.

61. For the purpose of this section of the Judgment, it is the case put forward by D2 and D3 that Muthusamy and Arulselvi acquired D1 and assumed responsibility for substantial contingent liabilities for RM5,000. The transaction gives rise to a compelling inference that Muthusamy and Arulselvi were not the real owners of D1, but nominees of D2 and D3.

62. To this contention, D2 and D3 argued that the Plaintiff cannot assert that Muthusamy and Arulselvi are nominees because it was not pleaded. This Court disagrees and considers that the Plaintiff had adequately pleaded the nominal role of Muthusamy and Arulselvi as part of the series of overt conspiratorial acts attributed to D1 after February 2016, by the attributing the directing mind of D1 to D2 as its alter ego.

63. This Court also finds the testimony of Ng Choon Jin on how SL Ng Corporate Solutions came to issue a very specific quotation for liquidation services to D2 to be contrived and unconvincing. Based on the narrative offered as to why that fee quotation came to exist, the logical thing for a prospective liquidator to do is approach the petitioning creditors of recently wound up companies which information is readily available from public sources, rather than to seek out and proposition the wound up company and its directors. **Note : Serial number will be used to verify the originality of this document via eFILING portal

64. As it will also be apparent below, someone was funding the liquidator of D1 in litigation over the Plaintiff’s attempt to prove its debt. D2 was clearly an interested party in all of that, as a director and recipient of substantial dispositions of assets from D1 before its winding up. D. PROOF OF CONSPIRACY

65. The actors and the object of the supposed conspiracy thus being identified, it is time to consider the alleged overt unlawful acts levelled against D2 who contended that the Plaintiff was unable to prove all the elements to make a case of unlawful means conspiracy, principally because: a) there are no particulars or evidence of any combination or agreement between D1, D2 and D3; and b) that the Plaintiff cannot recast independent events after the Contract Termination as part of the alleged conspiracy because D2 and D3 were only reacting to events driven by other parties. Combination/Agreement

66. As a matter of law, the Court may infer the existence of a combination or agreement from evidence of the overt acts undertaken by the conspirators. This is an accepted approach as the courts recognize that conspiracy is seldom capable of proof by direct evidence (MGG Pillai v Tan Sri Dato Vincent Tan Chee **Note : Serial number will be used to verify the originality of this document via eFILING portal Yioun & 2 Other Appeals [1995] 2 CLJ 912; Deepak Jaikishan a/l Jaikishhan Rewachand&Anor v Intrared Sdn Bhd & Anor [2013] 7 MLJ 437).

67. In circumstances where the alleged conspiracy is between a company and its controlling director, the notion of a ‘combination’ between separate minds becomes somewhat artificial. The requirement of plurality remains formally necessary, though in such cases the company may operate as the vehicle through which the controlling mind carries the conspiracy into effect.

68. Thus, if the overt conspiratorial acts are proved, this Court may infer a common intention by D1 and D2 to achieve the object of the conspiracy. In the same way, this Court may evaluate proof of the overt conspiratorial acts to infer the individual intent and state of mind of D2. Overt unlawful acts

69. In this section, many of the facts are not disputed. D2 contended that they are independent events in which the actions of D1 and D2 are justified and/or lawful. The argument, as noted, was that the Plaintiff has sought to stitch them together to form a narrative of a conspiracy that never existed. This Court evaluated the facts and evidence to determine the more probable truth of the matter. **Note : Serial number will be used to verify the originality of this document via eFILING portal Undisputed facts

70. The Contract Termination and Matrix Concepts SPA phase have been set out earlier as part of the background of the case above. To add to that background, there was another notable condition precedent to the Matrix Concepts SPA, i.e. Matrix Concepts agreed to pay further sums to D1 as reimbursement of certain costs. It was thus agreed on 27-5-2015 that the following sums were payable: a) Project Consultant costs [RM3,098,255.57] b) Construction costs [RM15,125,688.86] c) Contribution for Indah Water Konsortium, drainage costs, water and electricity deposit paid [RM473,484.32 +RM13,250.00]; and d) pre-determined project management costs [RM1.6 million] The Plaintiff’s claims for work done, which included both unpaid certified claims and contingent uncertified claims, were not provided for.

71. This was despite the fact that a week before that on 20-5-2015, the Plaintiff had commenced adjudication proceedings to recover RM4,035,381.87 in payment claims. It was contested by D1 principally on grounds that the adjudicator had no jurisdiction to hear the matter, since the Contract had been terminated. The substantive defence for non-payment was unclear. **Note : Serial number will be used to verify the originality of this document via eFILING portal

72. On 30-10-2015, the adjudicator delivered the Adjudication Decision that ordered D1 to pay the Plaintiff its certified claim of RM1,805,866.65 (Payment Certificate No. 5-R1) with interest and costs. For about a year after that, the parties were embroiled in litigation and disputes over this Adjudication Decision as D1 applied to stay and set aside the Adjudication Decision, and resist enforcement of the same, all the way to the Federal Court.

73. Meanwhile, the balance of the Plaintiff’s claim of RM2,229,515.22 (Progress Claim No. 6) that D1’s appointed Quantity Surveyor had valued, was not ordered to be paid by the adjudicator who determined that it was not yet due and payable according to the contractual terms of payment as the progress claim had yet to be certified by the Architect. Thus, no statutory default had occurred under section 36(1) of CIPAA.

74. During this time, D2 and D3 contended that they had sold their entire 5 million shares in D1 to Muthusamy and Arulselvi on 29-2- 2016 and resigned as directors on 12-4-2016. The alleged share transfer was not updated in the records of the CCM until 19-7-2018 when the Section 51 Notification of Change in the Register of Members was lodged, and so no third party searching the public records could have known that D2 and D3 had divested their interest in D1.

75. According to the signed share transfer forms sighted, D2 and D3 sold their shares to Muthusamy and Arulselvi for a nominal consideration of RM5,000.00 just 3 days after D1 declared dividends of RM68 million for the year 2015 and the sum was paid **Note : Serial number will be used to verify the originality of this document via eFILING portal out to D2 and D3 on 26-2-2016. It was an unchallenged fact that the Plaintiffs found out about the dividend distribution for the first time through the affidavit affirmed by D2 on 21-6-2016 to oppose the winding up petition filed by the Plaintiff on D1’s failure to pay the Adjudication Decision.

76. To stave off the winding up, D2 said that the debt arising from the Adjudication Decision had been paid into a stakeholder account held by D1’s solicitors on 13-4-2016, and that the sum was advanced by IRDK Land Sdn Bhd. The adjudicated sum of RM2,033,225.03 with interest and costs, was finally released by D1 to the Plaintiff on 18-7-2016 using funds from IRDK Land Sdn Bhd after the Court of Appeal rejected D1’s appeal.

77. In the meantime, the Plaintiff commenced arbitration proceedings to recover its balance payment claim from D1 on 5-4-2016. After many delays attributed to, inter alia, a challenge to the constitution of the tribunal by D1, D1 filed a Statement of Defence and Counterclaim in the arbitration on 15-12-2017 to deny the claim, pleading that no sums are due because the Contract had been terminated and that for the Final Accounts, there were: “a) Cost incurred to the Respondent of having work completed by others; b) Professional fees incurred in connection with completion which would otherwise not be incurred; and c) Any loss to Respondent (e.g. Delay in completion, Cost of Insuring in the Works, Defect Remedy, Legal Costs, Third Party Claims, Liquidated Ascertained Damages and etc.)” **Note : Serial number will be used to verify the originality of this document via eFILING portal No other particulars were pleaded, and D1’s counterclaim was for: “a) A declaration that all certificates issued by the Claimant are void due to their breaches in the contract; b) General damages; c) Special damages being the loss of profit due to the Claimant’s breaches estimating to RM100 million; d) Exemplary damages; e) Loss of value from the sale of the land of RM20 million based on latest estimates; f) Upkeep of site costs to be assessed and ongoing; g) Interest on the amount granted by the learned Arbitrator based on Maybank base lending rate plus one (1) percent as per Clause 30.1 of the said Contract from the due date until full and final settlement; h) Professional Fees for Preparation of Detailed Design Audit or Geotechnical and Foundation Works; and i) Such further or other relief that the Learned Arbitrator may deem fit.”

78. As the arbitration progressed, D1 discharged its solicitors on 8-5- 2018 and sent one Ms Puspa Rani, an employee of IRDK Land Sdn Bhd and D2’s personal secretary, to postpone the arbitration hearing on 31-5-2018. In a letter, D1 informed the Arbitrator that it would appoint new counsel and as noted by the arbitrator in a record of a meeting on 26-6-2018, D1 indicated that it would respond by 6-7-2018. However, D1 was not heard from again after 26-6-2018. **Note : Serial number will be used to verify the originality of this document via eFILING portal

79. The Arbitrator proceeded to issue an ex parte final award on 5-10- 2018 and found that the Contract had been terminated with “unholy haste” without complying with the contractual requirements for termination. On merits, he also found the notices of default to be unreasonable and vexatious. He ordered D1 to pay RM3,841,087.81 with interest and costs comprising the following components of the claim: a) RM2,229,515.22 due for progress claim No. 6 b) RM1,611,572.59 due under the final accounts comprising i) RM436,500.00 retention sum ii) RM131,372.91 balance variation works iii) RM257,252.00 abortive works No. 1 and 2 iv) RM485,183.50 abortive works No. 3 v) RM22,000.00 abortive works No. 4 vi) RM279, 264.18 loss of profits

80. The Plaintiff obtained an order for recognition and enforcement of the Arbitration Award on 21-12-2018 and wound up D1 based on the award on 17-7-2019. It is also an unchallenged fact that the Plaintiff only learned at that stage from its appointed private liquidator that D1 had already been wound up on 5-7-2018 on the petition of one Ellipsis (M) Sdn Bhd (“Ellipsis”) for RM28,607.50 and a private liquidator Ng Choon Jin, had been appointed.

81. Apparently, Ellipsis had issued a statutory notice on 24-1-2018 based on unpaid interest on a Judgment debt and unpaid costs in the contested litigation relating thereto. The winding up petition was **Note : Serial number will be used to verify the originality of this document via eFILING portal presented on 28-3-2018 and Arulselvi had affirmed an affidavit to oppose the winding up.

82. On 21-7-2021, D1 through its liquidator, Ng Choon Jin, applied vide Originating Summons No. WA-24C(ARB)-45-07/2021 to set aside the Arbitration Award on grounds it was obtained ex-parte and that no leave was obtained before proceeding against D1 after it was wound up. Ng Choon Jin refused to recognize the Arbitration Award and rejected the Plaintiff’s Proof of Debt.

83. For about 3 years over the course of 2019 and 2022 the Plaintiff went through another series of litigation in the winding up Courts to have its Proof of Debt admitted: a) The Plaintiff filed an application to remove Ng Choon Jin as liquidator in post-winding-up application No.: WA-28PW-716- 12/2019; b) The Plaintiff filed an application to vary and/or reverse the decision of the liquidator to reject the Plaintiff’s proof of debt in post-winding-up application No.: WA-28PW-88-02/2020; c) D1 applied to strike out the application to remove Ng Choon Jin as liquidator in post-winding-up application No.: WA- 28PW-135-03/2020; and d) The Plaintiff filed an application for leave to sue D1 in post winding up application No.: WA-28PW-9-01/2022.

84. The Plaintiff was successful in all of the above post-winding up applications. Following post-winding-up application No.: WA- 28PW-88-02/2020, the Plaintiff was ordered to re-file its Proof of **Note : Serial number will be used to verify the originality of this document via eFILING portal Debt within 3 weeks from 28-7-2022, which the Official Receiver undertook to accept and certify as valid.

85. Ng Choon Jin was removed as liquidator, and on 31-3-2023, the High Court appointed Ler Cheng Chye and Lim Tuck Cheong as the new liquidators for D1.

86. Based on the above timing and sequence of events, the Plaintiff argued that the following overt unlawful acts emerged i.e. a) Wrongful termination of the Contract b) Non-payment of contractual claims c) Delaying the final determination of the Plaintiff’s claims d) Dissipation of assets to defraud creditors Wrongful termination of the Contract

87. D2 argued that the Contract Termination was the prerogative of the Architect due to breaches, and that the series of events the Plaintiff relied upon were D1’s reaction to actions taken by the Plaintiff and cannot have been part of a grand conspiracy. This Court does not accept that submission, either legally or factually.

88. The termination was found to be wrongful as it was procedurally in breach of the Contract. On the facts, that is an entirely defensible position that this Court can similarly determine on the Contract terms and the evidence in this trial. There was no reason for this **Note : Serial number will be used to verify the originality of this document via eFILING portal Court to disagree that it was indeed a bad termination, regardless of whether the Architect had reasons for it.

89. On the actual reasons for the termination, this Court has serious doubts that the Architect had sufficient grounds to recommend a termination of the Contract based on the record of the Arbitration proceedings. In any case, it transpired that any contractual reasons that the Architect may have had to recommend a termination, were quite immaterial because the Matrix Concepts SPA called for the termination of the Contract. D1 and D2 would have known this even before the SPA was executed. Non-payment of contractual claims

90. The more consequential breach of Contract in this case is the Plaintiff’s claim of non-payment for work done. This Court noted the fact that D1’s justification for non-payment of Progress Claim No. 6 was premised on the termination of the Contract, and that this carried through in D1’s jurisdictional objection to the Plaintiff’s CIPAA claim.

91. The Plaintiff was ultimately vindicated in respect of the CIPAA claim. There was also no challenge to the fact that the uncertified claim that remained unpaid was issued after a survey of the work done at the time and at no time did D1 assert that the work claimed was not done. In other words, D1 could not have been ignorant of the fact that the Plaintiff had a legitimate claim for payment. **Note : Serial number will be used to verify the originality of this document via eFILING portal Delay and winding up

92. A company is entitled to defend itself vigorously in court, to challenge claims, and even to restructure its finances in the ordinary course of business. Such steps remain lawful so long as they are undertaken in good faith, with proper disclosure, and without the intent or purpose of defeating creditors.

93. By contrast, when directors or shareholders deliberately delay proceedings to facilitate the stripping of a company of assets, divert funds to themselves, or orchestrate transactions designed to leave the company judgment-proof, those acts cross the line into fraud.

94. This Court must therefore scrutinize not only the form of the transactions but their substance, timing, and intent, to determine whether they are legitimate exercises of corporate autonomy or abusive schemes to evade justice.

95. Quite apart from the timing of the SPA, Contract termination and the Plaintiff’s legitimate claim for payment, D2 had caused D1 to launch into a vigorous defence in the adjudication and arbitration of the Plaintiff’s claims even though, according to him, both he and his wife had already divested themselves of all interest in D1 since 29-2-2016. The conduct of D1 and D2 on all the facts and circumstances as set out above was unusual.

96. D2 argued that he was assisting Muthusamy and Arulselvi, and that D1 was only reacting to actions taken by third parties, namely the Plaintiff initiating adjudication and arbitration proceedings, and the **Note : Serial number will be used to verify the originality of this document via eFILING portal Plaintiff and Ellipsis initiating winding up proceedings. Therefore, they say that the litigation defence strategy undertaken by D1 could not have been envisaged or planned in 2015 as part of a conspiracy.

97. This Court disagrees and takes the view that there is a pattern of conduct from which this Court infers a non-innocent agenda. Considering that the pleaded conspiracy to engineer events “so as to ensure that its shareholders are paid its dividends but the Plaintiff remains unpaid,” the overt and concerted actions taken by D1 and D2 to launch a strategy of technical obstruction and delay in the Plaintiff’s efforts to secure an enforceable judgment is entirely consistent with that objective as it avoids any enforced payment while putting the assets of D1 out of the Plaintiff’s reach.

98. There is no need to prove that the conspirators in a conspiracy planned the implementation of every overt act at the outset when the conspiracy was hatched. It is only necessary to prove the objective of the conspiracy that was, as it turns out in this case, successfully carried into effect by those overt acts that they consistently undertook. Dissipation of assets to defraud creditors

99. As noted, the RM95 million consideration from Matrix Concepts was wholly dissipated on or shortly after 29-2-2016, leaving D1 substantially a shell company, despite the Plaintiff’s unpaid certified claim, retention sum and other contingent claims that were known to D1 and D2. **Note : Serial number will be used to verify the originality of this document via eFILING portal

100. Fraud in this context means actual fraud i.e. dishonesty of some sort. It must be shown that what was done was dishonest according to the ordinary standard of reasonable and honest people, and that the actor himself must have realized that the act was by those standards dishonest.

101. Considering the Federal Court decision in Tay Keong Kok & Ors v Eastmont Sdn Bhd & Another Appeal [2025] 1 CLJ 583 on the statutory claim of fraudulent trading under section 540 of the CA, a fraudulent purpose may be manifested by actions that have the natural and foreseen consequences of avoiding payment of debts incurred, as the dishonest actor must know to be the case.

102. Based on the totality of the evidence, this Court did not find D2’s defence of the allegations against him to be credible. D2’s credibility as a witness was naturally undermined by his persistence in advancing a defence that this Court regards as disingenuous. This Court found the following matters established on the evidence: a) D2’s justification for the sale of the Project was that the Plaintiff had delayed piling works, although piling is carried out very early in the structural works phase, right after site preparation. b) In consultation with D2, the Architect issued a notice of termination that did not articulate the Plaintiff’s alleged delay in piling works as a reason for terminating the Contract. **Note : Serial number will be used to verify the originality of this document via eFILING portal c) D2 was aware that the Plaintiff was owed unpaid certified claims, a retention sum and credible uncertified claims, but did not provide for any part of these in the agreement for the reimbursement of costs paid by Matrix Concepts. d) D2 authorised a disposition of at least RM68 million of D1’s cash to himself and to his wife, and all remaining assets of D1 in unspecified dispositions at or about the same time, all while contesting a credible claim by the Plaintiff as a creditor of D1. e) D2 took steps to exit from D1 in an ostensible arrangement involving Muthusamy and Arulselvi, 2 characters that never surfaced in any contemporaneous record (save for 1 affidavit by Arulselvi). That arrangement made no commercial sense. f) D2 continued to instruct solicitors on behalf of D1 well beyond his alleged exit from D1, and these solicitors undertook a concerted effort to delay and obstruct proceedings initiated by the Plaintiff to secure an enforceable judgment against D1. g) It was more probable than not, that D2 also had a hand in the appointment of Ng Choon Jin, the private liquidator of D1 whose rejection of the Plaintiff’s Proof of Debt, warranted his removal by the winding up Court.

103. In the final analysis, this Court cannot overlook the facts and the compelling inferences they evoke. The events that unfolded were not unconnected events, and D2 is the only one who continued to **Note : Serial number will be used to verify the originality of this document via eFILING portal feature, to the exclusion of others like Arulselvi who should have appeared as key witnesses for the defence. Loss and damage

104. For the reasons set out above, this Court finds D1 and D2 jointly and severally liable to the Plaintiff for damages for conspiring to injure the Plaintiff by unlawful means, causing loss and damage to the Plaintiff which this Court assesses as the sum represented by the Proof of Debt independently adjudicated in the winding up process and accepted by the liquidator of D1, being the sum unrecoverable from D1 by reason of the conspiracy.

105. In Tay Keong Kok & Ors v Eastmont Sdn Bhd & Another Appeal [2025] 1 CLJ 583, the Court of Appeal approved the application of the principles enunciated by the House of Lords in Rookes v Barnard [1964] 1 All ER 367 for the grant of exemplary damages for fraudulent trading: “[235]… where the conduct of the defendants was calculated to make a profit for themselves which may well exceed the compensation payable to the plaintiff”

106. Thus, exemplary damages for fraudulent trading are granted based on established principles, primarily to punish and deter profit-driven misconduct. The same considerations apply with equal force where a conspiracy is used to achieve substantially the same dishonest purpose. The quantum is discretionary, guided by proportionality, the severity of the defendant's actions, and the impact on the **Note : Serial number will be used to verify the originality of this document via eFILING portal plaintiff, with awards ranging from RM10,000 to RM3,000,000 in reported cases, often around 25% of compensatory damages.

107. Considering: a) the flagrancy of D2’s actions in disregarding the Plaintiff’s rights as an unpaid contractor; b) the period of time and the costs and resources the Plaintiff had to deploy in response to D2’s concerted efforts to deprive it of payment; c) the absence of substantive merits for denying the Plaintiff such payment either in full or in part; d) the abuses of due process by D2 in the arbitration; and e) crucially, the general dishonesty of D2 in the elaborate scheme that would have outlasted most aggrieved litigants; this Court awards RM500,000.00 in exemplary damages against D2. Conclusions

108. Judgment is entered for the Plaintiff in the following terms:

(ii) A declaration that D2 is and continued to be the alter ego of D1 until the winding up of D1 and that the corporate veil of D1 be disregarded to that extent; **Note : Serial number will be used to verify the originality of this document via eFILING portal

(iii) General damages against D1 and D2 assessed at the sum represented by the Proof of Debt accepted by the liquidator of D1 in the winding up process;

(iv) Exemplary damages against D2 in the sum RM500,000.00;

(vi) Costs on a standard basis in the sum RM100k. Bertarikh: 08 Mei 2026 ELAINE YAP CHIN GAIK PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI MALAYA KUALA LUMPUR **Note : Serial number will be used to verify the originality of this document via eFILING portal Peguam Untuk Plaintif: Harold Tan Kok Leng (Pan Yan Teng dan Tan Joon Meng bersamanya) Tetuan Harold Lam Partnership Untuk Defendan Kedua dan Ketiga: Harjinder Kaur a/p Ajaib Singh (Chew Mingyih and Seh Zhen Yang bersamanya) Tetuan Shahrizat Rashid & Lee **Note : Serial number will be used to verify the originality of this document via eFILING portal