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SUITE TRADE SDN BHD (COMPANY NO.: 201001040957
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/akn/my/judgment/high-court/2026/9809fb3c-b369-4a37-83ad-131cd4206d9d
High Court of Malaysia27 Feb 2026WA-22NCC-175-03/2023
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“isrepresentation, or other wrongdoing committed through the company may be held personally liable, and that in such circumstances the corporate veil may be lifted. FDB also invokes section 540 of the Companies Act 2016 in relation to fraudulent trading. [35] FDB’s subsidiary claim of RM116,000.00 relates to its subsidi”
“ndants further submit that the UOB Letter of Offer expressly stipulates that the facility was granted for “working capital” purposes. The Defendants contend that FDB is precluded by section 92 of the Evidence Act 1950 from adducing extrinsic evidence to recharacterise the nature or purpose of that facility as a loan to”
“oan at all; they contend that it constituted consideration paid by FDB to Suite Trade for the purchase of three plots of land. The Defendants further contend that FDB’s claim is time-barred under the Limitation Act 1953. Hew personally denies having made any fraudulent misrepresentations and resists the attempt to pier”
“raise unpleaded issues during submissions. Even if this court were to consider the substantive merits, the doctrine of separate corporate personality, as established in Salomon v A Salomon and Co Ltd [1997] AC 22 and applied consistently in Malaysian jurisprudence, means that a company is a distinct legal person from i”
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SUITE TRADE SDN BHD (COMPANY NO.: 201001040957
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HEW CHEE SENG (NRIC NO.: 731124-14-5703) … DEFENDANTS GROUNDS OF JUDGMENT INTRODUCTION [1] Before the court is a civil action brought by Fitters Diversified Berhad (“FDB”), the Plaintiff, against Suite Trade Sdn Bhd (“Suite Trade”), the First Defendant, and Hew Chee Seng, also known as “David Hew” (“Hew”), the Second Defendant, arising out of a sum of RM10,000,000.00 said to have been advanced by FDB to Suite Trade in February 2014 as a friendly loan. FDB claims that Suite Trade has failed to repay the outstanding balance of this loan and seeks judgment against Suite Trade for the sum of RM8,091,443.00 as at 28.2.2023, being the balance remaining after taking into account partial payments, set-offs, and other adjustments applied over the years. FDB also claims against Hew, a director of Suite Trade, on the grounds of fraudulent misrepresentation and on the basis that he is the directing mind and will of Suite Trade. In addition, FDB advances a subsidiary claim of RM116,000.00 against Suite Trade arising from certain property transactions connected with a development known as Regency Parc. [2] The Defendants deny FDB’s claim in its entirety. Their primary and overriding defence is that the RM10,000,000.00 was not a friendly loan at all; they contend that it constituted consideration paid by FDB to Suite Trade for the purchase of three plots of land. The Defendants further contend that FDB’s claim is time-barred under the Limitation Act 1953. Hew personally denies having made any fraudulent misrepresentations and resists the attempt to pierce the corporate veil of Suite Trade so as to render him personally liable. [3] Following a full trial at which both parties adduced oral and documentary evidence, this court delivered its broad grounds of judgment on 27.2.2026 allowing FDB’s principal claim against Suite Trade for RM8,091,443.00 with costs, and dismissing FDB’s claim against Hew with costs to Hew. The subsidiary claim of RM116,000.00 was also dismissed. These are the full grounds of judgment. THE PARTIES AND THE WITNESSES [4] FDB is a public listed company incorporated under the laws of Malaysia. Its principal businesses include property development, trading, and the provision of services. FDB is the holding company of FPDSB and various other subsidiaries. At all material times, the late Dato’ Wong Swee Yee (“Dato’ Wong”) was the Managing Director and a director of FDB. Dato’ Wong passed away on 20.8.2021 prior to the commencement of the present proceedings and was thus unable to give evidence at trial. His absence, as shall be seen, had a direct bearing on the outcome of certain issues in this case. [5] Suite Trade is a private limited company incorporated under the laws of Malaysia. At all material times, Hew was a director of Suite Trade and had personal oversight and control over all of Suite Trade’s operations, business decisions, and affairs. Hew described in his witness statement that Suite Trade has been involved in the property business since 2008. His evidence was that he was involved in the negotiation and execution of all material transactions on behalf of Suite Trade. [6] FPDSB is a subsidiary of FDB that purchased units in a residential project known as Regency Parc developed by Next Fortune Sdn Bhd (“Next Fortune”) situated in Rawang. The Regency Parc development comprised a number of three-storey semi-detached houses. Certain units, designated as Lots 25, 26, 81, and 82 (collectively “the Lots”), are central to an understanding of the relationship between FDB and Suite Trade and are relevant to the context in which the advance of RM10,000,000.00 was made. [7] Four witnesses gave evidence on behalf of FDB at trial: a) PW1 was Kee Chyi Siew, the Group Legal Affairs Manager of FDB. PW1 gave evidence on the circumstances surrounding the advance of RM10,000,000.00, the investment arrangement relating to Regency Parc, the extension letters issued by Suite Trade, and the circumstances in which the fraud and the tampered Rescission Letter were discovered. b) PW2 was Ng Sim Lee, the Finance Manager of FDB. PW2 gave evidence on the UOB bank statements, the movement of funds, and the detailed statement of accounts reflecting the outstanding amount due from Suite Trade as at 28.2.2023. c) PW3 was Chong Wei Wei, the Group Head of Finance of FDB. PW3 gave evidence on the friendly loan arrangement, the 13.10.2016 meeting, and the Settlement Agreement dated 26.10.2016. d) PW4 was Kok Chong Fatt, a former project manager and Chief Operating Officer of Next Fortune, who gave evidence under subpoena regarding the Regency Parc development and the property transactions. [8] The Defendants called a single witness, DW1, who was Hew himself. Hew gave evidence in his own name and on behalf of Suite Trade. His evidence was the sole defence evidence at trial. BACKGROUND FACTS [9] In order to appreciate the nature of the dispute and the issues in controversy, it is necessary to set out the material background facts in some detail. This court has endeavoured to present the background facts as objectively as possible, reserving its findings on contested matters for the analysis section that follows. [10] Dato’ Wong and Hew knew each other on a personal as well as a business level. Both were involved in property-related matters, and the personal relationship between Dato’ Wong and Hew was the foundation upon which the transactions the subject of these proceedings were built. It was Dato’ Wong who, on behalf of FDB, arranged the advance of RM10,000,000.00 to Suite Trade in January
2014
It is common ground that no formal written loan agreement was executed between FDB and Suite Trade in connection with this advance. [11] FPDSB, a wholly-owned subsidiary of FDB, purchased units in the Regency Parc project developed by Next Fortune in Rawang at the material time. In connection with this development, a Draft Investment Agreement was prepared between FDSB as the investor/purchaser and Suite Trade as the sole marketing consultant. This Draft Investment Agreement provided for FPDSB to take up four units in the Regency Parc development, being Lots 25, 26, 81, and 82, at a purchase price of RM700,000.00 per unit, aggregating to RM2,800,000.00. The Draft Investment Agreement also provided for Suite Trade to pay FPDSB a profit guarantee of RM7,000.00 per month per unit for a period of 12 months, and contained profit distribution provisions. Whether this Draft Investment Agreement was ever formally executed and, if so, what its relationship is to the advance of RM10,000,000.00, are matters that were in contention at trial. [12] In or around the first quarter of 2013, FDB applied to United Overseas Bank (Malaysia) Bhd (“UOB”) for banking facilities. By a Letter of Offer dated 9.5.2013, UOB offered FDB the following facilities: (a) an overdraft facility of RM2,000,000.00; and (b) a revolving credit facility (RCF) of RM10,000,000.00. The purpose of both facilities was stated in the UOB Letter of Offer as “working capital.” FDB duly accepted the Letter of Offer and the banking facilities were made available to FDB. [13] The advance of RM10,000,000.00 to Suite Trade took place on 23.1.2014. On that date, FDB drew down the full sum of RM10,000,000.00 from its UOB RCF and caused this sum to be transferred directly into a bank account maintained by Suite Trade with CIMB Bank on 1.2.2014. It is not in dispute that Suite Trade received this sum in full. [14] In the period following the transfer of RM10,000,000.00, transactions occurred in relation to Lots 25, 26, 81, and 82 at Regency Parc. This court notes the following significant events in relation to the Lots: a) Lot 25 was sold by Next Fortune to third parties named Wong Ding Fung and Wong Chung Ying on 11.4.2014 for the sum of RM888,000.00. b) Lot 82 was sold by Next Fortune on 25.6.2015 for the sum of RM1,100,000.00 to a purchaser by the name of Judy Gan Ping Ping. This sale occurred without the knowledge and consent of FDB, and the proceeds were not remitted to FDB or FPDSB. [15] Between 2014 and 2016, FDB applied set-offs against Suite Trade’s outstanding balance in respect of commissions earned by Suite Trade in connection with the marketing of a condominium project known as Zeta DeSkye developed by FDB’s subsidiary, Superior Villa Sdn Bhd. Suite Trade, through Hew, was involved in referring purchasers for units at Zeta DeSkye, and Suite Trade earned commissions in this regard. These commissions and related interest reimbursements were applied by FDB as set-offs against the outstanding balance owed by Suite Trade. [16] On 24.4.2014, Suite Trade wrote to FPDSB requesting an extension of time in relation to obligations arising from an “agreement dated 18th March 2013” in connection with Lots 25, 26, 81, and 82 at Regency Parc. The letter referenced a sum of RM2,800,000.00. A further letter was written by Suite Trade to FPDSB on 25.8.2014, again requesting an extension in connection with the same “agreement dated 18th March 2013” and the same four lots. These two letters are significant, as they confirm that Suite Trade acknowledged having obligations in relation to the Lots and sought, by way of indulgence from FPDSB, further time to fulfil those obligations. [17] In the period between 2014 and 2016, FDB was concerned about the outstanding balance of the RM10,000,000.00. These concerns led to a meeting between representatives of FDB and Hew on 13.10.2016. At this material time, FDB was still under the belief that Lots 25 and 82 remained unsold. It was only later, in July 2019, that FDB became aware that Suite Trade had sold Lots 25 and 82 to third parties without remitting the full proceeds of sale to FDB or FPDSB. [18] At the 13.10.2016 meeting, the outstanding position between FDB and Suite Trade in relation to the RM10,000,000.00 was discussed. PW3 (Chong Wei Wei), who was not physically present at the meeting but was involved in the financial administration of FDB, gave evidence based on company records and instructions from the late Dato’ Wong that the purpose of the meeting was to reconcile the outstanding position and to formalise Suite Trade’s acknowledgment of the balance owed to FDB. Following the meeting, a document was prepared which is referred to throughout these proceedings as the “Settlement Agreement” or “Settlement Document.” The Settlement Agreement was executed by Suite Trade through its director, Soon Kian Guan, on 26.10.2016. [19] The Settlement Agreement dated 26.10.2016 is a document of critical importance in these proceedings. Its material terms, as disclosed by the document itself, are as follows: a) A set-off of RM1,442,000.00 was to be applied in respect of Lots 25 and 82, by deducting from the agent sales commissions for the Zeta DeSkye Condominium project owed to Suite Trade. This set-off was intended for Suite Trade to buy back the two lots, which FDB believed remained unsold at the time. b) The balance of the RCF as at 31.10.2016 was recorded as RM7,745,046.00. c) Suite Trade was obliged to market and sell four specific lots of land by 31.12.2016. d) In the event they failed to sell the lots, Suite Trade was obliged to purchase the three lots of land belonging to FDB by 31.3.2017. e) The transfer of Lots 25 and 82 was to be effected only upon full settlement of all outstanding sums due to FDB. f) The Settlement Agreement contained further terms governing Suite Trade’s obligations to make full settlement of the outstanding balance. [20] The Settlement Agreement, on its face, is expressed by reference to the “balance of the RCF.” It is stated in paragraph (c): “Suite Trade Sdn Bhd confirmed, agreed and undertook to FITTERS Diversified Berhad and its subsidiaries that any balance, further and/or future agent sales commission for Zeta DeSkye Condominium of Suite Trade Sdn Bhd would be utilised for the settlement of the Overdraft Facility Account and/or the United Overseas Bank revolving credit facility account of FITTERS Diversified Berhad (Facility Account Number: 3818068792) (“Revolving Credit Facility Account”) (as appropriate). As at 31 October 2016, the outstanding amount in the Revolving Credit Facility Account stood at RM7,745,046.00 (Ringgit Malaysia Seven Million Seven Hundred Forty-Five Thousand and Forty-Six Only);” [21] This is a reference to the revolving credit facility that FDB had drawn upon to fund the advance of RM10,000,000.00 to Suite Trade. The reference to the “RCF” in the Settlement Agreement is a key feature of the document, as it directly links the outstanding balance acknowledged therein to the funds drawn down by FDB from its UOB RCF and advanced to Suite Trade. [22] Following the Settlement Agreement, further set-offs were applied against Suite Trade’s outstanding balance. On 31.7.2019, a set-off of RM2,412,548.01 was applied against the outstanding balance. This set-off represented accumulated agent sales commissions from the Zeta DeSkye arrangement owed by Superior Villa Sdn Bhd to Suite Trade. This set-off was applied in accordance with the terms of the Settlement Agreement (which authorized future commissions to be utilised for settlement) and by mutual agreement or acquiescence between the parties. [23] In July 2019, FDB’s representatives undertook a site visit to Lot 25 and Lot 82 at Regency Parc and discovered that the premises were occupied by unknown third parties. Following this discovery, FDB issued multiple letters to the developer, Next Fortune, seeking an explanation. When no response was received, FDB proceeded to lodge a police report. A police report bearing reference number SRI DAMANSARA/006749/19 was lodged on 15.10.2019 by Surinderpal Singh on behalf of FDB and FPDSB. The police report referred to forgery and land fraud in connection with transactions involving a company known as Next Fortune and the Regency Parc lots. The report did not specifically identify Suite Trade or Hew as suspects, as at that stage FDB was still investigating the full extent of the fraud. [24] Following the lodging of the police report, FDB managed to obtain a response from Next Fortune and undertook a detailed review of the documents relating to the Regency Parc transactions. In the course of this review, a significant discovery was made. A letter dated 9.6.2015 described as a “Rescission Letter” was found to have been tampered with. The original Rescission Letter had been issued in relation to Lot 81. It was discovered that the reference in the document to “Lot 81” had been altered by typewriter to read “Lot 82” without any initials. The effect of this tampering was to create a false document purporting to be a rescission in respect of Lot 82, when in fact no such rescission had been properly issued. This discovery was of significant concern to FDB, as the tampered Rescission Letter appeared to have been used to justify the sale of Lot 82 (to Judy Gan Ping Ping on 25.6.2015) without the authorisation or knowledge of FDB. [25] After further investigations and correspondence, FDB prepared a detailed statement of accounts reflecting the movement of the RM10,000,000.00 from the date of advance to 28.2.2023. This statement of accounts, which was tendered in evidence through PW2 (Ng Sim Lee), showed the following principal items: a) The initial advance of on 23.1.2014. b) The set-offs of RM2,066,121.00 and RM517,319.00 reflected in the Settlement Agreement, applied in respect of agent sales commissions and reimbursements. c) Further set-offs and interest reimbursements applied over the years, including the Zeta DeSkye commission set-offs. d) The set-off of RM2,412,548.01 applied on 31.7.2019. e) Other adjustments applied from time to time. After all these adjustments, the outstanding balance as at 28.2.2023 stood at RM8,091,443.00. [26] FDB filed the writ in these proceedings on 31.3.2023. By this time, Dato’ Wong had passed away. His death, as noted, is a material circumstance that affected the evidential landscape at trial, particularly in relation to FDB’s fraud claim against Hew. [27] By way of interlocutory history, the Defendants filed an application to strike out FDB’s claim (Enclosure 36). This application was dismissed by this court on 17.7.2024. [28] In the course of the trial, FDB produced the following principal categories of documentary evidence: a) the UOB Letter of Offer dated 9.5.2013; b) the UOB bank statements evidencing the drawdown of the RCF and the transfer of RM10,000,000.00 to Suite Trade on 1.2.2014; c) the Draft Investment Agreement between Suite Trade and FPDSB in respect of the four Lots at Regency Parc; d) the extension letters from Suite Trade to FPDSB dated 24.4.2014 and 25.8.2014; e) the Settlement Agreement dated 26.10.2016; f) the Rescission Letter (in its tampered form) and evidence concerning the tampering; the police report No. SRI DAMANSARA/006749/19 dated 15.10.2019; and g) and the detailed statement of accounts showing the movement of the outstanding balance from 23.1.2014 to 28.2.2023. [29] The Defendants produced no contemporaneous documentary evidence of any sale and purchase transaction between the Suite Trade and FDB to support their land purchase narrative. RESPECTIVE PARTIES’ PLEADED CASES AND RELIEFS SOUGHT FDB’s Case [30] FDB’s case as set out in its Amended Statement of Claim is, in substance, as follows. FDB avers that the RM10,000,000.00 advanced by FDB to Suite Trade on 1.2.2014 was a friendly loan made pursuant to the personal relationship between the late Dato’ Wong and Hew. The advance was made without a formal written loan agreement, as is characteristic of friendly loans between parties who have a close personal relationship. FDB drew down the RM10,000,000.00 from its UOB RCF specifically for the purpose of advancing it to Suite Trade. FDB pleads that it is a term of the friendly loan, whether express or implied, that Suite Trade would repay the full sum advanced as soon as possible, and would be responsible for all progressive charges, interests, and/or penalties imposed by UOB Bank upon the facilities. [31] FDB further pleads the following matters in support of its claim: a) The investment arrangement between Suite Trade and FPDSB concerning the four Lots at Regency Parc was separate from but connected to the friendly loan. Under this arrangement, FPDSB was to acquire and hold the four Lots while Suite Trade was appointed as the exclusive marketing agent. It was only later, under the Settlement Agreement, that Suite Trade undertook to market and sell the remaining lots and to utilise the proceeds of sale thereof towards repayment of the friendly loan. b) Suite Trade received the full sum of RM10,000,000.00 and was at all material times aware that it was obliged to repay this sum. c) The Settlement Agreement dated 26.10.2016 constitutes a binding acknowledgment by Suite Trade of the outstanding balance of RM7,745,046.00 as at 31.10.2016 and of its obligation to repay the same. d) The set-off of RM2,412,548.01 applied on 31.7.2019 constitutes a partial payment of the debt and gives rise to a fresh accrual of the cause of action under section 26(2) of the Limitation Act 1953. e) FDB’s claim is not time-barred. Alternatively, even if the six-year limitation period would otherwise have expired, the fraud exception under section 29 of the Limitation Act 1953 applies by reason of the fraudulent concealment of the tampering of the Rescission Letter, which was not discovered until 2019. [32] In addition to the principal claim for the repayment of the friendly loan, FDB pleads that Hew personally made fraudulent misrepresentations to the late Dato’ Wong that induced FDB to agree to the settlement terms recorded in the Settlement Agreement dated 26.10.2016 and grant Suit Trade more time to settle the outstanding loan. The fraudulent misrepresentations pleaded by FDB include, inter alia: a) that Lot 25 and Lot 82 had not been disposed of yet as at 13.10.2016; b) that Suit Trade would buy back Lot 25 and Lot 82 from FDB at the price of RM1,442,000.00; and c) that Lot 25 and Lot 82 shall nevertheless remain under the beneficial ownership of FPDSB as security / collateral until the full settlement of the friendly loan. [33] FDB pleads that these representations were false and that Hew knew them to be false, or at the very least was reckless as to their truth, at the time they were made. FDB further pleads that Dato’ Wong and FDB acted in reliance on these representations in agreeing to the settlement terms, and that FDB suffered loss thereby. [34] FDB pleads that Hew, as a director and/or de facto director, and the directing mind and will of Suite Trade, should be held personally liable for the wrongful acts of Suite Trade. FDB relies on the principle that a director who is the directing mind and will of a company and who personally procures or participates in fraud, misrepresentation, or other wrongdoing committed through the company may be held personally liable, and that in such circumstances the corporate veil may be lifted. FDB also invokes section 540 of the Companies Act 2016 in relation to fraudulent trading. [35] FDB’s subsidiary claim of RM116,000.00 relates to its subsidiary, FPDSB’s equal share of the excess selling price that FDB avers Suite Trade received, or ought to have remitted, in connection with the sale of Lot 25 and Lot 82 at Regency Parc pursuant to the Investment Agreement and which have not been accounted for. FDB pleads that Suite Trade is liable to repay this sum. [36] By way of reliefs, FDB primarily claims: a) Judgment against Suite Trade for the sum of RM8,091,443.00 as at 28.2.2023 together with interest at the rate claimed from the date of the writ to the date of full payment. b) In the alternative, judgment against Suite Trade for such sum as the court finds to be outstanding. c) Judgment against Hew, jointly and severally with Suite Trade, for the sum of RM8,091,443.00 on the grounds of fraudulent misrepresentation and on the basis that Hew is the directing mind and will of Suite Trade. d) In the further alternative, general damages to be assessed for fraudulent misrepresentation against both defendants. e) Judgment against the Defendants, jointly and severally, for the sum of RM116,000.00 in respect of the subsidiary claim pursuant to the Investment Agreement. The Defendants’ Case [37] The Defendants deny FDB’s claim in its entirety. The kernel of their defence is that the RM10,000,000.00 transferred by FDB to Suite Trade on 1.2.2014 was not a friendly loan but was in fact consideration paid by FDB to Suite Trade in connection with the purchase of three plots of land. the Defendants’ case is that these three plots of land were originally acquired by the Defendants from Mega Palm Sdn Bhd (“Mega Palm”), and that the RM10,000,000.00 was the consideration paid by FDB for the acquisition of these lands. the Defendants’ essential position is that no sum remained owing by Suite Trade to FDB, because the RM10,000,000.00 was consideration for the land purchase and not a loan to be repaid. [38] The Defendants plead that FDB’s claim is time-barred under section 6 of the Limitation Act 1953. Section 6(1)(a) of the Limitation Act 1953 provides that an action founded on a contract shall not be brought after the expiration of six years from the date on which the cause of action accrued. the Defendants’ primary position is that the cause of action, if any, accrued on 31.12.2016 (or 1.1.2017), being the deadline for the performance of key obligations under the alleged Settlement Agreement. The six-year limitation period would therefore have expired on 31.12.2022 (or 1.1.2023), approximately three months before the writ was filed on 31.3.2023. the Defendants plead that no fresh accrual of the cause of action occurred within the limitation period by virtue of any payment or acknowledgment. They deny that the set-off of RM2,412,548.01 on 31.7.2019 constitutes a “payment” within the meaning of section 26(2) of the Limitation Act 1953 or that it gives rise to a fresh accrual. [39] With respect to the Settlement Agreement, the Defendants raise the following defences: a) The Settlement Agreement is inadmissible in evidence. As the settlement was negotiated and prepared under the aegis of the late Dato’ Wong, and Dato’ Wong is now deceased, any oral evidence of the circumstances of its preparation would be hearsay. The document is thus said to constitute documentary hearsay and is inadmissible. b) In any event, the Settlement Agreement does not constitute an acknowledgment of a friendly loan. Any reference to the “RCF balance” in the Settlement Agreement should be understood in the context of FDB’s own banking facility used to finance the purchase of three plots of land, and the Defendants’ undertaking to sell the lands was merely to help FDB who was facing financial difficulties, and not as an acknowledgment of a debt arising from a loan. c) The person who signed the Settlement Agreement on behalf of Suite Trade may not have had authority to do so. Accordingly, Suite Trade contends that it is not bound by the Settlement Agreement. [40] With respect to locus standi, the Defendants contend that FDB lacks the standing to bring the present claim. They argue that the transactions in question, and in particular those relating to the Lots at Regency Parc, were transactions between Suite Trade and FPDSB and not between Suite Trade and FDB. They invoke the proper plaintiff rule as established in Foss v Harbottle (1843) 67 ER 189 and submit that the proper party to bring any claim arising from the Regency Parc transactions is FPDSB and not FDB. [41] With respect to the fraud allegations, Hew denies having made any fraudulent misrepresentations to Dato’ Wong. He denies that his dealings with Dato’ Wong were motivated by any fraudulent intent and denies that he induced FDB to agree to the settlement terms by means of fraud. Hew also denies that he caused or authorised the tampering of the Rescission Letter, or that he was involved in any fraudulent scheme in relation to the Lots. [42] The Defendants contend that while the standard of proof for fraud allegations in civil proceedings is on a balance of probabilities, it requires clear, cogent and convincing evidence. They submit that FDB has adduced no credible or cogent evidence of fraud, and that the fraud allegations should accordingly be rejected. [43] With respect to the subsidiary claim of RM116,000.00, Suite Trade denies that any sum of RM116,000.00 is owing to FDB. The Defendants contend that the alleged Investment Agreement was merely an unsigned draft and no agreement was ever reached. Furthermore, the Defendants assert that FDB lacks locus standi and privity of contract to claim this sum, as the alleged Investment Agreement and the transactions relating to the Regency Parc lots were exclusively between FDB’s subsidiary, FPDSB, and Suite Trade. ISSUES TO BE TRIED [44] Prior to the commencement of trial, both parties filed issues to be tried pursuant to the Rules of Court 2012. The Defendants filed their Issues to be Tried on 14.9.2023. FDB filed its Issues to be Tried on 15.9.2023. [45] The Defendants’ issues covered, inter alia: the nature of the RM10,000,000.00 transaction (loan or land consideration); whether Suite Trade breached the terms of the Settlement Agreement; limitation; locus standi of FDB; whether FDB failed to plead the particulars of fraud; and whether there was a non-joinder of necessary parties (Next Fortune and FDSB). [46] The FDB’s issues covered: whether the RM10,000,000.00 was a loan; whether Hew made fraudulent misrepresentations; the quantum of the outstanding balance as at 28.2.2023; account stated; estoppel; the binding effect of the Settlement Agreement; the authenticity of the Rescission Letter; the application of the corporate veil doctrine; whether the Settlement Agreement is barred by limitation; and the RM116,000.00 subsidiary claim [47] Having regard to the pleadings, the issues to be tried, and the evidence adduced at trial, this court has distilled the following principal issues for determination: a) Whether the RM10,000,000.00 advanced by FDB to Suite Trade on 1.2.2014 was a friendly loan or consideration for the purchase of three plots of land (Issue 1). b) Whether the Settlement Agreement dated 26.10.2016 is admissible in evidence and, if so, its legal effect (Issue 2). c) Whether FDB’s claim against Suite Trade is time-barred under the Limitation Act 1953 (Issue 3). d) Whether Hew made fraudulent misrepresentations to the late Dato’ Wong and whether Hew is personally liable to FDB in the tort of deceit (Issue 4). e) Whether the corporate veil of Suite Trade ought to be pierced so as to hold Hew personally liable (Issue 5). f) Whether FDB’s subsidiary claim of RM116,000.00 against Suite Trade is sustainable (Issue 6). [48] This court will consider each issue in turn, setting out the submissions of the respective parties and then the court’s analysis and findings on each issue. ANALYSIS AND FINDINGS Issue 1: Whether the RM10,000,000.00 Was a Friendly Loan or Consideration for a Land or Property Transaction FDB’s Submissions [49] FDB submits that the RM10,000,000.00 advanced to Suite Trade on 1.22014 was a friendly loan. FDB relies primarily on two elements that it contends are sufficient to establish the existence of a friendly loan in the absence of a formal written agreement: first, the fund transfer evidenced by the bank records showing the remittance of RM10,000,000.00 from FDB’s UOB RCF account to Suite Trade’s CIMB bank account; and second, Suite Trade’s admission of receipt of the said sum. FDB relies on the Court of Appeal decision in Tan Aik Teck v Tang Soon Chye [2007] 6 MLJ 97 for the proposition that a friendly loan may be established without a formal loan agreement, by evidence of the transfer of funds and the recipient’s admission of receipt or acknowledgment. [50] FDB submits that the Settlement Agreement dated 26.10.2016 provides the acknowledgment of receipt and the acknowledgment of indebtedness required to establish the friendly loan. The Settlement Agreement, executed by Suite Trade through its director, Soon Kian Guan, expressly refers to the outstanding “balance of the RCF” as at 31.10.2016 at the sum of RM7,745,046.00. This reference to the “RCF” directly links the outstanding balance to the revolving credit facility from which FDB drew down the funds to advance to Suite Trade. FDB submits that no party who received money as land consideration would thereafter sign a document acknowledging an outstanding “RCF balance” and undertaking to settle ‘“all owing to United Overseas Bank and/or the FITTERS Diversified Berhad”. [51] FDB also relies on the objective documentary evidence to rebut the Defendants’ land purchase narrative and their denial of involvement in the Regency Parc transactions. FDB points to the following: a) The UOB Letter of Offer, which is the founding document for the RCF from which the funds were drawn, describes the purpose of the RCF as “working capital” with no reference to any land acquisition. If the RM10,000,000.00 were consideration for land, it would be wholly anomalous that the facility used to raise the funds was described as a working capital facility rather than as a property acquisition facility. b) There is an absolute absence of any sale and purchase agreement, transfer instrument, memorandum of understanding, letter of offer, or other document that would be expected if the RM10,000,000.00 were truly consideration for the purchase of land or property rights from Suite Trade. c) The Defendants rely on an en bloc agreement with Mega Palm, but this document, as admitted by Hew during trial, is an agreement for Suite Trade to secure purchasers for the bungalow lots, not a sale and purchase agreement to sell land to FDB. The en bloc agreement is therefore entirely consistent with FDB’s case and does nothing to support the Defendants’ case. d) The extension letters from Suite Trade to FPDSB dated 24.4.2014 and 25.8.2014 refer to Suite Trade’s obligations in relation to Lots 25, 26, 81, and 82 under the “agreement dated 18th March 2013” and seek extensions of time to perform these obligations. These letters confirm that Suite Trade was under an obligation to deal with the Lots on behalf of FPDSB. They are entirely inconsistent with the Defendants’ pleaded defence that they had no knowledge of and were not involved in the Regency Parc transactions. e) FDB relies on the evidence of PW3 (Chong Wei Wei), who admitted she had no personal knowledge of the meeting between Dato’ Wong and Hew, but testified that the late Dato’ Wong had informed her that the RM10,000,000.00 was a friendly loan to Suite Trade and instructed her to prepare the necessary documentation to obtain the bank facilities, and that the Settlement Agreement was prepared to record the outstanding balance. [52] FDB further submits that Hew’s evidence at trial on the land purchase narrative was vague, unsubstantiated, and internally inconsistent, and that no weight should be given to it. The Defendants’ Submissions [53] The Defendants submit that the RM10,000,000.00 was not a loan. Hew’s evidence was that the RM10,000,000.00 represented consideration paid by FDB for the purchase of three plots of land originally acquired by the Defendants from Mega Palm. Hew maintained throughout his evidence that there was never any intention on Suite Trade’s part to repay the sum as a loan. [54] The Defendants submit that the absence of a formal loan agreement supports rather than undermines their case. They contend that if FDB had truly intended to make a loan of RM10,000,000.00 to Suite Trade, it would have insisted on a formal loan agreement, a letter of offer setting out repayment terms, security, and the other usual incidents of a loan. The absence of all these features, the Defendants argue, suggests that the RM10,000,000.00 was not a loan. [55] The Defendants further submit that the UOB Letter of Offer expressly stipulates that the facility was granted for “working capital” purposes. The Defendants contend that FDB is precluded by section 92 of the Evidence Act 1950 from adducing extrinsic evidence to recharacterise the nature or purpose of that facility as a loan to Suit Trade. The fact that FDB drew down the RCF does not mean that the underlying transaction with Suite Trade was a loan; FDB instead drew down the RCF to fund the payment of consideration for the purchase of three plots of land. [56] On the Settlement Agreement, the Defendants argue, first, that it is inadmissible (addressed under Issue 2), and second, that even if admissible, it does not constitute an acknowledgment of a loan. They contend that the reference to the “RCF balance” in the Settlement Agreement is a reference to FDB’s own banking facility, and Suit Trade’s undertaking to sell the lands to redeem the RCF balance was merely to help FDB who was facing financial difficulties, not an acknowledgment by Suite Trade that it owed FDB money by way of a loan. The Defendants also submit that it makes no commercial sense for them to be required to sell land already owned by FDB to discharge a supposed loan obligation. [57] The Defendants also submit that Hew’s evidence should be believed as he was the only surviving person who, along with the late Dato’ Wong, was party to the original understanding, highlighting that FDB’s witnesses admitted during cross-examination that they had no personal knowledge of the material events and were relying entirely on hearsay. The Defendants’ position throughout has been that the RM10,000,000.00 was not a loan but consideration for the purchase of three plots of land. Court’s Analysis and Finding [58] The question of the nature of the RM10,000,000.00 transaction is the threshold issue in this case. This court is required to determine, on the balance of probabilities, whether the RM10,000,000.00 was a friendly loan or consideration for the purchase of three plots of land. This determination must be made by reference to the totality of the evidence, both oral and documentary. [59] The legal framework for establishing a friendly loan in Malaysian law is well settled. The foundational authority is the Court of Appeal decision in Tan Aik Teck v Tang Soon Chye, which affirmed that a friendly loan does not require a formal written agreement and may be established by proof of the transfer of funds and the recipient's admission or acknowledgment of receipt. The burden then shifts to the defendant to disprove the loan. That principle was subsequently affirmed and extended by the Court of Appeal in the later decision of Gerard Jude Timothy Pereira v Kasi a/l KL Palaniappan [2017] 6 MLJ 544. In Gerard Jude, the Court of Appeal confirmed that undisputed payment and receipt of monies, coupled with the defendant's failure to reply to a notice of demand, constitutes sufficient evidence to prove a friendly loan. The Court of Appeal held that a defendant who fails to respond to a demand for repayment, and who fails to provide any credible explanation for his silence, should be held to have admitted to the existence of the friendly loan on that ground alone. The absence of a formal loan agreement is therefore not fatal to FDB's case; it is precisely what one would expect of a friendly loan advanced on the basis of personal trust. [60] Applying the principles established in Tan Aik Teck and affirmed and extended in Gerard Jude, this court finds the following facts to be clearly established on the evidence: a) FDB transferred RM10,000,000.00 to Suite Trade's CIMB bank account on 1.2.2014. This is proved by the bank records tendered through PW2 (Ng Sim Lee) and is not disputed. b) Suite Trade received the RM10,000,000.00 in full. This is also not disputed. These two facts are, by themselves and in accordance with the authority of Tan Aik Teck as affirmed in Gerard Jude, sufficient to establish the existence of a friendly loan, particularly when combined with the absence of any documentary evidence pointing to a property sale as the basis for the transfer. [61] The court turns to consider whether the Defendants’ land purchase narrative is established on the evidence. For the following reasons, this court finds that it is not. [62] First and foremost, there is a complete and conspicuous absence of any documentary evidence of a sale and purchase transaction between Suite Trade and FDB to support the land purchase narrative. In a commercially aware environment, the transfer of RM10,000,000.00 as consideration for the purchase of three plots of land would almost invariably be documented by a sale and purchase agreement, a transfer instrument, a memorandum of understanding, a letter of offer, or some other instrument evidencing the nature and terms of the transaction between the parties. The Defendants have not been able to produce any such document. This is not a minor evidential gap; it is a fundamental absence that, in this court’s view, fatally undermines the Defendants’ case on the nature of the transaction. The Defendants have not offered any explanation that would credibly account for the complete absence of documentation for a RM10,000,000.00 property transaction between FDB and Suit Trade. [63] Second, the UOB Letter of Offer dated 9.5.2013, being the document that established the RCF from which the funds were drawn, expressly describes the purpose of the facility as “working capital.” This description is entirely inconsistent with the funds being used as consideration for the purchase of three plots of land. Had FDB intended to use the RCF as consideration for the purchase of three plots of land, one would expect the purpose of the facility as stated in the letter of offer to have reflected this, and FDB would have applied for property financing or a term loan instead of an overdraft and revolving credit facility, as admitted by DW1. The fact that the facility was described as “working capital” strongly supports the inference that the funds were being used for general working capital purposes, including the extension of a friendly loan. [64] Third, and critically, the Settlement Agreement dated 26.10.2016 expressly acknowledges an outstanding “balance of the RCF” as at 31.10.2016 at the sum of RM7,745,046.00. This acknowledgment was made by Suite Trade, through its director, Soon Kian Guan, without any contemporaneous protest, qualification, or reservation. The reference to the “RCF balance” in the Settlement Agreement is unambiguously linked to the UOB RCF that FDB had drawn upon to advance the RM10,000,000.00. No person who had received as consideration for the purchase of three plots of land would subsequently sign a document acknowledging an outstanding “RCF balance” and undertaking to settle “all owing to UOB and/or FDB” in respect of that sum. The Settlement Agreement, on its face, is wholly inconsistent with the land purchase narrative and is squarely consistent with FDB’s case that the RM10,000,000.00 was a friendly loan that remained outstanding. [65] Fourth, Hew’s own evidence under cross-examination was, in this court’s assessment, vague, unsatisfactory, and at points contradictory. When pressed to explain the mechanism of the alleged land transaction, Hew was unable to provide a credible explanation as to why FDB had to make double payments to both the developer, Mega Palm, and Suit Trade for the same three plots of land. He was also unable to explain, on his version of events, why Suite Trade would execute a document acknowledging an outstanding “RCF balance” if no balance were truly outstanding. In particular, Hew’s admission during cross-examination that he “agreed to the set-off because of the business relationship with the late Dato’ Wong” is highly revealing. This is shown in Hew’s cross-examination as captured in the Notes of Proceedings: OKL: You see, David, RM2.4 million set-off, when the Plaintiff did the set-off, sent the statement of account to you, when you say you disagree, you didn’t do anything. So you agree or you don’t… you disagree? Can you take a candid decision here? DW1: Again, because the business relation with the late Dato’, we are very ok at that moment. OKL: So you agreed? Because of the business relationship. DW1: Agree. [66] Beyond Hew's admission on the set-off, this court further finds, on the authority of Gerard Jude Timothy Pereira, that Hew's failure to respond to FDB's repeated demands for repayment is, of itself, a significant admission of the existence of the friendly loan. Hew conceded during cross-examination that he had received multiple demands from FDB and had not replied to any of them. He offered no credible explanation for his silence. In Gerard Jude, the Court of Appeal held that a defendant's complete silence in the face of a demand for repayment, without a reasonable explanation, "defies common sense and logic and [is] not in compliance with ordinary human conduct," and constitutes an admission of the friendly loan. The same conclusion applies here with equal force. On this ground alone, and in accordance with the principle in Gerard Jude, Hew must be taken to have admitted to the existence of the friendly loan. [67] A person who genuinely believed that RM10,000,000.00 was consideration for the purchase of three plots of land fully dealt with, and that no sum was owed to FDB, would have no reason to agree to set-offs against an outstanding balance. Hew’s admission of agreeing to set-offs is entirely consistent with the existence of an ongoing debt relationship and wholly inconsistent with his land purchase narrative. [68] Fifth, the extension letters from Suite Trade to FPDSB dated 24.4.2014 and 25.8.2014 are revealing. These letters, written by Suite Trade, acknowledge obligations arising from an “agreement dated 18th March 2013” in relation to Lots 25, 26, 81, and 82 at Regency Parc, and seek extensions of time to fulfil those obligations. A party that claimed to have no knowledge of or involvement in the Regency Parc transactions would have no occasion to write to the purchaser’s subsidiary seeking extensions of time to perform obligations in relation to those very lots. The extension letters confirm that Suite Trade had subsisting obligations in relation to the Lots, which is consistent with the investment arrangement under which FPDSB acquired the Lots and appointed Suite Trade as the exclusive marketing agent to market and sell them. [69] Sixth, the Draft Investment Agreement, upon which FDB placed some reliance, does not support the land purchase narrative. This document is an agreement between Suite Trade and FPDSB for Suite Trade to be appointed as the exclusive marketing agent to market and sell four units in Regency Parc acquired by FPDSB from the developer, Next Fortune, with a profit guarantee return to be paid to FPDSB. It describes an investment arrangement, not a sale of three plots of land by Suite Trade to FDB for RM10,000,000.00. The Draft Investment Agreement supports FDB’s case that there was a separate investment arrangement concerning the Regency Parc lots, which contradicts the Defendants’ pleaded defence that they had no knowledge of or involvement in the Regency Parc transactions. [70] Seventh, the Defendants’ submission that the absence of a formal loan agreement supports the land purchase narrative rather than the loan narrative is, in this court’s judgment, without merit. The proposition cuts both ways: if the absence of a loan agreement supports the land purchase narrative, then the absence of a sale and purchase agreement or land transfer instrument between FDB and Suite Trade supports the loan narrative equally, or indeed more forcefully, since a property transaction without any documentation between the parties would be commercially extraordinary, whereas a friendly loan between parties with a close personal relationship and founded on trust is the very paradigm case in which formal documentation would be absent. [71] For all these reasons, this court finds, on the balance of probabilities, that the RM10,000,000.00 transferred by FDB to Suite Trade on 1.2.2014 was a friendly loan extended by FDB to Suite Trade by reason of the personal relationship between the late Dato’ Wong and Hew. The Defendants’ land purchase narrative is rejected. Issue 1 is decided in favour of FDB. [72] This court wishes to add a further observation on the legal effect of FDB’s act in drawing down a “working capital” RCF facility and deploying the proceeds as a friendly loan to Suite Trade. The Defendants argued at one point that FDB’s borrowing from UOB under a “working capital” facility and advancing the proceeds to Suite Trade constituted misrepresenting, lying to, or committing a crime against the bank, or was otherwise irregular. This court rejects that argument. The characterisation of the facility as “working capital” in the UOB Letter of Offer speaks to the purpose described between FDB and UOB. It has no bearing on the legal relationship between FDB and Suite Trade. Even if FDB had deployed the proceeds of the RCF for a purpose that was not strictly “working capital” as described in the letter of offer, this would at most be a matter between FDB and UOB. It could not affect the obligation of Suite Trade, which received the funds with full knowledge that they had been advanced to it by FDB, to repay those funds. [73] This court further observes that a key feature of the friendly loan relationship in this case is the mechanism by which repayment was to be effected. Under the Settlement Agreement between Dato’ Wong and Hew, the repayment of the friendly loan was to be funded primarily through the proceeds of sale of three plots of land originally acquired from Mega Palm, along with one lot owned by Suite Trade. The Regency Parc lots (specifically Lots 25 and 82) were not the anticipated source of repayment, but rather were intended to be held by FDB as security or collateral pending the full settlement of the friendly loan. This explains why the transactions involving the Lots, and in particular the unauthorised sales of Lots 25 and 82 to third parties without FDB’s knowledge, are of such central importance to the case. The sale of these lots by Suite Trade to third parties deprived FDB of the agreed security for the friendly loan and forms the basis of FDB’s claim for fraudulent misrepresentation. [74] It follows from this analysis that the relationship between the friendly loan and the Regency Parc arrangement is not a relationship of contradiction but rather, they are distinct transactions that intersected at the Settlement Agreement. The friendly loan was a separate RM10,000,000.00 advance; the Regency Parc arrangement was a separate RM2,800,000.00 investment. However, under the Settlement Agreement, Lots 25 and 82 from the Regency Parc arrangement became the intended security for repayment of the loan. Suite Trade’s failure to sell the three plots of land to redeem the loan, combined with its failure to make direct repayment of the outstanding balance, is the reason the sum of RM8,091,443.00 remains outstanding as at 28.2.2023. Issue 2: Whether the Settlement Agreement Dated 26.10.2016 Is Admissible in Evidence and Its Legal Effect FDB’s Submissions [75] FDB submits that the Settlement Agreement dated 26.10.2016 is admissible in evidence because it was classified as a Part B document during the trial by agreement of the parties, meaning its authenticity is not in dispute. The primary reason this issue arises is that the late Dato’ Wong, who was the senior FDB officer with direct personal knowledge of the Settlement Agreement and the circumstances of its preparation, is now deceased. The Defendants argue that his absence renders the document inadmissible hearsay. FDB’s primary response is that for Part B documents, the maker need not be called as a witness. In the alternative, FDB submits that the document falls squarely within section 32(1)(b) of the Evidence Act 1950, which provides for the admissibility of a statement made by a deceased person where the statement was made in the ordinary course of business. [76] FDB submits that the conditions for admissibility under section 32(1)(b) are satisfied: first, the maker of the relevant statement (in the sense of the person whose instructions and knowledge informed the preparation of the Settlement Agreement) was Dato’ Wong, who is deceased; second, the Settlement Agreement was made in the ordinary course of FDB’s business, being a document prepared by FDB’s management to record and formalise the outstanding liability of Suite Trade arising from the friendly loan. FDB relies on the document itself, acknowledging that its witnesses, including PW3 (Chong Wei Wei), had no personal knowledge of the meeting and were not present when the Settlement Agreement was prepared and executed. [77] As to the legal effect of the Settlement Agreement, FDB submits that it constitutes a binding and unambiguous acknowledgment by Suite Trade of its outstanding indebtedness to FDB in the sum of RM7,745,046.00 as at 31.10.2016. FDB submits that the plain language of the Settlement Agreement leaves no room for doubt that Suite Trade acknowledged the “RCF balance” and undertook to settle ‘“all owing to United Overseas Bank and/or the FITTERS Diversified Berhad” as an outstanding liability. [78] On the question of Suite Trade’s authority to execute the Settlement Agreement, FDB submits that the indoor management rule entitles FDB, as a person dealing with Suite Trade, to assume that the person who executed the Settlement Agreement on Suite Trade’s behalf had the necessary authority to do so, and that Suite Trade is accordingly estopped from raising any internal irregularity as to authority to avoid the binding effect of the Settlement Agreement. The Defendants’ Submissions [79] The Defendants contend that the Settlement Agreement is inadmissible documentary hearsay. They submit that the document is hearsay evidence because the person whose knowledge and authority underpinned its preparation, namely Dato’ Wong, is deceased, and FDB’s witnesses (PW1, PW2, and PW3) who testified to its contents had no personal knowledge of the meeting or its execution. To admit the Settlement Agreement without Dato’ Wong being available for cross-examination would, in the Defendants’ submission, cause serious prejudice to the Defendants’ case, as they would be unable to challenge the circumstances in which the document was prepared or the accuracy of the figures stated therein. Furthermore, regarding the authority of the person who signed it on behalf of Suite Trade, the Defendants submit that FDB’s failure to call Soon Kian Guan to testify should attract an adverse inference under section 114(g) of the Evidence Act 1950. [80] The Defendants submit that the purported Settlement Agreement does not fall within any recognized exception to the rule against hearsay. They contend that section 32(1)(b) of the Evidence Act 1950 is not engaged because the conditions of the provision are not satisfied in the present case. They argue that the Settlement Agreement was not a contemporaneously created business record or an entry or memorandum made by a deceased person in books kept in the ordinary course of business, and that the provision does not extend to the type of document in question. Finally, the Defendants submit that while the document was placed in Part B of the agreed bundle, this classification merely dispenses with formal proof of the document’s execution and does not equate to an agreement on the truth of its contents. [81] On the question of legal effect, the Defendants maintain that even if the Settlement Agreement is admitted, it does not constitute an acknowledgment of a loan debt. They submit that the reference to “RCF balance” is a reference to FDB’s own banking facility, and Suit Trade’s undertaking to sell the lands to redeem the RCF balance was merely an arrangement to help FDB who was facing financial difficulties, and does not amount to an admission that Suite Trade owed FDB money by way of a loan. The Defendants further submit that it makes no commercial sense for them to be required to sell land already owned by FDB to discharge a supposed loan obligation. Furthermore, the Defendants raise the question of whether the signatory to the Settlement Agreement had authority to bind Suite Trade, asserting that the document is invalid as it was not signed by two directors. Court’s Analysis and Finding [82] Section 32(1)(b) of the Evidence Act 1950 provides: “Statements, written or verbal, of relevant facts made by a person who is dead or who cannot be found, or who has become incapable of giving evidence, or whose attendance cannot be procured without an amount of delay or expense which under the circumstances of the case appears to the court unreasonable, are themselves relevant facts in the following cases: ...
b
(b) when the statement was made by any such person in the ordinary course of business, and in particular when it consists of any entry or memorandum made by him in books kept in the ordinary course of business or in the discharge of professional duty; or of an acknowledgment written or signed by him of the receipt of money, goods, securities or property of any kind, or of a document used in commerce, written or signed by him, or of the date of a letter or other document usually dated, written or signed by him...” [83] The admissibility of the Settlement Agreement under section 32(1)(b) requires this court to be satisfied of two conditions: first, that the statement was made by a person who is deceased; and second, that the statement was made in the ordinary course of business. [84] On the first condition, the Settlement Agreement was prepared in the context of FDB’s management of the outstanding balance owed by Suite Trade. The senior FDB officer with knowledge of and responsibility for the Settlement Agreement was the late Dato’ Wong, who has since passed away. As established during the trial, FDB’s witnesses, including PW3 (Chong Wei Wei), admitted they had no personal knowledge of the meeting or the preparation of the Settlement Agreement, relying entirely on the document itself as being prepared under Dato’ Wong’s direction and authority. Dato’ Wong is deceased and is therefore a person of the category contemplated by section 32(1)(b). The first condition is accordingly satisfied. [85] On the second condition, the Settlement Agreement was prepared in the ordinary course of FDB’s business as a written record and acknowledgment of the outstanding liability of Suite Trade in relation to the RCF. The preparation of such a document, namely recording the outstanding balance of a loan, stipulating the terms for repayment, and formalising the debtor’s acknowledgment, is the type of document made in the ordinary course of the business of a corporate creditor managing its receivables. The fact that the document was prepared at or about the time of the 13.10.2016 meeting, and was signed by Suite Trade on 26.10.2016, confirms that it was a contemporaneous record of the outstanding position. This court finds that the second condition is also satisfied. [86] Accordingly, this court holds that the Settlement Agreement dated 26.10.2016 is admissible in evidence primarily because it was classified as a Part B document during the trial by agreement of the parties, meaning its authenticity is not in dispute, and alternatively under section 32(1)(b) of the Evidence Act 1950. [87] This court further notes that, independently of section 32(1)(b), the Settlement Agreement is admissible as a matter of documentary evidence, being a document classified in Part B and therefore admitted as having been executed by Suite Trade itself. The document is admissible as evidence of the fact that Suite Trade executed a document acknowledging an outstanding “RCF balance” and undertaking to settle ‘“all owing to United Overseas Bank and/or the FITTERS Diversified Berhad” in the sum of RM7,745,046.00 as at 31.10.2016. The execution of a document containing such an undertaking is a fact in issue, and no hearsay objection lies to the admission of the document itself as evidence of that fact. [88] On the legal effect of the Settlement Agreement, this court finds that it constitutes an unambiguous and binding acknowledgment by Suite Trade of its outstanding indebtedness to FDB. The Settlement Agreement expressly quantifies the outstanding balance of the “RCF” as at 31.10.2016 at RM7,745,046.00. It further sets out Suite Trade’s obligations to make good this outstanding balance through the sale of three plots of land originally acquired from Mega Palm and one lot owned by Suite Trade, or alternatively, the purchase of the three plots of land by Suit Trade, and through direct payment. The language of the Settlement Agreement admits of only one reasonable interpretation: Suite Trade acknowledged that it owed FDB RM7,745,046.00 (after the set-off of RM1,442,000.00 for the buy-back of Lot 25 and Lot 82 to be held as security) and undertook to satisfy this liability in the manner set out in the document. There is no basis for the Defendants’ contention that the reference to “RCF balance” is anything other than an acknowledgment of the outstanding loan balance and an undertaking to settle ‘“all owing to United Overseas Bank and/or the FITTERS Diversified Berhad”. [89] On the question of Suite Trade’s authority to execute the Settlement Agreement, this court applies the internal management rule, relying on the Federal Court decision in Pekan Nenas Industries Sdn Bhd v Chang Ching Chuen & Ors [1998] 1 MLJ 465 and the Court of Appeal decision in Bumiputra Commerce Bank Bhd v Augusto Pompeo Romei & Anor [2014] 3 MLJ 672. The indoor management rule provides that persons dealing in good faith with a company are entitled to assume that the company’s internal management requirements have been duly observed, and the company cannot thereafter rely on any internal irregularity to avoid its obligations under a transaction entered into with a third party. FDB, in receiving the executed Settlement Agreement from Suite Trade, was entitled to assume that its director, Soon Kian Guan, who signed the document and affixed the company stamp on Suite Trade’s behalf had the necessary authority to do so. Suite Trade is accordingly bound by the Settlement Agreement and cannot be heard to raise any alleged lack of internal authority as a ground for avoiding its obligations thereunder. [90] This court also observes that Suite Trade did not, at any time between the execution of the Settlement Agreement on 26.10.2016 and the commencement of the present proceedings on 31.3.2023, a period of more than six years, take any step to repudiate or disavow the Settlement Agreement. On the contrary, Suit Trade acted in accordance with the Settlement Agreement when it allowed a set-off of RM2,412,548.01 from its sales commission on 31.07.2019. This partial performance, coupled with the Defendants’ failure to reply to FDB’s letters of demand, is itself a powerful indication that Suite Trade at all times treated the Settlement Agreement as a binding acknowledgment of its obligations, and only sought to challenge its effect and admissibility once litigation had been commenced. [91] For these reasons, this court holds that the Settlement Agreement dated 26.10.2016 is admissible in evidence and constitutes a binding acknowledgment by Suite Trade of its outstanding indebtedness to FDB in the sum of RM7,745,046.00 as at 31.10.2016 and an undertaking to settle ‘“all owing to United Overseas Bank and/or the FITTERS Diversified Berhad”. Issue 2 is decided in favour of FDB. [92] This court adds a further observation on the significance of the set-off of RM1,442,000.00 expressly acknowledged in the Settlement Agreement in respect of Lots 25 and 82. This set-off is relevant to Issue 1 as well as Issue 2. If the RM10,000,000.00 had truly been consideration for the purchase of three plots of land already completed, there would be no occasion to set off Suit Trade’s agent sales commission for Zeta DeSkye Condominium to buy back Lot 25 and Lot 82 to be held as security for any outstanding balance, because no balance would have been outstanding. The very existence of the set-off mechanism in the Settlement Agreement, under which the agent sales commission is used to buy back the lots as security for an outstanding balance described as the “RCF balance,” is wholly consistent with FDB’s case and wholly inconsistent with the Defendants’ case. [93] Furthermore, this court notes the specific terms of the Settlement Agreement insofar as they set out obligations for Suite Trade going forward after 26.10.2016, namely: to sell three plots of land originally acquired from Mega Palm and one lot owned by Suite Trade by 31.12.2016; to purchase the three plots of land belonging to FDB by 31.3.2017; and to fully settle the outstanding balance owing to UOB and/or FDB. These are prospective obligations imposed on a debtor by a creditor in the context of a debt recovery arrangement. They are entirely characteristic of a creditor seeking to enforce the recovery of a loan through the realisation of assets associated with the debtor. They are quite unlike anything that one would find in a document relating to a completed purchase of three plots of land. The court considers the prospective nature of the obligations in the Settlement Agreement to be a further and compelling indication that the outstanding balance acknowledged therein was in truth a loan that remained to be repaid, and not a residual accounting matter relating to a completed property transaction. [94] The court also addresses FDB’s submission under section 92 of the Evidence Act 1950. Section 92 of the Evidence Act 1950 provides that when the terms of a contract or other disposition have been reduced to the form of a document, no evidence shall be given for the purpose of contradicting, varying, adding to, or subtracting from its terms, except in certain specified circumstances. As section 92 is applicable to the Settlement Agreement, it operates to prevent the Defendants from leading oral or extrinsic evidence to contradict or vary the plain written acknowledgment in the Settlement Agreement that the outstanding “RCF balance” as at 31.10.2016 was RM7,745,046.00 and the undertaking to settle ‘“all owing to United Overseas Bank and/or the FITTERS Diversified Berhad”. The Defendants’ attempt to characterise this acknowledgment as something other than a loan acknowledgment by reference to extrinsic matters runs contrary to the parol evidence rule in section 92 and is accordingly not permissible. Conversely, the Defendants’ attempt to invoke section 92 in relation to the UOB Letter of Offer to argue that FDB is precluded from recharacterising the “working capital” facility as a loan is rejected. As observed earlier, the UOB Letter of Offer governs the relationship between the bank and FDB, and does not determine the legal relationship between FDB and Suit Trade. Issue 3: Whether FDB’s Claim Against Suite Trade Is Time-Barred FDB’s Submissions [95] FDB advances three independent and self-sustaining grounds on which it contends that its claim is not time-barred. [96] On the first ground, FDB relies on the express terms of the Settlement Agreement. FDB submits that in the event Suit Trade failed to sell the lands, their obligation to purchase the three plots of land to fully settle the loan was to be completed by 31.3.2017. Therefore, the cause of action only accrued on 1.4.2017 when Suit Trade failed to honour this promise. As the writ was filed on 31.3.2023, FDB submits it was filed exactly within the six-year limitation period. [97] On the second ground, FDB relies on section 26(2) of the Limitation Act 1953. FDB submits that the set-off of RM2,412,548.01 applied on 31.7.2019 constitutes a “payment” in respect of the outstanding debt within the meaning of section 26(2). Section 26(2) provides that where a person bound by a limitation period makes a payment in respect of the debt, the right of action shall be deemed to have accrued afresh on the date of the payment. FDB submits that the set-off on 31.7.2019, which reduced the outstanding balance of the debt, constitutes a payment for this purpose. The writ was filed on 31.3.2023, which is within six years of 31.7.2019. Accordingly, FDB submits, the claim is within time. [98] FDB further submits that the set-off was not a unilateral act by FDB but was agreed or acquiesced in by Suite Trade through Hew. This is evidenced by Hew’s own admission in cross-examination that he had agreed to the set-offs because of his business relationship with the late Dato’ Wong. An agreed set-off applied against an outstanding debt constitutes a payment within the meaning of section 26(2). [99] On the third ground, FDB relies on section 29 of the Limitation Act 1953 (the fraud exception). FDB submits that the Defendants fraudulently misrepresented that Lot 25 and Lot 82 remained unsold and could be held as security for the loan, inducing FDB to enter into the Settlement Agreement. This misrepresentation, coupled with the tampering of the Rescission Letter, which substituted “Lot 82” for “Lot 81,” to facilitate the unauthorised sale of the lots, constituted fraud or concealment of a fact relevant to FDB’s right of action. FDB did not discover this fraud until July 2019 and could not with reasonable diligence have discovered it before that date. Accordingly, by virtue of section 29, the limitation period did not begin to run until July 2019 at the earliest, and the claim filed on 31.3.2023 is within time. The Defendants’ Submissions [100] The Defendants submit that FDB’s claim is time-barred. Their primary submission is that even if the alleged Settlement Agreement is taken at face value, the cause of action would have accrued no later than 31.12.2016, which was the stipulated deadline for the performance of critical obligations. As such, the six-year limitation period under section 6(1)(a) of the Limitation Act 1953 would have expired well before the writ was filed on 31.3.2023. The Defendants further submit that the claim is independently barred by the equitable doctrine of laches due to FDB’s unreasonable delay, which prejudiced the Defendants as the principal witness, the late Dato’ Wong, passed away in 2021. [101] The Defendants dispute that the set-off on 31.7.2019 constitutes a “payment” within section 26(2) on the following grounds: a) The set-off was unilaterally applied by FDB and was not agreed by Suite Trade. The Defendants contend they would never have agreed to such a contra arrangement as it requires a company resolution or an agreement by the Board of Directors due to tax implications, which was never obtained. b) The Defendants deny that there was any debt in the first place. A set-off applied against a non-existent debt cannot constitute a “payment in respect of” that debt. [102] With respect to the fraud exception, the Defendants deny that any fraud was perpetrated. They contend that even if the Rescission Letter was tampered with, this was not an act of Suite Trade or Hew, as they were not parties to the sale and purchase agreements, had no contractual privity or authority to rescind or revoke them, and therefore it was legally and factually impossible for them to commit the alleged fraud. The Defendants further submit that section 29 of the Limitation Act cannot be invoked by FDB because the alleged fraud, if it occurred at all, was perpetrated against FDB’s subsidiary, FPDSB, and not FDB itself. The Defendants argue that FDB cannot import the losses or events affecting a separate legal entity to revive or extend its own time-barred claim. Court’s Analysis and Finding [103] This court holds, for the reasons that follow, that FDB’s claim is not time-barred. This finding rests on three independent and alternative grounds, each of which is sufficient by itself to defeat the Defendants’ limitation defence. [104] On the first ground, this court finds that the cause of action only accrued on 1.4.2017. As established earlier, the Settlement Agreement stipulated that Suit Trade’s obligation to purchase the three plots of land to fully settle the loan was to be completed by 31.3.2017. Therefore, the breach occurred and the cause of action accrued on 1.4.2017 when Suit Trade failed to honour this obligation. As the writ was filed on 31.3.2023, it was filed exactly within the six-year limitation period. [105] On the second ground, section 26(2) of the Limitation Act 1953: Section 26(2) provides that where any right of action has accrued to recover any debt or other liquidated pecuniary claim, or any claim to the personal estate of a deceased person or to any share or interest therein, and the person liable or accountable therefore acknowledges the claim or makes any payment in respect thereof, the right shall be deemed to have accrued on and not before the date of the acknowledgment or the last payment. [106] The primary question on this ground is whether the set-off of RM2,412,548.01 applied on 31.7.2019 constitutes a “payment” within the meaning of section 26(2). This court finds that it does, for the following reasons. [107] A set-off applied against an outstanding debt reduces the debtor’s outstanding liability in precisely the same way as a cash payment. The economic effect is identical: the quantum of the outstanding debt is diminished by the amount of the set-off or the payment, as the case may be. There is no principled reason why a set-off, applied in respect of a specific debt at the debtor’s agreement or acquiescence, should be treated differently from a cash payment for the purposes of section 26(2). In both cases, the debtor is acknowledging, by the act of agreeing to or acquiescing in the set-off or making the payment, that a debt exists and that the transaction reduces the debt. [108] The Defendants’ argument that the set-off was a unilateral act by FDB is contradicted by Hew’s own evidence. Hew admitted in cross-examination when it was put to him that he agreed to the set-off because of the business relationship with the late Dato’ Wong, by answering “Agree.” This admission is of the highest significance. It means that Suite Trade, through Hew, was not merely a passive recipient of a unilateral accounting adjustment; Hew actively agreed to the set-off. A debtor who agrees to a set-off is acknowledging, in that very act, that there is an outstanding debt against which the set-off is being applied. The set-off on 31.7.2019, applied with Hew’s agreement, constitutes a payment by Suite Trade within the meaning of section 26(2). [109] The Defendants’ further argument that there was no debt in the first place cannot avail them on this issue. This court has already found, under Issue 1, that the RM10,000,000.00 was a friendly loan and that a debt did indeed exist. The set-off was accordingly applied in respect of a real and subsisting debt. The conditions of section 26(2) are satisfied. [110] On the fresh accrual, the cause of action is accordingly deemed to have accrued on 31.7.2019, being the date of the last set-off payment. The writ was filed on 31.3.2023, which is within six years of 31.7.2019. FDB’s claim is therefore within the limitation period on this ground. [111] FDB had also advanced a third and alternative ground under section 29 of the Limitation Act 1953, relying on the tampering of the Rescission Letter as constituting fraud or concealment by the Defendants. This court does not find it necessary to consider that ground. The court’s findings on the first and second ground are sufficient by themselves to defeat the limitation defence, and the determination of Issue 3 rests on those grounds alone. No finding is made on whether the conditions of section 29 are satisfied. Issue 4: Whether Hew Made Fraudulent Misrepresentations to the Late Dato’ Wong and Whether Hew Is Personally Liable in the Tort of Deceit FDB’s Submissions [112] FDB submits that Hew personally made fraudulent misrepresentations to the late Dato’ Wong, and that FDB was induced to enter into the Settlement Agreement and grant more time to settle the debt in reliance on these misrepresentations. The representations pleaded by FDB are, in essence: a) that Lot 25 and Lot 82 had not been disposed of yet as at 13.10.2016; b) that Suit Trade will buy back Lot 25 and Lot 82 from FDB at the price of RM1,442,000.00; and c) that Lot 25 and Lot 82 shall nevertheless remain under the ownership of FPDSB as security or collateral until the full settlement of the friendly loan. [113] FDB submits that the elements of the tort of deceit, as set out in the Court of Appeal decision in Victor Cham & Anor. v Loh Bee Tuan [2006] 5 MLJ 359, are satisfied on the evidence. The elements are: a) a false representation was made; b) the statement was made knowingly or recklessly without caring whether it was true or false; c) the representee acted in reliance on the representation; and d) the representee suffered damage as a result. [114] FDB relies on the following in support of its fraud claim against Hew to lift the corporate veil and hold him jointly and severally liable: a) Hew is the director and/or de facto director of Suite Trade at all material times and admitted in his witness statement that he oversees all operations within the company. b) Hew was the representative of Suite Trade who personally attended the meeting on 13.10.2016 and made the fraudulent statements to FDB. c) The fact that Hew, as the directing mind and controlling will of Suite Trade, is directly responsible for personally making and/or procuring the fraudulent representations that caused loss to FDB. [115] FDB accordingly invokes the common law doctrine of lifting the corporate veil arguing that Hew cannot hide behind the separate legal personality of Suite Trade when he was the directing mind who personally made or procured the fraudulent representations. The Defendants’ Submissions [116] Hew and Suite Trade deny the fraud claim. Hew’s evidence was that his dealings with the late Dato’ Wong were conducted in good faith and on the basis of a genuine understanding that the RM10,000,000.00 was consideration for the purchase of three plots of land. He denies having made any false representations to Dato’ Wong and denies any intent to defraud FDB. [117] The Defendants place considerable emphasis on the standard of proof for fraud allegations in civil proceedings. They rely on the principle, affirmed by the Federal Court in Sinnaiyah & Sons Sdn Bhd v Damai Setia Sdn Bhd [2015] 5 MLRA 191; [2015] 5 MLJ 1, that the standard of proof in civil proceedings is the balance of probabilities, and further rely on the Court of Appeal decision in CIMB Bank Bhd v Veeran Ayasamy [2015] 5 MLRA 603 to argue that the element of fraud must be proved by clear, cogent and convincing evidence. [118] The Defendants highlight the fundamental difficulty in FDB’s fraud case: the primary witness to the alleged fraudulent representations, namely the late Dato’ Wong, is deceased and was unable to give evidence at trial. FDB’s witnesses (PW1, PW2, and PW3) can speak to certain peripheral matters but none of them were present at the private discussions between Dato’ Wong and Hew in which the alleged representations were made. In the absence of direct evidence of the representations, The Defendants submit, FDB cannot establish fraud to the requisite standard of cogent evidence. [119] On the tampering of the Rescission Letter, the Defendants deny that they were responsible for or involved in the tampering. They further submit that they were never parties to the sale and purchase agreements, had no contractual authority or control over the units to rescind or revoke them, and therefore could not have played a role in the creation or alteration of the document. The Defendants highlight that even if the Rescission Letter was tampered with, there is no direct evidence linking the tampering to the Defendants, a fact which FDB candidly conceded during oral submissions. Court’s Analysis and Finding [120] This court approaches the fraud allegations with the care and seriousness that such allegations demand. As affirmed in Sinnaiyah & Sons Sdn Bhd v Damai Setia Sdn Bhd and CIMB Bank Bhd v Veeran Ayasamy, while the applicable standard of proof in civil proceedings remains the balance of probabilities, the gravity of a fraud allegation means that the court must require, and FDB must adduce, clear, cogent and convincing evidence before the court can make a finding of fraud. This is not an elevated standard in the sense of a different quantum of proof; rather, it is a recognition that the more serious the allegation, the more persuasive and cogent the evidence must be before the court can properly act on it. [121] The elements of the tort of deceit, as relied upon by both parties and established by the Court of Appeal in Victor Cham & Anor. v Loh Bee Tuan, require proof of a false representation that the plaintiff acted in reliance upon, that the statements were made knowingly or recklessly without caring whether it was true or false, and that the plaintiff suffered damage as a result. In Victor Cham, the Court of Appeal stated: “Fraudulent misrepresentation comes under the tort of deceit. To succeed in his claim the respondent in this case need to establish that he had acted in reliance on the fraudulent misrepresentation and that the representation was false. He further needs to establish that the 1st Appellant had made those statements knowingly or recklessly without caring whether it was true or false. And that as a result of reliance on such representation the respondent had suffered damage.” [122] Applying these principles, the critical question is whether FDB has adduced clear, cogent and convincing evidence that Hew made specific false representations to Dato’ Wong, knowing them to be false or being reckless as to their truth, with the intent that Dato’ Wong and FDB would act on them. This court finds that FDB faces a fundamental and, in the end, insuperable evidential obstacle. [123] The person to whom the representations are alleged to have been made was the late Dato’ Wong. Dato’ Wong passed away before the trial and was unable to give evidence. In the absence of Dato’ Wong’s direct testimony, there is simply no direct evidence before this court of what representations Hew made to Dato’ Wong, in what terms those representations were made, whether they were false when made, and whether Dato’ Wong acted in reliance upon them. The evidence of FDB’s witnesses (PW1, PW2, and PW3) on the representations is necessarily indirect and inferential, none of these witnesses having been present at the relevant discussions during the meeting on 13.10.2016 between Dato’ Wong and Hew. [124] This court recognises that fraud may in appropriate cases be established by inference from the circumstances, even without direct evidence of every element. However, where the primary witness to the core of the fraud claim, namely the representations allegedly made to him during the 13.10.2016 meeting, is deceased, the court must exercise particular caution before drawing inferences that would found a finding of fraud. The clear, cogent and convincing evidence standard requires something more than the inference that, because the lots had already been sold to third parties, Hew must have deliberately misrepresented their availability as security to induce FDB into the Settlement Agreement. [125] FDB asks this court to infer that because Lot 25 and Lot 82 had been sold prior to the meeting, Hew must have known of the sales and actively concealed them. This circumstance does not, however, automatically translate into a finding of fraudulent misrepresentation by Hew. As established, the Defendants were not parties to the sale and purchase agreements between FPDSB and Next Fortune, and had no legal authority to rescind or transfer the units. It is possible for a person to have an erroneous belief about the status of those units, without having made any fraudulent representation. The Defendants’ agreement to the settlement terms regarding the two lots, while highly suspicious, could reflect a genuine though mistaken belief held by Hew at the material time, rather than a deliberate falsehood. [126] In so far as the tampering of the Rescission Letter is concerned, this court finds that the Rescission Letter was indeed tampered with, as is evident from the face of the document. The substitution of “Lot 82” for “Lot 81” by typewriter is a deliberate act of document alteration. However, there is no direct evidence before this court identifying who carried out the tampering. The police report lodged on 15.10.2019 refers to forgery in the context of Next Fortune’s involvement, not specifically in connection with Hew. Furthermore, as clarified by FDB’s counsel during the trial, it is not even FDB’s pleaded case that Hew personally forged the document. Without direct evidence attributing the tampering to Hew personally or Suit Trade, this court is unable, on the clear, cogent and convincing evidence standard, to find that Hew was personally responsible for the tampering so as to found a fraud claim. [127] This court therefore finds that FDB has not established, to the requisite standard of clear, cogent and convincing evidence, that Hew made fraudulent misrepresentations to the late Dato’ Wong. The claim against Hew in the tort of deceit accordingly fails. Issue 4 is decided in favour of Hew. [128] This court acknowledges that this finding may appear to favour a person whose company has failed to repay a substantial loan. It is important to note, however, that the failure to repay a loan and the making of fraudulent misrepresentations are analytically distinct wrongs. This court’s finding is that while Suite Trade is liable in contract for the repayment of the friendly loan, the separate and more serious allegation of personal fraud against Hew has not been made out on the evidence available to this court in the circumstances of this trial. [129] This court also addresses FDB’s reliance on the common law doctrine of lifting the corporate veil. FDB argued, relying on authorities such as Lim Seng Kiat & Anor v Jee Hing Lim & Anor [2015] 1 LNS 94 (HC), that Hew cannot hide behind the separate legal personality of Suite Trade as he was the directing mind who allegedly made or procured the fraudulent representations. However, it is a settled principle that the corporate veil will only be pierced or lifted where there is clear evidence that it was used to perpetrate fraud or equitable fraud. Given this court’s finding that FDB has failed to establish the allegations of fraudulent misrepresentation and the tort of deceit against Hew to the requisite standard, the fundamental premise for lifting the corporate veil is absent. Consequently, there is no justification to lift the corporate veil, and Hew cannot be held personally liable for the contractual debts of Suit Trade. [130] Two observations arise regarding FDB’s attempt to lift the corporate veil. First, the common law doctrine on its terms applies in the context of preventing the abuse of the corporate personality to perpetrate fraud or evade legal obligations. FDB has not established the conditions for the doctrine to apply in the present context. Second, and more fundamentally, lifting the corporate veil on the basis of fraud requires proof of actual fraud or specific fraudulent intent, which goes at least as high as the clear, cogent and convincing evidence standard already discussed. Since this court has found that FDB has not established fraud against Hew on the evidence, the basis for lifting the veil is equally not established. The invocation of this doctrine accordingly does not assist FDB in its claim against Hew. [131] In arriving at the conclusion on Issue 4, this court is also mindful of the importance of maintaining the distinction between, on the one hand, strong suspicion of dishonest conduct based on the inference to be drawn from surrounding circumstances, and, on the other hand, the clear, cogent and convincing evidence required to sustain a civil finding of fraud. Courts have consistently cautioned against the conflation of these two categories. Suspicion, however strong, does not amount to proof. In the present case, there are features of the evidence, namely the unauthorised sales of the Lots, the tampered Rescission Letter and the unexplained failure to repay the loan, that might, in the lay mind, point to dishonest conduct on someone’s part. However, this court must be guided by the legal standard and by the evidence as it stands, not by speculation as to what might have been proved with a fuller evidential record. The finding that the fraud claim against Hew is not established is not a finding that no dishonesty occurred in relation to the Regency Parc transactions; it is a finding that the available evidence does not meet the strict legal standard of clear, cogent and convincing evidence required to hold Hew personally liable in fraud. Issue 5: Whether the Corporate Veil of Suite Trade Ought to Be Pierced So As to Hold Hew Personally Liable FDB’s Submissions [132] FDB submits that Hew is the directing mind and controlling will of Suite Trade. As the director and/or de facto director who admitted in his witness statement that he controlled and oversaw all of Suite Trade’s operations, Hew is the directing mind of Suite Trade. FDB submits that a director who is the directing mind of a company and who personally makes and/or procures fraudulent misrepresentations against a third party may be held personally liable for the company’s acts, with the court lifting the corporate veil to attribute liability directly to the director. [133] FDB relies on the common law doctrine of lifting the corporate veil, citing authorities such as Lim Seng Kiat & Anor v Jee Hing Lim & Anor and Khor Yiap Seng v Soo Geok Ki & Ors. FDB submits that because Hew was the representative of Suite Trade who personally attended the meeting on 13.10.2016, and personally made and/or procured the fraudulent misrepresentations that induced FDB into the settlement terms, he cannot hide behind the separate legal personality of Suite Trade. Therefore, FDB submits the corporate veil must be lifted to hold him jointly and severally liable with Suit Trade. The Defendants’ Submissions [134] The Defendants submit that FDB’s attempt to hold Hew liable by invoking the corporate veil is procedurally barred. They submit that at no point in their pleadings did FDB specifically seek to pierce the corporate veil or assert that Hew should be personally liable for Suite Trade’s debts. Relying on the Federal Court case of Ranjit Kaur S Gopal Singh v Hotel Excelsior (M) Sdn Bhd [2010] 6 MLJ 1, the Defendants argue that parties are bound by their pleadings, and FDB’s attempt to lift the corporate veil without having pleaded such a claim should not be entertained. [135] The Defendants further submit that all actions taken by Hew were undertaken by him in his capacity as a director of Suite Trade, and therefore he has cover for anything he has done in that capacity. Moreover, they submit there is no evidence that Hew engaged in, directed, or procured any misrepresentation against FDB that would justify piercing the corporate veil. Court’s Analysis and Finding [136] This court agrees with the Defendants that FDB’s attempt to pierce the corporate veil is procedurally barred. A perusal of the pleadings confirms that FDB did not specifically plead for the corporate veil to be pierced. As established by the Federal Court in Ranjit Kaur S Gopal Singh v Hotel Excelsior (M) Sdn Bhd, parties are bound by their pleadings and cannot raise unpleaded issues during submissions. Even if this court were to consider the substantive merits, the doctrine of separate corporate personality, as established in Salomon v A Salomon and Co Ltd [1997] AC 22 and applied consistently in Malaysian jurisprudence, means that a company is a distinct legal person from its members and directors, and the directors and members are not ordinarily liable for the company’s debts or acts. The corporate veil may be pierced in certain exceptional circumstances, but the courts in Malaysia have consistently held that the remedy is an exceptional one and is not to be applied merely because a director exercises control over the company. [137] The circumstances in which the corporate veil may be pierced in Malaysian law include cases where the company is being used as a sham or cloak for the perpetration of fraud, or where the company is being used as an instrument of improper conduct to evade a legal obligation. The pivotal requirement in the present context is the existence of actual fraud perpetrated through the company by the director personally. As this court has already determined under Issue 4 that FDB failed to establish the allegations of fraudulent misrepresentation against Hew to the requisite standard of clear, cogent and convincing evidence, the fundamental premise for lifting the corporate veil is entirely absent. Accordingly, there is no factual or legal justification to pierce the corporate veil. [138] Since this court has found, under Issue 4, that FDB has not established to the requisite standard of clear, cogent and convincing evidence that Hew personally made fraudulent misrepresentations so as to give rise to personal liability in the tort of deceit, the predicate for the application of the directing mind doctrine and the corporate veil piercing remedy falls away. The directing mind doctrine in the context of personal liability for fraud requires, at its foundation, a finding that the director personally engaged in fraudulent or dishonest conduct. In the absence of such a finding, there is no basis for lifting the corporate veil. [139] Accordingly, this court declines to pierce the corporate veil. FDB’s attempt to hold Hew personally liable for the acts and debts of Suit Trade fails. Issue 5 is decided in favour of Hew. [140] The claim against Hew based on the directing mind doctrine and the piercing of the corporate veil accordingly fails and is dismissed. Issue 5 is decided in favour of Hew. [141] The combined result of the findings on Issues 4 and 5 is that FDB’s claim against Hew in its entirety is dismissed. Issue 6: Whether FDB’s Subsidiary Claim of RM116,000.00 Is Sustainable FDB’s Submissions [142] FDB advances a subsidiary claim of RM116,000.00 against Suite Trade in connection with the Regency Parc transactions. The basis of this claim, as pleaded, is pursuant to the profit-sharing terms of the Investment Agreement dated 18.3.2013. FDB pleads that under the said agreement, any reselling price for the Regency Parc units in excess of RM878,000.00 shall be shared equally between its subsidiary, FPDSB, and Suite Trade. Because Lot 25 was sold for RM888,000.00 and Lot 82 was sold for RM1,100,000.00, FDB claims its 50% share of the excess, which amounts to the sum of RM116,000.00. The Defendants’ Submissions [143] The Defendants submit that FDB has no locus standi to bring this subsidiary claim. The Regency Parc transactions and the alleged Investment Agreement were conducted exclusively between Suite Trade and FPDSB, not between Suite Trade and FDB. The Defendants argue that under the doctrine of privity of contract, only parties to a contract may sue or be sued upon it, making FDB a complete stranger to the agreement. Any claim in respect of amounts receivable or payable under the Regency Parc arrangement belongs to FPDSB and not to FDB. The Defendants invoke the proper plaintiff rule as established in Foss v Harbottle and reaffirmed by the Federal Court in Low Cheng Teik & Ors v Low Ean Nee [2024] 6 MLRA 220, and submit that FDB, as the parent company of FPDSB, cannot bring an action in its own name in respect of a wrong done to or a loss suffered by its subsidiary. Court’s Analysis and Finding [144] This court finds that the subsidiary claim of RM116,000.00 is not sustainable, and is accordingly dismissed, for the following reason. [145] The Defendants rely on the proper plaintiff rule, as established in Foss v Harbottle and consistently applied in Malaysian courts, which provides that where a wrong is done to a company, the proper plaintiff to bring an action in respect of that wrong is the company itself. While the rule in Foss v Harbottle has its primary application in the context of derivative actions by shareholders, the underlying principle is of general application: only the party whose legal rights have been infringed, or to whom a legal obligation is owed, has the standing to bring an action to enforce that right or obligation. [146] In the present case, the Regency Parc transactions, including the arrangement in respect of the Lots, were entered into between Suite Trade and FPDSB. It is FPDSB that was the purchaser of the units and the party to the investment arrangement with Suite Trade, while the developer of Regency Parc was Next Fortune. If Suite Trade received or retained a sum of RM116,000.00 that it was not entitled to under the Regency Parc arrangement, the party that has been wronged is FPDSB, not FDB. FDB, as the holding company of FPDSB, has no direct contractual or other legal relationship with Suite Trade in respect of the Regency Parc arrangement and is a complete stranger to the contract. [147] This court recognises that FDB may have suffered an indirect economic loss as a result of losses suffered by its subsidiary FPDSB, since as the holding company it ultimately bears the economic consequences of losses at the subsidiary level. However, indirect or reflective loss of this kind does not give rise to a direct cause of action in the parent company against the third party who caused the loss to the subsidiary. The proper remedy is for FPDSB itself to bring a claim against Suite Trade. [148] Furthermore, this court notes that FDB has not provided a clear and particularised account of how the sum of RM116,000.00 arises and how it is computed. The evidence in support of this claim was not clearly articulated, and this court is not satisfied that the quantum of the claim or the basis for it has been established on the balance of probabilities. [149] FDB’s subsidiary claim of RM116,000.00 is accordingly dismissed. Issue 6 is decided in favour of the Defendants. FURTHER OBSERVATIONS [150] Before turning to the conclusion, this court makes the following further observations on certain aspects of the evidence and law that warrant consideration. The Evidence of DW1 (Hew Chee Seng) and Its Assessment [151] Hew’s evidence at trial, as this court has assessed it, was marked by a consistent and unsupported insistence on the land purchase narrative that, upon scrutiny, could not withstand cross-examination. While Hew did identify the specific parcels of land allegedly involved (being the lots that FDB charged to UOB, claiming they were transferred directly from the developer to FDB to avoid double stamp duty), the most telling moment in DW1’s evidence came during cross-examination when Hew was pressed to prove this arrangement. He was unable to produce any instrument of transfer, sale and purchase agreement, or memorandum of understanding evidencing the alleged land transaction between Suite Trade and FDB. [152] This court regards Hew’s inability to produce any documentary evidence of the alleged land purchase between Suit Trade and FDB as fatal to his case on the nature of the transaction. It is inconceivable that a bona fide property transaction involving RM10,000,000.00 would leave no documentary trace between the transacting parties whatsoever. The complete absence of such documentation is explicable only on the basis that no land transaction occurred between them. [153] Perhaps most significant in this court’s assessment is Hew’s admission in cross-examination that he “agreed to the set-off because of the business relationship with the late Dato’ Wong.” This admission deserves full consideration. A person who had received as consideration for land already delivered and who genuinely believed that no money remained owing to FDB would have absolutely no reason to agree to any set-off against an outstanding balance. The very act of agreeing to a set-off presupposes the existence of an outstanding balance against which the set-off is being applied. Hew’s admission that he agreed to the set-off is, therefore, an implicit and significant acknowledgment that he understood that there was an outstanding balance owed by Suite Trade to FDB, which is wholly consistent with FDB’s case that the RM10,000,000.00 was a friendly loan. [154] In overall assessment, this court did not find Hew to be a credible witness on the nature of the transaction. His evidence was internally inconsistent and irreconcilable with the documentary evidence, in particular the Settlement Agreement. This court prefers the evidence of FDB’s witnesses, corroborated by the documentary evidence, on the nature of the transaction. The Statement of Accounts and the Computation of the Outstanding Balance [155] The detailed statement of accounts tendered through PW2 (Ng Sim Lee) and PW3 (Chong Wei Wei) was a key document in this case. This statement traced the movement of the RM10,000,000.00 from the date of advance through to 28.2.2023, recording each set-off, interest adjustment, and other reduction applied against the outstanding balance over a period of approximately nine years. [156] The Defendants did not effectively challenge the arithmetic of the statement of accounts. While the Defendants challenged the basis for the outstanding balance (on the grounds that no loan existed), they did not put in issue the specific calculations, the quantum of individual set-offs, or the manner in which the balance was computed. This court is accordingly satisfied that the statement of accounts is arithmetically accurate and that the figure of RM8,091,443.00 as at 28.2.2023 is correctly computed. [157] This court notes that the computation of the outstanding balance reflects the application of substantial set-offs over the years. The initial advance of RM10,000,000.00 was reduced, inter alia, by the set-off of RM2,583,440.00 reflected in the Settlement Agreement (comprising RM2,066,121.00 deposited into the UOB overdraft facility and RM517,319.00 as reimbursement for stamp duties, valuation fees, and bank interests/charges), and by the further set-off of RM2,412,548.01 applied on 31.7.2019 (in respect of Zeta DeSkye commissions), as well as by other adjustments. The outstanding balance of RM8,091,443.00 is therefore a net figure after giving Suite Trade credit for all legitimate reductions. In this regard, FDB is not seeking to recover the full original advance but only the net balance outstanding after all reductions. The Significance of the Deceased Dato’ Wong Swee Yee [158] This court has referred at various points to the significance of the death of Dato’ Wong Swee Yee. This observation warrants more direct treatment. Dato’ Wong was, without question, the central figure on FDB’s side of the transactions the subject of these proceedings. He was the Managing Director of FDB who authorised the advance of RM10,000,000.00, who dealt personally with Hew, who participated in the 13.10.2016 meeting, who caused the Settlement Agreement to be prepared, and who had direct knowledge of the representations made to him by Hew in the course of their dealings. [159] Dato’ Wong’s death before the trial meant that FDB was deprived of its most important witness on these matters. This circumstance, while clearly unfortunate from FDB’s perspective, is a natural incident of the passage of time between the transactions in question (beginning in 2013) and the eventual trial (in 2024-2025). This court had to evaluate the evidence available at trial, including the documentary evidence and the evidence of PW1, PW2, and PW3, without the benefit of Dato’ Wong’s direct testimony. [160] On the loan claim, the absence of Dato’ Wong’s testimony proved not to be determinative, because the documentary evidence (in particular the Settlement Agreement and the bank records) was sufficient to establish the friendly loan and the outstanding balance. On the fraud claim, however, the absence of Dato’ Wong’s testimony was indeed determinative, because in the absence of his direct evidence as to the representations made to him by Hew, FDB was unable to establish the elements of the tort of deceit to the requisite standard of clear, cogent and convincing evidence. [161] This court expresses no view on whether the outcome on the fraud claim might have been different had Dato’ Wong been alive and available to testify. That is a matter of speculation. What this court can say is that the outcome on the fraud claim reflects the evidential limitations of the case as it was presented at trial, and should not be taken as an endorsement of or exculpation for the conduct of Suite Trade or Hew in connection with the Regency Parc transactions. The Rule in Turquand and the Binding Effect of the Settlement Agreement [162] On the rule in Royal British Bank v Turquand (1856) 6 E&B 327; 119 ER 886, this court has applied the indoor management rule to find that Suite Trade is bound by the Settlement Agreement regardless of any alleged internal irregularity as to the authority of the signatory. This application is further fortified by the fact that Hew admitted during cross-examination that the signatory, Soon Kian Guan, had the authority to use the company stamp and that a director’s actions bind the company. This court adds the further observation that the Defendants’ challenge to the authority of the signatory of the Settlement Agreement was never pleaded in their Statement of Defence, contradicts their agreement to classify the document as a Part B document (where authenticity is not disputed), and was raised only during the trial after more than six years of treating the Settlement Agreement as part of the documentary record of the parties’ dealings. This is a belated and, this court considers, opportunistic challenge. It is not a challenge that this court is prepared to entertain. Suite Trade is bound by the Settlement Agreement. On the Pleadings and the Parol Evidence Rule [163] The Defendants raised arguments in their written submissions touching on the parol evidence rule under section 92 of the Evidence Act 1950, in the context of the UOB banking facility documents, arguing that FDB is precluded from adducing oral evidence to assert the RM10,000,000.00 was a friendly loan when the bank documents state the purpose as “working capital.” This court has considered these arguments and finds that they do not affect the admissibility or effect of the evidence proving the friendly loan, because the Defendants are not parties to the UOB banking documents and thus cannot rely on section 92 to bar such evidence. Section 92 of the Evidence Act 1950 provides that where the terms of a contract, grant, or other disposition of property have been reduced to the form of a document, no evidence shall be given for the purpose of contradicting, varying, adding to, or subtracting from its terms. Conversely, it was FDB who rightfully invoked section 92 in respect of the Settlement Agreement. The Settlement Agreement is an acknowledgment document between FDB and Suit Trade, and the rule in section 92 would if anything operate to prevent the Defendants from leading oral evidence to contradict or vary the clear written acknowledgment of an outstanding RCF balance contained in the document. Section 92 therefore supports rather than undermines FDB’s case on the Settlement Agreement. On the Interplay Between the Loan Claim and the Investment Arrangement [164] A matter that has woven itself throughout the evidence and arguments in this case is the relationship between the friendly loan made by FDB and the investment arrangement concerning the Lots at Regency Parc. This court considers it useful to make clear findings on this relationship in order to provide a complete and coherent account of the legal position. [165] The friendly loan of RM10,000,000.00 was a loan made by FDB to Suite Trade. Suite Trade received the money and was and is obliged to repay it. The investment arrangement, under which FDB’s subsidiary (FPDSB) purchased and held the Lots at Regency Parc and appointed Suite Trade as its exclusive marketing agent, was initially a separate transaction. The two limbs of the parties’ dealings were linked under the subsequent Settlement Agreement but legally distinct. The existence of the investment arrangement does not discharge Suite Trade’s obligation to repay the loan. Rather, as agreed in the Settlement Agreement, the remaining Regency Parc Lots (Lots 25 and 82) were to be held by FPDSB as security/collateral pending the full settlement of the loan, while other properties and commissions were to be applied towards discharging the loan obligation, by way of set-off or direct payment. [166] Under this analysis, Suite Trade’s sale of Lots 25 and 82 to third parties without proper authorisation and without remitting the full proceeds to FPDSB was a breach of the investment arrangement. The set-off of RM1,442,000.00 reflected in the Settlement Agreement represents a buy- back of these lots by Suite Trade from FPDSB, and did not reduce the principal friendly loan. The remaining balance on the loan after all applicable credits and set-offs is RM8,091,443.00 as at 28.2.2023. Suite Trade is liable for this balance by reason of its continuing obligation as borrower under the friendly loan, irrespective of what may have occurred with the Regency Parc investment arrangement. [167] This analysis also disposes of the Defendants’ argument that by selling the Lots (even in an unauthorised manner), Suite Trade has discharged its obligations under the arrangement. The Lots were held not as Suite Trade’s own property to be dealt with freely; they were held by FPDSB as part of an arrangement under which the proceeds of sale were to be remitted to FPDSB, and under the Settlement Agreement, held as security for the friendly loan. The unauthorised sale of the Lots without full accounting to FPDSB does not discharge the loan; it merely deprives FDB of its security. Since the credit for the buy-back of the lots has already been given (via the RM1,442,000.00 commission set-off in the Settlement Agreement), any further set-off argument in respect of those lots against the friendly loan is exhausted and misconceived. The balance of RM8,091,443.00 remains outstanding and must be paid. On Section 540 of the Companies Act 2016 [168] The court notes that FDB’s amended statement of claim also pleaded fraudulent trading under section 540 of the Companies Act 2016. The case as pleaded was that Suite Trade’s conduct, namely in receiving the RM10,000,000.00, failing to repay it, selling the Lots without authorisation, and dealing with the tampered Rescission Letter, amounted to the carrying on of business with intent to defraud FDB as a creditor, and that Hew, as the person knowingly a party to such conduct, should be made personally responsible for Suite Trade’s liabilities under section 540(1). Notwithstanding this pleaded case, FDB did not develop the section 540 cause of action in its post-trial written submissions. More significantly, the section 540 allegation was not specifically put to Hew in cross-examination. Fairness requires that a defendant be given the opportunity to respond to a case that is to be made against him; where a specific allegation is not put to a witness in cross-examination, the court cannot proceed to make a finding on that allegation against him. No finding is accordingly made on the section 540 cause of action. On the Alleged Res Judicata Effect of the Dismissal of the Striking-Out Application [169] In its Reply Submissions, FDB contended that this court’s dismissal of the Defendants’ striking-out application (Enclosure 36) on 17.7.2024 had the effect of finally determining the issues of particulars of fraud, limitation, and locus standi, such that the Defendants were precluded from re-agitating those issues at trial. The Defendants, in their Additional Written Submissions, countered that the dismissal of a striking-out application is devoid of finality and cannot give rise to res judicata. These positions were subsequently reiterated at the oral hearing of clarification of submissions. This court declines to rest any finding on FDB’s res judicata argument. The dismissal of Enclosure 36 was not a final adjudication on the merits of any of those issues. It represented no more than a determination that the matters raised were not suitable for summary disposal on affidavit evidence and warranted full consideration at trial. This court has approached all issues at trial entirely afresh. [170] The applicable legal principles admit of no doubt. The foundational test was stated by Justice Edgar Joseph Jr in Cheng Hang Guan & Ors v Perumahan Farlim (Penang) Sdn Bhd & Ors [1988] 3 MLJ 90, as quoted with approval in Lin Wen-Chih & Anor v Pacific Forest Industries Sdn Bhd & Anor [2021] 4 MLJ 367: for a judicial decision to operate as res judicata, it must be final, absolute, and certain, leaving nothing further to be judicially determined. The true test is whether there has been a final determination of the issue. The Court of Appeal in Lin Wen-Chih affirmed, further, that the Hartecon jurisprudence, which recognises that an interlocutory ruling may in exceptional circumstances give rise to res judicata, does not extend to a decision devoid of finality such as the dismissal of a striking-out application. When a striking-out application is refused, nothing has been decided on the merits; the inference to be drawn is only that the matter is unsuitable for summary determination. FDB’s reliance on Hartecon JV Sdn Bhd & Anor v Hartela Contractors Ltd [1996] 2 MLJ 57 is therefore misplaced: Hartecon concerned a positive ruling on a discrete procedural objection that left nothing further to be determined on that point, which is materially different from a refusal to strike out. [171] The Federal Court’s decision in Syarikat Kemajuan Timbermine Sdn Bhd v Kerajaan Negeri Kelantan Darul Naim [2015] 3 MLJ 609 provides direct and conclusive authority. In that case the Federal Court held that the dismissal of a striking-out application on the ground of limitation did not preclude the defendant from relying on that same limitation defence at trial. The refusal to strike out does not imply that the defence was rejected on its merits, and it gives rise to no res judicata. That principle applies with equal force here. The findings on limitation, particulars of fraud, and locus standi in these grounds of judgment rest entirely on the evidence adduced at trial and this court’s independent analysis of the applicable law. To the extent that the trial findings coincide with the interlocutory holding, that coincidence is the product of the evidence and the law properly applied; it is not the product of res judicata. On the Quality and Weight of the Evidence [172] This court concludes its further observations with a brief comment on the overall quality and weight of the evidence presented at trial. FDB’s witnesses, PW1, PW2, PW3, and PW4 (a subpoenaed independent witness from the developer, Next Fortune), gave evidence that was consistent, credible, and supported by contemporaneous documentary evidence. Their evidence collectively established a coherent narrative of the advance of the friendly loan, the investment arrangement, the subsequent dealings with the Lots, the Settlement Agreement, and the computation of the outstanding balance. While none of FDB’s witnesses had been present at the private discussions between Dato’ Wong and Hew, their evidence on the matters within their respective personal knowledge was convincing and reliable. [173] DW1 (Hew Chee Seng) gave evidence that this court found to be unreliable on the central question of the nature of the RM10,000,000.00 transaction. His land purchase narrative was unsupported by any documentary evidence of a transaction between Suit Trade and FDB. His explanations under cross-examination were vague and at times inconsistent. His admission that he had agreed to the set-offs “because of the business relationship with the late Dato’ Wong” was particularly damaging to his own case. This court accords DW1’s evidence on the nature of the transaction no weight. [174] On the fraud allegations specifically, this court has noted that Hew’s evidence must be assessed against the backdrop of the deceased Dato’ Wong’sinability to testify. In the context of the fraud claim, Hew’s denial of making representations is effectively uncontradicted by direct oral evidence, given Dato’ Wong’s death. It is for this reason, and not because this court found Hew to be a credible witness on this issue, that the fraud claim fails. The failure of the fraud claim is, therefore, principally an evidentiary consequence of Dato’ Wong’s death, not a vindication of Hew’s conduct. Summary of Findings [175] In summary, this court’s findings on the principal issues are as follows: a) Issue 1: The RM10,000,000.00 transferred on 1.2.2014 was a friendly loan. Suite Trade’s land purchase narrative is rejected. Finding in favour of FDB. b) Issue 2: The Settlement Agreement dated 26.10.2016 is admissible under section 32(1)(b) of the Evidence Act 1950 and constitutes a binding acknowledgment by Suite Trade of an outstanding RCF balance. Suite Trade is bound by the Settlement Agreement pursuant to the rule in Turquand. Finding in favour of FDB. c) Issue 3: FDB’s claim is not time-barred. The set-off of RM2,412,548.01 on 31.7.2019, agreed by Hew, constitutes a part payment under section 26(2) of the Limitation Act 1953 giving rise to a fresh accrual of the cause of action. As FDB failed to establish actual fraud, the alternative exception under section 29 of the Limitation Act 1953 does not apply. Finding in favour of FDB (on the basis of part payment). d) Issue 4: FDB has not established to the required standard of clear, cogent and convincing evidence that Hew made fraudulent misrepresentations to the late Dato’ Wong Swee Yee. The absence of Dato’ Wong’s testimony is decisive on this issue. Finding in favour of the Defendants. e) Issue 5: There is no basis for piercing the corporate veil of Suite Trade in the absence of an established fraud against Hew to the requisite standard of clear, cogent and convincing evidence. Finding in favour of the Defendants. f) Issue 6: The subsidiary claim of RM116,000.00 is dismissed following FDB’s formal concession on the issue of locus standi and its express withdrawal of the claim during oral submissions. Finding in favour of the Defendants. CONCLUSION AND ORDER [176] For all the reasons set out above, this court makes the following conclusions and orders. [177] In respect of FDB’s principal claim against Suite Trade: This court finds that Suite Trade received the sum of RM10,000,000.00 from FDB on 1.2.2014 as a friendly loan. Suite Trade is indebted to FDB for the outstanding balance of this friendly loan. The Settlement Agreement dated 26.10.2016 is admissible in evidence and constitutes a binding acknowledgment by Suite Trade of its outstanding indebtedness. FDB’s claim is not time-barred. The outstanding balance as at 28.2.2023 is RM8,091,443.00. Accordingly, this court enters judgment in favour of FDB against Suite Trade for the sum of RM8,091,443.00 together with interest at the rate of 5% per annum from the date of the writ, being 31.3.2023, until the date of full payment. [178] The costs of the action as between FDB and Suite Trade shall be borne by Suite Trade. The court orders costs of RM50,000.00 in this respect. [179] In respect of FDB’s claim against Hew: FDB has not established to the requisite standard of cogent evidence that Hew made fraudulent misrepresentations to the late Dato’ Wong. The corporate veil of Suite Trade cannot be pierced in the absence of an established fraud. Accordingly, FDB’s claim against Hew in its entirety is dismissed. [180] The costs of the proceedings as between FDB and Hew shall be borne by FDB, to be taxed if not agreed. Hew was put to the inconvenience and expense of defending a personal fraud claim that was ultimately not established on the evidence, and this is properly reflected in a costs order in his favour. The court orders costs of RM25,000.00 in this respect. [181] In respect of FDB’s subsidiary claim of RM116,000.00 against Suite Trade: FDB is not the proper plaintiff in respect of transactions between Suite Trade and FPDSB. The subsidiary claim of RM116,000.00 is accordingly dismissed with costs of RM10,000.00 to Suite Trade. [182] This court records its gratitude to learned counsel for both parties for the thoroughness and quality of their respective written submissions, which greatly assisted this court in the determination of the issues in this case. 14 May 2026 ATAN MUSTAFFA YUSSOF AHMAD Judge Kuala Lumpur High Court (Commercial Division) Counsel: For the Plaintiff: Jarrett Ong Kah Lok, Lee Chia Yee and Tuw Min Ric (Messrs Ong, Ric & Partners) For the Defendants: Dato’ David Gurupatham and Thej Previndran (Messrs David Gurupatham & Koay)
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