Speed Concrete Industries Sdn Bhd v Teh Hoan Gea (Disaman Sebagai Pengarah Dan/Atau Pemegang Sahak Kaizen Piling Sdn Bhd)(No Syarikat 200901023749/866848T) (BA-22NCvC-437-10/2022)

TEH HOAN GEA (Sued in the capacity of Director and/or Shareholder of KAIZEN PILING SDN BHD) (Company No. 200901023749/866848T)

LOKE MANG KEAT (Sued in the capacity of Director and/or Shareholder of KAIZEN PILING SDN BHD) (Company No. 200901023749(866848T)

TEH HOAN HOOI (Sued in the capacity of Director and/or Shareholder of KAIZEN PILING SDN BHD) (Company No. 200901023749(866848T) 31/07/2026 09:39:10

TAN FOH SIM (Sued in the capacity of Director and/or Shareholder of KAIZEN PILING SDN BHD) (Company No. 200901023749(866848T) ...DEFENDANTS GROUNDS OF JUDGMENT

My judgment concerns the Plaintiff’s claim seeking a sum of RM2,175,907.16 from four Defendants, for unpaid amounts and interest pertaining to goods supplied to Kaizen Piling Sdn Bhd. The claim against the First and Second Defendants, as directors and shareholders of the Kaizen SB, rests on allegations of fraudulent trading and unconscionable conduct warranting the lifting of the corporate veil. The claim against the Third and Fourth Defendants is based on personal guarantee’s dated 20 November 2010. However, on the first day of trial, the Defendants chose silence, calling no witnesses, tendering no evidence and resting their defence entirely on a submission of no case to answer.

The Company, Kaizen Piling Sdn Bhd, was at all material times a customer of the Plaintiff, which carried on the business of supplying concrete piling products and construction materials. The First and Second Defendants were directors and shareholders of the Kaizen SB, a fact not disputed by the Defendants. The Third and Fourth Defendants executed a Guarantee dated 20 November 2010 and the execution of which was expressly admitted at paragraph 4.1 of the Statement of Defence. The Defendants did not dispute the admissibility of the Guarantee, which was duly tendered through the Plaintiff’s witness, SP1, without challenge.

According to the SSM search results exhibited in the Plaintiff’s bundle of documents, Kaizen SB has been struck off the register and dissolved, however it was not wound up. The Plaintiff pleaded that Kaizen SB is indebted to it in the sum claimed, comprising a principal balance reflected in document OR018818 dated 30 December 2017 (showing a credit of RM24,358.19 and a resulting balance of RM687,792.46) together with five items of late payment interest dated 9 May 2022 amounting to RM1,488,114.70. This brings the total sum claimed to RM2,175,907.16.

This sets up the evidential foundation for the issues of fraudulent trading, lifting the corporate veil and personal guarantee liability.

The trial proceeded before me on 27 April 2026 and the Plaintiff called one factual witness, Mr. San Kah Hin ("SP1"), the Senior Sales Manager of the Plaintiff, whose witness statement was marked WSPW1. Through SP1, the Plaintiff tendered, among other things:

The SSM search results and company profile pertaining to the

The Guarantee dated 20 November 2010;

Invoices and delivery orders at pages 27 to 132 of Bundle B;

A statement of account reflecting the Alleged Outstanding Sum; and

The Company's dissolution records.

The Defendants' cross-examination of SP1 was, as reflected in the Notes of Proceedings, was brief and confined largely to the following:

The invoices and delivery orders;

The insolvency and dissolution status of the Company; and

The bankruptcy status of the Third Defendant.

When Defendants elected to make a no case to answer submission and call no evidence, the Court must decide the case based on the Plaintiff’s evidence alone. The burden of proof remains with the Plaintiff under sections 101 and 103 of the Evidence Act 1950, requiring proof on a balance of probabilities. The Defendants’ silence does not relieve this burden but it does mean the Plaintiff’s evidence is assessed without contradiction and this strategic choice has significant consequences.

Under section 114(g) of the Evidence Act 1950, adverse inferences may be drawn against parties who withhold evidence they were uniquely positioned to give. Authorities such as Jaafar bin Shaari v Tan Lip Eng, Takako Sakao v Ng Pek Yuen and Khaw Cheng Bok v Khaw Cheng Poon confirm that the opposing party’s evidence may then be accepted as true.

Pleadings are mere allegations and carry no evidential weight unless proved or admitted (Mohamed Abdullah v Lim Guan Eng). Further, the rule in Browne v Dunn requires material challenges to be put in cross-examination. In my opinion, since the Defendants did not challenge SP1’s testimony on invoices, delivery orders, the Guarantee or the statement of account, those parts of the evidence stand unchallenged and are properly accepted.

Having regard to the pleadings and the parties' respective submissions, the issues for determination are:

Whether the Plaintiff supplied and delivered goods to Kaizen SB and proved the alleged outstanding sum of RM2,175,907.16, including the admissibility of invoices, delivery orders, and the statement of account.

(ii) Whether the First and Second Defendants, as directors and shareholders of Kaizen SB, are personally liable for the outstanding sum on the basis of fraudulent trading, piercing of the corporate veil, or absence of privity of contract

(iii) Whether the Third and Fourth Defendants executed the Guarantee dated 20 November 2010 and are liable thereunder, notwithstanding the absence of a prior judgment against Kaizen SB;

(iv) Whether the Plaintiff’s claim, or any part of it, is statute-barred, and whether the Defendants have established any defence capable of displacing the Plaintiff’s case ISSUE 1: THE ALLEGED OUTSTANDING SUM

The Plaintiff’s case, supported by SP1’s testimony and contemporaneous business records, is that Kaizen SB owed RM687,792.46 in principal after accounting for a credit entry, with late payment interest of RM1,488,114.70 accruing in five tranches, bringing the total indebtedness to RM2,175,907.16. The invoices and delivery orders, identified and confirmed by SP1, constitute reliable business records carrying substantial evidential weight.

In my opinion, the Defendants’ contention that the absence of document OR018818 was fatal, is rejected, as the statement of account already incorporated the relevant credit entry and was not challenged in cross-examination. Their reliance on SP1’s reference to RM22,400.00 in purchase orders is also misplaced, as this was expressly illustrative and not exhaustive.

Critically, the Defendants did not challenge SP1’s evidence in cross-examination, nor suggest fabrication or non-delivery, thereby precluding them from raising such arguments in submissions under the rule in Browne v Dunn. In the absence of any rebuttal evidence, the Court accepts SP1’s testimony and the documentary record as proving, on a balance of probabilities, that the Plaintiff supplied and delivered goods and construction materials to Kaizen and that the outstanding sum of RM2,175,907.16 remains due.

The Defendants also objected that the invoices and delivery orders in Bundle B were unpleaded material facts, citing Fujisash (Malaysia) Sdn Bhd v Facade Treatment Engineering Sdn Bhd [2019] MLJU 1961 and Order 18 rule 12(1) ROC 2012. I reject this objection, as the Plaintiff’s Statement of Claim sufficiently pleaded the sale and delivery of goods, the outstanding balance and the statement of account. The invoices and delivery orders are evidence in support of those pleaded facts and it is neither necessary nor customary to plead each document individually.

The present case is distinguishable from Fujisash, where the pleadings lacked particulars, altogether. Here, the Statement of Claim identifies the business relationship, the supply of goods, credit terms, late payment interest and the precise sum claimed. I further find no basis to exclude invoices F01/2011 to F04/2011 or the statement of account, as SP1, the Plaintiff’s Senior Sales Manager, was competent to verify them as ordinary business records and his evidence stands unrebutted.

It is undisputed that Kaizen SB was a separate legal entity under the doctrine in Salomon v Salomon. However, in my opinion, the corporate veil may be pierced where the company is used as a vehicle for fraud or as a mere facade, as affirmed in Ong Leong Chiou v Keller and Takako Sakao v Ng Pek Yuen. The Defendants argued that no evidence of fraud was adduced by the Plaintiff, but the unrebutted record shows that the First and Second Defendants controlled the Company, continued procuring goods despite non-payment, allowed debts to accumulate and permitted dissolution without explanation.

Fraudulent intent may be inferred from such circumstances (PP v Lin Lian Chen) and their silence attracts an adverse inference under section 114(g) of the Evidence Act 1950.

Applying Browne v Dunn, the Defendants’ failure to challenge SP1’s evidence precludes them from disputing it at submission stage. On the totality of the evidence, I find that the First and Second Defendants caused or permitted the Company to trade in circumstances amounting to unconscionable conduct, justifying the piercing of the corporate veil. Consistently with Roy Hew Chee Kay v Passion Entertainment, they were the individuals behind and in control of the Company and are personally liable for the Alleged Outstanding Sum of RM2,175,907.16.

The First and Second Defendants argued that, since the contracts of sale were between the Plaintiff and Kaizen SB, there was no privity of contract with them personally and they could not be sued absent proven fraud. Having already found this to be a proper case for piercing the corporate veil, I accept the Plaintiff’s submission that its cause of action is not contractual but rests on the Defendants’ personal responsibility as the directing minds of Kaizen SB for causing and permitting it to incur debts, they knew or ought to have known, it would not be fulfilled.

In my view, once fraud or unconscionable conduct is sufficient to pierce the veil and it is established, the doctrine of privity affords no defence, as confirmed in Aspatra Sdn Bhd v Bank Bumiputra.

The execution of the Guarantee dated 20 November 2010 by the Third and Fourth Defendants is admitted on the pleadings, at paragraph 4.1 of the Statement of Defence and its admissibility is not disputed. The Third and Fourth Defendants did not, in cross-examination, put to SP1 any challenge to the due execution of the Guarantee, nor did either of them enter the witness box to deny having signed it. Applying Brown v Dunn, I find the Guarantee to be admitted in substance as genuine and valid.

The principal issues raised by the Third and Fourth Defendants are that of: -

Their liability has not been crystallized or been validly invoked in the absence of a prior judgment against the Kaizen SB; and

The Guarantee is void for uncertainty as the guaranteed amount was left blank.

As to the first point, Clause 15 of the Guarantee expressly provides that: - "…a statement of account in writing showing the indebtedness of the Customer to you duly certified by your Managing Director or an authorized representative and any judgment recovered by you against the Customer in respect of such indebtedness shall be binding and conclusive against the Guarantor(s)…”

The Plaintiff tendered a duly certified statement of account, confirmed on oath by SP1, which under Clause 15 is binding and conclusive against the guarantors. A prior judgment against the Company is not a precondition to liability and I decline to import such a requirement where none exists in the contract. Under section 79 of the Contracts Act 1950, the liability of a surety is co-extensive with that of the principal debtor unless otherwise provided.

I accept that the Guarantee, given in respect of a continuing trade credit facility, need not specify a fixed monetary ceiling and that the absence of a figure is properly construed as covering the full extent of the Company’s indebtedness. The doctrine of contra proferentem does not render the Guarantee void.

Furthermore, the objection concerning the Third Defendant’s bankruptcy status was not pleaded and is therefore disregarded, consistent with Jugajorthy v Pentadbir Tanah Daerah. In any event, such a point would go to procedural competence rather than the merits. I accordingly find that the Third and Fourth Defendants are liable under the Guarantee for the Alleged Outstanding Sum of RM2,175,907.16.

The Defendants contend that the Plaintiff's claim is statute-barred under section 6(1)(a) of the Limitation Act 1953, on the footing that the invoices and delivery orders relied upon are dated between 07 January 13 2011 and 04 April 2011, some eleven years before this suit was filed in October 2022.

I do not accept this submission. The Plaintiff's statement of account, which was not materially challenged in cross-examination, records a payment of RM24,358.19 made on 30 December 2017 (on the basisi of a running account). Pursuant to section 26 of the Limitation Act 1953, a part payment made in respect of a debt causes the limitation period to run a fresh from the date of that payment. On this basis, the relevant limitation period runs from 30 December 2017 and the present suit, filed in October 2022, was filed well within the six-year period prescribed by section 6(1)(a).

The Defendants characterise the five late payment interest invoices dated 09 May 2022 as an afterthought designed to circumvent limitation. I note, however, that this characterisation was never put to SP1 in cross-examination and applying Browne v Dunn, I decline to accept a contention advanced only in submissions and never tested against the Plaintiff's witness.

I further note that the burden of proving a limitation defence rests upon the party asserting it. (Sabah Electricity Sdn Bhd v ARL Power Sdn Bhd & Anor & Another Suit [2021] MLJU 3115). The Defendants adduced no evidence whatsoever as to whether by way of computation, accounting record or otherwise, to displace the Plaintiff's evidence of the part payment made on 30 December 2017. In those circumstances, I find that the Defendants have failed to discharge their burden and the limitation defence fails.

The Defendants’ Statement of Defence consists of bare denials unsupported by oral testimony, documentary evidence, accounting records or independent witnesses and therefore carries no evidential weight, consistent with Mohamed Abdullah v Lim Guan Eng. The Defendants, being best placed to explain the Company’s management, transactions, non-payment and dissolution, chose to remain silent despite the seriousness of the allegations.

In these circumstances, the Court is entitled to draw the strongest adverse inference under section 114(g) of the Evidence Act 1950 and to accept the Plaintiff’s unrebutted evidence as substantially true, in line with Takako Sakao v Ng Pek Yuen. I accordingly find that the Defendants have failed to establish any credible defence and their submission of no case to answer is unsustainable both in law and on the facts.

For the reasons set out above, I find that the Plaintiff has proved its case on a balance of probabilities and the Defendants’ submission of no case to answer is dismissed. I accordingly enter judgment in favour of the Plaintiff against the First, Second, Third and Fourth Defendants, jointly and severally, for the sum of RM2,175,907.16 together with interest and costs. Date: 29 July 2026 SGD SHOBA DORAI RAJAH JUDICAL COMMISSIONER SHAH ALAM HIGH COURT Solicitor for the Plaintiff: Hing Hong Ing [MESSRS HING CHAMBERS (SUBANG JAYA)] Solicitor for the Defendants: Tan Ai Vee [MESSRS HISHAM YOONG - K C LIM (SUBANG JAYA)]