Ss Minerals Trading Sdn Bhd v Ibrahim Bin Mat Seddek (WA-22NCvC-275-06/2020)

IBRAHIM BIN MAT SEDDEK (No. K/P: 711218-04-5393)

MOHAMMAD AZAHAN BIN MAT SEDDEK 15 (No. K/P: 770123-04-5083)

FAROUK RIZAL BIN MAT NORI (No. K/P: 790126-14-5811) …DEFENDAN-DEFENDAN 20 JUDGMENT (Enclosure 1) [1]

INTRODUCTION 1 This case concerns an uncomplicated issue involving goods sold and 25 delivered by the plaintiff to Maser Chemical Berhad (Maser), a company in the Maser Group of Companies (Group Enterprise) at the time of the transaction:

The plaintiff, as pleaded, is a foreign investment company established in Malaysia that, amongst other things, supplies Barite 30 Powder for use in the oil and gas industry.

An official company search with SSM: CBOD Vol 1 (Part A), enclosure 40, pp.40-48, revealed that: 26/03/2024 13:41:37

The first defendant (D1), a Maser shareholder, was appointed board member on 24.06.2004.

The second defendant (D2), also a shareholder, was appointed to the board of Maser on 01.04.2010. He was also appointed as the manager of Maser on 29.04.2013, and

The third defendant (D3), also a shareholder, was appointed to Maser's board on 17.01.2013. 40 D1 and D2 were the board members in control of Maser during the commercial transaction between the plaintiff and Maser, which involved a subsequent default in payment.

1.2 In the plaintiff’s case:

The Ds, who were directors of Maser, had conducted the company’s affairs to defraud the plaintiff by denying payment for goods ordered and supplied.

It is trite law that a company, being a legal persona, can only act through its duly appointed agents depending on the nature and 50 extent of their given authority.

Management power is bestowed upon the board of directors to manage the company’s affairs. They constitute the will and the mind of the company and may, in justifiable circumstances, be held personally accountable for their actions when dealing with 55 outsiders. 60 [2] The plaintiff anchored this suit on section 540 of the Companies Act 2916 (s.304 Companies Act 1965) in targeting the Ds directly as directors and the controlling will and mind of Maser to be held personally accountable for the acts or conduct of Maser for fraudulent and insolvent trading. 65 2.1 The plaintiff asserts:

At the time of the transaction, the Ds were fully aware that Maser was in no position to meet its financial obligations to the creditors or the suppliers. Still, they assured the plaintiff that Maser would meet its financial obligations to the plaintiff, leading the plaintiff to 70 agree to the transaction and to grant Maser credit terms for the purchase.

It is also the plaintiff’s case that in addition to Maser defaulting in the payment for the order placed, the Ds, in their capacity as 75 directors and officers of Maser, had dissipated the assets of Maser by emptying its bank account to avoid paying the plaintiff once a civil recovery suit was taken against Maser in 2016. The Ds were directors running Maser at the time. Unable to recover the judgment sum from Maser, the plaintiff now pursues the Ds 80 personally for facilitating fraudulent trading by Maser and seeking the lifting of the veil of incorporation to that end.

Judgment if default (JID) had been entered against the third defendant (D3) on 30.12.2020, and there is no evidence that D3 85 acted to set aside the JID and challenge the action against him.

My determination will now focus only on D1 and D2 (the Ds). [3] On 29.01.2024:

3.1 In my considered judgment, on the balance of probabilities, I found that 90 the plaintiff succeeded in proving its claim and entered final judgment against the defendant as claimed in the Statement of Claim (SoC).

3.2 Cost of RM20,000.00 was awarded to the plaintiff payable by the Ds within forty-five (45) days from the date hereof.

3 Aggrieved, the defendant appealed against my decision, and these are my reasons. [4] WITNESSES

1 Plaintiff:

SP1: Paramaguru a/l Thambyrajah: Director

4.2 The First and Second Defendants (the Ds):

SD 1: Ibrahim Bin Mat Seddek (D1): Director and Shareholder of 105 Maser

SD2: Mohammad Azahan Bin Mat Seddek (D2): Director and Shareholder of Maser [5] SALIENT FACTS: 110 5.1 The claim by the plaintiff is personally against the three directors, who are also the shareholders (D1: 19%, D2: 17%, and D3: 15% = 51%) of Maser Chemical Berhad (in liquidation) as reflected in the official search of SSM.

5.2 Maser was placed in liquidation by the Court on 09.11.2017 on the 115 petition by the plaintiff, chronologically as follows:

Maser ordered from the plaintiff who delivered Barite Powder for use in the oil and gas industry valued at USD344,248.59 (RM891,494.15).

Maser defaulted on the payment of the order and was sued by the 120 plaintiff in KL HC Civil Suit: WA-22NCVC 359-06/2016. A final judgment for the said amount was entered against Maser on 01.11.2016.

Maser did not appeal, rendering the High Court judgment final and binding between the plaintiff and Maser. The facts and 125 circumstances of the judgment are closed for any attempted debate or arguments by the Ds as directors of Maser. The presiding High Court would have sufficiently considered all circumstances before recording a final judgment on the claim in that suit, which remained unchallenged.

Maser defaulted to meet the judgment sum and was wound up by the plaintiff’s petition for winding up (Company Winding Up: WA- 28NCC-574-09/2017) on 09.11.2017.

The judgment sum, of USD344,248.59 (RM891,494.15) is still due and outstanding.

5.3 The plaintiff claimed that at the time the order for the chemicals was placed with the plaintiff, the Ds, who were directors of Maser, were fully aware that Maser was in no financial position to meet its financial obligations:

Despite that actual knowledge, the Ds continue to operate Maser with the malicious intent to defraud the creditors.

The Ds, as board members, jointly and severally deceived and defrauded the plaintiff into giving credits to Maser by assuring that Maser would meet its financial obligations for the purchase.

This is fortified by the Ds, who collectively constituted the largest shareholder and were members of Maser's board, opted not to challenge and appeal the High Court judgment against Maser by the plaintiff on 01.11.2016, and neither did they oppose Maser's winding-up on 09.11.2017.

Maser has common shareholders, directors, company secretaries and auditors with Maser (M) Sdn Bhd within the Maser Group of Companies (Group Enterprise).

Knowing Maser Chemical Berhad's financial and legal predicament, the Ds took steps to remove Maser (M) Sdn Bhd as 155 a holding company to mitigate liability and defeat the creditors' claims.

Maser (M) Sdn Bhd and other related companies in the Maser Group of Companies remain active in business and have sufficient assets and resources to settle the plaintiff’s claim.

With their resources, they could easily facilitate the settlement if they were genuine to resolve the plaintiff’s claim. Still, they chose not to, fraudulently hiding behind the veil of incorporation to the detriment of Maser’s creditors. 165 5.4 Official inquiries with SSM by the plaintiff discovered that:

As of the end of November 2015, Maser Chemical Berhad had more than RM2.7M cash in its bank account, which could have been used to settle the plaintiff's purchase order, but the defendant chose not to.

The Ds emptied Maser’s account, and once the plaintiff commenced court proceedings for recovery, all the books and accounts disappeared.

5.5 Consequently, the plaintiff has been made to suffer losses and damage 175 from the Ds' fraudulent insolvent trading of Maser. The plaintiff:

Claims against the Ds jointly and severally for the judgment sum with interest already granted against Maser in WA-22NCVC 359-06/2016 on 01.11.2016.

A mandatory injunction compelling the Ds to deliver all Maser's books and accounts within 14 days of this order.

Costs. [6] THE PARTIES ARGUMENTS

Before the winding up of Maser on 09.11.2017, its Financial Statement ending 31.12.2015 showed a cash balance in the bank account of Maser stood at RM2,750,882.00 at pg.237: CBOD, Vol 2 (Part B), pp.219-241. 190

By a letter dated 29.01.2018:

The Insolvency Department informed the plaintiff that Maser had only RM3,000.00 in its account: CBOD, Vol.1 (Part A), pp.189-190.

The circumstances of the facts lead to an irresistible and 195 compelling conclusion that the dissipation of assets was intended to defraud Maser's creditors since the company faced the possibility of being wound up by them.

The Court of Appeal in Lama Tile (Timur) Sdn Bhd v Lim Meng Kwang & Anor [2015] 4 MLJ 85, CA, in setting aside 200 the decision of the High Court, found in favour of the appellant by observing that section 304 in the Companies Act 1965 (section 540 Companies Act 2016) deals with dishonest conduct involving real moral blame according to current notions of fair dealing among commercial men.

LMW Electronics Pte Ltd v Ang Chuang Juay & Ors [2010] 1 MLJ 185 observed that: The issue before the court falls upon the interpretation of s 304(1) and whether the facts of this case fall within the meaning of that subsection. The 210 wording of the section is quite clear. It is only necessary to establish that there was an intention to defraud. The standard of proof required is a lower degree of proof by reason of the words ‘if it appears’ in s 304(1). It is, therefore, sufficient if, on the evidence before the court, it appears that the business of IDSM has been conducted with intent to defraud 215 creditors or for any other fraudulent purpose. The Federal Court in Dato’ Prem Krishna Sahgal v Muniandy a/l Nadesan & Ors [2018] 2 MLJ 693, FC observed that: 220 It is trite that s 304 of the Act is available only to a person who is a creditor and who has been defrauded as such. Further, the Court of Appeal was correct in its finding that it was not necessary to establish a scheme to defraud on the part of the appellant to trigger the invocation of s 304 of the Act and that a single act of doing business to defraud a creditor 225 would be sufficient to trigger an action for compensation against the errant person in his personal capacity. In the circumstances, the courts below were right in finding that fraudulent trading within s 304 of the Act had been made out and that the appellant was liable to the employees (see paras 75–77, 80, 90–91 & 94).

6.2 The High Court in Huatah Sdn Bhd v Yap Chee Kian and Ors [2020] 8 MLJ 98, HC allowed the plaintiff’s claim for fraudulent trading under section 540(1) of the Companies Act 2016 (‘CA 2016’) against four individuals (‘Ds’) who were the directors of a company. It was 235 discovered during the trial that the Ds had destroyed the company's books, records, and accounts with the excuse that they were lost during the relocation exercise. This would contravene section 245(3) CA 2016 for the same to be retained for seven years after the relevant transaction date. Relying on Malhorta v Dhawan [1997] EWCA Civ 240 1096, an adverse inference should be drawn from destroying the company's books and records. Citing Malhorta, it was concluded that:

If it is found that the destruction of the evidence was carried out deliberately to hinder the proof of a plaintiff’s claim, then such finding will reflect on the credibility of the party that 245 destroyed the evidence; in such circumstances, the court may disregard the evidence of the destroyer upon the application of the presumption.

If the Court has difficulty in deciding which party’s evidence to accept, then it would be legitimate to resolve the doubt by the 250 application of the presumption and

If the judge forms a clear view, having borne in mind all the difficulties which may arise from the unavailability of material documents, as to which side is telling the truth, then the presumption has no application. The judge cannot be 255 required to accept the evidence he does not believe or to reject evidence he finds truthful.

6.3 The RM2,750,882 882 in Maser’s account under the management and control of the Ds had somehow instead disappeared without a trace, 260 prompting the plaintiff to take out this suit anchored on section 540 of the Companies Act 2016 for the Ds’ fraudulent trading in Maser Chemical Berhad. The plaintiff also referred to Re William C Leitch Brothers Ltd [1932] 2 Ch 71, where it was held that carrying on business with the intention to defraud means that a company continues 265 to carry on a business and incurs debts at a time when there is, to the knowledge of the directors, no reasonable prospect of the creditors ever receiving payment of those debts. The Court of Appeal in Chin Chee Keong v Toling Corp (M) Sdn Bhd [2016] 3 MLJ 479, CA held that the intention of the Ds to defraud the plaintiff could be inferred from 270 the fact that the company did not have a profit-generating business at the material time but yet placed huge orders without explaining how they were going to honour the company’s obligations.

6.4 The Court ruled in Panasonic Appliances Air-Conditioning (M) Sdn 275 Bhd v Top Square Sdn Bhd [2021] 8 MLJ 363 that when fraud is established, those who are responsible for the act in abusing corporate personality could be made personally liable. In such circumstances, the court found that the plaintiff was entitled to pierce the defendant's corporate veil to hold the directors liable. 280

6.5 Maser had sufficient funds (RM2,750,882.00 with a fixed deposit of RM158,032.00) before the unexplained dissipation, as shown in its Financial Statement ending 31.12.2015 that was verified and approved by D1 and D2 herein on 05.10.2016: CBOD Vol 2 (Part B), pg.225, pg.241. 285 6.6 The plaintiff claimed payment on 05.05.2016 when there were still funds, but the Ds elected not to pay: CBOD Vol 1 (Part A), pp.136-139.

6.7 The Ds completely controlled Maser Chemical Berhad, especially around November 2015. Despite D2 arguing that he was not involved 290 in the daily affairs of Maser, it was proven untrue at the trial:

D2 admitted during the trial that he set the rules in Maser: NOP: enclosure 81, pp.302-304. He was an addressee in all emails: CBOD Vol 4 (Part B), Bundle E. In those email threads, D2 was actively involved and liaised between the plaintiff and 295 Halliburton (the ultimate recipient of the Barite powder supplied by the plaintiff to Maser).

The Ds were the directors who managed and controlled the accounts of Maser Chemical Berhad: CBOD 41 Vol 2 (part B), 300 pg.241. The Ds failed to produce any evidence that the company’s funds were used to pay the creditors until the unexplained dissipation of the funds in Maser’s bank account. The funds could never be withdrawn without the knowledge and participation of the Ds.

In support, the plaintiff cited the Court of Appeal’s decision in Zaharen Bin Hj Zakaria v Redmax Sdn Bhd and other appeals [2016] 5 MLJ 91, CA that observed in that case that the monies that found their way to the unauthorised third 310 parties could not have been possible without the knowing and deliberate facilitation of the second defendant given his critical position in the company. The defendants were ordered to be jointly and severally liable for the damages ordered in the CA’s judgment.

The plaintiff also cited the Court of Appeal in Tradewinds Properties Sdn Bhd v Zulhkiple bin A Bakar & Ors [2019] 1 MLJ, CA that observed in that case that the trial judge ought to have lifted the corporate veil as there was evidence to show 320 a clear intention on the part of the respondents to attempt to defraud the appellant by depriving it of receiving the money. Section 304(1) of the CA 1965 only used the term ‘if it appears’, which indicated that a lower degree of proof was required. The facts and evidence showed that R1 was the 325 controlling mind and alter ego of R2 and R3 and that they had operated as a single commercial entity.

It is unconscionable for the Ds to argue that they were not involved in the dealings. As board members entrusted to 330 manage Maser's affairs, they cannot, in law, plead ignorance of the company's activities and can be held accountable for them.

6.8 The position taken by the defendant that Aims Oil & Gas Sdn Bhd 335 supposedly acquired equity in Maser was the one that mismanaged Maser, causing it to suffer losses, is untenable. The law is trite that the management of the Maser must reside in the members of the board as set out in its Memorandum and Articles of Association. They are ultimately responsible for answering the shareholders' questions about 340 the fate of Maser. The official search report from SSM confirmed that the Ds were the shareholders. It did not disclose any corporate shareholding in Maser: CBOD Vol 1 (Part A), enclosure 40, pp.40-48.

6.9 It is in the evidence at the trial that SD1: Ibrahim Bin Mat Seddek (D1), 345 Director and Shareholder of Maser, admitted that:

Apart from the supposed Police Report lodged, no legal action was taken against Dato Mat Nori, Farouk (D3) or Shaiful (supposedly the Aims Oil & Gas Sdn Bhd representative).

No recovery proceedings were taken against Dato Mat Nori, 350 Farouk, Shaiful or AOG for the supposed misappropriation of funds.

In any event that doesn’t concern the plaintiff, even if it's true, where in the present circumstances, there is no compelling evidence that it is.

The Ds failed to satisfy their burden of establishing a defence on merits, as required in sections 101, 102, and 103 of the Evidence Act 1950.

6.10 It was argued that:

The Ds attempted to trick this Court by arguing on a never-pleaded matter regarding the sudden price increase.

The law is trite in that they are bound by their pleadings as ruled by the Federal Court in Samuel Naik Siang Ting v Public Bank [2016] 6 MLJ, FC, that the parties are not 365 allowed to adduce facts and issues which they have not pleaded.

Where a vital issue is not raised in the pleadings, it cannot be allowed to be argued and to succeed on appeal.

The defendant argued that the material price had increased 370 as an afterthought. This was never part of the issues to be tried.

Nevertheless, this argument is untenable since all communications between the plaintiff and Haliburton included the Ds. This was never an issue.

The matters raised by the Ds had been canvassed and ventilated at the High Court (WA-22NCVC-359-06/2016), which nevertheless recorded a final judgment in favour of the plaintiff that was never challenged at the Court of Appeal.

It had been proven that (i) the Barite Powder supplied was 380 based on the Purchase Order from Maser, (ii) the Delivery Notes were issued in the name of Maser, and (iii) the invoices were issued against Maser. It is unsustainable to argue otherwise.

The merits had been heard, and a final judgment had been 385 rendered. To relitigate the matter would be barred by res judicata: Asia Commercial Finance (M) Berhad v Kawal Teliti Sdn Bhd [1995] 3 CLJ 783, SC. I find that the final determination by the High Court in WA- 390 22NCVC-359-06/2016 recorded a final judgment in favour of the plaintiff for the judgment sum against Maser, which would have considered all pertinent circumstances before entering the judgment sum. A judgment that was not challenged nor appealed, rendering the decision final and binding between the parties.

6.11 The circumstances amongst commercial men leading up to the issuance of the Purchase Orders, Delivery Orders, and Invoices are no longer open for debate. At this juncture, there is an uncontested and enforceable final judgment against Maser. Recovery is frustrated when 400 the directors/Ds have stripped Maser bare:

This Court must determine whether the Ds fraudulently, by design, denied the plaintiff any attempt at recovery from Maser, leaving the plaintiff out cold. At the same time, as directors and shareholders, they hid behind the corporate veil under section 20 405 of the Companies Act 2016 (also relevant to the Companies Act 1965).

They walked away free from Maser’s legal problems: Lai Fee & Anor v Wong Yu Vee & Ors [2023] MLRA 495, FC: A director is barred by the issue of estoppel and/or res judicata from asserting 410 defences which the company had unsuccessfully raised in the previous suit.

Parties entering into a contract while accepting the risks and omissions in the preceding negotiations would assume the honesty and good faith of the other.

The principle that the law did not expect people to arrange their affairs because others might commit fraud was not inconsistent with the principle of free consent under the Contracts Act 1950.

6.12 The plaintiff argued that the Ds had planned to hide behind the veil of 420 incorporation from the beginning. SD2: Mohammad Azahan Bin Mat Seddek (D2), in his evidence during cross, confirmed that he had that in mind in 2015.

6.13 The plaintiff also argued that Maser Group Enterprise was all revenue- 425 making going concerns. D1 and D2, their father, Dato Mat Seddek Bin Adam, and their company, Maser (M) Sdn Bhd, were also involved in another Suit No. WA-22NCC-502-11/2021 at KL High Court, where the Ds were also sued under Section 540 of the Companies Act 2016. It is with the same modus operandi by the Ds to avoid payments by hiding 430 behind the corporate veil and misplacing or destroying the company’s books and accounts to avoid being audited and investigated.

6.14 The amount of RM891,494.15 claimed by the plaintiff agrees with the plaintiff’s Proof of Debt in General Form filed with the Insolvency 435 Department against Maser: CBOD Vol.1 (Part A), pg.167-170. There is a computation of interest of 5% on the judgment sum amounting to RM31,629.08 (from 01.04.2017 to 15.12.2017).

6.15 The plaintiff argued that they had appropriately established the 440 undisputed debt. The Ds deceitfully dissipated Maser’s funds to avoid paying the judgment sum obtained against Maser, causing damage and loss to the plaintiff while hiding or destroying Maser's books, financial records, and accounts to circumvent an investigation and a forensic audit of their activities.

16 Therefore, it is an appropriate case under section 540 of the Companies Act 2016. The veil of incorporation of Maser Chemical must be lifted to attach personal liability on the directors for the fraudulent insolvent trading of Maser Chemical Sdn Bhd to the plaintiff's 450 detriment. In the circumstances, the plaintiff prays for order in terms. [7]

1 The Court would not pierce the corporate veil unless the justice of the case demands it, citing the High Court’s opinion in Harvinder Singh a/l Santa Singh v Pu Say Chiang & Anor [2022] MLJU 3619, HC that observed the plaintiff must prove special circumstances. Purely relying on the demand for justice alone is insufficient. It is trite law that special 460 circumstances to make a director personally liable is when there is either actual fraud at common law or some inequitable or unconscionable conduct amounting to fraud in equity.

7.2 The Ds argued that the court must be clear whether the fraud is common law fraud or equitable fraud, citing Takako Sakao v. Ng Pek 465 Yuen & Anor [2009] 3 MLRA 74, where Gopal Sri Ram FCJ emphasised that pleading the type of fraud as common law or equity is essential at the outset for the Ds’ preparation of their defence. Due to the failure to plead clearly in the statement of claim, the case is only confined to common law fraud.

7.3 The Federal Court decision in Lai Fee & Anor v Wong Yu Vee & Ors [2023] 3 MLJ 503, FC was cited that addressed the elements of s.540 CA 2016, i.e., the company had carried on business with intent to defraud (actual fraud), and the defendant was a party that partook in 475 the endeavour. The Federal Court observed that:

The element of fraudulent intent under s540 CA 2016 is to be read disjunctively with s304 CA 1965.

This means carrying on business intending to defraud the company's creditors. The word ‘intent’ implies that a man must intend the natural or 480 foreseen consequences of his act.

Fraud is defined under s17 of the Contract Act 1950 to include certain acts committed to induce another party to enter into a contract.

Fraud is a question of fact that depends on the circumstances of each case. Fraud must mean actual fraud, i.e., dishonesty according to the ordinary 485 standard of reasonable and honest people. The Plaintiff must prove actual knowledge at the material time, for instance, where debt is incurred with no reasonable prospect of creditors ever receiving payment of their debts. The defendants knew that, at the time the debt was incurred, there were no funds.

Dishonesty establishes that what was done was dishonest according to the 490 ordinary standard of reasonable and honest people, and the actor himself must have realised the act done was dishonest by those standards (Tradewinds Properties).

When done honestly, a thing is done in good faith, whether done negligently or not. Good faith is more related to the performance of the contract than the 495 duty of good faith in creating a contract. It is a duty to act honestly, not a duty of good faith.

7.4 The Federal Court in Tradewinds Properties Sdn Bhd v Zulhkiple bin A Bakar & Ors [2019] 1 MLJ 421, FC observed that fraudulent allegations must be proven by sufficient evidence because a mere 500 accusation is no evidence. Moreover, fraud is not presumed; it must be confirmed by clear and convincing evidence. The burden of proof is still the civil burden of proof on the balance of probabilities.

7.5 The Ds argue that the plaintiff failed in its pleadings to particularise the 505 type of alleged fraud by the defendant, thereby denying the Ds the just opportunity to set up an appropriate defence. The defendant argued that if the plaintiff intended common law fraud, intention to deceive must be established. At the same time, unconscionable conduct in a relationship of trust or confidence can be inferred if it was equitable 510 fraud. As in the present case, statutory fraud requires an intent to defraud or actual fraud because the company did business for a fraudulent purpose. In the plaintiff’s pleading, there are no particulars of the type of fraud against the Ds, thereby denying the Ds the right to set up the proper defence, which is unjust. The defendant cited the 515 High Court decision in Azhar Bin Harun v Dato’ Muthukumar A/L Ayarpadde & Ors [2021] MLJU 2389, HC that observed in an allegation of fraud, it must be pleaded with the highest degree of particularity. The Court cited the Federal Court in Dato’ Prem Krishna Sahgal v Muniady Nadasan & Ors [2017] 10 CLJ 385, FC, where it 520 was ruled that the Statement of Claim must, with precision and detail, disclose the plan or scheme used to defraud the creditors.

7.6 The intention to defraud can only be found in persons running the company and not in the company itself: Zamzam Arabic Food 525 Holding Sdn Bhd & Anor v Johanjana Corp Sdn Bhd [2022] 5 MLJ 302, CA. The Ds argued that the plaintiff had no personal cause of action against them since the contract breaker was Maser, for which a judgment had been secured. When entering the judgment against Maser, the plaintiff did not seek a remedy to lift the corporate veil 530 against the directors to make them personally liable. The defendant took the position that they were never involved directly or contractually in the impugned contract for goods sold and delivered:

The plaintiff has no cause of action against the Ds. Maser breached the contract. At the time of the suit against Maser, the 535 plaintiff did not seek to lift the veil.

They failed to prove that the Ds were directly involved during the transaction.

They failed to prove that they were induced into entering the contract for the supply of Barite Powder. It was argued that the 540 wrongdoer must make fraudulent misrepresentation directly to the plaintiff to establish unconscionable conduct. It was argued that it was Halliburton (the actual recipient of the Barite Powder) and the plaintiff scheming against Maser to make it a scapegoat from running a risk of loss on the declining oil and gas prices. I find this 545 argument has no legal foundation.

The plaintiff was aware of Maser's purported restructuring exercise in 2013 when D3 joined the board as an executive director. At the time, they were dealing with Dato Mat Nori, who supposedly assumed the role of Maser's President/CEO. 550

There is no evidence that the Ds committed actual fraud against the plaintiff when dealing with Dato Mat Nori from 2013 to 2015 at the time of the transaction.

There is no evidence that Maser could not meet its financial commitments at the time of the transaction.

7.7 The Ds argued that the RM2,750,882.00 cash in the bank was for Maser's estimated operation and business for the fiscal year ending 31.12.2015. Based on the accounting operating cycle, books were closed, and financial statements were calculated for 2014. Relying on 560 this financial report based on a fiscal year ending 31.12.2015 to show cash in hand is incorrect. The allegation of misappropriation by the Ds is untenable. Maser had suffered financially due to mismanagement and misuse of funds by Dato Mat Nori, D3, and Aim Oil & Gas Sdn Bhd. These parties had mismanaged and misused Maser’s funds 565 during that period, unknown to D1 and D2. I observed that, in light of the seriousness of the allegations of mismanagement and misappropriation of funds by the parties mentioned above, the Ds took no action to bring them to Court to seek 570 civil redress for Maser, and neither are there any criminal proceedings against these parties regarding the same. This does not augur well for the Ds' arguments. To claim complete ignorance of what was allegedly happening in Maser in the circumstances is not probable. The Ds were on the official record of SSM as the directors and officers of Maser 575 throughout the period. That said, the allegation of misuse of funds and mismanagement are internal matters of Maser vis-à-vis the shareholders and directors that do not concern the plaintiff, nor does it exonerate Maser's liability over the plaintiff's indebtedness. Indeed, it does not amount to a defence for this proceeding.

7.8 Also, the Ds argued that the plaintiff failed to establish that Halliburton made all the payments to Maser and the Ds evaded liability. However, I find, that is a matter between Maser and Halliburton, as the 585 transaction was between them for the actual recipient of the chemical supplied by the plaintiff to Maser. As far as the purchase order, delivery order, and invoice are concerned, they are between Maser and the plaintiff. 590 7.9 The plaintiff did not plead specific facts of fraud committed by the Ds other than a blanket allegation that they are majority shareholders and directors of Maser and Maser (M) Sdn Bhd (the holding company). From that vague plea of fraud, it suggested that the Ds acted in concert to defraud the plaintiff. The tort of conspiracy to defraud requires a 595 common intention to injure that differs from fraudulent trading. Therefore, the Ds pray that the plaintiff’s claim be dismissed with cost. [8]

8.1 Maser was managed by the board comprising the Ds (section 211 CA 600 2016). The SSM official Corporate Information confirms the position. D2 was also appointed as the Manager of Maser; D1 also confirms in his evidence that he is the policymaker for Maser and D1 and D2 are the only signatories of Maser’s bank account. 605

8.2 The Ds were in control and managed Maser. To claim ignorance is untenable. All the emails show that D1 had dealt with the plaintiff since October 2015. He even met up with the plaintiff to discuss the outstanding payment issue. 610 8.3 No evidence has been produced to support the Ds' arguments that Aim Oil & Gas Sdn Bhd controlled Maser and had mismanaged it. The official search with SSM shows that it had never been a shareholder of Maser, and neither is there a board representation. The Ds confirmed that no legal action has been taken to seek redress over the alleged 615 mismanagement and misuse of Maser’s funds.

8.4 The Ds raised two unpleaded issues, which the Federal Court decision in Samuel Naik Siang Ting v Public Bank Bhd [2015] 6 MLJ 1, FC, would not allow it:

Increase in material pricing; and

Plaintiff failed to prove that Halliburton had made all payments to Maser. This should have been raised in KL HC WA-22NCVC-359-06/2016, where judgment in favour of the plaintiffs was granted but not appealed 625 to the Court of Appeal. The Ds cannot be allowed by res judicata to relitigate the issue: Asia Commercial Finance (M) Berhad v Kawal Teliti Sdn Bhd [1995] 3 CLJ 783, SC.

8.5 The Ds could settle the amount owing to the plaintiff, but they 630 consciously decided not to. It was intentional by design. They lost all company documents to circumvent an inspection of the company’s affairs. Maser’s audited Report & Financial Statement as of 05.10.2016 showed that Maser had cash in the Bank amounting to RM2,750,882.00 and a Fixed Deposit amounting to RM158,032.00. 635 These amounts were more than sufficient to settle the debt due and owing to the plaintiff. [9] I CONSIDERED THE FIRST AND SECOND DEFENDANTS'

The contract for goods sold and delivered was a done deal.

The alleged circumstances, if any, leading to that transaction is irrelevant at this juncture, as it had been superseded by the contract’s complete performance by the plaintiff, which Maser cannot refute.

Otherwise, it would have been prudent at that time for Maser to stop the performance by the plaintiff if Maser genuinely, for any valid reasons, disputed the goods sold and delivered transaction, but it did not. It went along with the transaction vis-à-vis the Purchase Order, Delivery Order, and Invoice.

The High Court, in suit WA-22NCVC-359-06/2016, would have considered all pertinent issues before entering a final judgment against Maser, which remained uncontested, final, and binding to date.

In the circumstances, the only issue before me is whether the Ds 655 inappropriately, by deceit, denied or avoided payment of the invoice by the plaintiff as it falls due.

The Ds, as the duly appointed directors of Maser, were obligated to make the required payment (partial/complete) as the plaintiff’s claim for payment fell due, but evidence showed they made the 660 conscious election not to.

The ultimate recipient of the Barite Powder supplied by the plaintiff is claimed to have made the necessary payment to Maser for the shipment. Still, however, the Ds, who managed Maser's affairs at the time, did not pay the plaintiff.

They allowed Maser to be wound up without genuine contest.

Before doing so, there is plausible evidence that the Ds emptied Maser’s accounts and restructured Maser's equity structure by taking out the holding company, Maser (M) Sdn Bhd, leaving the plaintiff with an empty shell to seek recovery for goods sold and 670 delivered. All relevant books, accounts, and records of Maser had conveniently disappeared for an inspection into its affair regarding this matter. This does not augur well for the Ds as they were the parties in charge of Maser, contrary to their unsupported assertion of third-party mismanagement.

And now, the Ds are hiding behind the corporate veil to insulate themselves from the attachment of personal liability for the contractual debts of Maser that they brought into Maser’s accounts in managing the affairs of Maser as its duly appointed directors and officers, and as the circumstances have shown, with 680 no intention to honour the payment.

The Ds cannot deflect this responsibility to alleged third parties (Dato Mat Nori & 2 Ors) who are not parties in this proceeding. If the defendant's assertion is genuine, then prudence would dictate that those alleged third parties should have been joined as third 685 parties in the present suit to answer those charges. However, they are not. In that circumstance, the Ds' unsupported claim and arguments on this issue are rendered irrelevant and untenable. [10] THE LAW 690 The law on section 540 Companies Act 2016: “Section 540. Responsibility for fraudulent trading

If in the course of the winding up of a company or in any proceedings against a company, it appears that any business of the company has been carried on 695 with intent to defraud the creditors of the company or creditors of any other person or for any fraudulent purpose, the Court on the application of the liquidator or any creditor or contributory of the company, may, if the Court thinks proper so to do, declare that any person who was knowingly a party to the carrying on of the business in that manner shall be personally responsible, 700 without any limitation of liability, for all or any of the debts or other liabilities of the company as the Court directs.

Where a person has been convicted of an offence under subsection 539(3) in relation to the contracting of such debt as is referred to in that section, the 705 Court, on the application of the liquidator or any creditor or contributory of the company may, if the Court thinks proper so to do, declare that the person shall be personally responsible without any limitation of liability for the payment of the whole or any part of that debt. 710

When the Court makes any declaration under subsection (1) or (2), the Court may give such further directions as it thinks proper for the purpose of giving effect to that declaration and, in particular, may make provision for making the liability of any person under the declaration a charge on any debt or obligation due from the company to the person, or on any charge or any 715 interest in any charge on any assets of the company held by or vested in the person or any corporation or person on his behalf, or any person claiming as assignee from or through the person liable or any corporation or person acting on his behalf, and may from time to time make such further order as is necessary for the purpose of enforcing any charge imposed under this 720 subsection.

For the purposes of subsection (3), “assignee” includes any person to whom or in whose favour, by the directions of the person liable, the debt, obligation or charge was created, issued or transferred or the interest created, but does 725 not include an assignee for valuable consideration and consideration by way of marriage, given in good faith and without notice of any of the matters on the ground of which the declaration is made.

Where any business of a company is carried on with the intent or for the 730 purpose mentioned in subsection (1), every person who was knowingly a party to the carrying on of the business with that intent or purpose commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding ten years or to a fine not exceeding one million ringgit or to both. 735

This section shall have effect notwithstanding that the person concerned is criminally liable under this Act in respect of the matters on the ground of which the declaration is made.

On the hearing of an application under subsection (1) or (2), the liquidator 740 may give evidence or call witnesses himself.”

10.1 This section seeks to provide for the responsibility of any person for fraudulent or unlawful trading if it appears that any business of the 745 company has been carried on with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose. Section 540(1) of the Act is designed to prevent any company from being used to perpetrate fraudulent trading on unsuspecting creditors. The court is empowered to declare the culprit responsible for all the 750 debts and liabilities of the company. See: Jalex Sdn Bhd v City Properties Sdn Bhd & 2 Ors [2018] AMEJ

755 10.2 The phrase “if … it appears” indicates that a lower degree of proof is required. The standard of proof is one of the balance of probabilities. See: Dato’ Gan Ah Tee & Anor (in their capacity as liquidators of Par-Advance Sdn Bhd (in liquidation)) v Kuan Leo Choon & Ors [2012] 760 2 AMCR 829; [2012] 10 MLJ 706. [11] Lifting the corporate veil. 765 Section 20 Companies Act 2016: Separate legal Entity A company incorporated under this Act is a body corporate and shall-

have a legal personality separate from that of its members and

continue in existence until it is removed from the register.

11.1 Section 20 Companies Act 2016 followed the Companies Act 1965, codifying the legal concept of separate legal entity (Solomon v A Solomon & Co Ltd [1987] AC 22) for duly incorporated companies under the Act.

11.2 Upon registration, the company has a separate legal personality from its shareholders. It becomes a creature of a statute that can sue and be sued: See: 780 Mackt Logistics (M) Sdn Bhd v Malaysian Airline System Bhd [2014] 2 MLJ 518; [2014] 5 CLJ 851; and Tenaga Nasional Bhd v Irham Niaga Sdn Bhd & Anor [2011] 1 AMR 116; [2011] 1 MLJ 752 CA; [2011] 1 CLJ 491, CA. 785 11.3 The courts may “lift the corporate veil” to identify and determine the company's actual controlling mind and hold such person(s) personally accountable for a company's acts or purported acts. To pierce or lift the corporate veil, two conditions need to be fulfilled:

The lifting of the corporate veil is in the interest of justice; and 790

There are exceptional circumstances to pierce the corporate veil (e.g. commission of actual fraud or Common Law fraud; equitable fraud or constructive fraud has been committed; to prevent the evasion of liability or to prevent abuse of corporate personality. 795

11.4 The corporate veil can be lifted:

Where statutes permit it to be lifted.

In cases involving fraud.

The Supreme Court in Aspatra Sdn Bhd & Ors v Bank Bumiputra 800 Malaysia Bhd & Anor [1988] 1 MLJ 97, SC observed that “the court could generally lift the corporate veil to do justice, particularly where an element of fraud is involved”. In this case, the corporate veil of the appellant companies was lifted so that the assets of the appellant companies could be held or deemed to be the assets of one 805 Lorrain Osman, who had breached his fiduciary duty as a director of the first and second respondents by receiving secret profits.

In Tradewinds Properties Sdn Bhd v Zulhkiple bin A Bakar & Ors [2019] 1 MLJ 421, FC, that fraudulent allegations must be proven by sufficient evidence because a mere accusation is no evidence. 810 Moreover, fraud is not presumed; it must be confirmed by clear and convincing evidence. The burden of proof is still the civil burden of proof on the balance of probabilities.

Improper purpose 815

The Supreme Court in Lim Kar Bee v Duofortis Properties (M) Sdn Bhd [1992] 2 MLJ 281; [1992] 3 CLJ 1667, SC, observed two companies were formed for the express purpose of avoiding paying estate duty and lifted the corporate veil of each company, saying that it is well settled that the courts have the discretion to lift it to discover any 820 illegal or improper purpose.

11.5 The Supreme Court in Yap Sing Hock & Anor v PP [1992] 1 AMR 47; [1992] 1 CLJ Rep 356; [1992] 2 MLJ 714; [1993] 1 BLJ 35, SC had observed that in an appropriate case the Court is justified to disregard 825 and lift the corporate veil, and the category “the categories of purposes for which the court will lift the veil is never closed. A court has always the discretion to have a crack at it to do justice”. The circumstances included tax cases to ascertain tax liability or detect tax evasion, trading with the enemy for illegal or improper purposes 830 directed against a third party, and on account of equitable considerations (fraud, etc.).

11.6 The Federal Court in Ong Leong Chiou & Anor v Keller (M) Sdn Bhd & 2 Ors [2021] 3 MLJ 622, FC had set new guidance when corporate 835 personality can be pierced. The dispute stemmed from the construction of a multi-storey commercial development in Malaysia known as

(a) The main contractor is Bina Puri Holdings Berhad.

Perfect Selection Sdn Bhd was appointed subcontractor for 840 substructure works. Perfect Solution's directors were Tony Ong Leong Chiou and Liew.

Perfect Selection subcontracted the sub-structural works to PS Bina Sdn Bhd, which had three directors and shareholders: Tony, Liew and Chang.

Chang, on behalf of CTF Build Sdn Bhd, invited Keller (M) Sdn Bhd Keller to quote for the sub-structural works based on bills of quantities under Perfect Selection’s sub-structural works subcontract.

Unknown to Keller, the documents provided to Keller had a missing page, indicating that the earth bore works would not be paid for.

It was later found that Perfect Selection and its controlling shareholder and director, Tony, were aware of this omission.

Keller was awarded all three categories of sub-structural works, and letters of the award were issued by PS Bina, a newly incorporated company which was not the company that invited Keller to quote for the 855 works, stating that all three categories of sub-structural works, including the EBW, would be paid for.

Keller initially refused to sign up with PS Bina but was induced to enter into the subcontracts with PS Bina by Tony's false representations.

Keller then completed the sub-structural works, including the EBW.

However, PS Bina progressively decertified the total sum for the EBW.

Tony also knew that the payments for the EBW would be reversed as there would be no payment forthcoming from Bina Puri for the EBW.

Concurrently, Tony, Liew, and Chang's shareholding and directorship in PS Bina were transferred to third parties who did not know PS Bina’s 865 obligations to Keller.

Keller sued for recovery. The High Court found in favour of Keller and attached liability on PS Bina, Perfect Selection and Tony for sums due under its subcontract with PS Bina, including the total cost of the EBW.

The High Court held that:

In light of fraud or equitable fraud, it was only fitting that the corporate veils of Perfect Selection and PS Bina be lifted, and

(ii) PS Bina, Perfect Selection and Tony were jointly and severally liable to Keller for the debt concerning the performance of the EBW.

The Court of Appeal affirmed the findings of the High Court, hence the appeal to the Federal Court.

In dismissing the appeal, the Federal Court considered the UK Supreme Court case of Prest and the judgment of Lord Sumption, and when deciding whether to pierce the corporate veil, two elements must 880 be applied.

The concealment principle, and

(ii) The evasion principle.

The concealment principle in Prest does not, in reality, result in the piercing of the corporate veil but allows the court to disregard or look 885 behind the corporate personality to ascertain the facts of the concealed personality. This will enable the court to determine which legal principle of substantive law will be utilised to determine whether liability exists, and it may even involve the utilisation of principles of agency or trust or some other areas of law. Such application will allow for a more 890 significant analysis of the basis on which liability is imposed, rather than simply stating that the corporate veil has been lifted or pierced.

The evasion principle allows the court to pierce the corporate veil to impose liability on a person seemingly unconnected to the transaction in dispute. The court must first ascertain whether there is a legal right 895 against the person in control of the company which exists independently of the company’s involvement, but the company is “interposed so that the separate legal personality of the company will defeat the right or frustrate its enforcement”. Only in limited circumstances can the corporate veil be pierced.

The Federal Court held:

Based on the facts, Tony had interposed PS Bina between Perfect Solution and Keller to ensure that Keller's debt would not be paid.

(ii) Tony and Perfect Solution had deliberately procured the 905 performance of the EBW with no intention of paying for it, which amounted to interposing a sham company (PS Bina) to evade debt due to Keller for the EBW.

(iii) The Federal Court also acknowledged that, in many instances, the facts of the case would not allow for a clean and precise 910 application of either principle, as both might come into play.

(iv) The Federal Court also held that fraud for lifting or piercing the corporate veil need not be pleaded in the form “prescribed in textbooks with a formal plea of fraud followed by the particulars”. It suffices if the salient facts pointing to fraud and/or equitable fraud 915 have been set out comprehensively in the pleading.

A finding of common law and equitable fraud allows the corporate personality to be disregarded so that the actual wrongdoers, including the company itself, its shareholders, and controllers, can 920 be held liable.

The corporate personality can be disregarded using the doctrine of corporate veil piercing.

Wrongdoing should be analysed to ascertain whether it falls within Lord Sumption's “concealment” and “evasion” principles in Prest. 925 However, many cases will fall within both categories.

The Federal Court also agreed with Baroness Hale in Prest that where veil piercing is used to convert the liability of the controller of the company to the company itself, the utilisation of the agency concept and the ‘directing mind’ would be more appropriate than 930 the doctrine of piercing of the veil.

11.8 The latest position from the Apex Court on s.540 CA 2016 can be found in the Federal Court’s determination in Lai Fee & Anor v Wong Yu Vee & Ors [2023] MLRA 495, FC, which was asked to determine 935 whether there was intent to defraud within s.540 CA 2016 to impose personal liability on company directors (refer para 7.3 above). [12] FINDINGS

12.1 I have examined all-cause papers, the evidence at the trial, and the 940 parties' respective submissions in canvassing for their position in the present suit. Considering my observation in the totality of the evidence and my observations in the parties' respective arguments in paragraphs [6] 6.1-6.16 and [7] 7.1-7.9, [8], 8.1-8.5, and [9], in addition to, it is my considered determination from the totality of the 945 evidence that the plaintiff has on the balance of probabilities discharged its burden to establish its claim against the Ds as set out in its SoC. The Ds failed to produce compelling or persuasive evidence to tilt the evidential scale in their favour. 950 12.2 I have examined the evidence, the Common Bundles of Documents and the parties’ submissions, I find no legal basis for the defendant to deny the plaintiff’s claim. [13] Grounded on the totality of the evidence before me, it is my finding that: 955 13.1 The circumstances leading to the uncontested liquidation of Maser, its official financial statement, the confirmation of the financial standing by the insolvency department, that there was a dissipation of the company's assets:

The attempted explanation on the accounts of Maser does not 960 convince me of the truth of the matter. There are sufficient materials that showed that Maser could pay the plaintiff’s invoice as it fell due, but they elected not to, either partial or the total amount. I find guidance in the Court of Appeal in Lama Tile (Timur) Sdn Bhd (supra) that the action grounded on s540 CA 965 2016 concerns dishonest conduct involving real moral blame according to the notions of fair dealing among commercial men.

I am also guided by the Federal Court in Lai Fee & Anor v Wong Yu Vee & Ors [2023] MLRA 495, FC, says that the principle that the law did not expect people to arrange their affairs on the basis 970 that others might commit fraud was not inconsistent with the principle of free consent under the Contracts Act 1950. Parties entering into a contract whilst accepting the risks and omissions in the preceding negotiations would assume the honesty and good faith of the other. As such, contracts entered into were presumed 975 to be valid and enforceable. Indeed, parties engaged in negotiations to enter into a commercial contract conducted themselves on the expectation of honesty, good faith, and fair dealing. 980 The facts presented by the plaintiff at the trial support a determination in its favour. Dissipation of a company’s assets resulting in creditors being unable to recover any payment amounts to fraudulent trading. The conduct of transferring the company’s assets and trade receivables to the holding company at no consideration was conduct 985 that came within fraudulent trading, see LMW Electronics Pte Ltd v Ang Chuang Juay & 4 Ors [2010] 7 AMR 25; [2010] 1 MLJ 185, HC.

13.2 I find it improbable that the Ds in the present case, having complete control over the affairs of Maser as the official documents have shown, 990 could lose the financial records, books, and accounts of the company upon Maser being wound up unless it is to circumvent a potential investigation, forensic audit, or inquiry into its affairs concerning the present suit:

I find that, it is not probable that the Ds were ignorant of the 995 transaction, or that Maser was under different management at the time (contrary to official documents). There is no compelling evidence for such an assertion by the Ds.

I find guidance in Malhorta v Dhawan [1997] EWCA Civ 1096 that an adverse inference should be drawn from destroying the 1000 company's books and records. The Ds should expose the records if it can indeed exonerate them.

The Supreme Court in Yap Sing Hock & Anor v PP [1992] 1 AMR 47; [1992] 1 CLJ Rep 356; [1992] 2 MLJ 714; [1993] 1 BLJ 35, SC observed that in an appropriate case, the Court is justified in 1005 disregarding and lifting the corporate veil, and “the categories of purposes for which the court will lift the veil is never closed. A court always has the discretion to crack at it to do justice.”

I doubt the veracity of the Ds' evidence in these proceedings. However, I believe that the totality of the evidence at the trial shows 1010 that what transpired was indeed designed to insulate the Ds from liability: Lai Fee & Anor v Wong Yu Vee & Ors [2023] MLRA 495, FC.

The Federal Court in Ong Leong Chiou & Anor v Keller (M) Sdn Bhd & 2 Ors [2021] MLJU 393, FC, which had set new guidance 1015 on when corporate personality can be pierced. In that case, the High Court found for the plaintiffs. It was only fitting to lift the corporate veils of Perfect Selection and PS Bina in light of fraud or equitable fraud. The Court of Appeal affirmed the findings, and hence the appeal to the Federal Court that was also dismissed where the 1020 federal Court considered the concealment or evasion principle in determining the piercing of the corporate veil. The Federal Court also held that fraud for lifting or piercing the corporate veil need not be pleaded in the form “prescribed in textbooks with a formal plea of fraud followed by the particulars”. It suffices if the salient facts 1025 pointing to fraud and/or equitable fraud have been set out comprehensively in the pleading. Wrongdoing should be analysed to ascertain whether it falls within Lord Sumption's “concealment” and “evasion” principles in Prest. However, many cases will fall within both categories. The Federal Court also agreed with 1030 Baroness Hale in Prest that where veil piercing is used to convert the liability of the controller of the company to the company itself, the utilisation of the agency concept and the ‘directing mind’ would be more appropriate than the doctrine of piercing of the veil. 1035 13.3 Grounded on the circumstances of this case, I am unconvinced about the Ds' attempted explanation of the RM2,750,882.00 in Maser’s account under the Ds' management and control. I take guidance from the Court of Appeal in Chin Chee Keong v Toling Corp (M) Sdn Bhd [2016] 3 MLJ 479, CA that the intention of the Ds to defraud the plaintiff 1040 could be inferred from the fact that the company did not have a profit-generating business at the material time but yet placed huge orders without explaining how they were going to honour the company’s obligations. 1045 13.4 The unsupported position taken by the Ds that Aims Oil & Gas Sdn Bhd supposedly acquired equity in Maser was the one that mismanaged Maser, causing it to suffer losses, is untenable:

There is no evidence to support such an assertion, and even the official search with SSM could not support it. 1050

To reiterate what I had said earlier, the Ds cannot deflect this responsibility to alleged third parties (Dato Mat Nori & 2 Ors) who are not parties in this proceeding.

If the defendant's assertion is genuine, then prudence would dictate that those alleged third parties should have been joined as third 1055 parties in the present suit to answer those charges. The contract for goods sold and delivered was a done deal. The alleged circumstance, if any, leading to that transaction is irrelevant at this juncture, as it had been superseded by the plaintiff’s complete 1060 performance of the contract, which Maser cannot refute. The High Court, in suit WA-22NCVC-359-06/2016, would have considered all pertinent issues before entering a final judgment against Maser, which remained uncontested, final, and binding to date. 1065 13.5 Over the years, case law has developed on the piercing and lifting of the corporate veil grounded on necessary circumstances in the interest of justice: Sunrise Sdn Bhd v First Profile (M) Sdn Bhd & Anor [1997] 1 AMR 1; [1996] 3 MLJ 533; [1997] 1 CLJ 529, FC. To pierce or lift the corporate veil, two conditions need to be fulfilled: 1070

The lifting of the corporate veil is in the interest of justice; and

There are exceptional circumstances to pierce the corporate veil (e.g. commission of actual fraud or Common Law fraud; equitable fraud or constructive fraud has been committed; to prevent the evasion of liability or to prevent abuse of corporate personality. 1075 [14] In Lai Fee & Anor v Wong Yu Vee & Ors [2023] MLRA 495, FC, which was asked to determine whether there was intent to defraud within s.540 CA 2016 to impose personal liability on company directors. The Federal Court ruled that the defendant’s scheme was calculated 1080 to insulate them against personal liability. In all the circumstances, the fact that this was a single transaction did not negate the inferences arising from the settled facts. [15] CONCLUSION 1085 15.1 In the circumstances, on the balance of probabilities, I find the plaintiff has proven its case and I allow the plaintiff’s claim against the Ds with costs. The following orders are hereby entered:

The Ds are jointly and severally liable to pay all the debts owed by Maser Chemical Berhad to the plaintiff. 1090

The Ds are to jointly and/or severally pay the judgment sum of RM891,494.50 to the plaintiff.

The Ds are jointly and/or severally to pay the plaintiff RM31,629.08, interest at 5% on the judgment sum of RM891,494.15 from 01.04.2017 to 15.12.2017.

The Ds are to jointly and/or severally pay the plaintiff interest of 5% on the 1095 judgment sum of RM8912,494.15 from 16.12.2017 to the date of the Writ herein.

The Ds shall jointly and/or severally pay the plaintiff interest at 5% on the judgment sum of RM891,494.15 from the date of the Writ herein until full realisation. 1100

The prayer for a mandatory injunction to compel the Ds to deliver all of Maser Chemical Berhad's books of accounts, bank statements, records, and relevant documents to the satisfaction of the plaintiff within fourteen days from the date of this Order is withdrawn by the plaintiff, and it is so ordered. 1105

15.2 Cost of RM20,000 is awarded to the plaintiff, payable by the Ds within forty-five (45) days from the date of this Order. 1110 Dated 26.03.2024. 1115 HAYATUL AKMAL ABDUL AZIZ JUDGE HIGH COURT OF MALAYA WILAYAH PERSEKUTUAN KUALA LUMPUR 1120 Parties: 1125 Beh Chee Wei Messrs. Beh & Co. Counsel for the plaintiff. 1130 Hasiera binti Hashim Messrs. Kam & Sidhu Counsel for the First and Second Defendants