Super Happy Wing Limited v 1. ) Aag Healthcare Sdn. Bhd. (BA-22NCvC-149-04/2022)

AAG HEALTHCARE SDN. BHD. [No. Pendaftaran: 201101031570 (959705-P)]

AZEAN BINTI ABDUL GHANI (No. Kad Pengenalan: 771114-01-5434) …DEFENDAN-DEFENDAN JUDGMENT Introduction [1] During the height of the COVID-19 pandemic, when the global demand for gloves soared to unprecedented levels, the parties in this case — like many others — entered into a contract for their purchase and supply. However, as with numerous deals struck in the urgency of the crisis, this one 05/05/2025 14:23:32 BA-22NCvC-149-04/2022 Kand. 49 too went awry, culminating in the present claim brought by the Plaintiff against the Defendants. The Pertinent Issues [2] The twin salient issues in this action are as follows. [3] The first is whether there has been a breach of the terms of the contract. [4] The second is whether the Second Defendant engaged in fraudulent conduct, warranting the lifting of the corporate veil to hold her personally liable. The Parties and the Causes of Action [5] For avoidance of doubt, the contract was entered into between the Plaintiff and the First Defendant, both being companies incorporated under the Companies Act 2016. [6] The Second Defendant was at all material times the sole director and shareholder of the First Defendant. [7] The Plaintiff’s causes of action are predicated on (1) breach of contract by the First Defendant and/or the Second Defendant; (2) Unjust Enrichment by the First Defendant and/or the Second Defendant; and (3) Fraud by the Second Defendant. [8] It should be mentioned at the outset that the First Defendant was wound up on 27 October, 2023, 18 months after the commencement of this suit. [9] Accordingly, the Plaintiff has opted to pursue this action solely against the Second Defendant. The Proceedings at the Trial [10] The trial was conducted over four days, that is, on 22nd April, 24th April, 9th August, and 30th September, 2024. [11] The Plaintiff and the Second Defendant each called one witness. [12] Yap Wing Foo (PW1), the Plaintiff’s Director testified on behalf of the Plaintiff and Asean binti Abdul Ghani (DW1), the Second Defendant and Director of the First Defendant, testified on behalf of the Defendants. [13] The cause papers referred to during the trial were as follows: NO. DOCUMENT ENCLOSURE NO.

Bundle of Pleading 20

Common Bundle of Document Part A 21 B The Respective Contentions [14] The Plaintiff’s key arguments were that it is entitled to claim for USD468,000.00 together with costs for the wrong gloves delivered. The Plaintiff averred that the Defendants delivered vinyl gloves instead of the contracted nitrile gloves, violating the Sale and Purchase Agreement. [15] The Plaintiff led evidence through laboratory tests conducted by Minton, Treharne & Davies confirming the gloves were vinyl, a cheaper and inferior material. [16] As a result, the Plaintiff asserted that it suffered losses of USD534,136.65 and GBP6,007.46 due to its inability to sell the gloves and for storage costs. [17] It was further asserted by the Plaintiff that the Second Defendant had committed fraud through false representations made to DW1. The alleged 3. Common Bundle of Document Part A (Part 2) 27

Common Bundle of Document Part B 22

Common Bundle of Document Part B (Part 2) 28 C(1) fraudulent acts include misrepresenting to DW1 that the gloves purchased by the Plaintiff were of nitrile type, the gloves purchased by the Plaintiff have passed the SGS inspection, the Defendants undertook to refund the Plaintiff’s payments if specifications weren’t met and arrangement for the shipping of the gloves to the Plaintiff. [18] The Plaintiff also alluded to the fact that the Defendants had received and retained payments without fulfilling their obligations. [19] On the lifting of the corporate veil, it was the Plaintiff’s contention that the Second Defendant, as the sole director and shareholder of the First Defendant, had used the First Defendant as a facade to commit fraud. [20] Hence, the Plaintiff argued that the exception to the separate legal entity rule applies to the present action. In support of this argument, the Plaintiff referred this Court to the Federal Court cases of Gurbachan Singh s/o Bagawan Singh & Ors v Vellasamy s/o Pennusamy & Ors (on their behalf and for the 213 sub-purchasers of plots of land known as PN35553, Lot 9108, Mukim Hutan Melintang, Hilir Perak) and other appeals [2015] 2 AMR 1; [2015] 1 CLJ 719; [2015] 1 MLJ 773; [2015] 1 MLRA 107 (“Gurbachan Singh”), Ong Leong Chiou & Anor v Keller (M) Sdn Bhd & Ors [2021] AMEJ 0415; [2021] 4 CLJ 821; [2021] 3 MLJ 622; [2021] 4 MLRA 211 (“Ong Leong Chiou”) and Yahya Mohd Khalid v MISC Berhad [2020] MLJU 77; [2020] 3 MLRA 343 (“Yahya Mohd Khalid”). [21] In response to the breach of contract allegation, it was contended by the Second Defendant that the Plaintiff should have terminated the contract after being aware of the delay and/or the termination of the sale and purchase agreement by the Plaintiff was unlawful. The Second Defendant had also submitted the delay was caused by another entity, that is, the manufacturer of the gloves. [22] On the issue of fraud and the lifting of the corporate veil, the Second Defendant submitted that the latter had not been pleaded by the Plaintiff. The Decision of this Court [23] This Court shall first address whether, on a balance of probabilities, the Plaintiff has established a case for breach of contract. [24] The Second Defendant contended that the Plaintiff ought to have terminated the contract upon becoming aware of the delay in the delivery of the gloves. However, this Court finds PW1’s testimony both credible and compelling in addressing this contention. The essence of PW1’s explanation is that the Plaintiff’s existing contractual commitment with a third party for the sale and purchase of the gloves necessitated the multiple extensions granted for delivery. [25] More crucially, this Court notes that the Defendants’ breaches were not limited to delays alone. The evidence establishes non-compliance with several fundamental terms of the sale and purchase agreement. It is undisputed that the First Defendant failed to deliver the full consignment of 65,000 boxes of gloves, delayed the provision of the SGS Report, and supplied gloves that did not conform to the agreed specifications. [26] Notably, both the Plaintiff and the Second Defendant have selectively cited clauses from the sale and purchase agreement that align with their respective positions. The Plaintiff relied on the following provisions: (1) Clause 2 (glove specifications); (2) Clause 7 (payment and banking procedures); (3) Clause 8 (delivery schedule); (4) Clause 10 (termination notice); (5) Clause 11 (material breach); and (6) Clause 14 (force majeure). Meanwhile, the Second Defendant referred to Clauses 3.1, 5.1, 10.1, 10.2, and 11.1. [27] This Court emphasizes that the agreement must be interpreted holistically, rather than through selective reliance on isolated provisions that favour one party over the other. Applying the clear terms of the contract to the facts of this case, this Court finds that the First Defendant had indeed breached the agreement, and the Plaintiff was justified in terminating it. [28] Having determined that the First Defendant breached the contract, the next issue to consider is whether the Second Defendant engaged in fraudulent conduct, thereby warranting the lifting of the corporate veil. [29] The evidence before this Court supports the Plaintiff’s assertion that the Second Defendant committed fraud. Section 17 of the Contracts Act 1950 defines “fraud” as follows:

“Fraud” includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:

the suggestion, as to a fact, of that which is not true by one who does not believe it to be true;

the active concealment of a fact by one having knowledge or belief of the fact;

a promise made without any intention of performing it;

any other act fitted to deceive; and

any such act or omission as the law specially declares to be fraudulent. [30] The representations and promises made by the Second Defendant fall squarely within one or more of the instances enumerated in Section 17. [31] Relying on the authorities of Gurbachan Singh, Ong Leong Chiou, Yahya Mohd Khalid, and Lembaga Tabung Haji & Anor v Encap Sdn Bhd [2024] 1 AMR 171; [2024] 2 CLJ 728; [2024] 2 MLJ 98; [2024] 2 MLRA 242, this Court is satisfied that the failure to specifically plead the lifting of the corporate veil is not fatal. The Amended Statement of Claim sufficiently sets out the particulars of fraud (in paragraphs [39] to [41]), providing a firm basis for piercing the corporate veil. [32] In light of the foregoing findings, this Court allows the Plaintiff’s prayers as set out in Paragraph [45] (i), (ii), (iii), (iv), (vi), and (ix) of the Amended Statement of Claim. [33] The Second Defendant shall pay costs of RM30,000.00 to the Plaintiff. Dated: 2 May, 2025 sgd [CHOONG YEOW CHOY] Judicial Commissioner High Court of Malaya Shah Alam Counsel: Nur Azureen binti Ibrahim for the Plaintiff (Messrs. Saiful, Roger & Co.) Engku Attilla binti Engku Mohd Azhari For the Second Defendant (Messrs. Arni Attilla & Partners)