COMPANIES LAW- FRAUD AND LIFTING OF CORPORATE VEIL

My company (A Sdn Bhd) have entered into a contract with B Sdn Bhd company to construct a building. The directors of B Sdn Bhd told me that piling works will be paid in full. However, the written contract has missing pages purportedly stating that the piling work will not be paid. I am not aware of the missing pages. We were cheated. The piling works was completed and there was no payment from B Sdn Bhd. Later, I discovered that the directors of B Sdn Bhd has resigned. Can I sue the directors of B Sdn Bhd for cheating?

Yes.

  • When fraud (commonly known as cheating) is perpetrated, the court can pierce the corporate veil to make the fraudster personally liable for cheating. This is also known as fraudulent misrepresentation in law.
  • In this case, the directors can be made personally liable for fraud.

Q: What do I have to prove?

  • The standard of proof for fraud in a civil proceeding is prove on the balance of probability.
  • You have to give evidence that the directors of B Sdn Bhd told to you that the piling works will be paid in full. Alternatively, you can show the missing pages were deliberately omitted and concealed from your knowledge.
  • This misrepresentation has induced or caused you and your company to complete the piling works.

Q: Can I claim for the full amount of losses suffered from the unpaid piling work?

Yes.

  • The Court can allocate liability to the perpetrators of fraud, independently of the doctrine of piercing the corporate veil upon the finding of fraud caused by the directors.

Sorotan Terkini

PROPERTY LAW – LEGAL IMPLICATIONS OF SALE AND PURCHASE AGREEMENT BREACHES AND THE RIGHT TO OFFSET IN MALAYSIAN PROPERTY TRANSACTIONS

In the realm of Malaysian property transactions, the intricacies of Sale and Purchase Agreements (SPAs) and the enforcement of Liquidated Ascertained Damages (LAD) play pivotal roles in safeguarding the interests of both developers and purchasers. This article delves into the legal framework governing the rights and obligations of parties involved in property transactions, particularly focusing on the consequences of contractual breaches and the conditions under which a purchaser can exercise the right to offset against LAD. Through the examination of relevant case law and statutory provisions, we illuminate the legal pathways available for resolving disputes arising from the failure to adhere to the terms of SPAs, thereby offering insights into the equitable administration of justice in the context of Malaysian property law.

Read More »

WINDING-UP – OFFICIAL RECEIVER AND LIQUIDATOR (“ORL”)

In cases of compulsory winding up, the court would appoint a liquidator under s.478 of the Companies Act 2016 (“CA 2016”) to expeditiously recover and realise the assets of the wound-up company for the distribution of dividends to creditors and administer any outstanding matters involving………..

Read More »

JUDICIAL REVIEW – PROCEDURAL FAIRNESS AND LOCUS STANDI

This excerpt illuminates the foundational principles of judicial review as outlined in Order 53 of the Rules of Court 2012. It highlights the criteria for challenging public decisions on grounds of illegality, irrationality, or procedural impropriety. Central to the discussion is the question of timing in judicial review applications, particularly in cases of procedural unfairness. The practical scenario underscores the significance of a “decision” by the relevant authority as a prerequisite for locus standi, drawing insights from the case of Hisham bin Halim v Maya bt Ahmad Fuad & Ors [2023] 12 MLJ 714.

Read More »

CONTRACT LAW – CONTRACTUAL INTERPRETATION REMEDIES UNVEILED: DECIPHERING CONTRACTUAL CLAUSES AND LEGAL BALANCE

This legal updates explore the principles governing the interpretation of agreements, emphasizing the importance of clarity and unambiguity in contractual terms. It delves into a key issue involving restrictions on remedies for breach of contract, shedding light on the court’s commitment to upholding plain meanings. The illustrative scenario involving shareholders X and Y dissects a pertinent clause, showcasing the delicate balance between restricting remedies and ensuring fairness in legal proceedings.

Read More »

TIME’S UP: NAVIGATING THE 12-YEAR LIMITATION

In the intricate dance of land security and loan agreements, the ticking clock of the limitation period cannot be ignored. This excerpt delves into the critical understanding of how the 12-year limitation period, as prescribed by the Limitation Act 1953, plays a pivotal role in the enforcement of property charges in Malaysia. It elucidates the start time of this countdown and its legal implications, providing a comprehensive guide for both lenders and borrowers in navigating these time-sensitive waters.

Read More »
ms_MYBahasa Melayu
× Bagaimana boleh kami membantu?