CORPORATE LAW – PIERCING THE CORPORATE VEIL – PLAIN ERROR OF MIXED LAW AND FACTS – APPELLATE INTERVENTION WARRANTED
In Capital City Property Sdn Bhd v Teh Swee Neo & Anor [2026] MLJU 540, the Court of Appeal set aside a High Court ruling that had pierced the corporate veil of a developer company and held it liable for unpaid rent owed by a related tenant company. The Court reaffirmed that companies within a corporate group retain separate legal personality, and that veil piercing is permissible only in exceptional circumstances such as actual or equitable fraud. Common directors, shared addresses, or corporate control were held insufficient to impose liability. As the tenancy agreements were entered into solely with the tenant company and no fraud was proven, the developer could not be made responsible for the tenant’s unpaid rent.
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