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1. Shen Yong Engineering Works Sdn Bhd v Damai Residence Sdn Bhd & Anor [2023] MLJU 104
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 SHEN YONG ENGINEERING WORKS SDN BHD v DAMAI RESIDENCE
SDN BHD & ANOR
CaseAnalysis
| [2023] MLJU 104

Shen Yong Engineering Works Sdn Bhd v Damai Residence Sdn Bhd &
Anor [2023] MLJU 104
Malayan Law Journal Unreported

HIGH COURT (SHAH ALAM)

WONG KIAN KHEONG J
ORIGINATING SUMMONS NO BA-24C(ARB)-3-04 OF 2022
5 January 2023

Nicholas Hor Sien Pin (with Chua Shuhui) (Nicholas Hor & Co) for the plaintiff.
See Kwong Yan (See Kwong Yan) for the first defendant.
Chong Chui May (Chee Siah Le Kee & Partners) for the second defendant.

Wong Kian Kheong J:

JUDGMENT

(Court enclosure nos. 12 and 17)

A. Introduction

[1] This originating summons (OS) concerns the exercise of court’s discretionary power to grant interim relief under
s 11(1) of the Arbitration Act 2005 (AA) pending disposal of arbitration between parties.

[2] Before the filing of this OS, the plaintiff company (Plaintiff) has commenced arbitral proceedings (Arbitration)
against the first defendant company (1st Defendant) to claim for a sum of RM2,528,027.78 (Plaintiff’s Claim Sum)
which was allegedly due from the 1st Defendant to the Plaintiff under a construction agreement between the 1st
Defendant and Plaintiff (Agreement).

[3] Three novel questions arise in this OS:

(1) pending the outcome of the Arbitration, whether the court can grant pursuant to s 11(1)(c) AA a Mareva
injunction (Interim Mareva Injunction) which restrains any dealing regarding land (Land) which is owned
in law by the second defendant company (2nd Defendant) but the Land has been purchased by the 1st
Defendant and the full purchase price of the Land has already been paid by the 1st Defendant to the 2nd
Defendant;
(2) can the Plaintiff apply for an interim injunction pending the outcome of the Arbitration under s 11(1)(a), (b)
and/or (c) AA to restrain the use of the Land by the 1st and 2nd Defendants (collectively referred to in this
judgment as the “Defendants”)?; and
(3) whether the Plaintiff can apply for an interim injunction pursuant to s 11(1)(a), (b) and/or (c) AA to restrain
any dealing regarding assets which are partially owned by the 1st Defendant.

B. Background

[4] On 8.1.2014 the 1st Defendant had entered into a sale and purchase agreement to purchase the Land [held
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Shen Yong Engineering Works Sdn Bhd v Damai Residence Sdn Bhd & Anor [2023] MLJU 104

under title no. PN 55387, Lot 12539 (formerly held under title HS(D) 70877, PT 1850)] in “Kawasan Bandar VI,
Daerah Melaka Tengah”, Malacca from the 2nd Defendant (SPA). According to the SPA, the price of the Land was
RM7,343,569.92 [Price (Land)].

[5] The 1st Defendant has paid in full the Price (Land) to the 2nd Defendant. “Form 14A”, the form under National
Land Code (NLC) to register the transfer of the Land from the 2nd Defendant to the 1st Defendant had been
executed by the Defendants (Form 14A). However, the registered title to the Land has yet to be transferred from
the 2nd Defendant to the 1st Defendant.

[6] The Agreement consisted of the following documents:

(1) a “Letter of Award” dated 7.3.2014 from the 1st Defendant to the Plaintiff (LA) wherein the 1st Defendant
had appointed the Plaintiff to build a nursing home and medical centre on the Land (Project). According to
Part A LA, the value of the Project was RM29,811,818.60; and
(2) Part B LA had provided that the “Contract Documents” of the Agreement shall be the “Articles of
Agreement” and “Conditions of Contract” (COC) in “Agreement and Conditions of PAM Contract 2006
(Without Quantities)”.

[7] The 1st Defendant had instructed the Plaintiff to commence works in the Project (Works) and the Plaintiff took
possession of the site of the Project on 8.4.2014.

[8] By way of a letter dated 8.8.2014, the Project’s Consultant Engineer, GNL Engineering Consultancy (Project
Engineer), instructed the Plaintiff to cease immediately the Works (Works Suspension Instruction) because the
1st Defendant and its consultants had failed to obtain the relevant Planning Permission and Building Approval from
the authorities for the Works (referred collectively in this judgment as the “Relevant Approvals”).

[9] The Project’s architect, FWLA Architects (Project Architect), had issued an Interim Certificate on 2.2.2015
[Interim Certificate (Project Architect)] which certified as follows, among others:
(1) up to the date of the Works Suspension Instruction, the Plaintiff had completed Works of a value of
RM2,511,074.26 [Value (Plaintiff’s Certified Works)];
(2) a sum of RM251,107.43 was retained by the 1st Defendant under the Agreement as a retention sum
(Retention Sum); and
(3) after deducting the Retention Sum from the Value (Plaintiff’s Certified Works), the 1st Defendant should pay
an amount of RM2,259,966.83 to the Plaintiff [Certified Sum (Project Architect)].

[10] The Relevant Approvals were subsequently obtained by the 1st Defendant. However, the Plaintiff had suffered
a loss of “overhead cost” amounting to RM268,060.95 due to the 1st Defendant’s delay in obtaining the Relevant
Approvals [Plaintiff’s Loss (1st Defendant’s Delay)].

[11] The 1st Defendant had failed to pay the total of the Certified Sum (Project Architect) and Plaintiff’s Loss (1st
Defendant’s Delay), namely the Plaintiff’s Claim Sum.

[12] Ms. Yeo Eng Lam (Ms. Yeo) is a director of the 1st Defendant who owns 99% of all the shares in the 1st
Defendant. Between 23.3.2016 and 1.8.2017, the 1st Defendant (through Ms. Yeo) had exchanged many WhatsApp
messages [WhatsApp Messages (Ms. Yeo-Mr. Woon)] with the Plaintiff’s representative named Mr. Ken Woon
(Mr. Woon) which admitted the 1st Defendant’s indebtedness to the Plaintiff for the Works [1st Defendant’s First
Admissions (Indebtedness to Plaintiff)].

[13] Despite the 1st Defendant’s First Admissions (Indebtedness to Plaintiff), the 1st Defendant did not pay the
Certified Sum (Project Architect) to the Plaintiff. Hence, pursuant to clause 26.1(a) COC, the Plaintiff sent a letter
dated 8.12.2017 to the 1st Defendant which determined the Plaintiff’s employment under the Agreement [Plaintiff’s
Self-Termination Letter (8.12.2017)]

[14] Due to the 1st Defendant’s failure to pay the Certified Sum (Project Architect), the Plaintiff instituted
proceedings under the Construction Industry Payment and Adjudication Act 2012 (CIPAA) to recover the Certified
Sum (Project Architect) from the 1st Defendant (Adjudication Proceedings).

[15] In the Adjudication Proceedings -

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Shen Yong Engineering Works Sdn Bhd v Damai Residence Sdn Bhd & Anor [2023] MLJU 104

(1) the 1st Defendant was represented by Mr. See Kwong Yan (who also represented the 1st Defendant in this
OS);
(2) the 1st Defendant had resisted the Adjudication Proceedings on the sole ground that the Works performed
by the Plaintiff were illegal [Defence (Illegality)] because -
(a) the Works were done without Planning Permission as required by s 22(3) of the Town and Country
Planning Act 1976 (TCPA);
(b) Building Approval pursuant to ss 70 and 70A of the Street, Drainage and Building Act 1974 (SDBA)
had not been obtained for the Works; and
(c) the Agreement was void under s 24 of the Contracts Act 1950 [CA (1950)] due to a lack of the
Relevant Approvals; and
(3) on 11.4.2018 the adjudicator, Ms. Vanitha Annamalai, rejected the Defence (Illegality) and adjudicated that
the 1st Defendant shall pay to the Plaintiff, among others, the Certified Sum (Project Architect) with interest
and costs (Adjudication Decision).

[16] With regard to the Adjudication Decision -

(1) the 1st Defendant applied to Shah Alam High Court (HC) to set aside the Adjudication Decision [1st
Defendant’s Setting Aside Application (Adjudication Decision)] while the Plaintiff applied for leave of
HC to enforce the Adjudication Decision [Plaintiff’s Enforcement Application (Adjudication Decision)];
(2) Mr. See represented the 1st Defendant in the 1st Defendant’s Setting Aside Application (Adjudication
Decision) and Plaintiff’s Enforcement Application (Adjudication Decision). The same Defence (Illegality)
was raised by Mr. See in the HC; and
(3) on 8.10.2018, Vazeer Alam Bin Mydin Meera J (as he then was) in the HC -
(a) rejected the Defence (Illegality);
(b) dismissed the 1st Defendant’s Setting Aside Application (Adjudication Decision); and
(c) allowed the Plaintiff’s Enforcement Application (Adjudication Decision)

[HC’s Decision (Adjudication Decision)].

[17] Based on HC’s Decision (Adjudication Decision), the Plaintiff petitioned to the Shah Alam Insolvency Court to
wind up the 1st Defendant [Winding-Up Proceedings (HC)]. Mr. See opposed the Winding-Up Proceedings (HC)
on behalf of the 1st Defendant.

[18] On 2.4.2019, Azmi Bin Ariffin J -

(1) wound up the 1st Defendant; and
(2) appointed the Official Receiver (OR) as the interim liquidator for the 1st Defendant

(HC’s Winding-Up Order).

[19] Pursuant to HC’s Winding-Up Order, a “Statement of Affairs” of the 1st Defendant had been made by the 1st
Defendant’s directors and shareholders [SOA (1st Defendant)]. The SOA (1st Defendant) had submitted to the OR.
The SOA (1st Defendant) admitted to the OR that the 1st Defendant owed a sum of RM3,015,295.03 to the Plaintiff
[1st Defendant’s Second Admission (Indebtedness to Plaintiff)].

[20] The 1st Defendant had appealed to the Court of Appeal (CA) against HC’s Decision (Adjudication Decision)
and HC’s Winding-Up Order [1st Defendant’s Appeals (CA)].

[21] Regarding the 1st Defendant’s Appeals (CA) -

(1) the 1st Defendant applied to CA to amend its Memorandum of Appeal [1st Defendant’s Amendment
Application (Memorandum of Appeal)]; and
(2) the 1st Defendant’s Amendment Application (Memorandum of Appeal) was opposed by, among others, an
affidavit affirmed on 18.10.2021 by Mr. Loo Yoon Kai, a director of the Plaintiff (Mr. Loo’s Affidavit). In
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sub-paragraph 8.2.2 of Mr. Loo’s Affidavit, the Plaintiff had averred, among others, that if the 1st
Defendant’s Appeals (CA) were allowed, the Plaintiff would suffer irreparable prejudice because the
Plaintiff’s claim for the Certified Sum (Project Architect) [Plaintiff’s Claim (Certified Sum)] was time-
barred due to the following reasons -
(a) the Interim Certificate (Project Architect) was issued on 2.2.2015; and
(b) the Plaintiff’s cause of action for the Certified Sum (Project Architect) against the 1st Defendant arose
on 23.2.2015, ie., after the lapse of 21 days from the issuance of the Interim Certificate (Project
Architect)

[Sub-Paragraph 8.2.2 (Mr. Loo’s Affidavit)].

[22] In the Federal Court case of Jack-In Pile (M) Sdn Bhd v Bauer (M) Sdn Bhd and another appeal [2020] 1 CLJ
299, at [4], [25], [45], [54], [55], [59]-[62] and [70]-[72], Idrus Harun FCJ has decided that CIPAA cannot apply to
construction contracts entered into before 15.4.2014 (the enforcement date of CIPAA). Since the LA was issued on
7.3.2014, CIPAA did not apply to the Agreement. Consequently, on 21.2.2022 the the 1st Defendant’s Appeals (CA)
were allowed and the following orders were set aside:
(1) HC’s Decision (Adjudication Decision) and Adjudication Decision; and
(2) HC’s Winding-Up Order.

[23] The Plaintiff’s solicitors sent a letter dated 15.3.2022 to the 1st Defendant [Plaintiff’s Letter (15.3.2022)]
which, among others -
(1) gave notice to the 1st Defendant that the Plaintiff’s claim against the 1st Defendant under the Agreement
would be referred to arbitration in accordance with clause 34.5 COC; and
(2) requested the 1st Defendant to nominate an arbitrator for the Plaintiff’s consideration.

[24] The 1st Defendant replied to the Plaintiff’s Letter (15.3.2022) by way of a letter dated 31.3.2022 from Mr. See’s
firm [1st Defendant’s Letter (31.3.2022)]. According to the 1st Defendant’s Letter (31.3.2022), among others -
(1) “in prior court proceedings … it is not disputed that the [Works] allegedly performed by [Plaintiff] was done
without the [Relevant Approvals] contrary to the law; and/or”
(2) “in any event, [Plaintiff] admitted in its claims, as set out [in the Plaintiff’s Letter (15.3.2022)], are barred by
limitation”.

[25] The contents of the 1st Defendant’s Letter (31.3.2022) were denied by a reply dated 6.4.2022 by the Plaintiff’s
solicitors.

[26] Infinity Vantage Sdn. Bhd. (Infinity Vantage) has filed Civil Suit no. NA-22NCVC-57-08/2017 against Ms. Yeo
in Seremban HC [Infinity Vantage’s Suit (Ms. Yeo)]. In Infinity Vantage’s Suit (Ms. Yeo) -
(1) Infinity Vantage alleged that, among others -
(a) Infinity Vantage and Ms. Yeo entered into a “Joint Venture Agreement” on 3.10.2014 (JVA) wherein,
among others, Ms. Yeo agreed to provide to Infinity Vantage a piece of land, Lot 35648, Mukim Labu,
Seremban District held under title no. 242669 (Seremban Land) so as to enable Infinity Vantage to
develop the Seremban Land;
(b) Ms. Yeo is the registered and beneficial owner of the Seremban Land;
(c) pursuant to the JVA, Infinity Vantage had advanced a sum of RM7,000,000.00 to Ms. Yeo [Infinity
Vantage’s RM7 Million Loan (Ms. Yeo)]; and
(d) Ms. Yeo had breached provisions in the JVA; and
(2) Ms. Yeo’s defence pleaded, among others, that the JVA was an unlicensed moneylending transaction
between Infinity Vantage and Ms. Yeo which had breached the Moneylenders Act 1951 (MA). It is to be
noted that Ms. Yeo is not represented by Mr. See in Infinity Vantage’s Suit (Ms. Yeo).

C. This OS (Enc. 1)
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[27] In Enc. 1, the Plaintiff had initially cited the 1st Defendant only.

[28] Pending the disposal of Enc. 1, the Plaintiff had filed an ex parte application in court enclosure no. 3 (Enc. 3)
on a certificate of urgency for ex parte interim injunctions against the 1st Defendant.

[29] On 27.4.2022, I have allowed Enc. 3 and granted the following ex parte injunctions against the 1st Defendant
(Ex Parte Injunctions), among others:
(1) pending disposal of the OS, an ex parte Mareva injunction to restrain all dealings regarding the 1st
Defendant’s assets, including the Land, up to a value of the Plaintiff’s Claim Sum (Ex Parte Mareva
Injunction); and
(2) an ex parte mandatory injunction to compel the 1st Defendant to disclose in affidavit to the Plaintiff all the
assets of the 1st Defendant (Ex Parte Disclosure Order).

[30] In court enclosure no. 12, the 1st Defendant had applied to court to set aside the Ex Parte Injunctions (Enc.
12).

[31] In compliance with the Ex Parte Disclosure Order, on behalf of the 1st Defendant, Ms. Yeo affirmed an affidavit
on 17.5.2022 which disclosed all the assets of the 1st Defendant (1st Defendant’s Disclosure Affidavit).

[32] By way of court enclosure no. 14, the Plaintiff had applied for leave of court to amend Enc. 1 so as to join the
2nd Defendant in this case (Enc. 14). On 11.5.2022, I have allowed Enc. 14. Hence, the amended OS in court
enclosure no. 17 (Enc. 17) had been filed and served by the Plaintiff on the Defendants.

[33] On 10.6.2022, by consent of the Plaintiff and 2nd Defendant, the Plaintiff applied for leave of court to
discontinue Enc. 17 against the 2nd Defendant. I then struck out Enc. 17 against the 2nd Defendant without any
liberty to file afresh and without an order of costs.

[34] In Enc. 17, the Plaintiff had applied for the following relief, among others, against the 1st Defendant:
(1) pending disposal of the Arbitration, an interim injunction to restrain the 1st Defendant from using,
transferring, charging, removing or dealing with the 1st Defendant’s assets (including the Land) up to the
value of the Plaintiff’s Claim Sum; and
(2) the Mareva injunction as stated in the above sub-paragraph (1) shall apply to all assets which are -
(a) beneficially owned by the 1st Defendant; and
(b) owned jointly by the 1st Defendant together with any other party.

D. Issues

[35] In addition to the three novel questions stated in the above paragraph 3, the following issues will be
determined in this case -
(1) with regard to Enc. 17, whether the court should exercise its discretion to grant an Interim Mareva
Injunction under s 11(1)(c) AA to restrain dealings with respect to the 1st Defendant’s assets up to the value
of the Plaintiff’s Claim Sum pending the outcome of the Arbitration. In this regard -
(a) does the Plaintiff have a “good arguable case” against the 1st Defendant with regard to the Plaintiff’s
Claim Sum? This question discusses the following matters -
(i) should the court exercise its discretion to lift the corporate veil of the 1st Defendant to reveal that
Ms. Yeo is the 1st Defendant’s alter ego, controller, directing mind and will?;
(ii) can the 1st Defendant rely on the Defence (Illegality)?;
(iii) is the Plaintiff bound by Sub-Paragraph 8.2.2 (Mr. Loo’s Affidavit)? This entails a discussion of the
following issues -

(iii)(a) did Sub-Paragraph 8.2.2 (Mr. Loo’s Affidavit) constitute an admission of fact by the Plaintiff
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that the Plaintiff’s Claim (Certified Sum) was barred by limitation under ss 6(1)(a) and 30(1) of the
Limitation Act 1953 [LA (1953)]?; and

(iii)(b) in view of Sub-Paragraph 8.2.2 (Mr. Loo’s Affidavit), whether the Plaintiff is barred by issue
estoppel principle (the second limb of res judicata doctrine) and/or equitable estoppel doctrine from
asserting that the Plaintiff’s Claim (Certified Sum) is not time-barred; and
(iv) if Sub-Paragraph 8.2.2 (Mr. Loo’s Affidavit) does not bind the Plaintiff, whether the Plaintiff’s Claim
(Certified Sum) and Plaintiff’s claim for Plaintiff’s Loss (1st Defendant’s Delay) [Plaintiff’s Claim
(1st Defendant’s Delay)] are time-barred or not. This depends on when was the accrual of the
causes of action for the Plaintiff’s Claim (Certified Sum) and Plaintiff’s Claim (1st Defendant’s
Delay)? In this regard, is there a distinction between the date when a contracting party is obliged to
pay a sum due under the contract [Due Date (Payment)] and the date of accrual of the cause of
action for that breach of contract (to pay the due sum)?; and
(b) is there a real risk that the 1st Defendant would dissipate its assets?; and
(2) in respect of Enc. 12 -
(a) did the Plaintiff disclose all material facts to the court when the Plaintiff applied for the Ex Parte
Injunctions?; and
(b) whether the Plaintiff had misled the court and/or misrepresent any material fact to the court regarding
Enc. 3.

E. Judicial approach

[36] Section 11(1) AA states as follows:

“s 11 AA Arbitration agreement and interim measures by High Court

(1) A party may, before or during arbitral proceedings, apply to a High Court for any interim measure and the
High Court may make the following orders for the party to -
(a) maintain or restore the status quo pending the determination of the dispute

(b) take action that would prevent or refrain from taking action that is likely to cause current or imminent
harm or prejudice to the arbitral process

(c) provide a means of preserving assets out of which a subsequent award may be satisfied, whether by
way of arrest of property or bail or other security pursuant to the admiralty jurisdiction of the High Court;
(d) preserve evidence that may be relevant and material to the resolution of the dispute; or

(e) provide security for the costs of the dispute.”

(emphasis added).

[37] In deciding Enc. 17, I will adopt the approach as laid down in KNM Process Systems Sdn Bhd v Cypark Sdn
Bhd [2020] 10 MLJ 321, at [31(5)], as follows:

“[31] Regarding the Present s 11(1) AA, I am of the following view:

(5) the court cannot decide on the merits of the dispute between the parties under the Present s 11(1) AA because
the parties have agreed in their “arbitration agreement” [as understood in ss 2(1) and 9(1) to (5) AA] that all legal
and factual issues which arise from their dispute shall only be decided by the “arbitral tribunal” [as defined in s
2(1) AA]. This is fortified by s 11(2) AA which provides that where a party applies to court for any interim measure
after an arbitral tribunal has made a finding of fact, the court “shall” treat the factual finding as “conclusive’ for the
purposes of the application under the Present s 11(1) AA.
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Although the court cannot decide on the merits of a dispute under the Present s 11(1) AA, in deciding an
application under the Present s 11(1) AA, the court has to assess the evidence and decide the following two
matters [Court’s Decision (Interim Measure)] -
(a) whether an applicant for interim measure has met the requirements for seeking the interim measure as
laid down in s 11(1)(a) to (e) AA and

(b) whether the court should exercise its discretion to grant the interim measure sought for.

The reasons and reasoning of the Court’s Decision (Interim Measure) do not bind the arbitral tribunal in any
manner. Nor are parties bound or estopped in the arbitral proceedings by the reasons and reasoning of the Court’s
Decision (Interim Measure) …”

(emphasis added).

The above decision in KNM Process Systems has been affirmed on appeal to CA.
F. Should court lift 1st Defendant’s corporate veil?

[38] In the Federal Court case of Ong Leong Chiou & Anor v Keller (M) Sdn Bhd & Ors [2021] 3 MLJ 622, at
[98] and [99], Nallini Pathmanathan FCJ has explained the “Concealment Principle” and “Evasion Principle” as
follows:

“[98] The concept of lifting and piercing were and continue to be utilised interchangeably in this jurisdiction.
However, in this appeal, I have considered in greater detail the differences in the principles underlying the
principle of ‘piercing’ the corporate veil as enunciated by Lord Sumption. I am of the considered view that it would
be appropriate to adopt the analysis put forward by Lord Sumption in Prest, but as agreed by the majority of the
Bench in Prest, the analysis ought not to be applied too rigidly. It would be premature to bar or foreclose the
categories of cases in which the corporate personality may be either disregarded or the veil ‘pierced’.

[99] The following conclusions may be drawn in relation to the disregarding of the corporate veil:

(i) There subsists a long line of authority over the years in Malaysia which recognises that fraud, whether
common law fraud or fraud in equity permits the court disregarding of the corporate personality. This body of
law as adopted from the United Kingdom takes its line of reasoning from the ‘fraud unravels all’ principle as
expounded by Denning LJ in Lazarus v. Beasley (above). That body of law remains correct and relevant and ought not
to be lightly tampered with. It is reflective of the position in law recognised in Salomon v. Salomon (above). It is
moreover, with respect, entirely legally coherent because the theoretical concept of the separate corporate personality
was founded to enable business to be conducted. It is the essence of incorporation that the shareholder/controller of
the company limits his liability in respect of the future conduct of the company’s affairs. There is nothing wrong with
that. Advantage is taken of limited liability to avoid personal liability if things go wrong. (see Persad v. Singh per Lord
Neuberger [2017] UKPC 32).

However, the limitation of liability envisages that such future conduct of the company’s business is to be
conducted honestly and with integrity - the law is predicated on that assumption. Once honesty is abandoned
and the company is utilised as a vehicle for dishonest conduct, or fraud, or unconscionable conduct, then the
basis for the separate corporate personality is jeopardised and undermined. It no longer serves the purpose it
was intended for. As such it is only correct that a court investigating the injury or loss suffered by reason of
the wrongful utilisation of the corporate personality, or the abuse of the corporate personality, is allowed to
both look behind the façade to ascertain the true facts and also impose liability against the persons
perpetrating such wrongdoing as is required on the facts of a particular case. This body of law relating to
fraud subsists outside of the doctrine of ‘piercing’ the corporate veil as explained in Prest

(ii) I would respectfully concur with the legal rationale prescribed by Lord Sumption in Prest, which explains
that in order to ascertain whether the veil of incorporation ought to be ‘pierced’, the nature of the wrongdoing
in issue ought to be analysed to ascertain whether it falls within the purview of the ‘concealment’ principle or
the ‘evasion’ principle. To this end, the distinction between the two principles of concealment and evasion are
of importance and benefit to enable a court to analyse with greater accuracy the basis on which the corporate
personality is being disregarded. It also results in different consequences as explained earlier
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Concealment Principle

(iii) The analysis in Prest, namely that the concealment principle does not in reality pierce the veil of
incorporation, but allows the court to disregard or look behind the corporate personality to ascertain the true
facts, ought to be considered for use and application in this jurisdiction. The reason is because after
ascertaining the true facts concealed behind the corporate personality, it will enable a court to determine
which legal principle of substantive law it will then utilise to determine whether liability subsists, or does not
subsist, against a party to the dispute, on a given set of facts. This may involve the utilisation of the principles of
agency or trusts or some other area of the law. Such application allows for a greater analysis of the basis on which
liability is imposed, rather than simply stating that the corporate veil has been lifted and imposing liability on a party
without explaining the legal basis for doing so. It is also important to note that it does not engage the evasion
principle such that the corporate veil is not pierced

Evasion Principle

(iv) If the wrongdoing warrants the application of the evasion principle, the consequence is that the corporate
veil is pierced, so as to enable liability to be imposed on a person, seemingly unconnected to the transaction
in dispute. First, it is necessary to ascertain if there is a legal right against the person in control of a company which
exists independently of the company’s involvement, and a company is interposed such that the legal personality of the
company defeats the legal right or frustrates its enforcement. This is a considerable obstacle to overcome, and it is
only rarely that an appropriate set of facts will allow for such ‘piercing’. Ultimately, the narrow and rigid test ensures
that the corporate personality is not lightly disregarded.

Even when the facts of a particular case warrant invoking the evasion principle enabling the corporate veil to be
pierced, the court may only apply the doctrine to deprive the company or its controller of the advantage that they would
otherwise have obtained by the company’s separate legal personality.

If there subsists a legal relationship between the company and its controller, it might not be necessary to pierce the
corporate veil, in which event it ought not to be pierced;

Conclusions

(v) In many instances, the facts will not allow for a clean and clear application of either one of these principles. Both
principles might come into play. It has also been demonstrated that the application of these different principles might
well give rise to the same result. This is a practical reality that should be borne in mind when analysing the particular
factual matrix. It has also been reported that there has been a degree of misunderstanding in the application of these
two principles.

It is in this context that the comments of the rest of the Bench in Prest are most relevant. Baroness Hale, quite
correctly, questioned whether all cases would fall neatly into cases of either concealment or evasion. (see para 92).
Her comment that where the doctrine is sought to be utilised 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. I would respectfully concur with these statements;

(vi) Having reviewed some of the relevant case-law in this jurisdiction, I conclude, with respect, that there has been no
confusion in the application of the principles. Firstly all relevant principles in keeping with the law throughout the
Commonwealth have been adhered to.

This is marked by the move from the general and somewhat amorphous test of ‘in the interests of justice’ in earlier
case law to the clear boundaries drawn in Law Kam Loy v. Boltex (above) where disregarding the corporate veil
was stated to be applicable when there was evidence of actual fraud at common law or unconscionable or
inequitable conduct amounting to fraud in equity. This position in law was then expanded in Gurbachan Singh (‘above’)
where the test and rationale expressed in Prest were considered. In the present appeal, I have sought to clarify the position
in law further as above.

(emphasis added).
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[39] Firstly, in Enc. 17, the Plaintiff has not applied to pierce the 1st Defendant’s corporate veil so as to impose any
personal liability on any individual. In other words, the Plaintiff does not seek to invoke the Evasion Principle in this
case.

[40] Secondly, I accept the submission by the Plaintiff’s learned counsel, Mr. Nicholas Hor Sien Pin, that in
accordance with the Concealment Principle as laid down in Ong Leong Chiou. the court should exercise its
discretion to lift the corporate veil of the 1st Defendant so as to reveal Ms. Yeo as the 1st Defendant’s alter ego,
controller, directing mind and will. This decision is premised on the following evidence and reasons:
(1) Ms. Yeo is not only one of the directors of the 1st Defendant but she also owns 99% of the total shares in
the 1st Defendant;
(2) Ms. Yeo signed the following documents for the 1st Defendant -
(a) SPA;
(b) Form 14A;
(c) LA; and
(d) all the affidavits filed on behalf of the 1st Defendant in this OS, including the 1st Defendant’s Disclosure
Affidavit;
(3) according to the SOA (1st Defendant), the 1st Defendant owed money to only two creditors, namely, the
Plaintiff and Ms. Yeo. The SOA (1st Defendant) stated that the 1st Defendant owed RM8,000,000.00 to Ms.
Yeo!; and
(4) the 1st Defendant’s First Admissions (Indebtedness to Plaintiff) were made by way of WhatsApp Messages
(Ms. Yeo-Mr. Woon). Suffice it to reproduce below the following WhatsApp Messages (Ms. Yeo-Mr. Woon)
(as exhibited in the first affidavit filed by the Plaintiff in support of Enc. 1) which evidenced the 1st
Defendant’s First Admissions (Indebtedness to Plaintiff) -
(a) WhatsApp message sent by Ms. Yeo to Mr. Woon at 7.34 am, 23.3.2016 -

“I wl execute payment one way or the other … thanks for patience”

(emphasis added); and

(b) an exchange of Whatsapp messages between Ms. Yeo and Mr. Woon from 24.6.2017 to 1.8.2017 -

“24/6/2017, 19:32 - Ken-Woon: Ms. Yeo, any update on the payment?

28/06/2017, 08:44 - Ken-Woon: Ms. Yeo, any update????

06/07/2017, 08:50 - Ken-Woon: No update on payment??

06/07/2017, 08:50 - Ken-Woon: We need your payment no matter how you firm up your team.

06/07/2017, 10:00 - Yeo Eng Lam: Ok. Wl try this end july. Ok. Thanks

26/07/2017, 11:03 - Ken-Woon: Ms. yeo, comes to end of July, can we collect payment from your
office this week?

01/08/2017, 19:01 - Yeo Eng Lam: Mr Ken .. this Thursday I tell u.”

(emphasis added).
WhatsApp messages constitute contemporaneous and reliable documentary evidence - please refer to
Syarikat Faiza Sdn Bhd & Anor v Faiz Rice Sdn Bhd & Anor and another case [2019] 7 MLJ 175, at [23(1)]
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and [23(2)]. If Ms. Yeo was not the 1st Defendant’s alter ego, controller, directing mind and will, she would
not have exchanged WhatsApp Messages (Ms. Yeo-Mr. Woon) regarding the 1st Defendant’s First
Admissions (Indebtedness to Plaintiff) for a period of more than 1 year and four months (from 23.3.2016 to
1.8.2017).

G. Can 1st Defendant rely on Defence (Illegality)?

[41] Section 24 CA (1950) provides as follows:

“24 What considerations and objects are lawful, and what not

The consideration or object of an agreement is lawful, unless -

(a) it is forbidden by a law

(b) it is of such a nature that, if permitted, it would defeat any law

(c) it is fraudulent
(d) it involves or implies injury to the person or property of another or

(e) the court regards it as immoral, or opposed to public policy.

In each of the above cases, the consideration or object of an agreement is said to be unlawful. Every agreement of
which the object or consideration is unlawful is void.”

(emphasis added).

[42] I am of the view that the 1st Defendant cannot rely on Defence (Illegality). My reasons are as follows:
(1) it is decided in EONTAT Sdn Bhd v Budget Kitchen Sdn Bhd [2021] 3 MLRH 304, at [26] and [27], as
follows -

“[26] If “planning permission” has not been obtained for any “development” on a piece of land and
the development has been carried out, the following four consequences (4 Consequences) may arise:
(1) a breach of s 19(1) TCPA amounts to an offence which is punishable under s 26(1)(b) TCPA - please
refer to Everest Aisvaram Sdn Bhd v Majlis Bandaraya Shah Alam [2020] 9 MLJ 545, at [47];

(2) the local authority may issue a notice pursuant to s 27(1) and (8) TCPA to the following persons -

(a) land owner

(b) occupier of the land; and/or

(c) the person who, in the opinion of the local planning authority, is carrying out the development on
the land

- to reinstate the land “as far as possible to the condition it was in before the
development was commenced” [Local Authority’s Section 27(8) Notice] - Everest
Aisvaram, at [48];
(3) failure to comply with a Local Authority’s Section 27(8) Notice is tantamount to an offence which is
punishable under s 27(9) TCPA - Everest Aisvaram, at [49]; and

(4) by virtue of s 31(1) TCPA, the local authority may enter the land and demolish the building in question.

[27] I am of the view that the Plaintiff’s failure to obtain planning permission for the construction of
Warehouse B does not invalidate the Contract because -

(1) there is nothing in TCPA which prohibits the making of a contract to erect any building on a piece of
land. I cite the following judgment of Mahadev Shankar JCA in the Court of Appeal case of YK Fung
Securities Sdn Bhd v James Capel (Far East) Ltd [1997] 2 MLJ 621, at 667 -
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“Whether the contracts were illegal or otherwise is a matter for this court to decide. The trial
judge found as a fact that these contracts were valid because prior to the KLSE circular,
there was nothing in the KLSE rules prohibiting such contracts.

We agree. We would go further and state that what the law does not specifically prohibit, it
permits.”

(emphasis added);

(2) the Plaintiff’s failure to obtain planning permission for the construction of Warehouse B only attracts
the 4 Consequences which do not invalidate the Contract; and

(3) as explained in the above sub-paragraphs (1) and (2), the Contract in this case does not fall within any
one of the paragraphs (a) to (e) of s 24 [CA (1950)] because -

(a) the Contract is not forbidden by TCPA

(b) the Contract is not of such a nature that, if permitted, the Contract would defeat TCPA

(c) the Contract is not fraudulent

(d) the Contract does not involve or imply injury to any person or property; or

(e) the court does not regard the Contract as immoral or opposed to public policy.”

(emphasis added);

(2) there is no provision in SDBA which invalidates any construction contract if there is no Building Approval
for the construction work in question;
(3) the failure of a contracting party to obtain Building Approval pursuant to SDBA for the construction work,
does not ipso facto mean that the contract falls within any one of the paragraphs (a) to (e) of s 24 CA
(1950) and
(4) the Relevant Approvals were obtained. Hence, the Defence (Illegality) is no longer available to the 1st
Defendant.

H. Whether Plaintiff’s Claim Sum is time-barred

[43] The relevant parts of ss 6(1)(a), 30(1) and (3) LA (1953) are reproduced below:

“Limitation of actions of contract and tort and certain other actions

6(1) Save as hereinafter provided the following actions shall not be brought after the expiration of six years from
the date on which the cause of action accrued, that is to say -

(a) actions founded on a contract or on tort; …

Application of [LA (1953)] and other limitation enactments to arbitrations.

30(1) This Act and any other written law relating to the limitation of actions shall apply to arbitrations as they apply
to actions.

...

(3) For the purpose of [LA (1953)] and of any such written law as aforesaid, an arbitration shall be deemed to be
commenced when one party to the arbitration serves on the other party a notice requiring him or them to
appoint an arbitrator or to agree to the appointment of an arbitrator, or, where the submission provides that the
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reference shall be to a person named or designated in the submission, requiring him or them to submit the dispute to
the person so named or designated.”

(emphasis added).

[44] It is not disputed that by virtue of s 6(1)(a) read with s 30(1) LA (1953), the Plaintiff has a six-year limitation
period to recover the Plaintiff’s Claim Sum from the 1st Defendant by way of arbitral proceedings.

[45] Mr. See has submitted that Sub-Paragraph 8.2.2 (Mr. Loo’s Affidavit) binds the Plaintiff in this case.
H(1). No factual admission that Plaintiff’s Claim (1st Defendant’s Delay) was barred by limitation

[46] Sub-Paragraph 8.2.2 (Mr. Loo’s Affidavit) concerned solely the Plaintiff’s Claim (Certified Sum) and not the
Plaintiff’s Claim (1st Defendant’s Delay). This was because the Adjudication Proceedings were confined to the
Plaintiff’s Claim (Certified Sum). Similarly, HC’s Decision (Adjudication Decision), HC’s Winding-Up Order and 1st
Defendant’s Appeals (CA) were based solely on the Plaintiff’s Claim (Certified Sum) [not regarding the Plaintiff’s
Claim (1st Defendant’s Delay)]. It is thus clear that Sub-Paragraph 8.2.2 (Mr. Loo’s Affidavit) does not bind the
Plaintiff in respect of the Plaintiff’s Claim (1st Defendant’s Delay). In other words, the Plaintiff has not admitted that
limitation period for the Plaintiff’s Claim (1st Defendant’s Delay) has already set in.
H(2). Did Sub-Paragraph 8.2.2 (Mr. Loo’s Affidavit) constitute a factual admission that Plaintiff’s Claim
(Certified Sum) was time-barred?

[47] I am of the view that there was no factual admission by the Plaintiff in Sub-Paragraph 8.2.2 (Mr. Loo’s
Affidavit) that the Plaintiff’s Claim (Certified Sum) was time-barred under ss 6(1)(a) and 30(1) LA (1953). Sub-
Paragraph 8.2.2 (Mr. Loo’s Affidavit) only contained a legal submission made on behalf of the Plaintiff regarding Mr.
Loo’s belief based on the advice of the Plaintiff’s then solicitors (not the present solicitors for the Plaintiff in this OS)
that the Plaintiff’s Claim (Certified Sum) was time-barred. This decision is based on the fact that the contents of
Sub-Paragraph 8.2.2 (Mr. Loo’s Affidavit) were preceded by the words “Setelah dinasihati oleh peguamcara
[Plaintif], saya sesungguhnya percaya bahawa perbuatan [Defendan Pertama] untuk tidak membangkitkan isu
undang-undang Ireka Engineering [the same Federal Court judgment as delivered in Jack-In Pile (M)] mempunyai
kesan-kesan seperti berikut: …”.

If I have accepted the above contention by Mr. See, all paragraphs in an affidavit filed by a party (X) in legal
proceedings based on the advice of X’s solicitors (which in effect would constitute X’s legal submission), would
constitute factual admissions which bind X hand and foot in those proceedings. This is not only unjust to X but may
also lull the court into not deciding factual issues which arise in a case on the fallacious ground that X has made
factual admissions in X’s affidavit regarding such factual questions.

[48] All the cases cited by Mr. See can be easily distinguished from this OS on the ground that those cases
concerned factual admissions and not legal submissions made in affidavits based on the advice of solicitors.
H(3). Whether Plaintiff is estopped by Sub-Paragraph 8.2.2 (Mr. Loo’s Affidavit)

[49] The two limbs of res judicata doctrine, namely the cause of action estoppel principle and issue estoppel
principle (2 Limbs) have been explained by Peh Swee Chin FCJ in the Supreme Court case of Asia Commercial
Finance (M) Bhd v Kawal Teliti Sdn Bhd [1995] 3 MLJ 189, at 197-198, 198 and 199-200, as follows:
(1) once a court has finally decided a case (1st Case), the principle of cause of action estoppel bars a person
(Y) and/or Y’s “privy” from filing any action after the 1st Case (Subsequent Case) based on a cause of
action which has been decided in the 1st Case (1st Limb); and
(2) issue estoppel principle prevents Y and/or Y’s privy from raising any issue in the Subsequent Case which -
(a) has been raised in the 1st Case; or
(b) can be raised with reasonable diligence in the 1st Case

(2nd Limb).

[50] Firstly, the 1st Limb does not apply regarding Sub-Paragraph 8.2.2 (Mr. Loo’s Affidavit).
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[51] In view of Sub-Paragraph 8.2.2 (Mr. Loo’s Affidavit), the question that arises is whether the Plaintiff is barred
by the 2nd Limb from asserting that the Plaintiff’s Claim (Certified Sum) is not barred by limitation.

[52] The 2 Limbs are not mandatory statutory provisions intended by Parliament to be applicable in all
circumstances. Res judicata doctrine is an equitable concept based on case law and should not be applied
indiscriminately so as to cause an injustice or inequity - please see the judgment of Gopal Sri Ram JCA (as he then
was) in the Court of Appeal case of Chee Pok Choy & Ors v Scotch Leasing Sdn Bhd [2001] 4 MLJ 346, at 356,
357 and 358. If I have applied the 2nd Limb in this OS and decide that the Plaintiff’s Claim (Certified Sum) is time-
barred, this will occasion a grave injustice to the Plaintiff because -
(1) the Certified Sum (Project Architect) had been certified by the Project Architect, an independent
professional architect who has no interest in the outcome of this OS and Arbitration;
(2) the Plaintiff had performed the Works and this was not disputed by the 1st Defendant. In fact, the 1st
Defendant’s First Admissions (Indebtedness to Plaintiff) and 1st Defendant’s Second Admission
(Indebtedness to Plaintiff) [collectively referred to in this judgment as the “1st Defendant’s Two
Admissions (Indebtedness to Plaintiff)”] had been made; and
(3) until the date of this judgment, the Plaintiff has been deprived of payment for the Works. In other words, the
1st Defendant has deprived and is still depriving the Plaintiff of cash flow regarding the Works performed by
the Plaintiff.

[53] For the same reasons as explained in the above paragraph 52, it is neither just nor equitable for the court to
apply the doctrine of equitable estoppel in this case so as to estop the Plaintiff from asserting that the Plaintiff’s
Claim (Certified Sum) is not time-barred.
H(4). When did cause of action for Plaintiff’s Claim Sum accrue?

[54] Mr. See has made the following submission:

(1) the Plaintiff’s Claim (Certified Sum) was time-barred as follows -
(a) the Interim Certificate (Project Architect) was issued on 2.2.2015. According to paragraph (b) in Part D
LA [Sub-Paragraph D(b) LA], the 1st Defendant was obliged to pay the Certified Sum (Project
Architect) to the Plaintiff on 4.3.2015, ie., within 30 days from the issuance of the Interim Certificate
(Project Architect); and
(b) the six-year limitation period for the Plaintiff’s Claim (Certified Sum) had expired on 4.3.2021 [six years
from 4.3.2015, the date for the 1st Defendant to pay the Certified Sum (Project Architect) to the Plaintiff
according to Sub-Paragraph D(b) LA]. The Arbitration was only commenced by the Plaintiff on
15.3.2022 [when the Plaintiff’s Letter (15.3.2022) was sent to the 1st Defendant] after the limitation
period for the Plaintiff’s Claim (Certified Sum) had lapsed; and
(2) the Plaintiff’s Claim (1st Defendant’s Delay) arose on 8.8.2014 when the Project Engineer issued the Works
Suspension Instruction. However, the six-year limitation period for the Plaintiff’s Claim (1st Defendant’s
Delay) commenced on 4.3.2015 [when the 1st Defendant failed to pay the Certified Sum (Project Architect)
to the Plaintiff]. As such, the Plaintiff’s Claim (1st Defendant’s Delay) was time-barred because the Plaintiff
only instituted the Arbitration on 15.3.2022 (after the expiry of the six-year limitation period on 4.3.2021).

[55] I am not able to accept the above contentions by Mr. See. My reasons are as follows:
(1) a cause of action for breach of contract accrues on the date of the breach of the contract [Date (Breach of
Contract)] and not on the Due Date (Payment). I rely on the following judgment of Gill FJ (as he then was)
in the Federal Court case of Nasri v Mesah [1971] 1 MLJ 32, at 34:

“Now, what makes possible an action founded on a contract is its breach. In other words, a cause of
action founded on a contract accrues on the date of its breach. Similarly, the right to sue on a
contract accrues on its breach. In the case of actions founded on contract, therefore, time runs from
breach (per Field J. in Gibbs v Guild 8 QBD 296, 302).”

(emphasis added);
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(2) as explained in Nasri, the six-year limitation period for a claim for breach of a contract under s 6(1)(a) LA
(1953) commences on the Date (Breach of Contract) and not on the Due Date (Payment);
(3) on the Due Date (Payment), a contracting party (S) who is entitled to payment under the contract from the
other contracting party (T), has the following two options (S’s 2 Options) -
(a) S may issue a demand for T to pay and if T fails to comply with S’s demand, T would have breached
the contract and S’s cause of action for breach of contract would then accrue on the date of T’s breach
of the contract (1st Option). If S exercises the 1st Option, S’s cause of action for T’s breach of contract
accrues on the date of T’s breach of contract and not on the Due Date (Payment); or
(b) S may extend time for T to pay (2nd Option). If the 2nd Option is exercised by S, S cannot sue T for
breach of contract until T has failed to pay T within the extended time period granted by S; and
(4) if I have accepted the above contentions by Mr. See, this will render redundant S’s 2 Options. Worse still,
this will have an undesirable effect - S will be “compelled” to commence litigation or arbitration within six
years from the Due Date (Payment)! Such an outcome is not in the public interest as commercial
practicality supports the availability of S’s 2 Options.

[56] Premised on the reasons stated in the above paragraph 55, the Plaintiff’s Claim Sum is not time-barred under
ss 6(1)(a) and 30(1) LA (1953) because due to the WhatsApp Messages (Ms. Yeo-Mr. Woon), the Plaintiff had
exercised the 2nd Option. As a result of the Plaintiff’s magnanimity, on many occasions the Plaintiff had extended
time for the 1st Defendant to pay the Plaintiff’s Claim Sum up to 26.7.2017 (please refer to Mr. Woon’s WhatsApp
message to Ms. Yeo on 26.7.2017). Accordingly, the six-year limitation period could not have commenced in 2015
as contended by Mr. See.
I. When can court grant Interim Mareva Injunction under s 11(1)(c) AA

[57] Section 11(1)(c) AA confers a discretionary power on the court to order an Interim Mareva Injunction which
can preserve assets out of which a subsequent arbitral award may be satisfied. As to how this discretionary power
should be exercised, it is decided in Bumi Armada Navigation Sdn Bhd v Mirza Marine Sdn Bhd [2015] 5 CLJ 652,
at [58], as follows:

“[58] In deciding whether to grant a Mareva injunction under s 11(1)(f), (g) and (h) AA [before the enforcement of
Arbitration (Amendment) (No. 2) Act 2018, Act A1569] before or after during arbitral proceedings, I adopt the same
following tests as applied by cases in respect of Mareva injunctions pending disposal of suits:
(a) the plaintiff should have a “good arguable case”

(b) the defendant has assets within This Jurisdiction

(c) there is a risk of dissipation of the defendant’s assets and

(d) the balance of convenience should be in favour of granting the Mareva injunction.”

(emphasis added).

J. Does Plaintiff have a “good arguable case” against 1st Defendant?

[58] Without any hesitation, I decide that the Plaintiff has a “good arguable case” against the 1st Defendant for
breach of the Agreement by the 1st Defendant when the 1st Defendant failed to pay the Plaintiff’s Claim Sum to the
Plaintiff. This decision is clear from the following evidence and reasons:
(1) the Certified Sum (Project Architect) had been certified by the Project Architect, an independent
professional architect;
(2) the 1st Defendant did not reply, let alone deny, the Plaintiff’s Self-Termination Letter (8.12.2017). In this
regard, the following judgment of Azahar Mohamed FCJ (as he then was) in the Federal Court case of
Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 MLJ 441, at [62], is relevant -

“[62] … It is the ordinary nature of businessman to immediately refute any proposition injurious to
him contained in letters and not to let it stands (see Wong Hon Leong David v Noorazman bin Adnan
[1995] 3 MLJ 283; [1995] 4 CLJ 155).”
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(emphasis added);
(3) the 1st Defendant’s Two Admissions (Indebtedness to Plaintiff) had been made;
(4) as explained in the above Part G, the 1st Defendant cannot rely on Defence (Illegality); and
(5) the Plaintiff’s Claim Sum is not time-barred - please refer to the above Parts H(1) to H(4).

K. Whether 1st Defendant has assets in Malaysia

[59] I am of the view that the 1st Defendant is the sole beneficial owner of the Land. This is due to the following
evidence and reasons:
(1) the 1st Defendant had paid in full the Price (Land) to the 2nd Defendant, the registered owner of the Land;
(2) Form 14A (for the transfer of legal title to the Land) had been executed by the 2nd Defendant and 1st
Defendant as the vendor and purchaser of the Land respectively;
(3) the 1st Defendant’s Disclosure Affidavit has admitted that the Land belongs to the 1st Defendant; and
(4) upon the Plaintiff’s application, the 2nd Defendant had been made a co-defendant in this OS. The 2nd
Defendant had been served by the Plaintiff with all the cause papers of this OS and the 2nd Defendant did
not dispute the Plaintiff’s application for an Interim Mareva Injunction to freeze all dealings regarding the
Land pending the disposal of the Arbitration.

L. Is there a real risk that 1st Defendant would dissipate its assets?

[60] I accept the submission by Mr. Hor that the following evidence and reasons show the existence of a real risk
that the 1st Defendant would dissipate its assets so as to defeat a possible award in the Arbitration in the Plaintiff’s
favour:
(1) as explained in the above Part F, Ms. Yeo is the 1st Defendant’s alter ego, controller, directing mind and
will. The WhatsApp Messages (Ms. Yeo-Mr. Woon) proved a lack of probity on the part of Ms. Yeo (which
is imputed to the 1st Defendant as a result of the court’s lifting of the 1st Defendant’s corporate veil). This is
because in the WhatsApp Messages (Ms. Yeo-Mr. Woon), Ms. Yeo had dishonestly made many empty
promises to pay the Plaintiff’s Claim Sum to the Plaintiff.

Instead of being forthright with Mr. Woon (who represented the Plaintiff) that the 1st Defendant could
not pay the Plaintiff’s Claim Sum, Ms. Yeo had deliberately prevaricated for a period of more than 1
year and four months (from 23.3.2016 to 1.8.2017). If such a conduct is not mendacious, I do not know
what is;
(2) in Infinity Vantage’s Suit (Ms. Yeo), Ms. Yeo is represented by solicitors (not Mr. See). With the benefit of
legal counsel, Ms. Yeo pleaded in her defence in Infinity Vantage’s Suit (Ms. Yeo) that the JVA was an
unlicensed moneylending transaction between Infinity Vantage and Ms. Yeo which had contravened MA.
Such a pleading discloses Ms. Yeo’s perfidy in entering into sham transactions, such as the JVA in Infinity
Vantage’s Suit (Ms. Yeo);
(3) the SOA (1st Defendant) submitted to the OR falsely stated that the 1st Defendant did not own the Land.
The following two offences under s 536(1)(a), (d) and (3) of the Companies Act 2016 [CA (2016)] have
been committed with regard to the SOA (1st Defendant). I reproduce below the relevant parts of s
536(1)(a), (d) and (3) CA (2016) -

“s 536 Offences by officers of companies in liquidation

(1) Every person who, is or was an officer or a contributory of a company which is being wound up,
commits an offence if he -

(a) does not disclose to the liquidator all the property of the company, and how and to whom
and for what consideration and when the company disposed of any part of the property of the
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company, except such part as has been disposed of in the ordinary way of the business of the
company;

(d) makes any material omission in any statement relating to the affairs of the company

(3) A person who commits an offence under this section shall, on conviction, be liable to
imprisonment for a term not exceeding five years or to a fine not exceeding three million ringgit or to
both.”

(emphasis added); and

(4) despite the fact that the 1st Defendant had made full payment of the Price (Land) to the 2nd Defendant and
the Works on the Land had already commenced, the 1st Defendant’s “Reports and Financial Statements for
the Year Ended 31 December 2018)” [1st Defendant’s Audited Accounts (FYE 31.12.2018)] concealed
the 1st Defendant’s beneficial ownership of the Land.

[61] In deciding that there exists a real risk that the 1st Defendant (through Ms. Yeo) would dissipate its assets,
including the Land, I do not consider Mr. Hor’s contention that the 1st Defendant’s Audited Accounts (FYE
31.12.2018) have failed to disclose the fact that the Retention Sum is still being held by the 1st Defendant. This is
because, as correctly submitted by Mr. See, the above averment had not been made in any of the affidavits filed by
the Plaintiff in this OS. Hence, the 1st Defendant is deprived of its right to respond to such an allegation - please
refer to Dewani Design Sdn Bhd v Zhongji Construction Sdn Bhd [2022] MLRHU 2610, at [28].
M. Where does balance of convenience lie?

[62] Where the balance of convenience lies depends on which proposed interim court order (grant or refusal of
Interim Mareva Injunction) carries a lower risk of injustice to the parties - please refer to the Supreme Court’s
judgment delivered by Mohd. Jemuri Serjan CJ (Borneo) in Alor Janggus Soon Seng Trading Sdn Bhd & Ors v Sey
Hoe Sdn Bhd & Ors [1995] 1 MLJ 241, at 270-271.

[63] It is clear to me that the balance of convenience lies heavily in favour of the grant of an Interim Mareva
Injunction in this case. This is because -
(1) the grant of an Interim Mareva Injunction will carry a lower risk of injustice to the 1st Defendant as
compared to
(2) a higher risk of injustice to the Plaintiff if the court refuses to order an Interim Mareva Injunction.

The above decision is supported by the following reasons -

(a) if an Interim Mareva Injunction is not granted in favour of the Plaintiff against the 1st Defendant, there is a
high risk of injustice to the Plaintiff as follows -
(i) in view of the 1st Defendant’s dishonesty as explained in the above paragraph 60, there is a real risk
that the 1st Defendant’s assets, including the Land, may be dissipated by the 1st Defendant before the
disposal of the Arbitration; and
(ii) if the 1st Defendant is not restrained from dealing with the Land until the outcome of the Arbitration,
even if the Plaintiff is successful in the Arbitration against the 1st Defendant (Arbitral Award In
Plaintiff’s Favour), there will be irreparable harm to the Plaintiff because the Arbitral Award In
Plaintiff’s Favour is merely a paper arbitral award which cannot be enforced in monetary terms; and
(b) if an Interim Mareva Injunction is given in this case, there will be a low risk of injustice to the 1st Defendant
because -
(i) there is no evidence that the 1st Defendant intends to develop the Land. In fact, the 1st Defendant lacks
the financial resources to do so;
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(ii) as discussed in paragraph 71 below, this court will not grant to the Plaintiff an interim injunction to
restrain the 1st Defendant’s use of the Land pending the disposal of the Arbitration;
(iii) to ensure that the Interim Mareva Injunction does not cause irreparable prejudice to the 1st Defendant,
the Interim Mareva Injunction -

(iii)(a) will make allowance for the 1st Defendant’s reasonable and ordinary operating expenses;

(iii)(b) allows the 1st Defendant to pay for legal advice and representation in this case and the Arbitration;
and

(iii)(c) grants liberty to the 1st Defendant to apply subsequently to court to vary or discharge the Interim
Mareva Injunction. If the Plaintiff subsequently abuses the Interim Mareva Injunction as a tool of
oppression, the 1st Defendant is entitled to apply to court to set aside the Interim Mareva Injunction;
(iv) even if it is assumed that the 1st Defendant has suffered any prejudice due to the Interim Mareva
Injunction, if the 1st Defendant succeeds in the Arbitration (Arbitral Award In 1st Defendant’s
Favour), the 1st Defendant may apply to the arbitral tribunal to enforce the Plaintiff’s undertaking to pay
damages for all loss and/or damage suffered by the 1st Defendant which is caused by the Interim
Mareva Injunction (Plaintiff’s Undertaking); and
(v) there is no evidence to show that the Plaintiff is commercially insolvent and cannot honour the
Plaintiff’s Undertaking in the event of an Arbitral Award In 1st Defendant’s Favour and if the 1st
Defendant wishes to enforce the Plaintiff’s Undertaking.

N. Nature and extent of Interim Mareva Injunction

[64] As explained in the above Parts F to M, this court exercises its discretion to grant an Interim Mareva Injunction
under s 11(1)(c) AA in Enc. 17.

[65] The court will now decide the nature and extent of the Interim Mareva Injunction to be ordered in this case.
N(1). Interim Mareva Injunction is confined to value of Plaintiff’s Claim Sum

[66] The Interim Mareva Injunction to be ordered in Enc. 17 must be confined to the value of the Plaintiff’s Claim
Sum - please refer to the Court of Appeal’s judgment delivered by Gopal Sri Ram JCA (as he then was) in Motor
Sports International Ltd & Ors v Delcont (M) Sdn Bhd [1996] 2 MLJ 605, at 611-612.
N(2). Can court grant Interim Mareva Injunction over Land which is beneficially owned by 1st Defendant?

[67] Notwithstanding the Torrens system of registration of titles and interest in land as codified in NLC, our case
law has recognized the application of equitable doctrine of bare trust. In the Federal Court case of Tan Ong Ban v
Teoh Kim Heng [2016] 3 MLJ 23, at [33] to [39], Arifin Zakaria CJ has decided as follows:

“The principle of beneficial ownership

[33] We will begin with an elucidation of the principle of beneficial ownership which we think is crucial to this case.
This principle of beneficial ownership was alluded to by Edgar Joseph JR in Borneo Housing Mortgage Finance
Bhd where he observed:

… the contractual events which result in the vendor becoming a bare trustee of the land the subject matter of
the agreement of sale and purchase for the purchaser, is on completion, that is to say, upon receipt by the
vendor of the full purchase price, timeously paid and when the vendor has given the purchaser a duly
executed, valid and registrable transfer of the land in due form, in favour of the purchaser, for it is then the
vendor divest himself of his interest in the land. (Emphasis added.)

[34] According to this principle, when a purchaser of a property has performed his or her contractual obligation
upon the full settlement of the purchase price besides executing all the formal documents to effect the registration
of ownership, equity accords him or her with all the rights and privileges of a legal owner over the property. The
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purchaser thus enjoys the benefit of being the owner of the acquired property even though he or she has yet to
become its registered owner.

[35] This is clearly demonstrated by the case of J Raju v Kwong Yik Bank Bhd & Anor [1994] 2 MLJ 408; [1994] 2 AMR
1220, where the Supreme Court held that:

… the vendor of the land is only regarded as having divested himself of the beneficial interest in his land and
vested it on the purchaser at the time when the purchase money had been paid in full.

(see also M & J Frozen Food Sdn Bhd and Peninsular Land Development Sdn Bhd v K Ahmad [1970] 1 MLJ 149).

[36] The principle of beneficial ownership differentiate between the rights of a purchaser of a property who has
fully settled the purchase price with one who has not. This principle clothes a purchaser who has settled the full
purchase price with a distinct privilege equivalent to a legal owner, although he or she has yet to be registered as
the proprietor of the property.

[37] Under this principle of beneficial ownership, the vendor becomes a bare trustee for the purchaser in respect of
the transacted property, while the purchaser assumes the position of beneficial owner having right in rem over the
property. The purchaser is commonly accepted as having a beneficial interest in the land on the execution of the
contract and upon which specific performance may be granted by the court. This beneficial interest is also
sufficient to entitle the purchaser to enter a caveat under the [National Land Code].

[38] On the other hand, a purchaser who has not settled the full purchase price does not enjoy such benefit. The right of
such purchaser is contractual in nature and in personam. He or she does not have any beneficial interest in the property. In
the event of dispute, such purchaser can only institute action against the vendor with whom he or she has contracted. In
other words, such purchaser merely enjoys a contractual right or a right in personam.

[39] In short, a beneficial or equitable owner of a property stands in the same position as the legal owner in terms
of enforcing proprietorship rights against the world at large. The only difference is that a beneficial owner is yet to
be vested with the legal title.”

(emphasis added).

[68] In this case, notwithstanding the fact that the 2nd Defendant is the registered proprietor of the Land, the
equitable doctrine of bare trust applies due to the 1st Defendant’s full payment of the Price (Land) to the 2nd
Defendant and the due execution of Form 14. Furthermore, the 2nd Defendant does not dispute the invocation of the
equitable doctrine of bare trust in this case. Accordingly, by virtue of the application of the equitable doctrine of bare
trust -
(1) the 1st Defendant is the sole equitable owner of the Land; and
(2) the 2nd Defendant is only a bare trustee of the Land for the sole benefit of the 1st Defendant.

[69] I am not able to find any previous Malaysian case where the court has granted an interim Mareva injunction
under s 11(1)(c) AA to freeze dealings on assets which are beneficially owned by a party pending outcome of
arbitral proceedings between the parties. Nonetheless, I unhesitatingly exercise my discretion pursuant to s 11(1)(c)
AA to order an Interim Mareva Injunction to apply to the Land which is beneficially owned by the 1st Defendant (by
reason of the application of the doctrine of bare trust). My reasons are as follows:

(1) there is nothing in s 11(1)(c) AA which prohibits the court from restraining dealings on assets which are beneficially
owned by parties (pending outcome of arbitration between parties); and

(2) equitable ownership of an asset can be assigned in Equity (Equitable Assignment). I rely on the following judgment of
the Federal Court delivered by Peh Swee Chin FCJ in Khaw Poh Chhuan v Ng Gaik Peng & Ors [1996] 1 MLJ 761, at 775
-

“… In any event, compliance with s 4(3) Civil Law Act 1956 is not a pre-requisite to the validity of an
assignment, which is to be determined in the usual ways. Even without complying with s 4(3), eg even without
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notice of the assignment to such debtors, for the sake of argument, the assignment would have been valid in
equity in any event against the assignor.

The learned judge appears to be in error in suggesting as if there were two different distinct kinds of
assignment, ie one in equity and one under s 4(3) [CLA], both assignments being mutually exclusive. Nothing
is further from the truth. If an assignment is valid in law or legal (ie legally binding on the assignor), then it is
valid or legal and compliance with s 4(3) is not essential to make it valid or legal as stated. Section 4(3) has not
made any alteration in the law of assignment; it has merely made it easier for the assignee in one aspect in
that the assignee can sue in his own name without sometimes having to borrow the name of the assignor or if
the assignor is uncooperative, to join the assignor as a co-defendant.”

(emphasis added).

If the court has no power under s 11(1)(c) AA to freeze assets which are beneficially owned by a party (U) pending the
disposal of an arbitration [Arbitration (U-V)] between U and another party (V), U may execute an Equitable Assignment
before the conclusion of the Arbitration (U-V) and if the Arbitration (U-V) is subsequently resolved in favour of V (Arbitral
Award In V’s Favour), the Equitable Assignment may unjustly defeat the Arbitral Award In V’s Favour. The court cannot
allow an outcome which defeats the purpose of the Arbitration (U-V).

N(3). Can Plaintiff apply for interim injunction to restrain 1st Defendant’s use of Land?

[70] Mr. Hor has applied for an interim injunction to restrain the use of the Land by the 1st Defendant pending the
outcome of the Arbitration.

[71] I am not able to accede to the above application because -

(1) s 11(1)(c)AA only empowers the court to preserve “assets out of which a subsequent [arbitral] award may
be satisfied”. Section 11(1)(c) AA does not allow the court to grant an interim injunction to restrain the use
of the Land by the 1st Defendant pending the resolution of the Arbitration;
(2) the Plaintiff cannot rely on s 11(1)(a) AA because there was no maintenance or restoration of the “status
quo pending the determination of the dispute” between the Plaintiff and 1st Defendant by way of the
Arbitration;
(3) s 11(1)(b)AA does not apply in this case because there is no “current or imminent harm or prejudice” to the
Arbitration; and
(4) if I have ordered an interim injunction to restrain the use of the Land by the 1st Defendant pending the
outcome of the Arbitration, this may oppress the 1st Defendant. The court must ensure that any equitable
interim relief does not amount to a tool of oppression.

N(4). Whether court can grant Interim Mareva Injunction to restrain dealings on assets which are partially
owned by 1st Defendant

[72] Enc. 17 has applied for an Interim Mareva Injunction pending the resolution of the Arbitration to restrain any
dealing regarding assets [Assets (Co-Ownership] which are co-owned by the 1st Defendant together with another
person (Co-Owner) and the Co-Owner has not been cited as a co-defendant in this OS.

[73] I have no hesitation to dismiss the above prayer on the following grounds:
(1) s 11(1)(a) to (c) AA do not empower the court to issue any interim relief pending the outcome of the
Arbitration which restrains any dealing regarding Assets (Co-Ownership);
(2) the Co-Owner was not a party to the Agreement. Hence, the Plaintiff has no contractual cause of action
against the Co-Owner;
(3) the Co-Owner was not a party to the dispute between the Plaintiff and 1st Defendant;
(4) the Co-Owner is not a party in the Arbitration; and
(5) the Plaintiff has not applied to court to join the Co-Owner as a co-defendant in Enc. 17. It is therefore
unjust to restrain any dealing over Assets (Co-Ownership) without giving the Co-Owner a right to be heard.
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O. Outcome of Enc. 17

[74] In view of the evidence and reasons stated in the above Parts F to N, Enc. 17 is allowed with the following
order:
(1) pending disposal of the Arbitration and upon the furnishing of the Plaintiff’s Undertaking to court, the court
grants an Interim Mareva Injunction to restrain the 1st Defendant from transferring, charging, removing
and/or dealing with the assets of the 1st Defendant, including the Land, up to the value of the Plaintiff’s
Claim Sum;
(2) the 1st Defendant has a right to apply to court -
(a) for reasonable and ordinary operating expenses of the 1st Defendant to be excluded from the
application of the Interim Mareva Injunction;
(b) to exclude from the scope of the Interim Mareva Injunction all expenses which have been incurred or
may be incurred in the future by the 1st Defendant with regard to legal advice and representation in -
(i) this case; and
(ii) the Arbitration; and
(c) to vary or discharge the Interim Mareva Injunction if there are subsequent circumstances in this case
which warrant the exercise of the court’s discretion to vary or discharge the Interim Mareva Injunction;
and
(3) costs of Enc. 17 shall be borne by the 1st Defendant.

P. Enc. 12

[75] In support of Enc. 12, Mr. See has contended as follows:

(1) in obtaining the Ex Parte Injunctions, the Plaintiff had concealed a material fact from the court, namely,
Sub-Paragraph 8.2.2 (Mr. Loo’s Affidavit);
(2) the Plaintiff’s Claim Sum was time-barred; and
(3) there is no real risk that the 1st Defendant would dissipate its assets.

[76] As explained in the above Parts H and H(1) to H(4), this court cannot accept the 1st Defendant’s reliance on
limitation defence.

[77] The court is satisfied in this case of the existence of a real risk that the 1st Defendant would dissipate its assets
- please refer to the above Part L.

[78] The court has a discretion to set aside any ex parte order which has been previously granted to a party (W) if
W has -
(1) failed to disclose a material fact to court when W applied for the ex parte order; and/or
(2) misled the court and/or misrepresented any material fact to the court with regard to the ex parte order.

[79] I am not satisfied that the Plaintiff had suppressed any material fact when the Plaintiff obtained the Ex Parte
Injunctions. Nor did the Plaintiff mislead the court or misrepresent any material fact in Enc. 3. As explained in the
above Parts H(2) to H(4), Sub-Paragraph 8.2.2 (Mr. Loo’s Affidavit) is of no relevance in this case.
Q. Court’s decision

[80] Premised on the above evidence and reasons -

(1) Enc. 17 is allowed with the order as stated in the above paragraph 74; and
(2) Enc. 12 is dismissed with costs.

End of Document