[1] These two actions were taken by a company against the defendants who are its directors, customers, supplier and manufacturer for the losses it suffered as a result of a fictitious transaction scheme carried out by the defendants. The plaintiffs' cause of action against the defendant in suit 710 and the first defendant in suit 714 is for negligence and breach of fiduciary duty in discharging their duties to the company. As against the other defendants in Suit 714, the plaintiffs' cause of action is they had conspired to injure the plaintiffs by unlawful means. After a lengthy trial, 1 held the defendants liable to the plaintiffs. I, then ordered all the defendants to pay damages, interest and costs to the plaintiffs. Against my decision, the defendant in suit 710 and the first defendant in suit 714 had appealed to the Court of Appeal. My reasons for the decision is as follows. F

The Parties

[2] Kontron Asia Pacific Design Sdn Bhd (KAPDSB) was formerly known as Kontron Design Manufacturing Services (M) Sdn Bhd (KDMS). KDMS changed its name to KAPDSB on 9 July 2012. Since the events in these cases took place when the company is known as KDMS, in my judgment I shall refer the first plaintiff as KDMS. KDMS is a subsidiary of the second plaintiff, Kontron AG. KDMS was incorporated in Malaysia with its registered address at Suite 18.01, 18th Floor, MWE Plaza, No 8, Lebuh Farquhar, Georgetwon, Pulau Pinang. Its business address is at Plot 554 & 574, Lorong Perusahaan 4, Zon Perindustrian Bebas, Prai, Pulau Pinang. Kontron AG is a public listed company in Germany. Effective 21 August 2017, Kontron AG has transferred all its assets, rights and liabilities to Kontron S & T A.G. The management of KDMS is run by the local people. The German bosses are based in Germany.

[3] The first defendant in suit 714, Quah Sin Chye, also known as Dr Sam was the former director and President/Chief Executive Officer of KDMS. The defendant in suit 710, Quah Chong Ghee (CG Quah) was the former director and Financial Controller of KDMS.

[4] The second defendant, World Best City Sdn Bhd (WBC); the third defendant, USP Development Sdn Bhd (USP) and the fourth defendant, North East Electronics Ltd (NEE) were the customers of KDMS. The director and shareholder of WBC are Anuar bin Aziz (the seventh defendant) and Lim Soon Ghee (SG Lim) (the eighth defendant). WBC is a Malaysian company with its registered address at No 8A, Tingkat 1, Lebuh Tenggiri 2, Pusat Bandar Seberang Jaya, Pulau Pinang. USP is a Malaysian company having a registered address at 8B, Lorong 24, Taman Patani Jaya, 08000 Sungai Petani, Kedah. USP carries out its business at 33A, Tingkat Satu, Jalan Bertam, Kepala Batas, Pulau Pinang. NEE is a foreign company based in Hong Kong with its registered address at Unit 8, 2/F, International Trade Centre, 11-19 Sha Tsui Road, Tsuen Wan, Hong Kong.

[5] The fifth defendant, TSLK Enterprise Sdn Bhd (TSLK) is a Malaysian company with its registered and business address at No 32, Lebuh Lembah Permai 4, 11200 Tanjung Bunga, Pulau Pinang. TSLK was purportedly the supplier for the purchase orders made by WBC, USP and NEE. TSLK was controlled by SG Lim, the eighth defendant. The sixth defendant, Synergy Hardmetal Technology Sdn Bhd (Synergy) is a Malaysian company with its registered address at 441-3-9 Pulau Tikus Plaza, Jalan Burma, 10350 Pulau Pinang. Synergy business address is at No 1-3-55, 1-Avenue, Medan Kampung Relau 1, 11900 Bayan Lepas, Pulau Pinang. Synergy's role was to manufacture all the goods and/or products to fulfil the purchase order given by