Directors can be held personally liable for company debts incurred fraudulently, violating statutory obligations regarding asset disposal and record keeping.

[1] The plaintiff is a judgment creditor of a company (the judgment debtor). The judgment debtor was unable to satisfy the judgment debt and was consequently wound up. The judgment debt remains unsatisfied to-date. The plaintiff describes the present case as one which concerns the manner in which the plaintiff, as a judgment creditor, was deprived of enjoying the fruits of its litigation (a judgment debt) due to the calculated dissipation of the judgment debtor's assets by the directors of the judgment debtor and active concealment of the financial affairs of the judgment debtor by the destruction of the books and records. Thus, the plaintiff's present application is targeted at the directors of the judgment debtor. And in this regard, it is alleged by the plaintiff that with the judgment debtor having been wound up, the directors of the company have sought to keep their fraudulent dealings secret by:

(i) first, providing inaccurate information to the liquidator who was appointed to take control of the company's affairs; and

(ii) then, destroying all of the company's accounts and documents in breach of their statutory duty.

[2] The matter before me is an application by Huatah Sdn Bhd (Co. No 1087-H) via Originating Summons No WA-24NCC-453-10-2017 dated 24 October 2017 ("OS453") for the following orders (jointly and severally) against the defendants (as directors of Billionz Showcase Sdn Bhd (Co. No 1018166-P) (in liquidation) - "BSSB") namely:

(1) A declaration that the defendants are jointly and severally liable to the plaintiff for all debts of Billionz Showcase Sdn Bhd (Company No 1018166-P) (in liquidation) ("the Company") pursuant to:

(a) the Sessions Court Order dated 20 January 2015 (Originating Summons No B54-46-09-2014) ("Sessions Court Order");

(b) the High Court Order dated 22 May 2015 (Civil Appeal No 12ANCVC-6-0l/2015 ("High Court Order"); and

(c) the Winding Up Order dated 22 May 2015 (Companies (Winding-Up) No 28NCC-178-03/2015) ("Winding Up Order");

(2) That the defendants make payment of all debts of BSSB pursuant to the Sessions Court Order, High Court Order and Winding Up Order to the Plaintiff within one (1) month days from the date of service of this Order;

(3) Costs of this application be paid by the defendants jointly and severally to the plaintiff on the indemnity basis; and

(4) Any further and/or reliefs deemed fit and just by this Honourable Court.

The License Agreement - Null And Void

[3] On 26 June 2013, the plaintiff and BSSB entered into a licence agreement for the right to carry on a business under the Tai Lei Loi Kei ("TLLK") trademark ("the license agreement"). The plaintiff and BSSB also executed a supply agreement dated 26 June 2013 ("the supply agreement") for the supply of products, furniture and equipment for the operation of the plaintiff's TLLK outlet. The plaintiff had carried out its obligations under the license agreement and supply agreement on the basis that the agreements are collectively a franchise agreement as the "franchise", "franchisee" and "franchisor" were often used by both parties. Further, the conduct of the parties showed that the relationship between the parties was one of a franchisee and franchisor.

[4] The plaintiff was, at all material times, under the impression that BSSB was authorised to sell the TLLK franchise to the plaintiff. However, on or about June 2014, the plaintiff found out that BSSB was