This is an application by Pei Huat Pte Ltd ('PH') and Peck Chuan Development Pte Ltd ('PC') ('the subsidiaries'), the wholly-owned subsidiaries of Peck Seng Co Pte Ltd ('PS') who are the plaintiffs in these consolidated actions, for, inter alia, an order to set aside a Mareva injunction obtained ex parte by Lomania Ltd ('Lomania'), the third defendants, on 14 March 1989 in the following terms:

Pek Seng Co (Pte) Ltd whether by itself its directors its officers subsidiary companies servants or agents or otherwise howsoever be restrained from removing from the jurisdiction of this court charging selling dealing with transferring diminishing or in any other way whatsoever disposing of its assets of whatever description within the jurisdiction of this court or the assets of whatever description within the jurisdiction of this court of Pek Chuan Development Pte Ltd or of any other subsidiary company which is within the power of Pek Seng Co (Pte) Ltd or of any of its directors servants or agents to control, save and in so far as the value of the same unencumbered exceeds the sum of $5,793,275.55 until after the determination of Lomania Ltd's notice for further directions filed 7 March 1989 or further order in the meantime.

The material facts are as follows. On 24 February 1987, Lomania obtained judgment against PS for the sum of $4.27m in Suit No 2673 of 1986. Execution on the judgment has been stayed pending the trial of PS's counter-claim in the said action. PH became a wholly-owned subsidiary of PS in 1975 and PC achieved the same status in 1989. It is common ground that PS is effectively controlled by one shareholder, Pek Tiong Seng ('PTS') and that PH and PC are controlled by PS. At the date of hearing of this application, each of the said companies had two directors, one of whom was PTS and the other his nominee. PTS therefore has effective control of the subsidiaries, whether directly as the dominant director or indirectly through PS.

PC carries on the business of real estate development and investment with a net worth of $4.29m as valued by a firm of accountants as at July 1988. Its assets consisted of 13 units of offices in Pek Chuan Building worth about $2.63m as at October 1988, and fixed deposits in a bank. Its income is derived from the sale of the units, rentals and interest on the fixed deposits. PH's only asset is its claim against the defendants in these consolidated actions.

After the hearing of this application, the parties came to an agreement to vary the Mareva injunction to allow PH and PC to proceed to carry on their ordinary businesses and to pay their legal costs of PH and PC. Accordingly, in this judgment, I shall only consider the principal complaint of the subsidiaries that the injunction ought not to have been granted, or at least not in the present form.

Counsel for the subsidiaries advanced two arguments in support of this complaint: (i) there was no real risk of PS dissipating its assets, and (ii) if there is, the injunction should not apply to the assets of PH and PC as these assets did not belong to PS: see The Maritime Trader [1981] 2 Lloyd's Rep 153. It was further contended that the injunction, in so far as it affected the assets of the subsidiaries, was effective only if such assets were treated as the assets of PS and that this was legally possible only if the corporate veils of the subsidiaries were lifted, and that in the present case there was no justification for doing so. Counsel referred me to Farrar's Company Law (2nd Ed) at pp 60–66, where the author has conveniently classified the decisions where the courts have lifted the corporate veil into seven categories, viz agency, fraud, group enterprises, trusts, enemy, tax and companies legislation. Counsel submitted that the present case did not fall within any of these categories. Counsel sought to distinguish the decision of Re A Company [1985] BCLC 333 where the Court of Appeal upheld the lifting of the corporate veil by t