Vernon Ong Lam Kiat JC:

[1] By an assignment dated 12 September 1991 ('the 1st assignment') the 3rd defendant Sin Leong Hang Sdn Bhd ('SLHSB') assigned to Zhong Mei Sdn. Bhd. ('Zhongmei') the full benefit of the application of the trade mark application no. 85/05266 in class 29 for RM1,000. On 15 July 1994 Zhongmei was registered as the proprietor of the Trade Mark No. 85/05266 (Chinese characters and device) in class 29 ('the Trade Mark'). By a deed of assignment dated 15 December 1995 ('the 2nd Assignment') Zhongmei assigned the Trade Mark to Sin Leong Hang Sdn. Bhd.('SLHSB') for RM1,000.

[2] The 1st assignment was signed by the 2nd defendant Seow Ah Mai @ Seow Gek Beng ('Seow') as managing director on behalf of SLHSB (the assignor) and by Ong Eng Kow on behalf of Zhongmei (the assignee). According to a directors' resolution of SLHSB passed on 12 September 1991 the 1st assignment was subject, inter alia, to SLHSB's right to demand for the immediate transfer back of the proprietorship of the Trade Mark for RM1,000. SLHSB's board resolution was signed by Seow, Ong Eng Kow and Ong Eng Chee.

[3] The 2nd assignment was signed by the 1st defendant Chia Hoon Seng ('Chia') as director for Zhongmei (the assignor) and by Seow as managing director for SLHSB (the assignee). The 2nd assignment was approved in a directors' resolution of Zhongmei dated 15 December 1995 signed by Seow, Chia, and Ong Soh Wah @ Ong Siew Mooi.

Zhongmei's Claim

[4] According to Zhongmei at all material times Chia was a director and Seow a managing director of Zhongmei. At the same time Seow was also a managing director and shareholder of SLHSB. Both Chia and Seow are said to have acted in breach of trust and/or breached their fiduciary duties owed to Zhongmei and/or Chia, Seow and SLHSB have committed fraud on Zhongmei. Zhongmei is seeking for a declaration that the 2nd Assignment is null and void ab initio and other consequential orders.

[5] The particulars of the alleged breaches may be summarised as follows:

(i) The 2nd assignment for the consideration of RM1,000 is substantially lower than the market value of the Trade Mark. The consideration sum of RM1,000 was never paid to and received by Zhongmei.

(ii) The 2nd Assignment was entered into without the knowledge and/or approval of Zhongmei, Hai Tong Co. (Pte) Ltd ('Hai Tong'), its shareholders and/or board of directors. No resolution was passed to approve the 2nd assignment or to approve the execution thereof by Chia on behalf of Zhongmei and Seow on behalf of SLHSB.

(iii) Seow in acting as a signatory for and on behalf of SLHSB acted in breach of trust and/or in breach of his fiduciary duties to Zhongmei and/or acted in conflict of interest with his duty as managing director of Zhongmei. Further Chia did not have any authority to bind Zhongmei in the 2nd assignment and had acted in breach of trust and/or breach of his fiduciary duty to Zhongmei.

(iv) Seow and/or SLHSB had prior to and subsequent to the execution of the 2nd assignment fraudulently utilised the Trade Mark for his/their own benefit.

(v) Seow acting as managing director of SLHSB in receiving the assignment of the Trade Mark had wrongfully placed himself in a position of conflicting interest with Zhongmei.

(vi) Seow and Chia fraudulently, wrongfully and unlawfully caused the assignment of the Trade Mark by Zhongmei to SLHSB.

The Evidence

[6] In this case it is pertinent to trace the history of Zhongmei since its inception. Zhongmei was incorporated on 24 August 1991 The original shareholders of Zhongmei were Seow, Ong Eng Kow and Ong Eng Chee. Sometime in 1991 or 1992 Seow offered to Hai Tong to take over Zhongmei. Hai Tong agreed to invest in Zhongmei for the purpose of manufacturing bird's nest for export to China, Japan, America and the European markets. Hai Thong invested in Zhongmei by financing the purchase of a factory by Zhongmei for approximately RM700,000.

[7] According to Tan Hee Chye (PW1) a director of Hai Tong, the substa