Personal liability of corporate directors depends on established duty of care; corporate structure protects against negligence claims unless specific proximity is established.

[1] This is my judgment in respect of the 8th and 9th defendants' application (encl. 16) to strike out the plaintiffs' action pursuant to O 18 r. 19(1)(b), (c), (d) and alternatively the name of the 8th and 9th defendants in the writ and statement of claim be struck out pursuant to O 15 r. 6(2)(a) of the Rules of the High 1980 .

[2] The central issue in this case is whether the 8th and 9th defendants who were directors of Arthur Andersen Corporate Advisory Sdn. Bhd. ("AA") and who were involved in the restructuring scheme presentation etc, could be made personally liable in negligence etc.

[3] The parties have relied on the following cases: Lai Yoke Ngan & Anor v. Chin Teck Kwee & Anor, [1997] 2 MLJ 565 ; Merrett v. Babb [2001] QB 1174; Williams v. Natural Life Foods [1998] 2 All ER 577; Lim Soh Wah & Anor v. Wong Sin Chong & Anor & Another Appeal; [2001] 2 CLJ 344 ; [2001] 2 AMR 2001 ; Aspatra Sdn. Bhd. & Ors v. Bank Bumiputra (M) Bhd & Anor ; Sunrise Sdn. Bhd. v. First Profile (M) Sdn. Bhd. & Anor; [1996] 3 MLJ 533 ; [1997] 1 CLJ 529 ; [1997] 1 AMR 1 ; Caparo Industries Plc v. Dickman [1990] 2 AC 605; Ernst & Young v. Maxbiz Corporation Berhad; [2009] 1 MLJ 206 ; [2008] 6 CLJ 136 ; Kuala Lumpur Finance Berhad v. KGV & Associates Sdn. Bhd.; [1995] 1 MLJ 504 ; [1995] 1 CLJ 519 ; Bank Bumiputra (M) Bhd v. Tetuan Wan Marican Hamzah & Shaik & 2 Lagi; [1994] 1 MLJ 124 ; [1994] 2 CLJ 365 ; Trevor Ivory Ltd v. Anderson [1992] 2 NZLR 517; C Evans & Sons Ltd v. Spritebrand Ltd [1985] 2 All ER 415; Credit Lyonnais Bank Nederland NV v. Export Credits Guarantee Department [2000] 1 AC 486; Abdul Manaf Ahmad v. Mohd Kamil Datuk Hj Mohd Kassim ; [2011] 4 MLJ 346 ; [2009] 2 CLJ 121 .

Brief Facts

[4] The plaintiffs' complaint in essence is in respect of the former directors of the plaintiffs for wrongful disposal of land and shares. And assert that AA did not adequately advise against the disposal and thereby facilitated the disposal of the assets when the plaintiffs were insolvent.

[5] The striking out application is premised on time bar under the Limitation Act 1953 (Revised 1981) and wrongful joinder of parties. And the applicants assert that it was AA who was appointed and they were not appointed personally. The learned counsel for the applicants submits as follows:

(i) They do not owe any duty of the case towards the plaintiffs in their personal capacity;

(ii) Alternatively, even if such duty was owed, which is denied, they did not act negligently;

(iii) Even if there was a duty owed and the 8th and 9th defendants have acted negligently, which is denied, the plaintiffs' claim is time barred.

[6] The applicants also say that the plaintiffs' allegation that the 8th and 9th defendants aided and abetted in the conspiracy carried out by the other defendants cannot be sustained as aiding and abetting are concept in criminal law and has no application in respect of civil claim for conspiracy. In addition the applicants say that the action is time barred as the engagement, transaction and the scheme took place more than 12 years ago. And assert that in the instant case the pleadings do not disclose a cause of action for conceded fraud and what is alleged is inaction on the part of the 8th and 9th defendants and not positive fraudulent conduct. And rely on the case of Abdul Manaf Ahmad (supra) where Gopal Sri Ram JCA had referred to Rustomji on the Law of Limitation and Adverse Possession, 7th edn in which it was stated:

There must be some affirmative act designed to prevent, and which does prevent, the discovery of the cause of action. Mere silence or passiveness (there being