Mohd Radzi Harun J:

GROUNDS OF JUDGMENT

INTRODUCTION

[1]The Plaintiffs filed an application for a summary judgement under O. 14 of the Rules of Court 2012 (“ROC”) to be entered against the Defendants. The 2^nd Defendant filed an application under O. 18 r. 19(1)(b)(c) and/or (d) to strike out the Plaintiffs’ Amended Writ and Amended Statement of Claim against him.

[2]I had disallowed both applications with costs.

[3]The Plaintiffs did not appeal against my dismissal of their application. The 2^nd Defendant filed this appeal having aggrieved by this Court’s decision disallowing his application. The following are my grounds in coming to such decision .

BACKGROUND

[4]The Plaintiffs’ action against the Defendants are for the alleged act of passing off by the 1^st Defendant of the 1^st Defendant’s products bearing the trade marks “S.A.C Cemfix”, a cement material, and “S.A.C. Bond-8”, a bonding agent, as the Plaintiffs’ products with the trade marks “Cemfix 777” and “Bond It”, also cement material and bonding agent respectively. The 2^nd Defendant is one of the 1^st Defendant’s directors. The 1^st Defendant was appointed as the Plaintiffs’ agent in 2017 which had ended in 2019.

[5]The Plaintiffs’ claims against the 2^nd Defendant in the main were -

(i)that the 2^nd Defendant was one of the Plaintiffs’ agents or distributors of Cemfix 777 and Bond It;

(ii)that the 2^nd Defendant on his own and/or his representative or agent had passed off and misrepresented the 1^st Defendant’s S.A.C. Cemfix and S.A.C Bond-8 products as the Plaintiffs’ Cemfix 777 and Bond It products which had been repackaged and rebranded;

(iii)that the 2^nd Defendant is the alter ego and directing mind of the 1^st Defendant, being the majority shareholder of the 1^st Defendant, aside from an arrangement between the parties pertaining to a loan of RM300,000.00 by the 2^nd Defendant to the 1^st Plaintiff resulting in an investment by the 1^st Defendant into the 1^st Plaintiff as per the terms of a Friendly Loan Agreement dated 15/5/2018.

[6]The 2^nd Defendant’s main argument to challenge the Plaintiffs’ suit against him is pivoted on his contention that he should be entirely left out of the dispute between the Plaintiffs and the 1^st Defendant in adherence to the well-established principle of a company being a separate legal entity, pursuant to s. 20Companies Act 2016Salomon v A. Salomon & Co Ltd Abdul Aziz bin Atan & Ors v Laang Rengo Malay Estate Sdn Bhd Public Bank v New Ace Digital Pront Sdn Bhd & Anor ^nd Defendant in its Suit against the 1^st Defendant could only be sustained when this Court allows the piercing or lifting of the corporate veil of the 1^st Defendant having satisfied that the Plaintiffs had fulfilled the special circumstances. (See Solid Investment Ltd v Alcatei-Lucent (M) Sdn Bhd (previously known as Alcatel Network .Systems (M) Sdn Bhd ).

[7]The learned counsel for the Defendants further cited Ahmad Zahri bin Mirza Abdul Hamid v Aims Cyberjaya Sdn Bhd

”[13] Put simply, “lifting/piercing the corporate veil” means disregarding the dichotomy between a company and a natural person behind it and attributing liability to that person where he has misused or abused the principle of corporate personality. Since the decision of the House of Lords in Salomon v. Salomon & Co , which affirmed the legal principle that, upon incorporation, a company is generally considered to be a new legal entity separate from its shareholders, the courts in Malaysia, England and other Commonwealth jurisdictions have found exceptions to the general principle stated in Salomon (supra) and have lifted/pierced the corporate veil to reveal those who controlled the company .

[14] The application of the doctrine of veil lifting/piercing the corporate veil is far from clear from case law. Professor Farrar has described the Commonwealth authority on piercing the corporate veil as “incoherent and unprincipled” (See: J Farrar, ‘Fraud, Fairness and Piercing the Corporate Veil ‘(1990) 16 Canadian Business Law Journal