Back
2026 MarsdenLR 2093
HIGH COURT MALAYA JOHOR BAHRU
NORADURA HAMZAH, JC
BEST AMITY SDN BHD – Appellant
Versus
SAKURA ARIFFIN & ORS – Respondent
[Civil Action No: JA-22NCC-36-07/2020]
A director owes a continuing fiduciary duty of loyalty and must not place personal interests in conflict with those of the company. Misappropriation of corporate assets, failure to account for funds, and unauthorized disclosure of confidential information constitute actionable breaches, justifying compensatory and exemplary damages.
Headnote:(A) Companies Act 1965 - Section 132 - Companies Act 2016 - Section 213 - Fiduciary duties of directors - Conflict of interest - Duty to account for company assets - Misappropriation of funds and property -
(B) Evidence Act 1950 - Section 114(g) - Adverse inference - Discretion of Court in drawing inference based on materiality and circumstances of case -
(C) Tort - Conversion - Essential elements - Possession and immediate right to possession - Positive wrongful act of dealing with goods inconsistent with owner's rights -
(D) Unjust enrichment - Distinct cause of action - Elements including enrichment at plaintiff's expense and unjust retention - (E) Remedies - General and exemplary damages - Awarded for deliberate and calculated wrongful acts including conspiracy and breach of confidence. (Paras 8, 11-13, 15-17, 65-68)
Facts of the case:
An action was brought by a company for breach of fiduciary duty, conspiracy, fraud, trespass, and conversion against a former director and other individuals who were present at its premises. The claims involved the misappropriation of payments from customers, unauthorized retention of corporate assets, conversion of a vehicle, and disclosure of confidential financial information to a litigation opponent. The defendants counterclaimed for unpaid salaries and allowances, which they alleged were promised for their work.
Findings of Court:
The court found the evidence of the primary defendant to be unreliable due to multiple material contradictions. The court held that the defendants acted in breach of fiduciary duty and conspired to misappropriate corporate property. The defendants failed to provide documentation to substantiate their ownership of the converted assets or their entitlement to the claimed salaries, which were characterized as fabricated. Admissions made during cross-examination proved pivotal to the court's findings.
Issues: The main issues were whether the director breached fiduciary duties; whether the defendants conspired to misappropriate company assets; whether the defendants committed trespass and conversion in relation to a corporate vehicle; whether the defendants were unjustly enriched; and whether the defendants’ counterclaim for unpaid remuneration was established.
Ratio Decidendi: A company director stands in a fiduciary relationship requiring loyalty, honesty, and avoidance of conflicts of interest. The court may infer an agreement to conspire from the conduct of parties and their failure to adequately respond to allegations. Conversion is established where there is a wrongful dealing with goods inconsistent with the owner's rights. Where a fiduciary makes it impossible to trace misappropriated assets, the court will not allow the wrongdoers to benefit from the uncertainty created. Exemplary damages are justified where the defendants' conduct is deliberate and calculated to profit at the company's expense.
Result: Plaintiff's claim allowed in part; Defendants' counterclaim dismissed with costs.
| Table of Content |
|---|
| 1. overview of parties, claims, and director's fiduciary duties. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9) |
| 2. legal standard for fiduciary duties, civil burden of proof, and evidentiary principles. (Para 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20) |
| 3. breach of fiduciary duty established through misappropriation of company funds. (Para 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46) |
| 4. conspiracy found via conduct and non-denials regarding misappropriated inventory. (Para 47 , 48 , 49 , 50 , 51 , 52 , 53) |
| 5. ownership of company assets and liability for conversion. (Para 54 , 55 , 56 , 57 , 58) |
| 6. breach of confidentiality and unjust enrichment through unauthorized use of company data. (Para 59 , 60 , 61 , 62 , 63 , 64) |
| 7. awarding exemplary and general damages for calculated breaches of duty. (Para 65 , 66 , 67 , 68) |
| 8. dismissal of counterclaim due to fabricated evidence and lack of employment proof. (Para 69 , 70 , 71 , 72 , 73 , 74 , 75 , 76) |
| 9. credibility assessment and final judgment orders. (Para 77 , 78 , 79 , 80 , 81 , 82 , 83) |
JUDGMENT
Introduction
[1] This is an action by the plaintiff, a company carrying on a recycling business, against four defendants. The 1st Defendant ("D1"), Sakura binti Ariffin, was a director of the plaintiff from 29 November 2013 until she was removed on 15 December 2017. She is also the sole proprietor of a separate business firm registered under the name Best Amity Enterprise [Company Registration No.: JM 0555590K]. The 2nd Defendant ("D2"), the 3rd Defendant ("D3"), and the 4th Defendant ("D4"), are individuals who were present at the plaintiff's premises during the material period. D4 is also a director of Yong Hup Metal Sdn Bhd, a company in the scrap trading business.
[2] The plaintiff's claims against the defendants are for, inter alia, breach of fiduciary duty by D1, conspiracy and fraud by all Defendants in relation to the misappropriation of scraps purchased from Flextronics Shah Alam Sdn Bhd, trespass and conversion of a lorry bearing registration number JHV 3900, breach of confidence by D1 and unjust enrichment. The Defendants have denied the claims and have filed a counterclaim for unpaid salaries/allowances.
[3] The trial was conducted over six days between 27 October 2025 and 23 January 2026. The plaintiff called one witness, Kew Khuan Ying ("SP1"), who is the Plaintiff's director. The Defendants called four witnesses, being the Defendants themselves (D1-D4). Written submissions, reply submissions together with bundle of authorities were filed by both parties.
[4] Having considered the evidence, the submissions of the parties and the applicable law, on the balance of probabilities, I now set out my findings and the reasons for my decision.
Background
[5] The Plaintiff is a private limited company established for the purpose of carrying on a recycling business. Its business involves collecting and/or purchasing scrap items from customers and reselling the scraps to manufacturing companies after segregation into relevant categories including mixed plastic, carton boxes and pallets.
[6] Since 2014, the Plaintiff entered into business contracts with several companies for the sale and purchase of scrap items, including LSM Metal Ace Sdn Bhd, BIOCON Sdn Bhd, Meng Hoe Trading Sdn Bhd, Taiko Metals Sdn Bhd, Hiap Huat Recycling Enterprise, Aikha Hardware Sdn Bhd and Flextronics Shah Alam Sdn Bhd.
[7] D1 was appointed as one of the Plaintiff's directors on 29 November 2013. It is common ground that she was removed as a director in late 2017 in which the Plaintiff pleads 15 December 2017 and the Defendants refer to 29 November 2017. Nothing material to this suit turns on the precise date, and I adopt the pleaded date of 15 December 2017 for the purposes of this judgment.
[8] It is not in dispute that as a director, D1 owed fiduciary duties to the Plaintiff under s 132 of the Companie
