Separate legal entity

2019 started with a bang. Yesterday, was our first decision for the year and it couldn't have been better.

The Sessions Court at Kuala Lumpur dismissed a suit brought by a businessman against a Director and 2 of his companies. The reliefs sought were basically for Orders compelling the Director to deliver the audited accounts of his 2 companies and through these accounts, to establish whether or not consideration under all 3 Agreements executed by the businessman and the 2 companies have been paid in full.

Basic company law principles like separate legal entity, privy of contract, lifting of the veil of incorporation, fraud (both actual and equitable), validity of Agreements where consideration has not been paid and whether consideration can be paid other than in the manner provided for in the Agreements were canvassed before the Sessions Court Judge.

The Court found in favour of the Defendants and dismissed the Plaintiff's claim against all 3 Defendants. The Court also allowed a counterclaim by one of the Defendant's and declared that the Management Agreement and Sale of Business Agreement void for want of consideration. The Court further Ordered that the Plaintiff deliver up the business of the 2nd Defendant and also the premises from where the business is being run to the 2nd Defendant withihn seven days from yesterday. The Court also ordered costs amounting to RM10,000.00.