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subsidiary. Abdul Malik J held that in the interests of justice it was necessary to lift
the corporate veil even though there was no fraud involved. From this decision, it
appeared that the court lifted the veil in order to determine whether the subsidiary
was under the absolute control of the parent company.
In the case of Golden Vale Golf Range & Country Club Sdn Bhd v Hong Huat
Enterprises Sdn Bhd (Airport Auto Centre Sdn Bhd & Anor as third party), 181 the
managing director of the plaintiff company and her bankrupt husband were alleged
to have used the company as an extension of themselves to commit fraud on the
defendant. In this situation, the High Court lifted the corporate veil and found that
the managing director had been in effective control of the company and was
therefore liable. 182
In another case, 183 an appeal from the Industrial Court involved a dispute between
the Union representing the workers of Hotel, Bar and Restaurant and the Jaya Puri
Chinese Garden Restaurant which employed the workers. The workers were
retrenched due to business closure owing to losses. The restaurant was operating in
the premises belonging to Hotel Jaya Puri Bhd, the plaintiff, and both the restaurant
and the hotel, had the same managing director. The Union sought to have the Hotel
joined as a party on the basis that the workers were the employees of the hotel and
they were dismissed and not retrenched as alleged by the restaurant.
The court lifted the corporate veil and held they were the hotel‟s employees. The
judge also made reference to several English cases 184 and noted that courts are quite
181 [2005] 5 MLJ 64.
182 It should be noted that this case, however, is not the case where the holding company has to be
liable for the debt of the subsidiary.
183 Hotel Jaya Puri Bhd v National Union of Hotel, Bar & Restaurant Workers & Anor [1980] 1 MLJ
109.
184 Smith, Stone and Knight v Birmingham Corporation [1938] 4 All ER 116; Re FG (Films) Limited
[1955] 1 WLR 483; and Firestone Tyre & Rubber Co v Llewelyn [1957] 1 WLR 464.
111