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willing to lift the veil of incorporation when the justice of the case so demands. In
doing so, it was found that the hotel and the restaurant were functioning as one
integral entity andin terms of management they also constituted a single unit.
Gopal Sri Ram JCA in Law Kam Loy & Anor v Boltex Sdn Bhd 185 declined to follow
D.H.N. which is deemed no longer sustainable, and referred to Adams and Woolfson
as guidance. 186 The judge opined that it is no longer desirable for the court to lift the
veil in the interests of justice unless special circumstances have been established.
Special circumstances include cases where there is either actual fraud at common
law or some inequitable or unconscionable conduct amounting to fraud. In light of
the later Court of Appeal decisions, it is no longer open to the court to lift the veil in
the interest of justice per se. The court must insist on the evidence of fraud or mere
façade is to be established first, only then the lifting is justified.
The court will scrutinise the capacity of a director who gives any undertaking on
behalf of the holding company, namely whether he or she is acting in the capacity as
director in the subsidiary of the holding company. If the undertaking is given in his
or her capacity as director in a subsidiary, the court will not lift the veil to hold the
holding company liable. Only when the undertakings are given on behalf of the
parent will the veil be lifted.
This matter is illustrated in the case of People’s Insurance Co (M) Sdn Bhd v
People’s Insurance Co Ltd & Ors. 187 The plaintiff was the subsidiary of the first
defendant and the second, third, fourth and fifth defendant were on the board of
directors in the plaintiff company. They were also senior officers of the first
185 [2005] 3 CLJ 355.
186 See also decisions in Perman Sdn Bhd & Ors v European Commodities Sdn Bhd & Anor [2006] 1
MLJ 97.
187 [1986] 1 MLJ 68.
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