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justice alone is not sufficient; there must be other elements, such as fraud, present
before the veil will be lifted.
In cases where undertakings have been given by directors of both parent and
subsidiary, the court will scrutinise on whose behalf they are acting. It is also
interesting to note that recent decisions of the courts open the possibility that the
separate legal entity principle will be ignored. The courts have relied on other
principles, such as estoppel, in order to make the parent company liable for the debts
of its subsidiary.
It is apparent that the courts in Malaysia have been influenced by the English courts
and it is submitted that the trends will continue. As such, any developments in the
area will have great impact on Malaysian corporate law. Parliament has been
reluctant to intervene in the area of corporate personality and the matters have been
left to judges to decide, as and when necessary, to depart from the separate legal
entity doctrine. The courts, therefore, will have to look elsewhere for guidance, and
any developments in common law jurisdictions have become their primary source of
reference.
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