1. ) YAP WEE CHUN 2. ) ASHAK BIN HASSAN JALEX SDN BHD

1. ) YAP WEE CHUN 2. ) ASHAK BIN HASSAN JALEX SDN BHD

Section 540(1) CA 2016 extends to corporate 'persons' read with the Interpretation Act; the Court may infer subjective dishonest intent where a company continued to incur debts after its dedicated funding (TL3) was exhausted with no credible alternative funding and where concealment and non‑disclosure occurred; Yap and Ashak were directing minds of KLL and Yap's knowledge was attributable to CPSB such that CPSB, Yap and Ashak were 'knowing parties' under s.540(1); appeals dismissed and costs awarded.

Citation
W-02(NCC)(W)-1223-07/2022 (Mahkamah Rayuan)
Parties
Appellant/2nd Defendant Below: Yap Wee Chun; Appellant/3rd Defendant Below: Ashak bin Hassan; Appellant/1st Defendant Below: City Properties Sdn Bhd; Respondent/plaintiff Below: Jalex Sdn Bhd
Court
NCC
Jurisdiction
Malaysia
Judgment Date
27 April 2026
Case Number
W-02(NCC)(W)-1223-07/2022 (Mahkamah Rayuan)
Procedural Posture
Civil Appeal (companies Act Fraudulent Trading) / Court of Appeal Judgment Dismissing Appeals
Outcome
Both appeals dismissed by Court of Appeal
Legal Topics
Fraudulent Trading (s.540 Companies Act 2016), Attribution of Corporate Knowledge, Piercing Corporate Veil/ Directing Mind and Will, Discovery and Adverse Inferences, Causation for Civil Contributions Vs Punitive Relief
Source Language
Malay/English
Company Law Insolvency Law Civil Procedure Contract Law Evidence Law Fraudulent Trading (s.540 Companies Act 2016) Attribution of Corporate Knowledge Piercing Corporate Veil/ Directing Mind and Will +2 more

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Parties

Yap Wee Chun

Appellant/2nd Defendant Below

Ashak bin Hassan

Appellant/3rd Defendant Below

City Properties Sdn Bhd

Appellant/1st Defendant Below

Jalex Sdn Bhd

Respondent/plaintiff Below

Procedural Posture

Civil Appeal (companies Act Fraudulent Trading) / Court of Appeal Judgment Dismissing Appeals

Legal Issues

  1. 1 Whether the term 'person' in s.540(1) CA 2016 includes a body corporate
  2. 2 Whether dishonest intent can be inferred where a company continues trading and incurring liabilities after its dedicated funding was exhausted
  3. 3 How to attribute knowledge/dishonesty to a corporate 'knowing party' and which attribution rules apply

Ratio Decidendi

Section 540(1) CA 2016 extends to corporate 'persons' read with the Interpretation Act; the Court may infer subjective dishonest intent where a company continued to incur debts after its dedicated funding (TL3) was exhausted with no credible alternative funding and where concealment and non‑disclosure occurred; Yap and Ashak were directing minds of KLL and Yap's knowledge was attributable to CPSB such that CPSB, Yap and Ashak were 'knowing parties' under s.540(1); appeals dismissed and costs awarded.

Court Disposition

Both appeals dismissed by Court of Appeal

Orders

  • Both appeals dismissed with costs fixed at RM50,000.00 each, subject to payment of the allocatur