JUDGMENT

Wong Kian Kheong JCA:

A. Novel Issues

[1] This case discusses whether the court could pierce the corporate veil of one company (Company X) and impose liability incurred by Company X on another company (Company Y) when-

(1) Company Y had developed commercial lots in a shopping mall (Lots) and sold the Lots to various purchasers (Purchasers);

(2) the Purchasers and Company X had entered into tenancy agreements wherein the Purchasers rented the Lots to Company X (Tenancy Agreements);

(3) Company X was liable to the Purchasers for the unpaid rent of the Lots under the Tenancy Agreements (Unpaid Rent);

(4) Company Y was not a party to the Tenancy Agreements;

(5) the Purchasers had obtained a final judgment against Company X for the Unpaid Rent [Purchasers' Final Judgment (Company X)]; and

(6) Company X is solvent; and

(7) the Purchasers' Final Judgment (Company X) is not a "paper judgment" and can be executed against Company X.

The above question also discusses the following matters-

(a) with regard to a group of companies [Group (Companies)], in view of the separate legal personality of each member company in the Group (Companies) as well as the right of the Group (Companies) to arrange its corporate affairs among the member companies of the Group (Companies), how should the court exercise its discretionary power to pierce the corporate veil of Company X and impose Company X's liability on Company Y? In this regard, whether the court can exercise its discretionary power to pierce a company's corporate veil when-

(i) actual fraud had been committed;

(ii) there existed equitable fraud or unconscionability;

(iii) Company Y was evading its liability for the Unpaid Rent;

(iv) there was an abuse of the corporate personality of Company X;

(v) there existed special or exceptional circumstances;

(vi) it was in the interest of justice to pierce the corporate veil of Company X; and/or