GREATSHIP GLOBAL OFFSHORE SERVICES PTE LTD v 1. ) VANTAGE MARINE & LOGISTICS SDN BHD 2. ) AZIZUL AZMA BIN AB MALIK 3. ) ESWARAN A/L PANJARATNAM 4. ) WONG CHENG PERNG 5. ) MARGRATE TAMBANUN 6. ) MUHAMMAD SABRI BIN AB GHANI 7. ) SKOSV SDN BHD

Case Significance

Illustrates how a contractual obligation to hold funds can give rise to a constructive trust and fiduciary duties enforceable against a non-original party, and the stringent proof of a predominant intention to injure needed to establish conspiracy against company directors.

This High Court decision, delivered in the Commercial Division at Kuala Lumpur, concerns a claim arising out of a contractual payment mechanism connected with an addendum to a charterparty in the offshore marine industry. The plaintiff, Greatship Global Offshore Services Pte Ltd, sued a group of defendants including Vantage Marine & Logistics Sdn Bhd, several individuals who were common directors, and the seventh defendant, SKOSV Sdn Bhd. Although the seventh defendant was not originally a party to the underlying contract, it had acknowledged and confirmed the payment terms under a set-off and payment arrangement and thereby assumed the obligations which it later breached. The court held that the payment mechanism, which required the seventh defendant to hold funds due to the plaintiff, gave rise to a constructive trust and a fiduciary relationship between the plaintiff and the seventh defendant, so that the seventh defendant's diversion of those funds was a breach of trust and of fiduciary duty. The plaintiff also advanced a claim in the tort of conspiracy to injure by unlawful means against the common directors of the first and eighth defendants, and claims founded on inducement of breach of contract and direct interference. On the conspiracy claim, the court applied the requirement of a predominant intention to injure proved through overt acts and, by circumstantial proof under section 10 of the Evidence Act 1950, found no evidence of any concerted arrangement or of the predominant intention to injure required, and so declined to hold the individual directors liable in conspiracy. In the result the court adjudged that the plaintiff's claim against the seventh defendant was allowed, ordering the seventh defendant to pay the plaintiff RM9,366,741.47 as at 31 March 2023 together with interest, while the claim in conspiracy against the individual defendants failed. The judgment is a useful illustration of how a contractual obligation to hold funds can generate a constructive trust and fiduciary duties, and of the stringent proof required to establish the tort of conspiracy to injure against company directors.