Conspiracy to Injure:

A. Short Introduction on Malaysian Law

Article 160 of the Federal Constitution includes 'the common law in so far as it is in
operation in the federation or any part thereof'.
Section 3, Civil Law Act (CLA) 1956 (Revised 1972) ' the common law of England
and the rules of equity and in prescribed circumstances, English statutes.
The application of the English common law and rules of equity (and in Sabah and
Sarawak, English statutes of general application) in Malaysia is conditional, i.e. it is
subject to three conditions:
a) absence of local statutes/legislation covering the same matter;
b) cut off-dates; and
c) suited to local circumstances.
B. An overview of the concept of the tort of Conspiracy to injure, by unlawful means,
and a detailed analysis of the matters which must be shown to establish this tort.
The Tort of Conspiracy to Injure is plainly explained in the Court of Appeal of Kuwait
Oil Tanker Co SAK & Anor v Al Bader & Ors [2000] 2 All ER (Comm) 271 in the
Court of Appeal, at paragraphs 107-108:
It is common ground that there are two types of actionable conspiracy,
conspiracy to injure by lawful means and conspiracy to injure by unlawful
means. The first is sometimes described simply as a conspiracy to injure and the
second as a conspiracy to use unlawful means (see eg Clerk and Lindsell on Torts
(17th edn, 1995) pp 12671268, paras 2376). In our view they are both conspiracies
to injure and their ingredients are the same, with one crucial difference. In both cases
there must be conspiracy to injure the claimant, but in the first case (in which the
means employed would otherwise be lawful) the predominant purpose of the
conspiracy must be to injure the claimant whereas in the second case, although the
defendant must intend to injure the claimant, injury to the claimant need not be his
predominant purpose.
We shall treat them as different torts, although, as it seems to us, they are
better regarded as species of the same tort. It matters not. For present purposes we
would define them as follows. (1) A conspiracy to injure by lawful means is
actionable where the claimant proves that he has suffered loss or damage as a result of
action taken pursuant to a combination or agreement between the defendant and
another person or persons to injure him, where the predominant purpose of the
defendant is to injure the claimant. (2) A conspiracy to injure by unlawful means is
actionable where the claimant proves that he has suffered loss or damage as a result of
unlawful action taken pursuant to a combination or agreement between the defendant
and another person or persons to injure him by unlawful means, whether or not it is
the predominant purpose of the defendant to do so. We shall call them a lawful
means conspiracy and an unlawful means conspiracy respectively.

Requirement: An agreement/ combination/ understanding/ or concert to injure

involving two or more persons.
-Company may conspire with its directors being two or more legal persons. (Belmont
Finance Corp. v. Williams Furniture Ltd (No.2) [1980] 1 All E.R. 393, CA)
-The conspirators need not join in at the same time or exactly have the same aim in mind, but
the possession of a separate aim may be evidence that the party concerned has not
participated in the combination at all. (R. v. OBrien [1955] 2 D.L.R 311 at 315)
Lawful means conspiracy:
does not require any unlawful acts to be done by the parties to the agreement.
does require the parties' sole or predominant purpose to have been to cause injury to the
target.
can make two or more individuals liable for an act which would be lawful if done by one.
Unlawful means conspiracy:
requires the use of unlawful means in furtherance of the agreement, and an intention to
cause injury to the target.
occurs where two or more people act together unlawfully, intending to damage a third party,
and do so.
The key feature of unlawful means conspiracy is the requirement that the conspirators use
unlawful means to pursue their objective. It would appear from the decided cases that a wide
approach should be adopted when considering what will constitute unlawful means for the
purposes of a conspiracy claim.
The distinction between the two was succinctly elucidated by Lord Bridge in Lonrho plc v
Fayed & Others [1991] 3 All E R 303 as follows Where conspirators act with the predominant purpose of injuring the plaintiff and in fact
inflict damage on him, but do nothing which would have been actionable if done by an
individual acting alone, it is in the fact of their concerted action for that illegitimate purpose
that the law, however anomalous it may now seem, finds a sufficient ground to condemn their
action as illegal and tortious. But when conspirators intentionally injure the plaintiff and use
unlawful means to do so, it is no defence for them to show that their primary purpose was to
further or protect their own interests; it is sufficient to make their action tortious that the
means used were unlawful.
Malaysian cases:
Cubic Electronic Sdn Bhd v MKC Corporate & Business Advisory Sdn Bhd and another
appeal [2016] MLJU 88

Facts:
The plaintiff and 1st defendant are private limited companies incorporated in Malaysia. The
1st defendant was a registered owner of a land situated at Mukim Bukit Katil, District of
Melaka Tengah, Melaka ("the subject property"). The 2nd defendant is the director and the
majority shareholder of the 1st defendant. The plaintiff and the 1st defendant entered into the
Master Tenancy Agreement ("MTA") for a period of 3 years commencing from 12.8.2009 and
expiring on 11.8.2012 where the 1st defendant was to let out the subject property to the
plaintiff. Pursuant to the MTA, the plaintiff paid a security deposit of RM500,000.00 and
utility deposit of RM50,000.00 to the 1st defendant. A monthly rental of the subject property
was fixed at RM250,000.00. According to the plaintiff, whilst the MTA was still subsisting,
the 1st defendant had entered in to a tenancy agreement dated 14.1.2011 with the 3rd
defendant over the same subject property with monthly rental of RM116,099.25. Prior to that,
the 3rd defendant had entered into a subtenancy agreement dated 3.1.2011 with the 4th
defendant with monthly rental agreed at RM1,486,070.40, also over the same subject
property. The plaintiff averred that the 1st and 2nd defendants together with the 3rd and 4th
defendants had conspired to deprive the plaintiff of its right under the MTA. The plaintiff
further averred that the 1st defendant had breached the MTA by failing to give vacant
possession of the subject property to the plaintiff. Consequently, the plaintiff initiated this
action. The defendants resisted the suit and filed their respective statements of defence. The
1st defendant alleged that the plaintiff had failed to pay the rental and refused to take vacant
possession. Therefore, the 1st defendant by its solicitor's letter dated 31.3.2011, terminated
the MTA. The 1st defendant filed a counter-claim against the plaintiff seeking, inter alia, for a
declaration that the MTA dated 12.8.2009 between the 1st defendant and the plaintiffs was be
deemed terminated and unenforceable.
To appreciate the submissions advanced by learned counsel for the defendants, we think it is
relevant to deal with the law of conspiracy which is part of what are known as the "economic
torts". There are four elements to a conspiracy claim 1i)

a combination or agreement between two or more individuals;

1ii)

an intent to injure;
- For lawful means conspiracy, it is necessary to prove that the conspirators had
the sole or predominant intention of injuring the claimant. As it was put in
Crofter Hand Woven Harris Tweed Co Ltd v Veitch [1942] AC 435: If that
predominant purpose is to damage another person and damage results, that is
tortious conspiracy. If the predominant purpose is the lawful protection or
promotion of any lawful interest of the combiners (no illegal means being
employed), it is not a tortious conspiracy, even though it causes damage to
another person.
The mental element of intention to injure the claimant will be satisfied where the
defendant intends to injure the claimant either as an end in itself or as a means to
an end such as to enrich themselves or protect or promote their own economic

interests. It will not be satisfied where injury to the claimant is neither a desired
end nor a means of attaining it but merely a foreseeable consequence of the
defendants' actions.
-For unlawful means conspiracy, in the House of Lords decision of Lorho plc v
Fayed (1992), the Lords decided: it is sufficient to make their action tortious that
the means used were unlawful. No need to establish predominant purpose to
injure.
1iii) pursuant to which combination or agreement, and with that intention, certain
acts were carried out; and
1iv) resulting loss and damage to the claimant.
Held:

Tested on the backdrop of aforesaid enunciation of the legal principles, on the

evidence available on record, we are not prepared to hold that there was a conspiracy
between the defendants when they entered into the tenancy agreements. The
predominant purpose of those tenancy agreements are the lawful promotion of their
lawful interests.
The plaintiff is never required to show the existence of the arrangements between the
conspirators in the nature of an express agreement, whether formal or informal.
Therefore, as is often the case, the agreement or combination is to be inferred from
the evidence.
We have painstakingly and carefully scrutinised the evidence on record and find no
evidence to support the plaintiff's contention that the rental paid by 4th defendant was
for 1st defendant's ultimate benefit or that the 1st, 2nd and 3rd defendants must have a
share in the profits. With respect, the learned trial judge's finding is against the weight
of the evidence presented at the trial and merely grounded on pure fanciful conjuncture.

Renault SA v Inokom Corp Sdn Bhd & other appeals [2010] 5 MLJ 394
F: Renault made a representation to Inokom and Quasar on an investment sum which
resulted in the latter parties not participating in a project called the Kangoo project. They
allege that Conspiracy between Renault, Tan Chong and TC Euro to injure and defraud
Inokom and Quasar by their negotiations relating to the Kangoo project.
Held:
- It is trite law that the agreement to injure must come first (in other words the
agreement should have crystallised), before the alleged unlawful acts are done in
execution or pursuant to the agreement.
- Inokom and Quasar have never denied the fact that the alleged representation was first
made by Renault to them in the year 2000.

-At para 38: We are unanimous that there cannot in law and in fact conceivably be an
agreement or combination or conspiracy between Renault and Tan Chong to injure
Inokom and Quasar when the alleged representation was pleaded to have been made in
2000 and the alleged conspiracy was pleaded to have occurred in 2001.
Muniandy a/l Nadasan & Ors v Dato Prem Krishna Sahgal & Ors [2016] MLJU 207
(High Court)
(1) the 3 elements of the tort of conspiracy to injure by unlawful means (3 Elements), are
as follows:
(a) there must be proof of (i) an agreement; and/or
(ii) a combination of efforts
of the conspirators to injure the plaintiff. Such an agreement or combination may be
(iii) (ai) formal or informal; or
(iv) (aii) in writing or by word of mouth;
(b) there are acts committed to execute the agreement or combination to injure the
plaintiff; and
(c) the plaintiff has suffered damage due to acts done in execution of the agreement
or combination to injure the plaintiff; and
(2) the tort of conspiracy to injure by lawful means has the 3 Elements and a fourth
ingredient, namely there is a pre-dominant purpose or intention of the conspirators to
injure the plaintiff.
Khoo Teng Chye v Cekal Berjasa Sdn Bhd [2015] 6 CLJ 449 (CoA)
F: The appellant/plaintiff obtained a judgment against the first respondent/first defendant.
On the first respondent's failure to pay the judgment sum, the appellant served a statutory
notice under s. 218(1)(e) of the Companies Act 1965to the first respondent. However, the
first respondent, through its solicitors (third defendant), induced the appellant to withhold
the enforcement of the judgment. The appellant alleged that it was subsequently
discovered that the first respondent had transferred two plots of its land to the second
respondent/second defendant and the appellant had thus suffered loss as the land, which
ought to be a part of the assets of the first respondent available to the creditors of the first
respondent including the appellant, were no longer available. The appellant alleged that a
common director of the first and second respondents, Amir Hussain, had played a major
role to deprive the appellant of its right to recover the judgment sum or part thereof
against the first respondent. Amir Hussain and the second respondent had benefitted out
of the land transaction to the detriment of the appellant. The appellant's claim against the

respondents, based on the tort of 'conspiracy to injure', was dismissed by the High Court
and hence, the appeal.
Held:
- A judgment debtor, whether solvent or insolvent, can dispose of the judgment debtor's
assets tobona fide purchaser if there is no restriction in law. A creditor cannot complain
that the disposal has affected his rights per se. However, when such disposal is done to
attract a complaint of conspiracy as well as tort of 'conspiracy to injure', the court is
obliged to grant the relief based on established legal principles.
-The Third Defendants through their letter dated 23.11.2007 informed the Plaintiff's
solicitors that the Managing Director of the First Defendants was overseas and the Third
Defendants will revert after the Managing Director returns on 12.12.2007. This was not
true.
- Oxford Advanced Learner's Dictionary - 7th edn, defines conspiracy as 'a secret plan by
a group of people to do something harmful or illegal'. To support criminal or civil
liability, the Evidence Act 1950 (EA 1950) recognises the issue of conspiracy as relevant
and admissible evidence based on a low threshold of 'reasonable ground to believe that
two or more persons have conspired'. Once evidence is introduced as to the nexus of the
parties involved in the subject matter of the dispute, the court is obliged to consider the
facts and relevant circumstances to ascertain whether it was a genuine transaction or
whether it has element of civil or criminal wrong. (Refer to S.10 of the Evidence Act)
-Janabs Key to Law of Evidence:
Section 10 deals relevancy of facts in relation to actions for conspiracy. Conspiracy is an
agreement between two or more persons to do an unlawful act or to do a lawful act by
unlawful means. It may be both a crime as well as tort. The principle on which section 10
is based is the theory of agency, which is based on the maxim, 'qui facit per alium
facit per se' ie, he who does by another does it himself. Each conspirator is the agent as
well as the principal of the other conspirators. Statement made in the absence of one
conspirator will be taken in evidence as an exception to 'res inter alios acta principle ', ie,
transaction that happened between strangers are inadmissible.
We have read the appeal record and the able submissions of the parties. After much
consideration to the submissions of the learned counsel for the respondents, we are of the
considered view the appeal must be allowed. Our reasons inter alia are as follows:
(1) It is not in dispute in the instant case:
(i) Amir Hussain was the witness for the first respondent only, notwithstanding that he
was the director of the first respondent as well as the second respondent;
(ii) the second respondent took control of the first respondent;

(iii) Amir Hussain had signed the redemption agreement as director of the first respondent
notwithstanding the document does not set out his name below the signature;
(iv) Amir Husain also has signed the sale and purchase agreement between the first and
second respondent notwithstanding the document again does not set out his name below
the signature;
(v) statutory notice for winding up was served on 24 October 2007;
(vi) on 31 October 2007 Amir Hussain as the Managing Director of the first respondent
and a Director of the second respondent instructed the third defendant (action withdrawn)
to respond to the statutory notice;
(vii) the requested papers were served on 16 November 2007 and on 23 November 2007
the appellant was informed that DW1 was overseas until 12 December 2007 and response
to the appellant's statutory notice would only be made after his return;
(viii) the third defendant was the common solicitors and had completed the execution of
transfer forms, Form 14A, etc. one day before DW1 was said to return from overseas. It
was never established that DW1 was overseas.
Yeohata Machineries Sdn Bhd v Coil Master Sdn Bhd & Ors [2015] MLJU 545
- The first appellant was at all material times the owner of a patent relating to an
apparatus and process for the manufacture of mosquito coils (the patent). The second
and third respondents had incorporated the first respondent company to manufacture and
sell a mosquito coil making machine by the trade name Coilmaster MK-1. The
appellants claimed that the respondents decision to manufacture and sell the Coilmaster
MK-1, without the appellants consent, constituted an infringement of the patent.
According to the appellants the second and third respondents had acquired confidential
information relating to the sale, marketing, manufacture, production and operation of the
Yeohata, while in the employment of the second appellant and that the second and third
respondents had breached their fiduciary duties when they used such confidential
information to manufacture and sell the Coilmaster MK-1. The appellants further
claimed that the respondents had conspired to defraud and injure the appellants in their
business by inducing the second appellants customers to switch to the first respondents
machines. The appellants thus filed an action to restrain the respondents from infringing
the patent and using confidential information relating to the patent and sought damages
and costs. The respondents counterclaimed for the invalidation of the patent on the
grounds that there was prior art. The trial judge found that the appellants had failed to
prove that the Coilmaster MK-1 had breached the patent. On the other hand, the trial
judge found that the patent was based on prior art which was already in the market, such
as Nakamura, Tickwell and Sri Dapat. As such, the High Court dismissed the appellants
claim with costs and allowed the respondents counterclaim with costs. This was the
appellants appeal against the decision of the High Court. The appellants argued that the
trial judge had inter alia misdirected herself as to the evidence adduced by the

respondents, failed to consider the evidence adduced by the appellants and had
misinterpreted the nature of the patent.
Held:
-Para25: In order to sustain an action in conspiracy, the plaintiffs must plead and prove
four essential ingredients. They are: (i) a combination or agreement between two or more
individuals, (ii) an intent to injure, (iii) pursuant to which combination or agreement and
with that intention certain acts were carried out, and (iv) resulting in loss and damage to
the plaintiffs. The learned trial judge found that the evidence produced by the plaintiffs
was not sufficient to establish the tort of conspiracy to injure. The first defendant
company was not operational while the third defendant was a director of the first plaintiff.
The defendants did not take any confidential information from the plaintiffs. There was
no agreement to prevent the defendants from incorporating a new company. We have
considered the evidence in totality and find that there is nothing to justify us in disturbing
the findings of fact of the learned trial judge.
Deepak Jaikishan a/l Jaikishhan Rewachand & Anor v Intrared Sdn Bhd (previously
known as Reetaj City Centre Sdn Bhd and formerly known as KFH Reetaj Sdn Bhd) &
Anor [2013] 7 MLJ 437
F: The plaintiffs were shareholders and directors of the 2 nd defendant company which
entered into a sale and purchase agreement (SPA) to buy a building owned by Glomac.
The 2nd Defendant obtained financing from KFH which provided the funds on condition it
had equity participation in the acquisition of the building. Later, as the plaintffs wanted to
sell their shares in the 2nd Defendant and KFH wanted to buy the building for itself, KFH
incorporated the 1st defendant to buy the plaintiffs shares. However, the purchase price
was not paid even though the 1st defendant was made the owner of both the 2nd defendant
and the shares. The plaintiffs assigned the debt to Bank rakyat and the 1st defendant
undertook to repay the debt. However, 1st defendant and 2nd defendant stopped making
payments after they found that there was a restriction of use of the building. As a result
the plaintiffs were blacklisted by Bank Negara in the default list and penalty charges were
imposed against them. The 1st defendant denied that it had conspired with 2 nd defendant to
hurt the plaintiffs. Intrared denied it had conspired to injure the plaintiffs and said such a
claim was in any case unmaintainable as KFH was no longer a party to the action, the
claim against it having been discontinued following a settlement agreement. Intrared said
it had no option but to cease making payments under the SSPA for its own protection
because if it had terminated the agreement the plaintiffs would not have been able to
repay the substantial sums that had already been paid thereunder. Intrared also contended
that even if it was guilty of committing a breach, Deepak had, by his involvement in
trying to resolve the issue of cl 47, waived the breach.
Held:
-As stated at the outset in relation to the law, the first element that has to be established is
the existence of an agreement between the conspirators, namely Intrared and KFH, or a
combination of action or concerted action between Intrared and another person or persons
to injure the plaintiffs (see Kuwait Oil Tanker Company SAK v Al-Bader and others). As
also stated in that case, it is not necessary to show anything in the nature of an express
agreement, whether formal or informal. It is sufficient if two or more persons combine
with a common intention, or that they deliberately combine, albeit tacitly to achieve a

common end. How then is this to be ascertained? As stated in R v Siracusa the existence
of such an agreement or combination of action with a common purpose can only be
inferred from overt acts.
-1st D's act of suspending payment indefinitely was wrong and breached the agreement to
pay for the purchase of shares. The gravity of the breach was borne out by the fact it was
aware the payment of the balance purchase price went towards meeting the plaintiffs'
repayment obligations to Bank Rakyat.
-Prior to the entry into the SSPA, 1st D's solicitors had undertaken a due diligence
exercise which made express reference to the Development Order. As its solicitors
had full knowledge of the subsistence of the DO, Intrared was presumed to have had
knowledge not only of the subsistence of the DO but also of its contents. Its stance that it
only became aware of the existence of cl 47 in the DO much later was untenable and less
than credible
-1st D's contention that it could not terminate either the SSPA or the SPA was untenable.
The recourse of terminating the agreement with the plaintiffs was available to it and it
was no excuse to contend the plaintiffs were 'unlikely to be able to repay the monies'.
That would have been the correct legal position to adopt rather than effecting a breach of
the SSPA which provided no remedy in relation to the SPA between Prestige Scale and
Glomac:
The starting point must be the fact of Intrared and KFH acting in combination or
jointly to halt or cease all payments due under separate contractual obligations to
third parties (Bank Rakyat) which directly affected the plaintiffs. In other words, I
refer to the fact that Intrared took a decision not to honour its obligations under the Share
sale and purchase agreement in January 2011. KFH, in terms of timing, also took a
decision not to honour its obligations under the separate irrevocable letter of
undertaking issued to the plaintiffs. The fact that both entities determined at the
same time not to honour their separate obligations under two different contracts
evidences to my mind, concerted action or an agreement or a combination of action
by two parties. The fact that their actions affected one common 'target' namely the
economic interests of the plaintiffs also cannot be denied. When viewed in totality
therefore the acts of Intrared and KFH, to cease payments under their separate contracts
amount to overt acts from which it may be inferred that:
(a) the two entities acted together pursuant to an agreement or in combination or in
concert; and
(b) with the common purpose of giving rise to a breach or default in two separate
contracts with the plaintiffs, the net effect of which would be to cause detriment to the
plaintiffs.
-The only inference that could be drawn was that Intrared and KFH intended to injure the
plaintiffs' economic interests. Even if it was accepted that Intrared deliberately ceased to
honour its contractual obligations to protect or promote its own economic interests, that
was sufficient to satisfy the mental ingredient or 'intention' required for the tort
of conspiracy to injure.