Civil Conspiracy : The Conspiracy Theory

What is Civil 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 criminal, tortious or even a civil claim. For example:

  1. Person A and Person B conspire together to ensure that Person C suffers the loss of business or trade;
  2. Person A and Person B conspire together to physically harm Person C; or
  3. Person A and Person B conspire together to ensure that Person’s C civil suit claim against Person A is rendered futile.

What is the law/ elements required to prove conspiracy?

In order to succeed in the claim of civil conspiracy, a claimant needs to prove/ establish1:

  1. There is an agreement between two or more person;
  2. The agreement between them was to injure the claimant; and
  3. The claimant suffered damage as a result of the acts done in the execution of that agreement.

Is there a specific category of an act/ commission that falls under the label of “conspiracy”?

No. The court has held that it all depends on the circumstances of each case- as long there is a criminal offense i.e. perversion of justice or where a person suffers damage arising out of a tortious claim, an aggrieved party can bring a claim under this category.

How does one prove conspiracy?

The courts have on many occasions noted that civil conspiracy as a whole is usually brought about in secrecy. This meant that in most cases, it is outright impossible to prove conspiracy2. Therefore, the act of conspiracy or the agreement to injure is usually established in the vast majority of cases by circumstantial evidence3– it could be inferred from utterances, writings, acts, omissions, and conduct of the parties to the conspiracy which is usually done4.

Is it applicable to a company i.e. can a company conspire against another individual/ company?

The short answer is yes. The long answer is this- a company may conspire against another company/ individuals by conspiring with an individual (or individuals) such as their directors/ employees or even with another company to ensure another individual/ company suffers losses.

As noted by the court5, even criminal law accepts that a company can conspire with its directors. Therefore, it would be safe to assume that they could in fact conspire together with its employees to cause mischief. This can be seen for example in our Penal Code6, where a company and its agent7 (partner, co-owner, clerk, servant, employee, banker, broker, auctioneer, architect, clerk of works, engineer, advocate and solicitor, accountant, auditor, surveyor, buyer, salesman, trustee executor, administrator, liquidator, trustee) can be charged for conspiring to misappropriate property8.

For example, in Khoo Teng Chye v Cekal Berjasa Sdn Bhd & Anor9, Teng Chye obtained a judgment against Cekal Berjasa, in which Cekal Berjasa had to pay Teng Chye a certain sum of money.  Obviously Cekal Berjasa did not pay and was threatened with winding up proceedings. In order to render the winding-up proceedings futile (i.e. no money nor assets to pay Teng Chye), Cekal Berjasa sold off the land  (via a lawyer) that they owned to another company.  Teng Chye filed a claim against them. One of the claims (amongst others) is that Cekal Berjasa and its cohorts have conspired against him and he has suffered loss as the said lands which ought to be available to the creditors (including Teng Chye) was no longer available for the creditors to recoup their monies.

The court sided with Teng Chye. The court held that a judgment debtor whether insolvent or solvent can dispose of the judgment debtor’s assets to bona fide purchasers if there is no restriction in law and a creditor cannot complain that the disposal has affected his rights per se. However, it cannot do so in a manner that bears the hallmark of a conspiracy claim, namely it is not done in a bona fide manner, but it was done with the sole intention to injure the creditors (in this case, Teng Chye).

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1. Renault SA v Inokom Corp [2010] 5 MLJ 394.
2. Balakrishnan Pillai v State [1996] Cri LJ 757.
3. Khoo Teng Chye v Cekal Berjasa Sdn Bhd & Anor [2015] MLJU 992.
4. State of Tamil Nadu v Nalini AIR 1999 SC 2640.
5. Canberra Data Centres Pty Ltd v Vibe Constructions (ACT) Pty Ltd [2010] ACTSC 20.
6. Section 130L, Penal Code.
7. Section 402A, Penal Code.
8. Section 403, Penal Code.
9. [2015] MLJU 992.

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