Bukit Baru Villa v Amber Spectra Sdn Bhd (D4) (WA-22NCC-59-02/2017)

YEOH TEEN EAM

WONG SHAN MAY

ZAIHAZRI BIN ZAINI

AMBER SPECTRA SDN BHD

YONG CHEN LIM (rakan kongsi dan beramal di Tetuan Yong Chen Lin Saridah) ...DEFENDAN-DEFENDAN DI HADAPAN YANG ARIF TUAN MOHD NAZLAN BIN MOHD GHAZALI HAKIM JUDGMENT Introduction [1] This case concerns two applications, filed by the fourth and fifth defendants in enclosures 21 and 23, respectively, to strike out the statement of claim of the plaintiff. At the conclusion of the hearing of both applications which were heard together, I allowed the same and Page 2 of 25 highlighted the key reasons for my decision. This judgment contains the full grounds for my decision. Key Background Facts The Parties [2] The plaintiff, a private limited company, was at all material times, the registered and beneficial owner of two pieces of land held under Geran GRN 11210, Lot 122, Bandar Bukit Baru, Seksyen III and Geran GM 3191, Lot 9200, Mukim Bukit Baru; both in Daerah Melaka Tengah (‘the Lands”). [3] The first defendant and the second defendant were, respectively, a director and the company secretary of the plaintiff company at the material time. The third defendant is also a director of the plaintiff. The fourth defendant is a private limited company and the purchaser of the Lands from the plaintiff. The fifth defendant is an advocate and solicitor handling the purchase transaction for the fourth defendant. The Sale of the Lands [4] In pursuance of an option to purchase, the plaintiff had granted an option to one Aw Boon Huan (“ABH”) and/or his buyer to purchase the Lands at the purchase price of RM6,209,400.00, and subject to the terms and conditions stipulated therein. [5] ABH then on 30 December 2015 managed to secure the fourth defendant to purchase the Lands. The law firm of the fifth defendant, where he is a partner, Messrs Yong Chen Lim & Saridah (“Messrs YCLS”) were retained by the fourth defendant to act on behalf of the fourth defendant, as the purchaser in the transaction. [6] In its letter dated 11 January 2016, the fifth defendant informed the plaintiff that a sum of RM500,000.00, being the earnest deposit for the purchase price of the Lands had been paid by the fourth defendant to the plaintiff’s account. It was also stated in the letter that a draft sale and purchase agreement had been emailed to the plaintiff’s solicitors, Messrs Kamil Hashim Raj & Lim (“Messrs KHRL”) and also that the fourth defendant had additionally deposited the balance 20% of the purchase price in the sum of RM741,880.00 with the fifth defendant. Page 3 of 25 [7] In response, in its letter of undertaking and confirmation dated 14 January 2016 to the fourth defendant, the plaintiff acknowledged receipt of the said sum of the balance 20% of the purchase price and gave an undertaking to forward to the solicitors for the fourth defendant, Messrs YCLS the documents stated as follows:-

Two sets of the duly certified true copies of the plaintiff’s Memorandum and Articles of Association, forms 24, 44, and 49 of the Companies Act 1965;

Duly certified true copies of the plaintiff’s members’ resolution and directors’ resolutions sanctioning the sale of the Lands;

The Memorandum of Transfer in respect of the Lands;

Duly paid quit rent and assessment receipt for the year 2016 in respect of the Lands; and

Any other relevant documents for registration. [8] A letter of similar effect, albeit undated was also sent by the plaintiff to Messrs YCLS, acknowledging receipt of the balance of the 20% deposit of the purchase price. [9] This then resulted in the execution of the sale and purchase agreement dated 20 January 2016 by the plaintiff as vendor and the fourth defendant as purchaser, wherein the plaintiff agreed to sell and the fourth defendant agreed to purchase the Lands for a consideration sum of RM6,209,400 as the purchase price (“the SPA”). [10] In line with the requirements of the terms of the SPA, the following documents had been executed by the plaintiff, as delivered by Messrs KHRL, the solicitors for the plaintiff, to Messrs YCLS, as the solicitors for the purchaser (fourth defendant), for purposes of transferring the Lands to the fourth defendant:-

the Memorandum of Transfer (“MOT”);

the directors’ circular resolution and members’ circular resolution, both dated 20th January 2016 (“Resolution”); Page 4 of 25

the certified true copies of the plaintiff’s forms 24, 44 and 49 of the Companies Act 1965;

the certified true copy of the memorandum and articles of association of the plaintiff (“M&A”);

the original redemption letter cum undertaking by the plaintiff’s financier;

the certified true copies of the identity card of the plaintiff’s directors;

the statutory declaration in relation to the plaintiff’s solvency (“the SD”); and

the plaintiff’s letter of undertaking in favour of the fourth defendant’s financier. [11] As part of the standard conveyancing process, on or around 20 April 2016, the Inland Revenue Board of Malaysia (“LHDN”) issued two (2) notices of assessment/adjudication for the proposed transfer of each of the Lands, for the amounts of RM132,234.00 and RM42,051.00, respectively (“the Stamp Duties”). The Stamp Duties were paid by the fourth defendant on 26 April 2016. Significantly, on the basis of the assessment by LHDN, the Lands were valued as the same purchase consideration agreed in the SPA. [12] It is common ground that the fourth defendant had subsequently fully paid the purchase price for the Lands in accordance with the terms of the SPA. [13] The Lands were then duly registered in the name of the fourth defendant, on or around 27 April 2016. Public Islamic Bank Berhad was registered as the chargee of the Lands. [14] However, in February 2017, the plaintiff commenced the underlying writ action against the defendants. The Writ Action [15] In its statement of claim, the key allegation raised by the plaintiff levelled against all the defendants is that the sale transaction of the Lands to the fourth defendant was tainted with fraud, Page 5 of 25 misappropriation, deceit, breach of trust, as well as forgery of documents and signatures and/or mala fide by the defendants. Thus in respect of the first, second and third defendants who were company officials at the material time, the plaintiff asserted that neither the plaintiff nor its directors or shareholders had knowledge of the sale, and that none of the transaction documents were signed by the plaintiff or authorized by company resolution. [16] The plaintiff further denied and disputed the various key sale transaction documents on the sale of the Lands to the fourth defendant, including the option signed by the first defendant and ABH, the SPA, the directors’ and members’ circular resolutions on the SPA, both dated 20 January 2016, and the From 14A. The plaintiff’s claim against the fifth defendant revolved around the allegation that the latter had failed to perform the requisite due diligence in the discharge of his duties as the solicitor handling the sale transaction. [17] A specific complaint of the plaintiff against the fifth defendant is that the latter had failed to undertake a proper company search of the plaintiff at the Companies Commission of Malaysia (CCM) to confirm the directors of the plaintiff. The plaintiff contended that despite the search results as contained in exhibit “YCL-15” accompanying the affidavit showing that the third defendant was not the new director as alleged by the fifth defendant, the fifth defendant regardless proceeded with the sale, causing the fraudulent transfer of the Lands from the plaintiff to the fourth defendant. [18] It is important to note that the applications herein are only filed by the fourth and fifth defendants, for the plaintiff has as a matter of fact, managed to obtain judgments in default against both the first and third defendants on 3 May 2017 who were at all material times directors of the plaintiff company, with damages to be assessed. Essence Of Arguments Of Parties In These Striking Out Applications [19] These applications are instituted by the fourth and fifth defendants. The crux of the former’s case which formed the basis of its striking out application in enclosure 21 is that the fourth defendant had acted in good faith without notice of any alleged irregularities in any of the documents concerning the transaction. The fourth defendant argued that the plaintiff’s affidavit in reply to the fourth defendant’s affidavit in support of this application failed to disclose evidence to substantiate its Page 6 of 25 many allegations and averments. The shortcoming in the lack of particularisation of the circumstances of fraud levelled against the fourth defendant is not only impairing the statement of claim but also further worsened by the bare affidavit averments of the plaintiff in resisting this application, all of which, according to the fourth defendant, justifiably render the claim to be one that is obviously unsustainable and ought to be struck out. [20] The fifth defendant similarly argued that the plaintiff had simply denied knowledge on its part and made bare denial and allegations of fraud and conspiracy but was unable to contradict the fifth defendant’s averment or to adequately substantiate its claim with credible evidence, to the extent that the fifth defendant’s averments must be taken to be true pursuant to the leading authority of Ng Hee Thoong & Anor v Public Bank Bhd [1995] 1 MLJ 28. The thrust of the fifth defendant’s contention is that the plaintiff’s case must fail since the sale of the Lands (and all documents relating thereto, none of which was created by the fifth defendant) was valid and regular, particularly since the plaintiff was represented by Messrs KHRL in the sale, and that the fourth defendant had paid the purchase price as stipulated under the SPA, which has even been duly acknowledged by the plaintiff. [21] The plaintiff, in its opposition to these applications, on the other hand argued that based on affidavits filed by parties, it was apparent that there are numerous arguable points which are serious in nature and warranting a full trial. It is important to call witnesses to establish the truth and at the same time facilitate the disposal of the case. The plaintiff submitted that case-law authorities would favour the instant case to be fully ventilated at trial, and referred to two cases which I shall only refer briefly herein. The first is Sivarasa Rasiah & Ors v Che Hamzah Che Ismail & Ors [2012] 1 MLJ 473 where the Court ruled:- “A striking out order should not be made summarily by the court if there is issue of law that requires lengthy argument and mature consideration. It should also not be made if there is issue of fact that is capable of resolution only after taking viva once evidence during trial”. [22] The second is the case of Zakaria Bin Mohamad Esa v Dato’ Abdul Aziz Bin Ahmad & ors [1985] 2 MLJ 222 which held that:- “It is settled rule in this type of application that the pleading must be read as a whole, each paragraph must be viewed in relation to others and cannot be viewed in isolation.” Page 7 of 25 [23] The plaintiff emphasised that there are many issues concerning the purported sale transaction which were tainted with fraud, misappropriation, deceit, breach of trust, forgery and/or mala fide on the part of the defendants, and in respect of which a police report had also been lodged, which should therefore be resolved in a trial proper. The case should thus not be summarily struck out without the examination of witnesses in full trial. In short, the plaintiff submitted that its claim is far from being obviously unsustainable to justify a striking out at this stage. Evaluation & Findings of this Court The Law on Striking Out - Summary [24] This is a striking out application. So I should only briefly refer to the already trite law on striking out, apart from which authority is also part of the inherent jurisdiction of the Court, is primarily contained in Order 18 r 19 (1) which states: “19. Striking out pleadings and endorsements (O 18 r 19)

The Court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement, of any writ in the action, or anything in any pleading or in the endorsement, on the ground that-

it discloses no reasonable cause of action or defence, as the case may be;

it is scandalous, frivolous or vexatious:

it may prejudice, embarrass or delay the fair trial of the action; or

it is otherwise an abuse of the process of the Court, and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.” [25] The defendants in the instant case relied on limbs (b) and

(d). Thus it was submitted that the claim of the plaintiff is vexatious and frivolous and that it otherwise tantamount to an abuse of court process. [26] The leading authority on Order 18 r 19(1) of the RC 2012 is the Supreme Court decision in Bandar Builder Sdn Bhd v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36, and in particular the Page 8 of 25 following part of the judgment of Mohamed Dzaiddin SCJ (later Chief Justice):- “The principles upon which the Court acts in exercising its power under any of the four limbs of O. 18 r. 19(1) Rules of the High Court are well settled. It is only in plain and obvious cases that recourse should be had to the summary process under this rule (per Lindley M.R. in Hubbuck v. Wilkinson [1899] 1 QB 86, p. 91), and this summary procedure can only be adopted when it can be clearly seen that a claim or answer is on the face of it "obviously unsustainable" (Attorney-General of Duchy of Lancaster v. L. & N.W. Ry. Co. [1892] 3 Ch. 274, CA). It cannot be exercised by a minute examination of the documents and facts of the case, in order to see whether the party has a cause of action or a defence (Wenlock v. Moloney [1965] 1 WLR 1238; [1965] 2 All ER 871, CA.). The authorities further show that if there is a point of law which requires serious discussion, an objection should be taken on the pleadings and the point set down for argument under O. 33 r. which is in pari materia with our O. 33 r. 2 Rules of the High Court) (Hubbuck v. Wilkinson) (supra). The Court must be satisfied that there is no reasonable cause of action or that the claims are frivolous or vexatious or that the defences raised are not arguable”. [27] It is well established that the power of the Court to strike out under the four grounds of Order 18 r 19(1) is to be exercised when it can clearly be determined that a claim or answer is prime facie obviously unsustainable. It is also only to be invoked sparingly (see Affin Bank Bhd v. Eye Bee Sdn Bhd [2005] 7 MLJ 1). [28] It could also be said that as for limb (b), the test is the same consideration on the claim being obviously unsustainable and that for limb (d), it arises when the process of the Court is not used in a bona fide manner and has been abused (see the Court of Appeal decision in Harapan Permai Sdn Bhd v Sabah Forest Industries Sdn Bhd [2011] 2 MLJ 192) and the said claim must also be proven to be obviously unsustainable (see another Court of Appeal decision of Zainal Abidin bin Hamid @ S. Maniam v Kerajaan Malaysia [2009] 6 MLJ 863). [29] It is equally clear as it is practical that the situations that could fall within the categories under limb (d) are never closed given the variety of circumstances arising from the facts of each particular case. The categories of cases where the process of the Court could be abused are varied as they are numerous. They are also non-exhaustive (see Jasa Keramat Sdn Bhd & Anor v Monatech (M) Sdn Bhd [1999] 4 MLJ 637). Page 9 of 25 [30] And, as established by the Supreme Court in Raja Zainal Abidin bin Raja Haji Tachik v British-American Life & General Insurance Bhd [1993] 3 MLJ 16, the Courts have the inherent jurisdiction to prevent an abuse of its process. [31] The Court is permitted, in an application other than under limb (a) (on the ground of no reasonable cause of action) to examine the affidavit evidence instead of merely the pleadings in the statement of claim of the plaintiff (see Pengiran Othman Shah Bin Pengiran Mohd Yusoff & Anor v Karambunai Resorts Sdn Bhd & Ors [1996] 1 MLJ 309), and where necessary, scrutinise them with a fine tooth comb (see Tractors Malaysia Bhd v Tio Chee Hing [1957] 2 MLJ 1). The pleadings of the plaintiff [32] It is useful for the pleadings which make reference to the fourth and fifth defendants be stated. They group the fourth and fifth defendants together in the various allegations, as follows:-

Plaintif juga memplidkan bahawa Defendan Kedua, Defendan Ketiga, Defendan Ke-empat dan/atau Defendan Kelima telah secara langsung dan/atau tidak langsung bersubahat dan/atau turut sama dengan Defendan Pertama melakukan penipuan, penyelewengan dan/atau frod mengakibatkan kepentingan Plaintif terjejas teruk dan mengalami kerugian yang besar”. [33] The statement of claim then sought to particularise the allegations of fraud, abuse of power, breach of trust and violation of fiduciary duties, most of which are levelled against the first defendant. The paragraphs which concerned the fourth and fifth defendants are as follows:-

Plaintif selanjutnya memplidkan bahawa Defendan Pertama bersama-sama dengan Defendan Keempat dan/atau Defendan Kelima telah secara langsung dan/atau tidak langsung bersubahat dan/atau turut sama dengan Defendant Pertama telah menyalahgunakan kuasa dan/atau melakukan penipuan dan/atau frod dalam urusan atau transaksi jual beli hartanah milik Plaintif…….. d) Plaintif memplidkan bahawa wujud penyelewengan, penipuan dan/atau frod di antara Defendant Pertama, Defendant Keempat dan Defendan Kelima dalam urusan, transaksi dan/atau Perjanjian Jual Beli yang dikatakan tersebut apabila hartanah-hartanah tersebut telah dijual ... dibawah harga pasaran... Page 10 of 25 e) Plaintif memplidkan bahawa mana-mana transaksi yang melibatkan hartanah-hartanah tersebut dan/atau pemalsuan dokumen bagi membolehkan Defendan Pertama, Kedua, Ketiga, Keempat dan/atau Kelima meneruskan….transaksi yang melibatkan hartanah-hartanah tersebut adalah terbatal….. g) Defendan Pertama telah bertindak secara salah dan/atau menipu dan/atau frod dan Defendan Keempat dan/atau Defendan Kelima telah secara langsung dan/atau tidak langsung bersubahat dan/atau turut sama dengan Defendan Pertama untuk kepentingan diri sendiri, meraih keuntungan hasil dari transaksi jual beli... h) ...Defendan Kelima adalah peguam yang mengendalikan urusan transaksi jualbeli tersebut termasuk...menyediakan Perjanjian Jual Beli bertarikh 20 Januari 2016... Defendan Kelima telah gagal dan/atau cuai dalam menjalankan tanggungjawab sebagai peguam bagi memastikan segala langkah-langkah munasabah yang sepatutnya dilakukan dalam sesuatu transaksi jual beli, termasuk semakan atau carian bagi dokumen-dokumen yang diperlukan telah sempurna dijalankan. Kegagalan dan/atau kecuaian berbuat demikian, Defendan kelima telah secara cuai dan frod memindahkan hartanah tersebut daripada Plaintif kepada Defendan Keempat. i) Plaintif juga memplidkan bahawa Defendan Pertama, Keempat dan/atau Kelima telah secara salah mewujudkan dokumen Borang 14A Pindahmilik Tanah bertarikh 08.04.2016 dan/atau dokumen-dokumen lain bagi tujuan Pindahmilik Tanah tersebut, dan Plaintif tidak pernah memberi resolusi atau kelulusan bagi tujuan yang dikata tersebut....

Plaintif memplidkan bahawa Plaintif mengalami kerugian besar dan prejudis yang teruk akibat perbuatan-perbuatan Defendan Pertama di atas dan Defendan Kedua, Defendan Ketiga, Defendan Keempat dan/atau Defendan Kelima telah secara langsung dan/atau tidak langsung bersubahat….dengan Defendan Pertama.” Insufficient Particularisation [34] It is trite that under Order 18 r 7, material facts must be pleaded, for these are the material factors which are necessary for the purpose of formulating a complete cause of action. In Bruce v Odhams Press Ltd [1936] 1 KB 697, Scott LJ said: Page 11 of 25 “The word 'material' means necessary for the purpose of formulating a complete cause of action, and if any one 'material' fact is omitted, the statement of claim is bad”. [35] A party is entitled to have from the opposing party, particulars of facts, as opposed to evidence, relevant to the issues at stake in order to prevent surprise, and to enable the other party to know the exact case he has to meet, especially since parties cannot at trial adduce evidence in support of facts which were not pleaded facts (see the Supreme Court decision in Superintendant of Lands and Surveys (4th Div) v Hamit bin Matusin [1994] 3 MLJ 185). [36] A careful review of the pleadings concerning the fourth and fifth defendants as reproduced above however merely contain accusations against them of primarily conspiracy to commit fraud and forgery without stating the manner how these were committed. The most direct allegation against the fourth defendant in the alleged fraud and conspiracy is that it was involved in the creation of Form 14A and other key documents without the knowledge of the plaintiff, but without even suggesting what exactly was the fourth defendant’s role and the specific acts done by the fourth defendant for such purpose. And as for the fifth defendant, the allegation is on its failure to undertake the necessary searches to verify the relevant transaction documents. [37] Such pleadings in my view do not satisfy the requirements of Order 18 r 7. It cannot be safely said that the fourth and fifth defendants are able to appreciate from such averments by the plaintiff in the statement of claim the exact case against them that they have to answer, more so since the process and documents concerning the sale of the Lands in pursuance of the SPA, which included the SPA itself, the Form 14A and the Stamp Duties all appeared to be in order, as stated earlier. [38] More crucially, the pleadings in the instant case as against the fourth and fifth defendants are flawed because they infringe another important rule of pleadings especially relevant to the instant applications. This is encapsulated in Order 18 r 12. [39] Order 18 r 12(1) (a) of the Rules of Court 2012 (“the RC 2012”) provides that:- Page 12 of 25 Particulars of pleading (O18 r 12)

–(1) Subject to paragraph (2), every pleading shall contain the necessary particulars of any claim, defence or other matter pleaded including, without prejudice to the generality of the foregoing words-

Particulars of any misrepresentation, fraud, breach of trust, wilful default or undue influence on which the pleading party relies; and …. [40] It is an important civil procedure rule that when pleading fraud, a plaintiff must plead by stating with particularity the circumstances constituting fraud. There must be enough facts to state a claim to relief that is plausible on the face of the statement of claim in order to prevent dismissal of a complaint. [41] The leading text of Bullen & Leake & Jacob’s Precedents of Pleading (13th Edition at page 428) states thus:- “… Any charge of fraud or misrepresentation must be pleaded with the utmost particularity. The statement of claim must show the nature and extent of each alleged misrepresentation and contain particulars showing by whom and to whom it was made, and whether orally or in writing, and if in writing, identifying the relevant documents …” [42] Yet, the averments in the pleadings against the fourth and fifth defendants as shown earlier, are conspicuous for the absence of the requisite particulars of the alleged fraud and other improprieties levelled against them. [43] It cannot be emphasised enough that whenever an allegation like fraud is raised, the facts proffered in support of the complaint ought to be specified with the requisite particularity, because general statements are simply not sufficient to ensure that litigation between the parties is conducted firmly, openly and without surprises (see Astrolavnis Compania Naviera SA v Linard [1972] 2 QB 611). [44] In the case of Lee Kim Luang v Lee Shiah Yee [1988] 1 MLJ 193, Vohrah J held:- “Order 18 rule 12, R.H.C., governs the pleadings in this case although the pleadings were filed under the old R.S.C. 1957 (see Order 1, rule 2(1)) and the rule is that particulars have to be given of the fraud pleaded. In this case, however, there is merely a general allegation of fraud and the pleadings stand mute as to the circumstances relied upon as constituting the alleged fraud. A general allegation of fraud is Page 13 of 25 insufficient even to amount to an averment of fraud of which any Court ought to take notice: Wallinford v Mutual Society (1880) 5 App Cas 685”. [45] The other key allegation raised in the statement of claim is one of conspiracy. In Gasing Heights Sdn Bhd v. Aloyah Bte Abd Rahman & Ors [2000] 2 CLJ 664, Mahadev Shankar J (as he then was) said: "Just as fraud must be pleaded with great particularity, so also all the constituent ingredients going to make up the conspiracy, must be pleaded. On this ground alone, the claim for conspiracy fails". [46] Thus conspiracy must similarly be pleaded with great particularity, failing which, the claim is liable to be struck out under O 18 r 19(1) (a) of the RC. [47] In dealing with the element of the tort of conspiracy, I can do no better than reproduce the pertinent passages from the judgment of Mohd Zawawi Salleh JCA in a recent Court of Appeal decision in Cubic Electronic Sdn Bhd v. MKC Corporate & Business Advisory Sdn Bhd and another appeal [2016] 3 CLJ 676, as follows:- “[10] 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:

a combination or agreement between two or more individuals;

(ii) an intent to injure;

(iii)

(iv) resulting loss and damage to the claimant. (See Khoo Teng Chye v. Cekal Berjasa Sdn Bhd & Anor, Civil Appeal No: P-02-542-03-2015 (CA) [2015] 6 CLJ 449 (CA)). [11] There are two kinds of conspiracy, the elements of which are distinct:

unlawful means conspiracy: a conspiracy in which the participants combine to perform acts which are themselves unlawful (under either criminal or civil law); and

(ii) lawful means conspiracy: a combination to perform acts which, although not themselves per se unlawful, are done with the sole predominant purpose of injuring the claimant - it is in the fact of the conspiracy that the unlawfulness resides. (See Milicent Rosalind Danker & Anor v. Malaysia-Europe Forum Bhd & Ors [2012] 2 CLJ 1076 (HC); SCK Group Bhd & Anor v. Sunny Liew Siew Pang & Anor [2010] 9 CLJ 389; [2011] 4 MLJ 393 (CA)). [12] The distinction between the two was succinctly elucidated by Lord Bridge in Lonrho Plc v. Fayed & Others [1991] 3 All ER 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”. [48] A conspiracy essentially consists in the agreement of two or more to do an unlawful act, or to do a lawful act by unlawful means (see Mulcahy v R (1868) LR 3 HL 306). The tort of lawful means conspiracy and unlawful means conspiracy both require evidence of the element of an agreement between two or more parties who take concerted action that causes injury to the claimant. [49] But again, the plaintiff, from the pleadings as reproduced earlier, has clearly failed to plead either of the circumstances of any alleged agreement between the defendants, the objective and intention of the said agreement, the purported overt acts of the defendants in pursuance of the agreement or in what manner the acts of the fourth and fifth defendants had resulted in injury to the plaintiff. [50] In the instant case, the particulars of fraud, conspiracy and other accusations are absent. There are simply insufficient facts to support any of them. Not against the fourth defendant, not against the fifth defendant. For the latter, it was virtually no particularisation at all. And as against the fifth defendant, the accusation which is accompanied by some particularisation at most is the averment that the fifth defendant, did not, as the lawyer involved in the transaction undertake the necessary steps which somehow fraudulently led to the transfer of the Lands to the fourth defendant. But I reiterate that an allegation that the fifth defendant had committed fraud without condescending into the details of fraud is bad pleading. Page 15 of 25 [51] I further cannot but agree with the fifth defendant that to the extent that the allegation concerned negligence on the part of fifth defendant, it is incumbent upon the plaintiff to ensure and state that the particulars of fraud demonstrate that the fifth defendant is dishonest and not merely negligent. Certainly, material facts showing more than a mere omission, particularly the element of intention to deceive, would be necessary in order to support the allegation revolving around fraud and dishonesty against the fifth defendant (see CIMB Bank Bhd v Veeran Ayasamy [2015] 7 CLJ 289). [52] The attack on Form 14A is similarly unsubstantiated. The averments in the pleadings do not express in what manner either of the fourth or the fifth defendants was involved in its creation, in the absence of particulars of such as who created it, how it was done, where it occurred, and date of event. Reference to “lain-lain dokumen” in the pleadings as stated earlier is especially inconsequential for not adding to anything. [53] After all, in all proceedings, the Court will only consider matters which are pleaded. The Court cannot help improve the case of the litigants which must stand or fall based squarely on what have been pleaded. Hamid Sultan JCA in delivering the decision of the Court of Appeal in Heritage Grand Vacation Club Bhd v Pacific Fantasy Vacation Sdn Bhd [2016] 4 MLJ 389 held that: “[4] It is well established that it is not the function of the court to build a case for the plaintiff/defendant inconsistent with the pleaded case. In Yew Wan Leong v Lai Kok Chye [1990] 2 MLJ 152, the Supreme Court had in strong terms held, and which 27 still stands as a ‘gold standard’ in pleading rules and evidence, as follows: It is not the duty of the court to make out a case for one of the parties when the party concerned does not raise or wish to raise the point. In disposing of a suit or matter involving a disputed question of fact, it is not proper for the court to displace the case made by a party in its pleadings and give effect to an entirely new case which the party had not made out in its own pleadings. The trial of a suit should be confined to the pleas on which the parties are at variance. (Emphasis added) …” [54] The plaintiff must furnish the requisite particularity by pleading the circumstances of material facts as to the questions of “who, what, where, when and how” of the alleged fraud and conspiracy in order to enable the defendants to provide a meaningful response. It cannot be emphasised enough that general statements which are vague and containing conclusory allegations do not satisfy the requirements of Page 16 of 25 Order 18 r 7 and r 12. The statement of claim too cannot hide behind purported averments which in truth are nothing but merely a set of formulaic recitation of the ingredients of a cause of action. [55] Pleadings sans particularisation is bad pleading because matters such as fraud and conspiracy cannot be expected to be inferred from statements which are vague and general in nature, more so as the concept of fraud itself is not immutable. Similarly, when alleging fraud and conspiracy against more than one defendants, like presently, the plaintiff must specify, with particularity, each of the fourth and fifth defendant’s offending conduct. The defendants cannot be grouped together without identifying which defendant has committed which wrong. [56] An example of a striking out where the pleading was found not to have shown the existence of a reasonable cause of action is the case of Renault SA v Inokom Corp Sdn Bhd [2010] 5 MLJ 394 where the statement of claim containing the allegation of conspiracy did not set out with clarity and precision the overt acts alleged to have been done by each of the alleged conspirators in furtherance of the conspiracy. The Court of Appeal in that case concluded thus:- "[48] We are unanimous that there is no cause of action in the tort of conspiracy as against TC Euro. The statement of claim is vexatious and frivolous. Just as fraud must be pleaded with great particularity, so must the constituent ingredients of the alleged conspiracy by TC. Euro be pleaded. In the circumstances, for reasons already stated, the appeal is allowed and the statement of claim against TC Euro is struck off". In other words, the failure of the plaintiff in the instant case to plead the constituent ingredients of its claim of conspiracy against the defendants ought similarly to be met with the rejection of its Statement of Claim. The affidavit of the plaintiff too failed to depose the necessary to deny averments of the defendants [57] The case of the plaintiff is particularly difficult to sustain because not only is its statement of claim seriously lacking in particulars, the affidavits affirmed for the plaintiff to resist the instant applications too do not provide the requisite clarification and particularity of the alleged fraud and conspiracy. Not that an affidavit can validly improve and repair on what should have rightfully be in the statement of claim. Page 17 of 25 [58] Yet the documents relevant to the transaction on the sale of the Lands, being contemporaneous to the process do not suggest any irregularity that render any of documents flawed or invalid. Crucially, relevant transfer documents had been generated and forwarded by Messrs KHRL, the plaintiff’s solicitors to Messrs YCLS, the fourth defendant’s solicitors. The MOT was also prepared and sent by Messrs KHRL and appeared to have been validly executed by the plaintiff under its common seal. [59] The fifth defendant had never singly created any documents. Not to mention the fourth defendant. The SPA was drafted by the fifth defendant, as the solicitor for the fourth defendant, the purchaser of the Lands, in line with industry practice for the buyer to prepare the draft agreement. The SPA was sent to both the plaintiff and Messrs KHRL for their comments and endorsement before the execution of the SPA. [60] Further, statutory company documents such as the Forms 24, 44, 49 of the Companies Act 1965 and the M&A had been compiled, sent and thus represented by Messrs KHRL to be properly and validly certified by the second defendant as the company secretary of the plaintiff. And again, the Lands were successfully registered in the name of the fourth defendant. [61] That Messrs YCLS, as the solicitors for the fourth defendant, had conducted the requisite land searches on the Lands and company searches on the plaintiff cannot be disputed. Nor can it be denied that, I repeat, the draft SPA had been sent to both the plaintiff, as the vendor, and its solicitors, Messrs KHRL for their comments and endorsement prior to the execution of the SPA. [62] But from the affidavit evidence, and in light of standard conveyancing practice, a number of factual observations cannot be emphasised enough. First, copies of the identity cards of the plaintiff’s directors had been certified by a lawyer practising at Messrs KHRL, the law firm acting for the plaintiff. Secondly, the plaintiff’s Forms 24, 44, and 49, as well as the M&A, and the directors’ circular resolution and members’ circular resolution had been certified by the second defendant as the company secretary of the plaintiff company. [63] Thirdly, the Forms 14A MOT had been duly executed by the first and third defendants for the plaintiff company, and the plaintiff’s common seal affixed thereon. Therefore the said Forms 14A are valid, binding and enforceable as against the Plaintiff. Fourthly, as stated Page 18 of 25 earlier, LHDN’s assessment valued the Lands at the same purchase consideration as contained in the SPA, and the Stamp Duties thereon duly paid. And fifthly, the Lands were on or about 27 April 2016 registered in the name of the fourth defendant as the proprietor. [64] As stated earlier, the shortcomings in the case of the plaintiff are not merely in respect of the serious lack of particularisation of the allegation of fraud, and conspiracy in the statement of claim. That, as found earlier, already considerably weakens the position of the plaintiff. And it is trite law that omissions of material facts in the statement of claim cannot be made good by affidavit evidence (see the Court of Appeal decision in Sivakumar a/l Varatharaju Naidu v Ganesan a/l Retanam [2011] 6 MLJ 70). [65] But crucially, even in the affidavits of the plaintiff filed to oppose the striking out applications the plaintiff fell significantly short in terms of not providing any relevant evidence and averments to credibly rebut those of the defendants. Instead, the plaintiff is contented to aver only bare denials and disclaimed knowledge, inconsistent with the existence and contents of documents. This failure to contradict should be treated as an admission in line with the established principle stated in Ng Hee Thoong & Anor v Public Bank Berhad [1995] 1 MLJ 281. [66] Most of the transaction documents such as Form 14A were prepared by and originated from Messrs KHRL. Messrs CSL, being the fifth defendant, had thus in that context only proceeded on the basis of the implied representation from Messrs KHRL, who have not been sued by the plaintiff nor made a party to the underlying writ action. [67] Among others, as highlighted in the affidavits, the plaintiff’s claim that the SPA was below market price is devoid of merit. Based on the assessment by LHDN, as stated earlier, the Lands were valued at the same price as the SPA. Notwithstanding the bare allegations of the plaintiff, based on affidavit evidence, it cannot be doubted that the fifth defendant had indeed conducted the necessary land and company searches in the discharge of the duty of the fifth defendant as the solicitor for the fourth defendant’s solicitors. [68] Nor can the plaintiff’s allegation that the fifth defendant is negligent and had therefore committed a fraud be construed other than being untenable. For plainly, the fifth defendant, as the solicitor for the purchaser (the fourth defendant) does not owe any professional duty of care to the plaintiff as the seller of the Lands. This duty should and Page 19 of 25 could only be owed by Messrs KHRL, being the plaintiff’s own solicitors for the transaction in question. The assertion by the plaintiff that Messrs KHRL were not its solicitors flies in the face of the various correspondences accompanying, and documents integral to the conveyancing process of the Lands including the several letters from Messrs KHRL themselves, which point overwhelmingly to the contrary. Thus the affidavits contesting these applications fall short of mounting a successful challenge to the striking out. [69] It is manifest from the contents of the statement of claim that the principal case of the plaintiff of conspiracy, forgery and fraud is for all intents and purposes directed against the first to the third defendants, all, at the relevant time, being company insiders. [70] The fourth and fifth defendants are outsiders to the plaintiff company. Indoor management rule strengthens case of the defendants [71] In such event, the fourth and fifth defendants were entitled to assume that the internal proceedings of the plaintiff company were undertaken in good order, on the basis of the indoor management rule as established in the English case of Royal British Bank v Turquand [1856] 119 ER 474. [72] This concept of presumption of regularity in the internal management of a company, subject to exceptions such as where one is put on enquiry when circumstances require the same (and which in my assessment is not applicable to this instant case) is also well established in this country (see the Federal Court decision in Pekan Nenas Industries Sdn Bhd v Chang Ching Chuen [1998] 1 AMR 169). [73] This is further supported by the plaintiff’s own affidavit, for after all, the plaintiff had even averred that the first defendant, as its director, had custody of the plaintiff’s documents, including the land title and company seal. The first defendant had complete control over matters in relation to the plaintiff’s administration and operation. This is borne out of the plaintiff’s own admission that “kebiasaan dia [the first defendant] yang membuat urusan Syarikat” in a police report lodged by the plaintiff’s representative, as exhibited. [74] Thus I cannot but agree with the contention that alleging knowledge and fraud concerning the sale of the Lands on the part of the Page 20 of 25 fourth and fifth defendants instead when the plaintiff himself clearly admitted that the plaintiff company was run by the first defendant means that the plaintiff is blowing hot and cold on the matter. [75] The plaintiff cannot blow hot and cold. It cannot approbate and reprobate. In the case of Bakti Dinamik Sdn Bhd v. Bauer (Malaysia) Sdn Bhd [2016] 10 CLJ 247, I stated thus:- “[43] The position taken by the plaintiffs currently may be characterised as one which violated the principle against ‘approbating and reprobating’. In the Court of Appeal case of Visage Continental Sdn Bhd v Smooth Track Sdn Bhd [2007] 6 CLJ 570, Richard Malanjum JCA (as his Lordship then was) referred to various authorities and enunciated clearly the rule that a party should not be allowed to approbate and reprobate as it is a practice that is both plainly unconscionable and unfair”. [76] In examining the pleadings, the Court is looking at the plaintiff who has pleaded his best case (see Godrej Sara Lee Ltd v Siah Teong Teck & Anor (No. 1) [2007] 10 CLJ 255). But, in the instant case, the allegations in the statement of claim that the fourth defendant together with the fifth defendants have directly and/or indirectly abetted and/or participated with the first defendant in the abuse of power and/or cheating and/or misappropriating and/or fraud in the sale and purchase transaction of the Lands, causing the plaintiff to suffer heavy losses, are simply untenable when pleaded generally without particularisation, and when the affidavits of the defendants are not credibly challenged, let alone denied. [77] On the basis of the pleadings, and more so when the affidavit evidence of the defendants are not controverted, it is difficult to deny the contentions of the fourth and fifth defendants that the sale and transfer of the Lands by the plaintiff to the fourth defendant are valid, binding and effective, that the fourth defendant appears to be a bona fide purchaser for value without notice, whose title as registered owner of the Lands is indefeasible pursuant to Section 340 of the National Land Code 1965, and that the fourth and fifth defendants had acted in good faith and without knowledge of the internal workings or management of the plaintiff. [78] That is not all. For the sale and purchase transaction also appears to be an ordinary transaction of property with terms in the SPA which are generally expected to be found in other sale of property agreements. So too would the manner in which the transaction was Page 21 of 25 carried out not have alerted the suspicions of a reasonable man similarly circumstanced as the fourth defendant, being the purchaser who acted upon the advice of the fifth defendant solicitor. I cannot emphasise enough that both seller and buyer had their own solicitors advising them on the sale of the Lands, and I reiterate that the affidavit of the plaintiff did not contain any averments that could credible challenge the propriety of the attendant process and the accompanying documents. [79] Whilst it is trite that a statement of claim should not plead evidence, in a striking out application based on affidavit evidence, the failure of the plaintiff to rebut averments of the defendant which are substantiated by documents must surely be detrimental to the plaintiff’s case. [80] In the instant case, the plaintiff’s affidavit in reply is, for all intent and purposes, devoid of any evidence of abuse of power, cheating, misappropriation, forgery or fraud (despite being pleaded in the statement of claim) on the part of the first defendant and neither is there any evidence of abetment of the same on the part of the fourth defendant or fifth defendant. [81] Thus, as examples, despite the pleading in paragraph 11.4 of the amended statement of claim that the CCM had rejected Form 48A and Form 49 dated 13 January 2016, the plaintiff’s affidavit in reply is devoid of any evidence of the alleged rejection when faced with the fifth defendant’s affidavit which exhibited the relevant Form 49 which stated that the third defendant is a director of the plaintiff company at the material time. Notwithstanding the pleading in paragraph 12(d) of the amended statement of claim, the plaintiff’s affidavit in reply is similarly bereft of any evidence of the alleged market value of the Lands being RM12 million. [82] Further, the Federal Court of Doshi v Yeoh Tiong Lay [1975] 1 MLJ 85, as cited by the defendants is most instructive. It was held thus:- “In regard to the purchase price, the learned judge took the view that it was insufficient for the defendant to make a bare allegation without the support of some sort of valuation or assessment to show the market value of the land at the date of sale. In the circumstances, he was unable to say that there was fraud to which the Plaintiff or his servant or agent was a party or privy. Page 22 of 25 [83] The plaintiff’s affidavit in reply is also conspicuously silent of any evidence of its interest which was claimed to have been adversely affected, not to mention the absence of any semblance of quantification or evidence of such alleged losses suffered by the plaintiff. [84] The plaintiff’s affidavit in reply too engaged in averments which are unsupported, chief amongst which is the brazen denial of the legal representation by Messrs KHRL for the plaintiff in respect of the SPA. This assertion is so directly in conflict with various documentary evidence exhibited in the defendants’ affidavits in support, such as including the SPA, and all written communication concerning thereto, as mentioned earlier. [85] Yet, at the same time, as correctly highlighted by the defendants, the plaintiff has refrained from making similar allegations of abuse of power or cheating or misappropriation or fraud vis-à-vis the payments of the redemption sums by the fourth defendant of the redemption sums of the Lands which effectively extinguished the plaintiff’s debt of RM2,484,301.11 to Malaysia Building Society Berhad. [86] In this regard the plaintiff quietly accepts certain parts of the transaction but conveniently challenges other parts of the same sale transaction of the Lands. I repeat that the plaintiff cannot approbate and reprobate. [87] It is as clear as day that viewed in totality, the averments and arguments raised by the plaintiff are considerably inflicted by various shortcomings that do little, if at all, to advance its resistance to these striking out applications. Above all, the case of the plaintiff is also riddled with averments which are not substantiated. These are largely bare averments without any real or true support thus, seriously impairing the case of the plaintiff. [88] No documents of any real substantive worth were produced by the plaintiff to corroborate its stance on virtually all of its assertions. It is of course trite that mere bare denials or assertions do not constitute evidence and they cannot give rise to triable issues (see the Court of Appeal decision in Chen Heng Ping & Ors v Intradagang Merchant Bankers (M) Bhd [1995] 2 MLJ 363). [89] The following observation of the Supreme Court in Raja Zainal Abidin Raja Tachik & Ors v British-American Life & General Page 23 of 25 Insurance Bhd [1993] 1 MLRA 372 is especially relevant to describe the case of the plaintiff:- “In conclusion, with great respect, the learned Judge could have avoided the pitfall as described by the Privy Council in the Tractors (supra). The lower Court should have also scrutinized the evidence in order to decide whether the action was bound to fail. If so, it would have been found otiose to send the case back to its starting point to start its long and expensive course albeit such a conclusion was reached on an application filed under O.18 r.19 We must emphasize that for any Court to reach such a similar decision on an application under O.18 r.19, there must, in all probability, have been an absence of conflict of material evidence or of conflict of affidavits on material points so that seemingly triable issues, seemingly difficult ones, could be readily decided in such a way as to lead to the conclusion that the action was bound to fail.” [90] I agree that there are no triable issues raised by the claim of the plaintiff. No serious discussion is warranted, nor is a full trial justified. Instead it is plainly frivolous, vexatious and an abuse of the process of the Court. The claim is so obviously unsustainable. [91] Nor do the various cases referred to by the plaintiff advance its position. Cases such as Dato’ Ahmad Zahid Bin Hamidi v Amir Bazli bin Abdullah [2012] 6 MLJ 564, Sivarasa Rasiah & Ors v Che Hamzah Che Ismail & Ors [2012 1 MLJ 473, Sheikh Khaled Bin Jassem Bin Mohammad Jassem Al-Thani (t/a Petroserv General Trading Establishment) v Merbok Hilir Bhd (No.2) [2013] 7 MLJ 879 involve significant conflicts of affidavit evidence which could only be resolved during trial unlike the instant case, which as I have shown exhibited nothing but a patent absence of any such conflict. [92] Denials of knowledge and bare averments without any supporting evidence and failure to specify the alleged arguable points of law or fact requiring full trial translate quite plainly into the inescapable conclusion that there are simply no triable issues. [93] For completeness, I should state that the fourth defendant had also raised a preliminary objection against the admission of the plaintiff’s affidavit in reply for allegedly not having stated the date of affirmation. I dismissed this objection and heard the parties on the merits of the striking out applications. Page 24 of 25 Conclusion [94] In view of the myriad of reasons as discussed above, it is my judgment that the fourth and fifth defendants have clearly succeeded in establishing their case to have the statement of claim of the plaintiff struck out for being frivolous and vexatious under Order 18 r 19 (1) (b) as well as an abuse of process under Order 18 r 19 (1) (d), rendering the claim to be obviously unsustainable, justifying its striking out. [95] Accordingly, I allow enclosures 21 and 23 with costs. Dated: 2 November 2017 (MOHD NAZLAN BIN MOHD GHAZALI) Judge High Court NCC1 Kuala Lumpur Counsel Counsel for Plaintiff George Varughese with Azhana Mohd Khairudin and Johan Mohan Messrs George Varughese Petaling Jaya, Selangor Counsel for the Second Defendant CJ Ooi Messrs Chih - Jen & Associates Kuala Lumpur Page 25 of 25 Counsel for the Fourth Defendant Sheena Sinnapah with Valerie Fernando Messrs Sheena Valerie & Partners Melaka Counsel for the Fifth Defendant Robert Low with Helen Lim and Ryan Ng Messrs Ranjit Ooi & Robert Kuala Lumpur