Chan Kok Meng v 1. ) East West Horizon Plantation Berhad (WA-22NCC-154-03/2024)

EAST WEST HORIZON PLANTATION BERHAD (Company No.: 940673-T)

JESSIE TANG (Identity Card No.: 680115-02-5506)

PACIFIC TRUSTEES BERHAD (Company No.: 317001-A) … DEFENDANTS GROUNDS OF JUDGMENT (Enclosure 23)

This is the Plaintiff’s application to enter summary judgment against the 1st Defendant for a sum of RM 2,085,600.00, with judgment interest and costs.

After hearing the parties and having read the pleadings, cause papers in respect of the application as well as the written submissions, I allowed the application with costs.

The Plaintiff is an individual investor.

The 1st Defendant is a management company that manages a planter’s scheme known as the East West Horizon Planter’s Scheme (“the Scheme”). The 1st Defendant’s core business is to carry on oil palm plantation activities and to operate and manage the oil palm plantation involved in this suit.

The Plaintiff pleads that pursuant to, among others, the representation of the 2nd Defendant, the Plaintiff invested in the Scheme.

The Plaintiff and the 1st Defendant executed a Planter’s Agreement on 15 January 2021 (“the Agreement”).

7.

The Subscription Fees are to be paid by the Plaintiff through the Trustees appointed for the Scheme, which in the present case, is the 3rd Defendant. The Monthly Net Return to be paid to the Plaintiff, upon receipt of the same by the 3rd Defendant from the 1st Defendant, is also to be remitted by the 3rd Defendant to the Plaintiff.

It is not in dispute that the Plaintiff paid a sum of RM 2,640,000.00 as the Plaintiff’s Subscription Fees. In return, the Plaintiff was allocated 22 blocks of shares known as Emerald Shares valued at RM 120,000.00 a block.

It is also not in dispute that the Plaintiff has received investment quarterly returns of RM 52,800.00 from the time he commenced his investment until the 1st quarter of 2023 when the last payment of RM 52,800.00 was remitted to him.

The Plaintiff’s claim is premised on Clause 9.2 of the Agreement, which allows the Plaintiff to return his share certificates to the 1st Defendant and the 1st Defendant to repurchase the shares on the following terms at an agreed “Repurchase Price”:

9.2 The Management Company is obliged to repurchase the Planter's Block after the second (2nd) year from the date of the first Planter's Block subscription as registered in the Register of Planters in the following terms: "Repurchase Price" means: in relation to a Planter's Block, means an amount equal to seventy five percent (75%) of the Subscription Fee for the Planter's Block in the third (3rd) year, eighty five per cent (85%) of the Subscription Fee in the fourth (4th) year, ninety five per cent (95%) of the Subscription Fee in the fifth (5th) year, and full refund of the Subscription Fee from the sixth (6th) year onwards, subject to any deduction of any monies owed to the Management Company. The Repurchase Price stated shall be calculated on a full year basis, commencing from the Commencement Date.

The Plaintiff contends that upon the expiry of the third year, on 17 October 2023, the Plaintiff surrendered the share certificates and is entitled to a payment equivalent to 75% of his Subscription Fees. The Plaintiff also claims for the 2nd and 3rd quarter of his investment returns for the year 2023. The Plaintiff therefore claims for the following sums from the 1st Defendant: 75% of investment amount RM 2,640,000 x 75% RM 1,980,000.00 2nd and 3rd quarter returns for 2023 RM 52,800.00 x 2 RM 105,600.00

The Plaintiff submits that while the sum of RM 2,085,600.00 is to be paid by the 3rd Defendant, the 3rd Defendant is only able to do so upon receipt of the payment from the 1st Defendant.

The 3rd Defendant has confirmed that the 3rd Defendant did not receive the said sum of RM 2,085,600.00 from the 1st Defendant. Neither has the 3rd Defendant received the investment returns from the 1st Defendant since March 2023.

The Plaintiff commenced this suit seeking payments of the sum of RM 2,085,600.00. The Plaintiff then took out the present application seeking summary judgment against the 1st Defendant. 1st Defendant’s Contention

The 1st Defendant, during the course of oral hearing of this matter, limited arguments to the following 2 triable issues: i. That the Plaintiff did not proceed with a mandatory mediation process prior to filing the present suit; and ii. That the 1st Defendant is prohibited from making any payments to the Plaintiff on account of an injunction granted by the Kota Kinabalu High Court in Civil Suit No.: BKI-22NCC-9-9/2023 (“KK Suit”).

Now, the KK Suit was commenced by another planter representing 157 other planters in the same scheme as that of the Plaintiff. This is how the KK Suit came about.

By an email dated 16 June 2023, a company known as East West One Group Sdn. Bhd. expressed an intention to replace the 3rd Defendant as Trustee allegedly "to allow better efficiency and management of the Scheme as a whole". A notice dated 1 September 2023 was issued to the planters of the scheme to attend a General Meeting on 27 September 2023 to accept the resignation of the 3rd Defendant as Trustee and appoint the new Trustee.

However, the General Meeting could not proceed due to an Injunction granted in the KK Suit on the application of another planter in the scheme.

The 1st Defendant contends that the injunctive order has prevented the appointment of a new Trustee and this has the effect of disrupting the financial administration of the Scheme.

The 1st Defendant contends that given the injunctive order, the 1st Defendant cannot be held liable for payments that are under the exclusive control of the Trustee, when no active Trustee exists due to circumstances beyond the 1st Defendant's control.

The Court’s jurisdiction to grant summary judgment is governed by Order 14 of the Rules of Court 2012.

Once the Plaintiff fulfils the procedural requirements of Order 14 Rule 2(1) of the Rules of Court 2012, the burden shifts to the Defendant to raise at least one triable issue to justify the Court granting the Defendant leave to defend. (See: South East Asia Insurance Bhd. v. Kerajaan Malaysia [1998] 1 CLJ 1045, CA)

The first triable issue raised by the 1st Defendant relates to the alleged failure of the Plaintiff to refer the dispute to mediation. Hence, the 1st Defendant claims that the suit by the Plaintiff is premature.

The mediation clause is contained in Clause 25 of the Agreement. It reads as follows: MEDIATION CONTRACT CLAUSE If a dispute arises out of or related to this Agreement (including any dispute as to breach or termination of this Agreement) a party to this Agreement may not commence any court or arbitration proceedings relating to the dispute unless it has complied with the following paragraphs of this Clause except where that party seeks urgent interlocutory (sic) relief:-

a party to this Agreement claiming that a dispute (hereinafter referred to as "the Dispute") has arisen under or in relation to this Agreement must give written notice to the other party of this Agreement specifying the nature of the Dispute; and

on the receipt of that notice by the other party, the parties to this Agreement (hereinafter referred to collectively as "the Parties") must endeavour to resolve the Dispute expeditiously, and in the event the Dispute is not resolved within fourteen (14) days, the Parties must submit the dispute to the Sabah Law Association (hereinafter referred to as "SLR") and unless the Parties agree on a mediator on the panel of SLR within seven (7) days, the SLR shall appoint a mediator on the panel and the Dispute shall be mediated in accordance with the Mediation Rules of the SLR, and both the Parties do hereby agree to abide with the Mediator's final decision. (emphasis added)

The mediation clause uses the word “may”. Courts have, generally, barring some exceptions based on context, held that the use of the word “may” is descriptive of a permissive verb.

In Lembaga Pelabuhan Kelang v. Kuala Dimensi Sdn. Bhd. & Another Appeal [2010] 9 CLJ 532, the Court of Appeal held as follows: “In addition, unlike the peremptory word "shall", the permissive word "may" used in the arbitration clause ie, cl. 11.1 of DA1 is capable of readily abandoning the discretion to refer to arbitration, and opting for litigation instead, as expressed and contractually agreed by the parties …”

In the present case, reading the clause as a whole, I do not find the permissive verb “may” to be capable of placing a mandatory obligation on the Plaintiff to refer the dispute to mediation prior to commencing litigation.

I have also considered the fact that the writ was filed on 5 March

The 1st Defendant then proceeded to file its Defence. The 1st Defendant also took active part in the litigation without so much applying to stay the proceedings on account of the mediation clause. The 1st Defendant’s defence could well have been more credible if the 1st Defendant had proceeded with a stay application since the contention is that mediation is a mandatory pre-requisite to filing of this suit.

In those circumstances, the 1st Defendant raising the issue of mediation is not only an after-thought but constitutes a feeble attempt at raising the issue as a triable issue.

On the issue of the injunction granted in the KK suit, the exact terms of the injunction order were not made available to me. Nothing has been exhibited in the 1st Defendant’s affidavit in reply opposing the summary judgment application for me to identify what exactly is the nature of the injunction granted or the status of the KK Suit at the time this summary judgment application was heard.

Evidence presented to the Court shows that as early as 6 July 2023 (which is the date when the 1st two quarter payments of the net monthly return have already fallen due), the 1st Defendant had informed the Plaintiff that the payment of the returns will not be made “due to the company will be calling for a Planter Meeting as soon as the appointment of the new trustee is finalised. The appointment of the new trustee is currently pending the relevant authority's approval.”

When the solicitors for the Plaintiff wrote to the 3rd Defendant to inquire of the payments due to the Plaintiff, the response of the 3rd Defendant was as follows: “With regard to paragraph 4 of your letter, please be informed that the [1st Defendant] has defaulted to remit the Monthly Net Return (MNR) since March 2023 to the Reserve fund Account. Since there are an interim injunctions (sic) and an ongoing legal suit in respect of the Scheme in Kota Kinabalu High Court, we are unable to divulge much information to your good office.”

Given the 3rd Defendant’s confirmation of the 1st Defendant’s failure to make payments to the 3rd Defendant and the failure of the 1st Defendant to show the precise term and effect of the injunction that allegedly prohibits the 1st Defendant from making the payment to the Plaintiff, I am constrained to disregard the bare averments of the Plaintiff as constituting a triable issue to defeat the summary judgment application.

In those circumstances, the 1st Defendant is bound by Clause 9.2 of the Agreement to repurchase the Plaintiff’s shares upon surrender of those shares to the 1st Defendant at the contractually agreed Repurchase Price. That this is the correct interpretation to be given to the contractual term concerned has neither been disputed nor displaced by the 1st Defendant.

The 1st Defendant did not also otherwise dispute the amounts claimed by the Plaintiff.

As the 1st Defendant has failed to raise a triable issue that merits further investigation by way of viva voce evidence in a trial, I entered judgment in terms applied for in the Plaintiff’s notice of application with costs. Dated the 6th day of November 2025 ……………………………………………………………………… MUHAMMAD ADAM @ EDWARD BIN ABDULLAH Judicial Commissioner High Court (Commercial Division NCC 4) High Court of Kuala Lumpur In the Federal Territory, Malaysia Counsel for the Plaintiff : Tang Kim Choong Messrs. Raja Ariff & Sin. Counsel for the 1st Defendants : Cheok Sun Meng

South East Asia Insurance Bhd. v. Kerajaan Malaysia [1998] 1 CLJ

Lembaga Pelabuhan Kelang v. Kuala Dimensi Sdn. Bhd. & Another Appeal [2010] 9 CLJ 532, CA

Order 14: Order 14 Rule 2(1) of the Rules of Court 2012