Extreme Commerce Sdn Bhd v Nik Mohd Sharizal Bin Abdullah (WA-22C-72-10/2023)

On 15.1.2026, the Defendant filed Enclosure 51("Setting Aside Application") seeking to set aside this Court's 13.8.2024 judgment, entered in his absence, for RM1,518,090.00 with 5% per annum interest from 16.1.2024 until full payment, and costs of RM40,000("Judgment").

Having considered the written submissions of both parties and the affidavits filed in support and in reply, I dismissed the Setting Aside Application with costs. The Defendant has since lodged an appeal against my decision in respect of the aforesaid Application. These constitute my full reasons for the decision.

By a construction contract dated 10.4.2022 and signed on 15.4.2022 ("Contract"), the Defendant agreed to act as turnkey contractor for the Plaintiff's proposed demolition, renovation and construction of a 4-storey boutique hotel("Project") at a contract sum of RM1,544,400.00.

The Plaintiff paid the Defendant a total of RM1,098,590.00 in advance. The Defendant failed to complete the works or to carry them out with reasonable care and skill, and failed to complete the Project within the agreed timeline. Hence the above Suit was filed in October 2023.

Following the discharge of the Defendant's previous solicitors, case management ("CM") was held on 11.3.2024 with the Defendant present in person. At the CM, the parties agreed to specific modes of service, namely service by hand at 2 identified addresses and/or by email to the Defendant's personal and business email addresses (nikmohdsharizal@gmail.com and anggunradenarchitects@gmail.com).

The Defendant expressly admitted to these arrangements. He also informed this Court that he intended to appoint new solicitors. However, none was appointed until November 2025.

Despite being duly notified of the trial date of 13.8.2024 ("Trial Date") through multiple letters and emails on 12.6.2024 and 18.7.2024, the Defendant failed to attend the Trial. This Court was satisfied with the evidence adduced by the Plaintiff and entered the Judgment accordingly.

The Judgment sum comprised: (i) excess payment to Defendant: RM1,098,590.00; (ii) rental loss: RM102,000.00; (iii) forfeited rental deposit: RM59,500.00; (iv) washing machines deposit: RM48,000.00; (v) loss of profit: RM90,000.00; and (vi) penalties: RM120,000.00.

On 29.8.2024, the Plaintiff's solicitors served the sealed Judgment on the Defendant by email and attempted personal service. On 13.9.2024, the Defendant himself replied, acknowledging the Judgment, confirming he had engaged a lawyer, and expressing willingness to refund payments by way of a scheduled repayment plan. In a further email dated 25.11.2024, he stated that "full settlement is not an issue."

The Defendant did not file any application to set aside the Judgment until 15.1.2026 - some 17 months after the Judgment was entered and approximately 16 months after he acknowledged receipt of the sealed Judgment. The Setting Aside Application was filed only after the Plaintiff had commenced bankruptcy proceedings against the Defendant in or around September 2025.

The applicable provision for setting aside a judgment entered after a trial proceeded in the absence of a party is Order 35 rule 2 of the Rules of Court 2012 ("ROC 2012"). Order 35 rule 2(2) requires that such application be made within 14 days after the date of judgment, without prejudice to the Court's power to extend time.

Order 35 rule 2(3) directs the Court to have regard to: (a) the interest of justice; (b) whether the absence was deliberate or due to accident or mistake; (c) the prospects of success at trial; (d) whether there is any delay in making the application; and (e) whether the applicant's conduct has caused prejudice to the other party which cannot be compensated by costs.

The Court of Appeal in Lembaga Kemajuan Tanah Persekutuan (FELDA) & Anor v Awang Soh bin Mamat & Ors [2009] 4 MLJ 610 drew a clear distinction between a judgment entered without a trial having proceeded (to which the Evans v Bartlam principle applies) and a judgment entered after a trial has proceeded (to which the principles in Shocked & Anor v Goldschmidt & Ors [1998] 1 All ER 372 apply). This is a case of the latter kind.

Under the Shocked(supra) framework, as adopted by our courts in FELDA(supra), where judgment has been given after a trial, the predominant consideration is the explanation for the absence of the absent party. Unless the absence was not deliberate but due to accident or mistake, the Court will be unlikely to allow a rehearing. A party who had notice of proceedings and disregarded the opportunity to participate will normally be bound by the decision. Furthermore, the Court will not consider setting aside a regularly obtained judgment unless the applicant enjoys real prospects of success.

The Defendant invoked Order 1A, Order 2 rule 1, and Order 92 rule 4 of the ROC 2012 as a general plea in equity and justice. While the Court is mindful of its overriding duty under Order 1A to deal with cases justly, those provisions are not a blanket dispensation from the specific requirements of Order 35 rule 2.

The overriding objective must be applied having regard to all the circumstances, including the conduct of the party seeking relief. Where the delay and the absence are the product of deliberate choices by the applicant, as I find in this case, it would be contrary to justice - not consistent with it - to set aside a regularly obtained judgment.

The Judgment was received by the Defendant no later than 13.9.2024, the date on which he himself replied to the Plaintiff's solicitors' email transmitting the sealed Judgment. Even taking this later date as the starting point, the deadline under Order 35 rule 2(2) ROC 2012 to file the application was 27.9.2024 (14 days). Even under the longer 30-day period in Order 42 rule 13, the deadline would have been 13.10.2024.

The Setting Aside Judgment was filed on 15.1.2026- approximately 16 months after even the latest conceivable deadline. The delay is inordinate and wholly unexplained in any adequate legal sense.

The Defendant's own affidavit (Enclosure 55, paragraphs 10 and 12) is tellingly candid. He deposed that the intervening period was spent attempting to negotiate a settlement with the Plaintiff, and that he only appointed solicitors to file this application after negotiations reached an impasse. This is not a good reason to extend time.

A defendant who consciously chooses to attempt direct settlement rather than seek legal recourse - particularly where he had been expressly directed by this Court to appoint solicitors - cannot subsequently rely on his own strategic choice as justification for a delay of over 16 months.

The Defendant contended under his first substantive argument (D.1 of his written submission) that the Plaintiff executed the Judgment while negotiations were still ongoing. This contention is legally irrelevant. A judgment creditor is fully entitled to enforce a valid judgment; there is no legal obligation on a judgment creditor to indefinitely suspend enforcement pending informal negotiations.

This is particularly so where the judgment debtor has not sought a stay of execution and has made no payments in any respect. The mere fact of ongoing settlement discussions does not estop the Plaintiff from enforcing its legal rights nor does it constitute a valid ground to set aside the Judgment.

I further note that the Defendant only took the step of appointing solicitors (Messrs Idi Amin, engaged 11.11.2025) after the Plaintiff initiated bankruptcy proceedings in September 2025. This chronology confirms that the filing of the Setting Aside Application is a reactive measure to avoid enforcement, not a genuine attempt to ventilate a bona fide defence on the merits.

The Defendant's explanation for his absence at Trial Date, set out in paragraph 7 of Enclosure 55, was that he was unrepresented, did not know how to defend himself, and was not informed that his attendance at trial was obligatory.

I reject this explanation entirely. The evidence is overwhelming that the Defendant had full knowledge of the Trial Date and the proceedings:

The Defendant attended the case management on 11.3.2024 in person and personally agreed to the modes of service for all cause papers, including the Trial Date notice;

The Plaintiff's solicitors sent multiple letters and emails to the Defendant's agreed email addresses notifying him of the Trial Date;

On 13.9.2024, the Defendant himself wrote to the Plaintiff's solicitors acknowledging the post-judgment correspondence and confirming he had engaged a lawyer - which plainly contradicts any assertion that he was oblivious to the proceedings;

The Defendant's own proposal for a repayment schedule and his email of 25.11.2024 stating that "full settlement is not an issue" are wholly inconsistent with his present assertion that he was unaware of any obligation to attend the Trial Date.

The assertion that the Defendant did not know his attendance at Trial Date was obligatory is untenable. The Defendant had previously been represented by solicitors who were subsequently discharged. At the case management of 11.3.2024, he personally indicated his intention to appoint new solicitors. He failed to follow through, but that failure cannot be attributed to ignorance.

A litigant who has previously been represented, who personally attends case management hearings, and who thereafter conducts his own correspondence with opposing solicitors cannot plausibly claim ignorance of his obligations.

As the High Court stated in Ng Chek Kiam & Anor v Best Fruits Sdn Bhd [2006] MLJU 643, ignorance of procedure or failure to appoint counsel cannot by itself constitute a valid ground to set aside a regularly obtained judgment.

I find that the Defendant's absence at Trial Date was deliberate. He had ample notice and chose, for whatever reason, not to attend and not to be legally represented. Under the Shocked(supra) framework, this is a fatal consideration against granting the application.

Even if I were prepared to excuse the delay and the deliberate absence - which I am not - the Defendant has failed to demonstrate any real prospects of success at a retrial. His purported defences are, in the main, bare denials and afterthoughts unsupported by any contemporaneous documentary evidence.

The Defendant advances the following substantive arguments: (i) that the dispute should have been referred to adjudication under Construction Industry Payment and Adjudication Act 2012 ("CIPAA"); (ii) that the action should have been commenced by way of arbitration; (iii) that significant portions of the Judgment sum are not recoverable because payments were made to third-party contractors; (iv) that the consequential losses are attributable to the Plaintiff's own defaults, including failure to comply with DBKL guidelines and refusal to fund additional structural works; and (v) that the building structure was found to be unsafe, requiring additional costs which the Plaintiff refused to bear. I address each in turn.

The Defendant contends that disputes arising from the Contract are subject to the CIPAA. This argument fails on multiple grounds.

First, there is no adjudication clause in the Contract. The Defendant's own submission (paragraph 19 of Enclosure 58) frankly concedes this when he states that "the action should commence by way of arbitration even though not specifically stated in the construction contract." By parity of reasoning, CIPAA adjudication cannot be implied where there is no express contractual provision for it.

Second, the Plaintiff is not an "unpaid party" within the meaning of sections 4 and 5 of CIPAA. Under CIPAA, "payment" means payment for work done or services rendered under the express terms of a construction contract, and an "unpaid party" is one who claims payment of a sum not paid under such a contract. The Plaintiff's claim is fundamentally one for overpayment and consequential damages against a contractor who failed to perform not a claim for payment for work done.

Third, as the High Court held in FZL Power Engineering Sdn Bhd v Norangkasa Enterprise Sdn Bhd [2022] MLJU 1534, overpayment claims do not fall within the scope of CIPAA adjudication and must be pursued in the civil courts. The same reasoning applies here. An employer who has overpaid a defaulting contractor and suffered consequential losses from the contractor's breach cannot be characterised as an "unpaid party" under CIPAA.

Fourth, CIPAA is not a mandatory pre-litigation step. A party is not required to invoke CIPAA adjudication before commencing civil proceedings.

Fifth and finally, this argument was never raised by the Defendant in his Defence (Enclosure 5) filed during the substantive proceedings. A defendant who seeks to set aside a judgment cannot introduce fresh legal arguments that he failed to raise at the appropriate time, particularly where his own post-judgment conduct - proposing a direct repayment plan to the Plaintiff without any reference to adjudication - is wholly inconsistent with any genuine belief that this dispute ought to have been adjudicated.

The Defendant argues that the action should have been commenced by way of arbitration "even though not specifically stated in the construction contract." This argument is legally untenable. Under the Arbitration Act 2005, the Court's jurisdiction to refer parties to arbitration is premised on the existence of a valid arbitration agreement in writing. Where there is no arbitration clause, there is no obligation to arbitrate. The Defendant's assertion that arbitration applies "even though not specifically stated" is a bare assertion without any legal foundation and is accordingly rejected.

The Defendant claims that out of the RM1,098,590.00 received from the Plaintiff, approximately RM700,000.00 was paid to third-party contractors and suppliers for demolition works and material purchases, leaving a balance of approximately RM300,000.00. He further claims that certain building materials were placed on site and were subsequently removed by the Plaintiff after no project approval was forthcoming.

These assertions are bare allegations. The Defendant did not attend the trial on the Trial Date, did not adduce any supporting evidence before the trial court, and has produced no contemporaneous documentary evidence in Enclosure 52 - no payment vouchers, invoices, receipts, delivery orders, or any written record - to substantiate these claims. The trial court, after hearing the Plaintiff's evidence, was satisfied that the excess payment of RM1,098,590.00 was proved. The Defendant's belated and unsupported assertions do not displace that finding.

As the High Court stated in Rich Contracts Sdn Bhd v TME Bio Resources Sdn Bhd [2021] MLJU 2020, an afterthought defence or bare denial that merely denies the Plaintiff's assertions without supporting documentation does not constitute evidence and cannot give rise to a triable issue. F.4 Consequential Losses-Rental Loss, Forfeited Deposits, Loss of Profit and Penalties

The Defendant contends that the heads of consequential damage, namely rental loss (RM102,000.00), forfeited rental deposit (RM59,500.00), washing machines deposit (RM48,000.00), loss of profit (RM90,000.00), and penalties (RM120,000.00), have no nexus with the Defendant and amount to "fictitious claims" constituting unjust enrichment. He attributes these losses to the Plaintiff's own failings, in particular the Plaintiff's alleged failure to pay rental for the building units and the Plaintiff's inability to obtain approval from Dewan Bandaraya Kuala Lumpur ("DBKL").

I reject these contentions for the following reasons. First, these are not newly discovered facts. If the Defendant genuinely believed that the Plaintiff's losses were caused by the Plaintiff's own defaults rather than by the Defendant's breach, that was a defence squarely available to him at trial. He chose not to attend trial and not to advance any such defence. He cannot now seek to reopen, by way of an application to set aside, factual and causation issues that this Court has already determined on the basis of evidence properly led at trial.

Second, the causal connection between the Defendant's breach of contract and these heads of loss is a matter that was before the trial court and was determined adversely to the Defendant. The Defendant's bare assertion that these losses are "not because of the Defendant" does not constitute a triable issue within the meaning of Asmahaida bt Ashaari v Malaysia Building Society Bhd [2024] MLJU 339, which reaffirmed that a bare denial unaccompanied by corroborating documents cannot give rise to a triable issue.

Third, the allegation that the Plaintiff failed to pay rental for the building units and that the Plaintiff caused delays by failing to comply with DBKL guidelines are, if true, matters that were within the Defendant's knowledge at all material times. No mention of them was made in the Defendant's Defence (Enclosure 5). They appear for the first time in this Setting Aside Application and are therefore properly characterised as afterthoughts.

Fourth, as to the unjust enrichment argument, this is misconceived. The Plaintiff's claim was founded on breach of contract and the consequential losses flowing therefrom, not on the law of restitution. Where a contractor in breach causes its employer to suffer ascertainable consequential losses, it is not unjust enrichment for the employer to recover those losses by way of damages. The label of "unjust enrichment" adds nothing to the Defendant's position and does not transform his bare denial into a substantive defence.

The Defendant further alleges that two engineers, upon thorough inspection, found the original building structure to be unsafe for renovation and the erection of a new floor as planned, necessitating additional structural works at extra cost, which the Plaintiff refused to fund.

This contention, even taken at its highest, does not assist the Defendant. If structural conditions were materially different from what the Defendant had contracted to deliver, the proper course as any competent turnkey contractor would know was to raise these issues formally at the time, issue a variation order, and seek the Plaintiff's written instructions before proceeding or halting work. There is no evidence that any such formal process was followed. More fundamentally, as a turnkey contractor, the Defendant bore the contractual responsibility to reasonably investigate site conditions before and during execution of the works. This responsibility was expressly part of his obligations under the Contract.

In any event, the Defendant raises this structural argument for the first time in his Supporting Affidavit (Enclosure 52), without any supporting engineering reports, inspection records, or contemporaneous written communications to the Plaintiff about the alleged structural defects. As with the other arguments advanced in the Setting Aside Application, this is a bare assertion unsupported by any documentary evidence and raised belatedly as an afterthought. It does not disclose a real prospect of success.

The Plaintiff has taken active steps in reliance on the Judgment, including commencing bankruptcy proceedings. Setting aside the Judgment at this stage, some 17 months after it was entered, would cause real and substantial prejudice to the Plaintiff that cannot adequately be compensated by an order of costs.

There is also a compelling public interest consideration. This case proceeded on the basis of a contested trial, evidence was led, and the Court made findings of fact. Setting aside that judgment in the circumstances of this case would require a complete retrial on matters of fact already investigated and determined. There are no strong reasons - exceptional or otherwise - that would justify imposing such a retrial on the Plaintiff.

The Defendant's conduct throughout is also a material consideration under the Shocked(supra) framework. He failed to comply with this Court's direction to appoint solicitors, failed to attend trial on the Trial Date, failed to apply to set aside the Judgment for 16 months, failed to make any payment whatsoever despite expressly proposing a repayment plan and acknowledging that "full settlement is not an issue," and moved to set aside the Judgment only after enforcement proceedings were initiated.

The Court should be less ready to exercise its discretion in favour of a party whose entire conduct demonstrates a strategic approach to avoiding legal obligations.

Applying the factors in Order 35 rule 2(3) holistically, the balance of justice decisively favours the Plaintiff. The Defendant's delay is inordinate and without adequate explanation; his absence was deliberate; his purported defences are bare denials unsupported by contemporaneous evidence; and the Plaintiff would suffer material prejudice if the Judgment were set aside.

The overriding interest of justice under Order 1A, properly applied, requires that a litigant who has strategically avoided proceedings and sought legal recourse only when faced with bankruptcy be held to the consequences of his choices.

For all the foregoing reasons, I dismissed the Setting Aside Application 51 with costs. Costs of RM8,000.00 were awarded to the Plaintiff, subject to allocatur. Dated this 2nd day of April 2026 RAJES RAGHAVJI JUDICIAL COMMISSIONER HIGH COURT CONSTRUCTION COURT1 KUALA LUMPUR COUNSEL: For the Plaintiff: Khor Poay Ying (Messrs C H Tay & Partners (Kuala Lumpur) For the Defendant: Wan Idi Amin bin Ibrahim (Messrs Idi Amin (Puchong) Case(s) referred to: Lembaga Kemajuan Tanah Persekutuan (FELDA) & Anor v Awang Soh bin Mamat & Ors [2009] 4 MLJ Shocked & Anor v Goldschmidt & Ors [1998] 1 All ER 372 Ng Chek Kiam & Anor v Best Fruits Sdn Bhd [2006] MLJU 643 FZL Power Engineering Sdn Bhd v Norangkasa Enterprise Sdn Bhd [2022] MLJU 1534 Rich Contracts Sdn Bhd v TME Bio Resources Sdn Bhd [2021] MLJU 2020 Asmahaida bt Ashaari v Malaysia Building Society Bhd [2024] MLJU 339 Legislation(s) referred to: