Heis (M) Sdn. Bhd. v K.I. Engineering Sdn. Bhd. (BA-22NCvC-430-10/2025)

K.I. ENGINEERING SDN. BHD.

HCM ENGINEERING SDN. BHD.

EDWARD KHOO MONG WEI (NRIC NO.: 780507-14-5699) … DEFENDANTS GROUNDS OF JUDGMENT Enclosure 21 — 2nd and 3rd Defendants’ Striking Out Application

This is the Court’s Grounds of Judgment in respect of Enclosure 21, namely the application by the 2nd Defendant, HCM 28/07/2026 11:34:49 BA-22NCvC-430-10/2025 Kand. 72 Engineering Sdn Bhd, and the 3rd Defendant, Edward Khoo Mong Wei, to strike out the Plaintiff’s Writ of Summons and Statement of Claim as against them pursuant to Order 18 rule 19(1)(a), (b), (c) and/or (d) of the Rules of Court 2012.

The Plaintiff, HEIS (M) Sdn Bhd, opposes the application. The Plaintiff contends that its claim against the 2nd and 3rd Defendants is not merely contractual, but also involves pleaded issues of unjust enrichment, assumption of responsibility, agency, apparent or ostensible authority, misrepresentation, continuing representations, and the legal effect of partial payments made by the 2nd Defendant and/or HCM-Molek JV Sdn Bhd.

The 2nd and 3rd Defendants submit that the Plaintiff’s claim against them is plainly unsustainable because the Consultancy Services Agreement relied upon by the Plaintiff was entered into between the Plaintiff and the 1st Defendant, K.I. Engineering Sdn Bhd, only. They contend that there is no privity of contract between the Plaintiff and the 2nd and 3rd Defendants, that the Plaintiff has not properly pleaded the material facts necessary to sustain unjust enrichment or assumption of responsibility, and that no sufficient basis has been pleaded to impose personal liability upon the 3rd Defendant.

Having considered the cause papers, affidavits, pleadings, written submissions and authorities cited by the parties, this Court dismissed Enclosure 21. These are the reasons.

The Plaintiff’s claim arises from a construction-related commercial transaction concerning a public works project described as the upgrading of Federal Road FT004 Gerik/Kupang/Lunas from Section 23.10 to Section 35.70, Kulim, Kedah Darul Aman, awarded by the Public Works Department / Government of Malaysia.

The Plaintiff’s pleaded case is that it was engaged to provide consultancy services, advice, guidance and assistance in relation to the sourcing, tendering and procurement of the said Project. The Plaintiff alleges that the arrangement was success-based, meaning that payment would become due upon the successful award of the Project.

Initially, the Plaintiff alleges that a Consultancy Services Agreement was entered into with the 2nd Defendant around 1.5.2021. The Plaintiff further alleges that the 3rd Defendant acted as the person communicating, negotiating and representing matters on behalf of the relevant corporate entities, including the 1st and/or 2nd Defendant.

The Plaintiff then pleads that around October 2021, it was informed, on the 3rd Defendant’s instructions, that the agreement involving the 2nd Defendant would be terminated or replaced, and that the 1st Defendant would instead be named as the “Client”. Subsequently, a Consultancy Services Agreement was entered into between the Plaintiff and the 1st Defendant around December 2021.Hed

Under the Plaintiff’s pleaded case, the consultancy fee payable was 8% of the contract sum. The Project was subsequently awarded to the 1st Defendant by way of Surat Setuju Terima. The Plaintiff says the contract sum was RM299.2 million, giving rise to an alleged consultancy fee of RM23.936 million. The Plaintiff further says that it received partial payments totalling RM2.315 million, leaving an alleged balance of RM21.621 million.

The Plaintiff pleads that the partial payments were made by the 2nd Defendant and/or HCM-Molek JV Sdn Bhd, based on invoices issued pursuant to the instructions of the 3rd Defendant. The Plaintiff contends that these payments are material because they show, at the very least, the involvement of the 2nd Defendant and the factual basis for the Plaintiff’s claim that the 2nd Defendant assumed responsibility, received benefit, or was unjustly enriched.

The 2nd and 3rd Defendants deny liability. They say the only relevant Consultancy Services Agreement for the present claim is the one between the Plaintiff and the 1st Defendant. They submit that neither the 2nd Defendant nor the 3rd Defendant was a party to that agreement. They further say that the alleged partial payments were ex-gratia and made out of goodwill, and not as an admission of liability.

The 2nd and 3rd Defendants also contend that the Plaintiff’s claim against the 3rd Defendant is unsustainable because he was not personally a contracting party, and because any acts done by him were done in his capacity as director, representative or officer of the 2nd Defendant. C. Parties’ Arguments C1. The 2nd and 3rd Defendants’ Arguments

The 2nd and 3rd Defendants submit that the Plaintiff’s claim against them ought to be struck out because there is no reasonable cause of action disclosed against them.

First, they submit that there is no privity of contract. The Consultancy Services Agreement dated 15.12.2021 was entered into between the Plaintiff and the 1st Defendant only. The 2nd and 3rd Defendants were not parties to it. Therefore, they cannot be sued for the contractual consultancy fee. The 2nd and 3rd Defendants rely on the principle that contractual obligations cannot generally be imposed on non-parties to a contract.

Secondly, the 2nd Defendant submits that the Plaintiff’s claim in unjust enrichment is not properly pleaded and is legally unsustainable. It says that the Plaintiff’s alleged entitlement to payment is governed by a written contractual framework, namely the Consultancy Services Agreement with the 1st Defendant. The 2nd Defendant relies on Kosbina Konsult (K) Sdn Bhd v Madu Jaya Development Sdn Bhd [2019] 3 MLJ 471 for the proposition that unjust enrichment cannot be used to override, subvert or defeat a contractual allocation of rights and obligations.

The 2nd Defendant also relies on Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 MLJ 441, submitting that unjust enrichment is a distinct cause of action and the appropriate remedy is restitution. The 2nd Defendant argues that the Plaintiff has not sufficiently pleaded the elements of unjust enrichment: enrichment of the defendant, enrichment at the plaintiff’s expense, unjust retention, and absence of defences.

The 2nd Defendant further submits that Yap Yin Hing v Hexatech Energy International Sdn Bhd [2020] 1 LNS 1563 supports its position that where benefits arise from separate contractual arrangements, and where the plaintiff is not privy to those arrangements, unjust enrichment may not be made out.

Thirdly, the 2nd Defendant submits that the Plaintiff cannot rely on assumption of responsibility merely because the 2nd Defendant and/or HCM-Molek JV made partial payments. It relies on Ketua Pengarah Jabatan Kerja Raya v Strongkota Development Sdn Bhd [2016] 6 MLJ 512, Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465, and ECH Development & Management Sdn Bhd v Prabagaran a/l Perumal & Anor [2020] MLJU 516 to argue that assumption of responsibility requires proper pleading of a special relationship, proximity, reliance and a voluntary assumption of legal responsibility.

Fourthly, the 2nd Defendant relies on City Cabinet Factory Sdn Bhd v Pembinaan Pasti Dinamik Sdn Bhd [2018] MLJU 1994, submitting that the mere fact that a third party processes or makes payment does not shift legal liability to that third party unless there is a clear undertaking to assume liability.

Fifthly, the 3rd Defendant submits that he cannot be personally liable simply because he acted as a director or representative of the 2nd Defendant. He submits that the Plaintiff has not pleaded facts sufficient to justify piercing or lifting the corporate veil. Reliance is placed on Abdul Manaf Mohd Bin Ghows & Ors v Nusantara Timur Sdn Bhd & Ors [1997] 3 MLJ 661, for the proposition that acts carried out by a director in his corporate capacity do not, without more, render him personally liable.

The 3rd Defendant also argues that the authorities relied upon by the Plaintiff on “directing mind and will”, including Datuk Sahar Bin Arpan v Public Prosecutor [2007] 1 MLJ 967 and Tesco Supermarkets Ltd v Nattrass [1972] AC 153, are distinguishable. He says those cases concern different factual and statutory contexts and do not establish that a director is automatically personally liable for acts done for a company.

The 3rd Defendant further relies on Aik Ming (M) Sdn Bhd & Ors v Chang Ching Chuen & Ors [1995] 2 MLJ 770, Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 3 All ER 918, and Hoh Kiang Ngan v Mahkamah Perusahaan Malaysia & Anor [1995] 3 MLJ 369, to submit that attribution of corporate acts or knowledge is context-specific and does not automatically impose personal liability on directors.

The 3rd Defendant further submits that the corporate veil may only be lifted in exceptional circumstances, such as fraud, facade, unconscionable conduct, or use of corporate personality to evade obligations. In this regard, reliance is placed on RDS Bina Sdn Bhd v Ong Chin Hoe & Anor [2014] 11 MLJ 606 and Jones v Lipman [1962] 1 All ER 442. The 3rd Defendant says no such facts are pleaded here.

In summary, the 2nd and 3rd Defendants submit that the Plaintiff’s claim against them is plainly and obviously unsustainable and that their continued inclusion in the suit would prejudice, embarrass and delay the fair disposal of the action.

The Plaintiff submits that Enclosure 21 should be dismissed because the claim against the 2nd and 3rd Defendants raises serious triable issues.

The Plaintiff accepts that the written Consultancy Services Agreement dated 15.12.2021 was between the Plaintiff and the 1st Defendant. However, the Plaintiff submits that its claim against the 2nd and 3rd Defendants is not confined to a contractual claim for breach of that agreement. The Plaintiff’s case is also premised upon unjust enrichment, assumption of responsibility, agency, apparent or ostensible authority, misrepresentation and continuing representations.

The Plaintiff submits that the 2nd Defendant was originally involved as the intended contracting party. The Plaintiff says the 2nd Defendant was later replaced by the 1st Defendant on the instructions or representation of the 3rd Defendant. The Plaintiff also relies on the alleged D1-D2 joint venture arrangement in respect of the Project.

The Plaintiff places significant reliance on the fact that partial payments totalling RM2.315 million were made by the 2nd Defendant and/or HCM-Molek JV Sdn Bhd. The Plaintiff says this raises triable issues as to whether the payments were truly ex- gratia, or whether they were evidence of the 2nd Defendant’s involvement, benefit, assumption of responsibility, or recognition of the Plaintiff’s entitlement.

The Plaintiff submits that whether the payments were ex-gratia is plainly a disputed factual issue. It cannot be decided summarily on affidavit evidence.

On unjust enrichment, the Plaintiff submits that it has pleaded sufficient material facts. It says the 2nd Defendant received a benefit from the Plaintiff’s services, that the benefit was obtained at the Plaintiff’s expense, and that it would be unjust for the 2nd Defendant to retain such benefit without payment. The Plaintiff relies on Mega Mayang M&E Sdn Bhd v Utama Lodge Sdn Bhd & Another Appeal [2018] MLRAU 506, submitting that where services are rendered commercially and not gratuitously, the absence of direct contractual privity is not necessarily fatal at the striking out stage.

On corporate personality, the Plaintiff submits that the Defendants have mischaracterised the Plaintiff’s case. The Plaintiff says it does not simply contend that D1 and D2 are the same legal entity. Rather, the Plaintiff relies on the pleaded factual matrix: D2’s initial involvement, D3’s alleged role, replacement of D2 with D1, D2’s subsequent alleged benefit from the Project, and partial payments made by D2 and/or HCM-Molek JV.

The Plaintiff relies on Lembaga Tabung Haji & Anor v Encap Sdn Bhd [2024] 2 MLRA 242, submitting that fraud is not the only possible basis for lifting the corporate veil and that the Court should consider whether pleaded facts may justify intervention where justice requires.

As against the 3rd Defendant, the Plaintiff submits that its claim is based not merely on his status as director, but on his own alleged representations, continuing assurances, personal involvement, and alleged assumption or appearance of authority. The Plaintiff says that the 3rd Defendant cannot simultaneously deny agency and yet rely on agency-based protections.

The Plaintiff further submits that a director may be personally liable for his own tortious conduct, even if committed in the course of corporate duties. Whether the 3rd Defendant made the alleged representations, whether the Plaintiff relied on them, and whether detriment was suffered are all matters requiring oral evidence and cross-examination.

The Plaintiff relies on the general principles in Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36, Tan Wei Hong & Ors v Malaysia Airlines Bhd [2019] 1 MLJ 59, See Thong & Anor v Saw Beng Chong [2013] 3 MLJ 235, and CC Ng & Brothers Sdn Bhd v Government of State of Pahang [1985] 1 MLJ 347, to submit that striking out is a drastic remedy and should only be exercised in plain and obvious cases.

In short, the Plaintiff says this is not a plain and obvious case. The claim against the 2nd and 3rd Defendants may be factually and legally contested, but it is not plainly hopeless.

The issues for determination are as follows:

Whether the Plaintiff’s claim against the 2nd and 3rd Defendants discloses a reasonable cause of action;

Whether the Plaintiff’s claim against the 2nd and 3rd Defendants is scandalous, frivolous or vexatious;

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

Whether the claim is otherwise an abuse of the process of the Court;

Whether the issues raised by the Plaintiff against the 2nd and 3rd Defendants are plainly unsustainable, or whether they are triable issues requiring trial. E.

The law on striking out is well-established. Under Order 18 rule 19 ROC 2012, the Court may strike out a pleading if it discloses no reasonable cause of action, is scandalous, frivolous or vexatious, may prejudice, embarrass or delay the fair trial of the action, or is otherwise an abuse of process.

The power to strike out is a drastic power. It must be exercised sparingly and only in clear cases.

In Bandar Builder, the Court emphasised that striking out should only be ordered in plain and obvious cases. The Court should not embark upon a minute examination of disputed facts or conduct a trial on affidavits.

In Tan Wei Hong, the Federal Court reaffirmed that where the matter involves detailed factual or legal disputes, or where the sustainability of the claim depends on evidence, the claim should ordinarily proceed to trial.

In See Thong, the Court of Appeal held that the mere fact that a claim may appear weak or unlikely to succeed at trial is not, by itself, a ground for striking out if the pleading discloses some cause of action or raises questions fit for determination.

In CC Ng & Brothers, the Federal Court cautioned that the inherent jurisdiction to dismiss an action summarily is to be exercised only in very exceptional cases. The Court should not shut out a litigant merely because the case appears difficult, improbable, or not strong.

These principles do not mean that an obviously unsustainable claim must always be sent to trial. A pleading which is legally defective, unsupported by material facts, or plainly incapable of giving rise to liability may still be struck out. However, where the Court is faced with contested facts, mixed questions of fact and law, or allegations requiring evidential testing, the Court should be slow to terminate the claim summarily. F. Analysis F1. Whether absence of privity is conclusive at this stage

The 2nd and 3rd Defendants’ primary argument is that there is no privity of contract. This is a serious argument. The Consultancy Services Agreement dated 15.12.2021 was entered into between the Plaintiff and the 1st Defendant. On a purely contractual claim for payment under that agreement, the doctrine of privity would be a significant obstacle to any claim against non-parties.

However, this Court is not persuaded that the absence of contractual privity is conclusive at this interlocutory stage.

The Plaintiff’s pleaded case against the 2nd and 3rd Defendants is not framed solely as a claim for breach of the Consultancy Services Agreement. The Plaintiff also pleads factual matters said to support unjust enrichment, assumption of responsibility, agency, apparent authority, representations and personal involvement.

Whether those causes of action will ultimately succeed is a different question. At this stage, the question is whether the claims are so plainly unsustainable that they should be struck out without trial.

The Court finds that the privity argument, while strong, does not dispose of all the Plaintiff’s pleaded bases of claim against D2 and D3 at the striking out stage. F2.The significance of the RM2.315 million payments

A central feature of the Plaintiff’s case is the partial payment of RM2.315 million allegedly made by the 2nd Defendant and/or HCM-Molek JV Sdn Bhd.

The 2nd Defendant says those payments were ex-gratia and made out of goodwill. The Plaintiff denies this and says the payments are evidence of the 2nd Defendant’s involvement, benefit, assumption of responsibility or recognition of the Plaintiff’s entitlement.

In this Court’s view, the nature of those payments is a live factual issue. The Court cannot, on affidavit evidence alone, safely determine whether the payments were truly ex-gratia or whether they bear the legal significance contended by the Plaintiff.

The question why D2 and/or HCM-Molek JV made payments to the Plaintiff, if there was no obligation or involvement whatsoever, is not a matter that can be dismissed as irrelevant at this stage. It is a matter that may require documentary evidence, witness testimony and cross-examination.

This does not mean that the Plaintiff has proven liability against D2. It only means that the issue is not plainly hopeless for the purpose of Order 18 rule 19. F3. Unjust enrichment against D2

The Court accepts that unjust enrichment is not a device to circumvent a valid contractual framework. Kosbina Konsult and Dream Property are important authorities. A restitutionary claim cannot be used to rewrite contractual obligations or redistribute risks agreed by contracting parties.

However, the Plaintiff’s pleaded position is not simply that D2 must pay because D1 contracted with the Plaintiff. The Plaintiff says D2 received a benefit from the Plaintiff’s services, participated in or benefited from the Project, and made partial payments in circumstances inconsistent with a purely gratuitous arrangement.

The 2nd Defendant says the pleadings are insufficient. The Plaintiff says the core elements are pleaded. Having reviewed the competing submissions, this Court is satisfied that the Plaintiff has at least raised an arguable claim sufficient to survive a striking out application.

The question whether D2 was enriched, whether any enrichment was at the Plaintiff’s expense, whether retention of the benefit would be unjust, and whether any defence applies are matters better determined at trial on full evidence.

The authorities relied upon by the Defendants may well assist them at trial or at a later dispositive stage. But at this interlocutory stage, they do not compel the conclusion that the Plaintiff’s claim is plainly and obviously unsustainable. F4. Assumption of responsibility

The Defendants submit that the Plaintiff has not properly pleaded assumption of responsibility. They rely on Hedley Byrne, Strongkota, and ECH Development, and argue that a special relationship, proximity, reliance and voluntary assumption must be pleaded.

The Court accepts the legal principles advanced by the Defendants. The doctrine of assumption of responsibility is not lightly imposed. Mere payment alone will not necessarily create a legal duty to pay future or further sums.

However, the Plaintiff relies not only on payment, but also on the alleged history of dealings, the earlier involvement of D2, the alleged replacement of D2 with D1, D3’s alleged role, the D1-D2 joint venture, and the partial payments made thereafter.

Whether those facts, taken together, amount in law to an assumption of responsibility is a matter requiring careful analysis. At this stage, the Court is not satisfied that the claim is so hopeless that it should be struck out summarily. F5. The claim against D3

The 3rd Defendant submits that he cannot be personally liable merely because he acted as director or representative of the 2nd Defendant.

That proposition is correct as a general rule. A director is not personally liable merely because he acts for a company. Separate legal personality remains a foundational principle of company law.

However, the Plaintiff’s claim against the 3rd Defendant is not based merely on his title as director. The Plaintiff alleges that the 3rd Defendant personally made representations, gave assurances, acted as the principal communicator, and induced or caused the Plaintiff to proceed with the restructuring of the consultancy arrangement.

Whether those allegations are true is disputed. Whether those allegations, if proven, give rise to personal liability is also a matter of law and fact. But this is not a case where the Statement of Claim is completely silent as to D3’s alleged role.

The Court is mindful of the Defendants’ argument that the 3rd Defendant’s conduct, if any, was done in a corporate capacity. That may be a strong defence. But it requires proper evaluation of evidence as to what was said, in what capacity, by whom, and with what reliance or consequence.

The Court is therefore not prepared to strike out the claim against the 3rd Defendant at this stage. F6. Corporate veil and “directing mind” arguments

The parties addressed the issue of corporate veil and “directing mind and will”. The Plaintiff relies, among others, on Lembaga Tabung Haji v Encap, while the Defendants rely on Abdul Manaf, Aik Ming, Meridian, RDS Bina and Jones v Lipman.

The Court accepts that lifting the corporate veil is exceptional. The Court also accepts that the “directing mind and will” doctrine does not automatically impose personal liability on a director.

However, it is important not to overstate this aspect of the Plaintiff’s case at the striking out stage. The Plaintiff says its case is not simply one of piercing the corporate veil. It relies on unjust enrichment, representations, agency, apparent authority and personal conduct.

Therefore, even if the Plaintiff may face difficulty in establishing veil-piercing at trial, that does not necessarily dispose of all claims against D2 and D3.

The Court’s refusal to strike out should not be understood as a finding that the corporate veil may be lifted. No such final finding is made. The Court merely finds that the pleaded factual matrix should be tested at trial. F7. Whether the action is frivolous, vexatious or an abuse of process

The Defendants submit that the inclusion of D2 and D3 is prejudicial and unnecessary because the true claim is against D1.

The Court is not persuaded that the joinder of D2 and D3 is, at this stage, an abuse of process. The Plaintiff has pleaded specific facts concerning D2’s involvement, D2’s alleged benefit, D2’s payments, D3’s alleged representations and D3’s alleged role in the restructuring of the transaction.

These allegations may or may not be proven. But they are not so obviously scandalous, vexatious or abusive as to warrant striking out.

The Court also considers that the presence of D2 and D3 may assist in the complete determination of the factual matrix. If they are removed at this stage, there is a risk that overlapping factual issues concerning payments, authority, representations and benefit may remain unresolved or become fragmented.

For the reasons stated, the Court makes the following findings:

The Plaintiff’s claim against D2 and D3 is not confined solely to a contractual claim under the Consultancy Services

The absence of privity of contract is a substantial defence, but it is not conclusive at the striking out stage because the Plaintiff also pleads unjust enrichment, assumption of responsibility, agency and misrepresentation;

The partial payments of RM2.315 million by D2 and/or HCM-Molek JV raise factual issues as to their true nature, purpose and legal effect;

Whether the payments were truly ex-gratia, or whether they evidence benefit, involvement, or assumption of responsibility, cannot be determined summarily;

The issue whether D2 benefited from the Project through the D1-D2 joint venture arrangement is a triable issue;

The Plaintiff has pleaded allegations concerning D3’s representations, continuing assurances, authority and personal role;

Whether D3 acted with actual, apparent or ostensible authority, and whether D3 may be personally liable for his own alleged representations or tortious conduct, require evidence and cross-examination;

The Court should not conduct a mini-trial on affidavit evidence in an application under Order 18 rule 19;

This is not a plain and obvious case warranting the drastic remedy of striking out. H.

The Court reiterates that the dismissal of Enclosure 21 does not amount to a final finding that the Plaintiff will succeed against the 2nd and 3rd Defendants.

The Court makes no final finding at this stage that D2 is liable in unjust enrichment or assumption of responsibility. The Court also makes no final finding that D3 is personally liable, or that he acted with actual, apparent or ostensible authority.

The Court’s finding is limited to this: the Plaintiff has raised sufficient arguable and triable issues against the 2nd and 3rd Defendants such that the claim should not be summarily terminated under Order 18 rule 19.

The claim may ultimately succeed or fail at trial. But it is not plainly and obviously unsustainable.

Accordingly, the Court orders as follows:

Enclosure 21 is dismissed;

The Plaintiff’s claim against the 2nd Defendant and 3rd Defendant shall proceed to trial;

Costs of Enclosure 21 are awarded to the Plaintiff in the sum of RM5,000, subject to allocatur;

The matter shall proceed for further case management and trial directions.