Hong Xin Construction Sdn Bhd v Zana Bina Sdn Bhd (JA-22NCC-75-11/2020)

ZANA BINA SDN. BHD. [COMPANY NO. : 918580-W]

CHOK KIM SIN [NRIC NO. : 611007-05-5139] ...DEFENDAN-DEFENDAN

This is the Plaintiff’s claim for the recovery of monies totalling RM2,582,019.00 paid to the 1st Defendant, arising from a construction dispute relating to the Taman Seri Molek Perdana housing project in Mukim Plentong, Johor Bahru.

The Plaintiff, claims the sum of RM710,000.00 and RM1,872,019.00 against the 1st Defendant, Zana Bina Sdn. Bhd. The Plaintiff’s case is that it acted as a payment conduit on behalf of the 2nd Defendant, Chok Kim Sin, in settlement of Cosmic Master Development Sdn Bhd’s (“Cosmic”) debt of RM2,607,019.00 to the 1st Defendant and that the liability for the debt rested solely on the 2nd Defendant pursuant to a Settlement Agreement dated 1.6.2018 and an oral arrangement of 23.4.2018.

The 1st Defendant denies this. Its principal defences are –

res judicata arising from OS JA-24NCC-11-05/2020;

the Plaintiff is independently liable as drawer of cheques under the

the payment of RM1,872,019.00 extinguished the Plaintiff’s cause of action; and

the “without prejudice” letters are inadmissible.

The 1st Defendant counterclaims RM1,000,000.00 in general damages for malicious litigation, RM200,000.00 in indemnity costs and RM50,000.00 as exemplary damages.

The 2nd Defendant did not participate in the trial. He is bankrupt. The Plaintiff informed the Court on 15.12.2025 (Enclosure 143) that it no longer wished to proceed against the 2nd Defendant.

The case was tried on 23 and 24 December 2025. The Plaintiff called two witnesses –

PW1 (Low Hui Ying, CEO and Director of the Plaintiff);and

PW2 (Lau Kok Guan @ Low Kok Guan, Advocate and Solicitor, former solicitor for the 2nd Defendant and Cosmic).

The 1st Defendant called one witness, DW1 (Azri Shafiq Bin Mohd Yusof, Managing Director of the 1st Defendant).

The Court directed written submissions by 4.2.2026, submissions in reply by 12.2.2026 and decision on 2.3.2026. This Court shall now deliver the decision and its ground.

The material background facts are largely undisputed and are drawn from the Agreed Facts (Enclosure 132), the Common Bundle of Documents (“CBOD”, Enclosure 131), the Plaintiff’s Bundle of Documents (“PBOD”) and the evidence of the witnesses.

Cosmic entered into a Project Business Collaboration Agreement dated 25.7.2011 with Syarikat Perumahan Negara Berhad (“SPNB”) for the development of 972 units of affordable housing at Lot 189189, 189190 & 189191, Mukim Plentong, Johor Bahru. Cosmic appointed the 1st Defendant as contractor via a Letter of Award dated 15.5.2015 for RM16,146,000.00. Cosmic defaulted on Valuation Interim Certificates No. 1 and 2, totalling RM2,607,019.00. The 1st Defendant obtained a CIPAA Adjudication Order (12.8.2016) endorsed by the KL High Court (24.10.2016) and subsequently wound up Cosmic on 22.11.2017.

A meeting was held on 23.4.2018 at the Plaintiff’s office. The attendance was confirmed by all three witnesses. What was agreed is the central dispute.

On 24.4.2018, Cosmic appointed the Plaintiff as replacement contractor. A consent judgment dated 6.6.2018 terminated Cosmic’s winding-up, with the 1st Defendant having no objection.

A Settlement Agreement dated 1.6.2018 was executed between the 2nd Defendant and the 1st Defendant. The Plaintiff was not a named party. The key terms are as follows –

RM200,000.00 by banker’s draft;

monthly instalments of RM65,000.00 for six months;

balance RM2,017,019.00 by 5.1.2019;

the 2nd Defendant to forward post-dated cheques;

upon default, the balance payable by the 2nd Defendant; and

security of 10 apartment units at Taman Seri Molek Perdana.

The Plaintiff issued seven post-dated AmBank cheques (Nos. 018949 - 018955) in favour of the 1st Defendant. The first six (RM65,000.00 each) were honoured between July and December 2018, totalling RM390,000.00. Following a deferment letter dated 4.1.2019 by PW2 on the 2nd Defendant’s instructions, three replacement cheques (064751 - 064753) totalling RM300,000.00 were honoured in January 2019 and two interbank giro payments of RM10,000.00 each were made on 22.3.2019 and 14.5.2019. Total pre-protest payments :

On 25.4.2019, the Plaintiff cancelled Cheque 018955 for RM2,017,109.00. The 1st Defendant presented it on 30.4.2019; it was dishonoured.

On 22.4.2020, the 1st Defendant issued a section 466(1)(a) of Companies Act 2016 [Act 777], a statutory demand for RM2,017,109.00. The Plaintiff filed OS JA-24NCC-11-05/2020 (fortuna injunction), which was dismissed on 8.7.2020. The Plaintiff filed the present suit on 17.11.2020. The 1st Defendant filed its Winding-Up Petition (JA-28NCC-141-11/2020) on 24.11.2020, seven days after the Plaintiff filed this suit. Thereafter, the Plaintiff’s Public Bank account was frozen, causing operational disruption.

The Plaintiff’s solicitors (Messrs Dorairaj Low & Teh) issued a letter dated 13.4.2021 marked “Without Prejudice”. The Plaintiff paid RM1,872,019.00 (inclusive of RM175,000.00 late payment interest) in seven instalments between 13.4.2021 and 30.9.2021. On 14.4.2021, the 1st Defendant wholly withdrew its winding-up petition. Total paid by the Plaintiff to the 1st Defendant: RM2,582,019.00.

The Isu-Isu Untuk Dibicarakan (Issues to be trial) were filed as Enclosure 135 (9.12.2025). There are two sets of issues : (a) the Plaintiff’s issues (Issues 1 - 5) and (b) the Defendants’ additional issues (Isu Tambahan 1 - 5). This Court observes that Issue 5 of the Plaintiff’s issues and Isu Tambahan 1 of the Defendants’ issues are substantially identical. Both ask whether the Plaintiff has a cause of action against the 2nd Defendant in light of the separate legal entity principle. This Court shall address each issue in turn, having first set out the background facts. Plaintiff’s Issues Issue 1 : Whether there was failure of consideration by the 1st and/or 2nd Defendant in receiving the Plaintiff’s payments of RM710,000.00 and/or RM1,872,019.00

The Plaintiff submits (Enclosure 181) that the 1st Defendant received the payments without providing any consideration to the Plaintiff. The Plaintiff relies on section 74 Contracts Act 1950 [Act 136], contending that the payments were made under a conditional oral arrangement that failed when Cosmic did not pay the Plaintiff under the Construction Contract. The Plaintiff relies on Yeo Hiap Seng v Australian Food Corp Pte Ltd & Anor [1991] 3 MLJ 144 and Grinterra Sdn Bhd v Quantum Hydromec Sdn Bhd [2021] MLJU 2289, submitting that the Court can look behind the cheque to the underlying transaction where there is total failure of consideration.

The 1st Defendant submits (Enclosure 185) that the Plaintiff is independently liable as drawer of the cheques under Act 204. The 1st Defendant relies on section 27 of Act 204 valuable consideration includes antecedent debt of a third party. (See : Kum Hui Bing v Premium Plaza [2018] 1 LNS 1027), section 47 of Act 204 (immediate right of recourse on dishonour) and N. Joachimson (A Firm Name) v

The 1st Defendant contends that the only written nexus between the Plaintiff and the 1st Defendant was the cheques, and the cheques constitute independent statutory obligations.

This Court is satisfied that, on the evidence, the Plaintiff received no consideration from the 1st Defendant for these payments. When asked in cross-examination : “Do you agree that by receiving this cheque, payment, any post-dated cheque from the Plaintiff, Zana Bina actually never provide any services or any product to the Plaintiff?”, DW1 disagreed but could only cite “The project”. When pressed, DW1 agreed that the project was given by Cosmic to the Plaintiff and that Cosmic would then pay the Plaintiff under the Construction Contract. DW1 then agreed : “Yes”, (that Cosmic would pay the Plaintiff based on the Construction Contract).

This Court observed that Cosmic did not pay the Plaintiff. This is evidenced by the Order dated 25 October 2020 (Enclosure 137, page 72 - 75), showing Cosmic was ordered to pay the Plaintiff approximately RM14 million, which DW1 agreed to. Therefore, condition upon which the Plaintiff issued cheques, that Cosmic would pay the Plaintiff, was not fulfilled.

On the Act 204 argument, this Court accepts the Plaintiff’s submission (Enclosure 187) that the cause of action is not founded on the cheque instruments but on the underlying arrangement and total failure of consideration. The Act 204 presumption of consideration is rebuttable where consideration has totally failed. (see : Yeo Hiap Seng and Grinterra). The Court is entitled to look behind the cheque to the underlying transaction.

The 1st Defendant further submits that the Plaintiff's claim of failure of consideration is inconsistent with the Plaintiff's conduct in honouring three replacement cheques (Nos. 064751 - 064753) and two interbank giro payments totalling RM320,000.00 after 5.1.2019, being the date of Cheque 018955 which the Plaintiff stopped. This Court does not find the inconsistency fatal to the Plaintiff's case. These replacement cheques were issued pursuant to the rescheduling arrangement confirmed by the 2nd Defendant's solicitor's letter dated 4.1.2019. They were smaller sums paid on behalf of the 2nd Defendant in the continuing hope that Cosmic would eventually honour its obligations under the Construction Contract. The stopping of Cheque 018955 for RM2,017,019.00, a substantially larger sum, was a proportionate response to the growing reality that Cosmic would not pay the Plaintiff. The conduit arrangement did not require the Plaintiff to refuse all payments simultaneously; it required the Plaintiff to act reasonably, which it did by continuing modest instalments while stopping the single large payment that would have been commercially catastrophic given Cosmic's default. The subsequent non-payment by Cosmic, confirmed by the judgment in JA-22C-4-06/2019, vindicated the Plaintiff's decision.

As for the RM1,872,019.00, this Court observed that this was paid under commercial compulsion arising from the winding-up proceedings. The Plaintiff’s solicitors’ letter dated 13.4.2021 bore the words “Without Prejudice”. The Plaintiff relies on Pan Northern Air Services Sdn Bhd v Maybank Islamic Bhd and another appeal [2021] 3 MLJ 408, where the Court held that payment accompanied by a “Without Prejudice” reservation is strictly without prejudice and may be recovered.

The 1st Defendant submits (Enclosure 185) that –

there was no contemporaneous protest;

the “payment under protest” plea was only added by amendment on 10.7.2025, four years after payment;

the “Without Prejudice” was merely a letter header; and

based to MBT (M) Sdn Bhd v Syarikat Perniagaan Mesra Sdn Bhd [2004] 1 MLJ 676, it creates an estoppel.

The 1st Defendant further relies on Boustead Trading (1985) Sdn. Bhd. v. Arab-Malaysian Merchant Bank Berhad [1995] 4 CLJ 283 for the principle that one cannot blow hot and cold.

This Court prefers the Plaintiff’s position for the following reasons. First, Pan Northern is directly on point. DW1 admitted seeing the “Without Prejudice” wording on the letter. Second, MBT is distinguishable. In that case, the payment was ultimately unconditional. Here, the “Without Prejudice” reservation was never withdrawn. Crucially, the chronology distinguishes this case from MBT. In MBT, the appellant made an unconditional payment in satisfaction of a judgment and thereafter sought to continue an appeal against that very judgment. The court held that the substratum of the appeal had dissipated. Here, the position is fundamentally different. The present suit was filed on 17.11.2020, before the winding-up petition (24.11.2020) and was never discontinued. The payment of RM1,872,019.00 was made between April and September 2021 to resolve the winding-up proceedings, not this suit. The Notice of Discontinuance dated 14.4.2021 related exclusively to the winding-up petition (JA-28NCC-141-11/2020). No Notice of Discontinuance was filed or signed in relation to the present suit. DW1 agreed to this chronology. The cause of action in the present suit therefore never abated. The 1st Defendant's submission that the cause of action was extinguished by the payment proceeds on the assumption that the payment was unconditional and constituted full and final settlement.

As for the 1st Defendant's reliance on Boustead Trading (1985) Sdn. Bhd. for the principle that a party cannot approbate and reprobate, the same reasoning applies. The doctrine presupposes that the party has taken an unequivocal position. Here, the Plaintiff's position was never unequivocal : the 'Without Prejudice' reservation was maintained throughout and the present suit was never discontinued. There was no approbation to contradict.

That assumption is contradicted by the "Without Prejudice" reservation in the solicitors' letter of 13.4.2021 and by the Plaintiff's consistent maintenance of the present suit throughout. Further, the four-year gap to the formal amendment adding the "payment under protest" plea is a factor, but the amendment was allowed on 25.3.2025 by consent and was not appealed. The substance of the protest is evidenced by the letter and the maintenance of the suit throughout.

On the admissibility of the 13.4.2021 letter, the 1st Defendant introduced Melawangi Sdn Bhd v Tiow Weng Theong [2020] MLJU 257 and Yeo Ing King v. Melawangi Sdn Bhd [2017] 1 CLJ 512 in its Additional Skeletal Submissions (Enclosure 190). These authorities concerned Part A documents and the proposition that Order 34 rule 2(2)(d) Rules of Court 2012 addresses agreement on contents, not truth. The letter is a Part B document : authenticity is not disputed.

The 1st Defendant contends that the letter is inadmissible because the maker, Messrs Dorairaj, Low & Teh, was not called to testify. This submission conflates the Part A and Part B regimes. Under Order 34 rule 2(2)(b) of the Rules of Court 2012, a Part B document is one whose authenticity is admitted but whose contents are disputed. The consequence is that the document is admissible without formal proof of execution; the contents go to weight, not admissibility. The maker's testimony would be relevant if authenticity were in issue. It is not. The "Without Prejudice" marking is a physical feature apparent on the face of the document. It is not a statement of fact requiring the maker's verification. The 1st Defendant's own witness, DW1, admitted seeing the marking. The 1st Defendant's reliance on Yeo Ing King v Melawangi Sdn Bhd and Melawangi Sdn Bhd v Tiow Weng Theong is misplaced : those authorities addressed the evidential status of Part A documents and the distinction between agreement on contents and agreement on truth. They do not stand for the proposition that a Part B document requires its maker to testify before it can be admitted. The admissibility question is therefore different.

The Plaintiff relies on Mohamad Fauzi bin Che Rus v JR Joint Resources Holdings Sdn Bhd [2016] 8 MLJ 739 and Ktl Sdn. Bhd. v Leong Oow Lai [2014] MLJU 1405. This Court admits the letter. The “Without Prejudice” marking is apparent on the face of the document and does not require the maker to testify. As for weight, DW1’s own admission of seeing the marking is corroborative.

This Court finds that there was a total failure of consideration in respect of both RM710,000.00 and RM1,872,019.00. The RM1,872,019.00 was additionally paid under protest and is recoverable. Accordingly, issue 1 is answered in the affirmative. Issue 2 : Whether under the Settlement Agreement dated 1.6.2018, liability for all payments to the 1st Defendant falls on the 2nd Defendant and not the Plaintiff

The Plaintiff submits (Enclosure 181, 187) that the Settlement Agreement on its face places all liability on the 2nd Defendant. The Plaintiff was deliberately excluded as a party. The Plaintiff relies on PW2’s independent testimony and the FC authorities on independent witnesses. (See : Henry Trading Co Ltd v Harun [1966] 2 MLJ 281 and Karthiyayani & Anor v. Lee Leong Sin & Anor [1974] CLJU 61).

The 1st Defendant submits (Enclosure 185) that the Plaintiff voluntarily issued its own cheques and is independently liable. DW1 stated : “That’s what the agreement between us and Hong Xin” and “No, through the Plaintiff”. The 1st Defendant contends that Plaintiff and Chok were acting in concert and that there is no written Plaintiff-D1 agreement.

This Court observed that the Settlement Agreement is clear on its face–

It was between the 2nd Defendant and the 1st Defendant only. DW1 admitted this;

Recital B : the 2nd Defendant agreed to pay the 1st Defendant for Cosmic’s debt. DW1 agreed;

Clause 1(d) : the obligation to forward post-dated cheques was on the 2nd Defendant. DW1 agreed;

Clause 1(e)(iii) : upon default, the balance becomes immediately payable by the 2nd Defendant; and

Clause 1(e) : security of 10 apartment units valued at ~ RM3.5 million provided by the 2nd Defendant.

The 1st Defendant’s own contemporaneous conduct confirms this reading. In February 2019, the 1st Defendant’s solicitors (Messrs PY Ho & Tai) demanded payment from the 2nd Defendant and not the Plaintiff. DW1 admitted that at the same time, Zana Bina did not issue any demand against Hong Xin. This is powerful evidence that the 1st Defendant itself treated the 2nd Defendant as the liable party.

DW1 admitted that the 1st Defendant did not sue the 2nd Defendant after the cheque was dishonoured, even when the 2nd Defendant was in default. DW1 could not identify which meeting or date the Plaintiff allegedly “agreed to pay”, “I can’t remember the date”, settling on “basically, the 23rd April, basically”.

PW2 (Lau Kok Guan), the 2nd Defendant’s own solicitor, corroborated the Plaintiff’s version. He attended the 23.4.2018 meeting, drafted the Settlement Agreement and issued the 4.1.2019 deferment letter on the 2nd Defendant’s instructions. His evidence has the character of a quasi-admission. His cross-examination, and his core documentary evidence was not undermined.

On the balance of probabilities, this Court finds that under the Settlement Agreement and the 23.4.2018 oral arrangement, liability rested on the 2nd Defendant. Accordingly, issue 2 is answered in the affirmative. Issue 3 : Whether the Plaintiff suffered losses of RM710,000.00 and/or RM1,872,019.00 by reason of misrepresentation

This issue has four sub-issues (3.1 - 3.4), each addressing a specific representation. Sub-issue 3.1 : Post-dated cheques conditional on Cosmic paying the

The Plaintiff’s position is that the cheques were issued on behalf of the 2nd Defendant and would only be honoured if Cosmic paid the Plaintiff under the Construction Contract. The 1st Defendant denies this and contends the Plaintiff voluntarily issued the cheques without condition.

Having found at Issue 2 that the oral arrangement and the Settlement Agreement placed liability on the 2nd Defendant, this Court also finds that the conditional nature of the arrangement is established. DW1’s own evidence that Cosmic would pay the Plaintiff under the Contract implicitly supports the conditional framework. PW2 corroborated the arrangement. Hence, sub-issue 3.1 is answered in the affirmative. Sub-issue 3.2 : Liability for dishonoured cheques rests on the 2nd Defendant.

This follows directly from this Court’s findings on Issue 2 and Clause 1(e)(iii) of the Settlement Agreement. DW1’s admission that the 1st Defendant’s solicitors demanded payment from the 2nd Defendant (not the Plaintiff) in February 2019 confirms that the parties understood default liability rested on the 2nd Defendant. Hence, sub-issue 3.2 is answered in the affirmative. Sub-issue 3.3 : Cheque 018955 was deferred by agreement

DW1 agreed that Cheque 018955 was not presented in January 2019. The 2nd Defendant’s solicitor (PW2) issued a deferment letter dated 4.1.2019 proposing rescheduling, which the 1st Defendant accepted by receiving the replacement cheques. DW1 admitted “we postpone” and agreed the 2nd Defendant asked for the cheque to be deferred. The 1st Defendant’s acceptance of rescheduled cheques in lieu of Cheque 018955 amounts to a deferment. Hence, sub-issue 3.3 is answered in the affirmative. Sub-isu 3.4 : Default liability on the 2nd Defendant under the

This is directly established by the express terms of Clause 1(e)(iii) and DW1’s admissions on Recital B, Clause 1(d), and Clause 1(e)(iii) of the Settlement Agreement, as set out under Issue 2 above. Hence, sub-issue 3.4 is answered in the affirmative. Issue 4 : Whether the Plaintiff is entitled to the reliefs sought in paragraphs 26 and/or 27 of the Amended Statement of Claim

Having answered Issues 1 - 3 in the affirmative, the Plaintiff has established –

total failure of consideration;

that liability under the Settlement Agreement rested on the 2nd

that the Plaintiff suffered losses from the representations made. The Plaintiff is entitled to recovery of the sums paid.

On the equitable dimension, the Plaintiff highlights that the 1st Defendant has received RM2,582,019.00 in cash payments and retains a contractual entitlement to 10 apartment units valued at RM3.5 million under the Settlement Agreement, for a debt of RM2,607,019.00. DW1 admitted never writing to demand the 10 units from the 2nd Defendant and never suing the 2nd Defendant after default.

While DW1 stated in re-examination that the units were never received, the contractual entitlement exists. The 1st Defendant’s failure to pursue the 2nd Defendant for the debt or the security, while simultaneously pursuing the Plaintiff, underscores the inequity.

The 1st Defendant further submits that the Plaintiff's claim amounts to unjust enrichment because the Plaintiff obtained judgment against Cosmic for approximately RM14 million in JA-22C-4-06/2019, which included claims for Interim Certificates Nos. 1 and 2 (works originally performed by the 1st Defendant) and that allowing recovery of RM2,582,019.00 from the 1st Defendant would result in double recovery. This Court rejects this submission.

First, the judgment against Cosmic remains unsatisfied. Cosmic has been wound up and DW1 agreed that Cosmic has not paid the Plaintiff. There is no double recovery where the Plaintiff has received nothing from Cosmic. Second, the causes of action are distinct : the claim against Cosmic was for breach of the Construction Contract for work done by the Plaintiff; the present claim is for recovery of monies paid by the Plaintiff as conduit on behalf of the 2nd Defendant where consideration has totally failed.

Third, the enrichment argument, if accepted, would produce the very inequity the 1st Defendant seeks to avoid. The 1st Defendant would retain RM2,582,019.00 in cash, retain its contractual entitlement to 10 apartment units valued at approximately RM3.5 million, while the Plaintiff, who was never the debtor, would bear the entire loss. It is the 1st Defendant, not the Plaintiff, that would be unjustly enriched if this claim were dismissed.

Accordingly, this Court finds that the Plaintiff is entitled to the reliefs sought. Accordingly, issue 4 is answered in the affirmative. Issue 5 and 1st Defendant additional issue : Whether the Plaintiff has a cause of action against the 2nd Defendant given the separate legal entity principle

As noted above, Issue 5 and 1st Defendant additional issue raise the same question. Both ask whether the Plaintiff has a cause of action against the 2nd Defendant in circumstances where the transactions involved Cosmic, a separate legal entity from the 2nd Defendant.

This issue is now moot. The 2nd Defendant did not participate in the trial, is bankrupt and the Plaintiff has informed the Court (Enclosure 143, 15.12.2025) that it no longer wishes to proceed against the 2nd Defendant. No determination is required. Accordingly, this Court decline to answer this issue.

This Court turns to the remaining Defendants’ additional issues. 1st Defendant additional issue has been dealt with together with Issue 5 above. Additional Issue 2 : Whether res judicata applies by reason of OS JA-

The 1st Defendant submits that the Plaintiff’s claim is barred by res judicata, relying on the wider Henderson v Henderson [1843] 3 Hare 100 abuse of process doctrine. The 1st Defendant contends that the same facts were raised in the OS, that the Plaintiff should have raised all claims there or appealed and that the OS was a standalone originating summons (not interlocutory). The 1st Defendant relies on Jasa Keramat v Monatech (M) Sdn Bhd [1999] 4 CLJ 533. Enclosure 190 merely reiterates reliance on all cause papers from the OS without new arguments.

The Plaintiff submits that a fortuna injunction under section 466 of Act 777 is interlocutory in nature and lacks the finality required for res judicata. (See : Redmax Sdn Bhd v PSI Incontrol Sdn Bhd [2018] 6 MLJ 281, JAKS Resources Bhd v Star Media Group Bhd and other appeals [2023] 6 MLJ 114; Yeoh Thiam Soon v Phoenix Oasis Sdn Bhd [2020] MLJU 374; and Cheng Hang Guan & Ors v Perumahan Farlim (Penang) Sdn Bhd & Ors [1988] 3 MLJ 90). The Plaintiff further argues that the OS concerned only the cheque for RM2,017,109.00 and the validity of the section 466 of Act 777 notice; the present suit encompasses different sums and different causes of action.

This Court observed that PW1 conceded under cross-examination that the same facts were raised in the OS and that she “did not succeed”. This was the 1st Defendant’s strongest cross-examination point.

the weight of Court of Appeal authority in Redmax clearly treats fortuna injunctions as interlocutory, lacking the requisite finality for cause of action estoppel or issue estoppel;

the OS concerned only the validity of the section 466 of Act 777 notice based on the dishonoured cheque; it did not adjudicate the substantive merits of the Plaintiff’s claims for recovery of RM710,000.00 and RM1,872,019.00;

the 1st Defendant itself wholly withdrew the winding-up petition on 14.4.2021 - meaning the underlying dispute was never finally determined.

Jasa Keramat is distinguishable as it was not a fortuna injunction case.

Accordingly, this Court finds that res judicata does not apply. Accordingly, this issue is answered in the negative. Additional Issue 3 : Whether res judicata applies by reason of the Cosmic suit JA-22C-4-06/2019

The 1st Defendant submits that the Plaintiff’s claim is barred by reason of a separate suit (JA-22C-4-06/2019) filed by the Plaintiff against Cosmic, in which judgment was obtained on 25.10.2019.

The parties to that suit were the Plaintiff and Cosmic and not the 1st Defendant. The cause of action was breach of the Construction Contract by Cosmic, which is different from the present claim for recovery of payments made to the 1st Defendant on behalf of the 2nd Defendant. Even on the wider formulation of res judicata advanced by the 1st Defendant's own authority in Chee Pok Choy & Ors v. Scotch Leasing Sdn Bhd [2001] 2 CLJ 321, the doctrine requires that the complaint or issue "has, or could have been disposed of in earlier proceedings between the same parties". The 1st Defendant was not a party to JA-22C-4-06/2019. The requirements for res judicata, same parties, same cause of action, same subject matter, are plainly not met. Therefore, additional issue 3 is answered in the negative. Additional Issue 4 : Whether the 1st Defendant is entitled to RM1,000,000.00 general damages, interest and costs as pleaded

The 1st Defendant counterclaims for malicious litigation, demanding for RM1,000,000.00 general damages, RM200,000.00 indemnity costs and RM50,000.00 exemplary/punitive damages. DW1 stated (witness statement) that the claim is “a dishonest act by the Plaintiff”.

The Plaintiff submits that the high threshold for malicious prosecution/litigation requires proof of the absence of reasonable and probable cause and that DW1’s own admissions defeat the counterclaim.

This Court agrees with the Plaintiff. DW1’s admission that the Plaintiff has a “genuine grievance” is a significant concession : it effectively acknowledges reasonable and probable cause for the action. Furthermore, this suit was filed before the winding-up. When put to DW1 that there was no evidence to prove the basis or amount of the damages claimed, DW1 merely disagreed without explanation. No damages evidence was adduced. Accordingly, the counterclaim is dismissed. Additional Issue No. 4 is answered in the negative. Additional Issue 5 : Whether the 2nd Defendant is entitled to RM500,000.00 general damages, interest and costs

The 2nd Defendant did not participate in the trial, filed no witness statement and adduced no evidence. The Plaintiff has abandoned its claim against the 2nd Defendant. No evidence in support of the 2nd Defendant’s counterclaim was presented. Accordingly, additional issue no. 5 is answered in the negative.

For the foregoing reasons, this Court makes the following orders –

The Plaintiff’s claim against the 1st Defendant is allowed;

The 1st Defendant shall pay to the Plaintiff the sum of RM2,582,019.00 being the total of RM710,000.00 and RM1,872,019.00 paid by the Plaintiff to the 1st Defendant;

Interest on the said sum at the rate of 5% per annum from the date of the filing of this suit (17.11.2020) until the date of full realisation;

The 1st Defendant’s counterclaim is dismissed;

The Plaintiff’s claim against the 2nd Defendant is struck out pursuant to Enclosure 143;

The 2nd Defendant’s counterclaim has become academic; and

Costs of RM100,000.00 subject to the allocator. Dated : 2 March 2026 -signed- (DR NORADURA BINTI HAMZAH) Judicial Commissioner High Court Civil 2 Johor Bahru Solicitor for the Plaintiff : : Tong Min Jie Messrs. Gan Partnership Solicitor for the First Defendant : : Ravichanthiran a/l Ganesan Messrs. Aida & G Ravi