Incitement Sdn Bhd v Fusionex Innovations Sdn Bhd (WA-22IP-20-02/2025)

FUSIONEX INNOVATIONS SDN BHD [Company No.: 201501040914 (1166234-D)] (Under liquidation)

FXI SOLUTIONS SDN BHD [Company No.: 202001016414 (1372735-D)]

ADV FUSIONEX SDN BHD [Company No.: 200501009393 (686440-V)] (Under liquidation) …DEFENDANTS GROUNDS OF JUDGMENT Enclosure 13 2nd Defendant’s Striking Out Application 2! ! A. INTRODUCTION [1] Before this Court is the 2nd Defendant's Application vide Enclosure 13 ("the Application"), seeking to strike out the Plaintiff's Writ of Summons and Statement of Claim dated 21 February 2025, insofar as they relate to the 2nd Defendant, FXI Solutions Sdn Bhd. The 2nd Defendant’s application was filed pursuant to Order 18 Rule 19(1)(a), (b) and (d) of the Rules of Court 2012 ("ROC 2012"). [2] The grounds invoked by the 2nd Defendant are:

Order 18 Rule 19(1)(a) – that the Plaintiff's Statement of Claim discloses no reasonable cause of action against the 2nd

Order 18 Rule 19(1)(b) – that the claim is scandalous, frivolous or vexatious; and

Order 18 Rule 19(1)(d) – that the claim is otherwise an abuse of the process of the Court. [3] Having heard the submissions of learned counsel for both parties and having carefully considered the written submissions, affidavit evidence, and the authorities cited, I dismissed the Application with costs. I now state the grounds of my decision. 3! ! B. BACKGROUND [4] The Plaintiff, Incitement Sdn Bhd, is a startup company operating a social-purpose business. Its business involves creating and operating an online platform known as www.theincitement.com ("the Platform") for companies to manage and raise funds for corporate social responsibility ("CSR") programmes and for charity organisations to raise donations and funds. [5] The Plaintiff's case, as pleaded in its Statement of Claim, may be summarised as follows: -

On or around January 2018, one of the Plaintiff's directors, Christian de Gruijter ("Chris"), met one James Martin Graham ("James"), who was at the material time the Program Director and Chief Technology Officer of a group of companies known as the Fusionex Group, which included the 1st Defendant (Fusionex Innovations Sdn Bhd) and the 3rd Defendant (ADV Fusionex Sdn Bhd).

On 30 January 2019, a Memorandum of Understanding ("MOU") was entered into between the Plaintiff and the 1st Defendant to formalise their collaboration.

Following the MOU, the Plaintiff handed over its intellectual property, including its full code repository, to the 1st Defendant. 4! !

Subsequently, numerous discussions were held between the Plaintiff and the Fusionex Group regarding a Term Sheet to formalise the collaboration. Drafts of the Term Sheet were circulated between the parties by email.

While the Term Sheet bears the date 17 February 2020 on its face, it was signed by Tan Soon Lin, as director of the 2nd Defendant (FXI Solutions), and dated 21 July 2020. The 2nd Defendant was incorporated on 2 July 2020. James emailed the duly executed Term Sheet to the Plaintiff's representative, Daniel de Gruijter ("Daniel"), on 21 July 2020.

On 9 December 2023, it came to the Plaintiff's attention that the entire upper management of the Fusionex Group had suddenly resigned. On 27 December 2023, the Plaintiff's Platform was suspended.

On 6 May 2024, winding up orders were granted against the 1st and 3rd Defendants.

The Plaintiff's claim is to recover its intellectual property from the Defendants or, in the alternative, damages for loss of its business. [6] The 2nd Defendant's case, as stated in its Defence (Enclosure 7) and the affidavit in support of the Application affirmed by its current director, Tahyas Jeti Anak Kolony ("Tahyas") (Enclosure 14), may be summarised as follows: - 5! !

The 2nd Defendant was not yet incorporated as at the date appearing on the face of the Term Sheet (17 February 2020), having only been incorporated on 2 July 2020;

The 2nd Defendant has no relationship whatsoever with the Plaintiff, contractual or otherwise, and has not corresponded with the Plaintiff;

The 2nd Defendant neither offered nor received any services from the Plaintiff, and vice versa;

The 2nd Defendant neither made nor received any payments from the Plaintiff;

The 2nd Defendant never hosted the Platform;

The 2nd Defendant never had possession, custody, control or power of the Plaintiff's intellectual property;

The 2nd Defendant was not and is not part of the Fusionex Group of Companies; and

Tan Soon Lin, the former director of the 2nd Defendant, did not sign the Term Sheet and his signature thereon was forged. [7] In support of its contention that Tan Soon Lin did not sign the Term Sheet, the 2nd Defendant relies on two police reports lodged on 26 March 2025 by Tan Soon Lin and by Tahyas respectively, as well as 6! ! Tahyas's averments in her affidavit that Tan Soon Lin had told her that he did not sign the Term Sheet. C. SUBMISSIONS OF THE PARTIES [8] Learned counsel for the 2nd Defendant submitted that the Plaintiff's claim against the 2nd Defendant is "obviously unsustainable" because:-

The Term Sheet is dated 17 February 2020, a date prior to the 2nd Defendant's incorporation on 2 July 2020. As such, it is a pre-incorporation contract that does not satisfy the strict requirements under Section 65 of the Companies Act 2016 as outlined by the Federal Court in Dae Hanguru Infra Sdn Bhd v Baldah Toyyibah (Prasarana) Kelantan Sdn Bhd & Another Appeal [2022] 5 CLJ 194.

The Plaintiff's own pleadings and the Table of (IR)Relevance prepared by the 2nd Defendant (Appendix A) demonstrate that the 2nd Defendant had no involvement in any of the dealings between the Plaintiff and the Fusionex Group;

All correspondence, services, and payments were between the Plaintiff and the 1st and/or 3rd Defendants, and not the 2nd

The Plaintiff's pre-litigation conduct shows it only pursued the liquidators of the 1st and 3rd Defendants, and not the 2nd Defendant, and the Plaintiff should be estopped by this conduct, 7! ! relying on Aura Indah Jaya Sdn Bhd v OCBC Bank (M) Bhd [2021] 10 MLJ 21; and

The allegation of forgery is supported by Tan Soon Lin's police report and Tahyas's affidavit evidence. [9] The 2nd Defendant further relied on the Federal Court decision in New Straits Times (Malaysia) Bhd v Kumpulan Kertas Niaga Sdn Bhd & Anor [1985] 1 MLJ 226 for the proposition that, in an application to strike out under Order 18 Rule 19(1), the Court must consider only the pleadings and the test is whether the cause of action is "obviously unsustainable". [10] On the issue of Tahyas's competence as a deponent, the 2nd Defendant relied on Omega Holdings Bhd v Dato' Tiah Thee Kian & Ors [2022] 7 CLJ 125 and Edmund Ming Kwan @ Kwaun Yee Ming, Edmund v Extra Excel (Malaysia) Sdn Bhd & Ors (Part 2) [2007] 7 MLJ 276 for the proposition that Order 41 Rule 5(2) ROC 2012 permits affidavits in interlocutory proceedings to contain statements of information or belief with sources and grounds. [11] Learned counsel for the Plaintiff submitted that the Application should be dismissed for the following reasons:-

The Plaintiff's claim is not obviously unsustainable. The Term Sheet is not a pre-incorporation contract. While the Term Sheet bears the date 17 February 2020, the contemporaneous documentary evidence (Exhibit ZK-1, Enclosure 15) shows that 8! ! it was actually signed by Tan Soon Lin on 21 July 2020, after the 2nd Defendant's incorporation on 2 July 2020;

The existence of the Term Sheet, bearing the signature of the 2nd Defendant's then director, gives rise to a prima facie cause of action;

Tahyas's affidavit evidence is hearsay, as she was only appointed director of the 2nd Defendant on 22 July 2024, long after the material events, and has no personal knowledge of whether Tan Soon Lin signed the Term Sheet. She merely relied on what Tan Soon Lin purportedly told her;

Significantly, Tan Soon Lin himself has not sworn any affidavit in these proceedings;

The police reports relied upon by the 2nd Defendant are not substantive evidence of the facts stated therein, relying on Wong Thin Yit v Mohamed Ali [1971] 2 MLJ 175 (FC) and Jaafar Bin Shaari & Anor v Tan Lip Eng & Anor [1997] 3 MLJ 693;

The striking out application, if allowed, would finally determine the Plaintiff's rights against the 2nd Defendant. It is therefore a final proceeding and, applying Hua Joo Development Co Sdn Bhd v Survey Development Services [1994] MLJU 58, Tahyas's hearsay averments cannot be taken as proof of the truth of the facts; and 9! !

There are serious conflicting issues of fact, particularly the allegation of forgery, which can only be resolved through viva voce evidence at trial. D. THE LAW ON STRIKING OUT [12] The principles governing the Court's power to strike out pleadings under Order 18 Rule 19(1) ROC 2012 are well settled. The power is exercised only in "plain and obvious cases" and only where it can be clearly seen that a claim is "obviously unsustainable". As stated by the Supreme Court in Bandar Builder Sdn Bhd & 2 Ors v United Malayan Banking Corporation Bhd [1993] 4 CLJ 7: "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)." [13] Under Order 18 Rule 19(1)(a), in assessing whether a reasonable cause of action exists, the Court examines the pleadings and presumes that the allegations in the Statement of Claim are true. As stated by the Federal Court in New Straits Times (Malaysia) Bhd v Kumpulan Kertas Niaga Sdn Bhd & Anor [1985] 1 MLJ 226: 10! ! "In an application to strike out pleadings under Order 18 rule 19(1) no evidence shall be admissible and the court must consider only the pleadings for the purpose of determining whether the Statement of Claim disclosed no reasonable cause of action... The test to be applied is whether on the face of the pleading, the court is prepared to say that the cause of action or the defence is obviously unsustainable..." [14] The meaning of "cause of action" was stated by Lord Diplock in Letang v Cooper [1965] 1 QB 232, and adopted by the Supreme Court in Government of Malaysia v Lim Kit Siang [1988] 1 CLJ (Rep) 63, as "a factual situation, the existence of which entitles one person to obtain from the Court a remedy against another person." ! [15] The Court must be slow and circumspect in exercising its power to strike out. A striking out deprives a litigant of its right to be heard, and the jurisdiction should be exercised sparingly. The power to strike out should not be exercised where there are disputed issues of fact or where the factual matrix is complex and not susceptible to summary determination. [16] It is also trite that where there are conflicting facts on affidavit, the case is not one which is suitable to be disposed of summarily. The conflicting matters of fact must be left to trial for determination through viva voce evidence: see See Thong & Anor v Saw Beng Chong [2013] 3 MLJ 235. E. FINDINGS a) Whether the Term Sheet is a Pre-Incorporation Contract 11! ! [17] Learned counsel for the 2nd Defendant argued that the Term Sheet is dated 17 February 2020, a date predating the 2nd Defendant's incorporation on 2 July 2020. Learned counsel contended that Section 65 of the Companies Act 2016, which mandates strict compliance for pre-incorporation contracts to be binding, has not been satisfied. [18] Learned counsel relied heavily on the Federal Court decision in Dae Hanguru Infra Sdn Bhd (supra) for this proposition. The Federal Court in Dae Hanguru Infra Sdn. Bhd. had the occasion to consider Section 65 of the Companies Act 2016 (and its predecessor Section 35(1) of the Companies Act 1965) and outlined the strict requirements to be fulfilled before a “pre-incorporation contract” can be said to exist: “[64] It would be opportune at this juncture to appreciate the principle of law in this regard. In common law, a company is not bound by a pre-incorporation contract, because a company cannot enter into any contract before incorporation due to a lack of legal entity. It has no separate legal existence until incorporation, as decided in Black v. Smallwood [1966] ALR 744. Neither can it appoint an agent before incorporation as stated in Kelner v. Baxter (1866) LR 2 CP 174. Thus, a company cannot ratify an agent’s action as any ratification has to be retrospective to the date of the transaction at which point the company was non-existent. [65] In Malaysia, this common law position has been altered and enacted into s. 35(1) and (2) of the Companies Act 1965 which has now been legislated slightly differently in s. 65(1) and (2) of the Companies Act 2016. … 12! ! [67] There are twin legal requirements under s. 35(1) before a pre-incorporated contract can be binding. First, it must be a contract made on behalf of the company (in this case the plaintiff) prior to its incorporation. Secondly, that contract must be ratified by the company once incorporated.” [19] Further, the Federal Court in Dae Hanguru Infra Sdn. Bhd. also held that, for a claim premised upon a “pre-incorporation contract” to succeed, the principles of promoter and successor ought to be specifically pleaded. The Federal Court held as follows:- “[60] One look at the above pleadings, in our view, cannot be said to have addressed the material facts upon which the legal principle of promoter and successor was grounded. Material facts must be specifically pleaded. The words “the first defendant accepted the SDJV (and subsequently the plaintiff’s)” in para. 6 above is meaningless because it did not plead how that subsequent fact of promoter and successor came about. The pleading at para. 11 “CDJV/the plaintiff” cannot be expanded to mean that the LOI and LOA issued by the first defendant to CDJV were on the basis that CDJV was the promoter of the plaintiff. [61] It would have been easier, plain and simple and indeed consonant with the salutary rule of pleadings if the plaintiff in specific terms pleaded that it was indeed a successor company to CDJV or that CDJV had entered into the negotiation or agreement on behalf of the plaintiff to anchor its reliance on s. 35. The inexplicable reluctance to plead in clear terms must have caused all the confusion at trial, which evidently culminated into a confusing decision by the High Court. However, since the pleading point has not been 13! ! raised in any of the questions of law before us, we will refrain from making any ruling on the same, though such form of pleading leaves much to be desired.” [20] Applying the above authority to the Plaintiff’s Claim against the 2nd Defendant, learned counsel for the 2nd Defendant submitted that the Alleged Term Sheet cannot qualify as a “pre-incorporation contract” under the requirements of Section 65 of the Companies Act 2016 as the Plaintiff has failed to adduce any evidence of ratification by the 2nd Defendant. To this end, the 2nd Defendant’s sole Director has affirmed an affidavit under oath exhibiting a police report lodged by her stating unequivocally that “the 2nd Defendant has no record or knowledge of the Alleged Term Sheet” and that “there is no possibility of the Alleged Term Sheet being a legitimate document”. In addition to this, the 2nd Defendant’s former Director at the material time has also lodged a similar police report stating the same. [21] Learned counsel also submitted that the Plaintiff has failed to specifically plead the principles of promoter and successor in the Plaintiff’s Statement of Claim. [22] I have considered this point, and with respect I disagree with the contentions advanced by the 2nd Defendant. There is a critical distinction between the date appearing on the face of a document and the date of actual execution of that document. The 2nd Defendant has focused exclusively on the former and has completely disregarded the latter. 14! ! [23] The Plaintiff's evidence, as exhibited in Exhibit ZK-1 of Enclosure 15, demonstrates that while the Term Sheet bears the date 17 February 2020 on its face, the Term Sheet was in fact signed by Tan Soon Lin on 21 July 2020, as evidenced by the date appearing next to his signature on the executed document. The signed Term Sheet was emailed by James to the Plaintiff's representative, Daniel, on 21 July 2020. [24] The 2nd Defendant was incorporated on 2 July 2020. The actual execution of the Term Sheet on 21 July 2020 therefore occurred after the incorporation of the 2nd Defendant. It follows that the Term Sheet is not a pre-incorporation contract within the meaning of Section 65 of the Companies Act 2016. [25] Accordingly, the authorities cited by the 2nd Defendant on the law of pre-incorporation contracts, including Dae Hanguru Infra Sdn Bhd (supra), Black v Smallwood [1966] ALR 744, and Kelner v Baxter (1866) LR 2 CP 174, have no application to the facts of this case. The Term Sheet, if validly signed by Tan Soon Lin as director of the 2nd Defendant on 21 July 2020, constitutes a contractual relationship that came into existence after the 2nd Defendant's incorporation. b) Whether the Plaintiff's Statement of Claim Discloses a Reasonable Cause of Action [26] Taking the Plaintiff's pleadings at their highest, as I am required to do under Order 18 Rule 19(1)(a), the following material facts are pleaded: 15! !

The Plaintiff entered into a MOU with the 1st Defendant on 30 January 2019 for collaboration, pursuant to which the Plaintiff handed over its intellectual property including the full code repository;

Following the MOU, a Term Sheet was entered into between the Plaintiff and the 2nd Defendant (as named in the final version of the Term Sheet);

The Term Sheet was signed by Tan Soon Lin as director of the 2nd Defendant on 21 July 2020;

The Plaintiff's Platform was suspended following the sudden resignation of the Fusionex Group's upper management and the subsequent winding up of the 1st and 3rd Defendants; and

The Plaintiff seeks the return of its intellectual property and/or damages for the loss of its business. [27] These pleaded facts, if proven, constitute a "factual situation" that would entitle the Plaintiff to seek remedies against the 2nd Defendant. The existence of the Term Sheet, bearing the signature of the 2nd Defendant's then-director, gives rise to a prima facie cause of action against the 2nd Defendant. [28] In Saroja @ Nagammai IK Shanmugan v Lakshmanan Perumaal [2008] MLJU 260, the High Court held that the plaintiff need only plead the nature of the agreement, the fact that the agreement was 16! ! entered into, and the fact of non-performance. Since the Plaintiff has done so, the Plaintiff's case against the 2nd Defendant is not plainly or obviously unsustainable. [29] I am mindful of the 2nd Defendant's Table of (IR)Relevance in Appendix A, which highlights that the Plaintiff's own pleadings refer to the Fusionex Group (being the 1st and 3rd Defendants) as the entities involved in the collaboration, and that most of the correspondence, services, and payments flowed between the Plaintiff and the 1st and/or 3rd Defendants, and not the 2nd Defendant. [30] However, I note that the Plaintiff has specifically pleaded that:-

In the early drafts of the Term Sheet, the parties were the Plaintiff and Fusionex. However, in the final version of the Term Sheet, FXI Solutions (the 2nd Defendant) was named as a party;

Tan Soon Lin, who was at the material time also a director in the Fusionex Group (namely the 1st Defendant and 3rd Defendant), signed the Term Sheet on behalf of the 2nd

James had directed the Plaintiff to enter into further transactional arrangements with the 2nd Defendant, as evidenced in Exhibit ZK-4. 17! ! [31] Whether the 2nd Defendant was in fact a vehicle used by the Fusionex Group for the purposes of the collaboration, and whether the Term Sheet is binding on the 2nd Defendant, are matters that require full ventilation at trial through viva voce evidence. These are not matters that can or should be summarily determined at this interlocutory stage on competing narratives. c) The Allegation of Forgery and the Quality of Evidence [32] The backbone of the 2nd Defendant's defence is the allegation that Tan Soon Lin did not sign the Term Sheet and that his signature thereon was forged. This is a serious allegation of fraud. It is also by nature an allegation that lives and dies on evidence and credibility. [33] That said, I shall now address the quality of the evidence adduced by the 2nd Defendant in support of this allegation.

Tahyas's Affidavit Evidence [34] The 2nd Defendant's affidavit evidence is provided by Tahyas Jeti Anak Kolony, the present sole director of the 2nd Defendant, who was appointed only on 22 July 2024. The events material to this case took place in 2019 and 2020, some four years before Tahyas's appointment. [35] Tahyas has no personal knowledge of whether Tan Soon Lin signed the Term Sheet. Her averment that Tan Soon Lin did not sign the 18! ! Term Sheet is based on what Tan Soon Lin purportedly told her. This is, by definition, hearsay. [36] The 2nd Defendant relies on Order 41 Rule 5(2) ROC 2012 and the authorities of Omega Holdings Bhd v Dato' Tiah Thee Kian & Ors [2022] 7 CLJ 125 and Edmund Ming Kwan (supra) for the proposition that affidavits in interlocutory proceedings may contain statements of information or belief with sources and grounds. [37] I accept that Order 41 Rule 5(2) does provide for such an exception in interlocutory proceedings. But the preliminary question remains whether a striking out, which may finally determine the Plaintiff’s rights against the 2nd Defendant, ought to be treated as “interlocutory” in the relaxed sense as contemplated by the rule, especially where the decisive factual issue is the authenticity of a signature. [38] In Hua Joo Development Co Sdn Bhd v Survey Development Services [1994] MLJU 58, the High Court drew a distinction between applications that are truly interlocutory (such as applications for discovery or preservation orders) and applications which, if granted, would finally determine the rights of the parties. The High Court held:- "But an application such as the one in our instant case, the purpose of which is to obtain an order which, if granted, is to strike out a pleading and to enter final judgment in the action is, in my opinion, not an interlocutory proceeding... An order under such an application would finally determine the rights of the parties in the action. Affidavits made in support of such an application, therefore, should, 19! ! in my view, contain facts that the deponent is able of his own knowledge to prove..." [39] The Application before me, if allowed, would result in the striking out of the Plaintiff's entire claim against the 2nd Defendant. This would finally and irrevocably determine the Plaintiff's rights vis-à-vis the 2nd Defendant. It is therefore arguable that this Application is not a truly interlocutory proceeding within the scope of Order 41 Rule 5(2) that justifies decisive findings on hearsay. [40] Even if I were to accept that the Application is interlocutory in nature and that Tahyas's affidavit is formally admissible under Order 41 Rule 5(2), the weight to be attributed to her hearsay averments on the critical issue of whether Tan Soon Lin signed the Term Sheet is minimal. Tahyas was not involved during the material period and has no first-hand knowledge of the event. Her assertion that Tan Soon Lin denied signing is based entirely on what he reportedly told her. Tan Soon Lin himself has not sworn any affidavit in these proceedings. This is a glaring omission. He is the very person alleged to be the victim of the forgery, and the person best placed to testify on whether or not his signature is genuine. His absence from these proceedings as a deponent is unexplained and, in my view, significantly undermines the 2nd Defendant's contention. [41] In the circumstances, I find that Tahyas's hearsay averments are insufficient to establish, even on a prima facie basis, that the Term Sheet was forged.

(ii) Tan Soon Lin's Police Report 20! ! [42] The 2nd Defendant also relies on the police report lodged by Tan Soon Lin on 26 March 2025, in which he stated that he did not sign the Term Sheet. [43] In Wong Thin Yit v Mohamed Ali [1971] 2 MLJ 175, the Federal Court held that a police report, while admissible, is not substantive evidence of the facts stated therein. Gill FJ stated that:- “…In my judgment, the learned trial judge was entitled to reject the defendant's account of the accident because of the evidence of the plaintiff and his witnesses which he had before him. I do not think it would have been right for the learned trial judge to reject the evidence of the plaintiff and his witnesses merely on the strength of the defendant's statement in the police report, which after all was not substantive evidence in the true sense of the word Assuming that it was substantive evidence, it was not tested by the usual method of cross-examination.” ! [44] Ali FJ stated the following:- “I have used the words “even if” advisedly, for in my view the police report in this case, though admissible by reason of section 35 of the Evidence Ordinance, was not substantive evidence of the fact, as asserted by the defence, that the plaintiff was knocked down while crossing the road. The report of the police officer who recorded it could only say this: “This is a statement by the appellant”. To that extent the report was clearly hearsay evidence. Its inclusion in the agreed bundle was obviously on the assumption that the appellant would appear at the trial to 21! ! testify. If he had done so, the report would undoubtedly have some value as corroborative evidence within the meaning of section 157 of the Evidence Ordinance. But standing by itself for the purpose of the present dispute it was clearly hearsay.” ! [45] Further, in Jaafar Bin Shaari & Anor v Tan Lip Eng & Anor [1997] 3 MLJ 693, it was held that if the police report is wholly exculpatory of the maker, it is pure hearsay and not admissible. [46] Tan Soon Lin's police report is precisely such a wholly exculpatory statement. He denies signing the Term Sheet, thereby exonerating himself. Standing alone, without viva voce testimony subject to cross-examination, the police report is pure hearsay and cannot be treated as proof that his signature on the Term Sheet was forged. [47] I therefore find that the 2nd Defendant cannot rely on Tahyas's affidavit averments and Tan Soon Lin's police report, without more, to establish at this interlocutory stage that the Plaintiff's cause of action is obviously unsustainable. d) Conflicting Issues of Fact Requiring Trial [48] The present case is characterised by serious conflicts of fact. At the heart of the dispute is the fundamental question of whether the Term Sheet was signed by Tan Soon Lin on behalf of the 2nd Defendant. [49] The Plaintiff asserts that it was, relying on the executed Term Sheet bearing Tan Soon Lin's signature dated 21 July 2020, email correspondence showing the signed Term Sheet being transmitted 22! ! by James to Daniel, and the contemporaneous email exchanges evidencing the 2nd Defendant's involvement in the Fusionex Group's dealings with the Plaintiff. [50] The 2nd Defendant asserts that it was not, relying on Tahyas's hearsay averments and the police reports. [51] This is precisely the kind of factual dispute that cannot and should not be resolved summarily. As stated in See Thong & Anor v Saw Beng Chong [2013] 3 MLJ 235, when there are conflicting facts in affidavits, the case is not suitable for summary disposal. The conflicts must be resolved through viva voce evidence, with the benefit of cross-examination, at a full trial. [52] The allegation of forgery, which forms the backbone of the 2nd Defendant's Defence, is an allegation of fraud. It is trite that allegations of fraud raise serious questions of credibility that can only be properly tested through oral evidence and cross-examination. The 2nd Defendant itself bears the burden of proving this allegation, and it has put the Plaintiff to strict proof. This itself demonstrates that the issues cannot be determined on the pleadings or affidavit evidence alone. e) The Pre-Litigation Conduct Argument [53] The 2nd Defendant submitted that the Plaintiff's pre-litigation conduct — in engaging only with the liquidators of the 1st and 3rd Defendants — demonstrates that the Plaintiff never intended to pursue the 2nd Defendant and should be estopped from doing so. 23! ! The 2nd Defendant relies on Aura Indah Jaya Sdn Bhd v OCBC Bank (M) Bhd [2021] 10 MLJ 21. In Aura Indah Jaya Sdn. Bhd the High Court allowed a striking out application, inter alia, on the basis that the plaintiff therein was estopped by his pre-litigation conduct which constituted an “abuse of process”. The High Court held as follows:- “[52] Given the plaintiff’s non dispute of the closure of the FD account and the encashment of the cashier’s order of the balance in the bank accounts without any protest, I am of the view the plaintiff is estopped by conduct from disputing the validity of the closure of the impugned bank accounts and in bringing this Action, has abused the court process.” [54] Applying the aforementioned authority, learned counsel for the 2nd Defendant submitted that the Plaintiff should be estopped from contending that the 2nd Defendant possesses the Plaintiff's Intellectual Property or is liable for any breach thereof. This submission is based on the Plaintiff's pre-litigation conduct of pursuing and/or engaging only the Liquidators of the 1st Defendant and 3rd Defendant, to the exclusion of the 2nd Defendant. [55] With respect, I disagree with learned counsel’s contention. The principle of estoppel by conduct requires a clear and unequivocal representation by one party, reliance on that representation by the other party, and detriment suffered as a result of that reliance. None of these elements have been established in the present case. 24! ! [56] The Plaintiff's engagement with the liquidators of the 1st and 3rd Defendants—both of which are under liquidation—in an attempt to resolve the matter amicably does not constitute a clear and unequivocal representation that the Plaintiff would not pursue the 2nd Defendant. A plaintiff is entitled to undertake dispute resolution through negotiation before resorting to litigation, and engaging with the liquidators of companies under liquidation is an entirely reasonable step that does not preclude pursuing other potentially liable parties. [57] Furthermore, the case of Aura Indah Jaya (supra) is distinguishable on its facts. In that case, the plaintiff had actively acquiesced to the closure of its bank accounts and encashment of funds without protest, constituting a clear representation of acceptance. In the present case, the Plaintiff's engagement with the liquidators of the 1st and 3rd Defendants is not equivalent to an acceptance that the 2nd Defendant bears no liability. [58] The 2nd Defendant also relied on Ganad Media Sdn Bhd v Big Tree Outdoor Sdn Bhd [2025] 1 MLJ 1 for the concept of judicial admission. However, the Plaintiff's pleading that it engaged with the liquidators of the 1st and 3rd Defendants does not amount to a judicial admission that the 2nd Defendant is not liable. It merely states a fact regarding the Plaintiff's pre-litigation conduct, which is consistent with a plaintiff exploring multiple avenues of resolution before or in addition to filing suit against all potentially liable parties. That recital cannot, without more, be converted into a forensic trap that defeats a pleaded contractual claim founded on an executed Term Sheet. 25! ! f) The “Table of (Ir)relevance” raises factual disputes rather than eliminating them [59] The 2nd Defendant's Appendix A, "Table of (IR)Relevance," sought to demonstrate that the Plaintiff's narrative attributes negotiations and performance to other entities (the 1st and 3rd Defendants and/or nominees), not to the 2nd Defendant. This appendix is, in essence, a point-by-point relevance matrix illustrating that, throughout the entire timeline (encompassing the period before the alleged term sheet, the alleged entry into the term sheet, and the alleged performance/breach), the Plaintiff's pleaded case and supporting narrative repeatedly connect the relevant acts to Fusionex Group entities (1st and 3rd Defendants). The 2nd Defendant's consistent position is that it was not involved, has no knowledge of the alleged arrangements, and has had no dealings with the Plaintiff. [60] The Appendix is designed to support the argument that the 2nd Defendant is “irrelevant” to the Plaintiff’s pleaded cause of action because: a) The Plaintiff’s own pleaded facts consistently identify the 1st and 3rd Defendants (Fusionex Group) as the actors; b) The 2nd Defendant’s pleaded stance is consistent throughout: no relationship, no correspondence, no knowledge, no negotiations, no payments, no invoices, no custody of IP, no agency through James, and not part of the Hitachi-acquired group; and 26! ! c) The 2nd Defendant’s inclusion in the suit/case theory is framed as misdirected, since the alleged rights, obligations, dealings, and breaches are not pleaded as being carried out by the 2nd Defendant. [61] For present purposes, I accept that the Appendix highlights real tensions between: i. the Plaintiff’s pleaded description of who negotiated, who employed the Plaintiff’s directors, who paid, who invoiced, and who hosted the platform; and ii. the 2nd Defendant’s denial of any participation in those activities. [62] But those tensions do not automatically entail that the Plaintiff’s claim against the 2nd Defendant is bound to fail. They raise questions such as: i. if the Term Sheet names the 2nd Defendant, was it acting through the same controlling minds or as part of a group arrangement? ii. were other entities acting as agents/nominees in performance of obligations said to arise from the Term Sheet? iii. does the pleaded conduct support an inference that the 2nd Defendant was the contracting entity notwithstanding operational acts done by others? 27! ! [63] These are not questions the Court should determine summarily in a striking-out application, especially where the parties’ affidavit positions diverge and the matter may turn on documents, cross-examination, and credibility. g) Order 18 Rule 19(1)(b) and (d) — Scandalous, Frivolous, Vexatious, or Abuse of Process [64] The 2nd Defendant also seeks to strike out the Plaintiff’s claim under Order 18 Rule 19(1)(b) of the ROC 2012, contending that the claim is scandalous, frivolous, or vexatious. It is trite that "scandalous" means "wholly unnecessary and irrelevant" and "frivolous and vexatious" means "obviously unsustainable." [65] For the reasons set out above, the Plaintiff's claim against the 2nd Defendant is not obviously unsustainable. The claim is premised on an executed Term Sheet that, on its face, names the 2nd Defendant as a party and bears the signature of its then-director. This cannot be characterised as wholly unnecessary, irrelevant, or obviously unsustainable. [66] As for Order 18 Rule 19(1)(d), the 2nd Defendant alleges that the claim is an abuse of process. The 2nd Defendant goes so far as to suggest, at paragraph 6 of its Main Submission, that "at its most sinister, the Plaintiff's Claim against the 2nd Defendant is an attempt to defraud the 2nd Defendant, due to the winding up of the 1st Defendant and the 3rd Defendant." 28! ! [67] This is a serious allegation that is wholly unsupported by any evidence. The Plaintiff has exhibited a signed Term Sheet naming the 2nd Defendant as a party. The Plaintiff is pursuing a claim based on that document. This cannot, by any measure, be described as an abuse of process or an attempt to defraud. The 2nd Defendant has not demonstrated that this action was filed for any collateral or improper purpose. If the 2nd Defendant asserts forgery, the law provides the proper forum and method to test that assertion—trial, evidence, and cross-examination—not summary termination premised on untested hearsay. [68] I therefore find no basis to strike out the claim under Order 18 Rule 19(1)(b) or (d). [69] Accordingly, the 2nd Defendant's Application under Enclosure 13 is dismissed with costs. Dated this day of 23rd February 2026. -sgd-EDWIN PARAMJOTHY MICHAEL MUNIANDY JUDICIAL COMMISSIONER COMMERCIAL DIVISION (NCC 7) HIGH COURT OF MALAYA KUALA LUMPUR 29! ! Counsel: For the Plaintiff : Mr. Danny Foong (Messrs. Teh & Soong) For the 1st and 3rd Defendant : Ms. Aufa binti Radzi (Messrs. Skrine) For the 2nd Defendant : Mr. Edward Kuruvilla (Messrs. Kuruvilla, Yeoh & Benjamin)