Khaleeg Marketing Sdn. Bhd. v Shaoxing County Baimei Trade Co., Ltd (WA-22NCC-615-09/2024)

KHALEEG MARKETING SDN BHD (Company No: 199901001026 (475926- T)) ... FIRST

ALAM BIN MUHAMMAD (NRIC No: 700803-12-5841) ... SECOND DEFENDANT (Counterclaim) GROUNDS OF JUDGMENT (Enclosure 9) Introduction [1] Before the court is the Defendant's application dated 19.11.2024 in Enclosure 9 to strike out the Plaintiff's Writ dated 12.9.2024 and Statement of Claim dated 16.10.2024

18.4.2024. Subsequently, Khaleeg filed an application for leave to appeal to the Federal Court, which was also dismissed on 22.8.2024. [9] Following these unsuccessful appeals, Khaleeg filed the present suit on 12.9.2024, seeking the following declarations and orders: a) A declaration that the Judgment dated 20.7.2022 is not valid for enforcement as long as Shaoxing has not complied with paragraph (a) in the Judgment; b) A declaration that Khaleeg is entitled to receive the benefit of the value of AR Bright invoices based on the Judgment; c) An order that Shaoxing should assign to Khaleeg the full value of AR Bright invoices (BM18705B, BM18705C, BM18705D, BM18705 and BM19701); d) An order that pending the determination of reliefs, all enforcement processes of the Judgment should be stayed or suspended against Khaleeg; and e) Other related reliefs including damages for failure to assign the benefit value of the AR Bright invoices. [10] On 19.11.2024, Shaoxing filed the present application in Enclosure 9 to strike out Khaleeg's claim on the ground that it constitutes an abuse of the court process. Shaoxing contends that Khaleeg is attempting to relitigate issues that have already been decided in Suit 378 and that the present suit is an improper attempt to vary a final and conclusive judgment. The Applicaction in Enclosure 9 [11] Enclosure 9 is a striking out application filed by Shaoxing seeking mainly that the original claim contained in the Writ dated 12.9.2024 and Statement of Claim dated 16.10.2022, by Khaleeg against Shaoxing, shall be struck out. The application is filed under Order 18 Rule 19(1)(d) of the Rules of Court 2012 on the primary ground that Khaleeg's suit constitutes an “abuse of court process.” [12] Shaoxing’s grounds for this application is that that the current suit involves the same AR Bright invoices that were already fully litigated and decided in the previous case (Suit 378) from High Court through Court of Appeal to Federal Court, making it barred by res judicata. Shaoxing contends this is an impermissible attempt by Khaleeg to have a “second bite at the cherry” after exhausting all appeal avenues, and that the court lacks jurisdiction to grant reliefs that would effectively vary or amend the final judgment from Suit 378, as courts become functus officio once judgments are finalized and affirmed by higher courts. Respective Parties' Submissions Defendant's Submissions [13] Shaoxing contends that Khaleeg's claim should be struck out as it constitutes an abuse of the court process. Shaoxing argues that the issues concerning the AR Bright invoices were already raised, argued, and decided in Suit 378, making the present suit an attempt to relitigate matters that have been conclusively determined. [14] Shaoxing submits that the doctrine of res judicata applies in this case, barring Khaleeg from relitigating issues that have already been determined. Shaoxing characterises the present suit as an impermissible attempt by Khaleeg to have a “second bite at the cherry” after having exhausted all avenues of appeal in Suit 378. [15] Further, Shaoxing argues that this court lacks jurisdiction to vary or amend the Judgment in Suit 378, which has become final and conclusive. Shaoxing submits that once a judgment has been pronounced, the court becomes functus officio and lacks jurisdiction to vary the judgment except in limited circumstances, which are not applicable in this case. Plaintiff's Submissions [16] Khaleeg contends that its claim is not an attempt to relitigate issues from Suit 378 but rather seeks consequential reliefs that arise from the Judgment. Khaleeg argues that it is not challenging the validity of the Judgment but rather seeking to enforce rights arising from it. [17] Khaleeg submits that Shaoxing's application is confined to Order 18 Rule 19(1)(d) of the Rules of Court 2012, which means Shaoxing implicitly accepts that the claim discloses a reasonable cause of action and is not scandalous, frivolous, or vexatious under sub-rules (a), (b), and (c). [18] Khaleeg also argues that the Affidavit in Support filed by Shaoxing is invalid because the deponent did not have proper authority under the Power of Attorney dated 17.6.2024 to swear the affidavit. Khaleeg contends that in the absence of a valid supporting affidavit, the striking out application should be dismissed. [19] Additionally, Khaleeg points out that Shaoxing has filed a counterclaim in this suit, which makes the issues inseparable and requires the court to determine all issues together for a fair and proper resolution. Analysis and Findings of the Court Validity of the Supporting Affidavit [20] Khaleeg challenges the validity of the Affidavit in Support (Enclosure 10) of Shaoxing's application, arguing that the deponent, Chan Chuan Yeak, did not have proper authority under the Power of Attorney dated 17.6.2024 to swear the affidavit. Khaleeg contends that the Power of Attorney was not properly executed by Shaoxing company, lacking a common seal, and was not registered at the High Court of Malaya. [21] The Defendant contends that Chan Chuan Yeak is duly authorised to act on behalf of Shaoxing. In Shaoxing's Affidavit in Reply (Enclosure 15), Shaoxing rectified any procedural defects by exhibiting a registered Power of Attorney dated 17.6.2024, which was registered at the Kuala Lumpur High Court on 2.7.2024. [22] Having examined the Power of Attorney exhibited in Shaoxing's Affidavit in Reply (Enclosure 15), I find that the objection raised by Khaleeg is without merit. While Khaleeg argues that the Power of Attorney does not conform to the requirements of the Power of Attorney Act 1949 as it lacks the company's common seal, this objection appears to be a technical one that does not go to the substance of the application. [23] The Writ itself, as filed by Khaleeg, acknowledged the existence of the Power of Attorney dated 17.6.2024 and was specifically addressed to the representative of Shaoxing based on this Power of Attorney. This is evident from paragraph 2 of the Statement of Claim, which states that Shaoxing “mempunyai alamat penyampaian di Malaysia menerusi Wakil Defendan berdasarkan Surat Kuasa Wakil bertarikh 17-6-2024...” (has an address for service in Malaysia through Shaoxing's Representative based on the Power of Attorney dated 17-6-2024). [24] By acknowledging the Power of Attorney in its own pleadings, Khaleeg can be said to have acquiesced to its validity for the purposes of this litigation. It is a well-established principle that a party cannot approbate and reprobate – Khaleeg cannot rely on the Power of Attorney for the purposes of service and then challenge its validity when it suits its interests. [25] Furthermore, any procedural defects in the Power of Attorney have been rectified by Shaoxing in its Affidavit in Reply, which exhibits a properly registered Power of Attorney. The purpose of procedural rules is to ensure fairness and orderly conduct of proceedings, not to create technical obstacles to the determination of substantive issues. [26] In the circumstances, I find that the Affidavit in Support of Shaoxing's application is valid and properly before this court. The objection raised by Khaleeg on this ground is accordingly dismissed. Scope of the Striking Out Application [27] Khaleeg contends that Shaoxing's application is confined to Order 18 Rule 19(1)(d) of the Rules of Court 2012, which means Shaoxing implicitly accepts that the claim discloses a reasonable cause of action and is not scandalous, frivolous, or vexatious under sub-rules (a), (b), and (c). [28] The Defendant submits that its application is properly brought under Order 18 Rule 19(1)(d) on the ground that Khaleeg's claim constitutes an abuse of the court process. The Defendant relies on authorities which establish that a court has the power to strike out pleadings that amount to an abuse of process, even if they might disclose a cause of action on their face. [29] Khaleeg's argument that Shaoxing, by relying solely on Order 18 Rule 19(1)(d), has implicitly accepted that the claim discloses a reasonable cause of action, is misconceived. It is well-established that an application for striking out under Order 18 Rule 19(1) can rely on any or all of the sub-paragraphs (a) to (d). The sub-paragraphs are not mutually exclusive, and the court may consider all grounds when determining whether to strike out a pleading. [30] This principle was affirmed in See Thong & Anor v Saw Beng Chong [2013] 3 MLJ 235 by the Court of Appeal. In that case, which involved a dispute over properties sold via sales and purchase agreements that the appellants claimed were executed merely as security for a loan, Ramly Ali JCA (as he then) was stated at paragraph 9: “An applicant for striking out under O 18 r 19 can rely on any one or more than one sub-paras (a)–

(d). So far, there is no authority to say otherwise... An application under this rule is not void and ineffective merely because sub-para (a) had been pleaded together with sub-paras (b)–(d).” [31] Similarly, in Solai Realty Sdn Bhd v United Overseas Bank

(M) Bhd [2013] 4 MLJ 545, the Court of Appeal reiterated this position in a case involving a third-party chargor claiming negligence against a bank. Ramly Ali JCA stated at paragraph 9: “An applicant for a striking out under O 18 r 19 can rely on any one or more than one sub-paras (a)–

(d)... An application under this rule is not void and ineffective merely because sub-para (a) had been pleaded together with sub-paras (b)–(d).” [32] Moreover, the concept of “abuse of process” under Rule 19(1)(d) is broad and encompasses various situations where the court's process is being misused. As explained in Middy Industries Sdn Bhd v Arensi-Marley (M) Sdn Bhd [2013] 3 MLJ 511 by the Court of Appeal, abuse of process “includes consideration of public policy and interest of justice” and “the categories of conduct rendering a claim frivolous, vexatious or an abuse of process are not closed and will depend on all the relevant circumstances of the case.” [33] Therefore, Shaoxing's choice to rely specifically on Order 18 Rule 19(1)(d) does not preclude the court from considering whether the claim discloses a reasonable cause of action or is frivolous or vexatious. The court must look at the substance of the application and the nature of the pleadings to determine whether they constitute an abuse of process. [34] In the present case, Shaoxing's contention is that Khaleeg's claim constitutes an abuse of process because it seeks to relitigate issues that have already been decided in Suit 378 and attempts to vary a final and conclusive judgment. This is a proper ground for an application under Order 18 Rule 19(1)(d), and the court has the jurisdiction to strike out the claim on this basis. Res Judicata and Abuse of Process [35] The Defendant contends that Khaleeg's claim is barred by the doctrine of res judicata as the issues concerning the AR Bright invoices were already raised, argued, and decided in Suit 378. The Defendant points to the written submissions, oral arguments, and the High Court's judgment in Suit 378, which specifically addressed the issue of the AR Bright invoices. [36] The Defendant characterises the present suit as an impermissible attempt to relitigate matters that have been conclusively determined, which is contrary to the public policy principle that there should be finality in litigation (interest rei publicae ut sit finis litium). [37] Khaleeg argues that its claim is not an attempt to relitigate issues from Suit 378 but rather seeks consequential reliefs that arise from the Judgment. Khaleeg contends that it is not challenging the validity of the Judgment but rather seeking to enforce rights that it claims arise from the Judgment. [38] Khaleeg submits that the cause of action in this suit only accrued after the Federal Court's decision on 22.8.2024, which marked the point at which all material facts were in existence to render the cause of action complete. [39] After careful consideration of the parties' submissions and the pleadings, I find that Khaleeg's claim indeed falls foul of the doctrine of res judicata and constitutes an abuse of the court process. [40] The doctrine of res judicata, as explained by the Supreme Court in Asia Commercial Finance (M) Bhd v Kawal Teliti Sdn Bhd [1995] 3 MLJ 189, is founded on two maxims: first, that it is in the public interest that there should be finality in litigation (interest rei publicae ut sit finis litium), and second, that no one ought to be vexed twice for the same cause of action (nemo debet bis vexari pro eadem causa). [41] There are two types of estoppel per rem judicatum: cause of action estoppel and issue estoppel. The former arises when a cause of action has been determined in a final judgment, while the latter prevents a party from challenging the correctness of a decision on an issue that has been determined in a previous final judgment. [42] In the present case, both types of estoppel are applicable. The issue of Khaleeg's liability for the AR Bright invoices was expressly raised and determined in Suit 378. This is evident from the High Court's grounds of judgment, which specifically addressed Khaleeg's argument that “the five Invoices were addressed to AR Bright and not to Khaleeg” and rejected this defence. [43] The High Court in Suit 378 held: “PW-1 had also testified that he received instructions from the defendant that the Goods are to be sent to AR Bright, and the defendant will be responsible for payment. His testimony remains unrebutted. AR Bright is also only identified as a consignee in the Statement of Account. The defendant is the party identified as the buyer.” [44] This finding was upheld by the Court of Appeal and, effectively, by the Federal Court when it dismissed Khaleeg's application for leave to appeal. The issue of Khaleeg's liability for the AR Bright invoices has therefore been conclusively determined. [45] Khaleeg attempts to circumvent the doctrine of res judicata by framing its claim as seeking “consequential reliefs” arising from the Judgment. However, this is a transparent attempt to relitigate the same issue through a different legal mechanism. Khaleeg's claim for an assignment of the benefit of the AR Bright invoices is predicated on the argument that it should not have been held liable for these invoices in the first place – an argument that has already been rejected by the courts. [46] Furthermore, the relief sought by Khaleeg in paragraph 8.1 of the Statement of Claim – a declaration that the Judgment “adalah tidak sah untuk dikuatkuasakan selagi pematuhan dalam ertikata perenggan (a) dalam Penghakiman tersebut belum dipatuhi oleh Defendan” (is not valid for enforcement as long as compliance in the sense of paragraph (a) in the Judgment has not been complied with by Shaoxing) – is a direct challenge to the validity and enforceability of the Judgment. This is precisely the kind of collateral attack on a final judgment that the doctrine of res judicata is designed to prevent. [47] Khaleeg's reliance on Tan Kong Min v Malaysian National Insurance Sdn Bhd [2006] 1 MLJ 601 to support the argument that Khaleeg's cause of action in this new suit only arose after the Federal Court's decision on 22.8.2024, which marked the point where all appeal processes were exhausted and the judgment became final is misplaced. That case, decided by the Federal Court, involved a mortgagee claiming the shortfall after a foreclosure and auction sale of the mortgaged property. The Federal Court held that the mortgagee's cause of action to recover the differential amount owing accrued only after the property was sold and the differential amount ascertained. However, this principle does not assist Khaleeg in the present case. In Tan Kong Min, the mortgagee was pursuing the same cause of action (recovery of money lent) against the same debtor, simply determining when that cause of action accrued for limitation purposes. Here, Khaleeg is attempting to create an entirely new cause of action by reframing an issue that has already been determined. The material facts relating to the AR Bright invoices were fully known to Khaleeg during Suit 378, the issue of its liability for these invoices was expressly determined in that suit, and Khaleeg had every opportunity to raise the assignment argument at that time. The distinguishing feature is that in Tan Kong Min, the second action was a natural extension of the first action (recovering the balance), whereas here, Khaleeg's claim is an attempt to reverse or modify the effect of the final judgment in the earlier case. [48] Similarly, Khaleeg's reference to Mega Palm Sdn Bhd v Hun Tee Siang [2022] 4 MLRA 200 to support the argument that the reliefs sought in this suit are different from those in Suit 378, so Khaleeg is entitled to file this new action does not assist its case. In Mega Palm, the Court of Appeal dealt with a situation where residents of Country Heights Damansara had sued the developer regarding the maintenance of basic infrastructure, resulting in a consent order. When the developer failed to comply with the consent order, the residents filed a fresh action to enforce it. The Court of Appeal held that a fresh action was appropriate because the consent order contained terms that went beyond the original reliefs sought in the first action, specifically regarding a resource center relocation which was not part of the original prayers. This is distinguishable from the present case in two critical respects: first, in Mega Palm, the second action sought to enforce a consent order that was not fully honoured, whereas here, Khaleeg is seeking to vary the effect of a contested judgment; second, in Mega Palm, the fresh action was premised on additional terms in the consent order that were not part of the original suit, whereas here, Khaleeg's claim directly revisits the same dispute over liability for the AR Bright invoices that was conclusively determined in Suit 378. The underlying cause of action remains identical - whether Khaleeg is liable for payment of the AR Bright invoices - and Khaleeg is merely attempting to repackage this same dispute in different legal terminology. [49] The Federal Court in Scott & English (M) Sdn Bhd v Yung Chen Wood Industries Sdn Bhd [2018] 6 CLJ 271 emphasised that “all litigation must come to an end” and that a party “could not relitigate” matters that have been finally determined. This principle applies squarely to the present case. Khaleeg has exhausted all avenues of appeal in Suit 378 and cannot now seek to relitigate the same issue through a fresh suit. [50] In Sayyid Shah bin Abdullah v Ng Seing Liong (joint receiver and manager) & Ors [2023] MLJU 1644, the High Court of Malaya aptly described a similar situation as “old wine in a new bottle: an attempt to resurrect issues directly and actively tried, contested and already adjudicated.” In that case, the plaintiff had previously filed an originating summons challenging the appointment of a receiver and manager (R&M) for a company under a debenture, which was dismissed. After the original R&M resigned and was replaced by new R&Ms appointed by the same bank under the same debenture, the plaintiff filed a fresh originating summons challenging the appointment of the new R&Ms on essentially the same grounds. Liza Chan J held that both cases arose from “the same set of facts, background, issues and circumstances” with the only difference being that “the name of [the first R&M] was replaced by [the names of the new R&Ms].” The court found that the action was undoubtedly caught by res judicata and constituted an abuse of process. This description is equally applicable to the present case, where Khaleeg has merely repackaged the same underlying dispute regarding liability for the AR Bright invoices into a claim for assignment of those invoices, with both actions calling into question the same contractual relationship and transaction between the parties, and both founded on the same basic contention that Khaleeg should not be liable for invoices addressed to AR Bright. [51] I therefore find that Khaleeg's claim is barred by the doctrine of res judicata and constitutes an abuse of the court process. The claim represents an impermissible attempt to relitigate matters that have been conclusively determined and to undermine the finality of the Judgment in Suit 378. Lack of Jurisdiction to Vary the Judgment [52] The Defendant contends that this court lacks jurisdiction to grant the reliefs sought by Khaleeg, as they would amount to varying or amending the Judgment in Suit 378. The Defendant relies on authorities such as Hock Hua Bank Bhd v Sahari Bin Murid [1981] 1 MLJ 143 (FC) and Scott & English (M) Sdn Bhd v Yung Chen Wood Industries Sdn Bhd [supra] (CA) to support this contention. [53] Khaleeg argues that it is not seeking to vary or amend the Judgment but rather to enforce rights arising from it. Khaleeg contends that the jurisdiction for filing this action is derived from the Judgment itself, and the court has jurisdiction to grant the consequential reliefs sought. [54] I find that the reliefs sought by Khaleeg would indeed amount to varying or amending the Judgment in Suit 378, which this court lacks jurisdiction to do. [55] It is a well-established principle, as affirmed by the Federal Court in Hock Hua Bank Bhd, that “clearly the court has no power under any application in the same action to alter vary or set aside a judgment regularly obtained after it has been entered or an order after it is drawn up.” This principle applies with even greater force when the judgment has been affirmed on appeal. [56] As the Court of Appeal explained in Scott & English: “There would be total mayhem in the judicial system if a lower court could amend an order affirmed by a higher court. The position is that unless appealed against, an order of a trial court stands final, binding and conclusive as pronounced by the trial court. If appealed against, an order of the trial court stands final, binding and conclusive as pronounced by the higher or highest court.” [57] In the present case, the Judgment in Suit 378 has been affirmed by the Court of Appeal and, effectively, by the Federal Court (through the dismissal of the leave application). It stands final, binding, and conclusive. This court does not have the jurisdiction to vary or amend this Judgment, either directly or indirectly. [58] The reliefs sought by Khaleeg would, if granted, effectively vary the Judgment. The declaration sought in paragraph 8.1 of the Statement of Claim – that the Judgment is not valid for enforcement – directly challenges the enforceability of the Judgment. Similarly, the orders sought to stay or suspend enforcement of the Judgment (paragraphs 8.1.1,

8.1.2, 8.2.2, and 8.3) would render the Judgment ineffective. [59] Khaleeg's argument that it is merely seeking “consequential reliefs” arising from the Judgment is not convincing. If Khaleeg believed it was entitled to certain consequential orders following the Judgment, the proper course would have been to apply to the court that issued the Judgment for those orders, not to file a fresh suit that effectively challenges the Judgment's validity and enforceability. [60] In Ooi Bee Tat @ Ooi Bee Lee v Ooi Bee Tat & Sons Sdn Bhd & Anor [1999] 5 MLJ 10, the High Court held that “one High Court cannot set aside a final order regularly obtained from another High Court of concurrent jurisdiction” and that “this action was an attempt to reopen an order which was final and binding, and this amounted to an abuse of the process of the court.” [61] Similarly, in Chan Kok Sung & Anor v Accupro Sdn Bhd & Anor [2024] 6 CLJ 394, the Court of Appeal emphasised that “as a general rule, no subsequent High Court can re-litigate the same matter so as to negate, modify, or vary the perfected order of the prior High Court.” [62] These principles apply squarely to the present case. This court lacks jurisdiction to grant the reliefs sought by Khaleeg, which would effectively vary or render ineffective the Judgment in Suit 378. Khaleeg's claim is therefore improper and constitutes an abuse of the court process. The Effect of the Counterclaim [63] Khaleeg argues that Shaoxing's filing of a counterclaim in this suit makes the issues inseparable and requires the court to determine all issues together for a fair and proper resolution. Khaleeg contends that the filing of the application to strike out the original claim is therefore improper. [64] The Defendant contends that the existence of a counterclaim does not preclude the court from striking out Khaleeg's claim if it is an abuse of process. The counterclaim raises separate issues regarding Khaleeg's failure to satisfy the Judgment and the personal liability of the second defendant, Alam Bin Muhammad. [65] I find that the existence of a counterclaim does not prevent the court from striking out Khaleeg's claim if it constitutes an abuse of process. [66] The counterclaim filed by Shaoxing raises distinct issues from Khaleeg's claim. While Khaleeg's claim seeks to challenge the enforceability of the Judgment and to obtain an assignment of the AR Bright invoices, the counterclaim seeks to enforce the Judgment and to hold the second defendant, Alam Bin Muhammad, personally liable for the judgment debt. The counterclaim introduces additional legal theories concerning corporate veil piercing and a contention that the second defendant established a separate business entity (Hasham Enterprise) to continue Khaleeg's business operations while avoiding payment of the judgment debt. These factual and legal questions are entirely separate from Khaleeg's attempt to relitigate the AR Bright invoices issue, with the counterclaim focusing on post-judgment conduct rather than the pre-judgment matters that formed the basis of Suit 378. [67] These are separate and distinct causes of action, and the court can determine the counterclaim independently of Khaleeg's claim. The striking out of Khaleeg's claim would not prejudice the determination of the counterclaim. Indeed, allowing Khaleeg's abusive claim to proceed alongside the counterclaim would likely complicate proceedings unnecessarily, waste judicial resources, and potentially lead to inconsistent findings. The principle of judicial economy favors the striking out of the improper claim while allowing the legally sustainable counterclaim to proceed on its merits. Furthermore, as the counterclaim presupposes the validity of the Judgment from Suit 378, it would be logically inconsistent and procedurally problematic to entertain simultaneously a claim that seeks to undermine that Judgment and a counterclaim that relies upon it. This separation of distinct causes of action ensures that the court's process is not abused while preserving Shaoxing's right to pursue its legitimate counterclaim. [68] Furthermore, it would be illogical to allow an abusive claim to proceed merely because a counterclaim has been filed. If Khaleeg's claim constitutes an abuse of process, as I have found it does, it should be struck out regardless of the existence of a counterclaim. [69] I therefore find that the existence of a counterclaim does not preclude the striking out of Khaleeg's claim. Conclusion and Order [70] For the reasons set out above, I find that Shaoxing's application to strike out Khaleeg's claim has merit and is accordingly allowed. [71] Khaleeg's Writ dated 12.9.2024 and Statement of Claim dated 16.10.2024 are hereby struck out with costs of RM5,000.00 for Shaoxing. 6 August 2025 ATAN MUSTAFFA YUSSOF AHMAD Judge Kuala Lumpur High Court (Commercial Division) Counsel: For the Plaintiff: Amarjeet Singh with Manjit Singh (Messrs Firdaus Shanti Bhupin) For the Defendants: CL Tan with SY Lee (Messrs Tan Chong Lii & Co)