KOPERASI TANJONG KERAMAT MALAYSIA BERHAD (dahulunya dikenali sebagai Koperasi Tanjong Keramat Kota Kinabalu Berhad) v 1. ) MYANGKASA HOLDINGS SDN. BHD. (WA-22NCvC-219-04/2022)

MYANGKASA HOLDINGS SDN. BHD. (No. Syarikat: 1029674-X)

ENABLING ASIA TECH SDN. BHD. (NO. Syarikat: 923680-T) …DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT Introduction [1] In this case, the Plaintiff, which is a co-operative society, had paid the 1st Defendant a sum of Ringgit Malaysia Three Million One Hundred and Fifty Thousand (RM3,150,000) but has not even received a single Sen in return from the Defendants. [2] The Plaintiff’s cause of action is founded on a tripartite agreement made between the Plaintiff and the Defendants dated 22nd May 2015, described by the parties as a Dealership Agreement (‘the said Dealership Agreement”). The main issues for determination are whether the 03/04/2025 15:06:49 WA-22NCvC-219-04/2022 Kand. 118 Defendants have breached the said Dealership Agreement and if so, whether the 1st Defendant ought to be held jointly and severally liable to pay the Plaintiff in accordance with the terms of their contract, and lastly, whether the Plaintiff’s rights to claim periodic payments of “Advertising Income” (as defined in the said Dealership Agreement) is barred by the Limitation Act 1953. [3] After a full trial, this Court decided to grant judgment in favour of the Plaintiff, holding the 1st Defendant jointly and severally liable with the 2nd Defendant to pay a sum of RM3,975,000 to the Plaintiff, which is a sum of RM75,000 payable over a period of 53 months. [4] My reasons for finding that only part of the Plaintiff’s claim is barred by the Limitation Act 1953 and that the Defendants are jointly and severally liable to pay the Plaintiff the sum of RM3,975,000 are as set out below. Background Facts [5] The Plaintiff is a co-operative society that is registered under s.7(1) of the Co-operative Societies Act 1993 to promote the economic interest of its members in accordance with co-operative principles. [6] The 1st Defendant is the mastermind of a project which it had named as “Adopt a Shop – MyANGKASA Mobile Branded Concept Stores Program” (‘the 1st Defendant’s Project”). [7] The Plaintiff, which was invited to participate in the 1st Defendant’s Project, was asked to sign the said Dealership Agreement with the Defendants, wherein the 1st Defendant is referred to as “the Master Distributor”, the Plaintiff as “the Dealer”, and the 2nd Defendant as “the Advertiser”. [8] Though rather poorly drafted, the said Dealership Agreement is clear enough in setting out the performance required of each party. The preamble contains several representations made to the party referred to as “the Dealer”(the Plaintiff in this case), in para C of the preamble and Clause 1.1 thereof, as follows: while Clause 1.1(e) thereof contains the following definition: [9] Clause 1.1(e) was an unequivocal representation that at the material time, the 2nd Defendant (referred to as “the Advertiser” therein) had authorised dealers who were managing and operating as many as 1,500 stores that qualified for a store remodeling program. [10] The role and involvement of the 1st Defendant (referred to as “the Master Distributor” in the said Dealership Agreement) was stated in Clause 1.1(g) as follows: [11] As shown in Clause 1.1(g), the said Dealership Agreement – which was prepared by the 1st Defendant – included a representation that as the Master Distributor, the 1st Defendant is authorised to distribute 1,500 dealerships which were attached to 1,500 Advertising Areas at a fee of RM50,000 per unit, which shall in turn be leased to the Advertiser (the 2nd Defendant). [12] The commitment and performance required from the Plaintiff was just to pay RM3,000,000 plus a 5% “administrative and processing costs” of RM150,000 to the 1st Defendant. This was set out in Clause 2.2 (iv) of the said Dealership Agreement: [13] The 2nd Defendant’s obligations (as “the Advertiser”) are stated in Clause 2.3 of the said Dealership Agreement, as follows: [14] A Ringgit and Sen summary of the said Dealership Agreement hatched by the 1st Defendant would be that by paying a total sum of RM3,150,000 to the 1st Defendant, the Plaintiff would receive from the 2nd Defendant (to be paid through the 1st Defendant) a sum of RM75,000 per month for 60 months, i.e. a total of RM4,500,000, to benefit the Plaintiff and its co-operative members. [15] It is undisputed that the Plaintiff paid the full sum of RM3,150,000 to the 1st Defendant to perform its part of the said Dealership Agreement. [16] It is also undisputed that the 1st Defendant did not pay any money to the Plaintiff, which led to the Plaintiff suing both Defendants by way of this civil suit. The Plaintiff’s Claim [17] The Plaintiff’s claim is for a full refund of RM3,150,000 paid to the 1st Defendant and RM4,500,000 being the total Advertising Income that it ought to have received under the said Dealership Agreement, interest and costs. [18] The sum of RM4,500,000 is the total amount that the Plaintiff is entitled to receive if the monthly “Advertising Income” of RM75,000 per month had been duly paid for a period of 60 months. The Defendants’ Defence [19] As the 2nd Defendant had failed to defend itself, the Plaintiff had entered Default Judgment against it but failed to recover any payment. Thus, it was necessary for the Plaintiff to proceed with its claim against the 1st Defendant. [20] The 1st Defendant’s Defence was a mere denial, disclaiming liability under the said Dealership Agreement and pleading that the Plaintiff should claim only from the 2nd Defendant. [21] As mentioned above, it was also pleaded by the 1st Defendant that the Plaintiff’s claim is barred by the Limitation Act 1953. The Plaintiff’s Witness [22] The Plaintiff’s sole witness (SP1) was one Miss Koid Chin Lin who is also known as “Suli”. She testified in her position as the Chief Executive Officer of the Plaintiff – which she confirmed is a co-operative society. [23] The Plaintiff’s said witness testified that the Plaintiff trusted the 1st Defendant because it is a subsidiary of a leading co-operative society, namely Angkatan Koperasi Kebangsaan Malaysia Berhad, commonly known as ANGKASA. According to her, ANGKASA issued an invitation letter to the Plaintiff in April 2015 and represented, inter alia, that the 2nd Defendant had 1,500 MyANGKASA Mobile Branded Concept Stores under its wings. [24] SP1 further confirmed that the sum of RM3,150,000 was paid by the Plaintiff to the 1st Defendant by using a CIMB Bank cheque on 22nd May 2015 after the said Dealership Agreement was signed. [25] In short, this witness’s evidence was plain and simple; that there was a breach of contract by the 1st Defendant because RM3,150,000 was paid to the 1st Defendant pursuant to the said Dealership Agreement but not a Sen of the agreed monthly Advertising Income of RM75,000 was paid by the Defendants to the Plaintiff pursuant to the said agreement. [26] In a nutshell, SP1 takes the stand that the Plaintiff is entitled to a full refund of the RM3,150,000 and also the sum of RM4,500,000 that was agreed to be paid to the Plaintiff under the said Dealership Agreement. The 1st Defendant’s Witnesses [27] The 1st Defendant called two witnesses. Its first witness was one Dato’ Sri Dr. Eric Yap (SD1) who was subpoenaed to attend as a witness for the 1st Defendant. He testified that he invested RM12million in the 2nd Defendant, was appointed a director but knew nothing at all about the business of the 2nd Defendant. SD1 specifically stated that he has no knowledge whatsoever about the said Dealership Agreement. [28] The 1st Defendant’s second witness was one Shaharuddin bin Mohamed (SD2), who was the Executive Director-General of the 1st Defendant at the material time. He testified that the RM3,000,000 received from the Plaintiff was paid over by the 1st Defendant to the 2nd Defendant while the “administrative and processing costs” of RM150,000 was paid by the 1st Defendant to a woman by the name of Fatin Liyana binti Hossin as her commission. [29] In his evidence, SD2 testified that the recipient of the RM150,000 collected from the Plaintiff as “administrative and processing costs”, namely Fatin Liyana binti Hossin, was a marketing agent appointed by the 1st Defendant. [30] Payment of RM3,000,000 to the 2nd Defendant was duly proven by SD2 but payment of RM150,000 was not proven. The recipient Fatin Liyana binti Hossin was not called as a witness. SD2, who did not have a copy of the 1st Defendant’s cheque, could not prove the identity of the payee named in the 1st Defendant’s cheque for RM150,000. [31] The evidence of SD2 could be summed up as the 1st Defendant disclaiming liability under the said Dealership Agreement and attempting to shift responsibility and liability to the 2nd Defendant. Analysis of the Evidence Adduced by Both Sides [32] Since the Plaintiff’s claim is a contractual claim based on the said Dealership Agreement, I have noted that it is the sole agreement that both sides are relying on as their contract – as in there is neither any supplementary agreement nor any written agreed variation of its terms and conditions. [33] There was also no attempt by any party to rely on the exceptions under s.92 Evidence Act 1950 to admit any oral agreement or statement for the purpose of contradicting, varying, adding to, or subtracting from the terms of the said Dealership Agreement. [34] Thus, the contract is to be construed solely from the terms and conditions of the said Dealership Agreement while the issue of performance of contract to be adjudicated based on the evidence adduced by both sides. [35] In my judgment, the fact that the 1st Defendant is a subsidiary of Angkatan Koperasi Kebangsaan Malaysia Berhad (“ANGKASA”) is irrelevant. As mentioned above, the parties are bound by terms and conditions of the said Dealership Agreement – to which ANGKASA is not a party. [36] There is no dispute regarding performance by the Plaintiff that had paid the full sum of RM3,150,000 to the 1st Defendant, by using a CIMB Bank cheque No.006380 on 22nd May 2015 after the said Dealership Agreement was signed. [37] The promises made by the Defendants under the said Dealership Agreement are in Clause 2.1(iii), 2.3 and 4.2 thereof, which screenshots are pasted below: [38] Clause 2.1(iii) makes it crystal clear that it was the responsibility of the 1st Defendant (the Master Distributor) to collect the agreed Advertising Income from the 2nd Defendant (the Advertiser) and to pay the same into the Plaintiff’s bank account within thirty days from the receipt. Even though Clause 2.1(i) does state that the 1st Defendant is not a guarantor, Clause 2.1(iii) clearly made it the 1st Defendant’s contractual obligation to collect the Advertising Income every month. It is not a matter of discretion for the 1st Defendant, as could be seen from its wording below: [39] The role and obligation of the 1st Defendant to collect the Advertising Income of RM75,000 per month from the 2nd Defendant is also evident in Clause 2.3(ii) of the said Dealership Agreement which provides that the 2nd Defendant (the Advertiser) is to pay the Plaintiff (the Dealer) “through the Master Distributor”, i.e. the 1st Defendant. [40] The essence of the said Dealership Agreement is that by making a single lump sum payment of RM3,000,000 as “the Fee” to the 1st Defendant to secure 60 units of the 1st Defendant’s “Adopt a Shop – MyANGKASA Mobile Branded Concept Stores Program”, the 1st Defendant shall collect “Advertising Income” of RM75,000 every month from the 2nd Defendant and pay over the RM75,000 to the Plaintiff for a period of 60 months. In addition to the RM3,000,000, the Plaintiff was also charged an “administrative and processing costs” of RM150,000. [41] It was proven by the 1st Defendant that it had paid over RM3,000,000 to the 2nd Defendant but adduced no cogent evidence to prove that RM150,000 was paid over to Fatin Liyana binti Hossin. I make this finding due to two reasons. [42] First, the Plaintiff’s evidence of previous dealings with ANGKASA (the holding company of the 1st Defendant) was unrebutted. It was ANGKASA that invited the Plaintiff to participate in the 1st Defendant’s Project. In other words, the parties were not strangers that require introduction by someone by the name of Fatin Liyana binti Hossin – and to pay her RM150,000.00 for the ‘introduction’. [43] The evidence of the Plaintiff’s witness (SP-1) in her witness statement, in answer to Q.7 and Q.8 respectively, made it abundantly clear that there was no introduction because they had previous dealings with each other. SP-1 further testified that the Plaintiff was not aware of any person being paid a commission. A screenshot of her answers in Q.7 and Q.8 of her witness statement are pasted below: [44] The second reason for my doubting that RM150,000 was paid by the 1st Defendant to the said Fatin Liyana binti Hossin is that the 1st Defendant’s payment voucher was not signed by her – who was not called as a witness by the 1st Defendant. There was also no copy of the cheque purportedly issued to her by the 1st Defendant in evidence. The fact that RM150,000 was paid out of the 1st Defendant’s bank account does not ipso facto prove the identity of the recipient. A further reason for finding this payment of RM150,000 to be a dubious payment is that it was described in the said Dealership Agreement as “administrative and processing costs” payable by the Plaintiff to the 1st Defendant but in the 1st Defendant’s evidence, it was stated to be payment of “Commission Adopt a Shop”. A screenshot of the relevant portion of the payment voucher is pasted below: [45] The same signature appears as the signature of the verifier and the recipient in the signing part of the voucher, meaning that the staff of the 1st Defendant company who verified the payment voucher had also signed to acknowledge receipt of the said cheque. A screenshot of the same is pasted below: [46] In summary, the facts prove that after receiving the RM3,150,000 from the Plaintiff, the 1st Defendant paid over RM3,000,000 to the 2nd Defendant, paid out RM150,000 to someone purportedly as “commission” but paid not even a Ringgit of Advertising Income to the Plaintiff. Even though the identity of the recipient of RM150,000 and justification for the payment as “commission” are questionable, those are facts that are relevant for this Court to weigh the conduct of the 1st Defendant. The more significant point is that s.38 Contracts Act 1950 makes it mandatory – with the word “must” – for the 1st Defendant to perform its promises. The said s.38 makes it mandatory for performance with the following words: “(1) The parties to a contract must either perform, or offer to perform, their respective promises, unless the performance is dispensed with or excused under this Act, or of any other law.” [47] The Plaintiff in this case did not dispense with performance. Neither is there any law to excuse the 1st Defendant from performing its promises under the said Dealership Agreement. In the circumstances, failure to perform would amount to a breach contract, and this Court is bound to find the 1st Defendant liable for breach of contract. If any authority is required on this point, I would rely on two authorities. First, I am guided by the judgment of Abang Iskandar bin Abang Hashim JCA (as the Rt. Hon. PCA then was) in Anuar bin Abu Bakar v. Samsuri bin Booyman [2016] 6 MLJ 96 where His Lordship held:- “[24] As such, the joint venture agreement was valid and was binding on the contracting parties. That joint venture agreement contained certain terms that would require the defendant to do certain things in favour of the plaintiff. Among them has been a term that obligated the defendant to transfer ten titles of the newly sub divided Lot 1971 to the plaintiff. In fact, there was no dispute on this term per se. … It is also clearly provided under s 38 of the Contracts Act 1950 that a party to a contract must, unless excused under the Contracts Act or any other law, be bound by the terms of the contract so entered between them.” [48] The judgment of the Court of Appeal in Anuar bin Abu Bakar v. Samsuri bin Booyman (supra) was approved by the Federal Court very recently in a landmark judgment in Obata-Ambak Holdings Sdn Bhd v. Prema Bonanza Sdn Bhd [2024] 5 MLJ 597. The application of s.38 Contracts Act 1950 in compelling parties to a contract to perform their respective promises was reiterated in the judgment of Hasnah binti Dato' Mohammed Hashim FCJ (as the current Rt. Hon. CJM then was), as follows: “[28] It is trite law that the parties to a contract are bound by the terms of the contract entered between them to perform their respective promises. It is also clearly provided under s 38 of the Contracts Act 1950 that a party to a contract must, unless excused under the Contracts Act or any other law, be bound by the terms of the contract so entered between them. There is no dispute between parties that the SPA has been concluded. The terms of the SPA are clear and unambiguous and the plaintiff is bound by it. Plaintiff is therefore estopped from denying what had been agreed between them (see Court of Appeal in Anuar bin Abu Bakar v Samsuri bin Booyman [2016] 6 MLJ 96; [2016] 8 CLJ 317).” [49] Even though this Court should do justice to the Plaintiff – which is a cooperative society that had paid RM3,150,000 to the 1st Defendant by using contributions made by its members – it is necessary to ensure that there is no unjust enrichment of the Plaintiff. The Plaintiff’s claim for a refund of RM3,150,000 and also Advertising Income amounting to RM4,500,000 would be a duplicity of claims. There is no provision in the said Dealership Agreement for repayment of RM3,150,000. As discussed above, what is clearly there is a term for payment of a contractual sum of RM75,000 per month, as Advertising Income, for a period of 60 months. [50] Pursuant to Clause 4.3 of the said Dealership Agreement, the 2nd Defendant was given a Grace Period of 90 days from the Effective Date to complete the preparation, installation and fitting of the Advertising Area – as defined in Clause 1.1(f) that states: [51] The 90 days period was from date of the said Dealership Agreement on 22nd May 2015 till 20th August 2015. The first month period when Advertising Income begun to become payable was therefore from 20th August 2015, rendering the first monthly payment of RM75,000 payable on 19th September 2015 and the 60th payment due on 19th August 2020. [52] The remaining issue to be determined is whether the Plaintiff’s claim or any part thereof is barred by the Limitation Act. [53] I find that only part of the Plaintiff’s claim is statute-barred. My finding is based on the undisputed fact that the 1st Defendant’s promise, under Clause 2.1(iii) of the said Dealership Agreement was a recurring contractual obligation. The Advertising Income was a fixed sum of RM75,000 per month as a periodic payment for 60 months. Each time the 1st Defendant failed to pay the periodic Advertising Income when it fell due, it was a discrete breach of contract giving rise to a new cause of action. [54] There is no “running account” in this case because the Defendants did not make even a single payment. The legal concept of a “running account” is that a creditor’s cause of action is extended by s.26(2) of the Limitation Act 1953 to cause the creditor’s right to be deemed as having “accrued on the date of the last payment” when there is a partial payment. If there is no partial payment at all – as in this case – there is no “running account”, and the debt that accrued earlier than 6 years prior to the filing of the Writ of Summons would be barred by s.6 of the Limitation Act 1953. Therefore, in this case, the Plaintiff’s cause of action is ‘alive’ only to claim the sum of Advertising Income that had accrued less than 6 years prior to the date of the filing of the Writ of Summons. [55] I find support for my finding in a judgment of the Court of Appeal of Canada. In Pickering Square Inc. v. Trillium College Inc., 2016 ONCA 179, the Court of Appeal for Ontario opined as follows: “[23] Breaches of contract commonly involve a failure to perform a single obligation due at a specific time. This sort of breach is sometimes called a “once-and-for-all” breach: it occurs once and ordinarily gives rise to a claim from the date of the breach – the date performance of the obligation was due. Trillium’s breach of s. 16.08 does not fall into this category because its obligation to operate its business was ongoing rather than single and time-specific. [24] A second form of breach of contract involves a failure to perform an obligation scheduled to be performed periodically – for example, a requirement to make quarterly deliveries or payments. A failure to perform any such obligation ordinarily gives rise to a breach and a claim as from the date of each individual breach: see e.g. Smith v. Empire Life Insurance Co. (1996), 1996 CanLII 8134 (ON SC), 19 CCEL (2d) 171 (Ont. Gen. Div.)…” (emphasis added) [56] The 1st Defendant’s obligation to collect and pay the Plaintiff was scheduled to be performed periodically. As the Writ of Summons was filed on 18th April 2022, a contractual claim for any cause of action that arose prior to 18th April 2016 would be barred by s.6(1)(a) of the Limitation Act

This means that the Plaintiff’s claim for the Advertising Income for the 7 months period between 19th September 2015 and 19th March of 2016 are barred by the Limitation Act 1953. [57] The upshot is that the Plaintiff’s claim must be reduced by 7 months, from 60 months to a period of 53 months. The computation works out as follows: RM75,000 x 53 months = RM3,975,000. Counsel for the Plaintiff: Lam Wai Tze (William Tan Phoo Yie (PDK) with him) SOLICITORS FOR THE PLAINTIFF: MESSRS LAM WAI TZE & CO. Advocates & Solicitors Suite A 316, Level 3, Block A, Kelana Square, No.17, Jalan SS 7/26, Kelana Jaya, 47301 PETALING JAYA, SELANGOR. Counsel for the Defendants: Muhammed Zahid Hazim Bin Kasim SOLICITORS FOR THE DEFENDANTS: MESSRS N.K. TAN & RAHIM. Advocates & Solicitors W-10-20 Menara Melawangi, Pusat Perdagangan Amcorp, No. 18 Persiaran Barat, 46050 PETALING JAYA, SELANGOR.

Anuar bin Abu Bakar v. Samsuri bin Booyman [2016] 6 MLJ 96 2. Obata-Ambak Holdings Sdn Bhd v. Prema Bonanza Sdn Bhd [2024] 5 MLJ 597 3. Pickering Square Inc. v. Trillium College Inc., 2016 ONCA 179

S.7(1) Co-operative Societies Act 1993 2. S.92 Evidence Act 1950 3. S.38 Contracts Act 1950 4.