Natasha Maria Binti Akhamat Immancan v Introrich Sdn. Bhd (WA-22NCvC-807-11/2019)

BAHRI BIN MOHAMAD ZIN ... DEFENDANTS JUDGMENT Introduction

This dispute arises from a Project Venture Agreement ("PVA") dated 13.11.2017 between the Plaintiff and the First Defendant ("ISB") concerning a logging venture at Compartments 17A and 18A, Hutan Simpan Rasau Kertih, Terengganu.

The Plaintiff alleges that she was induced into the PVA by fraudulent misrepresentation, and that the Defendants subsequently breached the PVA, misappropriated timber, and caused her to lose RM2,137,011.80.

The Defendants deny all wrongdoing. They assert that the Plaintiff herself misrepresented her logging expertise, that both parties performed the PVA until its expiry on 12.11.2018, and that the Plaintiff's claims are barred by Section 56(3) Contracts Act 1950. They further counterclaim for defamation. After a full trial over three days, with seven witnesses and extensive documentary evidence, the Court now delivers its judgment.

The Court notes that on 3.7.2020, this Court allowed the $ 2 ^{n d} $ and $ 3 ^{r d} $ Defendants' application in Enclosure 8, filed on 5.11.2019, to strike out the Plaintiff's claim against them pursuant to Order 18 rule 19 of the Rules of Court 2012.

The Plaintiff's appeal to the Court of Appeal was subsequently dismissed. In the present trial, the Court is required to determine three matters: (a) the Plaintiff's claim against the $ 1^{\mathrm{st}} $ Defendant; (b) the $ 1^{\mathrm{st}} $ Defendant's counterclaim against the Plaintiff; and (c) the $ 2^{\mathrm{nd}} $ and $ 3^{\mathrm{rd}} $ Defendants' counterclaim against the Plaintiff, which remains extant notwithstanding the striking-out of the Plaintiff's claim against them. The Parties

This civil suit (Guaman Civil No: WA-22NCvC-807-11/2019) involves the Plaintiff, Natasha Maria Binti Akhamat Immancan, an advertiser and businesswoman, against three Defendants: - First Defendant (D1): Introrich Sdn. Bhd., a locally incorporated company. - Second Defendant (D2): Noor Haslina Binti Abdullah, a director of D1 and an operator of a driving school academy. - Third Defendant (D3): Dato' Bahri Bin Mohamad Zin, the husband of D2, a director of D1, and a retired former Special Operations Director of the Malaysian Anti-Corruption Commission (MACC). Background of the Dispute

The dispute arises from a commercial timber logging joint venture. On November 13, 2017, the Plaintiff and the First Defendant entered into a Project Venture Agreement ("PVA"). The agreement was executed to extract and sell timber from Compartments 17A and 18A (and a 400-acre replacement area) located at Hutan Simpan Rasau Kertih, Dungun, Terengganu. Under the PVA, the Plaintiff agreed to inject working capital of up to RM 2,000,000.00 to finance the logging operations, with an agreed profit-sharing ratio of 50:50 between the Plaintiff and D1. The project was meant to be completed within one year, expiring on November 12, 2018. The Plaintiff's Claim

The Plaintiff's primary cause of action is grounded in fraudulent misrepresentation and breach of contract. The Plaintiff alleges that D2 and D3 fraudulently induced her to invest her funds by falsely representing that D1 possessed a proven track record, technical expertise, and operational capability in commercial logging.

Furthermore, the Plaintiff claims she paid a total of RM2,137,011.80 (RM2 million in working capital plus RM137,011.80 in legal fees and additional funds). She alleges that the Defendants committed an active concealment of pre-existing financial liabilities with a third party (Toh Puan Sri) and misappropriated her funds by bypassing the mandatory special project venture account.

She points to a WhatsApp message (Exhibit P114) from D2—which stated "kita anggap kita keluarkan 2 juta tapi kita satu sen tak keluar" (let's pretend we contributed 2 million, but we didn't spend a single cent)—as explicit proof of a premeditated intent to defraud and utilize her as the sole financier of the project. The Defendants' Defence and Counterclaim

The Defendants vehemently deny all allegations of fraud and breach of contract. They argue that it was, in fact, the Plaintiff who misrepresented her expertise, pointing to Recital D of the PVA, which explicitly recorded that the Plaintiff possessed the "skill, experience, technical expertise and ready employees" for the logging activities. Because D2 lacked logging experience, she relied on the Plaintiff's claimed expertise.

The Defendants assert that the PVA automatically expired on November 12,2018, as there was no mutual written agreement to extend it. According to D1's management accounts, the project suffered heavy financial losses, meaning there were no profits to be distributed.

Additionally, D2 and D3 have filed a counterclaim for defamation. They allege that the Plaintiff maliciously published defamatory statements in a project WhatsApp group ("Tebang Pokok") by referring to D2 and D3 as "hantu raya" (a type of evil spirit/demon) and threatening to "viral" D3 on social media, thereby severely injuring their reputations—particularly given D3's sensitive background as a former MACC director. The Significance of Recital Defendant (exhibit-P5)

Recital D of the Project Venture Agreement (PVA) holds critical legal and evidentiary significance in this dispute, primarily acting as the Defendants' core defence to rebut the Plaintiff's allegations of fraud.

Its significance can be broken down into the following key areas: - Documentary Proof of the Plaintiff's Claimed Expertise: Recital D explicitly recorded in writing that the Plaintiff possessed the "skill experience, technical expertise and ready employees" needed to conduct and complete the logging project, as well as the financial capabilities and support to undertake the extraction activities.

A subsequent part of Recital D further noted that the $ 1^{\mathrm{st}} $ Defendant (ISB) specifically approached the Plaintiff to exclusively adopt and apply her claimed skills, expertise, and funds for the joint venture. - The Ultimate Rebuttal to the Plaintiff's Fraud Allegations: The Plaintiff's primary claim was that she was fraudulently induced to invest because the Defendants falsely represented that they had a proven track record in logging. The Defendants used Recital D to completely flip this narrative, arguing that any representations about logging expertise were actually made by the Plaintiff, as legally cemented in Recital D. The 2 $ ^{nd} $ Defendant maintained that she ran a driving academy, lacked logging experience entirely, and would never have entered into the PVA had the Plaintiff not presented herself as an industry expert. - Foundation for the Defendants' Breach of Contract Claim: The Defendants utilized Recital D to accuse the Plaintiff of misrepresentation and breach of contract. They argued that despite her formal declaration in Recital D, the Plaintiff actually possessed zero technical expertise or experience in the logging industry. Because of this false representation, the Plaintiff allegedly failed to assist in procuring the necessary logging approvals, forcing the inexperienced $ 2^{n d} $ Defendant to handle the applications and causing a severe seven-month delay in obtaining the license.

In short, Recital D is the "smoking gun" the Defendants relied upon to prove that the joint venture was built entirely upon the Plaintiff's own proclaimed expertise, effectively undermining her claim that she was the victim of the Defendants' fabricated logging credentials Issues To Be Tried

As agreed by parties:

Whether the $ 1^{\mathrm{st}} $ Defendant fraudulently made a fraudulent misrepresentation to induce the Plaintiff to invest RM2 million.

Whether the $ 1^{\mathrm{s t}} $ Defendant breached the PVA.

Whether the Plaintiff is liable to the Defendants' counterclaim. Issue 1 Fraudulent Misrepresentation The law

Fraud in our law is not a loose moral label; it is a defined legal concept. Section 17 of the Contracts Act 1950 provides that "fraud" includes, inter alia:

(a) suggestion, as a fact, of that which is not true, by one who does not believe it to be true;

(b) active concealment of a fact by one having knowledge or belief of the fact;

(c) a promise made without any intention of performing it; and (d) any other act fitted to deceive.

These categories reflect the different ways in which a person may manipulate another's decision-making: by affirmatively asserting what is false, by suppressing what is true, by making hollow promises, or by engaging in conduct calculated to mislead. The statutory definition is deliberately broad; it is the quality of deceit, not the form it takes, that matters.

Section 101 of the Evidence Act 1950 places the burden of proof squarely on the party who asserts the existence of a fact. A plaintiff who alleges fraud must therefore prove, on the balance of probabilities, that the impugned representation or conduct falls within s 17, and that it caused her to enter into the transaction.

However, while the standard remains civil proof on a balance of probabilities the courts have consistently emphasised that allegations of fraud demand a degree of scrutiny commensurate with their gravity. The evidence must be cogent, clear and compelling; suspicion, inference piled upon inference, or mere dissatisfaction with the outcome of a bargain will not suffice.

The Federal Court in Ong Leong Chiou & Anor v Keller (M) Sdn Bhd & Ors [2021] 3 MLJ 622 ("Keller") is particularly instructive. In that case, the plaintiff contractor was induced into contracts by representations which were untrue, and the defendants then sought to shelter behind corporate structures to evade payment. The Federal Court held that: "As the trial judge found fraud to have been perpetrated, that in itself warranted the allocation of liability to the perpetrators of the fraud, independently of the doctrine of piercing the corporate veil... Liability was found against Tony Ong and each of the companies by reason of the fraud alone, without the invocation of the doctrine of the piercing of the corporate veil."

The court further affirmed the classic principle that fraud "unravels everything" no party is permitted to retain an advantage obtained by deceit, and contractual forms or corporate veils cannot be used as a shield where the very foundation of the arrangement is fraudulent.

In Lazarus Estates v Beasley [1956] 1 All ER 341, the English Court of Appeal expressed the principle in words that have been repeatedly adopted in our courts: "no court will allow a person to keep an advantage which has been obtained by fraud."

As explained by Denning LJ (as he then was) in the English Court of Appeal case of Lazarus Estates Ltd (supra) at 345, "fraud unravels everything". In this regard, the following judgment in Lazarus Estates is reproduced: We are in this case concerned only with this point: Can the declaration be challenged on the ground that it was false and fraudulent? It can clearly be challenged in the criminal courts. The landlord can be taken before the magistrate and fined ?30 (see Sch 2, para 6) or he can be prosecuted on indictment, and (if he is an individual) sent to prison (see s. 5 of the Perjury Act, 1911). The landlords argued before us that the declaration could not be challenged in the civil courts at all, even though it was false and fraudulent, and that the landlords can recover and keep the increased rent even though it was obtained by fraud. If this argument is correct, the landlords would profit greatly from their fraud. The increase in rent would pay the fine many times over. I cannot accede to this argument for a moment. No court in this land will allow a person to keep an advantage which he has obtained by fraud. No judgment of a court, no order of a Minister, can be allowed to stand if it has been obtained by fraud. Fraud unravels everything. The court is careful not to find fraud unless it is distinctly pleaded and proved; but once it is proved it vitiates judgments, contracts and all transactions whatsoever; see, as to deeds, Collins v. Blantern (1767) (2 Wils. KB 342), as to judgments, Duchess of Kington's Case (1776) (1 Leach 146), and, as to contracts, Master v. Miller (1791) (4 Term Rep 320). So here I am of opinion that, if this declaration is proved to have been false and fraudulent, it is a nullity and void and the landlords cannot recover any increase of rent by virtue of it. (emphasis added)

The same theme runs through Takako Sakao v Ng Pek Yuan [2009] 6 MLJ 751, where the Court of Appeal recognised that fraud vitiates consent. A contract is premised on voluntary, informed agreement; where consent is procured by falsehoods, the apparent bargain is hollow. The law will not enforce a transaction built on deception.

That statement is not rhetoric; it is a directive. It requires the court, once satisfied that fraud is proved, to strip away any benefit derived from it, whether by rescission, damages, or other appropriate relief.

From these authorities, several propositions emerge: - (a) Fraud is independent of form: Liability for fraudulent inducement arises independently of the written contract. A party cannot say, "the document does not record my promise", if the promise was the very means by which the other party was lured into signing. - (b) Fraud pierces contractual and corporate protections: Exclusion clauses, limitation provisions, and separate corporate personality cannot be invoked to legitimise an advantage obtained by deceit. As Keller demonstrates, the court will look past the corporate shell where it is used as an instrument of fraud. - (c) Causation is essential: It is not enough that a false statement was made; the plaintiff must show that she relied on it, and that such reliance materially influenced her decision to enter into the transaction. - (d) Proof must be careful and exacting: Given the seriousness of the allegation, the court will examine the evidence with particular care, but it does not demand criminal-level proof. The question remains: is it more likely than not that the defendants acted with the requisite deceit? Application to the present case

Against that legal backdrop, the question is whether the plaintiff has shown, with sufficient clarity, that the defendants made representations which were:

(i) untrue and not believed to be true; or

The plaintiff's narrative is that she was repeatedly assured that her investment was risk-free or minimally risky, that specific safeguards (whether in the form of security, guarantees, or regulatory compliance) were in place, and that the defendants would personally ensure repayment. She says that adverse information such as the true financial position of the corporate defendant, existing liabilities, or the absence of genuine security was never disclosed.

In assessing fraud, the court must separate hindsight from contemporaneous reality. Loss alone does not prove deceit. The inquiry is: what was said, what was known, and what was intended at the time the representations were made?

If the evidence shows that the defendants knew, at the time of their assurances, that the corporate vehicle was already insolvent or heavily encumbered, that no real security existed, or that they had no intention of honouring the promised protections, then the case falls squarely within s 17(c) and (d): promises made without intention to perform, and acts fitted to deceive.

Similarly, if material facts—such as ongoing litigation, regulatory warnings, or internal decisions to divert funds—were deliberately withheld while the defendants painted a picture of safety and reliability, that is "active concealment" within s 17(b). Silence can be fraudulent where there is a duty to speak, or where the silence is part of a calculated scheme to mislead.

The court must also examine the plaintiff's reliance. Did she, in truth, place weight on the defendants' assurances, or was she an experienced investor who understood and accepted the risks regardless of what was said? The more sophisticated the plaintiff, the more carefully the court will scrutinise claims of blind reliance; but sophistication does not immunise a person against fraud. Even seasoned parties can be deceived by deliberate falsehoods.

Where documentary records messages, emails, term sheets corroborate the plaintiff's account of what was promised, and where contemporaneous conduct (such as the defendants' immediate diversion of funds or failure to implement the promised safeguards) aligns with an inference of dishonesty, the evidential picture may reach the threshold of cogent proof required for fraud.

Conversely, if the alleged representations are vague, unrecorded, or inconsistent with the written documents, and if the defendants' explanation—that they spoke in general terms about commercial risk, not guarantees is plausible, the court must be slow to label the conduct as fraudulent. The law does not convert every optimistic statement or failed prediction into deceit.

In Keller, the Federal Court was satisfied that the defendant, Tony Ong, had made specific, untrue assurances to induce the plaintiff to enter into the contract, and that he structured corporate entities to evade payment once the works were done. The court held that: "The plaintiff enjoyed a legal right against Tony Ong, who was in control of PS Bina, which existed independently of the company's involvement... PS Bina was formed so that its separate legal personality would defeat or frustrate the plaintiff's rights... If so, then the court was entitled to pierce the corporate veil."

The present case, while factually different, engages the same principle: if the defendants used contractual forms or corporate structures as instruments of deception promising one thing to the plaintiff while intending another the court is entitled, and indeed obliged, to look beyond the surface and to hold the true actors personally accountable.

Ultimately, the court's task is not to punish commercial misjudgment, but to identify and remedy deceit. If, on a careful review of the evidence, the plaintiff's account of specific false representations, deliberate concealment, and hollow promises is more coherent, consistent and supported than the defendants' denials, then the balance of probabilities favours a finding of fraudulent misrepresentation.

In that event, following Keller, Takako Sakao and Lazarus Estates (supra), the court cannot permit the defendants to retain any advantage obtained through such fraud. The appropriate relief whether rescission, restitution, damages, or personal liability notwithstanding corporate forms must be fashioned to unwind the deceit and restore the plaintiff, as far as money can do, to the position she would have occupied had the fraud not occurred. ANALYSIS OF ISSUE 1: WAS THERE FRAUDULENT MISREPRESENTATION? The Plaintiff's case

The starting point is Section 17 of the Contracts Act 1950. Plaintiff's claim for fraudulent misrepresentation is statutorily governed by Section 17 Of The Contracts Act 1950: Section 17. "Fraud" includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:

(a) the suggestion, as to a fact, of that which is not true by one who does not believe it to be true;

(b) the active concealment of a fact by one having knowledge or belief of the fact;

(c) a promise made without any intention of performing it;

(d) any other act fitted to deceive; and

(e) any such act or omission as the law specially declares to be fraudulent.

Whereas, Misrepresentation is highlighted in the Section 18 Of The Contracts Act: - Section 18. "Misrepresentation" includes—

(a) the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;

(b) any breach of duty which, without an intent to deceive, gives an advantage to the person committing it, or anyone claiming under him, by misleading another to his prejudice, or to the prejudice of anyone claiming under him; and

(c) causing, however innocently, a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement.

On the Plaintiff's pleaded case, two limbs are immediately engaged: (i) a suggestion of fact which is untrue and not believed to be true, and (ii) an act "fitted to deceive".

In Mohd Pancha Bin Abdullah & Anor V Tham Kut Cheong & Anor [2011] 7 MLJ 382, where Abdul Aziz Rahim J held: - " [93] Next, can one say the first defendant is guilty of fraudulent misrepresentation against the plaintiffs. [94] Section 17 of the Contracts Act 1950 defines 'fraud' to include any of the acts specified paras (a) - (e) of that section, done by one party with intent to deceive another party or to induce that other party to enter into a contract. Two of the acts mentioned are relevant. They are paras (c) and (d). Paragraph (c) of s 17, refer to 'suggestion as to a fact of that which is not true by one who does not believe it to be true'; and para (d) refer to 'the active concealment of a fact by one having knowledge of belief of the fact'."

The allegation is that the $ 2^{\mathrm{nd}} $ Defendant painted a picture of ISB as an experienced logging operator, when in truth it had no such track record, and that this false picture was used to draw the Plaintiff into parting with RM2 million.

The burden of proof rests squarely on the Plaintiff under Section 101 of the Evidence Act 1950. She must establish fraud on a balance of probabilities, but with evidence that is clear, cogent and convincing, commensurate with the gravity of the allegation.

Fraud is not presumed; it must be proved. At the same time, it is well-settled that fraud is often proved by inference from a constellation of facts rather than by a single "smoking gun".

In Ong Leong Chiou & Anor v Keller (M) Sdn Bhd & Ors [2021]3MLJ622, the Federal Court reaffirmed the fundamental principle that fraud "unravels everything". Where a party induces another into a contract through false representations, liability arises independently of the written contract; the wrongdoer cannot shelter behind the four corners of the document. The court in Keller (supra) treated the fraudulent inducement as giving rise to personal liability, separate from the corporate structures interposed to evade payment. That approach is consistent with Takako Sakao and Lazarus Estates Ltd (supra)

These authorities collectively underscore a simple but stern proposition: once fraud is proved, the law will not permit the wrongdoer to retain the fruits of that deceit.

(A) The alleged representation on logging experience

The Plaintiff's evidence is that the $ 2 ^{n d} $ represented that ISB had prior logging experience and had successfully undertaken several logging projects. This was not a peripheral remark; it went to the heart of risk assessment. A reasonable investor deciding whether to inject RM2 million into a logging venture would naturally be concerned with the operator's competence, track record and capacity to execute.

During cross-examination, the Plaintiff (WP1) gave clear and consistent evidence regarding the nature of the representations made to her prior to the execution of the PVA. She testified that the $ 2^{\mathrm{nd}} $ Defendant had positively represented that she possessed prior experience in timber logging and had successfully undertaken several logging projects.

WP1 maintained this position even when pressed repeatedly by counsel. Although she could not identify the specific projects allegedly completed, she was firm that the Defendants had "convince[d]" her that such experience existed. Her evidence on this point was unwavering.

Thus, it is my considered view that these representations of seasoned logging expertise were a central inducement that led her to enter into the PVA. The venture involved substantial capital outlay and operational risk; assurances of prior experience and operational capability were therefore material to her decision.

However, when the $ 2^{\mathrm{nd}} $ Defendant (WD2) was confronted under cross-examination, her testimony stood in stark contrast to the representations described by WP1. WD2 made a candid and unqualified admission that she had no experience whatsoever in timber logging. She explained that her professional background was limited to operating a driving school in Kelantan and that she had never undertaken any logging operations. She further acknowledged that she had to "cari orang yang ada expertise" because she herself lacked the necessary knowledge and capacity. Her admission that "pengalaman membalak saya tak ada" was unequivocal.

These admissions, are fatal to the Defendants' case. Applying the principle in Mohd Pancha (supra), a party commits fraudulent misrepresentation when making a positive assertion of fact that is not warranted by the information in their possession. The $ 2 ^{n d} $ Defendant knew, at all material times, that she had no logging background, no project history, and no operational capacity to support the representations made to the Plaintiff. Her own testimony confirms that the assurances given were wholly unfounded.

In the Court's assessment, the Plaintiff's evidence on inducement was coherent and consistent, while the $ 2^{\mathrm{nd}} $ Defendant's admissions under oath dismantled the credibility of the Defendants' position. The evidential record supports the conclusion that the Plaintiff was induced to enter the PVA by representations that were materially false and unwarranted.

On the Plaintiff's version, she relied on this representation in deciding to invest. If, as she alleges, ISB in fact had no such experience, the representation is not merely inaccurate; it is a suggestion of a fact which is untrue within Section 17(a). The critical question then becomes: was it also not believed to be true by the $ 2^{n d} $ Defendant at the time it was made?

That state of mind must be inferred from the surrounding circumstances. If the evidence shows that ISB was newly incorporated, had no prior logging contracts, no technical team, no equipment, and no objective basis to claim a "successful" logging history, then the court is entitled to infer that the $ 2 ^{n d} $ Defendant knew the representation was false or was recklessly indifferent to its truth. In fraud, reckless indifference is as culpable as conscious falsity.

The Plaintiff's reliance is also material. She is not a logging operator; she was entitled to rely on the $ 2^{n d} $ Defendant's superior knowledge of ISB's business. There is no suggestion that she had independent means of verifying ISB's alleged track record.

In such a relational context, the representor cannot later say that the representee should have "checked for herself" when the very purpose of the representation was to secure her confidence.

Thus, once this material misrepresentation is proved, the legal burden shifts entirely to the Defendants to show that the Plaintiff did not rely on it. As held by the Court of Appeal in Sim Thong Realty Sdn Bhd V Teh Kim Dar @ Tee Kim [2003] 3 MLJ 460 "As a general rule, the burden is on a representee to show that the misrepresentation induced him to enter into the contract (see Kuppuswami Chettiar v Arumugam Chettiar AIR 1967 SC 1395. But this general rule should not be taken too far. This is because in a particular case: Where the defendant has made a material misrepresentation calculated to induce the plaintiff to act as he or she has acted, and where the loss is consistent with the plaintiff having acted on the misrepresentations alleged, the legal burden of proof shifts to the defendant to prove that the plaintiff did not rely, at all, on the misrepresentation (per Finch J in Sidhu Estate v Bains [(1996-06-07) BCCA V02469],citing Anderson JA in Parallels Restaurant Ltd v Yeung's Enterprises Ltd (1990), 4 CCLT (2d) 59. See also, Redgrave v Hurd [1881] 20 ChD 1. Put another way, a misrepresentation is innocent 'where the representor believes his assertion to be true and consequently has no intention of deceiving the representee.' (Chesire & Fifoot, Law of Contract (6th Ed)). It is the particular state of mind of the representor that determines the nature of the remedy available to the representee. So, if the misrepresentation is made fraudulently, then the representee is entitled to rescission and all damages directly flowing from the fraudulent inducement.

The principles in Sim Thong Realty (supra) on the shifting evidential burden are applied to the present facts, the Defendants' case cannot stand. The Plaintiff has established that the Defendants made a material and central misrepresentation concerning their alleged expertise in commercial timber logging operations.

The substantial financial loss of RM2,137,011.80 is entirely consistent with the Plaintiff having acted in reliance on that misrepresentation. In these circumstances, the evidential burden shifts to the Defendants to demonstrate that the Plaintiff did not rely on their representations. The Defendants, however, produced no credible evidence—whether documentary or testimonial to rebut reliance. Their silence on this critical issue is fatal.

Consequently, the PVA is vitiated by fraudulent inducement. The misrepresentation went to the very foundation of the agreement, and the Plaintiff's investment was made in the belief that the Defendants possessed the operational capacity and experience they claimed to have. The Plaintiff was left to shoulder the entire financial risk of a project that was structurally unsound from the outset, owing to the 2 $ ^{nd} $ Defendant's lack of expertise and the misrepresentations that shaped the formation and direction of the PVA.

On the measure of damages, the Plaintiff relies on the Court of Appeal's endorsement in Sim Thong Realty (supra) of Lord Denning MR's formulation in Doyle v Olby (Ironmongers) Ltd. (1969) 2 All ER 119.

In cases of fraud, the Defendant must make full reparation for all losses directly flowing from the fraudulent inducement. Unlike contractual damages, which are confined to what was within the contemplation of the parties, damages in fraud are not so limited. A defrauded party is entitled to recover the full extent of the loss suffered because of entering the transaction, including the money paid and any additional expenses incurred in attempting to carry out the venture.

The circumstances in the present case, align closely with the principles in Doyle. The Plaintiff would not have entered the PVA but for the Defendants' representations. She invested RM2,137,011.80, all of which was lost. She was then compelled to expend further resources attempting to salvage a project that was destined to fail due to the Defendants' lack of expertise and the absence of the operational capacity they had claimed to possess. The loss suffered is the direct and foreseeable consequence of the fraudulent inducement, and the Plaintiff is entitled to full restitution.

(B) The WhatsApp message: "kita anggap kita keluarkan 2j tapi kita satu sen tak kuar..."

The Plaintiff places particular emphasis on Exhibit P114, a WhatsApp message from the $ 2 ^{n d} $ Defendant stating: "kita anggap kita keluarkan 2j tapi kita satu sen tak kuar... jangan pecah bab duit ke Natasha."

Read in isolation, the message already raises concern. Read in context-after the Plaintiff had injected RM2 million into the venture it takes on a more troubling complexion. The phrase "kita anggap kita keluarkan 2j tapi kita satu sen tak kuar" suggests a conscious structuring of the arrangement so that "we" appear to have contributed RM2 million, when in reality "we" have not put in a single cent. The admonition "jangan pecah bab duit ke Natasha" is a direction to keep this financial reality concealed from the Plaintiff.

This is not the language of an honest commercial partner. It is the language of someone who knows there is a material truth about the funding structure which must be hidden from the very person whose money is being used.

That, in my view, is active concealment within Section 17(b) of the Contract Act 1950: a deliberate suppression of a material fact which the $ 2^{\mathrm{nd}} $ Defendant was under a duty to disclose, given the fiduciary-like trust he had invited the Plaintiff to repose in him.

The message clearly represents a direct and unequivocal expression of fraudulent intent within the meaning of Section 17 of the Contracts Act 1950. The Plaintiff poses the threshold question: if such a deliberate directive to fabricate a financial contribution and to conceal the truth from an investor does not constitute an actionable intention to deceive, it is difficult to conceive what would.

This was not a post-contractual complaint or an ambiguous remark. It was an instruction issued during the subsistence of the venture, aimed at maintaining a false financial narrative and suppressing material information that the Plaintiff was entitled to know.

The message reveals a conscious plan to mislead the Plaintiff regarding the Defendants' contribution and participation in the project.

The Defendants' submissions do not meaningfully address this evidence. Their silence leaves the message unchallenged and its implications unrefuted. Thus, at this juncture, the Court is both legally and equitably bound to treat this communication as a clear admission of fraudulent intent. It demonstrates active concealment and deliberate deception-conduct that falls squarely within the statutory definition of fraud under Section 17.

The message also supports an inference that the $ 2^{\mathrm{nd}} $ Defendant never intended to contribute capital as represented. If, prior to or at the time of the Plaintiff's investment, he had represented that he or ISB would "match" or "share" the financial risk, but in truth always intended to structure matters so that only the Plaintiff's funds were at stake, then any such promise would fall squarely within Section 17(c): a promise made without any intention of performing it.

In Keller(supra), the Federal Court treated similar documentary and circumstantial evidence—letters, conduct, and the restructuring of companies as revealing a pre-planned scheme to obtain work without paying for it.

Here, Exhibit P114 is a contemporaneous, self-authored record of the $ 2^{n d} $ Defendant's thinking. It is difficult to reconcile that message with a narrative of good faith and transparency.

(C) Standard of proof and overall evaluation

The court does not lightly make a finding of fraud. The Plaintiff's testimony must be weighed against the $ 2^{\mathrm{nd}} $ Defendant's explanation, if any, and against the objective documents.

If the $ 2^{\mathrm{nd}} $ Defendant offers no credible alternative meaning to Exhibit P114, or fails to explain why the alleged logging "experience" was asserted when none existed, the evidential balance begins to tilt.

The combination of:

(i) a specific representation of prior logging success,

Applying the principles in Keller, Takako Sakao and Lazarus Estates (supra), I am satisfied that, if these facts are accepted, the Plaintiff has discharged her burden on a balance of probabilities with the requisite degree of cogency.

The representation as to ISB's logging experience was untrue and not honestly believed; the funding structure was actively concealed; and the WhatsApp message is a telling admission of a scheme to let the Plaintiff's money do all the work while preserving the appearance of shared contribution.

In such circumstances, the law will not permit the $ 2 ^{n d} $ Defendant to retain any advantage obtained through this deceit. Fraud, once established, unravels the contractual and transactional fabric built upon it. The Plaintiff's consent to invest RM2 million was vitiated by fraudulent misrepresentation within Section 17 of the Contracts Act 1950, and liability arises independently of any written documentation that might otherwise be relied upon as a shield. The Defendants' case

The $ 2^{\mathrm{nd}} $ Defendant's cross-examination is telling. He accepted: "Saya memang tak ada pengalaman... saya mengajar di sekolah memandu... pengalaman membalak saya tak ada."

This admission is stark. Whatever may be said about entrepreneurial spirit or willingness to learn, it is the polar opposite of "prior logging experience" and "successful logging projects". If such representations were made, they were untrue and known to be untrue.

The Defendants attempt to shift the narrative by pointing to Recital D of the PVA, which they say reflects the Plaintiff's own representation of expertise. Even if Recital D records that the Plaintiff brought certain knowledge or contacts, that does not answer the separate question: what did the Defendants themselves represent about ISB's experience?

Contractual recitals are not talismans. As Keller (supra) makes clear, liability for fraudulent inducement arises independently of the written contract. A party cannot escape responsibility for pre-contractual deceit by pointing to a recital that casts the other party in a sophisticated light. The question remains: did the Defendants tell the truth about themselves?

As for P114, the Defendants say it is taken out of context. But they have not provided a coherent alternative explanation consistent with good faith. If the message was innocent, one would expect a clear narrative: what "2j" was being "considered" as paid, why "satu sen tak kuar", and why the Plaintiff was not to be told. The absence of a credible, detailed context weighs heavily against them. Application of the law to the facts

On the evidence, four elements of fraudulent misrepresentation emerge. First, there was a representation of fact.

The Plaintiff's testimony that the Second Defendant represented ISB as having prior logging experience and successful projects is not inherently improbable. It fits the commercial context: a promoter seeking capital will naturally emphasise track record. The Second Defendant's own admission of having "pengalaman membalak saya tak ada" confirms that, at the very least, he knew he personally had no such experience. Second, the representation was untrue and not believed to be true.

The Defendants have not identified any genuine logging projects previously undertaken by ISB or by the Second Defendant in any meaningful capacity. There is no documentary trail—no prior contracts, licences, or performance records consistent with the alleged experience. In the face of this vacuum, the admission in cross-examination is decisive. Third, there was active concealment and an act fitted to deceive.

P114 is powerful contemporaneous evidence. It shows a deliberate plan to create the impression of a RM2 million contribution by the Defendants without any real outlay, coupled with an instruction to keep this from the Plaintiff. That is not mere non-disclosure; it is active management of information to mislead a co-venturer about the true capital structure. Fourth, there was reliance and causation.

The Plaintiff's decision to invest RM2 million was plainly influenced by her belief that she was joining an experienced operator who was also putting in substantial capital. Had she known that (a) the $ 2^{nd} $ Defendant had no logging experience, and (b) the Defendants were not in fact putting in the RM2 million they portrayed, it is difficult to see how a reasonable investor in her position would have proceeded on the same terms.

The Defendants' reliance on Recital D does not break the chain of causation. Even if the Plaintiff projected some expertise, that does not neutralise the Defendants' own misstatements.

As Takako Sakao (supra) reminds us, the focus is on whether the Plaintiff's consent was vitiated by the Defendants' fraud. Here, the combination of false assurances about experience and concealed non-contribution of capital goes directly to the Plaintiff's consent.

Nor can the Defendants seek refuge in the PVA's contractual framework. Keller (supra) teaches that where a party is induced into a contract by fraud, liability arises independently of the written terms. The court will not permit the wrongdoer to say, in effect, "whatever I told you before is irrelevant; you signed the contract." That would be to allow fraud to hide behind form.

Finally, the evidential threshold is met. Fraud must be proved on a balance of probabilities, with careful scrutiny. Here, we have: - (a) Clear oral evidence of specific representations about experience; - (b) A candid admission of no logging experience; - (c) A contemporaneous WhatsApp message revealing concealment about capital contribution; and - (d) An absence of any credible alternative narrative.

When these strands are woven together, the picture is not of a mere failed venture but of a venture launched on a false premise, with the Plaintiff's money at risk and the Defendants' own exposure minimised and concealed.

I therefore find, on a balance of probabilities and with the heightened scrutiny appropriate to allegations of fraud, that the Plaintiff has established fraudulent misrepresentation within s 17 of the Contracts Act 1950.

The $ 2^{\mathrm{nd}} $ Defendant knowingly misrepresented ISB's logging experience and concealed the true position on capital contribution, intending that the Plaintiff rely on those matters. The Plaintiff did so rely and suffered loss.

Consistent with Keller, Takako Sakao and Lazarus Estates (supra), the court cannot allow the Defendants to retain any advantage obtained through that fraud. The contractual structure and recitals do not sanitise what was, at its core, a deceitful inducement. ISSUE 2: DID THE FIRST DEFENDANT BREACH THE PVA?

The PVA expressly required the $ 1^{\mathrm{st}} $ Defendant to secure the necessary approvals and the logging licence within two (2) months from the date of the agreement (Clause 3.1.3). Clause 3.1.3 A letter of approval by the Authority including the Forestry Department to commence logging activities on the Land and/or Logging Area in the favour of the Principal and/or ISB shall be obtained by The First Defendant;

This was not a peripheral obligation. It was a condition precedent, forming the structural foundation upon which the entire venture rested. Without the licence, no logging could commence, no revenue could be generated, and the Plaintiff's RM2 million working capital remained exposed and idle.

The evidence is undisputed: the licence was only obtained on 15.6.2018, approximately 7 months late. This was not a minor administrative slippage. It was a delay of such magnitude that, in ordinary commercial logic, it would have entitled the Plaintiff to terminate the PVA under Clause 3.4 and demand a refund of her investment. Clause 3.4 In the event that any or all the Conditions Precedent are not fulfilled or waived on or before the expiry of the Extended Conditions Precedent Period, and no further extension of time has been agreed by the Parties for the fulfilment of the Conditions Precedent, then any Party may terminate this Agreement whereby ISB shall refund the initial Working Capital to NMI and all other moneys paid and/or advance by NMI for the Project free of interest;

The Defendants themselves admitted the delay. WD2 (Noor Haslina) conceded that she had no experience in logging and had to "learn as she went", which inevitably contributed to the prolonged delay.

WD3 (Bahri) confirmed he did not participate in the licensing process at all, choosing to wait in the car park due to concerns about public perception. The evidence paints a picture of a company structurally incapable of meeting the contractual timeline.

The Defendants argue that the Plaintiff waived her rights under Section 56(3) of the Contracts Act 1950 by continuing with the project after the licence was eventually issued. They submit that since the Plaintiff did not terminate the PVA immediately upon expiry of the two-month period, she is now estopped from complaining about the delay. This argument, however, collapses under scrutiny.

The Court of Appeal in Parkwell Departmental Store Sdn Bhd V Icsd Ventures Sdn Bhd [2021] 1 MLJ 60: - " [25] The interpretation of the terms of a commercial contract must be done such as to give business efficacy. The doctrine of purposive construction of contracts entails that in the construction of a contractual term there must be ascribed to the words a meaning that would make good commercial or business sense. In this regard, the duty of the court is to construe the words used in the contract to give business efficacy to the bargain between the parties, rather than to strike down the words as bearing no meaning or an obtuse literal meaning. Every word used in the contract must be presumed to be used by the parties intentionally and for a purpose, and the words must be given their plain and ordinary meaning. If the terms or words used can be given a meaning that would accord with the purpose for which the term is contained in the contract, then a purposive construction must be made to give effect to it. [28] The purpose of interpretation, as Lord Steryn observed in Equitable Life Assurance Society v Hyman [2002] 1 AC 408, 'is to assign to the language of the text the most appropriate meaning which the words can legitimately bear'. That principle was reiterated by the Federal Court in SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor [2016] 1 MLJ 464; [2016] 1 CLJ 177, where Zainun Ali FCJ held as follows: [34] Where the natural meaning of the contract is not clear and in the particular absence of words to the effect mentioned above, the principles in ICS in their qualified form (see [28] which qualifies its application vis a vis rectification), remain applicable and relevant to the construction of the construct such as to enable the court to objectively determine 'the meaning which the contract would convey to a reasonable person having all the background knowledge ... available to the parties'. [35] The principles of Lord Hoffman were summarised in Berjaya Times Square Sdn Bhd (formerly known as Berjaya Ditan Sdn Bhd) v M Concept Sdn Bhd [2010] 1 MLJ 597 at p 620G; [2010] 1 CLJ 269 at p 296. Gopal Sri Ram FCJ, who delivered the leading judgment of the court stated: Here it is important to bear in mind that a contract is to be interpreted in accordance with the following guidelines. First, a court interpreting a private contract is not confined to the four corners of the document. It is entitled to look at the factual matrix which forms the background to the transaction. Second, the factual matrix which forms the background to the transaction includes all material that was reasonably available to the parties. Third, the interpreting court must disregard any part of the background that is declaratory of subjective intent only. Lastly, the court should adopt an objective approach when interpreting a private contract."

The Plaintiff's testimony was clear, consistent, and corroborated by contemporaneous conduct: she continued with the project only because the Defendants repeatedly assured her that the licence was "almost ready", "dalam proses", and "sikit lagi keluar". She testified that WD2 sent her photographs, updates, and verbal assurances to keep her invested and to prevent her from exercising her contractual right to terminate. This was not passive acquiescence. It was active inducement.

The Notes of Evidence show: - WP1: "Kami diberi harapan palsu... janji-janji manis... almost dapat... sabar sikit lagi." - WP1 further testified that she had already sunk substantial funds and felt compelled to continue because the Defendants represented that the licence was imminent.

These assurances were not denied by WD2. In fact, WD2 admitted under cross-examination that she had no experience and was struggling through the process yet continued to project confidence to the Plaintiff.

The clauses in the PVA clearly states as follows: Clause 7.1.1, 7.1.2 and 7.1.6 of the PVA: -

UNDERTAKINGS --- Undertaking by ISB

1.1 to assist in all matters particularly related to the administration, management and corporate matters of the Project including to liaise with the Principal and all authorities government departments and agencies including all Municipal/City Council and Department of Forestry;

1.2 to actively assist in the application of governmental or statutory approvals as set forth under Clause 6 hereof, whichever applicable to this Agreement, for the operation of the Project; and Undertaking by NMI

1.6 to assist generally in procuring all the governmental or statutory approvals as set forth under Clause 6 hereof, whichever applicable to this Agreement, for the operation of the Project;

The wording of Clause 7.1.2 is deliberate and meaningful. The inclusion of the adverb "actively" is not surplusage; it imposes on the $ 1^{\mathrm{st}} $ Defendant a proactive and continuous obligation to secure the necessary governmental approvals.

As the concessionaire holding the primary licence and exercising full operational control, the $ 1^{\mathrm{st}} $ Defendant bears the primary responsibility for ensuring regulatory compliance. Its duty is not passive or reactive it requires diligence, initiative, and sustained engagement with the relevant authorities.

In contrast, the Plaintiff's obligation under Clause 7.1.6 to "assist generally" is ancillary. It does not transfer or dilute the $ 1^{\mathrm{st}} $ Defendant's core responsibility for obtaining approvals. The Plaintiff's role is supportive, not determinative.

The structure of the PVA reflects this division of responsibility: the party with the licence and operational authority must lead the regulatory process, while the investor provides general assistance where appropriate.

The Plaintiff further relies on the business efficacy principle articulated in Parkwell (supra). A timber extraction venture is inherently time-sensitive and heavily regulated. If the $ 1^{\mathrm{st}} $ Defendant's interpretation were accepted namely, that responsibility for approvals was shared or ambiguous the PVA would lose commercial coherence.

The project would be reduced to an open-ended arrangement with no clear allocation of regulatory responsibility, a result the parties could not reasonably have intended. Business efficacy requires that the 1 $ ^{st} $ Defendant, as the licence holder and operational lead, carry the primary burden of securing approvals.

The Plaintiff maintains that she did, in fact, render assistance in the licensing process. Under cross-examination, WP1 rejected the suggestion that she had refused or failed to assist. She testified that her staff and her husband made repeated visits to the Forestry Department to expedite the licence, and that she provided logistical and financial support for these efforts.

Her evidence was that she assisted within the limits of her role, but the responsibility for the application remained with the First Defendant as the licence holder. The "active" duty imposed on the $ ^{1} \mathrm{st} $ Defendant under Clause 7.1.2 is the operational core of the PVA.

When that duty remained unfulfilled for seven months, the project could not function. The $ 1^{\mathrm{st}} $ Defendant cannot shift responsibility by invoking the Plaintiff's ancillary obligation to "assist generally" under Clause 7.1.6.

In determining commercial efficacy, the Court must consider which party possessed the authority and control necessary to discharge the obligation. As the concessionaire and the party in whose name the licence was issued, the $ 1^{\mathrm{st}} $ Defendant alone had the capacity to perform the "active" duty.

Applying the principles in Parkwell (supra), Clauses 7.1.2 and 7.1.6 must be interpreted in a manner that gives business efficacy to the PVA. A timber extraction venture is time-sensitive and regulatory-driven. The parties could not have intended an arrangement where the investor bore responsibility for obtaining approvals that only the licence holder could secure. The only interpretation that renders the contract workable is one that places the primary obligation on the 1 $ ^{st} $ Defendant.

It is my considered view that the Defendants had acted in bad faith by frustrating the completion of the project. WP1's evidence was that the PVA had a one-year validity period, ending on 12 November 2018, and that no extension was sought by the Defendants.

She explained that once the contract expired, she no longer had authority to sell timber and therefore could not accept proposals to dispose of the felled logs. Her position was that the Defendants' failure to extend the contract, coupled with the delayed licence issuance, deprived her of the opportunity to complete the sale of timber felled during the contractual period.

When confronted with the allegation that she had accused the Defendants of "stealing" timber after the expiry of the PVA,WP1 clarified that the logs in question were felled during the contractual period and therefore formed part of the joint venture's assets.

Any unilateral sale without her knowledge, she said, amounted to wrongful appropriation. She rejected the suggestion that she had obstructed the project or refused reasonable proposals, maintaining instead that she lacked the legal authority to proceed once the PVA had lapsed.

In summary, the Plaintiff's evidence is that the $ 1^{\mathrm{st}} $ Defendant's failure to perform its primary obligations under the PVA, coupled with its refusal to extend the contract, effectively prevented the completion of the project and deprived her of the benefit of the venture.

The Court accepts the Plaintiff's explanation. A party cannot rely on Section 56(3) CA 1950 when the very delay was caused or prolonged by its own misrepresentations, half-truths, and strategic reassurances. The law does not permit a party to:

Cause a delay,

Induce the innocent party to tolerate the delay, and then

Use that induced tolerance as a shield against liability.

This principle is consistent with: - Boustead Trading v Arab-Malaysian Merchant Bank [1995] 3 MLJ 331 - a party cannot rely on its own default to defeat the other party's rights. "The width of the doctrine has been summed up by Lord Denning in the Amalgamated Investment case ([1982] 1 QB 84 at p 122; [1981] 3 All ER 577 at p 584; [1981] 3 WLR 565 at p 575) as follows: The doctrine of estoppel is one of the most flexible and useful in the armoury of the law. But it has become overloaded with cases. That is why I have not gone through them all in this judgment. It has evolved during the last 150 years in a sequence of separate developments: proprietary estoppel, estoppel by representation of fact, estoppel by acquiescence, and promissory estoppel. At the same time it has been sought to be limited by a series of maxims: estoppel is only a rule of evidence, estoppel cannot give rise to a cause of action, estoppel cannot do away with the need for consideration, and so forth. All these can now be seen to merge into one general principle shorn of limitations. When the parties to a transaction proceed on the basis of an underlying assumption - either of fact or of law - whether due to misrepresentation or mistake makes no difference - on which they have conducted the dealings between them - neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so. If one of them does seek to go back on it, the courts will give the other such remedy as the equity of the case demands. (Emphasis added.) Lord Denning in WJ Alan & Co Ltd v El Nasr Export and Import Co [1972] 2 QB 189 said: 'If one party by his conduct, leads another to believe that the strict rights arising under the contract will not be insisted upon, intending that the other should act on that belief, and he does act on it, then the first party will not afterwards be allowed to insist on strict legal rights when it would be inequitable for him to do so." - Takako Sakao v Ng Pek Yuan [2009] 6 MLJ 751 - consent obtained through misrepresentation is not true consent. - Keller (Federal Court) - fraud or deception nullifies contractual protections.

The Defendants' reliance on Section 56(3) is therefore legally untenable.

Most critically, fraud vitiates waiver. If the Plaintiff's continued participation was induced by false assurances, then her conduct cannot amount to a voluntary waiver of rights. The Federal Court in Keller (supra) reaffirmed the timeless principle from Lazarus Estates v Beasley (supra): "No court will allow a person to keep an advantage obtained by fraud. Fraud unravels everything."

Thus, even if the Plaintiff had continued with the project, such continuation tainted by deception cannot be construed as a waiver. The Defendants cannot rely on Section 56(3) to escape liability for a delay they themselves caused and concealed.

Clause 4.3 of the PVA imposed a strict and non-negotiable obligation on the $ 1^{\mathrm{st}} $ Defendant to open a specific, dedicated bank account for the Project. This account was the financial backbone of the joint venture. It was designed to ensure: - transparency of all timber revenue; - proper accounting of expenses; - equal oversight by both parties; and - prevention of unilateral withdrawals or diversion of funds.

The clause required all revenue from the sale of timber to be deposited into this account, and withdrawals could only be made with the signatures of authorised representatives from both sides, including the Plaintiff's nominee. Clause 4.3 of the PVA states: - "4.3.2 ISB shall open a specific bank account for the Project with such bank as the Parties shall agree in accordance with such bank's standard mandate from (if necessary) and all revenue obtained from the sale of the timber/wood and/or logging activities shall be deposited therein. NMI's Director shall be one of the authorised compulsory signatory for all cheques issued under this bank account.

This was not a mere administrative formality. It was a core governance safeguard intended to protect the Plaintiff's RM2 million investment.

The Defendants admitted both in their witness statements and under cross-examination that this mandatory account was never opened, let alone operated.

The Notes of Evidence show: - WD2 accepted that no PVA account existed at any point during the project period. - WD2 further admitted that timber proceeds were handled "secara biasa" through other accounts or directly by individuals on the ground. - WD3 confirmed he had no involvement in financial oversight and left such matters entirely to WD2. - WD1, the company secretary, testified that he was never instructed to open any such account and that no board resolution was ever passed to establish it.

The Defendants' own submissions concede this point, attempting instead to minimise its significance by arguing that the Plaintiff's husband (WP2) was involved in sales and therefore "knew" how the money flowed. This argument is legally irrelevant. Knowledge of operational sales does not cure a contractual breach of a mandatory financial structure. The breach is undisputed.

This failure is not a technical or harmless omission. It is a clear, serious, and fundamental breach of the PVA.

Three reasons underscore its gravity:

(a) It destroyed the transparency mechanism the parties agreed upon

The failure to establish the mandatory PVA account fundamentally undermined the transparency framework the parties had agreed upon. The account was intended to serve as the central repository through which all timber revenue would be channelled, thereby ensuring that every sen received could be traced and verified.

In the absence of this account, the Plaintiff was deprived of any meaningful visibility over the core financial aspects of the venture, including the volume of logs sold, the prices obtained, the identity of purchasers, the revenue actually collected, and the expenses said to have been incurred.

Her evidence was that she repeatedly sought proper accounts but none were ever provided. This lack of disclosure is entirely consistent with the fact that the PVA account designed as the sole mechanism to ensure financial transparency was never opened or operated.

The Plaintiff's evidence was that she repeatedly asked for proper accounts but was given none. This is consistent with the absence of the PVA account.

(b) It enabled unilateral control of revenue by the Defendants

The failure to establish the PVA account enabled the Defendants to exercise unilateral control over all timber revenue, contrary to the express financial safeguards embedded in the agreement.

The evidence shows that WP2's role was confined to issuing delivery orders on the ground; he had no access to, or control over, any bank accounts, did not receive any proceeds from timber sales, and was not a signatory to any account operated by the $ ^{1 \mathrm{st}} $ Defendant.

In the absence of the mandatory PVA account intended to require joint signatories and shared oversight the Defendants retained exclusive dominion over all revenue generated from the project. This structural imbalance, created by the Defendants' own non-compliance, deprived the Plaintiff of the co-management and transparency protections the PVA was designed to guarantee.

(c) It undermined the profit-sharing and accounting provisions

Clause 10 required net profit to be determined by the Board. Clause 4.2 required a 50:50 sharing of profit. Clause 4.3 was the mechanism to ensure accurate calculation. Clause 4.3 The First Defendant shall open specific bank account for the Project with such bank as the Parties agree and all revenue obtained from the sale of the timber or wood and/or logging activities shall be deposited therein;

Without the PVA account, the entire profit-sharing structure collapsed. The Plaintiff was left entirely dependent on the Defendants' unilateral assertions of "losses", unsupported by audited accounts. This is precisely the mischief Clause 4.3 was designed to prevent.

The oral testimony elicited during cross-examination, which demonstrates that the Defendants' financial governance of the PVA was fundamentally inconsistent with the contractual framework the parties had agreed upon.

When confronted with the Defendants' assertion that the working capital accounts for 2017-2019 reflected contributions by both parties,WP1 firmly rejected the suggestion, maintaining that the accounts did not represent the true financial position.

As she stated, "Tidak setuju... tidak ada permintaan and by right untuk apply lesen sepatutnya pihak Defendan yang perlu uruskan"

The Plaintiff further relies on the testimony of WD2, who confirmed that a special project account was opened specifically for the PVA. WD2 stated, "memang serentak berlaku... untuk PVA ni lah... untuk JV ni kita buat akaun lain".

However, when asked why neither the Plaintiff's capital injections nor the alleged contributions of the $ 1^{\mathrm{st}} $ Defendant were deposited into the designated account, WD2 offered explanations that were inconsistent, evasive, and ultimately untenable.

She claimed that she had already spent funds prior to the PVA and therefore did not deposit monies into the project account, asserting, "saya dah keluar duit awal... macam mana saya nak pergi masuk kat situ" . This admission confirms that the mandatory financial structure of the PVA was disregarded from the outset.

The Plaintiff also highlights the significance of Exhibit P114, in which WD2 expressly wrote: "kita anggap kita keluarkan 2 juta tapi kita satu sen tak keluar. Semua Natasha keluarkan. Jangan pecah bab duit ke Natasha".

WD2 admitted the message was hers. Her subsequent attempt to explain it away as an effort to prevent third parties from approaching the Plaintiff for money does not withstand scrutiny. The written admission is clear, unequivocal, and directly contradicts her oral testimony. The inability of WD2 to provide a coherent explanation for this message strongly suggests deliberate concealment and a lack of candour.

Thus, WD2's reliance on "pre-PVA expenses" as justification for diverting funds is legally irrelevant. WD2 herself accepted that such expenses related to an oil palm venture between ISB and a third party, a project in which the Plaintiff had no involvement.

As WD2 conceded, "Setuju... Plaintif tidak terlibat dalam manamana 2 proses peladangan sawit". These admissions confirm that the $ 1^{\mathrm{st}} $ Defendant improperly treated the Plaintiff's capital as a means to sustain its own pre-existing commitments.

In these circumstances, the $ 1^{\mathrm{st}} $ Defendant's failure to maintain the special project account coupled with the diversion of funds and the written admission in P114 constitutes a fundamental breach of the PVA. The special account was a condition precedent and the financial backbone of the venture. Its absence rendered the PVA commercially unworkable and deprived the Plaintiff of the transparency and joint control expressly contemplated by the agreement.

Applying the principles in Parkwell (supra), the failure to maintain this financial infrastructure stripped the PVA of its business efficacy and undermined the very purpose for which it was executed.

From the above, I am of the view that WD2's testimony was doubtful as it is contradictory, unreliable, and inconsistent with her own written admission. The evidence establishes that the Plaintiff was the sole financier of the project, while the $ ^{1st} $ Defendant operated outside the contractual framework, concealed material financial information, and diverted funds for purposes unrelated to the PVA. These acts amount to a repudiatory breach entitling the Plaintiff to rescission and full restitution of the working capital advanced.

The Court finds, on the totality of the evidence, that the $ 1^{\mathrm{st}} $ Defendant's failure to open and operate the mandatory PVA account was not an inadvertent administrative lapse but a deliberate departure from the financial architecture agreed between the parties.

Clause 4.3 was inserted for a clear purpose: to ensure that all timber revenue would be channelled into a single, jointly-controlled account, thereby safeguarding transparency, enabling proper oversight, and preventing unilateral handling of project funds.

By choosing not to establish this account, the Defendants effectively dismantled the very mechanism designed to protect the Plaintiff's RM2 million investment. This omission deprived the Plaintiff of the contractual protections she bargained for.

Without the dedicated account, she had no visibility over the inflow of timber proceeds, no assurance that revenue was being properly recorded, and no ability to verify the Defendants' later assertion that the venture had suffered losses.

The evidence shows that timber sales were conducted informally, with proceeds handled through unspecified channels and without the Plaintiff's knowledge or participation. This created an environment in which the Defendants exercised exclusive control over project revenue, contrary to the express terms of the PVA.

The absence of the PVA account also meant that no proper accounting could be undertaken. The Defendants' reliance on draft, unaudited spreadsheets unsupported by bank statements or verifiable records underscored the consequences of their failure to comply with Clause 4.3.

The Plaintiff was left entirely dependent on the Defendants' unilateral assertions, with no contractual mechanism available to test or challenge those assertions. Such a state of affairs is fundamentally inconsistent with the joint-venture structure the parties agreed upon.

In these circumstances, the Court is satisfied that the failure to open and operate the PVA account constitutes a material breach going to the root of the agreement. It undermined the financial integrity of the venture, frustrated the Plaintiff's contractual rights, and enabled unilateral conduct that the PVA expressly sought to prevent. The breach is established on the Defendants' own admissions, and its consequences permeate the entire contractual relationship. Removal of timber without Plaintiff's consent

The evidence shows that on $ 13^{\mathrm{th}} $ and $ 14^{\mathrm{th}} $ November 2018, lorries entered the project site and removed timber without the Plaintiff's knowledge or participation. The Plaintiff reacted immediately by lodging police reports, a step she would not have taken lightly. Her promptness is consistent with her position that the removal was unauthorised and contrary to the PVA.

The evidence reflects her testimony that she was "shocked" to learn of the removals and that she had never signed any delivery order or release document for those logs. Her reaction was not manufactured; it was the natural response of a party who believed her contractual rights were being bypassed.

On the other hand, the Defendants' primary justification is that the PVA had expired on 12.11.2018, and therefore they were free to deal with the timber thereafter. This argument is superficial and ignores the broader factual context.

The Plaintiff had on 12.11.2018, issued a formal notice expressly affirming the PVA and demanding specific performance. The Defendants were fully aware that the Plaintiff did not accept the PVA as terminated.

In such circumstances, the Defendants could not unilaterally treat the contract as extinguished and proceed to remove timber the very next day. Their reliance on the expiry date is therefore opportunistic and inconsistent with the principle that a party cannot take advantage of a disputed termination to justify self-help measures.

The timing of the removal is particularly troubling. The lorries arrived immediately after the Plaintiff's notice was issued. This sequence of events strongly suggests that the Defendants acted in haste to extract timber before the Plaintiff could assert control or seek injunctive relief.

The Court finds this timing significant. It is improbable that the removal was coincidental; it aligns more closely with a deliberate attempt to pre-empt the Plaintiff's assertion of rights under the PVA. Clauses 9.1 and 9.2: The price of the woods or timber to be offered to the buyer shall be mutually decided by the Board, consisting of Plaintiff and any note of release or sale shall be signed and/or executed by at least two (2) persons in which one of the shall be among the individuals appointed and/or authorized by Plaintiff.

Clauses 9 of the PVA required that all timber removals be jointly authorised, with signatures from both parties. This safeguard was inserted to prevent unilateral dealings with project assets.

In the instant case, the Defendants did not produce a single document delivery order, removal slip, or weighbridge ticket bearing the Plaintiff's signature. Nor did they call any witness to testify that the Plaintiff had consented orally.

Their submissions merely assert that the PVA had expired, without addressing the contractual requirement for joint authorisation. The absence of documentary evidence is telling, especially when the Defendants were the parties in possession of such records, if they existed.

In these circumstances, the Court is satisfied that the removal of timber on $ 13^{\mathrm{th}} $ $ -14^{\mathrm{th}} $ November 2018 was carried out without the Plaintiff's consent, in breach of Clause 9 and in disregard of the Plaintiff's express affirmation of the PVA.

The Defendants' conduct deprived the Plaintiff of her contractual right to participate in and supervise the sale of timber, and it undermined the transparency and joint-venture structure that the PVA was designed to uphold. This constitutes a clear and material breach of the agreement.

At this juncture, I am satisfied that the $ 1^{\mathrm{st}} $ Defendant committed multiple breaches of the PVA, each of which strikes at the core obligations the parties had expressly agreed upon.

The delay of seven months in obtaining the logging licence, the complete failure to establish the mandatory PVA account, and the unilateral removal of timber without the Plaintiff's consent are not isolated lapses.

They form a pattern of conduct inconsistent with the transparency, joint control, and mutual accountability that the PVA was designed to secure. These breaches were not technical or peripheral; they undermined the very structure of the venture and deprived the Plaintiff of the contractual safeguards she relied upon when investing RM2 million.

In my considered view, these breaches collectively go to the root of the agreement. The PVA was premised on timely regulatory compliance, joint financial governance, and shared control over timber extraction and revenue.

When the $ 1^{\mathrm{st}} $ Defendant failed to meet these foundational obligations, the Plaintiff was left without the protections she had bargained for and without any meaningful ability to monitor or participate in the venture.

The cumulative effect of these breaches is to render the PVA fundamentally unperformed by the $ 1^{\mathrm{st}} $ Defendant. Thus, on this issue, my answer squarely in the Plaintiff's favour.

The Defendants' counterclaim rests on two WhatsApp messages in which the Plaintiff allegedly referred to the $ 3 ^{rd} $ Defendant as a "hantu raya" and expressed frustration by saying she would "viral" the matter.

These messages were exchanged within a small, closed WhatsApp group comprising individuals directly involved in the project. The Defendants contend that these words were defamatory and injured the $ 3^{rd} $ Defendant's reputation.

The Plaintiff, however, maintains that the messages were private, sent in the heat of a deteriorating business relationship, and never communicated beyond the confines of that group.

In Ayob Bin Saud v Ts Sambanthamurthi [1989] 1 MLJ 315 wherein it was held that the burden lies entirely upon the party asserting defamation to prove each of these elements on a balance of probabilities. In the present case, the $ 2^{n d} $ and $ 3^{r d} $ Defendants have failed to discharge this burden in respect of each and every element:- "Held, dismissing the claim:

The Plaintiff's position is supported by the surrounding circumstances. The WhatsApp group was not a public forum; it consisted of a handful of project participants who were already aware of the dispute and the tensions between the parties.

The Plaintiff testified that she never forwarded the messages to outsiders, never posted anything on social media, and never intended for the messages to circulate beyond the immediate group. Her evidence was consistent and unshaken. The Defendants produced no evidence to suggest that the messages were disseminated to any third party or that they reached the public domain.

Publication is an essential element of defamation. Without proof that the allegedly defamatory words were communicated to at least one person other than the Plaintiff and the Defendants, the tort cannot be made out.

The law does not concern itself with private quarrels or intemperate remarks exchanged within a closed circle.

It is only when such remarks escape into the public sphere and cause reputational harm that the law intervenes. In this case, the Defendants have not shown that the messages travelled beyond the private WhatsApp group.

This absence of publication is underscored by the $ 3^{\mathrm{rd}} $ Defendant's own admission under cross-examination. When asked whether any of the messages were ever "viralised" or circulated to the public, he replied candidly, "Saya tak tahu."

This admission is significant. If the alleged victim of defamation cannot say that the messages were ever published, the evidential foundation of the counterclaim collapses. The Defendants' submissions attempted to characterise the Plaintiff's words as inherently harmful, but without proof of publication, the law does not recognise a cause of action.

WP1 clarified under re-examination that the phrase "hantu raya" in the WhatsApp messages was not directed at the Second or Third Defendants, but at three employees of the First Defendant, namely Khairul, Romzi, and Zuraini. She explained that her message was a reminder of how, in earlier days when the Defendants were still fond of their staff, the Defendants themselves had used that term to describe those employees. This clarification was delivered clearly and without hesitation.

During cross-examination, counsel for the Defendants attempted to recast the message as an attack on the $ 2^{\mathrm{nd}} $ and $ 3^{\mathrm{rd}} $ Defendants. Counsel pointed to the surrounding text referencing "Dato dan Datin" and suggested that the term "hantu raya" must therefore refer to them.

WP1 disagreed. She maintained that the message, when read in full, referred to the Defendants' own past conversations in their internal WhatsApp group, where they had allegedly used the term "hantu raya" to describe their employees, not themselves.

She emphasised that her message was recounting what the Defendants had previously said, not labelling the Defendants personally.

The Defendants' counsel pressed the point, asserting that the Plaintiff was the one who had labelled the Defendants as "hantu raya". WP1 firmly rejected this suggestion. She reiterated that her message was contextual, recounting how the Defendants had once spoken about their staff, and that the phrase was not directed at the Defendants. Her explanation was coherent, consistent with the text of the message, and not shaken in cross-examination.

The Court notes that this evidence was not credibly contradicted. The Defendants did not produce any alternative interpretation grounded in the full text of the message, nor did they call any witness to rebut WP1's explanation of the context.

In the absence of such rebuttal, and given the clarity of WP1's testimony, the Court accepts her explanation as the more reliable account of the meaning and intended target of the phrase.

The Court therefore finds that there is no evidence whatsoever that the messages were communicated to any third party outside the private WhatsApp group. The Defendants did not produce screenshots showing further dissemination, did not call any witness who received the messages from someone other than the Plaintiff, and did not identify any platform on which the messages were allegedly "viralised", if any. The evidential record is silent on publication, and silence cannot satisfy the burden of proof.

Under Section 101 of the Evidence Act 1950, the burden lies squarely on the Defendants to prove each element of their counterclaim, including publication. They have not discharged that burden. Mere assertion is insufficient; the law requires proof. In the absence of such proof, the counterclaim cannot succeed. No Publication to a Third Party

The WhatsApp group in which the impugned messages appeared was a private, closed group comprising only individuals directly involved in the timber project. It was not a public forum, nor was it accessible to outsiders. This context is important because defamation requires publication to a third party, and private intra-group communications do not ordinarily satisfy that requirement.

During cross-examination, the Plaintiff's counsel put squarely to WD3 that there had been no publication, no "viral" dissemination, and no broadcast of any material concerning him. WD3 was unable to confirm that any such publication had occurred.

His response—"Saya tak tahu"—was repeated on two separate occasions, even after counsel clarified the question. WD3 ultimately accepted that he did not know whether anything had been published, shared, or circulated by the Plaintiff at all.

WD3's repeated response of "Saya tak tahu" is telling. A claimant who alleges defamation but cannot say whether publication ever occurred stands in the position of a person claiming his house was burned down while admitting he never saw smoke, never saw flames, and cannot say whether a fire happened at all. The law cannot act on shadows or speculation. Defamation requires a real fire actual publication not the mere fear that one might exist.

In legal terms, this evidential void is fatal. As established in Ayob bin Saud (supra), the burden lies firmly on the party asserting defamation to prove that the impugned words were communicated to at least one third party.

WD3's admission of ignorance repeated twice, even after clarification demonstrates that he cannot identify a single instance of dissemination, whether by forwarding, sharing, uploading, or any other mode of communication.

Without proof of publication, the tort does not arise. The counterclaim therefore collapses at the threshold, not because the words lacked sting, but because the essential element of publication was never established.

The Notes of Evidence reinforce this conclusion. When asked directly whether the Plaintiff had ever produced or attempted to "viral" any material about him, WD3 again replied, "Saya tak tahu." He later attempted to suggest that the message originated from the "Group Tebang Balak," but this did not advance the Defendants' case; it merely confirmed that he had no knowledge of any publication by the Plaintiff. When pressed further, he again conceded, "Saya tak tahu."

In the Court's assessment, this evidential vacuum is fatal. The Defendants have not shown that the allegedly defamatory words travelled beyond the private WhatsApp group. Without proof of publication, the tort of defamation cannot be made out. Under Section 101 of the Evidence Act 1950, the burden lies on the Defendants, and they have plainly failed to discharge it. Was There any Actual Damage Proven

The $ 3^{\mathrm{rd}} $ Defendant's own evidence on harm was notably limited. When asked directly about the impact of the impugned WhatsApp messages, WD3 confined his answer entirely to psychological discomfort, stating only that the matter affected him "dari segi psikologi."

He did not assert that his reputation had suffered in the eyes of any identifiable third party, nor did he claim that any colleague, superior, member of the public, or institution had viewed him differently because of the messages. His evidence stopped short of establishing reputational injury, which is the essence of defamation.

Under further cross-examination, WD3 expressly agreed that officers of the Malaysian Anti-Corruption Commission (SPRM) routinely face adverse public perception as part of the nature of their work. This concession is significant.

By acknowledging that negative public views are a general occupational reality, he effectively severed any causal link between the Plaintiff's private WhatsApp messages and any alleged harm to his reputation. If negative perception is already endemic to the role, the Defendants cannot attribute such perception to the Plaintiff's private remarks.

The Notes of Evidence reinforce this conclusion. When counsel pressed him on whether the Plaintiff's messages had resulted in any negative public reaction, WD3 repeatedly answered, "Saya tak tahu." He could not identify a single instance of publication, circulation, or public commentary arising from the messages.

He did not point to any disciplinary inquiry, public complaint, media report, or professional consequence. His evidence was, at its highest, that he felt personally distressed because his position was "sensitive." Personal anxiety, however genuine, does not constitute defamation in law.

The Plaintiff's submission is therefore well-founded: no particulars of reputational loss, financial loss, or any tangible adverse consequence were pleaded or proven. The Defendants have not shown that the messages caused any diminution in WD3's standing among third parties. This falls far short of the standard required under Ayob bin Saud (supra), which demands clear proof of publication and resulting harm. In the absence of such proof, the counterclaim cannot succeed. Absence of Malice

The impugned WhatsApp messages must be understood within their proper factual setting. The messages were exchanged within a private, closed WhatsApp group, comprising only individuals directly involved in the timber project.

They arose in the context of legitimate grievances concerning the Defendants' persistent failure to honour financial obligations owed to former employees of the 1 $ ^{st} $ Defendant. WP1 testified that these employees had repeatedly sought their entitlements through proper channels before the exchange occurred, and that the messages represented an expression of frustration within a confined and non-public environment. There is no evidence that the Plaintiff acted with malice or any deliberate intention to injure the reputation of either Defendant.

The $ 3^{\mathrm{rd}} $ Defendant's decision to lodge a police report does not alter the legal character of the communication. A private message, never disseminated beyond a closed group, does not become a defamatory publication merely because a recipient chooses to escalate it. The law requires publication by the alleged tortfeasor, not the subjective reaction of the complainant.

The Defendants have wholly failed to establish the essential elements of defamation as articulated in Ayob bin Saud (supra).

First, the phrase "hantu raya," when read in context, does not bear the defamatory meaning alleged and was not directed at the Defendants personally. Second, there is no evidence of publication to any third party outside the private group. Third, the Defendants have not proven any actual damage whether reputational, financial, or otherwise arising from the messages. No witness testified to any adverse perception, no documentary evidence was produced, and WD3 himself conceded that he did not know whether any publication had occurred.

In these circumstances, the counterclaim is wholly misconceived unsupported by the evidential record, and falls far short of the standard of proof required. It ought therefore to be dismissed with costs.

For these reasons, the Court concludes that the Defendants have failed to establish the essential elements of defamation. The counterclaim is therefore dismissed. Final Orders

For the reasons set out in this judgment, the Court makes the following orders:

Judgment is entered for the Plaintiff against the 1st Defendant. The 1st Defendant shall refund to the Plaintiff the sum of RM2,137,011.80, together with interest at 5% per annum from the date of filing of the writ until full settlement.

The 1st Defendant's counterclaim is dismissed.

The counterclaim by the 2nd and 3rd Defendants is likewise dismissed, the Court having found that the essential elements of defamation were not established.

Costs are awarded as follows:

(a) In respect of the Plaintiff's claim, costs of RM40,000 are to be paid by the 1st Defendant to the Plaintiff.

(b) In respect of the counterclaim by the 2nd and 3rd Defendants, the 2nd and 3rd Defendants shall bear the Plaintiff's costs of the counterclaim, which the Court assesses at RM10,000, to be paid jointly and severally. Closing Remarks

This case is a reminder that commercial honesty is not optional. When parties enter a venture involving millions of ringgit, trust is the currency that precedes capital. The Defendants sought to cloak their inexperience behind corporate structures and shifting narratives.

But as the Federal Court reminded us in Keller (supra), the law will not permit a party to retain an advantage obtained by fraud. The Plaintiff was entitled to rely on the representations made to her. She did so in good faith. The law must now restore her to the position she ought to have been in.

The Court records its appreciation to learned counsel for both the Plaintiff and the Defendant for their professionalism, courtesy, and focused advocacy throughout the trial, which materially assisted the Court in the fair and efficient disposal of the matter. Orders accordingly. Date: 29.7.2026 Judicial Commissioner High Court of Malaya Kuala Lumpur 71 PARTIES For the Plaintiff: Solicitor: Tengku Saiful Hisyam & Nurul Atiqah Isa Messrs Apandi Ali & Co. No.1, Jalan Dutamas Melor 1, Off Jalan Dutamas 5, Changkat Kiara Bayu 50480 Kuala Lumpur For the Defendant: Solicitor: Lua Kok Hiyong Messrs Lua & Mansor No.11-12, Jalan PJS 11/28 Bandar Sunway 46150 Petaling Jaya Selangor