Nytrex Global Sources Sdn Bhd v Daq Warehouse Sdn Bhd (BA-22NCC-39-03/2025)

DAQ WAREHOUSE SDN BHD

DAQ LOGISTICS SDN BHD (COMPANY NO.: 1124819-K / 201401048630) …DEFENDANTS

This is an application by the 2nd Defendant (D2) pursuant to Order 18, Rule 19 of the Rules of Court 2012 (ROC) to strike out the Plaintiff's claim on the grounds that it discloses no reasonable cause of action and is legally unsustainable.

After hearing both parties and considering the affidavits and written submissions filed, I allowed the application with costs. D2 now appeal to the Court of Appeal, and below are my grounds.

The Plaintiff’s claim arises from the destruction of goods allegedly stored pursuant to contractual arrangements involving the Defendants.

From the statement of claim, the Plaintiff’s pleaded cause of action concerns responsibility for storing the goods that were destroyed. The 1st Defendant (D1) is pleaded as the party responsible for providing this storage.

D2, on the Plaintiff’s own pleadings, is described as a logistics service provider, whose role was confined to the delivery and transportation of the goods.

In its pleadings and submissions, D2 has consistently characterised its role as that of a logistics service provider, engaged solely for the delivery and transportation of the goods, and not for the provision of storage or warehousing services. D2 maintains that the responsibility for the storage and safekeeping of the goods rested with D1.

It is also D2’s position that it did not, at any material time, assume custody, control, or responsibility for the storage of the goods that were ultimately destroyed. D2 further emphasises that its involvement was limited to operational logistics, and that any loss arising from the destruction of the goods could not, on the pleaded facts, be attributed to its role.

The Plaintiff seeks to implicate D2 on the basis that D2 issued invoices and accepted payments in relation to the transaction, and further contends that D1 and D2 should be treated as a single economic unit. D2 disputes this characterisation and asserts that such matters, without more, do not disclose any contractual or tortious liability on its part.

As submitted by D2, their grounds for this application are as follows:

D2’s role was limited to that of a logistics service provider responsible for delivery and transportation only, and not for the storage, warehousing or safekeeping of the Plaintiff’s goods.

The Plaintiff’s pleaded cause of action is directed at the destruction of goods arising from storage, a responsibility which, on the Plaintiff’s own pleadings, lies with D1 and not D2.

The Statement of Claim does not plead any particulars of negligence against D2, nor does it set out any facts establishing a duty of care, breach, or causation on the part of D2.

D2’s involvement in issuing invoices and accepting payments does not, in law, establish liability for the storage or destruction of the goods, and does not disclose a sustainable cause of action in contract or tort.

The Plaintiff’s reliance on the single economic unit argument is legally untenable, as D2 and the First Defendant are separate legal entities, and no facts have been pleaded to justify piercing the corporate veil.

In the absence of pleaded facts supporting liability, the claim against D2 is plainly unsustainable, incapable of being cured by evidence, and suitable to be struck out at an early stage under Order 18 rule 19 of the ROC.

Plaintiff objected to this application and states:

The application to strike out is premature, as the issues raised involve disputed facts which ought to be determined at trial and not summarily at the interlocutory stage.

D2 was not a mere delivery agent, but was actively involved in the transaction, including the issuance of invoices and acceptance of payments, which, according to the Plaintiff, demonstrates a sufficient nexus to ground liability.

The precise scope of D2’s duties and responsibilities, including whether such duties extended beyond delivery, is a matter that requires evidence and cross-examination.

Even if particulars of negligence against D2 are not extensively pleaded, the pleadings disclose a triable issue, and any deficiencies can be remedied by amendment rather than striking out.

D1 and D2 operate as a single economic unit, such that liability should not be compartmentalised strictly along corporate lines.

The principles governing Order 18 rule 19 require the Court to exercise caution, and that the claim against D2 cannot be said to be plainly or obviously unsustainable at this stage. Applicable Principles under Order 18 Rule 19

It is well established that the power to strike out pleadings under Order 18 Rule 19 must be exercised sparingly. However, where a pleading plainly discloses no reasonable cause of action, or where the claim is clearly unsustainable in law, the Court is entitled to strike it out at an early stage.

In this regard, I refer to the pleaded facts, and the question is whether, assuming those facts to be accurate, a legally recognisable cause of action has been disclosed. As stated in Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corp Bhd [1993] 3 MLJ 36, the Court should not permit a claim which is obviously unsustainable to proceed to trial.

Having perused the Statement of Claim and the Defence together with the submissions filed by both parties, I am satisfied that the Plaintiff’s pleaded cause of action is fundamentally directed at the alleged failure in the storage and safekeeping of the goods which were destroyed. On the Plaintiff’s own pleadings, this responsibility is attributed to D1.

D2’s role, as consistently characterised in its submissions, is that of a logistics service provider engaged for the purposes of delivery and transportation only. There are no pleaded facts to support any allegation that D2 assumed responsibility for the storage, custody or safekeeping of the goods at the material time. Even taking the Plaintiff’s pleadings at their highest, D2’s involvement does not extend to the subject matter of the alleged loss.

Although the Plaintiff relies on the existence of a bailor–bailee relationship, such a relationship, without pleaded particulars of a breach or negligence attributable to D2, I am of the opinion that it does not, in itself, disclose a sustainable cause of action against D2.

In this regard, I agree with D2’s submission that the Plaintiff’s contention that the matter ought to proceed to trial is misconceived. In an application under Order 18 rule 19, I am only concerned with the pleadings as they stand. Where a pleading fails to disclose a reasonable cause of action, I am entitled to strike it out without the necessity of a trial. As stated by the Supreme Court in Bandar Builder, the Court should not permit a claim which is plainly unsustainable to proceed merely on the basis that some evidence may emerge at trial.

More significantly, the Plaintiff has not pleaded any particulars of negligence against D2. There is no pleading identifying any duty of care owed by D2, any breach of such duty, or how any act or omission by D2 caused or contributed to the loss complained of.

In the absence of such pleadings, there is no factual foundation upon which evidence or cross-examination can meaningfully arise. This is not a case of imperfect pleading capable of rectification by amendment, but one in which the defect concerns the absence of a pleaded legal basis for liability, rendering the claim unsustainable in law.

The Plaintiff relies on the fact that D2 issued invoices and accepted payments in relation to the transaction. I agree with D2 that, without more, these matters do not disclose a cause of action against them, as they are merely accounting documents. I am of the view that the issuance of invoices and receipt of payment do not, in law, establish responsibility for the storage of goods or liability for their destruction, nor do they amount to pleaded facts capable of sustaining a claim in contract or in tort. I find support for the above findings in cases referred to by D2, in the case of WR Global Group Sdn Bhd v KPF Trading Sdn Bhd (formerly known as Felda Trading Sdn Bhd) [2023] MLJU 2734 and Hanson Building Materials Malaysia Sdn Bhd v Pearl Island Resort Development Sdn Bhd [2012]

The Plaintiff further seeks to fix liability on D2 by advancing the argument that D1 and D2 should be treated as a single economic unit. I agree with D2’s submission that this argument is legally untenable.

The principle of separate legal personality is well settled. As reaffirmed by the Federal Court in Ong Leong Chiou & Anor v Keller (M) Sdn Bhd & Ors [2021] 3 MLJ 622, each company is a legal entity separate and distinct from its members, and the corporate veil may only be pierced in exceptional circumstances. Similarly, in the case of Pamol (Sabah) Ltd & Anor v Joseph bin Paulus Lantip (2012) 5 MLJ 616, it was held that in a group of companies, liabilities of one company cannot be visited on another.

Furthermore, there are no pleaded facts alleging fraud, sham, façade, or any other recognised basis to justify lifting the corporate veil. The mere assertion of a single economic unit is insufficient in law and cannot, on its own, found liability against

I record my appreciation of both parties’ comprehensive submission on the “single economic unit” issue; however, I am convinced that, on the circumstances of this case, reliance on the same could not justify lifting of the corporate veil – refer to the case of Tenaga Nasional Bhd v Irham Niaga Sdn Bhd

1 MLJ 752, CA.

Taking the Plaintiff’s pleadings at their highest, and applying the principles articulated in Bandar Builder, I am unable to discern any sustainable cause of action against D2. The deficiencies identified are not matters that can be cured by evidence at trial, but go to the absence of a pleaded legal foundation. The claim against D2, therefore, falls squarely within the scope of Order 18 rule 19 of the Rules of Court 2012 and is liable to be struck out.

For the reasons set out above, I am satisfied that the Plaintiff’s claim against D2 discloses no reasonable cause of action and is legally unsustainable. The Statement of Claim fails to plead any duty, breach, or causation on the part of D2, and does not disclose a legally recognisable basis upon which liability may be imposed.

The identified deficiencies are substantive and cannot be cured by amendment. This is therefore a proper case for the exercise of the Court’s powers under Order 18, Rule 19 of the ROC.

Accordingly, D2’s application (Enclosure 10) is allowed. The Plaintiff’s claim against D2 is struck out with costs of RM3,000, subject to allocator. Dated this: 26th December 2025 ~signed~ (NOOR HAYATI BINTI HAJI MAT) JUDGE HIGH COURT OF MALAYA SHAH ALAM, SELANGOR For the Plaintiff : Lee Jie Xin Messrs Law Chambers of Lee J. X. For the Defendants : Wai Chong Khuan together with