Oasis Team Sdn Bhd v Star Labs Bioscience Sdn Bhd (BA-22NCC-137-11/2021)

STAR LABS BIOSCIENCE SDN BHD (No. Syarikat: 1229098-K)

P’NG AIK FONG (No. K/P: 760605-02-5991) … DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT (AFTER FULL TRIAL)

The Plaintiff commenced this civil suit against the Defendants for breach of contract.

The Plaintiff alleged that the Defendants breached the Business Corporation Agreement dated 13 August 2021 (“Business Agreement”) [pages 19-27 (pdf) of the Common Agreed Bundle of Documents in Enclosure 96 (Part B), where the authenticity of the documents is not disputed but their contents are disputed (“B1”)].

The Plaintiff sought a refund of RM500,000.00 and compensation or liquidated damages of RM2 million from the Defendants for breach of the Business Agreement [page 17 (pdf) of the Amended Bundle of Pleadings (“A”)].

The issues to be determined in this civil suit are as follows:

did the Defendants breach the Business Agreement, and if so, did they remedy the material breaches? (“Issue No. 1”); and

is the Plaintiff entitled to a refund of RM500,000.00 and RM2 million as compensation or liquidated damages? (“Issue No. 2”). SALIENT FACTS

The Second Defendant developed a web-based training programme known as the Neurobrain Training Programme and the Neurobrain Assessment Test/Report to help children and adults improve learning, thinking, and emotional control (“Products”).

The Products are owned and managed by the First Defendant.

The Products’ protocols are as follows [pages 44-52 (pdf) of B1]:

first, the neurobrain headband would scan the subject’s brain and send brainwave data to a server via neurobrain software;

second, the database server would transmit brainwave data to neurobrain management software, which would generate an electroencephalogram assessment report; and

third, the electroencephalogram assessment report would be referred to a Neurobrain Consultant, who would review it and recommend a training protocol for the subject’s brain. The Neurobrain Consultant would monitor training attendance and progress.

On or around 30 April 2021, the Plaintiff entered into an oral agreement with the Defendants (“Oral Agreement”) whereby the Plaintiff was given an exclusive 30-year right to use the Products from 1 March 2021 (“Exclusive Period”) subject to payment of RM2 million as follows:

first, an initial payment of RM500,000.00; and

second, the balance of RM1.5 million is payable in 30 monthly instalments of RM50,000.00 each, due on the seventh day of each month, commencing on 1 March 2022.

Between 30 April 2021 and 16 July 2021, the Plaintiff made multiple payments to the First Defendant to cover the initial amount of RM500,000.00 [pages 8-18 (pdf) of B1].

On 13 August 2021, all parties executed the Business Agreement, which, among other terms, included the following [pages 19-27 (pdf) of B1]:

under Clauses 3.1, 3.2, and 3.3 of the Business Agreement, the Plaintiff was the sole user of the Products worldwide, except in China and Korea;

under Clause 3.4 of the Business Agreement, the Plaintiff was required to pay RM2 million to the First Defendant in consideration of the exclusive use and access to the Products;

under Clause 3.4(a) of the Business Agreement, the First Defendant acknowledged receipt of the initial payment in the sum of RM500,000.00 made by the

under Clause 3.4(b) of the Business Agreement, the Plaintiff was required to pay the Defendants the remaining RM1.5 million in 30 monthly instalments of RM50,000.00 each, with each instalment due by the seventh day of every month starting from 1 March 2022;

under Clause 3.5 of the Business Agreement, besides

the Defendants could only access the Products for their own research and development;

(ii) the Defendants could not use, access, sell, authorise or assign the Products to any third party for commercial purposes;

(iii) the Defendants could not assign or use the Products in any way that would jeopardise the Plaintiff’s interest; and

(iv) if the Defendants assigned or utilised the Products in a manner that jeopardised the Plaintiff’s interests, it would constitute a material breach of the Business Agreement;

under Clause 3.6 of the Business Agreement, the Defendants’ personnel, including staff, managing directors, shareholders, directors, business associates, partners, consultants, and anyone with knowledge or control of the Products, were prohibited from providing training, analysis, explanations, consultations, methods, guidance, interpretations, or advice relating to the Products to any third party without the Plaintiff’s approval. Failure to comply would constitute a material breach of the Business Agreement;

under Clause 3.7 of the Business Agreement, the Defendants must provide documentary evidence to support their claims for online server usage charges; and

under Clause 7.3 of the Business Agreement, if the breaches are not remedied within 14 days, the Business Agreement will automatically terminate. If the Defendants are in default under the Business Agreement, they must refund all payments made by the Plaintiff and pay an additional RM2 million to the Plaintiff as compensation or liquidated damages.

As the Products were web-based, they could be accessed only with a unique login ID and password provided to the Plaintiff by the First Defendant.

However, on 11 October 2021, the Defendants denied the Plaintiff access to the Products, causing children with special needs who were using the Products to cease their training [paragraph 10 of WS PW1], and it got worse when the Defendants also locked the accounts of both the users and trainees of the Products [pages 28-30 (pdf) of B1].

On 29 November 2021, the Plaintiff commenced this civil suit against the Defendants.

On 24 May 2022, to maintain the status quo under the Business Agreement, an interim injunction was recorded by consent of all parties before Mohd Zaki Abdul Wahab J (as he then was) (“Original Interim Injunction”) [pages 53-54 (pdf) of B1]: “…injunksi interlokutori dikeluarkan terhadap Defendan-Defendan untuk menghalang Defendan Pertama dan Defendan Kedua secara sendiri dan/atau melalui pekerjanya dan/atau melalui agennya daripada menjual dan/atau membenarkan akses Neurobrain Training Programme dan Neurobrain Assessment Test/Report kepada mana-mana pihak …”.

On 23 February 2023, the Original Interim Injunction was amended as follows (“Amended Interim Injunction”) [pages 55-57 (pdf) of B1]: “…Defendan-Defendan Star Labs Bioscience Sdn Bhd dan P’ng Aik Fong oleh mereka sendiri, ejen atau pengkhidmat mereka atau selainnya ditahan dan suatu injunksi adalah dengan ini diberikan menahan mereka daripada menjual dan/atau membenarkan akses Neurobrain Training Programme dan Neurobrain Assessment Test/Report kepada mana-mana pihak …”.

On 18 November 2024, both Defendants were cited for contempt of Court by the Learned Judicial Commissioner Elaine Yap Chin Gaik for breaching the Amended Interim Injunction (“Order of Committal”). Her Ladyship ordered that, in addition to paying the RM100,000.00 penalty to the Court and the RM20,000.00 costs, the Defendants shall have no right to be heard in this proceeding until the penalty is paid [Enclosure 99].

On 4 November 2025 (the day before the full trial on 5 November 2025), the Learned Counsel for the Defendants made an application to vacate all dates fixed for the full trial, starting on 5 November 2025, on the basis that the Second Defendant had an accident in Jordan earlier that day [Enclosure 120].

The Learned Counsel for the Defendants informed the Court that the Second Defendant was being treated at a hospital in Jordan and undertook to furnish a medical report from that hospital. To date, no medical report for the Second Defendant has been furnished to the Court.

On 5 November 2025, before the full trial began:

the Learned Counsel for the Defendants handed a cheque for RM20,000.00 to the Learned Counsel for the Plaintiff to settle the issue of costs in accordance with the

the Learned Counsel for the Defendants, however, informed the Court that the Defendants had not yet paid the RM100,000.00 penalty to the Court and requested more time to do so; and

the Learned Counsel of the Defendants requested that all full trial dates be vacated, as stated in the letter dated 4 November 2025.

The Learned Counsel for the Plaintiff argued that:

the Order of Committal was made almost a year ago, and the Defendants had ample time to purge their contempt before 5 November 2025, yet they still failed to do so;

since the Defendants did not purge their contempt, neither they nor their counsel had the right to be heard. Therefore, the Defendant’s Learned Counsel should not be allowed to address the Court; and

based on these factors, the Defendants’ adjournment application should be refused.

I dismissed the Defendants’ application for an adjournment and directed the full trial to proceed without delay for the following reasons (see pages 5-7 of Enclosure 122-Notes of

first, this is an old case. It was filed in 2021;

second, there was no medical report or written confirmation from a Jordanian hospital or authority regarding the alleged accident involving the Second

third, the Defendants failed to pay the RM100,000.00 penalty to the Court for over 350 days after the Order of Committal was made. Since the RM100,000.00 penalty was not paid, the Defendants and their Counsel had no right to be heard (Wee Choo Keong v MBF Holdings Bhd & Anor and Another Appeal [1993] 1 MLRA 260; [1993] 2 MLJ 217; [1993] 3 CLJ 210; [1993] 2 AMR 1205, SC; MK Cooling Services & Anor v. Chong Kek Fong [2025] MLRHU 1959; [2025] MLJU 2818; [2025] CLJU 2254; AHT Syngas Technology NV v. Future NRG Sdn Bhd [2025] MLRHU 2270; [2025] CLJU 2599; [2025] MLJU 3273). 11 22. After that, the full trial proceeded, with Shiw Shin Yeen giving evidence as the Plaintiff’s sole witness (“PW1”).

PW1 provided her evidence orally and via a witness statement in Enclosure 110 (“WS PW1”).

PW1’s adequate and comprehensive evidence is supported by cogent documentary evidence contained in B1, Common Bundle of Documents in Enclosure 114 (“B2”), Additional Bundle of Documents in Enclosure 116 (“B3”), Additional Bundle of Documents (1) in Enclosure 118 (“B4”), Additional Bundle of Documents (2) in Enclosure 123 (“B5”) and Agreed Facts in Enclosure 55 (“C”). ANALYSIS AND FINDINGS

The Defendants’ contention that they did not breach the Business Agreement is unfounded and devoid of merit for the following reasons:

first, instead of granting the Plaintiff 30 years of exclusive access to the Products, the Defendants granted the Plaintiff only limited access to the Products until 10 October 2021, thereby causing a material breach of Clauses 3.1 and 3.3 of the Business Agreement. This complaint was supported by the following evidence:

not only did the Defendants lock the accounts of the user and the trainees of the Products [pages 28-30 (pdf) of B1], but they also admitted in their solicitors’ letter dated 8 November 2021 [pages 36- 37 (pdf) of B1] that they had denied the Plaintiff access to the Products;

(ii) on 14 October 2021, the Plaintiff lodged a complaint stating the Defendants provided limited access to the Products [pages 31-32 (pdf) of B1]; and

(iii) on 19 October 2021, the Plaintiff lodged two police reports against the Defendants, among others, for their actions in preventing the Plaintiff’s access to the Products [pages 38-41 (pdf) of B1];

second, except in China and Korea, the Defendants should not have permitted any third party to access and use the Products. However, the Defendants breached Clauses 3.5 and 3.6 of the Business Agreement by allowing Braintech, a company wholly owned by the Second Defendant [pages 64-69 (pdf) of B1], to access the Products and obtain a Neuroscience Report for a subject named Bob Lim (“Bob Lim’s Neuroscience Report”) [pages 70-80 (pdf) of B1]. Bob Lim’s Neuroscience Report closely resembled another Neuroscience Report for a subject named Lim Jedson (“Lim Jedson’s Neuroscience Report”) obtained earlier by the Plaintiff [pages 81-90 of B1];

third, except for research and development, the Defendants could not use the Products for their own benefit. However, the Defendants breached Clauses 3.5 and 3.6 of the Business Agreement when Braintech and the Second Defendant accessed the Products to showcase them to Universiti Sains Malaysia (“USM”) during a meeting with USM, with a view to forming a joint cooperation to use the Products. The information regarding Braintech and the Defendants’ access to the Products was uploaded to Braintech’s Facebook page on 2 October 2022 [pages 91-93 (pdf) of B1];

fourth, pursuant to Clauses 3.5 and 3.6 of the Business Agreement, third parties may access or use the Products only with the Plaintiff’s approval. In this case, not only was there no approval from the Plaintiff for third parties to access or use the Products, but the Defendants also failed to submit any application for such approval;

fifth, in a letter dated 20 October 2021, the Plaintiff requested that the Defendants strictly adhere to Clause 7 of the Business Agreement [pages 34-35 (pdf) of B1].

sixth, when the Defendants breached the Amended Interim Injunction, they also breached the Business Agreement. By failing to appeal to the Court of Appeal against the Order of Committal, they accepted the Court’s findings of breach of the Amended Interim Injunction, thereby acknowledging their breach of the Business Agreement as well; and

seventh, the Defendants had the opportunity over a year ago to purge the contempt and regain their right to be heard, but they chose not to. By failing to purge the contempt and to file an appeal against the Order of Committal, the Defendants forfeited their right to be heard, resulting in no rebuttal evidence being adduced. As a result, all the evidence adduced by the Plaintiff was not rebutted and therefore presumed to be true [Jaafar Shaari & Siti Jama Hashim v Tan Lip Eng & Anor [1997] 4 CLJ 509; [1997] 1 MLRA 605; [1997] 3 MLJ 693; [1997] 4 AMR 3744, SC; Syarikat Kemajuan Timbermine Sdn Bhd v Kerajaan Negeri Kelantan Darul Naim [2015] 2 MLRA 205; [2015] 2 CLJ 1037; [2015] MLJU 70, FC; Yui Chin Song & Ors v Lee Ming Chai & Ors [2019] 5 MLRA 94; [2019] 7 CLJ 740; [2019] 6 MLJ 417, FC].

Based on material breaches of the Business Agreement, the Defendants’ failure to remedy them, the automatic termination of the Business Agreement, the unchallenged Order of Committal, and the Plaintiff’s unrebutted evidence, I am of the view that the Plaintiff has proven its case against the Defendants on the balance of probabilities for breach of the Business Agreement. ISSUE NO.2 (REFUND & COMPENSATION/LIQUIDATED

Since the Defendants have failed to remedy the material breaches, I am of the view that, under Clause 7.3 of the

the Plaintiff is entitled to a refund of RM500,000.00; and

(b)

The Learned Counsel for the Plaintiff confirmed that the Plaintiff abandoned paragraphs 31(a) and 31(b) of the Amended Statement of Claim (Enclosure 103).

However, the Learned Counsel for the Plaintiff sought a further Order under paragraph 31(e) of the Amended Statement of Claim, under ‘any other reliefs’, for the Amended Interim Injunction to be extended and remain in force until the Judgment of this civil suit is fully satisfied and until the Defendants pay the penalty of RM100,000.00 to the Court (Enclosure 126) (“Extension Application”).

The Learned Counsel for the Plaintiff relied on Lim Eng Kay v Jaafar Bin Mohamaed Said [1982] 2 MLJ 156; [1982] 1 MLRA 71; [1982] CLJ 298 FC, Ritz Garden Hotel (Cameron Highlands) Sdn Bhd v Balakrishnan a/l Kaliannan [2013] 6 MLJ 149; [2013] 7 CLJ 413; [2013] 5 MLRA 349 FC, Tan Tek Seng v Suruhanjaya Perkhidmatan Pendidikan & Anor [1996] 1 MLJ 261; [1996] 2 CLJ 771; [1996] 1 MLRA 186 CA and Ooi Joo Aik v Tab Suan Sim [2025] MLJU 3233; [2025] CLJU 2569; [2025] MLRAU 318.

I am unable to accept the arguments of the Learned Counsel for the Plaintiff in relation to the Extension Application. The Extension Application is dismissed for these reasons:

first, under paragraph 31(c) of the Amended Statement of Claim, the Plaintiff claims monetary damages against the Defendants. In those circumstances, damages would be an adequate remedy, and injunctive relief should therefore be refused (Associated Tractors Sdn Bhd v. Chan Boon Heng & Anor [1990] 1 MLRA 298; [1990] 2 MLJ 408; [1990] 1 CLJ (Rep) 30 SC; Keet Gerald Francis Noel John v Mohd Noor Abdullah & Ors [1995] 1 MLJ 193; [1994] 1 MLRA 454; [1995] 1 CLJ 293, CA; and Inter Heritage (M) Sdn Bhd v. Asa Sports Sdn Bhd [2008] 3 MLRA 122, CA); and

secondly, the purpose of the Amended Interim Injunction is to preserve the status quo among the parties under the Business Agreement pending the disposal of this civil suit. Based on PW1’s evidence, the Business Agreement has been automatically terminated. Therefore, there is no valid reason for continuing the Amended Interim Injunction. Furthermore, once this civil suit is disposed of, the Amended Interim Injunction will become unnecessary. CONCLUSION

Based on the foregoing reasons, I make the following Judgment in this civil suit:

paragraphs 31(a) and 31(b) of the Amended Statement of Claim are dismissed;

regarding paragraph 31(c) of the Amended Statement of Claim, the Defendants are ordered to jointly and severally refund RM500,000.00 and pay RM2 million as agreed compensation or liquidated damages to the Plaintiff;

regarding paragraph 31(d) of the Amended Statement of Claim, the Defendants are ordered to jointly and severally pay the Plaintiff costs of RM30,000.00, subject to an allocatur fee; and

(d)