Perusahaan Otomobil Nasional Sdn. Bhd. v 1. Meka Automotive Industries Sdn. Bhd dan 2 Lagi (BA-24NCVC-100-04/2016)

MEKA AUTOMOTIVE INDUSTRIES SDN BHD (Formerly known as Dominant Motor Sdn Bhd) (Company No. 800977-T)

TCM STAMPING PRODUCTS SDN BHD (Company No. 72982-T)

DYNAMIC MFG. (M) SDN BHD (Company No: 325496-U) ...DEFENDANTS GROUNDS OF JUDGMENT (Enclosure 3 - Mandatory Injunction) A. BACKGROUND FACTS [1] The present case before this Court is a clear cut application for a mandatory injunction under Section 53 of the Specific Relief Act

The Plaintiff by its Enclosure 3 had applied to this Court for an order to compel the Defendants to return the Plaintiff’s own properties in which, the ownership to the properties were explicitly admitted and acknowledged by the 1st Defendant and the retention of the Plaintiff’s properties by the Defendants is legally wrong. 3 [2] The 1st Defendant’s defence and objection against this Application is overwhelmingly nonsensical and begs this Court to question the 1st Defendant’s truthfulness at all fronts. There is no reason for this Court to dwell on this case at length considering the obvious merits of the Plaintiff’s Application. And this Court adds very early in this judgment that, there is no necessity for the present Application to be elevated into a writ action, as the evidences, inclusive of the 1st Defendant’s own admissions is utterly telling of the Application’s merits. [3] Alluding to the facts, the Plaintiff {Perusahaan Otomobil Nasional Sdn Bhd (“Proton”)} a national car manufacturer had entered into numerous agreements with Meka Automotive Industries Sdn Bhd {formerly known as Dominant Motor Sdn Bhd (“ 1st Defendant”)} in which Proton agrees to purchase, and the 1st Defendant agrees to manufacture and supply Exora (Proton’s Car Model) Parts to the Plaintiff. This sale and purchase agreement was concluded in a Parts Purchase Agreement (“PPA”) between the Plaintiff and the 1st Defendant. The list of Exora Parts in the PPA was supplemented by numerous documents which were even signed by the 1st Defendant itself. There are overwhelming evidences in the Affidavits to indicate that the 1st Defendant has acknowledged 4 its obligation to manufacture and supply, on the Plaintiff’s demand specifically Exora Parts to the Plaintiff. [4] In light of the PPA, the 1st Defendant does not have the proper equipment and tools to manufacture the Exora Parts that the 1st Defendant is contractually obliged to supply to the Plaintiff. In remedying this fact, Proton has entered into two separate Tools Provisioning Agreements (“TPAs”) in which Proton had licensed the use of the Proton’s own Exora Toolings to the 1st Defendant to manufacture the parts required under the PPA. [5] In light of the TPAs, the Exora Toolings were transferred by the 1st Defendant to TCM Stamping Products Sdn Bhd (“2nd Defendant”) as well as Dynamic MFG (M) Sdn Bhd (“3rd Defendant”) (collectively referred to as “subcontractors”) in which the 1st Defendant had subcontracted its obligations under the PPA and the TPAs to the subcontractors. It is pertinent to note that the subcontractors have no objection to the present Application, and never contested on the Plaintiff’s rights for the return, and the ownership of the Exora Toolings. 5 [6] It was resoundingly clear and uncontested that amidst all of the 1st Defendant’s lame excuses, that at the core of the case, the 1st Defendant has ultimately failed to comply with the PPA and TPAs and supply Exora Parts to Proton on Proton’s demand. The factum of breach of the PPA and TPAs is very obvious and clear. The 1st Defendant did not even attempt to disprove the fact of the breach and instead went off on an irrelevant tangent supposing a “grand scheme” of a “financial strangulation” which hinders the 1st Defendant’s performance to comply with the PPA and TPAs. In essence, it remains undisputed that when Proton called for the delivery of Exora Parts on 19.4.2016, to be delivered in 15.3.2016, the 1st Defendant had ultimately failed to perform its end of the bargain. Further adding gravity to the 1st Defendant’s arrogant breach, was the fact that the Plaintiff had found that the 1st Defendant’s plant was closed and a notice of cessation of workers was issued by the 1st Defendant. [7] It is this undisputed breach that forms the basis of Proton’s present Application to compel the return of the Exora Toolings which were held at ransom by the 1st Defendant. It is remarkably simple. The 1st Defendant had breached the PPA and TPAs, allowing the Plaintiff to rightfully and legally terminate the PPA and TPAs, which 6 naturally entails that the Plaintiff has all the rights to take possession of the Exora Toolings which are still unlawfully held by the 1st Defendant through its subcontractors. There is really no reason at all for the Exora Toolings to be held by the Defendants owing to the fact that the tools were unique to produce Exora models, and that the Plaintiff no longer orders Exora Parts from the 1st Defendant. B. THE 1ST DEFENDANT IS CLEARLY OBLIGATED TO SUPPLY EXORA PARTS TO THE PLAINTIFF [8] The 1st Defendant had the audacity to contend, in total disregard of their own admissions, and evidences that they are not obligated to supply Exora Parts under the PPA. This contention is one of the many reasons that this Court believes that the 1st Defendant had not been totally candid and frank with the Court. Just reiterating the contention is ridiculous. The factum of the Exora Toolings being in the 1st Defendant’s possession is uncontested and admitted. The factum of the tools to be Exora Toolings being unique to the Exora Model is uncontested. Contrasting this contention to these two former facts, it makes no legal or logical sense that the 1st Defendant would be licensed to use these Exora 7 Tools and take the same into their care and possession if the 1st Defendant is not obligated to manufacture and supply Exora Parts. Why would the 1st Defendant take possession of the Exora Tooling if it was not incumbent upon the 1st Defendant to manufacture and supply Exora parts? Clearly here, the 1st Defendant admits and acknowledges their obligation to manufacture and supply Exora Parts. [9] Adding further dent to the 1st Defendant’s truthfulness and overall defence is the fact that the 1st Defendant had on numerous documents admitted to receiving Exora Toolings particularly three Lists of Toolings respectively dated 7.3.2014 and 15.4.2013. These Lists were even signed by the representative of the 1st Defendant. The First List dated 7.3.2014 is riddled with clear indications of the tools being tools used for the specific and unique manufacturing of Exora Parts. It is written in the table, “Dies Exora(MPV)”, “Jigs Exora(MPV)”, and “Mould Exora(MPV)” [10] Not only that, other signed documents such as the Supplemental Letter dated 18.7.2011 as well as the Parts Price Revision (“PPR”) dated 12.9.2013 had indicated the 1st Defendant’s own 8 agreement and admission to be obliged to supply Proton with Exora Parts. [11] There is no room at all for the 1st Defendant to contend otherwise than the fact that it is incumbent upon the 1st Defendant to manufacture and supply Exora Parts for Proton. Thus, this Court similarly finds that the 1st Defendant is indeed obligated under the PPA and the TPAs to manufacture and supply Exora Parts to the Plaintiff. C. THE PLAINTIFF IS THE OWNER OF THE TOOLS [12] Adding further damage to the 1st Defendant’s truthfulness and overall defence, is the fact that the 1st Defendant, against its own admission and acknowledgment of the Plaintiff’s full ownership of the Exora Toolings, had contended that the Plaintiff was not the owner of the Exora Toolings, and that the Exora Toolings were owned by another third party company. Again, this Court does not have to go at lengths to see the glaring lack of merit in the 1st Defendant’s contention. 9 [13] The 2nd and 3rd Defendants had never contested Proton’s ownership over the Exora Toolings. Furthermore, the 1st Defendant itself had repeatedly, times and times again, admitted and acknowledged the fact that the Exora Toolings were in fact fully paid for by the Plaintiff, and is indeed fully owned by the Plaintiff. The 1st Defendant had even acknowledged this fact in numerous instances. Admission of Proton’s proprietorship vide the List of Toolings dated 7.3.2014 [14] Beneath the table listing all of the Exora (MPV) toolings licensed and sent to the 1st Defendant, the 1st Defendant had explicitly signed, admitted and undertook the following: “I, the authorised representative of DOMINANT MOTOR SDN BHD (“the Company”) (now the 1st Defendant), hereby unconditionally undertake, acknowledge, and agree:

that title to and ownership of the abovementioned Tooling (“said Tooling”) is/are vested with and 10 owned by Perusahaan Otomobil Nasional sdn bhd (“PROTON”)

that the Company undertakes to maintain the said Tooling in good repair and condition at all times and make good any damage caused to the same;

that the said Tooling shall be returned/caused to be returned to PROTON forthwith on demand;

that the Company agrees and undertakes to obtain the prior written consent from PROTON in respect of any disposal, transfer, attachment, pledge, or otherwise any dealing whatsoever of the said Tooling. [15] The same was similarly admitted by the 1st Defendant in agreeing to enter into the two TPAs. Clause 4.1 of the two TPAs are identical, and both explicitly state that the proprietorship of the toolings shall vest in Proton. Moreover, Recital D (which is identical in both TPAs) also states that the parties, especially the 1st Defendant agrees that Proton had dully paid the price of the toolings. 11 [16] It is illogical and nonsensical that the 1st Defendant would make the above admissions under its own signature, if the 1st Defendant is not entirely sure of the Plaintiff’s proprietorship over the toolings. If so, then the 1st Defendant had indirectly came forth to this Court openly contending that the 1st Defendant had willingly out of its own volition, agreed to enter into a sham agreement where the content of the agreement is untrue. [17] Nonetheless, no parties shall be allowed to deal injustice by approbating and reprobating its stance. This Court refers to the decision of the Court of Appeal in the case of Cheah Theam Kheang v City Centre Sdn Bhd & Other Appeals (2012) 2 CLJ 16 regarding the Defendant’s conduct of blowing hot and cold with its stance: “In other words of Sir Nicolas Browne-Wilkinson VC in Express Newspapers Plc v News (UK) Ltd and Others (1990) 3 All ER 376 at pp. 383 to 384: There is a principle of law of general application that it is not possible to approbate and reprobate. That means you are not allowed to blow hot and cold in the attitude that you adopt. A man cannot adopt two 12 inconsistent attitude towards another : he must elect between them and, having elected to adopt one stance, cannot thereafter be permitted to go back and adopt an inconsistent stance.” (See also Boustead Trading (1985) Sdn Bhd v Arab Malaysian Merchant Bank Bhd [1995] 3 MLJ 331) [18] Thus, the 1st Defendant cannot now, after admitting that Proton is the rightful proprietor of the Exora Toolings and that Proton had fully paid for the Exora Toolings, be allowed to go against its words and stance, for allowing such would bring grave injustice against the Plaintiff. [19] Thus, it is this Court’s finding that the Plaintiff is undoubtedly the owner and proprietor of the Exora Toolings. D. THE 1ST DEFENDANT HAD BREACHED THE PPA and the TPAs [20] There is no reason to dwell for long in this issue. The 1st Defendant had never contested the fact that it had failed to comply with 13 Proton’s order when demanded. Instead, what was afforded to this Court, were a lame narrative of a supposed ‘financial strangulation’ on an altogether different and separate aspect of the 1st Defendant’s business and complaints of short payments and delay of payments in which the 1st Defendant itself had admitted to have been settled. The 1st Defendant’s claim for short payment and delay in payment untenable [21] These claims are untenable for the simple fact that the parties have already reached a final settlement in which concludes whatever short or delayed payment by the Plaintiff. The 1st Defendant claimed a total amount of RM5,974,874.18 for short and/or delayed payment. [22] However, as rightfully pointed out by the learned counsel for Proton, the parties have already reached a final settlement over the above sum and the 1st Defendant had explicitly admitted that it no longer held any other lawful claims against the Plaintiff. 14 [23] Now, the 1st Defendant contended that the evidence used to prove this settlement is inadmissible for the reason that the document is a ‘without prejudice’ document. However this Court does not hesitate to dismiss this misconceived notion the 1st Defendant laid on the Document. It is trite that a document would be without prejudice if the document is proof to a negotiation to settle, and not proof of the settlement itself. But that is altogether not the case in the present Application. The parties are no longer negotiating for a settlement. A settlement had already been reached, and any document to prove this settlement, is not any proof of negotiation, but proof of the settlement itself. [24] The 1st Defendant itself in its own letter had admitted to the final conclusion of the settlement and that the settlement is “free from without prejudice” in its own letter accepting the settlement dated 3.3.2016 (“Settlement Acceptance”). Paragraph 3 of the Settlement Acceptance stipulates the following: “MEKA hereby irrevocable agrees and declares that it shall accept this Settlement Letter free from without prejudice basis wholly and unconditionally and shall have no further and/or other claims whatsoever against 15 PROTON…and unconditionally and completely releases and discharges PROTON of and/or from any and/or all claims…” [25] A settlement had already been reached, and the 1st Defendant itself admitted to the inapplicability of the without prejudice rule. [26] In fact, following the Settlement Acceptance, the 1st Defendant followed up with a statutory declaration dated 7.3.2016 (“SD”) absolving the Plaintiff from claims and liabilities in relation to the short and/or delayed payments. The SD reads:

That MEKA AUTOMOTIVE SDN BHD has submitted all its claims against Perusahaan Otomobil Nasional sdn bhd (PROTON) as set out in… the Settlement Letter dated 3/3/2016 (the Settlement Acceptance in the present case) and that Meka Automotive Sdn Bhd has no other or further claims whatsoever against PROTON … 16

That in accepting this Letter of Settlement, MEKA AUTOMITIVE SDN BHD irrevocably agrees to waive all its rights to further claim, demand and/or pursue PROTON with regard to the claims [27] It has long been trite that without prejudice documents shall cease to be without prejudice when a settlement has been reached. This is simply because the documents now stand to be admissible evidence to prove the terms of the agreement. This principle is echoed in the Federal Court’s decision in Malayan Banking Berhad v Foo See Moi (1981) 2 MLJ 17, FC: “it is also settled law that where the negotiations conducted without prejudice lead to a settlement, then the letters become admissible in evidence of the terms of the agreement” [28] And rightfully so, the Settlement Acceptance and the SD now, is good admissible evidence to prove that the 1st Defendant no longer has any rights to claim for the purported short and/or delayed payment. 17 Whatever external ‘financial strangulation’ irrelevant to the present Application [29] In utter desperation, the 1st Defendant turned to attempt to justify its outright failure to comply with the PPA. And the 1st Defendant attempted so by supposing that the Plaintiff had set up a ‘grand scheme’ in which had put ‘financial strangulation’ hindering the 1st Defendant from performing its end of the bargain under the PPA. Even this contention is self-defeating the 1st Defendant’s own defence. On one hand, the 1st Defendant contends that it owes no obligation to supply Exora Parts to Proton under the PPA, and bewilderingly on the other, the 1st Defendant suddenly contends that it does owe such obligation but was unable to perform the obligation due to a self-conceptualised ‘grand scheme’ putting the 1st Defendant in a financial chokehold. This ideation of financial strangulation has no relevance at all in the present Application. Not only that, no real proof of such strangulation or deprivation had ever been appended in any of the 1st Defendant’s affidavit. All that was furnished is a loathsome narrative that the 1st Defendant was not able to perform its obligation because another spectrum of the 1st Defendant’s business was somehow hindered. The case is utterly plain and simple. The 1st Defendant had not proven any 18 valid monetary claims under the PPA, TPAs, and other supplementary documents that would justify the retention of the Exora Toolings. In fact, there were only glaring evidences that the 1st Defendant instead owed an obligation to the Plaintiff, which is the same obligation which was to date never been performed. This lame narrative of a financial strangulation was loosely hinged on the reports of the mainstream media stating that the Plaintiff is in a financial turmoil and that the Plaintiff generally owes millions of Ringgits to its vendors. However this lame narrative lacks any respectable cohesion and relevance to the present Application, simply because it proves nothing against the Plaintiff in relation to the PPA and the TPA which binds the 1st Defendant with Proton. It matters not if the Plaintiff owes other vendors monies at whatever earth-shattering magnitude. At the end of the day, Proton owes nothing to the 1st Defendant, and the 1st Defendant has no excuse whatsoever for failing and refusing to perform its obligations under the PPA, the TPAs and other supplementary documents. And the 1st Defendant has no excuse to retain the Exora Toolings ransom with hopes that the Plaintiff would endeavour to somehow dig the 1st Defendant out of its financial woes which is entirely not any concern for the Plaintiff. The 1st Defendant out of its own volition had agreed to shoulder its obligations under the PPA and the 19 TPAs. Thus, it would be against the sheer principle of commerce and the law for this Court to absolve the 1st Defendant’s liability for the breach simply because the 1st Defendant had found itself in a financial trouble which is entirely foreign to the PPA and the TPAs. [30] Therefore, it is this Court’s finding that the 1st Defendant clearly have failed and refused to perform its obligation under the PPA and TPAs and is in clear breach of the PPA and TPAs. E. IT IS WELL WITHIN PROTON’S RIGHTS TO HAVE THE EXORA TOOLINGS RETURNED [31] It is clear that the present case is a clear cut case for this Court to award a mandatory injunction to compel the Defendants to return the Exora Toolings to its rightful owner and proprietor which is the Plaintiff. The 1st Defendant had breached the PPA and TPAs and the same agreements had been lawfully terminated. There are no logical or legal reasons at all for the Exora Toolings to be retained by the 1st Defendant’s subcontractors. [32] This Court finds that the Plaintiff’s case is extremely and exceptionally clear and that a similar injunction would have been 20 granted had the case be disposed on trial and that refusing the injunction would have caused unnecessary and grave damage and inconvenience against the Plaintiff. Even at this stage in the Originating Summons, there is already a clear case for a breach of contract in which overwhelming evidences met out that the 1st Defendant is the delinquent party breaching the contract. It is overwhelmingly clear that the Plaintiff had rightfully terminated the PPA and the TPAs. It is overwhelmingly clear that the Defendants have no rights whatsoever in retaining the Exora Toolings. It is overwhelmingly clear that the Defendants have no justifiable reasons at all to retain the Exora Toolings since there will no longer be orders for Exora Parts placed by Proton on the delinquent 1st Defendant to manufacture. This immediate fact is infinitely more overwhelming considering the fact that the Exora Toolings can only produce Exora Parts and no other car models. [33] It is also overwhelmingly clear that the refusal of this mandatory injunction would cause undue damage and inconvenience to the Plaintiff in which damages will not be an adequate remedy. The unique Exora Toolings are the only tools capable of manufacturing the Exora Parts to exact specifications. Without the same Exora Tools, Proton would remain without the proper tools to ensure 21 smooth manufacturing of its car. Damages clearly would not remedy this glaring lack of appropriate toolings. Proton is simply out of any options and no amount of monies could replace what Proton is in dire need of to continue manufacturing and meeting orders – and that is exactly the irreplaceable Exora Toolings. Without the Exora Toolings, Proton could not even go to any other vendor to manufacture and supply the Exora parts. All manufacturing of Exora car models would go to a complete halt unless the Exora Toolings are returned to the proper and rightful owner that is the Plaintiff. This Court shall never allow the delinquent party (1st Defendant) to hold Proton’s property at ransom so as to allow the 1st Defendant to extort money from the Plaintiff. [34] On the balance of convenience, clearly greater harm would befall the Plaintiff in the event the injunction is refused. In fact, the 1st Defendant stands to suffer no harm or hardship at all if the injunction is allowed. This is simply because the Exora Toolings are worthless unless orders for Exora Parts are placed. And entailing the valid termination of the PPA and TPAs, the 1st Defendant shall no longer be placed with any order for Exora Parts from the Plaintiff. This is infinitely clearer considering Proton is the 22 only manufacturer of Exora Model Cars in the entire world. The Exora Toolings are not even in the possession of the 1st Defendant at the time of this Application. [35] Thus, it is this Court’s finding that the Plaintiff has successfully fulfilled all of the requirements to succeed in an application for mandatory injunction under Section 53 of the Specific Relief Act 1950. (see Redland Bricks Ltd v Morris & Anor [1970] AC 652; Tinta Press Sdn Bhd v Bank Islam (M) Bhd [1987] CLJ (Rep) 396 SC; Vistanet (M) Sdn Bhd v Pilecon Civil Works Sdn Bhd [2005] 6 MLJ 664) F. MISCELLANEOUS [36] Just for the sake of convenience and completion, this Court shall deal with the preposterous contention by the 1st Defendant that it now alleges that the TPAs were a forgery and fabrication merely for the reason that there were two different but identical TPAs which were executed. It is essential to note that it remains undisputed that the 1st Defendant and its subcontractors have long 23 had the benefit of use of the Exora Toolings. It is erroneous just to consider that the 1st Defendant would out of its own will, for no apparent reason at all, attain possession of Exora Toolings from the Plaintiff. It is infinitely more probable than not that there would be an agreement of between the 1st Defendant and the Plaintiff. The 1st Defendant, after having the benefit of the use of the Exora Toolings, cannot now suddenly aver that it questions the authenticity of the TPAs. Both the TPAs bore the exact same signature and company stamp of the 1st Defendant’s representative. Both TPAs by and large has the exact similar content, save for one miniscule typographical error. And it is more probable than not that the 1st Defendant is well aware of the reason behind the execution of both the TPAs (in rectifying the typographical error), considering that the 1st Defendant had for years enjoyed the use of the Exora Toolings without any queries or concerns asked. G. COURT’S DECISION [37] In view of all of the findings and deliberations above, this Court grants order-in-terms to the Plaintiff’s Enclosure 3 with costs of RM10,000.00. 24 [38] This Court also orders that all of the Exora Toolings as stipulated in Appendix A of the Plaintiff’s Originating Summons be returned to the Plaintiff. t.t. ...................................................... (DATUK AZIMAH BINTI OMAR) Judicial Commissioner High Court Shah Alam Selangor Darul Ehsan Dated the 13th October, 2016 For the Plaintiff - Messrs Shearn Delamore & Co. K Shanti Mogan Wong Lien Lien For the 1st Defendant - Messrs Kamil Hashim Raj & Lim Ahmad Nazri Ibrahim For the 2nd Defendant - Messrs Scully Yoon Ng Shi No Terrence Lee