Pj Midtown Development Sdn Bhd v Asianland Realty Sdn Bhd (WA-22NCC-267-05/2023)

ASIANLAND REALTY SDN BHD [NO. SYARIKAT: 199101017090 (227402-H)]

OYO ROOMS HOSPITALITY SDN BHD … DEFENDAN - [NO. SYARIKAT: 201501037558 (1162879-P)] DEFENDAN ANTARA ASIANLAND REALTY SDN BHD [NO. SYARIKAT: 199101017090 (227402-H)] … PLAINTIF

OYO ROOMS HOSPITALITY SDN BHD [NO. SYARIKAT: 201501037558 (1162879-P)]

ORAVEL STAYS SINGAPORE PTE LIMITED [NO. SYARIKAT SINGAPORE: 201532345W] … DEFENDAN-DEFENDAN JUDGMENT (Enclosures 19, 23, 25 and 67) [1] This Judgment is in respect of the following applications filed by the respective parties: Page 2 of 31 i) Enclosure 19: the Plaintiff’s, PJ Midtown Development Sdn Bhd (“PJ Midtown”), application for summary judgment against both the Defendants under Order 14 Rule 1 of the Rules of Court 2012 (“ROC”). ii) Enclosure 23: the 2nd Defendant’s in the Counterclaim, Oravel Stays Singapore Pte Limited (“Oravel”), application to strike out the 1st Defendant’s (in the main suit and plaintiff in the Counterclaim), Asianland Realty Sdn Bhd’s (“Asianland”) Counterclaim (the “Counterclaim”) against Oravel under Order 18 Rule 19(1)(a), (b) and (d) ROC. iii) Enclosure 25: the 2nd Defendant’s (in the main suit and 1st defendant in the Counterclaim), OYO Rooms Hospitality Sdn Bhd (“OYO MY”) application to strike out Asianland’s Counterclaim against OYO MY under Order 18 Rule 19(1)(a),

and (d) ROC. iv) Enclosure 67: Asianland’s application to amend its Counterclaim and to add PJ Midtown as a party to the Counterclaim under Order 20 Rule 5 and/or Order 15 Rule 6 ROC. (collectively referred to as “the Applications”) [2] All the above Applications were heard and decided together. After considering the submissions from all parties and the evidence presented, I allowed Enclosures 19, 23, and 25 and dismissed Enclosure 67. The reasons for my decision are set out below. A] SALIENT BACKGROUND FACTS [3] The PJ Midtown is the owner of a development which is also known as “PJ Midtown”. Around June 2019, Asianland approached PJ Midtown with a proposal to rent 100 units of service apartments (“the Units”) at PJ Midtown for short-term stays purposes. [4] To secure the PJ Midtown’s above agreement, OYO MY, which was collaborating with Asianland, executed a “Letter of Guarantee and Indemnity” dated 18.10.2019 (“the Guarantee”) in favour of Page 3 of 31 PJ Midtown. Under the Guarantee, OYO MY guaranteed to pay on demand any sums due and owing to PJ Midtown arising from the supply of the Units to Asianland. OYO MY also undertook to indemnify PJ Midtown against any losses/expenses incurred due to Asianland’s failure to comply with the terms of the agreement between PJ Midtown and Asianland. [5] Following this, on 13.12.2019, PJ Midtown and Asianland entered into a “Marketing and Operational Consulting Agreement” (“the 13.12.2019 Agreement”). Under the 13.12.2019 Agreement, Asianland was appointed to convert the Units for short-term stays by furnishing them according to an agreed inventory list. [6] The 13.12.2019 Agreement contained several key provisions: i) Clause 2.2.1(b) required Asianland to convert and furnish the 100 units for short-term stays, with the ownership of the furnishings remaining with Asianland. Asianland was also responsible for maintaining the furnishings at its own cost throughout the term. ii) Clause 3.0 set the Agreement’s duration at 24 months from its date. iii) Clause 4.1 entitled PJ Midtown to a fixed minimum guarantee of RM800.00 per month per unit for the first year. iv) Clause 4.3 provided that for the second year, PJ Midtown would receive either the Net Revenue generated from the Property or a minimum guarantee of RM1,000.00 per month per unit, whichever was higher. [7] Vacant possession of all 100 Units was delivered to Asianland on or before 28.2.2020. However, Asianland failed to pay the monthly charges from March 2020 onwards. Through its solicitors, PJ Midtown issued letters of demand dated 6.10.2020 to both Asialand and OYO MY claiming RM442,666.67 in fees/rental arrears. Both Asialand and OYO MY failed to make payment. [8] Despite PJ Midtown delivering possession of the Units, Asianland failed to pay the monthly fees/rentals from March 2020 onwards. Page 4 of 31 [9] By letter dated 12.3.2020, OYO MY informed PJ Midtown that it came to their attention that Lim Gian Huang, the person who signed the Guarantee on behalf of OYO MY, had no authority to do so. [10] As no payment was made by either Asialand or OYO MY, PJ Midtown, through its solicitors, issued letters of demand dated 6.10.2020 to both Asialand and OYO MY claiming RM442,666.67 in fees/rental arrears. Asialand and OYO MY did not make payment. [11] Instead, by letter dated 16.10.2020, Asianland’s solicitors denied any indebtedness to PJ Midtown. Similarly, OYO MY’s solicitors responded on 19.10.2020, contending that the Guarantee was invalid and not binding on OYO MY, while also denying any indebtedness to PJ Midtown. [12] Subsequently, PJ Midtown and Asianland agreed to terminate the tenancy for 50 units (“Batch 1”) on 7.9.2020 and the remaining 50 units (“Batch 2”) on 30.4.2021. As of 30.9.2021, the total sum owing to the PJ Midtown was RM1,196,385.48 (“the Outstanding Sum”). [13] Despite further demands via letters dated 15.10.2021, both Asialand and OYO MY failed to pay the Outstanding Sum, leading PJ Midtown to commence this action and the present application for summary judgment in Enclosure 19. B] ENCLOSURE 19 B1: PJ Midtown’s Arguments [14] PJ Midtown contends that: i) The 13.12.2019 Agreement and Guarantee are clear and unambiguous. ii) Neither Asialand or OYO MY has denied executing the 13.12.2019 Agreement and Guarantee respectively. Page 5 of 31 iii) Asianland’s liability for the Outstanding Sum is clearly established under the 13.12.2019 Agreement. iv) OYO MY’s liability is established under the clear wording of the Guarantee. v) The Asialand or OYO MY’s various defences are mere bare denials unsupported by evidence. B2: Asialand’s Arguments [15] Asialand’s defence to PJ Midtown’s claim and its key arguments to oppose Enclosure 19 are as stated below. The Nature, Construct and Purpose of the 13.12.2019 Agreement [16] Asialand contends that PJ Midtown’s claim for rent is misconceived as the 13.12.2019 Agreement is not a tenancy agreement. According to Asialand, the obligations under the 13.12.2019 Agreement are inconsistent with a tenancy relationship. Asialand emphasises that it acted merely as an “Aggregator” and is not in the business of managing and making available units for short-term stays. [17] Asialand further argues that any breach of the 13.12.2019 Agreement was caused by OYO MY and Oravel as they had failed to make the 100 Units available for short-term stays. Asialand highlights that all sums and monies collected from short-term stays were to be paid to OYO MY and/or Oravel, not to Asialand. Inducement by OYO MY and Oravel [18] Asialand claims it was induced by OYO MY and Oravel to enter into the 13.12.2019 Agreement with PJ Midtown. According to Asialand, OYO MY and Oravel’s conduct in inducing Asialand to enter into a direct agreement (the 13.12.2019 Agreement) with PJ Midtown was calculated to prevent and/or distance themselves from legal liability under the guise of absence of privity. Page 6 of 31 [19] Asialand argues that OYO MY and Oravel received benefits from this arrangement including: i) Access to 100 units of serviced apartments to list for short-term stays; ii) Ability to leverage the agreements to increase their portfolio and exposure; iii) Sole and exclusive rights to monetise the 100 units since February 2020. The Guarantee [20] Asialand contends that if there are any sums due to the Plaintiff, these should be paid by OYO MY or Oravel, not Asialand. This argument is premised on: i) The Guarantee which had induced Asialand into accepting the position as “Aggregator”; ii) The calculated conduct of OYO MY and Oravel which caused prejudice and loss to Asialand. No Loss Suffered by PJ Midtown [21] Asialand further argues that PJ Midtown suffered no loss under the 13.12.2019 Agreement because: i) The Units were unsold and sitting idle in PJ Midtown’s possession. ii) The 13.12.2019 Agreement expressly allowed PJ Midtown to sell or dispose of any of the Units. iii) PJ Midtown incurred no costs in furnishing the units. iv) PJ Midtown incurred no costs in reinstating the Units after termination. Page 7 of 31 B3: OYO MY’s Arguments [22] OYO MY primarily challenged the validity and enforceability of Guarantee. Timing of the Guarantee and 13.12.2019 Agreement [23] OYO MY contends that the alleged guarantee and indemnity dated 18.10.2019 predates the 13.12.2019 Agreement by about two months. According to OYO MY, this means the subject matter of the Guarantee did not exist when the Guarantee was purportedly executed. OYO MY argues this temporal gap raises suspicion about whether the 13.12.2019 Agreement was indeed entered into premised on the Guarantee, and whether there was a consensus ad idem between the parties. [24] Furthermore, OYO MY submits that the terms and conditions of OYO MY’s agreement with Oravel also called “Marketing and Operational Consulting Agreement” dated 20.10.2019 (“the 20.10.2019 Agreement”) do not make it an obligation for OYO MY to provide any guarantee to secure the Units needed for short-term stays through OYO MY’s platform. Lack of Consideration [25] OYO MY argues there was no consideration moving from OYO MY at the time the Guarantee was executed. OYO MY submits that the consideration must be at the request of the promisor. OYO MY contends this requirement was not met as: i) OYO MY would only receive payment upon successful reservations of rooms on its online platform. ii) There would be no fixed fees and OYO MY’s costs and investments were unfunded. iii) OYO MY was responsible for capital expenditures including facility management, maintenance, housekeeping and utilities. Page 8 of 31 Guarantee Due to Lack of Authority to Execute [26] OYO MY challenges the validity of the Guarantee’s execution, arguing that: i) The Guarantee bears only a mere signature with no name, personal details or designation of the person executing it on behalf of OYO MY. ii) There are no witnesses to the execution. iii) The execution fails to satisfy the requirements of Section 66 of the Companies Act 2016, which requires execution by either two authorised officers (one being a director) or a sole director whose signature is witnessed. [27] OYO MY contends that the Business Development Head, Lim Gian Huang, had no authority to execute the Guarantee. In support, OYO MY points to: i) The absence of any directors’ resolution authorising the giving of the Guarantee. ii) Letters dated 12.3.2020 and 19.10.2020 specifically informing PJ Midtown that any guarantee signed by the Business Development Head was not valid. iii) The fact that there was no precedent of OYO MY offering guarantees for securing hotel and apartment business Ambiguity in PJ Midtown’s Cause of Action [28] OYO MY argues that the Guarantee creates two distinct obligations: i) A guarantee obligation concerning sums due from the supply of service apartments. ii) An indemnity obligation for losses from Asianland’s breach of the 13.12.2019 Agreement. [29] According to OYO MY, PJ Midtown must demonstrate different elements depending on which obligation it relies upon. For a claim Page 9 of 31 under the Guarantee, PJ Midtown must show sums were due specifically from the supply of the Units by Asianland to OYO MY. For an indemnity claim, PJ Midtown must establish breach by Asianland, causation, quantification of loss, and mitigation efforts. [30] OYO MY submits that which obligation PJ Midtown is invoking remains unclear and constitutes a triable issue requiring examination at trial. B4: Analysis and Findings (Enclosure 19) The 13.12.2019 Agreement creates a form of Tenancy [31] Asialand’s contention that the 13.12.2019 Agreement is not a tenancy agreement cannot be sustained. The 13.12.2019 Agreement contains clear and unambiguous terms establishing a landlord-tenant relationship: Recital 3 “The Owner shall by this Agreement make available 100 Units of Serviced Apartments (the “Property”) comprised in the Development, to the Aggregator for the purposes of conversion of the said 100 Units for short term stays.” Clause 2.1.1(a) “The Owner shall make available 100 Units of Service Apartments of which the Aggregator had inspected prior hereto, in the Development to the Aggregator within 30days from the date of this Agreement which Units shall be particularised in Annexure B;” Clause 2.1.1(j) “The Owner agrees that the Property shall be exclusively available to the Aggregator during the Term. Further, the Owner shall not either by themselves or execute any third party contracts or allow the use of the other Service Apartments belonging to the Owner available at the Property to be used for guest bookings through any other third Parties or their platforms without the knowledge and written consent of the Aggregator.” Page 10 of 31 Clause 4.1 “The Owner shall be entitled to fees with a fixed minimum guarantee of RM800.00 per month per unit for the first year of the agreement.” Clause 4.3 “The Owner shall be entitled to either the Net Revenue generated by the Aggregator from the Property or a minimum guarantee of RM1,000.00 per month per unit whichever is higher on the second year of the agreement.” (own emphasis added) [32] The “Owner” in the 13.12.2019 Agreement refers to PJ Midtown and the “Aggregator” refers to Asialand. These provisions clearly establish periodic payments in exchange for the use of the Units, the hallmark of a tenancy relationship. The fact that the parties chose to title it as a “Marketing and Operational Consulting Agreement” does not change its essential nature as a tenancy agreement. [33] Asialand’s argument that it was merely an “Aggregator” is contradicted by the clear obligations it undertook under Clause 2.2.1(b) of the 13.12.2019 Agreement: “The Aggregator shall convert the 100 Units for short terms stays by furnishing the said 100 Units in accordance to the inventory list attached herewith in Annexure A which ownership of the furnishings shall at all times remain with the Aggregator. The Aggregator shall maintain the said furnishings at its own cost throughout the Term;” (own emphasis added) [34] There is no issue as to when the tenancy commences as vacant possession of all 100 Units was delivered to Asialand before 28.2.2020 as admitted by Asialand themselves (paragraph 13 of Asialand’s Affidavit In Reply in respect of Enclosure 23 (Enclosure 33) and paragraph 33 of Asialand’s Affidavit In Reply in respect of Enclosure 19 (Enclosure 44). Paragraph 13 of Enclosure 33 is reproduced below: “Walaupun Asianland telah melengkapkan Unit-Unit tersebut dan kunci bagi Unit-Unit telah diserahkan kepada OYO MY pada 28.02.2020, OYO Page 11 of 31 MY dan OYO SG telah gagal, enggan dan/atau cuai untuk memulakan operasi bagi Unit-Unit tersebut dan telah gagal untuk tnembuat Bayaran tersebut kepada Asianland.” (own emphasis added) [35] Hence, there can be no ambiguity about when the tenancy commenced. Based on the above averment, Asialand had already furnished the Units and subsequently handed vacant possession of the Units to OYO MY on 28.2.2020. This means that vacant possession of the Units was given to Asialand by PJ Midtown well before that date to enable Asialand to furnish the Units. Business Relationship and Alleged Inducement [36] Asianland contends that OYO MY and Oravel worked in concert to induce Asianland into entering the 13.12.2019 Agreement with PJ Midtown. That these entities deliberately structured the arrangement to distance themselves from direct contractual liability while maintaining operational control through separate agreements (i.e. the 13.12.2019 Agreement and the 20.10.2019 Agreement). [37] This allegation forms part of Asianland’s broader defence that it was merely an intermediary or “Aggregator” rather than a genuine tenant. However, this argument cannot succeed for several reasons. [38] First, the 13.12.2019 Agreement and Guarantee create clear legal obligations regardless of any alleged underlying business arrangements between the parties thereto as: i) the 13.12.2019 Agreement, between PJ Midtown and Asialand, unambiguously establishes Asianland’s obligations to pay the specified amounts for fees/rental of the 100 units; ii) the Guarantee, given by OYO MY to PJ Midtown makes OYO MY liable for these payments; iii) Oravel is not a party to the 13.12.2019 Agreement and Guarantee. Page 12 of 31 [39] Second, the business collaboration between OYO MY and Oravel through the Memorandum of Understanding and the subsequent 20.10.2019 Agreement between them and Asialand: i) is not material to the enforcement of the 13.12.2019 Agreement and Guarantee; ii) is only binding between them (OYO MY, Oravel and Asialand) but do not affect PJ Midtown or the 13.12.2019 Agreement and the Guarantee; and iii) the 13.12.2019 Agreement and Guarantee create distinct legal obligations between the parties thereto (namely, PJ Midtown and Asialand, and OYO MY and PJ Midtown, respectively) and they operate independently of any alleged scheme, arrangement or agreement between OYO MY, Oravel, and Asialand, to which PJ Midtown is not privy. [40] Third, if Asianland felt it was being used as a mere intermediary, it had every opportunity to refuse to enter into the 13.12.2019 Agreement or to insist on different terms. Instead, it voluntarily assumed clear contractual obligations, which it must now honour. [41] The fact that Oravel may have been involved in the broader business arrangement does not affect the enforceability of either the 13.12.2019 Agreement or the Guarantee. These remain valid and binding legal instruments, creating obligations between the parties thereto which are enforceable. Termination and Outstanding Sum [42] The first batch of 50 Units was returned following PJ Midtown’s letter dated 7.9.2020 agreeing to terminate the tenancy. This is not in dispute. [43] The second batch of 50 Units (2nd Batch) was returned on 30.4.2020. The 2nd Batch was terminated on 30.4.2021, as pleaded in paragraph 15 of the Statement of Claim and this was not denied by Asialand. Page 13 of 31 [44] Clause 4 of the 13.12.2019 Agreement provides for the sums Asialand is obligated to pay PJ Midtown. Clause 4 of the 13.12.2019 Agreement and its sub-clauses state as follows: “4.0 FEES

4.1 The Owner shall be entitled to fees with a fixed minimum guarantee of RM800.00 per month per unit for the first year of the agreement.

4.2 For the 2nd year of the agreement, the Owner shall be entitled to a percentage of the Net Revenue, the calculation of which, shall be on the following formula Total Revenue less 6% Sales and Services Tax, thereafter less 25% of the Revenue to the Aggregator, and thereafter less operation charges on the scale below:- Charges per used room per night

RM 40 for 1 Bedroom towards supervision, housekeeping &

(ii) RM50 for 2 Bedroom utilities.

4.3 The Owner shall be entitled to either the Net Revenue generated by the Aggregator from the Property or a minimum guarantee of RM1,000.00 per month per unit whichever is higher on the second year of the agreement.” (own emphasis added) [45] The calculation of the first year of the 13.12.2019 Agreement is not an issue as that is fixed at RM800.00 per month per unit for the first 12 months which is calculated from March 2020 as Asialand has admitted that on 28.2.2020 it had handed vacant possession of the Units to OYO MY. [46] As for the second year of the 13.12.2019 Agreement, there were two applicable formulas: i) Based on a percentage of the Net Revenue generated by Asialand (Clause 4.2); or ii) Based on a minimum guarantee of RM1,000.00 per month per unit, whichever is higher (Clause 4.3). Page 14 of 31 [47] It is not in dispute that Asialand has not provided its Net Revenue generated for the second year of the 13.12.2019 Agreement despite requests made by PJ Midtown. Therefore, PJ Midtown is entitled to rely on the minimum guaranteed sums under Clause.

4.3 of the 13.12.2019 Agreement (read together with Clause 4.1). [48] Asialand has raised an objection to the use of the formula under Clause 4.3 of the 13.12.2019 Agreement. However, it has not provided its Net Revenue for the first year of the 13.12.2019 Agreement. Even if it had, if the Net Revenue is lower than the minimum guaranteed sum, PJ Midtown would still be entitled to the RM1,000.00 per month per unit (the minimum guaranteed fee). Therefore, PJ Midtown is simply claiming the minimum fee guaranteed it is entitled under the 13.12.2019 Agreement, which could potentially be higher if PJ Midtown insisted on Asialand providing its Net Revenue for the second year. Hence, there is no reason for Asialand to object to the use of Clause 4.3. [49] In this regard, the calculation of the Outstanding Sum of RM1,196,385.48 is supported by PJ Midtown’s Statement of Account as of 30.9.2021, and this calculation has not been rebutted. The Guarantee Timing of the Guarantee [50] The fact that the Guarantee (18.10.2019) predates the 13.12.2019 Agreement does not invalidate it. The Guarantee explicitly states it was given “in consideration of you, PJ Midtown Development Sdn Bhd (Company No. 736837-A) (“Owner”) agreeing to enter into an agreement” with Asialand. This demonstrates it was intentionally executed as a condition precedent to secure PJ Midtown’s entry into the 13.12.2019 Agreement. Consideration for the Guarantee [51] The consideration for the Guarantee is clearly stated in the document itself, that is PJ Midtown’s agreement to enter into the 13.12.2019 Agreement with Asialand. This constitutes valid consideration under Section 80 of the Contracts Act 1950 which states as follows: Page 15 of 31 “Anything done, or any promise made, for the benefit of the principal debtor may be a sufficient consideration to the surety for giving the guarantee.” (own emphasis added) Lim Gian Huang’s Authority [52] The Guarantee was executed by Lim Gian Huang, the Business Development Head of OYO MY. Significantly, while OYO MY issued a letter dated 12.3.2020 questioning Lim Gian Huang’s authority to execute the Guarantee, at no point did OYO MY specifically deny that Lim Gian Huang executed the document. Instead, OYO MY merely stated it came to their attention that Lim Gian Huang had signed the Guarantee and questioned his authority to do so. There is a crucial distinction here: i) OYO MY does not dispute the fact that Lim Gian Huang executed the Guarantee; ii) OYO MY only questions Lim Gian Huang authority and therefore whether the Guarantee is binding on OYO MY. [53] Furthermore, this same individual had previously executed the Memorandum of Understanding between the parties thereto on behalf of OYO MY which in itself demonstrates he has actual or ostensible authority. [54] Further, the “indoor management” rule or the Turquand rule, applies such that third parties dealing with a company are entitled to assume that the company’s internal rules, regulations, and procedures, including those stated in its Articles of Association or Constitution, have been properly followed, even if they have not (Royal British Bank v. Turquand [1843-60] All ER Rep 435) [55] The Turquand rule was applied in Kim Guan Choong Sdn Bhd v. Pengarah Pejabat Tanah Dan Galian Pulau Pinang & Ors & Other Appeals [2023] 1 LNS 2427, where the Court of Appeal held as follows: “[72] Coming back to the position of R2, any party dealing with the Appellant, including R4, the OBB (bank) as chargee, R6, R9 and RIO could not have Page 16 of 31 known that R2 had ceased to be a director of the Appellant with effect from 26.5.1989 (bankruptcy order) and were entitled to assume that R2 had the apparent or ostensible authority to execute the S&P, MOT and charge on behalf of the Appellant. R2 was allowed to continue remain in control of the management and affairs of the Appellant until 1995 without any protest of the Appellant or any other directors of the Appellant. The Appellant ought to be estopped from now suggesting that R2 lacks of authority to act for the Appellant. The learned High Court judge held, and we agree, that by virtue of indoor management rule/ Turquand’s rule, and as enshrined under sections 20(1) and 127 of the Companies Act 1965 (now repealed by Companies Act 2016), the act of R2, in realizing the charged dan selling the 2/3 portion of the land to settle the Appellant’s outstanding loan arrears with Bangkok Bank was valid (see Grounds of Judgment paras 335 - 337). On the facts of this case, we find that Turquand rule as decided in Royal British Bank v. Turquand [1843-60] All EE 435, applies: …..” (own emphasis added) [56] The main exception to the Turquand rule occurs where the third party is aware, or ought reasonably to have been aware, of the internal irregularity, or if the third party has acted in bad faith (Pekan Nenas Industries Sdn Bhd v. Chang Ching Chuen & Ors [1998] 1 MLJ 465). [57] In the present case the Turquand rule applies as: i) There is no reason for any third party dealing with Lim Gian Huang, as the Business Development Head of OYO MY, to doubt his authority to act on behalf of OYO MY, given his significantly high position. ii) Lim Gian Huang has previously executed the Memorandum of Understanding on behalf of OYO MY, which demonstrates his authority to act for OYO MY, and OYO MY recognises this. It is rather inconsistent of OYO MY to now say otherwise. iii) Even if Lim Gian Huang truly lacked authority to act for OYO MY, there is no way PJ Midtown would know about this. iv) Since OYO MY claims that Lim Gian Huang lacked the authority to execute the Guarantee and that it was unaware of this, it is interesting that OYO MY has not provided any evidence showing that it took action against him. Page 17 of 31 v) There is no evidence to suggest that PJ Midtown had acted in bad faith. [58] Therefore, PJ Midtown was entitled to assume that Lim Gian Huang had the apparent authority to bind OYO MY, making the Guarantee binding on OYO MY. Right to Call on the Guarantee [59] Based on the facts of the present case, it makes no difference that the Guarantee is both a guarantee and an indemnity. Its terms are clear in that OYO MY has stated under the Guarantee that it: “irrevocably guarantee to pay on demand any sums due and owing to you from the supply of the said 100 units of Service Apartments by the Aggregator and undertake to indemnify you against any losses and/or expenses which you may incur or sustain by reason of the failure on the part of the Aggregator to comply with any terms and conditions under the agreement “Marketing & Operational Consulting Agreement” signed between PJ Midtown Development Sdn Bhd and Asianland Realty Sdn Bhd including to pay any monies payable thereundur. (own emphasis added) [60] As Asialand failed to pay the Outstanding Sum to PJ Midtown due to its breach of the 13.12.2019 Agreement, PJ Midtown was entitled to invoke the Guarantee, and Asialand is obligated to pay the Outstanding Sum. There is no ambiguity in PJ Midtown’s claim against OYO MY, which is based on a breach of the Guarantee. Therefore, OYO MY's argument on this issue is without merit. [61] Following Bank Negara Malaysia v. Mohd Ismail Ali Johor & Ors [1992] 1 CLJ (Rep) 14, where denials are inconsistent with contemporaneous documents, the Court must reject such denials as non-triable issues. Asialand and OYO MY’s various arguments contradict the clear documentary evidence before the Court. [62] Based on the above, I find there are no genuine triable issues warranting a full trial. The terms of both the 13.12.2019 Agreement and Guarantee are clear and unambiguous, and Asialand and OYO MY’s various defences amount to mere denials unsupported by evidence. Page 18 of 31 C] ENCLOSURES 23, 25 and 67 [63] Enclosures 23, 25 and 67 are interrelated and can be taken together. [64] Enclosures 23 and 25 are the applications by Oravel and OYO MY, respectively, to strike out Asialand’s Counterclaim against them. The Counterclaim does not include PJ Midtown. [65] In its Counterclaim against OYO MY and Oravel, Asialand seeks: i) An indemnity from OYO MY and Oravel against any judgment entered against Asianland by PJ Midtown. ii) General damages and exemplary damages against OYO MY and Oravel for: a) Causing Asianland to breach obligations to PJ Midtown; b) Having to reinstate the Units at its own cost; c) Being sued by PJ Midtown for RM1.19 million; d) Getting a bad credit rating with CTOS. [66] From the outset, I must highlight that after Enclosures 23 and 25 were filed on 7.7.2023, Asialand filed Enclosure 67, its application to amend the Counterclaim, about six months later on 25.1.2024. This, in itself, is telling of how Asialand viewed its Counterclaim. [67] Vide Enclosure 67, Asialand seeks to amend its Counterclaim to add PJ Midtown (Plaintiff in the main suit) as a defendant and seeks the following additional orders: i) That PJ Midtown be bound by any indemnity order made against OYO MY and Oravel; ii) That any enforcement of damages in PJ Midtown’s favour only be against OYO MY and Oravel. Page 19 of 31 C1: Additional Salient Background Facts [68] On 20.10.2019, OYO MY and Oravel entered into the 20.10.2019 Agreement with Asianland to provide units/rooms at PJ Midtown Development for short-term stays through OYO’s platform. [69] Subsequently on 13.12.2019, PJ Midtown and Asianland entered into the 13.12.2019 Agreement, that is the separate Marketing and Operational Consulting Agreement where PJ Midtown agreed to rent the 100 Units of service apartments to Asianland. [70] On 26.6.2020, Asianland commenced Civil Suit No. WA-22NCvC- 332-06/2020 (“Suit 332”) against OYO MY and Oravel in relation to the 20.10.2019 Agreement. OYO MY and Oravel applied for a stay pending arbitration pursuant to the arbitration clause in the 20.10.2019 Agreement. [71] On 17.8.2021, the Court of Appeal allowed OYO MY and Oravel’s appeal and ordered that proceedings in Suit 332 be stayed pending arbitration pursuant to Section 10 of the Arbitration Act 2005 (“Court of Appeal’s Stay Order”). [72] In the present suit, PJ Midtown’s claim against Asianland and OYO MY is for unpaid fees/rental under the 13.12.2019 Agreement and the Guarantee. Asianland filed its Defence and Counterclaim on 15.2.2023, counterclaiming against OYO MY and Oravel (but not PJ Midtown) for an indemnity against any judgment entered against Asianland, as well as general and exemplary damages. C2: OYO MY and Oravel’s Grounds for Striking Out [73] OYO MY and Oravel’s main grounds for striking out the Counterclaim can be summarised as follows: i) The Counterclaim is defective and unsustainable as it contravenes Order 15 Rule 3 ROC which requires PJ Midtown (as Plaintiff in the main suit) to be included as a defendant in the Counterclaim before any other party can be joined. Page 20 of 31 ii) Without a counterclaim against PJ Midtown, there can be no cause of action against OYO MY and Oravel as there is no nexus established between them “along with the plaintiff” as required under Order 15 Rule 3 ROC. iii) The Counterclaim relates to disputes under the 20.10.2019 Agreement which are subject to the Court of Appeal Stay Order pending arbitration. iv) Any decision on the Counterclaim would create issues of estoppel/res judicata and prejudice OYO MY and Oravel’s right to have these matters heard in arbitration. C3: Asianland’s Submissions in Opposition and Enclosure 67 [74] Asianland’s key contentions in opposing Enclosures 23 and 25 are as follows: i) The Counterclaim has disclosed valid causes of action against OYO MY and Oravel based on their calculated conduct which caused prejudice and damage to Asianland; ii) The Counterclaim is distinct and different from the claim in Suit 332 in that the latter was for specific performance of the 20.10.2019 Agreement while the Counterclaim is premised on OYO MY and Oravel’s calculated conduct; iii) Any procedural irregularity regarding non-joinder of PJ Midtown can be cured by amendment and should not be basis for striking out and substantive justice should prevail over procedural technicalities. C4: Analysis and Findings (Enclosures 23, 25 and 67) The Non-Compliance with Order 15 Rule 3(1) ROC [75] Order 15 Rule 3(1) ROC clearly provides that a defendant making a counterclaim against any other person (whether or not a party to the action) must first have a counterclaim against PJ Midtown before joining that other person as a party. Page 21 of 31 [76] Order 15 Rule 3(1) ROC provides as follows: “(1) Where a defendant to an action who makes a counterclaim against the plaintiff alleges that any other person (whether or not a party to the action) is liable to him along with the plaintiff in respect of the subject matter of the counterclaim, or claims against such other person any relief relating to or connected with the original subject matter of the action, then, subject to rule 5(2), he may join that other person as a party against whom the counterclaim is made.” (own emphasis added) [77] It is an express condition under Order 15 Rule 3(1) ROC that when a defendant files a counterclaim, the plaintiff must be included in the counterclaim first. [78] Asianland argues that this defect can be cured by amendment, however, I note that the cases cited by Asialand namely Solai Realty Sdn Bhd v. United Overseas Bank (Malaysia) Berhad [2013] 1 LNS 384 and Metroplex Holdings Sdn Bhd v. Commerce International Merchant Bankers Bhd [2013] 8 CLJ 329 dealt with defective pleadings generally and not specifically counterclaims which are governed by the express requirements of Order 15 Rule 3 ROC. [79] On the other hand, the following cases specifically address Order 15 Rule 3(1) ROC or its equivalent, stating that a defendant cannot plead a counterclaim against a co-defendant or third party who is not a party to the action, without first making the counterclaim against the plaintiff: i) Warisan TC Holdings Berhad & Anor v. Tan Boon Pun & Others [2004] MLJU 3998 where it was held as follows: “Further in the case of Furness v Booth [1876] 4 Ch.D.586 Jessel MR said: #"a pleading which asks no cross relief against a Plaintiff either alone or with some other person is not a counterclaim." A reading of the purported counterclaim showed that TBP makes no claim and claim no relief or remedy against Warisan. The counterclaim is a derivative action for the benefit of Warisan. Page 22 of 31 It is clear that before TBP could add other parties as co-defendant in the writ, he must first make a counter claim against Warisan. It follows that since TBP could not bring any counterclaim against Warisan, there cannot be any basis to bring 1st to 7th Defendant. Under Order 15 rule 3, before 1st to 7th Defendant could be added as parties TBP must have a valid counterclaim against Warisan which from the nature ofthe derivative action is not the case.” (own emphasis added) ii) Lim Bee Hoi v. Frontier Engineering Solutions Sdn Bhd & Anor [2021] MLJU 2494 where the High Court held: “[30] The issue is, could the 2nd Defendant’s claims against the 1st Defendant be made by counterclaim in this action commenced by the Plaintiff? [31] l do not think so. The 2nd Defendant’s claims are solely intended to be made against the 1st Defendant under the said Sub-Contract Agreement made between the 2nd and 1st Defendants. [32] The 2nd Defendant was not making any counterclaim against the Plaintiff in the action under order 15 rule 2 of the Rules of Court 2012. [33] The 2nd Defendant’s claims against the 1st Defendant is not capable of being brought against the 1st Defendant solely or alone as a “counterclaim” under Order 15 Rule 3(1) of the Rules of Court 2012. [34]This is because Order 15 Rule 3(1) of the Rules of Court 2012 provides:” ……. “[35] Thus, it is only permissible for a defendant to plead a counterclaim against a co-defendant or third party along with the Plaintiff in the action.” (own emphasis added) iii) Khan Kam Chee v. Loke Wan Yat Realty Sdn. Bhd. [1974] 1 MLJ 206 in which the High Court applied Order 21 Rule 11 Page 23 of 31 of the Rules of the Supreme Court which is in pari materia with Order 15 Rule 3(1) ROC and held as follows: “Under the circumstances, apart from anything else, it is essential in the first place to determine whether there is any cause of action raised by the counterclaim against the plaintiff before the court considers whether the cause of action against the plaintiff and Toby Lam is joint or in the alternative. If the relief claimed against Toby Lam is in the alternative only and not jointly with the plaintiff, the application to join Toby Lam as a co-defendant to the counterclaim should not be allowed. (own emphasis added) [80] In the present case, the Counterclaim is only against OYO MY and Oravel without including PJ Midtown as a defendant. This contravenes Order 15 Rule 3 ROC and renders the Counterclaim procedurally defective and unsustainable. [81] I will specifically address why Enclosure 67 cannot cure the defect in the Counterclaim in more detail in the next section, which focuses on Enclosure 67. Subject Matter of Dispute Falls Within Scope of Arbitration [82] In any event, I also find merit in OYO MY and Oravel’s contention that the Counterclaim relates to disputes that fall within the scope of arbitration pursuant to the Court of Appeal Stay Order. [83] Although Asianland argues that its Counterclaim is distinct from Suit 332, the basis of the Counterclaim, namely OYO MY and Oravel’s alleged conduct and breach of obligations, stems from and is inextricably linked to the 20.10.2019 Agreement, which contains the arbitration clause. [84] The issue here is whether the Counterclaim against OYO MY and Oravel is subject to the Court of Appeal’s Stay Order directing that disputes between these parties be stayed pending arbitration. [85] At the outset, it must be noted that Oravel was never a signatory to the Guarantee that forms part of the basis of the claims in this present case. This fact alone raises serious questions about Oravel’s connection to these proceedings. Page 24 of 31 [86] The core dispute between the parties stems from conflicting positions regarding which of the Marketing and Operational Consulting Agreement (the 13.12.2019 Agreement or the 20.10.2019 Agreement) should govern their relationship. In Suit 332, Asianland contends that the 13.12.2019 Agreement should apply. However, this very question of which agreement governs falls squarely within the ambit of disputes that the Court of Appeal has directed to arbitration. [87] Upon careful examination of the Counterclaim, it becomes evident that Asialand’s claims for indemnification and damages fundamentally arise from and depend upon the parties’ relationship under both the 13.12.2019 and 20.10.2019 Agreements (collectively referred to as “both Agreements”). Specifically, Asianland’s allegations regarding: i) Its inability to meet obligations to PJ Midtown; ii) Costs incurred in reinstating the Units; iii) PJ Midtown’s lawsuit against Asianland; and iv) Damage to Asianland’s credit rating, all stem from disputed interpretations of obligations under both Agreements. [88] Similarly, Asianland’s contentions regarding benefits allegedly obtained by OYO MY and Oravel, including leveraging the Agreements to enhance their portfolio and monetising the Units are inextricably linked to disputed obligations under both Agreements. [89] To allow the Counterclaim to proceed would require this Court to adjudicate matters that are properly within the jurisdiction of the arbitral tribunal. This creates issues of estoppel and res judicata that could prejudice OYO MY and Oravel’s right to have these matters determined through arbitration as directed by the Court of Appeal. [90] The effect of the Court of Appeal’s Stay Order was to ensure that all disputes between these parties (Asialand, OYO MY and Oravel) relating to obligations under both Agreements be resolved through arbitration. Allowing the Counterclaim to proceed would Page 25 of 31 circumvent that the Court of Appeal’s Stay Order and may lead to inconsistent findings between this Court and the arbitral tribunal (Jaya Sudhir a/l Jayaram v. Nautical Supreme Sdn Bhd & Ors [2019] 5 MLJ 1 (FC)). It should be emphasised that PJ Midtown is not a party to this dispute, which raises the question of why Asialand seeks to add PJ Midtown to the Counterclaim. [91] Although Jaya Sudhir (supra) involves an injunction to freeze arbitral proceedings pending the disposal of the suit, the principle from this case is still applicable here. The Federal Court in Jaya Sudhir (supra) emphasised the need to avoid multiplicity of proceedings. It was held that allowing the same issues to be litigated simultaneously before different tribunals poses the real risk of inconsistent findings. [92] Therefore, I find that the Counterclaim falls within the scope of matters that must be referred to arbitration pursuant to the Court of Appeal’s Stay Order. D] ENCLOSURE 67 [93] As stated earlier, Enclosure 67 has to be considered together with Enclosures 23 and 25 as it seeks to circumvent Enclosures 23 and 25. [94] In evaluating whether Asianland can remedy the defect in its Counterclaim, I have carefully considered Enclosure 67, which seeks to add PJ Midtown as a party to the Counterclaim. However, I find that this attempt to cure the defect cannot succeed for several reasons. [95] The timing and nature of Enclosure 67 demonstrates that it is merely an afterthought, filed by Asianland as a belated attempt to address the fundamental defect in its Counterclaim under Order 15 Rule 3(1) ROC. The law requires proper procedure to be followed from the outset, not retroactively, as stated earlier. [96] More fundamentally, the defect in this case is not one that can be cured through subsequent amendment. The jurisprudence on Order 15 Rule 3(1) ROC establishes that a defendant must first Page 26 of 31 have a valid counterclaim against the plaintiff before being permitted to join additional defendants to that counterclaim. [97] The requirement is sequential in that only after establishing a proper counterclaim against the plaintiff can other parties be joined as additional defendants. Asianland cannot now attempt to retroactively add PJ Midtown when it was not originally included as a party at the time the Counterclaim was filed. [98] As Asialand has failed to first establish a counterclaim against PJ Midtown, it, as the plaintiff in the Counterclaim, had no proper basis for joining OYO MY and Oravel as defendants in the Counterclaim. [99] The proper procedure under Order 15 Rule 3(1) ROC requires that PJ Midtown must have been made a party to the Counterclaim from its inception. This is a fundamental prerequisite that cannot be satisfied through subsequent amendment, as PJ Midtown was indisputably not an original party to the Counterclaim. [100] Further and in any event, Asialand has also failed to show that it has a valid cause of action against PJ Midtown and this is evident from the amendments in the Proposed Amended Defence and Counterclaim. [101] Asialand has also not shown how PJ Midtown is liable together with OYO MY and Oravel in the Proposed Amended Defence and Counterclaim (Laksana Webawa Sdn Bhd v. Paragon Advance Solutions Sdn Bhd [2010] MLJU 2122). Conversely, it is clear in the present case that the indemnity Asialand seeks from OYO MY and Oravel will no longer be an issue if they are removed as parties in the Counterclaim. In other words, without OYO MY and Oravel, Asialand has no reason to add PJ Midtown in the Counterclaim. This is one of the fundamental flaws in Enclosure 67. [102] Similarly, the reliefs sought in the Proposed Amended Defence and Counterclaim also suffers from the same fundamental legal flaw. The Counterclaim improperly attempts to create a binding indemnity order between two distinct legal relationships that cannot be conflated: i) First, there is PJ Midtown’s primary claim against Asianland, which stands independently on its own merits. Page 27 of 31 ii) Second, there is Asialand’s separate claim seeking indemnity from OYO MY and Oravel for any liability Asialand has toward PJ Midtown. [103] Asialand’s attempt to bind all these parties through a single indemnity order fails to recognise the distinct and separate nature of these legal relationships and what is legally permitted under the circumstances. [104] Simply put, there is no legal basis for Asialand to seek an order that PJ Midtown: i) “be bound by an order of indemnity made against” OYO MY and Oravel; and ii) “that the enforcement of any damages in favour of” PJ Midtown “be effected only against” OYO MY and Oravel. [105] Asialand has no legally recognisable cause of action against PJ Midtown, and therefore, Asialand’s proposed amendment to the Counterclaim to add PJ Midtown and the reliefs sought are legally misconceived and not bona fide. [106] Hence, I find that proposed amendments in Enclosure 67 are: i) not bona fide (see Yamaha Motor Co. Ltd. v. Yamaha (M) Sdn. Bhd. & Ors. [1983] CLJ Rep 428; Hong Leong Finance Bhd v. Low Thiam Hoe & Another Appeal [2015] 8 CLJ 1; ii) a tactical manoeuvre (Danaharta Urus Sdn Bhd v. Safri bin Nawawi & Anor (Part 2) [2008] 1 LNS 612; Hong Leong Finance (supra)); and iii) not material or otherwise “useless” (Wong Ah Hee @ Wong Ah Mooi & Anor v. Low Tuck Hoong [1994] 2 CLJ 313). [107] For these additional reasons, I also find that Enclosure 67 cannot cure the critical flaw in Asianland’s Counterclaim which justifies it being struck out. Page 28 of 31 E] CONCLUSION [108] Based on the above, I summarise my conclusions as follows: i) In respect of Enclosure 19, PJ Midtown has established its claim against OYO MY and Oravel and they have failed to raise any genuine triable issues (Bank Negara Malaysia (supra)). The requirements under Order 14 ROC 2012 have been satisfied for the granting of summary judgment (National Company for Foreign Trade v. Kayu Raya Sdn. Bhd. [1984] 1 CLJ Rep 283). ii) In respect of Enclosures 23 and 25, I find the Counterclaim to be scandalous, frivolous, and vexatious amounting to an abuse of process. The Counterclaim is obviously unsustainable (Seruan Gemilang Makmur Sdn Bhd v. Kerajaan Negeri Pahang Darul Makmur & Anor [2016] 3 MLJ 1). iii) In respect of Enclosure 67, I find the proposed amendments to be not bona fide, but rather a tactical manoeuvre, and they are immaterial or useless (Hong Leong Finance (supra); Wong Ah Hee (supra)). [109] In the circumstances, I allowed Enclosure 19 and granted Summary Judgment in favour of PJ Midtown, with costs. I also allowed Enclosures 23 and 25, striking out Asialand’s Counterclaim against OYO MY and Oravel, with costs. Enclosure 67 was dismissed with costs. Dated this 22nd day of January, 2025 -SGD- (WAN MUHAMMAD AMIN BIN WAN YAHYA) Judge High Court of Malaya, Kuala Lumpur (Commercial Division (NCC 3)) Page 29 of 31 COUNSEL FOR THE PLAINTIFF (IN THE MAIN SUIT) Alan Tan Fu Seng Messrs Joseph Ting & Co. Suite 5-14, 6th Floor, IOI Business Park, No. 1, Persiaran Puchong Jaya Selatan, Bandar Puchong Jaya, 47170 Selangor Tel: 03-80708090 Emel: info@josephting.com COUNSEL FOR THE 1ST DEFENDANT (IN THE MAIN SUIT AND PLANTIFF IN THE COUNTERCLAIM) Goh Keng Tat (Elfeez Thariq together with him) Messrs Goh Keng Tat & Co. B-9-27, 9th Floor, Empire SOHO, Jalan SS 16/1, 47500 Subang Jaya, Selangor Darul Ehsan Tel: 03-56126092 Emel: office@gohkengtat.com.my COUNSEL FOR THE 2ND DEFENDANT (IN THE MAIN SUIT AND 1ST DEFENDANT IN THE COUNTERCLAIM AND 2ND DEFENDANT IN THE COUNTERCLAIM) Rubini Murugesan (Ashley Tay Suet Yee together with her) Messrs Christopher & Lee Ong Level 22, Axiata Tower, No. 9, Jalan Stesen Sentral 5, Kuala Lumpur Sentral, 50470 Kuala Lumpur Tel: 03-22731919 Emel: rubini.murugesan@christopherleeong.com & ashley.tay@christopherleeong.com Page 30 of 31 LEGISLATION / RULES CITED Rules of Court 2012  Order 14 Rule 1  Order 15 Rule 3 and 6  Order 18 Rule 19(1)(a), (b) and (d)  Order 20 Rule 5 Rules of the Supreme Court  Order 21 Rule 11 Arbitration Act 2005  Section 10 Contracts Act 1950  Section 80 Companies Act 2016  Section 66

Bank Negara Malaysia v. Mohd Ismail Ali Johor & Ors [1992] 1 CLJ (Rep) 14

Danaharta Urus Sdn Bhd v. Safri bin Nawawi & Anor (Part 2) [2008]

Hong Leong Finance Bhd v. Low Thiam Hoe & Another Appeal [2015] 8 CLJ 1 4. Jaya Sudhir a/l Jayaram v. Nautical Supreme Sdn Bhd & Ors [2019]

Kim Guan Choong Sdn Bhd v. Pengarah Pejabat Tanah Dan Galian Pulau Pinang & Ors & Other Appeals [2023] 1 LNS 2427 Page 31 of 31 6. Khan Kam Chee v. Loke Wan Yat Realty Sdn. Bhd. [1974] 1 MLJ 206

Lim Bee Hoi v. Frontier Engineering Solutions Sdn Bhd & Anor [2021]

Laksana Webawa Sdn Bhd v. Paragon Advance Solutions Sdn Bhd [2010] MLJU 2122

Metroplex Holdings Sdn Bhd v. Commerce International Merchant

National Company for Foreign Trade v. Kayu Raya Sdn. Bhd. [1984] 1 CLJ Rep 283

Pekan Nenas Industries Sdn Bhd v. Chang Ching Chuen & Ors [1998]

Royal British Bank v. Turquand [1843-60] All ER Rep 435

Solai Realty Sdn Bhd v. United Overseas Bank (Malaysia) Berhad [2013] 1 LNS 384

Seruan Gemilang Makmur Sdn Bhd v. Kerajaan Negeri Pahang Darul

Warisan Tc Holdings Berhad & Anor v. Tan Boon Pun & Others [2004]

Wong Ah Hee @ Wong Ah Mooi & Anor v. Low Tuck Hoong [1994] 2

Yamaha Motor Co. Ltd. v. Yamaha (M) Sdn. Bhd. & Ors. [1983] CLJ