Rafena Ezanee Binti Ramli v Rusli Bin Zaman (DA-22NCC-5-11/2024)

The enclosure 10 ("Encl.10") is the Defendant's Notice of Application to strike out the Plaintiff's Writ and Statement of Claim under Order 18 Rule 19 (1)(a), (b), (c) and/or (d) of the Rules of Court 2012. This Court has allowed the Defendant's application in this Encl. 10 and has struck out the Plaintiff's Writ and Statement of Claim. The Plaintiff appealed to the Court of Appeal. Background.

This suit was brought by the Plaintiff against the Defendants in relation to a housing project investment agreement dated 8.7.2015 (“the first agreement”) entered into between a company named Dark Wave Construction Sendirian Berhad” (Company Registration No: 1150938-D) (“DWCSB”) and another company named Dubaiz Development Berhad” (Company Registration No: 849605 V) (“DDB”). The duration of the first agreement was for one year commencing from 15.8.2015 until 15.8.2016.

The Plaintiff is the director of DWCSB and the Defendant is the director of DDB.

4.

The first agreement then had been terminated by DWCSB and DDB and a new agreement dated 15.12.2016 (“the second agreement”) had been entered into between the Plaintiff and the Defendant.

6.

In the event the Defendant fails to pay the said amount, the Defendant shall transfer two properties and/or business under the Defendant’s name or belonged to the Defendant or other individual who is agreeable to transfer any property or business to the Plaintiff to satisfy the settlement amount.

The Defendant then applied to strike out the Plaintiff’s writ and statement of claim on 3 issues or grounds as follows:

Whether the Plaintiff and the Defendant are separate legal entity from DWCSB and DDB.

(ii) Whether the Plaintiffs has Locus Standi to sue the Defendant personally in respect of the agreement and transaction entered into between the two corporate entities.

(iii) Whether the Plaintiff’s claim is time barred pursuant to Limitation Act 1953. Summary of the plaintiff’s submission.

The learned counsel for the Plaintiff submits that the plaintiff has the required locus standi to bring and maintain this suit against the defendant to recover the debt owed by the defendant to the plaintiff.

It was also argued that the second agreement had been entered into by the plaintiff and defendant in their own individual names respectively and the defendant had agreed to undertake the obligation to settle the debt as stipulated in the second agreement in the amount of RM1,300,000.00 to the plaintiff on or before 6.12.2016. It was also agreed that the defendant to settle the said debt in his own personal capacity. Therefore, there has been a contractual relationship between the plaintiff and the defendant individually and not between DWCSB and DDB anymore.

It is further submitted for the plaintiff that, on 3.6.2019 the terms of the second agreement was renewed and amended by exchanges of “WhatsApp” messages between the parties where the defendant, in his personal capacity, has agreed to settle the said debt to the plaintiff in the amount of RM1,207,000.00 by monthly instalments commencing on the month end of June 2019 and the first instalment shall not be less than RM500,000.00. Therefore, the contractual relationship between the plaintiff and the defendant individually has existed since the formation of the second agreement.

The agreement through “WhatsApp” messages has superseded both the first and the second agreement the result of which DWCSB and DDB are no longer the parties to the action but the plaintiff and the defendant individually.

In respect of the issue of time barred, the plaintiff submits that her claim is not time-barred since there was written acknowledgement of debt by the defendant and the acknowledgement of debt was made within the period of six years, to be exact, 5 years, 5 months and 27 days. Summary of Defendant's Submission.

The learned Defendant's counsel submits that the Plaintiff's Statement of Claim does not disclose any reasonable cause of action against the Defendant and the Plaintiff's claim against the Defendant is a scandalous, frivolous or vexatious and it is an abuse of the court process based on two grounds: Firstly, the plaintiff and the defendant have separate legal entity from DWCSB and DDB hence the plaintiff has no locus standi to sue the defendant; and Secondly, the Plaintiff’s claims is time barred under Section 6(1)(a) of the Limitation Act 1953.

The learned counsel for the defendant submits that both DWCSB and DDB retain separate legal entity under the Companies Act

It follows that any contractual rights or liabilities in this case are attached to DWCSB and DDB and not to any of their directors or individuals behind them. The role of the defendant was only as a facilitator and negotiator to find solution for the dispute between DWCSB and DDB.

The defendant also contends that the second agreement as well as the agreement through “WhatsApp” messages was not made in the individual capacity of the parties. Therefore, the plaintiff, in her individual capacity, has no locus standi to sue the defendant based on the agreement entered into between DWCSB and DDB.

The plaintiff and defendant are not privy to the agreements entered into by DWCSB and DDB and hence have no power to enforce the said agreements.

The defendant further argued that, the plaintiff’s claim is time-barred since the first agreement was made on 8.7.2015 for a period of one year which expired on 7.8.2016. The cause of action had arisen since then and had expired on 8.8.2022.

The second agreement dated 15.12.2016. The plaintiff’s writ was filed on 29.11.2024 which was more than 8 years later. Hence it was also time barred. Hence the plaintiff has no cause of action against the defendant and it is an abuse of the court’s process. Analysis and Findings of the Court. The First Agreement dated 8.7.2015.

The cause of the dispute between the parties herein is the first agreement dated 8.7.2015. It was entered into between DWCSB and DDB allegedly for the investment purposes in a housing project at Pantai Cinta Berahi (PCB), Kota Bharu, Kelantan. The plaintiff and the defendant individually are not privy to the first agreement.

Based on the legal principle enunciated in the celebrated case of Salomon v Salomon & Co, Ltd; Salomon & Co, Ltd v Salomon [1895-99] All ER Rep 33 referred to by the learned counsel for the defendant, a company and its directors or officers stand on a separate legal entity. Hence, any action to enforce the first agreement shall be taken by or against the companies themselves i.e. DWCSB and/or DDB and not by or against the plaintiff and the defendant individually. The Second Agreement dated 15.12.2016.

It was submitted that the second agreement had been entered into by the plaintiff and the defendant individually without involving DWCSB and DDB. However, upon close scrutiny of the second agreement (exhibit RER-3 in Encl. 12) particularly to the preamble of the agreement, the names of the parties were clearly stated and mentioned along with the name of the companies as follows: “THIS AGREEMENT is made the 15th day of December 2016 Between DATO’ RAFENA EZANEE BINTI RAMLI (NRIC: 821127-02- 5394) of DARKWAVES CONSTRUCTION SDN BHD (hereinafter referred to as “DARKWAVES”) at … and DATO’ SERI RUSLI ZAMAN (NRIC: 801201-03-5685) of DUBAIZ DEVELOPMENT BERHAD (hereinafter referred to as (“DUBAIZ”) at … .” Emphasis is mine.

Not only the name on the companies are mentioned therein but other particular as to the business background of both companies are also mentioned in preamble no. 1, 3 and 4 as follows: i) In preamble No.1: “ … the parties executed an agreement (“letter of agreement”) whereby the parties agreed among others, for DRE to invest a certain sum of money and Darkwaves to be appointed as the subsidiary of Dubaiz …. “ ii) Preamble No. 3: “ … that DSR and Dubaiz has breached the terms and conditions of the letter of agreement due to the failure of DSR and Dubaiz to execute the terms and conditions of the letter of agreement.” iii) Preamble No. 4: “The parties mutually agree that DSR and/or Dubaiz must now refund and/or repay whatever that has been invested by DRE and/or Daerwaves. … “ Emphasis is mine.

There is no necessity to mention the name of the companies in the second agreement if indeed the said agreement has no relation to the companies at all and if it is true that the said agreement merely between the plaintiff and the defendant individually.

This Court is of the opinion that without the existence of the first agreement i.e. investment agreement between DWCSB and DDB, there is no transaction or debt to be the basis for the second agreement i.e. settlement agreement made between the plaintiff and the defendant herein since the defendant is not indebted to the plaintiff personally.

The law on separate legal entity between the company and its directors is well settled since the case of Salomon v Salomon & Co. Hence the second agreement entered into by the plaintiff and the defendant was invalid as there was no consideration or transaction between the plaintiff and the defendant personally.

For the sake of argument, if the second agreement is valid as submitted by the learned counsel for the plaintiff, this Court finds that the terms of the second agreement is impossible to be carried out by the parties especially the defendant since it is a back dated agreement.

The terms of the second agreement is said to have been back dated when clause 1 provides that the amount of RM1,300,000.00 were to be repaid by the defendant before 6.12.2016 while the second agreement itself was made on 15.12.2016 i.e 9 days after the due date. In other words, at the time the second agreement is entered into, the defendant has already defaulted the said agreement. It was impossible for the defendant to comply with the second agreement. Time limitation.

Paragraph 5 of the first agreement provides that the duration of the first agreement was for one year from 15.8.2015 until 15.8.2016. Hence, the cause of action has begun as early as 16.8.2016 and ended on 15.8.2022.

According the second agreement, the defendant should settle the amount on or before 6.12.2016. Therefore, based on the second agreement, the cause of action has begun on 7.12.2016 and ended on 6.12. 2022.

The plaintiff, in paragraph 15 of her affidavit in reply avers that the cause of action does not depend on the first and second agreement anymore but on the agreement through “WhatsApp” messages. Can the agreement through “WhatsApp” messages supersedes the first and the second agreement?

Clause 7 of the second agreement provides that any notice or other communication to be given by one party to the other party under, or in connection with, this Agreement shall be in writing, in English or Bahasa Malaysia and signed by or on behalf of the party giving it.

Does the “WhatsApp” communication comply with this clause 7 particularly on the requirement that the communication needs to be signed by the party giving it. Apparently, this “WhatsApp” agreement or communication shall not prevail over the first and second agreement.

Based on the above, this Court finds that the plaintiff in her personal capacity has neither cause of action nor locus standi to bring and maintain this action against the defendant.

If, however, the plaintiff has the cause of action or locus standi against the defendant, the action has been time-barred pursuant to section 6(1)(a) of the Limitation Act 1953.

This Court is mindful that the power to strike out pleading summarily should not be exercised lightly but at the same time this Court also has the duty to ensure that only meritorious cases with a reasonable cause of action to be brought to a full trial in order to save valuable judicial time. Conclusion.

In this case, this Court has carefully examined and considered the details of the Plaintiff's claim as well as the applicable principles of law in the exercise of the Court's powers to strike out the Plaintiff’s Writ and Statement of Claim. Upon such examination and consideration, this Court finds that the Plaintiff has no cause of action or locus standi against the defendant and that the plaintiff's claim had been barred by the limitation law.

The Plaintiff’s claims tantamount to a frivolous and vexatious or an abuse of the process of the court. Therefore, this Court allows the Defendants' application in Enclosure 10 and this Court strikes out the Plaintiff’s Writ and Statement of Claim with Cost of RM10,000.00 payable by the Plaintiff to the Defendants subject to the allocator fee. Dated this on 19th February 2026. (MOHD ROSLI BIN YUSOFF) Judge High Court (2) Kota Bharu Plaintiff's Counsel : Azlan Bin Abdul Razak, Messrs Azlan Razak & Associates, D4-U3-13, Block D4, Solaris Dutamas, No. 1, Jalan Dutamas 1, 50480 Kuala Lumpur. Defendant’s Counsel : Nur Shafika Binti Mustaffa, Messrs Shaharuddin Hidayu & Marwaliz, No.5578-E Lot 347 Tingkat Satu, Wisma SHM, Seksyen 23, Taman Desa Telipot, 15050 Kota Bharu, Kelantan.