Sarwaja Timur Sdn Bhd v Trenergy Infrastructure Sdn Bhd (WA-22NCC-332-05/2025)

P outstanding sums arising from inter - company services that were provided by P to the Defendant D . P filed an application dated 17.8.2025 in Enclosure 10 for summary judgment against D. Enclosure 10 is made under Order 14 of the Rules of Court 2012.

D in turn filed an application dated 19.8.2025 in Enclosure 12 to strike Enclosure 12 is made under Order 18 rule 19 (1) (a),

(b), (c) and (d) of the Rules of Court 2012.

On 7.11.2025, I allowed Enclosure 10 and entered summary judgment against D. It is my finding that D does not have a valid le issue. I am satisfied that this is a plain and obvious case where summary judgment ought to be granted.

Further, I consider D s striking out application in Enclosure 12 to be unsustainable and an attempt to deflect from its own lack of a defence. I therefore dismissed Enclosure 12. Here are the grounds of my decision. Background facts

P is a wholly - owned subsidiary of Sarawak Cable Bhd. Pursuant to an order of the High Court dated 9.7.2024 vide Originating Summons No. WA - 28 JM - 21 - 07 / 2024, an interim judicial manager was appointed to manage the affairs of Sarawak Cable Bhd.

Prior to 7.9.2023, D was a wholly owned subsidiary of Sarawak Cable Bhd and the sister company of P.

By reason of the aforesaid relationship, inter - company services were provided by P to D, for which the total amount due and owing is RM 2,684,752.69. The said services and the respective amounts are as follows :

rental of office space at P s office for a total sum of RM 174,300;

rental of motor vehicle for a total sum of RM 18,020;

transmission line project (for Tudan - Miri airport) for a total sum of RM 2,427,426.70;

payment on behalf for a total sum of RM 6,051.86; and

utilities bills for a total sum of RM58,954.13).

Interest charges were imposed on the outstanding sums throughout the material time, amounting to RM 71,676.18.

On 27.2.2019 and 28.2.2019, D had made payments to P totalling

According to P, the total sum due and owing by D to P is RM 2,756,428.87. Disposal of Defendant company

The outstanding sums were carried forward until the disposal of D by Sarawak Cable Bhd to a third party, i.e. Bilun Borneo Sdn Bhd, via a share subscription agreement on 7.9.2023. inancial statements

P avers that D indebtedness to P in the sum of RM 2,756,428.87 w audited financial statements for the financial year ended 31.5.2023 (FYE 2023). Where the debt was recorded under Note 10 : Amounts Owing to Fellow Subsidiaries .

Subsequently, the debt was then reclassified partly under Trade Payable and partly under Other Payable audited financial statements for the financial year ended 31.5.2024 (FYE 2024). Acknowledgement of debt

P further avers that D s acknowledgment of the debt is found in a series of email correspondences between 6 to 19 December 2023. These exchanges involved D s own project account officer and P s finance department. Specifically, they concerned D s management accounts and the statement of account detailing the debt in question. The correspondences were copied to the current owner of D.

On 20.6.2024, P issued a formal demand for payment of the outstanding sums. To - date, D did not make payment to P.

On 26.11.2024, P served a statutory notice of demand pursuant to section 466 of the Companies Act 2016, demanding payment of the outstanding sums.

On 26.2.2025, D obtained a fortuna injunction against P vide Originating Summons No. WA - 24 NCC - 595 - 11 / 2024. The learned judge ruled that the fortuna injunction is granted until the alleged debt (which is the outstanding sums claimed herein) is determined .

As such, P filed this action against D to claim the outstanding sums. The law on summary judgment

Summary judgment under Order 14 of the Rules of Court 2012 may be granted where the issue is unarguable or not triable. Especially where the issue raised is solely a question of law or where the facts are clear and undisputed.

The Supreme Court in Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 CLJ (Rep) 14 at 19 - 20; [1992] 1 MLJ 400 at 408 held : is asserted by one party, and denied or disputed by the other in an affidavit. Where such assertion, denial or dispute is equivocal, or lacking in precision or is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable in itself, then the judge has a duty to reject such assertion or denial, thereby rendering the issue not triable. In our opinion, unless this principle is adhered to, a judge is in no position to exercise his discretion judicially in an O 14 application. Thus, apart from identifying the issues of fact or law, the court must go one step further and determine whether they are triable. This principle is sometimes expressed by the statement that a complete defence need not be shown. The defence set up need only show that there is a triable issue. Where the issue raised is solely a question of law without reference to any facts or where the facts are clear and undisputed, the court should exercise its duty under O 14. If the legal point is understood and the court is satisfied that it is unarguable, the court is not prevented from granting summary judgment

Not all issues raised are capable of being a triable issue. The Federal Court in Voo Min En & Ors v Leong Chung Fatt [1982] 2 MLJ 241 at 243 held : not enough for the respondent in answer to the to raise an issue, or any issue. He must, however, raise such issue as would require a trial in order to determine it. In other words, the issue raised must be an arguable issue. But where the issue raised is irrelevant and ineffective, or to use the words of Lord Greene, should be entitled to what they prayed for in the summon - in -

Summary judgment should be granted in a plain and obvious case that ought not to go for trial. Especially one that involves construction of unsubstantial documents. And where no further facts could emerge which would throw any light upon the matter.

The Federal Court in Fadzil Mohamed Noor v Universiti Teknologi Malaysia [1981] CLJ (Rep) 53 at 59 held : [1971] 1 MLJ 168, I pointed out that in an O. 14 case, where it turned on the construction of few documents, and the Court was only concerned with what, in its judgment, was true construction, there could be no reason to go formally to trial where no further facts could emerge which would throw any light on the documents that had to be construed. We think we can

In respect of the burden of proof, the onus is on the defendant to show that there are triable issues. The Federal Court in Cempaka Finance Bhd v Ho Lai Ying (trading as KH Trading) & Anor [2006] 3 CLJ 544 at 551; [2006] 2 MLJ 685 held : [5] In an application under O. 14, the burden is on the plaintiff to establish the following conditions: that the defendant must have entered appearance; that the statement of claim must have been served on the defendant; that the affidavit in support must comply with r. 2 of O. 14 in that it must verify the facts on which the claim is based and must state the deponent s belief that there is no defence to the claim. Once those conditions are fulfilled, the burden then shifts to the defendant to raise triable issues

Bearing the above principles in mind, I consider the issues raised by D to be unarguable or not triable. I reject the bare assertions of D, which I find to be ineffective and inconsistent with the contemporaneous documents. I am satisfied that this suit is a plain and obvious case that ought not to go to trial. Here is my explanation. No triable issue or reasonable defence

In the statement of defence (Enclosure 8) and its supporting affidavits (Enclosures 13 and 15), D relied on the following defences :

a bare denial of the debt and an assertion of a lack of knowledge, unsupported by any credible contemporaneous evidence to contradict P s detailed records;

a misplaced reliance on the share subscription agreement, to which P was not a party and which contains no clause extinguishing the specific debt owed to P;

an unsubstantiated assertion that the inter - company debts were mere book - keeping entries with no intention of recovery, a claim directly contradicted by D s own audited financial statements and its historical payment of RM 496,000; and

a vague plea of limitation, which is untenable as the cause of action crystallised upon D ceasing to be a sister company of P in September / December 2023, rendering this action, filed in May 2025, well within the limitation period. Bare denial of the debt and an assertion of a lack of knowledge

D s primary defence of a bare denial of the debt, coupled with an assertion of a lack of knowledge, is legally insufficient to constitute a triable issue. This position is baseless because the relevant documents and details of the debt were, at all material times, within the knowledge and possession of D s new ownership and management. This is demonstrated by the email correspondence, wherein D s own project account officer actively engaged with P s finance department concerning the very management accounts and statements of account that detailed the outstanding sums. D cannot now profess ignorance of records it was actively reviewing.

Notably, D has failed to adduce any affidavit from its own project account officer, to deny receipt of the demand email or to challenge their contents. This omission suggest that such evidence would not have assisted its case, thereby exposing the lack of substance in its purported defence.

Ultimately, D s failure to contemporaneously dispute the debt is fatal to its current defence. Throughout the email exchanges in December 2023, and following P s formal demand in June 2024, D was presented with opportunities to deny the liability. Its silence and failure to raise any objection at that juncture constitutes a tacit admission of the debt.

The law rightly expects a party genuinely disputing a claim to voice its objection promptly. D s present denial, raised only after the initiation of legal proceedings, is an afterthought and tantamount to a spurious defence manufactured to delay judgment. Share subscription agreement

share subscription agreement goes, I find that the doctrine of privity of contract applies. The rule is one but the parties to a contract can be bound by it or entitled under . (See the Court of Appeal case of Boustead Naval Shipyard Sdn Bhd v Dynaforce Corp Sdn Bhd [2015] 1 MLJ 284 at 308).

Applying this settled principle, P, as a non - party to the share subscription agreement, cannot be bound by its terms. s attempt to use the share subscription agreement as a shield against a claim from a legal stranger to that agreement is misconceived.

In any event, there is no clause in the share subscription agreement that purports to extinguish the specific debt owed by D to P. D s defence on this point is therefore both legally invalid and factually baseless. Book - keeping entries

D alleges that the outstanding sums, i.e. the inter - company debts, - . However, that outstanding sums as each company within a group of companies are separate legal entities.

On this aspect, I refer to the High Court case of Terranova Builders Sdn Bhd (previously known as Nisa Consolidated Sdn Bhd) v Repe Services Sdn Bhd (previously known as Ranhill Engineers and Constructors Sdn Bhd) & Anor [2018] MLJU 1995 which said : The fact that D1 may be a wholly - owned subsidiary of D2 does not blur or banish the doctrine of separate legal entities of each company within the Group. If authority is needed one can refer to Besalon International Ltd & Ors v South Strong Industries Sdn Bhd [1997] 2 MLJ 131 at pg. where it was stated as follows : parent (holding) and subsidiary companies are two separate legal entities. That I accept as trite law

Furthermore, the repayment by D amounts to an admission of liability. If the inter - company debts were mere book - keeping entries with no intention of recovery, D would not have repaid them.

In Terranova Builders (supra), the High Court said : I agree with learned counsel for the Plaintiff that D1 by their admission of liability in the various letters and part payments made had rendered the assertion by D1 that they did not owe any money to the Plaintiff to be inherently improbable and indeed is contradicted by the contemporaneous

A similar finding was arrived in Eco Priority Sdn Bhd v Zhonghua Southern Pharma Sdn Bhd [2023] MLJU 3175, where the High Court ruled : Not only did D accept the raw materials supplied by P without protest, D has also made the part payment to P. Logically, if the raw materials supplied by P were not merchantable, D would not have made a single payment to P. Instead, D would have rejected the raw materials and complained to P. In the premises, I consider such part payment to be an acknowledgment and admission of indebtedness

At the end of the day, the value of the contemporaneous documents adduced by P outweighs the self - serving bare assertions made by D. (See the Federal Court case of Yong Nyee Fan & Sons Sdn Bhd v Kim Guan & Co Sdn Bhd [1979] 1 MLJ 182 at 194). Time - bar

D avers that claim is time - barred. This averment is untenable for the following reasons :

The debts in question are not static, one - off transactions. But constitute recurring inter - company charges for ongoing services (such as office rental, utilities and project works) that accumulated throughout the material time while the parties were related companies. The nature of such a running account means the cause of action is a continuing one.

Further, the said debt was audited and recorded in D s own audited financial statements for FYE 2023. This constitutes a continual acknowledgment of the debt within the meaning of the Limitation Act 1953. The limitation period cannot be said to have conclusively begun to run from a distant, singular point in the past.

In any event, the cause of action definitively crystallised on 7.9.2023 (or, at the latest, in December 2023), when D ceased to be a sister company of P following the completion of the share subscription agreement. It was at this juncture that the ongoing commercial relationship ended and the outstanding balance became immediately due and payable. The present action was filed in May 2025, which is well within the six - year limitation period prescribed by law.

In the premises, I find that the present claim is not barred by limitation.

As mentioned earlier, the debts were audited financial statements for FYE 2023 under Amounts Owing to Fellow Subsidiaries prepared by its own auditors and approved by its own board. D cannot represent this debt to its shareholders and the Companies Commission of Malaysia and then, in this proceeding, claim it does not exist.

limitation argument ignores the factual and legal reality of a continuing, inter - company running account and the relationship between related companies.

The outstanding sum was a moving target, not a static one wherein D conveniently frames the debt as arising from individual invoices dated as far back as 2014. This is a mischaracterization. The claim was the net position of a running account between sister companies. This account was active, fluid and continually acknowledged by both parties through the following :

- payment of RM 496,000 in February 2019 and the last charges made by P against D being in December 2020, are well within the six - year limitation period calculated from the date of commencement of this suit.

own audited financial statements year after year, right up to FYE

2023.

In light of the above, I find that the cause of action crystallised in 2023. The law does not require a plaintiff to sue its own sister company. The commercial reality is that these inter - company balances were managed within the corporate group at all material time.

The cause of action definitively accrued on 7.9.2023, when D was sold to a third party, i.e. Bilun Borneo Sdn Bhd. At that moment, the familial relationship ended, the running account closed, and the outstanding balance became immediately due and payable. Filing the present action in May 2025 is well within the limitation period.

In this regard, the High Court case of Ramesh @ Muthu a/l Nallayan (as the executor of the estate of Nallayan a/l Ramasamy, deceased) v Marappan a/l Muthusamy [2021] MLJU 1417 is instructive, which said : Nevertheless, it is my understanding that the audited Accounts do provide a high level of assurance. Assurance that adequate audit evidence has been obtained through checking, verification, confirmations and examination of records and source documents to support calculations, balances and transactions. That reconciliation of bank statements have been performed. To my mind, the audit process satisfies the burden of proof on a balance of probabilities. As such, I find that the income and expenditure of the Property and consequently the Profit, as stated in the Accounts, have been duly proven. Limitation period [104] part of the claim is more than 6 years from the date of the Counterclaim (i.e.

5.11.2018), they would be time barred under section 6(1) of the Limitation Act [105] running account and therefore not barred by limitation. The trust account over the Property is a running account. During the early years, the trust account was in the red. The costs incurred in relation to the Property exceeded the rental income. Resulting in a loss or negative balance, which was then carried forward to the subsequent years. In later years, the converse was true. The rental income exceeded the costs incurred in relation to the Property. Resulting in a profit, [106] In other words, the trust account is a single and entire account into which all receipts (i.e. the rental proceeds from the Property) and payments (i.e. the expenses of the Property) take place. This course of dealing has extended over a considerable period, from 1993 to date. All the sums paid in or paid out (as the case may be) form one blended fund, the parts of which have no longer any distinct existence. (See the Singapore Federal Court case of Bajaj Textiles Ltd v Gian Singh & Co Ltd [1968] 1 MLJ 279). [107] The balance on the trust account may show either a positive balance (i.e. a profit) or a negative balance (i.e. a loss) from time to time. Without regard to the numerous items of income and expenditure which, as a matter of history, are carried into the account and contribute to the balance for the time being. As the income and expenditure of the Property was maintained is barred by limitation. [108] I am guided by the Court of Appeal case of Ekuiti Setegap Sdn Bhd v Plaza 393 Management Corporation [2019] 2 CLJ 592 at 604 which said : Before we proceed with the main issues, we wish to state at the outset claim is based on a running account. In Wembley Industries Holdings Bhd (supra), it was held : ... a running account is a single account and not a composite of its various parts. A payment made on account of a running account is in respect of the entire outstanding balance, with the result that time is extended for the whole of the debt. It appears, therefore that a running account will become statute - barred only if more than six years elapse between the supply of the last article under it and the last payment on account. [33] Consequent

In the present case, the last charges by P against D, i.e. the last article of the running account, is as at 31.12.2020.

It bears reiterating that :

the outstanding sums were continually recorded and carried audited financial statements year after year, right up to FYE 2023.

the related documents to the accounts ( balance sheet, profit and loss account, and the breakdown of the Note 10 of the FYE 2023 audited financial statements) were emailed by D s own project account officer and P s finance department, and copied to the current owner of D. This chain of correspondence not only demonstrates D s active engagement and awareness of the outstanding sums, but also constitutes a tacit acknowledgment of the debt. D Enclosure 12)

ontending that :

statement of claim discloses no reasonable cause of action against D.

(b)

The act of filing the suit is itself an abuse of the process of the court.

The claim is statute - barred under the Limitation Act 1953.

To my mind, these grounds are nothing more than bare and self - serving assertions, without any factual or legal foundation. They fail to meet the stringent legal threshold required for a striking out.

D s affidavits, i.e. Enclosures 13 and 15, filed herein are devoid of any credible evidence to bare assertions and denials. D has failed to adduce any contemporaneous documentation from its own records to contradict P s documents, or to explain away the entries in its own audited financial statements.

To argue that a claim backed by audited accounts, partial payments, and contemporaneous correspondence discloses no reasonable cause of action or is frivolous is to ignore reality. The riking out application to avoid liability on a debt it has already acknowledged. Conclusion

For the reasons above, I Enclosure 12. I allowed Enclosure 10. I entered summary judgment against D for the sum of

I awarded interest on the judgment sum at the rate of 5 % per annum from the date of judgment until full settlement. I awarded global costs of RM 8,000 to P. Dated 17 November 2025 QUAY CHEW SOON Judge High Court of Kuala Lumpur (Commercial Division NCC 2 & Admiralty 9) Counsel for the Plaintiff : Phang See Eng (Messrs. Phang, Loi & Ngiam) Counsel for the Defendant : Celine Teh Sze Ning (Messrs. Haris Ibrahim Kandiah Partnership) Case Reference :

Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 CLJ (Rep) 14; [1992] 1 MLJ

Voo Min En & Ors v Leong Chung Fatt [1982] 2 MLJ 241 3. Fadzil Mohamed Noor v Universiti Teknologi Malaysia [1981] CLJ (Rep) 53 4. Cempaka Finance Bhd v Ho Lai Ying (trading as KH Trading) & Anor [2006] 3 CLJ 544; [2006] 2 MLJ 685 5. Boustead Naval Shipyard Sdn Bhd v Dynaforce Corp Sdn Bhd [2015] 1 MLJ 284 6. Terranova Builders Sdn Bhd (previously known as Nisa Consolidated Sdn Bhd) v Repe Services Sdn Bhd (previously known as Ranhill Engineers and Constructors Sdn Bhd) & Anor [2018] MLJU 1995 7. Eco Priority Sdn Bhd v Zhonghua Southern Pharma Sdn Bhd [2023] MLJU 3175 8. Yong Nyee Fan & Sons Sdn Bhd v Kim Guan & Co Sdn Bhd [1979] 1 MLJ 182 9. Ramesh @ Muthu a/l Nallayan (as the executor of the estate of Nallayan a/l Ramasamy, deceased) v Marappan a/l Muthusamy [2021] MLJU 1417 Legislation Reference :

Section 466 of the Companies Act 2016 2. Limitation Act 1953 3. Order 14 and Order 18 rule 19 (1) (a), (b), (c) and (d) of the Rules of Court 2012