Signature Cabinet Sdn Bhd v LIM Keng Heng (WA-22NCvC-498-07/2024)

LIM KENG HENG [NO. K/P: 720617-01-5241]

MOHAMED IZHAM BIN HAMZAH [NO. K/P: 631230-02-5061]

ALIGAN DESIGN SDN BHD [NO. SYARIKAT: 756185 -H]

ALIGAN HOLDINGS SDN BHD [NO. SYARIKAT:707840-D]

TULUS CONSTRUCTION SDN BHD [NO. SYARIKAT: 356735-D] 16/01/2026 09:45:03

JAYA PRAKASH A/L MUNIANDY [NO. K/P: 741221-14-5413] …DEFENDAN-DEFENDAN JUDGMENT (Enclosure 24: Fifth Defendant’s Application to strike out)

The Plaintiff (P) sued the Defendants for fraud. There are six Defendants.

The Fifth Defendant: Tulus Construction, previously called Brunsfield Construction (D5Co), applies to strike out the claim under Order 18 Rule 19(1) of the Rules of Court 2012 (Rules of Court).

Should P’s claim against D5Co be summarily struck out? D5Co RELIES ONLY ON LIMBS (b) and (d) OF ORDER 18 RULE 19(1)

D5Co’s application to strike out the claim is Enclosure 24. In Enclosure 24, D5Co states that it relies on these two limbs of

limb (b): that P’s claim is scandalous, frivolous or vexatious;

limb (d): that P’s claim is an abuse of the process of the court. Page 3 of 18

It is noteworthy that D5Co does not apply to strike out P’s claim under limb (a)—for disclosing no reasonable cause of action. This means that D5Co accepts that P has disclosed a reasonable cause of action against D5Co.

To put it differently, D5Co does not apply to strike out P’s claim for disclosing no reasonable cause of action. D5Co merely complains that P’s claim is scandalous, frivolous or vexatious, and that P’s claim is an abuse of the process of the court.

It is well established that so long as P’s pleadings disclose a reasonable cause of action, the claim should proceed to trial: (1) Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36 (SC); [1993] 2 AMR 1969; [1993] 4 CLJ 7; [1993] 1 MLRA 611; (2) Seruan Gemilang Makmur Sdn Bhd v Kerajaan Negeri Pahang Darul Makmur & Anor [2016] 3 MLJ 1(FC); [2016] 2 AMR 795; [2016] 3 CLJ 1; [2016] 2 MLRA 263.

Further, in Tan Wei Hong (a minor suing through guardian ad litem and next friend Chuang Yin E) & Ors v Malaysian Airlines Bhd & Other Appeals [2019] 1 MLJ 59 (FC); [2018] 6 AMR 529; [2018] 9 CLJ 425; [2018] 6 MLRA 433, the Federal Court propounds the following principles to follow when considering an application to strike out— Page 4 of 18 [17] The tests for a striking out application under O 18 r 19 of the ROC, as adopted by the Supreme Court in Bandar Builder are, inter alia, as follows: [2019] 1 MLJ 59 (SC) at 68

it is only in plain and obvious cases that recourse should be had to the summary process under the rule;

this summary procedure can only be adopted when it can be clearly seen that a claim or answer is on the face of it obviously unsustainable;

it cannot be exercised by a minute examination of the documents and facts of the case in order to see whether the party has a cause of action or a defence; … [18] The Court of Appeal, in Sivarasa Rasiah & Ors v Che Hamzah Che Ismail & Ors [2012] 1 MLJ 473; [2012] 1 CLJ 75, had adopted the well-settled principle of striking out in the following passage: A striking out order … should also not be made if there is issue of fact that is capable of resolution only after taking viva voce evidence during trial (see: Lai Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 2 MLJ 565 (FC))…. [20] The established rule on this point is that the court should not examine the evidence in summary proceedings in such a way as to amount to conducting a trial on the conflicting affidavit evidence … [64] We are also of the view that in dealing with an application for striking out, the court must exercise great care and caution, bearing in mind that the court must not drive away any litigant however weak his case may be from the seat of justice (see: Lee Nyan Choi v Voon Noon [1979] 2 MLJ 28)… [emphases are mine] THE PERTINENT FACTS PLEADED BY P

These are the pertinent facts that P pleads in its Amended Statement Of Claim (Amended SOC).

Sime Darby Brunsfield Resort Sdn Bhd owns the Senada project. The Senada project is a service-residence, office and shopping mall project in Bukit Kiara, Kuala Lumpur.

D5Co is the main contractor for the Senada project. D5Co was previously known as Brunsfield Construction Sdn Bhd.

Brunsfield Corporation Sdn Bhd (Brunsfield Corporation) wholly owns D5Co. Further, Brunsfield Corporation and D5Co have common directors.

Sime Darby Brunsfield Resort needed a nominated sub-contractor to supply and install kitchen cabinets in the Senada project. P negotiated to be appointed for the job. The principal person who negotiated with P was the First Defendant: Lim (D1). D1 is the Deputy General Manager of D5Co. D1 represented that he was responsible for appointing the subcontractor for the kitchen cabinet job.

After the terms were finalised, the eventual letter of intent (to appoint P for the job) was issued, not by D5Co (the main contractor), but instead by the Third Defendant: Aligan Design (D3Co), making D3Co P’s employer for the job.

D3Co (the employer) did not pay P for the work done.

D4Co owns 100% of the shares in D3Co. In other words, D4Co wholly owns D3Co.

D1 was a director of D3Co. D1 is also a director and shareholder of D4Co. He holds 45% of D4Co’s shares. D1 was therefore the controller and de facto controller of D3Co and D4Co.

The Second Defendant: Mohamed Izham (D2) is a director and shareholder of D4Co. He holds 55% of D4Co’s shares. As D4Co is D3Co’s holding company, D2 is, like D1, the controller and de facto controller of D3Co and D4Co.

D1 and D2, who are the “alter ego and the directing wills and minds” of D3Co, had “unconscionably, dishonestly, fraudulently or otherwise” used D3Co as “a façade or sham or device” to—

deprive P from getting paid for the work that P performed, and

to perpetrate a fraud on P.

Once these fraudulent acts were carried out, D1 and D2 abandoned D3Co. As P made demands for payment, D1 and D2 instructed their solicitors to delay legal proceedings. In September 2023, the Sixth Defendant: Jaya Prakash (D6), was appointed D3Co’s director. D6 was appointed because D3Co’s constitution required a minimum of two directors to manage it. In October 2023, D1 resigned as director. Then, in November 2023, Page 7 of 18 D3Co’s constitution was amended to require only one director (no longer two directors) to manage it. Also in November 2023, D2 resigned as a director as well, leaving D6 as D3Co’s sole director.

P pleads these material facts—

D3Co is the contracting party with P;

(ii) D4Co owns D3Co;

(iii) D1 and D2 are directors and shareholders of D4Co;

(iv) D5Co is the main contractor of the Senada project;

D1 is the Deputy General Manager of D5Co;

(vi) D1 is responsible for appointing P for the kitchen cabinet sub-contractor job.

In the context of these material facts, P pleads that all the Defendants (including D5Co: the main contractor, of whom D1 was the Deputy General Manager) perpetrated a fraud on P.

D5Co’s DEFENCE This is a summary of D5Co’s Defence. D1 was never D5Co’s employee or proxy. D2 was also never D5Co’s proxy.

But D5Co admits that Miss Goh Siew Chin and Encik Mohamad Hassan Zakaria (non-parties) were directors of D5Co. I note here that in P’s Amended SOC, P pleaded that Miss Goh Siew Page 8 of 18 Chin and Encik Mohamad Hassan Zakaria were also directors of Brunsfield Corporation, which wholly owns D5Co.

D5Co admits that it is the main contractor for the Senada project.

D5Co has no knowledge of, involvement in, or connection to, the pre-contract discussions leading up to the contract between D3Co and P (for the kitchen cabinet job).

D5Co is not a party to that contract between D3Co and P. Consequently, D5Co has no knowledge of the terms of the contract.

D5Co is not a party to the adjudication proceeding that P took against D3Co. D5Co has no knowledge of the adjudication proceeding.

D5Co denies committing any fraud on P.

D5Co avers that D1 was not the Deputy General Manager of D5Co, and was not fully in charge of the contract between D3Co and P. D5Co did not impliedly nor expressly authorise D1 to do what he did in relation to D3Co’s contract with P.

P’s action against D5Co is “a mere afterthought to seek double recovery on the same subject matter”, i.e. for the payment for work done.

No privity of contract First, D5Co argues that there is no privity of contract between P and D5Co. And so, P’s claim against D5Co should be struck out.

I find that this argument is misplaced. I do not see how the privity of contract is a pertinent or even relevant issue between P and D5Co. P’s cause of action against D5Co is not for breach of contract, but for fraud.

I do not see how this point about the privity of contract renders P’s claim scandalous, frivolous or vexatious, or that it is an abuse of the process of the court.

D5Co is incapable of committing fraudulent trading Second, D5Co argues that D5Co, “being a corporate entity, is incapable of forming the requisite intention to defraud” P, by committing fraudulent trading under section 540 of the

Section 540(1) provides for the offence of “fraudulent trading”, which is described as the carrying on of a company’s business Page 10 of 18 with the intent of defrauding its creditors, or generally the carrying on of a company’s business “for any fraudulent purpose”.

D5Co cites case law authority for the principle that section 540(1) of the Companies Act only applies to individuals and not to companies—Zamzam Arabic Food Holding Sdn Bhd v Johanjana Corp Sdn Bhd [2022] 5 MLJ 302; [2022] 6 CLJ 692; [2022] 5

D5Co argues that the underlying purpose of section 540(1) is to impose personal liability on the person who controls the company, and not the company itself. And that person cannot be another company. The person must be an individual. In other words, section 540 cannot be used against D5Co.

I similarly find that this argument is misplaced. P’s cause of action against D5Co is not for fraudulent trading under section 540 of the Companies Act. Instead, P’s cause of action against D5Co (and the other Defendants) is for fraud under common law.

I do not see how this point about how D5Co is incapable of committing fraudulent trading against P under section 540 of the Companies Act is scandalous, frivolous or vexatious, or that it is an abuse of the process of the court.

P’s claim against D5Co is an afterthought Third, P argues that it was D3Co who contracted with P. It was D3Co who did not pay P for the work done. P obtained an adjudication decision against D3Co, and enforced it against D3Co. But P did not make D5Co a party to the adjudication or enforcement proceedings. Claiming liability against D5Co for D3Co’s adjudication debt is therefore an afterthought.

I find this argument not cogent. P’s claim here against the Defendants, including D5Co, is not for breach of contract. Neither is P seeking to make D5Co liable for D3Co’s adjudication proceeding debt. Again, P’s claim against the Defendants, including D5Co, is for fraud. P asserts that the Defendants, including D5Co, had perpetrated a fraud against P.

I do not see how this point renders P’s claim against D5Co scandalous, frivolous or vexatious, or that it is an abuse of the process of the court

Res judicata and estoppel apply to prohibit P’s claim D5Co argues that although P took adjudication proceedings against D3Co, P did not name and include D5Co in those proceedings. D5Co argues that P could have made an assertion of fraud against D3Co and D5Co in those proceedings, but P did not do so. Accordingly, the principles of res judicata or estoppel apply to prohibit P from now asserting fraud against D5Co.

I find that this argument is misconceived. The adjudication proceeding was a summary proceeding to claim payment for work done under a construction contract, filed under the Construction Industry Payment and Adjudication Act 2012 (CIPAA). In contrast, P’s different cause in this suit is distinctly made under the common law—for fraud.

In this context, I find that the issues of res judicata or estoppel do not apply to P’s claim for fraud. There was no avenue for P to mount a claim for fraud against D5Co in those CIPAA proceedings against D3Co.

I cannot find that this point about res judicata and estoppel makes P's claim scandalous, frivolous or vexatious, or that it is an abuse of the process of the court.

BOTH SIDES MUST PROVE THEIR PLEADED MATERIAL FACTS I find that both sides to this striking out application (P and D5Co) must prove their diametrically opposing pleaded material facts. P asserts that D1 and D2 were the directing minds of D4Co, which wholly owns D3Co (the party that appointed P). Concerning D5Co, P asserts that D1 held himself out to P as the Deputy General Manager of D5Co, and that he is the person in charge of appointing the subcontractor for the kitchen cabinet job, i.e. D1 makes the decisions. P asserts that all the Defendants, including D5Co, committed a fraud on P.

On the other hand, D5Co denies these facts. D5Co asserts that D1 was not D5Co’s employee; D1 was not D5Co’s Deputy General Manager; D1 was not D5Co’s proxy.

I find that just as P has the burden to prove, at trial, every material fact that it pleads, such as the fact that D1 held himself out as the Deputy General Manager of D5Co (the main contractor in the Senada project), and that D1 represented that he was in charge of the contract relating to kitchen cabinets—D5Co too has to prove, at trial, every material fact that it pleads, such as the fact that D1 was not employed by D5Co, not the Deputy General Manager of the D5Co, and not a proxy of D5Co.

SUIT Put differently, I am deferring the ultimate decision on the merits of P’s claim on the cause of action for fraud (and the merits of D5Co’s defence too), until the oral and documentary evidence is fully adduced, to be considered together and as a whole.

52.

The issues that arise that make it not “plain and obvious” that P’s claim against D5Co is scandalous, frivolous or vexatious; or that P’s claim against D5Co is an abuse of the process of the Court; or that P’s claim against D5Co is “obviously unsustainable”, Page 14 of 18 include this elemental issue—Was D5Co complicit is the fraud that was allegedly perpetrated on P?

Most significantly, this issue can only be answered by the preponderance of evidence by both sides, and applying the law to the facts proven by the evidence.

I therefore hold that P’s claim should not be struck out summarily under either Order 18 Rule 19(1)(b) or (d) because—

D5Co has not shown, by its pleadings and affidavits, that P’s claim is scandalous, frivolous or vexatious, or that it is an abuse of the process of the court.

I am bound by the principles propounded in the case law authority of Bandar Builder (supra). Without going into the minute details of the exhibited documentary evidence and the averments in affidavits, I find that it is not “plain and obvious” that P’s claim is scandalous, frivolous or vexatious, or that it is an abuse of the process of the court.

Reading these two parties’ pleadings—the Amended SOC, D5Co’s Defence, P’s Reply (to D5Co’s Defence)—I find also that P’s claim is not a claim that is “obviously unsustainable” or “wholly unarguable”. Page 15 of 18

For this application, it is my judgment that both sides’ pleadings and affidavit averments should be tested through the process of a trial. The veracity of these documents will only be revealed through the rigours of a trial. The pleaded material facts for both sides should be proven in the legal setting of a trial, and not determined summarily under Order 18 Rule 19 of the Rules of Court.

BALANCE OF JUSTICE Finally, a compelling ground behind my decision is the balance of justice.

Order 1A of the Rules of Court compels me to “have regard to the overriding interest of justice”. Order 92 Rule 4 of the Rules of Court behoves me “to prevent injustice”.

So, I should consider where the justice of the case lies. I should consider the balance of justice.

If D5Co’s striking-out application is not allowed, D5Co has not lost its case. The merits of its Defence will still be canvassed, heard and determined at trial.

If, on the other hand, D5Co’s striking out application is allowed, then P has lost the opportunity—actually, the procedural right— Page 16 of 18 to prove its claim at trial. P would have been deprived of its day in court.

It is my view that in this suit, P should be given its day in court to prove its claim at trial rather than have it struck out summarily.

P should be given the opportunity, and the right, to utilise or avail itself of the entire procedural process from pleadings to trial to prove its claim against D5Co. D5Co also has the same opportunity, and the right, to utilise these procedural processes before going to trial to prove its Defence.

I am also mindful that the application of the law of evidence— direct evidence, indirect evidence, circumstantial evidence—may also be available to both sides to prove their respective cases at the trial.

At the trial is where these two sides’ merits get to be canvassed and ought to be finally determined.

The Order 18 Rules 19 of the Rules of Court summary striking out procedure is the exception rather than the rule in our legal system. That is why a plaintiff is given every opportunity to show that they can sustain their claim at trial. And a defendant is given the converse but equal opportunity to defend against the claim. Page 17 of 18

I have to be seriously mindful of these effects and circumstances when I weigh the balance of justice. And I am inclined to say that in the circumstances of this suit, it is fit and just to dismiss D5Co's striking out application, so that both sides’ respective cases can be heard and determined. Both parties should be given their day and time in court to prove their claim and their defence.

CONCLUSION I dismiss Enclosure 24—D5Co’s striking out application—with costs of RM7K to be paid by D5Co to P by 27.11.2025. Costs are subject to the allocatur. Dated: 16 Januari 2026 KENNETH ST JAMES HAKIM MAHKAMAH TINGGI MALAYA KUALA LUMPUR Solicitors for the Plaintiffs : Tan Pheng Chew & Chua Chee Ching Messrs. Richard Kok Solicitors for the 5th : Wan Mohamad Arsham Faris Defendant Messrs. Tiong & Associates Page 18 of 18 Legislation referred to:

Order 18 Rule 19 (1) of the Rules of Court 2012.

Order 1A of the Rules of Court 2012.

Order 92 Rule 4 of the Rules of Court 2012. Case referred to:

Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36 (SC); [1993] 2 AMR 1969; [1993] 4 CLJ 7; [1993] 1 MLRA 611.

Seruan Gemilang Makmur Sdn Bhd v Kerajaan Negeri Pahang Darul Makmur & Anor [2016] 3 MLJ 1(FC); [2016] 2 AMR 795; [2016] 3 CLJ 1; [2016] 2 MLRA 263.

Tan Wei Hong (a minor suing through guardian ad litem and next friend Chuang Yin E) & Ors v Malaysian Airlines Bhd & Other Appeals [2019] 1 MLJ 59 (FC); [2018] 6 AMR 529; [2018] 9 CLJ 425; [2018] 6 MLRA 433.

Zamzam Arabic Food Holding Sdn Bhd v Johanjana Corp Sdn Bhd [2022] 5 MLJ 302; [2022] 6 CLJ 692; [2022] 5 MLRA 393.