Signature Cabinet Sdn Bhd v 1. ) 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] 11/11/2025 12:12:43 WA-22NCvC-498-07/2024 Kand. 64 S/N /wJLbdPgAkanBtGDzevvYA

JAYA PRAKASH A/L MUNIANDY [No. K/P: 741221-14-5413] …DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT

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

The Fourth Defendant: Aligan Holdings Sdn Bhd (D4Co) applies to strike out the suit under Order 18 Rule 19(1) of the Rules of Court 2012 (Rules of Court).

Should P’s suit against D4Co be summarily struck out?

D4Co’s application to strike out the suit is Enclosure 22. In Enclosure 22, D4Co states that it relies on these limbs of Order 18 Rule 19(1)—

limb (a): that P’s suit (Writ and Statement of Claim (SOC)) disclose no reasonable cause of action against D4Co;

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

limb (d): that P’s suit is an abuse of the process of the court. S/N /wJLbdPgAkanBtGDzevvYA Page 3 of 20 THE LAW ON STRIKING OUT

It is well established that so long as P’s pleadings disclose a reasonable cause of action, the suit 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— [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; … S/N /wJLbdPgAkanBtGDzevvYA Page 4 of 20 [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 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.

The Fifth Defendant: Tulus Construction Sdn Bhd (D5Co) is the main contractor for the Senada project. D5Co was previously known as Brunsfield Construction Sdn Bhd. S/N /wJLbdPgAkanBtGDzevvYA

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 represented to P that he is the deputy general manager of D5Co. D1 represented that he was in charge of 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 by the Third Defendant: Aligan Design (D3Co), making D3Co P’s employer for the job.

D3Co 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 D4’s shares. As D4Co is D3Co’s holding company, D2 is, like D1, the controller and de facto controller of D3Co and D4Co. S/N /wJLbdPgAkanBtGDzevvYA

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, D3Co’s constitution was amended to require only one director (no longer two directors) to manage it. Also in November 2023, D2 too resigned as director.

In this context—(i) D3Co is the contracting party with P; (ii) D4Co owns D3Co; (iii) D1 and D2 are directors and shareholders of D4Co—P pleads that all the Defendants (including D4Co) perpetrated a fraud on P.

D4’s ARGUMENTS I set out D4Co’s primary arguments. S/N /wJLbdPgAkanBtGDzevvYA

No particulars of fraud One—D4Co argues that P has disclosed no reasonable cause of action against D4Co, because there are no particulars of fraud against D4Co. It only seems like there are a lot of particulars of fraud in the Amended SOC, but D4Co was only mentioned in passing. As D4Co puts it: there was no mention of what, when, why and how D4Co was involved in the fraud.

I find this argument untenable. Firstly, P pleaded the facts that D1 and D2 are directors and shareholders of D4Co; that D4Co wholly owns D3Co (the contracting party with P); and that several parties, including all the Defendants, were complicit in the fraud by operating as one “economic unit”.

I find that P has disclosed a reasonable cause of action against D4Co, which, of course, P has to prove at trial. I also find that P has disclosed an arguable claim against D4Co, which, again, P has the burden of proving at trial.

Secondly, if D4Co felt that there were insufficient particulars of fraud for it to mount a defence, D4Co could have and should have requested for, or applied for, further and better particulars from P. D4Co should have availed itself of this prescribed procedure, instead of straightaway invoking the summary procedure under Order 18 Rule 19(1) to strike out the claim— S/N /wJLbdPgAkanBtGDzevvYA Page 8 of 20 Malayan Banking Bhd v Gan Kong Yam [1972] 1 MLJ 32 (HC) at page 33; [1969] 1 MLRH 15; [1969] CLJU 105.

P relies on section 540 Companies Act, but does not plead it Two—D4Co argues that P relies on section 540 of the Companies Act 2016 (Companies Act), but P does not plead section 540. In other words, P does not plead that D4Co has offended section 540 of the Companies Act, and that this omission renders the Amended SOC scandalous, frivolous and vexatious.

D4Co 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 MLRA 393 (CA).

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

D4Co 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 S/N /wJLbdPgAkanBtGDzevvYA Page 9 of 20 another company. The person must be an individual. In other words, section 540 cannot be used against D4Co.

I find that this argument is misplaced. Firstly, P’s cause of action against D4Co is not for fraudulent trading under section 540 of the Companies Act. Instead, P’s cause of action against D4Co (and the other Defendants) is for fraud under common law.

Citing the case law authority—Zamzam Arabic Food Holding (supra)—for the principle that section 540 only applies to an individual and not to a company (i.e. D4Co), in my view, does not support D4Co’s assertion that P’s Amended SOC is scandalous, frivolous or vexatious.

Secondly, as I said earlier, P pleads that D3Co is the contracting party that refused to pay P for the work done. But the web of fraud surrounding the refusal to pay is bigger than that. P pleads that D1 and D2 own and control D4Co. D4Co wholly owns D3Co. So, D4Co controls D3Co. P pleads that these Defendants (D1, D2, D3Co, D4Co), together with other persons, committed a fraud on

I do not see how P’s pleaded cause against D4Co is scandalous, frivolous or vexatious, such that it should be summarily struck out. S/N /wJLbdPgAkanBtGDzevvYA

Abuse of process Three—P succeeded in getting an adjudication award against D3Co. P also filed proceedings to enforce the adjudication award against D3Co.

D4Co argues that it is an abuse of court process for P to file this suit against D4Co to recover the sums related to the adjudication and enforcement proceedings, because—

D4Co was not a party to the adjudication nor the enforcement proceedings;

D4Co did not participate in, and in fact had no knowledge of, the adjudication and enforcement proceedings;

D4Co was not found liable to P in the adjudication and enforcement proceedings.

To support this argument, D4Co cites the Court Of Appeal case law authority of Tenaga Nasional Berhad v Irham Niaga Sdn Bhd & Anor [2011] 1 MLJ 752 (CA); [2011] 1 AMR 116; [2011] 1 CLJ 491; [2010] 3 MLRA 126. The pertinent facts of that case were these—

Tenaga Nasional Berhad (TNB) was the holding company of TNB Transmission Network Sdn Bhd (TNBT). TNB wholly owns TNBT.

TNBT entered into five contracts with the respondents, whom I will refer to as A and B. TNB and TNBT sued A and B under the five contracts. S/N /wJLbdPgAkanBtGDzevvYA Page 11 of 20

However, there was an arbitration clause in the contracts. A and B applied to stay the suit, to refer the dispute to arbitration. The Order for a stay was granted.

But TNB, not being a contracting party under the contracts, was excluded from the arbitration.

The arbitration award favoured A and B, against TNBT.

Armed with the arbitration award, A and B sued TNB under the subject suit. A and B sued TNB claiming sums that included the arbitration award (against TNBT), and the costs of the arbitration. A and B’s case against TNB (the holding company) was that TNB was evading its liability to pay the arbitration award made against TNBT (the subsidiary).

A and B argued that TNB was the “controlling and directing mind” and the “alter ego” of TNBT, and that the corporate veil must be lifted to make TNB liable for TNBT’s liability.

The pertinent proceedings in that case were—

TNB applied to strike out A and B’s suit under Order 18 Rule 19(1).

The High Court dismissed the application. TNB appealed to the Court Of Appeal.

The Court Of Appeal allowed TNB’s appeal, i.e. A and B’s suit against TNB was struck out.

This is a summary of the grounds on which the Court Of Appeal struck out A and B’s suit against TNB— S/N /wJLbdPgAkanBtGDzevvYA

It is a trite principle in company law that a company (here: TNBT) is an entity distinct from its shareholders and directors: paragraphs [25], [26], [28], [32], [33], [36], [43], [60], [62], [63] of Tenaga Nasional Berhad (supra). Hence, TNB should not be held liable for TNBT’s debts.

The corporate veil should not be lifted purely because it is in the interest of justice to do so. There should also be “special circumstances” such as “actual fraud’ or “some inequitable or unconscionable conduct amounting to fraud”. “But here, there was no fraud at all”—paragraphs [44], [46], [48], [49], [50], [51], [52] of Tenaga Nasional Berhad (supra). Thus, the corporate veil should not be lifted, as the Court of Appeal found that there was no fraud.

To allow A and B to enforce the arbitration award against TNB for TNBT’s liability would be “unjust and an abuse of the process of the court”. TNB did not “pinch” or “remove” TNBT’s assets. TNB also did not give an undertaking to A and B to “honour” the arbitration award—paragraphs [53], [55].

A and B’s suit against TNB was defeated by the principle of estoppel by election. When TNB and TNBT sued A and B under the contracts, A and B had a choice to make. They could have defended against that suit and mounted a counterclaim against TNB or TNBT or both. Or, they could have alternatively referred the dispute between them and TNBT to arbitration, and applied to stay the suit. A and B elected the latter option. This choice did not involve TNB. This choice excluded TNB from the arbitration. Now that A S/N /wJLbdPgAkanBtGDzevvYA Page 13 of 20 and B have won in arbitration, they are estopped from turning around and pursuing the alternative of instituting a claim against TNB (which they chose not to do in the first place). To permit them to do so now (presently) would be a breach of natural justice—paragraphs [66] to [69], [71], [79], [80] of Tenaga Nasional Berhad (supra).

Purporting to apply this case law authority to the facts and issues of our case, D4Co argues that since P had taken adjudication and enforcement proceedings against D3Co, P should be prohibited from suing D4Co for the same remedies.

I find this argument unsupportable. Firstly, I would agree that since P had taken adjudication and enforcement proceedings against D3Co, P should be prohibited from suing D4Co for the same remedies—if this new suit was also for the breach of the contract between D3Co and P.

But this suit against the Defendants (including D4Co) is not for breach of contract. It is for fraud. In this suit, P asserts that the Defendants, including D4Co, have perpetrated a fraud on P. It is not a suit under the same contract (to supply and install kitchen cabinets). It is, instead, a suit with a different cause of action. It is a suit for the tort of fraud. S/N /wJLbdPgAkanBtGDzevvYA

Secondly, the Court Of Appeal in Tenaga Nasional Berhad (supra) was not prepared to lift the corporate veil to look into the conduct of the directors and shareholders (the controllers) of TNBT. In our suit here, I am not prepared to summarily determine whether to lift the corporate veil, without first considering the evidence that the parties will produce on the alleged fraud. The evidence of the alleged fraud can only be produced when it is filtered out through the rigorous process of a trial.

Thirdly, the Court Of Appeal in Tenaga Nasional Berhad (supra) was prepared to make a finding that TNB committed no fraud. In our suit here, I am not prepared to make any finding on the alleged fraud, at the stage of this interlocutory and summary striking out proceeding.

Fourthly, the issue of estoppel by election does not apply to this suit. I say this because when P filed an adjudication proceeding, and later the resultant enforcement proceeding, P did not have the election of whether to mount a suit for fraud against D4Co within those proceedings.

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. S/N /wJLbdPgAkanBtGDzevvYA

Res judicata Four—D4Co argues that P could have, but did not, in the adjudication proceeding, raise this issue of fraud against D4Co. The doctrine of res judicata applies against P, to prohibit P from filing this fraud suit against D4Co.

I find this argument misconceived, for the same reason as stated above. In the adjudication proceeding filed under CIPAA, there was no avenue for P to also pursue this fraud suit against D4Co (and against any of the other Defendants too).

46.

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

D4Co has not shown, by its pleadings and affidavits, that P’s claim does not disclose a reasonable cause of action, or that it 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 case law authorities, including Bandar Builder (supra) and Tan Wei Hong (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—does not disclose a reasonable cause of action, is S/N /wJLbdPgAkanBtGDzevvYA Page 16 of 20 scandalous, frivolous or vexatious, or is an abuse of the process of the court.

Reading these two parties’ pleadings—the Amended SOC, D4Co’s Defence, P’s Reply (to D4Co’s Defence)—I also find that P’s claim is not a claim that is “obviously unsustainable” or “wholly unarguable”.

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.

BALANCE OF JUSTICE Finally, a fundamental ground behind my decision is what I call the balance of justice.

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

So, I consider where the justice of the case lies. I consider the balance of justice. S/N /wJLbdPgAkanBtGDzevvYA Page 17 of 20

If D4Co’s striking-out application is not allowed, D4Co has not lost its case. The merits of its Defence will still be canvassed, heard and determined at trial.

If, on the other hand, D4Co’s striking out application is allowed, then P has lost the opportunity—actually, the procedural right— to prove its claim at trial. P would be 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—in fact P has the right—to utilise or avail itself of the entire procedural process from pleadings to trial to prove its claim against D4Co. D4Co too 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. S/N /wJLbdPgAkanBtGDzevvYA Page 18 of 20

The Order 18 Rules 19 summary striking out procedure is the exception rather than the rule in our adjectival (procedural) law. 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.

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 D4Co'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 respectively prove its claim and its defence.

CONCLUSION I dismiss Enclosure 22—D4Co’s striking out application—with costs of RM7K to be paid by D4Co to P by 17.10.2025. Costs are subject to the allocatur. Dated: 11 November 2025 KENNETH ST JAMES HAKIM MAHKAMAH TINGGI MALAYA GEORGETOWN PULAU PINANG S/N /wJLbdPgAkanBtGDzevvYA Page 19 of 20 Solicitors for the Plaintiffs : Richard Kok Chi Wei, Ho Yi Hun Messrs. Richard Kok Solicitors for the 4th : Lim Yuwen Defendant Messrs. Seng & Partners Legislation referred to:

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

Construction Industry Payment And Adjudication Act 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.

Malayan Banking Bhd v Gan Kong Yam [1972] 1 MLJ 32; [1969] 1 MLRH 15; [1969] CLJU 105. S/N /wJLbdPgAkanBtGDzevvYA Page 20 of 20

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

Tenaga Nasional Berhad v Irham Niaga Sdn Bhd & Anor [2011] 1 MLJ 752; [2011] 1 AMR 116; [2011] 1 CLJ 491; [2010] 3 MLRA

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