Sim Cheng Young v 3LYON Holdings Berhad (BA-22NCC-171-12/2023)

3LYON HOLDINGS BERHAD (NO. SYARIKAT: 201801046206 (1308238-U) …DEFENDAN PERTAMA

DATUK WIRA RANJEET SINGH SIDHU (NO. K/P: 700201-03-5371) …DEFENDAN KEDUA

DATO’ HAJI CHE PEE BIN SAMSUDIN (NO. K/P: 571015-02-5307) …DEFENDAN KETIGA

DATUK MANIBALAN KUTTY A/L RAGAVAN (NO. K/P: 660518-10-5039) …DEFENDAN KEEMPAT JUDGMENT Introduction [1] This was an application by the Second, Third and Fourth Defendants in Enclosure 14 to strike out the Plaintiff’s Writ pursuant to Order 18 rule 19(1)(a), (b), (c) and/or (d) of the Rules of Court 2012. [2] On 10 October, 2024, I dismissed the above application with costs of RM3,000. [3] Despite the express wordings in section 68(1)(f) of the Courts of Judicature 1964 which states that no appeal shall be brought to the Court of Appeal where a High Court dismissed any application to strike out any writ or pleading, the Second, Third and Fourth Defendants filed an appeal on 7 November, 2024 against this Court’s decision in dismissing their application to strike out the Plaintiff’s Writ. [4] Below are the findings of this Court and its decision re Enclosure 14. The Prevailing Issue [5] The dominant issue in Enclosure 14 is whether this is a proper case for this Court to exercise its discretion to strike out the Plaintiff’s Writ pursuant to Order 18 rule 19(1) of the Rules of Court 2012. The Parties and the Pertinent Background Facts [6] The First Defendant is an Investment Holding Company (“Company”). [7] The Second Defendant was the founder and a director of the Company whereas the Third and Fourth Defendants are the current directors of the Company. [8] The Company had initiated an investment scheme whereby it would issue redeemable preference shares (“RPS”) to potential investors at a price of RM1 per RPS. [9] The Company intended to utilise the proceeds raised from the RPS issuance for investment purposes and there was provision for dividends to those who subscribed to the RPS units. [10] The Plaintiff had subscribed to 15 million RPS units. [11] The Plaintiff has two distinct pleaded claims in this suit, one against the Company and one against the Second to Fourth Defendants. [12] As against the Company, that is the First Defendant, the Plaintiff’s pleaded claim is for breach of contract. The Plaintiff alleges that the Company purportedly failed to make payment of the redemption sum and dividends under the Plaintiff’s RPS units. [13] The Plaintiff’s claim against the Company was settled by way of a Consent Judgment dated 17 May, 2024 (in Enclosure 18 – without prejudicing the Plaintiff’s claim against the Second to Fourth Defendants for fraud and misrepresentation). [14] As against the Second to Fourth Defendants, the Plaintiff’s pleaded claim is for fraud and misrepresentation. The Plaintiff seeks general damages as well as both aggravated and exemplary damages against the Second to Fourth Defendants. The Second, Third and Fourth Defendants’ Case for Striking Out [15] The primary grounds relied by the Second, Third and Fourth Defendants to strike out the Plaintiff’s Writ under Order 18 rule 19(1)(a),

(b), (c) and/or (d) of the Rules of Court 2012 were as follows:

That the Plaintiff has no cause of action against the Second to

That the Plaintiff’s claims against the Second to Fourth Defendants lack particulars; and

That the Plaintiff’s claim against the Second to Fourth Defendants is ‘obviously unsustainable’ and ought to be struck out. [16] The crux of the Second to Fourth Defendants’ argument was that the Plaintiff’s claim, which was based on Fraud and Misrepresentation, lacks particularity. [17] The Second to Fourth Defendants further submitted that the principles governing the pleadings of such claims are stringent and that one of the key principles is that such claims must be pleaded with substantial particularity. They relied on Order 18 rule 12 of the Rules of Court 2012. [18] The Second to Fourth Defendants explained that the rationale for the principle is two-fold, that is, first, the opposing party has to be afforded a fair opportunity to appreciate the exact claim he has to meet; and second, the exact parameters of the claim ought to be defined to enable the identification of the disputed issues as well as to prevent any surprises during trial. The Second to Fourth Defendants relied on cases such Zung Zang Wood Products Sdn Bhd v Kwan Chee Hang Sdn Bhd [2014] 1 AMR 418; [2014] 2 CLJ 445; [2014] 2 MLJ 799; [2014] 5 MLRA 85 at paras [24]- [26]; CIMB Bank Bhd v Veeran Ayasamy [2015] AMEJ 1007; [2015] 7 CLJ 289; [2015] MLJU 993; [2015] 5 MLRA 603 at paras [16] and [17] and Rokiah bt Suhaili v Emly Batu ak Bagang & Ors [2013] CLJU 1350; [2014] 7 MLJ 452; [2012] MLRHU 1800 at paras [10] and [11]. [19] It was further averred by the Second to Fourth Defendants that “the Plaintiff’s claim for his ‘belief’ of a purported fraud and misrepresentation” contain no particulars at all. [20] The Second to Fourth Defendants also asserted that the Plaintiff in his Affidavit to oppose the striking out application had made further vague allegations in a bid to substantiate his already fatal pleaded claim and that these allegations ought to be disregarded in their entirety. It was argued that “the Plaintiff cannot make good his already fatal pleaded claim through Affidavits”. The Second to Fourth Defendants cited the case of Itramas Technology Sdn Bhd v Maju Holdings Sdn Bhd & Ors [2021] AMEJ 0983; [2021] CLJU 1002; [2022] 10 MLJ 656; [2021] MLRHU 559 at paras 42 and 43. The Plaintiff’s Reply to the Striking Out Application [21] The Plaintiff opposed the striking out application in Enclosure 14 by submitting as follows. [22] The Plaintiff alluded to the existence of an Information Memorandum made available to the public to which the Plaintiff claimed “contains material information, statements, facts and utilisation of proceed received from the proposed Redeemable Preference Shares (“RPS”) issued and/or introduced to the Plaintiff and the other subscribers and/or investors”. [23] Although the Plaintiff did concede that there were “all the risks disclaimers”, he went on to submit that “the IM is a very persuasive document that could lure and/or entice investors to invest in the RPS to maximise potential returns on the basis that the proceeds will be utilised as per the business strategy that could provide positive returns within the short to medium term coupled with long term capital appreciation”. [24] Premised on the above, the Plaintiff argued that this is not a proper case for this Court to invoke its powers pursuant to Order 18 rule 19(1) of the Rules of Court to strike out its claim. [25] The authorities cited by the Plaintiff include Tony Pua Kiam Wee v Datuk Seri v Dato’ Seri Mohd Najib Tun Hj Abdul Razak & Anor [2017] 7 AMR 499; [2017] 10 CLJ 503; [2017MLJU 1572]; Owen Sim Liang Khui v Piasau Jaya Sdn Bhd [1996] 2 AMR 2477; [1996] 4 CLJ 716; [1996] 1 MLJ 113; [1995] 2 MLRA 461; Joseph Paulus Lantip & Ors v Unilever PLC [2013] 1 AMR 481; [2012] 7 CLJ 693; [2012] MLJU 1799; [2012] 6 MLRA 614; Ahmad Zaki Resources Bhd v Sime Engineering Sdn Bhd & Anor [2013] 1 CLJ 889; [2013] 2 MLRA 367 and Seruan Gemilang Makmur Sdn Bhd v Kerajaan Negeri Pahang Darul Makmur & Anor [2016] 2 AMR 795; [2016] 3 CLJ 1; [2016] 3 MLJ 1; [2016] 2 MLRA 263. [26] In short, it was the Plaintiff’s contention that there are issues that needs should be determined this Court regarding the Plaintiff’s claim against the Second to Fourth Defendants in this suit filed herein. Accordingly, these issues warrant for the matter to not be struck out and/or heard summarily. [27] A pertinent point is the Plaintiff’s reference to paragraph 13 of the Plaintiff’s Statement of Claim, where it was argued that that one paragraph has “impliedly” pleaded that through the Information Memorandum, the Second to Fourth Defendants either jointly or severally have caused the Plaintiff to be engaged in an investment that is contrary with the objective of the Information Memorandum and that eventually led the Plaintiff into suffering actual loss and damage as per its claim against the First Defendant. [28] It was the Plaintiff’s contention that an examination of paragraph 13 of the Plaintiff’s Statement of Claim will reveal that the pleading clearly states that there was a contract, and a breach of contract had occurred as a result of the fraudulent misrepresentation from the Second to Fourth Defendants. The Plaintiff further asserted that the Second to Fourth Defendants had not kept to the objective stated in the Information Memorandum “which had lured the Plaintiff to actually believe in it, acted on it and eventually suffered severe losses by entering into the contract”. [29] In response to the Order 18 rule 12 of the Rules of Court 2012 argument, the Plaintiff cited Quality Concrete Holdings Bhd v Classic Gypsum Manufacturing Sdn BHd & Ors [2012] 5 CLJ 33; [2012] 2 MLJ 521; [2012] 4 MLRA 648; Virtual Infinite Sdn Bhd & Anor v Teras Sari Resources Sdn Bhd & Ors [2022] 1 LNS 3177; [2022] MLJU 3434 and Yoon Hwa (1983) Sdn Bhd v Mines Resort Sdn Bhd (di dalam likuidasi) & Ors [2024] CLJU 156; [2024] MLJU 180. The Decision of this Court [30] The question which this Court has posed to itself is: Is this a “plain and obvious case” or one that is exceptional for it to invoke Order 18 rule 19(1) of the RC 2012. [31] In considering this application, this Court has referred to and examined paras [34] and [35] of the Statement of Claim which read as follows: K. MISREPRESENTATION BY THE 2ND, 3RD AND 4TH

Further to all of the above, the Plaintiff further has reason to believe that the 2nd,3rd and 4th Defendants have made misrepresentations and/or acted in a fraudulent manner towards the Plaintiff as 2nd, 3rd and 4th Defendant either jointly or severally have caused the 1st Defendant to be engaged in investments which are contrary to the objectives contained and/or represented to the Plaintiff through the Information Memorandum and thereby causing harm and damage to the Plaintiff.

The Plaintiff will adduce and rely on all relevant documents, correspondences and witnesses at the trial of this suit filed herein. [32] This Court also finds that there was reference to the Information Memorandum in the said pleadings and has perused the said Document. [33] While the said pleadings may not be considered as model or exemplary pleadings, it has nevertheless put the Second, Third and Fourth Defendants on notice as to the allegations raised. [34] The Plaintiff is nevertheless bound by the four corners of his pleadings and documents to be adduced and arguments to be raised at trial will have to be confined to the pleaded case. [35] The Defendants’ application in Enclosure 14 is dismissed with costs of RM3,000. Dated: 6 December, 2024 sgd [CHOONG YEOW CHOY] Judicial Commissioner High Court of Malaya Shah Alam Counsel: Sabreena Mohd Sab for the Plaintiff (Messrs. Alwin Rajasurya) Irene Wong for the Defendants (Messrs. Irene Wong Chambers)