Yhs Resources Sdn Bhd v Damansara Realty (Pahang) Sdn Bhd (WA-22NCvC-737-11/2024)

The Defendant, by Notice of Application dated 28.2.2025 under Enclosure 8, seeks to strike out part of the Plaintiff’s claim as pleaded in the Writ and Statement of Claim dated 29.11.2024, pursuant to Order 18 Rule 19(1)(a), (b) and/or (d) of the Rules of 16/10/2025 16:55:42 WA-22NCvC-737-11/2024 Kand. 23 Court 2012 (‘ROC 2012”), specifically the claims set out in paragraph 40(a), and paragraphs 40(c) to (o) of the Statement of Claim.

Having heard learned counsel for both parties and considered the affidavit evidence and written submissions, this Court delivered its decision on 19.6.2025, allowing the Defendant’s application with costs. The Plaintiff then filed the Notice of Appeal.

The Court now sets out its full reasons and findings.

To understand the Defendant’s application to strike out a substantial portion of the Plaintiff’s claim, it is appropriate first to look at the prayers in the main action brought by the Plaintiff against the Defendant.

In the Statement of Claim, the Plaintiff seeks the following reliefs from the Defendant as follows:

A declaration that the Term Sheet dated 1 September 2020 was wrongfully and unlawfully terminated by the

An order for the Defendant to refund the Plaintiff’s deposit of RM5,000,000 within seven (7) days from the date of judgment, together with interest at 5% per annum from February 2016 and/or such period as determined by the Court until full settlement of the said deposit by the Defendant to the Plaintiff;

An order directing the Defendant to produce within 30 days from the date of judgment a statement of account showing the deposit of RM5,000,000 held in trust for the Plaintiff, to be prepared by a qualified accountant and/or certified auditor from the date the said deposit was received by the Defendant until the date of judgment;

An injunction restraining the Defendant and/or its agents, employees, staff, and/or officers from selling, handling, utilising, and/or disposing of all bauxite stockpiles located on the said land;

A declaration that the Plaintiff has absolute rights to deal with the bauxite stockpiles on the said land, including the right to sell them;

An order directing the Defendant to sign and/or produce all necessary and reasonable documents, consents, and related materials to enable the Plaintiff to sell and/or dispose of the bauxite stockpiles on the said land within seven (7) days of receiving a written request from the Plaintiff; and if the Defendant refuses, fails, neglects, and/or defaults in doing so, committal proceedings shall be initiated, or alternatively, the Senior Assistant Registrar or Deputy Registrar shall be authorised to sign such documents on behalf of the

Damages for expenses incurred by the Plaintiff amounting to RM18,418,394.21 and/or such other sum as deemed just and appropriate by the Court;

An order for assessment of damages suffered by the Plaintiff as a result of the Defendant’s wrongful and/or unlawful termination of all Agreements and the Term

Interest at 5% per annum on the advance payment of RM3,000,000 from the date of payment until the date of judgment;

Damages of RM5,000,000 for theft incidents that occurred, as evidenced by the police report dated 8

An order for assessment of damages for other losses, thefts (if any), depreciation in the value of the Plaintiff’s goods and/or possessions located on the said land;

Business loss damages for the period during which the Defendant terminated all Agreements and the Term

Costs of the action and interest at 5% on costs until full satisfaction;

Interest at 5% per annum from the date of filing of the writ; and

Such further or other reliefs as this Honourable Court deems just and appropriate.

The Plaintiff alleged that the Defendant refused to grant any further extension after 28.2.2022 and had wrongfully and/or unlawfully terminated the Term Sheet dated 1.9.2020, as a result of the Plaintiff’s failure to obtain the relevant PML licence.

The Plaintiff further alleged that the Defendant continued to retain the deposit monies belonging to the Plaintiff in the sum of RM5 million and refused to issue an authorisation letter to enable the Plaintiff to enter the site, to comply with the Defendant’s notice dated 1.3.2022, which is clearly not the case here.

The Defendant, on the other hand, contends that the Term Sheet dated 1.9.2020 had lawfully and/or automatically expired and/or lapsed on 1.3.2022, as a result of the Plaintiff’s failure and/or refusal to fulfil the conditions precedent by 28.2.2022, and when no further extension was agreed between the parties.

The Defendant further contended that the Plaintiff failed to fulfil and comply with its obligations, among others, under the Term Sheet despite the Defendant having granted several extensions to enable the Plaintiff to do so.

In fact, pursuant to Clause 15(b) of the Term Sheet, both parties had agreed that the Plaintiff waived its right to initiate any action against the Defendant.

The Plaintiff had also agreed under Clause 10(c) of the Term Sheet that the parties would not have any further claims arising from the failure to fulfil the Conditions Precedent. Defendant’s application to strike out

The Defendant’s application is premised on Order 18 Rule 19(1) of the ROC 2012, on the following grounds:

That the said claims disclose no reasonable cause of action;

That they are scandalous, frivolous, and/or vexatious;

That they are obviously unsustainable; and/or

That they constitute an abuse of the Court’s process.

The Defendant submitted that the Plaintiff failed to perform and comply with its obligations under the Term Sheet despite the Defendant having granted several extensions of time to the Plaintiff, which ultimately resulted in the Term Sheet lapsing and/or expiring.

Therefore, in accordance with Clauses 15(b) and 10(c) of the Term Sheet, the Plaintiff has no right and is now estopped from filing this action, or from making any claim whatsoever against the Defendant.

The excerpt of Clause 15(b) of the Term Sheet is as follows:

The excerpt of Clause 10(c) of the Term Sheet is as follows:

At paragraph 40(b) of the Statement of Claim, the Plaintiff is seeking for the refund of Deposit and interests to be imposed on the Deposit sums. However, the Defendant submitted that the Defendant’s obligation, if any, (but of which is denied) to return/refund the Deposit monies has not arisen for as long as the Plaintiff has not complied and failed to comply with Clause 7 of the Term Sheet, and the matters stated at paragraphs 3(a) to 3(e) of the Notice, whereby –

the Plaintiff failed to vacate, restore and handover the 4 Land Lots to the Defendant as to date;

the Plaintiff failed to settle the outstanding sum of RM119,288.02 as to date; and

the Plaintiff commenced this action to claim for the Deposit and also by raising facts in relation / pertaining to the fulfilment of the Conditions Precedent, contrary to Clause 10(c) of the Term Sheet, as agreed by parties.

Clause 7 of the Term Sheet shall apply. The parties shall have no further claims against one another arising from the non-fulfilment of the Conditions Precedent.

In that regard, Defendant submit that the Plaintiff’s claim in relation to the Deposit is premature at this juncture.

Defendant, in addition to resisting the Plaintiff’s claim, also filed a counterclaim in relation to the Plaintiff’s failure to vacate the site and pay outstanding sums.

The Defendant contends that the Term Sheet, which had been extended until 28.2. 2022, had expired and/or lapsed on 1.3.2022. On 1.3. 2022, through the Notice of Termination of Third Extension Period, the Defendant duly notified the Plaintiff of the termination/lapse of the Term Sheet, the effect of which was as follows:

The Plaintiff was to vacate and reinstate the four parcels of land at its own cost and expense within 90 days from 1.3.2022;

The Plaintiff was to settle outstanding arrears in the sum of RM119,288.02 within 30 days from 1.3.2022;

The Plaintiff was to continue to observe Clause 15(b) of the Term Sheet, under which the Plaintiff would not initiate any claim and had agreed to waive such right pursuant to Clause 15(b);

The Defendant would only refund the deposit 90 days after the Plaintiff had vacated the said four parcels of land, subject to deduction for any applicable costs; and

The Defendant reserved the right to appoint another contractor for any mining project involving the said four parcels of land.

However, the Plaintiff has failed, refused and/or neglected to comply with the said Notice of Termination of Third Extension Period, notwithstanding that the Term Sheet had expired and lapsed on 1.3.2022.

The Defendant submitted that to date, the Plaintiff has failed, refused, neglected and/or omitted, among others, to –

Vacate, reinstate and deliver possession of the said four parcels of land to the Defendant;

Remove all machinery, equipment and/or assets belonging to the Plaintiff from the said four parcels of land;

Pay the outstanding sum of RM119,288.02 to the

Comply with Clause 15(b) of the Term Sheet (whereby the Plaintiff agreed not to initiate any claim against the Defendant and to waive such right.

Accordingly, the Defendant contends that any obligation or liability on its part to refund the deposit to the Plaintiff has not arisen and/or has not been triggered, due to the Plaintiff’s failure and/or refusal to comply with the Notice of Termination of Third Extension Period.

The issue before the Court is whether the Plaintiff’s claims under paragraph 40(a), and paragraphs 40(c) to (o) of the Statement of Claim ought to be struck out on the grounds relied upon by the Defendant.

The Defendant’s application under Enclosure 8 is premised on Order 18 Rule 19(1) of the ROC 2012, on the following grounds:

That the said claims disclose no reasonable cause of action;

That they are scandalous, frivolous, and/or vexatious;

That they are obviously unsustainable; and/or

That they constitute an abuse of the Court’s process.

It is a well-established principle of law that the Court’s power to strike out pleadings must be exercised with caution. However, where the pleadings disclose no reasonable cause of action, and are plainly inconsistent with binding contractual terms, it is the Court’s duty to prevent abuse of process. In such circumstances, the judicial discretion under Order 18 Rule 19 ROC 2012 must be exercised to ensure that only justiciable claims proceed to trial.

As held in Bandar Builder Sdn Bhd v United Malayan Banking Corp Bhd [1993] 3 CLJ 7, “the claim on the face of it must be ‘obviously unsustainable’. The stress is not only on the word ‘unsustainable’ but also on the word ‘obviously’, ie, the degree of unsustainability must appear on the face of the statement of claim without having to go into a lengthy and mature consideration in detail.” Hence , it is trite law that under Order 18 Rule 19(1)(a) ROC 2012, a pleading may be struck out if it discloses no reasonable cause of action.

In the present case, based on the express terms of the Term Sheet, particularly Clause 10(c) and Clause 15(b), the Court believes that it is clear that –

No party shall have any right to initiate legal proceedings in the event the conditions precedent are not fulfilled; and

The Plaintiff had expressly agreed to waive any right to bring a claim against the Defendant in such circumstances.

The Plaintiff does not dispute that the conditions precedent were not fulfilled and that the Term Sheet had lapsed on 1.3.2022. In the circumstances, the Court finds that the Plaintiff’s claims under paragraph 40(a), and paragraphs 40(c) to (o) are plainly unsustainable. The Court believes that they fall squarely within the categories of pleadings that should be struck out under Order 18 Rule 19(1)(a), (b) and (d) ROC 2012, as they are legally untenable, devoid of merit, and amount to an abuse of the Court’s process.

Having considered the affidavits filed and the submissions of learned counsel for both parties, I am satisfied that the Defendant has established sufficient grounds under Order 18 Rule 19 ROC 2012 for the partial striking out sought.

Accordingly, the Defendant’s application to strike out those claims is allowed. Position of Paragraph 40(b) of the Plaintiff’s Statement of

Claim The Court notes that paragraph 40(b) of the Statement of Claim, which seeks a refund of the deposit together with interest is not within the scope of the present striking out application. As such, the Plaintiff’s claim under paragraph 40(b) shall proceed to trial.

I am of the view that this issue involves triable questions of fact, namely –

Whether the Defendant’s obligation to refund the deposit has arisen;

Whether the Plaintiff had complied with Clause 7 of the Term Sheet and the terms of the Notice dated 1.3.2022; and

Whether the Plaintiff’s claim for refund is premature in view of the conditions set out in the agreement.

I agree that these matters cannot be fairly determined without a full ventilation of evidence at trial.

Position of the Defendant’s Counterclaim In respect of the Defendant’s counterclaim, I find that it would be inappropriate to determine its merits within the ambit of this striking-out application. The counterclaim raises substantive issues of fact that require adjudication based on evidence and should be determined at the trial proper.

Accordingly, the Defendant’s counterclaim shall proceed to full trial together with the Plaintiff’s remaining claim under paragraph 40(b).

For the foregoing reasons, the Defendant’s application to strike out paragraphs 40(a) and paragraphs 40(c) to (o) of the Plaintiff’s Statement of Claim is allowed. The said paragraphs are struck out accordingly.

This decision does not preclude the parties from raising these issues at trial on para 40 (b) and the counterclaim, nor should it be taken as a ruling on the ultimate merit of the Plaintiff’s claims. It is simply a recognition that those matters are not suitable for summary determination.

The Plaintiff’s claim under paragraph 40(b) and the Defendant’s counterclaim shall proceed to full trial. Costs of RM3,000 are awarded to the Defendant. Dated : 15th October 2025 ……………………………………………… (YA PUAN MAHAZAN BINTI MAT TAIB) JUDGE HIGH COURT OF MALAYA KUALA LUMPUR For The Plaintiff : Shopna Rani Malakar Messrs. Shopna Rani Malakar & Co Advocates & Solicitors For The Defendant : Norazmi bin Norazman &