GUNALAN A/L SAGARAN (berurusaniaga atas nama dan gaya sebagai FUTURE RISE AGENCY ) 1. ) MOHD NASRI BIN ABDUL RAHIM 2. ) MUHAMAD ERMAN BIN OMAR HATTAB 3. ) HASWIRA AIMAN BIN HASSAN MERICAN 4. ) NAR TRADING TRADERS SDN. BHD. 5. ) ABDUL WAHAB

PA-22NCvC-98-05/2021 Kand. 44 22/01/2024 10:48:24 IN THE HIGH COURT OF MALAYA AT PENANG CIVIL SUIT NO. : PA-22NCvC-98-05/2021 BETWEEN GUNALAN A/L SAGARAN (NRIC No.: 800807-08-5531) (Trading in the name and style of FUTURE RISE AGENCY (Registration No.: 201503101174 (PG0364614-D) ... PLAINTIFF AND 1. MOHD NASRI BIN ABDUL RAHIM (NRIC No.: 860529-35-5697) …FIRST DEFENDANT 2. MUHAMED ERMAN BIN OMAR HATTAB (NRIC No.: 880508-35-5223) …SECOND DEFENDANT 3. HASWIRA AIMAN BIN HASSAN MERICAN (NRIC No.: 920830-07-5645) …THIRD DEFENDANT 4. NAR TRADING TRADERS SDN BHD (Registration No.: 201701002858 (1217008-M)) …FOURTH DEFENDANT S/N Ej0A0txMQk65lplxWbEung **Note : Serial number will be used to verify the originality of this document via eFILING portal 5. ABDUL WAHAB BIN S MOHD MYDIN (NRIC No.: 691014-07-5261) …FIFTH DEFENDANT 6. MOHAMMAD HAFEEZ BIN ABDUL WAHAB (NRIC No.: 950223-07-5931) …SIXTH DEFENDANT 7. RESOOL BIVI BINTI YUSOF GANI (NRIC No.: 720805-07-5604) … SEVENTH DEFENDANT JUDGMENT (STRIKING OUT) PRELUSION [1] The 1st Defendant to the 4th Defendant company (D1-D4Co) applies to strike out the Plaintiff’s (P) claim as against them. D1-D4 applies to strike out P’s Writ and Statement Of Claim (SOC) under limbs (a), (b) and (d) of Order 18 Rule 19(1) of the Rules Of Court 2012. [2] Limb (a) is the ground that P’s SOC discloses no reasonable cause of action against D1-D4Co. Limb (b) is the ground that P’s SOC is scandalous, frivolous or vexatious. And limb (d) is the ground that P’s SOC is an abuse of the process of the Court. [3] Should P’s claim against D1-D4Co be struck out in this case? P’S CAUSES OF ACTION AGAINST D1-D4 S/N Ej0A0txMQk65lplxWbEung **Note : Serial number will be used to verify the originality of this document via eFILING portal [4] P pleads that D1-D4Co breached their contract with P; that D1- D4Co cheated P; and that D1-D4Co committed a fraud on P. P’s causes of action against D1-D4Co are for breach of contract, cheating and fraud. THE PERTINENT PLEADED FACTS [5] D1 owns D4Co. D1, D2 and D3 are directors of D4Co. I will refer to D1, D2 and D3 together as “D1D2D3”. [6] D5 and D6 are partners in a firm (business). [7] D5 and D7 are partners in another firm (another business). [8] D1 and D5 have various businesses, such as hotels, an aquaponic farm, an oil palm plantation, a rubber plantation, and a durian orchard. [9] In April 2019, D1D2D3 and D5 asked P to invest in their businesses. P told them that he did not want to invest in their businesses, but he would, instead, give them a loan. They agreed, and D1 and D5 promised to return P's money by 31.12.2020. [10] P banked approximately RM4.78 million into D4Co’s account. [11] The Defendants failed to return the money to P by 31.12.2020. [12] P also discovered that the businesses that D1 and D5 represented that they had, were dormant or not in operation. P’S PRAYER IN THE APPLICATION [13] Foremost, I would like to point out that D1-D4Co’s striking out Application prays that an Order be given to strike out P’s claim entirely i.e. not only as against D1-D4Co, but as against all the Defendants. S/N Ej0A0txMQk65lplxWbEung **Note : Serial number will be used to verify the originality of this document via eFILING portal THE LAW ON STRIKING OUT PLEADINGS [14] A review of the law on striking out pleadings under Order 18 Rule 19(1) is found in the Federal Court case of Tan Wei Hong (a minor suing through guardian ad litem and next friend Chuang Yin Ee) & Ors v Malaysian Airlines Bhd & Other Appeals [2019] 1 MLJ 59 (FC); [2018] 6 AMR 529; [2018] 9 CLJ 425. [15] Tan Wei Hong (supra)sets out— [15] Order 18 r 19 of the ROC provides: 19 Striking out pleadings and endorsements (Order 18 rule 19) (1)The court may at any stage of the proceedings order to be stuck out or amended any pleading or the endorsement, of any writ in the action, or anything in any pleading or in the endorsement, on the ground that — (a)it discloses no reasonable cause of action or defence, as the case may be; (b)it is scandalous, frivolous or vexatious; (c)it may prejudice, embarrass or delay the fair trial of the action; or (d)it is otherwise an abuse of the process of the Court, and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be. (2)No evidence shall be admissible on an application under paragraph (1)(a). (3)This rule shall, as far as applicable, apply to an originating summons as if it were a pleading. [16] The principle for striking out of pleadings pursuant to O 18 r 19 of the ROC is well settled. It is applicable only in a plain and obvious case or where a claim is, on the face of it, obviously unsustainable (see: Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36; [1993] 4 CLJ 7 (SC); Hubbuck & Sons, Limited v Wilkinson, Heywood & Clark, Limited [1899] 1 QB 86; Attorney-General of the Duchy of Lancaster v London and North Western Railway Company [1892] 3 Ch 274). [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 (a)it is only in plain and obvious cases that recourse should be had to the summary process under the rule; (b)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; (c)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 Ej0A0txMQk65lplxWbEung **Note : Serial number will be used to verify the originality of this document via eFILING portal … (e)the court must be satisfied that there is no reasonable cause of action or that the claims are frivolous or vexatious or that the defences raised are not arguable. [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 not be made summarily by the court if there is issue of law that requires lengthy argument and mature consideration. It 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)). [19] The basic test for striking out as laid down by the Supreme Court in Bandar Builder is that 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. If one has to go into a lengthy detailed argument and mature consideration of the issues of law and/or fact, then the matter is not appropriate to be struck out summarily. It must be determined at the trial. [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. As rightly said by Lord Diplock in the House of Lords case of American Cyanamid Co v Ethicon Ltd [1975] AC 396 at p 407: … The court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried. It is no part of the court’s function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at the trial … This passage was cited with approval by the Privy Council in the Malaysian case of Eng Mee Yong & Ors v V Letchumanan [1979] 2 MLJ 212; [1979] 1 LNS 18 . . [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)... MY FINDINGS [16] Case law authorities guide me that I should not minutely examine the affidavit evidence when I am considering a striking out application. I S/N Ej0A0txMQk65lplxWbEung **Note : Serial number will be used to verify the originality of this document via eFILING portal should instead peruse pleadings, namely P’s SOC and D1-D4Co’s Defence. [17] The following is what I found. I found that there are averments in D1-D4Co’s Defence that D1-D4Co were involved in the factual matrix that P found his causes of action in this suit. [18] D1-D4Co knew about the relationships between D5, D6 and D7, and their businesses [Defence paragraph 5]. I will refer to D5, D6 and D7 together as “D5D6D7”. [19] D1-D4Co trusted D5 to use D5D6D7’s businesses to return the “hibah” to D4Co’s clients [Defence paragraph 10e] [20] D1-D4Co admit that P gave a loan to D4Co between May 2019 to July 2020. In this period, seven contracts had ended, and the “hibah” was given to P. But there were five contracts which were still active [Defence paragraphs 12 and 13] [21] D1-D4Co admit that D4Co received RM4.12 million from P [Defence paragraph 14b] [22] D1-D4Co deny committing any fraud, because the cheating and misappropriation of money was committed by D5 [Defence paragraph 18] [23] Further, from what I can decipher, D1-D4Co’s reasons to support this striking out Application include— S/N Ej0A0txMQk65lplxWbEung **Note : Serial number will be used to verify the originality of this document via eFILING portal (1) D1-D4Co did not sign any relevant contract with P. But in this regard, I must note that contracts do not necessarily have to be in writing. (2) The party who committed the cheating or fraud was D5. But I hold the view that just saying so, does not exonerate D1- D4Co. It certainly does not justify bypassing or side-stepping a trial of P’s claim against D1-D4Co. There must be cogent evidence to prove their assertion. (3) D1-D4Co have the burden to prove, at the trial of P’s claim, that it was D5 who committed the cheating and the fraud, and not them. Just as conversely, P has the burden to prove that D1-D4Co committed the cheating and fraud which caused loss and damage to P. [24] Perusing P’s SOC and D1-D4Co’s Defence, I am compelled to find that P’s claim against D1-D4Co is not a plain and obvious case to be summarily struck out. I also find that P’s claim against D1-D4Co is not obviously unsustainable. I further find that P has disclosed a reasonable cause of action against D1-D4Co. And I find that P’s claim is not scandalous, frivolous or vexatious, nor is it an abuse of the process of the Court—Bandar Builders Sdn Bhd v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36 (SC); [1993] 2 AMR 1969; [1993] 4 CLJ 7. [25] In Bandar Builders (supra), the Supreme Court held thus (at MLJ page 43)— The principles upon which the court acts in exercising its power under any of the four limbs of O 18 r 19(1) of the RHC are well settled. It is only in plain S/N Ej0A0txMQk65lplxWbEung **Note : Serial number will be used to verify the originality of this document via eFILING portal and obvious cases that recourse should be had to the summary process under this rule (per Lindley MR in Hubbuck & Sons Ltd v Wilkinson, Heywood & Clark Ltd 7, and 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' (see AG of Duchy of Lancaster v L & NW Rly Co 8). 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 (see Wenlock v Moloney & Ors 9). The authorities further show that if there is a point of law which requires serious discussion, an objection should be taken on the pleadings and the point set down for argument under O 33 r 3 (which is in pari materia with our O 33 r 2 of the RHC) (see Hubbuck & Sons Ltd v Wilkinson, Heywood & Clark Ltd 7). The court must be satisfied that there is no reasonable cause of action or that the claims are frivolous or vexatious or that the defences raised are not arguable BALANCE OF JUSTICE [26] Finally, a fundamental ground for my decision is the balance of justice. [27] Order 1A of the Rules Of Court 2012 compels me to “have regard to the overriding interest of justice”. And Order 92 Rule 4 behoves me “to prevent injustice”. And so I consider the balance of justice. [28] If D1-D4Co’s striking out Application is allowed, then P would lose the opportunity—actually, the procedural right—to prove his claim against D1-D4Co, at trial. P will not be given his day in Court. [29] If, on the other hand, D1-D4Co’s striking out Application is not allowed, D1-D4Co have not lost their case. The merits of D1-D4Co’s Defence will still be canvassed, heard and determined by this Court, at trial. S/N Ej0A0txMQk65lplxWbEung **Note : Serial number will be used to verify the originality of this document via eFILING portal [30] The Order 18 Rule 19 striking out procedure is the exception rather than the rule in our legal system. That is the reason that P is given every opportunity to show that he can sustain his claim at trial. And D1-D4Co are given the converse but equal opportunity to defend against the claim. [31] I have to be mindful of these effects and circumstances when I weigh the balance of justice. And I am inclined to say that in this suit, it is just to dismiss D1-D4Co's striking out Application, so that both sides’ respective cases can be heard and determined, not summarily, but by the process of a trial. Both parties should be given their day and time in Court to prove their claim and their defence. [32] For these reasons, I dismiss D1-D4Co’s striking out Application with costs of RM7K to be paid by D1-D4Co to P by 18.9.2023. Costs are subject to the allocatur. Dated: 22 January 2024 signed KENNETH ST JAMES Judicial Commissioner Penang High Court Counsel/Solicitors For the Plaintiff: Amareson K. Velu [Messrs. Amareson & Meera (Penang)] S/N Ej0A0txMQk65lplxWbEung **Note : Serial number will be used to verify the originality of this document via eFILING portal For the First to - Fourth Defendants: [Messrs. Amli & Associates (Petaling Jaya)] For the Fifth to Mashitah Jamaluddin @ Mohammad Seventh Defendants: Shukri [Rosli Ismail & Co. (Penang)] Legislation referred to: 1. Order 18 Rule 19 of the Rules of Court 2012. Cases referred to: 1. 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. 2. Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36; [1993] 4 CLJ 7 (SC). S/N Ej0A0txMQk65lplxWbEung **Note : Serial number will be used to verify the originality of this document via eFILING portal