KENANGA INVESTORS BERHAD 1. ) ZULRAFQ CAPITAL SDN BHD 2. ) TAN SRI ZULHASNAN BIN RAFIQUE PIHAK TERKILAN 1. ) DATUK WIRA ISMITZ MATTHEW 2. ) MUHAMMAD TAQIUDDIN HALIM

WA-22NCC-141-03/2023 Kand. 63 12/03/2024 08:37:37 IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY, MALAYSIA (COMMERCIAL DIVISION) SUIT NO.: WA-22NCC-141-03/2023 BETWEEN KENANGA INVESTORS BERHAD [Registration No. 199501024358 (353563-P)] … PLAINTIFF AND 1. ZULRAFQ CAPITAL SDN BHD [Registration No. 202101012497 (1412796-A)] 2. TAN SRI ZULHASNAN BIN RAFIQUE (NRIC No.: 460315-01-5301) … DEFENDANTS (by original action) AND BETWEEN 1. ZULRAFQ CAPITAL SDN BHD [Registration No. 202101012497 (1412796-A)] 2. TAN SRI ZULHASNAN BIN RAFIQUE (NRIC No.: 460315-01-5301) … PLAINTIFFS AND 1. KENANGA INVESTORS BERHAD [Registration No. 199501024358 (353563-P)] 2. MUHAMMAD TAQIUDDIN HALIM 1 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal (NRIC No.: 841208-14-5441) 3. DATUK WIRA ISMITZ MATTHEW (NRIC No.: 741029-01-5387) … DEFENDANTS (by Counter Claim) JUDGMENT Introduction [1] This judgment concerns an application for summary judgment filed by Kenanga Investors Berhad, against Zulrafq Capital Sdn Bhd and Tan Sri Zulhasnan bin Rafique, in relation to a Put and Call Option Agreement and a Supplemental Option Agreement. The dispute revolves around the Defendants’ failure to fulfill their obligations under these agreements, specifically the payment of a premium and rollover fees in consideration for an extension of the option periods. The Plaintiff contends that there are no triable issues and that summary judgment should be entered in its favour. The Defendants resist the application, arguing that there are various factual and legal issues that warrant a full trial, including the existence of an alleged oral agreement and understanding between the parties that a third party, Muhammad Taqiuddin Halim, would be ultimately responsible for making the payments due to Kenanga under the Option Agreements, as well as allegations of a conspiracy between Kenanga’s CEO, Datuk Wira Ismitz Matthew De Alwis and Muhammad Taqiuddin to 2 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal injure the Defendants and that the Option Agreements are sham agreements. Background facts [2] On 22.10.2021, the Plaintiff, Kenanga Investors Berhad, and the First Defendant, Zulrafq Capital Sdn Bhd, entered into a Put and Call Option Agreement together with a Term Sheet attached thereto (collectively referred to as “the Option Agreement”). Under the Option Agreement, Kenanga granted the First Defendant a Call Option to buy back from the Plaintiff RM40,000,000 worth of ordinary shares in KNM Group Berhad amounting to 190,476,190 shares (“Option Shares”). The Plaintiff also had an irrevocable Put Option to sell to the First Defendant or its nominee the Option Shares on the Maturity Date defined in the agreement. [3] The Call Option was exercisable by the First Defendant within 6 months from the Transaction Date of 5.11.2021 (“Call Option 1”) or 3 months from the expiry of Call Option 1 (“Call Option 2”). The Call Option Period of 9 months from the Transaction Date fell on 4.8.2022 (“Maturity Date”). The First Defendant had to serve written notice on the Plaintiff at least 3 business days prior to the Maturity Date to exercise the Call Option. 3 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal [4] The Plaintiff could exercise the Put Option by serving written notice on the First Defendant at least 10 business days prior to the Maturity Date. The Put Option Period was also 9 months from the Transaction Date. If the Put Option was not exercised during this period, it would lapse and terminate automatically. [5] On 22.10.2021, the Second Defendant, Tan Sri Zulhasnan bin Rafique, as part of the Option Agreement, provided a Personal Guarantee (“the Personal Guarantee”) to guarantee the performance of the First Defendant’s Zulrafq’s obligations. [6] On 27.7.2022, the First Defendant applied to the Plaintiff for a 9-month extension and rollover of the Call Option Period and Put Option Period from the Maturity Date of 4.8.2022. In consideration, the First Defendant agreed to pay the Plaintiff: a) RM4,800,000 as premium on or before 15.9.2022 (“Premium Payment”); b) RM400,000 as rollover fee on or before 30.8.2022 (“Rollover Fees”); and c) All relevant fees and expenses incurred in the extension on or before 15.9.2022. 4 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal [7] On 3.8.2022, the Plaintiff and the First Defendant executed a Supplemental Option Agreement varying the terms of the Option Agreement (“Supplemental Option Agreement”). The Call Option 3 was exercisable within 6 months from the expiry of Call Option 2, while Call Option 4 was exercisable 3 months from the expiry of Call Option 3. The Put Option Period was varied to 18 months from this Transaction Date. [8] On 7.11.2022, the Second Defendant wrote a letter to the Plaintiff that stating that he gave an undertaking to pay the RM4.8 million premium but requested further time to settle the sum. [9] The First Defendant failed to pay the Premium Payment and Rollover Fees by the due dates, in breach of the extension terms and Supplemental Option Agreement. The Plaintiff then commenced this legal action and filed a summary judgment application against the First Defendant and the Second Defendant. [10] On 13.7.2023, the Plaintiff filed a separate suit in Kuala Lumpur High Court Suit No.: WA-22NCC-489-07/2023 against the same defendants for their failure to exercise the Call Option to purchase the Option Shares at the Put Option Share price under the Supplemental Option Agreement. 5 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal The Plaintiff’s application [11] The Plaintiff’s application in the High Court of Malaya at Kuala Lumpur is a request for a Summary Judgment against the Defendants pursuant to Order 14 Rule 1 of the Rules of Court 2012 (“ROC 2012”). The Plaintiff seeks an order for a judgment to be summarily entered against the Defendants for specific monetary claims, including: a) RM4,800,000.00 for the Premium Payment. b) RM118,356.16 as interest on the Premium Payment at a rate of 5% per annum from 16.9.2022, to 15.3.2023. c) RM400,000.00 for the Rollover Fees. d) RM10,684.93 as interest on the Rollover Fees at a rate of 5% per annum from 1.9.2022, to 15.3.2023. e) Further interest at a rate of 5% per annum on both the Premium Payment and the Rollover Fees from 16.3.2023, until full and final settlement. f) Alternatively, further interest at the same rate from the date of the Statement of Claim until full and final settlement. 6 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal g) Costs of the legal action. h) Any other relief deemed proper and fair by the court. Law on Summary Judgment (Order 14 ROC 2012) [12] It is trite that once an application under Order 14 of the ROC 2012 is shown to have been correctly and properly filed, the burden shifts and thus rests on the defendant who desires to resist the application to raise a defence which shows a “bona fide triable issue”, in the sense of an issue which justifies and warrants the matter to be considered at the trial proper. [13] Order 14 Rule 3 of the ROC 2012 provides that unless the defendant satisfies the court with respect to the claim, or the part of a claim, to which the application relates that:- (a) there is an issue or question in dispute which ought to be tried or (b) there ought for some other reason to be a trial of that claim or part, the court may give such judgment for the plaintiff against the defendant on that claim or part as may be just having regard to the nature of the remedy or relief claimed. 7 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal [14] It is useful to refer once again to the often-quoted decision of the former Supreme Court in National Company For Foreign Trade v Kayu Raya Sdn Bhd [1984] 2 MLJ 300 which ruled as follows: “We think it appropriate to remind ourselves once again that in every application under Order 14 the first considerations are (1) whether the case comes within the Order and (b) whether the plaintiff has satisfied the preliminary requirements for proceeding under Order 14. For the purposes of an application under Order 14 the preliminary requirements are: (i) the defendant must have entered an appearance; (ii) the statement of claim must have been served on the defendant; and (iii) the affidavit in support of the application must comply with the requirements of Rule 2 of the Order 14. ... If the plaintiff fails to satisfy either of these considerations, the summons may be dismissed. If however, these considerations are satisfied, the plaintiff will have established a prima facie case and he becomes entitled to judgment. The burden then shifts to the defendant to satisfy the Court why judgment should not be given against him.” [15] The Plaintiff has satisfied these preliminary requirements, and this is not disputed by the Defendants. Thus, the burden is now firmly on the Defendants to show that there is a triable issue that does not justify summary judgment to be entered against it. If the Defendants can demonstrate even one triable issue, this court will not grant summary judgment. But it has to be a genuinely triable issue as would 8 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal require a trial in order to determine it [see Voo Min En & Ors v Leong Chung Fatt [1982] 2 MLJ 241 (Federal Court)]. Issues [16] There are a number of triable issues put forward by the Defendants in this matter listed as follows: a) Whether the Plaintiff was aware of an understanding or arrangement involving third parties, specifically Muhammad Taqiuddin Halim (“Taqiuddin”) and Steve Ho Soon Woon (“Steve Ho”), in relation to the financial arrangements underpinning the Option Agreement and forming part of the contractual obligations; b) Whether the payments made by a third party, Taqiuddin, on behalf of the Defendants under the Option Agreement can be considered as fulfilling the Defendants’ contractual obligations to the Plaintiff, or if they create a separate set of rights and obligations between Taqiuddin and the Defendants; c) Whether there is conspiracy to injure involving the Plaintiff’s CEO, Datuk Wira Ismitz Matthew De Alwis (“Ismitz”) and Taqiuddin, which led to the Defendants entering into the Option Agreement resulting in financial detriment; 9 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal d) Whether the Option Agreement, Supplemental Option Agreement and Personal Guarantee are sham agreements, thereby rendering them void and unenforceable. [17] Before considering the triable issues raised by the Defendants, the court will first address certain preliminary objections raised by the Defendants on the following bases: a) The Plaintiff’s application for summary judgment is defective due to an alleged failure in explicitly stating that there is ‘no defence’ to the Plaintiff’s claim, as opposed to stating ‘no defence on the merits’ in the supporting affidavit; and b) There was a delay in filing the application after entering an appearance as the Plaintiff should have promptly filed the application before the defence was submitted and there is a lack of explanation for the delay. Preliminary objection: Not stating that there is ‘no defence’ to the Plaintiff’s claim. [18] The crux of the Defendants’ objection rests on the assertion that the Plaintiff’s application is defective due to an alleged failure in explicitly stating that there is ‘no defence’ to the Plaintiff’s claim. 10 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal [19] The Defendants reference the case of Kerajaan Malaysia v Nooryana Najwa Bt Dato Seri Mohd Najib [2020] 11 MLJ 242 (High Court) to buttress their argument, emphasising that for a summary judgment to be validly entered, the supporting affidavit must convey the deponent’s belief that there is ‘no defence’ to the claim. Conversely, the Plaintiff counters this objection by citing the cases of Kerajaan Malaysia v Kumpulan Liziz Sdn Bhd [2021] 10 MLJ 826 (High Court) and Hong Leong Bank Bhd v Leadmont Properties Sdn Bhd & Anor [2023] MLJU 1758 (High Court), which advocate a more nuanced interpretation, suggesting that the distinction between ‘no defence’ and ‘no defence with merits’ is essentially a matter of semantics and should not obstruct the overriding interest of justice. [20] Upon a thorough examination of the submissions and the legal precedents cited, this court finds the Plaintiff’s argument more compelling. The procedural requirements under Order 14 Rule 2 ROC 2012 appear to have been meticulously followed by the Plaintiff. The Plaintiff’s Notice of Application (Enclosure 11) is adequately supported by an affidavit sworn by Izmitz, the CEO of the Plaintiff, clearly outlining the absence of a defence on the part of the Defendants. [21] The contention raised by the Defendants on the phrasing within the affidavit – ‘no defence on the merits’ as opposed to ‘no defence’ – seems overly technical and not substantive enough to invalidate the Plaintiff’s application. 11 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal The distinction made in the Kumpulan Liziz and Hong Leong Bank cases between these phrases is of critical importance. These cases illuminate the understanding that while the language may differ, the essence of the statement – that the Defendants lack a substantive defence against the claim – remains consistent. In the Kumpulan Liziz case, Su Tiang Joo JC held that: “[43] Having deposed to the facts in its affidavits which show that D2 and D3 have no defence to the plaintiff’s claim which would lead the court to be able to conclude that the issues of fact and law raised by the defendants are not triable, I am of the opinion that for the plaintiff to depose by affidavit that the defendants have no defence with merit is as good as deposing that the defendants have no defence in the circumstances of this case as to enable the court to do its duty to allow summary judgment to be entered. [44] I observed that in the Federal Court case of National Company for Foreign Trade v Kayu Raya Sdn Bhd relied upon by the High Court in Kerajaan Malaysia v Nooryana Najwa bt Dato Sri Mohd Najib the Federal Court had used the permissive words ‘may be dismissed’ if, inter alia, the affidavit is defective for omitting to state the deponent’s belief that there is no defence to the claim. For ease of reference the relevant part of the judgment of the Federal Court is set out below: [45] With all due respect, I am of the view that the Federal Court in its wisdom had the foresight to leave intact and available a discretion on the part of the trial judge to do justice to all who comes before the court be they plaintiffs or defendants, if the failure to satisfy a procedural condition is purely one of semantics or technical non-compliance. ……….. [48] I find that saying ‘no defence’ and ‘no defence with merits’ is one of semantics and they both mean the same thing. The addition of the words 12 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal ‘with merits’, is at best a surplusage to underscore the point being made that there is no defence. This surplusage is a form of a mere technical noncompliance and should not be allowed to stand in the way of having regard to the overriding interest of justice.” [22] The Kumpulan Liziz case was followed in the Hong Leong case where Ong Chee Kwan J held that: “[43] In any case, I hold that the omission by the Plaintiff to make an express averment that the Defendants have no defence to the Plaintiff’s claims in the affidavit filed in support of the Enclosure 7 is a mere irregularity under Order 1A of the Rules of Court 2012 which provides: “In administering these Rules, the Court or a Judge shall have regard to the overriding interest of justice and not only to the technical non-compliance with these Rules.” [44] A similar point was taken up in Kerajaan Malaysia v Kumpulan Liziz Sdn Bhd (formerly known as Kumpulan Liziz Bhd) & Ors [20211 10 MLJ 826 at 842 to 845 where the defendants’ technical objection relating to a purported non- compliance with Form 13 to depose that the defendant “has no defence to the claim” was raised. This was rejected by the Court on the basis that, if at all, the failure to satisfy a procedural condition is purely one of semantics or technical non¬compliance and reliance was placed on the provisions of Order 1A of the ROC 2012 and summary judgment was entered against the defendants. [45] In Syarikat Islamiyah v Bank Bumiputra Malaysia Bhd [1988] 3 MLJ 218 at 221 a supplementary affidavit was accepted by the Court to correct defects in the affidavit filed in support of a summary judgment application. In that case, the court had accepted the plaintiff’s supplementary affidavit containing an averment that the defendant had no defence to the plaintiff’s claim, which was 13 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal omitted from the plaintiff’s affidavit in support of the application for leave to enter summary judgment.” [23] In line with the principles established in the aforementioned cases, this court recognises the need to focus on the substance over form, especially in contexts where justice might be impeded by adherence to strict technicalities. The interpretation of ‘no defence’ should not be so rigid as to disregard the overall context in which it is used, particularly when the underlying intent and meaning are clear. [24] Therefore, this preliminary objection raised by the Defendants is found to be lacking in merit. The Defendants have not sufficiently demonstrated how the phrase ‘no defence on the merits’ materially deviates from the requirement of stating ‘no defence’ in the context of Order 14 Rule 2. Preliminary objection: Delay in filing Enclosure 11 [25] The Defendants have raised an objection based on a purported delay, referencing the case of Krishnamurthy & Anor v Malayan Finance Corp Bhd [1986] 2 MLJ 134 (Supreme Court) which emphasises the necessity for swift action in filing for summary judgment after an appearance is entered. They argue that the Plaintiff’s failure to promptly file the application before the defence is filed and the lack of explanation for this delay, warrants the dismissal of the summary judgment. 14 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal [26] Conversely, the Plaintiff contends that any delay in filing Enclosure 11 does not constitute a bar to its application for summary judgment. It cites the High Court cases of Lee Wah Bank Ltd v Chee Kong Electrical Engineering Sdn Bhd & Ors [1999] (High Court) and Fulcrum Capital Sdn Bhd v Low Kon Yang [2003] 4 MLJ 509 (High Court), where it was held that delay is not a substantive issue in the context of summary judgment applications, provided there are no bona fide triable issues. The Plaintiff further notes that post the 2012 amendments to the rules, which introduced case management, the timing of filing for summary judgment has become more flexible, as long as it adheres to the court’s directions during case management. [27] In evaluating these positions, the court notes that the crux of a summary judgment application lies in determining whether there exist bona fide triable issues warranting a full trial. The essence of such an application is to expedite the resolution of cases where no such triable issues are present. The case law cited by the Plaintiff, particularly Lee Wah Bank Ltd and Fulcrum Capital Sdn Bhd, supports the view that delay in itself is not a decisive factor in determining the appropriateness of granting summary judgment. The rulings in these cases clarify that the absence of triable issues is the primary consideration in such applications, rather than the timing of the filing. 15 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal [28] In the case of Lee Wah Bank Ltd Abdul Aziz J (as he then was) held: “Delay There has been no explanation for the delay of nine months from the time defence was filed until the time the summary-judgment application was filed. The Court of Appeal has ruled in Perkapalan Shamelin Jaya Sdn Bhd & Anor v Alpine Bulk Transport New York [1997] 3 MLJ 818 that delay is no answer to an application for summary judgment where there are no bona fide triable issues. Referring to a proposition that a summons for summary judgment may be defeated solely upon the ground of delay in making the application, Gopal Sri Ram JCA said at p 821D-E: Such a proposition runs counter to the interests of justice. For delay can surely provide no answer to an application made under O 14 where there are no bona fide triable issues. We therefore take this opportunity to declare the absence of the proposition contended for by counsel. I found that most gratifying because I myself have been baffled as to the existence of a good reason for such a proposition. The statement is like a breath of fresh air. The statement has further an implication. Taken literally, its corollary is that if there are bona fide triable issues, delay can provide an answer to an application for summary judgment. Since, however, the existence of a triable issue is the true answer to such an application, if a triable issue can be shown to exist, the application simply cannot succeed, and delay need not come into the balance at all. So what the statement amounts to is that delay is not relevant in an application for summary judgment. Irrespective of delay, if there is no triable issue or no reason otherwise for going to trial, the application must succeed, but if there is a triable issue, the application must fail.” 16 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal [29] In the case of Fulcrum Capital Sdn Bhd, the court again addressed the issue of the plaintiffs filing their summary judgment application two weeks after the defence was served on the plaintiffs. The court decided that unexplained delay is no bar to summary judgment. The judge adhered to the decision made in Lee Wah Bank Ltd, which stated that unexplained delay does not prevent the granting of summary judgment. [30] Moreover, the changes brought about by the amendments to the court rules in 2012, as highlighted by the Plaintiff, suggest a shift in the procedural landscape. These amendments, emphasising case management, imply a more pragmatic approach to the timing of summary judgment applications, allowing for some flexibility as long as such applications are filed in accordance with the directions provided during case management. [31] Considering these arguments and legal precedents, the court finds the Defendants’ reliance on Krishnamurthy to be less persuasive in the current procedural context. While the necessity for swiftness in filing for summary judgment is acknowledged, this principle must be balanced against the practicalities of modern case management and the overarching objective of determining the presence of triable issues. 17 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal [32] Therefore, the court determines that the preliminary objection on the alleged delay by the Plaintiff in filing Enclosure 11 cannot be sustained. Therefore, the court rejects the Defendants’ contention regarding the delay and proceeds to consider the substantive issues raised in the application for summary judgment. Analysis and findings of the court Plaintiff had knowledge [33] The Defendants’ primary contention revolves around the alleged involvement of Taqiuddin in the context of the Option Agreement and the Supplemental Option Agreement. The Defendants contend that there was an understanding struck between the Defendants and Taqiuddin wherein Taqiuddin shall for all intent and purpose be responsible to the Plaintiff in respect of all on going contractual obligation and based on the understanding between the Defendants and Taqiuddin, the First Defendant ‘signed’ the Option Agreement with the Plaintiff on 28.10.2021. The Defendants assert that the Plaintiff was aware of the role of Taqiuddin and Steve Ho in the financial arrangements underpinning the agreements. They reference various meetings and communications, including a meeting at Minori Japanese Restaurant on 15.11.2021, to establish the existence of an understanding or arrangement involving these third parties. The Defendants argue that this arrangement was central to the contractual obligations and 18 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal that the Plaintiff’s knowledge thereof is crucial to the resolution of the dispute. [34] The Defendants refer to a meeting held at Minori Japanese Restaurant on 15.11.2021, subsequent to the execution of the Option Agreement and the Supplemental Option Agreement. The Defendants contend that this meeting, involving the second Defendant, Ismitz, Taqiuddin and Steve Ho is pivotal in understanding the arrangements surrounding the Option Agreement and Supplemental Option Agreement. They highlight that during this meeting, there was a discussion about the payment under the Option Agreement and Supplemental Option Agreement, suggesting an arrangement wherein the paying party would be a third party, specifically Taqiuddin. The Defendants imply that this meeting bears relevance to the interpretation and execution of the Option Agreement and Supplemental Option Agreement, questioning why such arrangements were not formally documented and questioning the role of the Second Defendant and Ismitz in these discussions. [35] On the other hand, the Plaintiff firmly contends that the meeting at Minori Restaurant has no bearing on the legal obligations arising from the Option Agreement and Supplemental Option Agreement. The Plaintiff asserts that the meeting, occurring after the signing of the Option Agreement and Supplemental Option Agreement, does not alter the established contractual obligations. It emphasises the absence of formal documentation or written variations to 19 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal the agreement stemming from this meeting, arguing that for a transaction of such magnitude, reliance on oral arrangements without formal documentation is implausible. The Plaintiff also points out the contradiction in the Defendants’ position, highlighting that the Defendants have filed an application for an injunction in this action asserting their interest in the shares, which undermines their argument of a third-party arrangement. [36] The court observes that the central issue is the enforceability and interpretation of the Option Agreement and Supplemental Option Agreement as originally executed. While the Defendants reference the Minori Restaurant meeting as evidence of an understanding or arrangement involving third parties, such oral discussions do not constitute a formal amendment to the contractual obligations as set out in the Option Agreement and Supplemental Option Agreement. The principle of contract law dictates that variations to contractual terms, especially in significant financial transactions, require clear documentation and mutual consent of the contracting parties. The absence of such formal amendments in this case is noteworthy. [37] Moreover, the Plaintiff’s contention that the meeting has no bearing on the rights and obligations under the Option Agreement and Supplemental Option Agreement is compelling. The mere occurrence of a post-agreement meeting, without concrete evidence of a legally binding 20 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal amendment to the agreement, cannot be deemed to alter the existing contractual obligations. The Defendants have not provided sufficient evidence to establish that the discussions at the Minori Restaurant meeting were intended to form part of the contractual obligations or that they were acknowledged as such by all relevant parties. [38] The Defendants assert the involvement of Taqiuddin in the financial arrangements underpinning the Option Agreement and Supplemental Option Agreement based on a letter dated 20.1.2023, wherein it is claimed that Taqiuddin was responsible for facilitating payments and bearing all sums due under the agreement. The Defendants contend that this arrangement was a collective understanding, integral to the contractual relationship. [39] Contrastingly, the Plaintiff disputes this assertion. It highlights that the mention of Taqiuddin’s involvement was first raised by the Defendants only in January 2023, at the pre-litigation stage, after a letter of demand issued on 19.1.2023. The Plaintiff’s response on 7.2.2023 categorically denies any understanding or arrangement with Taqiuddin, asserting no privy to such agreements. It maintains that the obligation to pay the demanded amounts remains with the Defendants and their guarantor. [40] This court notes that the introduction of Taqiuddin’s role at a later stage of the dispute raises concerns regarding its credibility and relevance. The timing of these assertions, 21 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal following the issuance of a legal notice of demand, suggests a retrospective attempt to introduce new elements into the established contractual obligations. [41] Furthermore, the court observes that the Plaintiff’s position has been consistent throughout. Its response to the Defendants’ correspondence clearly refutes any prior knowledge or agreement involving Taqiuddin. The lack of any mention of Taqiuddin in prior correspondence reinforces this position. [42] The Defendants also assert that Steve Ho, alongside other parties, was involved in discussions and negotiations related to the Option Agreement and Supplemental Option Agreement. This assertion is grounded in the references made to Steve Ho in various communications, including the Plaintiff’s letter dated 9.9.2022 and the Defendants’ letter dated 13.12.2022. The Defendants contend that these discussions indicate a level of understanding or agreement that involves Steve Ho, thus suggesting his relevance to the contractual obligations under the Option Agreement and Supplemental Option Agreement and an inquiry at trial is required for Steve Ho to explain his role. [43] However, this court finds that the Defendants’ position cannot be sustained for several reasons. Firstly, the mere mention of Steve Ho in communications does not automatically confer upon him a legally significant role in the Option Agreement and Supplemental Option Agreement. 22 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal The terms and obligations of a contract are defined by the agreement itself and the parties directly involved in it. The introduction of a third party, such as Steve Ho, in discussions or communications does not inherently modify the contractual obligations or create new legal duties unless such changes are explicitly agreed upon and documented in a legally binding manner. [44] Secondly, Steve Ho’s involvement is extrinsic to the contractual obligations under the Option Agreement and Supplemental Option Agreement. Steve Ho is not a party to the proceedings and that his mention in the communications is irrelevant and not a substantive addition to the contractual terms. [45] Furthermore, the Defendants’ reliance on communications that mention Steve Ho does not provide conclusive evidence of his formal involvement in the Option Agreement and Supplemental Option Agreement. The obligations and rights of parties are primarily determined by the contents of the agreement and the intention of the parties as explicitly expressed therein and the Defendants have not presented sufficient evidence to establish that Steve Ho was intended to be a party to the Option Agreement and Supplemental Option Agreement or that he had any legally binding role in their formation or execution. [46] The case of Midf Amanah Ventures Sdn Bhd v Lim Thiam Chye [2018] MLJU 512 highlights that courts favour a 23 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal commercially sensible construction when interpreting commercial contracts, aligning with the presumed intention of the parties and avoiding unreasonable results unless clearly intended and explicitly stated by the parties. Khadijah Idris JC (as she then was) stated: “[41] Secondly, it relates to the interpretation of the Put and Call Option Agreement. In this respect reference is made to the case of The Government of Malaysia v Imej Warisan Sdn Bhd [2017] 1 LNS 1914, where the Court of Appeal had this to say about the interpretation of a particular provision in a design and build contract - [24] It has often been said that where the court is called upon to interpret a contract, it will do so in a sensible fashion (see Loh Wai Lian v SEA Housing Corporation Sdn Bhd [1987] 1 LNS 37). In this connection, it is also instructive to consider Lord Steyn’s statement in Mannai Investment Co Ltd v. Eagle Star Life Assurance Co Ltd [1997] AC 749, 771: “In determining the language of a commercial contract, and unilateral contractual notices, the law therefore generally favours a commercially sensible construction. The reason for this approach is that a commercial transaction is more likely to give effect to the intention of the parties. Words are therefore interpreted in the way in which a reasonable commercial person would construe them. And the standard of the reasonable commercial person is hostile to technical interpretations and undue emphasis on niceties of language. In contradistinction to this modern approach, Lord 24 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal Greene M.R’s judgment in Hankey v. Clavering [1942] 2 KB 326 is rigid and formalistic.” [43] As such, the Put and Call Option Agreement must be interpreted in a sensible commercial manner as to give effect to the intention of the parties. To interpret the Put Option in the manner contended by the Defendant would lead to an unreasonable result. This is because the Defendant, against whom the Put Option Notice was duly served in accordance with the provisions of the Put and Call Option Agreement, can deliberately and intentionally refuse, fail and neglect to honour his part of the bargain to purchase the Option Shares within the Put Option Period and after the expiry of such period use this as a sword against the Plaintiff. This absurd situation and result certainly cannot be the intention of the parties. [44] In this respect what was said in the English case Schuler (L) AG v. Wickman Machine Tool Sales Ltd [1947] AC 235 is of significant relevance - The fact that a particular construction leads to a very unreasonable result must be a relevant consideration. The more unreasonable the result the more unlikely it is that the parties can have intended it, and if they do intend it the more necessary it is that they shall make that intention abundantly clear.” [47] In light of the principles set out in Midf Amanah Ventures Sdn Bhd v Lim Thiam Chye and The Government of Malaysia v Imej Warisan Sdn Bhd [2017]1 LNS 1914, the court finds that commercial contracts should be interpreted in a manner that aligns with the explicitly stated intentions of the contracting parties. This perspective supports the enforcement of the clear and unambiguous terms of the Option Agreement and the Supplemental Option Agreement 25 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal as originally agreed upon. Applying these principles, it is evident that the Defendants’ disregard of their contractual obligations, is neither reasonable nor in keeping with the commercial intent of the agreements. [48] Furthermore, the court considers the principles from Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1 MLJ 400 pertinent in this context. The Defendants are required to demonstrate a bona fide triable issue on affidavit evidence. Their assertions are not precise and are inconsistent with the contemporaneous documents, thus failing to establish a credible triable issue. Taqiuddin made payments [49] The Defendants contend that the payments were made by a third party, specifically Taqiuddin, and not by the Defendants themselves. They argue that this is evidence of an arrangement between Taquiuddin and the Defendants which creates rights and obligations between Taqiuddin and the Defendants, separate from those between the Plaintiff and the Defendants. The Defendants reference Section 2(d) of the Contracts Act 1950 and the case of Mohd Shukri bin Mat v Wan Rahmah bt Wan Abdullah [2018] 3 MLJ 89 (Court of Appeal) to substantiate their claim that a contract can be formed orally and with consideration provided by a third party. 26 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal [50] However, the Plaintiff asserts that the source of the payment is immaterial as long as the obligations under the Option Agreement are met. It points out that the cheques, as exhibited by the Defendants, lack particulars connecting them to Taqiuddin or any specific context tying them to the obligations of the Defendants. The Plaintiff denies receiving any payments directly from Taqiuddin and maintains that the payments, made by third parties, were intended to fulfil the obligations of the First Defendant under the Option Agreement and Supplemental Option Agreement. [51] Upon examination of the evidence, the court finds the Plaintiff’s position more convincing. The essence of the contractual obligation, particularly in commercial transactions, is the fulfilment of the terms agreed upon by the parties to the contract. The key consideration here is whether the payment obligations under the Option Agreement and Supplemental Option Agreement were met, regardless of the source. The Defendants have not provided conclusive evidence to demonstrate that the involvement of third parties in making the payments alters the fundamental nature of the contractual obligations between the Plaintiff and the Defendants. [52] Moreover, the Plaintiff’s argument is supported by the terms of the Option Agreement, which do not specify that payments must be made directly by the first Defendant, only that they must be made to the Plaintiff. Clause 18 specifies that “All payments to be made to KIB (the Plaintiff) by ZRQ 27 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal (the First Defendant) shall be made promptly in immediately available funds in Ringgit Malaysia...” This phrasing is explicit in designating the First Defendant as the party responsible for making payments to the Plaintiff. The clause does not inherently preclude third parties from making payments on behalf of the First Defendant, but it clearly defines the First Defendant as the party obligated to ensure that payments are made to the Plaintiff. [53] The key element in this provision is the direct reference to the First Defendant as the party from whom the payments are to be made. This specification can be interpreted as an indication that while the actual source of the funds could potentially be varied, the responsibility for ensuring that these payments are made lies unequivocally with the First Defendant. The clause does not explicitly state that payments must be made directly by the First Defendant, but it establishes the First Defendant as the party accountable for the fulfilment of this payment obligation. [54] The Defendants’ interpretation of this clause to mean that the payment must specifically come from the First Defendant is therefore incorrect. [55] In conclusion, based on the evidence presented and the court’s interpretation of Clause 18 of the Option Agreement, the court rules in favour of the Plaintiff. The payments made, irrespective of their source, are deemed to fulfil the obligations of the first Defendant under the Option 28 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal Agreement and Supplemental Option Agreement. The Defendants’ contention regarding third-party payments is not evidence of another contractual relationship having obligations which overrides the Option Agreement and Supplemental Option Agreement as originally executed between the Plaintiff and the Defendants. Conspiracy [56] The Defendants claim that there is a conspiracy to injure, which they allege involves the Plaintiff’s CEO, Ismitz and Taqiuddin. This claim, which is the basis of a counterclaim by the Defendants against the Plaintiff and Ismitz and Taqiuddin is positioned as a defence to the Plaintiff’s claim. [57] The Defendants allege that a conspiracy led them to enter into the Option Agreement and Supplemental Option Agreement for the purchase of the Option Shares, which subsequently resulted in financial detriment to them, as evidenced by the plummeting share prices post-agreement. They cite Low Teck Huat v Kwan Teck Hian & Ors [2021] MLJU 690 (High Court) in support of their assertion that a conspiracy need not be formally agreed upon but can be inferred from circumstantial evidence. [58] The Plaintiff, in response, argues that the Defendants’ allegations of conspiracy are unsubstantiated and insufficient to form a defence or a triable issue. It refers to Ng Ah Ba & Ors v Ramanda Sdn Bhd [1996] 1 CLJ 738 29 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal (Court of Appeal) and Renault SA v Inokom Corporation Sdn Bhd & Anor and Other Applications [2010] 5 CLJ 32 (Court of Appeal), highlighting the necessity of clearly pleading each element of the tort of conspiracy, including an agreement to injure, execution of the agreement resulting in damage and the need for damage to be explicitly pleaded. [59] Given the nature of summary judgment, the court must consider whether the Defendants have presented a defence that necessitates a trial. The Defendants’ claim of conspiracy, while serious, lacks the requisite specificity and evidence at this juncture to constitute a defence to the Plaintiff’s claim. The allegations appear to be largely inferential and circumstantial, without clear demonstration of an agreement to injure or specific overt acts undertaken pursuant to such an agreement, as required by the legal precedent established in Renault SA v Inokom Corporation Sdn Bhd & Anor. In this case, the Court of Appeal held that four elements must be satisfied in a claim for conspiracy at the interlocutory stage: “[32] In regard to the tort of conspiracy, the following need to be satisfied at this interlocutory stage: (a) an agreement between two or more persons (that is an agreement between Tan Chong and others); (b) an agreement for the purpose of injuring Inokom and Quasar; 30 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal (c) the acts done in execution of that agreement resulted in damage to Inokom and Quasar; (d) Damage is an essential element and where damage is not pleaded the statement of claim may be struck out. [34] It is trite law that the agreement to injure must come first (in other words the agreement should have crystallised), before the alleged unlawful acts are done in execution or pursuant to the agreement. ……….. [42] There is no allegation of any overt acts carried out by TC Euro in the pleadings and by necessary implication TC Euro had not carried out any overt acts. The gist of the tort of conspiracy is not the conspirational agreement alone but that agreement plus the overt acts causing damage (Marrinam v. Vibart [1963] 1 QB 234; affirmed [1963] 1 QB 528). Pleading. The Statement of Claim should describe who the several parties are and their relationship with each other. It should allege the agreement between the defendants to conspire, and state precisely what was the purpose or what were the objects of the alleged conspiracy, and it must then proceed to set forth, with clarity and precision, the overt acts which are alleged to have been done by each of the alleged conspirators in pursuance and in furtherance of the conspiracy; and lastly, it must allege the injury and damages occasioned to the plaintiff thereby." 31 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal [60] Moreover, the matter at hand concerns the Plaintiff’s claim based on contracts - the Option Agreement and the Supplemental Option Agreement, which is distinct from the conspiracy allegation raised in the Defendants’ counterclaim. The Defendants’ conspiracy claim, while potentially relevant in their counterclaim, does not directly counter or invalidate the contractual basis of the Plaintiff’s claim in this summary judgment application. The court’s focus in this application is on the existence of a bona fide defence to the Plaintiff’s claim, not on the adjudication of the counterclaim, which may be pursued separately. Sham agreements [61] The Defendants assert that the Option Agreement, Supplemental Option Agreement and Personal Guarantee, are sham agreements and should be held void. They contend that these agreements were prepared by the Plaintiff and subsequently placed on the First Defendant’s letterhead to give the appearance of originating from the Defendants. They refer to the case of Seascope Sdn Bhd v Syed Izhar bin Syed Syed Salleh [2006] 3 MLJ 756 (High Court) to support their argument that evidence is admissible to show that a transaction is a sham. The Defendants argue that the true intention of the parties was for Taqiuddin to undertake all payments related to the agreements and that the Defendants did not make any payment as consideration, which they claim is essential for creating a legal relationship in respect of the agreements. 32 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal [62] The Plaintiff, however, maintains that the Defendants are bound by the terms and conditions of the Option Agreement, Supplemental Option Agreement and Personal Guarantee. It argues that the agreements were entered into on an arm’s length basis, with an understanding that the Defendants had accepted the terms after obtaining their own independent legal advice. The Plaintiff relies on the cases of Chin Well Fasteners Co Sdn Bhd v Sampath Kumar Vellingiri & Ors [2006] 1 MLJ 117 (Court of Appeal) and L’estrange v F. Graucob, Limited [1934] 2 KB 394 to assert that a person is bound by a contract he has signed, in the absence of fraud or misrepresentation, regardless of whether he has read or appreciated its contents. [63] In assessing these arguments, the court notes that the burden of proving that an agreement is a sham rests on the party asserting it. The assertion that an agreement is a sham requires clear and convincing evidence that both parties had a common intention not to create the legal rights and obligations that the agreement purports to create. In the case of Seascope Sdn Bhd, the court highlighted that for an act or document to be a sham, all parties to it must have a common intention that they are not to create the legal rights and obligations they appear to create. [64] In the present case, the Defendants have not provided sufficient evidence to demonstrate such a common intention. Their contention appears to be primarily based on the assertion that the agreements were prepared by the 33 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal Plaintiff and placed on the First Defendant’s letterhead. However, this alone does not conclusively establish the agreements as sham. The fact that a contract was drafted by one party does not inherently render it void or a sham, especially in a commercial context where such practices are not uncommon. [65] Moreover, the Defendants’ claim that the true intention was for Taqiuddin to undertake all payments does not negate the legal efficacy of the agreements they signed. The Defendants’ failure to provide concrete evidence showing that they did not intend to create the legal rights and obligations set out in the agreements weakens their assertion. [66] The Plaintiff’s reliance on the cases of Chin Well Fasteners Co Sdn Bhd and L’estrange v F. Graucob, Limited is pertinent. These cases establish the principle that, in the absence of fraud or misrepresentation, parties are bound by a contract to which they have affixed their signature, irrespective of whether they have read or understood its contents. The Defendants have not alleged fraud or misrepresentation, nor have they provided evidence to support a claim of duress or undue influence. [67] The Defendants have failed to show that the agreements are sham and have not raised a bona fide triable issue, thereby establishing the validity and enforceability of the signed agreements. 34 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal Conclusion [68] Considering the totality of the facts and circumstances of the case as disclosed in the affidavit evidence, it was quite clear to me that the Plaintiff had clearly met the preliminary requirements in an Order 14 application in accordance with the principles established by National Company For Foreign Trade v Kayu Raya Sdn Bhd [supra] and further, applying the leading Supreme Court case of Bank Negara Malaysia v Mohd Ismail Ali Johor & Ors [supra] 1 CLJ 627. Accordingly, I held that the contentions of the Defendants do not amount to triable issues or constitute any reasonable defence. [69] It is therefore ordered that the Plaintiff’s claim in the Statement of Claim is allowed whereby the Defendants shall pay to the Plaintiff as follows: a) RM4,800,000.00 for Premium Payment; b) RM118,356.16 which is interest on RM4,800,000.00 at a rate of 5% per annum from 16.9.2022 to 15.3.2023; c) RM400,000.00 for Rollover Fee; d) RM10,684.93 which is interest on RM400,000.00 at a rate of 5% per annum from 1.9.2022 to 15.3.2023; 35 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal e) further interest at a rate of 5% per annum respectively on RM4,800,000.00 and RM400,000.00 from 16.3.2023 until full and final settlement; and f) Costs of RM5,000.00 subject to allocatur. 11 March 2024 ATAN MUSTAFFA YUSSOF AHMAD Judge Kuala Lumpur High Court (Commercial Division) Counsel: For the Plaintiff: Shaikh Saleem with Teoh Jo Vi (Messrs Shaikh David & Co) For the Datuk J Shamesh with Lim Yi Chan Defendants: (Messrs Jeeva Partnership) 36 S/N tBNz9buQ4EGBjkSdMFHlyw **Note : Serial number will be used to verify the originality of this document via eFILING portal