MYCREATIVE VENTURES SDN. BHD. 1. ) VISION ANIMATION SDN. BHD. 2. ) LOW HUOI SEONG

WA-22NCC-459-07/2024 Kand. 45 03/03/2025 14:26:04 IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR CIVIL SUIT NO.: WA-22NCC-459-07/2024 Between MyCreative Ventures Sdn. Bhd. (Company No.: 201201014087 [987604-M]) ... Plaintiff And 1. Vision Animation Sdn. Bhd. (Company No.: 199401031938 [317620- H]) 2. Low Huoi Seong (NRIC No.: 561113-10-5889) ... Defendants JUDGMENT (Enclosures 13 and 15) [1] Before the court are two applications arising from a share subscription arrangement, one seeking summary judgment for a claimed redemption amount and the other aiming to strike out the claim as unsustainable. The key issue is whether the contractual obligations have been effectively triggered, justifying summary relief, or if the case should be dismissed without a full trial. Background Facts [2] This case concerns a financial and contractual arrangement involving a Share Subscription Agreement dated 10.4.2015 1 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal (“SSA”), executed between the Plaintiff, MyCreative Ventures Sdn Bhd, the First Defendant, Vision Animation Sdn Bhd, the Second Defendant, Low Huoi Seong, and another entity, Double Vision Sdn Bhd. (“Double Vision”) The SSA governed the subscription by the Plaintiff to 5,000,000 Redeemable Convertible Preference Shares (“RCPS”) in the First Defendant, amounting to a total value of RM5,000,000. The subscription was carried out in eight tranches. [3] Under the SSA, the First Defendant was obligated to redeem the RCPS at the “Redemption Amount” after five years from the date of issuance of the first tranche, setting the redemption date as 31.12.2020. In the event of failure to redeem, Item H(iv)(c) of the SSA specified that the First Defendant would incur a separate and independent obligation to immediately pay the Redemption Amount to the Plaintiff as a debt due and owing. [4] Further, Item M(i) of the Third Schedule to the SSA identified circumstances constituting an “Event of Default.” These included the failure of the First Defendant to redeem the RCPS when due or the failure of any ordinary shareholder of the company, such as the Second Defendant, to procure or guarantee the redemption. [5] On the same date as the SSA, a Letter of Undertaking was executed by the Second Defendant and Double Vision. In the Letter of Undertaking, the Second Defendant provided 2 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal an irrevocable and unconditional commitment to ensure that the First Defendant had sufficient funds to address any cash shortfalls or cost overruns. Paragraph 4 of the Letter of Undertaking also stipulated that upon a request for redemption of the RCPS, the Second Defendant was required to “immediately pay, repay, settle and discharge in full all monies due and payable” under the SSA. [6] Despite these obligations, the First Defendant failed to redeem the RCPS on the redemption date of 31.12.2020. The Plaintiff subsequently issued notices of redemption on 11.1.2021 and 1.6.2023 to inform the Defendants of the redemption obligations. Both notices specified a Redemption Amount of RM7,032,910.96. However, the First Defendant failed to comply with these notices. [7] On 24.11.2023, the Plaintiff's solicitors issued a demand letter to the Defendants, reiterating their failure to redeem the RCPS and demanding payment of the outstanding amount. Despite this demand, neither defendant fulfilled the obligations to procure or guarantee redemption, nor did they make any payment toward the Redemption Amount. [8] As a result, the Plaintiff initiated legal proceedings by filing a Writ and Statement of Claim on 12.7.2024. The First Defendant did not enter an appearance, leading to a Judgment in Default of Appearance being entered against it on 2.8.2024. 3 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal [9] Following this, the Plaintiff filed an application for Summary Judgment (Enclosure 15) against the Second Defendant on 3.9.2024, seeking recovery of the Redemption Amount. The Second Defendant also filed an application to strike out the Plaintiff’s Statement of Claim (Enclosure 13) on the same date. These applications form the core of the present dispute. [10] The Plaintiff’s claim against the Second Defendant rests on the contractual terms of the SSA and the Letter of Undertaking, asserting that the Second Defendant is obligated to guarantee redemption of the RCPS or to make direct payment of the Redemption Amount. The Second Defendant's application seeks to strike out the claim on the basis that the Plaintiff has no sustainable cause of action against it as a guarantor. Enclosure 15 [11] In Enclosure 15, the Plaintiff seeks summary judgment against the Second Defendant pursuant to Order 14 rule 1 of the Rules of Court 2012. The relief sought includes payment of the Redemption Amount totalling RM7,032,910.96, together with any accrued interest and costs. The application is based on the premise that the Second Defendant is liable under the terms of the SSA and the Letter of Undertaking to guarantee or procure the redemption of the RCPS. The Plaintiff contends that there is 4 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal no triable issue requiring a full trial and that judgment should be entered summarily to avoid unnecessary delays. [12] The Plaintiff asserts that the Second Defendant has a clear and unequivocal obligation under the SSA and the Letter of Undertaking to ensure or guarantee redemption of the RCPS and, upon default, to pay the Redemption Amount. The Plaintiff relies on specific provisions, including Item M(i) of the SSA, which identifies a failure by the First Defendant to redeem the RCPS or by any ordinary shareholder to guarantee redemption as an event of default. Paragraph 4 of the Letter of Undertaking reinforces this obligation by requiring immediate payment upon request for redemption. The Plaintiff also refers to precedents involving similar factual matrices where courts upheld the enforceability of such agreements. It is argued that the Second Defendant has no sustainable defence, as the contractual terms and supporting evidence unequivocally establish liability Issues [13] There are a number of triable issues put forward by the Second Defendant in this matter listed as follows: a) Whether the Plaintiff’s reliance on paragraph 4 of the Letter of Undertaking and clause M(i) of the Share Subscription Agreement establishes an immediate payment obligation on the Second Defendant; 5 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal b) Whether the Second Defendant’s obligations under the Letter of Undertaking and the SSA are discharged due to the lack of direct notice of redemption and unconsented extensions of the redemption date; c) Whether the presence of Double Vision as a co- surety precludes entry of summary judgment against the Second Defendant for the full amount claimed; and d) Whether the arrangement was meant solely to ensure operational sufficiency and not to impose an independent obligation for immediate payment [14] Additionally, the Plaintiff relies on the unreported Court of Appeal decisions in MyCreative Ventures Sdn Bhd v Tsyahmi Group Sdn Bhd & 2 Ors (Case No.: B- 02(IM)(NCC)-305-02/2022) and MyCreative Ventures Sdn Bhd v Haslina bt Ali & 2 Ors (Case No.: W-04(IM)(NCC)- 375-08/2022) which overturned the cases of MyCreative Ventures Sdn Bhd v Tsyahmi Group Sdn Bhd & Ors [2022] MLJU 2383 and Haslina bt Ali & Ors v Mycreative Ventures Sdn Bhd and another case [2022] MLJU 2221 to argue that these Court of Appeal cases were under substantially similar contractual frameworks involving letters of undertaking and share subscription agreements and the courts found individual shareholders liable for payment of redemption amounts upon a company's default. The 6 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal Second Defendant argues that these are distinguishable from the present case, suggesting they turned on different factual matrices and did not address the specific challenges raised here regarding pleadings, construction of clause M(i), and the juridical nature of the Letter of Undertaking. [15] This contention necessitates a thorough examination of the appellate precedents to determine whether the reasoning in those cases applies with equal force to the contractual framework at issue in Enclosures 13 and 15, particularly in light of the 2nd Defendant's claim that the principal obligation here was merely to “ensure” the 1st Defendant's compliance rather than to pay directly upon default. Therefore, the court will also undertake a detailed analysis of these authorities to ascertain their applicability and binding effect on the present dispute. Enclosure 13 [16] In Enclosure 13, the Second Defendant seeks to strike out the Plaintiff’s Statement of Claim pursuant to Order 18 rule 19(1)(b) and/or (d) of the Rules of Court 2012. The relief sought includes the dismissal of the Plaintiff’s claim on the basis that it is unsustainable, frivolous, vexatious, or constitutes an abuse of process. The Second Defendant argues that the Plaintiff’s pleadings fail to disclose a reasonable cause of action or sufficient legal basis to hold the Second Defendant liable as a guarantor under the SSA or the Letter of Undertaking. 7 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal [17] The Second Defendant contends that the Plaintiff’s claim suffers from critical legal and procedural flaws. First, it asserts that the Plaintiff’s pleaded case against the Second Defendant is confined solely to clause M(i) of the SSA and does not include reliance on the Letter of Undertaking under the relevant heading in the Statement of Claim. This omission, the Second Defendant argues, precludes the Plaintiff from invoking the Letter of Undertaking to impose liability. Second, the Second Defendant maintains that the terms of clause M(i) merely identify an event of default but do not impose an obligation to pay the Redemption Amount. Additionally, it is argued that the Plaintiff’s reliance on notices of redemption and extensions of time without the Second Defendant’s consent is inconsistent with the Contracts Act 1950 and discharges any surety obligations. Finally, the Second Defendant submits that the Plaintiff’s attempt to expand its case through affidavits amounts to a procedural irregularity, rendering the claim unsustainable. Analysis and findings of the court [18] The determination of Enclosures 13 and 15 will turn on the same fundamental issues despite representing opposing procedural motions. At their core, both applications hinge on whether the contractual documents—specifically Clause M(i) of the Share Subscription Agreement and paragraphs 1(a) and 4 of the Letter of Undertaking—create an enforceable payment obligation against the Second Defendant as guarantor. The court must decide whether 8 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal these provisions merely establish an obligation to “procure” redemption (as the Second Defendant argues) or whether they create direct liability for payment (as the Plaintiff contends), and whether the Plaintiff is procedurally entitled to rely on the Letter of Undertaking in its claim. [19] The interconnected nature of these applications creates a mutually exclusive outcome wherein success for one party necessarily means failure for the other. If the court concludes that the contractual provisions create a clear payment obligation and that the claim was properly pleaded, the Second Defendant's striking out application will fail (as the claim would not be “obviously unsustainable”) while the Plaintiff's summary judgment application will likely succeed (as there would be no triable issue). Conversely, if the court determines that the documents do not create such an obligation or that the Plaintiff is procedurally barred from relying on the Letter of Undertaking, the striking out application might succeed while the summary judgment application would necessarily fail. Whether the Plaintiff’s reliance on paragraph 4 of the Letter of Undertaking and clause M(i) of the Share Subscription Agreement establishes an immediate payment obligation on the Second Defendant [20] The Second Defendant contends that the Plaintiff has fundamentally misconstrued the interaction between paragraphs 1(a) and 4 of the Letter of Undertaking. 9 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal According to the Second Defendant, paragraph 1(a) merely sets out the general undertaking to ensure sufficient funds, whereas paragraph 4 is the operative trigger that allows the Plaintiff to enforce its rights upon a breach. The Second Defendant argues that the Plaintiff’s reliance on paragraph 4 after the alleged redemption failure reverses the order and purpose of these provisions, leading to an incorrect conclusion that payment is immediately due and owing from the Second Defendant. The Second Defendant further contends that the Plaintiff’s case is confined solely to clause M(i) of the SSA and that the Plaintiff cannot now rely on the Letter of Undertaking to impose liability as a guarantor. Additionally, the Second Defendant submits that the Plaintiff, by failing to plead the Letter of Undertaking specifically under the heading “Keingkaran Defendan- Defendan,” is precluded from relying on it as a basis for liability. [21] Clause M(i) of the Third Schedule of the SSA reads: “M. EVENTS OF DEFAULT The following are Events of Default: (i) The Company fails, for any reason, to redeem any Redeemable Convertible Preference Shares when due for redemption in accordance with the Articles and/or this Agreement; or any ordinary shareholder of the Company fails to procure or guarantee the redemption of any Redeemable Convertible Preference Shares by the Company when due for redemption in accordance with the Articles and/or this Agreement.” 10 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal [22] The Second Defendant asserts that clause M(i) and the Letter of Undertaking, both separately and collectively, do not impose an obligation on the Second Defendant to pay the full redemption sum. The Second Defendant also suggests that including the Letter of Undertaking would, in any event, only oblige it to ensure that the First Defendant has sufficient funds, not to effect immediate payment to the Plaintiff, and that the absence of Double Vision as a party and co-surety precludes the Plaintiff from claiming the entire sum against the Second Defendant. [23] The Plaintiff, on the other hand, maintains that the Second Defendant’s liability to pay the amount due and owing arises unequivocally from the clear contractual terms, both in the SSA and the Letter of Undertaking. The Plaintiff submits that the relevant provisions of the Letter of Undertaking and clause M(i) of the Third Schedule of the SSA operate to render the Second Defendant liable as a guarantor for the redemption of the RCPS. The Plaintiff cites the Tsyahmi and Haslina Court of Appeal cases as authorities with similar factual matrices, where the courts have consistently upheld the enforceability of such undertakings and found that the shareholders were obliged to pay sums due. The Plaintiff argues that the clauses do not merely set out the events of default or the obligation to ensure sufficiency of funds in isolation, but also that upon failure to redeem, the Letter of Undertaking empowers and obliges the Second Defendant to discharge all outstanding amounts. The Plaintiff rejects the Second Defendant’s technical objection 11 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal concerning the headings in the pleadings and emphasises that paragraph 27 of the Statement of Claim expressly pleads that payment is due to the Plaintiff under both the SSA and the Letter of Undertaking. The Plaintiff submits that the Letter of Undertaking, together with the Event of Default clause under M(i), establishes a positive obligation on the Second Defendant to ensure redemption, failing which immediate payment must be made. There is, accordingly, no triable issue and the Plaintiff is entitled to summary judgment. [24] In analysing the competing arguments, it is crucial to consider the contractual terms in their proper commercial and contextual setting. The Letter of Undertaking is not a mere side agreement limited to operational matters; its language, particularly in paragraph 4, must be read holistically with paragraph 1(a) of the same document and the relevant provisions of the SSA. Paragraph 4 reads: “...Upon such cancellation of the subscription of the Subscription Shares (or any part thereof) and/or your request for early redemption or redemption of any Subscription Share, we shall immediately pay, repay, settle and discharge in full all monies due and payable under or pursuant to the Subscription Agreement.” [25] Paragraph 1(a) reads: “(a) in the event of any cash shortfall or any cost overruns in or suffered by or occur to the Company, any Designated Account and/or KooKoo Harujuku during the Relevant Period, we shall ensure that the Company has sufficient funds 12 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal to meet and fund any and all such cash shortfall and cost overruns and any applicable penalty and such other moneys incidental thereto or in connection therewith incurred by or on behalf of the Company (collectively and any one of them, to be referred to as the “Funding Shortfall”);” [26] Paragraph 1(a) imposes a broad obligation on the Second Defendant to ensure sufficient funds for the First Defendant. While the Second Defendant characterises this merely as ensuring operational sufficiency, the authorities cited by the Plaintiff demonstrate that this obligation extends to ensuring that the First Defendant can meet its redemption obligations to the Plaintiff. In the Tsyahmi and Haslina cases, the Court of Appeal addressed similar undertakings and found that they imposed enforceable obligations to indemnify the Plaintiff for its losses arising from the failure of the company to redeem. This court finds these appellate authorities persuasive. The Second Defendant cannot credibly maintain that paragraph 4 of the Letter of Undertaking is not triggered, or that it does not impose a payment obligation, when a proper reading of the clause states that upon a request for redemption, the Second Defendant “shall immediately pay, repay, settle and discharge in full all monies due and payable.” There can be no plainer commercial language imposing an obligation to pay. [27] The Second Defendant’s argument that the Plaintiff has in some way reversed the operation of paragraph 4 is not supported by the cases or the wording of the clause. The language is unconditional and immediate once the company 13 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal fails to redeem. It is not a clause that the Plaintiff may only invoke after some secondary step; it arises naturally and simultaneously upon the First Defendant’s failure to redeem upon the Plaintiff’s request. Similarly, the contention that the Plaintiff may not rely on the Letter of Undertaking because it was not pleaded under a particular heading in the Statement of Claim is untenable in law and fact. [28] The Plaintiff’s pleading at paragraph 27 of the Statement of Claim expressly states that the Defendants have failed, refused, and neglected to pay the amount due under both the SSA and the Letter of Undertaking. It reads: “Meskipun notis-notis yang diplidkan di atas telah dikeluarkan, Defendan-defendan secara bersesama dan berasingan telah gagal dan/atau enggan dan/atau ingkar untuk membayar jumlah yang dituntut di mana asas jumlah tersebut adalah sepertimana yang disyaratkan di dalam Perjanjian Langganan Saham dan/atau Surat Akujanji.” [29] Applying the approach in Ranhill Process Systems Sdn Bhd v Thyssenkrupp Industries (M) Sdn Bhd [2023] MLJU 3032 (High Court) and Clearpath Marketing Sdn Bhd v Malayan Banking Bhd [2019] MLJU 100 (Court of Appeal), it is clear that the Plaintiff has pleaded all essential ingredients of a cause of action in breach of contract. Moreover, headings have no binding interpretative value, as established in Catajaya Sdn Bhd v Shoppoint Sdn Bhd & Ors [2021] 2 MLJ 374 (Federal Court). 14 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal [30] The Second Defendant’s suggestion that Double Vision should have been joined is a non-starter, as Double Vision is not an ordinary shareholder of the First Defendant. The Event of Default clause M(i) imposes a clear and express obligation on ordinary shareholders to procure or guarantee redemption of the RCPS. This was expressly construed in the High Court decision of MyCreative Ventures Sdn Bhd v Pearly Wong Studio Sdn Bhd & Ors [2021] MLJU 2781 to impose liability on shareholders to redeem or ensure redemption, leading to summary judgment against them. Additionally, the High Court decision in MyCreative Ventures Sdn. Bhd. v EA Inspiration Sdn. Bhd. & 2 Ors (Civil Suit No.: WA-22NCC-791-10/2023) reinforces that event of default clauses and letters of undertaking of a similar character indeed translate into direct obligations to pay. There is no credible defence raised by the Second Defendant to suggest otherwise, and no triable issues emerge from the pleadings or the evidence before the court. [31] In the circumstances, the court finds that the Plaintiff has established a strong and unanswerable case that the Second Defendant is liable to pay the outstanding sums under the SSA and Letter of Undertaking. The authorities relied upon by the Plaintiff are directly on point and favour the Plaintiff’s construction. The court is thus satisfied that there is no reasonable defence to the claim and that the Plaintiff’s action is not obviously unsustainable. The Second Defendant’s attempt to restrict the Plaintiff’s case to clause M(i) alone, or to exclude reliance on the Letter of 15 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal Undertaking due to its placement in the pleadings, fails on legal and factual grounds. The Plaintiff’s Summary Judgment application should therefore be allowed, and the Second Defendant’s Striking Out application must be dismissed. Whether the Second Defendant’s obligations under the Letter of Undertaking and the SSA are discharged due to the lack of direct notice of redemption and unconsented extensions of the redemption date [32] The Second Defendant contends that the lack of notice of redemption to the Second Defendant, coupled with multiple extensions of the redemption date from 31.12.2020 without its knowledge or consent, discharges its obligations as a surety. The Second Defendant relies on the provisions of the Contracts Act 1950 to assert that a surety’s liability is terminated by any extensions granted to the principal debtor without the surety’s assent. The Second Defendant says that despite the issuance of two notices of redemption dated 11.1.2021 and 1.6.2023, these were addressed only to Vision Animation and Double Vision, not to the Second Defendant. It is argued that the absence of direct notice and the failure to secure the Second Defendant’s consent before extending the redemption date three times from 31.12.2020 deprives the Plaintiff of any rights to claim under the surety arrangement. 16 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal [33] The Plaintiff submits that neither the SSA nor the Letter of Undertaking imposes a requirement that notices of redemption be issued to the Second Defendant as a precondition to liability. The Plaintiff emphasises that the contractual terms are broad and confer upon the Plaintiff a right to demand payment under both the SSA and the Letter of Undertaking without the necessity of serving formal notices on every party. The Plaintiff also notes that the Letter of Undertaking and the SSA clauses are clear in creating a direct and enforceable obligation upon the Second Defendant to ensure or guarantee redemption and, failing that, to pay the sum due. The Plaintiff further highlights that the Second Defendant’s argument overlooks the unconditional language of the contractual provisions and relies on a misapplication of the Contracts Act 1950. The Plaintiff cites, inter alia, the Tsyahmi and Haslina Court of Appeal cases to show that similar undertakings have been upheld without any requirement of individual notification or consent to extensions of time. [34] In considering the parties’ submissions, the court is mindful that the contractual documents must be interpreted holistically. The absence of a specific requirement to notify the Second Defendant of the redemption, or of any extensions to the redemption date, is significant. The SSA and the Letter of Undertaking, when read together, impose a positive obligation on the Second Defendant to ensure that the First Defendant redeems the RCPS and, in default, to pay the amounts due. There is no clause requiring the 17 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal Plaintiff to provide additional notice or to secure the Second Defendant’s consent to extensions before exercising its rights. The critical provisions of the Letter of Undertaking, particularly paragraph 4, and the Event of Default clause under item M(i) in the Third Schedule of the SSA, impose unequivocal payment obligations once the First Defendant fails to redeem. [35] The authorities relied upon by the Plaintiff demonstrate that courts have enforced similarly worded undertakings without regard to the giving of notices of redemption to every party involved. In the Tsyahmi case, the Court of Appeal found that letters of undertaking created a binding obligation on shareholders to top up shortfalls and ensure redemption without requiring additional notice. Similarly, in the Haslina case, the Court of Appeal interpreted an analogous letter of undertaking as imposing a direct and enforceable obligation to indemnify the Plaintiff for its losses, even though no separate notice to the individual shareholders was highlighted as necessary. Those decisions indicate that the presence or absence of a separate redemption notice to the Second Defendant does not negate the underlying contractual liability. [36] The argument that the surety is discharged under the Contracts Act 1950 because of time extensions without consent must be examined in the factual matrix of the case. Here, the Letter of Undertaking is not merely a secondary contract of guarantee in the conventional sense. Its terms 18 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal place the Second Defendant in the position of ensuring redemption or paying the sum due. The extensions of time were given to the First Defendant to perform its obligation, and the contractual language does not stipulate that the Second Defendant’s liability is contingent on its specific consent to each extension. Rather, the Second Defendant assumed a broader obligation, one that does not hinge upon separate consents to changes in dates. Furthermore, the Plaintiff has produced evidence in the form of a certificate of indebtedness and clear contractual clauses showing that the sum claimed is due. The existence of such a certificate and the unconditional wording of the undertaking call for no trial to ascertain the question of liability. There is no demonstration of prejudice to the Second Defendant arising purely from the lack of formal notice, nor any suggestion that the contractual framework has been materially altered in a manner discharging the surety. [37] In these circumstances, the court is satisfied that the Second Defendant’s arguments concerning notice and consent to time extensions do not raise a triable issue. The contractual documents impose liability upon the Second Defendant in the event of the First Defendant’s failure to redeem, and that liability is not displaced by a lack of direct notification or by the extensions granted to the First Defendant. The Plaintiff’s case is consistent with the authorities cited and aligns with the plain language of the contractual provisions. Accordingly, the Second Defendant’s 19 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal argument that it was discharged from liability under the Contracts Act 1950 fails. Whether the presence of Double Vision as a co-surety precludes entry of summary judgment against the Second Defendant for the full amount claimed [38] The Second Defendant submits that Double Vision’s involvement as a signatory to the Letter of Undertaking and the Plaintiff’s treatment of Double Vision as responsible under it, as evidenced by the issuance of demand notices, raises a material issue as to the nature and extent of the Second Defendant’s liability. The Second Defendant contends that the absence of documentary evidence establishing joint and several liability makes it inappropriate for the court to grant summary judgment for the entire debt against the Second Defendant alone. It is argued that this creates at least a triable issue, thereby preventing the grant of summary [39] The Plaintiff responds by emphasising the plain wording of the contractual documents and the obligations set out in both the SSA and the Letter of Undertaking. The Plaintiff maintains that there is nothing in the contractual language that suggests the necessity of joining other co-sureties or proving joint and several liability before enforcing the Second Defendant’s obligations. The Plaintiff contends that these obligations are clear, conclusive, and unaffected by the status or actions of Double Vision. The Plaintiff thus 20 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal submits that no triable issue arises simply because a potential co-surety is not joined to these proceedings. [40] In considering these arguments, the court recognises that where more than one party may be responsible as guarantors, questions of apportionment might arise. However, such considerations cannot override the terms of a contractual arrangement freely entered into by the parties. The SSA and the Letter of Undertaking in the present case are drafted in terms that confer on the Plaintiff the right to enforce payment obligations directly and individually against each party who has undertaken them. The authorities cited by the Plaintiff, particularly the Court of Appeal decisions in Tsyahmi and Haslina, as well as the High Court decision in MyCreative Ventures Sdn. Bhd. v EA Inspiration Sdn. Bhd. & 2 Ors have consistently interpreted similarly worded undertakings as imposing a direct and enforceable obligation on shareholders to pay the sums due without requiring the Plaintiff to pursue other guarantors simultaneously. [41] The fact that Double Vision may also have certain obligations does not necessarily dilute or postpone the liability of the Second Defendant. The contracts do not specify that liability is contingent upon the presence, absence, or concurrent enforcement of rights against any other shareholder. Instead, these instruments impose obligations on each obligor individually. The existence of a co-surety does not, without more, create a triable issue 21 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal precluding summary judgment. The Second Defendant, having failed to show any factual or legal basis under the contract that such co-surety status would preclude immediate enforcement against him, cannot rely merely on the possibility of others’ involvement to resist summary judgment. There is no evidence suggesting that the contractual documents require the Plaintiff to pursue Double Vision simultaneously or that the Plaintiff’s claim is otherwise conditional upon establishing joint and several liability. [42] The Plaintiff has produced a certificate of indebtedness, as well as clear evidence from the contractual terms that the Second Defendant is liable for the amounts claimed upon the First Defendant’s failure to redeem. Nothing in the documents or the decided cases cited requires that the Plaintiff first prove joint and several liability or seek judgment against all potential obligors. The Second Defendant’s attempts to introduce uncertainty based on Double Vision’s position do not amount to a genuine defence or raise a triable issue. This court is satisfied that the Plaintiff’s claim against the Second Defendant stands on its own terms and may be For these reasons, the court finds that the Second Defendant’s argument concerning Double Vision’s co-surety status does not create a triable issue warranting the refusal of summary judgment. The obligations to pay, as set out in the SSA and the Letter of Undertaking, are clear, and the lack of evidence relating to joint and several liability does not absolve the Second 22 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal Defendant of his contractual obligations. enforced independently. Whether the arrangement was meant solely to ensure operational sufficiency and not to impose an independent obligation for immediate payment [43] The Second Defendant submits that the overall structure of the arrangement indicates that its primary purpose was to ensure the company’s operational viability and ability to meet obligations, rather than to create an enforceable and immediate payment liability upon shareholders. It is contended that the Plaintiff’s attempt to extract immediate payment from the Second Defendant disregards the true commercial intention behind the contractual documents. The Second Defendant maintains that there has been no proper establishment of the preconditions or the extent of liability required before immediate payment can be demanded, thereby necessitating a full trial to examine the factual matrix and not permitting summary determination. [44] The Plaintiff submits that the terms of the SSA and the Letter of Undertaking are clear and that the Second Defendant’s liability is triggered upon the First Defendant’s failure to redeem the RCPS. The Plaintiff submits that the commercial purpose of the arrangement, while ensuring sufficient funds for the company’s operations, does not negate the existence of a direct and enforceable obligation to make payment. The Plaintiff argues that the contractual 23 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal wording, especially paragraph 4 of the Letter of Undertaking and the Event of Default clause in the SSA, unambiguously state that upon the First Defendant’s failure to redeem, the Second Defendant is obliged to immediately pay the redemption sum. Therefore, no further preconditions need to be established at trial, and summary judgment is appropriate. [45] In examining the parties’ submissions, the court acknowledges that the contractual arrangement indeed served to ensure the company’s ability to perform its obligations. However, the presence of a commercial rationale geared towards operational sufficiency does not preclude the creation of a legally enforceable payment obligation. The key consideration is the precise language of the contractual documents. Here, the SSA and the Letter of Undertaking are drafted in terms that clearly provide that, should the First Defendant fail to redeem the RCPS, the Second Defendant is required to pay the sum due to the Plaintiff immediately. The court notes that similar clauses have been the subject of judicial scrutiny in the cited appellate decisions. In Tsyahmi and Haslina, the Court of Appeal upheld the immediate and enforceable nature of similar undertakings. In EA Inspiration, the High Court took a comparable view, concluding that the arrangement did create a direct obligation to make payment once certain default conditions were met. 24 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal [46] The Second Defendant’s argument that preconditions have not been properly established is not borne out by the contractual wording. The terms clearly set out that once an event of default occurs—namely, the failure of the First Defendant to redeem the RCPS—the Letter of Undertaking and the SSA provisions jointly and severally impose a liability upon the Second Defendant. The Plaintiff has put forward the relevant certificate of indebtedness, as well as uncontested evidence of the First Defendant’s failure to redeem, thereby satisfying the contractual requirements for immediate payment. In such circumstances, there is no need for a trial to further clarify “operational purpose” versus “payment liability.” The documents speak for themselves and the Plaintiff’s reliance on them is consistent with previously decided cases. [47] This court therefore finds no legitimate triable issue arising from the Second Defendant’s contention that the arrangement was merely designed to ensure operational sufficiency and not to impose independent payment liability. The Plaintiff’s case falls squarely within the four corners of the agreement, and no factual or legal uncertainty remains that would necessitate a full trial. 25 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal Whether MyCreative Ventures Sdn Bhd v Tsyahmi Group Sdn Bhd & Ors (Court of Appeal) and MyCreative Ventures Sdn Bhd v Haslina bt Ali & Ors (Court of Appeal) are distinguishable [48] The Second Defendant argues that the Court of Appeal decisions of Tsyahmi and Haslina do not squarely address the core arguments advanced here. It is said that those cases turned on facts or issues that differ from the present circumstances, and thus their reasoning ought not to apply. The court is not persuaded by these attempts at distinction. [49] Upon careful reading, the Court of Appeal in both Tsyahmi and Haslina dealt with similar contractual frameworks, where letters of undertaking and share subscription agreements imposed an obligation on shareholders or directors once the principal obligor defaulted on its redemption obligations. In Tsyahmi, the Court of Appeal upheld the principle that a letter of undertaking could indeed create an enforceable obligation to pay any shortfall without the need for further factual inquiry, as long as the default event triggering payment had occurred. Likewise, in Haslina, the Court of Appeal gave effect to a letter of undertaking that required the defendants to keep the company’s operations afloat and ensure funds were available, holding that once there was a failure to redeem, the defendants were obliged to indemnify the plaintiff without the necessity of proceeding to trial. 26 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal [50] The present case turns on similar clauses and the same form of undertakings. While the Second Defendant contends that the Court of Appeal in Tsyahmi and Haslina did not consider the specific angles argued here, this court finds that the reasoning in those cases is directly applicable. Both decisions confirm that letters of undertaking and the related terms of the share subscription agreements can be construed to impose immediate liability upon shareholders when certain defaults occur. The attempts to draw fine factual distinctions fail because the key contractual triggers and obligations—such as the duty to ensure redemption of shares or to pay upon default—are set out in similarly unequivocal terms and were the basis of the appellate courts’ conclusions. [51] Moreover, these cases stand for the principle that where the contractual language is sufficiently clear, extrinsic considerations or alleged factual differences will not preclude the grant of summary relief. Just as in Tsyahmi and Haslina, the Plaintiff here has adduced conclusive evidence of default and pointed to clear contractual clauses imposing liability. The essence of the Court of Appeal’s rulings is that once these trigger points are met, and the operative clauses unambiguously prescribe the shareholder’s liability, the court need not embark on a trial to ascertain meaning or intent. This is precisely the scenario now before the court. 27 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal [52] Accordingly, the Second Defendant’s attempt to distinguish Tsyahmi and Haslina on the basis that those Court of Appeal judgments did not specifically address each nuance of the arguments raised here is not tenable. The key operative principles—immediate enforceability of the letter of undertaking and the unconditional nature of the obligation once default has been established—apply with equal force. The court therefore concludes that the reliance on these Court of Appeal authorities is appropriate and that the distinctions advanced by the Second Defendant do not undermine their applicability or the Plaintiff’s entitlement to summary judgment. Conclusion [53] Having considered the parties’ submissions, the contractual documentation, and the relevant legal authorities, this court is satisfied that the Plaintiff has established a clear and enforceable obligation on the Second Defendant to pay the Redemption Amount arising upon the First Defendant’s failure to redeem the RCPS. The express terms of the SSA and the Letter of Undertaking, read holistically, impose a direct and immediate liability on the Second Defendant once the redemption default occurred, without the necessity of further preconditions or notices. The Plaintiff’s reliance on the Court of Appeal decisions of Tsyahmi and Haslina, as well as other authorities, is apposite and reinforces the conclusion that no triable issues arise. The Second Defendant’s attempts to limit the Plaintiff’s claim solely to 28 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal Clause M(i), to argue procedural deficiencies, or to assert that additional parties or notices were required, are without merit. Likewise, the objections raised regarding time extensions, the role of Double Vision, and the alleged limited commercial intent of the arrangement fail to displace the Second Defendant’s express payment obligations. [54] In the circumstances, the Plaintiff’s Summary Judgment application (Enclosure 15) against the Second Defendant is allowed, and the Second Defendant’s Striking Out application (Enclosure 13) is dismissed. The court orders costs of RM10,000 for the Plaintiff for both enclosures. 3 March 2025 ATAN MUSTAFFA YUSSOF AHMAD Judge Kuala Lumpur High Court (Commercial Division) Counsel: For the Plaintiff: Tengku Nazmi bin Tengku Anuar (Messrs Azmi & Associates) For the 2nd Kenny Chan Kean Li Defendant: (Messrs Gibb & Co.) 29 S/N i34YMsFqvkmODSEiQcL/Hw **Note : Serial number will be used to verify the originality of this document via eFILING portal