A reply cannot introduce new allegations not in the original pleading; doing so may prejudice the trial and constitute an abuse of process.

JUDGMENT

Atan Mustaffa Yussof Ahmad J:

[1] Before the court is an application to strike out certain paragraphs from the Plaintiffs' Reply to Defence, which contain extensive allegations regarding purported fraudulent transactions not mentioned in the Amended Statement of Claim. The key issue is whether these paragraphs improperly expand the scope of the original pleading and should be struck out under O 18 r 19(1) of the Rules of 2012 for being scandalous, frivolous or vexatious, likely to prejudice or delay fair trial, and/or an abuse of process. The application arises in the context of a wider commercial dispute where the Plaintiffs allege breach of duties and fraudulent conduct by former directors and officers of their companies, with the impugned paragraphs introducing detailed particulars of additional transactions that the applicant contends should have been pleaded in the Statement of Claim if they were to be relied upon.

Background Facts

[2] The Plaintiff, IOUPay Limited (now known as Ovanti Ltd), is a public company listed on the Australian Securities Exchange. It has several subsidiaries including the 2nd Plaintiff, iSentric Sdn Bhd, IOU Pay (Asia) Sdn Bhd (now known as Ovanti Ventures Sdn Bhd), and the 4th Plaintiff, Datamorph Services Sdn Bhd (collectively "the Plaintiffs").

[3] The 1st Defendant, Kuan Choon Hsuing ("D1") was appointed as Group Chief Financial Officer of the lOUPay Group from 15 July 2020 to 11 March 2023. Following D1's appointment, the 5th Defendant, Edward Tan Tee Tong ("D5'), was appointed as Head of Group Corporate Finance of iSentric on 1 August 2020, and was subsequently promoted to Group Chief Operating Officer of the Malaysian operations. He was also appointed as director of the 2nd Plaintiff and the 3rd Plaintiff, IOU Pay Asia (from 26 August 2020 to 10 March 2023) and the 4th Plaintiff (from 26 October 2020 to 26 May 2023).

[4] On 24 May 2024, the Plaintiffs filed a Reply to D5's Defence, containing certain paragraphs that are now the subject of a striking out application. These paragraphs (3(e)(i) to (xxiii) and 3(f)(i) to (xiv)) relate to two sets of transactions.

[5] The first set involves a purported gold mining joint venture between N.S. Au Mining Sdn Bhd (" NSAM") and S.E.R.E.M. Malaysia Sdn Bhd ("SEREM"). D5 was a director of NSAM from 15 January 2021 to 1 November 2023 and held 5,000 shares in the company. On 22 April 2021, through Messrs. Thomas Philip acting for SEREM, terms were confirmed for a joint venture agreement for gold mining on a 141.5-hectare plot in Sungai Tersang, Mukim Batu Talam, Daerah Raub, Pahang.

[6] The second set involves factoring agreements between D3 and Teppanyaki Properties Sdn Bhd ("Teppanyaki Properties"). On 22 September 2021, they entered into a Business Investment Agreement ("BIA1") where D3 was to disburse RM5,000,000.00. D5 signed this agreement as a witness. On 28 September 2021, RM5,650,000.00 was transferred to Messrs. Thomas Philip's bank account. Subsequently, on 1 April 2021, a second Business Investment Agreement was entered into when the principal amount from BIA1 was rolled over.

[7] On 19 July 2024, D5 filed an application (encl 202) to strike out these paragraphs from the Plaintiffs' Reply to Defence, arguing they contain new allegations not found in the Amended Statement of Claim. The Plaintiffs filed their opposition on 13 August 2024 through an affidavit by Mohammad Azizuddin bin Shahruddin.

[8] The matter is also connected to another ongoing suit in Kuala Lumpur High court Suit No WA-22NCC-292-05/2024 ('Suit 292") which involves some of the same transactions and parties. Additionally, there is a separate suit (WA-22NCC-235-05/2022) where NSAM obtained summary judgment against SEREM on 6 March 2023 for RM1,014,296.83.

Enclosure 202

[9] D5's application under O 18 r 19(1)(b), (c) and/or (d) of the Rules of 2012 and/or the court's inherent jurisdiction seeks orders to: (1) strike out paras 3(e)(i) to (xxiii) and paras 3(f)(i) to (xiv) fr