JUDGMENT

Shamsulbahri Ibrahim J:

[Enclosure 12]

Introduction

[1] This is the 1st Defendant's application in encl 12 inter alia to set aside the judgment in default of appearance ("JID") dated 4 June 2025 entered against the 2nd Defendant.

[2] As a brief background, the Plaintiff is a housing developer and property manager. The 1st Defendant is one of the plaintiff's directors while the 2nd Defendant is a company engaging in courier activities.

[3] The Plaintiff is the co-owner of the following properties:

(a) Geran Mukim 3858, No Lot 3285, Mukim Kapar, Daerah Klang, Negeri Selangor ("Lot 3285");

(b) Geran Mukim 3859, No Lot 3286, Mukim Kapar, Daerah Klang, Negeri Selangor ("Lot 3286"); and

(c) Geran Mukim 3857, No Lot 646, Mukim Kapar, Daerah Klang, Negeri Selangor ("Lot 646").

All properties will be collectively referred to as "Properties".

[4] Before the Plaintiff owns the Properties, they belonged to the beneficiaries of the previous owner ("Beneficiaries"). On the agreement of the Beneficiaries, the Properties were transferred to the plaintiff with consideration the Beneficiaries were allotted with the plaintiff's shares and appointed as the plaintiff's directors. As the value of the plaintiff's shares were lower than the Properties market value, the plaintiff owed money to the Beneficiaries.

[5] On 25 November 2010, one of the Beneficiaries known as Tan Kim Sooi entered an agreement with the plaintiff where the plaintiff agreed to transfer a 2/7 of undivided share in Lot 646 to him with condition that Tan Kim Sooi's shares in the plaintiff would be distributed to other plaintiff's shareholders and Tan Kim Sooi would no longer have any authority or right in the plaintiff. Consequently, a 2/7 of undivided share of Lot 646 was transferred and registered in Tan Kim Sooi's name while the balance remains with the plaintiff.

[6] On or about 2024, the 1st Defendant who is also one of the Beneficiaries vide his wife known as Lee Bee Lian made a similar proposal to the plaintiff's representative known as Tan Seng Chai as what Tan Kim Sooi did.

[7] The 1st Defendant averred that this proposal was orally accepted by Tan Seng Chai and both parties allegedly agreed that the 1st Defendant's 2/7 of undivided share in the Lot 646 ("the Proposed Lot") would be located next to Tan Kim Sooi's. As a result, the 1st Defendant states that:

(a) the plaintiff started vacating the Proposed Lot and stopped using it as a store;

(b) the plaintiff had surrendered the vacant possession of the Proposed Lot to the 1st Defendant;

(c) the plaintiff had instructed its company secretary to prepare the names of recipients of the 1st Defendant's share;

(d) the 1st Defendant spent RM89,326.10 to refurbish the Proposed Lot; and

(e) the 1st Defendant rented out the Proposed Lot to the 2nd Defendant.

[8] In view of the 1st Defendant's proposal and to reflect what have been discussed between Tan Seng Chai and Lee Bee Lian, the plaintiff's solicitors sent a draft agreement to the 1st Defendant on August 2024. In reply, the 1st Defendant's solicitors vide WhatsApp application on 24 August 2024 forwarded to the plaintiff's solicitors a plan showing the location of the Proposed Lot. The 1st Defendant's solicitors also informed about the 1st Defendant's proposal to rent out the Proposed Lot to a third party pending the settlement of all issues pertaining to the draft agreement.

[9] On 11 September 2024 the plaintiff's solicitors issued a letter to the 1st Defendant's solicitors stating that the plaintiff would send a letter of confirmation on the 1st Defendant's proposal to rent out the Proposed Lot. In short, the 1st Defendant would only be allowed to rent out the Proposed Lot subject to the terms of the tenancy agreement which must be firstly agreed by the plaintiff.

[10] The Plaintiff contended that since the company and the 1st Defendant have not reached any amicable compromise and the draft agreement has not been finalised, the 1st Defendant's proposal has not been materialised and he r