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2026 MarsdenLR 1056
HIGH COURT MALAYA JOHOR BAHRU
NOOR HISHAM ISMAIL, J
CONCEPT THEATRE SDN BHD – Appellant
Versus
TAM QUEK SIN & ORS – Respondent
[Civil Suit No: JA-22NCC-7-01/2025]
An action should not be struck out if it discloses a reasonable cause of action. Res judicata is inapplicable where factual grounds differ from prior proceedings, and the limitation period for fraud-based claims commences only upon the discovery of the fraud by the plaintiff.
Headnote:(A) Rules of Court 2012 - Order 18 Rule 19(1) - Striking out of pleadings - Principles apply where claim on its face discloses a reasonable cause of action. (Para 32)
(B) Companies Act 2016 - Section 540 - Fraudulent trading - Criteria include 'intent to defraud' and 'dishonesty' as essential ingredients which are questions of fact to be ascertained from circumstances. (Paras 21, 29, 30)
(C) Limitation Act 1953 - Section 29 - Fraud - Commencement of limitation period occurs only upon the discovery of the fraud or when it could with reasonable diligence have been discovered. (Paras 25, 26)
(D) Res Judicata - Doctrine of - Application requires finality of judgment on same facts or issues and does not apply where subsequent proceedings involve distinct causes of action or facts emerging after prior litigation. (Paras 16, 17, 18, 19)
Facts of the case:
Multiple defendants sought to strike out a suit alleging fraudulent trading, arguing that the claim was precluded by the doctrine of res judicata, time-barred by the limitation period, and lacked necessary particulars. The plaintiff asserted that the claims were based on events and discoveries subsequent to an earlier litigation involving the same parties.
Findings of Court:
The court found that the present claim involves different causes of action and factual foundations that arose after the previous litigation, thereby avoiding the application of res judicata. Furthermore, the court determined that for claims involving fraud, the limitation period begins upon the discovery of the fraud, not the occurrence of the underlying act. Concluding that the issues of dishonesty and intent require a full hearing rather than a summary disposal at the pleadings stage, the court dismissed the applications to strike out.
Issues: Whether the plaintiff is estopped by res judicata, whether the claim is time-barred under the limitation statute, and whether the suit should be struck out for lack of particulars.
Ratio Decidendi: A striking out application is not a trial on affidavits and should only be granted if no reasonable cause of action is disclosed. Res judicata does not apply where the subsequent action addresses different subject matters or facts emerging after the prior decision. Regarding limitation, the period for fraud claims commences upon discovery. Allegations involving intent and dishonesty represent factual disputes that are unsuitable for determination through affidavits alone.
Result: All applications to strike out were dismissed with costs.
JUDGMENT
(Enclosures 15, 17, 19, 22, 26 & 28)
Introduction
[1] Before this court are six (6) interlocutory applications filed by the defendants, either made individually or jointly, to strike out the plaintiff's suit under O 18 r 19(1)(a), (b) or (d) of the Rules of 2012.
[2] The said applications are given the following enclosure numbers:
(a) encl 15 (by the 1st Defendant);
(b) encl 17 (by the 3rd Defendant)
(c) encl 19 (by the 5th and 6th Defendants)
(d) encl 22 (by the 7th, 8th and 9th Defendants)
(e) encl 26 (by the 4th Defendant)
(f) encl 28 (by the 2nd Defendant)
[3] After having perused through the cause papers and the affidavits filed, and after having read and heard the submissions by all parties, this court dismissed all the defendants' applications with costs.
[4] The following is the single ground of judgment for the said decision.
Salient Facts
[5] The plaintiff's claim against the defendants in the present action is predicated on fraudulent trading pursuant to s 540 of the Companies Act 2016.
[6] The plaintiff contends that they are a creditor to a company known as Edutainment Dome Sdn Bhd ("EDome") which has been wound up through an order of the court dated 20 November 2016.
[7] The defendants were at all material times the directors of EDome.
[8] On or about March 2017, the defendants commenced the Johor Bahru High court Suit No. JA-22NCvC-41-03/2017 ("2017 Suit") against one Chong Voon Cher as 1st Defendant and the plaintiff as 2nd Defendant.
[9] In response, the plaintiff filed a Counterclaim against the defendants in the 2017 Suit which was dismissed after trial by the Johor Bahru High court on 31 July 2019.
[10] The defendants in their applications herein contend that the plaintiff's claims for fraud, fraudulent trading and conspiracy to defraud in the present suit are a repackaged allegation derived from the same facts and issues ventilated and traversed in the 2017 Suit.
[11] The plaintiff on the other hand contends the opposite.
Issues
[12] The defendants in their respective striking out applications raise similar issues, which are as follows:
(a) Whether the plaintiff is estopped from filing the present action against the defendants under the doctrine of Res Judicata
(b) Whether the plaintiff's claim herein is time barred under the Limitation Act
(c) Whether the plaintiff's claim herein should be struck out for lack of particulars.
Analysis And Decision
[13] Firstly on res judicata, the defendants collectively contend that the 2017 Suit contains facts and issues that are similar to the present action. Since the counterclaim by the plaintiff in the 2017 Suit has already been adjudged, the plaintiff must be estopped from revisiting those facts and issues.
[14] The defendants however were quick to admit that the plaintiff in the present action prays for reliefs and pleaded causes of action (fraudulent trading and conspiracy) which were not previously prayed for or pleaded in the 2017 Suit.
[15] Upon perusal of the plaintiff's Statement of Defence and Counterclaim dated 11 May 2017 (plaintiff was the 2nd Defendant then) and the final judgment after trial by the Johor Bahru High court dated 31 July 2019 in the 2017 Suit (exhibited as "TQS-1" in the 1st Defendant's Affidavit of Support), this court observes that the 2017 Suit primarily concerns with the return of goods belonging to plaintiff. However, the present suit on the other hand concerns with plaintiff seeking a declaration that the defendants have committed fraudulent trading within the meaning of s 540 CA 2016 and damages resulting from it.
[16] In simple terms res judicata means a matter adjudged. Once adjudged, the matter becomes res thus cannot be relitigated. The matter adjudged must be accepted as the truth between the parties. Res judicata creates an estoppel barring the parties from asking the court to re-look onto the evidence that had undergone proper judicial scrutiny. The rationale is there must be finality in litigation and no one should be vexed
