Case Name: QIAN SUI F&B SDN BHD v. EXCELSIUS GLOBAL SDN BHD & OTHERS
Citation: [2026] 2 MLRH 549
Court: High Court of Malaya, Shah Alam
Judge: Hazizah Kassim JC
Date of Decision: 23 October 2025
Brief FactsThe Plaintiff (Qian Sui F&B Sdn Bhd) sued the First Defendant (Excelsius Global Sdn Bhd) and its directors, seeking a declaration that their Business License Agreement (for the Chun Yang Tea business) was void. The Plaintiff claimed the agreement was a franchise that violated the Franchise Act 1998, demanding a refund of their investment (RM980,673.88) and alleging fraud/misrepresentation. The Defendants counterclaimed for damages related to the Plaintiff’s use of their intellectual property.Core Legal Principles DiscussedThe Court’s decision was guided by several key statutory provisions and judicial principles:
| Legal Principle | Relevant Legislation/Case Law | Application in the Judgment |
|---|---|---|
| Burden of Proof | Sections 101 and 103, Evidence Act 1950 | The burden of proof lies with the party asserting a fact. The Court found the Plaintiff failed to discharge the burden of proving that the agreement was a franchise or that fraud had occurred. |
| Objective Interpretation of Contract | Kwan Chew Holdings Sdn Bhd v. Kwong Yik Bank Bhd | When determining the true nature of an agreement, the Court must adopt an objective approach, considering the factual matrix and the objective aim of the transaction, rather than the subjective view of one party. |
| Elements of a Franchise | Section 4(c) and 4(e), Franchise Act 1998 | The agreement was not a franchise because it did not meet the mandatory legal elements: |
| Misrepresentation | Section 18, Contracts Act 1950 and Balakrishnan Devaraj & Anor v. Admiral Cove Development Sdn Bhd | Misrepresentation must be a false statement of fact that is material and induces the representee to enter into the contract. The Court found the Plaintiff failed to prove fraudulent misrepresentation, noting that the word “franchise” was never mentioned in the initial proposal. |
| Pleadings are Binding | Samuel Naik Siang Ting v. Public Bank Berhad | It is a cardinal rule that parties are bound by their pleadings and cannot adduce facts or issues that were not pleaded. This was cited in the context of the Plaintiff implicitly renewing the contract in its pleadings. |
| Cannot “Approbate and Reprobate” | Cheah Theam Kheng v. City Centre Sdn Bhd & Other Appeals | A party cannot “blow hot and cold” or adopt two inconsistent attitudes. The Plaintiff sought a refund of the investment while remaining silent about the sales proceeds enjoyed from the business for almost four years. |
Court’s Findings and Outcome
- On the Franchise Issue: The Court ruled that the agreement was valid. The requirement for “continuous control” under the Franchise Act 1998 was not fulfilled, as the Plaintiff made key operational decisions independently, such as changing the business location and sourcing disposable equipment and ingredients externally.
- On Fraud/Misrepresentation: The claims of fraud and misrepresentation were dismissed. The Court found the allegation to be an afterthought, raised only after the Plaintiff’s monthly revenue declined and the Plaintiff was preparing to launch a similar, new brand.
- Outcome: The Plaintiff’s claim was dismissed with costs of RM30,000.00. The First Defendant’s counterclaim was allowed, with a declaration that the License Agreement was valid and an award of general damages (to be assessed) for the Plaintiff’s unauthorized use of the brand’s intellectual property and the misuse of the online platform for the new brand.
Disclaimer: This post is for informational purposes only and does not constitute legal advice. Please consult a qualified Advocate & Solicitor for your specific legal needs.
Disclaimer: This case could be subject to further appeal.
