1. ) Alupanorama Metals Sdn Bhd v 1. ) Okaya International (H.K.) Ltd (BA-22NCC-109-09/2019)

ALUPANORAMA METALS SDN BHD (No. Syarikat: 354949-V)

AM METALS SERVICES CENTRE SDN BHD (No. Syarikat: 551888-W) …PLAINTIF-PLAINTIF

OKAYA INTERNATIONAL (H.K) Ltd 2. GUANDONG GUANG XIN INVESTMENT HOLDINGS CO. Ltd … DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT Introduction

Enclosure 144 is a discovery application by the 1st Defendant against the 1st Plaintiff. The documents sought to be discovered are as follows:-

(a) all correspondence, communications and/or records between the 1st Plaintiff and the 2nd Defendant (including their respective employees, agents and/or representatives) for years 2014 and 2015 including but not limited to emails, letters, telephone messages and/or, messages on WeChat, WhatsApp or other telecommunication App on their dealings in respect of sale and/or purchase of Aluminium products pleaded in paragraphs 6 to 14 of the Amended Statement of Claim dated 13.9.2021;

(b) all correspondence, communications and/or records between the 1st Plaintiff and the 2nd Defendant (including their respective employees, agents and/or representatives) including but not limited to emails, letters, telephone messages and/or, messages on WeChat, WhatsApp or other telecommunication App on their dealings in respect of sale and/or purchase of Aluminium products pleaded in paragraphs 5 to 36 of the Amended Statement of Claim dated 13.9.2021;

(c) all documents prepared by and/or exchanged between the 1st Plaintiff and 2nd Defendant (including but not limited to their respective employees, agents and/or representatives) including Purchase Orders, Sales Confirmation, Mill Certificates, Packing Lists, Bills of Lading, Form E, Fumigation Certificates and Credit Notes or other similar documents in respect of sale and/or purchase of Aluminium Products pleaded in paragraphs 15 to 36 of the Amended Statement of Claim dated 13.9.2021;

(d) all correspondence, communications and/or records between the 1st Plaintiff and 2nd Defendant (including their respective employees, agents and/or representatives) from 13.1.2018 onwards including but not limited to emails, letters, telephone messages and/or messages on WeChat, WhatsApp or other telecommunication App on their dealings in respect of sale and/or purchase of Aluminium Products; and

(e) all documents prepared by and/or exchanged between the 1st Plaintiff and the 2nd Defendant (including their respective employees, agents and/or representatives) including Purchase Orders, Sales Confirmation, Mill Certificates, Packing Lists, Bills of Lading, Form E, Fumigation Certificates and Credit Notes or other similar documents in respect of sale and/or purchase of Aluminium Products from 13.1.2018 onwards.

The application is made pursuant to Order 24 Rules 3 and 7, and Order 92 rule 4 of the Rules of Court 2012. Factual background

The application of the 1st Defendant is to be considered in the context of the following salient facts as set out in the pleadings of the parties. 1st Plaintiff’s claim

The claim of the 1st Plaintiff is this. The 1st and 2nd Plaintiffs are traders of aluminium products. These products are sourced by the Plaintiffs from factory mills and tailored to the requirements of their clients. The subject matter of this dispute concerns the type of aluminium produced by the factory mill of the 2nd Defendant (“the aluminium products”). The aluminium products were manufactured in the Guangxi Factory.

The Plaintiffs have been purchasing the aluminium products from the 2nd Defendant since 2012.

In 2015 however, the 2nd Defendant’s employee proposed for the Plaintiffs to engage the services of the 1st Defendant to purchase the products from the 2nd Defendant. The benefit of engaging the 1st Defendant to purchase the aluminium products is that the 1st Defendant would be able to provide credit facility to the Plaintiffs at the interest rate of 4% per annum.

The Plaintiffs were assured that the aluminium products would be manufactured from Guangxi Factory. A Mill Certificate issued by the Guangxi Factory will be issued by the 2nd Defendant, certifying that the aluminium products were produced by the Guangxi Factory and not any other factory that had not been audited and approved by both the Plaintiffs. The Plaintiffs paid a premium for the aluminium products manufactured from Guangxi Factory.

Based on the assurances given, the Plaintiffs agreed to engage the services of the 1st Defendant to purchase the aluminium products from the 2nd Defendant.

The 1st Plaintiff subsequently discovered that the aluminium products were in fact not manufactured by the Guangxi Factory. It claims that in breach of the agreement reached between the parties in this suit, the 1st Defendant had purchased the aluminium products from third party manufacturer at a price much lower and supplied them as products manufactured by the Guangxi Factory.

As the products supplied were sourced from elsewhere, the Plaintiffs claim that the Defendants had conspired to cheat and defraud the Plaintiffs. Due to these fraudulent acts the 1st Defendant had obtained unjust enrichment of profit from the sales of the aluminium products. The 1st Plaintiff claims against the 1st Defendant various declarations as well as damages and losses for the return of the unjust and unfair enriched profits as a result of its fraudulent conduct. 1st Defendant’s defence

In its defence, the 1st Defendant allege that it had no knowledge that the aluminium products were to be sourced from the Guangxi Factory. It was not privy to the initial dealings between the 1st Plaintiff and the 2nd Defendant prior to February 2015.

In 2015, when the 2nd Defendant’s representative proposed for the use of the 1st Defendant’s services to order and purchase the products from the 2nd Defendant, the 1st Defendant agreed to act as the intermediary between the 2nd Defendant and the 1st Plaintiff by settling the purchase price with the 2nd Defendant and giving 90 days’ credit terms to the 1st Plaintiff.

The tripartite arrangement between the parties was explained as this. The 1st Plaintiff would first confirm with the 2nd Defendant the aluminium products to be purchased (including its specification, price and quantity) and the documents required to be furnished by the latter ie. the Mill Certificate, Form E and Fumigation Certificate (“the Documents”).

The 1st Plaintiff will then issue a Purchase Order to the 1st Defendant setting out the specification of the aluminium products to be purchased, and the requisite documents to be given by the 2nd Defendant. The price of the aluminium products would be marked up being the 1st Defendant’s commission for providing the 1st Plaintiff with the credit terms. This would be followed by the Sales Confirmation by the 2nd Defendant.

The 1st Defendant would compare the aluminium products stated in the Purchase Order and Sales Confirmation to ensure they correspond. If they do, the 1st Defendant will then issue a Sales Contract Note to the 1st Plaintiff, and a Purchase Order to the 2nd Defendant.

Thereafter, the 2nd Defendant would deliver the aluminium products, the Documents, 2nd Defendant’s packing lists and Bills of Lading directly to the 1st Plaintiff, and issue an invoice to the 1st Defendant for payment. After settling the amount with the 2nd Defendant, the 1st Defendant would invoice the 1st Plaintiff wherein the amount invoiced had to be settled within 90 days.

At all material times, the 1st Defendant role was merely to facilitate the 1st Plaintiff’s purchase of products from the 2nd Defendant by settling the purchase price with the 2nd Defendant and providing credit terms to the 1st Plaintiff. It has no obligation to ensure the quality of the aluminium products. The contractual relationship for the purchase of the aluminium products was purely between the 1st Plaintiff from the 2nd Defendant. It was not involved in the supply and shipment of the aluminium products or delivery of the Mill Certificates.

The 1st Defendant denied that it was informed that the aluminium products must be manufactured by the Guangxi Factory. It was not liable to the 1st Plaintiff for its claim as it essentially relates to the manufacture of the aluminium products.

The pleading of the 1st Defendant included a counterclaim for the amounts in the invoices it issued to the 1st Plaintiff and which remains unpaid. As a result of the repeated failures of the 1st Plaintiff to make payment towards the invoices, the 1st Defendant ceased to provide the credit terms. The grounds in support of the discovery application

The 1st Defendant has categorised the documents sought to be discovered into the following:-

(i) pre-1st Defendant’s Involvement Correspondences;

Prior to the filing of the present application, the 1st Defendant received from the 1st Plaintiff some of the documents sought herein. In respect of category (i), none were given. In respect of category (ii), only some emails were furnished. As for category (iii), no documents were furnished.

The 1st Defendant contends that its discovery application falls within the principles for which discovery can be ordered. Analysis and decision of this court

The Defendant has premised his application for discovery under the provisions relating to general and specific discovery (Order 24 rules 3 and 7). The governing principles are the same. The elements to be satisfied for an order of discovery to be granted are laid down in the case of Yekambaram Marimuthu v Malayawata Steel Berhad [1994] 2 CLJ 581, The essential elements for an order for discovery are threefold, namely first, there must be a “document”, secondly, the document must be “relevant’, and thirdly, the document must be or have been in the “possession, custody or power” of the person against whom the order for discovery is sought. It is undisputable that the items sought were documents and were in the possession, custody or power of the Defendant. As to “relevance”, the Rules of the High Court limit discovery to documents which are “relevant to” or “relate to the factual issues in dispute”. The discovery obligation applies to documents “relating to matters in question in the action” (O.24 r.1(1)) or “relating to any matter in question in the cause or matter” (O.24 r.3(1)).

A discovery order is made in the exercise of the discretion reposed in the court, when the court is of the opinion that the order is necessary for disposing fairly of the cause or matter. This power has to be exercised judiciously and fairly in the best interest of justice having regard at all times to the circumstances of the case. (See: Rotta Research Laboratorium SpA v Ho Tack Sien [2010]

Apart from the principles laid down in above, the Rules of Court 2012 sets out the consideration to be had in making an order for discovery, evident in Order 24 rule 8 which provides, Discovery to be ordered only if necessary (O. 24, r. 8) 8. On the hearing of an application for an order under rule 3, 7 or 7A, the Court, if satisfied that discovery is not necessary, or not necessary at that stage of the cause or matter, may dismiss or adjourn the application and shall in any case refuse to make such an order if and so far as it is of the opinion that discovery is not necessary either for disposing fairly of the cause or matter or for saving costs.

It is therefore incumbent on the party applying to satisfy the court that discovery is necessary for disposing fairly the cause or matter.

With the principles set out aforesaid in mind, I will now consider the 1st Defendant’s application to see if it meets the legal requirements to grant an order in its favour. Reference will be made to the documents set out in paragraph 1 (a) to (e) as aforementioned.

The documents in paragraph 1(a) relate to documents for the years 2014 to 2015, and have been categorised as pre-1st Defendant’s Involvement Correspondences.

The 1st Defendant maintains in its defence that it was not privy to, nor involved in any of the dealings between the 1st Plaintiff and the 2nd Defendant prior to February 2015. Notwithstanding this stance, it seeks a discovery of documents between the 1st Plaintiff and the 2nd Defendant for the purpose of determining whether the 2nd Defendant gave the alleged representations and assurances as alleged in the Statement of Claim.

To my mind, it is not the business of the 1st Defendant to seek discovery in relation to a period of time prior to its involvement. The 1st Defendant was not engaged by the 1st Plaintiff prior to 2015. Neither should it seek discovery on factual issues between other parties, namely the 1st Plaintiff and the 2nd Defendant. I find the documents sought have no relevance to the 1st Plaintiff’s claim nor the 1st Defendant’s counterclaim.

The next set of documents are those listed in paragraph 1(b) and

(c). These have been categorised as 2015-2018 Correspondences and 2015-2018 Transaction documents between the 1st Plaintiff and the 2nd Defendant in relation to the sale and purchase of the aluminium products.

The 1st Defendant contends that the pleadings of the respective parties gives rise to the following broad issues:-

(i) whether there is a tripartite arrangement between the 1st Plaintiff, the 1st Defendant and the 2nd Defendant;

Whilst I agree that the above are issues which arise from the pleadings of the parties, the documents requested for are specifically correspondence and transaction documents between the 1st Plaintiff and the 2nd Defendant. The 1st Defendant must show how these documents are relevant to its case with the 1st Plaintiff, in that it falls within the ambit of disputed facts between the 1st Plaintiff’s pleaded case against it and the 1st Defendant’s counterclaim. I do not find it to have been done.

Further, the documents sought to be discovered are so wide and extensive, spanning a period of 3 years, as to suggest that the Defendant is embarking on a fishing expedition.

The Court of Appeal in the case of Nguang Chan a.k.a Nguang Chan Liquor Trader & Ors v Hai-O Enterprise Bhd [2009] 5 MLJ 40 held, Finally the court would dismiss a plaintiff's application for discovery if it is of the view that the plaintiff was 'merely fishing for evidence to prop up his case' and to allow him discovery would be unduly oppressive to the party giving discovery — see Leslie S Holmes v Engineering Service Inc [1993] 1 AMR 27 at p 36.

The discovery process is not to be abused to allow an applicant for discovery to cast his net far and wide in the hope of obtaining evidence to support his case. The unreasonable width of the documents makes it oppressive and onerous to the 1st Plaintiff.

Finally, documents in paragraph 1(d) and (e) pertain to documents from 13.1.2018 between the 1st Plaintiff and the 2nd Defendant, which is referred to as post-1st Defendant’s involvement Correspondences and Transaction documents.

These are documents relating to transactions that transpired after the 1st Defendant refused to provide the aluminium products to the 1st Plaintiff. They cannot be relevant as the transactions are excluded from, and do not form part of the 1st Plaintiff’s claim. For the same reason, they are also excluded from the 1st Defendant’s counterclaim. They clearly do not satisfy the legal requirements for a discovery order. Conclusion

For the foregoing reasons, the application by the 1st Defendant for discovery of the documents as listed in paragraphs 1(a) to (e) herein is dismissed.

The 1st Defendant’s discovery application herein was heard together with the 1st Plaintiff’s application for discovery against the 1st Defendant in Enclosure 155. Enclosure 155 was only partially allowed. Taking into consideration the outcome of both applications, I make no order as to costs. Dated : 2nd December 2022. -sgd- ………………..….... Alice Loke Yee Ching Judicial Commissioner High Court of Malaya at Shah Alam Counsel for the 1st Plaintiff : Mr. Tuw Min Ric (Mr. Jarrett Ong with him) Tetuan Ong, Ric & Partners Counsel for 1st Defendant : Mr. Mong Chung Seng (Ms. Amelia Loh Pui Yan with him) Tetuan Lee Hishamuddin, Allen & Gledhill