Chong Wui En v Wong Shen Nee (WA-12BNCC-5-03/2025)

CHONG WUI EN

CHONG HUI YI (NO.K/P: 850918-14-5870) (Trading as the partnership SEO TECHNOLOGY) ...PLAINTIFFS AND WONG SHEN NEE (NO.K/P: 720817-14-5702) …DEFENDANT GROUNDS OF JUDGMENT I.INTRODUCTION [1] This is an appeal by the First and Second Appellants against the decision of the learned Sessions Court Judge dated 24 February 2025 in the Sessions Court at Kuala Lumpur Civil Suit No.WA-B52NCC-172-04/2022, wherein the Respondent's claim against the Appellants for the sum of RM593,715.00, together with interest at 5% per annum and costs, was allowed in full, and the Appellants' counterclaim was dismissed. [2] The dispute concerns an oral agreement made in or about December 2018 between the Respondent and the First Appellant for the development of an e-commerce website branded “LaCeci” and a mobile application branded “Mamamia”. The Appellants traded as a partnership under the name and style of SEO Technology, of which the First Appellant was at all material times a partner, and the Second Appellant was also a partner until her formal withdrawal recorded with the Companies Commission of Malaysia (“SSM”) as taking effect on 1 January 2021. [3] Six questions arise for the determination of this Court: a) Whether the proper appellate standard has been correctly identified and applied; b) Whether the learned Sessions Court Judge was plainly wrong in finding that the Respondent had locus standi to sue in her personal capacity; c) Whether the learned Sessions Court Judge was plainly wrong in finding a total failure of consideration notwithstanding the Appellants' contention of substantial performance; d) Whether the learned Sessions Court Judge was plainly wrong in receiving the First Appellant's WhatsApp communication of an offer of RM200,000.00 as an admission of liability; e) Whether the learned Sessions Court Judge was plainly wrong in holding the Second Appellant jointly and severally liable as a partner of SEO Technology; and f) Whether the learned Sessions Court Judge was plainly wrong in dismissing the Appellants' counterclaim. [4] Outcome stated upfront. Having reheard the matter on the record and considered the written and oral submissions, this Court finds no appealable error in the judgment of the learned Sessions Court Judge. The appeal is dismissed with costs of RM5,000 to be paid by the Appellants jointly and severally to the Respondent. The decision of the Sessions Court is affirmed in its entirety, including the dismissal of the counterclaim. The reasons are set out below. II. ISSUES FOR DETERMINATION [14] On the basis of the pleadings, the evidence, and the submissions, the issues for determination are: a) Issue 1 — The standard of appellate intervention; b) Issue 2 — Whether the Respondent had locus standi to sue in her personal capacity; c) Issue 3 — Whether there was a total failure of consideration entitling the Respondent to full restitution of RM593,715.00; d) Issue 4 — Whether the WhatsApp message of February or March 2022 is protected by without prejudice privilege; e) Issue 5 — Whether the Second Appellant is jointly and severally liable; and f) Issue 6 — Whether the counterclaim was rightly dismissed. III .ANALYSIS AND FINDINGS Issue 1 — The standard of appellate intervention [26] This Court approaches its task as an appellate court on rehearing. The threshold for displacing findings of fact made after a full trial at which the witnesses were observed is, as stated, the “plainly wrong” standard articulated in Ng Hoo Kui. That deference applies with particular force to findings on credibility, since the trial judge alone observed the demeanour of the witnesses. [27] Findings of law, and the application of law to facts, attract a less deferential review, but even there, the appellate court does not lightly substitute its own preferences for those of a properly directed trial court. With those principles in mind, this Court turns to the substantive issues. Issue 2 — Locus standi [28] The Appellants pleaded in their Amended Defence that the proper plaintiff is Mages Asia Sdn Bhd. They relied principally on the line on the Tax Invoices reading “Company's Name: Mages Asia Sdn Bhd”, and on the Respondent's admission in re-examination that her personal CIMB account was on occasion also used to pay the invoices of other corporate suppliers, including a supplier identified as Medica Research Produit. [29] The Respondent's evidence, accepted by the trial judge, was that she personally negotiated the oral agreement of December 2018 with the First Appellant; that the contract was made between herself and the partnership SEO Technology; that the consideration of RM593,715.00 was paid out of her personal CIMB account; and that the reference to “Mages Asia Sdn Bhd” on the invoices was a designation of the project's intended commercial beneficiary, not an identification of the contracting party. [30] This Court finds, primarily on the documentary record: a) The contracting parties to the oral agreement were the Respondent (in her personal capacity) on the one hand, and SEO Technology on the other. The Appellants tendered no contemporaneous document — no signed engagement letter, no internal corporate resolution of Mages Asia Sdn Bhd, no payment voucher of Mages Asia Sdn Bhd — recording the company as the contracting party. b) That the Respondent's personal CIMB account was the source of every payment is not neutral. It is a strong contemporaneous indicator that the obligation to pay rested on her personally. The fact that the same account was at times used for other corporate expenses does not displace this inference; it merely shows the account to have been multi-purpose. The Appellants' attempt to convert the Respondent's candour in re- examination into an admission against her own standing overstates the evidence. c) The reference on the invoices to “Mages Asia Sdn Bhd” is, on this Court's reading, a billing notation identifying the commercial purpose of the project — the expansion of the company's operations — rather than an identification of the legal contracting party. The invoices were on the evidence directed to the Respondent and acted upon by the Respondent. [31] The supporting forensic point is that the Appellants did not put their case to the Respondent in cross-examination on the locus standi defence. The defence, having been pleaded, depended on facts within the Respondent's personal knowledge — namely, in what capacity she had contracted. The Respondent was not asked the question. By the rule in Browne v Dunn and Aik Ming, that is a forensic failing on the Appellants' part. It does not, by itself, dispose of the issue (which this Court has decided on the documents); but it confirms that the Appellants did not seriously test their own pleaded case at trial. [32] For these reasons, this Court finds that the learned Sessions Court Judge was not plainly wrong in finding that the Respondent had locus standi to sue in her personal capacity. The Appellants' authority of Ikatan Kelab-Kelab Melayu is distinguishable: that authority concerned a plaintiff with no connection at all to the cause of action, which is plainly not the position here. Issue 3 — Total failure of consideration [33] The Appellants advance two strands of argument. First, that the LaCeci website was completed and physically delivered at a Starbucks meeting in February 2019. Second, that the Mamamia App deliverables were transmitted by email on 31 January 2022. Either way, they say, there was substantial performance, and the remedy can lie only in damages, not in restitution. [34] This Court finds these contentions to be without merit, for the following reasons: a) The “Starbucks delivery” of February 2019 was not pleaded. It was raised for the first time during the cross-examination of the First Appellant. A party may not introduce, by way of evidence, a fact that has not been pleaded: Order 18 rule 7 of the Rules of Court 2012 and The Carbon Co Sdn Bhd. Even setting aside the pleading defect, the trial judge made an adverse credibility finding against the First Appellant on this point, which this Court has no reason to disturb. The First Appellant's claim that the website was “live” up to the date of trial in September 2024 was unsupported by any evidence of who paid the hosting or domain renewals after August 2020. b) The invoice dated 5 March 2019 — issued by the Appellants themselves and described as relating to “e-commerce” — is squarely inconsistent with the asserted February 2019 completion. The Appellants offered no satisfactory explanation for this inconsistency. c) The 31 January 2022 email transmitted Google Drive links, access credentials, and ZIP files. The Respondent's evidence, accepted by the trial judge, was that the links could not be opened and the application did not function. The Appellants did not produce any independent technical evaluation showing that the platforms were functional. d) The doctrinal point. “Consideration”, for the purposes of the restitutionary remedy, is the performance of the bargained-for obligation. The bargain in this case was for functional, working digital platforms — an e-commerce website that could transact, and a mobile application that could be deployed for end-user use. The bargain was not for the delivery of files-as-such, links-as-such, or credentials-as-such. Where what is delivered is incapable of doing what was promised, the bargained-for benefit has not been conferred. In such a case the failure of consideration is total, notwithstanding that the payer may have received envelopes containing inert material. The principle in Berjaya Times Square and the line of cases beginning with Fibrosa is properly applied to this position. e) The Respondent's own conduct does not contradict this conclusion. That she downloaded the ZIP files, and purchased an Android phone to test the Mamamia App, is evidence of her attempts to verify whether the bargained-for performance had been rendered. It is not evidence of acceptance of value received. A buyer who tests a defective product to confirm its defectiveness is not thereby accepting it. Equally, the RM5,000 hosting payment of 13 November 2020 was made in the expectation that the website was being or would be made functional; it is not evidence that the website was in fact functional, much less that the bargained-for performance had been rendered. f) On the hosting question more generally, the First Appellant could not produce any evidence of who paid the hosting fees after August 2020, despite his assertion that the website remained “live” up to trial. The trial judge was entitled to disbelieve him on this point and this Court endorses that adverse credibility finding. g) The Appellants' authority of Lim Swee Choo does not avail them. That authority addresses the situation where the claimant has received and retained a measurable benefit; it does not displace the principle that, where the bargain is for a functional product and what is delivered is non-functional, the benefit bargained for has not been conferred. [35] In the result, this Court finds that the learned Sessions Court Judge was correct to hold that the Respondent received nothing of the bargained-for benefit and that the failure of consideration was total. The remedy in restitution is, accordingly, available, and the trial judge's award of the full sum of RM593,715.00 is sustained. [36] By way of observation only and not forming part of this Court's ratio, even if this Court had found that some limited measure of value had been conferred — for instance, in the form of partially functional code that might have been salvageable in the hands of another developer — the burden of proving the value of any benefit retained would have lain on the Appellants. The Appellants tendered no such valuation evidence at trial. On either route, the trial judge's award would be sustained. Issue 4 — The WhatsApp message and without prejudice privilege [37] The First Appellant sent the Respondent a WhatsApp message in or about February or March 2022 offering to settle the dispute by payment of RM200,000.00 in installments over five years. The Appellants now contend that this message is privileged from disclosure as a bona fide settlement communication. [38] This Court finds the privilege submission to be unsustainable, for the following reasons: a) The message bears no “without prejudice” marking. The absence of such a marking is not by itself decisive, but it is a relevant indicator of whether the parties intended the communication to be privileged. b) There was no structured negotiation in train. The exchange did not pass through solicitors; it was not part of any pre-action protocol; and no negotiation framework had been established between the parties. The communication was a unilateral overture made in the wake of the Respondent's complaint that the platforms had not functioned. c) The burden of establishing privilege lies on the party asserting it, namely the Appellants. They led no evidence to establish the contextual elements of privilege at trial. d) The form of the message, on its plain reading, is not a hypothetical “I would pay to make this go away without admitting liability”. It is an unconditional acknowledgment that money is owed in some quantum, coupled with a proposal as to instalments and timing. That is the language of acknowledgment, not the language of negotiation. e) Section 23 of the Evidence Act 1950 protects admissions made on express condition that they are not to be given in evidence, or where the court can infer such an agreement. Neither limb is engaged on the facts here. f) The Appellants' authority of Premalla v Tetuan Othman Hashim & Co is properly distinguished. There the communications were plainly part of a structured exchange between solicitors. The factual matrix here is materially different. [39] This Court accordingly finds that the WhatsApp message was not a privileged communication and that the trial judge was right to receive it in evidence. As an admission of liability — albeit one as to disputed quantum — it constitutes a further evidentiary anchor for the trial judge's findings. Issue 5 — The Second Appellant's liability [40] The Second Appellant contends that she resigned from the partnership in June 2018 and that she should not therefore be liable for any obligation arising from the December 2018 oral agreement. [41] This Court rejects that contention, for the following reasons: a) The June 2018 resignation was not pleaded. The relevant documents (purported resignation letters) were tendered for the first time at trial. Pursuant to Order 18 rule 7 of the Rules of Court 2012, they are not properly before the Court. b) The official SSM records — public, contemporaneous, and effective in the absence of cogent evidence to the contrary — record the Second Appellant's withdrawal as taking effect on 1 January 2021. She was therefore a partner of SEO Technology at all material times during the formation, performance, and breach of the contract. c) There is, moreover, a self-inflicted contradiction in the Appellants' case. Ground 3 of the Appellants' own Memorandum of Appeal asserts that “Perayu-Perayu telah pun menyempurnakan servis” — that both Appellants performed the services. The Second Appellant cannot in one breath disclaim involvement from June 2018 and in the other claim performance jointly with her co-partner. A party cannot pursue mutually inconsistent factual cases. d) Section 11 of the Partnership Act 1961 makes the Second Appellant jointly and severally liable for all obligations of SEO Technology incurred while she was a partner. The contractual obligation in this case was incurred in December 2018 and continued through 2019 and 2020; she remained a partner throughout. The mere fact that she withdrew on 1 January 2021 does not extinguish her liability for obligations already incurred. She remains liable for them. [42] This Court accordingly finds that the learned Sessions Court Judge was right to hold the Second Appellant jointly and severally liable with the First Appellant for the sum awarded. Issue 6 — The counterclaim [43] The Appellants' counterclaim sought payment from the Respondent for (i) outstanding invoices, including a document referred to as “Invoice No. 16”, (ii) hosting fees alleged to have been left unpaid, and (iii) professional fees for data entry and system maintenance allegedly undertaken on the Mamamia App. The factual basis pleaded was that the Respondent had abandoned the LaCeci project and instructed work to be done on the Mamamia App, for which she had not paid. [44] The learned trial judge dismissed the counterclaim on three principal grounds, each of which this Court endorses: a) No proof of delivery or performance. The Appellants tendered no documentary evidence proving that the Mamamia App was ever delivered in functional form, or that the data-entry and maintenance services they invoiced for were ever actually rendered. The legal burden of proving the work for which payment is sought lay on the Appellants. They did not discharge it. b) The fabricated “Invoice No. 16”. The trial judge made an express factual finding that “Invoice No. 16” had not been billed, sent, or received before the dispute arose, and was diada-adakan (fabricated) by the Appellants only after they were served with the Respondent's writ. That is a strong adverse credibility finding made by the judge who saw and heard the witnesses, and this Court has no basis on the appellate record to disturb it. c) The First Appellant's personal-capacity defect. To the extent that the counterclaim was pursued by the First Appellant in his personal capacity for sums owed to the partnership, the claim is misconceived. The contracting party on the Appellants' own case was the partnership SEO Technology; only the partnership has the right to sue for sums owed to it. The First Appellant cannot, in his personal capacity, sue for partnership receivables. [45] The hosting-fees aspect of the counterclaim falls with the substantive case. If the website was never properly delivered in functional form, the Respondent does not owe further moneys for the continuing hosting of an undelivered platform. [46] This Court accordingly finds that the counterclaim was rightly dismissed by the learned Sessions Court Judge. VII.CONCLUSION AND ORDERS [47] The combined effect of the foregoing findings is that: a) The learned Sessions Court Judge directed herself correctly on the law; b) Her findings of fact are supported by the evidence and are well within the band of conclusions reasonably open to a trial judge on this record; c) None of the alleged appealable errors is made out; and d) The decision below is not plainly wrong. [48] This Court accordingly orders that: a) The appeal is dismissed; b) The decision of the learned Sessions Court Judge dated 24 February 2025 is affirmed in its entirety, including the dismissal of the counterclaim; and c) The Appellants shall pay to the Respondent costs of this appeal in the sum of RM 5,000, subject to allocator. VIII.APPRECIATION [49] This Court records its appreciation of counsel on both sides for the assistance rendered. The submissions, both written and oral, were of considerable assistance in clarifying the issues and the relevant authorities. Dated 06hb May 2026 (MOHAMAD REDZUAN BIN IDRUS) JUDICIAL COMMISSIONER KUALA LUMPUR HIGH COURT NCC 5 WILAYAH PERSEKUTUAN KUALA LUMPUR APPEARANCES For the Appellants: Gan Jui Siang, Annabelle Tan (PDK) (Hazidin Chan (Kuala Lumpur)) For the Respondent: Keppy Wong Khai Pun, Choong Jing Yen (Keppy Wong & Associates (Kuala Lumpur))

Aik Ming (M) Sdn Bhd v Chang Ching Chuen [1995] 2 MLJ 770

Berjaya Times Square Sdn Bhd v M Concept Sdn Bhd [2010] 1

Browne v Dunn (1893) 6 R 67 (HL)

The Carbon Co Sdn Bhd v Yam Kong Seng & Anor 5. Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 6. Henderson v Foxworth Investments Ltd [2014] UKSC 41 7. Ikatan Kelab-Kelab Melayu 8. Lim Swee Choo 9.

Malayan Banking Bhd v Foo See Moi [1981] 2 MLJ 17 (FC)

Miller v Minister of Pensions [1947] 2 All ER 372 Ng Hoo Kui & Anor v Wendy Tan Lee Peng [2020] 12 MLJ 67

Premalla v Tetuan Othman Hashim & Co

Re Daintrey, ex parte Holt [1893] 2 QB 116

Contracts Act 1950 — sections 71 and 73 2. Evidence Act 1950 — sections 23, 101, 102, and 103 3. Partnership Act 1961 — section 11 4. Rules of Court 2012 — Order 18 rule 7