Vertex Central Industries Sdn. Bhd. v Posim Marketing Sdn. Bhd. (DA-12ANCC-3-10/2025)

VERTEX CENTRAL INDUSTRIES SDN BHD

MOHD ALI AMIN BIN AB LATIF

MOHD AZKARI MUNIF BIN AB LATIF (ID. NO: 790214-03-5591) … APPELLANTS AND POSIM MARKETING SDN BHD (COMPANY NO: 198501004385 (136824-M) … RESPONDENT In The Session Court In Kota Bharu In The State Of Kelantan Darul Naim, Malaysia Civil Suit No: DA-B52NCC-5-06/2025 Between Posim Marketing Sdn Bhd (Company No: 198501004385 (136824-M) … Plaintiff And S/N koAsblxlV0OrHtw0WBat2A

Vertex Central Industries Sdn Bhd (Company No: 200501001009)

Mohd Ali Amin Bin Ab Latif (Id. No: 840730-03-6219)

Mohd Azkari Munif Bin Ab Latif (Id. No: 790214-03-5591) … Defendants

This is an appeal by the appellants against the order of the Sessions Court Judge (SCJ) dismissing their application to set aside a judgment in default recorded against them on 7.7.2025.

Upon hearing both parties’ argument and upon perusing their respective written submissions, this Court dismissed the appellants’ appeal and affirmed the decision of the learned SCJ. Hence, the appellants further appeal to the Court of Appeal.

The respondent commenced this action against the appellants to recover the payment for goods sold and delivered. The respondent’s writ and statement of claims were served to the appellants at their respective address as follows: S/N koAsblxlV0OrHtw0WBat2A i) To the first appellant, at the address as stated in the application form for credit facilities dated 9.10.2018 i.e at Tingkat 2, P.T. 178, Jalan Hamzah, 15050, Kota Bharu, Kelantan; ii) To the second appellant, at the address as stated in the Continuing Guarantee and Indemnity dated 2.10.2018 i.e at PT 763, Taman Hijrah, Padang Rokma, 16250 Wakaf Bharu, Kelantan; and iii) To the third appellant, at the address as stated in the Continuing Guarantee and Indemnity dated 2.10.2018 i.e at No. 20, Taman Binjai Manis, 16450 Ketereh, Kelantan.

The appellants failed to enter appearance and a judgment in default was entered against them accordingly. The Appellants’ submission

The appellants submitted that their appeal to set aside the judgment in default was based on 2 grounds namely the service of the writ and statement of claims upon them were defective for the reason “unable to complete delivery”, thus, the judgment in default recorded against them should be set aside as of right.

Secondly, it was submitted that the appellants had a good defence to the claims where the respondent failed to act upon the security of bank guarantee before taking legal action against the appellants S/N koAsblxlV0OrHtw0WBat2A and that the appellants disputed the final amount claimed by the respondent. Analysis and finding of the High Court. Service of the writ and statement of claims.

On the issue whether the service of the writ and statement of claim on the appellants was a good and proper service, this Court found that the writ and statement of claims were served on the 1st appellant as the principle debtor pursuant to the terms of the credit facilities application form executed by the 1st appellant dated 9.10.2018 and on the 2nd and 3rd appellants respectively as the guarantors pursuant to the terms of the Continuing Guarantee and Indemnity dated 2.10.2018 executed by the 2nd and the 3rd appellants.

Paragraph (i) of the credit facilities application forms provides as follows: “Agree that the service process of all legal and non legal documents and notices in respect of any action arising out of or connected with supply of goods/services by you may be effected by prepaid registered post to the last known address as shown herein and shall be deemed to have been served upon expiry of 5 days from the date of posting notwithstanding any proof to the contrary.” S/N koAsblxlV0OrHtw0WBat2A

Paragraph 18 of the Continuing Guarantee and Indemnity provides as follows: “ … . The Guarantor further agrees that service process of all court documents, notices whatsoever related to the Guarantee or connected to the Guarantee shall be effected by prepaid registered post to the last address known as shown in First Schedule and shall be deemed to have been served upon expiry of 5 days from the date of posting notwithstanding any proof to the contrary.”

It was not disputed that the respondent had served the writ and statement of claims to the appellants by prepaid registered post to the address as stipulated in the contract respectively. The service on the 1st appellant was made through registered parcel No. RY636527197MY whereas the registered parcel for the 2nd and 3rd appellant was RY636527206MY and RY636527020MY respectively. However, the delivery of all the parcels was not completed as the Pos Malaysia Live Parcel Tracking system showed the remark of “Unable to complete delivery”.

The delivery of Parcel No. RY636527197MY and Parcel No. RY636527206MY was unable to complete due to “Missed delivery card” whereas the delivery of Parcel No. RY636527020MY was unable to complete due to “Recipient has moved”.

The learned counsel for the appellants submitted that the deeming provisions contained in both the credit facilities application form and the continuing guarantee and indemnity in respect of service of legal documents was not absolute and still rebuttable. The appellants S/N koAsblxlV0OrHtw0WBat2A had successfully rebutted such “deemed service” by showing the registered parcel had not been delivered to the appellants.

The learned counsel for the appellant referred and quoted the case of Arab-Malaysian Finance Berhad v. Chong Chin Shoong [1997] CLJU 404 where the court said: “The other is Robert Batcheller & Son. Limited v Batcheller [All ELR Annotated, May 1945, Vol 1, p. 522] where, at p.530, in connection with the word “deemed” in article 3 of the article of association of a company, the learned judge said: “It is, of course, quite permissible to “deem” a thing to have happened, when it is not known whether it happened or not. It is an unusual but not an impossible conception to “deem” that a thing happened when it is known positively that it did not. To deem, however, that a thing happened, when not only it is known that it did not happen, but it is positively known that precisely the opposite of it happened, is a conception which to my mind, if applied to a subject-matter such as that of art. 93, amounts to a complete absurdity.”

Due to the reason “unable to complete delivery” the learned counsel for the appellants submitted that they had successfully rebutted the “deemed service” provisions and the service of the writ and statement of claims was defective and the judgment in default should be set aside ex debito justitiae. S/N koAsblxlV0OrHtw0WBat2A

The learned counsel for the respondent, on the other hand, argued that the writ and statement of claim were served to the appellants in compliance with the terms of the contract between the parties. It was served by way of prepaid registered post to the respective address of the appellants as stated in their respective contract.

The learned counsel for the respondent further argued that the service of the writ and statement of claim was a good and effective service upon the appellants notwithstanding the remark of “unable to complete delivery” since the appellants have agreed in the respective contract that such service shall be deemed to be a good and effective service “notwithstanding any proof to the contrary”.

The learned counsel for the respondent referred and quoted the case of TA Securities Bhd v. Ng Yen Ling [2001] 1 CLJ 102 where the Court said: “Here then is a case of a contract which specifies the manner in which the process by which an action in respect of the contract is begun may be served on the defendant. The manner specified is by prepaid registered post to the defendant’s address coupled with the deeming of service upon the expiry of three days. The case falls under O.10 r. 3(1)(b) which provides, inter alia, that if the writ is served in accordance with the contract “the writ shall be deemed to have been duly served on the defendant”. There are here two deeming of service, one contractual is para 23, the other statutory in O. 10 r. 3(10(b). The later endorses the former.” “The effect is that even if the defendant in fact did not receive the notice of demand or the writ she will not be allowed to prove it, S/N koAsblxlV0OrHtw0WBat2A but in the case of a notice of demand the consequences is that the cause of action would have arisen against her but she still will be able to defend the action whereas in the case of a writ the consequence is that judgment will have been entered against her and she will not be able to set it aside solely on ground on non-service.” “Here I feel bound by the authorities to hold that the defendant in this case is precluded from showing that she did not received the writ. I have to take it as conclusive that the writ was served on her.”

This court, having considered both the authorities referred to by the learned counsels where both cases were decided by the same judge i.e Abdul Aziz Mohamad J (as he then was), found that, in both cases referred to, the Court found that the notice of demand (in the case of Arab-Malaysia Finance Berhad) and the writ (in the case of TA Securities) was properly served on the defendant.

This Court found in this case that the appellants had executed the relevant contract with the respondent indicating that the appellants had agreed to be bound by the terms of the contract including the terms on the manner of service of legal documents. Having agreed so, the appellants are now estopped from contending the same. So long it could be proven that the writ and the statement of claim were served to the appellants by prepaid registered post to the address mentioned in the contract, it would be deemed to have been properly served to the appellants 5 days thereafter. Therefore, this Court held that the service of the writ and S/N koAsblxlV0OrHtw0WBat2A statement of claims on the appellants in this case was a good and proper service. Defence on merit.

On the issue of defence on merit, the learned SCJ found that the appellants had never disputed the goods that were sold and delivered to them as well as the debit notes and the interest rate imposed. Hence the appellants were estopped from challenging the respondent’s claims based on the decision of Peransang Dagang Sdn Bhd v. Tanjung Teras Sdn Bhd [2007] 3 MLRH

Hence, the appellants had no defence on merit to the respondent’s claim.

This Court having perused the grounds of the learned SCJ found no reason to disagree with him.

It is obvious that the appellants had never disputed the goods that had been delivered to them as well as the debit notes. On top of that the appellants had made part payments for the claim. Not only that, the appellants had gone further to make a clear acknowledgement of debt to the respondent vide their letter dated 13/7/2025 (Appeal Record Vol. 2 at page 133) where they stated as follows at paragraph 2 of the said letter: “Berdasarkan perbincangan dengan pengurus Negeri Kelantan, En. Chan Guan Chiang, pihak kami telah membuat pembayaran sebanyak RM100,00.00 dan baki hutang akan dibayar dalam masa terdekat. S/N koAsblxlV0OrHtw0WBat2A Kami mohon agar pihak tuan mengembalikan Bank Guarantee (BG) kami No. Ref:TF001G259098 dalam masa terdekat untuk pihak kami membuat akaun akhir (final account) kepada pihak tuan.” emphasis added

This letter was a clear and unambiguous admission of debt by the appellants when they said “baki hutang akan dibayar dalam masa terdekat”.

Having made such an admission of debt, the appellants are now estopped from contending the same pursuant to Section 31 of the Evidence Act 1950 which provides as follows: “Admissions are not conclusive proof of the matters admitted, but they may operate as estoppels under the provisions hereinafter contained.”

In this case, this Court found that the learned SCJ had carefully examined and considered the respondent’s claim as well as the appellants’ defence and the applicable principles of law in the exercise of the court's powers to set aside the judgment in default entered or recorded against the appellants. S/N koAsblxlV0OrHtw0WBat2A

This Court found no merit in the appellants’ appeal and hence, this Court dismissed the appellants’ appeal with costs of RM5,000.00 payable by the appellants to the respondent subject to the allocator fee. Dated this on 4th May 2026. …………………………………… MOHD ROSLI BIN YUSOFF Judge High Court (2) Kota Bharu Kelantan Appellants’ Counsel: Altaf Akma Bin Anuar & Raihana Ashikeen Ramlan Tetuan Rafizah Azwan & Associates, Lot 3803, Tingkat 2, Jalan Hospital, 15200 Kota Bharu, Kelantan. Respondent’s Counsel: Seok Mae Jane, Tetuan Cheong Yee & Partners, 5F-19, IOI Business Park, No. 1 Persiaran Puchong Jaya Selatan, Bandar Puchong Jaya, 47100 Puchong, Selangor. S/N koAsblxlV0OrHtw0WBat2A