Accord Construction Sdn Bhd v Yekon Equipment (M) Sdn Bhd (WA-12AC-2-04/2023)

This is an appeal (“Appeal”) against the decision of the Learned Sessions Court Judge (“SCJ”) given on 27.3.2022 which dismissed the Appellant’s Notice of Application dated 6.1.2023 (NOA 6.1.2023) to set aside the Judgment In Default dated 7.12.2022 (“JID”) obtained by the Respondent against them on 7.12.2022 for the sum of RM828,732.44 with interest at the rate of 5% per annum form the date of the JID till full settlement with costs of RM1,291.00.

I had after hearing counsels submit before this Court on 12.12.2023 on the Appeal, delivered my decision on 12.1.2024 and dismissed the Appeal with no order as to costs.

On 14.11.2022, the Appellant received a copy of the Writ dated 1.11.2022 (“Writ”) and Statement of Claim dated 11.11.2022 (“Statement of Claim” (collectively referred to as “the cause papers”) which were served at the registered and business address of the appellant.

Upon the receipt of the cause papers by the Appellant, the following matters took place:

The Appellant had immediately made a request to the Respondent via email dated 14.11.2022, to halt the legal S/N w4/d2PZ7tkKnBggTBH0qug proceedings while parties attempt to resolve their disputes between themselves (“Appellant’s Request”).

(ii) On 16.11.2022, the Respondent responded to the Appellant’s Request with a proposal for settlement of the purported amounts due and owing (“Respondent’s Response”) and by stating, amongst others, the following: “We appreciate your effort to amicably resolve the outstanding amount… In the hope of the continual of good business relationship, and for consideration to withdraw all legal actions, we propose…”

(iii) It was alleged by the Appellant that the Appellant was led to believe that the Respondent’s Response intended to mean that the Respondent was agreeable to halt the legal proceedings pending settlement negotiations between the parties.

(iv) It was further alleged by the Appellant that it was on that basis that the Appellant continued negotiations with the Respondent in attempting to reach an amicable settlement of the Respondent’s claims which is alleged to be due and owing.

It was also alleged by the Appellant that there was an understanding that the Respondent was not going to proceed with the legal proceedings, and thus the Appellant had not entered an appearance or filed a Defence in these matters.

(vi) While parties were allegedly in the midst of negotiation, the Respondent had obtained the Judgment in Default dated 7.12.2022 (“JID”) and served a copy of the same on the Appellant on 9.12.2022. S/N w4/d2PZ7tkKnBggTBH0qug

(vii) It was upon receiving the JID, that the Appellant sought legal advice from the Appellant’s solicitors and filed the present application on an immediate basis. [5] It was also alleged by the Appellant that during the period when the cause papers were served on the Appellant, the Managing Director of the Appellant was abroad from 8.11.2022 to 17.11.2022 and 6.12.2022 to 15.12.2022 which contributed to the circumstances of the Appellant in not entering an appearance in suit filed in the Sessions Court. Analysis & Findings [6] In coming to my decision, I had considered the Appellants contention that: a) the JID was a regular judgement but that it has a defence on the merits. b) service of the papers on the Appellant was being disputed. c) the defence of limitation. d) there were negotiations between the parties with the request to halt legal proceedings. e) there was no admission by the Appellant. Defence on Merits [7] With regards the defence on the merits which the Appellant claims that it has, I have viewed the draft Statement of Defence (Proposed Defence) and the Affidavit in Support of the NOA 6.1.2023 and find S/N w4/d2PZ7tkKnBggTBH0qug that the Proposed Defence has no documents in support of the same before this Court to prima facie show proof of evidence or corroborate the alleged defences. Accordingly, I hold that the Appellant has failed to satisfy this Court that the defence has any merits. Service of Cause Papers [8] As to the alleged service of the cause papers being disputed due to the contention of the Appellant that its Managing Director (“MD”) was overseas, I note from the Affidavit of Service affirmed by one Mohd Dalnish bin Mohd Hamdan affirmed on 6.12.2022 that the Writ and Statement of Claim was personally served on the Appellant in 11.11.2022 on both its registered and business address. This would be in due compliance with Order 62 rule 4 of the Rules of Court 2012 and I find that the fact of the MD not being around is in law not a tenable argument which this Court can accept. In any event it is not denied that the Appellant had made a request to the Respondent on 14.11.2022 to attempt to resolve the dispute between themselves. This clearly evidences that the Appellant had notice of the said cause papers and an opportunity to file its Notice of Appearance. Defence of Merits [9] Accordingly, in having considered the defence of limitation as submitted by the Appellant, I hold that the Appellant had at all material times the opportunity to file its Notice of Appearance based on the chronology of the events before me and on this basis the defence of limitation is, in my view, no longer available to be raised and/or is now not available to the Appellant. S/N w4/d2PZ7tkKnBggTBH0qug Negotiations Between Parties and If there Was Any Intention to Halt Legal Proceedings [10] I have also considered the alleged negotiations which had taken place between the parties and which the Appellant claims to have been commenced with the request to halt legal proceedings in the meantime. [11] I had looked at the evidence which consisted of a letter from the Appellant dated 14.11.2022 with the heading “Request o Halt Legal Action Taken On An Outstanding Amount” and the email of 15.11.2022 and find that there was no understanding or agreement that the Respondent would halt or put on hold any legal proceedings towards the Appellant as the email of 15.11.2022 from the Respondent had only stated that ‘ We may discuss and resolve the issue directly with you”. [12] In the subsequent letter from the Respondent dated 16.11.2022 to the Appellant, there was only a proposal from the Respondent to ‘withdraw all legal actions’ if the Appellant was to settle the outstanding amount of RM828,732.44 (Outstanding Amount) in 2 instalments. [13] It was only on 22.11.2022 that the Appellant responded to the letter of 16.11.2022 wherein they admitted and acknowledged the Outstanding Amount but stated that the reason for the Outstanding Amount was “...due to we still yet to settle our account with the S/N w4/d2PZ7tkKnBggTBH0qug developer” and that the Appellant had requested for a discussion with the Respondent as well as for a discount to be given to them. [14] It was submitted by the Appellant that the Appellant was under the belief that the Respondent was agreeable to halt the legal proceedings. This is with respect, entirely misconceived as there is nothing in the said documents before me which shows that such an intention by the Respondent was made. [15] A clear reading of the said documents only evidences that:

15.1 the Respondent was negotiating with the Appellant at the request of the latter.

15.2 that no settlement had been reached.

15.3 that the legal action would only have been withdrawn had the Appellant agreed to making the payment for the Outstanding Amount by way of the 2 instalments as indicated in the letter of 16.11.2022.

[16] Thus, I hold after a reading of the aforesaid documents mentioned that there is no indication by the Respondent that legal proceedings will be halted in the midst of negotiations but there is an admission as to the debt due to the Respondent. [17] In the circumstances, this Court had hereby dismissed the Appeal but made no order as to costs. S/N w4/d2PZ7tkKnBggTBH0qug Dated: 12th day of January 2024 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE CONSTRUCTION COURT 1 COUNSEL FOR THE APPELLANT: Aarthi Jayaraja & Jayasri Ravichanthiran (Messrs Aarthi & Associates] COUNSEL FOR THE RESPONDENT: Jovien Khew (Messrs C H Tay & Partners] S/N w4/d2PZ7tkKnBggTBH0qug