Ample Objectives Sdn Bhd v Goh Teng Whoo & 1 lagi (W-02(IM)(NCVC)-840-04/2018)

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1 DALAM MAHKAMAH RAYUAN MALAYSIA [BIDANG KUASA RAYUAN] RAYUAN SIVIL NO: W-02(IM)(NCVC)-840-04/2018)

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(ii) whether the appellants had shown they had merits in their defence. 3 SUBMISSIONS [3] Concerning the 1st issue, learned counsel for the appellants’ submission was twofold; on the liquidated demand and on the service of the Writ. On the liquidated demand, learned counsel submitted that the High Court had erred when a final judgment was entered against the appellants. He argued that the respondent’s claim was based on tort of misrepresentation, hence notwithstanding that the Statement of Claim pleaded a definite figure as the respondents’ loss, at most, the respondent was only entitled to enter interlocutory judgment for damages to be assessed upon the alleged non-appearance of the appellants. He cited the case of Mahindar Singh v Amanah Saham Pahang Berhad [1983] 1 MLRH 428, per VC George J (as he then was), at page 430 in particular the following paragraphs: “Was the RM28,814.04 claimed as special damages a liquidated demand? A liquidated demand is in the nature of a debt, i.e. a specific sum of money due and payable under or by virtue of a contract. Its amount must either be already ascertained or capable of being ascertained as a mere matter or arithmetic. If the ascertainment of a sum of money, even though it be specified or named as a definite figure, requires investigation beyond mere 4 calculation, then the sum is not a ‘debt or liquidated demand’, but constitutes ‘damages’. The words “debt or liquidated demand” do not extend to unliquidated damages, whether in tort or in contract, even though the amount of such damages be named at a definite figure (Knight v. Abbot 10 QBD 11). The Supreme Court Practice 1979 Vol. para 6/2/4A. To my mind many of the items that made up the RM28,814.04 call for investigations beyond mere calculation and accordingly are not debts or liquidated demands but damages...” Also quoted was the case of HSBC Bank Malaysia Berhad v. Loyalex Industry Sdn Bhd & Ors (2002) 2 MLRH 533. [4] On service, learned counsel for the appellants submitted that the service of the Writ was irregular, hence there was no service of the Writ. He relied on the recent decision of this Court in Chung Wai Meng v Perbadanan Nasional Berhad [2018] 1 MLRA 331 where it was inter alia held that a court cannot dispense with the requirement to prove receipt of the Writ by the person named in the AR Registered Post and that if such mode of service failed, it was incumbent on the plaintiff to apply for service by substituted service. 5 [5] In this instant appeal there was no production of the AR card and there was evidence that after the JID was entered, it transpired that the AR card in respect of the service on the 1st appellant was returned, but with the acknowledgement signed by his brother who was not duly authorised to accept service on the 1st appellant’s behalf. [6] Further, the affidavit of service did not mention the date of service; instead it only stated the date of posting which, learned counsel for the appellants submitted, made the affidavit of service irregular. [7] He also submitted that the provision of section 12 of the Interpretation Acts 1948/1967 (Act 388) on service cannot override Order 10 rule 1 of the ROC which is a specific provision providing for the Writ to be served and the ROC imputes the act of actually handing the Writ to the defendant. [8] On the 2nd issue, it was the contention of learned counsel for the appellants that the Learned Judicial Commissioner (JC) of the High Court erred when she found that the appellants did not furnish any proposed defence disclosing the merits of the defence, when in actual fact they did 6 exhibit the proposed defence as shown at pages 133 to 140 of the Records of Appeal. [9] On the part of the respondent, it’s learned counsel’s arguments on the 1st issue were that, it was not true that the relief sought by them was not a liquidated demand. The respondent had specifically pleaded for the refund of the amount invested and paid by it in the sum of RM2,620,080.00. [10] Still on the first issue, he further argued that the service was regular as the writ was served by A.R. registered post to the appellants’ last known address as shown in the search done by them (the respondent) with the National Registration Department at pages 107 and 108 of the Records of Appeal. The respondent relied on this Court’s decision in Yap Ke Huat & Ors v Pembangunan Warisan Murni Sejahtera Sdn Bhd & Anor [2008] 4CLJ 175 which agreed with the High Court in Pengkalen Concrete Sdn Bhd v Chow Mooi & Anor [2003] 6 CLJ 326 and held inter alia as follows: 7 “(2) There was no provision of law that the plaintiffs must also prove that the person so named in the post had received the writ of summons and statement of claim. Once the writ and statement of claim are sent by AR registered post, it is prima facie proof of service unless the defendant is able to rebut this.” [11] On the evidence that the AR card in respect of the 1st appellant was signed by his brother, learned counsel for the respondent cited the following decision of Pengkalen Concrete, supra, at Held [1]- ‘[1] There is no indication under O.10 r.1(1) of the Rules of the High Court 1980 that the plaintiff must evidentially prove that the named person in the writ must be the very person who had received it ie if it was sent by prepaid AR registered post. In this case, the plaintiff had fulfilled all the prerequisites, therefore the recipient being "Yanti" did not vitiate that service. It was construed that the defendants had constructive notice of the issuance of the summonses. With no rebuttal evidence adduced, and every precondition adhered to, good service of the writ had taken place. Also, there was no prima facie evidence, raising serious issues as bona fide reasonable defence that ought to be tried. The defendants were not serious in their attempts to challenge the plaintiff. (pp 329f-i, 331 a-b & g-h)”. 8 Hence he argued that the service was in order and the JID entered was regular. [12] On the 2nd issue, it was the respondent’s contention that the appellants failed to show any merits in their proposed defence. It was a bare denial as the appellants had denied any involvement and yet there were evidence that the 2nd defendant had transferred 400,000 of his shares to the 2nd appellant and the 3rd defendant had transferred 400,000 of his shares to the 1st appellant. There was also an article in a “Globat CEO” magazine on the activities of the 1st respondent which showed the appellants’ photographs with caption of “Executive Director” of the 1st defendant. He therefore submitted that the appellants were in fact the de facto directors of the 1st defendant and had no defence. Our Decision [13] We had perused the Records of Appeal and carefully considered the submissions of the parties. Having done so, we unanimously found there was no sufficient reasons for us to set aside the learned JC’s decision. We therefore proceeded to dismiss the appeal with costs. Our reasons are as explained below. 9 [14] The issue of the liquidated demand, even though it was raised by the appellants in their submissions at the High Court, the learned JC had not touched on it. To us, this actually was a non-issue. This case, in our opinion, was a simple claim for the refund of the amount paid and invested by the respondent after the appellants had breached their promises. According to paragraph 11 of its Statement of Claim, the respondent pleaded that it had invested the sum of RM2,620, 080.00 with the defendants and the relief sought by them in paragraph 16(a) of the Statement of Claim was the same amount of RM2,620,080.00, nothing more and nothing less. [15] Learned counsel for the appellants had cited the case of Mahindar Singh, supra, to support their argument. However Mahindar Singh, supra, can be distinguished from the instant appeal as it was a motor accident claim whereby the claim made for RM28,814.04 was said to be for inter alia the costs of hiring taxi for three persons, wages paid to a driver for 127 days ect. Unlike our appeal, the amount in Mahindar Singh, supra, involved various costs. So the learned Judge in Mahindar Singh, supra, raised the following questions: 10 “..he should have held that the claim for costs of repairs calls for an investigation as to whether the repairs were necessitated by the accident. In the absence of explanations the costs of hiring taxi for 3 persons called for investigation as did the claim for “travelling to Kuala Lumpur on 2 occasions”. The issue would have been why 3 persons and why travel to Kuala Lumpur on 2 occasions. As to wages paid to a driver for 127 days, there is no averment of there being a paid driver and why 127 days. There was no averment that the plaintiff’s motor car could not be used and the significance of the 127 days and 125 days, the significance of the payment of hire purchase, the difference between the price of diesel oil and petrol are on the face of the statement of claim, meaningless and called for investigation on the part of the Senior Assistant Registrar. On the plaintiff being without a car for 57 days at RM200 per day similarly call for an investigation as to why it was 57 days, why the plaintiff was without a car and why the amount of RM200 was asked for.” The decision in HSBC, supra, cited by the appellant in our view was actually in favour of the respondent. That case involved a hire-purchase agreement and Jeffrey Tan J (as His Lordship then was) held the amount due could be quantified as upon termination of the agreement, the remaining instalments became due hence the argument and appeal by the defendant in that case was dismissed. 11 [16] So with this instant appeal. Never did the respondent plead for any special damages or unquantifiable amount. The respondent indeed pleaded for a specific amount as alluded to above. [17] On service, learned counsel for the appellants relied heavily on this Court’s decision in Chung Wai Meng, supra and other High Court decisions, inter alia, Tajudeen MK Syed Muhamed v ZMS Construction [2018] 5 MLRH 72 which followed Chung Wai Meng, supra. The learned JC on the other hand, in her grounds of judgement had relied on this Court’s decision in Yap Ke Huat, supra and the Supreme Court case of Amanah Merchant Bank Bhd (formerly known as Amanah-Chase Merchant Bank Bhd v Lim Tow Choon (Through Official Assignee) [1993] 1 MLRA 102. [18] Yeoh Wee Siam J, (as Her Ladyship then was) who delivered the decision of this Court in Chung Wai Meng, supra, had referred to this Court’s decisions in Sivamurthy Muniandy & Ors v Lembaga Kumpulan Wang Simpanan Pekerja [2013] 5 MLRA 687 and Yap Ke Huat, supra, which both held that as long as there is evidence of posting, 12 there is no necessity for the respondents to prove receipt of the writ by the person named in the AR Registered post. However, in paragraph 40 of the judgment, Her Ladyship stated as follows: “[40]. It is observed that nowhere in our O 10 r 1(1) of the ROC is there a specific requirement similar to r 16.03(4)(a) of the Ontario Rules to require an acknowledgement of receipt card to prove service on the person to be served. With the greatest respect, we are of the considered opinion that since O 10 r 1(1) of the ROC is silent on such a requirement, then in line with the thinking in a whole host of High Court’s decisions here and similar decisions in other Commonwealth jurisdictions, in order to prove due service of the Writ and SOC on the defendant, it is not for the court as in the case of Sivamurthy (supra), and Yap Ke Huat (supra) to dispense with the requirement to prove receipt of the Writ and SOC by the person named in the AR registered post, or proof that the acknowledgement of the AR registered posting has been returned and duly acknowledged by the intended recipient.” [19] With the greatest respect, it was as if this Court is bound by the High Court decisions which is obviously against the principle of stare decisis. One of the two Commonwealth decisions (the other was the Ontario Superior Court of Justice) cited in Chung Wai Meng, supra, was a High Court Singapore case of Ho Miaw Ling v Singapore Island 13 Country Club [1997] 1 SLR(R) 276. In that case the plaintiff contended that the General Committee of the defendant had failed to serve the requisite notices as provided under rule 47(e) of the defendant’s Rules. The defendant argued, inter alia, that the plaintiff was deemed to have received the notices under rule 49(b). What we were interested in was paragraph 32 of the judgement which stated as follows: “[32] It is also of interest to compare rule 49(b) with the provision on service in the Malaysian case Amanah Merchant Bank Bhd v Lim Tow Choon [1994] 1 MLJ 143 which reads “Any notice may be served…either personally or by sending the same through the post in an envelope addressed to the last known place of address of the person to be served and a notice so sent shall be deemed to be served on the day following that on which it is posted’. Rule 49(b) is nowhere near to that; it only covers the last bit.” [20] What was interesting to note Ho Miaw Ling, supra, although without further elaborations did make reference to our Supreme Court case of Amanah Merchant, supra. But Chung Wai Meng, supra, did not; even though Ho Miaw Ling, supra, was referred to by it; and even though Amanah Merchant, supra, was decided by a Court higher in terms of hierarchy than the High Courts. 14 In Amanah Merchant, supra, the Supreme Court held inter alia: “[2]…….It is not necessary that the appellant must show that the AR card has been duly acknowledged to constitute effective service of the notice of demand. It is sufficient for the appellant to show that the notice was correctly addressed, pre-paid and delivered to the post office and acknowledged for service by the postal authority.” [21] We say the provision of Order 10 rule 1of ROC is very clear. It merely says that “a writ shall be served personally on each defendant or sent to each defendant by prepaid A.R. registered post addressed to his last known address….” Learned counsel for the appellants argued that the ROC is a specific provision and section 12 of Act 388 is therefore not applicable. Even if we were to follow this argument, it is clear there is nothing in Order 10 rule 1 of the ROC which requires the AR card to be duly acknowledged. For us to say otherwise is like adding extra provision to the law which is not provided for. It is the duty of the legislator to make laws. In respect of the ROC, the duty falls on the Rules Committee. It is up to the Rules Committee to amend this provision (Order 10) if it is 15 found to be wanting but not for this Court to rewrite the Order or to improve upon it by reason to make it fairer or for whatever reason. [22] We also found support in the Federal Court decision in Maxland Sdn Bhd v Timatch Sdn Bhd [2014] 7 CLJ 149, wherein in paragraph 30 of the judgement, the Federal Court, in distinguishing Maxland case and Yap Ke Huat, supra, had found that “In Yap Ke Huat, the statement of claim had been duly served on the defendant….”. Hence in Maxland, supra, the Federal Court had confirmed that Yap Ke Huat, supra, was correct in finding that the writ had been properly served when it was sent by prepaid A.R. registered post to the defendant’s last known address and there was sufficient evidence of posting without the necessity to prove that the acknowledgement of the AR registered posting had been returned. We believe this Court in Chung Wai Meng, supra, had no opportunity to refer to Maxland, supra. [23] Order 10 rule 1 of ROC requires the writ to be sent by prepaid A.R. registered to the last known address and the respondent had done just that and the proof of posting was shown at page 87 of the Record of Appeal. 16 [24] Based on the above, our answer to the 1st issue was in the affirmative. [25] On the 2nd issue, we found the learned JC was not entirely wrong when she said there were no details given on the proposed defence of the appellants nor was any draft of the Statement of Defence exhibited in the Affidavit in Support of the application (“ tiada butiran berhubung pembelaan yang ingin dibangkitkan dibutirkan di dalam Affidavit Sokongan yang difailkan bersama permohonan di sini, mahu pun sebarang cadangan pembelaan dikemukakan …”). [26] The proposed draft of Statement of Defence was indeed not exhibited in the Affidavit in Support of the application. It was only adduced in the appellants’ second affidavit, after the respondent objected to their applications and raised the issue that the appellants had no defence on merits in paragraph 10 of the respondent’s Affidavit in Reply as shown at page 57 of the Record of Appeal. We found the appellants’ action in filing the draft of Statement of Defence later on to be an afterthought. Not only that, we found it to be a bare denial. We also 17 found some contradictions between the Affidavit in Support and the draft of Statement of Defence. For example, in paragraph 20, at page 51 of the Record of Appeal, the appellants, in their Affidavit in Support admitted that they were marketing agents of the 1st defendant. But in their proposed Statement of Defence, at pages 134-139 of the Record of Appeal, especially at page 136, they denied any role and stated that whatever promotion made, it was by the 1st defendant’s “marketeers” and they were not involved. In paragraph 24 of the Affidavit in Support they also admitted giving briefing on the investment to the respondent. Why then in the draft Statement of Defence did they deny any involvement? [27] The respondent in its Affidavit in Reply had shown the transfer of shares made by the 2nd and 3rd defendants to the appellants. There was no rebuttal to this evidence. Therefore, we agreed with the respondent that it was not true that the appellants had nothing to do with the 1st defendant. The photograph of the appellants in the magazine as alluded to earlier, in our view, shows that they are important figures in the 1st defendant. There was no evidence that they had protested against the publication of their photograph. 18 [28] In the upshot, we found the appellants had failed to even show their defence on merits. Conclusion [29] For the reasons already given, we dismissed the appeal with agreed costs of RM5,000 subject to allocatur. sgd Dated: 17 October 2019 (ZALEHA BINTI YUSOF) Judge Court of Appeal Malaysia Peguamcara Responden Tetuan Mansur & Yazrudin 50A-1, Tingkat 1, Jalan Aman Perdana 1A/KU5 Taman Aman Perdana 41050 Klang Selangor Peguamcara Perayu-Perayu Tetuan Au & Jasvinjit No. 36-2, Medan Setia 2 Plaza Damansara Bukit Damansara 50460 Kuala Lumpur 19