Axventure Sdn Bhd v Apex Communications Sdn. Bhd. (WA-22C-56-08/2023)

The Plaintiff here had applied under Enclosure 18 (Enclosure 18) for an order under Order 14 Rule 1 of the Rules of Court 2012 for a summary judgment against the Defendant amounting to a sum of RM3,773,399.69 together with interest at the rate of 5% per annum on the said sum on such date the Court deems appropriate until full realization together with costs. 2 [2] The ground relied on by the Plaintiff for Enclosure 18 is in essence that the Defendant has no defence.

The Plaintiff and the Defendant first entered into a Collaboration Agreement dated 08.03.2021 for the purposes of the development and/or construction of the following project. “CADANGAN PEMBANGUNAN RESIDENSI PRIHATIN KELUARGA MALAYSIA YANG MENGANDUNGI: - 1) 1 BLOK PANGSAPURI 724 UNIT-29 TINGKAT (TERMASUK 4 TINGKAT TEMPAT LETAK KERETA BERTINGKAT AN 1 TINGKAT ATAS POKUM, 2) 2 UNIT PENCAWANG ELEKTRIK (ARAS TANAH) 3) 2 UNIT RUMAH SAMPAH 4) 1 UNIT PONDOK PENGAWAL 5) KEMUDAHAN SOKONGAN – TASKA & TADIKA, PEJABAT PENGURUSAN DAN BILIK BACAAN, DEWAN SERBAGUNA, 3 UNIT KEDAI, SURAU & BILIK JENAZAH DAN RUANG SERVIS UTILITI DI ATAS LOT 156, PRESINT 16, WILAYAH PERSEKUTUAN PUTRAJAYA” (“said Project”)

Subsequently, both the Plaintiff and Defendant entered into one DEED OF RESCISSION AND MUTUAL RELEASE [Settlement Agreement’ dated 04.01.2023 (“Settlement Agreement”), whereby it was agreed, among others, that: - 3 4.1 Upon the execution of the Settlement Agreement, the said Collaboration Agreement that was previously entered shall thereby be deemed invalid and/or not void under Clause 91) of the Settlement Agreement;

4.2 That the Defendant has to make the following payment to the

Plaintiff: -

2.1 The sum of RM1,000,000.00 upon the execution of the

4.2.2 The sum of RM1,048,311.19 no later than ninety (90) days after the First Payment (“Second Payment”);

4.2.3 Subject to the outcome of Join Inspection and/or valuation conducted at site by both Parties, the Defendant has to pay the Plaintiff the sum as agreed in APPENDIX (3) of the Settlement Agreement by way of five 95) equal instalments each month commencing from on or before the 30th day of the Second Payment, with an interval of thirty (30) days from each payment instalment moving forward (“Third Payment”). i. That the total sum contained under APPENDIX (3) of the Settlement Agreement is RM2,725,088.50 to which that sum is to e paid to the creditors of the said Project including the consultants; ii. That the Defendant is given an option to either: -  directly pay the Third Payment to the plaintiff in which the Plaintiff shall then be fully responsible of settling and/or managing the creditors’ outstanding debts for the said Project: or  should the Defendant choose not to make the Third Payment, the Defendant then as to give an undertaking to the plaintiff to settle and/or manage all of the creditors’ outstanding debts for the said Project via an undertaking letter;

4.3 There shall not be any full and final settlement of all sums due and payable by the Defendant to the plaintiff until: -

the receipt by the Plaintiff, of all the sums as per paragraphs 4.2.1 until 4.2.3 above; or

(ii) the receipt of the Plaintiff, of all sums as per paragraphs 3.2.1 until 4.2.2 above, together with the execution of a letter of undertaking by the Defendant to manage and/or settle the creditors’ outstanding debts including the consultants for the said Project;

4.4 That the sums listed in the Settlement Agreement are full, final and binding between parties upon execution of the Settlement

4.5 That the Settlement Agreement constitutes the entire agreement between the parties and supersedes all previous agreements, arrangements undertakings and understandings between the parties. [5] It is an undisputed fact that the Defendant, upon the execution of the Settlement Agreement had then made the First payment of RM1,000,000.00 to the plaintiff on 04.01.2023 – thereby complying with Clause 2(a)(i) of the Settlement Agreement. [6] Despite the First Payment made, the Defendant to date, has allegedly failed to pay the Second Payment as well as the Third payment to the Plaintiff as per the Settlement Agreement which totals to RM3,773,399.69 (“outstanding sum”) despite numerous reminders given. [7] No undertaking letter was even given to the plaintiff by the Defendant to indicate that the Defendant shall manage and/or settle the outstanding debts of the authorized creditors of the said Project. Analysis and Findings [8] The Plaintiff had firstly submitted that the Defendant had failed to comply with the 2nd Payment under the Settlement Agreement. I had read clause 2 (a) (ii) of the Settlement Agreement which provides as follows: - “Apex shall undertake to pay ASB, all costs and expenses incurred for the said Project to date as follows: -

The following sum being the cost incurred by ASB as per Appendix (2) and (3) to be paid by Apex to ASB in the such manner: -

…

(ii) The amount of RM1,048,3111.19… (hereinafter. Referred to as the “Second Payment’) no later than 90 days after the First Payment” [9] I hold that the said clause 2(a) (ii) of the Settlement Agreement clearly stipulates that the 2nd payment is to be made within 90 days of the said the 1st payment which was paid by the Defendant on 4.1.2023. Accordingly, the due date for the 2nd payment by the Defendant to the Plaintiff is to be no later than 4.4.2023. [10] It is trite that such a term in the Settlement Agreement, which has in this case been reduced in writing, binds the parties to the same. I have also found that the Defendant has not pleaded that the said agreement was done in the presence of any fraud, duress or undue influence and thus clause 2 (a) (ii) of the Settlement Agreement is in my view valid and enforceable. [11] The Defendant had attempted to argue that the sum under the 2nd Payment is amongst others unreasonable. I find this contention as being untenable for the reasons that appear in my written ground herein. [12] From the documents before me, there are several reminders sent by the Plaintiff with regards the said 2nd Payment as per exhibit WCL-3 in Enclosure 19 on 18.4.2023 and 8.5.2023 and I find that the Defendant has not denied the said 2nd payment in their response vide their letter dated 8.5.2023 to the Plaintiff. In fact, a reading of the Defendant’s reply letter would show that they admit the said payment as being due. See as authority for this the cases of Victor Buyck Steel Construction Sdn Bhd v PI Corrosion Engineering Sdn Bhd [1998] 7 MLJ 513 and KKRMC Trading Sdn Bhd v Richallenge Corporation Sdn Bhd & Anor [2021] MLJU 2246. [13] It was also contended by the Defendant that the Plaintiff had failed to assist the Defendant to manage and prepare the drawing plan to obtain approval for KMPB for the Project. I hold that this is merely an afterthought although the Settlement Agreement does contain in clause 3 (i) that the Plaintiff is to assist the Defendant to manage and prepare the drawing plan to obtain the said approval but I find that the said Settlement Agreement does not state the 2nd Payment is to be withheld pending such assistance by the Plaintiff to manage and prepare the drawing plan. This Court is also unable to accept the Defendants contention as argued as there is no evidence before this Court that the Defendant had ever requested for the Plaintiff’s assistance on the said management and preparing for the drawing plan. [14] The Plaintiff had also submitted that the Defendant has failed to make the 3rd Payment under the Settlement Agreement which provides the amount as per Appendix (3) be paid by Apex being RM70,030.00 for Pre Development cost and RM 1,540,801.80 for the Construction Costs, which the Defendant has to pay to the Plaintiff in, I quote as per Appendix (3), “..5 equal instalment(s) each month commencing from on or before the 30th day of the second payment with an interval of thirty days from each payment instalment”. [15] I find that clause 5 and 6 of the Settlement Agreement had given an option to the Defendant via vis the 3rd Payment to provide an undertaking letter to inter alia manage all creditors involved in the said Project or to comply with the payment arrangement referred to in Appendix (3). As I have not been shown any evidence by the Defendant of the said undertaking letter to inter alia manage all creditors involved in the said Project, I hold that it is to be implied that the Defendant has opted to comply with the payment arrangement referred to in Appendix (3) which is now due and owing as the 2nd Payment date was due no later than 4.4.2023. [16] I now turn to the Defendant’s purported defence that the Plaintiff has failed to provide any bill or invoices to prove the sums stipulated under the 2nd Payment or the 3rd Payment. I cannot accept the Defendants said defence as the Settlement Agreement is clearly the agreed and final arrangement and agreement between the parties which are not only final but binding on the parties. Hence, I find no necessity for any bill or invoices to be provided by the Plaintiff to the Defendant for the sums stipulated. [17] Be that as it may it appears from the facts before me that the Plaintiff did issue the said bills and invoices to the defendant vide their letter of 30.3.2023 as per exhibit WCL 7 in Enclosure 21. [18] As to the Defendants point that the Plaintiff had amended the 3rd Payment vide their letter of 10.7.2023, I have viewed the Plaintiff’s letters of 1.2.2023 and 7.2.2023 as well as the Defendant’s reply of 7.2.2023 all in exhibit WCL 8 of Enclosure 21, where the Plaintiff had informed the Defendant and thus the Defendant was aware that one of the sub-contractors G-Pile System Sdn Bhd had demobilized from the project site and thus the sum for the 3rd Payment was to be reduced, for which the Defendant had expressly stated that they had no objections thereto. [19] I also hold that the Defendants submission with regards the decision to terminate the Collaboration Agreement was due to the Plaintiff’s fault in complying with their obligations is untenable and misconceived as the Settlement Agreement has clearly provided in clause 1 thereto that the said Collaboration Agreement was to be rescinded and deemed void. It is also provided in clause 11 (d) that the Settlement Agreement constituted the entire agreement. I agree with the High Court’s decision in Puteh Aman Power Sdn Bhd v Bittersweet Estates (Sabah) Sdn Bhd [2012] MLJU 835 and do hold that the entire agreement clause does not permit any extrinsic evidence to be imported or to contradict the said clause and/or Settlement Agreement. [20] It is therefore clear that the Plaintiff has the right to commence this action against the Defendant and for the Defendant to submit otherwise is in this Court’s view untenable as clause 10 (a) of the Settlement Agreement expressly provides that the Plaintiff is entitled to commence a legal action against the Defendant where there is a default by the Defendant on the terms agreed upon in the said agreement. Decision [21] In the circumstances, I do hold that there is no triable issue being raised by the Defendant in the matter before me and that there is no valid defence by the Defendant to the Plaintiff’s claim in Enclosure 18. [22] I therefore grant Order in Terms for prayers i, ii and iii costs of RM7,000.00 under Enclosure 18. Dated: 4th day of March 2024 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE CONSTRUCTION COURT 1 COUNSEL FOR THE PLAINTIFF: Chen Hui Ken and Jec Siose (Messrs Jec Siose & Co.] COUNSEL FOR THE DEFENDANT: Nurul Afiqah binti Mohd Noh (Messrs Fadzilah Hassan & Co.]