Causeway Iron Works Sdn. Bhd. v 1. Sanki-Kigyo Construction Sdn. Bhd. (BA-22C-9-01/2019)

SANKI-KIGYO CONSTRUCTION SDN. BHD. (Co. No.: 382777-W)

TECGATES ENGINEERING (M) SDN. BHD. (Co. No.: 254230-H) … DEFENDANTS JUDGMENT (Court enclosure no. 12)

The second defendant company (2nd Defendant) is the main contractor for a construction project known as “Lhois EPC Downstream, Truck Loading and Big Bagging System” (Project).

By way of a “Purchase Order” dated 11.5.2015 (2nd Defendant’s PO), the 2nd Defendant had appointed the plaintiff company (Plaintiff) as a sub-contractor for the supply and erection of structural steel works and installation of certain equipment regarding the Project.

In a Purchase Order dated 15.12.2015 (Plaintiff’s PO), the Plaintiff had appointed the first defendant company (1st Defendant) to supply and erect structural steel works for the Project. 2

Regarding the Plaintiff’s PO, the 1st Defendant claimed for payment from the Plaintiff (1st Defendant’s Claim). The 1st Defendant’s Claim was referred to adjudication under the Construction Industry Payment and Adjudication Act 2012 (Adjudication Proceedings).

In the Adjudication Proceedings, the 1st Defendant had adduced, among others, the following documents in support of the 1st Defendant’s Claim:

17 undated “Dimension Check Reports” (DCR’s) under the 1st Defendant’s name which purportedly had, among others, the following two signatures on each of the 17 DCR’s -

17 signatures below “CHECKED BY” [17 DCR Signatures (Checked

17 signatures below “WITNESSED/REVIEWED BY” [17 DCR Signatures (Witnessed/Reviewed By)]; and

two “Weld Dimensional Check Reports” (WDCR’s) under the 1st Defendant’s name which had, among others, a signature below “WITNESSED/REVIEWED BY” on each of the 2 WDCR’s [2 WDCR Signatures (Witnessed/Reviewed By)]. B. This suit

The Plaintiff filed this action (This Suit) against the 1st and 2nd Defendants (collectively referred to in this judgment as the “Defendants”).

According to the Plaintiff’s Statement of Claim (SOC), the Plaintiff had pleaded, among others, two causes of action against the 2nd Defendant [2 Causes of Action (2nd Defendant)], namely - 3

the 2nd Defendant had committed a tort of negligence against the Plaintiff [Plaintiff’s Negligence Claim (2nd Defendant)]; and

the Defendants had committed a tort of conspiracy to injure the Plaintiff by depriving the Plaintiff of the Plaintiff’s claim against the 1st Defendant (Plaintiff’s Conspiracy Claim). C. 2nd Defendant’s application to strike out This Suit (Enc. 12)

In Enc. 12, the 2nd Defendant applied to court to strike out This Suit against the 2nd Defendant on the following grounds:

This Suit does not disclose any reasonable cause of action as understood in O 18 r 19(1)(a) [Paragraph (a)] of the Rules of Court 2012 (RC);

This Suit is scandalous, frivolous or vexatious under O 18 r 19(1)(b) RC [Paragraph (b)];

a fair trial of This Suit is prejudiced, embarrassed or delayed within the meaning of O 18 r 19(1)(c) RC [Paragraph (c)]; and

This Suit constitutes an abuse of court process pursuant to O 18 r 19(1)(d) RC [Paragraph (d)]. D. Can 2nd Defendant rely on Paragraph (a)?

It is decided in Novaviro Technology Sdn Bhd v QL Plantation Sdn Bhd & Anor [2018] 11 MLJ 392, at [25], as follows: “[25] To decide Enc. 5 under O 18 r 19(1)(a) RC [Paragraph

(a)] -

according to O 18 r 19(2) RC, the Court cannot consider affidavit evidence - please see the Court of 4 Appeal’s judgment delivered by Ramly Ali JCA (as he then was) in See Thong v Saw Beng Chong [2013] 3 MLJ 235, at paragraphs 9 and 10; and

the court will assume that the contents of the SOC are true - please see the Court of Appeal’s judgment given by Mahadev Shankar JCA in Tuan Haji Ishak bin Ismail v Leong Hup Holdings Bhd & other appeals [1996] 1 MLJ 661, at 679.” (emphasis added).

For the purpose of deciding Enc. 12 under Paragraph (a) -

by reason of O 18 r 19(2) RC, this court cannot consider affidavit evidence; and

I have to assume the contents of the SOC to be true - Tuan Haji Ishak bin Ismail v Leong Hup Holdings Bhd & other appeals [1996] 1 MLJ 661, at 679.

The SOC has clearly pleaded the 2 Causes of Action (2nd Defendant). Hence, I have no hesitation to dismiss Enc. 12 premised on Paragraph (a). E. Whether court can invoke Paragraph (c) to support Enc.

No affidavit evidence has been adduced by the 2nd Defendant to show that a fair trial of This Suit may be prejudiced, embarrassed or delayed. As such, this court dismisses Enc. 12 based on Paragraph (c). F. 2 Causes of Action (2nd Defendant) F(1). Whether Plaintiff’s Negligence Claim (2nd Defendant) is triable

Firstly, despite the existence of a contractual relationship between the Plaintiff and the 2nd Defendant (by way of the 2nd Defendant’s PO), the Plaintiff can nevertheless 5 rely on the Plaintiff’s Negligence Claim. I cite the following Federal Court’s judgment delivered by Zainun Ali FCJ in Lok Kok Beng & Anor v Loh Chiak Eong & Anor [2015] 7 CLJ 1008, at [29]: “[29] Tortious liability arises from a wrongful act where the common law imposes a duty to take reasonable care. It is settled law that despite the existence of a contractual relationship between parties in an action, liability in negligence extends beyond the contractual obligations (Lembaga Kemajuan Tanah Persekutuan v. Mariam & Ors [1984] 1 LNS 168; [1984] 1 MLJ 283).” (emphasis added).

It is not disputed that the Plaintiff has to prove the following three elements of a tort of negligence against the 2nd Defendant:

whether the 2nd Defendant (as the main contractor of the Project) owed a duty to the Plaintiff (as the 2nd Defendant’s sub-contractor) to take all reasonable care so that the Plaintiff would not suffer any loss (Duty of Care);

if the 2nd Defendant owed a Duty of Care to the Plaintiff, had the 2nd Defendant breached the Duty of Care (2nd Defendant’s Breach)?; and

in the event of the 2nd Defendant’s Breach, whether the Plaintiff had suffered loss (Plaintiff’s Loss) which -

was not too remote in law and could be recovered from the 2nd Defendant; and

was “caused” by 2nd Defendant’s Breach.

At this juncture, based on affidavit evidence filed regarding Enc. 12, I am satisfied that there are three triable issues in This Suit regarding the existence of the Duty of 6 Care, 2nd Defendant’s Breach and Plaintiff’s Loss. It is trite law that if there is at least one triable issue raised in an action, the action cannot be struck out - please see the judgment of Gopal Sri Ram JCA (as he then was) in the Federal Court case of Lai Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 3 CLJ 305, at 331. I also rely on the following judgment of the Federal Court delivered by Ramly Ali FCJ in Seruan Gemilang Makmur Sdn Bhd v Kerajaan Negeri Pahang Darul Makmur & Anor [2016] 3 CLJ 1, at [28]: “If one has to go into lengthy and mature consideration in detail of the issues of law and/or fact, then the matter is not appropriate to be struck out summarily. It must be determined at trial.” (emphasis added).

In this case, the Plaintiff’s Negligence Claim is not without basis due to the following evidence and reasons:

paragraph 3 of the 2nd Defendant’s letter dated 16.7.2018 to the 1st Defendant stated that the 2nd Defendant had received, among others, the “original” DCR’s and WDCR’s (Original Documents) from the Plaintiff. This was reiterated in the third and fourth paragraphs of the 2nd Defendant’s letter dated 19.7.2018 to the Plaintiff;

paragraph 1 of the 2nd Defendant’s letter dated 20.12.2018 to the Plaintiff stated that the 2nd Defendant was unable to find any record regarding -

the identity of the person in the Plaintiff who had sent the Original Documents to the 2nd Defendant;

the whereabouts of the Original Documents; and

to whom the Original Documents were forwarded by the 2nd Defendant; 7

the Plaintiff had appointed a handwriting expert, Mr. Lim Yok Chaw (Mr. Lim), to give an expert opinion regarding the authenticity of the 17 DCR Signatures (Checked By), 17 DCR Signatures (Witnessed/Reviewed By) and 2 WDCR Signatures (Witnessed/Reviewed By) (36 Signatures). Mr. Lim has affirmed an affidavit which exhibited the following documents -

Mr. Lim’s “Curriculum Vitae” which shows Mr. Lim’s expertise as a handwriting expert; and

a report by Mr. Lim which states Mr. Lim’s expert opinion that the 36 Signatures are “not genuine signatures but are fabricated signatures” (Mr.

the 2nd Defendant did not adduce any expert opinion by way of affidavit to rebut Mr. Lim’s Expert Opinion (Rebuttal Expert Opinion). Even if the 2nd Defendant has filed an affidavit which contains a Rebuttal Expert Opinion, I will still have dismissed Enc. 12 because there is a fourth triable issue concerning the genuineness of the 36 Signatures; and

the Plaintiff had lodged the following two police reports regarding, among others, the alleged forgeries in respect of the 36 Signatures -

Jalan Dang Wangi Police Report no. THSL/2167/18 dated 26.7.2018; and

Jalan Dang Wangi Police Report no. THSL/3122/18 dated 3.2.2019. F(2). Should Plaintiff’s Conspiracy Claim be tried?

I have decided as follows in Muniandy a/l Nadasan & Ors v Dato’ Prem Krishna Sahgal & Ors [2016] 11 MLJ 38, at [18], [21]: “[18] My understanding of case law is that there are 2 kinds of tort of conspiracy to injure, namely - 8

tort of conspiracy to injure by unlawful means; and

tort of conspiracy to injure by lawful means. … [21] Based on my understanding of the above cases -

the 3 elements of the tort of conspiracy to injure by unlawful means (3 Elements), are as follows:

there must be proof of -

an agreement; and/or

(ii) a combination of efforts of the conspirators to injure the plaintiff. Such an agreement or combination may be - (ai) formal or informal; or (aii) in writing or by word of mouth;

there are acts committed to execute the agreement or combination to injure the plaintiff; and

the plaintiff has suffered damage due to acts done in execution of the agreement or combination to injure the plaintiff. 9

the tort of conspiracy to injure by lawful means has the 3 Elements and a fourth ingredient, namely there is a pre-dominant purpose or intention of the conspirators to injure the plaintiff.” (emphasis added).

The Plaintiff’s Conspiracy Claim raises the following triable issues regarding -

the three elements of a tort of conspiracy to injure by unlawful means; or

the four ingredients of a tort of conspiracy to injure by lawful means. G. Can This Suit be struck out when there is a triable issue?

According to Novaviro Technology, at [28] - “[28] The use of the permissive term “may” in O 18 r 19(1) RC means that the court has a discretionary power to strike out a suit under any one or more of the paragraphs in O 18 r 19(1)(a) to (d) RC.” (emphasis added).

Once a plaintiff raises at least one triable issue in the SOC and/or affidavit, the court should not exercise its discretion to strike out the action. This is because the fact that a plaintiff has raised at least one triable issue in a suit means that -

it is not a plain and obvious case for the court to strike out the action - please see Mohd. Dzaiddin SCJ’s (as he then was) judgment in the Supreme Court case of Bandar Builder Sdn Bhd & Ors v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36, at 43;

the suit is neither frivolous nor vexatious within the meaning of Paragraph (b); and 10

the action does not constitute an abuse of court process as understood in Paragraph (d) and O 92 r 4 RC.

In This Suit, the Plaintiff has raised various triable issues - please refer to the above paragraphs 15, 16 and 18.

It is to be borne in mind that even if a pleaded claim is weak and is not likely to succeed, this is not a ground in itself to strike out the claim - Bandar Builder Sdn Bhd, at p. 44. H. Did SOC scandalise 2nd Defendant?

In the High Court case of Technointan Holding Sdn Bhd v Tetuan Tan Kim Siong & Teh Hong Jet [2006] 7 CLJ 541, at [28], Low Hop Bing J (as he then was) has decided that if the contents of a SOC in an action are “wholly unnecessary or irrelevant”, those contents may be scandalous as understood in Paragraph (b).

Firstly, I am of the view that This Suit does not scandalise the 2nd Defendant within the meaning of Paragraph (b). Even if it is assumed that the SOC has scandalised the 2nd Defendant, I am not inclined to exercise my discretion to strike out This Suit pursuant to Paragraph (b) because of the various triable issues raised by the Plaintiff in this case (please see the above paragraphs 15, 16 and 18). I reiterate what I have decided in Novaviro Technology, at [30]: “[30] Even if it is assumed that the contents of the Plaintiff’s SOC are scandalous, this court will not exercise its discretion to strike out this suit under Paragraph (b). This is because the SOC has pleaded 2 Causes of Action - please see Mokhtar Sidin JCA’s judgment in the Court of Appeal case of Abdul Rahim bin Abdul Hamid & Ors v Perdana Merchant Bankers Bhd & Ors [2000] 2 MLJ 417, at 428.” (emphasis added). 11

Premised on the above reasons, Enc. 12 is dismissed with costs. WONG KIAN KHEONG Judge High Court of Malaya Shah Alam, Selangor Darul Ehsan DATE: 12 OCTOBER 2020 Counsel for Plaintiff: Mr. Lai Yee Fun, Ms. Fyionna Lai Phik-Wy & Ms. Amerly Wong Yin Mei (Messrs Fyiona, Lai & Dennis Thong) Counsel for 2nd Defendant: Ms. Felicia Ho Shok Heng & Ms. Edlyn Ashwini Jacobs (Messrs Ho-Noecker & Pragasam)