Datafm Sdn Bhd v Shaziman Transport Sdn Bhd (MC-A72NCvC-26-12/2024)

This judgment concerns the following applications filed by the plaintiff: - a) Enclosure 12: the plaintiff’s application for summary judgment against the defendant under Order 14 rule 1 of the Rules of Court 2012 (“ROC 2012”); and b) Enclosure 13: the plaintiff’s application to strike out the defendant’s counterclaim under Order 18 rules 19(1)(b), (c) or (d) of the ROC 2012.

All the above applications were heard and disposed of together. Upon careful consideration of the parties’ submissions and the cause papers filed, this court allowed both Enclosures 12 and 13. The reasons for this decision made are set out in the following context. B) DEFENDANT’S OBJECTION TO THE FILING OF THE PLAINTIFF'S

As regards the Plaintiff’s affidavits in reply at Enclosures 23 and 24 which were only filed on 30 April 2025 and served upon the defendant even later i.e. on 6 May 2025, had both clearly out of time and in breach of this court’s earlier directions. In this regard, the defendant raised an objection, contending that no consideration ought to be given to the said affidavits.

The plaintiff stated that they had received the defendant’s responding affidavit in hard copy on 9 April 2025, while a soft copy was sent via email on 8 April 2025. As such, the deadline for the plaintiff to file the affidavit in reply was 23 April 2025. However, the plaintiff failed to file it by that date. Instead, on 28 April 2025, during a scheduled case management via e-Review, the plaintiff sought an extension until 29 April 2025, without first seeking the defendant’s prior consent.

This court granted the extension, allowing the plaintiff’s affidavits in reply to be filed by 11:59 p.m. on 29 April 2025 and maintained the existing deadline for filing written submissions, subject to the defendant’s right to raise objections in their written submission. Notwithstanding the extension, the plaintiff only filed the affidavit on 30 April 2025 at 3:45 p.m., and the hard copy was served on the defendant six days later i.e. on 6 May 2025, leaving the defendant with less than a week to respond before filing the written submissions.

It is pertinent to note that while the plaintiff’s counsel filed written submissions on 13 May 2025, the defendant’s counsel only filed theirs on 21 May 2025. In paragraph 11 of the plaintiff’s written submissions, it was argued that there was no undue delay in filing the affidavits in reply, but the “delay” amounted to merely 16 hours. Therefore, the plaintiff’s counsel submitted that no prejudice had been caused to the defendant.

This court observes with concern the conduct of both counsels in the handling of the matter. In the letter at Enclosure 36, plaintiff’s counsel alleged that defendant’s counsel acted unilaterally and delayed the filing of submissions, doing so 15 days after receiving the plaintiff’s affidavits. Plaintiff’s counsel further alleged that, in comparison to the 16-hour delay by the plaintiff, the defendant’s late filing was done in bad faith and the defendant’s objection became baseless.

In response, defendant’s counsel in the letter at Enclosure 37 stated that the delay in filing written submissions was a direct consequence of the plaintiff’s late service of the affidavits. However, plaintiff’s counsel, in the letter at Enclosure 38, responded by stating that the defendant’s counsel had made personal and unwarranted attacks, contrary to Rule 18 of the Legal Profession (Practice and Etiquette) Rules 1978.

This court also took note on a puzzling statement by plaintiff’s counsel in the letter at Enclosure 38, which suggested that the defendant is not entitled to respond to the affidavits through submissions, or to raise new matters. Reliance was placed on the case Lum Choon Realty Sdn Bhd v Perwira Habib Bank Malaysia Bhd [2003] 4 MLJ 409. However, a careful reading of the letter at Enclosure 37 revealed that defendant’s counsel did not at any time attempt to introduce new evidence but merely addressed the issue of late filing which was only related to a procedural matter that had been apparent from the record.

In light of the conduct displayed, this court made a remark in the letters and directed both counsels to read the recent case of Tan Lay Ean v Kenneth Yoong & Ors, Court of Appeal W-02(A)-1522- 09/2023; [2025] MLJU 1075, which held that complaints by one counsel to the presiding judge, labelling the opposing counsel as “frivolous and vexatious”, may amount to professional misconduct. Such conduct risks prejudicing the mind of the presiding judge, obstructs the administration of justice and contributes to unhealthy professional practices.

This court wishes to reiterate a fundamental principle, viz, to treat others as you would wish to be treated. Counsels here are reminded of their duty to uphold the dignity and honour of the legal profession. It is imperative that as a lawyer, one shall conduct himself at all times with candour, diligence, and respect. Professional courtesy and cooperation are not mere formalities, they are essential to the efficient administration of justice. Lawyers must treat one another, opposing parties, the judge and members of the public with civility and respect. Most importantly, neglect and tardiness are not only unprofessional but also diminish the integrity of the legal system as a whole.

In this instance, the plaintiff’s counsel had admitted to filing the affidavit 16 hours “late” but alleged that defendant’s counsel made personal attacks against him by highlighting non-compliance of the plaintiff with court directions. Meanwhile, the defendant’s counsel also filed written submissions late, on 21 May 2025, without obtaining prior leave of court or consent from the plaintiff’s counsel.

This court reminds both counsels that such conduct of unilateral delays without court leave or opposing counsel’s consent is not acceptable. Order 3 rule 5(3) of the ROC 2012 permits extensions of time with written consent without requiring an order of court. However, this must be read together with Order 92 rule 4 of the ROC 2012, which preserves this court’s inherent power to prevent injustice or abuse of process, particularly in situations where counsel have consented to an extension of time that is unreasonable in length. Hence, while extensions by consent are permitted, both parties must still inform the court and must not act autonomously without oversight.

The earlier decision date fixed for 30 May 2025 had to be vacated due to the defendant's late filing of submissions on 21 May 2025. The matter has since been rescheduled for decision on 30 June

Both parties were also granted an extension to file reply submissions, if any, by 13 June 2025.

This court hereby issues a stern reminder to both counsels that, lawyers are officers of the court and are expected to act responsibly and professionally. Punctuality, respect for court directions and courteous communication are non-negotiable aspects of legal practice. In the circumstances, the court dismisses the defendant’s objection to the plaintiff’s late filing of the affidavits and acknowledges the defendant’s delay in filing the written submissions at Enclosure 31 and 33. The court now proceeds to determine the substantive applications before it.

The plaintiff and the defendant entered into a written agreement dated 1 September 2018 (“the Agreement”), which was duly executed by both parties. Pursuant to the Agreement, the Plaintiff agreed to supply, install, commission and maintain Global Positioning System (GPS) and On-Board Camera (OBC) equipments for the defendant’s road tankers, and the defendant agreed to rent the said system.

The initial contractual period under the Agreement was from 1 September 2018 to 31 August 2020. However, based on mutual agreement between the plaintiff and the defendant, the service contract was extended on the same terms and conditions and eventually expired on 31 December 2023.

In accordance with the Agreement, the plaintiff rendered services to the defendant and issued invoices as listed in Schedule A (copies of invoices which are found at pages 34 to 73 of the filing marked Enclosure 15): No.

1.

15.2.2020 00015207 2,218.00 2.

1.9.2022

1.10.2022

15.11.2022

1.2.2023

20.2.2023

15.6.2023

1.10.2023

1.11.2023

1.12.2023

24.12.2023 IV-05658 3,008.00 TOTAL

Multiple meetings were held to discuss the invoices and the services allegedly performed for which the plaintiff was seeking payment. Upon resolution of these discussions, either credit notes were issued by the plaintiff in favour of the defendant or payments were made by the defendant. The defendant stated that this course of dealing is generally admitted by the plaintiff in its pleadings.

By this action, the plaintiff sought to recover outstanding amounts allegedly due under the invoices, including late payment charges. Despite repeated demands by the plaintiff for payment, the defendant has failed, neglected, and/or refused to settle the outstanding sums. On 13 June 2024, the plaintiff’s solicitors issued a letter of demand to the defendant seeking payment of the outstanding sums based on the said invoices.

In response, by letter dated 26 June 2024, the defendant’s solicitors asserted that the plaintiff, by previously allowing a 90- day payment period, had thereby waived its right to now insist on payment within 30 days. The defendant also disputed the invoices, denying the imposition of late payment charges as being wrongful, and thus disputed the amounts claimed. Furthermore, the defendant counterclaimed for various sums previously paid on the basis that they were wrongly charged by the plaintiff for services allegedly not rendered. Additionally, the defendant sought the return of a deposit sum of RM4,730.00 paid under the Agreement. This has led to the plaintiff initiating the present suit and filing two applications: i. Enclosure 12: for summary judgment in respect of the plaintiff’s claim; and ii. Enclosure 13: to strike out the defendant’s counterclaim.

(I) Enclosure 12 Trite Principle 22. It is well-established that in any application made under Order 14 of the ROC 2012, the court must first consider two key questions: a) whether the matter falls within the scope of Order 14; and b) whether the plaintiff has fulfilled the necessary preliminary requirements to proceed under this Order 14. These preliminary requirements are as follows: the defendant must have entered an appearance;(ii) the statement of claim must have been served on the defendant; and (iii) the affidavit supporting the application must comply with rule 2 of Order 14. Once these threshold requirements are met, the plaintiff is deemed to have established a prima facie case and is, in principle, entitled to judgment. At that stage, the burden then shifts to the defendant to show cause as to why judgment should not be entered against him (National Company for Foreign Trade v Kaya Raya Sdn Bhd [1984] 2 CLJ 220, Federal Court).

Hence, in an application under Order 14 of the ROC 2012, the court must be satisfied on affidavit evidence that the defence has not only raised an issue, but also that the said issue is triable. The determination of whether an issue is or is not triable depends on the facts or the law arising from each case as disclosed in the affidavit evidences before the court. A complete defence need not be shown and the defence set up need only show that there is a triable issue (Bank Negara Malaysia v Mohd Ismail & Ors [1992] 1

Three Invoices for Travelling Charges

The first thing to consider is the defendant’s argument regarding the three invoices for travelling charges. The defendant attempted to dispute Invoices IV-02610, IV-03238 and IV-04253, which were claimed by the plaintiff as charges for travel undertaken in connection with support services provided to the defendant. The defendant asserted that the support services were necessitated due to allegedly defective or malfunctioning systems and/or equipment supplied, and/or due to the plaintiff’s installation, management, or services.

In line with the above, in the email, the defendant pointed out that the equipment supplied by the plaintiff was defective or malfunctioning and that the plaintiff should rectify them. These issues were the result of the plaintiff’s own defective equipment, and therefore, the defendant alleged that the plaintiff is not entitled to claim for the said invoices.

The defendant raised this alleged dispute concerning those invoices and had requested a reconsideration of the said costs. The plaintiff indeed agreed to reconsider the costs, as confirmed in the email dated 12.6.2023. The defendant’s counsel then argued that there was no reason for the plaintiff to agree to reconsider the costs and still charged the same as the plaintiff should be estopped from resiling from its position.

Nevertheless, as the Agreement clearly granted the plaintiff the right to impose such charges based on Paragraph 2 of Exhibit E in the said Agreement, the plaintiff decided not to reduce the amount and proceeded to claim it in full. Paragraph 2 of Exhibit E in the said Agreement provided for travelling reimbursement for installations and support services from Malaysia. Accordingly, there is no issue or meritorious defence regarding the invoices for travelling charges i.e. IV-02610, IV-03238, and IV-04253 as each amounting to RM2,718.90, totalling RM8,156.70.

This court agreed with the plaintiff’s position, as all these were reflected in the terms of the said Agreement. The plaintiff’s courtesy in agreeing to “relook” the charges did not, in law, estopped them from asserting their contractual rights. In commercial contracts, each party is normally entitled to assume that a legally binding agreement has been formed, and courts will generally accept that there is a contract as long as the agreement was validly formed. Especially where the formality of an executed contract is a matter of choice, it must be made clear that parties are not bound until the formal contract is executed which, in the current case, had clearly been done (Deutsche Bank (M) Bhd v MBf Holdings Bhd & Anor [2015] 6 MLJ 310, Federal Court).

In the considered view of this court, the reconsideration (“relook”) never resulted in a novation agreement with the consent of both parties nor did it bring into existence a new contract. The plaintiff retained control to make the same decision as before, as long as it was within the scope of the Agreement between the plaintiff and the defendant. This is a simple matter of logic.

(ii) The Plaintiff’s Claim for Alleged Late Payment Interest

The defendant alleged that the plaintiff bears the burden of proving not only the fact of damages but also the amount of damages claimed. In this action, the plaintiff seeks to recover RM22,203.03 inclusive of alleged late payment interest as at 5.12.2024. The plaintiff argued that it is entitled to claim interest pursuant to paragraph 3 of Exhibit C of the Agreement (PDF page 14, Encl. 15), which reads: “DataFM shall be entitled to charge the contractor interest at a rate of 1.5% per month for any amount owing by the contractor to DataFM after the expiry of 30 days from the date of the issuance of DataFM’s invoice to the contractor.”

The defendant countered by arguing that the parties, by their course of dealing, had waived the enforcement and practice of these terms. Accordingly, the plaintiff is estopped and cannot now insist on strict compliance with the Agreement. In support of this position, the defendant pointed to the following contemporaneous conduct, in brief, the defendant had, at all material times, made payments on undisputed invoices beyond the 30-day period without the plaintiff ever charging or demanding any late payment interest, and no invoices containing such charges were ever issued. Furthermore, the defendant argued that even in the plaintiff’s solicitors’ letter of demand dated 13.6.2024, no claim for late payment charges was made. The defendant stated that all disputed invoices were subject to ongoing discussions until full resolution, after which no late payment interest was imposed. This included discussions concerning other agreements or accounts between the parties, as seen at Pages 75–76 of the plaintiff’s Affidavit in Support, where discussions were still ongoing as at 12.6.2023 regarding Invoice IV-0015207 dated 15/2/2020, again without any late payment charges.

Based on the above, the defendant submitted that the plaintiff should be estopped from departing from the agreed and consistent course of dealing between the parties. The defendant argued that these are factual disputes that preclude summary judgment. Additionally, the defendant contended that the plaintiff's computation of late payment interest was manifestly inaccurate. In calculating RM22,203.03, the defendant argued that the plaintiff had used “expiry of 30 days from the date stated in the invoices” rather than “expiry of 30 days from the date of issuance of the invoices to the Defendant,” which is the correct basis as stipulated in the Agreement. In the position of the defendant arguing the Agreement specifies that any late payment charges, if at all applicable, are to be computed from the date the defendant receives the invoice, not the date stated on the invoice.

Upon hearing both parties, this court agreed with the plaintiff’s counsel, who submitted that the Plaintiff denies the existence of any course of dealing that waives its right to impose late payment charges in accordance with Exhibit C of the Agreement. This court accepted that the plaintiff’s right to claim late payment interest arises under the Agreement, which the defendant had expressly agreed to. Therefore, the defendant is estopped from now denying the plaintiff’s entitlement to impose such charges. However, the court took note with some sympathy of the plaintiff’s written reply submissions, where it was stated at paragraph 12, that at all material times, the plaintiff has only imposed interest based on the terms of the Agreement, and if the defendant disputes the plaintiff’s right to impose interest based on the invoice date and contended that the plaintiff is only entitled to charge interest from the date the invoice was delivered to the defendant, the plaintiff is willing to submit that the plaintiff is prepared to accept interest to be calculated from the date the invoice was delivered to the defendant and therefore, this issue no longer warrants a trial.

In the considered view of this Court, the ongoing discussions referred to by the defendant including discussions on other agreements or accounts between the parties as referred to Pages 75–76 of the plaintiff’s Affidavit in Support regarding Invoice IV- 0015207 merely indicate attempts to reach an amicable settlement. Such discussions do not amount to any novation or variation of the original Agreement, as there is no evidence of mutual consent to form a new agreement with revised terms. Thus, the plaintiff retains its right to enforce the terms of the existing Agreement.

In furtherance, the issue of late payment interest was clearly provided for in paragraph 3 of Exhibit C of the Agreement. This court found no merit in the defendant’s argument as the plaintiff’s right to impose such interest stems from an agreed contractual term. From a commercial standpoint, it is common practice for such clauses to be enforced. This court also agreed with the plaintiff that it is entitled to charge late payment interest, especially as the defendant had never once objected to this clause since the Agreement came into effect on 1 September 2018. The longstanding business relationship between the plaintiff and defendant was evidently conducted based on the plaintiff’s invoices. This demonstrated the defendant’s acceptance by conduct of the contract terms stated therein.

The wording of the Agreement clearly states that interest is chargeable from the “issuance of the invoice”, not from “its receipt”. Had the parties intended for the interest to accrue only upon receipt, the clause would have stated so. The defendant admitted that the invoices were issued and received, and thus the term “issuance”, as consented to by both parties, indeed referred to the invoice date as generated by the plaintiff. Accordingly, the date of issuance is not in dispute and is consistent with the Agreement. These matters do not give rise to triable issues. This is plainly and obviously a case where summary judgment is appropriate.

As held by the Supreme Court in Bank Negara Malaysia v Mohd Ismail [1992] 1 MLJ 400, if the matter involves only a legal question with no dispute over the facts, and the court finds that the legal point is clearly unarguable, summary judgment can still be granted even if the legal issue seems complex at first. To rule otherwise in this case would ignore the clear terms agreed by the parties in the 2018 Agreement and go against commercial reality (Alliance Bank Malaysia Bhd (Formerly known as Multi Purpose Bank Bhd and Malaysia French Bank Bhd) v Mukhriz bin Mahathir & Anor [2006]

(iii) The Plaintiff seemed to have unilaterally deducted RM872.00 out of its claim

As to the RM872.00 allegedly “unilaterally deducted” by the plaintiff from its claim on a “goodwill basis”, the defendant vehemently denied this. The defendant contended that the underlying invoices were disputed from the outset. The main issue was the absence of OBC equipment on Road Tanker No. 71-6204 since 31 January

Therefore, the plaintiff’s issuance of monthly rental charges thereafter was erroneous.

The defendant also alleged that the plaintiff had agreed to issue credit notes for RM430.00 and RM442.00 but failed to do so and refused to issue credit for other similar overpayments. Again, the defendant submitted that the plaintiff’s explanation that these deductions were made on a “goodwill basis” was misleading. According to the defendant, on or about 12 June 2023, the plaintiff acknowledged that credit notes would be issued. However, in court, the plaintiff stated that the deductions were made voluntarily on a goodwill basis, and that no credit notes were necessary as the plaintiff had offset the amounts against the outstanding debt owed by the defendant.

The defendant further complained about an RM12.00 SST charge under IV-01976, arguing that if RM430.00 is admitted, then the corresponding SST should also be refunded. The defendant has counterclaimed for the recovery of these amounts and related interest.

In response, the plaintiff submitted that the intention to refund RM430.00 and RM442.00 was clear but since the amount owed by the defendant was larger, a credit note was not issued by deducting from the defendant’s outstanding sum owing to the plaintiff. This court found in favour of the plaintiff, as a credit note is merely a documentary record of a reduction in the payable amount as it carried the same significant in the current case when the plaintiff made the deduction to reduce the outstanding amount owed by the defendant.

In this instance, the plaintiff was merely offsetting amounts already due and the defendant was duly informed. As a matter of logic, the defendant was aware of the deduction made by the plaintiff from the outstanding sum, which was intended merely as a set-off and not to increase the Defendant’s liability or to gain any undue advantage (Pacific & Orient Insurance Co Sdn Bhd v Cheng Chor Tong & Ors [2006] 5 MLJ 431, HC). This court further found no written evidence that the defendant had protested or disputed the plaintiff’s conduct prior to the filing of this suit. On the contrary, the defendant appeared to have accepted the plaintiff’s conduct by assuming that a credit note would be issued which carried the same significance here from the plaintiff’s deduction to a reduced amount of the outstanding sum of the defendant owing to the plaintiff. Instead, the defendant has only now raised a counterclaim on this issue based on their allegations.

Regarding the RM12.00 SST, the plaintiff submitted at paragraph 15 of its reply submission that it did not wish to waste the court’s time over such a minor amount and was willing to return the RM12.00 alongside the RM430.00 and RM442.00 deductions. This court had perused the plaintiff’s explanation, but needed to remind the plaintiff’s counsel that such matters, if disputed, should still be dealt with judiciously. While minor, the plaintiff should not invoke judicial economy as a reason to sidestep accountability.

In conclusion, this court found no merit in the defendant’s contention that the plaintiff acted unilaterally to gain an undue advantage. The deductions were made transparently and were known to the defendant since 2023. The long-standing relationship between the parties and the consistent application of the Agreement’s terms, support the plaintiff’s position. The Agreement binds both parties, and the Defendant had knowledge of and acquiesced to its terms throughout. Therefore, the plaintiff’s claim is justified. Decision of Enclosure 12 45. This court found that the issues raised by the defendant did not constitute a triable issue requiring examination at trial and the defendant has no defence to the claim. In the upshot, this court grants an order in terms of the application for summary judgment to be entered against defendant in the sum of RM22,203.03 together with interest thereon at 5% pa from the date of judgment until full settlement and costs of RM2,000.00.

Enclosure 13 Trite Principle

This Enclosure 13 is the plaintiff’s application to strike out the defendant’s counterclaim pursuant to Order 18, Rule 19(1)(b), (c), or (d) of the ROC 2012 [pages 5–9 of DBOA]. The plaintiff claims that the defendant’s counterclaim allegedly falls under the following limbs: i) it is scandalous, frivolous, or vexatious; ii) it may prejudice, embarrass, or delay the fair trial of the action; or iii) it constitutes an abuse of the process of the court.

In paragraphs 9–14 of the defendant’s written submission, it was raised that, in the plaintiff’s affidavit in support, the Plaintiff additionally averred that the defendant’s counterclaim also allegedly “discloses no reasonable cause of action”, which referred to limb (a) of Order 18, Rule 19(1). However, the plaintiff did not rely on this ground in its Notice of Application dated 6.3.2025 filed as Enclosure 13. As such, the plaintiff’s striking out application does not fall under limb (a) i.e. disclosing no reasonable cause of action, and the plaintiff cannot rely on this ground through its affidavit alone. The defendant submitted that such contradiction is significant, especially since Order 18, Rule 19(2) expressly states that no evidence shall be admissible in support of an application under subparagraph (1)(a). The omission of limb (a) in the plaintiff’s Notice of Application means the plaintiff is not relying on that ground and is bound by its own prayers in the application. It cannot now introduce averments in an affidavit to support a ground not pleaded.

In response, the plaintiff in its written submission in reply clarified that the plaintiff only relies on Order 18, Rule 19(1)(b), (c), and (d). It is trite law and this court is well aware that, in one case of See Thong & Anor v Saw Beng Chong [2013] 3 MLJ 235; [2012] 1 LNS 817 (CA), Ramly Ali JCA (as His Lordship then was) clarified the proper approach when a striking-out application is premised on multiple limbs under O 18 r 19(1). His Lordship stated that the High Court erred by entirely ignoring para (a) simply because affidavits were filed. Instead, the proper approach is, firstly, to consider limb

without referring to affidavit evidence; then, proceed to consider limbs (b)–(d) with the benefit of the affidavits. As affirmed in Amanah Raya Bhd (representative for Cheng Song Lim, deceased) v Ong Chin Hoo [2020] 3 MLJ 463 (CoA), an applicant under this rule may rely on one or more limbs disjunctively, and combining limbs does not render the application defective.

At this juncture, this court reminded both parties of the well-settled principle that even if the application pleads for limb (a), it can still be considered along with other limbs, a fortiori in the present case where the defendant merely pointed out that the plaintiff seemed to rely on limb (a) in its affidavit, even though the Notice of Application clearly states reliance only on limbs (b), (c), and (d) disjunctively. Further, the Plaintiff explained at paragraph 22 of its written submission in reply that it relies only on Order 18, Rule 19(1)(b), (c), and (d). Accordingly, this court found no merit in the defendant’s allegation that the plaintiff’s Notice of Application is vague or ambiguous.

Despite the plethora of authorities on this principle, it is very simple and clear to apply. This court further emphasises the well-established principle that a striking-out order should not be made summarily where there is a legal issue that requires mature consideration and extended argument;or there are factual disputes that can only be resolved through viva voce evidence at trial (Lai Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 3 CLJ 305; [1997] 2 MLJ 565 (FC); Sivarasa Rasiah & Ors v Che Hamzah Che Ismail & Ors [2012] 1 CLJ 75; [2012] 1 MLJ 473 (CoA)).

The premise of the defendant’s counterclaim is that the plaintiff’s retention of payments made under various invoices and of the deposit sum is unjust, and that there was a failure of consideration as the plaintiff allegedly did not render the services for which it charged the defendant under the Agreement. The defendant hereby submitted that this is a legitimate cause of action that is not liable to be summarily struck out. The defendant’s counterclaim is divided into two parts as follows.

First Part: Failure of Consideration

In the first part of the counterclaim, the defendant argued that the plaintiff wrongly charged rental fees for OBC equipment under several invoices even though the equipment was no longer installed in the defendant’s road tanker No. 71-6204 since the end of January 2022. The defendant alleged that the plaintiff’s refusal to refund these amounts constitutes unjust enrichment, as detailed in the following table: No. Invoice Date Amount 1. IV-00315 1.2.2022 RM442.00 2. IV-00561 1.3.2022 RM442.00 3. IV-00799 1.4.2022 RM442.00 4. IV-01033 1.5.2022 RM442.00 5. IV-01266 1.6.2022 RM442.00 6. IV-01498 1.7.2022 RM442.00 7. IV-01735 1.8.2022 RM442.00 8. IV-01976 1.9.2022 RM442.00 9. IV-02216 1.10.2022 RM442.00 TOTAL

The plaintiff applied to strike out the counterclaim, contending, among others, that the defendant had paid these invoices and is now estopped from recovering the amounts. The plaintiff submitted that the defendant never disputed these charges before the suit was filed and only raised the issue now, making the counterclaim an afterthought.

The defendant, however, insisted the payments were made by mistake. The defendant further contended that the plaintiff had acknowledged the overcharges and agreed to issue credit notes on or about 12 June 2023, but only for RM430.00 (under IV-01976) and RM442.00 (under IV-02216). The plaintiff now claimed falsely, according to the defendant, that these deductions were made purely on a goodwill basis. The defendant argued this is plainly negated by the reference to “71-6204” in the documents, reflecting the true nature of the dispute.

The plaintiff maintained that the defendant’s counterclaim for RM3,978.00 lacks merit, arguing that the defendant voluntarily paid the invoices and never previously disputed the charges. The plaintiff also amusingly asserts that the defendant, being prudent, would not have overpaid.

This court emphasizes the well-established principle that detriment is not a required element of estoppel. It is sufficient that, in the circumstances, it would be unjust to allow a party to insist on strict legal rights after having acted otherwise (Seabanc Kredit Sdn Bhd v Greentree Contractors Sdn Bhd & Ors [1996] MLJU 295, HC). Based on the findings of fact, this court is of the considered view that estoppel applies and therefore the defendant is estopped from reclaiming RM3,978.00 on the basis of alleged mistaken payment for OBC equipment that was not installed in Road Tanker No. 71- 6204 and was allegedly returned in January 2022.

As plaintiff’s counsel submitted, the defendant's claim for RM3,978.00 is clearly without basis or merit. It is a mere afterthought raised only during these proceedings, with no such demand made at any material time prior to the filing of this suit. The defendant’s failure to raise the issue earlier further reinforces this conclusion.

Given the defendant’s conduct from January 2022 until the filing of this suit, it would be unjust and unconscionable to now claim that the payments were made by mistake. It is unreasonable for a customer to claim, three years later, that they paid for services not used. Furthermore, the deduction of RM872.00 has already been clearly explained by the plaintiff, as recorded in the Court's earlier findings.

This court observes the inconsistency in the defendant’s own conduct. The plaintiff had, as a matter of goodwill, agreed to deduct RM872.00 related to Invoices IV-01976 and IV-02216, pursuant to the meeting minutes dated 9 June 2023 (PDF pp. 74–76, Enclosure 15). Yet, the defendant failed to raise the RM3,978.00 issue at the same time on the said 9 June 2023, which undermined their credibility. In any event, as established in Jasa Keramat Sdn Bhd & Anor v Monatech (M) Sdn Bhd [1999] 4 MLJ 637 (CoA), the situations that may fall under Order 18 rule 19(1)(d) are non-exhaustive and depend on the particular facts of each case since abuse of court process may take many forms. Further, the Supreme Court in Raja Zainal Abidin bin Raja Haji Tachik & Ors v British-American Life & General Insurance Bhd [1993] 3 MLJ 16 reaffirmed that the courts possess inherent jurisdiction to prevent abuse of process.

Accordingly, this court found that the first part of the defendant’s counterclaim is plain and obvious in constituting an abuse of the court’s process under Order 18 rule 19(1)(d), Order 92 rule 4 of the Rules of Court 2012, and/or the court’s inherent jurisdiction. The issues raised could and should have been dealt with earlier, as the defendant has no credible defence to the plaintiff’s claim regarding the absence of OBC equipment in Road Tanker No. 71-6204 since 31 January 2022.

(ii) Second Part: Wrongful Retention of Deposit Sum of RM4,730.00

For ease of reference, the paragraph 2 of the Agreement between the parties provides that, “The contractor shall deposit with DataFM ONE (1) month equivalent of the price of each FMS Package as per Exhibit D. The deposit shall be returned by DataFM to the contractor, free from interest, at the expiry of the term of each FMS

The defendant argued that the said clause clearly required the deposit to be returned at the expiry of the Agreement. In this context, the defendant had paid a deposit of RM4,730.00 and the Agreement expired on 31.12.2023. By its own admission, the plaintiff has not returned the deposit, thereby breaching the terms of the Agreement. On this basis alone, the defendant claimed that it has a valid cause of action and as such the plaintiff’s application to strike out this part of the counterclaim has no merit.

As stated earlier, the plaintiff now seeks, through this action, to unilaterally set off the deposit sum against invoices allegedly owed. However, the defendant argued that such a set-off must be determined by the court, especially since the defendant disputed the plaintiff’s claims. By withholding the deposit after the expiry of the Agreement in breach of contract, the defendant argued that the plaintiff cannot, on its own accord, deprived the defendant of its right to interest for the period of wrongful retention since 31.12.2023. According to the defendant, the plaintiff’s unilateral deduction of the deposit is self-serving, arguing that the court retains the authority to scrutinize the circumstances surrounding this deduction. From the defendant’s own perspective, there is no doubt that a valid cause of action exists where the defendant also relies on section 73 of the Contracts Act 1950 [page 143 of DBOA], which states: “A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it.”

In essence, the plaintiff in response states that the RM4,730.00 deposit has already been deducted from the total claim amount, and thus the defendant’s counterclaim is unsustainable and an abuse of the court process.

This court refers to the legal definition of a “deposit” as explained by James LJ in Ex p Barrel LR 10 Ch 512, where a deposit is seen as a guarantee that the contract will be performed. If the contract is completed, the deposit goes towards the purchase price. However, if the purchaser defaults, the deposit is forfeited. Not only this, courts in Malaysia have consistently held that for a sum to qualify as a “deposit”, the Agreement must expressly state so (Linggi Plantations Ltd v Jagatheesan; K Umar Kandha Rajah v EL Magness [1985] 1 MLJ 116, Federal Court). Although payment at the time of contract formation may indicate a deposit, it is only one of several factors. The overall intention of the parties, as reflected in the Agreement, must be examined by this court in the current case.

In the landmark case of Cubic Electronics Sdn Bhd (In Liquidation) v Mars Telecommunications Sdn Bhd [2019] 2 CLJ 723, the Federal Court held that if a payment serves as both earnest money and part-payment, it qualifies as a deposit and is subject to section 75 of the Contracts Act 1950, which provides: “When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled... to receive... reasonable compensation not exceeding the amount so named.” (emphasis added)

Moreover, in the case of Sun Properties Sdn Bhd v Happy Shopping Plaza Sdn Bhd [1987] 2 MLJ 711, the court held that a deposit is not just part payment, but earnest money to secure the contract and motivate performance. In the premise, this court agrees that section 75 of the Contract Act 1950 is a statutory safeguard to prevent abuse and the key consideration is whether the compensation sought is reasonable, guided by the principles of legitimate interest and proportionality.

In the current case, this court found that the RM4,730.00 paid by the defendant was not intended as a guarantee of performance only. A deposit commonly accepted as earnest money is typically around 10% of the total contract price. This aligns with the principle in the case of Invescor Sdn Bhd v Sobena Maju Sdn Bhd [2008] 2 MLJ 359 where Zainun Ali JCA (as she then was) and Mokhtar Sidin JCA (as he then was) concurring, where 10% was recognized as a reasonable deposit. However, the Agreement here refers to the sum as “ONE (1) month equivalent of the price of each FMS Package as per Exhibit D,” which points to it being part-payment of the contract, and also an earnest deposit as a guarantee of performance.

Therefore, under Cubic Electronics’ case (supra), the principle is that when a contract is breached, any money paid in advance as part of the contract price is typically recoverable by the party who made the payment; but, a deposit that serves not only as part-payment and also as a guarantee of performance is generally not refundable. This court found that the wording of the Agreement clearly indicated an intention for the deposit to represent one (1) month’s equivalent of the price of each FMS Package and the stated price of each package showed that the deposit was meant not only as part payment but also as a guarantee of performance, reflecting the defendant’s commitment to pay for the services rendered by the plaintiff.

The test as held in the Cubic Electronics’ case (supra), is that a damages clause will only be struck down if the sum stipulated is unconscionably high and exorbitant in relation to the innocent party’s legitimate interest in the performance of the contract. However, that is not the case in the current matter. On the contrary, the deposit sum stipulated as disputed by the defendant is reasonable. As such, this court found that the defendant failed to prove that the forfeiture of RM4,730.00 was excessive or unreasonable, especially when weighed against the total sum of RM22,203.03 owed, as the burden of proof lies on the defaulting party to show that the forfeiture was unreasonable. Since the defendant failed to do so, this court found that the amount forfeited is reasonable and consistent with section 75 of the Contract Act 1950.

Accordingly, the part two of the defendant’s counterclaim is found scandalous, frivolous or vexatious under Order 18 rule 19(1)(b) of the ROC 2012. As clarified in Technointan Holding Sdn Bhd v Tetuan Tan Kim Siong @ Teh Hong Jet [2006] 7 CLJ 541, “scandalous” means wholly unnecessary and irrelevant, while “frivolous or vexatious” means obviously unsustainable. Based on the above analysis, this court applied the test in Bandar Builder Sdn Bhd v United Malayan Banking Corp Bhd [1993] 4 CLJ 7 that a claim in the current case was obviously unsustainable on its face, without requiring detailed examination (also referred to the case of Gulatis Global Business Sdn Bhd v Qijang Technologies Sdn Bhd & Ors [2025] CLJU 682).

Thus, following this court’s assessment of the plaintiff’s application to strike out the defendant’s counterclaim, it was evident that the defendant had no sustainable case. Accordingly, the counterclaim was struck out with costs of RM2,000.00 awarded to the plaintiff.

Persuant to the above reasoning, this court allowed Enclosure 12 and granted summary judgment in favour of the Plaintiff with costs of RM2,000.00. This court also allowed Enclosure 13, striking out the defendant’s counterclaim against the plaintiff with costs of RM2,000.00. Dated this 30 June 2025 SGD ------------------------------ TEOH SHU YEE MAGISTRATE MAGISTRATES’ COURT AT ALOR GAJAH FOR THE PLAINTIFF : En. Pannirselvam Mannar TETUAN NURLINY, PANNIR MANNAR & CO., SELANGOR FOR THE DEFENDANT : En. Hasvinder Singh Gill TETUAN SHARIF & KHOO, NEGERI