Dragger Engineering (M) Sdn Bhd v Exora Trading & Construction Sdn Bhd (WA-12BNCvC-135-09/2022)

The Plaintiff in this case had filed a claim against the Defendant for the refund of a sum RM434, 729.32 paid to the Defendant under a sub-contract.

After a full trial the learned Sessions Judge allowed the Plaintiff’s claim with interest and a cost of RM12, 000.

The Defendant has appealed to this Court against the decision of the learned Judge allowing the Plaintiff’s claim whereas the Plaintiff has counter appealed against the decision of the learned Judge disallowing late delivery penalty (LAD) of the sum of RM48,000. 06/04/2023 13:52:01 WA-12BNCvC-135-09/2022 Kand. 37 S/N 1kWGGavxfkCPdIHlymCUng The brief facts

The dispute in this case arose as a result of a project to renovate and upgrade Kolej Komuniti Bagan Serai (the project). This project was tendered to a company called Utama ZA (Malaysia) Sdn Bhd (the main contractor).

The main contractor had sub-contracted works to be done under the project to the Plaintiff by virtue of a letter of award dated 27/8/2015.

The Plaintiff in turn sub-contracted the supply of information technology equipment for the project to the Defendant by virtue of a letter of award dated 9/5/2016.

Amongst the terms of the sub-contract to the Defendant which amounted to RM434,729.32 the Defendant had until 28/8/2016 to supply the equipment. The failure to supply the equipment within the time agreed will attract a penalty of RM500 a day until the sub-contract is fulfilled.

The Plaintiff paid the full sum of the sub-contract upon being invoiced by the Defendant. However the Plaintiff alleges that the Defendant failed to supply the equipment within the time frame or any time after. On 7/4/2017 the Defendant terminated the sub-contract and has claimed for the refund of the money paid as well as payment of LAD until the date of termination. S/N 1kWGGavxfkCPdIHlymCUng

The Defendant in their defense raised a number of issues which includes allegation of fraud, the invalidity of the sub-contract, the Plaintiff’s failure to allow the Defendant to fulfil the sub-contract.

The learned Sessions Judge made a finding that the full sub-contract sum had been paid by the Plaintiff to the Defendant. The learned Judge also made a finding that the Defendant had failed to supply the equipment as agreed.

The learned Judge also decided the sub contract was valid and the allegation of fraud was baseless. Admissibility of the sub-contract

The main basis for the Defendant saying that the sub-contract is inadmissible in this case is because the sub-contract was not stamped as required under section 52(1) of the Stamp Act 1959.

Section 52(1) of the Stamp Act 1959 states as follows:

No instrument chargeable with duty shall be admitted in evidence for any purpose by any person having by law or consent of parties authority to receive evidence, or shall be acted upon, registered, or authenticated by any such person or by any public officer, unless such instrument is duly stamped: S/N 1kWGGavxfkCPdIHlymCUng Provided that-

any such instrument shall, subject to all just exceptions, be admitted in evidence on payment of the duty and the penalty, if any, chargeable in respect thereof under section 43 or section 47A;

nothing herein contained shall prevent the admission of any instrument in evidence in any criminal Court;

nothing herein contained shall prevent the admission of any instrument in evidence in any Court when such instrument has been executed by or on behalf of the Government of Malaysia or of any State or of the Government of any other country or where it bears the certificate of the Collector as provided by this Act.

At one glance the provision above disallows a document which is not stamped to be admitted as evidence. In this case it is undisputed that the sub-contract was not stamped.

In the Court’s view however the specific legislation on admissibility of evidence is the Evidence Act 1950. It is trite law that specific law overcomes general statutes like the Stamp Act 1959.

For admissibility of documents the provisions of the Evidence Act 1950 applies. There are a host of provisions under the Evidence Act on admissibility of documentary evidence. For the purpose of this S/N 1kWGGavxfkCPdIHlymCUng case, only certain provisions will be reproduced for ease of reference.

Section 61, 62 and 73A of the Evidence Act 1950 states as follows: The contents of documents may be proved either by primary or by secondary evidence. (Section 61) Primary evidence means the document itself produced for the inspection of the court. (Section 62)

Notwithstanding anything contained in this Chapter, in any civil proceedings where direct oral evidence of a fact would be admissible, any statement made by a person in a document and tending to establish that fact shall, on production of the original document, be admissible as evidence of that fact if the following conditions are satisfied:

if the maker of the statement either-

had personal knowledge of the matters dealt with by the statement; or

(ii) where the document in question is or forms part of a record purporting to be a continuous record, made the statement (so far as the matters dealt with thereby are not within his personal knowledge) in the performance of a S/N 1kWGGavxfkCPdIHlymCUng duty to record information supplied to him by a person who had, or might reasonably be supposed to have had, personal knowledge of those matters; and

if the maker of the statement is called as a witness in the proceedings: Provided that the condition that the maker of the statement shall be called as a witness need not be satisfied if he is dead, or unfit by reason of his bodily or mental condition to attend as a witness, or if he is beyond the seas and it is not reasonably practicable to secure his attendance, or if all reasonable efforts to find him have been made without success.

In any civil proceedings, the court may at any stage of the proceedings, if having regard to all the circumstances of the case it is satisfied that undue delay or expense would otherwise be caused, order that such a statement as is mentioned in subsection shall be admissible as evidence or may, without any such order having been made, admit such a statement in evidence-

notwithstanding that the maker of the statement is available but is not called as a witness; and

notwithstanding that the original document is not produced, if, in lieu thereof, there is produced a copy of the original document or of the material part S/N 1kWGGavxfkCPdIHlymCUng thereof certified to be a true copy in such manner as may be specified in the order or as the court may approve, as the case may be.

Nothing in this section shall render admissible as evidence any statement made by a person interested at a time when proceedings were pending or anticipated, involving a dispute as to any fact which the statement might tend to establish.

For the purposes of this section, a statement in a document shall not be deemed to have been made by a person unless the document, or the material part thereof, was written, made or produced by him with his own hand, or was signed or initialled by him, or otherwise recognised by him in writing as one for the accuracy of which he is responsible.

For the purpose of deciding whether or not a statement is admissible as evidence by virtue of subsections (1) to (4), the court may draw any reasonable inference from the form or contents of the document in which the statement is contained, or from any other circumstances, and may, in deciding whether or not a person is fit to attend as a witness, act on a certificate purporting to be the certificate of a registered medical practitioner, and, where the proceedings are with assessors, the court may in its discretion reject the statement notwithstanding that the requirements of this section are satisfied with respect S/N 1kWGGavxfkCPdIHlymCUng thereto, if for any reason, it appears to it to be inexpedient in the interests of justice that the statement should be admitted.

In estimating the weight, if any, to be attached to a statement rendered admissible as evidence by this Act, regard shall be had to all the circumstances from which any inference can reasonably be drawn as to the accuracy or otherwise of the statement, and, in particular, to the question whether or not the statement was made contemporaneously with the occurrence or existence of the facts stated, and to the question whether or not the maker of the statement had any incentive to conceal or misrepresent facts.

For the purpose of any rule of law or practice requiring evidence to be corroborated, or regulating the manner in which uncorroborated evidence is to be treated, a statement rendered admissible as evidence by this Act shall not be treated as corroboration of evidence given by the maker of the statement. (Section 73 A).

Notwithstanding the provisions of the Stamp Act 1959, the Court rules that the sub-contract and the terms contained therein are admissible as evidence in this case. S/N 1kWGGavxfkCPdIHlymCUng Validity of the contract

On the validity of the contract the provisions of the Contracts Act 1950 is applicable. The sub-contract is a valid contract if all the elements of the contract are fulfilled.

In this case the Defendant alleges fraud and deception against the Plaintiff. Fraud is defined under the Contracts Act 1950 as follows: "Fraud" includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract-

the suggestion, as to a fact, of that which is not true by one who does not believe it to be true;

the active concealment of a fact by one having knowledge or belief of the fact;

a promise made without any intention of performing it;

any other act fitted to deceive; and

any such act or omission as the law specially declares to be fraudulent. Explanation - Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, S/N 1kWGGavxfkCPdIHlymCUng unless the circumstances of the case are such that, regard being had to them, it is the duty of the person keeping silence to speak, or unless his silence is, in itself, equivalent to speech. ILLUSTRATIONS

A sells, by auction, to B, a horse which A knows to be unsound. A says nothing to B about the horse's unsoundness. This is not fraud in A.

B is A's daughter and has just come of age. Here, the relation between the parties would make it A's duty to tell B if the horse is unsound.

B says to A, "If you do not deny it, I shall assume that the horse is sound." A says nothing. Here, A's silence is equivalent to speech.

A and B, being traders, enter upon a contract. A has private information of a change in prices which would affect B's willingness to proceed with the contract. A is not bound to inform B.

From the testimony of the witnesses the Defendant has in fact admitted that the sub-contract was executed by a person authorised by them. Therefore the person executing the contract had full knowledge of all the terms of the contract. This is further evidenced by the fact that by its conduct of invoicing the Plaintiff for the sub-S/N 1kWGGavxfkCPdIHlymCUng contract sum, shows that the Defendant had full knowledge of the terms of the sub-contract.

Under the Evidence Act conduct is a relevant factor to be considered by the Court in arriving at a decision. This is stated in section 8(2) of the Evidence Act 1950 as follows: 2) The conduct of any party, or of any agent to any party, to any suit or proceeding in reference to that suit or proceeding, or in reference to any fact in issue therein or relevant thereto, and the conduct of any person an offence against whom is the subject of any proceeding, is relevant if the conduct influences or is influenced by any fact in issue or relevant fact, and whether it was previous or subsequent thereto.

Further invoicing the Plaintiff and accepting the sum of money from the Plaintiff is an admission on the part of the Defendant. Section 18(1) of the Evidence Act 1950 provides as follows: 1) Statements made by a party to the proceeding or by an agent to any such party whom the court regards under the circumstances of the case as expressly or impliedly authorized by him to make them are admissions.

The effect of an admission is stated in section 31 of the Evidence Act as follows: S/N 1kWGGavxfkCPdIHlymCUng Admissions are not conclusive proof of the matters admitted, but they may operate as estoppels under the provisions hereinafter contained.

The fact that the Defendant had accepted the contract and they have admitted accepting the contract sum acts as an estoppel of not carrying out their obligations under the contract.

Further the Defendant by accepting the contract sum is estopped from alleging that the contract is invalid under the principle of approbation and reprobation. The concept of approbation and reprobation was accepted in the case of Cheah Theam Keng v City Center Sdn Bhd & other appeals [2012] 2 CLJ 16.

Having regard to all the factors above the Court rules that the contract is valid and the Defendant’s allegation of fraud is baseless. The Defendant has breached the contract and should therefore refund the money received on termination of the sub-contract.

It is clear from the reading of the grounds of judgement that the learned Judge had allowed a sum of RM48,000 as LAD but has termed it as “ganti rugi tentu”.

As the Court has decided the contract between the Plaintiff and the Defendant is a valid contract the terms with regards to the payment of LAD is also applicable and the Plaintiff has a right to this sum of money. S/N 1kWGGavxfkCPdIHlymCUng

Based on the factors above the Court dismissed the Defendant’s appeal and allowed the Plaintiff’s appeal with a cost of RM10,000. Dated: 6.4.2023 sgd DATO’ HAJI AKHTAR BIN TAHIR Judge High Court of Malaya, Kuala Lumpur S/N 1kWGGavxfkCPdIHlymCUng PARTIES For the Apellant: Tetuan Kamarudin Wee & Co. No. 19-01 Jalan SS 16/6C 47500 Subang Jaya

Stamp Act 1959;

Evidence Act 1950;

Cheah Theam Keng v City Center Sdn Bhd & other appeals [2012] 2 CLJ 16.; S/N 1kWGGavxfkCPdIHlymCUng