Exceljaya Engineering Sdn. Bhd. v E & L Engineering Sdn. Bhd. (WA-12BNCvC-137-10/2023)

After a full trial with the cross-examination of four witnesses and hearing the submissions of both sides, the learned Sessions Court judge allowed the Respondent’s claim on 23rd October 2023. Judgment for the sum of RM528,555.21 was entered against the Appellant/Defendant, with the usual consequential order for interest at 5% per annum on the judgment sum and costs to be paid by the Appellant.

The Appellant filed an appeal to this Court. Prior to the learned Sessions judge making her grounds available, the Appellant’s solicitors filed a lengthy Memorandum of Appeal containing 25 paragraphs. After grounds were issued by the learned Sessions Court judge, a Memorandum Rayuan Tambahan containing 11 paragraphs was filed.

Unfortunately for the Appellant, after I reserved decision to go through the lengthy Memorandum of Appeal and submissions filed by both sides, I found no appealable error in the decision of the learned Sessions Court judge. I therefore dismissed the Appellant’s appeal, with costs of RM5,000. My grounds for finding no appealable error are as set out below. S/N x7YijGckYE2KLYa4yvdbgw **Note : Serial number will be used to verify the originality of this document via eFILING portal 3 Background Facts [5] The Respondent’s claim was contractual one, based on an agreement, in the form of a letter signed by both companies on 12th May 2017 (“the said Agreement”). The said Agreement was prepared by the Appellant for the Respondent to sign. Loh Hoong Yee @ Loh Hoong Aik (referred to at the Sessions Court as “WSD-2”) signed on behalf of the Appellant while Chai Meng Swee @ Eric (referred to at the Sessions Court as “WSP-2”) signed on behalf of the Respondent/Plaintiff. A screenshot of the contents of the said Agreement is as shown below: S/N x7YijGckYE2KLYa4yvdbgw **Note : Serial number will be used to verify the originality of this document via eFILING portal 4

The said Agreement shows that its subject matter was for the “splitting of future collection of payments from the Ara Damansara Project”, with the percentage of sharing agreed at 70% for the Respondent/Plaintiff and 30% for the Appellant/Defendant.

Due to the Appellant’s failure to pay the Respondent the sum of RM528,555.21 being the agreed 70% share out of RM755,078.88 received as at 3rd September 2019 in accordance with the said Agreement, the Respondent filed the action at the Sessions Court, and as mentioned above, after a full trial, the learned Sessions Court judge found in favour of the Respondent/Plaintiff and granted judgment for the sum of RM528,555.21. The Appellant’s Defence and Memorandum of Appeal [8] The Appellant narrated that it is a company carrying out electrical service supply business and what it described as ELV, which is the abbreviation for electrical low voltage. It is undisputed that the Respondent/Plaintiff's director, Chai Meng Swee who used the name “Eric Chai” (SP2), was a former director and shareholder of the Appellant/Defendant. The other shareholder is Loh Hoong Yee, who is still a director and shareholder of the Appellant/Defendant company.

In the year 2012, the Appellant/Defendant was appointed by one Jaks Sdn Bhd to perform electrical service work and ELV services for a project known as "Construction and Completion of Main Building Works for a Development Proposal Containing 15 Storey Commercial Blocks and 4 Floors Basement Level above Lot 59215 (PM55) and 59216 S/N x7YijGckYE2KLYa4yvdbgw **Note : Serial number will be used to verify the originality of this document via eFILING portal 5 (PN8025), Jalan PJU 1A/4, Ara Damansara, Petaling District, Selangor Darul Ehsan for Messrs MINH Global Assets Management Sdn Bhd”. This project was identified by both sides as “Ara Damansara Project”.

The Appellant/Defendant subsequently appointed the Respondent/Plaintiff and approximately four to five other subcontractors for the Ara Damansara Project.

A dispute arose between Eric Chai and Loh Hoong Yee in early 2017 resulting in them agreeing on 26th January 2017 for Eric Chai to sell all his 55,000 shares in the Appellant/Defendant company to Loh Hoong Yee and his wife Wong Wai Kuan for a consideration of RM200,000.00 payable within a period of 18 months.

The essence of the Appellant’s lengthy memorandum of appeal is that the said Agreement was void for lack of consideration because according to the Appellant, there was actually no outstanding work to be performed in the Ara Damansara Project in year 2017. The Appellant/Defendant’s director Loh Hoong Yee alleged that he relied on representation made by Eric Chai.

The Appellant in its Memorandum of Appeal submits that the learned Sessions Court judge erred in deciding that the consideration for the said Agreement was as stated therein. It was further submitted that there was no outstanding work as at the date of the said Agreement, i.e. 12th May 2017, that there was neither any defects to be repaired nor any variation works outstanding then. S/N x7YijGckYE2KLYa4yvdbgw **Note : Serial number will be used to verify the originality of this document via eFILING portal 6

The Appellant also submitted that the learned Sessions Court judge erred in disregarding a Certificate of Practical Completion issued on 9th May 2016 and instead made a finding that the issuance of a “Certificate of Interim Payment” issued by Jaks Sdn Bhd on 4th July 2017 was evidence that there were still works to be performed in year 2017. Analysis of the Law and Evidence by the Sessions Court [15] I found that the learned Sessions Court judge did address all the points raised by the Appellant in her Grounds of judgment. She had duly explained all her findings with reference to the pleadings as well as the testimony of the witnesses.

As could be seen in para [58] of her extensive Grounds, the learned Sessions Court judge noted that the said Agreement was prepared by the director of Defendant (SD2) and there was no denial that he signed it.

The learned Sessions Court judge was right to point out that in such cases, the parties are bound by the terms unless there are vitiating elements such as fraud, mistake, duress or undue influence. She went on to observe that the first instance of the Appellant/Defendant alleging that the said Agreement was void was about 4.5 years after the signing S/N x7YijGckYE2KLYa4yvdbgw **Note : Serial number will be used to verify the originality of this document via eFILING portal 7 thereof. See para [59], [62], [65] and [66] of her Grounds, which I am setting out below for convenient reference.

On the applicable law, I found that the learned Sessions judge was also right in relying on two authorities, namely, Lee Teck Seng v. Lasman Das Sundra Shah [2000] 8 CLJ 317 and Baoning Mineral Sdn Bhd v. Magna Alliance (M) Sdn Bhd [2022] 1 LNS 238, to support her decision.

Lee Teck Seng v. Lasman Das Sundra (supra) is an oft-quoted authority on the binding effect of a contract that a person signs S/N x7YijGckYE2KLYa4yvdbgw **Note : Serial number will be used to verify the originality of this document via eFILING portal 8 voluntarily, that one’s signature is irrefutable evidence of his assent to the whole contract. The relevant passage reads: “It is trite law that when a party signs a contract knowing it to be a contract which governs the relations between them, like the present case, then, to use the words of Denning J (as he then was) in Curtis v. Chemical Cleaning & Dyung Co. Ltd. [1951] 1 All er 631, "His signature is irrefutable evidence of his assent to the whole contract, including the exempting clauses, unless the signature is shown to be obtained by fraud or misrepresentation. Scrutton CJ in L Estrange v. F. Grancob Ltd [1934] 2 KB 394 had this to say: When a document containing contractual terms is signed, then in the absence of fraud, or, I will add, misrepresentation, the party signing is bound, and it is wholly immaterial whether he has read the document or not.”

Baoning Mineral Sdn Bhd v. Magna Alliance (M) Sdn Bhd (supra) is a judgment of SM Komathy JCA (when Her Ladyship was at the High Court). She reiterates the principle that inordinate delay in alleging duress in the signing of an agreement would be held against that party. It also restates a principle of estoppel that a party who enters into a further agreement based on the position stated in an earlier agreement would be barred from asserting that the earlier agreement was entered into under duress. The words of Justice Komathy in BAONING MINERAL SDN BHD v. MAGNA ALLIANCE (M) SDN BHD (supra) clearly illustrate the above principles, which are essentially based on common sense and estoppel in construing the conduct of a party alleging that he signed an agreement under duress: S/N x7YijGckYE2KLYa4yvdbgw **Note : Serial number will be used to verify the originality of this document via eFILING portal 9 “[23] Next, there is evidence that by letters dated 26 March 2019 and 9 December 2019, the plaintiff had made a demand against the second defendant to satisfy the guarantee it provided under the Agreement. The second defendant responded to the demand via its solicitors' letters dated 9 April 2019, 13 December 2019 and 22 May 2019. However, in none of these letters has the second defendant complained that it was made to enter the Agreement as a result of duress. The lack of it is most telling. It is raised for the first time in the Defence. The lateness supports the conclusion that it was never a genuine complaint to begin with.

Lastly and crucially, there is also evidence that on 25 June 2019 (some 4 years and 6 months after the Agreement) both the defendants entered into a guarantee of repayment agreement. By this agreement, the second defendant expressly recognised its position as guarantor under the Agreement and sought indemnification from the first defendant. If it is true that the second defendant entered into the Agreement as a result of duress, it is improbable that the second defendant would years later enter into another agreement to recognise its position as guarantor under the very Agreement it seeks to impugn. The second defendant's allegation of duress is inconsistent with its own conduct and inherently improbable. The allegation is, in my view, a desperate afterthought and is not a triable issue.” (emphasis added)

The learned Sessions Court judge also dealt with the Appellant’s point that the said Agreement was allegedly void for lack of consideration. This issue was sufficiently dealt with in para [72] and [73] of her Grounds, as follows: S/N x7YijGckYE2KLYa4yvdbgw **Note : Serial number will be used to verify the originality of this document via eFILING portal 10

The learned Sessions judge had evidently perused the Notes of Evidence as she had even cited the answer given by the Appellant’s witness who confirmed that he answered YES to the question as to whether item (a) and (b) [of the said Agreement] is the consideration in the said Agreement. The relevant line is set out below:

Factually, the learned Sessions Court judge recorded her finding that she found the Appellant’s allegation about being under coercion and financial pressure due to the Respondent’s director refusing to sign cheques – as a co-signatory – to have been refuted and debunked by the fact that several cheques were honoured during the “pressure period” alleged by the Appellant. This is evident from para [75], [76] and [77] of her Grounds, which I am setting out below: S/N x7YijGckYE2KLYa4yvdbgw **Note : Serial number will be used to verify the originality of this document via eFILING portal 11 Conclusion [24] As narrated above, the Appellant had, in its lengthy memorandum of appeal, thrown in every conceivable defence in attempting to vitiate the said Agreement – from misrepresentation to coercion and duress. Alas, the learned trial judge who had observed the demeanour of the witnesses was not convinced. She had rightly pointed out – as I have done above at the outset – that the said Agreement was prepared by the Appellant/Defendant. This undisputed fact militates against the Court accepting the allegations of misrepresentation and coercion raised by the Appellant/Defendant. S/N x7YijGckYE2KLYa4yvdbgw **Note : Serial number will be used to verify the originality of this document via eFILING portal S/N x7YijGckYE2KLYa4yvdbgw **Note : Serial number will be used to verify the originality of this document via eFILING portal 13 Counsel for the Appellant: Ong Swee Long (Eng Yi Wang with him) SOLICITORS FOR THE APPELLANT: MESSRS ARMIY RAIS No. 1-2B, 1st Floor, Jalan PJU 8/3A, Damansara Perdana, 47820 PETALING JAYA, SELANGOR. Counsel for the Respondent: Anantha Krishnan (Farhanah Jahn with him) SOLICITORS FOR THE RESPONDENT: MESSRS ANANTHA KRISHNAN Advocates & Solicitors No. 51, Persiaran Bruas, Damansara Heights, 50490 KUALA LUMPUR. S/N x7YijGckYE2KLYa4yvdbgw **Note : Serial number will be used to verify the originality of this document via eFILING portal 14 CASE(S) REFERRED TO:

Lee Teck Seng v. Lasman Das Sundra Shah [2000] 8 CLJ 317.

Baoning Mineral Sdn Bhd v. Magna Alliance (M) Sdn Bhd [2022] 1 LNS 238. S/N x7YijGckYE2KLYa4yvdbgw