Farlim Group (Malaysia) Berhad v Impact Resources Sdn Bhd (PA-11ANCvC-21-07/2021)

The Appellant (Farlim) is a property developer. The Respondent (Impact) is a landscape consultant. Farlim appointed Impact as the landscape consultant for one of their projects.

There was a letter of appointment, with an agreed lump sum fee of RM92,023.36. The letter was issued by Farlim to Impact.

There were landscape plans submitted by Impact. There were letters of approval that were issued by the Jabatan Kerja Raya and the Majlis Daerah Tapah, issued to Impact and copied to Farlim. 16/06/2022 14:17:20 PA-11ANCvC-21-07/2021 Kand. 25 S/N xZZxyie7Hkiw0h8GDirKkw **Note : Serial number will be used to verify the originality of this document via eFILING portal

There were three progressive Invoices issued by Impact. The first Invoice was for half the agreed fee—RM46,011.68. Farlim paid that sum. The second and third Invoices were for the balance other half. Farlim did not pay this sum.

Impact sued for the balance other half that was unpaid.

Farlim’s counter-position was that the RM46,011.68 that they had paid to Impact was an advance. They asserted further that Impact only performed Phase 1 of the work. They quantified the Phase 1 fee at only RM11,502.92. From this position, Farlim launched a Counterclaim for the return of the difference between the RM46,011.68 allegedly advanced and the Phase 1 fee. In other words, Farlim pleaded that they had paid Impact more than they deserved. And Farlim wants what they allegedly overpaid to be returned.

Impact applied to strike out Farlim’s Counterclaim. The Magistrates Court struck it out. Farlim appealed against that Decision.

Was Farlim’s Counterclaim correctly struck out?

The law on our striking out procedure is well-settled. The summary procedure to strike out pleadings (and hence strike out the Claim or the Defence) under Order 18 Rule 19 of the Rules Of Court 2012 should only be used in “plain and obvious” cases, or when the claim (or Counterclaim, S/N xZZxyie7Hkiw0h8GDirKkw **Note : Serial number will be used to verify the originality of this document via eFILING portal Page 3 of 6 as it were in this suit) is “obviously unsustainable”: Bandar Builder Sdn. Bhd. v United Malayan Banking Corporation Bhd. [1993] 3 MLJ 36 (SC). C. Farlim’s opposition to the striking out application is untenable

Farlim’s argument is as alluded to above— i. that Impact had only performed Phase 1 of the work; ii. that they paid the RM46,011.68 to Impact as an advance; iii. that the difference between the RM46,011.68 allegedly advanced and the Phase 1 fee, should be returned to them.

I find this proposition to be incongruous with the evidence disclosed through the documents that were exhibited in the affidavits— i. In September 2017, Farlim issued the letter of appointment to Impact. ii. In September 2017, Impact issued their first Invoice for the RM46,011.68 (labeled on the Invoice as the “1st Claim”). iii. In September 2017, Farlim paid that first Invoice. iv. In November 2019, Impact issued their second Invoice for RM20,000.00 (labeled on the Invoice as the “2nd Claim”). v. In August 2020, Impact issued their third Invoice for RM 26,011.68 (labeled on the Invoice as the “3rd Claim”). These two later Invoices make up the balance other half of the agreed fee—amounting to RM46,011.68. vi. In August 2020, Impact issued a Statement Of Account to Farlim for the outstanding RM46,011.68. S/N xZZxyie7Hkiw0h8GDirKkw **Note : Serial number will be used to verify the originality of this document via eFILING portal Page 4 of 6 vii. In November 2020, Farlim’s project manager initiated and exchanged WhatsApp messages with Impact’s director, about a proposal to settle at a lower sum of RM30,000.00. viii. There was no contemporaneous document to show that Farlim disputed the work that was done in 2019 and in 2020. Nor was there a contemporaneous document to show that Farlim disputed the two subsequent amounts that were invoiced (RM20,000.00 and RM26,011.68). ix. There was also no contemporaneous document that supports Farlim’s assertion that the RM46,011.68 was an advance. Instead, Farlim’s own Payment Voucher for the RM46,011.68 payment states that it was a payment towards Impact’s first Invoice. The particulars of Impact’s Invoice were in fact stated on Farlim’s Payment Voucher. x. It was not until after this suit was filed in July 2021, and faced with a summary judgment application, that Farlim raised this issue that the RM46,011.68 paid towards Impact’s first Invoice, was an advance. I find this assertion to be an afterthought.

Based on these exhibits alone, I am persuaded that Farlim’s Counterclaim is untenable, and is bound to fail.

I have come to the same summation that Farlim’s Counterclaim should be struck out because it is frivolous and an abuse of the process of the Court. S/N xZZxyie7Hkiw0h8GDirKkw **Note : Serial number will be used to verify the originality of this document via eFILING portal

I therefore hold that this is a plain and obvious case to use the Order 18 Rule 19 procedure to strike out Farlim’s Counterclaim. I do so also because I find that Farlim’s Counterclaim is obviously unsustainable.

I accordingly dismiss Farlim’s Appeal against the Order striking out their Counterclaim, with costs. Decision date: 17th February 2022 Judgment date: 14th March 2022 Signed (KENNETH ST JAMES) Judicial Commissioner High Court of Penang Counsel/Solicitors For the Appellant: Dato’ Abd. Fareed b. Abd Gafoor & Puan Najwa bt Fahmi Messrs V M Mohan Fareed & Co Greenhall Chambers, No 33, Green Hall 10200 Georgetown, PULAU PINANG Telefon : 04-2633095 Faks : 04-2615304 S/N xZZxyie7Hkiw0h8GDirKkw **Note : Serial number will be used to verify the originality of this document via eFILING portal Page 6 of 6 For the Respondent: Cases referred to:

Bandar Builder Sdn Bhd v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36 Puan Nur Aiman Sahzwin bt Shafaai & Encik Wong Xian Zheng Messrs San Law Chambers Unit 6.2, 6th Floor, Wisma Leader, No. 8, Jalan Larut, 10050 Georgetown, PULAU PINANG Telefon : 04-2288616 Faks : 04-2299616 S/N xZZxyie7Hkiw0h8GDirKkw