Hanson Building Materials Malaysia Sdn Bhd v 1. ) Chong Boon Heng (BA-B52C-37-11/2021)

CHONG BOON HENG

SER CHIN POH (NO. K.P.: 620520-10-6181) …DEFENDANTS GROUNDS OF JUDGMENT (FULL TRIAL) A.

This is a claim for outstanding debts arising from a business relationship involving the supply of construction materials.

A default judgment was entered against the Second Defendant on 25th January 2022. S/N 5r8B9zFkAku4TgbGMvOmg

The Plaintiff sought judgment against the First Defendant for the sum of RM406,294.99 as at 31th October 2021 together with late interest charges at 1.5% per month from 1st November 2021 until full settlement and costs.

After full trial, this court allowed the Plaintiff’s claim. Dissatisfied, the First Defendant filed this appeal. B.

The Plaintiff supplied concrete materials to Syarikat Generasi Nirwana Sdn Bhd (GNSB) for its project at Dash @ Cahaya SPK Shah Alam (Jalan Denai Alam).

The First Defendant, as Managing Director, and the Second Defendant, as Director of GNSB, signed a Letter of Guarantee and Indemnity dated 29th August 2005, securing the debts of GNSB to the Plaintiff (pages 5 to 9 of Ikatan Dokumen Bersama – Ikatan B).

GNSB was wound up on 16th March 2021, prompting the Plaintiff to initiate this legal action against both Defendants.

The Second Defendant did not contest his liability under the Letter of Guarantee and Indemnity; consequently, a default judgment was entered against the Second Defendant.

The First Defendant has contested the validity of the Letter of Guarantee and Indemnity, raising issues regarding the execution and enforceability of the guarantee.

During the hearing, this Court granted the Letter of Guarantee and Indemnity an “ID” status and indicated that its marking as an Exhibit would be decided after full trial and depend on the written submissions. S/N 5r8B9zFkAku4TgbGMvOmg C.

The Plaintiff asserted that the Letter of Guarantee and Indemnity dated 29.08.2005 is valid and binding. The content of this document is identical to the Letter of Guarantee and Indemnity dated 04.03.2002 in the Hanson Quarry case, which was upheld by both the High Court and the Court of Appeal.

The Plaintiff relied on the Hanson Quarry case judgment (Hanson Quarry Products v. Syarikat Generasi Nirwana Sdn Bhd (GNSB) (High Court and Court of Appeal judgments) referred), which resolved identical issues against the same Defendant.

The Plaintiff argued that the issues raised by the First Defendant regarding the Letter of Guarantee and Indemnity dated 29.08.2005 have been conclusively addressed in the Hanson Quarry case by the High Court and Court of Appeal.

Under the binding precedent principle, it was argued that this court is obligated to follow those decisions, validating the Plaintiff's claims.

The Plaintiff emphasizes that, under Section 106 of the Evidence Act 1950, the burden of proving facts within the knowledge of the First Defendant, such as the alleged non-execution of the guarantee, lies with the Defendant.

Plaintiff averred that the Defendant failed to call his witness, Tiong Lee Ping, who could have verified the authenticity of the document. This omission raises an adverse inference under Section 114(g) of the Evidence Act.

Furthermore, it was submitted that the First Defendant has, in fact, acknowledged the execution of the document. The First Defendant’s pleadings implicitly acknowledge the execution of the Letter of Guarantee and Indemnity by raising defences such as the winding-up of GNSB and the scope of the guarantee. Further, the First Defendant implicitly acknowledged signing the S/N 5r8B9zFkAku4TgbGMvOmg Letter of Guarantee and Indemnity by asserting that he signed it to fulfil his duties as a director of GNSB.

Plaintiff stressed the fact that the First Defendant's claims of forgery, lack of initialling, delay in stamping, and non-receipt of documents were all technical defences previously dismissed in the Hanson Quarry case. The same arguments are raised here and should be rejected based on the binding precedent.

Plaintiff highlighted that under the terms of the guarantee, the Defendants agreed to act as principal debtors and indemnify the Plaintiff fully (Clause 1(a) and 1(b)) and the obligations under the guarantee are absolute and unconditional (Clause 11).

Plaintiff reiterated that these terms were upheld in the Hanson Quarry case, therefore reinforcing the Plaintiff’s claim in this case. It was argued that the principle of binding precedent necessitates the same conclusion in this case.

It was also argued that since the Second Defendant, who signed the same document, did not dispute his signature or contest his liability under the Letter of Guarantee and Indemnity, leading to a default judgment being entered against him, this creates circumstantial evidence supporting the Plaintiff's claim that the document is valid and executed by the First Defendant.

The Plaintiff argued that the First Defendant’s reliance on the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Act is misplaced, as it does not affect the enforceability of the guarantee.

The Plaintiff sought admission of the Letter of Guarantee and Indemnity as an exhibit and requested the court to uphold the binding precedent, validate the Letter of Guarantee and Indemnity dated 29.08.2005 as evidence, and grant judgment against the Defendant as per the Statement of Claim. S/N 5r8B9zFkAku4TgbGMvOmg D.

The First Defendant denied executing ID-1, arguing that the signature is vague and not genuine, and that their usual practice of initialling every page of agreements was not followed.

The First Defendant also highlighted the Plaintiff’s failure to produce the credit application form to verify ID-1’s authenticity, suggesting potential tampering or forgery. Defendant cited the case of Lim Yew Jin v. Adderina Kaharudin & Anor [2024] CLJU 256 which emphasizes the evidentiary burden of proving the authenticity of Part C documents.

The First Defendant contended that ID-1 was stamped 16 years after the alleged execution, raising questions about its validity.

The First Defendant argued that ID-1 should not be admitted as evidence because the Plaintiff failed to call witnesses, such as the document’s maker or other signatories, to establish its authenticity. The First Defendant urged the court to invoke Section 114(g) of the Evidence Act to draw an adverse inference against the Plaintiff for not producing the credit application form or calling relevant witnesses.

Further, according to the First Defendant, the document presented was a scanned copy, not an original, and no justification was provided to admit it as secondary evidence. First Defendant cited the case Troy Information Technology Malaysia Sdn Bhd v. Nissen Technology Sdn Bhd [2024] 5 CLJ 769 which emphasizes the inadmissibility of scanned documents as primary evidence without proper justification.

The First Defendant argued that any guarantee provided by them became null and void following the winding-up of GNSB on 16th March 2021. S/N 5r8B9zFkAku4TgbGMvOmg

The First Defendant asserted that he did not personally benefit from the Plaintiff’s deliveries to GNSB and that the guarantee was solely for the company’s benefit.

The First Defendant argued that the Plaintiff failed to demonstrate that the Outstanding Sum (RM406,294.99) is owed by GNSB because several delivery orders were not acknowledged by GNSB but by third parties like Aqem DB Sdn Bhd and Khairi Consult Sdn Bhd.

First Defendant further argued that the deliveries made after GNSB’s winding-up on 16.03.2021 are invalid as contracts post-winding-up require consent from the liquidator or Insolvency Department. First Defendant averred that deliveries made after GNSB’s winding-up constitute unjust enrichment for the Plaintiff.

The First Defendant alleged that deliveries made to GNSB after its winding-up constituted unjust enrichment for the Plaintiff.

The First Defendant contested the Plaintiff’s reliance on the High Court case (Hanson Quarry Products Sdn Bhd v. Chong Boon Heng) as a binding precedent.

The First Defendant argued that the High Court in that case dismissed a similar reliance on the alleged guarantee and indemnity letter. The First Defendant highlighted that the Plaintiff relied solely on the previous High Court decision and failed to provide any additional arguments or evidence to establish the admissibility of ID-1 under the Evidence Act 1950.

The First Defendant reiterated that ID-1, the alleged Letter of Guarantee and Indemnity, should not be admitted due to the Plaintiff’s failure to tender the document properly under the Evidence Act 1950 (EA 1950) and call witnesses, including signatories, to verify the document’s authenticity. S/N 5r8B9zFkAku4TgbGMvOmg

The First Defendant argued that the Plaintiff has failed to discharge its burden of proof under Section 101(1) of the Evidence Act 1950, which requires the Plaintiff to establish the facts it asserts.

The First Defendant claimed that the Plaintiff’s claim is premature under Section 7 of the Covid-19 Act 2020, which provides temporary relief for contracts affected by the pandemic.

The First Defendant concluded that the Plaintiff’s claims are unsubstantiated and founded on an inadmissible document. He requested that the claim be dismissed with costs. E. THE FINDINGS AND ANALYSIS OF THE COURT

This court admitted the Letter of Guarantee and Indemnity (LG) dated 29.8.2005 as an exhibit and this documents ID-1 is now marked as P1 based on the following reasons.

I am satisfied that the Plaintiff’s witness has provided sufficient evidence to show the authenticity and the existence of such LG. The LG is a genuine document procured by the Company before the deal to supply concrete products to Syarikat Generasi Nirwana Sdn Bhd (GNSB) (in which the first Defendant was holding the post as Managing Director) was approved. (see page 63 – 66 of the Notes of Proceeding).

The document was tendered through an appropriate witness who has access to and custody of all related documents relevant to her role as Pengurus Kredit Nasional in the company (see pages 42 and 43 of the Notes of Proceedings). SP1 had testified that for every credit application, letter of guarantee must be S/N 5r8B9zFkAku4TgbGMvOmg attached to the application, see her evidence at page 18 of the Notes of Proceeding: “S: Puan, for the purpose of easy reference, I will refer Generasi Nirwana Sdn Bhd as Generasi Nirwana sahaja puan. Alright, Cik Nithya, sebelum satu Surat Jaminan ataupun Indemnity ditandatangan oleh mana-mana wakil syarikat, syarikat itu sendiri perlu membuat permohonan kredit kepada plaintif, betul? Semasa permohonan kredit, Surat Jaminan ini akan dikepilkan bersama dengan permohonan kredit. So, maknanya bagi setiap permohonan kredit mesti ada Surat Jaminan dan Indemnity dari syarikat? Ya. ……………….. Dikepilkan oleh siapa? …… Dia akan diberikan oleh klien kami kepada kami. Waktu membuat permohonan? Ya, sebahagian daripada permohonan kredit.”

So, the document in question was, in fact, provided to the Plaintiff by the Defendant. ID-1, being the original document supplied by the Defendant, was received, accepted, and approved by the Plaintiff Company (see page 45 of the Notes of Proceedings) See further at page 44 of the Notes of Proceeding: S/N 5r8B9zFkAku4TgbGMvOmg “PD: Kalau kita sign dokumen dan it’s original, dokumen itu, signature kita boleh rasa kalau kita run through our finger and yang itu memang, it’s a printout copy, puan. If it is a printout copy, then an admission has to be made that it is a printout copy. Diorang tak ada original. Tetapi, since diorang kata it’s original, then we maintain our stand, puan. It should be marked as ID. We can argue in submission if my learned friend still insists on the document tu dijadikan sebagai exhibit, puan. But for now, based on the rules, I pray that the document will remain as ID1, puan. PP: If anybody wants to yang kena datang untuk mengatakan bahawa tandatangan, it actually should be D1 and importantly D2. Why D2 tak pernah cabar? Dia sign bersama dengan… Saya tanya saksi sebentar. Is this the document that is available in the record? In which record? In your record about this case, the tuntutan. This is the only letter of guarantee that is available. I mean this is the very document that your plaintiff received from the defendant? Yes. There's no other documents, correct? No. PP: Anybody were to talk about the authenticity is for them to come and tell the court, not the plaintiff. Plaintiff cuma terima je. PD: Ataupun maybe puan can decide after dengar D1 punya evidence because my learned friend will ask him also the same question. So, let's see. S/N 5r8B9zFkAku4TgbGMvOmg Mahkamah akan tentukan ni kemudian. Kita proceed dengan bicara dulu.”

Based on section 65(1)(a)(i) and 66 (b) or (d) of the Evidence Act, even if the LG produced is not the original as contented by the Defendant, this court is of the view that this document falls under the category of secondary evidence which may be given and admitted in court. For ease of reference, sections 65 and 66 of Evidence Act 1950 (Act 65) are provided below: “Section 65. Cases in which secondary evidence relating to documents may be given.

Secondary evidence may be given of the existence, condition or contents of a document admissible in evidence in the following cases:

when the original is shown or appears to be in the possession or power—

of the person against whom the document is sought to be proved;

(ii) of any person out of reach of or not subject to the process of the court; or

(iii) of any person legally bound to produce it, and when after the notice mentioned in section 66 such person does not produce it;

when the existence, condition or contents of the original have been proved to be admitted in writing by the person against whom it is proved or by his representative in interest;

when the original has been destroyed or lost, or when the party offering evidence of its contents cannot for any other reason not arising from his own default or neglect produce it in reasonable time; S/N 5r8B9zFkAku4TgbGMvOmg

when the original is of such a nature as not to be easily movable;

when the original is a public document within the meaning of section 74;

when the original is a document of which a certified copy is permitted by this Act or by any other law in force for the time being in Malaysia to be given in evidence;

when the originals consist of numerous accounts or other documents which cannot conveniently be examined in court, and the fact to be proved is the general result of the whole collection.

(a) In the cases referred to in paragraphs (1)(a), (c) and (d) any secondary evidence of the contents of the document is admissible.

In the case referred to in paragraph (1)(b) the written admission is admissible.

In the case referred to in paragraph (1)(e) or (f) a certified copy of the document but no other kind of secondary evidence is admissible.

In the case referred to in paragraph (1)(g) evidence may be given as to the general result of the documents by any person who has examined them and who is skilled in the examination of such documents.” “Section 66. Rules as to notice to produce. Secondary evidence of the contents of the documents referred to in paragraph 65(1)(a) shall not be given unless the party proposing to give such secondary evidence has previously given to the party in whose possession or power the document is, or to his advocate, such notice to produce it as is prescribed by law; and if no notice is prescribed by law, then such notice as the court considers reasonable under the circumstances of the case: S/N 5r8B9zFkAku4TgbGMvOmg Provided that such notice shall not be required in order to render secondary evidence admissible in any of the following cases or in any other case in which the court thinks fit to dispense with it:

when the document to be proved is itself a notice;

when from the nature of the case the adverse party must know that he will be required to produce it;

when it appears or is proved that the adverse party has obtained possession of the original by fraud or force;

when the adverse party or his agent has the original in court;

when the adverse party or his agent has admitted the loss of the document; or

when the person in possession of the document is out of reach of or not subject to the process of the court.”

This court observed that the First Defendant did not deny the signing of such document, in contrast, his stance is even if such LG was given by him, the LG is void due to the winding up of the company. First Defendant even pleaded the purposes why such LG was needed, i.e for the benefit of the Company and also to enable him to carry out his duty as a Director of the Company. In other words, First Defendant admitted the existence of this LG. To my mind, the implied admission in the pleading should be given sufficient weight to deduce that the existence of this LG is a truth. In the Federal Court case of Yam Kong Seng & Anor v Yee Weng Kai [2014] 4 MLJ 478 paras 16 – 18, the Federal Court held that: - “ [16] The above averment was in response to para 12 of the statement of claim S/N 5r8B9zFkAku4TgbGMvOmg wherein the appellants averred that the company and the respondent had confirmed in writing of the amount owing and payable to them. It is trite law that a judicial admission made in a pleading stands on a higher footing than evidentiary admission (Sarkar’s Law of Evidence) with the respondent’s admission therein be made the foundation of the rights of the parties (Satish Mohan Bilal v State of UP AIR 1986 All 126, at p 128; 1985 All CJ 507). Any failure on the part of the respondent to rebut the admission to avoid the legal consequences of his admission would entitle the appellants to enter judgment against him. [17] Having perused the defence in particular para 8, we find that there is clear judicial admission of the debt owed. The question that must follow would be whether the respondent was avoiding responsibility to pay up. In Jacob and Goldrein’s Pleadings: Principle and Practice [1990] pp 133-134 in dealing with confession and avoidance, the following is stated: Confession and Avoidance Meaning The term ‘confession and avoidance’ is the description of a plea in the defence which, while expressly or impliedly admitting or confessing or assuming the truth of the material facts alleged in the statement of claim, seeks at the same time to avoid or destroy the legal consequences of those facts. The plea is invoked by alleging fresh or additional facts to establish some legal justification or excuse, or some other ground for avoiding or escaping legal liability. The defendant, as it were, confesses the truth of what is alleged against him but proceed immediately to ‘avoid’ the effect of such allegations. [18] Having scrutinised the defence we find that the respondent has failed to avoid legal liability. With there being judicial admission by the respondent sufficient to hold him liable to the amount claimed the answer to the first question of law in this appeal must be answered in the positive.” S/N 5r8B9zFkAku4TgbGMvOmg

In this case, the Plaintiff produced a Guarantee Letter bearing the First Defendant's signature and, through SP1, demonstrated how the letter was obtained. Based on the evidence, the Plaintiff established that without this Guarantee Letter, the Company would not have entered into further business transactions with the applicant. Furthermore, whether or not the document was initialed was immaterial to the Plaintiff's decision to approve the application (see page 37 of the Notes of Proceedings), SP1 also testified regarding the verification process undertaken by the Company for each application. See page 66 of the Notes of Proceeding: “MAH: Ya. Dan pihak Hanson akan verify ataupun tidak selepas setiap kali surat guarantee dikembalikan? Macam mana verify, termasuk in terms of person yang menandatangani semua ni? Kita akan verify the guarantor orang yang benar sebab kita akan mendapatkan IC dan juga untuk saksi kita pun akan verify saksi ini. MAH: How you verify? Usually saksi, whoever yang sign, kita akan minta IC. MAH: So, maksudnya tempat yang sign ni, akan ada IC dibekalkan kepada pihak Plaintif? Akan ada.”

Counsel for the Defendant admitted that the credit application form that he referred the witness to during cross-examination is relevant to the claim in the current case. See page 25 of the Notes of Proceeding: Alright. Cik Nithya, kalau Cik Nithya tengok, this credit application, adakah credit application ini berkaitan dengan tuntutan plaintif di hadapan mahkamah sekarang? S/N 5r8B9zFkAku4TgbGMvOmg Setuju. MAH: Setuju apa? Setuju permohonan kredit ini adalah berkaitan dengan tuntutan mereka di hadapan mahkamah sekarang. Mana satu? 1 hingga 4. Permohonan kredit ini adalah hanya untuk satu syarikat betul, Generasi Nirwana Sdn Bhd?

This Court is entitled to form an opinion through its own comparison (as provided under Section 73 of the Evidence Act 1950). The Letter of Guarantee (LG) in question with Hanson Building (the Plaintiff) was signed on 29 August 2005. Upon comparison with other documents bearing the First Defendant's signature—namely, the Application for Credit Account Form dated 16.11.2015 (page 4 of Bundle B) and the Letter of Guarantee and Indemnity with Hanson Quarry dated 16.11.2015 (page 15 of Ikatan Dokumen Tambahan Plaintif) - this Court, not being aided by any expert evidence, though cannot conclusively determine that the signature on P1 belongs to the First Defendant, however, the Court is able to form an opinion that the signatures appear similar. It must be emphasized that this Court remains cautious, recognizing that such an opinion formed through comparison should not be relied upon solely to determine the issue at hand.

Bearing in mind based on the standard of “balance of probabilities”, a plaintiff is only required to prove that his case is more likely than not to happen and not with certainty. This explanation was given by Harmindar Singh JCA (now FCJ) in the case of Elizabeth Chin Yew Kim & Anor v Dato’ Ong Gim Huat and other appeals [2017] 1 MLJ 328 at page 337: S/N 5r8B9zFkAku4TgbGMvOmg “We must emphasise that proof on the balance of probabilities simply means proving that something was more likely than not to have occurred. There is no burden to prove with 100% certainly that it was the first Defendant’s breach which led to the injury. The Plaintiff only needs to prove that it was at least 51% likely that it was so.”

Circumstantially, the First Defendant did not dispute the fact that he was holding the post as a Managing Director of the company named Generasi Nirwana Sdn Bhd, hence a suitable person or authorised person to sign such LG. In other words, the First Defendant is neither a remote party nor a total stranger to the guarantee, as he also admitted that the LG was signed for the benefit of the company in which he served as Managing Director.

Pertinently, the First Defendant does not dispute the fact that since 2005, this Company named Generasi Nirwana Sdn Bhd applied for credit facility from the Plaintiff i.e Hanson Buiding Materials Malaysia Sdn Bhd and the Plaintiff’s another group company named Hanson Quarry Products Sdn Bhd. Both LG bear the First Defendant’s signature.

Plaintiff’s witness also provided justification regarding the delayed stamping of this document, see page 65 of the Notes of Proceeding: MAH: Ya. Dalam kes ini ada distamp, tapi stamping hanya dibuat pada 10 Februari 2022. Dengan yang letter of guarantee ini stated 2005. Ya betul. Can you please explain? Seperti mana yang saya jelaskan tadi, kita terima banyak surat jaminan dari klien kita, kita mempunyai beribu-ribu klien. So, kalau kita perlu S/N 5r8B9zFkAku4TgbGMvOmg menstampkan setiap surat jaminan, ia adalah kos yang besar kepada syarikat kami. So, kami hanya akan stampkan bila diperlukan. So, for this case, just for this case? Pardon? For this case, ada dah sign kan? Ya, sudah sign. Sebab ada tuntutan?

Hence, based on all the reasons aforesaid and when all the evidence including circumstantial evidence were weighed cumulatively, I am satisfied that the Plaintiff had proven on a balance of probabilities that the First Defendant did execute such an LG. Now the onus of proof shifted to the First Defendant. Unless and until the signature is shown to be obtained by fraud or misrepresentation, that signature is irrefragable evidence of First Defendant’s assent to the guarantee.

The burden now shifts to the First Defendant to rebut and demonstrate that the signature on the Guarantee Letter is not his, as a mere denial is insufficient under the circumstances. This Court considers it incumbent upon the First Defendant to either call other witnesses or produce expert testimony to aid the Court in determining the authenticity of the signature on the Guarantee Letter. Unfortunately, the First Defendant did neither. S/N 5r8B9zFkAku4TgbGMvOmg

First Defendant admitted that all the location written in the Delivery order are the project site under his company. (see page 62 Notes of proceeding). This court is also satisfied that acknowledgement of delivery was done by either the Company’s staff or the company’s appointed site engineer/inspector of works. Such acknowledgement was never disputed prior to this. If the materials were indeed wrongly delivered or not received by the Defendant’s company, this Court would expect the Defendant’s company to raise concerns about non-delivery or dispute the invoices issued. However, no such issues were raised at any point. Therefore, this Court is satisfied that the Plaintiff successfully delivered the items ordered by the Defendant’s company.

SP1 further explained about how their company’s system works. SP1 informed this court that in daily operation, invoices were automatically generated and sent via email to their client. The information about location of delivery and Delivery Order constitute part of the content of the invoices. The customer’s email address is maintained in the system and if the invoice failed to be delivered by the system, it will trigger an error message. In this case, there was no such error message triggered in any of the transactions. (see SP1’s evidence from page 37 – 39 of the Notes of Proceeding)

Overall, I am satisfied that the Plaintiff has proven the delivery orders were acknowledged by GNSB staff and, in some instances, by AQEM DB Sdn Bhd and Khairi Consult Sdn Bhd, acting as Site Engineer and Inspector of Works, respectively. The Plaintiff’s trucks delivered materials as documented in the delivery orders (pages 60–477) and summarized in the invoices (pages 19–59) of Ikatan Dokumen Bersama – Ikatan B. The Statement of Account dated 31st October 2021 (pages 17–18) confirms the outstanding amount claimed. Together, these documents—Invoices, Delivery Orders, and the Statement of S/N 5r8B9zFkAku4TgbGMvOmg Account—constitute cogent evidence of the goods supplied and the sums due to the Plaintiff.

The wound-up status of GNSB at the material time was known only to the Defendant's company. If they intentionally concealed this fact, continued placing orders, received goods (see page 42 of the Notes of Proceeding), and benefited from the supplies without raising any complaints about the contract's validity, they should be estopped from contesting this issue. By continuing to place orders and accept goods as though they were a valid legal entity capable of entering into business transactions, the Defendants effectively affirmed the contract until the eleventh hour.

In my view, raising the issue of the contract's validity due to the company's wound-up status at this stage is a shameless tactic to evade payment. The Plaintiff, as a bona fide supplier, was engaged in the legitimate business of supplying concrete goods to construction sites based on orders placed. The Plaintiff had no obligation to investigate the winding-up status of every company they dealt with. This Court is of the opinion that the principle of estoppel by conduct applies in this case, preventing the Defendant’s company from denying the terms of their order and using their wound-up status to unjustly enrich themselves.

In Alpine Return Sdn Bhd v Matthew Ng Hock Sing & Ors [2021] MLJU 1923, the Court applied the doctrine of estoppel by conduct, preventing the purchasers from reneging on the agreed terms of the SPAs as the purchasers were fully aware of and had consented to the 60-month completion period at the time of executing the SPAs, and thus could not later claim LAD based on a 36-month period.

Likewise, in the current case, the Defendants, fully aware of the company's status, continued purchasing by placing orders. The Plaintiff, having relied on these orders in good faith, should not be penalized retroactively merely because S/N 5r8B9zFkAku4TgbGMvOmg deliveries made after GNSB’s winding-up on 16.03.2021 are allegedly deemed invalid. Just as the Court in Alpine Return Sdn Bhd applied the doctrine of estoppel by conduct to prevent the purchasers from reneging on agreed terms, the Defendants in this case should similarly be estopped from disputing the validity of the deliveries or their obligations arising from those orders. The transaction or contract should be upheld in the interest of fairness and reliance.

In Ahmad Bin Salleh & Ors v. Rawang Hills Resort Sdn Bhd [1995] 3 MLJ 211, the court held that: “When the first sale and purchase agreement was executed, the defendants were not in existence. However, the agreements were subsequently ratified under s 35 of the Companies Act 1965. Also, the plaintiffs were estopped from raising this issue as they had until just before the trial, accepted the defendants as a legal entity in the first sale and purchase agreement.”

The doctrine of estoppel is clearly applied in Ahmad Bin Salleh, demonstrating the court's inclination to hold that parties who have treated and accepted a company as a legal entity throughout their contractual dealings cannot later dispute its existence or raise objections about the company’s status. These principles underscore the importance of fairness and reliance in contractual dealings, ensuring that parties are held accountable for their consistent recognition and acceptance of the other party's status throughout their relationship.

Drawing the same analogy, the post-wound-up status of the Defendant's company is irrelevant to the validity of the contract. The Defendants, having continued to place orders and accept goods as though they were a valid legal entity, cannot now dispute their obligations arising from those transactions. S/N 5r8B9zFkAku4TgbGMvOmg

Based on my observations, the First Defendant's credibility is seriously in doubt, as he was unable to provide any meaningful or helpful information in his own case. A review of the Notes of Proceedings reveals that a significant portion of his responses consisted of phrases such as 'tak tahu,' 'benda ini saya tak tahu,' 'saya tak tahu,' and 'saya tidak pasti’.

The witness's responses regarding the critical issue of whether he signed the Letter of Guarantee (LG) are also inconsistent. At one point, he denied the signature, yet he simultaneously argued that even if he did sign, it was 'untuk manfaat GNSB semata-mata dan bukan saya secara peribadi' (see his witness statement). This Court is of the view that the Defendant’s adoption of contradictory positions in his Defence is akin to 'blowing hot and cold.' It was held by the Federal Court in Nabors Drilling (Labuan) Corp v Lembaga Perkhidmatan Kewangan Labuan [2020] 12 MLJ 54 as follows: - [16] … Such conscious conduct on the part of the appellant, viewed cumulatively must surely be held against it for it raises the application of the principle of law, in the words of Sir Nicholas Browne-Wilkinson VC in Express Newspaper plc v News (UK) Ltd and others [1990] 3 All ER 376 ‘… that it is not possible to approbate and reprobate. That means you are not allowed to blow hot and cold in the attitude that you adopt. A man cannot adopt two inconsistent attitudes towards another: he must elect between them and, having elected to adopt one stance, cannot thereafter be permitted to go back and adopt an inconsistent stance’. (emphasis added)

In addressing the First Defendant's contention that the Plaintiff's reliance on the High Court case Hanson Quarry Products Sdn Bhd v. Chong Boon Heng as a binding precedent is incorrect, as the High Court in that case had dismissed a S/N 5r8B9zFkAku4TgbGMvOmg similar reliance on the alleged guarantee and indemnity letter, this court however noted that both cases involve the Plaintiff, Hanson Building Materials Sdn Bhd (for this case) and Hanson Quarry Products Sdn Bhd (for the Hanson Quarry case), as entities within the same Hanson Group. The First and Second Defendants executed Letters of Guarantee and Indemnity for debts owed by Syarikat Generasi Nirwana Sdn Bhd (GNSB) to the Plaintiff in both cases.

Additionally, the Letter of Guarantee and Indemnity dated 29.08.2005 in this case is identical in content to the Letter of Guarantee and Indemnity dated 04.03.2002 in the Hanson Quarry case. Both documents outline the Defendants' obligations as guarantors and indemnifiers of GNSB's debts. The key issues raised by the First Defendant in both cases—such as alleged forgery, lack of initialling, delay in stamping, and non-receipt of documents—are identical. These issues were adjudicated and dismissed by the High Court in the Hanson Quarry case (BA- 22C-41-11/2021), with the judgment subsequently upheld by the Court of Appeal.

This court finds that since there is no new development or new issues were raised during this trial. The Court of Appeal’s reaffirmation of the High Court judgment in the Hanson Quarry case further validates the Plaintiff’s reliance on the 29.08.2005 Letter of Guarantee and Indemnity as a binding document. In other words, the findings in the Hanson Quarry case significantly reinforce the validity of the Letter of Guarantee and Indemnity dated 29.08.2005 and the Plaintiff’s entitlement to judgment.

Be that as it may, this Court emphasizes that it does not rely solely on the previous High Court decision in reaching its verdict in this case. Today’s decision is primarily grounded in this Court’s findings and analysis after hearing the witnesses and adjudicating the case based on the evidence presented at trial. Even in the absence of the prior High Court or Court of Appeal decisions, this Court would have reached the same conclusion after thoroughly evaluating the witnesses’ testimonies, the documentary evidence, and considering the arguments advanced by both parties. S/N 5r8B9zFkAku4TgbGMvOmg WHETHER SECTION 7 OF THE COVID-19 ACT IS APPLICABLE TO THE

In addressing the First Defendant's argument that the suit is premature under Section 7 of the Covid-19 Act, which provides temporary relief for contracts affected by the pandemic, this Court will first examine the relevant provision. For ease of reference, Section 7 of the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020 is reproduced below: “Section 7: Inability to perform contractual obligation The inability of any party or parties to perform any contractual obligation arising from any of the categories of contracts specified in the Schedule to this Part due to the measures prescribed, made or taken under the Prevention and Control of Infectious Diseases Act 1988 [Act 342] to control or prevent the spread of COVID-19 shall not give rise to the other party or parties exercising his or their rights under the contract.”

This court is of the view that the First Defendant has not met the burden of proof required under SN Akmida Holdings Sdn Bhd v. Kerajaan Malaysia [2021] MLJU 2449, which mandates clear evidence of an inability to perform contractual obligations due to measures implemented under the Covid-19 Act. General references to the pandemic or movement control orders are insufficient.

In the High Court case of SN Akmida Holdings Sdn Bhd, the court held that a party relying on relief under Section 7 of the Covid-19 Act bears the burden of proving, on the balance of probabilities, that the following conditions are met: I. The party must demonstrate that it is unable to perform a specific contractual obligation, which must be clearly stated. S/N 5r8B9zFkAku4TgbGMvOmg II. The inability to perform must result from one of the categories of contracts listed in Part II of the Schedule to the Act. III. The inability to perform must be caused by measures implemented under the Covid-19 Act to control or prevent the spread of COVID-19.

Hence, based on the SN Akmida Holdings Sdn Bhd case, it is insufficient for a party to merely rely on the occurrence of the pandemic, movement control orders, or their consequences as reasons for failing to perform contractual obligations. It is a requirement for the party to provide specific evidence to justify invoking Section 7.

Apart from that, it is noteworthy that Section 7 addresses "inability" to perform, thus it is not a blanket for denial of contractual obligations. The key term in Section 7 is "inability" and not merely a "denial" of the ability to perform the contract. Thus, the Defendant must clearly and specifically prove its inability to perform its contractual obligations.

The First Defendant has failed to provide specific evidence of how pandemic-related measures directly caused their inability to perform. Additionally, in Ravichanthiran Ganesan v. Lee Kok Sun & Ors [2021] 1 LNS 1581, the High Court decided that the Act only provides temporary measures to mitigate the effects of COVID-19 and does not serve as a law that allows a party to avoid liability or debt merely because the debt arose during the pandemic.

Therefore, drawing upon the principles articulated in the aforementioned case authorities, since the First Defendant has failed to establish a clear and specific inability to perform its contractual obligations, this court finds that the First Defendant’s reliance on Section 7 is baseless. Section 7 of the Covid-19 Act is inapplicable to the First Defendant and the Covid-19 Act does not absolve the First Defendant of liability in this case. S/N 5r8B9zFkAku4TgbGMvOmg F.

Having heard the witnesses and perused the submissions of parties, this court finds that the Plaintiff successfully proved its case on the balance of probabilities. The Letter of Guarantee and Indemnity dated 29.08.2005 is enforceable, supported by binding precedents and credible evidence. The First Defendant failed to raise a credible defence, with his arguments found inconsistent and unsubstantiated. This court dismissed objections regarding the winding-up of GNSB and found no merit in the reliance on Section 7 of the COVID-19 Act.

Premised on the above, this court allows the Plaintiff’s claimed sum of RM406,294.99 with late interest charges and costs of RM13,000. Dated: 28 December 2024 (YONG LEOU SHIN) Judge Session Court Shah Alam Selangor Counsel for the Plaintiff Panir Selvam Messrs N. Selvam Jay And Company Kuala Lumpur Counsel for the First Defendant Ahmad Zayd Messrs Faisal & Zayd Shah Alam, Selangor S/N 5r8B9zFkAku4TgbGMvOmg