Hc Plastic Sdn Bhd v Tritex Polymer Sdn Bhd (WA-12BNCvC-136-12/2025)

This is an appeal by the Appellant against part of the decision of the learned Sessions Court Judge delivered on 18.11.2025 after a full trial spanning thirteen days. The Sessions Court dismissed the Appellant's claim in its entirety and allowed the 1st Respondent's counterclaim for RM800 (transportation), RM4,902.54 (balance under the Fourth Invoice), and interest at 5% per annum. The counterclaim for storage charges and libel was dismissed.

Having carefully considered the Record of Appeal, the Grounds of Judgment dated 13.03.2026, the parties' written submissions (Enc. 11, 12, 14, 17), and the authorities cited, my reasons follow. Material Facts

The dispute centres on two commercial transactions for the supply of recycled plastic material, each expressly described in the invoices as "white LDPE shredded (post-industrial grade)". The description was neither casual nor incidental; it formed the very identity of the goods forming the subject matter of the parties' bargain.

The first transaction concerned a single container. Upon its arrival at the Appellant's factory on 4.1.2020, the Appellant immediately discovered that the material delivered did not resemble white LDPE shredded as contracted.

Instead, the goods consisted of a mixture of heterogeneous plastic materials, inconsistent in both appearance and composition with the contractual description. The Appellant rejected the goods on the same day and notified the 1st Respondent without delay.

The second transaction initially involved twenty containers. Following discussions with the Canadian supplier, thirteen containers were cancelled, leaving seven containers already en route to Malaysia. The Appellant, having rejected the first container for non-conformity, terminated the second transaction on the basis that the remaining seven containers would inevitably suffer from the same defect.

The Respondents take a different view. They maintain that the goods supplied were indeed LDPE shredded, albeit of a lower grade commensurate with the agreed price of RM800 per metric ton. They contend that the presence of mixed materials is commercially acceptable within the recycled plastics industry and consistent with the price point.

The Respondents further argue that the Appellant is estopped from asserting non-conformity because it accepted RM14,968 from the sale of the goods in the first container, and because it failed to inspect the seven containers under the second transaction before sending them to storage.

These competing narratives form the factual matrix against which the legal issues in this appeal must be assessed. Issues For Determination

The following issues arise:

(i) Whether the goods corresponded with the contractual description under s.15 of the Sale of Goods Act 1957 ("SOGA").

(v) Whether the Appellant is estopped by accepting sale proceeds.

The starting point is the contractual description. Both the 1st and 2nd transactions were expressly documented as involving "white LDPE shredded (post-industrial grade)". This was not a casual label but the very identity of the goods forming the subject matter of the bargain. The sale was therefore unequivocally a sale by description within the meaning of the Sale of Goods Act 1957. Section 12 of the Sale of Goods Act 1957 reads that: "(2) A condition is a stipulation essential to the main purpose of the contract, the breach of which gives rise to a right to treat the contract as repudiated.

Section 15 of the Act imposes an implied condition-not a mere warranty-that goods supplied under a contract for sale by description must correspond strictly with that description. The obligation is exacting. Even a seemingly minor deviation from the description constitutes a breach of condition and entitles the buyer to reject the goods.

In the present appeal, the Respondents themselves accepted that the goods delivered were not pure LDPE, acknowledging that they contained "a little mixture of other material" (Enc.14, para 17). This admission is significant. It goes directly to the identity of the goods and is wholly inconsistent with the contractual description.

In Vantage Access Limited & Anor v NT-2 Corporation Sdn Bhd & Ors [2025] MLRHU 672, where it was held that :- "[30] If the written contract specifies conditions of weight, measurement and the like, those conditions must be complied with. A ton does not mean about a ton, or a yard about a yard. Still less than when you descend to minute measurements does 1/2 an inch mean about 1/2 an inch. If the seller wants a margin he must and in my experience does stipulate for it."

The scientific evidence reinforces this. The SIRIM chemist (PW2) testified that the retained sample contained polyethylene (PE) and isotactic polypropylene (iPP)a composition incompatible with LDPE. This was not challenged by any competing expert evidence.

The Respondents, for their part, produced no expert, no counter-analysis, no alternative sample, and no inspection report to rebut the SIRIM findings. Their challenge rested solely on speculation about the chain of custody and general assertions about industry practice. Such assertions cannot displace uncontroverted scientific evidence.

The learned Sessions Court judge accepted the Respondents' explanation that the presence of mixed materials was consistent with the price point and common practice in the recycled plastics industry.

With respect, this was a misdirection. The inquiry under s.15 is not whether the goods were commercially usable, nor whether the price was low, nor whether impurities are common in the trade. The decisive question is whether the goods corresponded with the contractual description. In the law of sale by description, the description is the lodestar by which the parties chart their course, and the court must not allow that guiding star to be dimmed by considerations extraneous to the contract.

As the Court of Appeal emphasised in Wee Lian Construction Sdn Bhd v Ingersoll-Jati Malaysia Sdn Bhd [2010] 3 MLJ 425, a seller who fails to supply goods answering the description is guilty of a total failure of performance. Price, custom, or commercial tolerance cannot be invoked to dilute or rewrite the express description agreed by the parties.

Wee Lian (supra), recognises two categories of cases. The first concerns a failure to achieve exact conformity with the contractual description of the goods, which results in a total failure to perform the contract. The second concerns situations where the goods supplied are, in substance, not the goods ordered at all, such that the contract is treated as wholly unperformed.

In this context, every element of the contractual description that forms a substantial ingredient of the identity of the goods sold is a condition. The law insists that the "description" by which goods are sold is confined to the words chosen by the parties to identify the very kind of goods to be supplied. It is those words and only those words that define the identity of the subject matter.

The correct test is whether the buyer could fairly and reasonably refuse to accept the goods on the ground that their failure to correspond with what was said about them in the contract renders them goods of a different kind from those he agreed to purchase.

In light of the Respondents' own admissions, the unchallenged scientific evidence, and the strict statutory requirement under s.15, I find that the goods supplied did not correspond with the contractual description. The implied condition under the Sale of Goods Act was therefore breached. Validity Of Rejection

The Appellant notified the Respondents of the non-conformity on the very day the goods were delivered, namely 4.1.2020. This contemporaneous notification is not disputed. Such immediate rejection accords squarely with S.42 of the Sale of Goods Act 1957, which recognises the buyer's right to reject goods that do not correspond with their description upon delivery. S.42 of the Sale of Goods Act 1957, The buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him and he does any act in relation to them which is inconsistent with the ownership of the seller, or when, after the lapse of a reasonable time, he retains the goods without intimating to the seller that he has rejected them.

The provision sets out three distinct situations in which the law will treat a buyer as having accepted the goods, even if he has not expressly said so. The underlying idea is that acceptance can be shown not only by words, but also by conduct and by silence over time.

First, a buyer is deemed to have accepted the goods when he communicates acceptance to the seller. This may be done expressly or by conduct that clearly conveys approval.

Secondly, acceptance may arise where the buyer, after delivery, acts in a manner inconsistent with the seller's ownership. This refers to conduct that only an owner would ordinarily undertake for example, using the goods, processing them, reselling them, or otherwise dealing with them as if they were his own. Such conduct is incompatible with the position of a person who is still deciding whether to accept or reject the goods.

Thirdly, the law recognises that silence can amount to acceptance. If the buyer retains the goods for a "reasonable time" without notifying the seller of rejection, the law treats this inaction as acceptance. The rationale is that a seller is entitled to certainty and should not be left indefinitely in doubt as to whether the buyer intends to keep or reject the goods.

Taken together, these principles ensure that acceptance is not confined to formal declarations. It may arise through words, conduct, or prolonged inaction, provided the circumstances objectively indicate that the buyer has elected to treat the goods as his own.

In the instant appeal, the evidence showed that, two physical samples were produced for comparison before SD1. The first was the sample retained by the Plaintiff from the container delivered under the 1st Invoice (Exhibit P5). The second was a sample of pure LDPE film from the Plaintiff's own inventory (Exhibit P6).

Upon examining both samples, SD1 confirmed that while both were plastic trims, Exhibit P5 was a mixture of various plastics, whereas Exhibit P6 was pure LDPE. This admission is significant. It is a direct acknowledgment from the Respondents' own witness that the goods delivered under the 1st Invoice did not match the contractual description of "white LDPE shredded (post-industrial grade)."

SD1's concession therefore establishes, on the Respondents' own evidence, that D1 failed to comply with the specification stated in the 1st Invoice. This is not a matter of degree or quality; it is a failure of identity, going to the heart of section 15 SOGA.

SP2, the SIRIM chemist, testified that laboratory analysis of the retained sample revealed the presence of polyethylene (PE) and isotactic polypropylene (iPP). These findings, reflected in the SIRIM Lab Report, confirm that the sample was not pure LDPE.

Crucially, SP2's expert opinion was unequivocal. When asked whether a material containing polypropylene could still be classified as LDPE, she replied: "Tidak boleh... It's a mixture... Dia tidak boleh diklasifikasikan sebagai LDPE sahaja. Dia adalah campuran PE dan PP."

This testimony removes any ambiguity. The goods supplied cannot be classified as LDPE; they are a mixture, inconsistent with the contractual description.

SP2 further verified that the sample tested by SIRIM was the same sample retained from the container under the 1st Invoice. Her confirmation was based on both the physical characteristics of the sample and the chain of custody reflected in the documentation. This eliminates any suggestion that the wrong sample was tested.

The learned Sessions Court Judge erred in rejecting the SIRIM Report and SP2's testimony on the basis that "there is no proof that the Plaintiff had delivered the actual sample under the 1st Invoice" for testing.

This finding is unsustainable for several reasons.

(i) The fact of retention was agreed It was an agreed fact that the Plaintiff retained a sample from the container delivered under the 1st Invoice. No party disputed this. The Court was therefore not entitled to disregard the sample's provenance.

Further, the expert witness, SP2, confirmed unequivocally that the sample tested by SIRIM was the very same sample retained from the container under the 1st Invoice. At no stage during the trial did the Respondents challenge the chain of custody or suggest that the sample had been substituted or mishandled.

In these circumstances, the evidential foundation for the sample's authenticity was firmly established, and the Plaintiff bore no further burden to prove how the sample was extracted. The Sessions Court therefore misdirected itself by imposing a burden that the law does not require.

The evidence, when viewed cumulatively, points in only one direction. SD1 expressly acknowledged that Exhibit P5 was a mixture of plastics, not pure LDPE. This admission is reinforced by SP2's scientific analysis, which confirmed that the retained sample contained both PE and iPP and therefore could not be classified as LDPE.

The chain of identification of the retained sample was also unbroken: the sample was admitted having been retained from the first container, physically produced in court, and verified by the expert as the same sample tested by SIRIM.

Taken together, these strands of evidence lead to a single, inescapable conclusion: the goods delivered under the 1st Invoice did not correspond with the contractual description. The Sessions Court's decision to disregard this body of evidence was a material misdirection, and appellate correction is plainly warranted.

The statutory framework is clear: a buyer is only deemed to have accepted goods if he intimates acceptance, performs an act inconsistent with the seller's ownership, or retains the goods for a reasonable time without intimating rejection. None of these circumstances arise on the facts before this Court.

The Respondents' contention that the Appellant's machines were "still functioning" is immaterial. The statutory inquiry is not whether the goods could be processed, nor whether they were capable of yielding some output, but whether they corresponded with the contractual description. Functional usability cannot cure a failure of identity.

The law does not permit a seller to rely on the fact that the goods can be made to work in some fashion when the goods delivered are not, in substance, the goods contracted for.

The Appellant's retention of a small sample of the material further reinforces, rather than undermines, the lawfulness of the rejection. The sample was retained solely for the purpose of verifying conformity with the contract a purpose ultimately fulfilled through the SIRIM analysis, which provided objective findings on the composition of the retained sample.

In the circumstances and having regard to the statutory scheme under ss. 41, 42 and 37(3) of the Sale of Goods Act 1957, I am satisfied that the rejection was both valid and timely, and that the Appellant exercised its right of rejection in the clearest possible terms. "As Is Where Is" Clause

The Respondents place considerable reliance on Clause 4 of the invoice, which states that the goods were sold on an "as is where is" basis. They contend that this clause absolves them of responsibility for the condition and composition of the goods supplied.

While such a clause may, in appropriate circumstances, exclude warranties relating to quality, fitness for purpose, or merchantability, it cannot displace the statutory condition of correspondence with description imposed by section 15 of the Sale of Goods Act 1957.

The law draws a clear and deliberate distinction between the quality of goods and their identity. An exclusion clause may speak to the former, but it cannot rewrite or dilute the latter.

To accept the Respondents' submission would be to allow a seller to label a box as "white LDPE shredded" while filling it with assorted scraps and then insist that the buyer is bound by whatever happens to be inside. An "as is where is" clause cannot convert a mislabelled box into the product described.

Such an approach would undermine commercial certainty and erode the very purpose of a sale by description. The contractual description is not a decorative label; it is the core identifier of the goods bargained for.

It performs a defining function in the architecture of the contract. An exclusion clause cannot be used as a vehicle to substitute one product for another; to permit this would be to allow the seller to change the very subject matter of the bargain while insisting that the buyer remain bound.

In commercial terms, it would be akin to handing over a different commodity altogether and then seeking refuge behind a general disclaimer. The law does not countenance such an inversion of contractual responsibility.

Moreover, the Respondents' own admission that the goods contained "a little mixture of other material" underscores the fact that the issue here is not one of minor quality variation but of non-conformity with the essential description.

In Aim Edition Sdn Bhd v Ambank (M) Berhad [2020] MLJU 82 where it was held that "as is where is" clause cannot operate beyond the express term of the contract :- "[66] We agreed with the Appellant that in this case the "as is where is basis" principle is not applicable since the particulars of title in the Proclamation of Sale that the actual size of the land does not correspond with 94.76 hectares as stated in the particulars of title in the Proclamation of Sale. It is also our view that the size of the said land is an express term of the contract. In actual fact, there was evidence of witness (Witness Statement of Er Ka Wei dated 23.5.2018 (page 49 of RIP-Volume 2) that before bidding for the said land, a land search was conducted and all the particulars of title including the size of 94.76 hectares corresponds with the particulars of title stated in the Proclamation of Sale. The Appellant's expert witness, SP3 testified that there was no acquisition exercise over the said land, to give rise to the overlapping lots (see: Notes of Evidence dated 23.5.2018). [67] We agreed with the the High Court's finding in Azharin Shaari v Tabung Haji Properties Sdn. Bhd's case, supra, when it was held that, although the land was sold on the basis of "as is where is" the area represented for sale was 55.25 acres. It was on that premise the plaintiff made his offers and subsequently accepted the defendant's offer. It does not lie on defendant to say that "as is where is" meant the plaintiff bought the land represented to be 55.25 acres when it turned out to be 29.5 acres. There is no obligation on the plaintiff to do a search on the land size when the offer was clear the area was for 55.25 acres in respect of 688 lots. Further there was no indication at the material time of any master titles. There was nothing to show the land size was other than what was shown in the advertisement and the defendant's offer."

Therefore, "as is where is" clause cannot be stretched to validate the delivery of goods that do not answer the description agreed by the parties.

In these circumstances, I find that the "as is where is" clause does not assist the Respondents. It does not operate to cure a failure of identity, nor does it override the statutory protection afforded to buyers under section 15 SOGA 1957. Price Point And Trade Custom Arguments

The Respondents contend that the agreed price of RM800.00 per metric ton necessarily implies a lower grade of recycled LDPE in which the presence of impurities or mixed materials is commercially acceptable. In essence, they invite the Court to read into the contract an unstated tolerance for mixture based solely on price and alleged industry practice.

However, this argument is fundamentally flawed for two reasons.

(i) The argument was never pleaded The Statement of Defence contains no plea whatsoever that the LDPE supplied was of "Grade D/E", nor any assertion that a certain level of mixture or contamination was permissible. There is likewise no pleading of any trade usage or custom relating to recycled plastics that would qualify or dilute the contractual description. Equally absent is any plea that the agreed price of RM800 per metric ton carried with it a price-based qualification of the description. In short, the Respondents never pleaded any factual or legal basis to suggest that the goods delivered could lawfully depart from the express description agreed between the parties. The law is settled. As the Court of Appeal held in Cheong Heng Loong Goldsmiths (KL) Sdn Bhd & Anor v Capital Insurance Bhd [2003] 2 MLRA 313, Gopal Sri Ram JCA (as he then was) propounded that:- "[19] Now, it is a cardinal rule of pleading that a defendant to an action for breach of duty - whether in contract or tort - may properly deny liability and require the plaintiff to prove his or her claim. But once a defendant takes that course, he must stand or fall on his pleaded case. He cannot simultaneously put forward an unpleaded case of justification for his conduct. ...it is not even permissible for them to proceed to put forward some affirmative case which they have not pleaded or alleged." Parties are bound by their pleadings, and a court is not permitted to decide a case on a theory that was never put to the opposing party at trial. The learned Sessions Court judge therefore erred in accepting and relying upon a theory that was not pleaded, not particularised, and not put to the Plaintiff's witnesses in cross-examination. This constitutes a misdirection warranting appellate intervention.

The Appellant did accept the sum of RM14,968.00, being the proceeds from the sale of the rejected goods. This fact is not disputed. The Respondents rely on this acceptance to argue that the Appellant is now estopped from asserting non-conformity.

It is my findings, that submission cannot be sustained. The total amount paid by the Appellant under the first transaction was RM20,165.95. Even after the sale proceeds were credited, a shortfall of RM5,197.95 remained outstanding. The Appellant did not receive full restitution, nor did it treat the transaction as concluded. The acceptance of a partial sum does not, without more, amount to affirmation of the contract.

The law draws a clear distinction between acceptance of goods and acceptance of money following a breach.

The Federal Court in Cheng Chuan Development Sdn Bhd v Ng Ah Hock [1982] 1 MLRA 552 provides clear guidance on this issue. In that case, the purchaser accepted a refund of the booking fee following the vendor's breach. The Federal Court held that such acceptance did not amount to a waiver of the purchaser's rights, nor did it give rise to estoppel. Instead, the Court characterised the acceptance as "an acceptance of the appellant's repudiation of the contract, which in turn brought the contract to an end and at the same time entitled him to sue for damages."

The principle is directly applicable here. Acceptance of monies following a breach does not, without more, signify affirmation of the contract. It is simply the buyer recognising that the seller has repudiated the agreement and recovering what he can while preserving his right to pursue the balance.

The Federal Court further emphasised that estoppel is an equitable doctrine and may only be invoked by a party who approaches the court with clean hands. On the facts before me, the Respondents cannot satisfy this threshold. The non-conformity originated from their own breach, and the Appellant consistently maintained its complaint from the outset. There is no basis upon which estoppel can operate in their favour.

The evidence here is consistent with that principle. From the very outset, the Appellant maintained its complaint of non-conformity. It rejected the goods on the day of delivery, notified the Respondents immediately, and continued to press for a refund of the full amount paid. At no point did the Appellant resile from its position or conduct itself in a manner suggesting acceptance of the goods or affirmation of the contract.

The Respondents' estoppel argument also fails because estoppel requires a clear and unequivocal representation by the Appellant that it accepted the goods, coupled with reliance and detriment on the part of the Respondents. No such representation was made. The Respondents did not alter their position in reliance on the Appellant's acceptance of the sale proceeds; indeed, the sale was arranged by the Respondents themselves.

In these circumstances, I find that the acceptance of RM14,968.00 does not give rise to estoppel. It was not an affirmation of the contract but a partial recovery of monies following the Respondents' breach. The Appellant's right to reject the goods and pursue the balance of its claim remains intact. The Quantum of the Plaintiff's Claim

The Plaintiff's claim comprises two principal heads of damages:

(i) the refund of sums paid under the terminated invoices; and j

Under the first head, the Plaintiff seeks a total of RM128,497.95, being the outstanding sums refundable by the Defendants on a joint and/or several basis. The breakdown is as follows: - Balance yet to be refunded under the 1st Invoice: RM197.95 - Sum yet to be refunded under Debit Note: RM5,000.00 - Sum yet to be refunded under the 2nd Invoice: RM96,000.00 - Port Klang release charges for 7 containers: RM14,000.00 - Haulage costs for 7 containers: RM13,300.00 Total:RM128,497.95

Items 1, 2 and 3 represent liquidated sums which the Defendants are strictly liable to refund following the lawful rejection of the non-conforming goods and termination of the invoices. Items 4 and 5 represent necessary expenses incurred by the Plaintiff at the express request of D1/D2 to clear and transport the seven containers to Polymix Plastic Industries Sdn Bhd for storage. Balance Sum Under the 1st Invoice (Item 1)

At this juncture, I incline to agree with the Appellant that the learned Sessions Court Judge erred in holding that the Plaintiff's acceptance of the resale proceeds was "without protest", thereby rendering the dispute under the 1st Invoice a non-issue.

The Plaintiff's acceptance of the sale proceeds does not amount to a waiver of rights. The Plaintiff consistently maintained that having rejected the goods, it was indifferent to the Defendants' internal arrangements for refunding the purchase price.

The Defendants' decision to resell the goods and remit the proceeds as partial refund cannot extinguish the Plaintiff's rights. In the absence of a full and final settlement or an express waiver, the mere receipt of a partial refund does not bar the Plaintiff from recovering the balance purchase price. Cost of Clearance / Release of the 7 Containers (Item 4)

As a matter of regulatory necessity, all cargo arriving at Port Klang attracts release charges imposed by the port authorities. Any delay in clearing such cargo exposes the consignee to demurrage, detention charges, and even the risk of blacklisting. These are not discretionary consequences but mandatory regulatory outcomes.

As the named consignee under the 2nd Invoice, the Plaintiff was legally obliged to clear the seven containers notwithstanding its earlier rejection of the goods. Both SP3 and SD1 confirmed that failure to do so would have resulted in substantial financial penalties and reputational harm. Their evidence establishes that the Plaintiff had no lawful option but to proceed with clearance.

SD1 further accepted that only the Plaintiff, as consignee, possessed the authority to release or clear the containers. No third party could undertake this process without the Plaintiff's authorisation. The regulatory framework therefore placed the burden of clearance squarely on the Plaintiff, irrespective of the underlying dispute.

In these circumstances, the release charges were incurred solely because of the Defendants' breach in supplying non-conforming goods. It would be inequitable to require the Plaintiff to absorb these costs. To do so would permit the Defendants to benefit from their own breach and would amount to unjust enrichment. Haulage Costs (Item 5)

The Plaintiff incurred haulage costs of RM13,300.00 to transport the seven containers to the Ijok Warehouse at the request of D1 and D2, and upon their assurance that these costs would be reimbursed. SP3 confirmed that the invoice issued to D1 was for the purpose of claiming transportation charges, not for "authentication" as later alleged by SD1.

The WhatsApp correspondence shows that D2 requested the haulage cost details and that neither D1 nor D2 objected to the charges at the material time. SD1 admitted that he requested the invoice and did not dispute the charges when they were communicated.

SD1's belated claim that the invoice was for "authentication" purposes was never previously raised and was contradicted by the contemporaneous messages. Plaintiff's Loss Flowing from the Breach

It is trite that a party in breach must compensate the innocent party for losses arising naturally from the breach.

Section 74 of the Contracts Act 1950 entitles the injured party to compensation for losses that arise in the usual course of things or were within the contemplation of the parties. Section 76 further provides that a party who rightly rescinds a contract is entitled to compensation for damage sustained through non-fulfilment.

The Plaintiff claims RM210,000.00 in loss of profit, representing the profit it would have earned had the Defendants supplied conforming LDPE under the 1st and 2nd Invoices. The Plaintiff had secured a downstream contract with TSS Recycle Sdn Bhd for processed LDPE.

The Plaintiff earns RM0.50 per kilogram from processing LDPE. Based on the total ordered quantity of 418,957.44 kg, the Plaintiff would have earned RM209,478.72. SP4's testimony confirms this arrangement and was never challenged in cross-examination.

SD1 had actual knowledge that the Plaintiff was purchasing LDPE for processing and resale. The Defendants did not challenge SP4's evidence, and in Forest Steel Sdn Bhd v Iconic Gateway Sdn Bhd & Anor and another appeal [2020] MLJU 563, unchallenged testimony on a material point is deemed accepted. In the said case it was held: "[97] It is settled law that failure to cross-examine a witness on a crucial part of the case will amount to an acceptance of the witness's testimony (Wong Swee Chin v Public Prosecutor [1980] 1 LNS 138). Iconic is deemed to have accepted the evidence of PW2 and PW3 when they failed to cross-examine them on the issue of the preliminary works"

The Plaintiff's loss is therefore directly connected to the Defendants' breach and was plainly within the contemplation of the parties. The Court of Appeal in Karun Klasik Sdn Bhd v Tenaga Nasional Bhd [2023] 3 CLJ 175, affirmed that damages should place the injured party in the position it would have been in had the contract been properly performed. The Plaintiff's claim for loss of profit is consistent with this principle. Non-Inspection of the 7 Containers Under the 2nd Invoice

The Sessions Court dismissed the Plaintiff's claim under the 2nd Invoice on the basis that the Plaintiff failed to inspect the goods at the port. This was a misdirection.

SD1 admitted during cross-examination that the seven containers under the 2nd Invoice were "the same as the first container", i.e., non-conforming. The Plaintiff was not required to conduct a futile inspection. SP4 corroborated this, confirming that SD1 had acknowledged that the remaining containers contained the same non-conforming material.

The Sessions Court therefore erred in dismissing the Plaintiff's claim for refund under the 2nd Invoice. The Counterclaim

The Respondents' counterclaim for RM4,902.54 (being the alleged balance under the Fourth Invoice) and RM800 (for transportation charges) rests entirely on the premise that the goods delivered were conforming and that the Appellant was therefore obliged to pay the remaining sums. The counterclaim stands or falls with that foundational assumption.

Having found that the goods were non-conforming, that the Appellant validly rejected them on the day of delivery, and that the rejection was exercised in accordance with sections 41,42 and 37(3) of the Sale of Goods Act 1957, the legal consequence is straightforward: the buyer is discharged from any obligation to pay the balance price or ancillary charges. A buyer who has rightfully rejected goods cannot be compelled to pay for them, nor can he be saddled with transportation costs incurred in respect of goods that were never accepted.

It is also material that the Respondents' own conduct confirms that the counterclaim is unsustainable. The sale of the rejected goods was arranged by the Respondents themselves, and the proceeds were remitted to the Appellant as part of the refund process.

This is wholly inconsistent with the notion that the Appellant remained liable for the balance price. The Respondents cannot simultaneously treat the goods as rejected for the purpose of resale, yet as accepted for the purpose of claiming the balance of the invoice.

In these circumstances, the counterclaim has no factual or legal foundation. It is premised on a state of affairs that this Court has found not to exist. The Appellant's rejection was lawful, timely, and unequivocal. The Respondents' entitlement to the balance price and transportation charges therefore never arose.

I accordingly find that the counterclaim must be set aside in its entirety. Fraud Allegations Against D2-D4

The Appellant also advances a claim in fraud against the 2nd to 4th Respondents and invites the Court to pierce the corporate veil. Allegations of this nature are serious. They carry consequences not only for liability but for personal reputation, and the law therefore requires that they be pleaded with particularity and proven with cogent evidence.

Fraud, even though determined on the civil standard of the balance of probabilities, must be established by evidence of a quality commensurate with the gravity of the allegation. Mere suspicion, inconsistency, or commercial dissatisfaction cannot suffice. The Court must be satisfied that there was deliberate deception or dishonest intent.

On the evidence before me, that threshold is not met. The Appellant has not demonstrated that the 2nd, 3rd or 4th Respondents engaged in any intentional misrepresentation or deceit. The dispute between the parties, when properly analysed, concerns the quality and identity of the goods supplied, not any scheme or design to defraud. The Respondents' explanation that the goods were of a lower grade consistent with the price may ultimately be incorrect in law, but it does not, without more, amount to fraud.

The Appellant further contends that an adverse inference should be drawn under section 114(g) of the Evidence Act 1950 because the 3rd and 4th Respondents did not testify. While the failure of a material witness to take the stand may, in appropriate circumstances, justify an adverse inference, it is not an automatic consequence.

The Court must consider the totality of the evidence. Here, the documentary record, the admissions made, and the nature of the dispute do not support the conclusion that the absence of testimony was intended to conceal fraudulent conduct.

The Plaintiff bears the legal burden of producing documentary or other admissible evidence to substantiate the serious allegations of fraud levelled against the Defendants. Only when this burden is discharged does any obligation arise for the Defendants to answer the claim.

The principle that the Plaintiff bears the burden of proving allegations of fraud applies with particular force in this case. The 2nd, 3rd and 4th Defendants had each filed a Defence expressly denying the allegations made against them, thereby putting the Plaintiff to strict proof.

The 2nd Defendant also entered the witness box to rebut the accusations directed at the individual Defendants, demonstrating that the allegations were actively contested. Further, the Plaintiff's own director (PW4) candidly confirmed that he had never met the 3rd and 4th Defendants and that they had not participated in any negotiations or dealings with the Plaintiff. This evidence underscores the need for the Plaintiff to establish, through credible and affirmative proof, the involvement of these individuals in the alleged fraudulent conduct.

This is borne out by PW4's testimony, where he candidly stated that he had never met the 3rd and 4th Defendants and that they were not involved in any discussions or documentation relating to the transactions in question.

The Defendants' position is supported by established authority. In Ever-Yield Sdn Bhd v Yap Keat Choon [2022] MLJU 1952, the Court of Appeal reaffirmed the fundamental rule that he who alleges must prove.

The Federal Court in Letchumanan Chettiar Alagappan & Anor v Secure Plantation Sdn Bhd [2017] 5 CLJ 418, similarly emphasised that a plaintiff's case must stand or fall on the strength of its own evidence; it cannot succeed merely because the defence is weak or incomplete. The burden only shifts when a defendant raises a new affirmative defence which is not the case here.

The Court of Appeal in Juahir Sadikon v Perbadanan Kemajuan Ekonomi Negeri Johor [1996] 4 CLJ 1 further clarified that the inability of a plaintiff to produce a crucial witness does not shift the burden to the defendant, nor does it justify invoking an adverse inference under section 114(g) EA1950 against the defendant. The obligation remains with the party asserting the allegation.

Against this legal backdrop, the court is of the considered view that there was no dishonest conduct on the part of the 2nd, 3rd or 4th Defendants in declining to accede to the Plaintiff's demand for a refund.

Their position was that the 1st Defendant was entitled to retain the payments because, in their view, the goods supplied under both transactions conformed to the description in the invoices. They rely on Clause 4 of the General Terms and Conditions, which states that all products being plastic scraps or production trims were sold strictly on an "as is where is" basis.

The Defendants also point out that the 2nd Defendant had advised the Plaintiff to take delivery of only one container initially as a sample before placing further orders. On this footing, they contend that there was no misrepresentation by any of the individual Defendants.

When the evidence is viewed as a whole, the dispute is fundamentally contractual, not fraudulent. The Respondents may absence of any pleading, evidence, or cross-examination to support them. This alone constitutes a material misdirection, as parties are bound by their pleadings and a court cannot decide a case on an unpleaded theory.

Secondly, the Court treated the "as is where is" clause as if it could override the statutory condition of correspondence with description under section 15 of the Sale of Goods Act 1957. This was an error of law. An exclusion clause cannot displace a statutory condition that goes to the identity of the goods.

Thirdly, the learned SCJ has failed to give proper weight to the Respondents' own admissions that the goods contained mixed materials, an admission that directly undermined their case on conformity.

Fourthly, the Court did not properly appreciate the effect of the SIRIM report, which provided unchallenged scientific evidence that the goods were not LDPE as described. The absence of any counter-expert or contrary analysis should have been decisive.

Finally, the Court misapplied the burden of proof, effectively requiring the Appellant to disprove speculative assertions about industry practice rather than requiring the Respondents to prove the defences they advanced.

These errors, taken cumulatively, demonstrate that the decision below was reached on an incorrect legal footing and without proper judicial appreciation of the material evidence. They constitute clear grounds warranting appellate intervention. Conclusion

This appeal at its core presents a straightforward case of a seller who contracted to supply one specific thing but delivered something materially different. The express contractual description of "white LDPE shredded" is unambiguous and forms a strict condition of the contract under Section 15 of the Sale of Goods Act 1957.

The Respondents' defences whether relying on the "price point", "trade custom", or the "as is where is" clause—are entirely devoid of merit. An unpleaded "trade custom" and a general exclusion clause cannot legally override a specific, written contractual specification.

The learned Sessions Court Judge's decision was plainly wrong due to a profound lack of judicial appreciation of the evidence. The trial court ignored uncontroverted facts, including the objective scientific findings of the SIRIM Report and the oral admission of the Respondents' own witness (SD1) that the goods supplied were nonconforming mixtures rather than pure white LDPE.

To allow the 1st Respondent to succeed in its counterclaim to recover the balance price and transportation costs for delivering non-conforming, lawfully rejected goods would be to assist them in benefiting from their own wrongdoing, which is akin to unjust enrichment. Orders

The appeal is allowed. The claims against the 2nd-4th Defendants for fraud are dismissed. The 1st Defendant's counterclaim for RM4,902.54 and RM800 is dismissed. Costs of RM8,000.00 awarded to the Appellant. I hereby order so. Date: 29.07.2026 NIXON ANAK KENNEDY KUMBONG Judicial Commissioner High Court of Malaya Kuala Lumpur PARTIES For the Appellant: Solicitor: Wong Kar Chun / Wong Yi Ying Messrs Gan & Zul Level 30 Tower B Vertical Business Suite Avenue 3 Bangsar South No.8 Jalan Kerinchi 59200 Kuala Lumpur For the Respondent: Solicitor: Soo San San / Sabrina Chu Messrs Paul Og & Associates Unit No. B-2-8 Block B Tingkat 2 Megan Avenue 1 No.189 Jalan Tun Razak 50400 Kuala Lumpur