Interworld Network (M) Sdn. Bhd. v Ivory Glove Sdn. Bhd. (AB-A72NCC-123-10/2023)

The trial of this action took place before me over five days: 14 May 2024, 10 June 2024, 6 August 2024, 23 September 2024 and 27 February 2025.

The trial was stayed after 23 September 2024 because the defendant was wound up by the Taiping High Court. The trial resumed on 27 February 2025 after the Taiping High Court set aside the winding up order by way of a consent order.

A total of seven witnesses gave evidence. The plaintiff called three witnesses while the defendant called four witnesses.

The plaintiff’s claim was for a refund of RM 76,877.68 being the price paid for 398 cartons of gloves out of a total of 800 cartons purchased from the defendant for RM 154,528.00. The plaintiff contends that the defendant misrepresented the quality of the gloves and that the gloves supplied were not of merchantable quality. The plaintiff also claimed RM 1,356.80 for inspection and testing costs.

The defendant denied liability and filed a counterclaim for:

RM 3,866.67 for storage costs from 19 April 2023 to 7

(ii) RM 1,200 per month for storage from November 2023 until the gloves were collected by the plaintiff or until the date of the judgment; and

(iii) RM 50,000 for labour and utility costs in repacking the gloves. [6] After full trial, the Court allowed the plaintiff’s claim with costs and interest as prayed. The defendant’s counterclaim was dismissed also with costs. [7] When delivering my decision, I gave the parties the broad grounds of my findings. This judgment now sets out my full written grounds AB-A72NCC-123-10/2023 3 of 34 prepared pursuant to the defendant’s notice of appeal (Encl. 38) to the Taiping High Court against the decision of this Court. PARTIES TO THE DISPUTE [8] The plaintiff is a company incorporated in Malaysia. It is a trading company engaged in the business of purchasing gloves from manufacturers for resale to its customers. [9] The defendant is a company incorporated in Malaysia that manufactures rubber gloves including nitrile disposable gloves. THE PLAINTIFF’S CASE [10] According to the plaintiff’s pleadings and evidence, the plaintiff’s representative, Mr. Andy Ang Chee Guan (‘PW3’) was contacted by the defendant’s Vice Chairman, Mrs. Sumanthi Jayabalan (‘DW4’) who introduced the defendant’s gloves. DW4 also provided PW3 with samples of the gloves together with their specifications (see: WhatsApp conversation between PW3 and DW4: [E10 (Bundle D), at pp. 20 and 30]). [11] PW3 informed DW4 that the plaintiff was seeking gloves suitable for laboratory use specifically to protect users from exposure to chemicals and other hazardous substances. He further stated that all gloves purchased from the defendant would be resold by the plaintiff to its customers. The plaintiff contends that the defendant was fully aware of these requirements. AB-A72NCC-123-10/2023 4 of 34 [12] The plaintiff alleged that the defendant made the following representations which induced the plaintiff to purchase the gloves from the defendant (collectively referred to as ‘the representations’) (see: [E10 (Bundle D), at pp. 20–28]):

The gloves had a tensile strength of at least 14 MPa in accordance with ASTM D6319 standards.

(ii) The gloves were resistant to puncture.

(iii) The gloves possessed elasticity sufficient to protect users from chemicals and hazardous substances in laboratories.

(iv) The gloves complied with the following standards: EN455, EN374, EN420, EN ISO 13485, ISO 16604, and ISO 10993.

DW4 represented to PW3 that the gloves to be sold and delivered to the plaintiff would correspond with the samples provided and the specifications sent by DW4.

(vi) If the plaintiff purchased the gloves, the defendant agreed to store them in its warehouse until the plaintiff secured buyers without imposing any additional charges/costs. [13] Relying on the representations, the plaintiff purchased 800 cartons of disposable nitrile gloves (‘the purchased gloves’) at RM 193.16 per carton. The defendant issued invoices for the purchased gloves and the plaintiff paid a total of RM 154,528.00. (See: [E10 (Bundle D), at pp. 1– 6]). AB-A72NCC-123-10/2023 5 of 34 [14] The defendant delivered 402 cartons to the plaintiff while the remaining 398 cartons remained in the defendant’s possession. (See: [E10 (Bundle D), at pp. 7–9]). The arrangement between the plaintiff (being a trading company) and the defendant in respect of the remaining 398 cartons was that the defendant would deliver them to the plaintiff once the plaintiff had secured a buyer. [15] The plaintiff resold part of the 402 cartons to its customer, Lam Research International Sdn Bhd (‘Lam Research’). (See: [E10 (Bundle D), at pp. 199–209]). [16] Shortly thereafter, Lam Research lodged complaints regarding the quality and specifications of the gloves supplied by the plaintiff (which originated from the defendant). The purchased gloves were alleged to be defective: tearing easily during use, sticky (with gloves adhering to one another), unsuitable for laboratory work involving chemicals and hazardous substances, difficult to wear, wrinkled and generally unusable. (See: [E14 (Bundle E), at pp. 7–12] and [E10 (Bundle D), at pp. 270– 281]). [17] The plaintiff inspected the gloves and confirmed the defects. The defendant was informed of these complaints. (See: [E10 (Bundle D), at pp. 263–269]). [18] The defendant acknowledged the defects and offered to repackage the gloves for free of charge. (See: [E14 (Bundle E), at p. 11] and [E10 (Bundle D), at pp. 282–298]). However only 10 cartons were repackaged and according to the plaintiff, these remained defective and were rejected by its customers. (See: [E14 (Bundle E), at pp. 12–36]). AB-A72NCC-123-10/2023 6 of 34 [19] The plaintiff subsequently requested SIRIM QAS International Sdn Bhd (‘SIRIM QAS’) to test samples of the purchased gloves. The samples were taken from the gloves supplied by the defendant and sold by the plaintiff to Lam Research. [20] The testing was carried out by Ts. Muhammad Rizal bin Abdul (‘PW2’), a Senior Testing Engineer. His report dated 7 February 2023 confirmed that the samples did not meet ASTM D6319 standards under clause 7.5, Physical Requirements Test (Before Ageing). Specifically, instead of the required minimum tensile strength of 14 MPa, the gloves only achieved a tensile strength of 4.1 MPa (see: [E10 (Bundle D), at pp. 299–302]). [21] The plaintiff was then compelled to source gloves from an alternative manufacturer that is Cleanera (Malaysia) Sdn Bhd to meet its customer’s requirements. (See: [E14 (Bundle E), at pp. 40–46]). [22] Consequently, the plaintiff commenced this action against the defendant on the cause of action of misrepresentation seeking among others:

a refund of RM 76,877.68 being the price paid for the remaining 398 cartons of gloves that are in the defendant’s possession; and

RM 1,356.80 for inspection and testing costs; [23] The learned counsel of the plaintif submitted that the cause of action is misrepresentation as the gloves delivered did not correspond AB-A72NCC-123-10/2023 7 of 34 with the representations. The plaintiff further submitted that the defendant’s counterclaim was an afterthought and that an adverse inference should be drawn against the defendant for failing to call a key witness, Mr. Selvam Subramaniam (‘Mr. Selvam’). [24] The plaintiff called three witnesses whose evidence may be summarised briefly as follows: Witness Role & Position Substance of Evidence PW1: Ms Fatin Fazlina Facility Coordinator, Lam Research (subpoenaed witness) Confirmed Lam Research purchased gloves from the plaintiff and complained of the defects. PW2: Ts. Muhammad Rizal bin Abdul Senior Testing Engineer, SIRIM QAS Confirmed that the gloves failed to meet ASTM D6319 standards. PW3: Mr Andy Ang Chee Guan Sales Manager, Plaintiff Testified on the representations made by DW4 and produced relevant documents (purchase orders, invoices, receipts and communications). THE DEFENDANT’S CASE [25] The defendant denied liability and filed a counterclaim. In summary, the defendant’s case is as follows:

There was no misrepresentation. The plaintiff had placed its order with the defendant only after carrying out its own review of the quality of the gloves supplied.

(ii) Sales of the defendant’s gloves were subject to a strict “no refund” policy.

(iii) The plaintiff had sold 402 cartons of gloves to its customer and makes no claim in respect of those cartons.

(iv) The plaintiff failed to prove that the gloves supplied were not of merchantable quality. The defendant had also sent randomly selected samples of its gloves to SIRIM QAS for independent testing. The SIRIM QAS report dated 14 April 2023 confirmed that the gloves complied with ASTM D1412- 16 (2021) standards with a tensile strength of 19.2 MPa. (See: [E10 (Bundle D), at pp. 306–309]).

The plaintiff itself admitted that there was no issue regarding the quality of the defendant’s gloves. (See: [E10 (Bundle D), at p. 323]). [26] In addition, the defendants filed a counterclaim. They argued that because the plaintiff failed to collect the remaining 398 cartons, the defendants were compelled to rent third party storage facilities. Accordingly, the defendants claimed as follows:

RM 3,866.67 for storage costs from 19 April 2023 to 7

(ii) RM 1,200 per month for continued storage from November 2023 until the gloves are collected by the plaintiff or until judgment; and AB-A72NCC-123-10/2023 9 of 34

(iii) RM 50,000 for labour and utility costs incurred in repacking the gloves from cartons into smaller plastic packs as allegedly requested by the plaintiff. [27] The defendants called four witnesses to support their case whose evidence may be summarised as follows: Witness Role & Position Substance of Evidence DW1: Ir. Muhammad Faiz bin Zainon Testing Engineer, SIRIM QAS (subpoenaed witness) Confirmed that he issued the SIRIM QAS report dated 14 April 2023 which stated that the gloves complied with ASTM D1412-16

standards and achieved a tensile strength of 19.2 MPa. DW2: Mrs. Eliamastura binti Kamaruddin Director, Defendant Involved in business dealings with the plaintiff. Testified on the defendant’s counterclaim stating that the defendant had to rent third-party storage for the 398 cartons and also incurred labour and utility costs in repacking the gloves into smaller plastic packs at the plaintiff’s request. She further testified that the plaintiff’s action was an afterthought following the sudden market price drop of gloves after the purchase. DW3: Mr. Hamry bin Ramli Compounding Manager, Defendant Involved in the production of the gloves and responsible for ensuring their quality. Testified that all gloves supplied to the plaintiff complied with required standards and specifications. Also gave evidence regarding labour and utility costs for AB-A72NCC-123-10/2023 10 of 34 repacking the gloves into smaller packs as requested by the plaintiff. DW4: Mrs. Sumanthi Jayabalan Vice Chairman, Defendant Testified that she was involved at the initial stage of discussions with the plaintiff’s representative regarding the defendant’s gloves. She acknowledged sharing approvals from relevant authorities with the plaintiff and admitted making representations about the gloves to the PW3. THE ISSUES [28] From the facts and circumstances of this case, the following issues arise which once determined will fully resolve both the claim and the counterclaim:

Issue 1: Whether the defendant made any representations as to the standard, specification and merchantable quality of the gloves supplied.

(ii) Issue 2: Whether the representations made by the defendant were false.

(iii) Issue 3: Whether the plaintiff relied on those representations to its detriment.

(iv) Issue 4: Whether in consequence the plaintiff is entitled to rescission and/or damages for misrepresentation. AB-A72NCC-123-10/2023 11 of 34

Issue 5: Whether the defendant is entitled to recover storage costs, labour costs and utility charges from the plaintiff. [29] At this point, I must state at the outset that as this is a civil case, the burden of proof rests on the party seeking judgment in its favour. The standard is the balance of probabilities. A fact is proved if the court believes it is more likely than not to be true. THE LAW ON MISREPRESENTATION [30] A misrepresentation is a false statement of existing or past fact made by the representor before or at the time of making the contract which is addressed to the representee and which induces the representee to enter into the contract (see: Anson’s Law of Contract (28th Ed, 2002) at p. 237). [31] The elements of misrepresentation are satisfied when a party relies on a false representation in entering the contract with the representor. A misrepresentation that induced a contract and which, by operation of sections 18 and 19 of the Contracts Act 1950, renders the contract voidable at the option of the party whose consent was so compromised. [32] It is relevant to set out section 18 of the Contracts Act 1950 which defines “misrepresentation” as follows: “ “Misrepresentation”

“Misrepresentation” includes-

the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;

any breach of duty which, without an intent to deceive, gives an advantage to the person committing it, or anyone claiming under him, by misleading another to his prejudice, or to the prejudice of anyone claiming under him; and

causing, however innocently, a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement.”. [33] Section 19 of the Contracts Act 1950 reads as follows: “Voidability of agreements without free consent

(1) When consent to an agreement is caused by coercion, fraud, or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused.

A party to a contract, whose consent was caused by fraud or misrepresentation, may, if he thinks fit, insist that the contract shall be performed, and that he shall be put in the position in which he would have been if the representations made had been true. Exception - If such consent was caused by misrepresentation or by silence, fraudulent within the meaning of section 17, the contract, nevertheless, is not voidable, if the party whose consent was so caused had the means of discovering the truth with ordinary diligence. AB-A72NCC-123-10/2023 13 of 34 Explanation - A fraud or misrepresentation which did not cause the consent to a contract of the party on whom the fraud was practised, or to whom the misrepresentation was made, does not render a contract voidable. ILLUSTRATIONS

A, intending to deceive B, falsely represents that five hundred gantangs of indigo are made annually at A's factory, and thereby induces B to buy the factory. The contract is voidable at the option of B.

A, by a misrepresentation, leads B erroneously to believe that five hundred gantangs of indigo are made annually at A's factory. B examines the accounts of the factory, which show that only four hundred gantangs of indigo have been made. After this B buys the factory. The contract is not voidable on account of A's misrepresentation.

B, having discovered a vein of ore on the estate of A, adopts means to conceal, and does conceal, the existence of the ore from A. Through A's ignorance B is enabled to buy the estate at an undervalue. The contract is voidable at the option of A.

A is entitled to succeed to an estate at the death of B; B dies; C, having received intelligence of B's death, prevents the intelligence reaching A, and thus induces A to sell him his interest in the estate. The sale is voidable at the option of A.”. [34] In Travelsight (M) Sdn Bhd v Atlas Corp Sdn Bhd [2003] 6 CLJ 344, the High Court held that a misrepresentation is a representation that is untrue. It is “a false statement made by one party to the contract to the AB-A72NCC-123-10/2023 14 of 34 other, before, or at the time of, contracting, on which that other party relied in contracting”. [35] Further guidance on the application of the law of misrepresentation is found in Chia Tien Foh & Ors v Lo Man Heng & Ors [2015] CLJU 1219, where the Court of Appeal held as follows: “[35] It is settled law that a claim premised on misrepresentation must be a representation of fact relating to an existing state or situation. It is not a promise to do something in the future. The principles governing an actionable misrepresentation have been spelled out by the Court of Appeal in Sim Thong Realty Sdn Bhd v. Teh Kim Dar [2003] 3 CLJ 227 (CA) at 234 as follows: Now the elements of an actionable misrepresentation are well settled. They are set out as follows in Professor McKendrick's Contract Law, 3rd edn, a leading work on the subject: A misrepresentation may be defined as an unambiguous, false statement of fact which is addressed to the party misled and which materially induces the contract. This definition may be broken down into three distinct elements. The first is that the representation must be an unambiguous false statement of fact, the second is that it must be addressed to the party misled and the third is that it must be a material inducement to entry it the contract.”. [36] In addition, the Court of Appeal in Yeohata Machineries Sdn Bhd & Anor v Coil Master Sdn Bhd & Ors [2016] 2 CLJ 414, in a judgment delivered by Vernon Ong JCA (as he then was) set out the elements of false misrepresentation in greater detail as follows: “[23] In order to sustain an action for fraudulent misrepresentation, the plaintiffs must establish five essential facts. First, there must be a AB-A72NCC-123-10/2023 15 of 34 representation of fact by words or by conduct and mere silence is not enough. Second, the representation must be made with the knowledge that it is false, ie it must be willfully false or at least made in the absence of any genuine belief that it is true or recklessly (ie, without caring whether his representation is true or false (Derry v. Peek (1889) 14 App Cas 337). Third, the representation must be made with the intention that it should be acted upon by the claimant, or by a class of persons which will include the claimant, in the manner which resulted in damage to him. Fourth, it must be proved that the claimant acted upon the false statements. Lastly, it must be proved that the claimant has sustained damage by so doing (see Bradford Third Equitable Benefit Building Society v. Borders [1941] 2 All ER 205 at p 211, per Viscount Maugham).”. [37] From the above authorities, the law may be distilled as follows:

There must be a false representation of fact, not mere opinion or future promise.

(ii) The false representation must be addressed to the party misled.

(iii) The false representation must be material and induce the contract, though it need not be the sole inducement.

(iv) The innocent party must have acted upon the false representation in entering the contract.

The innocent party must have suffered loss or damage as a result. [38] In the present case, the plaintiff must therefore prove on a balance of probabilities that the defendant made false representations as to the AB-A72NCC-123-10/2023 16 of 34 quality and standards of the gloves, that the plaintiff relied on those representations in purchasing the gloves and that the plaintiff suffered loss in consequence. FINDINGS/DECISION Issue 1: Whether the defendant made any representations as to the standard, specification and merchantable quality of the gloves supplied [39] On the evidence, the Court is satisfied on a balance of probabilities that representations were indeed made by the defendant regarding the quality and standards of the gloves as set out at paragraph [12] of this judgment. They are representations of fact. This finding is borne out by the documentary communications tendered before the Court (see: [E10 (Bundle D), at pp. 20–30]) and further admitted by DW4, the Vice-Chairman of the defendant company during cross-examination. The defendant’s Director (DW2) also confirmed the same. Accordingly, there is no real dispute that such representations were made. Issue 2: Whether the representations made by the defendant were false [40] This issue is the substantive dispute between the parties. [41] On the balance of probabilities, I find that the plaintiff has established that the representations made by the defendant were false, particularly with respect to the merchantable quality of the gloves. My reasons are as follows. AB-A72NCC-123-10/2023 17 of 34 Complaints by the plaintiff’s customer [42] The starting point is the complaint from the plaintiff’s customer, Lam Research which raised serious concerns about the poor quality of the gloves supplied (see the complaint at [E14 (Bundle E), at pp. 7–10]). PW1 from Lam Research also testified to this and her evidence remained intact during cross-examination, unchallenged. [43] Moreover, the chain of supply of the gloves is undisputed: these gloves were sourced directly from the defendant. On this point, PW3’s evidence was clear, consistent and cogent and I find no reason to disbelieve him. [44] The defendant sought to argue via DW2 that the plaintiff only raised this quality issue because the price of gloves had fallen after the purchase and its entirely afterthought (see: [E21, at pp. 6-7]). [45] In my respectful view, this argument is speculative and unsupported by contemporaneous evidence. Apart from complaint by the Lam Research at [E14 (Bundle E), at pp. 7–10], PW1 also has confirmed that the gloves were defective: yellowish, fragile, sticky, lacking elasticity, tearing easily and thus unfit for their intended purpose. Photographs were produced to corroborate this (see: [E10 (Bundle D), at pp. 288–295]). These photographs were taken by Lam Research at the time they made the complaint and clearly show the defects present in the gloves supplied by the defendant. Thus, a complaint of this seriousness from a customer cannot be dismissed as an afterthought. In my opinion, it demonstrates the existence of a genuine defect. AB-A72NCC-123-10/2023 18 of 34 Plaintiff’s verification and prompt notice [46] The evidence further shows that upon receiving Lam Research’s complaint, the plaintiff did not sit idle. They inspected the gloves themselves and promptly notified the defendant. In my view, this conduct by the plaintif is wholly consistent with a party facing a genuine problem not with a party concocting a story after the fact. [47] The matter was escalated to the defendant’s Managing Director, Mr. Selvam. Two WhatsApp groups, “White Nitrile Glove” and “Glove Quality Issue” were created to involve representatives from both parties (see: [E10 (Bundle D), at pp. 282-298]). The very creation of these WhatsApp groups particularly one named “Glove Quality Issue” indicates that genuine quality problems existed. It is unlikely that such WhatsApp groups would have been established to address a problem that did not exist. [48] In the WhatsApp group named “Glove Quality Issue”, PW3 forwarded the complaints from Lam Research together with the photographs to Mr. Selvam, the managing director of the defendant as well as to DW4, both of whom were members of the WhatsApp group. (see: [E10 (Bundle D), at pp. 296-298]). [49] Thus, the defendant’s bare denial in its pleadings and subsequently in court particularly DW2’s claim in her witness (see: [E21, at p. 4]). statement that complaints were made only nine months after the gloves were purchased and after the defendant compelled the plaintiff to take the remaining 398 cartons of gloves is AB-A72NCC-123-10/2023 19 of 34 contradicted by contemporaneous documents and thereby calls into question the credibility of the defendant’s case. [50] Moreover, the timeline speaks for itself as follows:

The plaintiff purchased the gloves from the defendant in June 2022 (see: [E10 (Bundle D), at pp. 1–6]);

(ii) The defendant delivered 402 cartons in July and August 2022 (see: [E10 (Bundle D), at pp. 7 & 9]);

(iii) The plaintiff resold part of these gloves to Lam Research in early and mid-August 2022 (see: [E10 (Bundle D), at pp. 199–209]);

(iv) Towards the end of August 2022, Lam Research lodged a complaint (see: [E14 (Bundle E), at pp. 7–10]; [E10 (Bundle D), at pp. 270–281]); and

Shortly thereafter, the plaintiff notified the defendant (see: [E10 (Bundle D), at pp. 265–269]). [51] This sequence of events directly contradicts DW2’s testimony and shows that complaints arose almost immediately after delivery not months later as claimed. Contemporaneous documents ‘firmly indicate’ otherwise than as contended by the defendant. [52] In this regard, the Court refers to the Federal Court’s decision in Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229 at p. 234, AB-A72NCC-123-10/2023 20 of 34 where the worth and weight of a contemporaneous document was lucidly explained as follows: “For myself, I would with respect feel somewhat safer to refer to and rely on the acts and deeds of a witness which are contemporaneous with the event and to draw the reasonable inferences from them than to believe his subsequent recollection or version of it, particularly if he is a witness with a purpose of his own to serve and if it did not account for the statements in his documents and writings. Judicial reception of evidence requires that the oral evidence be critically tested against the whole of the other evidence and the circumstances of the case.”. (Emphasis added). Admission by defendant’s managing director [53] The defects in the gloves were further acknowledged by the defendant’s managing director, Mr. Selvam. He conceded that ‘when a customer wears the glove and if the glove cannot enter, then it is considered a quality issue,’ and even proposed remedial steps such as ‘blowing the gloves’ (see: [E14 (Bundle E), at p. 11]). He also agreed to repackage the cartons of gloves purchased from the defendant (see: [E10 (Bundle D), at p. 282]). These were Mr. Selvam’s responses to the complaints from Lam Research which were forwarded to the defendant by PW3. [54] These contemporaneous admissions by the key stakeholder namely the managing director of the defendant directly contradict the defendant’s current position and confirm that the defects were real. The law does not allow a party to approbate and reprobate; a party cannot acknowledge a problem in practice while denying its existence in court. AB-A72NCC-123-10/2023 21 of 34 Expert Evidence – PW2 [55] The plaintiff further strengthened the probability that the representations made by the defendant were false by requesting SIRIM QAS to test samples of gloves purchased from the defendant. [56] PW2, an expert witness confirmed that the gloves he tested (which belonged to the defendant and were purchased by the plaintiff) were defective and failed to meet the applicable standards/specifications. PW2’s report dated 7 February 2023 confirmed that the glove samples did not comply with ASTM D6319 standards under clause 7.5, Physical Requirements Test (Before Ageing). Specifically, instead of the required minimum tensile strength of 14 MPa, the glove samples achieved only 4.1 MPa (see: [E10 (Bundle D), at pp. 299–302]). [57] The defendant argued that PW2’s report is not probative because the samples tested were allegedly not from gloves manufactured by the defendant. This argument is unconvincing. [58] Although PW2 conducted testing in 2023, the evidence shows that all 800 cartons were manufactured as a single batch by the defendant. The defects identified in the 402 cartons delivered to the plaintiff were consistent and documented through complaints by Lam Research in 2022 which were promptly communicated to the defendant. The findings of PW2 were also communicated to the defendant as confirmed by PW2 in cross-examination. If the samples were not from the defendant, there would have been no reason for the plaintiff to notify the defendant of the test results of the PW2. Besides, there is no evidence to suggest that the samples tested by PW2 were sourced from any other production. AB-A72NCC-123-10/2023 22 of 34 [59] In light of the totality of evidence and the clear chain of events, the tested samples can reasonably be concluded to originate from the same batch (402 cartons) supplied by the defendant. Accordingly, PW2’s report is highly probative and confirms that the gloves were defective and did not meet the representations made by the defendant. [60] There is also no rebuttal evidence challenging PW2’s expert opinion. DW1, called by the defendant testified only as a factual witness and not as an expert. Therefore, PW2’s expert testimony remains unchallenged. It is a well-settled principle that an expert evidence should be accepted on its face value unless inherently unreliable. I find PW2’s testimony credible consistent with the other evidence before the court and therefore I accept his findings. PW2’s evidence therefore further confirms that the defendant’s representations regarding the quality and standards of the gloves were false. Defendant’s reliance on SIRIM QAS Report dated 14 April 2023 [61] The defendant placed heavy reliance on the SIRIM QAS report dated 14 April 2023 (see: [E10 (Bundle D), at pp. 306–309]). I attach little weight to this report for several reasons. [62] First, the report does not identify the defendant as the manufacturer of the gloves tested. Second, no evidence was adduced to establish a direct link between the samples tested in that report and the gloves purchased by the plaintiff. Third, the report was produced almost a year after the purchase and long after the complaints regarding the defective gloves had been raised. Fourth, the findings of the report were AB-A72NCC-123-10/2023 23 of 34 never communicated to the plaintiff as admitted by DW2 during cross-examination. [63] Most importantly, the findings of the SIRIM QAS report prepared by DW1 are contradicted by the expert report of PW2 whose evidence I have found credible and reliable. It is also significant that DW1 was called only as a factual witness and not as an expert. Thus, his report lacks the weightage of expert evidence. PW2’s testing on samples which clearly originated from the defendant’s production batch confirms the defects and supports the plaintiff’s claim. In light of the reasons discussed earlier at paragraphs [58] and [59] and considering the consistency of PW2’s report with the contemporaneous evidence, the SIRIM QAS report by DW1 carries little probative value in this case. The quality of the remaining 398 cartons [64] The defendant submitted that the plaintiff failed to prove that the remaining 398 cartons still in the defendant’s warehouse were defective. I am unpersuaded by this especially in light of the evidence from PW3 and DW4 which confirms that all 800 cartons were produced as part of a single and continuous order. [65] Moreover, the documentary evidence also shows that the plaintiff purchased all 800 cartons in one transaction and made a single payment. As explained by PW3 and supported by DW4, the arrangement was that the defendant would deliver 402 cartons to the plaintiff first, while the remaining 398 cartons would be retained in the defendant’s warehouse until the plaintiff collected them. If the entire batch had not been produced together, it would be illogical for the remaining 398 cartons to be stored in AB-A72NCC-123-10/2023 24 of 34 the defendant’s warehouse pending collection. Furthermore, it would defy logic and commercial sense to suggest that defects afflicted only the 402 cartons delivered but spared the remaining 398. The more probable inference is that the quality of the entire batch was affected. Defendant’s reliance on letter dated 24 July 2023 [66] The defendant relied vehemently on a letter dated 24 July 2023 (see: [E10 (Bundle D), at p. 323]) to argue that the plaintiff acknowledged no issue of merchantable quality. The said letter is reproduced as follows: AB-A72NCC-123-10/2023 25 of 34 [67] I reject this submission. In the first place, DW2 admitted that the SIRIM QAS report by DW1 cited therein was never communicated to the plaintiff. Moreover, the letter, titled ‘Re: Taken Out 1 Pack (100 Pcs) Glove Size M’ makes no reference to any waiver of rights. PW3’s unchallenged testimony was that he signed the letter merely to acknowledge receipt but not to indicate agreement. I accept his explanation. [68] It is trite that waiver of legal rights must be clear and unequivocal. This document falls far short of that standard. To treat it otherwise would be to allow defendant to manufacture a waiver unilaterally. Summary [69] Taking the evidence in the round, the plaintiff has demonstrated on the balance of probabilities that the representations made by the defendant were false. The gloves supplied were not of merchantable quality. Issue 3: Whether the plaintiff relied on those representations to its detriment [70] On this issue, the defendant contended that the plaintiff undertook its own inspection before purchase and therefore did not rely on the representations of the defendant. [71] The law on this however is clear. As recognised in JEB Fasteners v Marks, Bloom & Co [1983] 1 All ER 583, a misrepresentation need not be the sole inducement. It is sufficient if it played a real and substantial part in inducing the contract. The law does not demand exclusivity of AB-A72NCC-123-10/2023 26 of 34 reliance, only that the representation materially influenced the decision to contract. [72] If the defendant’s argument were accepted, it would mean that a party could make false representations with impunity provided the innocent party conducted some form of inquiry or due diligence. This would lead to the illogical result that a careful party who sought to act prudently but failed to uncover the falsity would be penalised while a careless party who made no inquiries at all would be rewarded. Such a proposition is plainly unsustainable as it would undermine the policy of the contract law which is to discourage fraud and protect good faith in commercial dealings. [73] The Singapore Court of Appeal in Jurong Town Corp v Wishing Star Ltd (No 2) [2005] SGCA 25 explained this position with clarity as follows: “112. If the proposition advocated by WSL were correct, it means that a fraudster can be as deceitful as he wishes in his representations and yet escape the consequences of his deceit if the innocent party chooses to make his own inquiry or due diligence on his representations. However, if the innocent party chooses not to make his own inquiry or due diligence, he can rely on the misrepresentations to avoid the contract.

We see no logic, firstly, in penalising a party who has chosen to act carefully but failed, whether due to negligence or otherwise, to discover the fraud. Put in another way, such a proposition would encourage the indolent. Secondly, such a proposition would also encourage fraud.

It is our view that such a proposition cannot be valid. A person who has made a false representation cannot escape its consequences just because AB-A72NCC-123-10/2023 27 of 34 the innocent party has made his own inquiry or due diligence, unless the innocent party has come to learn of the misrepresentation before entering into the contract or does not rely on the misrepresentation when entering into the contract. This is all the more so when the representation is made fraudulently. We would add that it matters not whether the inquiry or due diligence is conducted by the innocent party or his agents or both. The principle is the same.”. [74] Against this legal backdrop, I find that the plaintiff did in fact rely at least in substantial part on the representations of the defendant. The fact that the plaintiff conducted an inspection does not absolve the defendant of liability. Due diligence cannot cure falsehoods that were never discoverable at the time or were concealed. [75] The testimony of PW3, DW2 and DW4 confirmed that the plaintiff placed its order of 800 cartons based on the product specifications issued by the defendant (see: [E10 (Bundle D), at pp. 20–30]). In particular, page 30 of the Bundle D which communicated to PW3 expressly stated (among others) that:

the gloves had a tensile strength of at least 14 MPa in accordance with ASTM D6319 standards;

(ii) the gloves were resistant to puncture;

(iii) the gloves possessed elasticity sufficient to protect users from chemicals and hazardous substances in laboratories; and

(iv) the gloves complied with the following standards: EN455, EN374, EN420, EN ISO 13485, ISO 16604 and ISO 10993. AB-A72NCC-123-10/2023 28 of 34 [76] These are not mere puffery or statements of opinion. They are clear and specific assertions of fact as to the qualities and standards of the defendant’s gloves. As such, they fall squarely within the category of actionable representations. The plaintiff’s reliance on the representations was both natural and foreseeable and amounted to substantial reliance as they originated from the defendant’s vice-chairman and not from anyone else. [77] Because of the defendant’s false representation, the plaintiff ended up with gloves that were of such poor and unmerchantable quality that they could not be used to meet its customers’ requirements. This left the plaintiff not only out of pocket for the money already spent on the unusable gloves but also forced to turn to another manufacturer i.e., Cleanera (Malaysia) Sdn Bhd to urgently purchase replacement gloves at further cost. The court is therefore satisfied that the plaintiff, as the innocent party, has in fact suffered real financial loss as a direct result of the defendant’s false representation. [78] In light of the foregoing, I am satisfied that the plaintiff relied on the representations made by the defendant to purchase the gloves. The defendant cannot escape liability by arguing that the plaintiff’s inspection of the samples of glove negated the impact of the misrepresentation. The law is settled i.e., where a false representation plays a real and substantial part in the decision to contract, liability attaches. In this case, the plaintiff was left with gloves of unmerchantable quality, resulting in monetary loss from having paid for unusable goods and further expense in obtaining replacement gloves from Cleanera (Malaysia) Sdn Bhd to satisfy its customers’ requirements. Accordingly, I find that the plaintiff has suffered AB-A72NCC-123-10/2023 29 of 34 actual financial loss directly flowing from the defendant’s misrepresentation. Issue 4: Whether in consequence the plaintiff is entitled to rescission and/or damages for misrepresentation [79] The law on damages for misrepresentation is settled. The measure of damages is to restore the innocent party to the position it would have occupied had the misrepresentation not been made (see McGregor on Damages, 21st Ed, 2021, Edelman J and Livingstone v Rawyards Co

5 App Cas 25 at 39). [80] Section 19 of the Contracts Act 1950 further provides that a contract induced by misrepresentation is voidable at the option of the innocent party who may elect to rescind. Rescission has the effect of unwinding the transaction: benefits conferred must be returned or where this is not possible monetary compensation is awarded (see generally Mindy Chen-Wishart, Contract Law, at pp. 235-236). [81] Applying these principles to the present case, the plaintiff has elected to rescind the transaction in respect of the remaining 398 cartons of gloves which are still in the possession of the defendant. This is entirely consistent with section 19 of the Contracts Act 1950. The evidence shows that the plaintiff purchased 800 cartons under a single order and paid for them in full. Of these, 402 cartons were delivered and later found to be defective. In light of the misrepresentation as to quality, the plaintiff cannot be compelled to accept delivery of the balance. Rescission entitles the plaintiff to be restored to its pre-contractual position by recovering the price paid for the undelivered cartons. AB-A72NCC-123-10/2023 30 of 34 [82] I therefore find that the plaintiff is entitled to a refund of RM 76,877.68 being the price of the 398 cartons remaining with the defendant. In addition, the plaintiff is entitled to recover RM 1,356.80 incurred for inspection and testing costs. Issue 5: Whether the defendant is entitled to recover storage costs, labour costs and utility charges from the plaintiff Storage costs [83] The defendant filed a counterclaim seeking (i) RM3,866.67 for storage costs from 19 April 2023 to 7 September 2023 and (ii) RM1,200 per month for storage from November 2023 until the gloves were collected by the plaintiff or until the date of judgment. [84] I find no merit in the defendant’s counterclaim for storage costs. [85] First of all, this claim is fundamentally inconsistent with the Court’s finding that the contract has been rescinded. Rescission restores the parties to their pre-contractual positions: the plaintiff is entitled to a refund of the price and cannot at the same time be made to pay storage charges for defective and unmerchantable gloves which it was never bound to accept. To order otherwise would go against the very principle of rescission. [86] Further, contemporaneous evidence shows that one of the representations made by DW4 to PW3 was that if the plaintiff purchased the gloves, the defendant would store the cartons in its warehouse until buyers were secured without imposing any additional charges. The AB-A72NCC-123-10/2023 31 of 34 counterclaim directly contradicts this assurance and, on that ground alone must fail. [87] The counterclaim is also unsustainable on the evidence. Under cross-examination, DW2 admitted that the alleged storage charges of RM 3,866.67 (for the period from 19 April 2023 to 7 September 2023) and RM 1,200 per month thereafter had not in fact been paid by the defendant. There is therefore no proof that the defendant suffered any actual loss. The claim is at best premature and at worst entirely baseless. [88] For these reasons, the defendant’s counterclaim for storage costs is dismissed. Labour and utility costs [89] The defendant also counterclaimed for RM 50,000 said to represent labour and utility costs incurred in repacking the gloves. [90] I find this counterclaim also entirely without merit. [91] The Court has already found that the gloves were defective and that the contract has been rescinded. It would be wholly inconsistent with rescission to require the plaintiff to bear costs arising from remedial steps undertaken by the defendant in respect of goods which the plaintiff was never bound to accept. [92] The evidence further shows that the suggestion to “blow” and “repackage” the gloves originated from the defendant’s managing director, Mr Selvam as part of the defendant’s own response to AB-A72NCC-123-10/2023 32 of 34 complaints. At no time was the plaintiff informed that it would be liable for such costs. No document, correspondence or contemporaneous record has been produced to show that the defendant ever sought or reserved a right to charge the plaintiff for labour or utility costs. [93] The evidential basis of this claim is equally lacking. The defendant failed to produce a single invoice, receipt or supporting document to substantiate the alleged expenditure of RM 50,000. Indeed, under cross-examination, DW2 candidly admitted that she could not explain how the figure of RM 50,000 was calculated. This admission confirms that the sum is speculative and unsupported by any evidence. [94] In these circumstances, the counterclaim for labour and utility costs is nothing more than an afterthought. As no actual loss has been proven, the claim must fail. [95] Accordingly, the defendant’s counterclaim for labour and utility charges is also dismissed. CONCLUSION [96] For the reasons set out above, I am satisfied on the balance of probabilities that the plaintiff has proved its case. The gloves supplied by the defendant were defective and did not conform to the representations made as to their standard, specification and merchantable quality. The plaintiff relied substantially on those representations in purchasing the gloves manufactured by the defendant which caused loss to the plaintif. Accordingly, the elements of the cause of action in misrepresentation are satisfied. AB-A72NCC-123-10/2023 33 of 34 [97] In consequence, the plaintiff is entitled to a refund in respect of the remaining 398 cartons together with RM 1,356.80 being the costs incurred for inspection and testing. The defendant’s counterclaims for storage costs, labour costs and utility charges are without merit and are accordingly dismissed. [98] For the avoidance of doubt, I make the orders set out in paragraphs 22.1, 22.2, 22.3, and 22.4 of the Statement of Claim (see: [E9 (Bundle A), at p. 11]). [99] As to costs and consistent with the plaintiff’s claim being allowed and the defendant’s counterclaim being dismissed, I award costs to the plaintiff for both the main claim and the counterclaim. Such costs to be determined in accordance with the scale under Order 59, Rule 23(1) of the Rules of Court 2012. Dated: 18 September 2025 AB-A72NCC-123-10/2023 34 of 34 List of Counsel For the plaintiff: Mr Elson Beh (with Mr Khaw Yee Kang) [Messrs Lim, Ho, Cheong & Lok] No. 48-1 & 50-1, Lorong Usahaniaga 1 Taman Usahaniaga 14000 Bukit Mertajam, Penang. For the defendant: Mr Kumarathiraviam Kasinathan (with Ms Shaaleni Ravendran) [Messrs K. Kumara & Co.] No. 41-5-3, 5th Floor, Wisma Prudential Cantonment Road 10250 Penang, Penang.