K.P. Loo Engineering Sdn Bhd .... Plaintiff v Bekal Hikmat Sdn Bhd .... Defendant (22-1792-2009)

denial of any knowledge or any request or any receipt of the said goods in relation to the alleged outstanding sum of RM1,017,287,47.

that a company by the name of Areva T&D had ordered and accepted the said goods by using the Defendant’s official purchase orders and the Defendant’s rubber stamp to acknowledge the receipt of such goods without the Defendant’s knowledge or permission or authority.

that the said goods were never delivered to the Defendant but instead were delivered to the address designated by a third party, and the Defendant had not benefitted from the said goods.

that the Plaintiff had negligently or with mala fide intent, conspired with a third party to wrongly benefit from the Defendant in the form of debts. 3

the interest of 1.5% claim was never agreed to and/or it was unilaterally imposed after the contract was entered into.

the alleged transaction and the alleged debt had been reported to the Malaysian Anti-Corruption Commission (MACC). [3] The common issues which have been agreed upon by the Plaintiff and the Defendant for this court’s determination are as follows:

Whether the Plaintiff had sold and delivered goods to the Defendant as claimed by the Plaintiff in their Statement of Claim.

Whether the Defendant had at all material times acknowledged receipt of the goods sold and delivered by the Plaintiff without any objections

Whether the Plaintiff is entitled to obtain judgment against the Defendant for:- i) the sum of RM1,017,287.47 (as at 30.09.2009), ii) interest at the rate of 1.5% per month on the principal sum of RM884,586.10 from 01.10.2009 to the date of judgment; 4

(ii) judgment interest on the principal sum of RM884,586.10 from date of judgment to date of full settlement;

(iv) costs.

Whether the action and investigation that is currently being undertaken by the Suruhanjaya Pencegahan Rasuah Malaysia (SPRM) is connected with the Plaintiff‟s Invoices, Delivery Orders (DOs) and Purchase Orders (POs) for the year 2008 and 2009, and whether it has any impact or connection/relation with the Plaintiff‟s action against the Defendant. [4] The Defendant had also raised an additional issue for this Court’s determination which reads: Whether the Plaintiff‟s failure to bring an action against Areva T&D Malaysia Sdn Bhd (Company No.: 2156632-V) (hereinafter referred to as the „Third Party‟) or to add the third party as Second Defendant in this action has an implication against the Plaintiff? [5] Before determining the issues mentioned above, it is necessary for this Court to set out the undisputed facts which had surfaced during the trial reflecting the factual business background between the Plaintiff and the Defendant. These undisputed factual business background are 5 relevant and essential to the issues raised in this case. They are as follows:

5.1 The Plaintiff, K.P Loo Engineering Sdn Bhd, is a Malaysian company which is involved in the manufacturing and contract manufacturing of switch gears and relay panels and operates its business at Block C, Lot 3687, 4 ½ Miles Jalan Segambut Kuala Lumpur (Block C).

5.2 The Defendant, Bekal Hikmat Sdn Bhd is also an incorporated company under the laws of Malaysia having its registered address at 61A, Jalan Sesama, Taman Perusahaan Batu Caves, 68100, Batu Caves Selangor Darul Ehsan. It is not in dispute that the Defendant is a Bumiputera Company and its corporate information appearing in the Companies Commission of Malaysia

(CCM)’s register shows that the Defendant’s business is the trading of electrical and mechanical production. It is also in dispute that prior to 1.10.2008, the Defendant’s had its registered address at 17A, Jalan SG 3/10, Taman Seri Gombak, 68100, Batu Caves, Selangor.

5.3 It is not in dispute that the Defendant and a company by the name of GEC Alsthom T&D Sdn Bhd (the company’s name was later changed to Areva T&D Malaysia Sdn. Bhd) had entered into a Memorandum of Understanding (the MOU) on 30.10.1987. The MOU can be found at pages 1 to 4, Bundle B2. By this MOU, the Defendant and Areva had agreed to collaborate and 6 pool their resources, skills and expertise to manufacture Medium Voltage Switchgears with the intent to supply them to Tenaga Nasional Berhad and other Industrial Projects. The intention was clearly reflected in the preamble of the MOU. It is also not in dispute that the MOU was valid for one year with an option for renewal in which the parties had continuously exercised until it was terminated in 2009.

5.4 It must be noted that at the time the said goods were transacted, the MOU was still subsisting.

5.5 The obligations of both the Defendant and of GEC Alsthom T&D Sdn Bhd (Areva) under the MOU are clearly spelt out under Clauses 1.1 and 1.2 of the MOU. For ease of reference, the two clauses are reproduced here:

1.1 GEC ALSTHOM will support BEKAL HIKMAT with the supply of parts and components for the manufacture of the switchgears. Above all, the engineering aspect will be provided by GEC ALSTHOM.

1.2 BEKAL HIKMAT will make ready a factory for the assembly and testing of the medium voltage switchgears. The activities by BEKAL HIKMAT will include:-  Assembly of cubicles  Wiring of cubicles  Testing of cubicles  Packing and delivery of MV switchgears to customers 7

5.6 What is intended under the MOU is simply this; Areva will support the Defendant with the supply of all parts and components for the manufacturing of the switchgears and also provide the engineering aspect of the switchgears, while the Defendant on the other hand will be responsible to make ready a factory for the assembly and testing of the medium voltage switchgears.

5.7 It is also not in dispute that the Defendant’s business operation was not conducted at the address appearing on the CCM’s register but instead at Block A, Lot 3687, 3 1/2 Miles, Jalan Segambut 51200 Kuala Lumpur (Block A).

5.8 It must also be noted that Areva T&D also operates its business at Block A, the same address as the Defendant.

5.9 It is an undisputed fact that at the material time the Defendant’s employees were stationed at Block A to run and operate the business for the Defendant. The Plaintiff‟s case [6] It is the Plaintiff’s case that its claim against the Defendant is a simple and straightforward claim on a commercial transaction of goods which had been sold and delivered by the Plaintiff to the Defendant in which the Defendant had failed or refused to pay despite repeated demands had been made against them by the Plaintiff. 8 [7] The Plaintiff had pleaded in its Statement of Claim that at the request of the Defendant, for the period between July 2008 to September 2009, the Plaintiff had delivered to the Defendant electrical components comprising of, amongst others, switchgears, panels for 11 KV switchboard, control panel, PIX End cover (electrical switchgear panel c/w bolts & nuts) (the said goods). [8] It is also the Plaintiff’s case that the business relationship between the Plaintiff goes back a long way since the year 2000 when the Plaintiff first moved into its current business premises at Block C which was prior to the material transaction in this case. [9] It is the contention of the Plaintiff that the Plaintiff and the Defendant had conducted their business relationship with a special arrangement that was put in place in respect of the manner on which the business is to be conducted or transacted. The special arrangement among others, includes the manner orders of goods are to be made, delivery of goods and invoicing for the purposes of payment. According to the Plaintiff, the business arrangement between the parties was as follows: Even though the Defendant’s business address in the CCM’s register is stated as 61A, Jalan Sesama, Taman Perusahaan Batu Caves, 68100, Batu Caves Selangor Darul Ehsan (prior to 1.10.2008, the Defendant’s registered business address was at 17A, Jalan SG 3/10, Taman Seri Gombak, 68100, Batu Caves, Selangor)(Batu Caves addresses) the business operation of the Defendant will be conducted at Block A. The Defendant will station its employees there and they 9 were authorised by the Defendant to conduct the Defendant’s business. The Defendant’s employees’ authority extends to, among others, making orders by issuing Purchase Order, endorsing Delivery Order, acknowledging receipt of goods and receiving invoices. It is also the contention of the Plaintiff that the Defendant’s factory was at Block A and it was sharing the same address with Areva. As such, it was also the arrangement between the Plaintiff and the Defendant that the goods ordered by the Defendant through its Purchase Order should not be delivered to the Batu Caves addresses but to Block A instead. Evidence and analysis [10] Now, coming back to the Plaintiff’s claim. In support of its claim, at the trial, the Plaintiff had called six witnesses namely, Lim Fong Fun (Fennie-PW1), Loo Kok Peng (PW2), Loo Chun Hoon (PW3), Farawahida bte Abdul Rani (PW4), Faridah bte Abdul Rani (PW5) and Ng Chay Diok (PW6). PW1, PW4 and PW5 were former employees of the Defendant. [11] Through these witnesses the Plaintiff had produced documentary evidences namely Purchase Orders (PO’s) – (pages 31 to 83 of Bundle B3), Delivery Orders(DO’s) - Exhibit P4 (pages 84 to 135 of Bundle B3), and corresponding Invoices - Exhibit P8 (pages 136 to 187 of Bundle B3), and Statement of Account - Exhibit P9 (pages 28 to 30 of Bundle B3). 10 [12] The Purchase Orders (PO’s) indicated the Defendant’s request for the said goods from the Plaintiff. The PO’s bore the Defendant-company’s letterhead with the company’s registered address stated as the Batu Caves addresses. The PO’s also contain the signatures of the Defendant’s employees who are either Faridah bt Abd Rani, Fennie (Lim Fong Fun) or Farawahida. The PO’s contained notes that the goods are to be delivered to Block A which is the factory address of the Defendant. The goods were then delivered to Block A in which the Defendant had acknowledged receipt by incorporating the Defendant’s rubber stamp together with signatures of the Defendant’s employees onto the Plaintiff’s DO’s. [13] It was submitted on behalf of the Plaintiff’s that the clear evidence of the existence of such special business arrangement (arrangement) can be seen from the evidence of the Plaintiff’s witnesses PW1, PW4 and PW5. It was also submitted by the Plaintiff’s counsel that from the evidence of PW1, PW4 and PW5, it is abundantly clear that they were formerly employed by the Defendant during the period the transactions were transacted (at the material time). They testified that at the material time the Defendant had specifically stationed them at Block A to run the business operation for the Defendant. According to them, their tasks among others, are, issuing purchase order, accepting delivery order and acknowledging receipt of goods. They confirmed that the PO’s were PO’s from the Defendant and the incorporation of the Defendant’s rubber stamp acknowledging the receipt of the goods were done either by one of them according to the names appearing on the DO’s. 11 [14] In this connection, the learned counsel for the Plaintiff further submitted that the Defendant did not at any time challenge the evidence of the existence of the special business arrangement between the Plaintiff and the Defendant arising from the MOU. Similarly also, even the evidence that the Defendant’s employees were stationed at Block A to conduct the Defendant’s business was not challenged by the Defendant. It is also undisputed that the special business arrangement becomes the practice and convention in the business dealings between the Plaintiff and the Defendant. In fact, the counsel for the Plaintiff further submitted that the Plaintiff’s evidence on the existence of the arrangement was even corroborated by the Defendant’s own witnesses namely Nasharuddin bin Shaharun Ayumi (DW1) and Azlina bt Zulkifli (DW2). DW1 and DW 2 are the current directors of the Defendant. In their evidence they had told the court that even though they have not been made directors of the Defendant during the time these transactions took place, they were fully aware and had knowledge that the Defendant’s employees were permanently stationed at Block A to operate the business of the Defendant. The Defendant‟s Case [15] The Defendant had vigorously denied the Plaintiff’s claim. In its Statement of Defence, the Defendant had disputed the Plaintiff’s claim primarily on the ground that the issuance of the PO’s were made without the authority, permission and knowledge of the Defendant. A similar stand was taken in respect of the Defendant’s 12 acknowledgement of receipt of the goods incorporated on the DO’s. On this basis, the Defendant had also raised the defence of unjust enrichment on the part of the Plaintiff. [16] At the outset, it must be noted and emphasised again that the Defendant’s line of defences pleaded in its Amended Statement of Defence in opposing the Plaintiff’s claim are that; the Defendant had never requested for the goods, the goods were never delivered to the Defendant and thus the Defendant had not received any benefit from the goods, the Defendant had no knowledge of the transactions that gave rise to the invoices issued by the Plaintiff, the issuance of the PO’s and acknowledgment incorporated on the DO’s were made without the knowledge, permission and authority of the Defendant and the Plaintiff had failed to take reasonable steps to verify the representation from the Defendant in respect of the PO’s and DO’s. Furthermore, it was also the pleaded case of the Defendant at paragraphs 21 to 26 that on or around 26.11.2013 the Malaysian Anti - Corruption Commission (MACC) had commenced an investigation on alleged corrupt practices involving the Defendant’s business transactions with the Plaintiff and some other companies. The Defendant here is also facing other civil suits on similar transactions in which other companies are also filing civil actions to recover unpaid debts from the Defendant. [17] Having briefly summarized the cases for the Plaintiff and the Defendant, this Court will now examine the issues raised in this case. This Court must state that Issues (a) and (b) are inter-related. These 13 two issues primarily centred on documents produced by the Plaintiff, particularly the PO’s and the DO’s to prove that the goods had been ordered, purchased and delivered. These two issues can be disposed of by determining one crucial issue namely; whether there existed a special business arrangement between the Plaintiff and the Defendant in respect of the conduct or the manner of the business to be carried out between them. Whether there was a special business arrangement between the Plaintiff and the Defendant in respect of the conduct or the manner of the business to be carried out between them. [18] Firstly, it must be noted that the Defendant had not at any time challenged the PO’s and the DO’s as well as its contents. The entire defence put up in disputing the Plaintiff’s claim was that the transactions were conducted without the knowledge, permission or authority of the Defendant. The Defendant also did not dispute that the business relationship of the Defendant and the Plaintiff arose from the MOU entered between the Defendant and Areva T&D. Secondly, it was never in dispute that the Defendant’s factory was located at Block A, sharing the same address in which Areva runs its operation. The fact that the Defendant’s factory was located at Block A was even supported with the Defendant’s own document tendered by the Plaintiff. This was also confirmed by Exhibit P11. Exhibit P11 (pages 19-20, Bundle B2), is a letter (together with an attachment or lampiran) from Ministry Of Finance to the Defendant approving certain duties exemption to the Defendant. A closer perusal of P11 reveals, without a single shade of doubt that the address of the Defendant’s factory is 14 stated as Block A‘s address. The contents of the letter is reproduced below: Ruj. Kami: (8.20)116/5/1-14242 Vol.2 (23) Tarikh : 5 Jun 2009 Tetuan, Bekal Hikmat Sdn. Bhd., Blok A, Lot 3687, Batu 3 ½, Jalan Segambut, 51200 KUALA LUMPUR Tuan, Pengecualian Duti Import Ke Atas Bahan Mentah/ Komponen Bagi Mengeluarkan Keluaran Siap Oleh Syarikat Bekal Hikmat Sdn. Bhd. Dengan hormatnya saya diarah merujuk kepada permohonan tuan yang dialamatkan kepada Lembaga Kemajuan Perindustrian Malaysia (MIDA) mengenai perkara di atas.

Adalah dimaklumkan bahawa Kementerian Kewangan selaras dengan peruntukan di bawah Seksyen 14(2) Akta Kastam 1967 telah bersetuju mengecualikan duti import ke atas bahan mentah/komponen bagi mengeluarkan keluaran siap seperti di LAMPIRAN I. Pengecualian ini adalah tertakluk kepada syarat-syarat seperti di LAMPIRAN “A”.

Tempoh pengecualian, stesen import, tempat pengilangan/penyimpanan bahan mentah/komponen dan pasaran adalah seperti dinyatakan dalam Lampiran I berkembar. Jika pasaran tidak dinyatakan, syarikat tuan bebas untuk menjadualkan keluaran siap berkaitan di pasaran tempatan/dieksport/ FIZ/LMW sekiranya keluaran tersebut merupakan input kepada keluaran FIZ/LMW berkenaan.

Sekiranya syarikat ingin memohon untuk lanjutan pengecualian duti import, syarikat dinasihatkan supaya mengemukakan permohonan kepada MDA tiga (3) bulan sebelum tamat tempoh pengecualian. 15 Sekian, terima kasih. “BERKHIDMAT UNTUK NEGARA” Saya yang menurut perintah, t.t. (KHODIJAH BINTI ABDULLAH) Bahagian Analisa Cukai, b.p. Ketua Setiausaha Perbendaharaan 16 Thirdly, the evidence of PW1, PW4 and PW5 in respect of Defendant’s conduct of business were clear and unshaken. They had testified that they were administrative clerks who were tasked to issue the PO’s and to acknowledge receipt on the DO’s. As a matter of fact, they further testified that issuing purchase order and acknowledging receipt of goods are their primary tasks authorised by the Defendant. Undeniably, PW1, PW4 and PW5 were specifically placed or stationed at the Defendant’s premises which the Defendant shared with Areva at Block A, Lot3687, 31/2 Miles, Jalan Segambut, 51200 Kuala Lumpur to conduct the business for the Defendant. Fourthly, interestingly it was also evidenced that the two Batu Caves premises are shop house lots, in which Lot 17A (the premise’s photograph can be found at page 26 of Bundle B3) with an area of 20 feet x 50 feet, was at the first floor with a monthly rental of RM900.00, while No. 61A, Jalan Sesama (the premise’s photograph can be found at page 25 of Bundle B3) was also located at the 1st Floor Factory Building with an area of 30 feet x 60 feet and the rental was at RM1000.00 monthly. The evidence revealed before this Court is that two premises are small unit shop houses which cannot possibly be a factory to accept goods supplied by the Plaintiffs such as switchgears, panels for 11 KV switchboard, control panel and what more to assemble large finished products such as Medium voltage switchgears and to store them. The products can be seen at pages 20-23, Bundle B3. In this connection, this Court is inclined to agree with the submission of the counsel for the Plaintiff that the Defendant had never received the goods from the Plaintiff at either one of the Batu Caves addresses as those two premises were too small to store the goods. This fact is consistent that the Defendant had never 17 had a factory for purposes of this commercial dealings at the Batu Caves addresses and that the Defendant’s factory was in actual fact was at Block A, the same address with Areva’s factory address. This is consistent with the note appearing on the PO’s that goods ordered or purchased from the Plaintiff are to be delivered at Block A. [19] This special business arrangement is further supported by three other supporting documentary evidences. Interestingly some of these documents were Defendant’s own documents. Firstly, as this Court had mentioned earlier in the judgment, the Defendant was also sued by another company by the name KVC Industrial Supplies (KVC suit) for a claim similar to the present case. In the KVC suit the Defendant had defended the civil action by filing Statement of Defences and the defences were basically the same defences as in the present case. In the KVC suit trial, the former Managing Director of the Defendant, Puan Badariah binti Isman (Puan Badariah) was called to give evidence for the Defendant. Puan Badariah in her Witness Statement and her oral evidence had stated that there was an arrangement between the Defendant and Areva that the Defendant’s employees were permanently placed in the premises of Areva at Block A to conduct the Defendant’s business pursuant to the terms of the MOU and the employees were also required to act on the instructions of Areva. The relevant passages of Puan Badariah’s evidence in the Notes of Evidence in KVC Suit are as follows: Notes of Evidence in KVC Suit Pages 30,31,32,33 and 34, Bundle 34 18 “ABM Saya rujuk Puan kepada mukasurat 19 sehingga 27 Ikatan C1. Sepertimana yang telah ditunjukkan tadi saya katakana kepada Puan bahawa dokumen-dokumen tersebut adalah berdasarkan kepada perihal gaji bonus dan peningkatan gaji bagi pekerja-pekerja Defendan. Setuju ataupun tidak? Nama yang tercatit di sini bukan kesemuanya pekerja Defendan. Which page are you asking the question? It is basically all the, from 19 to 27. But I can be more specific if the witness is. What was your question, sorry? My question was, Yang Arif that this documents we leave to the issues concerning bonuses, increments and. All that don‟t worry. The only relevant thing was whether they were employees. Everything else is irrelevant. What is the next question? Soalan saya seterus-terusnya berkenaan dengan dokumen yang tersebut juga. Adakah dokumen-dokumen, saya katakan bahawa dokumen-dokumen ini dikeluarkan oleh syarikat Defendan? Must be isn‟t it, it is in the Defendant‟s bundle? I interested to see as to what she has to say Yang Arif. These documents belong to Defendant is your question? 19 Belong and also issued by the Defendant. Setuju ataupun tidak Puan Badariah? Dikeluarkan menggunakan letterhead syarikat saya tapi diluluskan oleh pihak Areva. Yes, these documents, sorry what did the witness say? Menggunakan. Menggunakan letterhead. Letterhead Defendant tetapi kenaikan gaji diluluskan dan diarahkan oleh pihak Areva. Ini sebab you punya what‟s the arrangement? What‟s the Malay word for arrangement. Persetujuan. Itulah you punya cadangan atau arrangement dengan Areva betul? Tidak? Itu you punya arrangement dengan Areva betul? Betul. That‟s their arrangement with Areva. Jadi adakah Puan mempunyai pengetahuan tentang dokumen-dokumen ini? You see because Mr. Budiman, if you took at page 20 of C1, you see the signature of Mr. Andrew Chelliah approved, recommended. Yes, Yang Arif. 20 So, they work, they are employees. You can ask the witness, they are employees of the Defendant who work with her permission in the third party‟s premises and wages are paid by the Defendant but their performance etc, is rated by the third party. You ask the witness. Betul. Yes, she can understand, that‟s betul. Sorry, never mind. I‟ll ask her later. You complete your cross. I confirm that the arrangement. Never mind, you carry on. Much obliged Yang Arif. Jadi bolehkan Puan menjelaskan bagaimana Puan memiliki salinan dokumen-dokumen ini? Biasanya melalui faks. Which document? The employee one? Again from pages 19 to 27, Yang Arif. Jadi dokumen-dokumen tersebut disahkan oleh Puan selaku pengarah urusan Bekal Khidmat Sdn Bhd? Saya sahkan dokumen ini tapi bukan. Itu sahaja. Ya atau tidak? Selaku pengarah urusan Bekal Khidmat, secara lazimnya Puan membenarkan pihak-pihak lain menggunakan letter head ataupun dokumen-dokumen kepunyaan syarikat? 21 I think you should be specific. Ask whether they authorized those few employees. Faridah and all, to use the letter head of the Defendant and sign on behalf of the Defendant. That‟s what it is here, ask the witness the direct question. Very well Yang Arif. Adakah secara lazimnya Puan membenarkan pekerja-pekerja Puan yang dihantar di Areva? Who were working on the premises. Di premis pihak ketiga iaitu Areva untuk menggunakan dokumen-dokumen syarikat Bekal Khidmat Sdn. Bhd.? Ya, tapi mereka harus merujuk kepada saya terlebih dahulu untuk setiap transaksi. Must get my permission, what did the witness say? Must refer, employees must relate to her. Ask her whether she inform the Plaintiff to that effect, that they mustn‟t receive any purchase order on that letter head unless they get her permission. Adakah arahan untuk merujuk Puan tersebut di khusus untuk segala purchase order yang dikeluarkan oleh syarikat kepada suppliernya? Termasuk Plaintiff? 22 Ask her which page in the document, we can see the documents? Adakah ia dinyatakan di mana-mana dokumen, arahan tersebut yang dikeluarkan oleh Puan supaya dirujuk kepada Puan terdahulu? Anything in writing? Tiada. Just one minute, can you ask the witness. Page 1, all the purchase orders? Bundle B1, yang tebal itu. Mukasurat 1 sehingga mukasurat 166. Ask the witness what, is her evidence based on what she had just said that she‟s not complaining about the use of the letter head. She‟s only complaining that they did not raise the matter with her before they used the letter head. Is that what her evidence is? Ask her. With reference to the documents, 1 to

I think. Jadi soalan saya. Puan rujuk pada pesan pembelian yang dikeluarkan menerusi mukasurat 1 hingga 166 tersebut di Bundle B1. Sedia maklum Puan? Jadi, soalan ialah berkenaan dengan pengeluarkan PO ini, PO-PO tersebut saya cadangkan pada Puan masalahnya bukan hanya kepada tiada rujukan dibuat pada Puan. Saya mengatakan bahawa Puan tiada masalah menggunakan 23 pekerja-pekerja Puan menggunakan PO-PO tersebut dan dikeluarkan kepada Plaintiff. Dalam erti kata lain. [20] This Court takes cognizance that the KVC suit was settled before the trial was completed as parties had entered into a consent judgment. [21] The second document is Exhibit D27. This document also relates to Puan Badariah. She had lodged a police report concerning the numerous civil suits faced by the Defendant. She had clearly stated in the police report that the Defendant’s employees had been permanently stationed in Areva’s premises pursuant to the terms of the MOU and the arrangement thereto was that the employees were required to act on the instructions of Areva. The relevant portions of the police report read as follows:

Saya adalah pengarah urusan bagi syarikat Bekal Hikmat Sdn Bhd (258140-k) yang beralamat di 61A, Jalan Sesama, Taman Perusahaan Batu Caves,68100 Selangor Darul Ehsan.

Terdapat suatu Memorandum Persefahaman (“Memorandum of Understanding”) bertarikh 30.10.1997 telah dimasuki di antara GEC Alsthom T & D Sdn Bhd (yang kini dikenali sebagai “Areva T & D Malaysia Sdn Bhd” (215632-V)) dan Bekal Hikmat Sdn. Bhd di mana Areva T & D Malaysia Sdn Bhd akan membantu Bekal Hikmat Sdn Bhd dalam membekalkan bahagian ataupun komponen untuk pengeluaran-electrical switchgears-untuk dibekalkan kepada Tenaga Nasional Berhad dan untuk projek industri. Adalah dalam persefahaman semua pihak bahawa Areva T&D Sdn Bhd akan membekalkan kepakaran jurutera teknikal (“engineering technical expertise”) memandangkan Bekal Hikmat Sdn Bhd, iaitu sebuah syarikat bumiputra, tidak mempunyai pengalaman dalam industri ini. ... 24

Saya percaya pekerja-pekerja Areva T&D Malaysia Sdn Bhd seperti dinyatakan di bawah boleh membantu siasatan polis:

Cik Lim Fong Fun (No. K/P :811022-04-5576)

(ii) Faridah binti Abd Rani (No. K/P :841224-14-5580)

(iii) Farawahida binti Abd Rani ( No. K/P:790710-08-5838)

Secara rasminya, Cik Faridah binti Abd Rani dan Cik Farawahida binti Abd Rani adalah pekerja-pekerja Bekal Hikmat Sdn Bhd. Oleh kerana terdapatnya suatu “arrangement” di antara Areva T&D Malaysia Sdn Bhd bersama Bekal Hikmat Sdn Bhd, Cik Faridah binti Abd Rani dan Cik Farawahida binti Abd Rani telah ditempatkan di alamat tersebut untuk bekerja dengan Areva T&D Malaysia Sdn Bhd sepenuh masa. Berdasarkan “arrangement” tersebut, mereka akan menerima arahan terus daripada Areva T&D Malaysia Sdn Bhd dan bukannya dari Bekal Hikmat Sdn Bhd. Setiap bulan gaji mereka akan dibayar oleh Areva T&D Malaysia Sdn Bhd dan bukannya dari Bekal Hikmat Sdn Bhd. Bonus dan gaji mereka adalah berada dalam kuasa Areva T&D dan ditentukan oleh Areva T&D dan ditentukan oleh Areva T&D Malaysia Sdn Bhd sepenuhnya. [22] Thirdly, there were other documentary evidences produced by the Plaintiff through PW1, PW4 and PW5. These documentary evidences were also the Defendant’s document. The documents pertain to the Defendant’s employees’ salaries, approval for increments and bonuses. It is interesting to note that PW1, PW4 and PW5 despite being the Defendant’s employees, their salaries, increments and bonuses were determined by Areva and not the Defendant. This is evidenced by Exhibits P3 [(a) to (g) (pages 111 to 117), Bundle B4] and was also supported by Puan Badariah’s evidence in the KVC suit. For ease of reference, pages 111, 112, 113 are reproduced below:- 25 Page 111 26 Page 112 27 Page 113 28 The relevant part of Puan Badariah’s evidence in the KVC suit is also reproduced below:- “ABM Saya rujuk Puan kepada mukasurat 19 sehingga 27 Ikatan C1. Sepertimana yang telah ditunjukkan tadi saya katakan kepada Puan bahawa dokumen-dokumen tersebut adalah berdasarkan kepada perihal gaji bonus dan peningkatan gaji bagi pekerja-pekerja Defendan. Setuju ataupun tidak? Nama yang tercatit di sini bukan kesemuanya pekerja Defendan. Which page are you asking the question? It is basically all the, from 19 to 27. But I can be more specific if the witness is. What was your question, sorry? My question was, Yang Arif that this documents we leave to the issues concerning bonuses, increments and. All that don‟t worry. The only relevant thing was whether they were employees. Everything else is irrelevant. What is the next question? Soalan saya seterus-terusnya berkenaan dengan dokumen yang tersebut juga. Adakah dokumen-dokumen, saya katakan bahawa dokumen-dokumen ini dikeluarkan oleh syarikat Defendan? 29 [23] Based on the aforementioned evidences, it is this Court’s judgment that there are overwhelming evidences as to the existence of a special business arrangement between the Defendant and the Plaintiff in conducting their business. This Court would go as far as to say that the evidence is plainly glaring that from the MOU, the Defendant who was supposed to or obligated to make ready a factory for purposes of manufacturing the switchgears, had instead of setting up its own factory or facility, devised this special business arrangement in conducting its business. In fact, the special business arrangement had been deliberately put in place by the Defendant itself and therefore the Defendant cannot now turn against the arrangement by asserting excuses that the transaction or documentations prepared by its own employees were made without its knowledge or permission or authority. Authenticity of PO‟s and Acknowledgement incorporated on the DO‟s [24] The Defendant in the course of trial during the cross-examinations of the Plaintiff’s witnesses had attempted to question the authenticity of those documentations. This Court must also stress here that a large portion of the written submission be it in the main submission or the reply submissions, the counsel for the Defendant had focused his attention on the failure of the Plaintiff to bring Areva T&D as a party to this action. In doing so, the submission of the learned counsel for the Defendant revolves on the documentary evidences which had been produced by the Plaintiff. Those documentary evidences mainly being the PO’s and the acknowledgment of receipt on the DO’s. What the 30 counsel for the Defendant had attempted to raise is referring to the authenticity of the documents which were issued by the Defendant’s employees who were stationed in Block A in which the Defendant had attempted to assert that there are contradictions of evidences between them. An example of those contradictions being the directions issued by them, the tenure of their employment with regards to their appointment, their resignations, their new employees and their relation with Areva T&D or persons who have relations with Areva. In this matter, this court reiterates again that the Defendant had raised matters which were not pleaded in their statement of defence. The authenticity of the PO’s issuance and acknowledgment of receipt on the DO’s or the authenticity of documents were never disputed by the Defendant in their defence. What was raised by the Defendant was that the issuance of these documents were made without the Defendant’s consent. The matter on the authenticity of the documents was only raised when the Plaintiff’s witnesses were cross-examined. It must be stressed here that this Court had ruled earlier in this judgment that the Plaintiff vide the documentary evidences and oral evidences of the witnesses have successfully proven that the PO’s and the incorporation of the Defendant’s acknowledgment of receipt on the DO’s had been performed or conducted by the Defendant’s own employees which were stationed in Block A where Areva also conducts its business and that the delivery to Block A was made based on the special arrangement by Defendant’s own volition. This special agreement by the Defendant and the Plaintiff had been the status quo since as early as the year 2000. This special agreement is a business practice which was established or devised by the Defendant himself 31 and was followed by its business partner which is the Plaintiff and had consistently continued until the transaction became this dispute before this Court. It is this Court’s judgment that when one party had agreed to undertake to follow such business practice of this manner, and the other party had performed all their proper obligations pursuant to the said agreed business practice, thus, the said other party shall retain the rights to claim for all that is properly due to him. Therefore in this present case, the Defendant should not be allowed to raise anything which attempts to deflect and defeat the arrangement which the Defendant himself had willingly opted to venture, adhere to and agreed to ever since the inception of the business relations and deny their liabilities. [25] This Court is in total agreement with the Plaintiff’s counsel that the issue of the authenticity of the documents was never pleaded by the Defendant in its Statement of Defence. Therefore, the issue of authenticity must be disregarded as the Defendant is bound by its pleaded case. [26] It is trite law that parties are bound by their pleading. There is a myriad of authorities on this. (See i. RHB Bank Bhd (substituting Kwong Yik Bank Bhd) v Kwan Chew Holdings Sdn Bhd, [2010] 2 MLJ 188. ii. The Chartered Bank v Yong Chan [1974] 1 MLJ 157. iii.

Pembinaan SPK Sdn Bhd v Jalinan Waja Sdn Bhd [2014] 2 MLJ iv. State Government of Perak v Muniandy [1986] 1 MLJ

v. Astrovlanis Compania Naviera AS v Linard [1972] 2 QB 32 611, [1972] 2 All ER 647. vi. Spedding v Filzpatrick 1888 38 Ch D 410 at p 413. vii. Thomson v Birkley (1882) 31 WR 230. viii. Bousted Trading (1985) Sdn Bhd v Arab Malaysian Merchant Bank Berhad [1995] 4 CLJ 283.) In any event, following this Court’s earlier finding on the existence of the special business arrangement between the Plaintiff and the Defendant in the conduct of their business, the Defendant’s contention on the authenticity of the documents must also fail. Statement of account or the customer ledger [27] The counsel for the Defendant had also attempted to query the invoices and account statements by disputing Exhibit P9 (pages 28-30, Bundle B3) which were issued by the Plaintiff and submitted to this Court that the account statements which were issued by the Plaintiff should not be admitted as they are not entries in the books of account which is relevant under Section 34 of the Evidence Act 1950. It was also submitted on behalf of the Defendant that Exhibit P9 is not in adherence to Section 34 of the Evidence Act 1950 on the ground that Exhibit 9 are not account statements issued in the ordinary course of business. The counsel for the Defendant further submitted that there is in existence contradictory evidences between PW2 and P6 in the preparation of the said account statements. [28] This Court is of the considered view that Exhibit P9 which were prepared by the Plaintiff was based on the business practice which was agreed upon by both the Defendant and the Plaintiff. For all this 33 while since the year 2000, the Defendant had never questioned or challenged the customer ledger (account statement) which were issued by the Plaintiff. To this Court, the same answer and conclusion in the matter of the PO’s and the DO’s shall also similarly apply here. All throughout this business relation between the Defendant and the Plaintiff, the Defendant had already accepted the customer ledger (account statement) and had already furnished payments to the Plaintiff. [29] Regarding the provision of Section 34 of the Evidence Act 1950 which was raised by the Defendant, this Court must reiterate again that this business practice which was performed by the Defendant and the Plaintiff from the outset is a practice not in the ordinary course of business, thus the Defendant cannot assert now that the said customer ledger is a matter not in an ordinary course of business. That cannot at all be correct. The special arrangement practiced had veered off from the ordinary course of business from the outset and both the parties especially the Defendant had willingly acceded and accepted it. There is nothing ordinary left in the course of business between the Defendant and the Plaintiff to warrant the invocation of Section 34. As found earlier, this business practice had been the status quo since the year 2000 and had remained unchallenged until this dispute arose. Notwithstanding this unordinary course of business, this Court would go as far to find that, based on the special arrangement (which was unchallenged and in fact accepted since the year 2000 until this dispute arose), it is verily more probable than not that the customer ledger (being undisputed and paid for by the Defendant) is in fact the 34 agreed ordinary course of business to be taken in conducting their business. In the same matter, I am also in agreement with the counsel for the Plaintiff that the customer ledger which is Exhibit P10 (pages 204-210, Bundle B3) must be read together with the invoices issued by the Plaintiff in Exhibit P8 (pages 136-138, Bundle B3). Upon close scrutiny of these two exhibits, this Court indeed found that the exhibits do correspond with each other. Thereto, these entries in the customer ledger are verily relevant as they are corroborated by other supporting documents such as the PO’s, DO’s and the invoices. Contrary to the Defendant’s contention on the ordinary course of business, there are overwhelming evidences to prove that the issuance of the customer ledger is in line with the course of business arranged and agreed by the parties. [30] Succinctly put, firstly, the Defendant cannot deem the customer lodger out of the ordinary course of business since the business arrangement is already out of the ordinary. Secondly, it is more probable than not that the issuance of the customer ledger is indeed the ordinary course of business agreed by the parties in the special arrangement. Nonetheless, it needs to be emphasised here that the Plaintiff is not solely relying on the statement of account to prove its case. The Plaintiff had produced PO’s, DO’s and Invoices to prove that the goods were sold and delivered and Exhibit P9 are entries which are supported by these other documents. Adverse inference under section 114(g) of the Evidence Act 1950 against the Defendant for not calling Puan Badariah as a witness. 35 [31] The learned counsel for the Plaintiff had urged this Court to draw an adverse inference under section 114(g) of the Evidence Act 1950 against the Defendant for its failure to call the Defendant’s former Managing Director as a witness. The counsel for the Plaintiff had submitted that Puan Badariah was the Managing Director at the material time and she was called to give evidence for the Defendant in the KVC suit. The Defendant had instead called DW1 and DW2, the current directors and both of them when testified in Court had told this Court that they had only obtained their information regarding the Defendant from Puan Badariah. [32] This Court is also in total agreement with the counsel for the Plaintiff on this matter. Puan Badariah was the Defendant’s Managing Director at the material time. Hence, she was responsible in the running of the Defendant’s business at the material time and she is definitely the best, proper and capable person to enlighten this Court on the special business arrangements of the Defendant. More so, she gave evidence for the Defendant in the KVC suit. She was the person who lodged the police report on behalf of the Defendant. As a matter of fact, when DW1 and DW2 gave evidence, they had informed the Court that all of the information they had pertaining to the Defendant were obtained from Puan Badariah. For reasons known to the Defendant, Puan Badariah was not called to testify for the Defendant and there was no reason afforded by the Defendant for not calling her. To this Court, this is an obvious case to invoke the adverse inference under section 114(g) against the Defendant. Clearly the failure of calling of Puan 36 Badariah as a witness, being an important and material witness is detrimental and in fact, fatal to the Defendant’s case. (See Munusamy V PP [1987] 1 MLJ 492 (SC)...“Held: (1) It is essential to appreciate the scope of section 114(g) of the Evidence Act 1950 lest it be carried too far outside its limit. Adverse inference under that illustration can only be drawn if there is withholding or suppression of evidence and not merely on account of failure to obtain evidence. It may be drawn from withholding not just any document, but a material document by a party in his possession, or for non production of just any witness but important and material witness to the case. Adverse inference under section 114(g) of the Evidence Act 1950 against the Plaintiff for not calling Loh Choon Kiam as a witness. [33] The learned counsel for the Defendant on the other hand had also urged this Court to invoke section 114(g) of the Evidence Act 1950 on the Plaintiff’s failure to call a person by the name of Loh Choon Kiam as its witness to prove its case. The Defendant had attempted to allege that the Defendant’s employees are supposedly the cronies to Loh Choon Kiam who is actually one of the Directors of Areva who may shed more light on the MOU which was signed by the Defendant and Areva T&D. Nonetheless, I am in agreement with the counsel for the Plaintiff that Loh Choon Kiam has no relation at all with the Plaintiff or the Plaintiff’s case. The Plaintiff’s case rests upon the documentary evidences which were issued by the Defendant itself and the Plaintiff’s other supporting documents, together with other oral evidences which were unchallenged. The narrative of the Plaintiff’s case is not at all deterred or rattled although Loh Choon Kiam was not called as a 37 witness. Thus, it does not at all carry the effect of withholding or suppression of evidence on the part of the Plaintiff when Loh Choon Kiam was not called as witness by the Plaintiff unlike the Defendant’s own failure to call the Defendant’s Former Managing Director at the material time, Puan Badariah. The Defendant’s application for this Court to invoke the adverse inference under section 114(g) is unwarranted and this Court shall not draw such inference. Whether the action and investigation that is currently being undertaken by the Suruhanjaya Pencegahan Rasuah Malaysia (SPRM) is connected with the Plaintiff‟s Invoices, Delivery Orders (DO‟s) and Purchase Orders (PO‟s) for the year 2008 and 2009, and whether it has any impact or connection/relation with the Plaintiff‟s action against the Defendant. [34] In view of this Court‘s finding on the existence of the special business arrangement between the Plaintiff and the Defendant in the conduct of their business, the above issue need not be addressed by this Court. Furthermore, it must be noted that the report to the MACC was only lodged in 2013, just a few days short of the first trial date in December

This Court could not agree more with the Plaintiff’s counsel that the whole purpose of the MACC’s report was to delay the trial. If at all there were some elements of corruption in the business dealings or transaction, this would have been within the knowledge of Defendant at the commencement of suits against the Defendant by the Plaintiff in

Here, it is not only the Plaintiff who is suing the Defendant to recover its debt but also some other companies filing similar claims around the same year (2009) against the Defendant. There were no conceivable reasons or justification afforded on the reason the 38 Defendant had to wait until four years to realise that there were elements of corruption to lodge a report to the MACC. Clearly, as aptly submitted by the Plaintiff, that the lodging of report to the MACC is an afterthought on the Defendant’s part. This Court has no reason to disagree. Whether the Plaintiff‟s failure to bring an action against Areva T&D Malaysia Sdn Bhd (Company No.: 2156632-V) (hereinafter referred to as the „Third Party‟) or to add the third party as Second Defendant in this action has an implication against the Plaintiff? [35] In view of this Court’s finding on the existence of the special arrangement between the Plaintiff and the Defendant in the conduct of their business, the above issue also need not be addressed by this Court. [36] Nonetheless, it must be minded that the parties to the arrangement were Areva and the Defendant. The Plaintiff is just a contract manufacturing company to the Defendant. The PO’s, DO’s and Invoices give rise to the imposition of a contractual relationship and obligation only onto the Defendant and the Plaintiff and certainly not Areva. There was no privity of contract at all between the Plaintiff and Areva. Thus, the Plaintiff’s failure to bring an action against Areva would not give rise to any implication against the Plaintiff’s claim in the present case. [37] The counsel for the Defendant had also argued that even the Plaintiff itself had admitted, in paragraph 3 of its pleadings that Areva were the 39 Defendant’s nominees and thus, Areva must be roped in into this suit. Similarly in this regard, in light of the earlier finding that the PO’s, DO’s and invoices only bind the Plaintiff to the Defendant as a contract manufacturing company, this Court finds that this argument is untenable. Areva is not at all a party to this contract and therefore is not privy to it and there is no necessity at all to bring Areva as a party in this dispute. Thus, the authorities cited therein are irrelevant to this case. [38] Coming back to the evidence of DW1 and DW2, DW1 was appointed as a director only after these transactions had taken place. Indeed, a director would be responsible in terms of liability of a company but he was only made a director in year 2011 more than a year after this present case was filed. Obviously he would not be in any position to indulge the court on the authorisation or permission and knowledge as he was not in charge of the Defendant at that point in time. Thus, I agree with the Plaintiff’s counsel that these transactions were not within the knowledge of DW1 and even more so on the question of authority or permission which should well be beyond his knowledge. [39] And in so far as the evidence of DW2 is concerned, this Court had the opportunity to observe DW2 when she gave her evidence. The most logical and probable inference that can be concluded from her evidence is that even though she is the Defendant’s director, she is merely a sleeping director, who knows nothing of the business, what more the running of it. Every questions posed to her had to be repeated so many times as she appeared to be quite lost and alien to 40 all of the questions posed to her. Her conduct seemingly indicates that she actually did not participate in the Defendant’s business activities. This Court entirely agrees with the Plaintiff’s counsel’s submission that not much weight could be placed on her evidence. [40] In this connection, the evidence of DW3 – Mr. Lee Seng and his involvement in this case is somehow very perplexing. He was the person who lodged the report to the MACC and also the person who owns one of the Batu Caves addresses namely No. 61A, Jalan Sesama, Taman Perusahaan Batu Caves, 68100, Batu Caves Selangor Darul Ehsan. He was also the witness in the MOU. He came to court projecting himself as someone who cares about justice and wants justice to be observed. He stated in his evidence that he has no role in the Defendant’s company. Somehow or rather when he testified in court he seemed to know the business that Defendant is engaged with in great depth. I would even say that he knows the Defendant’s business inside and out even though he is not the director of the company or even a shareholder of the Defendant company. However, the business operation of the Defendant seems to be on his fingertips. Furthermore, his wife Mrs. Lee, has an obvious hold in the Defendant’s management and this can be clearly seen in Exhibit P3, pages 111 to 117 of B4 and Exhibit D14 at page 118 of B4. [41] At this juncture, this Court poses a question – who is this DW3 to the Defendant company? From the evidence adduced in court particularly the Defendant’s own evidences from its witnesses DW1 and DW2, it is reasonable to conclude that DW3 somehow has his hand in this 41 company. In this instance, the issue regarding knowledge, authority and permission raised by the Defendant is not something the Defendant can complain. [42] This Court’s evaluation in totality of the oral evidence or testimonies of the witnesses as well as the documentary evidences, the answers to the issues (a), (b), and (c) are in the affirmative. [43] Based on the aforesaid grounds set out above, this Court is satisfied that the Plaintiff has established its case on the balance of probabilities and accordingly, this Court makes the following orders:- i) judgment is entered for the Plaintiff for the sum of RM1,017,287.47 (as at 30.09.2009). ii) interest at the rate of 1.5% per month on the principal sum of RM884,586.10 from 01.10.2009 to the date of judgment. iii) interest rate at the rate 5% per annum on the principal sum of RM884,586.10 from date of judgment to date of full settlement. As to the issue of costs [44] With regard to costs, this Courts orders the Defendant to pay RM35,000.00 to the Plaintiff. 42 t.t. (DATUK AZIMAH BINTI OMAR) Judicial Commissioner High Court NCVC 13 of Shah Alam Selangor Darul Ehsan Dated the 29th day of August, 2014. For the Plaintiff - Tetuan Prasad Abraham & Associates Miss Veronica Mary Anne Dominic For the Defendant - Tetuan K.F. Ee & Co.