Khazanah Jaya Sdn Bhd v Hisco (Malaysia) Sdn Bhd (W-02(NCC)(W)-1557-08/2019)

Khazanah Jaya Sdn Bhd (No. Syarikat: 188377-W)

Tan Boon Keong (No. K/P: 540526-10-5657)

Tan Jiat Jui (No. K/P: 820924-14-5095) ... Defendan-Defendan) KORAM MOHAMAD ZABIDIN BIN MOHD DIAH, HMR VAZEER ALAM BIN MYDIN MEERA, HMR DARRYL GOON SIEW CHYE, HMR 2 JUDGMENT OF THE COURT Introduction [1] There is only one main issue in this appeal, and that is whether a friendly loan granted by the respondent to the appellant was an unconditional demand loan, or whether it was a conditional loan repayable upon demand upon completion of a project for which the loan was given. [2] The determination of this issue was crucial for the appellant’s plea of limitation to succeed. If it was a loan simpliciter, repayable upon demand, as contended by the appellant, the respondent’s claim would be time-barred. Whereas, if the loan was only payable on demand after completion of the said project, as contended by the respondent, then the claim would still be within the prescribed limitation period. Background facts [3] The respondent had sometime in December 2007, upon the oral request of the 2nd Defendant, Tan Boon Keong, agreed to provide a friendly loan of RM2.5 million to the appellant. The loan was fully disbursed between 19.12.2007 and 30.1.2008. This was not disputed. [4] The purpose of the loan was to finance a project known as “Cadangan membekal, menghantar, memasang, mengujiterima, 3 mentauliah dan menyelenggara peralatan serta pengendalian kursus di Institut Kemahiran Belia Negara (IKBN) Temerloh, Pahang” (“IKBN Project”). [5] The IKBN Project was awarded by the Kementerian Belia & Sukan (“KBS”) to a company called Sinar Bekal (M) Sdn Bhd. The appellant was appointed by Sinar Bekal to administer the IKBN Project, where the appellant and Sinar Bekal had a profit share arrangement between them. [6] The respondent was one of the equipment suppliers for the IKBN Project through Sinar Bekal. [7] No written agreement was executed between the appellant and respondent in respect of the loan. The IKBN Project was completed on 28.2.2015, and fully paid by KBS to Sinar Bekal on 14.12.2015. In fact, it was the respondent who had completed the remaining part of the service and maintenance works of the project on behalf of Sinar Bekal vide a Deed of Assignment dated 2.5.2014 to bring the IKBN Project to completion. [8] On 16.8.2017, the respondent issued a written demand for repayment of the loan (“1st Written Demand”). This was followed by the respondent’s solicitor’s statutory notice of demand dated 6.9.2017 issued pursuant to section 465 of the Companies Act 2016 (“Statutory Notice”) 4 demanding repayment of the loan. The appellant disputed the Statutory Notice on the basis that the demand for the repayment was time-barred by reason of the Limitation Act 1953. The appellant contended that the loan was repayable upon demand and as such time started to run from the date of disbursement of the loan at the latest on 30.1.2008, and not from the date of demand. Thus, the appellant argued that the action was time-barred. [9] The respondent did not act on the Statutory Notice to file a petition to wind-up the appellant, but instead filed a civil action claiming judgment for the loan, which is the subject matter of this appeal. At the High Court [10] On 6.6.2016, the respondent filed the present Writ claiming that the defendants (including the appellant) had failed to repay the loan when demanded. [11] The defendants (including the appellant) filed their Defence and repeated their defence of statutory limitation pursuant to section 6(1)(a) of the Limitation Act 1953 based on their contention that the loan was repayable upon demand from the date of disbursement. [12] The respondent filed their Reply to Defence and contended that the loan was repayable upon completion of the IKBN Project and receipt of 5 the contract proceeds, and since the project was completed only on 28.2.2015, the claim was not barred by the prescribed statutory limitation period. [13] On 8.8.2019, after a full trial, the learned High Court Judge found the appellant liable to repay the loan of RM2.5 million and judgment was accordingly entered for the respondent. [14] The learned trial judge found and held that the loan given by the respondent to the appellant was to be “repaid upon receipt of the proceeds from the IKBN Project” and as such the claim was not time barred. The appeal [15] The appellant being dissatisfied with that decision appealed to this Court. The appellant’s grounds of appeal set out in the Memorandum of Appeal may be broadly categorized as:

(a) The failure of the learned High Court Judge to appreciate that the loan given by the respondent to the appellant was an unconditional loan repayable upon demand, and as such statutory limitation would have set in to bar the action pursuant to section 6(1)(a) of the Limitation Act 1953. 6

(b) The learned trial judge had erred in law and/or in fact when he failed to appreciate that the respondent’s cause of action cannot be grounded on the Reply to Defence and that it must be confined to the Statement of Claim.

(c) The learned High Court Judge’s decision went against the documentary evidence and admission of the respondent’s director that the loan was an unconditional loan repayable upon demand.

(d) The learned High Court Judge had erred in law and/or in fact when failing to appreciate that the respondent had abandoned their claim against the appellant. 1st Issue – Whether the repayment of the loan was conditional [16] The appellant contended that the loan granted by the respondent was a loan simpliciter, i.e. where no conditions were attached for its repayment and was thus repayable anytime from the date of disbursement (see Kong Ming Bank Berhad v Sim Siok Eng [1982] 2 MLJ 205; Sim Siok Eng v Kong Ming Bank Berhad [1980] 2 MLJ 21; Boot v Boot [1999] GCCR 2097; Ogilvie v Adams [1981] VR 1041). However, the respondent argued that the loan was only repayable upon demand, after the completion of the IKBN Project. [17] The learned trial judge made the following findings in this regard: 7

(a) the only admissible direct evidence regarding the terms for the repayment of the loan was the oral testimony of the respondent’s director, Mr Hoe Min (PW3);

(b) even though there was no other direct evidence to this effect, the learned judge was of the view that PW3’s testimony was corroborated by inferences that could properly be drawn from undisputed primary facts;

(c) the loan was advanced for the purpose of funding the IKBN Project, and if the appellant was to have repaid the loan independently of the receipt of the contract proceeds upon completion of the IKBN Project, then there would have been no necessity to borrow the RM2.5 million in the first place; and

(d) it is common ground that the loan was intended to fund the IKBN Project, which clearly indicated that the appellant did not have access to available funds to itself finance the project, and this leads to an irresistible inference that the loan would be repaid once the contract proceeds from the IKBN Project was received. [18] Having made those findings of fact, the learned trial judge alluded to the evidential burden that was then placed on the appellant’s shoulders 8 to disprove the inference. The Court of Appeal in George Jude Timothy Pereira v Kasi KL Palaniappan [2017] 6 MLJ 54; [2017] 1 LNS 889 said: [50] As rightly pointed out by the learned trial judge himself, in a civil case the Plaintiff bears both the legal and evidential burden of proof (see: sections 101 and 103 Evidence Act 1950). It is also trite law that legal burden is imposed by law and remains with the Plaintiff throughout the trial and never shifts to the Defendant. On the other hand, evidential burden moves to and fro between the Plaintiff and the Defendant depending on the state of the evidence introduced at any one stage of the trial, and unless and until the Plaintiff discharges his evidential burden by establishing a prima facie case, there is no burden on the Defendant to prove his defence, no matter how weak his defence might be. [19] Having considered the evidence, the learned trial judge concluded as follows:

In this case, no evidence was led by the defendants showing any other source of repayment, which could have rebutted the assertion that repayment was to be effected upon receipt of the proceeds of the IKBN project. I therefore found the contention of the plaintiff in this regard was proven, and that the loan in question was not a loan simpliciter, and hence its cause of action did not accrue when the loan was disbursed in January 2008.

The evidence in this case showed that the IKBN project was completed on 28 February 2015, which meant that the plaintiff was not out of time when it commenced this action in June 2018. [20] Hence, the learned trial judge concluded that there was conditionality to the repayment of the loan and that it was to be repaid upon demand after completion of the IKBN Project. The IKBN Project was completed on 28.2.2015. This action was filed on 6.6.2018. Thus, the 9 claim was filed well within the 6 years limitation period prescribed in section 6(1)(a) of the Limitation Act 1953. The law on appellate intervention on findings of fact [21] The law on appellate intervention in respect findings of facts made by a trial court is well settled. We are reminded of the general rule that an appellate court should be slow to interfere with the findings of fact of a trial court unless the findings were arrived at with no or insufficient judicial appreciation of the evidence before it to render such findings plainly wrong; or the findings were the result of a misdirection by the trial court on the applicable law or there was a wrong application of the law to the facts; or the findings were of a kind which a reasonable court similarly circumstanced, which had properly directed itself and asked the right questions, would not have arrived at (see: China Airlines Ltd. v. Maltran Air Corp Sdn Bhd. & Another Appeal [1996] 3 CLJ 163 (FC); Lee Ing Chin @ Lee Teck Seng & Ors v. Gan Yook Chin & Anor [2003] 2 CLJ 19; [2003] 2 MLJ 97 (CA); Gan Yook Chin (P) & Anor v. Lee Ing Chin @ Lee Teck Seng & Ors [2004] 4 CLJ 309; [2005] 2 MLJ 1 (FC); Sivalingam Periasamy & Anor v. Periasamy & Anor [1996] 4 CLJ 545). 10 Submissions of appellant’s counsel [22] Learned counsel for the appellant submitted that the learned trial judge had failed to fully appreciate the evidence and that the factual findings went against the documentary evidence and admission of PW3 that the loan was unconditional. We find this contention to be bereft of any merit. PW3 testified as follows in his Witness Statement: What was the term of repayment of the RM2.5 million loan? When the 2nd Defendant approached me to lend him the money of RM2.5 million on or about 19.12.2007, he personally informed me that the monies were used to finance the IKBN Project and request me not to demand for repayment of the RM2.5 million loan when the IKBN Project is on-going until and unless full completion of the said project of which the Plaintiff also has participated in the supply business as well. Are you saying that the repayment of RM2.5 million loan was conditioned? Yes, it is a conditional loan tied with IKBN Project. The loan of RM2.5 million is pay back on condition that the IKBN Project is fully completed and contract money is fully received from KBS. [23] This evidence was challenged by counsel for the appellant in cross-examination, but PW3 stood firm and remained unshaken. The following part of the cross-examination is relevant: And the response to that today, their response to that today is that they don’t owe you the 2.5 million anymore, do you agree? No I don’t agree. 11 I am putting it to you that they have stated that because Khazanah Jaya’s position is that the recovery of the loan is now statute barred agree. No I don’t agree. DK: I am not asking you whether it is statute barred or not I am asking you they have always told you that it is statute barred. Well he told me that way. I don’t agree. But you do agree he told you that? Yeah I agree he told me that. But what he said I do not agree. [24] And in re-examination PW3 stated: Everything is based on oral, so when BK Tan need to borrow the money we get him the money. So orally he should pay me back when I want the money back but every time when I chase for the money he will say the project is not completed, so project is not completed so the condition is okay, let the project completed, you should pay us back the money. After that also never pay the money that is why we sue them. That is the main reason. [25] Learned counsel for the appellant submits that there were several oral demands for repayment of the loan in late 2012 and 2013, and this suggests that the repayment was not conditioned upon completion of the IKBN Project. Though there were such oral demands, PW3 explained that when those demands were made the appellant had stated that they would repay the loan upon completion of the IKBN Project, and the respondent had agreed to that. The respondent then waited until after completion of the IKBN Project to demand payment. 12 [26] In fact, we find that this evidence supports the respondent’s contention that the repayment was to be made after completion of the IKBN Project. PW3 had stated in his testimony that after completion of the IKBN Project in 2015, he had on various occasions orally demanded repayment of the loan and the 2nd defendant had always given some promise of repayment that never materialized. The following excerpt from PW3’s Witness Statement is pertinent to the issue: Upon completion of the IKBN Project, does the Plaintiff demand for repayment of the RM2.5 million loan from the Defendants? Upon completion of the IKBN Project in 2015, I had on numerous occasions orally demanded from the 2nd Defendant to repay the RM2.5 million. But every time the 2nd Defendant requested the Plaintiff to wait and if the Plaintiff really wanted the loan of RM2.5 million repaid quickly he can offer the Plaintiff some property in Bandar Seri Gemilang at Lahad Datu, Sabah or lands from China projects could be transferred to the Plaintiff as repayment of the loan. However, what he promised was never materialized. It is just to induce me to delay pursuing back the loan. [27] The evidence shows that from 2013 till the completion of the project there were no written demands made, until the issuance of the 1st Written Demand on 16.8.2017, and the Statutory Notice dated 6.9.2017. There was no response from the appellant to the 1st Written Demand, however, the appellant disputed the Statutory Notice. [28] Learned counsel for the appellant further submits that the first time that respondent raised the issue of the repayment of the loan being 13 conditional on the completion of the IKBN Project was in the Reply to Defence. Counsel submitted that the respondent had an earlier opportunity to raise this namely in an application for a Fortuna Injunction made by the appellant to restrain the respondent from filing a winding-up Petition, but did not do so. Thus, the appellant contended that this issue was an afterthought to save the respondent’s claim from statutory time-bar. [29] We find that there is no substance to this contention. The respondent had issued the 1st Written Demand and the Statutory Notice demanding repayment of the loan. When the appellant disputed the loan on the basis of limitation in the Fortuna Injunction application, the respondent made a call not to proceed with winding-up but instead chose to have the matter resolved by way of the civil action. This was a prudent course to take as first obtaining a judgment on their claim would be the better option than proceeding with winding-up in the face of a disputed debt. Thus, the lack of averment by the respondent during the Fortuna Injunction proceedings as to when the loan was to be repaid, was not indicative whether the loan was an unconditional demand loan. The court would have to look at the evidence in its entirety before concluding whether the loan was unconditional as contended by the appellant. 14 [30] Applying the legal principle governing the burden of proof in a civil claim, we are in agreement with the learned trial judge that based on the facts and circumstances of the present case, the respondent had sufficiently discharged its evidential burden to establish a prima facie case that the loan of RM2.5 million made to the appellant was for the purpose of funding the IKBN Project, and that it was repayable upon demand after completion of the project. Having established that, the evidential burden had shifted to the appellant to lead, by admissible evidence based on their pleaded case, that there were no such condition for repayment of the loan and that the loan was repayable upon demand simpliciter. We further agree with the learned trial judge that the appellant had failed to discharge that evidential burden. See: Wong Hon Leong David v. Noorazman Bin Adnan [1995] 4 CLJ 155; [1995] 3 MLJ 283 and in Tan Aik Teck v. Tang Soon Chye [2007] 5 CLJ 441; [2007] 6 MLJ 102. [31] A similar issue to whether a claim for repayment of a friendly loan was statute barred by limitation came up for consideration in Kam Seng Realty Sdn Bhd v Dato Tai Fatt Yew & Anor [2012] 7 MLJ 825, where Mohamad Ariff J (as he then was) held: [39] The issue on limitation revolves around the question whether there were agreed terms of repayment, and if they were no such terms, when the limitation period can be said to run. The minutes of the board of directors meeting referred to earlier, merely refers to 'upon such terms and conditions mutually agreed by 15 both parties thereat'. What these terms and conditions are cannot be gathered from the minutes themselves. Mr Jayakumar, counsel for the first defendant, refers to the common law rule that stipulates where there is no fixed date for repayment of the loan, the period of limitation runs from the earliest time at which an action could be brought'. See the observations of the Federal Court in Nadefinco Ltd v Kevin Corporation Sdn Bhd [1978] 2 MLJ 59 and the reference to the English case of Reeves v Butcher [1891] 2 QB 509, where Lindley LJ was quoted as stating, 'the right to bring an action may arise on … this event; but it has always been held that the statute runs from the earliest time at which an action could be brought.' See also the decision of the Singapore High Court in Tay Ivy v Tay Joyce [1992] 1 SLR 893 when it is stated that in the case of a loan simpliciter, as a loan repayable from the date of advance, limitation runs from the date of advance. On the evidence, as seen earlier, the date of advance of this particular friendly loan is 14 January 2004. The writ is issued on 24 March 2010. With the limitation period of six years stipulated under s 6(1) of our Limitation Act 1953, if time is taken to run from the date of the advance, the plaintiff's claim will be time-barred. The issue then turns very much on whether they were in fact terms of repayment agreed between the parties. This again is a matter of evidence. [32] Similarly, in the present case, the learned judge had construed the evidence as a whole before coming to the conclusion that the claim was not time-barred. We do not find that there was any lack of appreciation of the evidence by the learned trial judge. We agree with the submissions of learned counsel for the respondent that the learned trial judge had considered the totality of the evidence, the inherent probability of the case, and had drawn the proper inferences from the evidence. There was full and mature consideration of the evidence and there was proper application of the law to the established facts of the case. The learned 16 trial judge had neither misdirected himself on any point of law nor applied any wrong principles of law to warrant appellate intervention. 2nd Issue - The pleadings point [33] The appellant contends that in the Statement of Claim, the cause of action is premised upon an unconditional interest free loan repayable upon demand, and that there is no mention in the Statement of Claim:

(a) of the IKBN Project or the purpose of the loan; and

(b) of any conditions such as the loan being repayable upon completion of the IKBN Project. [34] The appellant also stated that the respondent had, in the relief prayed for in paragraph 12 of the Statement of Claim, amongst others, sought pre-judgment interest to be calculated at the rate of 5% per annum from 1.2.2008. Thus, the appellant contended, the reason why the appellant had prayed for interest to be calculated from 1.2.2008 was that the cause of action had accrued on 1.2.2008. [35] However, in reply to the defence of limitation raised by the appellant in their Defence, the appellant had filed a Reply to Defence wherein it was specifically pleaded that the repayment of the loan was conditional upon demand made after the IKBN Project was completed. Learned counsel for 17 the appellant submits that as a matter of pleadings, the respondent’s claim was bound to fail as the material facts for the cause of action for breach of contract to repay the loan on demand after completion of the IKBN Project had not been specifically pleaded in the Statement of Claim. This material fact was only stated by the respondent in the Reply to Defence. Counsel for the appellant argued that the Reply to Defence cannot supplement or amend the defects of the Statement of Claim. In this regard, appellant’s counsel relied on the decision of the High Court in Accolade Land Sdn Bhd v Mass Rapid Transit Corporation Sdn Bhd & Ors [2017] MLJU 1868. [36] Learned counsel for the respondent on the other hand submitted that the matters stated in the Reply to Defence were in response to matters raised by the appellant in their Defence and that this was entirely permissible under the rules of procedure. Learned counsel for the respondent contended that the fact of the repayment of the loan being conditional upon demand being made after the IKBN Project was completed, and the contract proceeds paid by KBS to Sinar Bekal, need be pleaded in the Reply to Defence as this would be its specific answer to the plea of limitation raised by the appellant in their Defence. [37] Now, it is well settled that pleadings in a civil action include the statement of claim, defence and reply to defence. See: Janagi v Ong Boon 18 Kiat [1971] 2 MLJ 196. It is also well established that each party must plead all the material facts on which that party intends to rely on at trial. The respondent’s Statement of Claim had set out the essentials for a claim of a debt due and owing. In Saroja @ Nagammai IK Shanmugam v Lakshmanan Perumaal [2008] MLJU 260 the High Court correctly held that: The plaintiff's claim against the defendant is of the monies lent to the defendant which she alleged were given as friendly loan on an oral basis. To sustain a cause of action against the defendant all that the plaintiff is required to plead in her pleading is the nature of the loan, the fact that the loan was given, and that it had not been repaid. [38] Thus, the material facts necessary to establish a cause of action for the repayment of a friendly loan, i.e. a debt due and owing, had been adequately pleaded by the respondent in the Statement of Claim. The appellant, in its Defence, had raised the issue of the loan being unconditional and payable upon demand, and that the claim was time-barred by reason of section 6(1)(a) of the Limitation Act 1953. It then became necessary for the respondent to reply and refute that averment as the respondent’s position was that the claim was not time barred as repayment of the loan was conditional upon completion of the IKBN Project and not merely repayable upon demand . 19 [39] The respondent may plead as such in the Reply to Defence pursuant to O.18 r.3(1) of the Rules of Court 2012 which provides:

Service of reply and defence to counterclaim (O. 18 r. 3)

Matters which shall be specifically pleaded (O. 18 r. 8)

(a) which he alleges makes any claim or defence of the opposite party not maintainable;

(b) which, if not specifically pleaded, might take the opposite party by surprise; or

(c) which raises issues of fact not arising out of the preceding pleading. [40] Hence, in K.E.P Mohamed Ali v K.E.P Mohamed Ismail [1981] 2 MLJ 10, in an action for recovery of money due under a deed of compromise, the defendant raised a plea of limitation. However, the plaintiff countered that contention by pleading in the reply to defence, by way of a general averment, that the law of limitation does not apply, without specifying the material facts relating to a subsequent acknowledgment of the debt, that defeated the limitation plea. Now, as to whether that was permitted by the rules and whether it was sufficient pleading, the Federal Court held: 21 In the present case, the material facts relating to the acknowledgement was not pleaded in the statement of claim; it was also not pleaded in the reply apart from stating that the law of limitation does not apply to the present action. That in our opinion is bad pleading. But it is a matter of indifference to the court whether the plea of acknowledgement is pleaded in the statement of claim or in the reply. If it is raised in the statement of claim, it would make a reply unnecessary and so reduce costs. A further advantage of pleading an acknowledgement in the statement of claim is that the defendant may thereby be led to refrain from raising the issue of limitation in the defence, thus narrowing the area of discovery and reducing costs: see Bullen & Leake (12th edition) at page 638. Since the material facts and circumstances were not pleaded in the statement of claim, it should have been pleaded in the reply. [Emphasis added] [41] Therefore, it has been authoritatively settled by the Federal Court, that when limitation is raised by the defendant, the plaintiff’s answer to that defence plea should be in the reply to defence. This is important as once a plea of limitation is taken up by the defendant in his pleadings, the plaintiff has the burden of proving that the action was commenced within the limitation period, or why limitation does not apply. See: Wilby v Henman (1834) 149 ER 924. And in order to do so, the plaintiff must plead the material facts that would establish the fact that the claim is not statute barred by limitation. Otherwise the plaintiff would be precluded from adducing evidence in that regard. [42] In so stating we are cognizant of the principle that in a reply to defence, the plaintiff cannot be inconsistent with any previous pleading, 22 nor raise a new ground or claim. In Mat bin Lim & Anor v Ho Yut Kam & Anor [1967] 1 MLJ 13, Raja Azlan Shah J (as HRH then was) said: That being the case, the reply must not depart from the statement of claim. In this connection I may as well adopt a passage from the current edition of Bullen & Leake's "Precedents and Pleadings" (11th Edn.) at page 694: "The plaintiff, however, must not set up in his reply a new cause of action which is not raised either on the writ or in the statement of claim; it is provided that 'no pleading shall, except by way of amendment, raise any new ground of claim or contain any allegation of fact inconsistent with the previous pleadings of the party pleading the same'. In other words the reply must not contradict or 'depart' from the statement of claim". See also International Shipcare Sdn Bhd v The owner of and other persons interested in the ships or vessels MV “EL HADJAR” registered at the port of Annaba, Algeria; MV “AIN TEMOUCHENT”, MV “NEMEMCHA” and MV “NEDROMA” which are all registered at the port of Algiers, Algeria [2014] AMEJ 1034; [2015] 7 MLJ 753; and Williamson v London & North Western Railway (1879) 12 ChD 787. [43] The function of a reply in the overall scheme of pleadings in a civil action was considered and well expressed by the Singapore Court of Appeal in Romar Positioning Equipment Pte Ltd v Merriwa Nominees Pty Ltd [2004] SGCA 44, where the Court held: It bears remembering that the function of a reply is to allow the plaintiff to raise facts in answer to the defendant’s case. In particular, it will be necessary to file a reply if the defendant raises a new issue for the first time in the defence. As 23 the function of a reply is limited to answering matters raised in the defence, it follows that the reply should not be used as an avenue to introduce new causes of action which are not raised in the statement of claim. If a plaintiff wishes to raise an additional and inconsistent claim in the alternative after the statement of claim has been filed, the proper approach should be to apply to amend the statement of claim, rather than slip it in by way of the reply. [44] Learned counsel for the appellant had referred to the judgment of my learned brother Lee Swee Seng J (as he then was) in Accolade Land Sdn Bhd v Mass Rapid Transit Corporation Sdn Bhd & Ors [2017] MLJU 1868 in support of his contention that the respondent had supplemented the Statement of Claim by the additional facts pleaded in the Reply to Defence, and that this is not permitted in law. Whilst we agree that as a general rule a party cannot supplement the statement of claim through the reply to defence, we do not find the respondent had in this case, supplemented their case, by merely answering, specifically, the plea of limitation raised by the appellant in the Defence. In fact, the pronouncement of my learned brother in Accolade Land Sdn Bhd v Mass Rapid Transit Corporation Sdn Bhd & Ors (supra) supports the respondent’s position. In this regard it would be appropriate to quote the relevant passage from the judgment of Lee Swee Seng J (as he then was): [103] It follows from the cardinal principle that a plaintiff is not allowed to supplement its statement of claim by including in its reply, matters that should have been pleaded in the statement of claim. The Singapore High Court case 24 of Nirumalan K Pillay & Ors v A Balakrishan [1997] 1 SLR 322 stated as follows this principle at p. 326, para. [10]: “....Further, because the function of a reply is to answer matters raised in the defence, its contents must relate to matters raised in the defence. What is the same thing, the plaintiffs may not supplement his statement of claim by including in his reply matters which ought to have been included in the statement of claim. In this respect, a reply is analogous to re-examination of a witness which should be confined to matters touched on in cross-examination. Fresh evidence adding to or re-affirming evidence-in-chief is not permitted in re examination.” (emphasis added), [45] The respondent, as plaintiff in this action, must specifically plead and identify their cause or causes of action against the appellant/defendant in the Statement of Claim. See Yap Seong Yee v

Eureka Property Management Sdn Bhd and another appeal [2018] 6 MLJ This the appellant has done. There is no requirement in law for the appellant, as plaintiff, to plead in the Statement of Claim facts in anticipation of the respondent’s defence. Learned counsel for the appellant argues that the respondent ought to have amended the Statement of Claim to include the fact of the repayment of the loan being conditional after completion of the IKBN Project, instead of doing so in the Reply to Defence. We are of the opinion that in the circumstances of the case the respondent’s answer to the plea of limitation taken up in the Reply to Defence was wholly appropriate, as the respondent was merely responding to matters raised in the Defence, as it was entitled to. The 25 respondent was neither seeking to supplement nor to amend any defect in the Statement of Claim. It was also not a case of adding a new cause of action in the Reply to Defence. Hence, we find that nothing turns on this issue. The claim for pre-judgment interest from 1.2.2008 [46] Now, as for the issue of the plea for pre-judgment interest to be calculated from 1.2.2008, as part of the relief claimed, learned counsel argued that by reason of this relief sought in the Statement of Claim, the respondent was admitting that the cause of action had accrued on 1.2.2008. We are unable to agree with that contention. The respondent’s claim must be seen from the totality of the pleadings. The prayer for relief was only a part of the pleadings. The respondent’s claim for pre-judgment interest at 5% per annum from 1.2.2008 was merely wishful thinking. When the pleadings are construed as a whole, it is evident that the cause of action accrued from the earliest date where the demand could be made after completion of the IKBN Project. Hence, though the respondent had prayed for pre-judgment interest from 1.2.2008, the learned trial judge only awarded pre-judgment interest at the “rate of 5% per annum to be paid from 1 March 2015 until the date of judgment”, i.e. the earliest date on which the demand could be made and when the cause of action was capable of arising. Thus, it is obvious that the learned trial judge took the 26 respondent’s pleaded case as a whole in granting the appropriate relief, including the claim for pre-judgment interest. 3rd Issue – Abandonment of claim [47] Learned counsel for the appellant submitted that the learned trial judge had erred in law and in fact when he disregarded the abandonment of the respondent’s claim against the appellant. [48] We do not find any merit in this submission. The claim by the respondent, as plaintiff, against the defendants was in the alternative. In fact, one of the issues for determination by the trial court was “whether the loan had been granted to the defendants jointly, or whether the loan was only granted to one or other of the defendants.” The learned trial judge had specifically put his mind to this issue and it is reflected in the Grounds of Judgment:

The plaintiff’s case was expressed in two ways:

(a) first, it was contended that the loan had been granted jointly to Khazanah Jaya and the second defendant; and

(b) second, it was contended that, even if the loan was granted to Khazanah Jaya only, the second defendant was liable to repay the loan on the basis that the benefit of the loan had accrued to him as a shareholder and director of Khazanah Jaya. ... ... 27 17. Thus, properly understood, the plaintiff’s claims against the defendants were in the alternative: the loan was granted to either the first defendant or the second defendant. The basis for the contended liability of the second defendant was the allegation that the loan was given to him personally, and not that the veil of incorporation ought to be lifted to make the second defendant personally liable for a loan that was granted to the first defendant.

Hence, even if the plaintiff’s claim succeeded, it could only obtain judgment against one of the defendant, but not both. [49] The learned trial judge then went on to consider the evidence and found that the loan was in fact granted to the appellant and not the 1st defendant, and thus his Lordship entered judgment against the appellant only for the sum of RM2.5 million with interest and costs. [50] In fact, during the trial the learned trial judge enquired from learned counsel for the respondent whether the claim against the defendant was in the alternative or if the respondent was abandoning the claim against the appellant, and the same was recorded in the Notes of Proceedings: No, no sorry, you just answer my question. Are you abandoning your claim against the First Defendant? No, we are not. So, it’s an alternative claim? Yes. But do you accept that they cannot both be liable at the same time? Yes. 28 [51] Thus, it is abundantly clear that the respondent had not abandoned their claim against the appellant. This was expressly stated by learned counsel for the respondent when queried by the learned trial judge. Hence, we do not find any merit in the appellant’s contention that in the course of the trial and submissions the respondent had abandoned its claim against the appellant. If that was so, there would not have been any necessity for the learned High Court Judge to make a finding as to which of the defendants were liable for the loan. Conclusion [52] In the final analysis, we do not find any merit in the issues raised by the appellant in this appeal that would warrant appellate intervention. Wherefore, we dismissed the appeal with costs to the respondent and affirmed the Order of the High Court. Dated this 16th day of December 2021. -sgd-Vazeer Alam Mydin Meera Judge Court of Appeal Putrajaya 29 Counsel for the Appellant: Jack Yow It Pin (together with him Neoh Jin Keat) Messrs. Rahmat Lim & Partners Suite 33.01, Tingkat 33 The Gardens North Tower Mid Valley City Lingkaran Syed Putra 59200 Kuala Lumpur Counsel for the Respondent: Clifford Lee Messrs. Clifford Lee, Yen & Yee MK 2-15-07, Mont Kiara MK2 No. 15, Jalan Sultan Haji Ahmad Shah Kompleks Kerajaan 50480 Kuala Lumpur