Kumpulan Liziz Sdn Bhd v Dato' Sri Abang Aditajaya Bin Haji Abang Alwi (BA-22NCC-69-07/2021)

This is the Plaintiff’s application in enclosure 9 for Summary Judgment under Order 14 Rule (1) of the Rules of Court 2012 (the Application) against the Defendant for a sum of RM3,500,000.00.

Vide Letter of Undertaking (LOU) dated 03.08.2016 the Defendant expressly undertakes and warrants that: a. the Plaintiff will be appointed as the exclusive subcontractor for a project known as “Projek Melaksanakan Jambatan Rambungan, Matang, Sarawak” (the Project) in the event any of the five companies where the Defendant is the legal owner and/or major shareholder (i.e I Fly Construction Sdn. Bhd, Semaju Construction Sdn. Bhd., Majutia Holdings Sdn. Bhd., Cahaya Deka Sdn. Bhd. and A Shift Design (S) Sdn. Bhd. [the 5 Defendant’s Companies]) successfully awarded with the said Project. b. the Defendant then appoints the Plaintiff as an exclusive subcontractor for the said Project within seven days from the date any of the said 5 Defendant’s Companies receive the award of the said Project from the developer.

It was also agreed in the said LOU that: a. the Plaintiff, as the exclusive subcontractor, will obtain 85% of the total contract sum of the said Project, whereas the Defendant will obtain 15% of the total contract sum of the said Project. b. the Plaintiff is required to make payments to the Defendant according to the schedule and events as follows: i. a sum of RM3,500,000.00 as the earnest deposit upon signing of the said LOU. ii. an additional earnest deposit of RM1,500,00.00 will be paid upon the receipt of the Letter of Award to appoint the Plaintiff as the exclusive subcontractor of the said Project. iii. the balance 15% of the total contract sum to be obtained by the Defendant will be paid progressively by the Plaintiff to the Defendant on a pro-rata basis throughout the contract period of the said Project. c. In the event that the said Project is not awarded to any of the said 5 Defendant’s Companies, or in the event the said 5 Defendant’s Companies fail to award the said Project to the Plaintiff, within 6 months from the said LOU or before 06.12.2016, then the Defendant undertakes and warrants to refund to the Plaintiff in full all the earnest deposit paid to the Defendant, within 5 days from the date of the Plaintiff’s request for refund.

It is undisputed that the Plaintiff had paid the sum of RM3,500,000.00 to the Defendant as agreed in the said LOU.

The Defendant had failed to acquire or award the said Project to the Plaintiff, and therefore, the Plaintiff was never appointed as the exclusive subcontractor for the said Project.

Due to the Defendant’s failure, the Plaintiff then repeatedly requested and demanded the return of the sum of RM3,500,000.00 from the Defendant. However, the Defendant had continuously failed, neglected and/or refused to refund the said sum. Hence, pursuant to the undertaking and warrant in the said LOU, the Plaintiff’s solicitors sent a Letter of Demand dated 22.06.2021 to the Defendant to claim for the refund of the said sum of RM3,500,000.00 within five days as per the terms of the LOU.

The Defendant had failed to respond to the said Letter of Demand and the said sum is still owing to the Plaintiff.

The Defendant did not deny receiving the said sum. The Defendant contended that he was merely the representative of the main contractor and the sum was received as Plaintiff’s appointment guarantee.

The Defendant contended that it is beyond his ability to determine whether the said Project is awarded to the main contractor as stated in the LOU. At all material times, the Defendant had carried out his obligations and responsibilities under the agreement to ensure that the said Projects are obtained.

The Defendant contended the said sum was made independent of the contract with regard to the said Project. Various payments were made before the LOU was executed.

The principles of law relating to Summary Judgment applications are trite. The Plaintiff, in an application for Summary Judgment, must satisfy the primary requirements under Order 14 Rules of Court 2012. The preconditions for the application for Summary Judgment were stated in the case of National Company for Foreign Trade v Kayu Raya Sdn. Bhd. [1984] 2 MLJ 300.

Once the primary requirements have been satisfied, the burden then shifts to Defendant to satisfy the court that there is in existence the triable issue that warrants a trial and why judgment should not be entered against it (see: National Company for Foreign Trade v Kayu Raya Sdn. Bhd. [1984] 2 MLJ 300; Cempaka Finance Bhd v Ho Lai Ying (trading as KH Trading) & Anor [2006] 2 MLJ 685).

In the case of Ng Hee Thong & Another v Public Bank Berhad [1995] 1 MLJ 281, Gopal Sri Ram JCA (as His Lordship was then) stated: “In Malayan Insurance (M) Sdn Bhd v Asia Hotel Sdn Bhd [1987] 2 MLJ 183 at p 183, Hashim Yeop A Sani SCJ explained the basis of the summary jurisdiction in clarity of language that is usually associated with that eminent judge: The underlying philosophy in the O 14 provision is to prevent a plaintiff clearly entitled to the money from being delayed his judgment where there is no fairly arguable defence to the claim. The provision should only be applied to cases where there is no reasonable doubt that the plaintiff is entitled to judgment. Order 14 is not intended to shut out a defendant. The jurisdiction should only be exercised in very clear cases.”

This Court is satisfied that the Plaintiff, in this case, has fulfilled the preconditions for the application for Summary Judgement as provided for under Order 14 Rule 2 of the ROC. Therefore, once the preconditions are fulfilled, the Plaintiff has established a prima facie case and becomes entitled to the judgement. The burden has now shifted to Defendant to prove that there is an existence of a triable issue that warrants a trial.

It is well settled in an Order 14 application, that if the Defendant succeeds in raising even a single triable issue it will not be a fit and proper case to order Summary Judgment (see: Southeast Asia Insurance Bhd. v Kerajaan Malaysia [1998] 1 CLJ 1045).

This Court finds that the Defendant has failed to satisfy this Court that there are triable issues that could not be dealt with summarily. The reasons are as stated below.

It is undisputed that the Plaintiff was not awarded the Project that was promised. The LOU clearly states that the earnest deposit is to be refunded in the event the Project is not awarded.

I find there are sufficient contemporaneous documents adduced by the Plaintiff to prove that the Defendant had received the payment of RM3,500,000.00 and payments were made into the Defendant’s personal account.

The Defendant had acknowledged receiving the said amount in its Statement of Defence (see paragraph 6).

Clause 6 of the LOU had clearly stated: “I hereby irrevocably undertake on behalf of myself and the main contractor to refund to LIZIZ or LIZIZ’s nominated subcontractor in full all the earnest deposit or any other monies paid to me or to the main contractor….” This means that the Defendant had irrevocably undertaken by himself to refund the earnest deposit or any other monies in full which were paid to him or to the main contractor. In this case, evidence shows that the monies were paid to the Defendant into his personal account. I do not find any ambiguity in the wording of the

Further, the perusal of the Defendant’s Statement of Defence, the Defendant had not denied signing the LOU and it was not the Defendant’s pleaded case. The Defendant did not challenge his signature in the LOU. He had only said that he never received the signed copy. This to my mind would not constitute a triable issue.

Though the learned counsel for the Defendant had raised the issue on payments made prior to the signing of the LOU and raised the issue of whether the payments were made for the Project under the LOU, I find this issue was not pleaded. Further, the Defendant had acknowledged receiving the payments for the said Project in its Statement of Defence and was aware of the arrangement. The Defendant never denied being involved in the investment; and the Defendant admitted that he was to try and get the said Projects. This, to my mind, would negate the learned counsel’s contention.

This Court has to disregard submissions that had raised issues which were not pleaded to or raised in the affidavit by the Defendant. The submission must be confined to the material facts that have been pleaded. Further, parties must plead all the material facts on which the parties proposed to rely upon. It is trite, failing to do so, parties are barred from adducing any evidence on such non-pleaded facts. I refer to the case of TSC Education Sdn. Bhd. v Kolej Yayasan Pelajaran MARA & Anor [2002] 5 MLJ 577, Abdul Malik J (as the Lordship was then) held that: “…The learned counsel for the second defendant submitted, quite rightly, that the issue of the first defendant operating under the approval of the Ministry of Education was never raised by the plaintiff in its statement of claim or in its affidavits. Thus, so the submission went, the plaintiff was barred from raising this new issue that was not pleaded nor alluded to in its affidavits. Cotton LJ aptly said in Philipps v Philipps & Ors (1878-79) 4 QBD 127 at p 139: But in my opinion, it is absolutely essential that the pleading, not to be embarrassing to the defendants, should state those facts which will put the defendants on their guard and tell them what they have to meet when the case comes on for trial. In Hadmor Productions Ltd & Ors v Hamilton & Anor [1983] 1 AC 191 at p 233, Lord Diplock echoed the same sentiments: Under our adversary system of procedure, for a judge to disregard the rule by which counsel are bound has the effect of depriving the parties to the action of the benefit of one of the most fundamental rules of natural justice: the right of each to be informed of any point adverse to him that is going to be relied upon by the judge and to be given an opportunity of stating what his answer to it is. In short, each party must plead all the material facts which that party proposes to rely upon otherwise that party will be barred from adducing any evidence of them in the course of the trial. The same principle would also apply when the party is making a submission of its case in that such a submission must be confined to the material facts that have been pleaded. [emphasis added]

It is trite in a Summary Judgment application mere bare denials or assertions do not constitute evidence and they cannot give rise to triable issues. As observed in the case of Independent Oil Tools Malaysia Sdn. Bhd. v Olio Resources Sdn. Bhd. [2018] MLJU 1245, the High Court stated as follows: “[71] The observations I made in another summary judgment case of Affin Bank Bhd v Tes Steel Products Sdn Bhd & Ors [2017] 8 MLJ 733 are similarly applicable here. I had said: - [35] When viewed in totality, the averments and arguments raised by the first defendant are considerable inflicted by various shortcomings that do little, if at all, to advance its resistance to this summary judgment application. [36] Above all, the case of the defendants is also riddled with averments which are not substantiated. These are bare averments without real support. No documents were produced by the first defendant to corroborate its stance on virtually all the arguments to challenge this summary judgment application. It is trite that mere bare denials or assertions do not constitute evidence and they cannot give rise to triable issues… [72] In my view, denials of plain and non-controversial facts ought to be deprecated for they are often a clear sign of the absence of any valid issues of real dispute, more so when the defendant had undoubtedly benefitted from the business relationship with the plaintiff.”

The learned counsel for the Defendant raised the issue that the Plaintiff was wound up on 18.11.2020 and therefore, the Letter of Demand dated 22.06.2021 is not valid. However, this Court finds that the Plaintiff upon being wound up on 18.11.2020 by Pembinaan Azam Jaya Sdn. Bhd., the said order was set aside on 28.05.2021 on appeal to the Court of Appeal (see Kumpulan Liziz Sdn. Bhd. (in Liquidation) v Pembinaan Azam Jaya Sdn. Bhd. [2021] 1 LNS 2043). Then the second winding up took place on 20.09.2021. Therefore, for the period between 28.05.2021 till 20.09.2021, there was no winding up order on the Plaintiff.

Hence, I find the Letter of Demand dated 22.06.2021 is valid as the Letter of Demand was issued before the Plaintiff was wound up for the second time on 20.09.2021. Subsequently, as the Plaintiff was wound up, the liquidator pursuant to section 486 and the Twelfth Schedule of the Companies Act 2016, has the power to bring or defend any action or legal proceedings in the name and on behalf of the Plaintiff’s company.

It is my considered view that the triable issues raised by the Defendant are not substantiated. Therefore, I find this is a plain and obvious case that the Defendant had failed to refund the earnest deposit pursuant to clause 6 of the LOU to the Plaintiff.

For the foregoing reasons stated above, I, therefore, ordered that the Plaintiff’s Application in enclosure 9 be allowed with costs of RM6,000.00. Dated: 7th day of December 2022 -sgd-JAMHIRAH ALI JUDICIAL COMMISSIONER High Court of Malaya at Shah Alam (NCVC 1) To the parties’ solicitors: For the Plaintiff : Michael Choo & Grace Phung (Messrs Michael Choo & Partners) For the Defendant : Sumita Balasubramaniam (Messrs Harjit Sandhu, Wan & Associates)