Lim Thiam Leong Realty Sdn. Bhd v 1. ) GNC-Ilmugaya JV Sdn. Bhd. (WA-12BNCC-8-03/2022)

GNC ILMUGAYA JV SDN. BHD. [No. Pendaftaran: 201401002869 (1078943-K)]

CHU KAR KING (No. K/P: 851126-10-6157) (Berniaga sebagai Green Nature Construction) [No. Pendaftaran: 200503126788 (001568924-A)] … RESPONDEN-RESPONDEN [DALAM MAHKAMAH SESYEN DI KUALA LUMPUR DALAM WILAYAH PERSEKUTUAN KUALA LUMPUR, MALAYSIA GUAMAN NO. WA-B52NCC-372-07/2020 ANTARA LIM THIAM LEONG REALTY SDN. BHD. [No. Pendaftaran: 197101001179 (11539-U)] … PLAINTIF S/N PnPef2bw9064BrvC1nyw

GNC ILMUGAYA JV SDN. BHD. [No. Pendaftaran: 201401002869 (1078943-K)]

CHU KAR KING (No. K/P: 851126-10-6157) (Berniaga sebagai Green Nature Construction) [No. Pendaftaran: 200503126788 (001568924-A)] … DEFENDAN-DEFENDAN] JUDGMENT A. Introduction [1] This is an appeal against the decision of the learned Sessions Court judge, dismissing the appellant’s claim against the respondent. [2] I shall refer to the parties as they are referred to at the Sessions Court, namely the appellant as the plaintiff, and the respondent as the 1st defendant. [3] After considering the evidence before this court and hearing submissions of counsel, I dismissed the appeal and provided brief reasons for my decision. These are the full grounds of my decision. S/N PnPef2bw9064BrvC1nyw B. Background Facts [4] The plaintiff’s claim arose from a letter of award dated 13 February 2014 (“Letter of Award”), pursuant to which the plaintiff appointed the 1st defendant as a contractor for a project known as the “Proposed Renovation and Conversion of Existing Commercial Complex Level 13 to 20 – Campbell Complex Into Hotel” (“Project”). [5] The Letter of Award provides that the plaintiff agreed to pay the 1st defendant RM14,176,766 for works completed for the Project. The contract value was subsequently revised to RM16,521,275.18 (“Revised Contract Value”). [6] The plaintiff claimed that it received a letter dated 28 August 2017 from the 1st defendant (“Letter of Authorisation”). The Letter of Authorisation states that the 1st defendant authorised Green Nature Construction (“Green Nature”) to collect payment for claims submitted for tiles supplied for the Project. [7] Thus, between 30 August 2017 to 23 May 2018, the plaintiff made payments amounting to RM588,041 (“Plaintiff’s Payments”) to Green Nature, the 2nd defendant and Chu Yin Keong, who is said to be a representative of Green Nature. [8] The 1st defendant however denied issuing the Letter of Authorisation, and claimed that the signature on the letter was forged, and that the letter was fraudulently issued. S/N PnPef2bw9064BrvC1nyw [9] The plaintiff’s case is that it had relied on the Letter of Authorisation in making the Plaintiff’s Payments. The plaintiff filed a claim at the Sessions Court, seeking special damages in the sum of the Plaintiff’s Payments and further or in the alternative, a declaration that the Plaintiff’s Payments are part payment for the Revised Contract Value. [10] The 2nd defendant did not enter an appearance, and no judgment in default was entered against the 2nd defendant. The trial at the Sessions Court therefore proceeded without the involvement of the 2nd defendant. [11] After a full trial, the Sessions Court dismissed the plaintiff’s claim. The learned Sessions Court judge found that the case relates substantially to a claim that had been adjudicated in Shah Alam High Court Suit No. BA-22-NCVC-119-03/2019 (“Suit 119”). Suit 119 was filed prior to the commencement of the plaintiff’s claim at the Sessions Court. [12] In reaching his decision on the plaintiff’s claim, the learned Sessions Court judge considered Suit 119 and held as follows: “[25] It is the finding of fact by this Court that the present case relates substantially to the claim for the works done under the project and the purported letter of authorization dated 28/8/2017. [26] The Court is satisfied that the matter had been adjudged by the HC Shah Alam and accordingly the maxim of res judicata definitely applies.” S/N PnPef2bw9064BrvC1nyw C. Considerations [13] I therefore considered whether the learned Sessions Court judge was correct in finding that the doctrine of res judicata applies to this case, and in dismissing the plaintiff’s claim on such basis. [14] The law on res judicata is set out clearly in Asia Commercial Finance (M) Bhd v Kawal Teliti Sdn Bhd [1995] 3 MLJ 189. The Supreme Court held as follows: “What is res judicata? It simply means a matter adjudged, and its significance lies in its effect of creating an estoppel per rem judicatum. When a matter between two parties has been adjudicated by a court of competent jurisdiction, the parties and their privies are not permitted to litigate once more the res judicata, because the judgment becomes the truth between such parties, or in other words, the parties should accept it as the truth; res judicata pro veritate accipitur. The public policy of the law is that, it is in the public interest that there should be finality in litigation – interest rei publicae ut sit finis litium. It is only just that no one ought to be vexed twice for the same cause of action – nemo debet bis vexari proeadem causa. Both maxims are the rationales for the doctrine of res judicata, but the earlier maxim has the further elevated status of a question of public policy. … S/N PnPef2bw9064BrvC1nyw The starting point ought to be the celebrated passage by Wigram VC in the case of Henderson v Henderson (1843) 3 Hare 100 at p 115 which is: The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation and which the parties, exercising reasonable diligence might have brought forward at the time. … To revert to that famous passage set out above, the next step is to state our view on its scope of operation or approach towards such scope which has given rise to certain controversial aspects referred to earlier. Bearing in mind the well-known relevancy of a previous judgment in barring a second suit, eg please see s 40 of the Evidence Act 1950, it will be readily understood that when Wigram VC spoke of 'points', the points should actually include causes of action, or all causes of action which one of the two parties has against the other, based on, or substantially on the same facts or issues, and not just all issues of law or of fact that are in dispute between the parties …” (emphasis added) S/N PnPef2bw9064BrvC1nyw [15] From Asia Commercial Finance (supra), res judicata would apply not only to prevent the re-adjudication of issues that had already been adjudicated by a court of competent jurisdiction. It would also apply to all issues that could have been brought forward by parties exercising reasonable diligence. [16] To determine whether res judicata applies in this case, I compared the claim at the Sessions Court with the claim in Suit 119. For reasons explained below, I found the subject matter of both disputes to be the same. [17] The plaintiff’s claim at the Sessions Court arose from the Letter of Award, pursuant to which the plaintiff appointed the 1st defendant as a contractor for the Project. In the Letter of Award, the plaintiff is to pay the 1st defendant RM14,176,766, which amount was subsequently revised to the Revised Contract Value. [18] The plaintiff claimed it had relied on the Letter of Authorisation and made the Plaintiff’s Payments, as authorised by the letter. However, the 1st defendant denied issuing the Letter of Authorisation, claiming the signature on the letter was forged, and the letter was fraudulently issued. [19] Thus, the plaintiff claimed special damages in the sum of the Plaintiff’s Payments and further or in the alternative, a declaration that the Plaintiff’s Payments are part payment for the Revised Contract Value. The premise of this claim is the Letter of Authorisation, and the stand taken by the plaintiff is that it had relied on the Letter of Authorisation in making the Plaintiff’s Payments. S/N PnPef2bw9064BrvC1nyw [20] Suit 119 is a claim by the 1st defendant in this action against the plaintiff and Shapadu Properties Sdn Bhd (“Shapadu Properties”), for the Revised Contract Value, which the 1st defendant alleged remains outstanding. The outstanding Revised Contract Value amounted to RM2,237,434.83. [21] A judgment in default of appearance was entered against the plaintiff and Shapadu Properties on 16 April 2019 (“JID”). The plaintiff applied to set aside the JID (“Setting Aside Application”). In the proposed defence in the Setting Aside Application, the plaintiff alleged that payments has been made to representatives of the 1st defendant, as a result of the plaintiff relying on the Letter of Authorisation. [22] On 7 November 2019, the Shah Alam High Court dismissed the Setting Aside Application, but reduced the judgment sum to RM2,182,394.83. [23] In July 2020, the plaintiff sought leave to file an appeal against the dismissal of the Setting Aside Application out of time (“Application for Leave”). The Application for Leave was dismissed by the Court of Appeal. [24] What emerged from my consideration and comparison of the action in the Sessions Court and Suit 119 is that both actions relied on the Letter of Authorisation as a basis for payments made pursuant to works done under the Letter of Award. In the Sessions Court, the plaintiff relied on the Letter of Authorisation in its claim for the Plaintiff’s Payment, and in Suit 119, it relied on the Letter of Authorisation in its defence, and claimed that payments had been made to representatives of the 1st defendant, pursuant to the Letter of Authorisation. Further, in the S/N PnPef2bw9064BrvC1nyw Application for Leave, the plaintiff argued that it has a defence on the merits in Suit 119. The plaintiff referred to the Letter of Authorisation and claimed that it had made payments amounting to RM588,041 (i.e. the Plaintiff’s Payments) in reliance on the Letter of Authorisation. This is the exact argument raised by the plaintiff at the Sessions Court. [25] As such, it is my finding that the subject matter of the claim in the Sessions Court is the same as the subject matter that had been considered and disposed of in Suit 119. Consequently, I further find that the claim in the Sessions Court is barred by res judicata. [26] The plaintiff argued that the parties in this case are different from the parties in Suit 119, and as such, res judicata cannot apply. This case involves the plaintiff, the 1st defendant and the 2nd defendant who is the sole proprietor of Green Nature. Suit 119 involves the 1st defendant, the plaintiff and Shapadu Properties. [27] There is a plethora of cases that have held that res judicata can apply even though the parties to the earlier suit may not be the same as the parties in the later suit (see Seruan Gemilang Makmur Sdn Bhd v Badan Perhubungan UMNO Negeri Pahang Darul Makmur (via his secretary Dato' Ahmad Tajudin bin Sulaiman) [2010] 8 MLJ 57 and Dato’ Sivananthan a/l Shanmugam v Artisan Fokus Sdn Bhd [2016] 3 MLJ 122). [28] In Dato’ Sivananthan (supra), the Court of Appeal held that although the first civil suit (referred to as the “HTF suit”) was an action based on a cheque that was dishonoured, and the appeal before the Court of Appeal was a suit for breach of contract, both cases arose from the S/N PnPef2bw9064BrvC1nyw same set of facts, background, issues and circumstances, and the reliefs claimed are consequent to the agreement which was the subject matter of the dispute. This was so, even though the case involved different parties as the parties in the HTF suit. [29] The following passage from the judgment of the Court of Appeal is instructive: “[25] In the present appeal, since the present action would undoubtedly involve going over precisely the same facts as in the previous HTF suit, and accepting the broader approach and the wider sense of res judicata as the preferred and correct legal position, the fact that the parties to this suit are different from the HTF suit does not disentitle the appellant to invoke the doctrine of issue estoppel to bar the respondent from relitigating a specific issue that had been decided in the prior separate action. The doctrine also applies to a non-party. It is therefore not necessary for parties to be the same in both actions. What the doctrine seeks to prevent is an abuse of the process of the court by attempting to make a double claim as well as allowing the plaintiff to relitigate its cause for the same relief and based on the same subject matter for which judgment had successfully been obtained in the HTF suit and to produce the same set of facts, the same witnesses and the same documents (see Seruan Gemilang Makmur Sdn Bhd v. Badan Perhubungan UMNO Negeri Pahang Darul Makmur, supra ).” (emphasis added) S/N PnPef2bw9064BrvC1nyw [30] Similarly in this case, the facts forming the basis of this claim, namely, the award of the Project to the 1st defendant, the issuance of the Letter of Award and the plaintiff’s reliance on the Letter of Authorisation, are identical to the facts in Suit 119. Following Dato’ Sivananthan (supra), the fact that there are other parties named in this action and in Suit 119 does not preclude the application of res judicata. [31] Finally, it is important that I highlight two issues. [32] The first is that the question of the applicability of the doctrine of res judicata was raised in the 1st defendant’s application to strike out the Sessions Court action. The learned Sessions Court judge dismissed the striking out application, and the 1st defendant’s appeal to the High Court was dismissed. The decision of the Sessions Court judge to dismiss the 1st defendant’s striking out application does not in my view prevent him from reconsidering the applicability of res judicata after full trial, and holding that res judicata applies. [33] The second is that Suit 119 was not determined at full trial. The Shah Alam High Court dismissed the Setting Aside Application, and the Application for Leave was similarly dismissed by the Court of Appeal. In my view, the determination of Suit 119 in this manner does not prevent res judicata from applying. This is especially so as the proposed defence in the Setting Aside Application refers to the Letter of Authorisation and payments made in reliance on the Letter of Authorisation. The Application for Leave also makes reference to the same set of facts, which was later raised at the Sessions Court. S/N PnPef2bw9064BrvC1nyw

[34] From the considerations set out above, I find that issues raised in this case had already been raised in Suit 119. In my view, res judicata would apply to this case, barring the re-litigation of issues that had been raised in Suit 119. [35] Having reached such a conclusion, I did not find it necessary to consider the other issues raised in the appeal. [36] I saw no reason to disturb the findings of the learned Sessions Court judge, and as such, I dismissed the appeal, with costs. Dated 26 May 2023 - sgd - Adlin Abdul Majid Judicial Commissioner High Court of Malaya Commercial Division (NCC6) Kuala Lumpur Counsel: Appellant : Wilson Lim of Messrs. Wilson Lim 1st Respondent : Chin Yu Yan (together with Bryan Tan) of Messrs. YY Chin S/N PnPef2bw9064BrvC1nyw