Liong Shan Group Sdn Bhd v Odr Lubricants Sdn Bhd (WA-12ANCC-163-12/2021)

This was an appeal against the decision of the Sessions Court on 10.12.2021 allowing summary judgment to be entered against the Appellant (Defendant) pursuant to Order 14 of the Rules of Court ROC . Page 2 of 20 [2] After hearing submissions from both parties, I allowed the appeal in part by principally varying the interest granted by the Sessions Court but upheld

The essentially for goods sold and delivered at the request of the Appellant and for dishonoured cheques.

The goods consist of, inter alia, petrol, diesel and lubricants the Goods .

The Respondent had issued the Appellant invoices for the Goods that were sold and delivered for the period from 26.6.2019 to the Invoices

The Invoices total the sum of RM983,043.13.

For the period from 26.6.2019 to 5.11.2019 the Appellant had made part payments towards the Invoices totalling RM423,580.00.

After deducting the total sum paid by the Appellant the principal amount due and owing by the Appellant to the Respondent under the Invoices is RM462,366.20.

By way of an email of 8.7.2020 s 8.7.2020 Email the Respondent, inter alia: i) informed the Appellant that there are invoices which have been due for over 6 months; ii) informed the Appellant that if the Respondent did not hear from the Appellant in the next 7 days late payment interest of 3% per month on the total amount due starting 1.3.2020 will be charged; iii) informed the Appellant that the amount due to the Respondent as at 8.7.2020 is RM462,366.20; Page 3 of 20 iv) provided the breakdown of the invoices as well as a statement of account as at 8.7.2020; v) asked the Appellant when it can make payment; vi) informed the Appellant that payment can be made to the vii) attached a statement of account as at 8.7.2020; and viii) bank account.

The Appellant had agreed to settle the Principal Outstanding Sum via instalments and gave the Respondent 9 post-dated cheques the 9 PD Cheques , the details of which are as follows: Date Cheque No. Amount (RM)

1.

30.11.2020

31.12.2020

31.1.2021

28.2.2021

31.3.2021

30.4.2021

31.5.2021

30.6.2021

31.7.2021 RHB 001240 62,366.20 TOTAL 462,366.20 [11] On 1.12.2020, the Respondent deposited the first post-dated the First PD Cheque First PD Cheque was dishonoured and the Respondent was informed by the bank that the Appellant had stopped the First PD Cheque. [12] The Respondent then sent an email dated 24.12.2020 Respondent to the Appellant asking the Appellant to pay the first instalment payment (for which the First PD Cheque was issued) or replace the First PD Cheque. [13] However, the Appellant did . Page 4 of 20 [14] The Respondent, through its solicitors, then sent a letter of demand dated 29.3.2021 Letter of Demand to the Appellant. [15] The defences raised by the Appellant are, inter alia, as follows: i) The Invoices that were issued were supported not by delivery orders supporting documents . ii) The Respondent had vide letter dated 30.12.2020 replied to the 24.12.2020 Email and, inter alia: a) asked the Respondent not to bank-in all the 9 PD Cheques; b) informed the Respondent that Invoices were without the complete delivery orders; c) informed the Respondent that out of the total Invoices issue by the Respondent, 4 were only received by the Appellant after the Appellant had requested the same from the Respondent and they are as follows: d) informed the Respondent that the Invoices in items (1) to (3) above were discovered to be without purchase order or delivery order; e) requested that the Respondent provide the chopped and signed invoice for item no. (4) above; f) informed the Respondent that the following invoices are without supporting documents, in particular delivery orders: Date Invoice No.

1.

4.7.2019 19/07-0026 76,986.00 2.

22.7.2019 19/07-0027 39,639.60 3.

22.7.2019 19/07-0028 39,639.60 4.

29.11.2019 LS/1911-0011 38,984.40 Page 5 of 20 g) informed the Respondent that if the supporting Delivery orders are not sent to the Appellant, the Appellant iii) By way of letter dated 12.4.2021 Letter , the Appellant responded to the Letter of Demand stating, inter alia, that the Respondent had still not furnished the delivery orders or purchase orders as requested and as claim. [16] Putting it simply, th on essentially the following grounds: i) The Invoices issued by the Respondent are not supported by a duly acknowledged deliver order (and/or purchase order). ii) The 9 PD Cheques were issued by the Appellant without and the Invoices. iii) The 9 PD Cheques were issued on condition that the Respondent will provide the delivery orders for the Invoices. iv) There are some discrepancies in some of the Invoices. v) The interest levied by Appellant on the Respondent is exorbitant. [17] are triable issues. Date Invoice No.

1.

23.7.2019 19/07-00025 76,984.40 2.

29.8.2019 19/08-00019 39,148.20 3.

29.8.2019 19/18-00020 39,148.20 Page 6 of 20 B] UNDISPUTED FACTS [18] The following facts are not disputed by both parties: i) The Appellant has had previous business dealings with the Respondent. ii) The Appellant did make some part payments towards some of the Invoices totalling RM423,580.00. iii) The Appellant gave the Appellant the 9 PD Cheques after iv) The Appellant stopped the First PD Cheque. v) All the correspondences (letters and emails) referred to above are not disputed and the Letter of Demand were not exhibited. The Appellant and the Letter of Demand was [19] Bearing the above facts in mind, I will now examine the issues raised by the Appellant which are said to be triable. C] WHETHER THERE IS A TRIABLE ISSUE [20] The principles governing a summary judgment application is trite and does not require restating. Once the 3 preliminary requirements under Order 14 Rule 1(1) ROC have been fulfilled regarding the entry or appearance by the defendant, the service of the statement of claim on the defendant and the affidavit in support is in compliance with the requirements of Order 14 Rule 2 ROC then the plaintiff in a summary judgment application will have established a prima facie case entitling him to judgment. The burden then shifts to the defendant to satisfy the Court why judgment should not be given against him (National Company for Foreign Trade v. Kayu Raya Sdn. Bhd. [1984] 1 CLJ Rep 283). Page 7 of 20 [21] In this regard, the defendant and in the present case, the Appellant has to raise a triable issue or some other reason to be a trial (Bank Negara Malaysia v. Mohd Ismail & Ors [1992] 1 MLJ 400 and Kayu Raya (supra)). [22] The 4 issues raised by the Appellant as summarised in paragraphs 16(i), (ii), (iii) and (iv) above can be dealt with together as they are all connected. Issues regarding the Invoices (Supporting Documents and Discrepancies) and the 9 PD Cheques [23] Learned counsel for the Appellant argued that: i) the Respondent did not provide the supporting documents for the Invoices specifically the delivery orders; ii) there is a discrepancy in the total amount of the Invoices which were exhibited by the Respondent in its Affidavit In Support in that the total sum arrived by the Appellant is RM846,306.60 and not RM983,043.13 as stated in paragraph 3 of the Statement of Claim; and iii) that the 9 PD Cheques were issued on the conditions that the Respondent will furnish the delivery orders and/or the purchase orders for the Invoices and that this is further fortified [24] I did not find any of the above issues triable for the reasons stated below. [25] The starting point would be the chronology of events from when [26] Appellant that (as at 8.7.2020) there were Invoices which were already past due by over 6 months and that the sum of RM423,580.00 is owing by the Appellant. The Respondent also Page 8 of 20 informed the Appellant, inter alia, that a late payment interest of 3% per month would be charged on the outstanding amount. The Appellant was then asked, The 9 PD Cheques [27] The Appellant did not dispute, deny, object or even attempt to ask for supporting documents (delivery orders for the Invoices) stated willingly gave the Respondent the 9 PD Cheques without any covering letter. [28] Firstly, failure to raise any objection or dispute the after receiving it goes against the Appellant. The Court of Appeal in David Wong Hon Leong v. Noorazman Adnan [1995] 3 MLJ 283 held: (own emphasis added) [29] Secondly, what makes it more evident that the Appellant accepts issuing and sending the Respondent the 9 PD Cheques. It is trite that apart from writings the conduct of parties can tantamount to acceptance. The following passage from the Court of Appeal case of Genneva Malaysia Sdn Bhd v. Tio Jit Hong & Ors [2020] 6 MLJ 703 makes this point clear: (own emphasis added) [30] Further, in Chow Sow Yoon & Anor v. Universal Industrial Gas Sdn Bhd and another appeal [2017] MLJU 2104 which is also a case pertaining to goods sold and delivered, the High Court held: Page 9 of 20 (own emphasis added) [31] Similar to Chow Sow Yoon (supra), in the present case, not only was there no dispute or objection by the Appellant to the immediately or soon after it was received but as proof of the that it did not , the Appellant then issued the 9 PD Cheques totalling RM462,366.20 in which the First PD Cheque was only stopped on or at the time it became due. RM462,366.20 is a substantial sum and a reasonable person and more so a reasonable businessman would be careful before making such a large payment. Thus, I am inclined to believe the issues raised by the Appellant are merely afterthoughts. [32] Thirdly, as submitted by learned counsel for the Respondent, the 9 PD Cheques are bills of exchange drawn on a banker and payable on demand under the Bills of Exchange Act 1949. I agree with learned counsel for reference to the following cases: i) Yee Teck Fah v. Lee Chee Meng [2020] MLJU 1054, a case involving an action for a dishonoured cheque by reason that it was stopped by the drawer or issuer of the cheque, Justice Ahmad Fairuz Zainol Abidin in allowing summary judgment held, inter alia, as follows: Page 10 of 20 Page 11 of 20 (Emphasis added) (own emphasis added) ii) Kum Hui Bing v. Premium Plaza Sdn Bhd [2018] MLJU 979, where the Court of Appeal in dealing with, inter alia, a cheque dishonoured upon presentation and Sections 2, 43(2), 55 (1) dan 38(1) of the Bills of Exchange Act 1949 held as follows: Page 12 of 20 Issuance and Stoppage of the 9 PD Cheques [33] vit In Reply, the Appellant averred that the First PD Cheque was issued/given on 17.10.2020. [34] The Respondent deposited the First PD Cheque on 1.12.2020 but it was dishonoured. The Appellant had stopped/countermanded the First PD Cheque as stated in the statement issued by Alliance Bank Berhad, the bank the First PD Cheque was deposited. This is not disputed by the Appellant. [35] The following can be seen from the above sequence of events: i) Email of 8.7.2020 to 1.12.2020, about 4 months and 26 days, the Appellant did not take any action claim. ii) There was no indication from the Appellant that the First PD Cheque which was due on 30.11.2020 will be stopped. iii) Cheque was given on 17.10.2020, the Appellant would have had about 3 months and 9 days to check the Invoices, the ask for the delivery orders for the Invoices. If the Appellant truly did not said statement of account (as it Page 13 of 20 claimed in paragraph 15 of the Appellant 1st Affidavit In Reply) then it could have easily have asked the Appellant for it before issuing the 9 PD Cheques. iv) Notwithstanding whether the delivery orders (or purchase orders) were in fact requested (as the Appellant claims it was made orally), during the 3 months and 9 days the Respondent or any reasonable businessman for that matter, would have had ample time to verify the Invoices and all the information f 8.7.2020 including the total sum of RM423,580.00 previously to paid the Respondent. v) It must be pointed out that the Respondent, as a company, would have its internal accounting processes and corporate governance to comply with before the Respondent can issue the 9 PD Cheques amounting to RM462,366.20. vi) It defies logic that for 4 months and 26 days, from the time of PD Cheque was stopped, the Respondent did nothing to verify statement of account as at 8.7.2020 and the Invoices. vii) It also defies logic, bearing the above matters in mind, that the Appellant would issue the 9 PD Cheques on the condition that the Respondent will subsequently provide the supporting documents for the Invoices namely the delivery orders. [36]

24.12.2020 Email where the Respondent requested for the Appellant to pay the first instalment payment or replace the First PD Cheque. [37] It was only then did the Appellant reply by sending the Appellant 30.12.2020 Letter raising various issues as stated in paragraph 15(ii) above. [38] The Appellant relied 30.12.2020 and 12.4.2021 to say that it had requested for the Page 14 of 20 delivery orders for the Invoices. The Appellant also then raised various issues not only regarding the delivery orders but also regarding payments that it had previously made. That is in respect of the RM423,580.00 the Appellant had paid the Respondent which was never an issue before this. [39] What is glaring is that prior and 12.4.2021: i) there is no correspondence by the Appellant asking for the supporting documents for the Invoices; ii) there is no correspondence by the Appellant stating that the 9 PD Cheques were given on condition that the Respondent will furnish the Respondent the delivery orders for the Invoices (though this in itself does not make any business sense); and iii) the Appellant never raised any issue regarding the RM423,580.00 previously paid from 26.6.2019 to 5.11.2019, about over a year before. [40] Th 30.12.2020 and 12.4.2021 is misplaced and it does not support or delivery orders from the Respondent before these letters were issued. [41] As the above chronology shows the Appellant had ample time to verify the Respondent or could have simply waited for the said delivery orders and/or purchase orders to be furnished before issuing the 9 PD Cheques. [42] It makes no sense for the Appellant to have acted with such urgency and for the Appellant to take such huge efforts to issue the 9 PD Cheques for significant sums without waiting for the supporting documents to be furnished. Discrepancies regarding the Invoices [43] Firstly 30.12.2020 Letter nor the discrepancies regarding the previous payments made by the Page 15 of 20 Appellant totalling RM423,580.00. The issue in both these letters were regarding the delivery orders for some of the Invoices. [44] In fact two of the invoices mentioned by the Appellant in the where it was said no delivery orders were furnished (invoices numbers: 19/07-0026 and 19/07-0027), the Appellant had already made part payment for these invoices on 28.11.2019 as shown in the table in paragraph 5 of the Statement made part payment towards these invoices the Appellant now tries to challenge the delivery of the goods. [45] The argument raised by learned counsel for the Appellant as stated in paragraph 23(ii) above was only raised in the Appellant Affidavit In Reply. Learned counsel for the Appellant argued that the computation of the total amount of the Invoices does not tally with the total amount stated in the Statement of Claim. However, i s In Reply (1 and 2), the Appellant itself did not provide, illustrate or otherwise show mathematically how the total sum of the Invoices as pleaded in the Statement of Claim is said to be wrong. [46] It is also important to note that the Appellant ended its 30.12.2020 Letter as follows: We are truly thanks to your long-time support and apologize for the payment delay. After you provided all the above documents or clarified with all the queries and obtain a final sum, we will propose to you again the favorable payment time for amicably settlement (own emphasis added) [47] If indeed the Appellant felt the Respondent was not being honest about its claim then the Appellant would not have ended its 30.12.2020 Letter in such an apologetic manner with a further proposal to pay. [48] By c of this case, the can be summed up as follows: i) As at 8.7.2020, the Appellant already paid the Respondent a total sum of RM423,580.00 which the Appellant claims is a the Overpayment Issue Page 16 of 20 ii) The Overpayment Issue was never raised until this action was filed. None of the correspondences exhibited show that this issue was ever raised prior to the initiation of this action. iii) This would mean that from 26.6.2019 (the date of the first payment) to 5.11.2019 until this action was filed in July 2021, about 2 years, the Appellant had not checked or ensured that the Respondent provides the Appellant with the supporting documents in respect of the Appellant previous payments to the Respondent totalling RM423,580.00. iv) In other words, Overpayment Issue only became an issue until after this action was filed. v) Despite the absence of the supporting documents (delivery orders and/or purchase orders or statements of account), the Appellant, nevertheless, went ahead and issued the 9 PD Cheques totalling RM462,366.20 solely based on the Respondent 8.7.2020 Email. vi) The Appellant made previous payments of RM423,580.00 and issued the 9 PD Cheques totalling RM462,366.20 without Invoices issued in respect of them. vii) Despite finding out that the Appellant had overpaid the Respondent as alleged, however, no Counterclaim or Set-Off was filed by the Appellant in this action. [49] Therefore, it is not reasonable that throughout its business relationship with the Respondent, the Appellant had made payments of such significant sums without proper documents to support the Invoices. I am unable to find any merit in this argument. Interest [50] Whilst I agree with the Appellant that the interest levied by the Respondent is exorbitant, however, this does not tantamount to a triable issue. Page 17 of 20 [51] In a goods sold and delivered case, the seller and in this case the Respondent is entitled to charge reasonable interest and there are authorities to say that the rate of interest of 1.5% per month is considered reasonable (Perangsang Dagang Sdn Bhd v. Tanjung Teras Sdn Bhd & Ors [2008] 2 CLJ 199; Daya Anika Sdn Bhd v. Kuan Ah Hock [1998] 5 CLJ 200 and Enco Systems Sdn Bhd v. Soon Hin Hardware Sdn Bhd [2009] 9 MLJ 535). [52] The learned Sessions Court Judge granted the 3% interest per month charged by the Respondent on the sum of RM462,366.20 totalling RM97,096.93. The learned Sessions Court Judge allowed the principle sum of RM559,463.13 (RM462,366.20 + RM97,096.93) as per paragraph 17(a) of the Statement of Claim. I removed the RM97,096.93 interest leaving the principal sum awarded as RM462,366.20. [53] I then varied the interest granted by the Sessions Court to 5% per annum on RM462,366.20 from 30.11.2020, the date the First PD Cheque became due, to the date of final settlement. [54] The 5% per annum interest is in line with the prevailing post judgment interest and is also made pursuant discretionary powers under Section 11 of the Civil Law Act 1956 (Revised 1972) which provides as follows: [55] There is no appeal or cross-appeal on the issue of interest by the Respondent. D] CONCLUSION [56] It should also be highlighted that the Appellant did not dispute all the Invoices or all of the payments it had made but attempted to raise issues with some of the Invoices for not having delivery orders or that some of the Invoices had discrepancies. However, these Page 18 of 20 issues were only raised after the 9 PD Cheques were given and the First PD Cheque was stopped. In so far as the Bill of Exchange Act 1949 is concerned the 9 PD Cheques were given in consideration of the debt the Appellant owed the Respondent. [57] The chronology of the events that have transpired in this action and the conduct of the Appellant show that there is no real dispute to raise issues which were never raised previously and are thus after the fact. [58] In the circumstances, save for the issue of interest which I had varied the learned Sessions Court Judge was right in granting Summary Judgment in favour of the Respondent and I find no reason to disturb her decision. [59] For the reasons stated above, I allowed this Appeal in part with costs of RM5,000/- in favour of the Respondent. The Sessions sum to RM462,366.20 and changing the interest on this sum to 5% per annum calculated from 30.11.2020 to the date of final settlement. The rest of the Sessions Court Order dated 10.12.2021 is maintained. Dated this 31st day of January, 2023 -SGD- (WAN MUHAMMAD AMIN BIN WAN YAHYA) Judge High Court of Malaya, Kuala Lumpur (Commercial Division (NCC 3)) Page 19 of 20 COUNSEL FOR THE APPELLANT Michael Chang (Zarina Begum together with him) Messrs Lim Soh Wah & Zarina Lot 5.118, 5th Floor Wisma Central Jalan Ampang 50450 Kuala Lumpur. Tel: 03-2162 2292 Email: limswr@gmail.com COUNSEL FOR RESPONDENT James Ong Messrs Sin Leong Associates E-12-02, Plaza Mont Kiara No. 2, Jalan Kiara 50480 Kuala Lumpur. Tel: 03-6211 2231 Email: sing@singleong.com.my LEGISLATION / RULES CITED Rules of Court 2012 Order 14 Order 14 Rule 1(1) Order 14 Rule 2 Bills of Exchange Act 1949 Sections 2, 38(1), 43(2) and 55(1) Civil Law Act 1956 (Revised 1972) Section 11 Page 20 of 20

Bank Negara Malaysia v. Mohd Ismail & Ors [1992] 1 MLJ 400 2. Chow Sow Yoon & Anor v. Universal Industrial Gas Sdn Bhd and another appeal [2017] MLJU 2104 3. David Wong Hon Leong v. Noorazman Adnan [1995] 3 MLJ 283 4. Daya Anika Sdn Bhd v. Kuan Ah Hock [1998] 5 CLJ 200 5. Enco Systems Sdn Bhd v. Soon Hin Hardware Sdn Bhd [2009] 9 MLJ 535 6. Genneva Malaysia Sdn Bhd v. Tio Jit Hong & Ors [2020] 6 MLJ 703 7. Kum Hui Bing v. Premium Plaza Sdn Bhd [2018] MLJU 979 8. National Company for Foreign Trade v. Kayu Raya Sdn. Bhd. [1984] 1 CLJ Rep 283 9. Perangsang Dagang Sdn Bhd v. Tanjung Teras Sdn Bhd & Ors [2008] 2 CLJ 199

Yee Teck Fah v. Lee Chee Meng [2020] MLJU 1054