Lubeguard Sdn. Bhd. v Maxchem Petroleum (M) Sdn. Bhd. (BL-12ANCC-10-12/2025)

This is an appeal filed by the Appellant/Defendant against the decision of the Sessions Court Judge ("SCJ") on 2.12.2025 in allowing the Respondent's application for summary judgment with costs.

As a brief background, the Respondent/Plaintiff is a commercial entity engaged in investments, property holdings and general trading, with a core business in petroleum products, chemicals, lubricants and paraffin oil. Meanwhile, the Appellant is a company trading and distributing lubricants, petroleum products and automotive spare parts.

From 4.1.2025 through 3.3.2025, the Appellant placed a series of purchase orders with the Respondent, following which the Respondent issued the corresponding commercial invoices amounting to RM375,896.00 to the Appellant.

The Respondent contends that the company had duly supplied and delivered the requested goods to the Appellant.

Despite having received the goods, the Appellant failed, neglected, or refused to settle the outstanding invoices.

On 14.5.2025, the Respondent, through its solicitor, served a notice of demand on the Appellant's solicitor for the outstanding debt of RM375,896.00, together with accrued late payment interest of RM19,824.18 as of 6.5.2025. In reply, the Appellant's solicitor stated that the legal firm would refer the matter to the Appellant for further instructions. Nevertheless, the Appellant took no further steps to settle the outstanding debt.

On 1.8.2025, the Respondent filed the action at the Klang Sessions Court claiming for the outstanding debt and interest from the Appellant.

The Appellant in refuting the Plaintiff's claim, filed its Statement of Defence on 12.9.2025.

Subsequently, on 6.10.2025, the Respondent filed an application under O.14 of the Rules of Court 2012 ("ROC") for summary judgment against the Appellant.

On 2.12.2025, the learned SCJ allowed the Respondent's application with costs. Dissatisfied with the decision, the Appellant filed this appeal.

It is pertinent to note that at the hearing of this appeal, no grounds of decision were prepared or provided by the learned SCJ for the benefit of all parties including this Court to evaluate the reasoning behind the decision.

O.14 r.1 of the ROC states-Application by plaintiff for summary judgment (O.14,r.1)

(1) Where in an action to which this rule applies a statement of claim has been served on a defendant and that defendant has entered an appearance in the action, the plaintiff may, on the ground that the defendant has no defence to a claim included in the writ, or to a particular part of such a claim, or has no defence to such a claim or part thereof except as to the amount of any damages claimed, apply to the Court for judgment against that defendant. [13] George Seah FCJ when delivering the judgment of the Federal Court in National Company For Foreign Trade v. Kayu Raya Sdn Bhd [1984] 1 CLJ Rep 283, said-We come now to consider the merit of the appeal. It was submitted by learned Counsel for the appellant that the learned Judge in the High Court was wrong to hold that the statement of claim does not disclose an enforceable contract. In so holding, it was contended that the learned Judge was under the misapprehension that "consideration" ought to be specifically pleaded in the statement of claim. We think it appropriate to remind ourselves once again that in every application under O.14 the first considerations are (a) whether the case comes within the Order and (b) whether the plaintiff has satisfied the preliminary requirements for proceeding under O.14. For the purposes of an application under O. 14 the preliminary requirements are:

the defendant must have entered an appearance;

(ii) the statement of claim must have been served on the defendant; and

(iii) the affidavit in support of the application must comply with the requirements of r.2 of the O.14. It is to be observed that a case is not within O.14: (a) where no statement of claim has been served on the defendant; (b) where the indorsement on the writ includes a claim or claims outside the scope of O.14 as coming within r.1(2); (c) where the affidavit in support of the application is defective, e.g. in omitting to state the deponent's belief that there is no defence to the claim or part to which the application relates; (d) where the application is made in an action against the Government [O.73 r.5(1)]. If the plaintiff fails to satisfy either of these considerations, the summons may be dismissed. If however, these considerations are satisfied, the plaintiff will have established a prima facie case and he comes entitled to judgment. The burden then shifts to the defendant to satisfy the Court why judgment should not be given against him [see O.14 r.3 and 4(1)]. [14] Then, Steve Shim CJSS speaking for the Federal Court in Cempaka Finance Bhd v. Ho Lai Ying & Anor [2006] 3 CLJ 544 held that once these three considerations are satisfied, the plaintiff will have established a prima facie case and he becomes entitled to a summary judgment. The burden then shifts to the defendant to satisfy the Court as to why judgment should not be given against him. [15] The Supreme Court speaking through Mohamad Azmi SCJ in Bank Negara Malaysia v. Mohd Ismail & Ors [1992] 1 CLJ Rep 14; [1992] 1 MLJ 400 said-The scope of O 14 proceedings meant for cases which are virtually uncontested or uncontestable is now determined by the Rules of the High Court 1980. Generally where a defendant shows that he has a fair case for defence, or reasonable grounds for setting up a defence, or even a fair probability that he has a bona fide defence, he ought to have leave to defend. Order 14 is not intended to shut out a defendant. The jurisdiction should only be exercised in very clear cases (Malayan Insurance (M) Sdn Bhd v Asia Hotel Sdn Bhd 10; Gunung Bayu Sdn Bhd v Syarikat Pembinaan Perlis Sdn Bhd 11). It was held in the well-known House of Lords' case of Jacobs v Booth's Distillery Co 12 that a complete defence need not be shown. The defence need only show that there is a triable issue or question or that for some other reason there ought to be a trial, and leave to defend ought to be given. In fact, even though the defence is not clearly established, but only reasonable probability of there being a real defence, leave to defend should be given (Manger v Cash 13)." [16] Similar approach was taken by the Federal Court in Abdul Rahim Abdul Hamid & Ors v. Perdana Merchant Bankers Bhd & Ors [2006] 3 CLJ 1; [2006] 5 MLJ 1; [2006] 3 AMR 629 where Pajan Singh Gill FCJ held-The principle governing summary judgment under both rules are more or less the same. In a nutshell, in an application under O 14 made by the plaintiff for summary judgment without trial, the general principles established are that the plaintiff has to satisfy the court that the defendant plainly and obviously has no defence to the plaintiff's claim or part of the plaintiff's claim. If the plaintiff is able to satisfy the court, then summary judgment should be entered in the plaintiff's favour. On the other hand, if the defendant can show that there is a serious conflict of material facts as disclosed in the opposing affidavits, or there is otherwise a triable issue worthy of judicial investigation in the trial of the action, or there is an important and difficult point of law requiring further and mature consideration at the trial, summary judgment should be refused." [17] Accordingly, it is incumbent upon the Appellant to show that there is a triable issue or question or that for some other reason there ought to be a trial that would preclude the entering of summary judgment. [18] In the Appellant's submission, the company submits that the Respondent's application must have been dismissed by the learned SCJ since there are triable issues in the Respondent's main suit as follows:

the goods (base oil) received were not in compliance with the quality standards required by the Appellant; and

there was no judicial admission made by the Appellant. Analysis of this Court [19] The Appellant contends that the central triable issue revolves around the quality of the goods supplied by the Respondent. The Appellant asserts that from the first consignment of base oil delivered under Invoice No. INV25-14225 dated 4.1.2025 until the final shipment under Invoice No. INV25-14341 dated 3.3.2025, the quality of the base oil systematically failed to conform to the contractually agreed standards. Consequently, the Appellant avers that this non-compliance directly prejudiced and compromised the quality of the lubricant oil blended by the Appellant. [20] On this issue, I find the Appellant's contention regarding the poor quality of the base oil is highly implausible. If all 25 consignments were indeed substandard, it defies logic that the Appellant did not immediately reject or halt subsequent shipments upon discovering the defective quality of the very first consignment. Instead, the Appellant continued to accept deliveries without protest, waiting until the 25th and final consignment before raising any objection. In all the circumstances, it is my view that the Appellant is estopped from asserting about the substandard of the goods. [21] My above view is fortified by the case of Perusahaan Sinar Jaya Sdn Bhd v. Etiqa Insurance Bhd [2013] 8 MLJ 317 where Nallini Pathmanathan J (later FCJ) held- [118] From the foregoing the following matter may be inferred:

the defendant's conduct in accepting the renewal payments as late as 3-5 months after they were due coupled with payment out on two incidents during this time warrant the inference that the defendant unequivocally represented to the plaintiff that it was prepared to forbear or excuse the strict application of the deferred premium clause in respect of the respective policies that were issued in favour of the plaintiff;

these policies were renewable on a yearly basis and notwithstanding the delay in the payment of the deferred premium, in contravention of the terms of the clause, the defendant nonetheless accepted the same and renewed the policy insurance yearly. It is renewal despite late payment of the deferred premium that constitutes the unequivocal representation by the defendant;

the plaintiff relying upon such express representation, namely that the defendant would continue to renew the policy notwithstanding late payment of anything from 3-5 months, continued to make late payments for the renewal premiums due for the prevailing policy as the time of the incident, namely from 19 September 2010 to 18 September 2011;

for this particular policy, in any event, the defendant only issued the debit note demanding payment of the first instalment some there months after the due date, rendering strict compliance with the deferred premium clause impossible. To that extent the plaintiff acted to its own detriment in relying upon the defendant's express representation that it would accept late payment of deferred premiums;

in this context, I find that the defendant had knowledge of the state of affairs pertaining to the plaintiff's account in relation to deferred premium payments, because the defendant's Tawau office had full cognisance of the same. The knowledge of the Tawau office is necessarily attributable to the defendant, its principal; and

as such, the conduct of the defendant in continuing to accept, without objection, renewal premiums which are overdue, amounts not only to a waiver of the forfeiture or cessation of the policy as stipulated, but to a general waiver for the future of the condition in the policy requiring payment on a particular date, (ie for the payment due in 2010 but received in 2011). [119] I therefore find on the basis of invoking the doctrine of waiver by estoppel that the policy for the period 19 September 2010-18 September 2011 remains valid and subsisting notwithstanding the late payment of the deferred premium payments in March 2011. [22] In light of the above, I agree with the learned counsel for the Respondent that the Appellant's failure to raise any objection at the material time constitutes an implied waiver of its contractual rights. Consequently, the doctrine of estoppel applies, and the Appellant is now estopped from resiling from its prior position to the detriment of the Respondent. [23] Further, I find that the Appellant raised no contemporaneous objections when served with the notice of demand. Instead, the Appellant's solicitor merely replied that it would refer the matter to the Appellant for instructions. At no point did the Appellant challenge the quality of the delivered goods or contest the outstanding debt amount after receiving the notice, rendering its current defence an afterthought. [24] It is trite that in the context commercial and business-related letters of demand, any intention to deny or dispute must be communicated promptly and vigorously. In this regard, I draw support from the Court of Appeal case of Halim Saad v. Chan Yok Peng [2021] 1 CLJ 499, where S Nantha Balan JCA held- [51] Further, it is clear that the defendant had admitted via his defence dated 12 March 2019 and, in his affidavit, affirmed on 23 May 2019 in opposition to the summary judgment application, that he had indeed borrowed RM3,000,000 from the plaintiff and that the loan had been fully paid by way of cash and transfer of shares in a public listed company. Thus, the defendant's suggestion that the borrower was Cekal Teguh and lender was Tekad Mulia is inherently improbable, is an afterthought and is in stark contrast to the contemporaneous documents and contradicts the defendant's earlier stance per his defence and affidavit. Lastly, the defendant's failure to respond to the plaintiff's letter and the solicitor's letter of demand seals the fate of the defendant as the non-response is deemed an admission. (see Mohd Zin Omar 's case (supra) and Tan Cheng Hock 's case (supra)). [25] Similarly in Dah Sing Insurance Agency Ltd & Anor v. Best Re (L) Ltd [2020] 2 CLJ 632; [2020] 8 MLJ 373 where Mohd Nazlan Mohd Ghazali J (now FCJ) said- [60] The courts have held that in commercial and business relationships, the failure of one party to deny a solicitor's demand by the opposing party would amount to an implied admission. In David Wong Hon Leong v. Noorazman Adnan [1995] 4 CLJ 155, Gopal Sri Ram JCA (as he then was) held instructively as follows: During argument, we registered our surprise at the learned Judge's reluctance to enter judgment for this sum of RM100,000. After all, the appellant had failed to respond to the letter of 17 December. If there had never been an agreement as alleged, it is reasonable to expect a prompt and vigorous denial. But, as we have pointed out, there was no response whatsoever from the appellant. In this context, we recall to mind the following passage in the judgment of Edgar Joseph Jr. J. in Tan Cheng Hock v. Chan Thean Soo [1986] CLJU 42; [1986] 1 LNS 42 [1987] 2 MLJ 479-487: In Wiedemann v. Walpole [1891] 2 Q.B. 534, 537 an action for breach of promise of marriage, it was held, that the mere fact that the defendant did not answer letters written to him by the plaintiff in which she stated that he had promised to marry her, was no evidence corroborating the plaintiff's testimony in support of such promise. Lord Esher M.R., in his judgment, remarked: Here, we have only to see whether the mere fact of not answering the letters, with nothing else for us to consider is any evidence in corroboration of the promise. Earlier, in his judgment, he said, 'Now there are cases - business and mercantile cases in which the Courts have taken notice that, in the ordinary course of business, if one man of business states in a letter to another that he has agreed to do certain things, the person who receives that letter must answer it if he means to dispute the fact that he did so agree. [61] Relatively recently, the Court of Appeal in the case of Small Medium Enterprise Development Bank Malaysia v. Lim Woon Katt [2016] 9 CLJ 73, stated thus:

In the instant case, it was not in dispute that the respondent did not respond to the demand notice of the plaintiff and the defence alleging that he was not liable was only raised in the statement of defence. Evidently, failing to respond to the plaintiff's letter of demand, that too when the defence case was related to forgery, as well as the fact that the respondent did not lodge a police report upon receiving the demand, weakened the probative force of the defence case. In David Wong Hon Leong v. Noorazman Adnan [1995] 4 CLJ 155, the Court of Appeal went to the extreme end to say that failure to respond on the facts of the case should lead to entering of judgment...

In abundance of caution we must say that failure to respond must not be equated to admission of the claim under s.17 of the Evidence Act 1950 (EA 1950). Failure to respond will relate to conduct under s. 8 of the EA 1950. Conduct is a relevant fact for the court to take into account to give the relevant probative force to the version of the plaintiff and/or defendant's case. It is well-settled that not all demand notices must be responded. In Wiedmann v. Walpole [1891] 2 QB 534, in an action for breach of promise of marriage, it was held, that the mere fact that the defendant did not answer letters written to him by the plaintiff in which she stated that he had promised to marry her, was no evidence corroborating the plaintiff's testimony in support of such promise.

It must also be noted that in commercial cases (not civil), courts have taken notice that, in the ordinary course of business, if one man of business states in a letter to another that he has agreed to do certain things, the person who receives that letter must answer it if he means to dispute the fact that he did so agree. (See PECD Construction Sdn Bhd v. Freehold Point Sdn Bhd [2008] 3 CLJ 215). [26] In the present appeal, the Appellant has not only failed to settle the outstanding debt stated in the notice but has also remained completely silent following the notice of demand, offering neither an admission of liability nor any objection to the claim. [27] I agree with the learned counsel for the Respondent that if the Appellant wished to object to or deny the notice of demand, whether concerning the volume or the quality of the base oil supplied, such an objection or denial ought to have been raised immediately and not post-commencement of legal action. The Appellant's failure to do so implies an acceptance of both the notice of demand and the debt quantum stated therein. Conclusion [28] In conclusion, having carefully considered the facts and circumstances of the present appeal, I find that the Appellant has failed to discharge its burden of demonstrating any bona fide triable issue or question or that for some other reason there ought to be a trial to defeat the summary judgment. Consequently, this appeal is dismissed with costs of RM8,000.00 to be paid by the Appellant to the Respondent, subject to the payment of the allocation fee. The order of the SCJ is hereby affirmed. (SHAMSULBAHRI BIN HAJI IBRAHIM) JUDGE, HIGH COURT OF MALAYA, KLANG SELANGOR For the Appellant/ Defendant: Siti Nurazwani binti Zulkeflee Nadia binti Ahmad Suhaidin Messrs. Shahabudin & Rozima For the Respondent/ Anis Amirah binti Zakaria Plaintiff: Messrs. Jason Kong & Co.