Lyfemed Medicare (M) Sdn Bhd v 1. ) Professional Latex Sdn Bhd (WA-22NCC-74-02/2023)

PROFESSIONAL LATEX SDN BHD [Company No.: 201601005805) (1176731-V]

XALI PTE LTD [Company No.: 199607155M]

SENDOR SDN BHD [Company No.: 144895-W]

TANG KUM HOE [Company No.: S6946261H] …DEFENDANTS

This action pertains to a claim born out of misdirection not of motive but of legal recourse. The Plaintiff seeks to recover a deposit of money paid to secure the manufacture of nitrile gloves during the Covid-19 pandemic. The deposit was paid to the 1st Defendant but the contractual relationship and the corresponding legal obligation to refund the deposit lay not with the 1st Defendant but with the 2nd Defendant. Regrettably the 2nd Defendant has since been wound up rendering any claim against it futile. In the wake of that insolvency, the Plaintiff now turns to the 1st Defendant in search of recovery. However, as the Court must now determine, the law does not permit recovery from a party who was never bound by contract nor unjustly enriched by the payment. Sympathy, while not absent, cannot override the foundational principle that a claim must lie within the confines of a recognized cause of action.

The Plaintiff, Lyfemed Medicare (M) Sdn Bhd (“Lyfemed”) is a company that exports and imports rubber gloves.

At all material times, the Plaintiff dealt with the 2nd Defendant, Xali Pte Ltd (“Xali”), for the supply of nitrile powdered gloves for the Plaintiff’s customers.

Xali, in turn, would order the nitrile powder gloves from the 1st Defendant, Professional Latex Sdn Bhd (“Professional Latex”), a glove manufacturer and supplier company.

In this case, Lyfemed had sometime in May 2021, ordered 2,400,000 nitrile gloves (“the Nitrile Gloves”) for the price of USD 22,800,000.00 at USD 9.50 per piece from Xali. In order for Professional Latex to process and begin manufacturing Xali’s order for Lyfemed’s purchase, Professional Latex required Xali to place a deposit sum of USD 950,000.00 (“the Deposit Sum”) into its Hong Leong Bank Account No: 11500050968 (“the HLB Account”).

Towards the aforesaid, it is not disputed that Lyfemed had pursuant to Xali’s instructions paid the Deposit Sum into the HLB Account. It is also not disputed that Professional Latex was aware that the Deposit Sum was paid into its HLB Account directly from Lyfemed.

Further, it is also not disputed that Lyfemed had paid to the 3rd Defendant, Sendor Sdn Bhd (“Sendor”) for all sums due and agreed with Xali as the purchase consideration in respect of the Nitrile Gloves that it had ordered. Payments were made to Sendor at the instructions of the 4th Defendant, Tang Kum Hoe (“Tang”) who was at the material times, a director of Xali.

Sometime in November 2021, after the Nitrile Gloves had been delivered by professional Latex, Lyfemed requested Xali for the refund of the Deposit Sum. However, Xali failed to refund Lyfemed the Deposit Sum although a sum of RM 100,000.00 was paid to the Plaintiff by Tang, who at the time of payment was no longer a director of Xali.

When Lyfemed wrote directly to Professional Latex for the refund of the Deposit Sum, Lyfemed was informed that based on its agreement with Xali, the Deposit Sum had been utilized towards deductions of the purchase price that was agreed between Xali and Professional Latex in respect of Lyfemed’s orders. Whatever balance thereafter of the Deposit Sum after the deductions had been refunded to Xali.

Not being satisfied, Lyfemed filed this action initially against Professional Latex only. Subsequently, Lyfemed added Xali, Sendor and Tang as the 2nd, 3rd and 4th Defendants respectively.

However, by the time the matter came up for trial, Lyfemed had withdrawn its action against Xali and the action against Sendor had been struck out. Further, the solicitors for Tang had discharged themselves and Tang has been adjudged a bankrupt. No leave was obtained to continue this action against Tang.

Based on the aforesaid, the following factual and legal issues fall for determination: a) who were the contracting parties to the sale and purchase of the 2,400,000 nitrile gloves for the price of USD 22,800,000.00 at USD 9.50 per piece; b) whether Lyfemed had any contractual relationship with Professional Latex; c) whether Professional Latex owed any duty to Lyfemed in respect of the Deposit Sum that Lyfemed had paid directly into the HLB Account; d) whether Tang is personally liable to the Plaintiff in respect of the Deposit Sum.

Based on the contemporaneous documents, it is clear that Lyfemed‘s purchase of the Nitrile Gloves was from Xali and not with the 1st Defendant, Professional Latex. Lyfemed had no contract with Professional Latex at all.

In order to fulfill its contract with Lyfemed in respect of the Nitrile Gloves, Xali had contracted with Professional Latex to manufacture the Nitrile Gloves.

That Lyfemed’s contract was with Xali and not with Professional Latex is clear as the Proforma Invoice No. PI/2021/00203 that was issued on 7.5.2021 to Lyfemed was from Xali. There is no evidence, documentary or otherwise adduced before this Court of any representation by Xali that the contract of sale was entered into by Xali as agent for Professional Latex as claimed by Lyfemed.

Instead, what is revealed from the contemporaneous document is that Xali, upon receiving the order for the Nitrile Gloves from Lyfemed, had entered into a back-to-back purchase of the Nitrile Gloves from Professional Latex. Xali was never a manufacturer of nitrile gloves but it had a relationship with Professional Latex who was a glove manufacturer. In this regard, there is evidence that Lyfemed knew that Xali was not a manufacturer. In a WhatsApp message from Xali to Lyfemed on 4.5.2021 at 12:51:08 hours, Xali’s representative expressly stated thus: ‘Mike Xali: Nitrile Gloves from direct factory (Malaysia listed company)’ In the same message, Xali also clarified to Lyfemed the procedure for the purchase transaction as follows: ‘*SOP* - Buyer issue PO to Xali-Xali issue PI to buyer-Buyer sign back and make deposit - Once stock ready buyer make payment then arrange container for loading and export’

That Lyfemed’s purchase contract was with Xali and not with Professional Latex was made abundantly clear to Lyfemed in the following WhatsApp message on 6.5.2021 at 13:13:07 hours: ‘Mike Xali : * EA Nitrile Gloves with FDA/510K* Direct from PL factory. Allocation belong to Xali (PL distributor) : : Sales Contract with Xali’ [emphasis added]

In other words, from the above, it was plainly obvious to Lyfemed that the Nitrile Gloves would come directly from a factory belonging to a Malaysian listed company (for which Xali is not) and that factory was expressly identified as “PL” which is the 1st, Defendant, Professional Latex. Additionally, the allocation by Professional Latex was an allocation that belonged to Xali as Professional Latex’s distributor. Further, to put things beyond doubt, Xali had expressly mentioned that Lyfemed’s Sales Contract was with Xali.

By Professional Latex’s letter dated 10.5.2021 to Xali, Professional Latex had confirmed Xali’s orders for the Nitrile Gloves and had made 2 allocations, one for June 2021 to May 2022 in the amount of 2,400,000 boxes and the other for July 2021 to May 2022 in the amount of 2,200,000 boxes for the manufacture of the further nitrile gloves subject to Xali making a payment of a deposit of USD 950,000.00 for each allocation.

Based on the said letter, Lyfemed would be making the payment of the Security Sum directly to Professional Latex for the first allocation. A copy of this letter was forwarded by Xali to Lyfemed vide a WhatsApp message on the same day. Following from the aforesaid, Lyfemed had at around 13:51:23 hours on 10.5.2021 transferred a sum of RM 3,885,500.00, being the then equivalent of USD 950,000.00 to Professional Latex.

There was no direct communication at all between Lyfemed and Professional Latex on the Deposit Sum.

The fact that Lyfemed had made the direct payment of the Deposit Sum to Professional Latex in this case did not mean that Lyfemed had a contract with Professional Latex at all. This is clear because in Professional Latex’s aforesaid letter of 10.5.2021, it had expressly referred to the order as an order from Xali and the allocation of the Nitrile Gloves to be manufactured as an allocation to ‘Xali Pte Ltd for Lyfemed Medicare (M) Sdn Bhd’. In other words, the allocation was an allocation that belonged to Xali. This is clear from the following WhatsApp message on 6.5.2021 at 13:13:07: Mike Xali : * EA Nitrile Gloves with FDA/510K * Direct from PL factory. Allocation belong to Xali”

Furthermore, on 11.5.2021, Lyfemed had issued its Purchase Order of the Nitrile Gloves to Xali and not to Professional Latex.

As regards the relationship between Professional Latex and Xali, Professional Latex had dealt only with Xali in respect of all matters dealing with the orders made by Xali. More specifically, all communication dealing with the inner and carton artwork for the boxes and the shipment of the Nitrile Gloves ordered were only between Professional Latex and Xali. The Commercial Invoices were also issued by Professional Latex to Xali. The Debtor Statements were also directed only to Xali and never to Lyfemed.

As such, the above facts do not support Lyfemed’s claim that Xali was acting at all times as an agent of Professional Latex at all.

In short, there is no evidence at all to show that Lyfemed had a contractual relationship with Professional Latex in respect of the Nitrile Gloves.

Whilst it is true that Professional Latex was aware that the Deposit Sum was paid by Lyfemed, apart from Lyfemed being directed by Xali to pay to Professional Latex the sum of RM 3,885,500.00 as deposit on 5.10.2021, there is absolutely no evidence adduced of any communication between Lyfemed and Professional Latex on the manner in which the Deposit Sum was to be utilized by Professional Latex.

Accordingly, based on the aforesaid, it is my judgment that Lyfemed’s claim against Professional Latex based on the cause of action in contract has no merits whatsoever. This suffices to dispose of the action by Lyfemed against Professional Latex based on the pleadings which is anchored on the existence of a contract between the parties.

However, notwithstanding that the Statement of Claim does not contain any pleadings referring to the causes of action based on unjust enrichment and or breach of trust or fiduciary duty, a last minute attempt was made to amend the Statement of Claim post trial to include these causes of action. However, although the application was dismissed by this Court, during oral submissions, another attempt was made to rely on these causes of action in support of Lyfemed’s claims.

Th facts as disclosed at the trial however simply do not support any claims based on these unpleaded causes of action.

As between Lyfemed and Professional Latex, there was neither a trust relationship nor was there a fiduciary relationship created in the circumstances. There is also no basis to hold that Professional Latex owed any such duty to Lyfemed in relation to the Deposit Sum that it had received in its HLB Account.

The claims that Lyfemed has been unjustly enriched by the retention of the Deposit Sum is simply untenable. This is because sometime after Lyfemed had paid the Security Sum to Professional Latex, Xali had given express instructions to Professional Latex to deduct from the Deposit Sum towards the payment of their invoices issued for the manufacture of the Nitrile Gloves. More specifically, Professional Latex has produced its Debtor Statement that evidenced each deduction made from the Security Deposit from each of its invoices issued to Xali for the period from June 2021 to September 2021. These deductions from the Deposit Sum are supported by the email exchanges between Xali and Professional Latex during the corresponding period.

What the aforesaid means is that Professional Latex had utilized the Deposit Sum towards the payment of the Nitrile Gloves that it had manufactured for Xali pursuant to its contract with Xali. There was no unjust enrichment at all enjoyed by Professional Latex. There is no evidence that Professional Latex had received more that what it was otherwise entitled to under its contract with Xali.

Professional Latex was never privy to the arrangement between the Xali and Lyfemed. More specifically, Professional Latex was not aware that Lyfemed had, notwithstanding the Deposit Sum being paid, in fact made full payment of the purchase price for the Nitrile Gloves to Xali. Put it differently, there is no evidence that Professional Latex knew that Xali had received the full payment of the Nitrile Gloves from Lyfemed (over and above the Deposit Sum) but nevertheless Xali had proceeded to instruct Professional Latex to utilize the Deposit Sum towards the payment of the purchase price with each delivery of Lyfemed’s orders.

In this regard, Lyfemed contended that Professional Latex needed its authorization before it could deduct the Deposit Sum towards the payments of the purchase price for the Nitrile Gloves. This is premised on the fact that Professional Latex knew and had confirmed that the Deposit Sum was placed by Lyfemed directly into the HLB Account merely to secure the orders by Xali for Lyfemed.

With respect, there is simply no legal basis to support the contention that consent or authorization from Lyfemed was needed before Professional Latex could deduct the Deposit Sum towards payment of the purchase price for manufacturing the Nitrile Gloves for Xali. As alluded to above, Professional Latex had no contractual relationship with Lyfemed at all. Neither was the relationship between Lyfemed and Professional Latex such that the law would impose any fiduciary duty upon Professional Latex and or create a trust relationship between them.

Lyfemed’s recourse for the loss of the Deposit Sum, if at all, lies with Xali. There is no evidence that Lyfemed was ever informed by Xali at the material times that the Deposit Sum had been deducted toward payment of the purchase price for the Nitrile Gloves at all.

This is because sometime on 8.11.2021, after Lyfemed was no longer keen to purchase more nitrile gloves from Xali, Lyfemed had informed Xali that it would like to have the Deposit Sum refunded from Professional Latex. However, instead of disclosing to Lyfemed that the Deposit Sum had already been deducted toward the payment of the purchase price for the Nitrile Gloves, Xali had given the excuse to Lyfemed that the refund might not be possible and that the Deposit Sum could be forfeited. This was what one Mr Eric of Xali stated in his WhatsApp message on 8.11.2021 at 11:29 am: ‘Eric Xali: I understand your situation, but I might not be able to do it so fast, PL usually won’t refund cos contract not ended. If u cancelled the order. By right PL need to forfeit the deposit. Let me think how to talk to

The aforesaid was notwithstanding that on 3.11.2021, just 5 days prior to the said WhatsApp message above, Professional Latex had already written to Xali to confirm Xali’s instructions on the deduction of the Deposit Sum towards the payment of the purchase price for the Nitrile Gloves ordered by Lyfemed. This is evidenced by Professional Latex’s letter to Xali dated 3.11.2021 where at paragraphs 2(d) and (e), it states thus:

And upon receipt of the said Deposit, we have delivered the said nitrile gloves to your goodselves whereby you have also given us instructions and confirmations that the purchase price of the nitrile gloves (which had been acknowledged by your goodselves) shall be deducted and deducted from th said deposit.

Therefore via your letter dated 01.11.2021, you have confirmed that parties do not have any outstanding due and owe to each other.”

As far as Lyfemed was concerned, it had understood the Deposit Sum to be merely a security required by Professional Latex as a condition for making allocations available for the manufacture of the nitrile gloves by its customers.

Since Lyfemed had made full payment of its purchases to Xali and based on its understanding that the Deposit Sum was merely ‘a deposit’, when told that Professional Latex might forfeit the same, Lyfemed accordingly could not accept that the Deposit Sum paid could not be refunded to Xali. This is clear from Lyfemed’s Whatsapp message on 16.11.2021 at 12:29 pm: ‘THE POSITIVE THINKER: Let’s avoid friction bro, as explained the deposit as security only, we hv not defaulted any contract, let’s do it amicably’.

On 18.11.2021 at 9:57 am, by WhatsApp message, Xali represented to Lyfemed that even if Professional Latex agrees to the refund, it would take some time: ‘Eric Xali: Terence ask me to refund to u. He say even factory agrees wouldn’t be so soon’.

Quite clearly, Xali’s aforesaid response to Lyfened was simply to buy time and to avoid disclosing to Lyfened the truth that Professional Latex had, acting on Xali’s instructions, deducted the Deposit Sum towards the payment of the Nitrile Gloves.

In fact, Xali never wrote to Professional Latex for the refund of the Deposit Sum at all. It could not simply because it had already instructed Professional Latex to deduct the Deposit Sum towards the payment of the purchase price.

The contention by Lyfemed that because DW1 had admitted that the Deposit Sum was not reflected in Professional Latex’s Debtor’s Statement Account and therefore somehow the Deposit Sum was never intended to be made as part of the regular commercial transactions between the parties, is with respect misconceived. The Deposit Sum would obviously not be reflected in Professional Latex’s Debtor’s Statement Account as it was not the outstanding purchase price. It was however subsequently utilized towards paying the outstanding purchase price.

There is also no inconsistency in Professional Latex’s explanation on the Deposit Sum. In both its letter dated 3.11.2021 and its email dated 17.6.2022, Professional Latex had expressly stated that the Deposit Sum had been utilized for the purchases of goods by Xali.

Lyfemed further contended that Professional Latex has failed to adduce any evidence that the Deposit Sum had indeed been deducted from its account towards payment of the purchase price for the goods ordered by Xali. On this basis, it was submitted that it would be unconscionable for Professional Latex to hold on to the Deposit Sum.

Again, the aforesaid contention is devoid of any merits. In the first place, Professional Latex owed no duty to Lyfemed to give an account on the Deposit Sum. In any case, Lyfemed has not rebutted the evidence that Xali had instructed Professional Latex to deduct from the Deposit Sum towards the payment of the purchase price at all. As alluded to above, there are emails between Professional Latex and Xali evidencing the deductions from the Deposit Sum towards payment of the purchase price.

There is also no evidence adduced that Professional Latex had been paid more than the purchase price for the Nitrile Gloves ordered by Xali. Accordingly, the issue of unconscionability simply does not arise at all.

In fact and in truth, Lyfemed was fully aware that its right of recourse was against Xali. This was the reason why Lyfemed had in paragraphs 13D to 13F of its Amended Statement of Claim pleaded that Tang had without Lyfemed’s knowledge and consent authorized Professional Latex to utilize the Deposit Sum towards the payment of the purchase price for the Nitrile Gloves.

In fact, prior to the filing of this action, Lyfemed had demanded from Xali and Tang for the return of the Deposit Sum. It was only after they had failed to do so that Lyfemed thereafter looked to Professional Latex to recover its loss.

When the refund was not forthcoming and due to the urging by Lyfemed for the refund, sometime on 20.12.2021 Tang then transferred a sum of RM 100,000.00 to Lyfemed. Thereafter, despite promises to make payment to Lyfemed, Xali has failed to do so.

Lyfemed has not shown any cause of action against Tang at all. Apart from the fact that Tang had personally paid RM 100,000.00 to Lyfemed, there is nothing to support its claim that Tang is personally liable to pay the Deposit Sum. In any case as alluded above, Tang has been adjudged a bankrupt.

In the premises, Lyfemed’s claims against Professional Latex cannot be sustained and must be dismissed with costs. The Plaintiff is to pay Professional Latex costs fixed at RM 50,000.00 subject to allocator. Dated the 24th day of July 2025 ONG CHEE KWAN JUDGE OF THE HIGH COURT HIGH COURT (COMMERCIAL DIVISION NCC2 & ADMIRALTY) HIGH COURT OF KUALA LUMPUR IN THE FEDERAL TERRITORY, MALAYSIA Counsel for Mr. GK Ganesan together with Ms. Pavitha Plaintiff: Apparao, Mr. Thenish a/l Chandra Keshavan and Ms. JN Lheela (Messrs. Tengku Azlina, Rao, Low & Associates) Counsel for Mr. Goh Kee Seng Defendant: (Messrs. Kelvin Wong, Phang & Associates)