Malaysia Debt Ventures Berhad v 1. Ordyn Technologies Sdn Bhd (22NCC-299-08/2016)

Preamble

Whereas the 2nd Defendant’s counter claim against the Plaintiff is for professional fees for the works done by the 2nd Defendant particulars of which are stated in paragraph 12.1 to 12.23 of the 2nd Defendant’s Pembelaan dan Tuntutan Balas dated 4 August 2018. [3] After full trial I dismissed the Plaintiff’s claim, allowed the 2nd Defendant’s counter claim and directed for assessment to be held to determine the quantum of professional fee which the Plaintiff is liable to pay to the 2nd Defendant. At the end of the hearing of the assessment I awarded nominal fee to be paid to the 2nd Defendant. 3 [4] The Plaintiff appealed against my decision dismissing their claim and allowing the 2nd Defendant’s counter claim (Mahkamah Rayuan Rayuan Sivil No. W-02(NCC)(W)-1455-07/2017. The 2nd Defendant appealed against my decision awarding only nominal fee (Mahkamah Rayuan Rayuan Sivil No. W-02(NCC)(W)-2516-12/2017. [5] The judgment herewith deals with my decision dismissing the Plaintiff’s claim, allowing the 2nd Defendant’s counter claim and awarding only nominal fee to the 2nd Defendant. Parties [6] Plaintiff, Malaysia Debt Ventures Berhad is a public listed company in the business of providing, among others, project financing facilities to information technology companies. [7] The First Defendant, Ordyn Technologies Sdn Bhd (1st Defendant) is a private limited company. [8] The Second Defendant, Fi-Mest Networks (M) Sdn Bhd (2nd Defendant) is a private limited company involved in providing technology solution. 4 Factual Background [9] Both the Plaintiff and 2nd Defendant has mutually agreed the facts of this case are as stated in The Statement of Agreed Facts dated 26 September 2016 marked as Bundle C. The said facts are as stated below. [10] Via letter of offer dated 4 November 2008 (Letter of Offer) and Master Facility Agreement dated 2 March 2009 (Facility Agreement), the Plaintiff granted to the 1st Defendant a financing facility in the sum RM15,000.000.00 (Facility) for purpose of financing expenses in relation to the supply, delivery, installation, integration, testing and commissioning of STM-ADM Equipment for Bharat Sanchar Nigam Limited (BSNL) awarded by Punjab Communications Limited and Fibcom India Limited (the Project) subject to the terms of the Letter of Offer and Facility Agreement. [11] As security for the financing granted, the following securities were created in favour of the Plaintiff – 5

Lampiran

Lampiran A di sini, di dalam tempoh (7) hari dari tarikh perintah ini atau dalam tempoh lain sebagaimana yang difikirkan patut oleh Mahkamah yang Mulia ini; 5. Defendan Kedua hendaklah membayar gantirugi am kepada Plaintif yang akan ditaksirkan oleh Mahkamah yang Mulia ini bagi segala perbelanjaan dan kerugian yang dialami oleh Plaintif akibat kegagalan, keengganan dan/atau kecuaian Defendan Kedua untuk menyerahkan dan/atau mengembalikan kesemua aset dan harta yang telah dicagarkan kepada Plaintif menurut Debencer, di mana butir-butir lengkap aset dan harta tersebut adalah seperti yang dinyatakan secara khusus di Lampiran A di sini; 11 6. Defendan Kedua hendaklah membayar faedah pada kadar 5% setahun ke atas gantirugi am yang ditaksirkan oleh Mahkamah yang Mulia ini mulai dari tarikh penghakiman sehingga ke tarikh penyelesaian penuh; 7. Kos atas dasar peguam dan anakguam; [23] The Plaintiff’s claim against the 1st Defendant has been duly adjudged completely by this court pursuant to an Order dated 24 May 2016, where this court has allowed the Plaintiff’s claim against the 1st Defendant as stated in prayers no. (1), (2), and (3) of the Originating Summons. [24] The Plaintiff’s claims against the 2nd Defendant are for an order to return of the Equipment to the Plaintiff, general damages, interest and costs as stated in prayers no. (4), (5), (6) and (7) of the Originating Summons. [25] The Plaintiff’s claim against the 2nd Defendant for delivery and/or return of the Equipment to the Plaintiff as stated in prayer no. (4) of the Saman Pemula was duly settled pursuant to a Consent Order dated 24 May 2016 (Consent Order), where the 2nd Defendant has agree to deliver and/or return the Equipment to the Plaintiff in accordance with 12 the terms of the Consent Order leaving the Plaintiff’s claim for general damages interest and costs to be duly adjudged. [26] On the application of the 2nd Defendant and pursuant to an Order of Court dated 27 June 2016, this court allowed the 2nd Defendant’s application to continue the Originating Summons as a writ action and directed the Plaintiff and the 2nd Defendant to file their respective pleading. [27] The works carried out by the 2nd Defendant as stated in the 2nd Defendant’s Pembelaan dan Tuntutan Balas was done in their capacity as an agent and/or representative of the Plaintiff. [28] In consideration of the works done by the 2nd Defendant and pursuant to the agreement between the Plaintiff and the 2nd Defendant, the Plaintiff had made payments claimed by the 2nd Defendant for the following – (a) valuation fee, (b) travelling expenses, (c) out of pocket expenses, (d) expenses for the approval and certification by SIRIM, 13 (e) warehouse storage expenses, (f) expenses for the transport of the Equipment from India to Malaysia, (g) custom duty, (h) port charges, (i) payment to Globe Tech to manage the delivery of the Equipment to Malaysia. Plaintiff’s submissions [29] With regards to their claim against the 2nd Defendant, the Plaintiff contends as follows – (a) as an agent of the Plaintiff, the 2nd Defendant’s fundamental duty is to deliver the Equipment (which belongs to the 1st Defendant who had charged the Equipment to the Plaintiff) to the Plaintiff immediately upon the 2nd Defendant taking possession of the same on arrival in Malaysia. (b) pursuant to the Memorandum of Understanding, the 2nd Defendant as the Plaintiff’s duly authorised representative 14 and VMC Systems Limited, on behalf of the Corporate Guarantor, handed over the Equipment to the 2nd Defendant to enable the 2nd Defendant to hand over the Equipment to the Plaintiff in Malaysia. (c) as a chargee under the Debenture, the Plaintiff has an absolute and exclusive right to the possession of all the Equipment and legal rights to enforce the Debenture and to sell the Equipment. For purpose of exercising its powers under the Debenture, the Plaintiff appointed M/s Boardroom Advisory Sdn Bhd as the Receiver of the 1st Defendant on 11 November 2015. (d) via letter dated 11 November 2015 (Letter of Instruction), the Plaintiff informed the 2nd Defendant that pursuant to the Debenture, the Plaintiff had appointed the Receiver and instructed the 2nd Defendant to hand over the Equipment to the Receiver on immediate basis. (e) the Letter of Instruction was never revoked or retracted by the Plaintiff. As such the Plaintiff’s instructions to the 2nd Defendant to deliver the Equipment to the Receiver remain 15 effective. However, the 2nd Defendant has failed, refused and/or neglected to deliver the possession of the same to the Plaintiff as instructed by the Plaintiff. (f) It is an agreed fact that the shipment of the Equipment from VMC Systems Limited to the 2nd Defendant could not be carried out by VMC Systems Limited as the licence of VMC Systems Limited has lapsed. In the circumstances and to facilitate the shipment of the Equipment to the 2nd Defendant, the 2nd Defendant had approached and obtained the services of a local company in India known as Globe Tech. The 2nd Defendant obtained the services of Globe Tech to act as an intermediary to facilitate the shipment of the charged assets to the Second Defendant in Malaysia. The fee for the services rendered by Globe Tech as aforesaid was fully paid by the Plaintiff. [30] Save for obtaining the services of Globe Tech to act as an intermediary to facilitate the shipment of the Equipment to the 2nd Defendant in Malaysia, it is the Plaintiff’s submission that there was no transaction to sell and buy the Equipment between Globe Tech and the 16 2nd Defendant as the exclusive right over the Equipment was and is vested with the Plaintiff pursuant to the Debenture. [31] The Equipment arrived at Port Klang, Malaysia on 3 July 2015. The 2nd Defendant, as an agent of the Plaintiff, took possession of the Equipment and stored the same in a warehouse in Klang, Selangor Darul Ehsan. The costs of the rental of the warehouse was borne and paid by the Plaintiff although the contract for storage services was entered between the 2nd Defendant and the warehouse owner. [32] The 2nd Defendant, being an agent of the Plaintiff, has no right of adverse possession over the Equipment. When the 2nd Defendant brought back the Equipment for the Plaintiff to Malaysia, the 2nd Defendant imported the Equipment to Malaysia in its capacity as the Plaintiff’s agent. At all material time there was no change of ownership of the Equipment and the 2nd Defendant does not become the owner of the Equipment merely by importing the same under its name. [33] The 2nd Defendant has failed, refused and/or neglected to deliver the Equipment to the Plaintiff. Instead, the 2nd Defendant imposed conditions that the Plaintiff should issue a purchase order to buy the 17 Equipment from the 2nd Defendant and the 2nd Defendant will issue a letter to waive the payment. [34] In breach of its legal duty as agent to the Plaintiff, the 2nd Defendant only delivered and/or returned the Equipment to the Receiver on 2 June 2016 (after Consent Order obtained by the Plaintiff) after keeping the possession of the same for almost ten (10) to eleven (11) months. [35] Upon taking possession of the Equipment, the Receiver proceeded with the necessary steps to sell the Equipment via an open tender. There were two (2) tender exercised carried out and the Equipment. The first tender exercise was aborted due to the price offered by two (2) bidders was below both the market value and forced sale value. The Equipment were eventually sold at the second tender exercise for RM161,558.00. [36] The Equipment are time sensitive to value and the longer the delay to dispose them, the market value will decrease drastically. The market value of the Equipment has depreciated, the marketability of the same has diminished and the Plaintiff’s ability to sell the Equipment has been seriously impaired as a result of the 2nd Defendant’s wrongful 18 detention and unreasonable delay to deliver and/or return the Equipment to the Plaintiff as aforesaid. [37] The 2nd Defendant is liable to pay damages (to be assessed) to the Plaintiff for all loss and damage suffered by the Plaintiff as a result of the 2nd Defendant’s wrongful detention of and unreasonable delay to deliver and/or return the charged assets to the Plaintiff as aforesaid. [38] The 2nd Defendant also acted as the Plaintiff’s agent for the purpose of recovery of the outstanding Facility due and payable from the 1st Defendant and the Corporate Guarantor and also recovery of the charged assets. It is the Plaintiff’s contentions that it is undisputed fact that the Plaintiff and the 2nd Defendant had agreed that the 2nd Defendant will be paid on a success basis and the 2nd Defendant will be paid a sum equivalent to twenty percent (20%) of the amount successfully recovered by the 2nd Defendant (on behalf of the Plaintiff) from the 1st Defendant and/or the Corporate Guarantor. [39] Pursuant to negotiation carried out by the 2nd Defendant and the Corporate Guarantor, the Corporate Guarantor agreed to settle the Plaintiff’s claim by making payments in the following manner – 19 (a) HSBC cheque no. 014382 dated 30 December 2011 for INR3,28,20,000. This cheque was cleared. (b) HSBC cheque no. 014383 dated 30 June 2012 for INR1,64,10,000. This cheque bounced. [40] The 2nd Defendant issued an invoice dated 8 March 2013 claiming the sum of RM400,000.00 being fee payable to them for partial recovery in the sum of RM2,000,000.00. The Plaintiff submits that the fee of RM400,000.00 is equivalent to twenty percent (20%) of RM2,000,000.00. The Plaintiff had duly paid the 2nd Defendant’s claim as per the 2nd Defendant’s invoice dated 8 March 2013. The Plaintiff paid the 2nd Defendant’s claim via two (2) payments as follows – (a) payment of RM174,319.55 via payment voucher dated 23.4.2013; (b) payment of RM162,739.69 via payment voucher dated 5.6.2013. [41] The total amount paid by the Plaintiff to the Second Defendant in respect of the invoice dated 8 March 2016 was RM337,059.24 and not RM400,000.00 as invoiced by the 2nd Defendant because the partial recovery in the sum of INR3,28,20,000 that was deposited into the 20 Plaintiff’s account was in Indian Rupee and subject to foreign currency exchange rate. The 2nd Defendant did not at any point objected that they were underpaid. [42] It is the Plaintiff’s case that an agreement dated 4 March 2014 (4 March 2014 Agreement) was executed between Fi-Mesh Network Pvt Ltd, a company registered under the Indian laws, for purpose of recovery of the outstanding Facility from the 1st Defendant and the Corporate Guarantor. Although Fi-Mesh Network Pvt Ltd (Fi-Mesh India) and the 2nd Defendant are two different entities, both the companies are essentially represented, managed and operated by the very same personnel and individuals, that is, Shahbaz Arshad (DW1) and Krishna Akella who is DW1’s business partner. [43] DW1 and Krishna Akella are directors of the 2nd Defendant company. Both of them are the alter ego of the 2nd Defendant and Fi-Mesh India and have been using both the 2nd Defendant and Fi-Mesh India interchangeably as a single economic entity when dealing with the Plaintiff as their objectives are similar as stated above. The Plaintiff has duly paid the 2nd Defendant’s claim as per the invoice dated 8 March 2013 being fees for the partial recovery of the money due under the Facility. In fact, it is an agreed fact that the partial recovery of 21 INR3,28,20,000 was done in India and deposited into the Plaintiff’s account. The invoice dated 8 March 2013 was issued by the 2nd Defendant and the fee of RM337,059.24 for the partial recovery as per the invoice was paid to the 2nd Defendant and not Fi-Mesh India. [44] As such the court ought to lift the corporate veil of the entities to determine the real personalities or individuals who have been managing the affairs of both the entities and to hold them responsible and bind them to the terms of the 4 March 2014 Agreement. Both the 2nd Defendant and Fi-Mesh India were involved in the whole transaction with the Plaintiff through these two (2) individuals namely DW1 and Krishna Akella as their de facto controllers to achieve the similar objectives. [45] In relation to the 2nd Defendant’s counter claim, the Plaintiff contends since it was agreed between the Plaintiff and the 2nd Defendant that the 2nd Defendant is only entitle to be paid fees for work done when the 2nd Defendant successfully recovers the money due under the Facility and the fee is to be a sum equivalent to twenty percent (20%) of the total amount recovered before tax less any foreign exchange differences, there is no room for implied term pertaining to payment of fees as claimed by the 2nd Defendant in their counter claim. 22 Defendant’s submissions [46] The 2nd Defendant denies that they failed to hand over the Equipment to the Plaintiff as alleged and contend that they were ready, willing and able to hand over the Equipment to the Plaintiff so long as it was done in a proper manner as the Equipment were imported into Malaysia using the 2nd Defendant’s name. [47] It is the 2nd Defendant’s contentions that based on the transactions that transpired from the time the Equipment arrived in Port Klang, Malaysia up to the obtaining of the approvals and certifications on 3 September 2015 there was no breach whatsoever by the 2nd Defendant as alleged by the Plaintiff. The transactions are as follows – (a) the 2nd Defendant had to ship the Equipment from India to Malaysia using their name because Plaintiff informed the 2nd Defendant that they did not want the Equipment to be shipped from India to Malaysia using their name. (b) that the Equipment was shipped by sea and left India for Malaysia on 15 May 2015 or thereabouts. The Equipment 23 arrived in Port Klang, Malaysia on 3 July 2015 and the 2nd Defendant informed the Plaintiff. (c) that the 2nd Defendant then went about obtaining the necessary approvals and certifications from the Royal Malaysian Customs and SIRIM in their name as they were declared the importers of the Equipment. The approvals and certifications under the 2nd Defendant’s name were only obtained on 3 September 2015. (d) it is the 2nd Defendant’s position that the Letter of Instruction was issued by the Plaintiff after discussions with the 2nd Defendant who wanted a letter from the Plaintiff to reflect the proper handing over of the Equipment. This is because the Equipment was imported into Malaysia using the 2nd Defendant’s name and approvals and certifications from government departments were issued in the 2nd Defendant’s name. When the 2nd Defendant received the Letter of Instruction the 2nd Defendant informed the Plaintiff that, on the advice of their auditors, they were not agreeable to the contents of the letter. 24 (e) the Plaintiff through email dated 13 November 2016 reminded the 2nd Defendant that the Letter of Instruction was issued at the 2nd Defendant’s request and the Plaintiff will seek advice from their solicitors before making any revision to the letter. (f) The 2nd Defendant waited for the Plaintiff’s decision from 13 November 2015 until 10 February 2016 (date of filing the OS). It turned out through PW2’s evidence that the Plaintiff actually never made any attempt to seek advice from their solicitors. [48] Based on the above the 2nd Defendant submits the evidence shows it was 2nd Defendant who was chasing the Plaintiff (for a decision) who was delaying the matter. [49] With regards to the 2nd Defendant’s counter claim, it is in respect pf works done by the 2nd Defendant for the recovery of the Equipment. The works done are listed at paragraph 12.1 to 12.23 of the 2nd Defendant’s Pembelaan dan Tuntutan Balas which are as follows – 25 12.1 Pursuant to discussions between the Plaintiff and the 2nd Defendant, the 2nd Defendant in June 2011 prepared and sent to the Plaintiff a document titled “Recovery and Asset Sale of Ordyn Malaysia Sdn Bhd”. 12.2 The Plaintiff appointed the 2nd Defendant to assist them in the recovery process thereto and the 2nd Defendant thereafter commenced work by tracking down the directors/shareholders of the 1st Defendant, Ordyn India and VMC and engaging them in negotiations with a view to the repayment of the outstanding monies owed to the Plaintiff under the financing facility granted to the 1st Defendant and guaranteed by Ordyn India. 12.3 That initially, the Plaintiff was only interested in enforcing the Corporate Guarantee against Ordyn India and was not interested in the recovery of the Equipment. 12.4 The 2nd Defendant successfully convinced Ordyn India and/or VMC to make installment payments to the Plaintiff in respect of the outstanding indebtedness under the financing facility. 12.5 The 2nd Defendant assisted the Plaintiff in encashing approximately RM 2 million paid by Ordyn India under a settlement agreement which, amongst other things, consisted of the opening of a bank account in India for the Plaintiff, obtaining a waiver of tax payable by the Plaintiff, obtaining the approvals and certifications of the Reserve Bank of India. 12.6 The 2nd Defendant assisted the Plaintiff in liaising with Indian lawyers and commencing court proceedings in India in respect of the dishonoring of the 2nd installment payment by cheque against Ordyn India and HSBC bank India. 26 12.7 The 2nd Defendant assisted the Plaintiff’s employees when they travelled to India by, amongst other things, taking them to police stations to make police reports and meeting with Indian lawyers. 12.8 After Ordyn India defaulted in their agreement to make installment payments to the Plaintiff, the 2nd Defendant investigated and located the whereabouts of a majority of the Equipment which has been removed from Ordyn India’s premises in Bangalore to the premises of VMC in Hyderabad. 12.8 Selepas Ordyn India memungkuri perjanjian mereka untuk membuat bayaran ansuran kepada Plaintif, Defendan Kedua membuat siasatan dan mengenal pasti lokasi kebanyakan Peralatan-Peralatan yang telah dikeluarkan dari premis Ordyn India di Bangalore dan di bawa ke premis VMC di Hyderabad. 12.9 Defendan Kedua berunding dengan Ordyn India dan VMC untuk pelepasan/pemulangan Peralatan-Pewralatan tersebut kepada Plaintif sebagai penyelesaian Jaminan Korporat yang akhirnya memuncak kepada pemeteraian Memorandum Persefahaman oleh pihak-pihak. 12.10 Defendan Kedua telah membuat banyak lawatan ke Hyderabad dan Bangalore, India untuk memperolehi pelepasan/pemulangan Peralatan-Peralatan tersebut daripada VMC. 12.11 Dalam proses ini, Defendan Kedua menghadapi dan telah menagani perkacauan perindustrian yang berterusan di kilang VMC yang diakibatkan oleh kegagalan VMC untuk membayar pekerja-pekerja mereka. 12.12 Seorang pengarah Defendan Kedua, En. Shahbaz Arshad yang bertindak sebagai wakil berkuasa Plaintif untuk mengambil balik 27 posesi Peralatan-Peralatan tersebut, telah di kurung oleh pekerja-pekerja VMC dan menghadapi ancaman fizikal dan lisan daripada pekerja-pekerja VMC yang enggan membenarkan Peralatan-Peralatan tersebut dikeluarkan dari kilang VMC. 12.13 Pengarah Defendan Kedua tersebut, selepas pujukan-pujukan, dapat meyakinkan pekerja-pekerja VMC untuk membenarkan Peralatan-Peralatan tersebut dibawa keluar dari kilang VMC tetapi bukan sebelum beliau menimpa tragedy peribadi dimana isterinya yang sedang mengandung kedua telah mengalami keguguran akibat kurungan En. Shahbaz Arshad oleh pekerja-pekerja VMC. 12.14 Defendan Kedua juga memohon dan memperolehi satu injunksi daripada Mahkamah Tinggi Hyderabad untuk membenarkan Peralatan-Peralatan tersebut dibawa keluar daripada premis VMC. 12.15 Selepas berjaya mengambil Peralatan-Peralatan tersebut, Defendan Kedua membuat kesemua pengaturan untuk mengangkut Peralatan-Peralatan tersebut dari Hyderabad untuk dihantar ke Malaysia. 12.16 Defendan Kedua juga berjaya untuk mencari dan memperolehi sekurangnya dua (2) pembeli untuk Peralatan-Peralatan tersebut daripada Bangladesh Telecoms dan sebuah syarikat di Africa yang berminat untuk membeli Peralatan-Peralatan tersebut walau bagaimana pun Plaintif tidak bersetuju. 12.17 Ketika Defendan Kedua membuat kesemua pengaturan untuk mengangkut Peralatan-Peralatan tersebut dari Hyderabad untuk dihantar ke Malaysia, Plaintif memaklumkan kedapa Defendan Kedua bahawa mereka tidak bersetuju untuk Peralatan-Peralatan tersebut dihantar ke Malaysia menggunakan nama Plaintif. 28 12.18 Defendan Kedua, kemudiannya terpaksa menggunakan nama mereka untuk menghantar Peralatan-Peralatan tersebut ke Malaysia. 12.19 Semasa membuat persediaan untuk penghantaran, Defendan Kedua memdapati bahawa lessen ekspot VMC telah dibatalkan dan oleh itu VMC tidak boleh dinamakan sebagai pengekspot Peralatan-Peralatan tersebut keluar dari India. 12.20 Defendan Kedua kemudiannya telah mendapat satu syarikat tempatan di Bangalore bernama Globe Tech yang bersetuju untuk menghantar Peralatan-Peralatan tersebut menggunakan nama mereka kepada Defendan Kedua sebagai pengimpot di Malaysia. 12.21 Defendan Kedua menyediakan kesemua kertas kerja yang berkenaan di India untuk Peralatan-Peralatan tersebut di hantar ke Malaysia. 12.22 Pada ketibaan Peralatan-Peralatan tersebut di Pelabuhan Klang Malaysia, Defendan Kedua memaklumkan Plaintiff mengenainya dan mula memohon dan mendapatkan kelulusan-kelulusan yang berkenaan dan dokumen-dokumen yang diperlukan daripada pihak Kastam Di-Raja Malaysia dan SIRIM, Malaysia. 12.23 Defendan Kedua juga membuat persediaan untuk Peralatan-Peralatan tersebut disimpan di Kawasan Bebas Cukai (Trade Free Zone) sementara pemerolehan kelulusan dan dokumentasi yang berkenaan. [50] It is the 2nd Defendant’s pleaded case that it is an implied term of the appointment of the 2nd Defendant that Plaintiff will pay all professional fees for the above works done by the 2nd Defendant. 29 Witnesses [51] The Plaintiff’s witnesses are as follows – (a) Mr. Baltasar Maskor (PW1) a director of Messrs Boardroom Advisory Sdn Bhd who was appointed by the Plaintiff as a receiver pursuant to the Debenture. PW1’s testimony essentially relate to the tender exercise carried out on behalf of the Plaintiff for purpose of disposing the Equipment. Two (2) tender exercise were carried out. The first was aborted due to the low price offered by bidders. It was at the second tender exercise that the Equipment were sold to the highest bidder at the price of RM161,558.00 (b) Encik Nazli bin Abdul Hamid (PW2), the Vice President of Asset Management Division of the Plaintiff company. PW2 represented the Plaintiff in all its dealings with the 2nd Defendant. PW2’s testimony substantially relate to facts surrounding the efforts made by the Plaintiff to recover monies due and owing from the 1st Defendant and Ordyn Technologies Limited/Corporate Guarantor and the 30 Equipment through the 2nd Defendant who was appointed as the Plaintiff’s agent and representative. (c) Mr. Siew Weng Hong (PW3), an expert witness of the Plaintiff. PW3 is under the employment of Henry Butcher Malaysia and a registered valuer under the Valuers, Appraisers and Estate Agent and Property Managers Act 1981. PW3 has 18 years experience as a practising registered valuer and he has been asked to testified in court in his capacity as an expert. PW3 conducted a valuation on the Equipment as instructed by the 1st Defendant (In Liquidation). In PW3’s valuation report dated 10 October 2016 (CBD 3) the market value of the Equipment was RM452,000.00 while the forced value was RM227,000.00. [52] The 2nd Defendant only witness is Mr. Shahbaz Arshad (DW1) who is one of the directors and shareholders of the 2nd Defendant company. DW1 represented the 2nd Defendant in dealing with the PW1 on behalf of the Plaintiff in relation to performing the 2nd Defendant’s duty as an agent of the Plaintiff. DW1’s testimony relate to facts surrounding the appointment of the 2nd Defendant as the agent and authorized 31 representative of the Plaintiff to recover the money under the Facility Agreement and the Equipment which were brought back to Malaysia and eventually handed over to the Plaintiff. Issues [53] Both parties agreed the following issues are to be determined by the court – (a) In respect of the Plaintiff’s claim against the 2nd Defendant – (i) whether the 2nd Defendant has breached its legal duty as the Plaintiff’s agent and/or representative when the 2nd Defendant has failed, refused and/or neglected to deliver the charged assets to the Plaintiff immediately upon the 2nd Defendant taking possession of same on arrival in Malaysia. (ii) whether the 2nd Defendant is liable to pay damages to the Plaintiff for all expenses including the rental of the warehouse, loss and/or damage suffered by the Plaintiff as a result of the 2nd Defendant’s failure, refusal and neglect to deliver the charged assets to the Plaintiff immediately upon 32 the 2nd Defendant taking possession of same on arrival in Malaysia. (b) In respect of the 2nd Defendant’s counter claim against the Plaintiff – (i) whether the Plaintiff is liable to pay to the 2nd Defendant fee for works done by the 2nd Defendant as stated in paragraphs 12.1 to 12.23 of the 2nd Defendant’s Pembelaan dan Tuntutan Balas in addition to all the payments that have been made by the Plaintiff to the 2nd Defendant. (ii) whether the 2nd Defendant is entitled to demand for fees from the Plaintiff for work done by the 2nd Defendant as stated in paragraphs 12.1 to 12.23 of the 2nd Defendant’s Pembelaan dan Tuntutan Balas in addition to all the payments that have been made by the Plaintiff to the 2nd Defendant. (iii) if the answers to sub-paragraphs b(i) and (ii) above are in the affirmative, what is the quantum or total fees to be paid by the Plaintiff to the 2nd Defendant. 33 Findings of court Whether the 2nd Defendant has breached its legal duty as the Plaintiff’s agent and/or representative when the 2nd Defendant has failed, refused and/or neglected to deliver the charged assets to the Plaintiff immediately upon the 2nd Defendant taking possession of same on arrival in Malaysia whether the 2nd Defendant is liable to pay damages to the Plaintiff for all expenses including the rental of the warehouse, loss and/or damage suffered by the Plaintiff as a result of the 2nd Defendant’s failure, refusal and neglect to deliver the charged assets to the Plaintiff immediately upon the 2nd Defendant taking possession of same on arrival in Malaysia. [54] The following facts are agreed and not disputed – (a) by the Memorandum of Understanding the Plaintiff appointed the 2nd Defendant as its agent and/or representative to deal with Ordyn Technologies Limited/Corporate Guarantor and VMC System Limited in respect of the Equipment (the charged assets) where the 2nd Defendant is tasked to accept the handing over of the same from Ordyn Technologies Ltd and VMC System Limited. The 2nd Defendant shall then bring back the 34 Equipment to Malaysia and deliver the same to the Plaintiff who is the chargee of the Equipment. (b) the Equipment arrived at Port Klang on 3 July 2015. (c) 2nd Defendant took possession of the Equipment and stored it in a warehouse in Klang, Selangor. (d) the Equipment was delivered to the Receiver on 2 June 2016, about eleven (11) months after the 2nd Defendant took possession of the same. [55] At the onset the Plaintiff submits that the Consent Order dated 24 May 2016 which is without any qualification by the 2nd Defendant is clear and conclusive evidence that the 2nd Defendant has breached its legal duty as the Plaintiff’s agent and/or representative of the Plaintiff. On this point, it is to be noted that the Consent Order was intended to resolve the issue of handing over the Equipment to the Plaintiff which was one of the prayers sought by the Plaintiff in the Originating Summons. When the Originating Summons was converted to writ action for the parties to pursue their claim against each other the Plaintiff, in their Statement of Claim sought general damages alleged to have been suffered by them due to the 2nd Defendant’s breach of their duty as the Plaintiff’s agent and/or representative. In the Agreed Issues to be Tried (marked as Bundle D) among the issues which both parties agree requires the court 35 determination is whether the 2nd Defendant has breached their legal duty as the Plaintiff’s agent and/or representative and consequentially whether the 2nd Defendant is liable to pay damages as a result of the said breach. [56] Thus I am of the view the Consent Order does not tantamount to an admission of liability on the part of the 2nd Defendant as the issue of breach of duty was not intended to be addressed via the Consent Order. Instead it is a live issue to be ventilated and adjudged in this writ action. [57] In his evidence in chief, PW2 testified that the 2nd Defendant breached its obligation as an agent and/or representative of the Plaintiff when the 2nd Defendant failed to hand over the Equipment to the Plaintiff immediately upon the 2nd Defendant taking possession of the same upon its arrival in Malaysia on 3 July 2015. Pursuant to that the Plaintiff issued Letter of Instruction instructing the 2nd Defendant to hand over the Equipment to M/s Boardroom Advisory Sdn Bhd the Receiver appointed by the Plaintiff pursuant to the Debenture. This is PW2’s testimony – 36 32. Apakah tindakan susulan yang diambil oleh Plaintif? Melalui surat bertarikh 11.11.2015, Plaintif telah mengarahkan Defendan Kedua untuk menyerahkan aset dan harta berkenaan dengan serta merta kepada Tetuan Boardroom Advisory Sdn Bhd yang telah dilantik oleh Plaintif sebagai Penerima menurut Debencer untuk membolehkan Penerima menjual dan/atau melupuskan aset dan harta berkenaan agar hasil jualan tersebut boleh digunakan untuk mengurangkan wang kemudahan pembiayaan yang terhutang daripada Defendan Pertama. Plaintif telah berulang kali membuat tuntutan terhadap Defendan Kedua untuk menyerahkan aset dan harta berkenaan namun Defendan Kedua telah gagal, enggan dan/atau cuai untuk berbuat demikian. [58] The Letter of Instruction is reproduced below – 11 November 2015 Shahbaz Arshad Director Fi-Mesh Networks (M) Sdn Bhd 19A Jalan Kencana 1A/22 Taman Pura Kencana 83300 Sri Gading Batu Pahat Johor Dear Sirs, 37 Subject : Ordyn Technologies (M) Sdn Bhd (“Ordyn”) (In Liquidation) Fi-Mesh Networks (M) Sdn Bhd to handover STM16 Material (“the Material”) equipment Receiver Appointed of Ordyn Reference is made to the above and our discussion held today at MDV’s office. Pursuant to the Debenture dated 2 March 2009 MDV had on 11 November 2015 appointed a Receiver i.e. Mr. Baltasar bin Maskor of M/s Boardroom Advisory sdn Bhd to dispose the material i.e. STM16 Material. Kindly therefore handover the material to the Receiver on immediate basis. Please be guided accordingly. Yours faithfully, for MALAYSIA DEBT VENTURES BERHAD sgd Nazli Abdul Hamid Vice President, Asset Management Division [59] When cross-examined on the reasons for issuing the Letter of Instruction, PW2’s testified as follows – Ok. En. Nazli tahu bagaimana surat ini dikeluarkan? Or the events leading up to the pengeluaran surat ini? En. Nazli yang sign. Ya, surat ini ditandatangani oleh saya. 38 Siapa suruh En. Nazli mengeluarkan surat ini? Siapa...? Mengapa En. Nazli mengeluarkan surat ini? Surat ini dikeluarkan sebab kami mahu Fi-Mesh Networks menyerahkan material, hand over material equipment kepada kami, kepada receiver. Sebab kami telah melantik receiver, iaitu Boardroom Advisory Sdn Bhd. Ok. Tapi saya telah diarahkan oleh anakguam saya bahawa surat ini sebenarnya telah dikeluarkan atas request Defendan Kedua and there’s an email to that. Atas request? Hmm. Yeah. Tak, kamu tak boleh mengatakan dia atas request sebab kami berbincang sebelum mengeluarkan surat ini. Maknanya Fi-Mesh, iaitu Defendan Kedua, juga mahu surat ini dikeluarkan dan oleh sebab itu, selepas perbincangan, kami mengeluarkan surat ini. Correct. Ia bukan satu situasi where Plaintif yang on its own mengeluarkan surat tersebut. You’ve actually berbincang dengan Defendan Kedua, betul? Sebelum surat ini dikeluarkan, betul? Ya. Correct. So, jawapan kamu kepada soalan jawapan 32 is not exactly correct sebab surat tersebut dikeluarkan, of course, selepas perbincangan Plaintif dan Defendan Kedua to overcome the issue of how the goods are to be handed over to the Plaintiff. 39 That means what I’m trying to say terdapat latar belakang bagaimana surat bertarikh 11 November 2015 dikeluarkan oleh Plaintif. There are background facts. Ya, betul. [60] PW2 was referred to an email (page 300 of Common Bundle of Document (CBD) 2) dated 13 November 2015 issued to the 2nd Defendant/DW1 by Jamilah Arifin on behalf of the Plaintiff and copied to PW2. The following is PW2’s testimony – ... there was a discussion between the Plaintiff and the Defendant with regards, mengenai surat bertarikh 11 November 2015. Right and earlier my question to you that the letter dated 11 November 2015 was issued at the request of the Second Defendant is evidenced in one Jamilah Arifin’s email to Shahbaz which you were cc-ed at page 300. If you look at the bottom, she writes “Dear Shahbaz, Reference is made to your email below and MDV’s letter dated 11 November 2015. Please be remindful that the letter prepared by MDV above was at your request. Hence MDV needs to obtain legal advice from its solicitor before any revision of the same can be made. We shall revert back to you upon receipt of the legal advice at the soonest”. So you see, En. Nazli, it’s actually it wasn’t an instance where you agree with me the Plaintiff was asserting their rights or demanding something on its own when they issue the letter dated 11 November 2015. That letter was issued because the Second Defendant requested for it. This email shows it. 40 Yeah of course they requested for it but we do not know what is their... what they want to do with it. [61] PW2 then confirmed that the 2nd Defendant had rejected the Letter of Instruction via email dated 13 November 2015 – … you say “Dear Jamilah, With reference to MDV’s letter dated 11 November 2015. Fi-Mesh categorically rejected the letter, Our auditor has strongly advised us to issue a delivery receipt in triplicate. Please note the material is Movable Property and ownership transfer has to be done.” (but the document says “clean”). So they did not agree to your letter dated 11 November, the way it was worded because you just wanted Fi-Mesh to give the equipment to Boardroom, your receiver, correct? PW2. Hmm. [62] PW2 also confirmed that the 2nd Defendant did not agree to the Letter of Instruction issued by the Plaintiff because the said letter was worded in such a manner which only addressed the Plaintiff’s concern to have the Equipment handed over to the Receiver (Notes of Proceedings on 5 October 2016 at page 63). This is not in line with the 2nd Defendant’s requirement to ensure the process of the handing over would enable the 2nd Defendant’s auditor to take the Equipment out of the 2nd Defendant’s books. This is consistent with DW1’s testimony during re-examination where DW1 testified (see Notes of Proceedings 41 on 9 November 2016 at page 110) that the 2nd Defendant had prepared a draft letter based on their auditor’s requirement and sent it to the Plaintiff for the Plaintiff to issue such letter. Since the Letter of Instruction issued by the Plaintiff was not in the manner as the letter drafted by the 2nd Defendant it was rejected by the 2nd Defendant. [63] Pursuant to the rejection of the Letter of Instruction by the 2nd Defendant, PW1 testified that the position as at 13 November 2016 was that the Plaintiff would be getting legal advice on the matter before revising the Letter of Instruction as requested by the 2nd Defendant and that the Plaintiff would revert to the 2nd Defendant soonest – The status as at 13 November 2015 ialah Plaintif akan mendapat nasihat undang-undang daripada peguamcara mereka dan akan revert kepada Defendan Pertama secepat mungkin as per Pn. Jamilah’s email, page 301. En. Nazli, setuju tak? That’s just a document only. Setuju. [64] However, with regards to the legal advice the Plaintiff said they would sought, PW2 informed the court no advice was obtained by the Plaintiff– 42 … I’d like to take the witness to page 300 of CBD 2. You are say that you are not sure this is right or not so we don’t know what to do. Now, didn’t your Pn. Jamilah say “MDV needs to obtain legal advice from its solicitors before any revision of the same can be made. We shall revert back to you upon receipt of the legal advice at the soonest”. 13th November you said you are going to take legal advice. 2nd or 4th December you all still keeping quiet. What happened to the legal advice? If you are not sure, tak tahu prosedur betul, you are supposed to take legal advice. Was legal advice taken En. Nazli? ... ... No, the legal advice has not been obtained. YA Not been obtained? [65] Based on PW2’s testimony and the contemporaneous evidence it is my finding that the Letter of Instruction was not issued due to the 2nd Defendant’s refusal or failure to hand over the Equipment to the Plaintiff. The said letter was issued pursuant to discussions between the Plaintiff and the 2nd Defendant to resolve the issue of how the Equipment are to be handed over to the Plaintiff. It is evident that the said letter was issued at the request of the 2nd Defendant who was eager to hand over the Equipment to the Plaintiff albeit in a proper manner. As such the Letter of Instruction was not issued by the Plaintiff out of its own volition 43 for the purpose of enforcing its right under the Debenture (as a chargee) as the Plaintiff has made it out to be. [66] In this respect I am of the view the fact that the Plaintiff had never revoked the Letter of Instruction is irrelevant as the contemporaneous evidence shows that the said letter was issued at the request of the 2nd Defendant arising out of a discussion held between the two parties as to the proper manner to hand over the Equipment to the Plaintiff. The said letter was intended to actually finalise the process of the handing over of the Equipment. However it turned out to be otherwise as it was rejected by the 2nd Defendant. [67] It is also the Plaintiff’s contention that the 2nd Defendant has imposed conditions on the Plaintiff for the delivery of the Equipment which is in breach of his duty as an agent of the Plaintiff. The following is PW2’s evidence in chief – 34. Apakah syarat yang dikenakan oleh Defendan Kedua berhubung penyerahan aset dan harta berkenaan kepada Plaintif? Defendan Kedua telah meminta Plaintif untuk mengeluarkan suatu pesanan belian bagi tujuan untuk membeli aset dan harta berkenaan daripada Defendan Kedua. Defendan Kedua pula akan mewujudkan suatu invois untuk transaksi jual beli aset dan harta berkenaan dan pada masa yang sama, Defendan Kedua akan mengeluarkan suatu 44 surat untuk melepaskan (“waive”) Plaintif daripada obligasi untuk membayar bagi transaksi tersebut. Saya merujuk kepada muka surat 252, 253, 307 – 310, 319, 338-339 Ikatan Dokumen Bersama (Jilid 2) (Bahagian B & C). 35. Apakah tindakan balas Plaintif terhadap syarat yang dikenakan oleh Defendan Kedua berhubung penyerahan aset dan harta berkenaan kepada Plaintif? Plaintif tidak bersetuju kepada syarat dan/atau cadangan Defendan Kedua memandangkan ianya adalah bertentangan serta tidak konsisten dengan hak Plaintif sebagai pemegang sekuriti dan/atau pemegang cagaran terhadap aset dan harta berkenaan menurut Debencer. Plaintif, sebagai pemegang sekuriti menurut Debencer, adalah berhak untuk mendapat milikan dan posesi terhadap aset dan harta berkenaan. Sebagai agen dan/atau wakil Plaintif, Defendan Kedua mempunyai tugas dan obligasi untuk menyerahkan aset dan harta berkenaan kepada Plaintif tanpa sebarang syarat sebaik sahaja Defendan Kedua mengambil posesi aset dan harta berkenaan yang telah tiba di Malaysia. [68] When cross-examined as to why he said the 2nd Defendant had imposed conditions, PW2 said – Ok, kita tengok email di mukasurat 307. Now email Shahbaz kepada kamu, Nazli “As discussed with regards to the handing over the material, please find attached documents needed to transfer ownership legally. (a) invoice (b) delivery receipt” You know. “This has to be acknowledged by the receiving party on behalf of MDV or MDV itself. The delivery receipt shall be in 5 copies so that we submit the necessary copies to authorities as 45 well as MDV and receiver in original. As we have mentioned earlier and also given the format letter, we shall no claim money for the material sale as per the invoice as it is bound by MOU. Please do note that Fi-Mesh cannot sell this material to anyone except MDV. I’m preparing the signed copied of the documents and delivering it to you. We urge you to expedite the process and take possession of the material. We had been having many lengthy conversation regarding the same but transfer is not taking place.” Ok, now after your status of waiting for your lawyer’s instructions on 13th of November, this email comes up on 23rd November. Setuju dengan saya, kalau kita baca emel ini, document contemporaneous, terdapat discussion di antara Plaintif dan Defendan Kedua dari 14 November 2015 hingga tarikh emel ini dikeluarkan? Ya. Ok. Setuju dengan saya emel ini dikeluarkan pursuant to, selaras dengan discussion-discussion tersebut? Ya? These emails were issued pursuant to all discussions? Ditulis di sana “as discussed”. Look at the email, En. Nazli, easy for you to follow. “As discussed, with regards”. “As discussed”. Hmm. Thus the purported conditions said to have been imposed by the 2nd Defendant were actually actions to be carried out by the Plaintiff pursuant to discussions between both parties in relation to the proper manner of handing over the Equipment. 46 [69] The 2nd Defendant’s email dated 23 November 2015 (issued by DW1 to PW2 and Jamilah Arifin) which the Plaintiff alleges as imposing conditions on the Plaintiff read as follows – Importance: High Dear Nazli, As discussed with regards to the Handing over the material, Please find attached documents needed to transfer ownership legally. a) Invoice – Created as per MOU please acknowledge this b) Delivery Receipt – This has to be acknowledged by the receiving party on behalf of MDV or MDV itself. The Delivery Receipt shall be in 5 copies so that we submit the necessary copies to authorities as well as MDV and receiver in originals. As we have mentioned earlier and also given the format of letter, we shall no claim money for the material sale as per the invoice as it is bound by MOU. Please do note Fi-Mesh cannot sell this material to anyone except to MDV. I’m Preparing the Signed copied of these documents and delivering it to you. We urge you to expedite the process and take possession of the material. We had been having many lengthy conversations regarding the same but the transfer is not taking place. Regards Shahbaz Arshad Director 47 [70] Learned counsel for the 2nd Defendant suggested to PW2 there is no condition imposed and what the 2nd Defendant required was for purpose of handing over the Equipment, PW2 said - Saya menganggapkan bahawa itu adalah salah satu syarat yang dikenakan. Ok, ok, fine. But syarat pursuant to discussions lah? As per what the email says. Dan saya juga, kalau tengok email ini, Defendan Kedua juga memaklumkan kepada Plaintif, invois dan delivery receipt diperlukan untuk diberikan kepada pihak-pihak berkuasa, the authorities. Betul? Mereka telah menyatakan di sani (should be sini) “copies to the authorities”. Ya? Hmm. [71] When asked why the 2nd Defendant need to submit the Delivery Receipt to the authorities, PW2 seems to be in the dark despite insisting it is conditions unnecessarily imposed by the 2nd Defendant – Mengapa copies invoice dan delivery receipt perlu diberi kepada authorities? Saya percaya customs dan SIRIM lah. Saya tidak berapa pasti kenapa harus diberikan. Tak pasti? Ok. So kamu tak pasti kenapa ditulis sana. And emel ini juga dengan express menyatakan mereka tidak mahu duit. They just want the proper documents, documentation to be done so the authorities will be notified and you can take your goods, 48 you or whoever you want to give it to. Setuju? This email. The contents of this email. They don’t even want money. They say just take. It’s what they said lah. Ya? Setuju tak En. Nazli? Ya, saya setuju. [72] It was put to PW2 that the reason for the delay of the handing over of the Equipment was due to the Equipment being brought back to Malaysia by using the 2nd Defendant’s name as requested by the Plaintiff. Even though PW2 admitted that they agreed for the Equipment to be brought back to Malaysia under the 2nd Defendant’s name PW2 was evasive on the reason why it was done in such a manner (which is at the request of the Plaintiff) – Dan setuju dengan masalah yang timbul on the delay on handing over is because the material was brought in to Malaysia under Fi-Mesh’s name, at you request because... Setuju? Kami bersetuju untuk Fi-Mesh membawa balik untuk equipment tu. Correct dan oleh kerana equipment tersebut diimport atas nama Fi-Mesh dan masuk, diimport ke Malaysia atas nama Fi-Mesh dan deklarasi-deklarasi telah dibuat kepada kastam dan SIRIM bahawa pengimport adalah Fi-Mesh, Fi-Mesh, Defendan Kedua 49 tidak boleh just like that give you the goods. Otherwise how? Because they are the importers, they have purchased the goods from India, they imported to Malaysia, they cannot come to Malaysia and just give you the goods because they have declared to customs that they are importing, their customs duties is paid. SIRIM certificate obtained. Am I right? En. Nazli faham tak the problem faced by the Second Defendant in handling over the goods to you? Saya pernah bertanya kepada Shahbaz sebab-sebab kenapa kena mereka kena apa macam MDV kena ada satu cara yang... macam mana nak cakap ha... sekejap ha. Saya pernah bertanya Shahbaz sama ada betul sama ada yang dia cakap ni betul ke tidak. Because kami dah berbincang dalam MDV itself, bahawa unless they can convince us that this is, ini adalah caranya barulah kami setuju. Ok. So... Maknanya kami tidak pernah berdepan dengan masalah macam ni, so dan pada masa yang sama mereka tidak dapat memberi penerangan yang tepat. Macam mana kami nak percaya. [73] From the Plaintiff’s evidence through PW2, it is evident that the Plaintiff was in doubt as to the manner how the 2nd Defendant dealt with the process of handing over the Equipment to them. In this respect it is pertinent to note, based on PW2’s testimony (Notes of Proceedings on 5 October 2016 at pages 57 – 59) the following evidence – 50 (a) that the Plaintiff were not agreeable for the Equipment to be shipped to Malaysia using their name. No evidence was led as to the reason why the Plaintiff refused to have the Equipment brought back to Malaysia using their name despite their consistent and persistent claim that they have the exclusive right to deal with the Equipment pursuant to the Debenture created in their favour. I find this rather odd. The 2nd Defendant had to use their name to ship the Equipment to Malaysia. As a result of that, the 2nd Defendant has recognized the Equipment in their books. (b) VMC System Limited could not be named as the exporter of the Equipment out of India because its export licence was cancelled. Therefore the 2nd Defendant had to get a local company in Bangalore known as Globe Tech which agreed to ship the Equipment using their name as exporter. In fact during cross-examination PW2 eventually confirmed (initially PW2 tried to disassociate the Plaintiff from Globe Tech) that the Plaintiff had made a payment of RM46,500.00 to Globe Tech. 51 (c) since the Equipment were brought into Malaysia using the 2nd Defendant’s name, the 2nd Defendant had to sought permission and made declaration to the customs, SIRIM and both the Government of India and Malaysia. When asked how long it takes for the approval and permission to be obtained, again PW2 said he is not sure. However based on the document (page 251 of CBD 2) PW2 agreed that all the necessary approval was obtained on 3 September 2015. [74] Although it is understandable for the Plaintiff to be in doubt as to the manner the 2nd Defendant dealt with the handing over of the Equipment, it is not acceptable that the Plaintiff, who had concern about the matter, to not deal with the matter promptly and diligently. I say so for the following reasons – (a) the Plaintiff alleges the 2nd Defendant had imposed conditions on the Plaintiff before the Equipment were handed over to the Plaintiff. The purported conditions were – (i) the Plaintiff to issue a purchase order to buy the Equipment from the 2nd Defendant; and 52 (ii) the 2nd Defendant will issue a letter to waive payment. In this respect it must be noted that the Plaintiff did not produce any contemporaneous evidence to support their pleaded case that the Plaintiff had in fact objected to the purported conditions allegedly imposed by the 2nd Defendant. (b) it is also pertinent to note that the Plaintiff through Jamilah Arifin acknowledged that they require legal advice on the matter. Unfortunately no advice was obtained. (c) the exchange of emails between the Plaintiff and the 2nd Defendant on the issue shows that it was the 2nd Defendant who had taken active steps towards finalizing the process of handing over of the Equipment. On the other hand, based on the conduct of the Plaintiff through PW2, it can be seen that the Plaintiff was indifferent to the issues raised by the 2nd Defendant and the steps suggested by the 2nd Defendant to finalise the handing over of the Equipment to the Plaintiff as soon as possible in a duly and proper manner. The Plaintiff’s indifference then is obviously not 53 consistent with the Plaintiff’s allegation now that they had repeatedly demanded for the handing over of the Equipment which the Plaintiff claim to be time sensitive to value and that the longer the delay to dispose the same, the market value will decrease drastically. [75] For ease of reference the table below chronologically set out the exchange of emails between the Plaintiff and 2nd Defendant – Item Date of letter/email Contents of email/letter 1. 11 November 2015 @ 7.02pm (page 293 of CBD 2) email from Jamilah Arifin of the Plaintiff to DW1 referring to a conversation between DW1 and PW2. Together with the email is a letter which the Plaintiff said the 2nd Defendant had requested which is said to be self-explanatory. 2. 11 November 2015 referred to as “Letter of Instruction” (page 295 of CBD 2) letter from Plaintiff to DW1 requesting/instructing the 2nd Defendant to handover the Equipment/CA to the Receiver appointed by the Plaintiff, Mr Baltasar bin Maskor of M/s Boardroom Advisory Sdn Bhd, on immediate basis 3. 11 November 2015 @ 10.41pm (page 296 of CBD 2) email from Krishna Akella to DW1 explaining the need for a letter (in the manner proposed by the 2nd Defendant in the said email) to be issued by the Plaintiff. Essentially such letter and other steps proposed to be taken is to enable the 2nd Defendant’s auditor to clear the 2nd Defendant’s books 4. 11 November 2015 @ 11.05pm (page 296 of CBD 2) email from DW1 to PW2 and Jamilah Arifin forwarding the email (item 3) from Krishna Akella to him 54 Item Date of letter/email Contents of email/letter 5. 13 November 2015 @ 8.54am (page 301 of CBD 2) email from DW1 to PW2 and Jamilah Arifin requesting Plaintiff to revise the Letter of Instruction so that proper documentation are in place to ensure the Equipment are properly handed over. DW1 repeated the same reasons stated in the email of Krishna Akella (item 3) as the basis for the revision 6. 13 November 2015 @ 10:49am (page 300 of CBD 2) email from Jamilah Arifin from the Plaintiff company to DW1 reminding the 2nd Defendant that the Letter of Instruction was prepared by the Plaintiff at the request of the 2nd Defendant. Thus the Plaintiff need to get legal advice before the said letter is revised. Plaintiff will revert to the 2nd Defendant after legal advice obtained 7. 13 November 2015 @12:13pm (page 300 of CBD 2) email from DW1 to Jamilah Arifin rejecting the Letter of Instruction as the auditor of the 2nd Defendant requires delivery receipt to be issued for the purpose of transferring ownership of the Equipment 8. 23 November 2015 @ 8.26pm (page 307 of CBD 2) email from DW1 to PW2 and Jamilah Arifin referring to discussion with regards to the handing over of the Equipment and attaching Invoice and Delivery Receipt which are required to transfer the ownership of the Equipment. The 2nd Defendant urged the Plaintiff to expedite the process and take possession of the Equipment. According to the 2nd Defendant the parties have had many lengthy conversations regarding the transfer, however the transfer has yet to take place. 9. 24 November 2015 @ 12.47pm (page 312 of CBD 2) email from Bradley See, the receiver appointed by the Plaintiff to DW1 referring to a discussion he had via an earlier telephone conversation with DW1 and requested from DW1 the necessary documentation to facilitate them as the receiver of the Plaintiff to act on the Plaintiff’s asset stored in the warehouse in PKFZ, Port Klang 10. 24 November 2015 @ 1.35pm (page 311 of CBD 2) email from DW1 replying to Bradley See’s email (item 9) explaining the position and informed the Receiver that D2 had already sent the necessary documentation to the Plaintiff 55 Item Date of letter/email Contents of email/letter 11. 2 December 2015 @ 3.17pm (page 314 of CBD 2) email from PW2 to DW1 asking DW1 to advise one Mr Parthiban to handover the Equipment to the Plaintiff 12. 2 December 2015 @ 4.38pm (page 313 of CBD 2) email from Krishna Akella of the 2nd Defendant to PW2 on suggesting, amomg others, the steps to be taken for purpose of handing over the Equipment. PW2 was requested to take possession of the Equipment at the earliest as the 2nd Defendant do not want the same to be in their books 13. 5 December 2015 @ 21:08 (page 316 of CBD 2) email from Krishna Akella to PW2 requesting the Plaintiff to release him as the Plaintiff’s legal rep in India. In the said email Krishna Akella had also referred PW2’s attention to his earlier email sent on 2 December 2015 to PW2 (item 12) 14. 7 December 2015 @ 8.59pm (page 316 of CBD 2) email from PW2 replying to Krishna Akella’s email informing that PW2 will try to manage the issue by that week 15. 9 December 2015 @ 11.02am (page 322, 323 of CBD 2) email from DW1 to PW2 requesting the Plaintiff to expedite the documentation process with regards to the handing over of the Equipment to the Plaintiff 16. 9 December 2015 @ 11.33am (page 322 of CBD 2) email from PW2 replying to DW1’s email (item 15) with a remark ‘Noted’ 17. 21 December 2015 @ 1.13pm (page 326 of CBD 2) email from DW1 to PW2 requesting the P to expedite the documentation process to hand over the Equipment from D2 to the Plaintiff with proper documentation and procedure 18. 8 January 2016 @ 3.40pm (page 335 of CBD 2) email from Krishna Akella to PW2, copied to DW1 stating parties have to resolve the handover issue, saying the more delay the more market value lose and requesting the Plaintiff to take over the Equipment as soon as possible. Krishna Akella asked PW2 to ask the Receiver to sign off the Delivery Receipt on behalf of the Plaintiff and to take control 19. 13 January 2016 @ 7.53pm (page 336 of CBD 2) email from DW1 to PW2 and Jamilah Arifin informing the Plaintiff that 2nd Defendant had been trying to contact PW2 for quite many days 56 Item Date of letter/email Contents of email/letter but no response from the Plaintiff either by phone or emails. DW1 requested Plaintiff to take actions on the handing over of the Equipment 20. 26 January 2016 @ 1.03am (page 338 of SBD 2) email from DW1 to PW2 and Jamilah Arifin attaching the Delivery Receipt (pursuant to discussion) 21. 28 January 2016 @ 9.43am (page 340 of CBD 2) email from Jamilah Arifin of the Plaintiff to DW1 seeking clarification and supporting documents about an invoice issued by a third party for remittance by the 2nd Defendant. DW1 was asked to provide justification for the invoice which is in respect of a job cancellation 22. 28 January 2016 @ 11.40am (page 340 of CBD 2) email from DW1 responding to Jamilah Arifin email (item 21) informing since the Plaintiff has decided to retain the Equipment at PKFZ instead of moving out to Skynet, the payment is in respect of cancellation of customs clearance for the Equipment to move out of PKFZ. DW1 also stated that all jobs were undertaken and executed upon the Plaintiff’s approval and prior notice. 23. 16 February 2016 @ 9.45am (page 334 of CBD 2) email from DW1 to Parthiban (copied to PW2 and Jamilah Arifin) requesting Parthiban to give full access to the STM 16 Telecom equipment stored at Parthiban’s PKFZ storage 24. February 2016 Plaintiff filed the Originating Summons against the 2nd Defendant [76] One particular instant which demonstrate the Plaintiff’s indifference was the Plaintiff’s silence response to an email dated 23 November 2015 from DW1 to PW2 (item 8 in the table above). In the said email the 2nd Defendant had attached the Invoice and Delivery Receipt for the Plaintiff’s action and urged the Plaintiff to expedite the 57 process of handing over so as to enable the Plaintiff to take possession of the Equipment. Such earnest request was apparent from DW1’s email, that is, even though there had been lengthy discussion in respect of the issue, the transfer of the Equipment has yet to finalized. However PW2 informed the court the Plaintiff did not reply to the said email – Dan akhirnya Defendan Kedua mengingatkan Plaintif “We urge you to expedite the process and take possession of the material. We had been having many lengthy conversation regarding the same but the transfer is not taking place”. They are asking you to expedite. Right? Now, adakah Plaintif, kamu, atau siapa-siapa dari Plaintif menjawab emel ini? Kamu telah terima emel ini. Did you reply to say “Oh, I’m not agreeable to invoice, deliver receipt. I don’t agree to what you suggested”. Ada apa-apa emel balas kepada ini? Reply sent by the Plaintif? Saya rasa tidak ada formal balasan. No. So there is no email reply? hmm [77] In his evidence in chief, DW1 testified that he had taken the following steps upon the arrival of the Equipment in Malaysia – Q18 What work did the 2nd Defendant undertake when the equipments reached Malaysia? 58 A: On the arrival of the Equipment to Port Klang, Malaysia, the 2nd Defendant notified the Plaintiff of the same and went about applying and securing the necessary approvals and documentations from Customs and SIRIM, Malaysia. The 2nd Defendant also made the arrangements for the Equipment to be stored in the Trade Free Zone pending the obtaining of the requisite approvals and documentations. [78] The 2nd Defendant denies that they had delayed in handing over the Equipment to the Plaintiff. The 2nd Defendant through DW1 explained – Q20 The Plaintiff alleges that the 2nd Defendant delayed in handing over the equipments after its arrival in Malaysia. What is your response to this? A I deny that the 2nd Defendant delayed in handing over the materials to the Plaintiff. The contemporaneous documents show that the 2nd Defendant was talking with the Plaintiff on a proper manner the equipments are to be handed over to them as the equipments when shipped to Malaysia was shipped under the 2nd Defendant’s name and all relevant permits were in the 2nd Defendant’s name. [79] The pleaded case of the Plaintiff is that the 2nd Defendant failed to hand over the Equipment immediately upon arrival of the same in Port Klang and that there was a delay of about 11 months to hand over the Equipment to the Receiver after the 2nd Defendant took possession of 59 the same. Based on the witnesses’ evidence it is my finding of fact that the 2nd Defendant did not fail, refuse or neglect to hand over the Equipment to the Plaintiff. [80] After taking possession of the Equipment in Port Klang on 3 July 2015, the evidence shows the 2nd Defendant had to take the necessary actions to get approval from the relevant regulatory authorities to ensure the importations and entry of the Equipment to Malaysia was in compliance with the law. The evidence adduced shows the parties were in the midst of discussing the proper manner of handing over the Equipment from the 2nd Defendant to the Plaintiff. This is in view of the fact that the Equipment were registered in the 2nd Defendant’s books so as to enable the 2nd Defendant to import the Equipment from India under their name. As such for purpose of handing over the Equipment to the Plaintiff the 2nd Defendant had suggested for the Plaintiff to ‘purchase’ the Equipment from the 2nd Defendant but at the same time the 2nd Defendant will waive payment of the said ‘purchase’. As a result of the ‘purchase’ the Plaintiff subsequently will issue a letter requesting the 2nd Defendant to hand over the Equipment to the Receiver (which turned out to be the Letter of Instruction). 60 [81] It is apparent from the exchange of emails between the 2nd Defendant and Plaintiff (see the chronology table above), there were discussions carried out between the parties as to the manner the Equipment were to be handed over by the 2nd Defendant to the Plaintiff. Even the Letter of Instruction (which the Plaintiff alleged as proof of their insistence to get the Equipment delivered to them) was issued at the request of the Plaintiff based on the discussion of both parties. As admitted by PW2, at the time the Letter of Instruction was issued the parties were in the midst of negotiation. Prior to the issuance of such letter (which is for a period of about 4 months after arrival of the Equipment) there is no evidence to show the Plaintiff had demanded for the delivery of the Equipment to them. Most crucially, the Plaintiff failed to adduce evidence to support their pleaded case that the Plaintiff had repeatedly demanded from the 2nd Defendant to hand over the Equipment to the Plaintiff immediately (see paragraph 23 and 28 of the Plaintiff’s Pernyataan Tuntutan and PW2’s evidence in chief at Question and Answer number 32). Based on the evidence, the reasonable explanation for the Plaintiff’s ‘silence’ is that the Plaintiff was very much aware of the various actions that is required to be carried out by the 2nd Defendant before the Equipment can be duly handed over to them. 61 [82] Based on the above, it is also my finding of fact there is no delay on the part of the 2nd Defendant. Delay, if any, ought to be attributed to the Plaintiff’s failure to respond promptly to the 2nd Defendant’s effort to expeditiously resolve the handing over process. Conclusion [83] Thus I am of the considered opinion that the Plaintiff has failed, on balance of probabilities, to prove that the 2nd Defendant has failed, refused or neglected to hand over the Equipment immediately after the arrival of the same into Malaysia. Thus the 2nd Defendant did not breached their duty as an agent and/or representative of the Plaintiff. Consequently the issue of the 2nd Defendant being liable to pay damages for such breach does not arise. Defendant’s counter claim the 4 March 2014 Agreement and lifting of the corporate veil [84] The Defendant is claiming for fees in relation to the works particularized at paragraphs 12.1 to 12.23 of the 2nd Defendant’s Pembelaan dan Tuntutan Balas (see paragraph 49 above). During 62 cross-examination of PW2, the Plaintiff confirmed that they are not disputing the facts that the works particularized in the Defendant’s pleading were carried out by the 2nd Defendant (see Notes of Proceedings on 5 October 2016 at pages 32 to 42). However it is the Plaintiff’s position that they are not liable to pay for the said works as all payments that is required to be paid to the 2nd Defendant had already been paid. [85] It is the Plaintiff’s submission that the agreement between the parties in regards to payment was that the 2nd Defendant will be paid on a success basis, namely, the Plaintiff will pay the 2nd Defendant a sum equivalent to 20% of the amount successfully recovered by the 2nd Defendant on behalf of the Plaintiff from the 1st Defendant and/or the Corporate Guarantor. Since the terms in respect of payment of fees was expressly agreed by the parties, there is therefore no room for implied terms to be read into the agreement between the parties. It is the Plaintiff’s contentions that pursuant to the agreement between the parties, the Plaintiff had paid to the 2nd Defendant for the following – (a) services and works done by the 2nd Defendant; (b) consultancy services; (c) valuation fee; 63 (d) travelling expenses; (e) out of pocket expenses; (f) expenses for the approval and certification by SIRIM; (g) warehouse storage expenses; (h) expenses for the transport of the Equipment from India to Malaysia; (i) custom duty; (j) port charges; (k) payment to Globe Tech to manage the delivery of the Equipment to Malaysia; [86] It is an undisputed fact that the 2nd Defendant had successfully recovered partially from the Corporate Guarantor the sum outstanding under the Facility. The said sum recovered being INR3,28,20,000 was credited into the Plaintiff’s account. The Defendant then issued an invoice dated 8 March 2013 claiming the sum of RM400,000.00 being the fee payable to them for the partial recovery of RM2,000,000.00. It is the Plaintiff’s submission that the fee claimed by the 2nd Defendant as stated in the invoice dated 8 March 2013 is evident of the parties agreement that the 2nd Defendant will be paid 20% of the amount successfully recovered by them. However the actual sum paid by the Plaintiff was RM337,059.24. This is after taking into account 64 INR3,28,20,000 that was recovered was in Indian Rupee and it is therefore subject to the prevailing foreign currency exchange rate. PW2 explained – PC Now berikan penjelasan kepada Mahkamah mengapa apa yang dibayar oleh Plaintif hanya 337,059.24 dan bukannya 400,000 seperti yang dituntut? MDV tidak membayar 400,000 kepada Defendan Kedua kerana jumlah yang diterima hmm tidak hmm ok, kami tidak membayar sebanyak 400,000 yang as per the invoice disebabkan oleh currency apa ni hmm disebabkan oleh difference in currency exchange lah. Maknanya hmm dalam invois yang dikeluarkan oleh Fi-Mesh 400,000 dalam Malaysian Ringgit jadi apa yang kami receive ialah dalam Indian Rupee. Jadi, disebabkan oleh kekurangan pada foreign exchange tu, figure dia akan menjadi lebih rendah. So itulah sebab… PC Jadi jumlah yang dikreditkan ke dalam akaun pihak Plaintif adalah in Indian Rupees which is subject to conversion rate. Yes. [87] During cross-examination DW1admitted that the invoice issued by the 2nd Defendant for payment of their fees in the sum RM400,000.00 was on the basis that they had recovered RM2,000,000.00 which is an estimated amount because the amount recovered by the 2nd Defendant 65 was in Indian Rupee. In this respect PW2 testified that the 2nd Defendant had never complained of being under paid. [88] Besides relying on the invoice issued by the 2nd Defendant to support their contention, the Plaintiff also relied on an agreement dated 4 March 2014 Agreement executed between the Plaintiff and a company registered under Indian law known as Fi-Mesh Network Pvt Ltd (Fi-Mesh India). Pursuant to the said Agreement Fi-Mesh India was appointed by the Plaintiff to undertake recovery of the monies outstanding under the Facility against the 1st Defendant and/or the Corporate Guarantor. The term of the said agreement which was relied on by the Plaintiff is clause 12 which states that the fee payable to Fi-Mesh India is 20% of the total amount recovered. [89] Fi-Mesh India is the holding company of the 2nd Defendant. The 4 March 2014 Agreement was signed by DW1 in his capacity as a director of Fi-Mesh India and witnessed by DW1’s wife, Siti Radziah binti Abdullah. DW1, his wife and Krishna Akella are directors and shareholders of the 2nd Defendant (the corporate information of the 2nd Defendant company appears at page 210 – 215 of CBD 1). DW1 confirmed during cross-examination that the 2nd Defendant and Fi-Mesh India are represented by him and his business partner, Krishna Akella. 66 [90] The Plaintiff submits even though the 2nd Defendant and Fi-Mesh India are different entity, DW1 has been using both the 2nd Defendant and Fi-Mesh India interchangeably as a single economic entity when dealing with the Plaintiff. Therefore it is the Plaintiff contentions that the circumstances demands and justifies the piercing of the corporate veil of the 2nd Defendant and Fi-Mesh India and to hold that the 4 March 2014 Agreement, in particular clause 12 is binding on the 2nd Defendant. [91] The 2nd Defendant object to the admissibility of the 4 March 2014 Agreement on the following grounds – (a) the Agreement dated 4 March 2014 was not pleaded by the Plaintiff in their pleadings (b) the Plaintiff had never pleaded that the fee payable at 20% to the 2nd Defendant is premised on clause 12 of the Agreement dated 4 March 2014 (c) lifting of the corporate veil was never pleaded by the Plaintiff. [92] My perusal of the Plaintiff’s pleadings confirm that the facts relating to the 4 March 2014 Agreement was never pleaded by the Plaintiff. Of significance is the reliance on clause 12(a) of 4 March 2015 67 the Agreement which was never pleaded. The said clause provides as follows – 12. Fees and Out-of-Pocket Expenses Parties shall agree on the fee and expenses as stipulated below:- a) The fee payable to Fi-Mesh in Malaysian Ringgit is Twenty percent (20%) of the total amount recovered (before tax) less any foreign exchange differences (“Fi-Mesh Fee”) which is credited into MDV’s bank account either in Malaysia or India (“MDV’s bank account”). The F-Mesh fee is to be paid within 30 days of written confirmation of receipt of the amount credited into MDV’s bank account provided that there is no restrictions imposed by relevant regulatory bodies on the transfer of monies recovered to MDV’s bank account in Malaysia. b) Save and except where it has been previously disclosed to and expressly agreed upon in writing by MDV, Fi-Mesh is only entitled to the out-of-pocket expenses of up to the amount equivalent to Ringgit Malaysia 100,000.00 only throughout the whole Term of this Agreement. Fi-Mesh shall NOT create or incur out-of-pocket expenses such as travelling, transportation and other related expenses without the prior written consent of MDV. c) In addition to items for 12(a) and 12(b) above, on a periodic basis save and except where it has been previously disclosed to and expressly agreed upon in writing by MDV, Fi-Mesh shall brought forward to MDV all out-of-pocket expenses (in a lump sum) with the original receipts produced for the purpose of reimbursement by MDV. All payments for fee and incidental charges shall be made in Ringgit Malaysia. … 68 [93] In its written submission the Plaintiff argue that it had complied with Order 18 rule 7 of the Rules of Court 2012 (RoC 2012) which requires the Plaintiff to plead a skeletal statement of material facts sufficient to identify the matters complained of and to enable the Plaintiff to establish its case at the trial based on what it pleads. The said provision provides as follows – 7. Facts, not evidence, to be pleaded (O. 18 r. 7) (1) Subject to the provisions of this rule and rules 10, 11 and 12, every pleading shall contain, and contain only, a statement in a summary form of the material facts on which the party pleading relies for his claim or defence, as the case may be, but not the evidence by which those facts are to be proved, and the statement shall be as brief as the nature of the case admits. (2) Without prejudice to paragraph (1), the effect of any document or the purport of any conversation referred to in the pleading shall, if material, be briefly stated, and the precise words of the document or conversation shall not be stated, except in so far as those words are themselves material. (3) A party need not plead any fact if it is presumed by law to be true or the burden of disproving it lies on the other party, unless the other party has specifically denied it in his pleading. (4) A statement that a thing has been done or that an event has occurred, being a thing or event the doing or occurrence of which, as the case may be, constitutes a condition precedent necessary for the case of a party is to be implied in his pleading. 69 [94] The Plaintiff submits that they have pleaded sufficient fact to identify the matter pertaining to the agreement reached between the Plaintiff and the 2nd Defendant with regard to the agreed term of payment as required by O18 r 7 of the Rules of Court 2012. The facts which the Plaintiff claims to be material and sufficient is said to be found at paragraph 17.2 of the Plaintiff’s Jawapan Kepada Pembelaan Defendan Kedua dan Pembelaan Kepada Tuntutan Balas Defendan Kedua dated 15 August 2016, where the Plaintiff pleaded as follows:- Plaintif mengatakan bahawa pada semua masa yang material, Defendan Kedua yang bertindak sebagai agen kepada Plaintif telah bersetuju dan mempunyai pengetahuan penuh bahawa Defendan Kedua hanya berhak untuk mendapat pembayaran fi/yuran sekiranya Defendan Kedua berjaya di dalam membantu Plaintif untuk memperolehi semula (“recover”) wang yang terhutang daripada Defendan Pertama. [95] Taking into consideration the provisions in the RoC 2012, the Plaintiff’s pleadings and the authorities cited by the Plaintiff (Dato’ Gopal Sri Ram v Dato’ C Vijaya Kumar & Ors [2006] 6 MLJ 328; Hadi bin Hassan v Suria Records Sdn Bhd & Ors [2005] 3 MLJ 522) I am not able to agree with the Plaintiff’s contentions (that they have pleaded material and sufficient facts in relation to the 4 March 2014 Agreement) for the following reasons – 70 (a) the 4 March 2014 Agreement is material as the Plaintiff’s defence to the 2nd Defendant’s counter claim rests substantially on the said agreement which the Plaintiff claim to be binding upon the 2nd Defendant. Thus the Plaintiff’s defence is premised on the provision of a contract purportedly executed by DW1 and the Plaintiff. In this respect reference is made to Janab’s Key to Civil Procedure Combined Rules (The Rules of Court 2012 Annexed) 5th Edition by Datuk Dr. Hj. Hamid Sultan Bin Abu Backer, where it is stated at page 232 – Facts necessary for the enforcement of a legal right or duty must be mentioned. Thus in an action for breach of contract the terms of the contract and the breach thereof by the defendant have to be stated specifically In the instant case, since the Plaintiff intended to enforce clause 12 of the 4 March 2014 Agreement against the 2nd Defendant, the Plaintiff ought to have pleaded the facts relating to the said Agreement and in particular clause 12. As can be seen from paragraph 17.2 of the Plaintiff’s Jawapan Kepada Pembelaan Defendan Kedua dan Pembelaan Kepada Tuntutan Balas Defendan Kedua the 14 March 2014 Agreement was not pleaded, what more the 71 vital provision clause 12 which provides for the manner how payment is to be made which is alleged to be binding on the 2nd Defendant. Granted the law does not require the Plaintiff to plead evidence (which in this case would be the 4 March 2014 Agreement) but the law does requires sufficient material facts relied upon to be pleaded. As the Plaintiff failed to plead material and sufficient facts pertaining to the 14 March 2014 Agreement, this court is not entitle to consider the said agreement. This court is only duty bound to consider the material facts disclosed in the pleadings for purpose of adjudicating the dispute between Plaintiff and 2nd Defendant (Projek Lebuh Raya Utara-Selatan Sdn Bhd v Kim Seng Enterprise (Kedah) Sdn Bhd [2013] 5 MLJ 360). (b) in its attempt to introduce the 4 March 2014 Agreement, the Plaintiff relies on the doctrine of lifting the corporate. However the Plaintiff’s Jawapan Kepada Pembelaan Defendan Kedua dan Pembelaan Kepada Tuntutan Balas Defendan Kedua did not specifically or expressly pleaded 72 the words “lifting the corporate veil”. Most crucially, the material facts upon which the Plaintiff argued as justifying the lifting of the corporate veil was not pleaded at all. With regards to the law on the lifting of corporate veil the Federal Court in Gurbachan Singh s/o Bagawan Singh & Ors v. Vellasamy s/o Pennusamy & Ors (on their behalf and for the 213 sub-purchasers of plots of land known as PN35553, Lot 9108, Mukim Hutan Melintang, Hilir Perak) and other appeals [2015] 1 CLJ 719; [2015] 1 MLJ 773 held – [96] … it is now a settled law in Malaysia that the court would lift the corporate veil of a corporation if such corporation was set up for fraudulent purposes, or where it was established to avoid an existing obligation or even to prevent the abuse of a corporate legal personality (see Prest v. Petrodel Resources Limited and others [2013] UKSC 34) It is evident from the Plaintiff’s pleadings that the Plaintiff’s case is not premised on any of the grounds laid in the case of Gurbachan Singh s/o Bagawan Singh to justify lifting of the 2nd Defendant’s corporate veil. In Giga Engineering & Construction Sdn Bhd v. Yip Chee Seng & Sons Sdn Bhd & Anor [2015] 9 CLJ 537; [2015] 6 73 MLJ 449 the Federal Court explicitly emphasised particulars of actual or equitable fraud must be specifically pleaded in order for the veil of incorporation to be lifted. The Federal Court held the particulars in the plaintiff’s statement of claim were insufficient to support a plea of actual or equitable fraud and therefore there was no justification for the lifting of the corporate veil. In the present case, the Plaintiff’s Jawapan Kepada Pembelaan Defendan Kedua dan Pembelaan Kepada Tuntutan Balas Defendan Kedua did not plead material facts in relation to the relationship between the 2nd Defendant and Fi-Mesh India as a single entity. In fact the name “Fi-Mesh INetwork Pte Ltd” did not appear at all in the Plaintiff’s pleadings. The position in Giga Engineering & Construction Sdn Bhd is similar as in the present case. This can be seen from the following passage of the Federal Court judgment which was quoted by learned counsel for the 2nd Defendant in his written submission – [36] It is also not pleaded that in the scheme of things the defendants and the third defendant were under the dominant control of Yip Kok Weng. There was also no allegation in the amended statement of claim of fraud or equitable fraud or misrepresentation practised by the defendants upon the 74 plaintiff during the discussion in the preparation of quotation or tender documents for the project. [37] Yet in his submission learned counsel for the plaintiff urged us, inter alia, to consider lifting the corporate veil of the defendants. Unfortunately, we find nothing in the amended statement of claim that alleged the defendants committed fraud, actual or equitable fraud upon the plaintiff. There was also no allegation that the defendants misled the plaintiff. … [42] Now, it is trite law that the plaintiff is bound by its own pleadings. (See R Rama Chandran v. Industrial Court of Malaysia & Anor [1997] 1 CLJ 147; [1997] 1 MLJ 145; Anjalai Ammal & Anor v. Abdul Kareem [1968] 1 LNS 8; [1969] 1 MLJ 22; Gimstern Corp (M) Sdn Bhd & Anor v. Global Insurance Co Sdn Bhd [1987] 1 CLJ 123; [1987] CLJ (Rep) 102; [1987] 1 MLJ 302 SC; Joo Chin Kia v. Loh Seng Tek [1987] 1 CLJ 194; [1987] CLJ (Rep) 662; KEP Mohamed Ali v. KEP Mohamad Ismail [1980] 1 LNS 169; [1981] 2 MLJ 10 FC). The plaintiff is not permitted to improve its pleading in any other manner other than by way of an application to amend. Otherwise it would be unfair and prejudicial to the defendants if the plaintiff could now be allowed to raise an issue that was not within the contemplation of the parties in the first place. (See Esso Petroleum Co Ltd v. South Port Corp [1956] AC 218; Playing Cards (Malaysia) Sdn Bhd v. China Mutual Navigation Co Ltd [1980] 1 LNS 57; [1980] 2 MLJ 182 FC). [43] Learned counsel for the plaintiff urged us to lift the veil of incorporation of the defendants in order to do justice. Learned counsel submitted that only by doing so would 75 unmask DW1, that is Yip Kok Weng, to be the real actor behind the scheme. [44] With respect, we are in agreement with the finding of the Court of Appeal that the plaintiff did not adduce any evidence of fraud, actual or equitable, or of any special circumstances that would have justified the lifting the veil of incorporation of the defendants. [45] It is settled law that 'there must be evidence either of actual fraud or some conduct amounting to fraud in equity to justify the lifting of corporate veil'. (See Solid Investments Ltd v. Alcatel Lucent (Malaysia) Sdn Bhd [2014] 3 CLJ 73). Further, in a plea of fraud mere allegations is not sufficient. There must be particulars given. (See Lee Kim Luang v. Lee Shiah Yee [1988] 1 CLJ 619; [1988] 1 CLJ (Rep) 717; [1988] 1 MLJ 193). In light of the Plaintiff’s failure to plead material facts which may justify the lifting of the corporate veil Plaintiff is therefore precluded from relying on the said doctrine. (c) the Plaintiff relies on Order 18 rule 12(3) of the RoC 2012 and submits that the 2nd Defendant could have applied for further and better particulars from the Plaintiff when the Plaintiff served their Jawapan Kepada Pembelaan Defendan Kedua dan Pembelaan Kepada Tuntutan Balas Defendan Kedua was served on the 2nd Defendant. It is 76 the Plaintiff’s contentions that the 2nd Defendant is estopped from objecting the admissibility of the 4 March 2015 Agreement because they failed to apply for particulars of the said Agreement. With respect, I am not able to agree with the Plaintiff’s contentions on the following grounds – (i) in Janab’s Key to Civil Procedure 5th Edition, at page 229, it is stated by the learned author - The objects of pleadings are as follows – (a) to define with clarity and precision the issues in dispute (see Thorp v Holdsworth (1876) 3 Ch. D. 637); (b) to require each party to give fair and proper notice to his opponent, in order to enable him to prepare his case (see Esso Petroleum Co. Ltd. V South Port Corporation (1956) AC 218); (c) to inform the court the issues, which are, required to be determined by the court (see Blay v Pollard (1930) 1 KB 628 Based on the aforesaid it is therefore incumbent upon the Plaintiff to lay its cards on the table (including the fact in relation to the 4 March 2014 Agreement) for purpose of notifying the 2nd Defendant (and the court too) the relevant facts it is relying upon and the issues arising from the facts pleaded. As such it is untenable for the Plaintiff to fault the 77 2nd Defendant for not asking for particulars in respect of facts which the Plaintiff had failed to plead in the first place. (d) the Plaintiff also argued the 2nd Defendant is estopped from objecting the admissibility of the 4 March 2014 Agreement and clause 12(a) thereto because the 2nd Defendant did not object the admissibility of the said Agreement when the same was included in the Common Bundle of Document in Part B. I find this argument untenable too. It is obvious the Plaintiff had every intention to rely on the said Agreement yet the Plaintiff chose (for reasons best known to them) not to plead the existence of the said Agreement in its pleading. Instead, the Plaintiff chose to include the said Agreement in the Common Bundle of Documents to be adduced as evidence which is after the close of pleadings. The Plaintiff could have applied for their pleadings to be amended but this was not done. Whether such an act is deliberate or an afterthought, it proves detrimental to them. Even though the inclusion of the 4 March 2014 Agreement was not objected to by the 2nd Defendant, it does not mean the said Agreement is admissible. In this respect reference is made to the case of CGU Insurance Bhd v Asean 78 Security Paper Mills Sdn Bhd [2006] 3 MLJ 1 CA where the Court of Appeal held – [48] … Even in civil cases, inadmissible evidence remains inadmissible absent any objection. In Malaysia National Insurance Sdn Bhd v Malaysia Rubber Development Corporation [1986] 2 MLJ 124, Lee Hun Hoe CJ (Borneo) said: Objection should have been taken to the evidence of DW1. Hearsay evidence which ought to have been rejected does not become admissible merely because no objection was taken earlier. The authorities are clear on this. Perhaps, it is only necessary to cite Sarkar, Law of Evidence, (13th Ed) at p 51 which reads: An erroneous omission to object to evidence not admissible or relevant under the Act does not make it admissible. It is the duty of the court to exclude all irrelevant or inadmissible evidence even if no objection is taken to its admissibility by the parties ... [96] As the Plaintiff is precluded from raising the 14 March 2014 Agreement, this court is not obliged to consider the said agreement and the testimony of witnesses in relation to 4 March 2018 Agreement. Thus Plaintiff’s argument that the said agreement and clause 12 thereto is binding on the 2nd Defendant must fail. Accordingly it is my finding of fact that there is no express term which governs the terms of payment between the Plaintiff and the 2nd Defendant in respect of the works done 79 by the 2nd Defendant. Under the circumstances the authorities cited by the Plaintiff (Aneka Melor Sdn Bhd v Seri Sabco (M) Sdn Bhd & Another Appeal [2016] 2 CLJ 563; Bentall, Horsley and Baldry v Vicary [1931] 1 K.B. 253) which relate to express provision in an agreement are irrelevant. whether the Plaintiff is liable to pay to the 2nd Defendant fee for works done by the 2nd Defendant as stated in paragraphs 12.1 to 12.23 of the 2nd Defendant’s Pembelaan dan Tuntutan Balas in addition to all the payments that have been made by the Plaintiff to the 2nd Defendant whether the 2nd Defendant is entitled to demand for fees from the Plaintiff for work done by the 2nd Defendant as stated in paragraphs 12.1 to 12.23 of the 2nd Defendant’s Pembelaan dan Tuntutan Balas in addition to all the payments that have been made by the Plaintiff to the 2nd Defendant if the answers to the above are in the affirmative, what is the quantum or total fees to be paid by the Plaintiff to the 2nd Defendant [97] PW2 testified that the 2nd Defendant was appointed by the Plaintiff since 2011 pursuant to a project proposal dated 18 June 2011 (page 1 – 9 of CBD 2) prepared by the 2nd Defendant titled Recovery and Asset Sale of Ordyn Malaysia Sdn Bhd Project for Malaysia Debt Venture, Malaysia (Project Proposal). The Project Proposal was 80 referred to PW2 during cross and re-examination. In the Executive Summary of the Project Proposal, it is stated that the said proposal “is sequel and result of many discussions with MDV officers… Fi-Mesh Networks Sdn Bhd extends its co-operation to MDV and help in acquiring assets of STM16 from Ordyn Technologies Sdn Bhd”. PW2 confirmed (Notes of Proceedings on 5 October 2016 at page 125 – 126) the scope of the 2nd Defendant’s services as stated in paragraph 4 Roadmap of the Project Proposal includes procuring the transfer of the assets STM16 to the 1st Defendant, hand over the assets to the Plaintiff for purpose of disposal, help the Plaintiff to find suitable buyer for the assets and participate in the negotiations with potential buyer of the assets. [98] PW2 eventually confirmed there is no documentary evidence in respect of the appointment of the 2nd Defendant and the terms of appointment. Nevertheless it is not disputed that the Plaintiff appointed the 2nd Defendant to be their agent and/or authorised representative in relation to the recovery of the assets and monies due and owing under the Facility by the 1st Defendant and the Corporate Guarantor to the Plaintiff. 81 [99] In 2012, the 2nd Defendant recovered a sum of RM2,000,000.00 being a partial amount of the monies due to the Plaintiff under the Facility Agreement. The recovery amount of RM2,000,000.00 and the hard work of the 2nd Defendant was duly acknowledged and admitted by the Plaintiff through PW1’s email to the 2nd Defendant dated 22 June 2012 which reads as follows – Dear Krishna, Shahbaz MDV wish to congratulate you for successfully recover our RM2m from Ordyn. Finally all the hardship for almost a year has borne fruit. We hope that you will continue the hard work and bring back more MDV’s money. [100] The 2nd Defendant issued an invoice dated 8 March 2013 (page 242 of CBD 2) claiming RM400,000.00 in consideration of the recovery of the RM2,000,000.00 and was paid a total sum of RM RM337,059.24 in the following manner – (a) consultancy fee in the sum of RM174,319.55 (Plaintiff’s payment voucher dated 23 April 2013 at page 228 of CBD 1); and (b) consultancy fee in the sum of RM162,739.69 (Plaintiff’s payment voucher dated 5 June 2013 at page page 229 of CBD 1) 82 It is to be noted in both the payment vouchers issued by the Plaintiff for the payment of the consultancy fees, under the column description the following caption appears – Being payment for :- Consultancy fee – 50% of fees pursuant to the Agreement dated 20/9/2011 … However no evidence was led in respect of the “Agreement dated 20/9/2011”. [101] Besides the above consultancy fee, the Plaintiff had also made the following payments to the 2nd Defendant either for services personally rendered by the 2nd Defendant and payment to third party for services procured by the 2nd Defendant in their capacity as the Plaintiff’s agent and/or authorised representative – (a) valuation fee in the sum RM8,000.00 (Plaintiff’s payment voucher dated 23 July 2014 at page 233 – 234 of CBD 1) (b) travelling expenses and out of pocket expenses in the sum RM121,300.00 (Plaintiff’s payment voucher dated 23 July 2014 at page 235 - 236 of CBD 1) 83 (c) travelling expenses, expenses for the approval and certification by SIRIM, registration fee and warehouse storage expenses in the sum of RM14,327.02 (Plaintiff’s payment voucher dated 23 September 2014 at page 237 - 238 of CBD 1) (d) travelling expenses to coordinate the shipping of the Equipment in the sum RM27,798.00 (Plaintiff’s payment voucher dated 26 December 2014 at page 239 – 240 of CBD 1) (e) SIRIM approval documentation, custom duty tax in the sum of RM21,865.40 (Plaintiff’s payment voucher dated 2 July 2015 at page 241 – 242 of CBD 1) (f) payment to Globe Tech to manage the delivery of the Equipment to Malaysia in the sum of RM41,300.00 (Plaintiff’s payment voucher dated 12 August 2015 at page 243 – 244 of CBD 1). [102] Looking at the above payments, a significant point to note is that none of the above payment is for professional fee claim by the 2nd Defendant for the recovery of the Equipment even though it was never an issue that the 2nd Defendant was appointed by the Plaintiff to recover the Equipment, bring it back to Malaysia and hand it over to the Plaintiff. 84 The task to recover the Equipment is actually part of the scope of the service stated in the Project Proposal dated 18 June 2011. The Plaintiff had unequivocally admitted that the 2nd Defendant had carried out the works listed at paragraph 12.1 to 12.23 Pembelaan dan Tuntutan Balas and had willingly paid the 2nd Defendant for the works done. [103] In this respect it is pertinent to note that the said works carried out and completed by the 2nd Defendant were essential for the recovery of the Equipment in India followed by the transportation of the same to Malaysia and eventually delivery of the same to the Plaintiff. Based on the testimony of the witnesses it is my finding of fact that it requires the 2nd Defendant’s hard work, effort and expertise to recover the Equipment. The hard work culminated in the execution of the Memorandum of Understanding where the Equipment was eventually handed over to the Plaintiff for their disposal. [104] If the Plaintiff is willing to pay for the works done (see paragraph 49) surely it goes without saying that the Plaintiff is also expected to pay for the 2nd Defendant’s effort, time and expertise in procuring the Equipment. After all the evidence shows, from PW2’s testimony during re-examination (Notes of Proceedings on 5 October 2016 pages 129 to 130), the Plaintiff relied substantially on the advice given by the 2nd 85 Defendant in relation to the necessary steps to be taken in order to recover the Equipment. To deny the 2nd Defendant of their fee would constitute unjust enrichment for the Plaintiff to recover the Equipment without paying the 2nd Defendant’s professional fee for the works done. [105] Accordingly it is my considered view that it was the intention of the parties that the 2nd Defendant is to be paid by the Plaintiff for professional fees in securing and delivering the Equipment to the Plaintiff. On the evidence adduced the 2nd Defendant has proven on balance of probabilities that the Plaintiff is liable to pay for the professional fees demanded by the 2nd Defendant in addition to the other payments that had been made by the Plaintiff. For purpose of determining the fee, this court directed for an assessment to be conducted. Assessment of professional fees [106] In their affidavit for the purpose of assessing the professional fees, the 2nd Defendant submits – (a) they are entitled to be paid 17 to 18% of the market value of the Equipment at the time when the 2nd Defendant 86 successfully recovered the Equipment from VMC System Limited in May/June 2015. The Plaintiff had appointed a valuer by the name Uday Baskar Rao Abburu (Uday Baskar) to evaluate the market value of the Equipment. The said Uday Baskar had prepared a valuation report and based on the said report the value of the Equipment was assessed at INR25,06,32,738.38 (which the 2nd Defendant said to be approximately RM11,000,000.00) and this value was incorporated in the Memorandum of Agreement. The value stated in the said Memorandum is binding on the Plaintiff since they had insisted the value of the Equipment to be incorporated in the said Memorandum, vetted, approved and signed the same (see exchange of emails between the Plaintiff and 2nd Defendant in Exhibit SA-1 Enclosure 59). The 2nd Defendant therefore claim 17% of RM11,000,000.00 which is RM1,870,000.00 as professional fees liable to be paid by the Plaintiff for the works done. (b) in relying on the value of the Equipment as stated in the Memorandum of Understanding, the 2nd Defendant stressed they are not relying on the valuation report 87 prepared by Uday Bashkar but on the value of the Equipment as stated in the Memorandum of Understanding. (c) the 2nd Defendant’s claim is just and reasonable. This is because a ‘Global Debt Recovery’ company would normally claim payment of 30% to 38% of the value of goods or monies recovered. The 2nd Defendant contends they are a ‘Global Debt Recovery’ company which carry out works and services similar to that of a ‘Global Debt Recovery’ company. To support such contention, the 2nd Defendant attached a ‘Profile’ and ‘Subscription Agreement’ of a company known as Equitasasia Sdn Bhd which is said to be an international debt recovery company. [107] In resisting the 2nd Defendant’s claim of RM1,870,000.00 as professional fees, the Plaintiff contends – (a) the valuation report furnished by the 2nd Defendant in their affidavit is inadmissible as the court had earlier ruled that Uday Baskar is not an expert. As such the 2nd Defendant’s claim that the market value of the Equipment as 88 RM11,000,000.00 is without basis as it is not supported by any evidence. (b) even if the 2nd Defendant is entitled to payment, the court ought to adopt the valuation report prepared by the Plaintiff’s witness PW3 who was appointed by the Receiver as an independent professional valuer. PW3 was called as a witness to tender his report in respect of the value of the Equipment. In his report dated 10 October 2016 (CBD 3/Exhibit EH-3 to Enclosure 62) PW3 opined the market value and forced sale value of the Equipment in its existing physical condition is RM452,000.00 and RM227,000.00 respectively. Since the 2nd Defendant failed to adduce expert evidence to challenge PW3’s valuation report, PW3’s valuation report is the conclusive evidence in respect the market value of the Equipment. (c) the Receiver had carried out two tender exercises for purpose of disposing the Equipment. The first tender exercise was aborted by the Receiver as the price offered by two bidders who participated had in the tender were low (RM159,588.00 and RM103,000.00). In the second tender 89 exercise, three bidders participated and the offer price were RM72,880.00, RM161,558.00 and RM110,000.00. The Receiver accepted the highest offer of the two tender exercises, which is RM161,558.00 and sold the Equipment at the said price. As such the Plaintiff submits RM161,558.00 is the true and fair value of the Equipment as it is the true reflection of the market value of the Equipment which was determined on a willing to pay and sell in an open market and at arm’s length. (d) the Exhibit SA-3 relied upon by the 2nd Defendant is not relevant as it relate to debt recovery services by a debt recovery agent. In addition to that, the terms of payment for the debt recovery services is based on the total amount of debt successfully recovered by the debt recovery agent. Whereas in the instant case, the 2nd Defendant is claiming payment for services rendered in bringing back the Equipment from India to be handed over to the Plaintiff. (e) since the 2nd Defendant failed to adduce evidence to prove the amount of damages that it is entitled to receive, the 2nd Defendant is only entitled to receive nominal damages. 90 Findings of Court [108] As stated above it is my finding that the 2nd Defendant had, on balance of probabilities, proved that the Plaintiff is liable to pay and the 2nd Defendant is entitled to be paid professional fees for the work done as set out in the 2nd Defendant’s Pembelaan dan Tuntutan Balas. In so far as the quantum is concerned, I am of the view the legal principle applicable to assessment of damages is also applicable for purpose of assessing the quantum of fee in the instant case. This is due to the fact that the purpose of determining the fees is to put the 2nd Defendant in the same position they would have been in if they had not been deprived of the fees which they are now entitled to (Subramaniam Paramasivam & Ors V. Malaysian Airline System Bhd [2002] 1 CLJ 230). The burden is therefore on the 2nd Defendant to prove the quantum (Tan Geok Khoon & Gerard Francis Robless v Paya Terubong Estate Sdn Bhd [1988] 2 MLJ 672). At the same time, the 2nd Defendant is not allowed to profit from the quantum of fees to be paid by the Plaintiff (Tan Sri Khoo Teck Puat v. Plenitute Holdings Sdn Bhd [1994] 3 MLJ 777). In the event the 2nd Defendant fails to prove the quantum they may only be entitle to nominal sum (LGB Engineering Sdn Bhd v. Saiful Rais Shaiks Salim & Ors [2014] 1 LNS 1383; [2015] 9 MLJ 349). 91 [109] It is to be noted that the 2nd Defendant in their written submission at the end of the full trial had argued that they are entitled to be paid the professional fees for the Works Done based on quantum meruit. However as evident from the 2nd Defendant’s pleadings, the 2nd Defendant’s counter claim for professional fee is premised on an implied term to be paid the same (see paragraph 31 of the 2nd Defendant’s Pembelaan dan Tuntutan Balas). Since quantum meruit is not pleaded, based on the principles of pleadings discussed above the 2nd Defendant is estopped from relying on quantum meruit as the basis of the 2nd Defendant’s counter claim. [110] Even if the 2nd Defendant is not precluded from relying on quantum meruit as the basis of their claim, it is my view that the 2nd Defendant has failed to prove that they are entitled to be paid the sum of RM1,870,000.00 as professional fees for the works done. My reasons are stated below. [111] In support of its claim for professional fees on quantum meruit the 2nd Defendant cited the case Syarikat Binaan Utara Jaya (a firm) v Koperasi Serbaguna Sungai Glugor Bhd [2009] 2 MLJ 546 where the Court of Appeal said – 92 [44] It must be borne in mind that when the appellant contractor is seeking a quantum meruit it is seeking not a precise sum of money nor a sum representing the general damages incurred by the appellant contractor as a result of some wrongful act on the part of the respondent employer. Rather the appellant contractor is seeking a sum that will provide the appellant contractor with the value of what the appellant contractor has done for the respondent employer. And this is usually calculated by reference to the market price or value of the services (see JW Carter, Ineffective Transactions, in PD Finn, ed, Essays on Restitution (North Ryde, NSWThe Law Book Company Limited 1990, 206 at pp 235-240)). (emphasis added) [112] The 2nd Defendant’s claim for the professional fees is 17% of RM11,000,000.00 which the 2nd Defendant alleged as the market value of the Equipment. To support their position the 2nd Defendant furnished Exhibit SA-2 which appears to provide information of a company known as Equitasasia Sdn Bhd which offers recovery debt services to its local and international client. In consideration of providing the services, Equitasasia charges subscription fee in the following manner – PACKAGES DURATION AGE OF INVOICE LOCAL INTERNATIONAL A@RM1200 24 Months less than 365 days 365 days and above 18% 28% 30% 38% B@RM800 12 Months less than 365 days 365 days and above 21% 31% 32% 40% 93 The 2nd Defendant submits they are not claiming 30% to 38% of the market price or value of the services it has rendered to the Plaintiff but 17% of the market value of the Equipment. As such they submit their claim is just and reasonable. [113] Although what the 2nd Defendant is claiming appears to be lower than what the 2nd Defendant claim to be ‘normal’ in the industry of debt recovery services, I am of the view the 2nd Defendant’s reliance on the fee imposed by Equitasasia is not justified for the following reasons – (a) the services rendered by Equitasasia is collecting and recovering debt due and owing to its client whereas the 2nd Defendant’s services is recovering goods/item of the Plaintiff, that is, the Equipment. It is doubtful whether the formula as set out in the table is applicable to recovery of Equipment like in the instant case. Moreover if one were to see the table reproduced, certain criteria like duration and age of invoice are taken into consideration in determining the fee. However it is not shown that such criteria is also applicable to recovery of the Equipment like in the instant case. 94 (b) there is no evidence to support the 2nd Defendant’s contentions that the fee of 30% to 38% or 17% of the market price is the fee which is the normal fee and/or generally accepted in the industry of debt recovery services. Merely producing the fee imposed by one debt recovery agency cannot be construed as the normal fee imposed in the said industry. (c) the fact that the 2nd Defendant is not claiming 30% to 38% but a much lower rate of 17%, does not necessarily mean the court ought to accept the lower rate claimed as justifiable. This is especially so in light of the different nature of services provided by Equitasasia Sdn Bhd (recovery of debt) and the 2nd Defendant (recovery of Equipment). [114] In determining the fair price to be paid, the 2nd Defendant submits the court ought to take into consideration the past conduct of the Plaintiff (Teras Kimia Sdn Bhd v Kerajaan Malaysia [2014] 7 MLJ 534). When the 2nd Defendant recovered RM2,000,000.00 from the Corporate Guarantor the Plaintiff had paid RM337,059.24 to the 2nd Defendant. The sum RM337,059.24 is approximately 15% to 18% of 95 RM2,000,000.00. Thus the 2nd Defendant ought to be paid RM1,870,000.00 which is 17% of RM11,000,000.00 being the market value of the Equipment. [115] With regards to the market value of the Equipment, I am in agreement with the Plaintiff that there is no expert evidence adduce to verify the market value of the Equipment as stated in the Memorandum of Agreement. This is because this court had earlier made a ruling (on a preliminary objection raised by the Plaintiff) that Uday Baskar who prepared the valuation report which determined the market value as stated in the Memorandum of Understanding is not an expert to give evidence in respect of the Equipment as he is not a registered valuer under the Valuers, Appraisers, Estate Agent and Property Managers Act 1981. Uday Baskar’s resume shows that his 18 years experience is in respect of sales marketing and not valuation. This ruling is not challenged by the 2nd Defendant. Thus there is no conclusive evidence as to the market value of the Equipment. The 2nd Defendant’s argument that they are not relying on the valuation report of Uday Baskar but on the market value of the Equipment as stated in the MoU is flawed as it is undisputed fact that the market value was determined by Uday Baskar who is not an expert. The fact that it was the Plaintiff who had insisted for the value of the Equipment to be incorporated in the Memorandum of 96 Understanding, the value so stated in the said Memorandum cannot be construed as the conclusive evidence of the market value of the Equipment. [116] In so far as the 2nd Defendant’s contentions that the rate of 17% is just and reasonable, I am not able to accept such contention for the reasons stated in paragraph 113 above. Conclusion [117] Having considered the evidence in totality I am of the view there is no sufficient and credible evidence to support the 2nd Defendant’s claim that they are entitled to be paid RM1,870,000.00 as their professional fees. As such a nominal sum of RM5,000.00 was awarded to the 2nd Defendant. ( KHADIJAH BINTI IDRIS ) JUDICIAL COMMISSIONER HIGH COURT (COMMERCIAL DIVISION) DATED 13 AUGUST 2018 97 Counsel: Plaintiff : S. Maniarasan and Fatin Nadhirah Binti Othman Hasbi of Messrs Adam Abdullah & Mani Defendant : Vinoben Mathiavaranam of Messrs The Law Offices Of C L Heng