MCS Mega Group Sdn Bhd v Golden Global Trading & Healthcare Sdn Bhd (BA-22NCC-117-09/2022)

These Grounds of Judgment are delivered pursuant to the appeal filed by the Plaintiff against my decision delivered on 22 January 2026, wherein I allowed the Defendant’s counterclaim.

For completeness, the Plaintiff’s claim had earlier been dismissed pursuant to Order 35 of the Rules of Court 2012 following the Plaintiff’s failure to attend the continued trial date on 13 November 2025. That procedural dismissal is not revisited here. The present appeal concerns my decision allowing the Defendant’s counterclaim in the sum of RM1,728,000.00 together with interest and costs.

It must be emphasised that the counterclaim did not succeed by reason of procedural default. A counterclaim stands as a cross-action and must be independently proved. As recognised by the Federal Court in Permodalan Plantation Sdn Bhd v Rachuta Sdn Bhd [1985] 1 MLJ 160, a counterclaim is in substance a separate action requiring proof in the ordinary manner. The Defendant therefore bore the burden under sections 101 and 103 of the Evidence Act 1950 to establish the facts entitling it to relief.

These Grounds are set out to articulate the factual findings and legal reasoning underpinning my decision. B.

The matter was part-heard before my learned sister YA Puan Jamhirah binti Ali. One witness had testified on 6 May 2025 and 7 May 2025 before Her Ladyship was administratively transferred. Upon assuming conduct of this docket, I continued the hearing from the stage at which it had been left. No objection was raised and no application was made to recall any witness.

I have considered the entirety of the Notes of Proceedings, the documentary exhibits, the witness statements, and the written submissions filed by both parties. The findings below are made upon that complete evidential record. C.

The contractual relationship between the parties arose from a Proforma Invoice dated 22.2.2021 bearing No. 220221-01-

Under that document, the Plaintiff agreed to sell nine containers of gloves to the Defendant for a total consideration of RM10,368,000.00.

It is not disputed that on 23.2.2021 the Defendant paid a deposit of RM1,728,000.00 (Ringgit Malaysia One Million Seven Hundred and Twenty-Eight Thousand Only). The Plaintiff admitted receipt of this sum.

The evidence of SD1 establishes that this amount represented the agreed deposit specifically in respect of three containers under the contractual structure. That evidence was not displaced in cross-examination. The Plaintiff accepted the deposit without reservation.

Once the deposit for three containers was paid and accepted, the Plaintiff’s obligation to deliver those three containers within the contractual timeline arose. D.

Clause 1 required delivery within 45 days from issuance, placing the contractual deadline on 7.4.2021. The documentary record further shows that the Plaintiff agreed via WhatsApp communication dated 23.2.2021 to deliver before 20.3.2021.

The Plaintiff subsequently proposed delivery dates in April

Those dates were inconsistent with both the original contractual deadline and the earlier agreement. No evidence was adduced to show mutual variation extending time.

In commercial contracts involving export of goods, adherence to delivery timelines is commercially significant. A unilateral alteration of delivery dates does not amount to performance.

I, therefore, find that the Plaintiff failed to comply with the contractual delivery timeline. E.

SD1 testified unequivocally that the gloves were never delivered. No Bill of Lading, Delivery Order, airway bill, customs clearance document, or shipping documentation was produced by the Plaintiff.

The absence of documentary proof of shipment in a transaction of this nature is decisive. I find as a fact that the three containers for which the deposit was paid were never delivered. F.

Clause 8(a) is triggered only “in the event Buyer cancels the order.” SD1’s evidence was clear that the Defendant never cancelled the order. There was no notice of cancellation and no communication amounting to repudiation by the Defendant.

I accept SD1’s evidence and find that the Defendant did not cancel the order at any material time. G.

For ease of reference, terms of clause 3 and 8 of the invoice are as follows: Clause 3 provides: “Buyer shall make advance payment of shipment of goods in accordance to the agreed payment term within three (3) working days from the date of issuance of PI, together with the confirmed artwork. The payment date shall be the date of Seller’s bank account received cleared funds. In the event of failure of payment and the confirmed artworks within the above-stipulated time, the Seller reserves the right not to proceed with the order.”

Clause 3 confers only a right not to proceed in the event of non-payment. It does not state that monies received are non-refundable. It does not confer a right of forfeiture.

The Defendant paid RM1,728,000.00 in accordance with the agreed terms. Clause 3 cannot be invoked to justify retention of the deposit. H.

Clause 8 provides: “The Seller hereby declares, represents and reserves its right that:- All the goods sold are strictly non-returnable, refundable nor exchangeable from the date of the goods collected by the Buyer and Seller recommends that all goods shall be kept in a good and proper storage due to the nature of the goods;

To impose a cancellation fee not more than 20% of the total amount of PI in the event Buyer cancels the order with or without notice given and all the costs incurred as a result of the cancellation shall be payable by the Buyer, including but not limited to packaging material, warehouse storage and labour charges. For the avoidance of doubt, the cancellation fee and related costs shall be payable by the Buyer within fifteen (15) days from the cancellation date;”

The first limb presupposes collection of goods. There was none.

Clause 8(a) is triggered only where the Buyer cancels the order. As found above, the Defendant did not cancel the order.

Clause 8 therefore does not entitle the Plaintiff to forfeit the deposit nor to claim RM345,600.00. I.

The gloves were intended for export to the United States. The Proforma Invoice identifies Pacific Rim Medical LLC in California as the destination.

SD1 testified that the FDA (510K) number was requested because medical grade gloves cannot lawfully enter the United States market without regulatory approval.

The Plaintiff did not satisfactorily demonstrate that it possessed or controlled the relevant FDA registration for the contracted goods. No documentary proof of regulatory compliance tied to this transaction was produced.

Although the counterclaim succeeds independently on non-delivery, the absence of evidence demonstrating readiness to supply compliant goods reinforces the conclusion that the Plaintiff was not in a position to perform the contract in accordance with its commercial purpose. J.

The Defendant paid RM1,728,000.00 in respect of three containers. Those containers were never delivered. No benefit was received.

This constitutes complete non-performance.

Neither Clause 3 nor Clause 8 displaces the Defendant’s right to restitution.

There was therefore total failure of consideration. K.

The Defendant bore the burden of proof throughout.

The Defendant proved payment and proved non-delivery. The Plaintiff failed to prove delivery.

On a balance of probabilities, the Defendant has discharged its burden under sections 101 and 103 of the Evidence Act 1950. L.

I therefore find that:

The Defendant paid a deposit of RM1,728,000.00 (Ringgit Malaysia One Million Seven Hundred and Twenty-Eight Thousand Only) in respect of three containers;

The Defendant did not cancel the order;

The Plaintiff failed to deliver the three containers;

Clause 3 does not confer forfeiture rights;

Clause 8(a) is inapplicable;

There was total failure of consideration;

The Defendant has proved its counterclaim. M.

Judgment is entered for the Defendant on the counterclaim in the sum of RM1,728,000.00 (Ringgit Malaysia One Million Seven Hundred and Twenty-Eight Thousand Only).

Interest at the rate of 5% per annum is awarded on the said sum from 23.2.2021 until full realisation.

Costs of RM 30,000.00 subject to fee allocator to be paid to the Defendant.

Costs under Order 59 rule 6(c) of the Rules of Court 2012 in the sum of RM 3,000.00 to be paid by the Plaintiff’s solicitor to the Defendant’s solicitor. Dated 15 April 2026 -sgd-DATO’ ANITA BINTI HARUN JUDICIAL COMMISSIONER HIGH COURT OF MALAYA SHAH ALAM SELANGOR DARUL EHSAN To the parties’ solicitors: For the Plaintiff : Pushparajan & Nor Arif Qayyum bin Norazam (Messrs Bila Salehuddin & Co.) For the Defendant : Sathia Stella Sidhu, Ganeshnathan Ramanathan (Messrs Sathia Stella Sidhu)