Mena Jaya Sdn Bhd v Ultimate Palms Sdn Bhd (WA-12BNCC-19-07/2024)

This is the Appellant’s appeal against the decision of the Sessions Court Judge that had allowed the Plaintiff’s / Appellant’s claim but only allowed damages to be paid by the Respondent / Defendant to the sum of RM 116, 299.60.

This Appeal was also heard together with the Respondent’s Appeal bearing number WA-12BNCC-19-07/2024. The Respondent’s appeal is S/N kOMbJa5X7EOSrbkky5fLkg on the basis that the learned Sessions Court Judge should not have allowed the Plaintiff’s / Appellant’s claim in toto.

For ease of reference, the Appellant shall be referred to as the Plaintiff and the Respondent shall be referred to as the Defendant.

After hearing arguments by counsels for the Plaintiff and the Defendant, this Court finds that this is a suitable case for this Court to vary the orders of the Sessions Court and dismiss the Defendant’s appeal. B. Background Facts 5. This Appeal arises out of the emails that were exchanged between the representative of the Plaintiff and the Defendant between 10-12-2021, 13-12-2021 and 30-12-2021.

In the email dated 10-12-2021, Mr Ron Thoe on behalf of the Defendant had stated as follows: - S/N kOMbJa5X7EOSrbkky5fLkg “In the meeting, we Mena Jaya Sdn Bhd would like to generate a long terms business relationship with your company for the secondary palm oil products…. As per mention, we are exporting the products to our client in Europe, hence we will sponsor a certification, called NIS (National Italian Scheme) to your mill, this certificate used to certify the products’ point of origin, and used for sustainability and traceability purposes. … While waiting on the certificate, Mena Jaya Sdn Bhd still will purchase your secondary products with market price plus our premium (RM 30 to RM 50). We are committed to this for this 5 years period.”

This was followed up with the email from Ron dated 13-12-2021 and a response from Jo Yee from the Plaintiff dated 27-12-2021. This culminated in the final email dated 30-12-2021 issued by Jo Yee for the Plaintiff: - S/N kOMbJa5X7EOSrbkky5fLkg

This Court notes that the Plaintiff did mention in the said email dated 30-12-2021 that it stated: - “Long Term Contract confirmation on 30 December 2021. ……. Duration: - January – December 2022. The renewal of long-term contract in 2023 will be at Seller’s option.”

The Defendant did not send an email or any correspondence in response to the said email. S/N kOMbJa5X7EOSrbkky5fLkg

Parties then entered into the Contract dated 30-12-2021 on terms as contained in the earlier email.

The Plaintiff then issued an email dated 29-12-2022, 30-12-2021 and 3-1-2023 where the Plaintiff informed the Defendant, inter alia, that: - “Further to our tele-conversation earlier, we wish to exercise seller’s option to renew long term contract in 2023 as per following” The price for the said product is as per the previous email dated 13-12-

2021.

The Plaintiff had then issued an email dated 9-1-2023 to the Defendant, inter alia, stating: - “Please find attached LTC agreement 2023, sales contract & Proforma invoice for your reference.”

The Defendant did not deny the existence of the right of the Plaintiff to exercise the right to renew the contract for the year 2023. Instead, the Defendant issued an email dated 16-1-2023 to the Plaintiff stating: - S/N kOMbJa5X7EOSrbkky5fLkg “As mentioned previously, we will need to fulfill the latest specs and requirement from enduser. Once Prosper can supply the RPO with the right specs, then we can discuss the rate and volume. The current quality have too high total metal causing the refinery issue and will be rejected if quality are not improved. If Prosper can add the washing process to reduce the total metal to below 500ppm then it will be considered.”

At no time did the Defendant deny that there was any agreement that the renewal of the contract is at the option of the Plaintiff.

Plaintiff had obtained supply of palm fibre oil to fulfill with the renewed contract with the Defendant in accordance with the exercise of the said option for renewal.

The Defendant refused to accept the existence of the said option to renew and denies that there was such a right to renew the earlier contract at the option of the Plaintiff. S/N kOMbJa5X7EOSrbkky5fLkg

The Defendant also filed a counterclaim against the Plaintiff for damages being sums that were wrongly retained by the Plaintiff to the sum of RM 18, 712.40. This sum represents the excess amount that was paid by the Defendant for the supply of the palm fibre oil that should be returned to the Defendant. C. Decision of the Sessions Court 18. The learned Sessions Court Judge, after hearing the witnesses and after considering the evidence tendered as well as submissions filed by the Plaintiff and the Defendant made the following findings: - S/N kOMbJa5X7EOSrbkky5fLkg …. S/N kOMbJa5X7EOSrbkky5fLkg S/N kOMbJa5X7EOSrbkky5fLkg

Despite the findings as reproduced above, the Sessions Court Judge had allowed the Plaintiff’s claim but reduced the damages claimable for a period of up to March 2023. Damages were assessed at S/N kOMbJa5X7EOSrbkky5fLkg RM 116, 299.60 to be paid by the Defendant to the Plaintiff. At the same time, the learned Sessions Court Judge had also allowed the Defendant’s Counterclaim without any explanation how the claim for the alleged excess sums was found or proven by the Defendant. D. Legal Position concerning Appellate Intervention 20. It is trite law that this Court should not lightly interfere with the findings made by the Sessions Court unless it could be shown that the decision was “one that no reasonable judge could have reached.”

I refer to the decision of the English Supreme Court in Henderson v. Foxworth Investments Limited [2014] UKSC 41, the Malaysian Court of Appeals in MMC Oil & Gas Engineering Sdn Bhd v. Tan Bock Kwee & Sons Sdn Bhd [2016] 4 CLJ 665 and the Malaysian Federal Court in Ong Leong Chiou & Anor v. Keller (M) Sdn Bhd & Ors [2021] 4 CLJ

821.

I make specific reference to the decision of Raus Sharif FCJ (as he then was) in UEM Group Bhd v Genisys Integrated Engineers Pte Ltd & Anor [2010] 9 CLJ 785, where his Lordship stated: - S/N kOMbJa5X7EOSrbkky5fLkg “[26] Thus, the prime issue in respect of Questions 1 to 3 is whether the Court of Appeal had erred in interfering with the findings of facts of the trial judge. It is well settled law that an appellate court will not generally speaking, intervene with the decision of a trial court unless the trial court is shown to be plainly wrong in arriving at its decision. A plainly wrong decision happens when the trial court is guilty of no or insufficient judicial appreciation of evidence. (See Chow Yee Wah & Anor v. Choo Ah Pat [1978] 1 LNS 32; Watt or Thomas v. Thomas [1947] AC 484; and Gan Yook Chin & Anor v. Lee Ing Chin & Ors [2004] 4 CLJ 309).”

I also refer to the judgment of Gopal Sri Ram JCA (as he then was) who in his usual manner, eruditely explained under what circumstances could an appellate court interfere with the exercise of the discretion by the lower courts in Paya Terubong Estates Sdn Bhd v. Pusaka Warisan Sdn Bhd [1998] 2 CLJ 909: - “Although the decision whether a caveat ought to remain on the register is a matter within the discretion of the judge, it is like all other discretionary matters one that is required to be exercised judicially. One can, of course, quite well appreciate an appellate court's reluctance to disturb the primary S/N kOMbJa5X7EOSrbkky5fLkg exercise of discretion. This is because a court of appeal in a matter such as the present does not possess an original discretion, its initial function being one of review only. However, where, as in the present instance, it is amply demonstrated that the judge in whom the primary discretion is vested has failed to take into account relevant considerations it is the duty of this court to say so and to intervene and set matters right by an exercise of its own discretion.

Taking my cue from the judgment of the above referred Judges, I again remind myself that I should only interfere with the findings of the Sessions Court if it could be shown: -

The said decision is one that no reasonable Judge could have reached.

There are errors of law that should be rectified by the Superior Courts.

An appellate Court has the power to intervene if it is shown that decision is plainly wrong either as to applicable law or the facts of the case. S/N kOMbJa5X7EOSrbkky5fLkg E. Decision of this Court Plaintiff’s Appeal - WA-12BNCC-17-06/2024 25. In this case, I opine that the learned Sessions Court Judge did commit errors of law and fact that should be rectified by this Court.

The emails from the Plaintiff and the Defendant reproduced above shows that at the material time, parties did agree that after contract for one (1) year, the Plaintiff is entitled to give notice to the Defendant to extend it for another one (1) year period and that will be continued based on the same terms that was earlier agreed upon. This can be seen in the email dated 30-12-2021.

Thereafter, parties entered into a written instrument dated 30-12- 2021, that contains the same material terms as what was stated in the email dated 30-12-2021.

The Defendant did not at any material time respond to the said email informing the Plaintiff that it did not agree to the said option to renew. S/N kOMbJa5X7EOSrbkky5fLkg

Furthermore, this must be considered in light of what was discussed at the material time. The Defendant had intimated to the Plaintiff of its intention to have a long-term relationship. This was also confirmed by the Defendant’s witness at trial: - Thoe Chea Hwei (SD2) S/N kOMbJa5X7EOSrbkky5fLkg Mah Lee Wing (SD1) S/N kOMbJa5X7EOSrbkky5fLkg

I also refer to the evidence of the Plaintiff’s witness: - Re-examination of the Plaintiff’s witness S/N kOMbJa5X7EOSrbkky5fLkg

Therefore, I find that the learned Sessions Court Judge should have taken into account the events and the correspondences exchanged between parties to determine whether or not that there was such an agreement in place for the contract to be renewed for a further period of one (1) year at the option of the Plaintiff.

It is wrong of the learned Sessions Court Judge to simply ignore the previous correspondence between the parties before the written instrument dated 30-12-2021. The emails exchanged between the parties’ representatives show that there was such an intention to allow the Plaintiff the right to renew the contract for a period of one (1) year if it chose to do so. The documents must be read together and not in isolation.

In this case I find the learned Sessions Court Judge was wrong to have only looked at the contract document in isolation without considering the emails that were exchanged between them. If she had done so, she S/N kOMbJa5X7EOSrbkky5fLkg would have found that there was an agreement that the contract could be extended at the option of the Plaintiff. I refer to Emas Kiara Sdn Bhd v. Michael Joseph Monteiro & Ors [2018] 8 CLJ 17 where Mary Lim JCA held: - “ [57] We agree with the appellant that all these letters, emails and forms must be read together, and not in isolation. It is not possible to do so given the circumstances and the contents of the letters themselves. This is where the learned judge erred, by reading the letters in the manner that he did without taking into account the context and the previous letters which had already been exchanged between the parties. The letters are actually not capable of standing or being understood without reference to the earlier exchanges. All the letters must be read together. More critically, the exchanges must always be read against the IM, the letter(s) of offer made by the appellant and the tender process under which the sale of the subject properties was being conducted by the R&M. So, when the learned judge found that the R&M's letter was purporting to accept the appellant's offer of 17 June 2011, that it was no longer available because the appellant's letters of 3 October 2011 and 4 October 2011 had superseded that letter, that finding and conclusion is plainly erroneous on the law and on the fact. ….. S/N kOMbJa5X7EOSrbkky5fLkg [77] The conduct of the parties following that, confirmed the existence of a contract. The fact that the parties continue to negotiate after they appear to have agreed to the same terms does not mean that there is no agreement reached. Disputing over the terms to be included in the SPA is also no reason to say that there was no contract. We further find that contrary to the learned judge's alternative findings that the R&M's letter of 17 October 2011 was at best, a counter-offer, also erroneous. The additional or new terms are not salient or material as these terms do not amount to essential terms or essential terms that the appellant has not already agreed to. The entire course of negotiations must be considered in order to decide whether an apparently unqualified acceptance did in fact conclude the agreement. As expressed in Charles Grenier Sdn Bhd v. Lau Wing Hong (supra): ... the case may then belong to any of three classes. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or implied, but nevertheless have made S/N kOMbJa5X7EOSrbkky5fLkg performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract. In each of the first two cases, there is a binding contract: in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document, and in the second case as a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution. [78] We agree with learned counsel for the appellant that there is a concluded contract and that an agreement has come into place. The parties were subsequently working out the finer details for inclusion in the SPA. The fact that they failed to agree on these details does not mean that there was no agreement reached. The dispute was over the conveyancing details which though essential were not the material terms that must be settled before an agreement may be said to have come into existence.” S/N kOMbJa5X7EOSrbkky5fLkg

Similarly, in this case, I find that the conduct of the parties, as indicated in the emails referred to earlier shows that parties did agree that the Plaintiff retained such rights. This was never denied by the Defendant before and even after the exercise of the said right.

Furthermore, I find that the Defendant did represent to the Plaintiff that there would be a long-term contract and this led to the Plaintiff agreeing to provide the supply of the product at the price quoted but with the additional condition that the contract could be renewed at the option of the Plaintiff. This was explained by the Plaintiff’s witness: - S/N kOMbJa5X7EOSrbkky5fLkg S/N kOMbJa5X7EOSrbkky5fLkg

As explained by the Plaintiff’s witness, the terms that were agreed upon were determined based on the Defendant’s commitment to the period beyond the initial contract and that this option will be exercisable at the option of the Plaintiff.

The circumstances of this case are almost similar to those appearing in Tan Chong & Sons Motor Co. Sdn. Bhd. v. Alan McKnight [1983] CLJ Rep 394.

In that case, the Plaintiff wanted to purchase a White Datsun 260C Station Wagon for use in Malaysia at the price of RM 17, 719.54. Prior to the purchase he had informed the salesman that the car must conform to the Australian Design Regulations as he intended to bring it back to Australia. The salesman made the representation that the car fulfilled the Australian Design Regulations. The written conditions appearing on the written instrument confirming the order, contains among others condition No. 5, which is as follows: “No guarantee or warranty of any kind whatsoever is given by the company in respect of the vehicle, the subject of the order, unless such guarantee and / or warranty is separately stipulated in writing hereto, but S/N kOMbJa5X7EOSrbkky5fLkg the Buyer / Hirer shall be entitled to the benefit of the Manufacturer’s

However, on delivery it was found that the said representation was false. The Defendant in that case denied liability and claimed among others that there was no such warranty and that this is clearly not stipulated in the written instrument. The Defendant also argued that such warranties contradict the written instrument that was agreed upon with the purchaser of the car.

The trial Judge agreed that there was such a warranty and entered judgment. The case was appealed to the Federal Court which confirmed the judgment of the lower Court and confirmed the decision of the Court of First Instance.

Delivering the judgment of the Federal Court, Salleh Abas FCJ held: - “As to the issue of liability the first question to ask in this case is this: was there a warranty and, if so, was it breached? S/N kOMbJa5X7EOSrbkky5fLkg The word " warranty " in the law of Contract tends to be confusing as it may relate to a term of a contract, or to a separate enforceable promise which is collateral to a contract. (See Anson's 24th Edn., pp. 125-129). Insofar as the word is used to denote a term of a contract, its employment is purely for the purpose of distinguishing the most important terms (known as conditions) from the less important ones (known as warranty), the breaches of which lead to different results and give different remedies to the innocent party. If the term breached is a condition, the innocent party has the right to repudiate the contract and consider himself discharged therefrom and claim damages for the breach. If on the other hand the term broken is only a warranty the innocent party cannot repudiate the contract and his remedy is confined to the claim for damages only. In the case of a breach of a condition it is of course open to the innocent party to treat the matter as breach of warranty and sue for the damages only without having to repudiate the contract. The other context in which the word warranty is used in the law of Contract is a separate precontract statement on the basis of which parties subsequently entered into a contract. Such precontract statements are binding and enforceable as a collateral warranty. It is referred to as collateral because it is external and subsidiary to the S/N kOMbJa5X7EOSrbkky5fLkg main contract. Erskine v. Adeane [1978] 8 Ch 754, De Lessalle v. Guildford [1901] 2 KB 215. It is in the context of a collateral warranty that the respondent found his cause of action in this case, although he referred to it in para. of his statement of claim as an " express " warranty. We attach no legal significance to the word " express " here other than indicating or referring to the manner in which the warranty was communicated or expressed to the respondent. It was expressed by words of mouth and by conduct of Mr. Sze. For the purpose of determining whether these words and conduct amount to a warranty enforceable at the suit of the respondent, we can do no better than be guided by the test laid down by Lord Denning MR in Dick Bentley Productions, Ltd. & Anor. v. Harold Smith (Motors), Ltd. [1965] 2 All ER 65 at 67 - a test which he had followed and applied in subsequent cases. The test is this-Looking at the cases once more, as we have done so often, it seems to me that if a representation is made in the course of dealings for a S/N kOMbJa5X7EOSrbkky5fLkg contract for the very purpose of inducing the other party to act on it, and it actually induces him to act on it by entering into the contract, that is prima facie ground for inferring that the representation was intended as a warranty. It is not necessary to speak of it as being collateral. Suffice it that the representation was intended to be acted on and was in fact acted on. But the maker of the representation can rebut this inference if he can show that it really was an innocent misrepresentation, in that he was in fact innocent of fault in making it, and that it would not be reasonable in the circumstances for him to be bound by it ". [1965] 2 All ER at p. 67. One of the ways to rebut this prima facie inference is for the maker of the representation to show that he honestly believed on reasonable grounds that it was true. Chess (Oscar) Ltd. v. Williams, [1957] 1 All ER 325 and Heilbert, Symens & Co. v. Buckleton [1913] AC 30.”

Also refer to Tan Swee Hoe Co Ltd v Ali Hussain Bros [1980] 2 MLJ 16 and Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ

S/N kOMbJa5X7EOSrbkky5fLkg

In this case, I find that it was wrong for the learned Sessions Court Judge to ignore what was discussed by parties in the said emails and the events that led to the entry of the Contract. Parties had intended and agreed that the Contract would not be merely for a 1-year period, but could potentially extend to a longer-term contract, subject to the exercise of the option to renew at the discretion of the Plaintiff.

If the Defendant was not agreeable to the said requirement then it should have indicated clearly that it did not agree to the same.

I also note that the pricing of the said palm fibre oil is dependent on the agreement to have this long-term period. The price to be supplied will depend on the NIS certificate to be obtained by the Defendant: - This also appears in the Contract Note dated 30-12-2021. S/N kOMbJa5X7EOSrbkky5fLkg

I have also carefully considered the Defendant’s argument where it says that it had rejected the said exercise of the option to renew and refers to the email dated 16-1-2023. I find that the said contention to be incorrect. The Defendant did not reject the said option and did not outrightly say that there was no such option that was agreed upon. Instead, the Defendant only stated that they wanted to discuss the supply to be based on a new specification and not what was discussed and agreed earlier.

If indeed there was no such agreement, then surely the Defendant could have indicated clearly that there was no such agreement to renew the contract exercisable at the option of the Plaintiff. This was not indicated at any material time by the Defendant in any of its correspondence to the Plaintiff.

The Defendant suggests that mere silence on its part cannot and does not tantamount to an agreement or a collateral agreement as suggested by the Plaintiff. As a general rule, I agree with the Plaintiff that silence does not generally mean acquiescence. See Lexobumi Sdn Bhd v SK M&E Bersekutu Sdn Bhd [2017] MLJU 328 and R v Director General of Inland Revenue [1975] 1 MLJ 183. S/N kOMbJa5X7EOSrbkky5fLkg

Nonetheless, in this case, the Defendant did act actively in entering into the Contract based on the terms as stated in the email 30-12-2021. This is as what has been specifically stated by this Court in the preceding paragraphs.

Furthermore, I also find that the general rule can be displaced. Acquiescence by silence can arise in an appropriate case. I refer to Chooi Loo See v PNSG Holdings Sdn Bhd & Ors [2023] MLJU 569 where Ong Chee Kwan J held: - “[75] As a start, it seems to me quite uncontroverted that silence whilst capable of amounting to admission or acquiescence of statement made, need not always be the case. Even in the cases where silence or failure to deny can be treated as admission, it is only so as corroborative to other probative evidence which taken together tilts the balance of probabilities towards establishing the fact asserted by the statement. [76] In Bessela v. Stern (1877) 2 C.P.D. 265 (C.A.), the plaintiff claiming a breach of promise to marry relied on the defendant’s failure to deny the allegation made that ‘[y]ou always promised to marry me, and you don’t S/N kOMbJa5X7EOSrbkky5fLkg keep your word’ as evidence of the defendant’s acceptance of the existence of the promise, the Court of Appeal, at p. 272, Branwell L.J. stated: ‘A claim is made on a man in respect of goods sold and delivered, and he does not deny it. If a statement is such that a denial of it is not to be expected, then silence is no admission of its truth; but if two persons have a conversation, in which one of them makes a statement to the disadvantage of the other, and the latter does not deny it, there is evidence of an admission that the statement is correct.’ [77] However, in Wiedemann v. Walpole [1891] 2 Q.B. 534, another action for breach of promise to marry, Lord Esher M.R. drew a distinction between commercial usage and cases involving criminal charges at pp. 537 and 538, stating: ‘[T] here are cases - business and mercantile cases - in which the Courts have taken notice that, in the ordinary course of business, if one man of business states in a letter to another S/N kOMbJa5X7EOSrbkky5fLkg that he has agreed to do certain things, the person who receives that letter must answer it if he means to dispute the fact that he did so agree. So, where merchants are in dispute one with the other in the course of carrying on some business negotiations, and one writes to the other, ‘but you promised me that you would do this or that,’ if the other does not answer the letter, but proceeds with the negotiations, he must be taken to admit the truth of the statement. But such cases as those are wholly unlike the case of a letter charging a man with some offence or meanness.’ [78] Learned counsel for the Plaintiff urged this Court to treat the silence as admission in the present case given the commercial relationship between the parties and has referred to the Court of Appeal’s decision of David Wong Hon Leong v. Noorazman Bin Adnan [1995] 4 CLJ 155 where Gopal Sri Ram JCA (as he then was) said this: During argument, we registered our surprise at the learned judge’s reluctance to enter judgment for this sum of RM100,000. After all, the appellant had failed to respond to the letter of 17 December 1991. If there had never been an agreement as alleged, it is reasonable to expect a S/N kOMbJa5X7EOSrbkky5fLkg prompt and vigorous denial. But, as we have pointed out, there was no response whatsoever from the appellant. ... Earlier, in his judgment, he said, ‘Now there are cases-business and mercantile cases in which the courts have taken notice that, in the ordinary course of business, if one man of business states in a letter to another that he has agreed to do certain things, the person who receives that letter must answer it if he means to dispute the fact that he did so agree’. [79] However, a subsequent Court of Appeal decision has opined that the view taken by Gopal Sri Ram JCA in that case was ‘extreme’. The case of Small Medium Enterprise Development Bank Malaysia (formerly known as Bank Perusahaan Kecil dan Sederhana Malaysia Bhd) v. Lim Woon Katt [2016] 5 MLJ 220 at p. 226 - 228 has held that the failure to respond only goes to conduct and although a relevant fact, it is not an admission. His Lordship Hamid Sultan JCA at para [8] held thus: ‘[8] We had read the appeal records and submissions of the learned counsel. We thanked the learned counsel for their able submissions. After giving much consideration to the submission of S/N kOMbJa5X7EOSrbkky5fLkg the learned counsel for the respondent, we took the view that it was a fit and proper case to allow the appeal. Our reasons, inter alia, were as follows:

in the instant case, it was not in dispute that the respondent did not respond to the demand notice of the plaintiff and the defence alleging that he was not liable was only raised in the statement of defence. Evidently, failing to respond to the plaintiffs letter of demand, that too when the defence case was related to forgery, as well as the fact that the respondent did not lodge a police report upon receiving the demand, weakened the probative force of the defence case. In Wong Hon Leong David v Noorazman bin Adnan [1995] 3 MLJ 283; [1995] 4 CLJ 155, the Court of Appeal went to the extreme end to say that failure to respond on the facts of the case should lead to entering of judgment. Justice Gopal Sri Ram JCA at p 288 (MLJ); p 159 (CLJ), had this to say: On December 17, 1991, the respondent wrote to the appellant confirming an agreement between them whereby the former was to receive an additional fee of RM100,000 if he assisted in resolving the problem regarding the access. S/N kOMbJa5X7EOSrbkky5fLkg It is the respondent’s case that he did in fact obtain the required access through his exertions. The appellant, however, denies any agreement to pay the additional fee. In respect of this sum, the learned Judge granted leave to defend. We would digress for a moment to say a few words about this latter order of the learned judge. During argument, we registered our surprise at the learned judge’s reluctance to enter judgment for this sum of RM100,000. After all, the appellant had failed to respond to the letter of 17 December. If there had never been an agreement as alleged, it is reasonable to expect a prompt and vigorous denial. But, as we have pointed out, there was no response whatsoever from the appellant;

in abundance of caution we must say that failure to respond must not be equated to admission of the claim under s 17 of the Evidence Act 1950 (‘the EA 1950’). Failure to respond will relate to conduct under s 8 of the EA 1950. Conduct is a relevant fact for the court to take into account to give the relevant probative force to the version of the plaintiff and/or defendant’s case. It is well settled that not all demand notices must be responded. In S/N kOMbJa5X7EOSrbkky5fLkg Wiedemann v Walpole [1891] 2 QB 534, in an action for breach of promise of marriage, it was held, that the mere fact that the defendant did not answer letters written to him by the plaintiff in which she stated that he had promised to marry her, was no evidence corroborating the plaintiff’s testimony in support of such promise;

It must also be noted that in commercial cases (not civil), courts have taken notice that, in the ordinary course of business, if one man of business states in a letter to another that he has agreed to do certain things, the person who receives that letter must answer it if he means to dispute the fact that he did so agree (see PECD Construction Sdn Bhd v Freehold

there is a latin maxim which says ‘silence amount to consent’ (see Quit tracet consentire videtur). However, this is not part of our law of evidence. Failure to respond goes to conduct and is a relevant fact and not an admission as stated in illustration (g) of s 8 of the EA 1950 ...” S/N kOMbJa5X7EOSrbkky5fLkg [80] The Courts in the United Kingdom also do not take the view that in commercial cases, silence or the failure to respond to a claim will invariably attract an admission. Although the Court will be more willing to draw an inference of admission from the silence or the failure to deny by the defendant in commercial cases, such an inference should only be drawn where the circumstances are such that a denial of the statement would clearly be required or expected of the defendant. In this connection, I find the following passages of Charleton J from the Irish Supreme Court in Ulster Bank Ireland Limited v. Rorv O’Brien. Danny O’Brien and Michael McDermott [2015] 2 IR 656 illuminating: [60] Analysing the various circumstances under which a failure to deny particular and detailed allegations, based upon a preexisting commercial or other relationship, and backed up by correspondence, is a matter for the application of this principle to particular circumstances; Tapper, Cross & Tapper on Evidence (11th ed., Oxford University Press, 2007) at p. 42 affirms the need for close analysis before admission through silence is accepted as testimony: - S/N kOMbJa5X7EOSrbkky5fLkg “A thin stream of civil cases has adhered to the proposition that failure to answer an allegation is capable, depending upon the circumstances, of amounting to evidence against the silen[t] party... The principle underlying the cases in which reliance has been placed on the maxim res ipsa loquitur is based on the importance of the absence of an explanation.” The necessity for close analysis is reaffirmed by Heydon and Ockelton, Evidence: cases and materials (4th ed., Butterworths, 1996) at pp. 147 and 148: - “In cases where the inference may be drawn, the test is whether a denial could reasonably be expected in the circumstances. The circumstances of a business relationship commonly permit the inference to be drawn; a defendant’s silence in the face of correspondence becomes much more relevant in business cases than in affiliation cases. ... Regard must be paid to the status of the accuser.... Another factor is the situation of the party charged and the circumstances surrounding the charging... S/N kOMbJa5X7EOSrbkky5fLkg When will an indignant reply be expected? One test is the seriousness of an accusation, eg a charge of incest by a daughter to her father (R. v. Power [1940] Q.S.R. 111), or a breach of promise of marriage (Bessela v. Stern (1877) 2 C.P.D. 265, CA) ... Another is the solemnity of the form of the accusation; so an executor’s failure to dispute an affidavit alleging that he owes the estate money may be an admission (Freeman v. Cox (1878) 8 Ch. D. 148).” This principle is also referred to in Phipson on Evidence (18th ed., Sweet & Maxwell, 2013) at p. 1327: - “[37-11] ... The mere failure to answer a letter or object to an account... will not necessarily imply an admission of its contents ... But it is otherwise if the letter is sent under circumstances which entitle the writer to an answer; or where it is the ordinary practice of people to reply.” [61] Thus, analysing whether a failure to respond in the face of an accusation can amount to a declaration against interest must depend upon a myriad of factors. What follows cannot be definitive but merely S/N kOMbJa5X7EOSrbkky5fLkg indicative: an analysis of the nature of the relationship between the parties is essential; the circumstances under which an allegation is made must be taken into account, what is solemn, being different from what is social and from what is jocular or mischievous; the nature of what is claimed may amount, on the one hand, to a bare allegation or, on the other, to an apparently definitive statement backed up by documentary proof; but finally, the test must be that a failure to respond, in circumstances when a denial would clearly be required, would amount in terms of the conduct of reasonable people to an admission. [81] To my mind, corollary to or even further to the question whether the circumstances is one where a denial is required, is the related question whether the silence or non-denial is relatable to the statement that is sought to be established. This means that if the defendant is able to provide a credible and satisfactory answer for his silence or non-denial, for example, where the defendant was otherwise incapable of responding by reason of some health issues and or that the statement was susceptible to a different interpretation which was not unreasonable in the particular circumstances, then it will not be right for the Court to equate the silence or failure to deny as an admission. Thus, where the statement S/N kOMbJa5X7EOSrbkky5fLkg made is capable of an equally plausible interpretation by the recipient which does not require his response or where his response is not expected, the failure to do so cannot be said to be relatable to the statement as understood by the sender. [82] In this regard, I would respectfully adopt the reservation expressed by McKechnie J in yet another decision of the Irish Supreme Court in Bank of Scotland Ltd v Fergus [2019] IESC 91 where the learned judge, quietly rightly held the opinion that a person may decline to reply to a demand made for a variety of reasons: ‘104. Furthermore, for a multitude of different yet genuine and understandable reasons, a customer may not reply to correspondence, may not engage with the bank or credit institution, and may simply fail to deal with or respond to the resulting demands. In the last ten years or more courts in this jurisdiction dealing with possession orders and debt recovery have witnessed at first hand this type of conduct on almost a daily basis. Sometimes it is prompted by fear, by ignorance, by not knowing what to do or who to turn to, or by failing to face up to reality, all resulting in the situation being ignored. There are I am sure a multitude of other reasons for not engaging. To suggest in those circumstances that a demand letter or a failure to S/N kOMbJa5X7EOSrbkky5fLkg reply could be taken as an admission of the debt due, is something I simply could not accept. I would not therefore permit a bank to establish its debt by relying upon any inference drawn from the non-response or silence of a customer: the obligation is and remains on it to adduce sufficient evidence to that end. [83] Although McKechnie J was referring specifically to the context of the bank and its customers when making the aforesaid comments, to my mind, the reasoning applies with equal force to non-banking cases as well.”

I further refer to the decision of the Court of Appeal in David Wong Hon Leong v. Noorazman Adnan [1995] 4 CLJ 155 where Gopal Sri Ram JCA held: - “In this context, we recall to mind the following passage in the judgment of Edgar Joseph Jr. J. in Tan Cheng Hock v. Chan Thean Soo [1986] CLJU 42; [1986] 1 LNS 42 [1987] 2 MLJ 479-487: In Wiedemann v. Walpole [1891] 2 Q.B. 534, 537 an action for breach of promise of marriage, it was held, that the mere fact that the defendant did not answer letters written to him by the plaintiff in which she stated that he S/N kOMbJa5X7EOSrbkky5fLkg had promised to marry her, was no evidence corroborating the plaintiff's testimony in support of such promise. Lord Esher M.R., in his judgment, remarked, Here, we have only to see whether the mere fact of not answering the letters, with nothing else for us to consider is any evidence in corroboration of the promise.' (Emphasis added). Earlier, in his judgment, he said, 'Now there are cases - business and mercantile cases in which the Courts have taken notice that, in the ordinary course of business, if one man of business states in a letter to another that he has agreed to do certain things, the person who receives that letter must answer it if he means to dispute the fact that he did so agree. (The emphasis is ours.)”

The above proposition was quoted with approval by the Federal Court in Dream Property Sdn Bhd v. Atlas Housing Sdn Bhd [2015] 2 CLJ 453 where Azahar Mohamed FCJ held: - “….It is the ordinary nature of businessman to immediately refute any proposition injurious to him contained in letters and not to let it stand (see David Wong Hon Leong v. Noorazman Adnan [1995] 4 CLJ 155). Thus, the previous conduct of the defendant in accepting that the delivery of S/N kOMbJa5X7EOSrbkky5fLkg vacant possession was on 21 November 2005 was plainly contrary to its new position that vacant possession was only granted on 28 February

Thirdly, it was only on 8 March 2006, which was about 14 days before the completion date (21 March 2006), that the defendant's solicitors for the first time alleged that vacant possession was only delivered on 28 February 2006.”

Therefore, considering the background facts and the commercial relationship between the parties, I find that the Defendant did admit that there was such a right to extend the contract. The Defendant never denied the existence of such a right and had instead wanted to change the quality of goods purchased from the Plaintiff. As I said, if indeed there was no such right, it would not have been difficult for the Defendant to say there was no such right in its response to the Plaintiff’s email exercising the option.

The Defendant’s counsel also suggests that the claim for collateral contract should not be entertained by this Court as it was allegedly not pleaded. I agree that the exact term collateral contract was not pleaded by the Plaintiff. However, I find that the facts that justify the existence of a collateral contract were pleaded by the Plaintiff. S/N kOMbJa5X7EOSrbkky5fLkg

Even if I am wrong on the above, I find that a substantial body of evidence was produced during the trial to support such a claim without objection from counsel for the Defendant.

Therefore, it is the duty of this Court and the Court below to consider the said issue and determine whether the facts support such claims by the Plaintiff against the Defendant. I refer to the decision of the Federal Court in Kondisi Utama Sdn Bhd v. Baltic Agencies Pte Ltd & Another appeal [2018] 9 CLJ 561 where Zaharah Ibrahim FCJ stated: - “[123] We deal now with issue of Baltic’s claims not being pleaded in its amended statement of claim. [124] We have carefully examined Baltic’s amended statement of claim. There can be no doubt that Baltic’s complaint is essentially that both EPIC and Kondisi had caused Baltic to believe that it was being engaged to perform the works and had caused Baltic to take steps and to spend time and to incur expenses in the attempt to obtain Sical Portofino, and when that was unsuccessful to obtain a replacement dredger and other vessels. When Baltic succeeded in obtaining the necessary vessels, EPIC and Kondisi had sidelined Baltic and shut it out completely from the works. The S/N kOMbJa5X7EOSrbkky5fLkg specific pleaded reliefs notwithstanding, in our view neither EPIC nor Kondisi was under any misapprehension that that was the complaint against them. [125] This court in the case of Gurbachan Singh Bagawan Singh & Ors v. Vellasamy Pennusamy & Other Appeals [2015] 1 CLJ 719 held that evidence adduced during the hearing can overcome the defects in pleadings as long as the other party is not taken by surprise, especially if the evidence was given without any objection by the other party. The court referred to the judgment of the Supreme Court in the case of Superintendent of Lands and Surveys, 4th Division & Anor v. Hamit Matusin & Ors [1994] 3 CLJ 567. In that case, Peh Swee Chin SCJ, delivering the judgment of the Supreme Court said, at p. 572: “As was stated by the Federal Court in Ang Koon Kau & Anor v. Lau Piang Ngong [1984] 2 MLJ 277, FC at page 278: Evidence given at the trial can therefore in appropriate circumstances overcome defects in the pleadings where the net result of such evidence is to prevent the other side from being taken by surprise. S/N kOMbJa5X7EOSrbkky5fLkg There is however, at least one important exception to such curing of defect of pleading by evidence departing from such pleading without objection then and there to such evidence. The exception is when such evidence represents a radical departure from the pleading, and is not just a variation, modification or development of what has been alleged in the pleading in question, please see Waghorn v. George Wimpey & Co. Ltd, [1969] 1 WLR 1764, which gave rise to the proposition, which was approved by Ang Koon Kau & Anor v. Lau Piang Ngong, supra, and John Stein & Co. Ltd v. O’Hanlon [1965] AC 890.” [126] As we have shown above, EPIC and Kondisi were certainly not taken by surprise by and did not object to the evidence given by witnesses for Baltic. Evidence was led during cross-examination of their own witnesses which supported Baltic’s position. [127] We are therefore of the view that what Baltic lacked in pleading was more than made up for by the evidence before the High Court.” S/N kOMbJa5X7EOSrbkky5fLkg

For the above reasons, I find that the learned Sessions Court Judge had committed errors of law. She did find that the Defendant liable to the Plaintiff for the period after the said first contract. That would mean that she did agree that the Plaintiff had a right to extend the contract and as a result granted damages for the 3 months after the original contract ended. She would not have done that if there was no obligation on the part of the Defendant to pay the sums for the losses suffered by the Plaintiff. These represent the price of the palm fibre oil as contracted with the Defendant to the price they were sold to third parties.

As a result, I opine that the Plaintiff has proven its claim. The Plaintiff has shown the existence of its right to extend the contract for an additional period of one (1) year and this was agreed to by the Defendant. This was the eventual outcome found by the learned trial Judge, but this was not supported by her grounds. This dichotomy warrants appellate interference, and I find that the decision of the learned Sessions Court Judge should be corrected.

As such, I find that the reasons for allowing the claim should be corrected and the order entered by the learned Sessions Court rectified. S/N kOMbJa5X7EOSrbkky5fLkg

On the issue of damages, I find that the Plaintiff has shown that it has suffered damages as contained in the table produced in the witness statement of the Plaintiff’s witness. Evidence of the losses was also produced by the Plaintiff at trial. This was again not objected to by counsel for the Defendants. As such, this Court must consider the same. Please see the following part of the Plaintiff’s witness statement in question 13: - S/N kOMbJa5X7EOSrbkky5fLkg

There is no evidence produced by the Defendant to rebut these claims. I therefore find that the Plaintiff is entitled to these damages as they arose as a result of the breach by the Defendant of the collateral contract. I refer to section 74 of the Contracts Act, sections 44 and 56 of the Sales of Goods Act as well as the decision of the Court in Kumpulan Prasana Rakyat Johor Sdn Bhd v. Emercon Bina Sdn Bhd & Another [2020] CLJU 1299.

Furthermore, the notes of proceedings show that the above was not challenged by counsel for the Defendant during cross examination. This will mean that the Defendant accepts the evidence of such losses. See Aik Ming (M) Sdn Bhd v Chang Ching Chuen & Ors [1995] 2 MLJ 770.

I also note that the learned Sessions Court Judge had also allowed the Defendant’s Counterclaim for excess payments made and for these sums to be returned to the Defendant.

In view of the fact that the said sums were admitted by the Plaintiff and were deducted from the amount claimed as seen in paragraph 15 of the Statement of claim, I will not intervene with the said finding. S/N kOMbJa5X7EOSrbkky5fLkg

For the above reasons, I allow the Plaintiff’s appeal and enter judgment against the Defendant for the sum of RM 414, 060.00 and interest at the rate of 5% per annum from the date of the hearing of this appeal to the date of full realisation. F. Defendant’s Appeal - WA-12BNCC-19-07/2024 66. For the reasons above, I dismiss the Defendant’s appeal with costs. Dated 22nd January 2025 Dato’ Indera Mohd Arief Emran bin Arifin Judge High Court of Malaya at Kuala Lumpur NCC5 S/N kOMbJa5X7EOSrbkky5fLkg Counsel: Krishna Dallumah together with Natasha Selvarah for the Appellant in Appeal 17 and Respondent in Appeal 19 Krishna Dallumah & Indran Advocates & Solicitors Jonathan Khaw and Hoo Enn Chee for the Respondent in Appeal 17 and Appellant in Appeal 19 Chern & Co. Advocates & Solicitors S/N kOMbJa5X7EOSrbkky5fLkg