The rest of the forecasted total units of 2,822 of the WiWi Product i.e. the balance 2,750 units, were for MTRs, not the Appellant. This was accepted by SP1 under cross-examination. The relevant part of the cross-examination is set out below: I’m going to go back. I think they going to… I just have a few more questions. Let’s go back to Razman’s email of 13th March, since this appears to be the key to BCM’s action. And that is at B1, page 29A and 29B. This email was sent on 13th of March by Razman. Is that correct? Correct. You have already confirmed that many of these orders are not supposed to come from MIMOS, they are supposed to come from Technology Recipients. Is that correct? No, there are also MIMOS there. I said ‘many of,’ not ‘all.’ So you agree that 72 orders are supposed to come from MIMOS, correct? Yes, he indicate there. And the rest are supposed to come from Technology Recipients. Correct? Correct. You have also earlier in my examination agreed that Technology Recipient placed orders directly with PCM, correct? Correct.’ (Emphasis added) [49] Under cross-examination, SP1 also accepted that orders from MTRs would be placed by MTRs. The relevant portion of SP1’s cross-examination on this point disclosed as follows: You have also earlier in my examination agreed that Technology Recipient placed orders directly with BCM, correct? Correct.’ [50] Therefore, the Appellant’s liability, if at all, should only be in respect of its forecasted orders of 72 units of the WiWi Product and not for the total forecast of 2,822 units. [51] It was common ground that there were no Purchase Orders issued by the Appellant for 2,822 units of the WiWi Product. There also does not appear to be any evidence of any proposal made by the Respondent to the Appellant for 2,822 units of the WiWi Product in respect of which any purchase order may be placed. The Appellant’s purchase of 1000 units of PCBA [52] The fact that the Appellant had agreed to purchase 1,000 units of PCBA from the Respondent, namely components purchased by the Respondent for the manufacture of 2,822 units of the WiWi Product, played a critical part in the decision of the learned trial judge. [53] SD1 (Datuk Abdul Wahab Bin Abdullah), the President and Chief Executive Officer of the Appellant at the material time, testified that he first became aware of the Respondent’s issue with the raw materials that it had purchased was when the Respondent’s Chief Executive Officer sought help from him. The relevant part of SD1’s testimony in his Witness Statement states as follows: ‘Q12: When did you first become aware that BCM was raising an issue concerning raw material held by it? A12: I became aware of this when I received a call from BCM’s CEO Lee Chong Yeow (“Mr. Lee”) in or around March 2013. Mr. Lee informed me that there was a problem with raw material purchased by BCM to “support” MIMOS and which was not being utilised. He asked if I could assist BCM with solving this problem. I informed him that I would look into the issue. At that time, no accusation was made that MIMOS had caused this problem. My impression was that BCM had optimistically purchased raw materials in anticipation of orders from Technology Recipients, but that risk had not paid off as the orders did not come in. BCM was therefore left holding the raw materials. Q13: What did you do following this call? A13: I instructed MIMOS personnel En. Wan Azli Wan Ismail (“En. Wan Azli”) (whose department was then dealing with BCM) to proceed to do a stock take at BCM’s premises to identify what raw materials were being held and the quantity of the same. En. Wan Azli and his team proceeded to conduct a stock take of the raw materials at BCM’s premises and it was determined that there were raw materials about RM3.2 million being held by BCM. The raw materials comprised of both generic and unique material. Following this stock take, MIMOS conducted an internal assessment of whether or not there were raw materials which MIMOS itself could purchase and use for its own projects. Based on that, MIMOS agreed to purchase semi-assembled (kits) materials for the production of 1000 units of WiWi to help BCM.’ (Emphasis added) [54] This testimony of SD1 is important as it traces the basis and reason for the Appellant’s purchase of the 1,000 units of PCBA. The testimony that it was the Chief Executive Officer of the Respondent who approached SD1 for help, ‘assistance to solve his problem’, was not challenged in cross-examination. His cross-examination went as follows: ‘JS Now during the course of execution of the contract, ok, probably somewhere in 2012 right up to your payment end of November, end of 2013, you will agree you have communicated with the BCM’s MD, Mr CY Lai, CY, CY Lee. CY Lai, ,CY Lee called me for help. Yes. You are – Communicated through that. You have communicated several times with Mr CY Lee? He initiated the call to me. Yes. And can you remember the first call was when? The request came, I can recall, somewhere March. March. Somewhere in March? March he calls me for help. There was also some email exchanges? No email exchanges. I am not recall any. And there, sorry? You cannot recall? I don’t, there’s an email.’ [55] It was put to SD1 that the Appellant’s purchase of the 1,000 units of PCBA suggested that the Appellant had agreed to take up 2,822 parts, and be responsible for the raw materials that were acquired by the Respondent. This was denied by SD1. SD1 also denied that the Appellant had purchased 1,000 units of the WiWi Product out of the 2,822 units that were allegedly ordered. SD1 was at pains to explain that the 1,000 units were not 1,000 units out of the 2,822 units of the WiWi Product allegedly ordered. The 1000 units were component parts, i.e. units of PCBA, that were bought by the Respondent for the production of 2,822 units of the WiWi Product allegedly ordered. This distinction between the 2,822 units of the WiWi Product and the component that would be used for their manufacture was important. [56] The reasons for the purchase of the 1,000 units of PCBA were provided by SD1. The purchase was of PCBAs which are components that the Appellant could use for the Appellant’s own projects. This purchase would, at the same time, assist the Respondent who had found itself in a predicament. The purchase of the 1,000 PCBAs was therefore not merely to help the Appellant purely out of goodwill at the expense of the Appellant. [57] Consistently, a Procurement Agreement and purchase orders were issued for the 1,000 units of PCBA. These were not settlement agreements in acknowledgement of a wrong committed. On this, the learned trial judge was right in stating that, ‘The Procurement Agreement is what it is. It is not, with respect, a settlement agreement to discharge the parties, in particular the defendant of its respective obligations’. [58] The Appellant’s purchase of the 1,000 units of PCBA should not attract any cynicism. It should not be inferred as an admission or indication of liability merely because of a view held that a government linked company would not pay another company a substantial sum of money out of sheer goodwill. As pointed out, that was not the evidence led. It was not payment out of sheer goodwill. [59] With respect, it was also plainly incorrect for the learned trial judge to take the view that, ‘It [the Respondent] cannot say that in the absence of any PO, there was the order was never confirmed but later on paid for a portion of the “unconfirmed order’’’. It was on this basis that the learned trial judge agreed with the contention that the Appellant had acted inconsistently, ‘approbating and reprobating’ at the same time. However, as pointed out, the purchase of the 1,000 units of PCBA was not a purchase of 1,000 units of the WiWi Product. It was a purchase of 1,000 units of a component that the Appellant could use for its own projects. Appellate Intervention [60] The principles upon which appellate intervention is permitted are well settled. They were reiterated in an authoritative and lucid pronouncement by the Federal Court in a judgment by Zabariah Yusof FCJ, in setting aside a decision of this Court for reversing findings of fact by a trial judge at first instance. That was the case of Ng Hoo Kui & Anor v Wendy Tan Lee Peng (administratrix for the estate of Tan Ewe Kwang, deceased) & Ors [2020] 12 MLJ 67. [61] In Ng Hoo Kui, after a careful analysis of authoritative decisions of Courts within and without the country, Zabariah Yusof FCJ stated as follows: ‘[62] The Malaysian position has always been that, a decision that is arrived at, due to a lack of judicial appreciation of evidence is plainly wrong. … [70] That appellate interference would only be justified in situations where the trial court has been ‘plainly wrong’ has been repeatedly affirmed in the latest decisions of this court: see Director of Forest Sarawak&Ors vNicholasMujah ak Ason&Ors [2020] 1 MLJ 612; [2020] 2 CLJ 1 at paras [73]–[74] and Jeli Anak Naga & 4 Others v Tung Huat Pelita Niah Plantation & Ors and Another Appeal [2019] MLJU 1311; [2020] 1 CLJ 449 at para [49]. … [76] What is pertinent is that, the ‘plainly wrong’ test is not intended to be used by an appellate court as a means to substitute its own decision for that of the trial court on the facts. … [78] Hence following this court’s ruling in Tengku Dato’ Ibrahim Petra bin Tengku Indra Petra an appellate court should not interfere with the factual findings of a trial judge unless it was satisfied that the decision of the trial judge was ‘plainly wrong’ where in arriving at the decision it could not reasonably be explained or justified and so was one which no reasonable judge could have reached. If the decision did not fall within any of the aforesaid category, it is irrelevant, even if the appellate court thinks that with whatever degree of certainty, it considered that it would have reached a different conclusion from the trial judge.’ [62] Thus, unless it can be demonstrated that a trial judge was plainly wrong due to a lack of judicial appreciation of the evidence led, there ought not to be any appellate interference with the trial judge’s finding of primary facts. [63] A decision or conclusion of a trial judge may be said to be ‘plainly wrong’ if it cannot reasonably be explained or justified and is a decision or conclusion that no reasonable judge could have reached. [64] A trial judge cannot be said to be plainly wrong merely because upon the evidence disclosed, the appellate tribunal prefers a different conclusion from that of the trial judge. [65] There is another observation that is of particular importance for the purposes of the instant case and that is the observation by Ward LJ in Assicurazioni Generali SpA v Arab Insurance Group [2003] 1 WLR 577 (CA), referred to in Ng Hoo Kui, : ‘If the challenge is to the finding of a primary fact, particularly if founded upon assessment of the credibility of witnesses, then it will be a hard task to overthrow. Where the primary facts are not challenged and the judgment is made from the inferences drawn by the judge from the evidence before him, then the Court of Appeal, which has the power to draw any inference of fact it considers to be justified, may more readily interfere with an evaluation of those facts.’ (Emphasis added) In making this observation, Ward LJ alluded to the judgment of the Court in The Glannibanta (1876) LR 1 PD 283 at 287 as being apposite on the point in which it was stated thus: ‘Now we feel, as strongly as did the Lords of the Privy Council in the cases just referred to [Bland v Ross, The Julia (1860) 14 Moo PC 210, 15 ER 284 and Reid (owner of the SS Alice) v Aberdeen, Newcastle and Hull Steam Co (owners of the Princess Alice), The Alice and The Princess Alice (1969) LR 2 PC 245], the great weight that is due to the decision of a judge of first instance whenever, in a conflict of testimony, the demeanour and manner of the witnesses who have been seen and heard by him are, as they were in the cases referred to, material elements in the consideration of the truthfulness of their statements. But the parties to a cause are nevertheless entitled, as well on question of fact as on questions of law, to demand the decision of the Court of Appeal, and that Court cannot excuse itself from the task of weighing conflicting evidence and drawing its own inferences and conclusions, though it should always bear in mind that it has neither seen nor heard the witnesses, and should make due allowance in this respect.' [66] In its conclusion, the Federal Court in Ng Hoo Kui, with respect quite wisely, declined to set rigid parameters for the applicable test. At paragraph 148, Zabariah Yusof FCJ stated thus: ‘[148] Given the aforesaid, we form the view that rather than adopting a rigid set of rules to demarcate the boundaries of appellate intervention insofar as findings of fact are concerned, the ‘plainly wrong’ test as espoused in decisions of this court should be retained as a flexible guide for appellate courts. As long as the trial judge’s conclusion can be supported on a rational basis in view of the material evidence, the fact that the appellate court feels like it might have decided differently is irrelevant. In other words, a finding of fact that would not be repugnant to common sense ought not to be disturbed. The trial judge should be accorded a margin of appreciation when his treatment of the evidence is examined by the appellate courts.’ [67] Reverting to the instant case, the primary issue was whether the Appellant had instructed the Respondent to manufacture 2,822 units of the WiWi Product based on its email of 13th March 2012. That was the Respondent’s pleaded case and the existence of the email in question was not disputed. This issue turned predominantly, if not entirely, on an interpretation of contemporaneous emails rather than the oral testimony and veracity of the witnesses (cf UEM Group Bhd (previously known as United Engineers (M) Bhd v Genisys Integrated Engineers Pte Ltd & Anor [2010] 9 CLJ 785, para [27]). The emails themselves were self-explanatory. The oral testimony adduced could very easily be tested against the expressed wordings of the emails, and the contexts and circumstances in which they were exchanged. [68] Having regard to the express words used in the email of 13th March 2012 itself, it is our view that it was neither rational nor reasonable to conclude that they were tantamount to instructions to manufacture 2,822 units of the WiWi Product. The subject of the email itself was headed ‘WIWI Order Forecast’. The message in the email itself contained the words ‘order/built forecast based on respective TR need for potential development.’ The table upon which the number of units of the WiWi Product was derived, i.e. 2,822, was entitled ‘WIWI TR’ and ‘Forecast’. Consistent with it being a forecast, the dates in the table in respect of when orders were forecasted were future months. [69] Having regard to the email trail and the context in which the email in question was sent, it is also clear that it was a forecast made at the request of SP1 in his email of the same date, 13th March 2012, but sent earlier at 5 p.m. The very words used were ‘pls include forecast of all the TR’. Clearly, in order to properly appreciate the intent of the email in question, its context needs to be taken into account. In this case, the context can clearly be drawn from the emails preceding the email in question. [70] The email trail also disclosed quite clearly that the context of the forecast was to enable the Respondent to project the lead time that would be required for the manufacture of the WiWi Product. This was tied up with the proposal that the Respondent had made to the Appellant in its email of 1st March 2012 at 3:11 PM by SP2, and which proposal contained the option whether the Respondent was to purchase the raw materials for the manufacture of the WiWi Product or whether it was to be on a consignment basis by the Appellant. This option was described as its ‘material buffer strategy’. [71] The conclusion whether the email of 13th March 2012 was tantamount to instructions to proceed to manufacture 2,822 units of the WiWi Product does not, in our view, turn on an assessment of the credibility of the witnesses. In fact, based on the learned trial judge’s judgment, there was no indication that the learned judge’s conclusion was premised on any such assessment. If anything, it was the credibility of SP1’s testimony as to whether he had misunderstood the email and what was meant by a forecast that is suspect. The email however, speaks for itself. [72] In light of the explanation given by SD1 for the purchase of the 1,000 units of PCBA and the fact that specific purchase orders were issued and the PCBA purchased were components that the Appellant could use, it was not reasonable to conclude that the purchase was somehow incompatible with a bona fide transaction to secure usable components for the Appellant and at the same time to provide some assistance to the Respondent in the predicament that it had found itself. It was incorrect for the learned trial judge to conclude that these purchases were payment, ‘for a portion of the “unconfirmed order”’. They were purchases and payment for component parts that the Appellant could use which explanation, in any event, was not challenged in cross-examination. [73] This is also not to overlook the fact that of the 2,822 units of the WiWi Product forecasted, only 72 units were forecasted to be purchased by the Appellant. The rest were units for MTRs. There is nothing to suggest that the Appellant would be purchasing the balance of the 2,822 units on behalf of the MTRs. There was nothing to this effect in the emails in question or evidence led. Conclusion [74] In the premises, we are respectfully of the view that the learned trial judge was plainly wrong in his finding that the Appellant had instructed the manufacture of 2,822 units of the WiWi Product and in concluding that the Appellant was liable for the Respondent’s claim of the sum of RM1,672,789.00. With respect, there was in our view a lack of judicial appreciation of the evidence led at the trial. Accordingly, the Appellant’s appeal was allowed with costs. The decision of the High Court was set aside. Dated this 17th day of March 2022 - sgd - (DARRYL GOON SIEW CHYE) JUDGE COURT OF APPEAL MALAYSIA PUTRAJAYA CASES CITED Assicurazioni Generali SpA v Arab Insurance Group [2003] 1 WLR 577 (CA) Ng Hoo Kui & Anor v Wendy Tan Lee Peng (administratrix for the estate of Tan Ewe Kwang, deceased) & Ors [2020] 12 MLJ 67 The Glannibanta (1876) LR 1 PD 283 UEM Group Bhd (previously known as United Engineers (M) Bhd v Genisys Integrated Engineers Pte Ltd & Anor [2010] 9 CLJ 785 Counsel/Solicitor For the Appellant : Shamala Devi Balasundaram (Calvin Wong Wai Hou with her) Messrs Chooi & Company + Cheang & Ariff Level 5, Menara BRDB 285, Jalan Maarof Bukit Bandaraya 59000 Kuala Lumpur Tel. No. 03- 2055 3888 Fax No. 03-2055 3880 For the Respondent: Dato' Shamesh A/L Jeevaretnam (Charlotte Williams with him) Messrs Jeeva Partnership D-22-03, Menara Suezcap 1 KL Gateway, 2, Jalan Kerinchi 59200 Kuala Lumpur Tel. No. 03-7932 3962 Fax No. 02-7932 4962