Negeri Sembilan Cement Industries Sdn Bhd v Tru-Mix Concrete Sdn Bhd (BA-22NCvC-239-06/2024)

TRU-MIX CONCRETE SDN BHD (No. Syarikat: 199101019339 (229676-D))

HO HUP CONSTRUCTION COMPANY BERHAD (No. Syarikat: 197301000497 (14034-W)) … DEFENDAN-DEFENDAN GROUNDS OF JUDGMENT Introduction [1] The Plaintiff applied for summary judgment to be entered against the Defendants jointly and/or severally for the following sums:

RM2,144,788.20 as at 29-2-2024;

Late payment interest in the sum RM358,004.50 at the rate of 1.5% per month on RM2,144,788.20 as at 29-2-2024; and

Late payment interest at the rate of 1.5% per month on RM2,144,788.20 calculated from 1-3-2024 until full payment. 24/12/2024 10:18:30 BA-22NCvC-239-06/2024 Kand. 37 S/N q6VzwXouVkZI0wjs/sSnw [2] On 15-11-2024, I heard arguments and allowed the application with costs of RM5,000.00. These are my reasons. Background Facts [3] The Plaintiff supplied cement to the 1st Defendant pursuant to a written supply contract dated 4-10-2021 (“Contract” or “P1” in the Plaintiff’s Affidavit). The 1st Defendant is a ready-mix cement supplier. [4] The 2nd Defendant had provided a Corporate Guarantee dated 18- 11-2021 to guarantee the 1st Defendant’s obligations under the Contract (“Guarantee” or “P2” in the Plaintiff’s Affidavit). [5] In the course of the relationship between the parties, the 1st Defendant would submit purchase orders (“PO”) for cement and the Plaintiff would deliver the goods with delivery orders (“DO”) and issue tax invoices. [6] At times, the Plaintiff’s delivery truck would be redirected and a “Redirection Advice” is issued if, e.g. a customer rejects a delivery or if the 1st Defendant’s silo at a particular location is full. [7] The Plaintiff invoiced the 1st Defendant monthly and the underlying POs, DOs, Redirection Advices and tax invoices constituted the transaction documents (“Transaction Documents” or “P3” in the Plaintiff’s Affidavit) in support of the claim. S/N q6VzwXouVkZI0wjs/sSnw [8] The Plaintiff also exhibited statements of the 1st Defendant’s account with the Plaintiff dated 29-2-2024, 31-3-2024 and 30-4-2024 (“Statement of Account” or “P4” in the Plaintiff’s Affidavit”). [9] The 1st Defendant’s account went into arrears and reminder letters (“P5” in the Plaintiff’s Affidavit), a solicitors’ demand (“P6” in the Plaintiff’s Affidavit) and e-mail communications concerning the overdue account (“P7” in the Plaintiff’s Affidavit) ensued between the Plaintiff and the 1st Defendant. Analysis and Findings [10] The Defendants pleaded a bare denial in the Defence to the Statement of Claim and in the Affidavit filed to oppose summary judgment. For the avoidance of doubt, I reproduce the substantive part of the sole affidavit filed by the Defendants: S/N q6VzwXouVkZI0wjs/sSnw [11] At the hearing, the Defendants raised the following issues via written submissions to oppose summary judgment:

The outstanding principal sum of RM2,144,788.20 is unsubstantiated by the Transaction Documents in that:

Invoices in a Finance Report furnished in the e-mail communications differ from the invoices in the Transaction Documents as do the pleaded POs.

(ii) Invoice 41190, 41217, 41253, 41257, 41302, 41303 and 41365 are for rejected deliveries and Invoice 41194, 41218, 41216, 41288, 41291, 41331 and 41330 are invoices without any Redirection Advice; and

(iii) The Plaintiff did not take into account a payment of RM880,928.90 made by the 1st Defendant on 20-1-2023 and other payments totaling RM628,587.80 as at 2-2-

2024.

There is no contractual provision that provides for joint and/or several liability as against the 1st and 2nd Defendants. Proof of Claim Amount [12] The Plaintiff relied on the following provisions of the Contract as prima facie proof of its claim: S/N q6VzwXouVkZI0wjs/sSnw Clause 3 “Your credit term is 60 days from the date of our monthly statement of accounts following the respective deliveries. In order to encourage you to pay earlier, we offer you a prompt payment incentive of RM4.00 per tonne for payment within 60 days. This incentive shall form part of the discounts/rebates stipulated in paragraph 2 above. However, payment beyond 60 days would not entitle you to this prompt payment incentive of RM4.00 per tonne.” Clause 4 “Interest at the rate of 1.5% per month will be charged for overdue amounts exceeding 60 days from the date of the respective statements of accounts to date of settlement. Any dispute on invoice must be notified in writing within 14 days.” Clause 9 “The statement of accounts signed by our authorized officers to the amount owing by you for the supply of the products in the absence of manifest error to be communicated to us within 30 days, shall be final, conclusive and binding.” [13] The outstanding invoices were from November 2022 to July 2023. As there were no contemporaneous disputes or objections to the tax invoices or Statements of Accounts which the 1st Defendant did not deny receiving, this Court finds that Clause 9 of the Contract served as conclusive evidence of the debt (Citibank NA v Ooi Boon Leong & Ors [1980] CLJU 168; Cempaka Finance Bhd v Ho Lai Ying & Ors [2006] 3 CLJ 544). S/N q6VzwXouVkZI0wjs/sSnw [14] Further, since no objections, protests or queries were raised by the 1st Defendant upon receiving the Statement of Account, an account stated came into existence. This creates an estoppel against the 1st Defendant from querying the accounts thereafter. There is a waiver of any right to complain (Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Berhad [1995] 4 CLJ 283; Sykt. Tan Thian Siong Sdn Bhd v Sykt. Siaw Teck Hwa Realty & Development Sdn Bhd [1983] CLJ Rep 878). [15] The open e-mail communications between the parties also revealed admissions that were contrary to the 1st Defendant’s denials about the Contract and the Plaintiff’s claims in the action. The following are some of the communications: S/N q6VzwXouVkZI0wjs/sSnw [16] During the hearing, I even stood the case down briefly and asked counsel for the Plaintiff to check and satisfy me that the Transaction Documents were complete and internally consistent. With reference to the Statement of Account as at 29-2-2024 as an example, counsel for the Plaintiff demonstrated that the Transaction Documents at pages 194-276 correspond to the amount invoiced as at 30-4-2023. [17] In respect of the triable issues sought to be raised by the Defendants, it has to be said that the manner in which counsel raised those issues is to be deprecated (Ng Hee Thoong & Anor v Public Bank Bhd [1995] 1 CLJ 609). Even if the issues raised emanate from the documents already exhibited in the affidavits, the Defendants must detail the nature of the issues intended to be argued and do so under oath in an affidavit so that there is an opportunity for the other party to answer them. [18] In this case, after asserting entirely from the Bar that there were differences and inconsistencies in the Transaction Documents, counsel for the Defendant did not attempt to identify and explain the issues by specific reference to the Transaction Documents, leaving it to everyone else to figure out what the alleged dispute was all about. [19] This Court would be justified in giving no weight to the submissions made from the Bar by counsel for the Defendants on proof of the claim amount. In any case, to the extent that the purport of counsel’s submissions could be discerned, they were hardly serious contentions:

There was no inconsistency between the Finance Report attached to the email communications and the claim. The S/N q6VzwXouVkZI0wjs/sSnw Finance Report was the 1st Defendant’s account over the period from May 2022 to January 2023 while the claim covers the period from November 2022 to July 2023 as per the Statement of Account.

The documents identified with numbers 41190, 41217, 41253, 41257, 41302, 41303 and 41365 (allegedly rejected); and 41194, 41218, 41216, 41288, 41291, 41331 and 41330 (allegedly diverted without Redirection Advices) are not invoices at all as asserted in the Defendants’ submissions, but POs.

The supply of cement to the 1st Defendant took place as seen from the Transaction Documents. For example, PO No. 41190 was diverted to the 1st Defendant in a Redirection Advice and invoiced on 9-11-2022; and PO No. 41194 was delivered to the 1st Defendant under a duly acknowledged DO, and invoiced on 18-11-2022.

As for the contention that part payments were not credited, it can be seen that the 1st Defendant’s Statement of Account as at 30-4-2024 does reflect the several part payments totalling RM628,587.80 which were credited to the account between 30-5-2023 and 2-2-2024.

The RM880,928.90 accumulated part payments made by the 1st Defendant was reflected in the Finance Report as at 20-1- 2023 and it left a balance due of RM2,674,246.83 as at that date. The Statement of Account was for the period S/N q6VzwXouVkZI0wjs/sSnw commencing from 29-1-2023 (the due date for invoices dated 30-11-2022). [20] For the above reasons, this Court found no bona fide triable issues as it relates to the 1st Defendant. The combination of the conclusive evidence clause in the Contract, the admissions by the 1st Defendant in the e-mail communications and the estoppel set up against the 1st Defendant due to its failure to dispute the tax invoices or the Statement of Accounts as well as the failure of the Defence to demonstrate any manifest error in the Statement of Accounts are sufficient to prove the Plaintiff’s case for summary judgment. Liability on Guarantee [21] The Guarantee is a continuing guarantee to pay on demand for the debts of the 1st Defendant up to a limit of RM3,000,000.00. It also has a conclusive evidence clause binding on the 2nd Defendant. The issue raised is that the 2nd Defendant may not be held jointly and/or severally liable with the 1st Defendant because there is no provision in the Guarantee to that effect. [22] There is no merit in this argument. Joint and several liability simply means that a creditor is entitled to proceed against all the parties concerned jointly and individually. In this case, the 2nd Defendant is also liable for the entire debt of the 1st Defendant. Per Clause 7 of the Guarantee: S/N q6VzwXouVkZI0wjs/sSnw “As between the Customer, ourselves, and you, we shall remain liable under this Guarantee as if we were the sole principal obligor and not merely a guarantor.” In the circumstances, they are jointly and/or severally liable not because of a provision in the Guarantee that must say so, but because that is the legal effect of both Defendants being liable for the same debt. [23] This Court cannot see how the issue raised with regards to the Guarantee passes muster as an issue if the debt under the Contract is indeed owed by the 1st Defendant as this Court has found. For these reasons, there are also no triable issues as it relates to the 2nd Defendant. Bertarikh : 23 Disember 2024 ELAINE YAP CHIN GAIK PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI MALAYA SHAH ALAM S/N q6VzwXouVkZI0wjs/sSnw Peguam Untuk Plaintif : Mishand Patmanathan (with Jeremiah Anand Lawrence), Messrs Haris Ibrahim Kandiah Partnership Untuk Defendan-Defendan : Shopna Rani Malakar, Messrs Shopna Rani Malakar & Co S/N q6VzwXouVkZI0wjs/sSnw