Pembinaan Muthiah & Sons & 2 Lagi v Swee Premix Sdn Bhd (WA-12ANCC-73-05/2021)

PEMBINAAN MUTHIAH & SONS (M) SDN BHD (Company No.: 705020-U)

MUTHIAH A/L RAMASAMY (NRIC No.: 470125-02-5305)

GUNALAN A/L MUTHIAH (NRIC No.: 791009-14-5825) … APPELLANTS AND SWEE PREMIX SDN BHD (Company No.: 557291-V) ... RESPONDENT Consolidated with IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR

BETWEEN PEMBINAAN MUTHIAH & SONS (M) SDN BHD (Company No.: 705020-U)

MUTHIAH A/L RAMASAMY (NRIC No.: 470125-02-5305)

GUNALAN A/L MUTHIAH (NRIC No.: 791009-14-5825) … APPELLANTS AND SWEE PREMIX SDN BHD (Company No.: 557291-V) ... RESPONDENT 2 GROUNDS OF JUDGMENT [1] There are 2 appeals (“Appeal 73 and “Appeal 74”) by the 1st, 2nd and 4th Defendants in the court below (“the Appellants”) which emanated from 2 decisions of the learned Sessions Court judge (“SCJ”) dated 10.5.2021 in allowing with costs the Respondent’s:

1.1 summary judgment application against the Appellants pursuant to Order 14 of the Rules of Court 2012 (“ROC 2012”); and

1.2 application pursuant to Order 18 Rule 19 (1) (b), (c) (d) and Order 92 Rule 4 ROC 2012 and/or under the inherent jurisdiction of the Court for striking out the Appellant’s Counterclaim dated 1.3.2021. [2] In these appeals, the Appellants and the Respondent will be referred to as the Defendants and Plaintiff respectively. Background [3] The Plaintiff claimed against the 1st Defendant the sum of RM237,225.15 being the balance sum inclusive of interest outstanding as at 31.12.2020 for the supply of premix (asphalt concrete) to the 1st Defendant. The other Defendants are sued as guarantors, having signed a guarantee and indemnity dated 28.01.2016 for debts owed by the 1st Defendant. [4] According to the Plaintiff, this is a simple straight forward claim for supply of goods, the debt was admitted, there are no triable issues; the 3 issue raised by the Defendants hinged on misrepresentation by the Plaintiff based on the percentage of Bitumen Content represented to be 5.60% which turned out to be 4.85% premised on a report dated 15.09.2020 by Ikram Paves Sdn Bhd (“the Ikram report”) is an afterthought and misleading as the Ikram report was prepared AFTER:

4.1 the Plaintiff had demanded for the sum outstanding;

4.2 the 1st Defendant had admitted the debt a few times; and

4.3 a year from when the goods were supplied; any test on the premix ought to have been carried out within 24 hours of laying and compacting the bituminous mix in accordance with Jabatan Kerja Raya Malaysia (JKR)’s “Standard Specification for Road Works”; it is reasonable for the percentage of the Bitumen Content to deviate due to wear and tear taking into account the weather such as high temperature in Malaysia, rain and daily usage by road users especially in an open space car park for a year. [5] The essence of the Defendants’ contentions are that:

5.1 Around June 2018, the Plaintiff had issued a “Mix Design for Asphaltic Concrete” showing that the “Mean Optimum Binder Content” (equivalent as Bitumen Content) was and will be 5.60%;

5.2 the Defendants were made to believe and believed that the Bitumen Content that will be supplied by the Respondent is 5.60%; 4

5.3 acting on the same belief, the Defendants ordered concrete mix from the Respondent;

5.4 however, from a report dated 15.9.2020 by Ikram Paves Sdn Bhd, the Defendants discovered that the Mean Optimum Binder Content or Bitumen Content had been reduced from 5.60% to 4.85%;

5.5 the Defendants had contacted the Plaintiff to dispute the same and a meeting on 25.9.2020 was held between the Defendants and the Plaintiff. The 1st Defendant in its letter to the Plaintiff on 14.10.2020 had alluded to this meeting, stated it awaited the Plaintiff’s response on the Ikram report, and would withhold a sum of RM88.891.50 whilst at the same time attached a cheque for part payment of RM50,000;

5.6 the existence of the meeting on 25.9.2020 was not disputed by the Plaintiff;

5.7 there are triable issues whether the Bitumen Content contained in the concrete mix supplied by the Plaintiff to the Defendants was intentionally reduced from 5.60% to 4.85%; and

5.8 if the 1st issue is resolved in favour of the Defendants, whether the Plaintiff is liable for fraudulent misrepresentation to the

5.9 if the 2nd issue is again resolved in the affirmative, whether the Defendants are still liable to pay the Plaintiff as claimed? 5 [6] The Learned SCJ agreed with Counsel for the Plaintiff and found:

6.1 no triable issue was raised by the 1st Defendant premised on the admissions made by the 1st Defendant in its letters of 29.6.2020, 14.9.2020 and 14.10.2020, and having made 2 part of payments on 14.8.2020 and 14.10.2020 of RM30,000 and RM50,000 respectively; the guarantor Defendants having signed the Guarantee are jointly and severally liable to the Plaintiff and accordingly entered summary judgment for the Plaintiff;

6.2 the Counterclaim to be scandalous, frivolous and vexatious based on the 1st Defendant’s admission of debt and part payment made; the asphalt quality was raised as an after thought; the impugned report was made only in September 2020, a year after the premix was supplied in 2019; “caveat emptor “ applied, the 1st Defendant ought to have inspected the goods as to its condition and quality citing Bayangan Sepadu Sdn Bhdv Jabatan Pengairan dan Saliran Negeri

6.3 the Defendants have failed to plead what is the misrepresentation. Appeal to this court [7] Dissatisfied with the learned SCJ’s decisions, the Defendants appealed to this court. 6 [8] l am mindful that pursuant to section 29 of the Courts of Judicature Act 1964 and Order 55 Rule 2 of the Rules of Court 2012, the appeals are by way of a rehearing. [9] On 13th October 2021, brief oral grounds of decision were given to the parties when I allowed both appeals. As the appeals were related, it is convenient to deal with both appeals in one judgment. Appeal against Summary judgment – Appeal 73 [10] It is trite law, following National Company For Foreign Trade v Kayu Raya Sdn. Bhd [1984] 2 CLJ 220 and Cempaka Finance Bhd v Ho Lai Ying & Anor [2007] 1 AMR 525, to be prima facie entitled to summary judgment, the Plaintiff has to fulfill the following preliminary requirements:

10.1 the statement of claim must have been served on the

10.2 the Defendants must have entered an appearance; and

10.3 the affidavit-in-support of the application must comply with the requirements of Order 14 rule 2 ROC 2012. [11] The Plaintiff in this case having satisfied the preliminary requirements that the Order 14 application has been properly filed, the burden then shifts to the Defendants to satisfy the Court why judgment should not be given against them. It is important to be reminded that in an Order 14 ROC 2012 application for summary judgment, the Court must look at the matter as a whole and ask itself whether the Defendants have satisfied the Court that there is an issue or question in dispute which 7 ought to be tried, or there ought for some other reason to be a trial of that claim or part of the claim. [12] Where a Defendant is able to demonstrate facts to show that he has raised a defence or reasonable grounds for setting up a defence or even a fair probability that he has a bona fide defence, he ought to be given leave to defend. This discretion lies with the judge. [13] It is also to be borne in mind that the Defendant must raise an arguable issue that requires a trial in order to determine it: Voo Min En & Ors v Leong Chung Fatt [1982] 2 MLJ 241. [14] In Bank Negara Malaysia v Mohd Ismail Ali Johor & Ors [1992] 1 MLJ 400; [1992] 1 CLJ Rep 14 the Supreme Court helpfully summarised the approach to be taken in dealing with the affidavits: “In our view, basic to the application of all those legal propositions, is the requirement under O. 14 for the Court to be satisfied on affidavit evidence that the defence not only has raised an issue but also that the said issue is triable. The determination of whether an issue is or is not triable must necessarily depend on the law arising from each case as disclosed in the affidavit evidence before the Court…. Under O. 14 when a fact is asserted by one party and denied by another, and such denial is equivocal or lacking in precision or is inconsistent with undisputed contemporary documents or other statement by the same deponent or is inherently improbable in itself, the judge has a duty to reject such assertion or denial, thereby rendering the issue as not triable. In our opinion, unless this principle is adhered to, a Judge is in no position to exercise his discretion judicially under an O.14 application. Thus, apart from identifying the issues of fact or law, the Court must go one step further and determine whether they are triable. This principle is sometimes expressed by the statement that a complete 8 defence need not be shown. The defence set up need only show that there is a triable issue. Where the issue raised is solely a question of law without reference to any facts or where the facts are clear and undisputed, the court should exercise its duty under O 14. If the legal point is understood and the court is satisfied that it is unarguable, the court is not prevented from granting a summary judgment merely because 'the question of law is at first blush of some complexity and therefore takes a little longer to understand'. (See Cow v Casey 6 and European Asian Bank AG v Punjab & Sind Bank 7 at p 516.)” [15] The threshold to resist summary judgment is relatively very low as the Defendants need only raise one triable issue to be given leave to defend - South East Asia Insurance Bhd v Kerajaan Malaysia [1998] 1 CLJ 1045 & Stamford College Bhd v Iris Corp Bhd [2014] 8 MLJ 178 at [10], [11] and [25]. [16] The Defendant need only raise a plausible defence – Noh Hyoung Seok v Perwira Affin Bank Bhd [2004] 2 MLJ 203. [17] Even if the Defendants cannot raise any triable issue, the summary judgment application may still be dismissed under Order 14 rule 3(1) ROC 2012 if “there ought for some other reason to be a trial”, namely there are circumstances that ought to be investigated by the court - please see the Federal Court’s judgment delivered by Mohd. Dzaiddin FCJ (as he then was) in United Merchant Finance Bhd v Majlis Agama Islam Negeri Johor [1999] 1 MLJ 657, at pg 666-668. [18] In Southern Finance Bhd v Sun City Development Sdn Bhd & Anor [2006] 7 CLJ 464, it was held: 9 “The general principle is where a Defendant shows that he has a fair case for defence or reasonable grounds for setting up a defence or even a fair probability that he has a bona fide defence he ought to be given leave to defend (Saw v.Hakim 5 TLR 72). A Defendant should not be shut out from defending unless it is very clear indeed that he has no case in the action under discussion (Sheppards v. Wilkinson 6 TLR 13). The power to give summary judgment under O. 14 is “intended only to apply to cases where there is no reasonable doubt that a Plaintiff is entitled to judgment and where therefore it is inexpedient to allow a Defendant to defend for mere purposes of delay”. (Jones v.Stone [1894] AC 122). Where there is any serious conflict to matters of fact or where any real difficulty as to matters of law arises, summary judgment under O. 14 should not be granted. (Electric and General Corpn. v.Thomson-Houston Electric 10 TLR 103). But, however difficult the point of law is, once it is understood and the Court is satisfied that it is really unarguable it will give final judgment (Cow v. Casey [1949] 1 KB 481). (See Percetakan Solai Sdn Bhd v. Kin Kwok Daily News Sdn Bhd & Anor [1985] CLJ (Rep) 632 at p. 637).”(emphasis own) [19] Thus, for the Defendant to succeed in being given leave to defend, he must convince this Court that he has raised an issue of fact and/or law to be tried in this action, and if he cannot, he has to show there is “some other reason for trial” pursuant to O. 14 r. 3(1) ROC 2012. [20] With the above principles in mind, I now deal with the appeal. [21] It seems to me that the difference in the Bitumen Content from that represented, to that delivered, appears to be the Defendants’ core defence. [22] Having reviewed the cause papers and the parties’ submissions, I find, at the very least, the following issues raised are triable in this case and can only be determined by way of oral or viva voce evidence at trial of the matter: 10

22.1 whether the Bitumen Content contained in the concrete mix supplied by the Plaintiff to the Defendants was reduced from 5.60% to 4.85%;

22.2 IF the 1st issue is resolved in favour of the Defendants, whether the Plaintiff is liable for fraudulent misrepresentation to the Defendants;

22.3 IF the 2nd issue is again resolved in the affirmative, whether the Defendants are still liable to pay the Plaintiff as claimed? [23] In this regard, it is noteworthy that the Plaintiff has not disputed that the Bitumen Content had deviated from 5.60% to 4.85% credibly. Instead the Plaintiff sought to explain that:

23.1 the deviation of the Bitumen Content was because of wear and tear resulting from weather factors, such as high temperature and rain; and

23.2 any test on the premix ought to have been carried out within 24 hours of laying and compacting the bitamunious mix in accordance with JKR’s “Standard Specification for Road Works”; the concrete mix in the instant case was a year old when Ikram Paves Sdn Bhd conducted the test. [24] In this case, the Plaintiff did not produce any evidence to show that the JKR Guidelines were made pursuant to any written law. When the Plaintiff’s counsel was queried by the Court as to whether JKR’s “Standard Specification for Road Works” had force of law, the Plaintiff’s counsel did not say so. 11 [25] My own reading of the JKR Guidelines at pdf pages 594 to 781 of the Appeal Record does not show the Guidelines was made pursuant to any written law. As such, the Plaintiff cannot prevail upon the court that the JKR Guidelines are applicable. [26] In Ho Kok Cheong Sdn Bhd & Anor v Kim Kay Tiong & Ors, [1979] 2 MLJ 224, the Federal Court found that a guideline called “Guideline for the Regulation of Acquisition of Assets, Mergers and Take-overs” issued by the Government of Malaysia had no force of law as it were not issued pursuant to any power given by law. Wan Hamzah J in delivering the decision of the Federal Court held at pg 226: “The guidelines were issued not pursuant to any power given by law, and in my opinion they have no force of law but are of advisory character merely. I do not think that non-compliance with the guidelines can be taken as an act opposed to public policy. The guidelines reflect the Government's political policy, but Government's political policy is not public policy.” [27] As mentioned earlier, the learned SCJ after considering the contents of all the affidavits and after hearing submissions, came to the conclusion that there were no triable issues and made a specific finding that there was no basis for the matter to go for trial. [28] In my respectful view, it is insufficient on affidavits alone to consider whether the extent of deviation of the Bitumen Content in the premix supplied was due to weather factors and / or wear and tear. The learned SCJ instead of giving the complaint short shrift, ought to have held the issue was triable and dismiss the Plaintiff's application and grant the Defendants leave to defend as the outcome of the claim depends on 12 expert opinion. It is trite that matters concerning expert evidence are issues of facts which ought to be determined by the Court at trial. I refer to just 2 cases:

28.1 Harren & Partner Schiffahrts GmbH & Co. KG MS Patea v Vitol SA [2020] EWHC 3315 (Comm) in which the English High Court held at [50] that where an application for summary judgment is based on the state of the parties’ expert evidence, and where there remain differences between the experts, the court finds it “difficult to envisage many circumstances where the summary determination of a dispute is desirable or even possible”.

28.2 Shi Wen Yue v Shi Minjiu and another [2016] 4 SLR 91, a case involving the opinions of experts on Chinese law engaged by parties. The Singapore High Court held at [7] that the disagreement between the experts on the issue concerned requires a trial, and summary judgment is clearly inappropriate. [29] In order to appreciate the learned SCJ’s refusal to accept the allegation of misrepresentation of the Bitumin Content, as asserted by the Defendants, it is relevant to consider the admissions of debt made which led to summary judgment being entered in the Court below. In my respectful view, granted there were admissions of debt made which caught the attention of the Learned SCJ, and which at first blush make the defence seem bleak, however, it is crucial to note that the admissions of debt were made before the Defendants were aware that the Bitumin Content had deviated. The Defendants drew attention of the Plaintiff to 13 this and within 2 weeks of the Ikram report, met the Plaintiff and withheld a balance sum of RM88.891.50. This aspect of the matter appears not to have been considered by the learned SCJ. The Ikram report was simply brushed aside. [30] From my perusal of the statement of Defence and the Defendants’ affidavits, it does not seem to me that the Defendants merely made a bare, sweeping or general allegation of the misrepresentation of the Bitumin Content - the Defendants’ complaint was backed by the Ikram report. If there is some evidence to support the Defendants’ complaint, in my utmost respectful view, it is not then for the court to delve into the merits and go into the sufficiency or adequacy of the evidence at the interlocutory stage:

30.1 The Federal Court in Peninsular Land Development v K Ahmad [1970] 1 MLJ 149 at 152 said: “The principle governing the exercise of power under Order 14 applies equally to Order 14A and as stated by Lord Chancellor in Jacobs v Booths Distillery (1901) 85 LTR NS 262 is in these terms:– … It is not for that tribunal to enter into the merits of the case at all. It ought to make the order only when it can say to the person who opposes the order, 'You have no defence. You could not by general demurrer, if it were a point of law, raise a defence here. We think it impossible for you to go before any tribunal to determine the question of fact.' We are not expressing any opinion whatever upon the merits of the case. It appears to me that there is a fair issue to be tried. On which side the chances of success are it is not for this House to determine; but thinking, as I do, that there is a fair issue to be tried by a competent tribunal, it seems to me to be perfectly clear that the order of the Court of Appeal ought to be reversed. “

30.2 In United Malayan Banking Corporation Berhad v Palm and 14 Vegetable Oils (M) Sdn Bhd & Ors [1983] 1 MLJ 206, the Federal Court also held at [28] that the Court hearing a summary judgment application should not touch on the “merits” of the issues involved: “28 We have not dealt in any detail with the facts and particulars of the several allegations made on both sides as it is not our province to touch on the merits of the issues involved. We only need to consider whether or not there are issues or questions in dispute which ought to be tried. Summary judgment is only given in a plain and obvious case. This is certainly not one. We find as we have indicated that there are in fact triable issues and this is substantiated by the necessity for applications for the admission of Queen's Counsel in this appeal on the grounds of the complexity of the case which involves difficult questions of fact and law and also the voluminous affidavits and exhibits put in and the arguments presented before us over a period of two days.” [31] Further, there were no suggestions or even hints of fraud or collusion on the part of Ikram and the Defendants in order to provide a Defence against the Plaintiff’s claim. In light of the Ikram report, with respect, the learned SCJ was wrong in rejecting the averment of misrepresentation of the Bitumin Content as an issue to be tried, as being a bare assertion and an afterthought. The Learned SCJ should only in my respectful view, consider whether the Defendants have raised a triable issue, not try disputed issues of fact and should have refrained from turning the summary judgment application into a summary trial. See: Syn Lee & Co Ltd v Bank of China [1961] MLJ 87, CA at 87E; Ng Hee Thoong v Public Bank Bhd [1995] 1 MLJ 281, CA at 289F; and Asia Life Assurance Society Ltd v Kong Leong Aik @ Simon Kong [1992] 2 CLJ (Rep) 129; [1992] 4 CLJ 2053, at 131c and 131g. [32] This Court cannot in good conscience and equity ignore the Ikram report. It is not out of place to state that IF construction materials are substandard, public safety may be impinged and the implications wide 15 ranging. I ought to say no more as the matter is at an interlocutory stage. At this juncture, the principles referred to above are sufficient to dispose off this appeal. [33] The Plaintiff also relied on ‘caveat emptor’ and the case of Bayangan Sepadu Sdn Bhd v Jabatan Pengairan dan Saliran Negeri Selangor & Ors [2021] 1 MLJ 322; [2020] MLJU 1276 which found favour with the learned SCJ. [34] In my utmost respectful view, the facts in Bayangan Sepadu were easily distinguishable as the physical condition of the land could readily be inspected. In the instant case, the Bitumen Content is latent and cannot readily be gleaned from a visual inspection. This was what the Court of Appeal held in Bayangan Sepadu: “[30] The legal maxim caveat emptor is succinctly stated in Halsbury’s Laws of England 3rd edn. Vol. 34 at p. 212: …the rule is; a purchaser should make inspection and inquiry as to that which he is proposing to buy. If he omits to ascertain whether the land is such as he desires to acquire, he cannot complain afterwards on discovering defects of which he would have been aware if he had taken ordinary steps to ascertain its physical condition; and, although as a general rule a vendor must deliver property corresponding to the description contained in the contract, yet an error in the particulars or description of the property in the contract is not a ground of objection if it is readily corrected on inspection. [31] The legal maxim caveat emptor or let the buyer beware, must necessarily apply to this case before us. The purchaser, in this case, the Plaintiff should have inspected the Land and make inquiries as to the property which it was proposing to bid. If the Plaintiff omitted to ascertain whether the Land is such as it had expected it to be, the Plaintiff cannot upon discovering the existence 16 of the Retention Pond and the Structures erected on the Land complain. If the plaintiff had conducted a physical inspection of the land as required in the proclamation of sale, it is highly inconceivable that the plaintiff did not have sight of not only the retention pond but the structures built on the disputed land in question. It is the proverbial ‘elephant in the room’; unmistakably difficult not to miss…. ”(emphasis own) [35] In the instant case, there is also nothing to show that the Defendants had purchased the premix on a ‘as is where is’ basis, where they ought to have known or was otherwise deemed to have known about the Bitumin Content. [36] The Plaintiff has further urged upon this court 2 other cases in support of its arguments but with respect, I do not think they are applicable for the following reasons. First, I find the case of Gemencheh Granite Sdn Bhd v Puncabahan Sdn Bhd & Anor [2013] 8 MLJ 594 was decided after trial where experts were called, and the Court, guided by the experts found that the crusher run and the goods were supplied, delivered and accepted by the Defendants after the tests were done to ensure the crusher run met specifications. The next case of Astenpave Sdn Bhd v Micheel Construction Holding Sdn Bhd [2020] MLJU 1101 did not assist the Plaintiff’s case one whit. The Court there in fact found that the Defendant’s complaint that the Plaintiff’s works carried out were not in accordance with specifications to be plainly triable, and, held that the Defendant’s striking out application was an abuse of court process. [37] Even if I am wrong in finding that the misrepresentation of the Bitumin Content is a triable issue, I find the Defendants had shown enough circumstances surrounding the case that called for further investigation at a trial - in the words of O 14 r 3(1), 'there ought for some 17 other reason to be a trial', and the instant case comes within the category which Megarry J had in mind in Miles v Bull [1969] 1 QB 258; [1968] 3 All ER 632; [1968] 3 WLR 1090. [38] Further, the Counterclaim ought to be properly considered in deciding whether summary judgment ought to be granted. In this context, I found an instructive Singapore High Court case of Kim Seng Orchid Pte Ltd v Lim Kah Hin (Trading As Yik Zhuan Orchid Garden) [2017] SGHC 4. The Singapore High Court laid down some guidelines in relation to the proper approach to be taken by the Court when determining whether summary judgment ought to be ordered where there is a subsisting counterclaim at [98]:

38.1 Step 1: The Court should first consider whether the counterclaim is plausible. If the counterclaim is not plausible, then its presence ought not to stand in the way of the Plaintiff obtaining summary judgment of its whole claim, without any stay pending the determination of the counterclaim.

38.2 Step 2: The Court should then determine whether the counterclaim that it had found to be plausible amounted to a defence of set-off, whether legal or equitable. If the plausible counterclaim did amount to a defence of setoff, then unconditional leave to defend should be granted in respect of the whole of the claim.

38.3 Step 3: The Court could then consider whether there was a connection between the claim and the counterclaim. If that counterclaim arose out of quite a separate and distinct 18 transaction or it was wholly foreign to the claim, the Court should generally grant summary judgment of the whole claim, without a stay pending the determination of the unconnected counterclaim.

38.4 Step 4: The Court should also consider whether there were grounds for a stay of execution in the light of the connected and plausible counterclaim. [39] The Singapore High Court at [80] to [96] relied on various authorities in formulating the above approach - United Overseas Limited v Peter Robinson Limited (trading as Top Shop) [1991] Lexis Citation 2739, EWCA at pages 3 to 4; Hawley & Hazel Chemical Co (S) Pte Ltd v Szu Ming Trading Pte Ltd [2008] SGHC 13 at [32] and [33]; United Overseas Bank Ltd v Tru-line Beauty Consultants Pte Ltd [2011] 2 SLR 590, SGHC at [41] to [44]; Nanyang Law LLC v Alphomega Research Group Ltd [2010] 3 SLR 914, SGHC at [17]; Invar Realty Pte Ltd v Kenzo Tange Urtec Inc [1990] 3 MLJ 388, MYHC at 391; P H Grace Pte Ltd v American Express International Banking Corp [1987] 1 MLJ 437, SGCA at [5]. [40] Applying the above approach to the instant case, with respect, summary judgment ought to be refused by reason of the counterclaim which was premised on misrepresentation; the Defendants’ counterclaim is clearly plausible and if the Defendants’ counterclaim is successful, the Defendants would be entitled to recover all loss and damage suffered arising from the Plaintiff’s misrepresentation which may fully extinguish the Plaintiff’s claim in the event that the counterclaim is allowed. The Defendants’ counterclaim effectively amounts to a defence of set-off. As 19 such, unconditional leave to defence should be granted. Even if it does not amount to a defence of set-off, the Defendants’ counterclaim is plainly connected to the Plaintiff’s claim. It is most appropriate for this Court to make a summary determination of the Plaintiff’s claim without also considering the Defendants’ counterclaim. [41] I am of the opinion that the Defendants’ admissions of debt before the Ikram Report does not bar the Defendants from Counterclaiming against the Plaintiff. [42] It is clear to me that the Plaintiff’s claim is not incontestable. The Defendants have clearly met the low threshold for leave to defend for the reasons explained. The summary judgment application ought to be dismissed by the Learned SCJ. In my respectful view, appellate interference is warranted where there has been no or insufficient judicial appreciation of the evidence by the Learned SCJ. Striking out the Counterclaim - Appeal 74 [43] As mentioned earlier, the striking out application was made by the Plaintiff under Order 18 Rule 19 (1) (b), (c) (d) and Order 92 Rule 4 ROC 2012 and/or under the inherent jurisdiction of the Court. I propose to set out O 18 r 19 ROC 2012 for convenience: “19. Striking out pleadings and endorsements (O. 18 r. 19)

The Court may at any stage of the proceedings order to be struck out or amended any pleading or the endorsement, of any writ in the action, or anything in any pleading or in the endorsement, on the ground that-

it discloses no reasonable cause of action or defence, as the case may be; 20

it is scandalous, frivolous or vexatious;

it may prejudice, embarrass or delay the fair trial of the action; or

it is otherwise an abuse of the process of the Court, and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.

No evidence shall be admissible on an application under paragraph

(1)(a).

This rule shall, as far as applicable, apply to an originating summons as if it were a pleading.” [44] In considering a striking out, the succinct words of the Federal Court are apposite in Seruan Gemilang Makmur Sdn Bhd v Kerajaan Negeri Pahang Darul Makmur & Anor [2016] 3 MLJ 1; [2016] 3 CLJ 1. In a judgment delivered by Ramly Ali FCJ, the Court said: “[25] The principles for striking out pleadings pursuant to O 18 r 19 of the ROC are well settled. It is only in a plain and obvious case that recourse should be had to the summary process under this rule; and this summary process can only be adopted when it can clearly be seen that a claim on the face of it is obviously unsustainable (see Bandar Builder; Hubbuck & Sons v Wilkinson, Heywood and Clark [1899] 1 QB 86; A-G of Duchy of Lancaster v London and North Western Rly Co [1892] 3 Ch 274). [26] The tests for striking out application under O 18 r 19 of the ROC, as adopted by the Supreme Court in Bandar Builder are, inter alia, as follows:

it is only in plain and obvious cases that recourse should be had to the summary process under the rule; 21

this summary procedure can only be adopted when it can be clearly seen that a claim or answer is on the face of it ‘obviously unsustainable’ (Emphasis added);

it cannot be exercised by a minute examination of the documents and facts of the case in order to see whether the party has a cause of action or a defence; and

if there is a point of law which requires serious discussion, an objection should be taken on the pleadings and the point set down for argument under O 33 r 3 of the ROC; and

the court must be satisfied that there is no reasonable cause of action or that the claims are frivolous or vexatious or that the defences raised are not arguable. …….. [28] The basic test for striking out as laid down by the Supreme Court in Bandar Builder is that the claim on the face of it must be ‘obviously unsustainable’. The stress is not only on the word ‘unsustainable’ but also on the word ‘obviously’ ie the degree of unsustainability must appear on the face of the claim without having to go into lengthy and mature consideration in detail. If one has to go into lengthy and mature consideration in detail of the issues of law and/or fact, then the matter is not appropriate to be struck out summarily. It must be determined at trial. [29] The established rule on this point is that the court should not examine the evidence in this summary proceedings in such a way as to amount to conducting a trial on the conflicting affidavit evidence. As rightly said by Lord Diplock in the House of Lords in American Cyanamid Co v Ethicon Ltd [1975] AC 396 at p 407: … The court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried. 22 It is no part of the court’s function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at the trial … “ [45] In my examination of the parties’ pleadings and assessment of the affidavits, I also found guidance in the approach of the Court of Appeal in Sivarasa Rasiah & Ors v Che Hamzah Che Ismail & Ors [2012] 1 MLJ 473; [2012] 1 CLJ 75 which was cited with approval by the Federal Court in the Seruan Gemilang case - that if there is an issue of fact that is capable of resolution only after taking viva voce evidence during trial, a striking out order should not be made summarily. The same court also stressed that a trial by affidavit ought not to be undertaken, and that a court should not conduct a minute examination of the documents and the facts of the case. The Court in that case held that as long as the claim discloses ‘some cause of action’ or ‘raises some question fit to be tried’ on the face of it, it ought not to be struck out. The fact that the case is weak and unlikely to succeed is insufficient basis to strike out a claim and reiterated the test for striking out as laid down by the Supreme Court in the Bandar Builder case that it ought to be ‘obviously unsustainable’. [46] Having given careful consideration to the matter, I found on the face of the Counterclaim that there is at least a reasonable cause of action based on misrepresentation, and with utmost respect, it is then unnecessary for this Court to traverse the ground that the action is scandalous, frivolous and vexatious or otherwise constitute an abuse of the process of court. [47] As for the contention that the full particulars of fraud and misrepresentation were not pleaded properly, I am of the view that the 23 substance of the claim has to be examined. The Federal Court in Letchumanan Chettiar Alagappan (As Executor to SL Alameloo Achi (Deceased) & Anor v Secure Plantation Sdn Bhd [2017] 4 MLJ 697; [2017] 5 CLJ 418, held that whether the word “fraud” was specifically pleaded was a semantic detail of no significance whatsoever from the standpoint of pleadings, as the correct test for a valid plea of fraud is whether or not the facts which make the conduct fraudulent were pleaded: “[30] The time has surely come to make a stand. We entirely agree with the reasoning in Davy v Garrett, Armitage v Nurse and others, and Three Rivers that it is not always necessary to plead the word ‘fraud’ if the facts which make the conduct fraudulent are pleaded.” [48] In this case, I find that there are pleas in the Defence and Counterclaim to capture the essence of fraud and misrepresentation as gleaned from paragraphs 8 to 10 of the Defence and Counterclaim. In my respectful view, the cause of action founded on fraud and misrepresentation though not pleaded perfectly, could still be made out when the Defence and Counterclaim is read as a whole. [49] Even if I am wrong, that particulars of fraud and misrepresentation were indeed wanting, the Defence and Counterclaim can be saved by an amendment. The Courts have on numerous occasions held that Order 18 rule 19 (1) ROC 2012 confers a discretion on the court to allow a plaintiff (as counterclaiming Defendants in the instant case) to amend the claim (instead of striking out the suit). I refer only to 2 of such authorities:

Mahadev Shankar JCA’s judgment in the Court of Appeal in Muniandy s/o Subrayan & Ors v Chairman & Board Members of Koperasi Menara Maju Bhd [1991] 1 MLJ 557, at 560 and 561; and 24

(ii) the judgment of Gopal Sri Ram JCA (as he then was) in the Court of Appeal case of Shahidan Shafie v Atlan Holding Bhd & Anor & Other Appeals [2005] 3 CLJ 793, at 803. [50] Additionally, in this case, the Counterclaim is inextricably linked to the Defence. The issues in the summary judgment application and that of striking out the Counterclaim are identical. [51] Pursuant to the principles in Residence Hotels and Resorts Sdn Bhd v Seri Pacific Corp Sdn Bhd [2016] 2 MLJ 640, the fate of the summary judgment application will determine the fate of the striking out application of the Counterclaim since the Counterclaim here arose and was a direct consequence of the defence pleaded against the Plaintiff’s claim, and, the issues in both applications were one and the same. [52] Having already found that the Defendants have raised a triable issue or shown 'there ought for some other reason to be a trial', the Plaintiff’s striking out application of the Counterclaim must fail, and I would have no hesitation to allow the appeal. [53] It is my judgment that the Counterclaim as it stands is not plainly unsustainable. The Counterclaim is not so hopeless, baseless or without any foundation in law and ought to be fairly and properly determined by way of a full trial. The Defendants ought to be given their day in court to meet the ends of justice. [54] As such, the Plaintiff’s contention that the Counterclaim is plainly and obviously unsustainable, is scandalous, frivolous or vexatious or an abuse of the process of the court is untenable. For that matter, the 25 Plaintiff’s own speculation that the deviation in Bitumen content could have been caused by wear and tear or weather conditions ought to be investigated. I am not in agreement with the views the Learned SCJ has expressed. I am satisfied that the allegation of misrepresentation is not altogether frivolous and made without any basis. [55] On the issues I have stated earlier, I am satisfied and I reiterate that they are triable and should only be resolved and determined in a trial. [56] I have considered the exhortation of Seah FJ in the Federal Court case of CC Ng & Brothers Sdn Bhd v Government of State of Pahang [1985] 1 CLJ 235; [1985] CLJ (Rep) 45; [1985] 1 MLJ 347 as well as that of the Court of Appeal in See Thong & Anor v Saw Beng Chong [2013] 3 MLJ 235; [2012] 1 LNS 817 that a striking out is “draconian” and ought to be “sparingly exercised” . [57] En passant, I ought to mention that O. 18 r 19 (1) uses the word “The Court may at any stage of the proceedings order to be struck out or amended any pleading …”. The word “may” is permissive. In this case, the court cannot with confidence conclude that the Counterclaim is altogether hopeless. [58] For reasons as discussed, Appeal 74 is allowed. Dated: 12th January 2022 - sgd - ……………………….. Liza Chan Sow Keng Judicial Commissioner High Court of Malaya at Kuala Lumpur 26 COUNSEL: For the Plaintiff : Dinesh Praveen Nair & Alice Kang Jia Yi Messrs Dinesh Praveen Nair For the Defendant : Fu Swee Theeng & Lee Hui Juan Messrs Gan Partnership CASES CITED Bayangan Sepadu Sdn Bhdv Jabatan Pengairan dan Saliran Negeri Selangor & Ors (2020) MLJU 1276 National Company For Foreign Trade v Kayu Raya Sdn Bhd [1984] 2 CLJ 220 Cempaka Finance Bhd v Ho Lai Ying & Anor [2007] 1 AMR 525 Voo Min En & Ors v Leong Chung Fatt [1982] 2 MLJ 241 Bank Negara Malaysia v Mohd Ismail Ali Johor & Ors [1992] 1 MLJ 400; [1992] 1 CLJ Rep 14 South East Asia Insurance Bhd v Kerajaan Malaysia [1998] 1 CLJ 1045 Stamford College Bhd v Iris Corp Bhd [2014] 8 MLJ 178 Noh Hyoung Seok v Perwira Affin Bank Bhd [2004] 2 MLJ 203 United Merchant Finance Bhd v Majlis Agama Islam Negeri Johor [1999] 1 MLJ 657 Southern Finance Bhd v Sun City Development Sdn Bhd & Anor [2006] 7 CLJ 464 Ho Kok Cheong Sdn Bhd & Anor v Kim Kay Tiong & Ors, [1979] 2 MLJ 224 Harren & Partner Schiffahrts GmbH & Co. KG MS Patea v Vitol SA [2020] EWHC 3315 Shi Wen Yue v Shi Minjiu and another [2016] 4 SLR 91 Peninsular Land Development v K Ahmad [1970] 1 MLJ 149 27 United Malayan Banking Corporation Berhad v Palm and Vegetable Oils (M) Sdn Bhd & Ors [1983] 1 MLJ 206 Bayangan Sepadu Sdn Bhd v Jabatan Pengairan dan Saliran Negeri Selangor & Ors [2021] 1 MLJ 322; [2020] MLJU 1276 Gemencheh Granite Sdn Bhd v Puncabahan Sdn Bhd & Anor [2013] 8 MLJ 594 Astenpave Sdn Bhd v Micheel Construction Holding Sdn Bhd [2020] MLJU 1101 Miles v Bull [1969] 1 QB 258; [1968] 3 All ER 632; [1968] 3 WLR 1090 Kim Seng Orchid Pte Ltd v Lim Kah Hin (Trading As Yik Zhuan Orchid Garden) [2017] SGHC 4 Seruan Gemilang Makmur Sdn Bhd v Kerajaan Negeri Pahang Darul Makmur & Anor [2016] 3 MLJ 1; [2016] 3 CLJ 1 Sivarasa Rasiah & Ors v Che Hamzah Che Ismail & Ors [2012] 1 MLJ 473; [2012] 1 CLJ 75 Letchumanan Chettiar Alagappan (As Executor to SL Alameloo Achi (Deceased) & Anor v Secure Plantation Sdn Bhd [2017] 4 MLJ 697; [2017] 5 CLJ 418 Muniandy s/o Subrayan & Ors v Chairman & Board Members of Koperasi Menara Maju Bhd [1991] 1 MLJ 557 Shahidan Shafie v Atlan Holding Bhd & Anor & Other Appeals [2005] 3 CLJ 793 Residence Hotels and Resorts Sdn Bhd v Seri Pacific Corp Sdn Bhd [2016] 2 MLJ 640 CC Ng & Brothers Sdn Bhd v Government of State of Pahang [1985] 1 CLJ 235; [1985] CLJ (Rep) 45; [1985] 1 MLJ 347 See Thong & Anor v Saw Beng Chong [2013] 3 MLJ 235; [2012] 1 LNS 817 STATUTE/LEGISLATION REFERRED TO Order 14, Order 18 Rule 19 (1) and Order 92 Rule 4 Rules of Court 2012