Pestech Engineering Technology China Co., Ltd v Pestech Sdn Bhd (WA-22NCvC-530-09/2025)

On 25.9.2025, the learned Deputy Registrar had granted a Judgment in Default of Appearance (“JIDA”) against the Defendant for failing to enter appearance within fourteen (14) days from the date of the service of the Writ and the Statement of Claim (Enclosures 1 and 2)

Dissatisfied with the decision of the learned Deputy Registrar, the Defendant had filed an application under Order 13 rule 8 and/or Order 42 rule 13 of ROC 2012 (Enclosure 7) to set aside the JIDA.

The Plaintiff had opposed the Defendant’s application.

Having considered all the cause papers and the submissions by both parties, this Court had dismissed Enclosure 7 with costs of RM3,000.00 for the following reasons.

Firstly, it is trite law that –

to set aside a regularly obtained judgment in default (“JID”), the defendant must disclose in its affidavit in support that prima facie he has a defence on the merits (see Evans v Bartlam [1937] AC 473; Bank Bumiputra Malaysia Bhd v Majlis Amanah Ra’ayat [1979] 1 MLJ 23; [1978] 1 MLRA 180; Fira Development Sdn Bhd v Goldwin Sdn Bhd [1989] 1 MLJ 40; [1988] 1 MLRA 288; B Dialdas & Co (Pte) Ltd v Sin Sin & Co & Ors [1984] 2 MLJ 223; [1983] 1 MLRH 70; Lai Yoke Ngan & Anor v Chin Teck Kwee & Anor [1997] 2 MLJ 565; [1997] 1 MLRA 284; Yap Ke Huat & Ors v Pembangunan Warisan Murni Sejahtera Sdn Bhd & Anor [2008] 5 MLJ 112; [2008] 1 MLRA 276; Mathew Willie & Anor v Roslin binti Afui @ Roslin binti Abui & Ors [2020] MLJU 1099; [2020] 2 SSLR 310); and

to set aside an irregularly obtained JID, ie. JID obtained without complying strictly with the ROC 2012, the defendant can set it aside as of right without the need of showing any merits (see Hasil Bumi Perumahan Sdn Bhd & Ors v United Malayan Banking Corp Bhd [1994] 1 MLJ 312; [1993] 1 MLRA 642; Cheow Chew Khoon (T/A Cathay Hotel) v Abdul Johari Bin Abdul Rahman [1995] 1 MLJ 457; [1995] 1 MLRA 679; Development & Commercial Bank Bhd v Aspatra Corp Sdn Bhd & Anor And Another Appeal [1995] 3 MLJ 472; Tuan Haji Ahmed Abdul Rahman v Arab-Malaysian Finance Bhd [1996] 1 MLJ 30; [1995] 2 MLRA 155; Ching Yik Development Sdn Bhd & Anor v Wordware Distributors (M) Sdn Bhd & Anor [2012] 10 MLJ 611; [2012] 5 MLRH 1; Lee Kok Kee v Ooi Chee Wee [2020] MLJU 285; [2019] MLRHU 1418).

For instance, in the case of Yap Ke Huat & Ors v Pembangunan Warisan Murni Sejahtera Sdn Bhd & Anor (supra), in delivering the judgment of the Court of Appeal, James Foong JCA (as he then was) held as follows: “It is trite that when considering an application to set aside a judgment in default, the first task is to ascertain whether it is a regular or irregular judgment. If it is an irregular judgment, then the default judgment ought to be set aside ex debito justitiae. If it is regularly obtained, then the principle expounded in Evans v Bartlam [1937] AC 473 applies — see the judgment of the Federal Court in Hasil Bumi Perumahan Sdn Bhd & Ors v United Malayan Banking Corp Bhd [1994] 1 MLJ 312. This requires the defendant to show that he has a defence on merits. Delay in making such application is a factor to be considered by the court in deciding whether to grant or refuse the application — see Tuan Haji Ahmed Abdul Rahman v Arab-Malaysian Finance Bhd [1996] 1 MLJ 30. … When the judgment is a regular judgment, this defendant: must show to the court that he has a defence that has some merits of which the court should try. To use common and plain language, the applicant must show that his defence is not a sham defence but one that is prima facie, raising serious issues as a bona fide reasonable defence that ought to be tried because obviously if the defence is a sham defence, there is no defence and the application must fail — Jemuri Serjan CJ (Borneo) in Hasil Bumi Perumahan Sdn Bhd & Ors v United Malayan Banking Corp Bhd.”.

According to the affidavit of service (Enclosure 4), the Writ and the Statement of Claim (Enclosures 1 and 2) were both effectively served on the Defendant at the Defendant’s last known address and/or registered business address at No. 26, Jalan Utarid U5/14, Seksyen U5, 40150 Shah Alam, Selangor Darul Ehsan on 10.9.2025. This was duly acknowledged by the Defendant’s representative (refer to Exhibit “B”, Enclosure 4 and Exhibit “LH-2”, Enclosure 15).

However, after receiving the Writ and the Statement of Claim, the Defendant had failed to enter an appearance within fourteen (14) days from the date of service as prescribed under Order 12 rule 4 of ROC

Hence, the Plaintiff had filed a Certificate of Non-appearance against the Defendant on 25.9.2025 (Enclosure 5) and JIDA was granted by the learned Deputy Registrar on the same date, ie.

25.9.2025, pursuant to Order 13 rule 1 of ROC 2012.

In this Suit, the Defendant had not only failed to enter an appearance within the prescribed time but also failed to set aside the JIDA until 31.10.2025, ie. nearly a month later. Since the delay was not explained by the Defendant, this Court is in agreement with the Plaintiff’s solicitors that the Defendant’s application in Enclosure 7 is an afterthought and a mere attempt to set aside the Plaintiff’s legitimate claim.

From the evidence and the facts of the case, it is the finding of this Court that –

the Writ and the Statement of Claim were properly, validly and regularly served and effected on the Defendant on 10.9.2025;

the Defendant had failed to enter an appearance within fourteen (14) days from the date of service; and

JIDA was properly and regularly obtained by the Plaintiff against the Defendant on 25.9.2025.

Secondly, since JIDA was properly and regularly obtained by the Plaintiff, based on the above authorities, in order to set aside the JIDA, the Defendant must show that they have meritable defence and arguable case, and the defence is not a sham defence.

Having considered the Defendant’s Proposed Defence (Lampiran “A”, Enclosure 7), the facts of the case, the evidence and the submissions by both parties, it is the finding of this Court that the

is devoid of merit;

has no bona fide defence;

has no arguable case;

has no reasonable prospect of success;

is a sham defence; and

is intended to delay the enforcement of a clear and undisputed debt.

The finding of this Court is based on the following reasons –

the Plaintiff is a company duly incorporated in China with a registered address at Room 708, Floor 7, Unit 1, No. 1 Building, No. 3 Jinhang Middle Road, Shunyi District, Beijing (Tianzhu Comprehensive Bonded Zone);

at all material times, the Plaintiff was and is, among others, in the field of electrical power substation EPC (engineering and design, electrical equipment procurement and site installation and commissioning, relative civil and construction works) turnkey business;

the Plaintiff conducts extensive business internationally including but not limited to Malaysia;

the Defendant is a company duly incorporated in Malaysia and has its registered and business address at No. 26, Jalan Utarid U5/14, Seksyen U5, 40150 Shah Alam, Selangor;

the Defendant is a subsidiary of Pestec International Berhad (previously known as Pestech International Berhad), a publicly listed holding company and parent of the Pestech Group of Companies, which includes the Defendant;

at all material times, the Defendant is in the business of comprehensive power system engineering and technical solutions for the design, procurement and installation of substations, transmission lines and underground cables for electricity transmission and distribution and manufacture proprietary power system components and equipment and investment holding;

the Plaintiff and the Defendant had entered into a Debt Waiver Agreement dated 10.4.2024 (“the Debt Waiver Agreement”) whereby the Defendant would continue to fulfill its obligations according to executed and/or signed Purchase Orders between the Plaintiff and the Defendant;

under the Debt Waiver Agreement, the payments of the current on-going Iraq Project will be on a back-to-back basis and that the Defendant shall make payment to the Plaintiff within five (5) calendar days upon receipt of project payments;

(i)

based on the said Purchase Order No. 2308023, the Plaintiff had issued several invoices to the Defendant amounting to USD7,664,158.81 but the Defendant had failed, refused and/or neglected to settle the total outstanding sum of USD7,664,158.81 which were due and owing to the Plaintiff. The total outstanding sum of USD7,664,158.81 is for the following descriptions and amounts –

FOB Protection – USD1,121,295.00;

(ii) AC/DC System – USD1,808,617.60;

(iii) Capacitor Bank – USD1,275,494.60;

(iv) Diesel Generator – USD714,124.18;

Power Cable – USD1,371,301.01; and

(vi) FAT SCS – RM1,373,326.24;

the Plaintiff’s solicitors then issued a first letter of demand dated 16.5.2025 demanding the Defendant to settle the outstanding sum of USD7,664,158.81;

(l)

the Defendant admitted to owing the Plaintiff the sum of USD7,664,158.81;

(ii) that the partial sum of USD3,670,106.81 had been paid by the Defendant to the Plaintiff; and

(iii) that the outstanding sum of USD3,994,052.01 will be paid in five tranches;

based on the said Purchase Order No. 2308023, on 14.7.2025, the Plaintiff had issued further invoices to the Defendant amounting to USD7,330,949.21 but the Defendant had failed, refused and/or neglected to settle the total outstanding sum of USD7,330,949.21 which were due and owing to the Plaintiff. The total outstanding sum of USD7,330,949.21 is for the following descriptions and amounts –

Special Tools – USD1,803,617.60;

(ii) GIS Building Complete – USD2,494,455.09;

(iii) FOB of SCS – USD1,224,258.92; and

(iv) CIP of Telecommunication – USD1,808,617.60;

the Plaintiff’s solicitors then issued a second letter of demand dated 5.8.2025 demanding the Defendant to settle the outstanding sum of USD7,330,949.21;

the Defendant had failed, refused and/or neglected to respond to the Second Letter of Demand and had failed to settle the outstanding sums to the Plaintiff and hence had caused the Plaintiff to suffer and continues to suffer loss and damage;

according to the numerous correspondence between the Plaintiff and the Defendant, minutes of meeting and several invoices as exhibited in Exhibit “LH-4” until “LH-8” of Enclosure 15, it is evident that the Defendant knew and was aware about the said Purchase Order No. 2308023, the Settlement Agreement, the outstanding sum of USD7,664,158.81, the First Letter of Demand; the outstanding sum of USD7,330,949.21, the Second Letter of Demand and the invoices (refer to Exhibit “LH-4” until “LH- 8”, Enclosure 15);

the Plaintiff’s claim against the Defendant in this Suit is for the recovery of the outstanding sum of USD7,330,949.21 as stipulated in the Second Letter of Demand and not for the amount of USD7,664,158.81 as stipulated in the First Letter of Demand. However, despite continuosly disputing the claims and the outstanding sum of USD7,664,158.81 in the First Letter of Demand, which is not the Plaintiff’s claim and cause of action in this Suit, the Defendant did not deny and/or raise any defence in the Defendant’s Proposed Defence with regard to the invoices for the total outstanding sum of USD7,330,949.21 as stipulated in the Second Letter of Demand, which becomes the subject matter in this Suit. The breakdown of the total outstanding sum of USD7,330,949.21 and the invoices is as the followings:

the Number of Corresponding Terms of Payment: No. 19 on CIP of Special Tools USD1,803,617.60 is appeared in Invoice No. IN000216 at page 116 of

(ii) the Number of Corresponding Terms of Payment: No. 20 on GIS Building Complete USD2,494,455.09 is appeared in Invoice No. IN000217 at page 117 of Enclosure 15;

(iii) the Number of Corresponding Terms of Payment: No. 21 on FOB of SCS USD1,224,258.92 is appeared in Invoice No. IN000218 at page 110 of Enclosure 15; and

(iv) the Number of Corresponding Terms of Payment: No. 22 on CIP of Telecommunication USD1,808,617.60 is appeared in Invoice No. IN000219 at page 109 of Enclosure 15.

Based on the above reasons, this Court is of the view that since the JIDA obtained by the Plaintiff is a regular judgment and the Defendant had failed to show that they have a defence on merits and serious bona fide issues to be tried, the Defendant’s application to set aside the JID in Enclosure 7 ought to be dismissed with costs of RM3,000.00. Dated : 12 MAY 2026 (DR. ARIK SANUSI BIN YEOP JOHARI) JUDGE HIGH COURT OF MALAYA, IN THE FEDERAL TERRITORY OF KUALA LUMPUR (KUALA LUMPUR) Counsel for the Plaintiff: Cik Tan Sue Yen (together with Cik Neha Navalashini Sominaidu) Messrs. Ravindran Advocates and Solicitors Unit B-9-02, Gateway Kiaramas Corporate Suites No. 1, Jalan Desa Kiara, Mont’ Kiara 50480 KUALA LUMPUR Tel : 03-6419 0949 Faks : 03-6419 0948 Ruj : 926.2025 E-mel : info@ravindran.com.my/ neha@ravindran.com.my Counsel for the Defendant: Cik Aawaisha A/P Steven Asokan Pillai (together with Encik Mohd Hafiz Bin Mahmund) Messrs. Ahmad Deniel, Ruben & Co Advocates and Solicitors C3-2-10, Solaris Dutamas Jalan Dutamas 1 50480 KUALA LUMPUR Tel : 03-6207 9745 Faks : 03-6207 9748 Ruj : ADR/CPR/2507/096 E-mel : officekl@adr.my/ hafiz@adr.my/ aawaisha@adr.my