Qtc Transformers Marketing Sdn Bhd v Goodwood Hotel Sdn Bhd (JA-12BNCvC-27-12/2020)

4300.00. No order as to costs was made. [4] Apparently, due to some discrepancies between the order of the First Sessions Judge and her grounds of judgment, the First Sessions Judge wrote new grounds. Both parties appealed against the decision of the First Sessions Judge to the High Court at Johor Bahru. Before The Honourable Judicial Commissioner Ahmad Murad Bin Abdul Aziz 3 [5] The High Court affirmed the decision of the First Sessions Judge, which allowed the Plaintiff’s claim and dismissed D1’s counter-claim. [6] After an application for clarification by the Plaintiff, the High Court Judge amended the Order of the Court. The Defendants then appealed to the Court of Appeal (“COA”) against the decision of the High Court dated 02.07.2019. Upon hearing the appeal from the High Court, the COA ordered a retrial. [7] This case then came for a retrial before the Second Sessions Judge. During the trial before the Second Sessions Judge, both parties agreed not to recall witnesses to testify but instead, to rely on the notes of proceedings during the trial before the First Sessions Judge. [8] After reading submissions by the parties, the Second Sessions Judge gave judgment for the Plaintiff and ordered the Defendants to pay the Plaintiff damages as prayed in the statement of claim and dismissed the Defendants’ counter-claim with costs. Both Defendants then filed an appeal to this Court against the decision of the Second Sessions Judge. In this grounds, I will deal with the appeal by D1 and will write another grounds for the appeal by D2. THE TEST TO BE APPLIED WHEN HEARING AN APPEAL AFTER TRIAL [9] It is trite law that the test to be applied when hearing appeals after trial is the “plainly wrong” test. Thus, unless a trial judge was plainly wrong in his finding of facts, an appellate court will not interfere in his decision. The learned judge in Foo Lan Foow & Anor v Kamisah Bt Abdul Hanis (as the wife and dependant of Rahman Bin Ismail, deceased) (2004) 5 MLJ 566 held: “It is trite law that an appellate court will not interfere with the findings of a trial judge more so when the latter had had the benefit of seeing and hearing the witnesses and assessing their ability to tell the truth.” Before The Honourable Judicial Commissioner Ahmad Murad Bin Abdul Aziz 4 Likewise in Mat Shah Mohamed & Anor v Foo Say Meng & Ors

CLJ (Rep) 254, the Federal Court made the following comment: “the learned judge in this case had the advantages of seeing and hearing the witnesses which opportunity the appellate court did not enjoy and there was no reason in this case for the appellate court to interfere in the case.” [10] In the present appeal, the Second Sessions Judge made his decision without seeing or hearing any of the witnesses. Upon agreement by the parties, the Second Sessions Judge made his decision just by reading the notes of evidence in the trial before the First Sessions Judge. Thus, I find that the Second Sessions Judge was in no better position than I am to evaluate the evidence during the trial since both he and I have to arrive at our decision just by reviewing the notes of evidence during the trial before the First Sessions Judge. [11] I have treated this appeal as a rehearing and based my findings on the notes of evidence in the first trial without making any reference to the grounds prepared by the Second Sessions Judge from, whose decision this appeal is filed against. BACKGROUND FACTS [12] The Plaintiff is an operator of a hotel situated at Johor Bahru. D1 is a company which supplies transformers based in Skudai, Johor. The Second Defendant (“D2”) is the manufacturer of the transformers, which D1 supplied to the Plaintiff. [13] The Plaintiff purchased two (2) transformers from D1 at a total cost of RM295,000.00 (RM147,500.00 each). This was evidenced by a quotation from D1 dated 20.09.2011 (“the quotation”). The two (2) transformers were delivered to the Plaintiff’s hotel (“the hotel”) at Bandar Baru Permas Jaya on 17.12.2011. The two (2) transformers are identified as No. 110109 (“first transformer”) and no. 110110 (“second transformer”). The selling price included installation fees for the two transformers. Before The Honourable Judicial Commissioner Ahmad Murad Bin Abdul Aziz 5 [14] On 21.10.2013 at 10.00 am the second transformer broke down and disrupted power supply at the hotel (“first incident). The next day D2 went to the hotel and brought the second transformer back to its factory to inspect and repair. On 22.10.2013, D2 sent a temporary replacement transformer with a capacity of 1600KVA (“first replacement transformer”) to restore the power supply at the hotel. [15] i) On 20.05.2014, about seven (7) months later, the first transformer also broke down (“the second incident”). The next day, D2 sent a replacement transformer also with a capacity of 1600KVA (“second replacement transformer”). D2 then brought the first transformer back to its factory for inspection and repair. On 23.06.2014, D2 made a promise to the Plaintiff that it would give the Plaintiff an additional warranty of three (3) years. On

02.11.2014, the first transformer was sent back to the hotel after repairs and the second replacement was taken back by D2. ii) For reasons not explained, D2 did not return the second transformer to the Plaintiff after taking it for repairs. Due to the Plaintiff’s failure to return the second transformer, the Plaintiff purchased a new Transformer with capacity of 2500KVA from a different supplier. THE TRIAL BEFORE THE FIRST SESSIONS JUDGE [16] Five (5) witnesses gave evidence at the trial before the First Sessions Judge. The Plaintiff called Wong Jiunn Shyong (“PW1”), who was from the supplier which sold the new transformer to the Plaintiff, and Lee Kwee Cheng (“PW2”), who was the Plaintiff’s director and the only witness from the Plaintiff’s company. The Defendants called three (3) witnesses, namely IR Ng Chok Chuang (“DW1”), who is an electrical engineer by profession and was called as an expert witness for D2, Tuw Fong Liong (“DW2”), who was D2’s director, and Tuw Yuin Yin (“DW3”), a director of D1. Before The Honourable Judicial Commissioner Ahmad Murad Bin Abdul Aziz 6 [17] In brief, the Plaintiff’s claim against D1 is for total failure of consideration and breach of contract. The Plaintiff’s claim against D2 is for negligence in installing the earthing system and the manufacturing defects of the two (2) transformers, thus rendering the transformers not of merchantable quality. CAUSE OF DAMAGE TO THE

– DEFENDANTS’ VERSION [18] After repairing the first transformer and returning it to the hotel, DW2, who was then the managing director of D2, went to the hotel to inspect the earthing system that had been allegedly installed by the mechanical and electrical contractors (M&E contractors) appointed by the Plaintiff. This was due to DW2’s curiosity because, according to him, in his many years of experience in the business, he had never received any complaints of transformers breaking down within a period of less than two (2) years. According to his evidence, he found that the M&E contractors had connected the transformers’ earthing system to the lightning arrestor via two (2) copper tapes in the transformer room. There was no separate earthing system installed for both transformers. [19] DW1 gave evidence that due to the absence of a separate earthing system for both transformers, every time lightning strikes, charges in the sky can cause a high voltage of electricity to flow through the lightning arrestors into both the transformers (see pages 215 and 217 of the Record of Appeal (“ROA”) – Part B). He stated that, over time and after several lightning strikes, the transformers would be damaged due to failure of the insulation. He said that is why two (2) transformers don’t break down at the same time. They would break down at different times. [20] DW1 and DW2 also alleged that the breakdowns of the transformers were caused by poor maintenance by the Plaintiff’s own workers, who had left nuts and bolts lying on top of the enclosure of the transformers, which then fell into the transformers. [21] On 29.09.2016, D2 sent a letter to the Plaintiff, explaining the actual causes of the breakdown of both transformers. D2 also enclosed an Before The Honourable Judicial Commissioner Ahmad Murad Bin Abdul Aziz 7 invoice to the Plaintiff for the costs of the actual repair work, transport, wiring work and other related services. The Plaintiff refused to pay D2’s invoice and on 18.06.2017, filed a suit against the Defendants. PLANTIFF’S VERSION OF THE CAUSE OF THE DAMAGE TO THE [22] The Plaintiff did not call any expert witness to testify on its behalf to explain the probable cause of damage to the transformers. The Plaintiff only relied on the evidence of PW2, who was the Plaintiff’s director. The Plaintiff also relied on the letter from D2 to the Plaintiff dated 29.06.2016 to explain the probable cause of damage. The letter (quoted verbatim) states: “Initially we suspect the failure did happen due to foreign particles which we observed lying above the enclosure which were left over by the M&E Contractor.... The lightning earthing point was connected to the neutral earthing bar of the Transformers. In this condition, of the lightning arrestor has seen actual lightning strikes, the extreme high surge create very high voltages to the transformers neutral damage the equipment. This is the actual cause of the damage to the transformers.” [23] In attempting to disprove that the damage to the transformers was caused by lightning strikes, the Plaintiff submited as follows: i) The second transformer broke down on 21.10.2013, while the first transformer broke down on 20.05.2014. If the cause of the failure of the two (2) said transformers was the lightning, theoretically the two (2) transformers should have broken down at or about the same time, when lightning struck. Before The Honourable Judicial Commissioner Ahmad Murad Bin Abdul Aziz 8 ii) Since the two (2) said transformers did not break down at or about the same time, it is illogical to suggest that lightning was the main cause for the transformers’ breakdown. In any event, it was also admitted by D2 that 20.05.2014 was a “normal sunny day”. iii) Since 20.05.2014 was a sunny day, this does not correspond with lightning as being the cause of breakdown for the transformers because there was no lightning on 20.05.2014. This stands unless the Defendants adduce expert evidence to rebut this theory, which the Defendants failed to do. THIS COURT’S FINDINGS OF THE CAUSE OF DAMAGE TO THE [24] After reviewing the evidence given by all the five (5) witnesses, I find that on a balance of probabilities, the Defendants’ version of the cause of breakdown of the transformers is more credible for the following reasons: i) The Defendants’ version is backed and supported by an expert’s report, particularly the part in which he found that the Plaintiff’s own M&E Contractors did not install a separate earthing system for both the transformers (pages 406-409 of the ROA). Instead, they connected the hotel’s lightning arrestor to the Neutral, Earth and Frame terminals of both transformers outside the transformer room. ii) The Plaintiff did not call any expert to rebut this evidence by DW1 concerning the cause of the breakdown. The Plaintiff just relied on the evidience of its director, PW2, whose evidence is based only on inference and conjecture from the facts prior to the two (2) incidences of breakdown. iii) The Plaintiff submited as follows: Before The Honourable Judicial Commissioner Ahmad Murad Bin Abdul Aziz 9 “[72] We submit that if the actual cause of the failure of the two Transformers is the lightning, theorically the Transformers should breakdown at or about the same time, when lightning strikes. [73] Since the Two Transformers did not breakdown at the same time or about the same time, it is illogical it is the main cause of for the breakdown. [75] There is a year and 10 months gap from the date of delivery to the date of the first incident dated 21.10.2013. [76] If the cause of breakdown as suggested by the Defendants is the lightning strike, the breakdown would have ocured during the said gap as the lightning would have occured throughout the gap. [77] Therefore, we submit that the lightning strike is not the cause of the breakdown because no breakdown occured during the gap.” As can be seen from the submission above, the Plaintiff only relied on conjecture and inference derived from the facts instead of presenting expert evidence before the First Sessions Judge to support its theory of the cause of the breakdown. In contrast, DW1 gave a detailed explanation in his expert report on how numerous lightning strikes over time would contribute to the breakdown. [25] The Defendants submits that the Plaintiff’s contention is not credible for the following reasons; i) The term “theorically” itself suggests that there is no proof at the moment and that it is speculative; ii) DW1 (D2’s expert witness) and DW2 gave evidence that, in the long run, every time lightning strikes, and even where there is no rainstorm, charges in the sky can cause a high voltage of electricity to flow through the lightning arrestors into both the transformers, causing a breakdown in the transformers. Below are notes of proceedings with respect to DW1’s evidence: Before The Honourable Judicial Commissioner Ahmad Murad Bin Abdul Aziz 10 Peg. Defendan : ... You were telling something that Malaysia Peninsular is somehow near the equator. Please refer to pages 215 and 257 of the ROA (Part B) for the evidence by DW1 and DW2. SD1 : Yes. Peg. Defendan : ... Can you explain? it was based on your report earlier. SD1 : ... Even if there are no rainstorm, there are charges all up in the sky, even on a bright daylight and that can also cause a strike. Peg. Defendan : ... Please explain to the court what it means. Because they asked you just now the question. SD2 : Dry transformer normally when lightning strike, it will not damage immediately... When lightning strikes of course the first strike, it won’t damage the transformer... So it must be due to several times when the lightning strike to damage the transformer because the insulation failed. That’s why two (2) transformer won’t break down at the same time. It will only break down at different times. Before The Honourable Judicial Commissioner Ahmad Murad Bin Abdul Aziz 11 Thus, I find that the Defendants’ version is the probable cause of damage to the transformers. WHETHER D1’S SCOPE OF WORK INCLUDED THE INSTALLATION OF A SEPARATE EARTHING SYSTEM [26] The Plaintiff avers that the installation of a separate earthing system is part of D1’s scope of work. The Plaintiff relies on the quotation by D1 to support its averment that D1’s scope of work includes the connection of the earthing system. The quotation by D1 (page 372, ROA, Part C) inter-alia states: “Earthing system included”. However, tD1 submits that the Plaintiff misread this phrase, and it just means D1 would supply the earthing system but that actual connection is required to be undertaken by the Plaintiff’s M&E contractors, who are qualified to perform the wiring work. [27] The issue to be determined by this Court is which party is responsible for connecting the transformers to the earthing system. The Plaintiff submitted that the wording used is ambigous, thus, the contra proferentem rule should be applied aganist D1. This would entail the quotation being read in favour of the Plaintiff’s understanding of the words “earthing system included”. [28] This Court finds that the word “included” only refers to the supply of the earthing system, but does not extend to connecting of the system to the transformers based on the following: i) The Plaintiff’s consultant approved the plan drawings of the work by the Defendants and full payment was made to D1 in March 2012. D1 only delivered the transformers to the hotel after the Plaintiff’s consultant, T Y Lin, approved the drawings (see page 357 of the ROA). The plan drawings approved by the Plaintiff’s consultant shows the Defendants’ job scope is confined to inside the transformer room (page 416 of the ROA). Before The Honourable Judicial Commissioner Ahmad Murad Bin Abdul Aziz 12 ii) D1 submits that if its job scope included installation and connection of a separate earthing system outside of the transformer room, the Plaintiff’s consultant (T Y Lin) would not have approved the work done by D2 and consequently, the Plaintiff would not have paid D1 in full for the work done. I accept D1’s submission on this issue as credible. Furthermore, PW2, during cross-examination, admitted that all the work carried out by D2 was supervised and approved by the Plaintiff’s consultant. (See pages 196-197, Part B of the ROA). PLAINTIFF’S PLEADINGS [29] The Plaintiff’s pleaded case against D1 is for a total failure of consideration in respect of the second transformer and that D1 only delivered one (1) transformer to the Plaintiff, which is the first transformer. However, there is indisputable evidence that two (2) transformers were delivered and installed at the Plaintiff’s hotel. The second transformer was taken back almost two (2) years later for repairs after the breakdown. The second transformer was not returned after repairs since D2 had replaced it with another transformer albeit with a smaller capacity. It is my finding that since the damage to the second transformer’s was not due to any defects in the said transformers but caused by the Plaintiff’s own negligence and the Plaintiff had already utilised the transformers for about two (2) years, the Plaintiff has failed to prove that there was total failure of consideration on the part of D1. D1 had performed its part of the contract and delivered two (2) transformers as per its quotation to the Plaintiff and the Plaintiff had accepted the two (2) transformers and used it for almost two (2) years. Since the second transformer was taken back by D2 and kept in its possession, any claim should only be for the residual or depreciated value of the second transformer and should be against D2, not D1. Since it is not disputed that the second transformer had been damaged, and the Plaintiff had not given any evidence of the residual value of the damaged used second transformer, I find that the Before The Honourable Judicial Commissioner Ahmad Murad Bin Abdul Aziz 13 Plaintiff had failed to prove its case against D1 on a balance of probabilities. CONCLUSION [30] For the aforesaid reasons, D1’s appeal against the decision of the Second Sessions Judge is allowed with costs of RM3,000 subject to allocatur fee. The Order by the Second Sessions Judge is also set aside. Dated 4th September 2022 Signed, ………………………….. Ahmad Murad Bin Abdul Aziz Judicial Commissioner High Court of Malaya Johor Bahru Johor DarulTa’zim Counsel / Solicitors: For the Appellant : Tan Ch’Eng Leong & V Varunath Messrs KP Lu & Tan [Petaling Jaya] D-7-9, Capital 4, Oasis Square, 2A, Jalan PJU 1A/7A, Ara Damansara, 47301 Petaling Jaya, Selangor Darul Ehsan (Ref: KPLT.2115.20/CL) For the Respondent : Cheah Peak Hua, KS Pang & Kenny Lo Jia Yi Messrs K.S. Pang & Co. Unit 8-02, Tingkat 8 Menara TJB No.9, Jalan Syed Mohd Mufti 85200 Johor Bahru Johor Darul Ta’zim (Ref: PKS/2603/2020/Kenny) Before The Honourable Judicial Commissioner Ahmad Murad Bin Abdul Aziz 14 Case Referred to:  Foo Lan Foow & Anor v Kamisah Bt Abdul Hanis (as the wife and dependant of Rahman Bin Ismail, deceased) (2004) 5 MLJ 566  Mat Shah Mohamed & Anor v Foo Say Meng & Ors (1983) CLJ (Rep) 254 Legislation Referred to:  Rules of Court 2012 Hearing Date : 09.12.2021 & 02.06.2022 Decision Date : 07.06.2022