Regal Elite Letrik Sdn Bhd v Country Garden Pacificview Sdn Bhd (JA-12BNCC-6-09/2024)

EPE POWER SWITCHGEAR SDN BHD [No. Syarikat: 201001005466 (890084-W)]

COUNTRY GARDEN PACIFICVIEW SDN BHD [No. Syarikat: 201301014505 (1044344-D)] …RESPONDEN-RESPONDEN [DALAM MAHKAMAH SESYEN DI JOHOR BAHRU DALAM NEGERI JOHOR DARUL TA’ZIM, MALAYSIA GUAMAN NO: JA-B52NCC-40-04/2022 ANTARA EPE POWER SWITCHGEAR SDN BHD [No. Syarikat: 201001005466 (890084-W)] … PLAINTIF DAN REGAL ELITE LETRIK SDN BHD [No. Syarikat: 199201022496 (254000-A)] …DEFENDAN DAN COUNTRY GARDEN PACIFICVIEW SDN BHD [No. Syarikat: 201301014505 (1044344-D)] … PIHAK KETIGA

In this appeal, there are three parties in the equation. They will be referred to as they were at the Sessions Court.

The Plaintiff (1st Respondent) claimed against the Defendant (Appellant) for goods sold and delivered.

The Defendant on the other hand took out third-party proceeding against the Third Party (2nd Respondent) for indemnity.

In essence, the Plaintiff’s claim against the Defendant is for the balance price of the goods sold and delivered to the Defendant for the sum of RM812,783.90 together with interests and costs.

The Defendant’s defence is that any payment to the Plaintiff is subject to them receiving the same from the Third Party since they were only agents for the Third Party in respect of the transaction concerning the Plaintiff’s claim against them.

The Third Party on other hand denied the Defendant’s indemnity claim against them and stated that the Defendant was never their agent.

During the trial before the Sessions Court, the Plaintiff called Long Yin Feai (SP1) and Lai Yaw Tyng (SP2) as their witnesses. The Defendant meanwhile called Dato’ Seri Liew Choon Kin (SD1) and Dato’ Nazli Sam Bin Mohd Nasir (SD2) as their witnesses. The Third Party on the other hand elected not to call any witness on their behalf and chose to rely on the Plaintiff’s witnesses instead.

At the conclusion of the trial, the Sessions Court allowed the Plaintiff’s claim against the Defendant. The Defendant’s claim for indemnity against the Third Party was however dismissed.

Hence, the appeal herein by the Defendant against the whole of the said decision by the Sessions Court Judge (“SCJ”). Duty of Court exercising appellate jurisdiction

It is trite that this Court in the exercise of its appellate jurisdiction would intervene when the findings of the sessions court is either plainly wrong or where there is no or insufficient judicial appreciation by the sessions court.

Reference on this can be made to UEM Group Bhd v Genisys Integrated Engineers Pte Ltd & Anor [2019] 9 CLJ 785 where it was held by the Federal Court at page 800 that:- “Thus, the prime issue in respect of Questions 1 to 3 is whether the Court of Appeal had erred in interfering with the findings of facts of the trial judge. It is well settled law that an appellate court will not generally speaking, intervene with the decision of a trial court unless the trial court is shown to be plainly wrong in arriving at its decision. A plainly wrong decision happens when the trial court is guilty of no or insufficient judicial appreciation of evidence."

Further, it is also worth noting that the failure of the sessions court to construe crucial evidence or to properly analyze the entirety of the evidence would also cause appellate intervention on appeal [refer: Azman Bin Mahmood & Anor v SJ Securities Sdn Bhd (2012) 6 CLJ 573; Lee Ing Chin & Ors v Gan Yook Chin & Anor (2003) 2 MLJ 97]. Whether P is entitled to claim sum of RM 812, 783.90

In determining that the Plaintiff is entitled to claim a sum of RM812, 783.90 from the Defendant, the SCJ held as follows:- “[16] EPE telah menyerahkan SSU 33KV dan Perintah Penghantaran untuk SSU 33KV tersebut telah diakui diterima oleh Regal Elite. Saksi Defendan juga mengesahkan terdapat baki bayaran sebanyak RM 812, 789.90. Justeru itu, Mahkamah berpendapat bahawa EPE sememangnya berhak menuntut baki bayaran sebanyak RM 812, 783. 90 tersebut daripada Regal Elite.”

The SCJ’s finding above seemed to have found support from the evidence of SD-1 when he admitted in cross-examination that the Defendant did not raise any issue upon receiving the goods in question and chose to keep silent on it despite the Plaintiff having made very clear that they were not agreeable to any “pay when payment term” as alleged by the Defendant. Further, that such payment was due within 60 days by way of post-dated cheque upon delivery or 30 days after the end of the month from the date of the invoice was also not disputed by the Defendant:- “YH: Ini adalah surat EPE bertarikh 30/05/2019. Dan surat ini diisu oleh EPE apabila EPE menerima nota pesanan daripada Regal Elite di muka surat 51. En Liew tahu ? Ok. Dan dalam muka surat 54 ini, perenggan kedua dinyatakan di sini, :Kindly take note that we are unable to accept the retention sum. Therefore, the total purchase amount will be in PD cheque of 60 days upon delivery”. En Liew ? Setuju dengan saya, Regal Elite tidak membalas surat EPE ini? Setuju? Setuju Dan kemudian, kita lihat kepada invois di muka surat 60, 61 ikatan yang sama 60 ? Ya. Invois ini, di bahagian atas. Invois ini daripada EPE kepada Regal Elite, betul ? Dan kotak ketiga 2 yang di tengah itu, “Terms days”. Betul Ada? “net 30th after EOM”. Ok? Maksudnya, invois ini kena dibayar 30 hari selepas akhir bulan. Setuju? Ya. On paper, yes. Dan Regal elite ada tak tulis apa-apa surat dalam dokumen di hadapan En Liew, ada tak apa-apa dokumen membantah terma bayaran ini? Tak ada. Tiada. Ok. Dan sekarang, kita lihat muka surat 62 iaitu nota penghantaran, bukti penghantaran yang kita lihat tadi. Ya. Kotak kelima di atas itu. “Terms”, juga sama. “Net 30th after EOM”. Setuju? Iaitu 30 hari selepas akhir bulan. Ok? Regal Elite ada tak mengisukan apa-apa dokumen ataupun surat kepada EPE, membantah terma bayaran ini dalam Mahkamah ini?

In light of the evidence above, having accepted the said goods, the Defendant is bound by their conduct in so accepting the goods together with the terms as stated in quotation or delivery order. Under such circumstances, acceptance without objection is surely a relevant consideration to the SCJ. Support for that can be found in Butler Machine Tool Co Ltd v Ex-Cell O Corporation (England) Ltd [1979 WLR 401 where it was held that:- “.. in some cases the battle is won by the man who fires the last shot. He is the man who puts forward the latest terms and conditions; and if they are not objected to by the other party, he may be taken to have agreed to them...” …..

Refer also to Brogden v Metropolitan Railway Co [1877] 2 APP Cas 666 where it was held by the House of Lords that:- “.. there may be a consensus between the parties far short of a complete mode of expressing it, and that consensus may be discovered from letters or from other documents of an imperfect and incomplete description...”

As such, this Court agrees with the Plaintiff that the Defendant is not subsequently permitted to raise a new term as alleged that the acceptance of the said goods is on a “pay when paid term”. Such attempt, is caught by the doctrine of estoppel and against s.115 of the Evidence Act 1950 which states as follows:- “When one person has by his declaration, act or omission intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, otherwise than but for that belief he would have acted, neither he nor his representative in interest shall be allowed in any suit or proceeding between himself and that person or his representative in interest to deny the truth of that thing.”

Further reference on the doctrine of estoppel can also be made to the celebrated case of Boustead Trading (1985) Sdn Bhd v Arab Malaysian Merchant Bank Berhad [1995] 4 CLJ 283 where it was held by the Federal Court that:- “We take this opportunity to declare that the detriment element does not form part of the doctrine of estoppel. In other words, it is not an essential ingredient requiring proof before the doctrine may be invoked. All that need be shown is that in the particular circumstances of a case it would be unjust to permit the representor or encouragor to insist upon his strict legal rights. In the resolution of this issue, a judicial arbiter would, when making his assessment of where the justice of the case lies, be entitled to have regard to the conduct of the litigant raising the estoppel. This may, but need not in all cases, include the determination of the question as to whether the particular litigant had altered his position, although such alteration need not be to his detriment.”

Further at page 298 in Boustead, the Federal Court held as follows:- “A reasonable man similarly circumstanced as the respondent would have been entitled to assume as the respondent did, that the appellant was agreeable to the imposition of the fourteen day limit. Influenced - and we use that term deliberately - by the conduct of the appellant the respondent paid out on those very invoices. This the respondent would not have done had the appellant protested. The appellant's attempt to raise this point some seven months later, well after the respondent had paid out its money to Chemitrade, must, in our judgment be classified as unconscionable and inequitable conduct. It ought not therefore to be permitted to question the validity of the endorsement.”

The Defendant’s conduct also seemed to diametrically opposed to that of the ordinary nature of a businessman in not immediately refuting a proposition injurious to him and to not allow it to stand. In this regard it is instructive to refer to Wiedemann v Walpole [1891] 2 QB 534 where it was opined that:- “There are cases - business and mercantile cases - in which the Courts have taken notice that, in the ordinary course of business, if one man of business states in a letter to another that he has agreed to do certain things, the person who receives that letter must answer it if he means to dispute the fact that he did so agree. So, where merchants are in dispute one with the other in the course of carrying on some business negotiations, and one writes to the other, 'but you promised me that you would do this or that,' if the other does not answer the letter, but proceeds with the negotiations, he must be taken to admit the truth of the statement. But such cases as those are wholly unlike the case of a letter charging a man with some offence or meanness.'

In local context, reference is made to Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 CLJ 453 wher it was held by the Federal Court that:- "....It is the ordinary nature of businessman to immediately refute any proposition injurious to him contained in letters and not to let it stand (see David Wong Hon Leong v. Noorazman Adnan [1995] 4 CLJ 155). Thus, the previous conduct of the defendant in accepting that the delivery of vacant possession was on 21 November 2005 was plainly contrary to its new position that vacant possession was only granted on 28 February 2006. Thirdly, it was only on 8 March 2006, which was about 14 days before the completion date (21 March 2006), that the defendant's solicitors for the first time alleged that vacant possession was only delivered on 28 February 2006."

In any event, there is no evidence to support D’s contention as such as rightfully decided by the SCJ as follows:- “[14] Dari keterangan-keterangan yang dikemukakan, Mahkamah mendapati bahawa Regal Elite telah gagal membuktikan bahawa terdapat perjanjian di antara EPE dan Regal Elite sama ada secara tersurat atau tersirat bahawa Regal Elite hanya perlu membuat bayaran kepada EPE setelah Regal Elite menerima bayaran daripada Pihak Ketiga/ CGPV termasuk wang tahanan (“retention sum”).”

Accordingly, this court find there is no appealable error on the part of the SCJ in allowing the Plaintiff’s claim against the Defedant. Whether the Defendant’s third-party claim should be allowed against the Third Party

Moving on to the third-party claim for indemnity, this Court notes that the SCJ took the view that as the Third Party is not a party to the agreement between the Plaintiff and the Defendant. According to the SCJ:- “[17] Memandangkan CGPV bukan merupakan salah satu pihak dalam Perjanjian/ Kontrak di antara EPE dan Regal Elite, tidak terlibat dalam perbincangan mengenai terma-terma dan syarat-syarat kontrak tersebut serta Regal Elite bukan merupakan agen CGPV dalam pembelian “SKU 33KV”, oleh yang demikian, CGPV tidak perlu membayar jumlah tertunggak mengenai Pesanan Pembelian tersebut kepada EPE.”

With all due respect to the SCJ, the above finding is totally against the totality of evidence adduced during the trial at the Sessions Court.

Firstly, there was the evidence of SD-1 who had confirmed that the Defendant issued a purchase order to the Plaintiff on behalf of the Third Party. Furthermore, there were evidence to show that the Defendant had facilitated payment to the Plaintiff via a variation order with funds channeled through the Defendant on Third Party’s behalf.

Secondly, the Plaintiff’s witness (SP2) in cross-examination said that he participated in pricing discussion concerning the said goods with the Third Party. What is more important is SP2’s evidence in cross-examination that he was aware that the said good were procured for Third Party’s benefit not the Defendant. According to SP2:- “JP: Yes. So, in your understanding, this SSU unit was for Country Garden Pacific View Sdn Bhd?

Thirdly, an analysis on the quotation issued by the Plaintiff to the Defendant makes explicit reference to Third Party has indeed highlighting the pertinent point that the intended recipient of the said goods would be the Third Party. This was confirmed by SP2 also in cross-examination:- “JP: You knew that this purchase order (quotation), you sent to Regal Elite but it is for Country Garden Pacificview Sdn Bhd ?

Fourthly, the Defendant then had caused a revised quotation to be issued to the Third Party followed by a variation order by the Third Party to the Defendant. A perusal of the variation order shows that the Third Party had negotiated directly with the Plaintiff on the pricing of the said goods followed by the Third Party’s agreement to a final price which is an increase of RM 705,265.00 from the original price. The Third Party had then allocated the same additional sum over and above the original sum and had also conducted a full evaluation before finally adopting the said goods.

Fifthly, the Third Party’s Engineering Management Manager and Project General Manager signed the variation order. SP2’s evidence confirmed to that effect that he had personally attended a meeting with the Third Party in relation to the variation order. Reference is also made to SD2’s witness who is a representative of the Third Party who said:- “YYH: Ok. Now, I’m going to refer you to Bundle A which is the pleadings, Dato. Ok, please refer to page 16. Ok? This is part of the Plaintiff’s statement of claim. I just want you to look at page 16 at paragraph 13. Ok, Dato? I’ll read to you. “Dari semasa ke semasa, wakil Plaintif, Daphne Long, James Lai, Yvonne dan wakil Country Garden termasuk Wang Jun, Tang Xin, Ma Li, Zhou Jin Je dan Dato’ Nazli telah secara langsung membincangkan dan berunding tentang harga produk tersebut”. Now, so listen to my question carefully, Dato’. So, when you say earlier there were meetings that you organize, is the meeting that you organized involved the parties mentioned in paragraph 13? Nazli: Yes YYH: Yes? Ok. So, you were present at those meetings, were you? Nazli: Yes …….. Allright. Am I right or am I wrong to understand that the negotiation was between Country Garden directing with EPE ? From this sentence, “Our cost department negotiating with the manufacturer of EPE”. So, my question to you is that sentence does it show that Country Garden was negotiating directly with EPE? Nazli: Based on this word or based on this paper ? There’s direct negotiate to the EPE. I will allow you to explain later. But, because of the word, “Numerously”, would you, am I right or am I wrong to understand that it wasn’t just once, but there may have been several times. Because the word “numerously”. Do you agree? Nazli: Agree … We look at this page as a whole. We have an onsite Variation Order, and we have an increase in price for the particular SSU unit and 705,000. And this negotiation was between Country Garden directly with EPE, correct ? Nazli: Correct And the agreement on the increase of 705 was directly with EPE, correct ? Nazli: Correct No. Soalan saya, did, with the increase, now we have a 705 increase, did Country Garden Pacificview Sdn Bhd pay partly for the increase ? or pay the increase? Bayar ke tidak bayar ? Nazli: Sepatutnya bayarlah. Sepatutnya bayar, maknanya tak bayarlah ? Nazli: Kena bayarlah. Kalau ada dalam on site VO. …. Now, we are, I’m taking your last answer. Sepatutnya bayar. So, ok, bayar half through Regal Elite atau bayar direct kepada EPE? How? Sila jelaskan. Nazli: Kalau ikutkan bayar kepada Regal Elite. Dan bayaran itu akhirnya kepada siapa?

The evidence of SD2 quoted at length above shows that the Third Party was directly involved, approved, and committed financially towards the purchase of the said goods from the Plaintiff.

The other evidence that the SCJ seemed to have ignored is that the said goods were delivered to the Third Party directly at their site.

Thus, on the basis of the above analysis, the SCJ had erred in failing to find that the Third Party is liable to fully contribute and indemnify the Defendant in respect of the Plaintiff’s claim against the Defendant.

On indemnity, it is instructive to refer to Eastern Shipping Co Ltd v Quah Beng Kee [1924] AC 177 where it was held by the Privy Council that:- "A right to indemnity generally arises from contract express or implied, but it is not confined to cases of contract. A right to indemnity exists where the relation between the parties is such that either in law or in equity there is an obligation upon the one party to indemnify the other. There are, for instance, cases in which the state of circumstances is such that the law attaches a legal or equitable duty to indemnify arising from an assumed promise by a person to do that which, under the circumstances, he ought to do The right to indemnity need not arise by contract; it may... arise by statute; it may arise upon the notion of a request made under circumstances from which the law implies that the common intention is that the party requested shall be indemnified by the party requesting him; it may arise (to use Lord Eldon's words in Waring v. Ward (1); a case of vendor and purchaser) in cases in which the Court will "independent of contract raise upon his (the purchaser's) conscience an obligation to indemnify the vendor against the personal obligation".

Accordingly, this Court agrees with the Defendant’s submission that there exist compelling factors as highlighted above for the Defendant, being an agent, to be indemnified in full by the Third Party being its principal. Reference hereby is made to Sime Darby Bhd & Ors v Dato’ Seri Ahmad Zubair @ Ahmad Zubir Bin Hj Murshid & Ors (Tun Musa Hitam & Ors, third parties) [2012] 9 MLJ 464 where it was held that:- "[42] There are certain recognised relationships that by law or in equity, may give rise to a right to an indemnity. [43] As illustrated in Pinsler on Civil Practice in Singapore and Malaysia, Vol 2, Chapter XIII at para 43, an obligation to indemnify in law or equity may arise in the following circumstances: An agent may have the right of an indemnity against his principal in respect of his actions within the scope of his authority. A trustee may be entitled to an indemnity in respect of a breach of trust. A co-guarantor might be entitled to be indemnified by another co-guarantor. [44] Halsbury's Laws of England, (5th Ed.), Vol 49, para 1260 at p 595 lists the following in regard to indemnities as incidents of legal relationships: 'A right of indemnity is an incident of certain legal relationships, for example those of agency or employer and employee, where an agent or employee is liable to be indemnified by his principal or employer against liabilities incurred in the reasonable performance of his agency or employment. Rights of indemnity may also arise under principles of equity. In case of breach of trust a trustee may be indemnified out of the interest of a beneficiary who has instigated the breach or be entitled to contribution or indemnity from a co-trustee. A personal representative is entitled to be indemnified out of the estate for his proper expenses. A receiver is ordinarily entitled to be indemnified out of the assets against liabilities properly incurred by him. A director of a company regulated by the Companies Act 1985 is entitled to be indemnified by the company for all debts, expenses and liabilities incurred in the ordinary course of business, and for money borrowed and applied for those purposes. The trustees or committee of a club are not in general entitled to be indemnified by the members against liabilities incurred on behalf of the club.”

Based on the reasons stated above, this Court dismisses the Defendant’s appeal against the decision of the Sessions Court which found them liable to the Plaintiff in respect of the payment for the said goods. There is no reason to disturb the findings of the SCJ in this regard. The Defendant is further ordered to pay costs of RM 5,000.00 to the Plaintiff subject to allocator fee.

Be that as it may, this Court however allows the Defendant’s appeal against the decision of the SCJ in dismissing the Defendant’s third-party claim against the Third Party. As such, this court finds the Third Party liable to pay the Defendant a sum of RM705,265.00 (the correct amount upon being quantified during trial) on the basis of indemnity. The Third Party is further ordered to pay the Defendant costs of RM 20,000.00 here and below subject to allocator fee. Dated: 27 July 2026 …………………………………………. (NOOR HISHAM BIN ISMAIL) Judge High Court, Johor Bahru Solicitors: For the Appellant (Defendant) : Messrs Nadzarin Kuok Puthucheary & Tan Suite 8.3, Level 8, Menara Pelangi, Jalan Kuning, Taman Pelangi 80400 Johor Bahru For the First Respondent (Plaintiff) : Messrs Shui-Tai Entrance 2, Suite 1308, 13th Floor, Block A Damansara Intan, No 1, Jalan SS20/27 47400 Petaling Jaya Selangor For the Second Respondent : Messrs Rahmat Lim & (Third Party) Partners Suite 33.01, Level 33 The Gardens North Tower Mid Valley City Lingkaran Syed Putra 59200 Kuala Lumpur