Soo Keng Tiong v Sharp-Roxy Sales & Service Company (M) Sdn Bhd (BA-12ANCC-30-11/2016)

CHOW HIN ELECTRONIC SDN BHD (No. Syarikat: 485524-U)

SOO KENG TIONG (No. K/P: 750411-08-5217

SOO KENG KEONG (No. K/P: 780912-08-5925 … DEFENDAN-DEFENDAN 2 GROUND OF JUDGMENT Introduction [1] This appeal arose from the Session Judge’s decision in dismissing the Appellant’s (2nd Defendant) application to set aside Judgment in Default (JID) that was obtained by the Respondent (Plaintiff) against the Appellant on 28.10.2015. [2] In this judgment, the parties will be referred to as they were in the Sessions Court. Having read the Appeal Record, the written submissions and heard the oral submissions from both counsels, I allow the appeal with costs and my grounds follow. Brief Facts [3] The 2nd Defendant by Notice of Application of 4.7.2016 under Order 13 rule 8 and Order 92 rule 4 of Rules of Court 2012 (ROC 2012) had filed an application to set aside the JID dated 28.10.2015. The Session Judge dismissed the 2nd Defendant’s application on 7.11.2016. The 2nd Defendant being dissatisfied, appealed against the whole decision of the Session Judge through its Notice of Appeal on 17.11.2016. The Plaintiff is claiming for RM102,967.02 as of 30.6.2015, and the interests on the said amount at the rate of 1.5% monthly from 1.7.2015 until date of judgment and at 1.5.% monthly until full settlement. 3 2nd Defendant’s case [4] The learned counsel for the2nd Defendant submitted that the 2nd Defendant did not receive the Writ and Statement of Claim of 28.10.2015 and was not aware of being served until the 2ndDefendant received the Bankruptcy Petition that was served to the address of No.1, Jalan Desa 2/4, Bandar Country Home, 48000 Rawang, Selangor Darul Ehsan. It was submitted that the Writ and Statement of Claim was however served to the address No. 55, Jalan Besar 35500 Bidor, Perak. [5] The 2nd Defendant’s counsel averred that the Plaintiff knew that the 2nd Defendant resides in Selangor and no longer in Bidor, Perak because the Plaintiff servedtheBankruptcy Petition to the 2nd Defendant at the address in Rawang, Selangor and yet served the Writ and Statement of Claim to the address in Bidor, Perak, although it is based on the Joint & Several Guarantee And Indemnity Agreement dated 23.2.2005 (the Agreement)(pages 14-15 of Appeal Record), it is submitted that it was not a regular service. [6] The 2nd Defendant’s counsel relied on the case of Christopher Micheal Chow v ANS Builders Sdn Bhd Civil No: 22NCC-304-03/2012 and the Federal Court case of Tuan Hj Ahmad Abdul Rahim v Arab Malaysia Finance Bhd [1996] 1 CLJ 241 that is, where the judgment was not regularly obtained, the defendant is entitle to have it set aside ex debito justicia. 4 [7] The 2nd Defendant’s counsel submitted several defences as in his affidavit among others, briefly, averred that the Agreement is not valid and the Plaintiff’s claim would have been time barred. The 2nd Defendant submitted that the Agreement is dated 2005 whereas the Plaintiff’s statement of accounts and Delivery Orders are dated 2015. [8] It is submitted by the 2nd Defendant’s counsel that the Chow Hin Electronics issued the cheques and not the 1st Defendant. The 1st Defendant was the guarantor as per the Agreement, had been removed from Companies Commission Malaysia (CCM) in 2009 and which pointed to the Court that the Plaintiff’s affidavit in reply of 1.7.2016 to the 2nd Defendant’s affidavit statesthe party as Chow Hin Electronics Sdn Bhd which no longer exist. It is also submitted that the Plaintiff did not take action against the 1st Defendant and therefore the 2nd Defendant should be released. [9] It is further submitted that based on the cheques compiled for instance the cheque dated 31.10.2014 as shown (page 36 of Appeal Record), is insufficient as the Plaintiff must prove, with supporting evidence that the previous payment was actually made by the 2nd Defendant and the payment due based on the statement of account of Plaintiff, are the sums owing since 2014 (page 16 of Appeal Record) by 2nd Defendant. [10] The 2nd Defendant’s counsel further submitted that nowhere in the pleading stated what was the debt and relied on the case of Malayan Banking Berhad v Yeo Sun Tong [1999] 4 CLJ 425. It was argued that the Plaintiff did not disclose the amount whether it was a principal or 5 inclusive of interests and nowhere in the pleading provides the statement as to why another 1.5% per month is imposed (page 69 of Appeal Record). Plaintiff’s case [11] The learned counsel for the Plaintiff submitted that the Plaintiff had conceded in his affidavit in support that the Writ and Statement of Claim of 28.10.2015 had been served via registered post on 15.1.2016 based on the address in the Agreement dated 23.2.2005 where the Writ and Statement of Claim had been made following the Agreement, under clause 15 of the Agreement. The counsel for the Plaintiff submitted that the service was regular according to the Agreement and under Order 62 rule 6(1)(b) of ROC 2012which allowed registered post and in reference to the service affidavit of 27.10.2015. The Plaintiff’s counsel averred that in filing the Bankruptcy Notice, a search was conducted where the Plaintiff found out the 2nd Defendant’s last known address is in Rawang, Selangor. [12] The Plaintiff’s counsel submitted that the 2nd Defendant does not have any defence of merits, also relying on the Court of Appeal case of Yap Ke Huat & Ors v Pembangunan Warisan Murni Sejahtera Sdn Bhd & Anor [2008] 4 CLJ 175. On the 2nd Defendant’s contention that he no longer lives in Bidor, Perak, the Plaintiff submitted that the address is as per the Agreement signed by the 2nd Defendant. It is submitted that the Session Judge was right to query as to why the 2nd Defendant did not amend the address part of the Agreement when he had moved to Rawang, Selangor. 6 [13] In relation to the deletion of the 1st Defendant’s registration with CCM, the Plaintiff’s counsel averred that the Plaintiff is not in possession of such knowledge as this was only raised before this Court. It is further submitted that the CCM’s letter of 23.1.2009 to CCM does not prove that the 1st Defendant had been removed from CCM’s registration. In fact it was a show cause letter whereby non-reply received by CCM within 1 month, CCM will notify to remove the 1st Defendant, but nowhere does it mentioned that the 1st Defendant had been removed. [14] In relation to the purchase orders, it is averred that the Plaintiff had been dealing with the 2nd Defendant since 2005 until early 2015 and the Delivery Order is adduced as exhibit “A-3” (pages 33-34 of Appeal Record) dated 26.2.2015 and 2.3.2015 that had been acknowledged by the 2nd Defendant. The Plaintiff’s counsel averred that the Plaintiff had received the payment through the cheques for the goods delivered to the 2nd Defendant. [15] In relation to the limitation issue raised by 2nd Defendant, the Plaintiff’s counsel submitted that its claim is within the 6 years period from the time the cause of action accrued. The counsel submitted that the liability of a guarantor arises only upon a demand being made: Soon Peng Yam & Anor v Bank of Tokyo-Mitsubishi (Malaysia) Bhd [2005] 2 MLJ

Defendant’s Reply [16] In relation to the submission by Plaintiff’s counsel on the last known address of the Defendant, in reply, the 2ndDefendant’s counselstated that 7 by serving the Bankruptcy Notice to the address in Rawang, Selangor, the Plaintiff had accepted the 2nd Defendant’s address to be in Rawang and by filing the Bankruptcy Notice at Shah Alam High Court, proves to show that the Plaintiff had accepted the 2nd Defendant’s address as such. It is submitted that such service of the Bankruptcy Notice would be consistent with section 5(1) of Bankruptcy Act 1967where the Bankruptcy Notice can only be filed within a jurisdiction if the 2nd Defendant is domiciled within the jurisdiction in a period of one year. [17] It is submitted that there was no challenge about the 1st Defendant no longer in existssince 2009 and as the company had been dissolved in

It was further submitted that there was nothing to show by the Plaintiff on the interest of 1.5% imposed based on Plaintiff’s statement of accounts (page 16 of Appeal Record). APPEAL [18] Where an appeal involves the setting aside of JID, the general principles can be found in the case of Yap Ke Huat & Ors v Pembangunan Warisan Murni Sejahtera Sdn Bhd & Anor [2008] 5 MLJ 112 where the Court of Appeal held at page 120: “[15] It is trite that when considering to set aside a judgment in default, the first task is to ascertain whether it is regular or irregular judgment. If it is an irregular judgment, then the default judgment ought to be set aside ex debitio justitiae. If it is regularly obtained, then the principle expounded in Evans v Bartlem [1937] AC 473 8 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 an application is a factor to be considered by the court in deciding whether to grant or refuse the application – see Tuan Haji Abdul Rahman v Arab-Malaysian Finance Bhd [1996] 1 MLJ 30.” [19] It is pertinent to verify the service effected on the 2nd Defendant whether had been properly made, that is the means of bringing to his notice the action being taken against him so that the 2nd Defendant can either defend or otherwise. In this regard, we must scrutinise firstly, whether the service was regular. If it is irregular, it can be set aside. Secondly, if the service was regular, whether there was a defence of merit to justify the delay. [20] Reverting to the facts, the Writ and Statement of Claim were served on the 2nd Defendant at the address of No. 55 Jalan Besar 25500 Bidor, Perak whereas the Bankruptcy Notice however was served at the address No. 1 Jalan Desa 2/4 Bandar Country Homes, 48000 Rawang, Selangor. [21] Upon careful perusal of the affidavits of the 2nd Defendant and the Plaintiff, and the Appeal Record, this Court finds that there is proof of receipt of posting to the address in Bidor, Perak (page 28 of Appeal Record) which shows that the Writ and Statement of Claim had been sent to the address in Bidor, Perak. 9 [22] The 2nd Defendant’s counsel reiterated that he never received the Writ and Statement of Claim but received the Bankruptcy Notice that was served to the address in Rawang, Selangor. The Plaintiff’s counsel’s submission to that point was that, a search had been done done and found the 2nd Defendant’s latest address. This Court viewed that, it would be stating the obvious that the 2nd Defendant was not notified of the claim against him prior to receiving the Bankruptcy Notice. [23] Based on Order 10 Rule 1(1) ROC 2012provides, “(1) Subject to the provisions of any written law and these Rules, a writ shall be served personally on each defendant or sent to each defendant by prepaid A.R. registered post addressed to his last known address and in so far as is practicable, the first attempt at service must be made not later than one month from the date of issue of the writ. …” The Plaintiff relied on Order 10 rule 3(1)(b) of ROC 2012 that the service was according to clause 15 of the Agreement. [24] Upon careful reading of the Agreement, this Court finds that clause 15 (page 30 of Appeal Record) provides that any notice or demand or other documents, “shall be deemed to have been duly given to the Guarantor(s) or his/their legal personal representatives either by sending the same by 10 ordinary post or served personally or left for at the last known address(es) of the Guarantor(s) ….” The Agreement clearly stated that it shall be deemed to have been duly given by ordinary post or personally served. This Court finds that based on Plaintiff’s affidavit in reply (pages 19-25 of Appeal Record), and the letter of 13.1.2016 by Plaintiff’s solicitor (page 27 of Appeal Record) and receipt of posting (page 28 of Appeal Record), showed that the Writ and Statement of Claim was served by certificate of posting (page 72 of Appeal Record) and the JID was served through registered post and not ordinary post as accorded under clause 15 of the Agreement. Both notices were addressed to Bidor, Perak. [25] On the affidavit evidence and exhibited documents before this Court, I am not satisfied that the service of the Writ and Statement of Claim had been properly effected on the 2nd Defendant. I viewed that the service was irregular andthe JID should be set aside. [26] Although the service is found to be irregular and should be set aside, for the purpose of completeness, I proceed to ascertain whether there is a defence of merits and following Yap Ke Huat (supra) case, the defence must not be a sham defence but one that is prima facie, raising serious issues of bona fide reasonable defence that the matter should be tried in court. [27] Upon careful reading of the 2nd Defendant’s affidavit in support (pages 8-12 of Appeal Record), the 2nd Defendant laid out several 11 defences. I viewed that the main issue concerns the Agreement and the payment claimed to be owing to the Plaintiff. The Agreement is dated in 2005 and the Plaintiff’s claim is based on the statement of account dated

Initially I was of the view that there was no notice of demand issued by Plaintiff to 2ndDefendant or to the 1st Defendant and this may be subjected to the limitation period under section 6(1)(a) of Limitation Act 1953. [28] However, after careful perusal of the Appeal Record, there was an additional affidavit of Plaintiff (page 45 of Appeal Record) by the Plaintiff’s solicitor of 6.10.2016 where the Plaintiff’s solicitor demanded from the 2nd Defendant and 3rd Defendant. This issue of limitation however would only arise if there is proof of earlier payment made by the 2nd Defendant and/or the 1st Defendant. [29] There are copies of cheques adduced by the Plaintiff (pages 36-40 of Appeal Record) and statement of account of the Plaintiff (page 16 of Appeal Record), claiming the payment that had been made by 1st Defendant, however there was no documentary evidence that payment had indeed been made by the 1st Defendant, showing that it had been credited into Plaintiff’s bank account. The statement of account dated 30.6.2015 is the statement stating since 23.12.2014 but no documentary evidence of the payments made prior to that, to link to the contractual relationship between Plaintiff and 1st Defendant existed since 2009. [30] This Court also finds no copies of purchase orders of the 1st or 2nd Defendant could be produced by Plaintiff but only the Delivery Orders as 12 exhibited by the Plaintiff, dated 2015 and of a lesser amount (pages 33-34 of Appeal Record). This Court viewed that there is a triable issue and even if only one triable issue, the 2nd Defendant is still entitled for the matter to be tried: Development & Commercial Bank Bhd v CheahTheam Swee [1989] 2 MLJ 496. [31] This Court had perused the CCM’s letter of 23.1.2009 (page 18 of Appeal Record) and finds that the CCM viewed that the 1st Defendant is no longer in operation and if CCM does not receive a reply from the 1st Defendant, CCM will remove the 1st Defendant by notice in gazette. In such, the 1st Defendant would have not been in existence and the concern is the payment made by cheques bearing the name Chow Hin Electronic, rather than Chow Hin Electronic Sdn Bhd. There was no search made on the status of the 1st Defendant by the Plaintiff. [32] Based on the above findings, this Court viewed that the 2nd Defendant has shown that there are bona fide triable issues which require the matter to be tried in court, for the documents to be produced and witnesses to testify, against the claim made by Plaintiff. The appeal is hereby allowed with costs. Dated: 31 May 2018 (ZALITA BINTI ZAIDAN) Judicial Commissioner Shah Alam High Court 13 COUNSEL FOR THE APPELLANTS PRAMJIT KAUR Messrs Mann & Associates Advocates & Solicitors No. 57-2, Jalan Bandar Rawang 1 48000 Rawang Selangor Darul Ehsan Tel: 03-6091 7300 Fax: 03-6091 5300 COUNSEL FOR THE RESPONDENT MOHAMMED RHIZA BIN GHAZI NUR SHUHADA BINTI MOHAMED NASAY Messrs Rhiza & Richard Advocates & Solicitors M-2-7 & M-3-7, Plaza Damas No. 60, Jalan Sri Hartamas 1 50480 Kuala Lumpur