Tec D Distribution (Malaysia) Sdn Bhd v Iris Information Technology Systems Sdn Bhd (WA-22NCvC-675-12/2023)

IRIS INFORMATION TECHNOLOGY SYSTEMS SDN BHD (Registration No.: 199101012507 (222819-K))

IRIS CORPORATION BERHAD [Registration No.: 199401016552 (302232-X)] ... DEFENDANTS

This action arises out of a substantial commercial dispute set against the backdrop of one of the Government’s more ambitious public-sector technology initiatives, namely the National Integrated Immigration System (“NIISe”) Project. This was no ordinary contract for the sale of goods, it was a venture valued at approximately RM1.16 billion, designed to overhaul 09/06/2026 15:34:39 WA-22NCvC-675-12/2023 Kand. 86 the technological backbone of Malaysia’s immigration services. The plaintiff, Tec D Distribution (Malaysia) Sdn Bhd, seeks to recover the sum of RM30,139,098.87 said to be outstanding for computer hardware and Oracle software licences supplied in furtherance of that project. The defendants are Iris Information Technology Systems Sdn Bhd (“the first defendant”), the operating entity engaged in the implementation of the project, and Iris Corporation Berhad (“the second defendant”), its holding company.

At the heart of this dispute lies a singular and compelling question, in that, when a supplier performs its part of the bargain by delivering high-tech hardware and vital software licences, and the purchaser accepts the benefit of those goods without demur, can the purchaser later seek refuge in the shadows of an unsigned conditional agreement or the assertion that some other corporate actor absent from the invoices, purchase orders, and contemporaneous correspondence, should bear the fiscal burden?

The issue is of some significance because the defendants’ resistance to the claim rests not upon any denial that the goods were supplied, nor upon any suggestion that they were defective, non-compliant, or rejected. The supplies were made. They were received. They were utilised for the purposes of the NIISe Project. The controversy lies instead in whether the legal obligation to pay for them may be displaced by two propositions advanced by the defence. First, that payment was subject to a pay-when-paid arrangement contingent upon prior payment by the Government of Malaysia; and secondly, that liability had, in substance, been assumed by a third party, Tass Tech Technologies Sdn Bhd (“Tass Tech”), such that the defendants bore no primary responsibility for the debt.

Having considered the pleadings, the oral and documentary evidence, and the contemporaneous correspondence in detail, I find that the plaintiff’s case is well supported by documentary record and makes commercial sense. The defendants’ case, by contrast, relies on arguments unsupported by the contractual documents, inconsistent with the manner in which the parties in fact conducted themselves, and advanced only after payment had fallen due. In the result, this is not a difficult case of contractual construction, nor an intricate dispute over technological performance. It is, in substance, a straightforward claim for payment resisted by defences ultimately built on foundations of conjecture and afterthought which the contemporaneous record does not sustain.

The material facts are not controversial. The chronology is, however, important, for in commercial cases of this kind the documents generated in the ordinary course of dealing are often more reliable than the later reconstructions made for litigation. The factual narrative begins on 29 January 2021, when the first defendant, was awarded the NIISe Project by the Ministry of Home Affairs. The objective was ambitious, that is, to replace an aging immigration system with a state-of-the-art, integrated technological solution.

In furtherance of that appointment, the first defendant turned to the plaintiff, as a supplier of the hardware and software necessary for implementation. Between January 2022 and June 2023, the first defendant issued no fewer than ten purchase orders to the plaintiff, bearing purchase order numbers 901860 to 902084. Particular significance attaches to Purchase Order No. 902084 dated 27 June 2023, which concerned Oracle programmes. Its terms were explicit. It provided for a down payment of RM16.6 million upon issuance, with the balance payable within 90 days. That document is of central importance, not merely because of its value, but because it stands as one of the clearest documentary indicators of the parties agreed payment structure.

Acting upon the faith of those purchase orders, the plaintiff procured the relevant goods and licences. In relation to the Oracle component, the procurement was formalised by an Oracle Ordering Document dated 3 July 2023, executed by the plaintiff, the first defendant, and Oracle Corporation Malaysia Sdn Bhd. The evidence establishes that the goods were supplied and the relevant services rendered. Hardware was delivered to the first defendant and, where the project required, to Jabatan Imigresen Malaysia. There is no contemporaneous evidence that any shipment was rejected, any licence disputed, or any delivery refused. No complaint was raised as to quality, quantity, conformity, or performance. On the contrary, the documentary record shows acceptance in the ordinary commercial sense. The goods were received, retained, and deployed for the purposes for which they had been ordered.

Following the performance of its obligations, the plaintiff issued invoices in the ordinary course of trade. In total, 29 invoices were issued in the aggregate sum of RM65,563,171.70. Against those invoices, the first defendant made part-payments amounting to RM32,424,222.83. Those payments are not insignificant, either in amount or in legal character. They were not described, at the time they were made, as ex gratia payments, temporary accommodations, or gestures of commercial indulgence. Nor were they said to be payments made on behalf of some other party. They were simply payments made against invoices rendered by the plaintiff pursuant to purchase orders issued by the first defendant. After giving credit for those payments, the balance said to remain outstanding is RM30,139,098.87, being the sum claimed in this action.

Thereafter, the matter moved from performance to collection. As payment remained outstanding, the correspondence between the parties became progressively more insistent. Between June and August 2023, emails were exchanged with increasing urgency. The plaintiff issued statements of account in the usual commercial form, each bearing the standard notification that any discrepancy was to be raised within seven days, failing which the account would be treated as correct. No substantive objection was raised in response. There was no complaint that payment was not yet due, no assertion that liability lay with Tass Tech, and no suggestion that the invoices had been issued to the wrong party. Letters of demand followed in October and November 2023. Even then, no coherent contractual objection was advanced of the kind now relied upon.

The defences now advanced emerged only later, once the dispute had hardened into litigation. That sequence is itself revealing. Contemporaneous silence may not always be conclusive, but a defence first articulated under the pressure of legal proceedings must be tested with particular care against the documents created before litigation was ever in contemplation.

The plaintiff’s case is, at its core, straightforward in structure. It is founded upon a familiar commercial proposition, that where goods are ordered, supplied, accepted, and partially paid for, the law will ordinarily require the purchaser to pay the balance, absent some clear and legally sustainable basis for refusing to do so. The plaintiff’s answer to the defence is therefore not elaborate, but direct. It says the contracts are found in the purchase orders; the goods were delivered in accordance with them; invoices were issued in the ordinary course; substantial part-payments were made against those invoices; and the defendants, having accepted the benefit of performance, cannot now seek to avoid the balance due.

The plaintiff vehemently denies the existence of any back-to-back or pay-when-paid arrangement as part of the contractual bargain between the parties. It rejects, in uncompromising terms, the suggestion that its entitlement to payment was contingent upon the first defendant receiving payment from the Government of Malaysia. The plaintiff submits that the defendants’ reliance upon the conditional letter of appointment dated 23 August 2021 (“CLA”) is impermissible because the document, and more importantly the factual case sought to be built upon it, was never properly pleaded. The specific clauses now relied upon, including clauses 4.1 and 6, were not distinctly traversed in the defence as the contractual foundation for a pay-when-paid arrangement.

Additionally, the plaintiff contends that the CLA is evidentially incapable of bearing the weight the defendants now seek to place upon it. The document was unsigned. There is no satisfactory evidence that it was ever accepted by the plaintiff, still less that it was intended to supersede the purchase orders subsequently issued and acted upon. A commercial condition of such significance, had it truly been agreed, would be expected to find clear expression in the operative contractual instruments governing payment. It does not. In contrast, the purchase orders do precisely what commercial instruments are expected to do. They identify the goods, stipulate the price, and specify the payment terms.

The plaintiff further relies upon the General Terms and Conditions, included to each of the invoices issued by the plaintiff, which require any variation to the terms to be mutually agreed in writing. That provision is of some significance. It means that even if some later departure from the express payment structure had been proposed, it would require documentary embodiment. None has been produced. The defendants have failed to produce any written agreement, signed variation, and contemporaneous instrument by which the agreed credit terms were amended into a contingent pay-when-paid arrangement. The plaintiff’s position is therefore a simple one, the purchase orders contain express payment terms. Those terms were acted upon, and no admissible or effective variation displaced them.

The plaintiff next rejects the suggestion that liability for the Oracle supply was assumed by Tass Tech. It describes that contention as recent in origin, unsupported by the primary documents, and inconsistent with the parties’ own contemporaneous conduct. The starting point is the Oracle Ordering Document dated 3 July 2023. That agreement was executed by three parties, and three parties only, that is, the plaintiff, the first defendant, and Oracle Corporation Malaysia Sdn Bhd. Tass Tech appears nowhere in it. It is not named as purchaser, payer, intermediary, guarantor, or substitute obligor. In a transaction of this size and specificity, that omission is not incidental. It is fatal to the suggestion that Tass Tech had assumed contractual responsibility for payment. The contemporaneous correspondence points in the same direction.

The plaintiff places particular reliance upon two internal payment exchanges in July 2023, each of which is said to be revealing of how the parties themselves understood the debt at the time. First, on 6 July 2023, the plaintiff’s representative wrote to the first defendant’s finance department to enquire whether a payment of RM14 million was intended to offset a particular invoice. The response was unequivocal. It was intended to offset the plaintiff’s Invoice No. UD23024886. Secondly, on 25 July 2023, the plaintiff queried the second defendant’s finance personnel regarding another payment of RM2.6 million. The response was equally clear. It was a partial payment for plaintiff’s Invoice No. UD23024886. Those exchanges are not merely administrative. They are admissions in the ordinary course of business as to the identity of the debt being paid. They identify the invoice, acknowledge the liability, and do so without any suggestion that payment was being made on behalf of Tass Tech, or that Tass Tech was in truth the party obliged to pay. The plaintiff accordingly submits that Tass Tech is absent from every document that matters. Its emergence as the alleged true debtor occurs only later, and only in the context of the defence now advanced.

The plaintiff further contends that, quite apart from strict contractual analysis, the defendants are in any event estopped from denying liability by reason of their own conduct. Over a sustained period, the defendants received invoices, statements of account, reminders, and demands. Those statements expressly provided that discrepancies were to be notified within seven days, failing which the entries would be treated as correct. No objection was raised. The defendants did not dispute the invoices. They did not dispute the sums claimed. They did not dispute the contractual basis upon which late payment interest was asserted. They paid more than RM32 million against the very invoices they now seek to disavow. The plaintiff submits that, conduct of that kind is not neutral. It is conduct from which representation may be inferred, and upon which reliance may be founded. A party who accepts performance, makes substantial payment, remains silent in the face of repeated statements of account, and raises no contemporaneous objection does not stand in the same position as one who has consistently disputed liability from the outset. In that regard, the plaintiff relies upon the equitable principles discussed in Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331; [1995] 4 CLJ 283 and Caltex Oil Malaysia Ltd v Classic Best Sdn Bhd & Ors [2007] 4 MLJ 772; [2006] CLJU 266; [2006] 1 LNS 266; [2006] 5 MLRH 16 to submit that it would be inequitable for the defendants to enjoy the benefit of the goods and part-pay the supplier, only to contest the liability later.

Finally, the plaintiff contends that the second defendant, cannot evade liability by presenting itself as a remote holding company detached from the transactions in question. The plaintiff’s case is that the relationship between the first and second defendants is intertwined and ought to be treated as a single entity to reflect the economic and commercial reality. Its case is that the second defendant was not a passive shareholder but an active participant in the relevant commercial dealings. It shared directors with the first defendant, operated through overlapping financial personnel, and permitted its officers and finance function to engage directly in payment discussions concerning the debt now in issue. On the plaintiff’s case, the two defendants operated, in practical and financial terms, with a degree of integration inconsistent with the rigid separation now asserted. Purchase orders were executed by personnel common to both entities. Payment discussions were conducted through finance personnel associated with the second defendant. Acknowledgments of invoice payments emanated from that same shared administrative structure. The plaintiff therefore submits that the second defendant cannot, having permitted its personnel and corporate machinery to participate in the management and acknowledgment of the liability, now seek to retreat behind the formal language of separate incorporation as though it were a stranger to the transactions altogether.

The defendants do not deny that the goods were supplied, that the Oracle licences were procured, or that payments were made on account. Their case is instead that the legal obligation to pay has either not yet arisen, has shifted elsewhere, or never attached to the second defendant at all.

The centrepiece of the defendants’ case is the CLA. They contend that this document, rather than the subsequent purchase orders, constituted the true governing agreement between the parties. On that footing, the defendants submit that the purchase orders and invoices upon which the plaintiff relies were no more than administrative instruments generated in the course of performance. They say those documents recorded procurement activity and facilitated internal accounting, but did not themselves create the underlying contractual bargain already struck by the CLA. They contend that the CLA imposed a conditional payment regime under which the plaintiff would only be paid upon the first defendant receiving payment from the Government of Malaysia. In other words, the plaintiff’s entitlement was said to be expressly contingent upon upstream payment by the ultimate employer, such that no debt became due unless and until the Government paid the first defendant.

The defendants submit that this arrangement is to be found in clauses 4.1 and 6 of the CLA, which they contend as establishing a classic back-to-back or pay-when-paid mechanism. The defendants accept that the CLA was unsigned by the plaintiff. They contend, however, that signature was unnecessary because the plaintiff accepted the terms of the CLA by conduct. That conduct, they say, is found in the plaintiff’s commencement of work on the NIISe Project, its procurement of the relevant supplies, and its participation in the project framework after the CLA had been issued. In substance, therefore, the defendants invite the Court to conclude that the plaintiff’s conduct amounted to acceptance of the CLA and all of its conditions, including the alleged pay-when-paid arrangement, notwithstanding the absence of any signed acceptance and notwithstanding the subsequent issue of purchase orders containing express payment terms.

From that premise, the defendants’ argument on prematurity follows. They contend that the plaintiff’s claim has not crystallised because the contractual condition precedent to payment has not occurred. The Government of Malaysia, they say, terminated the NIISe Project in August 2023 and has not paid the first defendant. Because the upstream payment was never received, the downstream obligation to pay the plaintiff never matured. The claim, they submit, is therefore premature in timing. It is said to have been brought before the contractual trigger for payment had arisen. In support of that proposition, the defendants rely upon Pacific Forest Industries Sdn Bhd & Anor v Lin Wen-Chih & Anor [2009] 6 MLJ 293; [2009] 6 CLJ 430 for the proposition that where a contractual entitlement is expressly conditional upon the occurrence of a stipulated event, no enforceable cause of action arises unless and until that condition has been fulfilled.

The defendants further submit that the express 90-day payment term contained in Purchase Order No. 902084 does not displace that analysis. They argue that the purchase order must be read consistently with the contractual structure established by the CLA, and not in isolation. In that regard, they rely upon Grogan v Robin Meredith Plant Hire [1996] CLC 1127; [1996] 15 Tr LR 371; 53 ConLR 87 for the proposition that invoices, purchase orders, and other transactional documents generated during performance may in an appropriate case be evidential of administration rather than constitutive of the substantive bargain. On that footing, the defendants contend that the payment language appearing in the purchase orders was merely administrative and cannot be treated as overriding the conditional payment regime already established by the CLA. The defendants’ position is therefore that the 90-day term recorded in the purchase order did not create an independent payment obligation, but merely reflected an internal billing framework subordinate to the governing pay-when-paid structure.

The defendants next contend that, at least in relation to the Oracle component, the plaintiff was aware that payment responsibility had in substance shifted to Tass Tech. They do not suggest that Tass Tech was formally inserted into the purchase orders or Oracle Ordering Document. Their case is that by subsequent tripartite understanding, and with the plaintiff’s knowledge and acquiescence, Tass Tech became the entity responsible for settling the Oracle-related payments. The principal foundation for that contention is a WhatsApp group exchange said to involve representatives of the plaintiff, the first defendant, and Tass Tech. The defendants submit that this informal but contemporaneous communication evidences a consensual arrangement by which the plaintiff understood that Tass Tech would assume responsibility for payment of the Oracle invoices. On that basis, the defendants contend that the plaintiff cannot now insist upon strict contractual privity while having, in practice, dealt with Tass Tech as the entity responsible for payment.

The defendants also resist the plaintiff’s claim for late payment interest at the rate of 18% per annum, or 1.5% per month. Their primary contention is that such interest never became chargeable because the underlying debt itself had not yet fallen due. If, as they contend, payment was subject to the pay-when-paid regime in the CLA, then no late payment could arise before receipt of payment from the Government of Malaysia. On that footing, the interest provision appearing in the invoices is said to be inapplicable. In the alternative, the defendants submit that the plaintiff’s own conduct disentitles it from insisting upon strict enforcement of the invoice interest clause. They say that throughout the course of the project the plaintiff did not rigidly enforce 30-day payment terms, did not consistently demand interest, and instead dealt with payment delays in a commercially flexible manner. That conduct, the defendants argue, demonstrates that the parties operated with a degree of practical versatility inconsistent with the plaintiff’s present reliance upon strict contractual penalty. The plaintiff, they say, cannot now retrospectively convert commercial accommodation into enforceable default interest.

Finally, the second defendant, maintains that it is not liable in law for the debts alleged against the first defendant. The second defendant submits that it is a separate legal person, distinct from its subsidiary, and that the Court should not disregard that separation merely because the two entities operated within the same corporate group. In support of that proposition, the defendants rely, first, upon the classic statement of principle in Aron Salomon (Pauper) v A Salomon and Company, Limited, A Salomon and Company, Limited v Aron Salomon [1897] AC 22; 66 LJ Ch 35; 75 LT 426; 45 WR 193; 13 TLR 46; 41 Sol Jo 63; 4 Mann 89, that a duly incorporated company possesses legal personality separate and distinct from its shareholders and affiliates. They further rely upon the decision in Tan Sri Dato’ Tajudin bin Ramli v Rego Multi-Trades Sdn Bhd [2018] 7 CLJ 197; [2018] 1 LNS 222, to submit that the corporate veil is not to be pierced merely because one company controls another, shares management with it, or belongs to the same group structure. The second defendant also invokes Terranova Builders Sdn Bhd (previously known as Nisa Consolidated Sdn Bhd) v Repc Services Sdn Bhd (previously known as Ranhill Engineers and Constructors Sdn Bhd) & Anor [2018] MLJU 1995; [2018] CLJU 2149 for the proposition that common directorships, shared premises, and administrative overlap are commonplace incidents of corporate group organisation and do not, without more, collapse separate legal identity.

On that basis, the second defendant submits that the plaintiff’s attempt to treat both defendants as a single economic unit is legally unsustainable. The second defendant did not issue the purchase orders. It was not named in the invoices. It was not the contracting party to the NIISe procurement. No letter of demand was addressed to it before proceedings were commenced. The plaintiff’s own conduct, the defendants say, demonstrates that it understood perfectly well which entity it regarded as its true debtor. The defendants therefore contend that whatever operational overlap may have existed between the two companies, there is no factual or legal basis for treating the second defendant as guarantor, co-contracting obligor, or co-debtor in respect of the plaintiff’s claim.

The defendants’ principal defence rises or falls with the alleged pay-when-paid arrangement. It is the fulcrum upon which their case turns. The first defendant’s case is that no enforceable obligation to pay the plaintiff arises unless and until the Government has paid the first defendant under the NIISe Project. The plaintiff resists that proposition on two fronts. First, as a matter of pleading. Secondly, as a matter of proof. In my judgment, both objections are well taken.

I begin with pleadings. The defendants’ reliance on the alleged CLA, and in particular on clauses 4.1 and 6 said to create a contractual pay-when-paid regime, was not pleaded with anything approaching the particularity required of a defence resting on contract. What was pleaded was a broad assertion of conditionality. An assertion that the plaintiff’s claim was premature because the first defendant had not yet been paid by the Government. Paragraphs 6 and 14 of the defence put the matter no higher than this:

Paragraphs 4 and 5 of the SOC are not disputed insofar as the 1st Defendant was awarded the NIISe Project by the Ministry of Home Affairs, Malaysia and/or the Government of Malaysia and the 1st Defendant had issued purchase orders to the Plaintiff as set out in paragraph 5 of the SOC. The 1st Defendant further states as follows: d) as of the date of the issuance of the invoices (as pleaded in paragraph 22 of the SOC) and/or the filing of the claim herein, the 1st Defendant has yet to be paid by the Government of Malaysia in respect of the products ordered through the said Purchase Orders; e) premised on the aforesaid, the 1st Defendant states that the Plaintiff’s claim herein is pre-mature.

Paragraphs 18 to 20 of the SOC are not admitted and the Plaintiff is put to strict proof thereof.

14.1 The 1st Defendant also reiterates that the Plaintiff was at all material times fully aware that the payment in respect of the other products ordered by the 1st Defendant were only to be paid once the Government of Malaysia has made payment the 1st Defendant.

14.2 As payment was not forthcoming from the Government of Malaysia in respect of those other products, the Plaintiff’s claim for such sums is premature. [Emphasis is mine]

That pleading advances a case of commercial expectation, it does not plead a case of contractual stipulation. The distinction is decisive. What the first defendant pleaded was, in substance, that payment had not yet been received from the Government and that the plaintiff’s claim was therefore premature. What the first defendant sought to advance at trial was something altogether more exacting. That there existed a concluded and binding agreement between the first defendant and the plaintiff, embodied in the CLA, and that clauses 4.1 and 6 of that agreement expressly made payment by the first defendant conditional upon prior payment by the Government. That is not mere evidential embroidery. Nor is it, as counsel suggested, simply the evidential mechanism by which an already pleaded defence was to be proved. It is a shift in legal footing. A general plea of deferred payment by commercial understanding is one thing, a specific plea of contractual conditionality arising from identified clauses in a named agreement is quite another. It is a different case, requiring different proof, inviting different legal consequences, and calling for a different forensic response.

The law tolerates elaboration but it does not permit transfiguration. A party may develop what has been pleaded. It may not arrive at trial with one case on the record and another in its brief. Pleadings are not decorative. They define the battlefield. Their purpose is to give fair notice of the case to be met, so that litigation is conducted openly and not by surprise. On that principle, the law has long been settled. In Iftikar Ahmed Khan (As The Executor Of The Estate For Sardar Mohd Roshan Khan, Deceased) v Perwira Affin Bank Bhd (Previously Known As Perwira Habib Bank Malaysia Bhd) [2018] 2 MLJ 292; [2018] 1 CLJ 415, the Federal Court restated the rule in terms too clear to admit of qualification: “[27] It is settled law that parties are bound by their pleadings and are not allowed to adduce facts and issues which they have not pleaded: Samuel Naik Siang Ting v Public Bank Bhd [2015] 6 MLJ 1, State Government of Perak v Muniandy [1986] 1 MLJ 490, Veronica Lee Ha Ling & Ors v Maxisegar Sdn Bhd [2011] 2 MLJ 141; [2009] 6 CLJ 232. In Lee Ah Chor v Southern Bank Bhd [1991] 1 MLJ 428; [1991] 1 CLJ Rep 239 it was held that where a vital issue was not raised in the pleadings, it could not be allowed to be granted and to succeed on appeal. A decision based on an issue which was not raised by the parties in their pleadings is liable to be set aside: Yew Wan Leong v Lai Kok Chye [1990] 2 MLJ 152. In The Chartered Bank v Yong Chan [1974] 1 MLJ 157 the Federal Court set aside the judgment of the trial judge as it was decided on an issue not raised on the pleadings. In that case the trial judge erred in concluding that the pleadings included a claim for breach of contract as well as a claim for libel.” [Emphasis is mine]

The point is one of elementary fairness. A party faced with a plea that payment has merely been delayed may answer it one way. A party faced with a plea that payment is contractually excluded unless and until a specified condition precedent is satisfied may answer it quite differently. The law insists that such a case be pleaded because fairness insists upon it. Here, the defendants did not plead the CLA as the legal source of the alleged conditionality. They did not plead clauses 4.1 and 6. They did not plead that the plaintiff’s entitlement was expressly subordinated, as a matter of contract, to prior receipt of Government funds. Those were not incidental omissions. They were omissions going to the legal character of the defence itself. In those circumstances, the defendants cannot plead conditionality in general and then, at trial, seek sanctuary in the precise language of unpleaded contractual clauses as though the point had always been squarely raised. That is not permissible. The defendants’ reliance on the CLA is, for that reason alone, fundamentally impaired.

But even if one were to put the pleading deficiency aside, the CLA fares no better on its merits. The document never actually became the binding agreement they now claim it was. The CLA is unsigned. That is not, of itself, conclusive. Commercial contracts may, in an appropriate case, be concluded by conduct. The law recognises that parties may bind themselves without formal execution where their words and conduct objectively demonstrate an intention to do so. But the burden of proving such acceptance rests firmly upon the party asserting it. Here, the burden rests on the defendants. The defendants submit that the plaintiff accepted the CLA by conduct, principally because the plaintiff commenced performance under the NIISe Project after the CLA had been issued. That submission is unsustainable. The difficulty for the defendants is that the parties thereafter conducted themselves in a manner fundamentally inconsistent with the alleged pay-when-paid regime the defendants now seek to imply. Where a party seeks to superimpose a term of substantial commercial consequence, here a term postponing payment until an uncertain third-party event, the conduct relied upon must point clearly and objectively to acceptance of that very condition. The defendants’ evidence does not come close to doing so. That inconsistency is most starkly illustrated by the purchase orders issued by the first defendant. The purchase orders were not silent as to payment, they contained express payment terms, most notably, Purchase Order No. 902084, concerning the Oracle supply, provided in clear terms: Note: Please send the NIISe Project invoices to the following email address iitsinvoice@iris.com.my Payment Term: RM16.6 million down payment upon PO issued, the remaining will be 90 days [Emphasis is mine]

That language admits of no ambiguity. It is not provisional. It is not contingent. It is not couched in the language of dependency upon governmental disbursement. It identifies, with precision, the trigger for payment and the period within which the balance is to be discharged. It is, in substance and in form, an express credit term. The defendants’ case requires the court to conclude that this clear and specific 90-day payment obligation was somehow subordinate to an earlier unsigned document. That submission is not merely improbable, it is commercially incoherent. If such a term had truly formed part of the bargain, one would expect it to be stated clearly in the operative procurement instruments, particularly in purchase orders issued by the first defendant, by which goods were ordered and paid for. It appears nowhere. The omission is not accidental. It is fatal.

The plaintiff’s invoices were thereafter issued by reference to those purchase orders and were received without contemporaneous protest. They were accompanied by the plaintiff’s standard terms, including provisions as to payment and late interest. Yet no objection was raised that payment was contingent upon governmental disbursement. No reservation was expressed that the sums were not yet due. No response was made asserting that the invoices were premature because the Government had not paid the first defendant. That silence in this context is irreconcilable with the defendants’ present case. The defendants’ position is further undermined by their own conduct. They made substantial part-payments against the invoices. They were made as payments on account of identified invoices. That is not the conduct of a party who believes no present liability has arisen. It is the conduct of a party recognising that liability exists, albeit one unable or unwilling to discharge it in full. The defendants rely upon acceptance by conduct. Properly analysed, it is their own conduct that undoes them.

The authorities do not assist the defendants. It is correct that acceptance by conduct is recognised in law. It is equally correct that a binding contract may, in some circumstances, be inferred from performance notwithstanding the absence of formal execution. But that principle assists only where the conduct relied upon objectively supports the term said to have been accepted. Here it does not. If anything, the defendants’ own subsequent conduct, issuing purchase orders with fixed credit terms and making payment on account, objectively points in the opposite direction. That is entirely consistent with the principle discussed in Cipta Cermat Sdn Bhd v Perbadanan Kemajuan Negeri Kedah [2007] 1 CLJ 498, namely that contractual intention may be inferred from conduct. Here, the conduct does not support conditionality, it negates it.

Nor does Pacific Forest Industries Sdn Bhd & Anor v Lin Wen-Chih & Anor [2009] 6 MLJ 293; [2009] 6 CLJ 430 advance the defendants’ case. That authority stands for the uncontroversial proposition that where parties have clearly agreed that a right is contingent upon the occurrence of a specified event, the court will give effect to that bargain. But that proposition assumes the contingency was in fact agreed. In Pacific Forest (supra), the contingency was established in the operative agreement itself. Here, by contrast, the defendants seek to import a condition of considerable consequence from an unsigned CLA, notwithstanding later purchase orders which expressly stipulate fixed payment terms and contain no trace of such a contingency. Pacific Forest (supra) offers no support for such an exercise.

The matter is, in truth, put beyond serious dispute by the evidence of the defendants’ own witness. Under cross-examination, DW1 accepted that there was no express reference to any back-to-back or pay-when-paid arrangement in the purchase orders. Its absence is not a matter of drafting deficiency. It is fatal to the defendants’ reliance on the unsigned CLA: Alright. So, this is a purchase order issued by the 1st Defendant itself. Correct? Yes. And in this purchase order, if you look at the payment terms, the payment terms stated there, there is no mention of Tec D would only be paid once government pay IITS. Correct? Correct In your own documents. Yes. Alright. And in your own documents, the purchase order, there is also no mention that Tec D’s entitlement to pay was subject to the government’s acceptance of the goods and services. Correct? Correct. [Emphasis is mine]

I therefore reject the defendants’ contention that payment to the plaintiff was contingent upon prior payment by the Government of Malaysia. The alleged pay-when-paid arrangement was neither properly pleaded, nor proved, nor reflected in the contractual documents by which the parties in fact conducted their bargain. It follows that the defence of prematurity fails.

The defendants’ alternative contention that liability for the Oracle licences had in substance shifted to Tass Tech, suffers from the same central defect as the pay-when-paid defence. It is contradicted by the contemporaneous documents and sustained only by retrospective reconstruction. The proposition advanced is not a mere question of administrative convenience. It is an assertion that responsibility for payment in a multi-million-ringgit software transaction had, by subsequent arrangement, been assumed by an entity other than the contracting purchaser. Such a proposition, if true, would be expected to leave a clear documentary trail. It does not.

The starting point is the Oracle Ordering Document dated 3 July

That document records the parties to the Oracle transaction with precision. They were the plaintiff, the first defendant, and Oracle Corporation Malaysia Sdn Bhd. Tass Tech was not a party to it. It was not identified as purchaser, substitute obligor, intermediary, paying agent, guarantor, or nominee. In a transaction of this scale and specificity, that omission is not peripheral, it is pertinent. The same is true of the invoice trail. Invoice No. UD23024886, which lies at the centre of this dispute, was issued by the plaintiff to the first defendant. Not to Tass Tech. Not on behalf of Tass Tech. Not with any qualification suggesting that the first defendant was merely a conduit for some alternative payer. The documentary position is plain; the first defendant was billed as principal.

The contemporaneous correspondence is, if anything, even more damaging to the defence. On 6 July 2023, PW2, Jenie Chong Yen Nie, acting on behalf of the plaintiff, wrote to the first defendant to enquire whether a payment of RM14 million was intended to offset a particular invoice. The question was direct and entirely commercial in character: From: Chong, Jenie <jenie.chong@mytecd.com> Sent: Thursday, July 6, 2023 2:46 PM To: Arfishah Arshad <arfishah@iris.com.my>; iitsinvoice <iitsinvoice @iris.com.my> Cc: Au Yeong, Stanley <stanley.AuYeong@mytecd.com>; Li, Lucas <lucas.i@mytecd.com> Subject: RE: IRIS INFORMATION TECHNOLOGY SYSTEMS SDN | SOA Date 21.06.23 _ DO Supporting Doc Dear Arfishah, Kindly advise on the advance payment RM14 Mil to offset which invoice. Thank you [Emphasis is mine]

The response admits of no ambiguity. Arfishah Ahmad of the first defendant responded: From: Arfishah Arshad <arfishah @iris.com.my> Sent: Thursday, July 6, 2023 3:44 PM To: Chong, Jenie <jenie.chong@mytecd.com>; iitsinvoice <iitsinvoice @iris.com.my> Cc: Au Yeong, Stanley <Stanley.AuYeong@mytecd.com>; Li, Lucas <lucas.li@mytecd.com> Subject: RE: IRIS INFORMATION TECHNOLOGY SYSTEMS SDN | SOA Date 21.06.23 _ DO Supporting Doc This email originated outside of TD SYNNEX. Please help keep our organization and partners safe. It's up to us; think before you click. Dear Jenie, Payment is part of invoice UD23024886. Thanks & Regards, Arfishah Arshad Finance Department IRIS INFORMATION TECHNOLOGY SYSTEMS SDN BHD [Emphasis is mine]

That response is of obvious significance. It did not suggest that the payment was being made on behalf of Tass Tech. It did not reserve the position that Tass Tech was the true debtor. It simply identified the invoice to which the payment was being applied, namely the plaintiff’s invoice issued to the first defendant and now sued upon. The same pattern appears in the subsequent exchange concerning the RM2.6 million payment. In correspondence with Cerlyn Yee of the second defendant’s finance department, the plaintiff inquired about a payment of RM2.6 million. The response was definitive: "This is partial payment for your invoice no: UD23024886 (IRIS PO No: 902084)". The Court found that this correspondence, occurring at the height of the transactional period, reflected the true commercial reality. The second defendant’s own finance department did not say, "This is from Tass Tech for their invoice.” It said what it was, a part payment of the plaintiff’s invoice issued under the first defendant’s purchase order.

Those exchanges matter not merely for what they say, but for when and why they were said. They were not generated for the purposes of litigation. They were not drafted with one eye on future pleadings. They were created in the ordinary course of business, by finance personnel engaged in the mundane but revealing work of reconciling invoices and payments. That is precisely why they carry particular evidential weight. They record commercial reality before legal strategy had occasion to revise it. The principle is well established that contemporaneous documents created at the material time ordinarily carry greater probative force than later oral reconstruction. As the Court of Appeal observed in Jayandran a/l Subramaniam v. Rajaprakash a/l Raghavan & Ors [2026] 2 CLJ 803: “[25] It must be borne in mind that the POAs are contemporaneous documents created at the time of the purchase of the lands by Ramaney. The law generally affords greater weight to such documents than to oral testimony or documents created long after the fact, as they reflect the intentions of the parties at the material time. The absence of a specific finding on the legal effect of cls. 24 and 25 of POA September 1976 had, in our view, left an aspect of the reasoning that required further examination.” [Emphasis is mine]

The emails exchanged in July 2023 are contemporaneous commercial records. They were created before this dispute hardened into legal proceeding, before positions were formalised, and before the present defences were conceived. They are therefore of materially greater probative value than the ex post facto explanations now advanced by the defence witnesses. Those contemporaneous records speak with one voice. They identify the first defendant as the invoiced debtor. They identify the payments as being made in reduction of the plaintiff’s invoice issued to the first defendant. They contain no suggestion, express or implied, that Tass Tech had assumed legal responsibility for payment.

Further and against that documentary record, the defendants rely principally on a WhatsApp group exchange and the oral assertions of DW2, Chia Jen Wen, that the plaintiff knew Tass Tech was involved. The WhatsApp group was established to expedite communication between the stakeholders involved in the supply and installation of the Oracle software. It included personnel from the plaintiff, the first defendant, and representatives from Tass Tech. The chat was used for operational matters, namely tracking delivery status, coordinating installation, and discussing the logistics of payment processing, such as, when the payment is coming or which invoice are being paid. The defendants argued that the mere presence of Tass Tech in this group, and discussions regarding payment, implied a tripartite understanding that Tass Tech was the ultimate source of funds and thus the true obligor. The Court rejected this line of reasoning for the following reasons.

A WhatsApp chat is by nature informal. It lacks the clarity required to extinguish a debt owed by the first defendant and transfer it to Tass Tech. As held in Jayandran (supra), the law looks for the intentions of parties at the material time, which are best reflected in the primary documents such as purchase orders, invoices or formal emails. The Whatsapp evidence failed to show the plaintiff’s consent to release the first defendant from liability. On the contrary, the plaintiff continued to issue invoices and demands exclusively to the first defendant, proving they never consented to look only to Tass Tech.

The Court also dismissed the reliance on emails sent to (hafiz.tass@iris.com.my). The presence of “tass” in the handle was found to be irrelevant. The domain was (@iris.com.my). The defendant’s group domain, proving the recipient was part of the Iris group facilitating the payment, not an external third-party dentor. The WhatsApp evidence was viewed by the Court as smoke without fire. It may have shown that Tass Tech was involved in the funding ecosystem of the project, perhaps as a sub-contractor to the first defendant, but it failed to prove that Tass Tech had replaced the first defendant as the debtor to the plaintiff. The contemporaneous emails where the first defendant claimed payments as their own, and the continued invoicing of the first defendant, rendered the WhatsApp chat legally ineffective in altering the contractual obligations. The suggestion that Tass Tech assumed liability for the Oracle licences is not borne out by the evidence. It is a retrospective reconstruction and nothing more. Estoppel, Silence and the Consequences of Conduct

The plaintiff’s reliance upon estoppel is, in my judgment, well founded both in principle and on the facts. Its case on estoppel is formidable. The defendants were served with invoices and statements of account that expressly warned them to notify discrepancies within seven days or accept the entries as correct. The defendants received those documents. They did not object. They did not dispute the invoices. They did not challenge the quantum claimed. They did not deny liability. They did not assert that payment was contingent upon receipt from the Government. They did not say Tass Tech was the true debtor. They did not protest the late payment terms endorsed upon the invoices. They remained silent. In commerce, silence is not always consent. But silence in the face of repeated demands, detailed statements of account, and express invitations to dispute liability is rarely without consequence. Where a party, with full knowledge of the claim asserted against it, elects neither to object nor to correct, and the other party proceeds on the footing that the account is accepted, the law does not treat such silence as commercially inert. The law is clear that a commercial party cannot sit on its rights and ambush a supplier with defences raised only after a letter of demand is issued. In Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331; [1995] 4 CLJ 283, it was held: “The time has come for this court to recognize that the doctrine of estoppel is a flexible principle by which justice is done according to the circumstances of the case. It is a doctrine of wide utility and has been resorted to in varying fact patterns to achieve justice. Indeed, the circumstances in which the doctrine may operate are endless... …It may operate to bind parties as to the meaning or legal effect of a document or a clause in a contract which they have settled upon (see the Amalgamated case) or which one party to the contract has represented or encouraged the other to believe as the true legal effect or meaning: American Surety Co of New York v Calgary Milling Co Ltd (1919) 48 DLR 295; De Tchihatchef v Salerni Coupling Ltd [1932] 1 Ch 330; Taylor Fashions.” [Emphasis is mine]

That statement is pertinent here. By their silence, their receipt of invoices, their failure to protest, and their subsequent conduct in making payment on account, the defendants encouraged the plaintiff to proceed on the footing that liability was not in dispute and that only payment remained outstanding. The law has long recognised that where accounts are rendered and left unchallenged, an account stated may arise with real legal consequences. That principle was applied in Caltex Oil Malaysia Ltd v Classic Best Sdn Bhd & Ors [2007] 4 MLJ 772; [2006] CLJU 266; [2006] 1 LNS 266; [2006] 5 MLRH 16, where the court held: “[13] In the present case, the plaintiff had sent statement of accounts and invoices to the first defendant. The fact is undisputed. Letters of demand were sent by the plaintiff to the defendant and the defendant had neither protested nor questioned the plaintiff on the statements of accounts, Invoices, delivery notes, debit notes and the letter of demand. Furthermore, the first defendant had stopped payment of its two cheques issued to the plaintiff without giving any reasons. [15] In the case of Syarikat Tan Thiam Siong Sdn Bhd [1983] 1 CLJ 256, also a case on goods sold and delivered, the High Court, granting the plaintiffs application for summary judgment, held that: ‘The law is that in the event of non-query an account-stated came into existence which created an estoppel against the defendant from querying the accounts thereafter. There are situations for example if there was fraud, when a query may be permitted but on the facts of the case, no such situation existed.’ [16] Applying the above principles to the present case, it is an undisputed fact that the plaintiff had sent statements of accounts to the first defendant and the first defendant had not questioned the plaintiff on the said accounts. This means that a situation of ‘account-stated’ had arisen and the defendants are thereby estopped from now questioning the statement of accounts. [17] The defendants had not alleged fraud and had even made payment based on accounts supplied by the plaintiff. The first defendant had made payment vide two Bank Utama cheques of which it had stopped payment. The defendants had not questioned the invoices sent by the plaintiff. If indeed they have not received the goods that they ordered, or that they were invoiced for someone else’s orders, it is only natural that the objection should have been raised there and then and not after this action is filed.” [Emphasis is mine]

The reasoning in Caltex Oil Malaysia (supra) applies with considerable force to the present case. If the defendants truly believed that the sums claimed were not yet due, that Tass Tech was the proper payer, or that the invoices had been wrongly rendered, one would have expected those objections to be made when the invoices and statements were first presented, not after letters of demand had issued, and still less after proceedings had been commenced. Their silence at the time, followed by their present elaboration of defences in litigation, is precisely the mischief to which the doctrine is addressed. The significance of the defendants’ conduct is reinforced by the fact of part-payment. The first defendant paid more than RM32 million against the invoices now in issue. Those payments were substantial, deliberate, and referable to identified invoices. They were not accompanied by reservation, qualification, or protest. In commercial terms, part-payment is not merely a transfer of funds. It is conduct. And in this case, it is conduct which objectively conveys acknowledgment of indebtedness. A party does not ordinarily pay tens of millions of ringgits against invoices it regards as non-binding, premature, or misdirected. That point was recognised in Kris Heavy Engineering & Construction Sdn Bhd v. Lewis & Co (Advocates & Solicitors) [2017] MLJU 906; [2017] CLJU 964, where part-payment was treated as cogent evidence of admission and acknowledgment of liability. The same conclusion follows here.

Taken together, the defendants’ receipt of invoices, their silence in response, their failure to dispute statements of account, and their substantial part-payment against those same invoices constitute a course of conduct from which acknowledgment of liability is plainly to be inferred. They are estopped from advancing, at this late stage, a contrary position inconsistent with the manner in which they conducted themselves at the material time.

The plaintiff also claims late payment interest at the rate of 1.5% per month pursuant to clause 6.4 of its General Terms and Conditions as stipulated in its invoices. The defendants resist that claim on two grounds. First, that the interest provision never became operative because the debt itself had not yet fallen due. Secondly, that they never accepted the term and that, in any event, the plaintiff had not previously insisted upon strict enforcement of it. The first objection falls with the pay-when- paid defence and requires no further elaboration. Once it is established that the debt fell due in accordance with the express payment terms stated in the purchase orders and invoices, the contractual consequences of non-payment follow in the ordinary way. The second objection is equally unpersuasive. The invoices issued by the plaintiff expressly stated the applicable late payment charge. Those invoices were received. Their receipt was not denied. No contemporaneous objection was raised to the interest term. No protest was made as to its inclusion. No reservation was expressed as to its enforceability. The legal consequence is straightforward. A party who receives invoices containing clear commercial terms, acts upon them, and raises no objection cannot later deny knowledge of those terms when enforcement is sought. In Agromate (M) Sdn Bhd v Felcra Niaga Sdn Bhd [2022] 5 MLJ 501, the Court of Appeal held: [19] At the trial, it was undisputed that the parties had been dealing with one another since 2016. It was also undisputed that all the pre and post 2018 invoices and delivery orders were printed with the term that late payment interest of 12% pa was chargeable… [22] In the premises, the letter dated 26 February 2018 should not have been considered in isolation. In fact, as we pointed out, it does not even mention the payment period although this is classic goods sold and delivered transaction. In our view, even if the said letter can be considered as a part of the contract between the parties, it cannot be relied upon to insist that the late payment interest term is not applicable. This is because all the invoices and delivery orders which are the subject of this claim carried the late payment interest term. The parties maintained a running account since

The defendant never raised any issue about the late payment interest term on the invoices or delivery orders after accepting the goods in question and paying the principal sum, albeit after much delay. As we said earlier, even after the defendant was sued, there was no categorical denial about the liability to pay late payment interest in the statement of defence. [25] In Tansa Enterprise Sdn Bhd v Temenang Engineering Sdn Bhd [1994] 2 MLJ 353, Haidar J (later CJM) said as follows: In respect of the claim of interest of 1.5% per month for overdue accounts by the plaintiff, the defendant cannot deny this claim as it had full knowledge of this as clearly indicated in the invoices submitted to it by the plaintiff and there was no protest of this claim at all when the invoices were presented to the defendant. I am therefore of the view that the plaintiff is entitled to claim such interest. It is similarly not a triable issue at all.” [Emphasis is mine]

The same principle applies here with full force. The defendants had full notice of the late payment provision. I respectfully adopt that reasoning. The defendants’ suggestion that the plaintiff had not always previously enforced strict payment timelines or default interest does not avail them. Commercial forbearance is not contractual abandonment. A creditor does not lose the benefit of a contractual right merely because, on earlier occasions, it elected not to insist upon immediate enforcement. To hold otherwise would produce a perverse result. Indulgence would become waiver, and commercial patience would extinguish contractual entitlement. The law does not require such a conclusion. The plaintiff was entitled to refrain from immediate enforcement while the commercial relationship remained extant. It was equally entitled, once default had plainly crystallised, to enforce the contractual consequences of non-payment in accordance with the agreed terms. I therefore find that the plaintiff is entitled to late payment interest at the contractual rate of 1.5% per month pursuant to clause 6.4 of its General Terms and Conditions.

The remaining issue concerns the liability of the second defendant, Iris Corporation Berhad. It is the most delicate aspect of the case, not because the facts are obscure, but because the law requires care. The plaintiff invites the court to hold the second defendant liable alongside the first defendant. The second defendant resists that implication by invoking one of the foundational principles of company law, that a company is a legal person separate and distinct from its shareholders, affiliates, and subsidiaries. That principle is elementary, and it is not in dispute. The separate legal personality of a company is not a technicality to be brushed aside when commercial convenience suggests otherwise. It is one of the pertinent principles of modern company law. The starting point is therefore the familiar rule in Aron Salomon (Pauper) v A Salomon and Company, Limited, A Salomon and Company, Limited v Aron Salomon [1897] AC 22; 66 LJ Ch 35; 75 LT 426; 45 WR 193; 13 TLR 46; 41 Sol Jo 63; 4 Mann 89, consistently affirmed in our jurisdiction, that a duly incorporated company possesses a legal personality distinct from that of its shareholders and related entities. The same principle has long been recognised in Malaysian law. In Tan Sri Dato’ Tajudin bin Ramli v. Rego Multi-Trades Sdn Bhd [2018] 7 CLJ 197; [2018] 1 LNS 222, the Court of Appeal held: “[65] We are in full agreement with the judge who held that TRI, as a holding company, and its wholly-owned subsidiary company, the respondent, are separate legal entities. There is a plethora of cases which have decided that even in a group of companies, each company is a separate legal entity possessed of separate legal rights and liabilities. A board resolution of a parent or holding company cannot bind a subsidiary or wholly-owned company of that parent or holding company. Thus, the directors must approach their duties as directors who recognise the separate legal personality of the two entities. Therefore in our view, the TRI BOD Resolution does not bind the respondent (see para 2.36 of Walter Woon on Company Law, 3rd edn, p. 51, Adams v. Cape Industries Plc [1990] BCLC 479 at p. 508 and 519, Thueringische Faser & Aktiengesellschaft Schwarza v. Bank Of Commerce (M) Berhad [2009] 4 CLJ 102; [2008] MLJU 908, and Lewis Holding Ltd v. Steel & Tube Holdings Ltd [2015] 2 NZLR 83).” [Emphasis is mine]

The first defendant and the second defendant are distinct entities with different registration numbers and incorporation dates. The fact that the second defendant is the holding company of the first defendant does not, by itself, dissolve the boundary between them. The plaintiff has failed to establish a legal basis to disregard this fundamental separation.

The plaintiff relies heavily on the fact that the defendants share common directors, a finance department, and business addresses. I find this argument to be legally tenuous. It is a common and entirely lawful commercial practice for companies within a group to share resources such as finance, procurement, and secretarial staff to achieve economies of scale. In People’s Insurance Co (M) Sdn Bhd v. People’s Insurance Co Ltd & Ors [1986] 1 MLJ 68, the Court emphatically stated: “The plaintiff company is a legal entity by itself. Although it is a subsidiary of the first defendant company, the plaintiff company maintains its own separate entity. In Ebbw Vale Urban District Council v. South Wales Traffic Area Licensing Authority, Cohen L.J. said: Under the ordinary rules of law, a parent company and subsidiary company, even a 100 percent subsidiary company, are distinct legal entities...” [Emphasis is mine]

In Terranova Builders Sdn Bhd (previously known as Nisa Consolidated Sdn Bhd) v Repc Services Sdn Bhd (previously known as Ranhill Engineers and Constructors Sdn Bhd) & Anor [2018] MLJU 1995; [2018] CLJU 2149, the Court warned that attaching liability to a parent company merely because of shared resources or email domains would be unfair: “[48] Again at the risk of stating the obvious, it is not unusual for companies in the same group to have a common email address after @ and in this case “@ranhill.com.my”. Both D1 and D2 being companies in the same Group used the same email address with the name of the employee in front of the @. It would be unfair to attach liability to the parent company just because some emails had been issued by a staff of D2 who had been kept in the loop on the progress of payments. It is also part of sharing of costs and expenses for companies in the same Group to share common facilities and even some finance and accounting and even legal and secretarial workforce. [58] It is not uncommon for companies in the same Group to share resources of the finance and accounting department of the parent company and for even the finance and cash flow of the subsidiary to be supervised to some extent by the parent company. It is also not unusual for the parent company to deputize one of its directors to be a director of its subsidiary or wholly-owned subsidiary. [59] The fact that D1 may be a wholly-owned subsidiary of D2 does not blur or banish the doctrine of separate legal entities of each company within the Group…” [Emphasis is mine]

The evidence shows that Dr. Poh Soon Sim and H’ng Boon Harng sat on the boards of both companies. However, this is a function of their dual directorships. When Dr. Poh or Mr. H’ng signed the purchase orders, they did so as directors of the first defendant. Their capacity as directors of the second defendant does not automatically bleed into the contracts of the first defendant. The plaintiff’s own witnesses, PW1 and PW3, admitted under cross-examination that it is not uncommon for group companies to share directors and addresses, and that there is nothing wrong with such an arrangement. The plaintiff cannot now complain about a structure they readily accepted during their commercial dealings.

The plaintiff seeks to rely on the doctrine of estoppel, arguing that the defendants conducted themselves as a single entity. As the Court of Appeal recognised in Kwan Chew Holdings Sdn Bhd V Kwong Yik Bank Berhad [2006] 6 MLJ 554; [2006] MLJU 326; [2007] 3 AMR 475; [2007] 2 CLJ 127 a party which has conducted itself on the footing of commercial unity may not later, when liability is sought to be enforced, retreat behind formal separation in a manner inconsistent with the representation previously made. [36] That brings me to the second point made by learned counsel for the defendant. He says that even if there was a breach by the defendant, the plaintiff can recover nothing as it was another company in the group and not the plaintiff that was the developer. This answer is singularly devoid of merit and the answer to it is not difficult to find. It lies in the defendant’s own conduct. If you examine the documentary evidence you will see that throughout their business relationship the defendant regarded the plaintiff and the group of companies to which it belonged as one and the same entity. That is why the defendant in its letter dated 23 September 1986 required the plaintiff to utilise all sums received in excess of the redemption monies to pay and settle the monies owing from the other companies in the group. Having conducted itself in this fashion towards the plaintiff it is, in my judgment, not open to the defendant to change its stance now and choose to treat each company in the group as a different entity. It is not a question of the court lifting the corporate veil (Adams v Cape Industries Plc [1990] Ch 433) or the companies in the group being treated as a single economic unit as was done in DHN Food Distributors Ltd v Tower Hamlets London Borough Council [1976] 1 WLR 852, a case which is at present of doubtful authority (see, Woolfson v Strathclyde Regional Council [1978] SLT 15). It is merely an example of equity acting in personam whereby the defendant is estopped from asserting that each company in the plaintiff ’s group of companies is a distinct and separate entity because it would be unjust for it to do so. As the Federal Court observed in Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd, estoppel is: a doctrine of wide utility and has been resorted to in varying fact patterns to achieve justice. Indeed, the circumstances in which the doctrine may operate are endless. [Emphasis is mine]

This submission is however contrary to the plaintiff’s own conduct and the contemporaneous documentary evidence. A critical aspect of the Kwan Chew Holdings (supra) doctrine is that the counterparty itself must have treated the companies as one. Here, the evidence shows the opposite. The plaintiff, at all material times, treated the first defendant as the sole contracting party. All 29 invoices were issued exclusively to the first defendant. The plaintiff never issued an invoice to the second defendant. The plaintiff’s emails and statements of account were addressed to the first defendant, IITS or (iitsinvoice@iris.com.my). The plaintiff did not send payment reminders to the second defendant until after this suit commenced. PW1 admitted that if the defendants had truly been interchangeable, the plaintiff would have sent demands to the second defendant as well. He conceded that prior to the suit, the plaintiff never made a claim against the second defendant.

To pierce the veil, the plaintiff must show that the second defendant is a mere facade or alter ego of the first defendant, used to evade existing obligations. The plaintiff has utterly failed to discharge this burden. In Formis Resources Bhd & Ors v Risk Management and Safety System Pty Ltd [2016] 6 MLJ 73; [2016] 9 CLJ 169 the Court of Appeal held: [37] This principle stands in the way of the plaintiff’s claim and it is a principle that the court cannot ignore. The events complained of including the acquisition of the 12th defendant, the subsequent disposal of the 12th defendant to the 13th defendant, the inter-company borrowings, the decisions to cease operations, the writing off of debts, the running and management of business operations, announcements at Bursa Malaysia, are all events and matters which routinely occur in the corporate world and in the general scheme of doing business or running a corporation. The transactions and decisions of companies, though under one umbrella or group of companies remain the individual decisions of the particular company until and unless there are holdings out or representations, guarantees to the contrary. The shareholding of the company, be it by a single sole or by thousands of shareholders does not affect these principles. There is no obligation in law for any one of the companies in the group, or for the holding company, to be liable for the obligations of another within the group. For that matter, there is no obligation for a subsidiary, no matter how substantively owned by a holding company, to be liable for the obligations of its holding company. These firm principles allow corporations to breathe and function, to do business. [Emphasis is mine]

There is no evidence that the second defendant used the first defendant as a shield to avoid liabilities. The first defendant was awarded the NIISe Project in its own name. The first defendant had the financial capacity and standing to perform the contract. The involvement of the second defendant's CEO or finance staff in the project was an exercise of group management support, not evidence of fraud or evasion. Furthermore, the plaintiff’s request for a corporate guarantee from the second defendant, which was rejected, is telling. If the plaintiff truly believed the second defendant was already liable by virtue of being a holding company or sharing directors, they would not have needed to ask for a guarantee. The request for a guarantee is an admission by the plaintiff that the second defendant was not originally liable.

The plaintiff’s case against the second defendant relies on an impermissible attempt to pierce the corporate veil based on factors that are routine in corporate group structures. The law does not permit a holding company to be dragged into the debts of its subsidiary merely because they share a roof, directors, or an email domain. The plaintiff’s own conduct in invoicing and demanding payment solely from the first defendant demonstrates that they recognised the distinction between the entities. To allow the plaintiff to now hold the second defendant liable would be to ignore the principles of separate legal personality established in Aron Salomon (Pauper) v A Salomon and Company (supra).

Accordingly, I find that the second defendant, Iris Corporation Berhad, is a separate legal entity from the first defendant. The plaintiff has failed to establish that the second defendant is jointly and severally liable, whether by piercing the corporate veil, by estoppel, or by virtue of any guarantee. The claim against the second defendant is dismissed in its entirety.

The defendants’ defences relating to the substantive debt have unravelled under the weight of contemporaneous evidence and established legal principles. The alleged pay-when-paid arrangement was not proved. It finds no expression in the operative purchase orders, no support in the invoices, and no foothold in the contemporaneous correspondence. The attempt to shift liability to Tass Tech is contradicted by the clear paper trail of acknowledgments and payments which confirm the first defendant as the obligor. The silence of the defendants in the face of repeated invoices and demands constitutes an admission that cannot be undone by an eleventh-hour plea of conditionality. Consequently, the plaintiff has proven its case on a balance of probabilities against the first defendant. The goods were delivered, the services rendered, and the invoices acknowledged. The failure to pay is a clear breach of contract.

However, the plaintiff’s attempt to hold the second defendant liable fails. The evidence does not support piercing the corporate veil or establishing an estoppel against the holding company. As found in the analysis, the second defendant is a separate legal entity, and the plaintiff’s own conduct in dealing with the first defendant alone precludes a finding of joint and several liability at this stage. The plaintiff’s claim against the second defendant is dismissed.

For the reasons set out above, judgment is entered in favour of the plaintiff against the first defendant. The orders of this Court are as follows:

Judgment is entered in favour of the plaintiff against the first defendant for the sum of RM30,139,098.87;

(ii) The plaintiff is entitled to late payment interest at the rate of 1.5% per month on the sum of RM30,139,098.87, calculated from the respective due dates of the invoices until full realisation;

(iii) The claim against the second defendant is dismissed in its entirety; and

(iv) Costs to the plaintiff against the first defendant fixed at RM80,000, and costs to the second defendant as against the plaintiff fixed at RM40,000, both subject to allocator. Dated the 25th day of May 2026 -SGN- ……………………………………………….. MOH KOK WAI JUDICIAL COMMISSIONER OF THE HIGH COURT HIGH COURT (CIVIL DIVISION NCvC14) HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY OF MALAYSIA Counsel for the Plaintiff : Christopher Arun Francis, Sylvie Tan Sie Ni and Muhammad Aiman bin Mohd Firhad Messrs Ariff Rozhan & Co. Counsel for the Defendants : Tan Gian Chung, Nina Lai Jien Xian and Wong Ai Yu Messrs Shook Lin & Bok