Telekom Malaysia Berhad v Aerovation Sdn Bhd (BA-22NCC-151-10/2020)

Based on our invoice (DSV-MMEA-2480/INV-01) dated 30 May 2018, Aerovation to pay RM2,000,000.00 on 25 Oct 2018; 2. The remaining balance of RM722,080.00 will be paid on 25 Nov. 2018;

Kindly provide a letter to TM Telekom Malaysia Berhad v Aerovation Sdn Bhd 4 stated that the project has been cancelled/KIV, etc …… This letter to be received by tomorrow.” [12] DW-1 does not deny that he had signed the COA. Under cross-examination, DW-1 agreed that by signing the COA, the defendant agreed that TM was entitled to RM2,722,080.00 as mobilisation fee. He also agreed that TM’s issuance of the invoice for the mobilisation fee was in accordance with clause 6(b) of TM’s quotation, which was accepted by the defendant in the LOA. DW-1 also agreed that payment of the invoice for the mobilisation fee should be made within 30 days of the defendant’s receipt of the invoice. [13] DW-1 admitted that the defendant, in its email dated 26.07.2018, stated that it would pay the mobilisation fee by mid-August 2018 at the latest. [14] One of the issues that arose during the trial was whether the “without prejudice” letters by the defendant’s solicitors to the plaintiff which evidenced the terms of the settlement between the plaintiff and defendant of the RM2,722,080.00 mobilisation fee was admissible in evidence. [15] The law on the admissibility of “without prejudice” documents is settled. The Federal Court in Malayan Banking Bhd. v Foo See Moi [1981] 2 MLJ 17 held that letters written without prejudice are inadmissible in evidence of the negotiations. But where the “without prejudice” negotiations lead to a settlement, the letters become admissible in evidence of the terms of the agreement, unless the agreement was incorporated in another document — which document would then be the evidence of the agreement. In Tomlin v Standard Telephone and Cables Ltd [1969] 3 All ER 201, the English Court of Appeal held that Telekom Malaysia Berhad v Aerovation Sdn Bhd 5 “without prejudice” letters were admissible as it was not possible for the Court to determine without looking into the letters whether there was a binding agreement between the parties. [16] Learned counsel for the defendant had initially objected to the inclusion of the without prejudice correspondence between the parties. However, during the trial proceedings, she submitted that she had no rebuttal to the plaintiff’s counsel’s application for the letters to be admitted as evidence. As counsel for the defendant did not pursue her objection to the inclusion of the without prejudice letters and the letters contained the terms of the agreement by the parties as to the settlement of the RM2,722,080.00 mobilisation fee by the defendant, this Court allowed the admission of the “without prejudice” letters and converted the copies of the letters from Part C to Part B documents. [17] The letters evidenced the following facts, namely that the defendant’s solicitors, in a letter to the plaintiff dated 26.10.2018, requested for a meeting to clarify and/or discuss the outstanding payment. A meeting was held on 21.12.2018 at the defendant’s solicitor’s office. DW-1 admitted that at the meeting the defendant agreed to pay the sum of RM2,722,080.00. The defendant agreed to pay the sum of RM2,722,080.00 progressively not more than 12 months starting from 01.01.2019, in consideration of TM not commencing any legal action. [18] However, the defendant has failed and/or refused to pay the said sum of RM2,722,080.00 to date. [19] TM filed this suit against the defendant in October 2020 for the sum of RM2,722,080.00, together with interest at the rate of 5% per annum from 31.05.2018 until full payment. Telekom Malaysia Berhad v Aerovation Sdn Bhd 6 TM’s Case [20] TM’s case is that the 20% mobilisation fee forms part of the term of the LOA and that the defendant shall pay the mobilisation fee within 30 days of TM’s invoice. Defendant’s Defence [21] The defendant’s case is that it had received a letter dated 19.03.2018 from the Pengarah Bahagian Hal Ehwal Penguatkuasaan Maritim Malaysia (the “Government”) stating that it intends to appoint the defendant to supply 30 units of the boats for the Project. However, the Government did not appoint the defendant. [22] The defendant’s pleaded defence is essentially there was no agreement between TM and the defendant for the supply of the boats because the contract between the defendant and the Government for the Project did not materialise. Analysis and Findings of this Court [23] The contract between TM and the defendant for the supply of the boats for the Project is governed by the LOA. It is separate and distinct from the proposed contract between the defendant and the Government for the supply of the boats for the Project. [24] As the evidence shows, the defendant, after receiving the letter of intent from the Government, issued TM the LOA for the purchase of the boats. It had also proceeded to issue a purchase order to TM for the first 10 units of the boats through the TM-Aerovation PO. Telekom Malaysia Berhad v Aerovation Sdn Bhd 7 [25] The LOA was not conditional upon a contract being entered between the defendant and the Government. It was not a condition precedent of the LOA that the defendant enters into a contract with the Government to supply 30 units of the boats for the Project. [26] The LOA shows that there was an agreement between TM and the defendant for TM to supply to the defendant 30 units of boats for the Project. The Aerovation-TM PO shows that the defendant had ordered the first 10 boats based on the terms of the LOA. [27] During cross-examination of PW-1, the defendant’s counsel failed to put to PW-1 the defendant’s case that there was no agreement between TM and the defendant for the supply of the boats. The Court of Appeal in Aik Ming (M) Sdn Bhd & 8 Ors v Chang Ching Chuen & 3 Ors & Another Case [1995] 3 CLJ 639; [1995] 3 AMR 2375; [1995] 2 MLJ 770 (“Aik Ming”) held that counsel’s failure to put its client’s case to the other side’s witness can be treated as an abandonment of the pleaded case. In the absence of valid reasons, the parties may be barred from raising it in argument. [28] Furthermore, in the defendant’s and defendant’s solicitor’s correspondence with TM, the defendant admitted that it owed TM the mobilisation fee of RM2,722,080.00. In addition, DW-1, under cross-examination, admitted that the defendant owed TM the said sum of RM2,722,080.00. He also admitted that the defendant had failed to any payment for the sum. [29] For these reasons, I find TM had discharge its burden of proof that the defendant owes it RM2,722,080.00, being the mobilisation fees for the 10 units of the boats. Telekom Malaysia Berhad v Aerovation Sdn Bhd 8

[30] Accordingly, judgment is given to TM against the defendant. [31] The defendant is ordered to pay TM the sum of RM2,722,080.00 together with interest at the rate of 5% per annum from 31.05.2018 until full payment of the judgment sum. [32] Costs in the sum of RM60,000.00 to be paid by the defendant to TM subject to the allocatur fee. Dated: 22 March 2024 t.t. FAIZAH JAMALUDIN Judge High Court of Malaya at Shah Alam Telekom Malaysia Berhad v Aerovation Sdn Bhd 9 COUNSELS: For the Plaintiff: P. Jeyakumar (Nik Asilah Binti Aziz with him) Messrs Zahir Jeya & Zainal L26-3A, PJX-HM Shah Tower, 16A, Persiaran Barat, 46050 Petaling Jaya, Selangor Darul Ehsan For the Defendant: Ms. Keerthana Raajendran Messrs Mohd Hafarizam Harun Suite 1, Level 5, Menara Dato’ Onn, Jalan Tun Ismail, 50480 Kuala Lumpur