Universal Industrial Gas Sdn Bhd v 1. ) TCTL Engineering Sdn Bhd (12ANCC-105-11/2016; 12ANCC-106-11/2016)

CHOW SOW YOON

CHAI JONE FUU (NRIC NO: 810504-08-5787) … APPELANTS ... RESPONDENT (Consolidated and to be heard together by way of an Order of the High Court of Kuala Lumpur NCC 5 dated 19 January 2017) IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR CIVIL APPEAL NO. WA-12ANCC-106-11/2016 TCTL ENGINEERING SDN BHD (COMPANY NO: 489827-X) … APPELANT ... RESPONDENT 2 [IN THE SESSIONS COURT IN KUALA LUMPUR CIVIL SUIT NO. WA-B52NCC-402-05/2016 … PLAINTIFF

TCTL ENGINEERING SDN BHD

CHOW SOW YOON

CHAI JONE FUU (NRIC NO: 810504-08-5787) ... DEFENDANTS] BEFORE YA KHADIJAH BINTI IDRIS JUDICIAL COMMISSIONER 3 GROUNDS OF JUDGEMENT Introduction [1] This is an appeal against my decision dismissing the appeals filed by the First Appellant on one part and the Second and Third Appellants on another part in respect of the appeals they filed against the decision of the learned Sessions Court Judge (SCJ) who allowed summary judgment to be entered against them. [2] In the Kuala Lumpur Sessions Court Guaman No. WA-B52NCC- 402-05/2016 the Plaintiff who is the Respondent here filed two applications, Enclosure 4 and Enclosure 33, against the First Appellant/Defendant and the Second and Third Appellants/Defendants respectively for summary judgment under Order 14 rule 1 and rule 3 of the Rules of Court 2012 (RoC 2012). [3] On 31 October 2016, the learned SCJ allowed the Respondent’s applications and entered judgment in the following terms: 4

The sum of RM496, 558.34 to be paid by the First Defendant, Second Defendant and Third Defendant to the

Interest at the rate of 1.5% per month on the total amount of RM496, 558.34 from 16 March 2016 until the date of full settlement to be paid by the First Defendant, Second

Cost of RM2, 000.00 for Enclosure 4 and Enclosure 33 each to be paid to the Plaintiff. [4] The Appellants, not satisfied with the learned SCJ’s decision, filed their Notice of Appeals, namely, Appeal No. WA-12ANCC-105-11/2016 (appeal by the Second and Third Appellants/Defendants) and WA- 12ANCC-106-11/2016 (appeal by the First Appellant/Defendant). On 19 January 2017, a court order was obtained for the two appeals to be consolidated and heard together. [5] For the purpose of this judgment the parties will be referred to as they are in the Session Court. The Records of Appeal in respect of the First Defendant will be referred to as Record of Appeal No. 106 and the Record of Appeal in respect of the Second and Third Defendants will be referred to as the Record of Appeal No. 105. 5 Factual background [6] The Plaintiff is a company incorporated in Malaysia with a business address at PT. No. 56937, Jalan 9/8, Seksyen 9, 43650 Bandar Baru Bangi, Selangor Darul Ehsan. [7] The First Defendant (1st Defendant) is a company established under the Companies Act 1965 and at all material times is the Plaintiff’s customer. The 1st Defendant has a business address at No. 5, Jalan Titiwangsa, 53200 Kuala Lumpur, Wilayah Persekutuan and/or No. 25-1, Jalan PJU 1/41, Dataran Prima, 47301, Petaling Jaya, Selangor Darul Ehsan. The 1st Defendant is involved in the business of shipbuilding, engineering, oil and gas. [8] The Second Defendant (2nd Defendant) and the Third Defendant (3rd Defendant) are Malaysian citizens. They are shareholders and directors of the 1st Defendant. The last known address of the 2nd and 3rd Defendants is at A2-33-2, Bukit Utama 1, Bandar Utama, 47800 Petaling Jaya, Selangor Darul Ehsan. [9] Sometime in 2010, the 1st Defendant applied to the Plaintiff for the supply of industrial gases and electrodes (“the Goods”) by way of credit 6 with the terms of payment of 60 days subject to the terms and conditions of the sale and delivery of the Goods and the Sales of Goods Act 1957. [10] Pursuant to a letter of guarantee dated 18 June 2012 (“Guarantee and Indemnity”) (Records of Appeal No. 105, Volume 1, page 249 to 251), the 1st and 2nd Defendants agreed to guarantee, as principle debtors, the payment obligation of the 1st Defendant for the Goods sold and delivered to the 1st Defendant. [11] The Plaintiff supplied the Goods to the 1st Defendant according to the invoices and specifications as stated in the 1st Defendant’s Purchase Orders. The 1st Defendant acknowledged receiving the Goods in good condition by stamping on the Delivery Order of the Plaintiff. There were no protest and/or rejection made by the 1st Defendant in respect of the Goods delivered to them. The Invoices, Delivery Orders and Debit Notes are collectively marked as Exhibit YKF-2 (Records of Appeal No. 106, Volume 2, page 225 to 398; Records of Appeal No. 106 Volume 3, pg 399 - 437). [12] The Goods were sold and delivered by the Plaintiff to the 1st Defendant accordingly. Beginning from the end of year 2012, the 1st Defendant had defaulted in the payment of the said Goods. The 2nd and 7 3rd Defendants who are guarantors also failed to comply with their obligations under the terms of the Guarantee and Indemnity. [13] As at 15 March 2016, the Defendants were indebted to the Plaintiff in the total amount of RM523, 629.29. [14] Numerous demands for payment of the above outstanding sums were made to all of the Defendants. However, the Defendants failed to make any payment. [15] On 25 September 2015, the Plaintiff, through its former solicitor, Messrs P.H Chen & Associates, sent a letter of demand (Record of Appeal No. 106, Volume 3, page 441 to 445) to all the Defendants claiming for the amount of RM558,629.29 as at 30 June 2015 with interest of 1.5% per month until the date of final settlement. However the 1st Defendant had only made a part payment of RM35,000.00. The 1st Defendant had admitted via letter dated 15 January 2016 (Record of Appeal No. 106, Volume 4, page 710 to 711) that it is indebted to the Plaintiff for the principal outstanding sum of RM337, 732.36. [16] On 21 March 2016, the Plaintiff through its present solicitor, Messrs Che Mokhtar & Ling, demanded against all the Defendants the 8 outstanding amount of RM523,629.29 as at 15 March 2016 with interest at the rate of 1.5% per month from 16 March 2016 till the date of full settlement (Record of Appeal No. 106, Volume 3, page 447 to 453). [17] The 2nd and 3rd Defendants, via their counsel’s letter dated 31 March 2016 (at page 454 to 455 Volume 3 of the Records of Appeal No. 106) replied stating they have no whatsoever knowledge about the claim against them. Nevertheless the 2nd and 3rd Defendants sought the Plaintiff’s assistance and cooperation to provide the details and relevant document for them to verify and check with the 1st Defendant. [18] Notwithstanding the demands made, all the Defendants have yet to pay and/or refused to pay the outstanding sum to the Plaintiff. [19] Via Writ Summons dated 10 May 2016 filed in MSS 8, the Plaintiff claims against all the Defendants the following:

the outstanding sum of RM523,629.29;

interest at the rate of 1.5% per month from 16 March 2016 till full settlement;

cost of RM1,200.00; and

any other order or relief that the Court thinks valid and fair. 9 The Plaintiff’s Submissions Enclosure 4: Summary Judgment as against D1 [20] The Plaintiff submits that all the preliminary requirements as stated in Order 14 rule 2(1) of the RoC 2012 has been complied with, namely –

the 1st Defendant had entered their appearance on 31

the Plaintiff had filed an affidavit affirmed on 15 June 2016 in support of its application for summary judgment (Record of Appeal No. 106, Volume 1, page 48 – 56). The deponent of the Plaintiff’s affidavit is its director Yong Kam Fook who has verified the facts on which the said application is based. The said deponent has also stated his belief that the 1st Defendant has no reasonable defence or had failed to show any triable issue that warrants a trial. [21] The Plaintiff contends that the 1st Defendant had unequivocally admitted its indebtedness of the principal outstanding sum of RM337,732.36 via its letter dated 15 January 2016 (Record of Appeal 10 No. 106, Volume 4, page 710 to 711). The 1st Defendant, through its General Manager (Operation) states as follow – Refer: TCTL/UIGSB/LET-0116-01 Date: 15th January 2016 Attention: Mr. Yong Kam Fook Universal Industrial Gases Sdn Bhd Plot 63, Jalan Teknologi 2 Taman Teknologi Johor 81400 Senai, Johor We refer to the above subject and our discussion over the phone; TCTL wishes to make payment to your kind selves by way of third party payment from Amcoweld (M) Sdn Bhd. This is for the amount of RM35,000.00 to be made as partial payment to the principal amount owing to UIG Sdn Bhd of RM372,732.36 giving us with a new principal amount of RM337,732.36. Interest rates and fees (if any) will be finalized at a future date. Sgd John Chai General Manager (Operations) – TCTL Engineering Sdn Bhd [22] The Plaintiff denied the 1st Defendant’s allegation that the parties has agreed that transaction was on a back to back payment basis as such oral agreement alleged by the 1st Defendant was not corroborated and is inconsistent with the contemporaneous documents. In any event, 11 the Plaintiff submits that the parole evidence rule under Section 92 of the Evidence Act 1950 (Evidence Act) applies. [23] The Plaintiff further contends that the imposition of 1.5% interest rate is as rightfully stipulated under Clause 6.2 and 6.3 of the terms of the Delivery Order (some of the many Delivery Orders issued by the Plaintiff can be seen at page 231 – 232, 236 – 238, 243 - 244 of Volume 2 of the Records of Appeal No. 106). The 1st Defendant has agreed to these terms when it accepted the Goods and placed its stamp on the Delivery Orders. [24] It is the Plaintiff’s position that the 1st Defendant’s allegation that the parties had orally agreed not to impose any interest on the principal outstanding sum does not hold water as the purported oral agreement is not corroborated and is inconsistent with the contemporaneous documents especially when the 1st Defendant’s letter dated 15 January 2016 stated specifically that ‘interest and fees (if any) will be finalized at a future date’. [25] The Plaintiff further submits that the 1st Defendant had never, at all material times before the Plaintiff initiated the suit against the Defendants, raised the issue of compounded interest. As such, it is 12 unconscionable for the 1st Defendant to raise it now. Furthermore, the 1st Defendant had also failed to plead this issue in its Statement of Defence. [26] Even if the issue of compounded interest was pleaded, the Plaintiff denied the 1st Defendant’s allegation as it was untrue and unfounded because:

It is inconsistent with the 1st Defendant’s Statement of Account, Invoices, Delivery Orders and the Debit Notes;

The comparison table of ‘simple interest’ and ‘compound interest’ prepared by the 1st Defendant (Exhibit CTL-9 page 1427 - 1428 and Exhibit ‘CTL-10’ at page 1435 to 1436 of Volume 8 Record of Appeal No. 106) is a mere internal document of the 1st Defendant which have never been shown to the Plaintiff nor does the Plaintiff have any knowledge about it;

The calculation of the simple and compounded interest by the 1st Defendant is inconsistent with the total overdue invoices issued by the Plaintiff; 13

The duration of the overdue period referred to by the 1st Defendant is different from what is recorded in any of the document;

In relation to the Debit Notes, particularly JDN001674 dated 31 October 2013 till JDN001919 dated 30 June 2014, the 1st

Defendant showed the constant principal sum of RM337,

Whereas, based on the Plaintiff’s calculation and records, the principal sum referred in these Debit Notes were

RM954, 334.90 initially and gradually decreased to RM612, 36 as the 1st Defendant had made some payment, hence the amount becoming lesser. The 1st Defendant had also failed to adduce any supporting evidence to justify it whereas the Plaintiff had justified the principal sum through its Statement of Account (Record of Appeal No. 106, Volume 8, page 1437 to 1489). [27] The Plaintiff explained on how it imposes the interest of 1.5% on the principal amount due and how it would be carried forward to the subsequent month when the 1st Defendant defaulted in making payment. The Plaintiff stresses that for every month the outstanding debt is not paid by the 1st Defendant, a Debit Note would be issued to the 1st Defendant and the late interest would accumulate. 14 [28] Despite the issuance of the monthly Debit Notes to the 1st Defendant, the Plaintiff had never received any protest by the Defendants when all the Debit Note were issued to the 1st Defendant. [29] On the allegation that the Plaintiff had wrongly billed the Invoices, the Plaintiff reiterates that this issue had never been pleaded in the 1st Defendant’s Statement of Defence and was only raised in the 1st Defendant’s Affidavit in Reply. In any event, the Invoices were signed by the 1st Defendant’s officer and/or stamped with the 1st Defendant’s company’s stamp thus making this issue an afterthought. [30] On the allegation of overcharged invoices, the Plaintiff replied that this issue was only raised for the first time. However, this allegation should not be considered as it is inconsistent with Clause 6.2 of the terms and conditions of the Delivery Orders. The Delivery Orders had been acknowledged receipt by the 1st Defendant without any objection and that the 1st Defendant continued making further orders of the Goods from the Plaintiff. 15 Enclosure 33: Summary Judgment as against D2 and D3 [31] The Plaintiff submits that all the preliminary requirements for summary judgment had been complied with, that is –

the 2nd and 3rd Defendants had entered their appearance on 15 August 2016; and

the Plaintiff had filed an affidavit in support of its application for summary judgment (Record of Appeal No. 105, Volume 1, page 45 – 56) in which the Plaintiff, through its director Yong Kam Fook, verified the facts on which the said application is based. The Plaintiff’s director has also stated his belief that the 2nd and 3rd Defendants has no reasonable defence or had failed to show any triable issue that warrants a trial. [32] By virtue of the Guarantee and Indemnity and in the light of the 1st Defendant’s admission of debt vide letter dated 15 January 2016, the Plaintiff states that the 2nd and 3rd Defendants are principally liable for the 1st Defendant’s outstanding debts of RM496,558.34 which consists of outstanding principal sum of RM337,732.36 plus late interest in the sum of RM158,825.98. 16 [33] All the issues raised by the 2nd and 3rd Defendants against the Plaintiff’s claim are untrue, irrelevant, baseless and/or an afterthought with intent to mislead the Court as it were inconsistent with the contemporaneous documents and facts of this case. [34] In response to the 2nd and 3rd Defendants’ allegation that the Guarantee and Indemnity is invalid as the principal debtor was not named in the said document, the Plaintiff contends that it was merely a technical error. Nevertheless, based on the facts of this case, the 2nd and 3rd Defendants had always been dealing with the Plaintiff through the 1st Defendant and they had been the only directors of the 1st Defendant and were in position to give guarantee as they control the management and business of the 1st Defendant. [35] In respect of the 2nd and 3rd Defendants’ denial that the signatures which appears on the Guarantee and Indemnity are theirs, the Plaintiff pointed out that the 2nd and 3rd Defendant has never raised the issue of fraud and/or forgery and/or misrepresentation. Nor was there any police report made by both the Defendants with regards to their claim that they had never signed the said guarantee document. 17 The Defendants’ Submissions [36] The Defendants submits that the SCJ had erred in law and in facts when deciding to allow the Plaintiff’s applications for summary judgement as there were various triable issues raised and therefore this case is not a fit and proper case to be dealt with under Order 14 RoC

The 1st Defendant’s Submissions [37] It is the 1st Defendant’s contention that two of the Plaintiff’s directors, namely, Yong Kam Fook and Eddie Lim Eng Poh had made a representation to the 1st Defendant that the Plaintiff would offer similar terms and conditions just as Southern Industrial Gas Sdn Bhd (“SIG”), a company that the 1st Defendant has been making purchases of construction materials from, has offered to the 1st Defendant i.e. that payment was to be on a ‘back to back’ or ‘pay when paid’ basis and without charging any interest for late payments of any construction materials purchased from the Plaintiff. [38] Therefore, it is the 1st Defendant’s position that all the terms and conditions in the Plaintiff’s Delivery Orders and Invoices are not 18 applicable and is not binding on the 1st Defendant and that the Plaintiff has no contractual and legal right to charge interest of 1.5% per month for any late payment of the balance purchase price. [39] Based on the above, the 1st Defendant submits that the claim by the Plaintiff is not due or matured for payment. [40] The 1st Defendant further submits that the Plaintiff has wrongly billed or charged the 1st Defendant for construction materials which had not been delivered to the 1st Defendant nor acknowledged receipt by the 1st Defendant. To substantiate this contention the 1st Defendant produce Exhibit CTL-8 which can be seen at page 1402, Volume 7, Record of Appeal No. 106. [41] The 1st Defendant further contend that the Plaintiff had overcharged the 1st Defendant by delivering the Goods below the quantity stated in the Delivery Orders and/or without complying with the quantity stated in the Plaintiff’s Delivery Orders. To support this, the 1st Defendant produce Exhibit CTL-6 at page 1010 – 1393, Volume 6 of the Record of Appeal No. 106. 19 [42] The 1st Defendant argued the Plaintiff contravenes section 11(a) of the Civil Law Act 1965 in that the Plaintiff has charged compounded interest on the 1st Defendant. The 1st Defendant referred to paragraph 11 of the Plaintiff’s Statement of Claim whereby the Plaintiff claimed for RM523,629.29 as at 15 March 2016 and at paragraph 12, the Plaintiff is claiming for RM523,629.29 as at 30 June 2014. Thus, the 1st Defendant alleged that the Plaintiff had claim interest on a compounded basis as RM523,629.29 had included interest as shown by the Debit Notes as particularised in paragraph 12 of the Statement of Claim. [43] The 1st Defendant had also prepared a Comparison Table of ‘simple interest’ and ‘compound interest’ shown at Exhibit CTL-9 at page 1427 -1428 and Exhibit ‘CTL-10’ at page 1435 to 1436 of Volume 8 Record of Appeal No. 106). The 1st Defendant further state that it requires the attendance of the Plaintiff’s accountant to explain on how the Plaintiff derived at the amount shown at paragraph 57 of the Plaintiff’s affidavit which is at page 88, Volume 1 of the Record of Appeal no 106. [44] The 1st Defendant took the position that the Plaintiff is not allowed to reduce its claim from RM523,629.93 to RM496,558.34 as it is not permissible in law for the Plaintiff to abort from its pleaded claim of 20 interest on compounded basis and to seek for interest on simple interest basis when the Plaintiff realized, three years and four months later (31 May 2013 to 9 September 2016), that there was a computer system error in the calculation of interest. [45] Based on the above, the 1st Defendant applied for the Plaintiff’s application for summary judgement be dismissed in limine as the Plaintiff’s claim in no longer complete and good for the purpose of Order 14. The 2nd and 3rd Defendants’ Submissions [46] The 2nd and 3rd Defendants adopted the arguments forwarded by the 1st Defendant. In addition they raised the following issues with regards to the Guarantee and Indemnity –

the 2nd and 3rd Defendants had never signed the Guarantee and Indemnity and the signature contained thereto are not their signatures;

the particulars of “the Customer” were not stated in the said Guarantee and Indemnity; 21

the limit of the guarantee was also not stated in the said Guarantee and Indemnity. [47] It is the 2nd and 3rd Defendants’ position that failure to state the name of the principal debtor renders the Guarantee and Indemnity invalid within the meaning of Section 79 and 80 of the Contracts Act 1950 as there can be no suretyship within the meaning of the said statutory provisions. Law [48] Order 14 RoC 2012 provides – Application by plaintiff for summary judgment (O. 14, r. 1)

(1) Where in an action to which this rule applies a statement of claim has been served on a defendant and that defendant has entered an appearance in the action, the plaintiff may, on the ground that the defendant has no defence to a claim included in the writ, or to a particular part of such a claim, or has no defence to such a claim or part thereof except as to the amount of any damages claimed, apply to the Court for judgment against that defendant. Manner in which application under rule 1 shall be made (O. 14, r. 2)

(1) An application under rule 1 must be supported by an affidavit in Form 13 verifying the facts on which the claim, or the part of a claim, to 22 which the application relates is based and stating that in the deponent’s belief there is no defence to that claim or part, as the case may be, or no defence except as to amount of damages claimed.

Unless the Court otherwise directs, an affidavit for the purposes of this rule may contain statements of information or belief with the sources and grounds thereof.

The notice of application, a copy of the affidavit in support and of any exhibits referred to therein must be served on the defendant within fourteen days from the date of receipt of the sealed notice of application by the applicant.

Order 32, rule 13(2) shall apply mutatis mutandis to all affidavits in respect of an application under this rule. Judgment for plaintiff (O. 14, r. 3)

(1) Unless on the hearing of an application under rule 1 either the Court dismisses the application or the defendant satisfies the Court with respect to the claim, or the part of a claim, to which the application relates that there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial of that claim or part, the Court may give such judgment for the plaintiff against that defendant on that claim or part as may be just having regard to the nature of the remedy or relief claimed. [49] The Federal Court in Cempaka Finance Bhd v Ho Lai Ying & Anor [2006] 3 CLJ 544 where at page 551 the court held – In an application under O. 14, the burden is on the plaintiff to establish the following conditions: that the defendant must have entered 23 appearance; that the statement of claim must have been served on the defendant; that the affidavit in support must comply with r. 2 of O.14 in that it must verify the facts on which the claim is based and must state the deponent’s belief that there is no defence to the claim. (See Supreme Leasing Sdn Bhd v. Dior Enterprises & Ors [1990] 2 MLJ 36.) Once those conditions are fulfilled, the burden then shifts to the defendant to raise triable issues. The law on this is trite. In National Company for Foreign Trade v. Kayu Raya Sdn Bhd [1984] 2 CLJ 220; [1984] 1 CLJ (Rep) 283, the Federal Court has stated thus: We think it appropriate to remind ourselves once again that in every application under Order 14, the first considerations are (a) whether the case comes within the Order and (b) whether the plaintiff has satisfied the preliminary requirements for proceedings under Order 14. For the purposes of an application under Order 14, the preliminary requirements are:

the defendant must have entered an appearance;

(ii) the statement of claim must have been served on the defendant; and

(iii) the affidavit in support of the application must comply with the requirements of Rule 2 of the Order 14. ... If the plaintiff fails to satisfy either of these considerations, the summons may be dismissed. If however, these considerations are satisfied, the plaintiff will have established a prima facie case and he becomes entitled to judgment. This burden then shifts to the defendant to satisfy the Court why judgment should not be given against him. The proposition of law enunciated by the Federal Court in National Company (supra) has been applied in numerous cases. We accept the correctness of that proposition. 24 Finding of the court [50] Based on the facts as stated at paragraphs 20 and 31 above, the Plaintiff has complied with the preliminary requirement stated in Order 14 rule 2 of the RoC 2012 in proving a prima facie case and becomes entitle to judgment. Thus the burden shifts on the Defendants to show that there is triable issues which warrant trial by calling witnesses from both the Plaintiff and Defendant to give oral testimony. No doubt the Defendants have raised numerous and various issues which they claim to be triable issues. It must be emphasised that the triable issues raised must be bona fide triable issues and whether the issues raised are bona fide triable issues would certainly depends on the facts of the case. The alleged back to back payments and the alleged agreement that there should not be any interest charged on the 1st Defendant for late payment of the balance purchase price [51] According to the 1st Defendant sometime in April 2010 there were discussion or negotiations held between the 1st Defendant and the Plaintiff’s directors leading to a mutual agreement that the 1st Defendant will only pay for the Goods sold and delivered by the Plaintiff to the 1st Defendant upon the 1st Defendant receiving payment from the main contractor of the sub-contract works carried out by the 1st Defendant. 25 According to the Plaintiff this term was the term agreed between the 1st Defendant and Southern Industrial Gas Sdn Bhd (SIG) which supply goods to the 1st Defendant. It was also alleged that the Plaintiff has agreed not to impose any interest in respect of late payment made by the 1st Defendant. [52] The Plaintiff’s cause of action against the Defendants is for goods sold and delivered. At this juncture it would be appropriate to refer to the case of Caltex Oil Malaysia Ltd v Classic Best Sdn Bhd [2007] 4 MLJ 772 which laid out principles in so far as cases involving goods sold and delivered. The learned High Court Judge had this to say – In coming to a decision in cases involving goods sold and delivered such as in this case, I would place due emphasis on the written documents, namely the Statement of Accounts, Invoices, Delivery Orders, Delivery Notes and the Debit Notes. These documents would collectively constitute a contract reduced into writing. This principle had been laid down in the case of Pernas Trading Sdn Bhd v. Persatuan Peladang Bakti Melaka [1979] 1 LNS 65; [1979] 2 MLJ 124 where Salleh Abas FJ (as he then was), delivering the judgment of the Federal Court said, "We feel that this course of action is not open to the respondents, as it is clear that under Section 92 of the Evidence Act 1950, oral evidence to contradict, vary, add to or subtract from, the terms of any contract, grant or disposition of property which had been reduced in writing is not admissible. The sales invoice and the delivery note being the contract reduced in writing between the appellants and the respondents section 92 therefore applies." See also YK Fung Securities Sdn Bhd v. Ronald 26 Yeoh Kheng Hian [1989] 2 CLJ 664 (Rep); [1989] 2 CLJ 1284; [1989] 3 MLJ 490 where the High Court had decided that "he was subsequently furnished with the relevant monthly statement of accounts to which he had no objections, protest or queries." Further in the case of Syarikat Pakar Kayu dan Perdagangan Sdn Bhd v. Maa-sk Sdn Bhd [1986] CLJ 694 (Rep); [1986] 1 CLJ 595, also a case concerning goods sold and delivered, the High Court granted the Plaintiff's application for Summary Judgment on the ground that the Defendant had not raised any objection or queries even though detailed particulars of the transactions were provided through the monthly Statements of Accounts. Based on the above authorities and by virtue of Section 92 of the Evidence Act 1950, the Defendant in this case cannot offer oral evidence to contradict, vary, add to or subtract from, the terms of any contract. In the present case, the Plaintiff had sent Statement of Accounts and invoices to the 1st 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 1st Defendant had stopped payment of its two cheques issued to the Plaintiff without giving any reasons. [53] In the instant case the contractual relationship between the 1st Defendant and the Plaintiff is governed by various documents consisting the Delivery Orders, Invoices, Debit Notes and the Statement of Account. The terms pursuant to which the Goods are sold and delivered 27 by the Plaintiff to the 1st Defendant is particularly stipulated in the Delivery Order. The following terms are of significance –

6.2 The Customer shall pay without set off or reduction any invoice rendered by UIG Products by the end of the following month of invoice date. If the Customer wishes to query an invoice, it shall raise its objections before the expiry of 14 days from the date of the invoice failing which it shall have no right to object.

6.3 UIG shall be entitled to charge interest on any sum overdue accruing in the period from that date it becomes overdue until the date of payment at a monthly rate of 1.5% over the period. Time of payment by the Customer shall be of the essence of this agreement.

7.3 The Customer shall verify the quantity of Products and/or Equipment delivered to it at the time of delivery and it shall give notice of short delivery at the time of delivery and, if such notice is verbal confirm it in writing within 5 days failing which it shall be deemed to have received the contracted quantity. [54] It is noted that the 1st Defendant did not at any time deny the existence of the Delivery Order, Invoices, Debit Notes and the Statement of Account. What the 1st Defendant is saying is that the Delivery Order, Invoices and Statement of Account is not applicable since there is a new agreement reached between the Plaintiff and the 1st Defendant. In this respect one is reminded of s. 92 of the Evidence Act 1950 which prohibits the introduction of oral evidence to contradict, vary, add to or 28 subtract from the terms of the Delivery Order, Invoices, Debit Notes and Statement of Account. [55] In any event there is no evidence to support the existence of a back-to-back agreement which is alleged by the 1st Defendant to have override the terms stipulated in the Delivery Orders and the Invoices. The documents produced by the 1st Defendant marked Exhibit CTL-1 (Record of Appeal No. 106, Volume 3, page 456 – 599 and Volume 4 page 600 - 683) to support its contention of a back-to-back agreement is of no relevance at all as the documents are obviously between the 1st Defendant and SIG. The voluminous documents produce by the 1st Defendant does not concern the Plaintiff. There is no evidence to explain how and in what manner the said documents are connected to the transactions between the Plaintiff and the 1st Defendant in particular to the alleged back-to-back agreement. Instead the contemporaneous evidence shows the 1st Defendant has agreed to submit itself to the mutual agreed terms as contained in the Delivery Orders and the Invoices. [56] If indeed a new agreement was reached between the Plaintiff and 1st Defendant sometime in April 2010 then certainly the 1st Defendant would have raised its concerns and objections when Delivery Orders 29 and Invoices with the same terms were issued by the Plaintiff to the 1st Defendant after April 2010 in respect of Goods sold and delivered after April 2010. There was no evidence of such concern and objections raised. Instead the evidence shows the 1st Defendant has continued to receive and accept the Goods by stamping on the Delivery Orders without questions asked. As recently as 15 January 2016 the 1st Defendant has even made payment RM35,000.00 to the Plaintiff as partial payment to the principal amount of RM372,732.36 owing to the Plaintiff without a word uttered in respect of the alleged back-to-back agreement. [57] In the absence of evidence to support its contentions, the alleged back-to-back agreement including the late payment interest is not a bona fide triable issue. Accordingly the 1st Defendant is bound by the Delivery Orders, Invoices, Debit Notes and the Statement of Account. Compounded interest [58] At the outset it is pertinent to note that the issue on compounded interest was never pleaded and particularised by the 1st Defendant in its Defence. As parties are bound by their pleadings, on this point alone 30 the 1st Defendant’s attempt to raise this compounded interest as a triable issue ought to be dismissed. [59] Even if it is pleaded I am of the view it is not a bona fide triable issue. It was raised for the first time by the 1st Defendant in its affidavit deposed by its director Chai Teck Lun on 11 July 2016 (Record of Appeal No. 106, Volume 1, page 57 to 70) in response to the Plaintiff’s affidavit in support of the application for summary judgment. Subsequently in an affidavit affirmed on 8 August 2016 by the same director The 1st Defendant adduced a comparison table showing the 1st Defendant’s calculation in respect of simple interest and compounded interest (Exhibit CTL-9 at page 1428 which is also found at Exhibit CTL- 10 at page 1436 of the Record of Appeal No. 106 Volume 8). Based on the said table in particular the fourth column, it would appear the 1st Defendant’s position is that the Plaintiff has claimed compounded interest in the amount RM185,896.93. However there is no explanation as to how the 1st Defendant derived at the said amount. [60] The Plaintiff denied the allegation and provide a detail explanation of how it calculates the interest in its affidavit affirmed on 22 July 2016 (Record of Appeal No. 106, Volume 1, page 71 – 101). At paragraph 56 – 58 of the said affidavit the Plaintiff has itemised the value of the 31 Invoices it issued for each month commencing December 2012 until July 2013 and the total figure of the invoices is RM337,732.36 which is the principal amount as at 15 March 2016. At the risk of repetition, the 1st Defendant has unequivocally admitted, in its letter dated 15 January 2016 that RM337,732.36 as the principal amount it owed the Plaintiff. The value of the Debit Notes issued by the Plaintiff in respect of late payment for each month commencing May 2013 until June 2014 totalled up to RM185,896.93 (which the 1st Defendant claimed the figure RM185,896.93 is compounded interest). Thus the total sum of the value of the invoices (RM337,732.36) and the Debit Notes (RM185,896.93) is RM523,629.29 as at 15 March 2016. The Invoices, Delivery Orders and Debit Notes issued are collectively marked as Exhibit YKF-2 which can be seen at page 229 – 398 of the Record of Appeal No. 106, Volume 2 and at page 399 – 437 of the Record of Appeal No. 106, Volume 3. [61] This amount RM523,629.29 is specifically stated in the 1st Defendant Statement of Account dated 15 March 2016 (Exhibit YKF-2 at page 252 – 468 of Record of Appeal No. 105 Volume 2). There was no evidence to show that the 1st Defendant objected or at the very least queried the Plaintiff as to the figure RM523,629.29 after the receipt of the Statement of Account. 32 [62] Considering the affidavit evidence I am of the view the Plaintiff’s explanation in respect of the calculation of interest charged at the rate of 1.5% (as agreed between the Plaintiff and the 1st Defendant pursuant to clause 6.3 of the terms of the Delivery Orders) is reasonable and credible. I am of the view the 1st Defendant’s calculation (Exhibit CTL-9 at page 1428 of the Record of Appeal No. 106 Volume 8) is not sufficient to raise triable issue in light of the Plaintiff’s explanation. The Goods sold and delivered by the Plaintiff to the 1st Defendant did not comply with the specification and/or quantity in the delivery orders [63] The 1st Defendant exhibited two letters dated 1 December 2012 and 20 December 2012 which they issued to the Plaintiff complaining about the quantity of the Goods. In the said letters the 1st Defendant complained that the quantity of dissolved acetylene and carbon dioxide supplied did not comply with the quantity as stated in the Delivery Orders. The Plaintiff in its affidavit stated that it has provided explanation to the 1st Defendant and that the issue was resolved amicably between the parties. [64] In this respect it is noted that the 1st Defendant did not identify the relevant Delivery Orders which provides detail of the Goods alleged to 33 be short in quantity. It is also pertinent to note despite the complaint, the 1st Defendant did not reject the Goods which was delivered to them. It is not clear whether the complaints made by the 1st Defendant via the two letters is in compliance with clause 7.3 of the Delivery Order. Under clause 7.3 of the Delivery Order the 1st Defendant is required to verify the quantity of the Goods delivered to it at the time of delivery and any complain is to be confirmed within five days from the date of delivery. Failure to do so, the 1st Defendant is deemed to have received the contracted quantity. In any event since the said letters did not indicate that the Goods were rejected by the 1st Defendant the 1st Defendant is deemed to have accepted the Goods. There were no further complaints or concern raised by the 1st Defendant in respect of the same subject matter as stated in the said two letters. [65] In fact the 1st Defendant continued to order for the Goods and continued to accept the Goods delivered to it. Subsequently when the Plaintiff demanded, via its solicitor’s letter dated 30 June 2015, against all the Defendants the amount of RM558,629.29 the 1st Defendant did not raise any issue in respect of the amount of debt claimed. As to the various issues raised by the 1st Defendant in its affidavit affirmed on 11 July 2016 (page 57 – 70 of the Record of Appeal No. 106) which the 1st Defendant said are triable issues, namely, that the signature on the 34 Invoices were not the signature of the 1st Defendant’s employee or agent and that the items stated on some of the Invoices were not ordered by the 1st Defendant, there were no evidence adduced by the 1st Defendant that they had raised the above issues within the time period as contractually agreed by both parties (clause 6.2 of the Delivery Order in respect of Invoices issued and clause 7.3 in respect the Goods delivered). These various issues were also not raised when the 1st Defendant made partial payment of RM35,000.00 in 2015 pursuant to a letter of demand dated 30 June 2015 issued by the Plaintiff’s solicitor. As such it is not open to the 1st Defendant to raise these issues now. Issue of wrongly charged invoices amounting to RM135, 911.55 and the overcharging amount of RM153, 680.00 [66] Again, it is to be noted that the above issue was not raised by the 1st Defendant in their Defence. As parties are bound by their pleadings the 1st Defendant is estopped from raising it now (Lee Ah Chor v Southern Bank Bhd [1991] 1 MLJ 48). Besides that, there is no evidence adduced by the 1st Defendant to show that it has registered its objection or queries with regards to the Invoices with the Plaintiff at the material time for being wrongly billed and overcharged. As the evidence shows, the contemporaneous conduct of the 1st Defendant is simply 35 contrary to the 1st Defendant’s present contention – the 1st Defendant had accepted the Invoices issued by the Plaintiff by signing on the Invoices and stamping it with the 1st Defendant’s rubber stamp. There were no issue of being wrongly billed or overcharged raised by the 1st Defendant at that point in time. Plaintiff ought not to be allowed to reduce its claim from RM523,629.93 as pleaded in its Statement of Claim to RM496,558.34 [67] It would appear the 1st Defendant’s objection to the said reduction is due to its contention that by reducing the claim from RM523,629.93 to RM496,558.34 the Plaintiff has actually do away with the compounded interest (which the 1st Defendant’s insist it is a triable issue) and chose to charge on simple interest. [68] The Plaintiff explained in its affidavit affirmed on 8 September 2016 (Record of Appeal No. 106, Volume 2, page 198 – 219) that the said reduction was arrived at after the Plaintiff rectified the amount of interest which was initially calculated as RM185,825.98 but which ought to be RM158,825.98 after the Plaintiff discovered a system error. As such the judgment entered against the Defendants is RM496,558.34 and not RM523,629.93 as initially pleaded. 36 [69] In this respect it is pertinent to note that the Plaintiff has provided a detail explanation in their affidavits as to how the figure RM158,825.98 was arrived out which is the interest calculated at the rate of 1.5% on the late payment (as contractually agreed by both parties pursuant to Clause 6.3 of the Delivery Order) made as evidenced from the Debit Notes issued by the Plaintiff. Taking into account the Plaintiff’s explanation and that the said reduction does not prejudice the Defendants I am of the view that the court is entitled to enter judgment against the Defendants on a lesser sum, namely, RM496,558.34 (Krishnamurthy Nagaratnam & Anor v. The Malayan Finance Corp. Bhd [1986] CLJ (Rep) 170). [70] However I am of the view interest at the rate of 1.5% (as mutually agreed by the parties and stated in the Delivery Order) ought not to be imposed on the sum RM496,558.34 because, as explained above, such sum contain the interest element of RM158,825.98 imposed on the principal amount RM337,732.36. As such interest of 1.5% ought to be imposed on the principal amount RM337,732.36. 37 Whether the Guarantee and Indemnity is enforceable against the 2nd and 3rd Defendants [71] It is the 2nd and 3rd Defendants’ position that the Guarantee and Indemnity is not enforceable against them for various reasons. The reasons are stated and discussed below.

both the Defendants denied ever signing the Guarantee and Indemnity and that the signature on the said guarantee are not theirs -

the onus is on the 2nd and 3rd Defendants to prove they did not sign the Guarantee and Indemnity and that the signatures are not theirs. However the 2nd and 3rd Defendant did not provide any evidence to substantiate such allegations and assertions. Simply put, it is only bare denial. Since it is a serious allegations one would expect both the Defendants to take immediate action to lodge a police report in respect of the issue in order to protect themselves. After all, the Guarantee and Indemnity imposes obligations on them as they are deemed to be the principal debtor which expose them to financial risk in the event the 1st Defendant fail to 38 duly perform its payment obligation in respect of the Goods sold and delivered to the 1st Defendant.

(ii) Assuming for a moment the signatures were not that of the 2nd and 3rd Defendants and naturally they were not aware of the existence of such document, both ought to have reported the matter for investigation the moment they were notified of the Guarantee and Indemnity via the letter dated 21 March 2016 from the Plaintiff’s solicitor demanding, in their capacity as guarantors to the 1st Defendant, the amount of RM523,629.29 as at 15 March 2016 (assuming both the Defendants’ allegation that they did not receive the demand made in 2015 by the Plaintiff’s former solicitor against them is true).

(iii) It must be noted that in their letter dated 3 March 2016 the 2nd and 3rd Defendants (in response to the letter of demand dated 21 March 2016 issued by the Plaintiff’s solicitor) did not categorically denied signing the Guarantee and Indemnity and did not specifically denied that they are guarantors of the 1st Defendant. It was merely a general denial of not having knowledge of the demand made against them as guarantors. In an act which is construed as being inconsistent with their denial as guarantor and the liability 39 thereto, both the Defendants sought the Plaintiff’s “assistance and cooperation” to provide them details and relevant documents for them to check and verify with the records of the 1st Defendant. Both the Defendants also informed that the 1st Defendant had made payment of RM35,000.00 and clearly indicated that the 1st Defendant was in the process of securing an amount of RM10,792,535.03 from a debtor and asked for a meeting to be held between the Plaintiff and directors of the 1st Defendant as soon as possible. In other words both the Defendants were seeking for a meeting between them as directors of the 1st Defendant and the Plaintiff in respect of the demand made against them.

(iv) Failure by the 2nd and 3rd Defendants to lodge police report at the earliest possible opportunity raise serious doubt as to the bona fide of their allegations that they raise now.

The contemporaneous conduct of the 2nd and 3rd Defendants provides sufficient evidence that at all material time they are aware of the business transaction between Plaintiff and 1st Defendant for the supply of the Goods and that as directors of the 1st Defendant they executed the Guarantee and 40 Indemnity in favour of the Plaintiff for the benefit of the 1st Defendant.

Both the Defendants pointed out the name of the 1st Defendant as the “Customer” was not stated and the liability limit under the Guarantee and Indemnity were not stated in the Guarantee and Indemnity.

the fact that the 1st Defendant’s name was not stated as the Customer to my mind does not in any way prejudice the 1st and 2nd Defendants. As I have stated earlier, the 2nd and 3rd Defendants being the shareholder and directors of the 1st Defendant are fully aware of the commercial transaction between the 1st Defendant and the Plaintiff to which they are the guarantors. Thus the absence of the 1st Defendant’s name in the Guarantee and Indemnity is not fatal.

the 2nd and 3rd Defendant’s limitation of liability not stated in the Guarantee and Indemnity

It is not disputed paragraph 1 of the Guarantee and Indemnity did not state the limitation of both the Defendants’ liability. In this respect it is to be noted that the guarantee 41 given by the 2nd and 3rd Defendants is a continuing guarantee until all monies owing by the 1st Defendant to the Plaintiff in respect of the Goods supplied shall have been paid in full. In the case of Elephant Gypsum Sdn Bhd v Elevic Trading Sdn Bhd [2001] 7 CLJ 405 the court held the absence of monetary limit being stated in the guarantee is not a sufficient ground to invalidate the guarantee given by the directors of the first defendant for goods (gypsum board and ceiling board) sold and delivered by the plaintiff to the first defendant. In any event the 2nd and 3rd Defendant did not at all material time raise this issue with the Plaintiff, even when demand against them were made for payment of the monies owing and due to the Plaintiff by the 1st Defendant. [72] In dealing with the 2nd and 3rd Defendants’ allegation that they had never signed the Guarantee and Indemnity and their denial that the signature which appears in the said guarantee document is theirs, learned counsel for the Plaintiff cited the Court of Appeal case Hassan Hussin v Tengku Azhar Adib T Yusof [2016] 7 CLJ 864 (Hassan Hussin case) and urge the court to make a comparative visual examination of the defendant’s signature as was undertaken by the Court of Appeal in 42 the said Hassan Hussin case pursuant to s. 73 of the Evidence Act 1950. [73] Having perused the said Hassan Hussin case, I found the facts of that case is similar and/or of relevance to the instant case in so far as the signature issue and the absence of the name of the 1st Defendant as the ‘Customer’ in the Guarantee and Indemnity is concerned. [74] The facts of Hassan Hussin case is as follows. On 5 December 2011 the plaintiff purchased from the defendant a piece of land and paid for the full purchase consideration to the defendant. However the land could not be transferred to the plaintiff due to a restriction in interest which prohibited any transfer of the land within ten years from the date of issuance of the land title. Thus the parties agreed that the defendant will execute all relevant documents for transfer when the restriction in interest cease to have effect and a final title issued. On the same day of the sale of the land the defendant executed a power of attorney in favour of the plaintiff giving full power to the plaintiff to deal with the land. The defendant also executed Form 14A of the National Land Code (Form 14A) for the transfer of the land to the plaintiff and surrendered the qualified title of the land to the plaintiff. When the restriction in interest expired in 2011, in the process to get the land transferred to himself, the 43 plaintiff discovered that final title of the land was issued in 2008 and that it was collected by the defendant. [75] The plaintiff brought an action against the defendant seeking, inter alia, declaratory relief that the land had been sold by the defendant to the appellant and that the defendant held the land as a bare trustee. In his defence the defendant denied selling the land to the plaintiff as he did not know the plaintiff. The defendant also denied receiving the purchase consideration from the plaintiff for the alleged sale of land. It was the defendant’s belief that the plaintiff has conspired to defraud the defendant or that the plaintiff was defrauded by an irresponsible party. He also denied executing the power of attorney and pleaded that his signature was forged and that the name of the donor was not his full name hence the power of attorney was false, void and of no effect. The defendant also denied signing the Form 14A and that the name appearing on therein was not his name. It appears from the fact that the name ‘ADIB’ was omitted from the defendant’s full name. [76] The High Court dismissed the plaintiff’s claim on the ground, inter alia, that the defendant did not execute the documents because there was a mistake in the spelling of the name of the defendant when the 44 name ‘ADIB’ was omitted. The plaintiff appealed and the Court of Appeal allowed the appeal. [77] The Court of Appeal held that the defendant’s defence was one of a mere denial. The onus is on the defendant to prove his assertion that he did not signed the power of attorney and the Form 14A and that his signature was forged. However the defendant did not adduce any evidence to prove his signature was forged. The Court of Appeal noted that the High Court in deciding that the power of attorney and Form 14A were not executed by the defendant had failed to consider, amongst other, the identity card number written on both the documents clearly belonged to the defendant and that the address of the defendant was correctly stated on both documents. The Court of Appeal had also taken the liberty to compare the defendant’s signature and made the following findings – [30] We have also undertaken a comparative visual examination of the respondent's signature in the power of attorney with his signature in his witness statement and found significant and material similarities which are both apparent and obvious to the naked eye. We are of the opinion that this court is perfectly entitled to embark upon this mode of comparative examination as provided by s. 73(1) of the Evidence Act 1950 which reads as follows: 45 Comparison of signature, writing or seal with other admitted or proved

(1) In order to ascertain whether a signature, writing or seal is that of the person by whom it purports to have been written or made, any signature, writing or seal, admitted or proved to be the satisfaction of the court to have been written or made by that person, may be compared by a witness or by the court with the one which is to be proved, although that signature, writing or seal has not been produced or proved for any other purpose. … We are satisfied that even though the name 'ADIB' was omitted from the respondent's full name, the omission is not fatal as the simple and naked facts relating to the identity card number, the address and the signature stated in the power of attorney and Form 14A clearly showed that the same indeed belonged to the respondent. We are thus convinced that the name appearing in these documents belonged to the respondent and that these documents were in fact executed by the respondent. [78] Coming back to the instant case. Having compared the 3rd Defendant’s signature on the Guarantee and Indemnity dated 18 June 2012 and the 3rd Defendant’s signature in Form 14A dated 18 April 2011 (Record of Appeal No. 105, Volume 8, page 1537 and 1538) I am of the view there are significant and material similarities in both the said signature which is sufficient evidence to strengthen the finding that the signature which appears on the Guarantee and Indemnity is the signature of the 3rd Defendant. 46 [79] Besides the signature, there are other factor (which the Court of Appeal in Hassan bin Hussin has considered in making its decision) which supports the finding that the 2nd and 3rd Defendants had signed the guarantee documents. It is the identity card numbers and the address of both the 2nd and 3rd Defendants which appears in the Guarantee and Indemnity is the same as that which appears in the said Form 49A dated 18 April 2011 (Record of Appeal No. 105, Volume 8, page 1537) and also in the document dated 1 July 2015 (Record of Appeal No. 105, Volume 8, page 1539 – 1541). In any event the 2nd and 3rd Defendants did not deny nor dispute their identity card numbers and the address. Conclusion [80] Premised on the aforesaid it is my considered opinion that, based on the facts and evidence adduced, the various issues raised by the Defendants are not bona fide triable issues. Most of the issues raised are not pleaded and/or not raised by the Defendants contemporaneously or immediately upon the occurrence of the various issues and in accordance with the terms of the agreement that bind their commercial relationship in the supply and delivery of the Goods. In this respect I am compelled to agree with the Plaintiff that the issues raised are 47 afterthoughts. I am also of the view that the Plaintiff has provided evidence which has adequately ruled out the need for a full trial. [81] I therefore dismissed the 1st, 2nd and 3rd Defendants’ appeals with cost and ordered for summary judgment be entered against all the Defendants. As such the 1st, 2nd and 3rd Defendants are to pay the Plaintiff the sum of RM496,558.34 and interests at the rate of 1.5% on the principal sum of RM337,732.36 from 16 March 2016 until date of full settlement. ( KHADIJAH BINTI IDRIS ) JUDICIAL COMMISSIONER HIGH COURT DATED 30 DECEMBER 2017 Counsel: Defendants/Appellants : Siew Pak Thai of Messrs P.T. Siew & Associates Plaintiff/Respondent :