Vodenzo Concept Sdn Bhd v My Healthland (Hq) Sdn Bhd (WA-22NCvC-324-06/2020)

This is simple case concerning works that was undertaken by the Plaintiff for the Defendant and its related companies as well as companies within My Healthland group. There is no dispute as to the amount of work undertaken by the Plaintiff for My Healthland and the companies within the group. (Note: for ease of convenience the Plaintiffs in the counter claim are referred to as the Defendant).

It is also not disputed that monies were paid by the Defendant in the Counterclaim as well as Goh Chee Siang to the Plaintiff.

Goh Chee Siang is a director of the Defendant and So Good (Global) Sdn Bhd. He is also a majority shareholder in the Defendant and So Good (Global) Sdn Bhd as well as the promoter of the businesses of all the Defendants and So Good (Global) Sdn Bhd.

The only issue that arises concerning the work that was done by the Plaintiff for So Good (Global) Sdn Bhd and the companies.

It is the Plaintiff’s case that the Defendant owes it the sum of RM 1, 820, 407.08 after deducting the sums paid by the Defendant and the sums paid by Goh Chee Siang.

The Plaintiff contends that the Defendant and the companies in the Counterclaim had authorized, through the promises and representations made by Goh Chee Siang, that the Plaintiff is entitled to deduct the sums paid by the Defendant and the companies in the Counterclaim including the sums paid by Goh Chee Siang for the works undertaken by it for the Defendants as well as for So Good (Global) Sdn Bhd.

The Defendant on the other hand denies such right and alleges that no such authorization was made by Goh Chee Siang or any person authorized by the Defendant.

The Defendant also contends that all payments were made on account for work done for the benefit for the companies within its group and not for So Good (Global) Sdn Bhd.

Therefore, the Defendant contends that they had made an overpayment to the Plaintiff and that the said Plaintiff should repay the sums overpaid to it to the sum of RM 767, 172.94.

The Defendant admits that it and the companies within its group are liable for the sum of RM 8, 852, 116.06. Since the Plaintiff received the total sum of RM 9, 619, 288.00, the Plaintiff should be made to repay to the Defendant and the Plaintiffs in the Counterclaim a refund of RM 767, 172.94. B. Decision of this Court No Evidence that the Plaintiff is authorized to use the monies paid by My Healthland Group of Companies for So Good (Global) Sdn Bhd

Having considered the evidence before me, I find that the Defendant and the Plaintiffs in the Counterclaim has shown to me on a balance of probabilities that the Plaintiff is not entitled to deduct the sums paid by the companies within the My Healthland group of companies for the works done for, So Good (Global) Sdn Bhd unless it was specifically authorized to do so.

I find that the debts of So Good (Global) Sdn Bhd should not be imposed on the Defendant. The Defendant or Goh Chee Siang did not agree that the sums due to So Good (Global) Sdn Bhd should be paid by the Defendant and there was never any agreement that the Defendant held any obligation for the debts of So Good.

I find that the evidence before me shows that the payments that were made by the companies within the My Healthland group were made with the description of either “Ln to HQ”, “DPC Reno on Acc”, “Reno POA”, “On Acc”, “MHL on Acc” or “Healthland POA” when they were made to the Plaintiff.

These were explained by the Defendant’s 2nd witness, Heng Teik Kung (DW-2), to mean that these payments were for the purposes of the accounts for the Defendant and not for any other company. There is no documentary evidence before me that suggests that these payments were for the works to be undertaken by So Good (Global) Sdn Bhd.

The other factor that I have considered is that the invoices issued to, So Good (Global) Sdn Bhd were never sent to the Defendant or any companies within the said group of companies. There is also no evidence before me that shows that the said invoices were sent to So Good (Global) Sdn Bhd. The invoices from the Plaintiff addressed to So Good (Global) Sdn Bhd did not show that the tax invoices were sent to the said company.

There is also no evidence that the said invoices were acknowledged by So Good (Global) Sdn Bhd. All of the invoices only had the seal of the Plaintiff and did not show any form of acknowledged receipt by the said entity. There is also no form of delivery orders shown to me that was shared and copy extended to the Defendant.

The Plaintiff also did not send any form of accounts to the Defendant to show the amount of work done for So Good (Global) Sdn Bhd to enable them to know the amount of work done and the number of monies deducted from the payments made by the Defendant and the Defendant’s related companies.

If indeed that there was such an arrangement for the said sums of monies to be utilized for the purposes of So Good (Global) Sdn Bhd, then surely these invoices and statement of account would have been forwarded to the Defendant.

As I said earlier, no evidence of the invoices and the delivery orders for So Good (Global) Sdn Bhd were sent to the Defendant or any of the companies in the Counterclaim.

The conduct of the parties indicate that they understood that the debts of So Good (Global) Sdn Bhd would be separate from those of the Defendant. I cannot therefore hold that the Defendant is a debtor of the Plaintiff. The sums due from So Good (Global) Sdn Bhd should only be claimed against that company or at most against Goh Chee Siang. No Representations and No right to rely on Estoppel

I have also considered the evidence of Mr. Lim Kien Sing, the Plaintiff’s sole witness who alleges that the Plaintiff had been represented by Mr. Goh Chee Siang and the Defendant that the Plaintiff had the right to appropriate or deduct the payments made for the debts of So Good (Global) Sdn Bhd. The said witness also alleges that the said Defendant and the related companies are estopped from making such claims based on the statements made in the WhatsApp conversations between Mr. Goh Chee Siang and Mr. Lim Kien Sing.

I have perused the witness testimony and considered the evidence tendered by Mr. Lim Kien Sing, Mr. Goh Chee Siang and Mr. Heng Teik Kung. I have also considered the extensive WhatsApp conversation produced by the Plaintiff to prove the existence of the alleged representations and the alleged estoppel suggested by the Plaintiff. WhatsApp conversations did not show such representations / estoppel

I do not find the existence of the alleged representation suggested by the Plaintiff. Even if I were to refer on the WhatsApp conversation between the Plaintiff and the Defendant’s witnesses, these did not show the existence of the alleged representation and did not show that the Plaintiff is entitled to rely on any form of estoppel suggested by the Plaintiff or his counsel.

It is trite law that the burden of proving the existence of an alleged representation and the right to rely on estoppel lies with the party who alleges the same. This is trite as seen in section 101 of the Evidence Act.

I also prefer the evidence of Mr. Heng Teik Kung, as his evidence is consistent with the documentary evidence presented before this Court. In all of the payments made by the companies, it is clear that these payments were made with the clear annotation that the sums paid were for the purposes of the Defendant and its group of companies. They were also made in account for the works done for the Defendant and its group of companies. They were not paid by So Good (Global) Sdn Bhd and there is no express representation by the Defendant or Mr. Goh Chee Siang that these monies paid could be used by the Plaintiff and apportion as it pleases.

I also do not find the evidence of Mr. Lim Kien Seng to be credible on this issue. The documents before me, especially the annotations to the payments made as to the purpose of payment and the fact that the invoices and delivery orders for So Good (Global) Sdn Bhd and the statement of accounts was not sent to the Defendant, shows that the allegations by the Plaintiff is mere an afterthought to enable it to deduct these payments as it wishes. This cannot be done when the Plaintiff is aware that these are separate entities with different group of shareholders and different set of directors. It would have been different if they are subsidiaries or companies within the same group of companies. One cannot assume such rights merely because Mr. Goh Chee Siang is a common director and common shareholder within these two companies.

However, for the reasons stated below, I find that the payments made by Mr. Goh Chee Siang should be attributed equally to the debts of So Good (Global) Sdn Bhd and the Defendant. Having directed the work to be undertaken for So Good (Global) Sdn Bhd, monies paid by him should be utilized equally for the work done for So Good (Global) Sdn Bhd and for the Defendant. So Good (Global) Sdn Bhd invoices, delivery orders and statement of accounts not sent to Defendant or even received by So Good

I find that the balance probabilities tilted in favor of the Defendant on the issue of the debts owed for So Good (Global) Sdn Bhd.

If the Plaintiff allegations are to be believed, surely the Plaintiff would have sent or shared the invoices, delivery orders and progress reports to the Defendant. The Plaintiff would also have sent a statement of accounts for the amount of sums deducted for So Good (Global) Sdn Bhd and a statement of account of the amounts outstanding from the Defendant and So Good (Global) Sdn Bhd.

If these documents were issued and sent to the Defendant at the time the work was done, this would have enabled the Defendant to seek payments for So Good (Global) Sdn Bhd or at the very least correct the Defendant’s wrong assumption. Such conduct would have also been consistent with the said allegations. Failure to produce such evidence indicates to me that this is merely an afterthought by the Plaintiff to seek recovery for its losses against the Defendant without any legal basis.

I find that it is incorrect for the Plaintiff to make such assumptions simply because they were dealing with Mr. Goh Chee Siang and assume that he gave them authority to do so. As I have said earlier, there is no evidence of such representations or authorization by Mr. Goh Chee Siang or of any authorized person from the Defendant.

I have also taken into account the Plaintiff’s contention that the cheques issued by the Defendant were issued on the instructions of Mr. Goh Chee Siang. This does not mean to me that the said payments were to be utilized for the purposes of So Good (Global) Sdn Bhd or enables the Plaintiff to rely on estoppel or the existence of the alleged representations as suggested by the Plaintiff. These directions were made after Mr. Lim Kien Seng sought payment for the work done but there is no indication in these conversations that the said payments would relate to the work done for So Good (Global) Sdn Bhd. At its highest, I opine that the said payments were to be utilized for the work done on the project relating to the Defendant and its related companies. Not for the purposes of So Good (Global) Sdn Bhd. Mr Lim Kien Seng is aware of the separate business and separate entities

Another factor that I have taken into account is that the director of the Plaintiff, Mr. Lim Kien Seng, is not a stranger to Mr. Goh Chee Siang, the Defendant and So Good (Global) Sdn Bhd. He is aware of the relationship between these companies. His wife did invest in So Good (Global) Sdn Bhd which had led to the dispute arising in the civil suit bearing number WA-B52NCC-12-01/2021. Therefore, it is irrefutable that Mr. Lim Kieng Seng is aware of the relationship between parties and the different business nature of these entities.

I find that Mr. Lim Kien Seng is aware that these are different entities with different shareholders and different types of businesses. I do not find it credible that he had simply assumed the right to deduct payment for the sums paid by the Defendant and the related entities to be utilized for So Good (Global) Sdn Bhd.

Although neither counsel had gone into the details as to the contents of the WhatsApp conversations between Mr. Lim Kien Seng and Mr. Goh Chee Siang, this Court had the opportunity to read the documents identified in the Plaintiff’s Additional Bundle of Documents that contained the WhatsApp messages.

I find that the WhatsApp messages shows there is a close relationship between them and they even discussed business dealings including obtaining work permits for the foreign workers for the venture and how to deal with the relevant officers of the Immigration Department.

When one reads the said WhatsApp messages, it is clear to me that Mr. Lim Kieng Seng is involved and is aware of the business deals undertaken by Mr. Goh Chee Siang especially those of So Good (Global) Sdn Bhd. They also discussed the dividends that allegedly should have been paid to Mr. Lim Kien Seng’s wife from So Good (Global) Sdn Bhd.

To me this shows that the Plaintiff and Mr Lim Kien Seng is aware that the contracts with So Good (Global) Sdn Bhd and those of the Defendants (the companies) are separate and distinct. The payments made by the Defendant should not be utilised for So Good (Global) Sdn Bhd and not for any other purposes as deem fit by the Plaintiff.

From these series of conversations there was no promise or representation by the Defendant or from Mr. Goh Chee Siang that these payments could be used solely at the discretion of the Plaintiff and for the purposes of So Good (Global) Sdn Bhd. As indicated earlier, when payments were made by the Defendant and its related companies, these payments were made with the notification that they were to be utilized for their account or at the very least for the Defendant’s account.

Therefore, the Plaintiff being aware of the differences between these companies should have ensured that these payments were received and utilized for the Defendant and its related companies accounts. The Plaintiff, if it wanted to utilize for So Good (Global) Sdn Bhd, should have ensured that confirmation of such use was clearly obtained from Mr. Goh Chee Siang and the Defendant.

It is also wrong to allow the payments made by the Defendant and its related companies for the purposes of So Good (Global) Sdn Bhd. I agree that Mr. Goh Chee Siang is a common shareholder and a common director. However, that does not mean that corporate veil could be lifted. These entities remain separate entities and the agreement to undertake work for the properties must be billed separately and paid by the Defendant and So Good (Global) Sdn Bhd.

I find that there are no circumstances justifying the lifting of the corporate veil that enables the Plaintiff to utilize payments received from the Defendant and its related companies for work done for So Good (Global) Sdn Bhd. Equity does not apply to the facts at hand

I do not find that the circumstances of this case justify the invocation of the principles of estoppel or equity as suggested in Boustead Trading Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [[1995] 3 MLJ 331 and Gan Tuck Meng & Ors v Ngan Yin Groundnut Factory Sdn Bhd [1990] 1 MLJ 227.

I find that the Defendant cannot be put to task for any alleged unconscionable conduct based on the transaction undertaken between parties. The Plaintiff has failed to show to me convincing evidence of the alleged representation or agreed assumption that the Plaintiff is entitled to deduct payments received from the Defendant for So Good (Global) Sdn Bhd. These allegations failed especially when the invoices, accounts and receipts for payments were not sent to the Defendant at any material time.

It cannot be said that the Defendant had by its conduct or the representations of Mr. Goh that these payments received from the Defendant could be used for any other purpose other than for the use of its own.

If the Plaintiff’s contention is to be accepted, I opine that there must have been a clear representation by the Defendant or Mr. Goh that these payments may be used by the Plaintiff for So Good (Global) Sdn Bhd. The Plaintiff would have then sent evidence of the work done for So Good (Global) Sdn Bhd to the Defendant, including the invoices, delivery orders and the statement of accounts to show the amount of work done. That would have enabled the Defendant to supervise the work done and ensure that the appropriate allocation be made or claim for such payment done from the said company. This was never done and instead the Plaintiff unilaterally allocated the portion of payments made as it deems fit without getting any confirmation from the Defendant or from Mr. Goh Chee Siang.

I find this unconscionable and I believe that the Plaintiff should not be allowed to claim for the work done for So Good (Global) Sdn Bhd from the Defendant and their related companies. The Plaintiff has also not explained how it allocated payments received from the Defendant and the extent at which such payments were allocated. There is no explanation as to how such allocations were made and I believe that the deductions were random at best.

I have also considered sections 60 to 62 of the Contracts Act. I find that the Defendant’s witness is consistent and have represented the truth as what had transpired at the material time. It was clearly stated that these payments were made with notification that they were to be used for the Defendant’s debts. They were not to be used to pay off So Good’s debt at any material time.

I do not believe that section 61 of the Contracts Act is applicable, especially when the invoices for any alleged debt for the said company were not shown to have been sent to the said entity and were not sent to the Defendant.

Simply put the Plaintiff has failed to prove that the Defendant is a debtor for the debts of So Good (Global) Sdn Bhd. As such, the Plaintiff is not entitled to deduct and utilize the funds paid by the Defendant for the debts of So Good. That could only be done if the Defendant agreed to be liable for the debts of So Good. There is no such evidence to sustain the Plaintiff’s claim, especially when the invoices and the statement of accounts of So Good were not delivered to the Defendant.

I am also guided by Re Lau Puong Ong, Ex P Government of Malaysia [1997] MLJU 129 where it was held that a creditor could only exercise the powers provided under Section 61 of the Contracts Act if such right was expressly either stated in any express term agreed by parties or were communicated by the creditor. No evidence of such statements or representations was shown by the Plaintiff.

I also refer to Leeson v Leeson [1946] 2 KB 156 and Re Loi Teck Soon [1999] MLJU 489 that have been relied on by the Plaintiff do not apply to the facts at hand. It must be shown that either such right was expressly stated in any written agreement or that this was clearly communicated to the Defendant. At the very least, the existence of these debts and the sums due to So Good should have been notified to the Defendant and these alleged invoices should have also been sent to the Defendant.

The final issue raised by the Plaintiff concerns the allegations that these are mere an afterthought by the Defendant to defend the Plaintiff’s claim. The Plaintiff alleges that the Defendant did not raise these issues until the claim was made by the Plaintiff for payment. This argument I believe is based on the position adopted by the Court of Appeal in KGN Jaya Sdn Bhd v Pan Reliance Sdn Bhd [1996] 2 CLJ 611.

I do not find that the Defendants’ counterclaim and defence as merely being an afterthought. The Plaintiff did not send a statement of accounts, the invoices and delivery orders for the work done for So Good (Global) Sdn Bhd to the Defendant. The Defendant would not have known that the payments they made were being utilized for So Good (Global) Sdn Bhd. As I found earlier, all payments made by the Defendant, save for the payments made personally by Mr. Goh Chee Siang, were for the accounts of the Defendant. This was indicated in all of the monies transferred to the Plaintiff.

As such, it cannot be said that the Defendants’ defence and counterclaim is an afterthought. I find that the Defendant was not aware of the utilization of the sums by the Plaintiff. I reiterate that it would have been different if the Plaintiff had sent the statement of account to the Defendant from the beginning with evidence of the invoices, delivery orders and a comprehensive account to the Defendant. This was simply ignored and the Plaintiff chose to deduct the said sums without any explanation and confirmation sent to the Defendant and its related companies.

The Plaintiff’s counsel also attempted to persuade me that payment was only made by the Defendant after the invoices were sent to the company or to Mr. Goh Chee Siang. Unfortunately, he was not able to show to this Court the sequence as to how the said payments and invoices were made. Instead, I find that the payments were made as when there were requests made by Mr. Lim Kien Seng to Mr. Goh Chee Siang and as indicated by Mr. Heng Teik Kung, these payments were made with an annotation / instruction that they were made on account for the work done for the Defendant.

In the circumstances, I find that the Plaintiff has failed to discharge its burden of proof to show that these payments and deductions for the work for, So Good (Global) Sdn Bhd were authorized or are correct in law. Payments made by Mr. Goh Chee Siang

On the other hand, with regard to the payment by Mr. Goh Chee Siang, I am of the opinion as he had directed works to be done for both So Good (Global) Sdn Bhd and the Defendant, the payments he had made should be equally apportion between the invoices outstanding for So Good (Global) Sdn Bhd and the Defendant.

The Plaintiff cannot apportion such payment as it deems fit but should equally apportion such payments. That would be equitable in the circumstances of this case as he did direct the works done to be undertaken for the premises owned by So Good (Global) Sdn Bhd and the Defendant.

Unlike the sums paid by the Defendant, an incorporated entity, which is separate to that of its shareholder, it would be fair in the circumstances of this case that the sums forwarded by Mr. Goh Chee Siang is utilized equally for So Good (Global) Sdn Bhd and those of the other Defendant. After all, Mr. Goh Chee Siang did direct for the works to be undertaken for these entities.

In this circumstance, although the said payments do not fall strictly under section 61 of the Contracts Act, as Mr. Goh Chee Siang is, strictly speaking is not a debtor of the Plaintiff. I believe it would be equitable that the sums paid by him be allocated equally for the debts owed by the Defendant and So Good (Global) Sdn Bhd.

Therefore, for the payments made by Mr. Goh Chee Siang, I opine that the Plaintiff is entitled to make equal portions for the payments made for works done for So Good (Global) Sdn Bhd and for the works done for the Defendant and its group of companies, the Defendant in the Counterclaim only on the sums paid by Mr. Goh Chee Siang.

The final issue I would like to address is the allegation of unjust enrichment raised by the Plaintiff.

I am of the opinion that this doctrine does not apply to the circumstances of this case. The work done for So Good (Global) Sdn Bhd would have benefited the said entity and the Defendant and its related entities. No form of unjust enrichment existed in the circumstances of this case. After all the Plaintiff is aware that it had independently chosen to contract with each entity separately and there are no circumstances justifying that the general rule concerning privity of contract and the rule concerning damages arising in contract to be displaced in this case. Please refer to Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 MLJ 48 and Tenaga Nasional Berhad v Ichi-Ban Plastic (M) Sdn Bhd [2018] 3 MLJ 14.

It is for the Plaintiff to make such claims against the said entity and not claim payment from the Defendant. This, however, does not extend to Mr. Goh Chee Siang. However, since the Plaintiff did not choose to initiate legal action personally against him and did not attempt to lift the corporate veil against him, no such remedy could be ordered against Mr. Goh Chee Siang.

Therefore, I do not find any credible basis to support the Plaintiff’s argument on unjust enrichment.

I do not find any basis to invoke the presumption of adverse inference as suggested by parties. I do not find any evidence of any attempt to suppress the evidence of any witnesses or any documents. Section 114(g) of Evidence Act is not an automatic proviso, and this Court should sparingly exercise its discretion to make such presumption in a civil suit unless it is shown that the litigant had attempted to suppress any evidence that may be of assistance to the other party. D. What are the sums that should be paid by the Defendant to the

I thank Counsels for their honest opinion when the above findings were shared with them.

I find that the following facts should be taken into account: -

Total sum paid by the Defendant and Goh Chee Siang RM 9, 616,288.00

(ii) Minus the sum admitted due for the work done for the Defendant and its group of companies RM 8, 852, 115.06

(iii) Minus half of the sums paid by Goh Chee Siang that should attributed for work done for So Good (Global) Sdn Bhd RM 1, 102, 300.00 (RM2, 204, 600 divide ½)

(iv) Total sums that should be paid by the Defendant to Plaintiff RM 335, 127.08

Therefore, the Defendant should be ordered to pay the Plaintiff the sum of RM 335,127.06. The Defendant’s Counterclaim is therefore dismissed for the reasons above. E. Orders of this Court

For the above reasons, I make the following orders: -

The Plaintiff’s claim is partly allowed, and the Defendant is directed to pay the Plaintiff the sum of RM 335, 127.06.

The Defendant’s Counterclaim is dismissed.

Interest on the sum of RM 335, 127.06 at the rate of 5% per annum from the date of judgment to the date of realization to be paid by the Defendant to the Plaintiff.

Costs of RM 30,000.00 are to be paid by the Defendants and the Plaintiffs in the Counterclaim to the Plaintiff jointly and severally subject to allocator. Dated 22nd August 2023 Dato’ Indera Mohd Arief Emran bin Arifin Judge High Court Malaya Kuala Lumpur NCvC 8 Ong Swee Long together with Eng Yi Wang for the Plaintiff Messrs. Armiy Rais Advocates & Solicitors Koo Wee Meng together with Khoo Wei See for Defendant Messrs. Darryl, Edward & Co. Advocates & Solicitors