Wit Ink Creative Sdn Bhd v Dk-My Properties Sdn Bhd (BA-12BNCC-7-06/2024)

In this Judgment, the parties will be referred to as they were in the court below. The Plaintiff’s claim before the Sessions Court was for the recovery of the unpaid balance of 2 invoices issued for services rendered in the sum of RM54,248.44 (out of the total sum invoiced of RM81,372.66), late payment interest at 3% per month (“LPI”) and costs.

The 2 invoices were dated 10-6-2020 and 22-7-2020 (“Invoices”) and provided that LPI at 3% per month was chargeable if the invoices remained unpaid after 30 days. The Invoices remained unpaid for some 2 years. In May 2022, an action similar to the present was filed by the Plaintiff before the Magistrate. For reasons that are unclear, the action was re-filed in the Sessions Court on 27-10-2022.

Before 27-10-2022, the Defendant tendered part-payment of RM27,124.22. Two further payments of RM27,142.22 were made on 4- 11-2022 and 14-12-2022. These sums represented only the principal debt and not the accrued LPI claimed.

The Plaintiff maintained its claim for the accrued LPI which proceeded to trial. It was dismissed by the Sessions Court Judge who determined that the Plaintiff had waived the imposition of LPI, and that the rate of interest imposed was excessive as it exceeded the limit allowed under the Moneylenders Act 1951.

At the hearing of the appeal, the Defendant raised a preliminary objection that the appeal was incompetent because the Notice of Appeal was served by email on the last date to do so on 6-6-2024 and a physical copy was only served the following day.

This Court heard and in the exercise of its discretion, dismissed the preliminary objection. This Court accepted that solicitors in this matter had a consistent practice of service by email, followed by physical delivery; and that the mode of service was therefore agreed upon. In any case, there was no apparent prejudice or miscarriage of justice.

The Plaintiff’s appeal to this Court turned substantively on the question of whether the Sessions Court Judge was plainly wrong in dismissing the Plaintiff’s claim on the grounds of waiver and estoppel. On this, the Plaintiff argued that the Sessions Court Judge had decided the case on a defence that was not pleaded. The Defendant contended that this was not a ground of appeal in the Memorandum of Appeal and should not be canvassed.

In dealing with this point, this Court was of the view that a ground of appeal raised on a question of law should be allowed even if it was not stated in the Memorandum of Appeal, provided that it is not premised on any new facts or evidence. It is also subject to the overriding discretion of the court to do justice (Dato' Tan Chin Woh v Dato' Yalumallai V Muthusamy [2016] 8 CLJ 293). In this case, it would be ironic and unjust 4 if the argument that the Sessions Court Judge had decided the case on an unpleaded point is not addressed simply because it is not pleaded as a ground of appeal in the Memorandum of Appeal, especially if there is merit in the argument.

On a review of the pleadings, this Court did find that the defence of waiver was not pleaded in the Defence. The pleaded defence in the action was that the Defendant never received the Invoices and did not agree to the imposition of LPI as no such term was stated in the Plaintiff’s quotation.

The Court of Appeal in Cheong Heng Loong Goldsmiths (KL) Sdn Bhd & Anor v Capital Insurance Bhd [2004] 1 CLJ 357 held that once a defendant takes that course, he must stand or fall on his pleaded case. He cannot simultaneously put forward an unpleaded case of justification for his conduct. See also Agromate (M) Sdn Bhd v Felcra Niaga Sdn Bhd [2022] MLJU 1604 and Bank Islam Malaysia Bhd v Aquasix Corp Sdn Bhd & Ors [2014] 3 MLJ 812 on the need to plead waiver as a substantive defence.

In this case, the Defendant’s substantive defence was found in the following paragraphs:

The aforesaid paragraphs of the Defence were premised on the Defendant’s case that it never received the Invoices or any other transaction document that mentions the LPI. The plea that the Plaintiff unilaterally imposed LPI because the Defendant never agreed to it, is quite a different one from the plea that the Plaintiff claimed LPI after waiving it.

Based on the trial evidence, the Sessions Court had rejected the Defendant’s primary defence and found that the Defendant did receive the Invoices by email on 15-7-2020 and 27-7-2020 as proved by the Plaintiff, and that upon receiving the Invoices, no objections were raised. The Sessions Court also accepted that it is conventional for LPI provisions to appear in invoices rather than the quotation, and as noted from the outset, it was not disputed that the Invoices did provide for LPI as claimed.

The findings of fact by the Sessions Court as aforesaid are consistent with the Plaintiff’s case that the chargeability of LPI was contractual. In debt recovery cases where the terms of business are not reduced to a single contractual document, transaction documents typically include purchase orders, delivery orders and invoices and collectively, they constitute the contract between the parties (Caltex Oil Malaysia Ltd v Classic Best Sdn Bhd & Ors [2006] 7 MLJ 131; CJ Century Technology Sdn Bhd v Axisjaya Sdn Bhd & Anor [2020] MLJU 2086).

Having made the aforesaid findings on the Invoices, the trial Judge ought to have concluded that the terms of business governing the parties included the LPI and it binds the Defendant whether or not they liked it. There being no alternative plea of waiver and estoppel in the Defence, it was not open for the Sessions Court to find as it did, that there was a waiver based on the following facts:

The Plaintiff’s letter of demand dated 10-3-2022 contained no demand for LPI

The LPI was not set out in the Plaintiff’s Statement of Account issued in May 2022 [16] While waiver is an equitable defence and requires no consideration (see Associated Pan Malaysia Cement Sdn Bhd v Syarikat Teknikal & Kejuruteraan Sdn Bhd [1990] 3 MLJ 287 and section 64 Contracts Act 1950), mere acts of indulgence will not amount to waiver. A waiver requires proof of a clear and unequivocal representation, sufficient reliance on that representation and alteration of position. Per Halsbury’s Laws of Malaysia – Equity [290.401]: “Where the waiver is not express, it may be implied from conduct which is inconsistent with the continuance of the right, apparently without the need for writing or for consideration moving from, or detriment to, the party who benefits by the waiver, but mere acts of indulgence will not amount to waiver; nor may a party benefit from the waiver unless he has altered his position in reliance on it. The waiver may be terminated by reasonable, but not necessarily formal, notice or when the relevant period of suspension of rights expires, unless the party who benefits by the waiver cannot resume his position or termination would cause injustice to him.” [17] As a matter of both pleading and evidence, the Defendant did not tender payment at any time before the Plaintiff initiated legal action to enforce the right to recover the LPI. The Plaintiff had reserved the right to claim interest in the letter of demand. There was still no tender of payment by the Defendant or alteration of its position in reliance on the Plaintiff’s Statement of Account. [18] For this reason, I agree that this case warrants appellate interference. To the extent that the trial Judge found that the case turned on waiver and estoppel, this is an appealable error. Penalty Interest [19] There was a second finding by the Sessions Court Judge that may or may not have underpinned the decision to dismiss the Plaintiff’s claim for LPI, that is, as to the excessiveness of the LPI. On this, parties did not offer any submissions, but to address it briefly, the law on section 75 of the Contracts Act 1950 was settled in Cubic Electronics Sdn Bhd (in liquidation) v Mars Telecommunications Sdn Bhd [2019] CLJ 723 and that is the party alleging unreasonableness must prove it. [20] Thus, the onus was on the Defendant to produce industry or other evidence to demonstrate that 3% per month LPI is unreasonable, but no such evidence was adduced. There is no law that says contractual interest exceeding the rate provided for in the Moneylenders Act 1951 is ipso facto unenforceable. Judgments for contractual interest at 3% per month were also not unprecedented in the law reports. [21] For completeness, the Sessions Court also concluded that the LPI claim was an afterthought because SP1 who testified for the Plaintiff left the calculation of it to the Plaintiff’s solicitors. This Court did not see this as a substantive issue. The computation of interest was straightforward as the parameters of the calculations were clearly shown in the pleading as follows: Conclusions [22] For the reasons set out above, this Court overturned the Judgment of the Sessions Court and allowed the Appellant/Plaintiff’s claim for LPI on the Invoices with costs of RM10,000.00. Bertarikh : 13 Jun 2025 SGD ELAINE YAP CHIN GAIK PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI MALAYA SHAH ALAM Peguam Untuk Perayu: Ivor Yip, Messrs Peter Ling & Co. Untuk Responden: Manpal Singh Sacdev, Messrs