Xin He Feng (M) Sdn. Bhd. v Ginma Industries Sdn. Bhd. (JB-11A-2-09/2021)

1.2 Tenancy period from 1.7.2018 to 30.6.2021.

1.3 The Appellant shall use the premises for the sole purpose of reprocessing, manufacturing and warehousing of the Tenant’s business.

2.1 Monthly rental is RM20,000-00.

3.1.1 The Appellant shall pay to the Respondent a security deposit of RM120,000-00 being 6 months rental.

3.3 A Security deposit shall not, without the previous consent in writing of the Respondent be deemed to be or treated as February 23, 2022 4 payment of any arrears of Rent and / or any money payable by the Appellant to the Respondent.

3.4 The Security deposit shall be forfeited by the Respondent as agreed liquidated damages if the Appellant is in breach of the Tenancy Agreement.

3.6 The security deposit shall be refunded to the Appellant within 14 days after the expiration/lawful termination of the Tenancy Agreement.

7.1(a) If the Appellant is in breach of the Tenancy Agreement, the Respondent shall serve a notice upon the Appellant pursuant to Section 235 of the National Land Code for the Appellant to remedy the breach within 21 days or within 7 days in the case of non payment of rental 7.1(b) If the premises be destroyed or damaged by fire without the fault of either parties and unfit for habitation and use for a period greater than 1 month, the rent shall be suspended and cease to be payable until the premises shall be rendered fit again for habitation and use.

7.1(i) Any notice required to be served shall be in writing and shall be sufficiently served on the Appellant if addressed to the Appellant and left at or sent by registered post to the premises or at the address stated in the Tenancy Agreement. [5] On 19.9.2020, a fire incident occurred in the premises and the premises was extensively damaged by the said fire incident. [6]

2.3.2021 The Respondent’s process server served the Writ of summons and Statement of claim at the registered address of the company secretary box.

4.3.2021 Affidavit of Service was filed by the Respondent. (page 16-41 of the Record of Appeal).

17.3.2021 Certificate of Non-Appearance and Judgment-in-Default were filed by the Respondent. (page 42-45 of the Record of Appeal).

19.3.2021 The Appellant was informed by the company secretary, Mr. Lai regarding the Respondent’s suit via WeChat.

22.3.2021 Affidavit of Service for Judgment-in-Default was filed by the Respondent. (page 46-62 of the Record of Appeal).

24.3.2021 The Appellant appointed Messrs YS Ling & Co. (“the appellant’s solicitors”) and the solicitors wrote to the Respondent’s solicitors on the suit.

25.3.2021 The Respondent’s solicitors replied by informing of the Judgment-in-Default entered against the Appellant (page 79 of the Record of Appeal).

5.4.2021 The Appellant has filed the Notice of Application to set aside the Judgment in Default, which is 19 days after the date of the Judgment-in-Default was filed by the Respondent. (page 63-65 of the Record of Appeal). [12] It was averred by Abdul Halim Bin Aziz the process server for Messrs Hong and Fong that on 2 March 2021, he went to serve the Writ of Summons and the Statement of Claim dated 1 March 2021 February 23, 2022 8 with a covering letter on the registered address of the appellant / defendant at No.25 1st Floor, Jalan Lambak, 86000 Kluang, Johoree as this address is found on the Companies Commission of Malaysia search certificate (“SSM search certificate”) dated 2 March 2021. (Enclosure 3 Page 51) The clerk denied that they are the company secretary and also denied that they refused service dan demanded that he take back the cause papers. Upon instructions from the Plaintiff’s solicitors, he left the cause papers at the mail box of the said address. [13] The Appellant then responded in the affidavit-in-opposition affirmed by Wong Wai Lean (Enclosure 3 page 61) that the purported secretary is no longer the serving secretary of the company and the director of the company, Mr Huang Kaihe was then in China and is unable to come to Malaysia due to travel restrictions both in China and Malaysia on account of COVID19 pandemic that struck mankind on the planet. [14] It was submitted by the Learned Counsel for the Appellant that the service was irregular and contrary to Rules of Court 2012 [15] There are now 2 set of averments which are poles apart. It was submitted that the service of the cause papers was on the company secretary as per the SSM search certificate. As against that was the averment of Wong Wai Lean (Enclosure 3 page 61) that the appellants have changed the company secretary and No.25 1st Floor, Jalan Lambak, 86000 Kluang, Johoree is not the registered address of the current company secretary. [16] I have a few observations: February 23, 2022 9 a. The registered address where the service of the cause papers was made is found in the SSM Search certificate dated 2 March 2021 which states No.25 1st Floor, Jalan Lambak, 86000 Kluang, Johoree. b. SSM Search Certificate is a public document under section 74 Evidence Act 1950 and the issuance of the SSM Search Certificate is made pursuant to the exercise of the functions of Companies Commission of Malaysia under section 17(e) Companies Commission Act 2001 which stipulates “(e) to enhance and promote the supply of corporate information under any laws specified in the First Schedule and to create and develop a facility whereby any corporate information received by, or filed or lodged with, the Commission may be analysed and supplied to the public.” c. The Appellant on the other hand, while averring that the service of the cause papers by the Respondents was on a former company secretary, did NOT disclose the new company secretary and did not exhibit any search certificate from Companies Commission of Malaysia. d. The Appellant also did not disclose the reason why the information on the appointment of a new company secretary was not registered and / or updated to the Companies Commission of Malaysia so the information in the Companies Commission of Malaysia database may be updated. No affidavit was forthcoming from the new company secretary. February 23, 2022 10 [17] In ZULIAHA SELAMAT & ANOR v. MAJLIS AMANAH RAKYAT & ANOR [2021] 1 LNS 857 the High Court explained the position of a public document as follows: [67] Keeping in mind that the Certificate issued by the Director General of Insolvency, YBhg Dato’ Anas bin Ahmad Zakie is within the meaning of “(a) documents forming the acts or records of the acts of (ii) official bodies and tribunals;”, the Certificate is a Public Document. [68] In my view, unless challenged either on the authenticity or the truth of its content, a Public Document will stand against other document that is not supported by the maker of document. Even if challenged, a Public Document would still stand unless proven wrong, the exception being that it is falsified or that the contents are a result of false or erroneous information. [18] There is no challenge in respect of the Companies Commission Search Certificate dated 2 March 2021 nor any averment to deny the same, hence the principles in NG HEE THONG v. PUBLIC BANK BHD [1995] 1 CLJ 609 is applicable, that is to say, “It is a well settled principle governing the evaluation of affidavit evidence that where one party makes a positive assertion upon a material issue, the failure of his opponent to contradict is usually treated as an admission by him of the fact so asserted.”. [19] For the reasons stated above, I rejected the averments of Wong Wai Lean the deponent for the Appellant (Enclosure 3 Page 61) in favour of the Companies Commission Search Certificate that the address “No.25 1st Floor, Jalan Lambak, 86000 Kluang, Johoree” was February 23, 2022 11 indeed the correct and true address of the company secretary of the Appellant at the material time. [20] It follows that the service by Abdul Halim, the process server for the Respondent’s solicitors was properly done and not irregular. ii. Whether Section 7 of the Temporary Measures For Reducing The Impact of Coronavirus Disease 2019 Act 2020 is applicable? [21] It has been submitted by the Learned Counsel for the Appellant that Section 7 of the Temporary Measures For Reducing The Impact of Coronavirus Disease 2019 Act 2020 is applicable. Hence any frustration or failure to perform contractual obligations does not give rise to the other party or parties exercising his or their rights under the contract. [22] I reproduced section 7 for ease of reference- 7 Inability to perform contractual obligation The inability of any party or parties to perform any contractual obligation arising from any of the categories of contracts specified in the Schedule to this Part due to the measures prescribed, made or taken under the Prevention and Control of Infectious Diseases Act 1988 [Act 342] to control or prevent the spread of COVID-19 shall not give rise to the other party or parties exercising his or their rights under the contract. [23] Section 7 is in Part II of the said Act. [24] The Preamble of the said Act reads as follows: February 23, 2022 12 “[Part I - 23 October 2020 (shall continue for a period of two years);

In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object. (emphasis added) February 23, 2022 13 [40] The declared purpose of the Interpretation Acts as manifested in the long title to the Act was for the application, construction, interpretation and operation of written laws. Read in this light, s. 17A underscores Parliament's intention that the interpretation and construction of any written law shall have regard to the underlying purpose or object of the Act. And s. 15 as amended further emphasises the point by stating that the long title and preamble and every schedule shall be construed and have effect as part of the Act. That in our view is the codification of purposive rule of construction, which is not merely confined to the provision of a section of the Act, but also includes the purpose or object manifest in the long title and preamble of the Act. [27] Following SELVA VINAYAGAM SURES (supra), it must be taken that the Preamble of Temporary Measures For Reducing The Impact of Coronavirus Disease 2019 Act 2020 must be read together with section 7 of the same Act. [28] Having said that, the Preamble reads “…Part II, Part III (Limitation Act 1953), Part IV (Sabah Limitation Ordinance), Part V (Sarawak Limitation Ordinance), Part VI (Public Authorities Protection Act 1948), Part IX (Consumer Protection Act 1999), Part X (Distress Act 1951) - 18 March 2020 until 31 December 2020;” meaning that Part II of the Act is only applicable until 31 December 2020. [29] This issue of judgment-in-default started from 2 March 2021, a few months past the application of section 7 of the Temporary Measures For Reducing The Impact of Coronavirus Disease 2019 Act 2020. February 23, 2022 14 [30] As such the Temporary Measures For Reducing The Impact of Coronavirus Disease 2019 Act 2020 in particular section 7, is inapplicable in our current case. iii. Whether the Appellant / Defendant has an arguable case. [31] It was submitted by the Learned Counsel for the Appellant the following: a. The director of the Appellant, Mr Huang Kaihe was then in China and is unable to come to Malaysia due to travel restrictions both in China and Malaysia on account of COVID19. b. There are disputes as to the interpretations of the contract which can only be resolved through a full trial where evidence and documents are adduced and explained. c. Section 7, Temporary Measures For Reducing The Impact of Coronavirus Disease 2019 Act 2020 is applicable [32] It must kept in mind, that if the judgment is regular, then there must be an affidavit of merits, that is, an affidavit stating facts showing a defence on the merits. [BANK BUMIPUTRA (M) BHD v. MAJLIS AMANAH RAKYAT [1979] 1 MLJ 23, 24 FC). [33] Where the judgment is regular, the applicant must show that the defence is not a sham defence but one that is prima facie, raising serious issues as a bona fide reasonable defence that ought to be February 23, 2022 15 tried. [HASIL BUMI PERUMAHAN v. UNITED MALAYAN BANKING [1994] 1 CLJ 328; [1994] 1 MLJ 312, SC]. [34] The burden of showing a strong defence rest upon the applicant who is, in our instant appeal, the appellant. [35] I have dealt the issue of section 7 Temporary Measures For Reducing The Impact of Coronavirus Disease 2019 Act 2020. [36] In this modern world of internet and virtual hearing etc, the issue of entering appearance via e-filing, teleconferencing etc., are at the tip of the fingers of parties. [37] Gone were the days of the bullock carts when a trip from Muar to Melaka may well take a 3-days journey when it could be done within the hour now. [38] As for the information and communication technology, the allegedly former company secretary texted the director of the appellant (a company), Mr Huang Kaihe was then in China via WeChat application. I am sure that the message did not take 3 days to reach parties and there is no averments that Mr Huang Kaihe was in remote areas of China where internet connections may be problematic. [39] I find it strange that people are so apt at using technology for personal and family matters but still prefer oxen carts when it comes to legal matters. February 23, 2022 16 [40] The Courts have move far ahead and it is unbelievably that ancient practices still exist in our midst. Technology is a blessing and so the world must embrace it. But make sure it is used for the sake of justice and the truth and not abuse to inflict injury on others, be it in cash or in kind. [41] I am unable to accept the explanations of the Appellant that COVID19 infections is the cause of every failure and delay in the legal system although it may be true in certain instances like when prison imposed an Enhanced Movement Control Order due to outbreak of COVID19 infections within their compounds. [42] Since the Appellant is bringing up the issue of interpretations of the contract, I must say that such an issue can only be considered once the parties have passed the threshold of showing that they have a valid reason on why appearance could not be entered within time. iv. Whether all the requirements to set aside a Judgment-in-Default has been fulfilled by the Appellant. THE LAW ON SETTING ASIDE A JUDGMENT-IN-DEFAULT [43] The Provisions that deals with setting aside a Judgment-in-Default are as follows: -

(a) Order 42 r. 13 Rules of Court 2012 42 Judgment and orders ..... February 23, 2022 17

Setting aside or varying judgment and orders (O. 42 r. 13) Save as otherwise provided in these Rules, where provisions are made in these Rules for the setting aside or varying of any order or judgment, a party intending to set aside or to vary such order or judgment shall make an application to the Court and serve it on the party who has obtained the order or judgment within thirty days after the receipt of the order or judgment by him.

(b) Order 19 r. 9 Rules of Court 2012 19 Default of pleadings .....

Setting aside judgment (O. 19 r. 9) The Court may, on such terms as it thinks just, set aside or vary any judgment entered in pursuance of this Order.

(c) Order 13 r. 8 Rules of Court 2012 13 Default of appearance to writ .....

Setting aside judgment (O. 13 r. 8) The Court may, on such terms as it thinks just, set aside or vary any judgment entered in pursuance of this Order.

(d) Order 62 R. February 23, 2022 18 62 Service of documents .....

Service on corporation (O. 62 r. 4)

(a) by leaving a copy of it at the registered office (if any) of the corporation;

(b) by sending a copy of it by registered post addressed to the corporation at the office, or, if there are more offices than one at the principal office of the corporation, whether such office is situated within Malaysia or elsewhere;

(c) by handing a copy of it to the secretary or to any director or other officer of the corporation; or

(d) in the case of a foreign company registered under Part XI of the Companies Act 1965 [Act 125] by handing a copy of it to, or sending the same by registered post to, a person authorized to accept service of process on behalf of the foreign company.

When considering such application, first identify whether the judgment-in-default is a regular or irregular judgment. It is well settled that if the judgment is irregular it will be set aside ex debito justitiae.

Default judgment: Where a judgment is entered because of failure of defendant to take any of the procedural steps provided by the Rules -

(a) Default of appearance

(b) Default of defence [44] The court has absolute discretion to set aside the judgment on the application of the defendant. [TETUAN TAN TENG SIAH REALTY SDN BHD v. ISLAND OIL PALM PLANTATIONS SDN BHD & ANOR [1997] 4 CLJ 634]. [45] The principle governing the exercise of discretion is “that unless and until the court has pronounced a judgment upon merits or by consent, it is to have the power to revoke the expression of its coercive powers, where that has been obtained by a failure to follow any of the rules of procedures”. [EVANS v. BARTLAM [1937] AC 473, 480 per Lord Atkin]. February 23, 2022 20 [46] The principles are set out in EVANS v. BARTLAM [1937] AC 437. These are: - a. Unless and until the Court pronounces a Judgment upon the merits or by consent, it is to have the power to revoke the expression of its coercive power where that has been obtained only by a failure to follow any of the rules of procedure; b. The Rules of Court give to the Judge a discretionary power to set aside the default Judgment which is in terms “unconditional” and the Court should not lay down rigid rules which deprive it of jurisdiction; c. The primary consideration is whether the Defendant has a defence to which the Court should pay heed and; d. There is no rigid rule that the Defendant must provide a reasonable explanation for delay in bringing the application but clearly this is a factor to which the Court will have regard in exercising its discretion to set aside a default Judgment. [47] The Principles on the exercise of discretion -

(a) When it is clearly demonstrated to the satisfaction of the court that a judgment has not been regularly obtained, the defendant is entitled to have it set aside ex-debitio justitiae (as a matter of right), irrespective of the merits and without terms; [TETUAN HAJI AHMED ABDUL RAHMAN v. ARAB-MALAYSIAN FINANCE SDN BHD [1996] 1 MLJ 30, FC] February 23, 2022 21

(b) An irregular judgment is one which has been entered otherwise than in strict compliance with the rules or some statute or is entered as a result of some impropriety which is considered to be so serious as to render the proceedings a nullity. [TUAN HAJI AHMED ABDUL RAHMAN v. ARAB-MALAYSIAN FINANCE BHD [1996] 1 CLJ 241; [1996] 1 MLJ 30, 36]

(c) If the judgment is regular, then there must be an affidavit of merits, that is, an affidavit stating facts showing a defence on the merits. [BANK BUMIPUTRA (M) BHD v. MAJLIS AMANAH RAKYAT [1979] 1 MLJ 23, 24 FC]

(d) Where the judgment is regular, the applicant must show that the defence is not a sham defence but one that is prima facie, raising serious issues as a bona fide reasonable defence that ought to be tried. [HASIL BUMI PERUMAHAN v. UNITED MALAYAN BANKING [1994] 1 CLJ 328; [1994] 1 MLJ 312, SC] [48] On the principles of law on Question of delay -

(a) Application to set aside a judgment or an order must be within 30 days after receipt of the judgment. [O. 42 r. 13 Rules of Court 2012]

(b) If there is a delay in making the application, the applicant must give satisfactory explanation for it. Whether the explanation is acceptable or not depends upon the facts and circumstances February 23, 2022 22 of each case. [KHOR CHENG WAH v. SUNGAI WAY LEASING SDN BHD [1997] 1 CLJ 396; [1996] 1 MLJ 223, CA]

(c) A defendant seeking the indulgence of the court to set aside a default judgment should make full, frank, candid and honest disclosure of all the relevant facts. [PUBLIC FINANCE BHD v. LEE BEE RUBBER FACTORY SDN BHD & ORS [1994] 2 CLJ 646; [1994] 1 MLJ 495] [49] In ALPINE BULK TRANSPORT CO INC v. SAUDI EAGLE SHIPPING CO INC [1986] 2 Lloyd's rep 221, the Court concluded that to arrive at a reasoned assessment of the justice of the case the Court must form a provisional view of the probable outcome if the Judgment were to be set aside. [50] In MCCULLOUGH v. BBC [1996] NI 580, Justice Girvan held that the primary consideration was whether a Defendant had merits justifying the matter going to trial. However, he differed slightly from the principles set out in the EVANS v. BARTLAM case in that he saw no “compelling reason why the Court should be required to form a provisional view of the probable outcome if the Judgment were to be set aside” as the exercise would have to be carried out at an early stage on the basis of limited material. CONCLUSION [51] An appellate court will not, generally speaking, intervene and interfere unless the trial court is shown to be plainly wrong in arriving at its conclusion. Matters of finding of facts and legitimate exercise of discretion by the courts of original jurisdiction are often not February 23, 2022 23 interfered with by the appellate courts. (See: WEE LIAN CONSTRUCTION SDN BHD v. INGERSOLL-JATI MALAYSIA SDN BHD [2010] 4 CLJ 203; [2010] 3 MLJ 425, MASTER JAYA ENVIRONMENTAL SDN BHD v. PENTAS FLORA SDN BHD [2020] 2 CLJ 609; [2020] 2 MLJ 117). [52] However, appellate interference is warranted where the trial judge has made a decision which is plainly wrong. A decision is plainly wrong if it is one which no reasonable judge could have reached. [53] The Federal Court in S QUARRY SDN BHD v. DESARU DEVELOPMENT CORPORATION SDN BHD & ORS [2019] 1 LNS 93; [2019] MLJU 99 laid down several instances when decisions are considered to be plainly wrong or perverse. Some of the instances where the trial judge’s decision is perverse, are where he had:-

(i) misdirected itself on the evidence;

(v) made wrong inference from facts;