[2012] 1 LNS 884 Legal Network Series

DALAM MAHKAMAH TINGGI MALAYA

DI PULAU PINANG
[GUAMAN SIVIL NO. 22NCVC-391-2011]

ANTARA

WELFARE PRINTED CIRCUITS BOARD … PLAINTIFF

CO. LTD

DAN

BUMICIRCUIT TECHNOLIGIES (M) SDN … DEFENDANT

BHD (SYARIKAT NO. 566652-K)

GROUNDS OF DECISION
ENCLOSURE 10 AND ENCLOSURE 12

1. Enclosure 10 was an application by the Plaintiff

pursuant to Order 14 Rules of High Court, 1980 (RHC)
for leave to enter final judgment against the Defendant
in the action.

Enclosure 12 was also the Plaintiff’s application but

brought under Order 18 r. 19(b), (c) and (d) of RHC to

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strike out the Defendant’s Counterclaim filed in this

suit.

Since there was an overlap of issues that emerged for

determination under both the applications, Enclosure
10 and Enclosure 12 were disposed together.

Background:

2. The Plaintiff was a company incorporated in Hong

Kong. The Plaintiff’s claim against the Defendant was
that as a customer of the Plaintiff the Defendant owed
the Plaintiff a sum of USD 1,382,745.85 (or the
equivalent sum of RM4,223,320.65 at the exchange
rate of USD 1:RM3.0543) as at 09.06.2011. This sum,
it was alleged was the unpaid price/cost in respect of:-

(a ) printed circuit boards (PCB) sold and

delivered at the Defendant’s order to the
Defendant and/or delivered to the
Defendant’s customers in turn, and

(b) ‘tooling’s’ built (fabricated) to produce the

aforesaid PCB’s for the Defendant.

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3. The Plaintiff pleaded further that 60-day credit terms

had been extended during the course of the
transactions with the Defendant to settle the respective
invoiced amounts and further that monthly statements
and accounts had been regularly rendered to the
Defendant in respect of the goods sold and delivered
to and/or made for the Defendant.

4. The Defendant in their Statement of Defence however

stated that in respect of the aforesaid transactions with
the Plaintiff, the Defendant was a ‘representative’
(wakil) or ‘exclusive agent’ ( agen eksklusif ) of the
Plaintiff to assist the Plaintiff to penetrate the Asian
and European markets for the goods in question.

The Defendant further alleged that there was also an

‘oral agreement’ ( perjanjian oral ) between the parties
whereby, in order to ensure Defendant’s continued
profitability, the Plaintiff had agreed not to increase
without the consent of the Defendant, the price of
PCB’s sold and delivered by the Plaintiff to the
Defendant.

5. The Defendant further complained that the Plaintiff had

unilaterally raised the price of the PCB’s supplied
and/or failed to supply certain of the ordered PCB’s

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and/or such items of the PCB’s which had been

supplied were found to be defective, causing the
Defendant, it was alleged, a total loss of USD
2,188,289.09.

6. The counterclaim of the Defendant was for the said

sum of USD 2,188,289.09 and also for general
d a m a g e s a n d o t h e r d a ma g e s t o b e or d e r e d by t h e
court for the alleged breach of contract or
mi s r e p r e s e n t a t i o n by t h e P l a i n t i f f a n d f o r l o s s o f
goodwill etc. suffered by the Defendant.

Law - Order 14.

7. It was trite that in an Order 14 application, once an

affidavit- in-support had been filed by the plaintiff in
compliance with Order 14 r. 2 RHC verifying the facts
on which the clai m was based and further stating that
in the deponent’s belief that there was no defence to
the clai m, the burden shifted to the defendant to raise
‘triable issues’, if the action was to merit a full trial with
witnesses. (Federal Court in Cempaka Finance
B e r h a d v . H o L a i Y i n g (t r a d i n g a s K H T r a d i n g ) a n d
Anor [2006] 2 MLJ 685; Court of Appeal in Cheng
Heng Ping @ Thian Seow Hock & 5 Ors. v.
I n t r a d a g a n g M e r c h a n t B a n k e r s (M ) B e r h a d [ 1 9 9 5 ] 3

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CLJ 690).

8. In assessing whether the defendant had been able to

show to the satisfaction of the court that one or more
triable issues were existent in the particular
circumst ances of a given case, it was incumbent upon
the court to critically analyse the assertions made in
the respective affidavit s of the parties and look at the
whole situation to decide whether the defence put up
were real or were indeed bona fide.

Thi s r ol e of t he cour t has been ad mi r abl y su mme d up

by VT S i nga m J i n t he case of E nri co Syst ems Sdn
Bhd v. Soon Hi n Hardwar e Sdn B hd [ 2009] 9 C L J 218
i n t he fol l owi ng passage s fr o m t hat j udg ment :

[3] “At this stage it is important to be reminded

that Order 14, of the RHC 1980 or O. 26A
(1) of the SCR 1980 is a summary
judgment procedure and not a summary
trial procedure. (See Ng Hee Thoong &
Anor v. Public Bank Berhad [1995] 1 CLJ
609 CA). In O. 14 applications the Court
must look at the whole situation and ask
itself whether the Defendant has satisfied
the Court that there is a fair or reasonable

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probability of the Defendant having a real

or bona fide defence. Ian Chin J in Wong
Nget Thau & Anor v. Tay Choo Foo [1994]
4 CLJ 617, HC was of the view that in
order to look at the “whole situation”, a
judge must go through the affidavit and
documentary evidence and not do so
“cursorily”. This was because it was trite
law that the affidavit evidence must not be
uncritically accepted.”

and at;

[5] “The general rule is, where a Defendant

shows that he has a fair case to raise a
defence or reasonable grounds for setting
up a defence or even a fair probability that
he has a bona fide defence, he ought to be
given leave to defend. (See Saw v. Hakim
5 TLR 72; Ironglade etc Co. c. Gardner 4
TLR 18). However, this discretion lies
entirely with the judge and the Defendant
must be able to demonstrate facts as might
be deemed sufficient to entitle him to
defend. In Bank Negara Malaysia v. Mohd
Ismail Ali Johor & Ors [1992] 1 CLJ 627;

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[1992] 1 CLJ Rep 14, the Supreme Court

said:

“Under O. 14 when a fact is

asserted by one party and denied
by another, and such denial is
equivocal or lacking in precision or
is inconsistent with undisputed
contemporary documents or other
statement by the same deponent or
is inherently improbable in itself, the
judge has a duty to reject such
assertion or denial, thereby
rendering the issue as not triable.”

and further at;

[10] “The Court will not find a triable issue for

the purpose of granting leave to defend on
the basis of the Defendant's allegation
alone. There must be some evidence to
support the allegation.

An allegation which is equivocal or lacking

in precision or is inconsistent with
undisputed contemporary documents or

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other statement by the same deponent or

is inherently improbable in itself, should be
rejected outright. No triable issued would
arise in these circumstances. (See Bank
of China v. Ngan Chin Wen [2004] 6 C LJ
290 HC).

The law is settled that it is not sufficient for

the Defendant to merely deny the debt but
he must condescend upon any cogent
facts which negative the existence of the
debt or which show that the claim is not
maintainable on other grounds.”

Law - Order 18 r. 19 and Counterclaim

9. What should be the approach to be taken by the court

in a situation as in this instant case, where there was a
concurrent application for leave to enter final judgment
and also an application to strike out the counterclaim
of the Defendant in the same suit?

The approach to be taken in such a case, in my view

was aptly captured in the following passage from the
judgment of Zakaria Yatim J in Ronald Quay Sdn Bhd
v. Maheswary Sdn Bhd [1987] 1 MLJ 322:

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“ It was not dis puted by the par ties that in the

pr es ent cas e s tay of execution pending the tr ial
of the defendant' s counter -claim s hould be
allowed pr ovided that the counter -claim s et out
by the defendant was bona fide and plaus ible .
T he author ities ar e clear on this point. In
Societe des Etains de Bayas T udjuh v. Who
H eng Mining Kongs i [ 1978] 2 M LJ 267,
Abdoolcader J. as he then was , held that wher e
ther e was clear ly no defence to the plaintiff' s
claim , s o that the plaintif f should not be put to
tr ouble and expens e of pr oving it, but the
defendant set up a plausible counterclaim for an
am ount not les s than the plaintiff' s claim , the
or der s hould not be for leave to defend but
should be for judgm ent on the claim with a s tay
of execution until the tr ial of the counter claim .

...

With regard to the question of plausible counter -

claim, it is necessary to ascertain what
constitutes a plausible counterclaim?

...

It is clear that when considering whether the

defendant had pleaded a plausible counterclaim
the test is whether or not it is reasonably
possible for the defendant to succeed if the

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counterclaim is brought to trial. Secondly,

whether the counterclaim is frivolous or not.”

Law- Conflict of Evidence on Affidavit

10. As regards the issue of how to resolve a conflict of

evidence as emerge from the rival affidavits filed, it is
helpful to recall the guidelines set by the judgment of
the Supreme Court in Bank Negara Malaysia v. Mohd.
Ismail and Ors [1992] 1 MLJ 400. That passage
(@p.408) was as in the following terms:

“On the treatment of conflict of evidence on

affidavits, Lord Diplock speaking in the Privy
Council on Eng Mee Yong & Ors v.
Letchumanan had this to say at p.217:

“Although in the normal way it is not

appropriate for a judge to attempt to
resolve conflicts of evidence on
affidavit, this does not mean that he is
bound to accept uncritically, as raising
a dispute of fact which calls for further
investigation, every statement on an
affidavit however equivocal, lacking in
precision, inconsistent with undisputed

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contemporary documents or other

statements by the s am e deponent, or
i n h e r e n t l y i m pr o b a b l e i n i t s e l f i t m a y
be”

Although L or d D iplock was dealing with an

application for r em oval of caveat in that
par ticular cas e, we ar e of the view that the
above pr inciple of law is r elevant and
applicable in all cas es wher e a judge has to
decide a cas e or matter on affidavit evidence.

Under an Order 14 application, the duty of a

judge does not end as soon as a fact is
as s e r t e d b y o n e p ar t y , a n d d e n i e d o r d i s p u t e d
by the other in an affidavit. Wh e r e such
as s e r t i o n , d e n i a l or d i s p u t e i s e q u i v o c a l o r
lacking in precision or is inconsistent with
u n d i s p u t e d c o n t e m p o r a r y d o c u m e n t s or o t h e r
statements by the s am e deponent, or is
inherently improbable in itself then the judge
h as a d u t y t o r e j e c t s u c h a s s e r t i o n o r d e n i a l ,
thereby rendering the issue not triable. In our
o p i n i o n , u n l e s s t h i s pr i n c i p l e i s a d h e r e d t o , a
judge is in no position to exercise his discretion
judicially in an Order 14 application. Thus,

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apar t fr om identi fying the is s ues of fact or law,

the cour t mus t go one s tep fur ther and
deter m ine whether they ar e tr iable.”

11. Sentiment s in si milar vein was expressed by Vincent

Ng J (as he then was) in Suppuletchimi a/p Karapaya
v. Palmco Bina Sdn Bhd [1994] 2 C LJ 561 where in an
almost simil ar circumstanced case as this instant
action, His Lordship observed as follows:

“ I r ecognis e that a tr ial on affidavi ts would be

clearly wrong ..... But in applications under
O . 18 r . 19 or O . 14, it is s till incum bent upon
the Cour t to deter m ine whether is s ues could
appr opr iately have been decided, without
expens es of a full tr ial with witnes s es and
expenditur e of the Cour ts ' invaluable tim e. No
par ty in a pr oceeding in entitled to r equir e the
Cour t to accor d them valuable tim e of s ever al
days open Cour t viva voce tr ial only upon m er e
or bar e as s er tions in their affidavits . T hough
ne vertheless it is essential that affidavits in such
applications filed should be confined to matters
pleaded and not go beyond pr im a facie
evidence of such matter s pleaded.

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The crucial question the Court would have to

ask itself in applications under O. 14 or O. 18 r. 19
(1) (a) to (d) is:

firstly, whether the piece or pieces of

evidence essential to make out a
r e as o n a b l e p r i m a f a c i e c a u s e o f a c t i o n
or a p r i m a f a c i e t r i a b l e i s s u e o f f a c t a r e
of the nature such that they are
adducible by affidavit evidence; and

secondly - if answer to this question is in

the positive - whether such essential
pr i m a facie evidence had been so
adduced in the supporting affidavits.

Such affidavits ought not to contain bar e

aver m ents but m us t condes cend or com e
definitel y into par ticular s for s er ious ar gum ent
such that they ar e s ufficient to s atis fy the Cour t
that ther e is a r eas onable pr im a facie caus e of
action or a tr iable is s ue or is s ues of fact or law
in the defence as the cas e m ay be.

In ess ence, pr im a facie evidence which ar e

capable of being adduced by affidavi t evidence

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ought to be so adduced even in summary

proceedings”

12. The pr i nci pl es of l aw dr awn fr o m t he above j udi ci al

pr onounce ment s cl ear l y r equir ed of t he cour t i n a
det er mi nat i on of whet her t her e was a ' t ri abl e i ssue '
and/ or 'pl ausi bl e count ercl ai m ' as t he case may be,
especi al l y wher e t her e ar ose a confl i ct of evi dence on
affi davi t s fi l ed, not t o j ust accept uncr it i cal l y ever y
st at ement of ‘ fact ’ asser t ed by one or ot her of t he
part i es on oat h in t he affi davi t s. Any of such
asser t i ons coul d st i l l be r ej ect ed by the cour t and an
i ssue found not tr i abl e or a cause of act i on ( i n a
count er cl ai m) not pl ausi bl e, part i cul ar l y i f it was
equivocal or lacking in precision or not supported by or
inconsistent to contemporaneous documents or so
inherently improbable in all the circumstances of the
matter.

Issues - Enclosure 10 and Enclosure 12.

13. The issues that were raised by the Defendant in

opposition to dissuade the court from allowing
Enclosures 10 and 12, were broadly threefold. They
were:-

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(a) The ‘special status’ contention of the

Defendant, namely that the Defendant was not
a me r e c u s t o m e r o r p ur c h a s e r o f t h e P l a i n t i f f
b u t a ‘ p a r t n e r ’ o r ‘ a g e n t ’ o f t h e Pl a i n t i f f i n t h e
s u b j e c t t r a n s a c t i o n s b e t w e e n t h e m;

( b) The allegation that t h er e was an 'oral

a g r e e m e n t ' t h a t pr e v e n t e d t h e P l a i n t i f f f r o m
i n cr e a s i n g t h e p r i c e o f t h e P C B s s o l d a n d
delivered to the Defendant save only with the
c o n s e n t o f t h e D e f e n d a n t a n d t h e Pl a i n t i f f h a d
br e a c h e d t h e s a me ; a n d

(c) The quantum of the Plaintiff’s claim were not

correct as there were certain o mi s s i o n s in
accounting and/or that ‘losses’ alleged to have
been suffered by the Defendant and stated to
b e a t t r i b u t a b l e t o t h e Pl a i n t i f f ’ s d e f a u l t ( t h a t i s ,
t h e b a s i s o f t h e D e f e n d a n t s c o u n t e r c l a i m) h a d
not been taken into account.

Courts Evaluation

Was the Defendant a ‘partner’ (‘agent’ or ‘representative’) of

the Plaintiff as claimed by the Defendant or was the Defendant
a mere ‘purchaser’s or ‘customer’ of the Plaintiff?

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14. That t her e wer e t r ansact i ons bet ween the par t i es for
some t i me i nvol vi ng PCBs pr oduced/ manufa ct ur ed by
t he P l ai nt i ff and del i ver ed t o t he Defendant (or
Defendant ’ s cust o mer s) on t he Defendant ’ s or der s,
was an undi sput ed fact . Save for t he bar e asser t i ons,
as I found t he m t o be, i n t he pl eadi ngs and affi davi t s
fi l ed by t he Defendant , ther e was no docu ment ar y
evi dence adduced by t he Defendant , mu ch l ess any
cr edi bl e cont e mpor aneous mat er i al , whi ch woul d even
r emot el y suggest that the rel at i onshi p bet ween t he
part i es or t he tr ansact i ons that had t aken pl ace was
pr e mi s ed on so me ot her foundat i on ot her than t hat of
an or di nary sel l er - buyer ( suppl i er - cust o mer ) of goods
basi s as in t he nor mal cour se of busi ness tr ansact i ons
of t hi s nat ur e.

15. It need to be highlighted here as well, that such a

supposed status as clai med by the Defendant was not
an issue raised by the Defendant themselves in their
own Solicitor’s response (Messrs Phee Chen and Ung)
of 04.07.2011 to the letter of demand (21.04.2011)
issued by the Plaintiff’s Solicitors. (See: Exhibit OKT.2
of Defendant’s affidavit - Enclosure 13). It only
surfaced in the pleadings filed by the Defendant. If at
all such a claim of special status was true, it was
inconceivable why such a material aspect or 'colour' to

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the alleged relationship was omitted (even for record

purposes only) in that response of 04.07.2011 at least.
To the contrary, the contents of the Defendant’s
Solicitors’ letter of 04.07.2011 lent credence to the
Plaintiff’s position that there was no special
relationship between the parties, save that of a
commercial transaction between a seller-buyer per se
(supplier- customer). The contents of that Defendant’s
Solicitor’s letter raised alleged issues as to non -
delivery, defective or rejected goods and unadjusted
‘debit notes’ in the statement of accounts, all of which
documentation or incidents are usually found in an
ordinary sale of goods transaction. If the relationship
was superimposed with any other condition or
privileges as between the parties as alleged, it would
have been natural for the Defendant to ma k e
r e f e r e n c e t o s u c h ‘ o v e r r i d i n g ’ c o n s i d e r a t i o n s i n s o me
e a r l i er c o r r e s p o n d e n c e or d o c u m e n t . G l ar i n g l y , t h er e
was none whatsoever produced here by the
Defendant.

16. The Plaintiff’s affidavit-in-support (in 3 volumes)

exhibited, on the other hand, copies of relevant
Purchase Orders and Delivery Order issued by the
Defendant and of invoices raised by the Plaintiff in
turn, which were also clearly representative of the

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normal commercial documents employed in ordinary

‘buying-selling’ transaction.

17. I was satisfied with the Plaintiff’s explanation that the

Defendant’s logo printed on the PCB’s were at the
behest of the Defendant and the inclusion of the
Defendant as a multiple- listee for certification
purposes were purely to assist the Defendant in the
PCBs being accepted by the Defendant’s customer. It
was not uncommon that goods produced or
manufactured by say, ‘X’ for ‘Y’, are often at the
request of ‘Y’, marked or packaged as directed by ‘Y’
f o r ma r k e t i n g p ur p o s e s . S u c h s p e c i a l r e q u i r e me n t s
di d not i n any way det r act fr om t he fact t hat t he
tr ansact i on was fundament al l y a buy er- sel l er
arr ange ment bet ween ‘ X’ and ‘ Y’ .

The visit of the Defendant’s personnel to China

(arranged for by the Plaintiff) did not impress me as a
determinant factor in any event either to indicate that
the relationship and/or the nature of the transactions
b e t w e e n t h e P l a i n t i f f a n d t h e D e f e n d a n t w a s o t h er
t h a n t h a t o f a n or d i n a r y ‘ s e l l e r - b u y e r ’ ( s u p p l i er -
customer).

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18. I had no hesitation therefore to hold on the material

placed before the court that the Defendant’s attempt to
give itself a special status was wholly baseless and
incredulous. It appeared to have been conjectured up
merely to put a spanner into the wheels of due process
taking its course in this action.

Was there any essential piece of evidence pointing to an oral

agreement or arrangement whereby the Plaintiff was obligated
not to vary or increase the price of the PCB’s without the
Defendant’s consent and/or that the Plaintiff was to sell the
PCB’s exclusively to the Defendant.

19. The allegation by the Defendant that the Plaintiff had

failed to “...adhere to agreed price and unilaterally
inflate their price....” was for the first time, as it would
appear, raised in the Defendants Solicitor’s response
of 04.07.2011 (Enclosure 13-Exhibit OKT 2) to the
Plaintiff’s Solicitor’ letter of demand of
21.04.2011(Enclosure 11-Exhibit SKM 6).

However it was pertinent to also note that a ‘Price

Adjustment Announcement’ had been issued by the
Plaintiff to the Defendant dated 30.12.2010 (included
within Defendant’s own Affidavit, Enclosure 13-Exhibit
OKT 3) . No di sput e was shown t o have been t aken by

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the Defendant to this notice issued by the Plaintiff to

the effect that there would be increase to the price of
PCB items. Further the other documents before the
court clearly evidenced that business transaction
between the parties was ongoing and carried on
thereafter till at about middle of April 2011.(See
Enclosure 11-Exhibit SKM 4), surely on the basis of
the increased price, without protest.

20. On 09.03.2011 by an email sent by one Caryn Khew of

the Defendant, it was acknowledged that that the
Defendant had not settled the overdue sums/payments
due to the Plaintiff for the deliveries in the months of
November and December 2010. What however was
most significant and telling against the Defendant’s
contention was that even on 09.03.2011 no issue or
reservation was registered by the Defendant that the
Plaintiff was not entitled to increase the price of the
P CB i t ems. (S ee: E ncl osur e 11 - Exhi bi t SKM - 8
wher e t he Defendant expr essl y hel d out t hat a sum of
' USD 350K ' as par t set t l e ment for November and
December 2010 pay ment s woul d be t r ansfer r ed t o the
P l ai nti ff on 24.03.2011) . ( M ore on thi s unqual i f i ed
acknowl edgement of debt by t he Def endant l at er i n
t hese Grounds. )

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21. It was inherently i mprobable that the Plaintiff would

have agreed to such a restraint either given the fact
that in ordinary course of affairs there was bound to be
increases in cost of raw mat erial and exchange rate
fluctuations over the course of time. The Defendant
was merely relying on an assertion made in the
Defendant’s Solicitor’s response of 04.07.2011 to the
notice of demand for pay ment by the Plaintiff’s
Solicitor (21.04.2011), which it must be stressed was
seven months after the notice to increase price issued
by the Plaintiff (30.12.2010) was admittedly received
by the Defendant.

There was no documentary evidence or any

contemporaneous correspondence or material,
produced by the Defendant to support the Defendant’s
clai m, even on a prima facie basis, that there was such
an arrangement as regards fixed-pricing and/or
exclusive rights as purchaser of the PCB’s produced
by the Plaintiff. There was no particulars provided by
the Defendant too as to when the alleged ‘oral
agreement’ was made and/or the individuals involved
in setting those terms on behalf of the parties.

22. In my assessment the mere allegation raised in

response to the notice of a demand to pay, coupled

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wi t h t he l ack of any shr ed of cr edi bl e evi dence as

afor esai d t o suppor t t hat cl ai m, amount ed t o only a
‘bar e asser t i on’ by t he Defendant as t o t he exi st ence
of such an agr eement . I had t her efor e no cause t o
bel i eve t he Defendant ’ s st or y. On t he ot her hand I had
mor e r easons t o accept t he Pl ai nt i ff’ s posi t i on t hat
t her e was no such ‘ agr eed’ or ‘ fi xed’ pr i ce
arr ange ment or of any excl usi ve r i ght s gr ant ed t o t he
Defendant .

On this second broad issue too, it was my conclusion,

that the Defendant had failed to show that there was a
‘triable issue’ or for that matter, a reasonable cause of
action to sustain the Defendant’s counterclai m, to
merit a full trial to be ordered.

Was the quantum of the Plaintiff’s claim not correct such that it
constituted a prima facie triable issue (Order 14)? Has the
Defendant shown some essential evidence to support a
reasonable cause of action to sustain the Defendant’s
counterclaim in this action(Order 18 r. 19)?

23. What had transpired between the parties in respect of

the monies owed by the Defendant to the Plaintiff,
need to be put in perspective of the sequence of
unfolding events.

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In Enclosure 11, the affidavit in support filed by the

Plaintiff (in respect of the Plaintiff’s Enclosure 10 and
Enclosure 12 applications) at Exhibit SKM-8, the
Plaintiff exhibited various emails passing between
relevant officers of the parties between the 04.03.2011
and 15.04.2011 on the subject of overdue payments to
the Plaintiff from the Defendant, that is the amount s
that had exceed the sixty day credit period granted to
the Defendant.

T h e e x i s t e n c e s o f t h e s e e m a i l s or i t s c o n t e n t s w e r e
n o t d i s p u t e d a t a l l by t h e D e f e n d a n t .

24. What was manifestly clear was that the Defendant,

without any express reservation, had also
acknowledged that payments for November and
D e c e mb e r 2 0 1 0 d e l i v er i e s h a d n o t b e e n e f f e c t e d t o
the Plaintiff. The email of 09.03.2011 from the
Defendant’s Caryn Khew, stated that a sum of ‘USD
350K’ as part settlement for November and December
2010 overdue sums would be effected by a transfer of
funds to the Plaintiff on (or by) 24.03.2011. This email
communication from the Defendant was an admission
that the Defendant owed the Plaintiff monies on
account as much as an undertaking as well to pay part
of the overdue sums by a specific date.

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There was no dispute that no such transfer of funds

took place or was effected by the Defendant as
undertaken.

25. On 21.04.2011, the Plaintiff though their Solicitors then

issued a notice of demand for settlement of the sum of
USD 786,840.32 then outstanding and owing by the
Defendant. About two months later on 04.07.2011 (as
alluded to earlier) the Defendant responded though
their Solicitors and raised various issues and set forth
a claim against the Plaintiff for USD 2,188,829.09.

The Defendant’s claims, now raised, it must be

highlighted for the first time ever, were detailed as
follows:-

(a) A sum of USD1,723,500.00 for loss suffered as

a result of pr i c e increase i mp o s e d by the
P l a i n t i f f w i t h o ut t h e D e f e n d a n t ’ s c o n s e n t .

(b) A sum of USD 182,000.00 for loss caused by

the alleged non-delivery of products:-

FT - 1897-2-3

FT - 1902-2-2

SY - 1816-1-3

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(c) A sum of USD 61,477.75 for l oss ar i si ng fr o m

‘qual i t y’ i ssue ( defect i ve) i n r espect of
pr oduct s: -

TP - 1853-4-4

SY - 1818-1-3

TP - 1812-2-2

JT - 2397-1-2

CTM - 2188-4-1

(d) A sum of USD 217,881.00 for PCB and PCBA

supplies purportedly rejected by Defendant’s
customers.

(e) That cer t ai n debi t not es amount i ng i n t ot al t o

US D 3,970.34 had not be adj ust ed i n t he
account s by t he Pl ai nti ff.

The aforesaid issues raised in defence to the Plaintiff’s

demand for payment, also formed the very foundation
or basis of the Defendant’s counterclaim brought
against the Plaintiff in this action.

26. Earlier in these grounds of decision I had in detail dealt

with the Defendant’s contention vis a vis that there
was an ‘oral agreement’ which bound the Plaintiff not
to increase the price of the PCBs sold and delivered

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by the Plaintiff save with approval of the Defendant. I

had for reasons stated there rejected outright any
credibility to such a unsupported contention of the
Defendant.

Following from that the Defendant definitely did not

have any ground to contend that they were entitled to
be compensated by the Plaintiff for any loss if indeed it
was suffered or for the sum of USD1,723,500.00
claimed. In any event, there were no supporting
documents like quotations, invoices or receipts
produced to back-up the claim. Neither was there any
explanation offered as to how the said sum was
derived.

27. As regards the Defendant’s allegation of non-delivery

of FT-1897-2-3, FT 1902-2-2 and SY-1816-1-3, the
Plaintiff had by reference to emails in Exhibit SKM-8,
(Enclosure 11) and Exhibit SKM-10 (Enclosure 14)
explained that the first two items had been collected
back by the Plaintiff on the request of the Defendant
and subsequently had been repacked with SY-1816-1-
3 for redelivery to Defendant’s warehouse on
15.04.2011. However redelivery had to be suspended
because the Defendant had failed to meet it
undertaking to make part payment of the outstanding

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Nove mber and Dece mb er 2010 pay ment by

24.03.2011.

In any event, here too there was no supporting

material, save the bare clai m, to support the so- called
loss of USD182,000.00 clai med to have been suffered
by the Defendant. If at all such a loss had indeed
arisen, the Defendant would have had in its custody
relevant purchase orders or debit notes passing
between the Defendant and such of the Defendant’s
customers affected by the non-delivery or if the PCBs
were for the Defendant use, proof of alternate sourcing
and relevant invoicing. The Defendant failed to
condescend with particulars which was necessary in
my view to even believe that the Defendant had a
chance to further this item of clai m.

28. The third item of ‘triable issue’ to the Plaintiff’s claim

or the plausible basis for the Defendant’s counterclaim
to go for full trial, put forward by the Defendant related
to ‘quality’ complaint in respect of five specified
product and purported loss claimed was for USD
61,477.75. The Plaintiff response was that this area of
compl ai nt was cl earl y an aft er t hought , as no such
i ssue had been r ai sed in any of t he e mai l
corr espondence bet ween t he par ti es dur i ng t he cr i t i cal

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period (between 09.03.2011 and 15.04.2011; See

Exhibit SKM-8 in Enclosure 11) or before the Plaintiff’s
Solicitor’s letter of demand of 21.04.2011 was sent to
the Defendant.

These clai ms as it appeared were also related to

products delivered by the Plaintiff much earlier than
the 09.03.2011 when there was that unreserved
acknowledgment by the Defendant to pay the Plaintiff
as earlier comment ed upon. The alleged rework
charges in respect of SY-1816-1-3 it was shown by the
Plaintiff allegedly occurred in April 2010 but was never
raised before by the Defendant. ‘Corrective action’
taken by the Plaintiff in two cases was also admitted
by the Defendant themselves, that is in the cases of JT-
2397-2-1 and JT -2397-1-2 (See Exhibit OKT-6 in
Enclosure 14). The issue in respect of TP-1813-2-2
was also resolved in April 2010 as conceded by the
Defendant (See Exhibit OKT-10- Enclosure 14). In
respect of CTM-2188-4-1, it was the Plaintiff’s
explanation that the last shipment of the product was
made way back in July 2010 and further, the Plaintiff
had never r ecei ved the phot ogr aph exhi bi t ed as
Exhi bi t OKT- 12 i n E ncl osur e 13.

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29. S o mewhat concedi ng t hat t hese cl ai ms had been

r ai sed l at e and only aft er t he Pl ai nt i ff had t hr ough
S ol i ci t or s made on 21.04.2011 a de mand for pay ment
of t he out st andi ng sum owi ng, t he Defendant i n
E ncl osur e 15 ( Defendant ’ s 2 n d Affi davi t ) cont ended
t hat i t was not l at e t o mak e such a demand.

In any event, notwithstanding the conceded fact that

some alleged defects had been corrected and rectified
by the Plaintiff, the Defendant still failed to show any
precise calculation as to how the claimed ‘loss’ of USD
61,477.75 was derived.

30. As regards the PCB and PCBA supplies allegedly

rejected by the Defendant’s customer and in respect of
which the Defendant claims it suffered loss of USD
217,881.00, there was no details produced by the
Defendant as to which product models were rejected,
when and the reasons for the rejections or how the
alleged quantum of loss arose.

Documents related to such rejection, like debit notes

issued by the Defendant’s customer or relevant
corr espondence on t he subj ect ( bet ween Defendant
and its customers), would in ordinary course, if that
allegation was true, be readily available with the

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Defendant . No such suppor t i ng mat er i al was shown or

i ntr oduced by the Defendant . In t he absence of any
such supporting material, one had no alternative but to
concl ude t hat t he Defendant pur port ed cl ai m under
t hi s head was wi t hout any basi s and fr i vol ous.

31. Now in respect of the Defendant’s claim that certain

Debit Notes (totaling USD 3,970.34) issued by the
Defendant to the Plaintiff had not been taken into
account and the alleged outstanding sum owed by the
Defendant was therefore not correct, it was firstly
pointed out by the Plaintiff that Debit Note No. BC DN -
0 2 1 1 d a t e d 1 7 . 0 3 . 2 0 1 1 ( U S D 2 , 5 6 7 . 7 0) h a d b e e n
taken into account and secondly, that in respect of
other Debit Notes (Exhibit OKT-13. Enclosure 13), the
P l a i n t i f f h a d n o t r e c e i v e d t h e m.

The fact that these debit notes were not sent to the
Plaintiff was (when challenged by Plaintiff) admitted by
the Defendant at paragraph 2 of the Defendant 2 n d
Affidavit (Enclosure 15). Three of the other four Debit
Notes that featured here and admitted as having not
been sent to the Plaintiff were dated in February 2011
and the remaining one was dated 21.03.2011.

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If the four Debit Notes were indeed in existence at the

alleged dates, there was no reason why they were not
referred by the Defendant in email communications
with the Plaintiff, which continued until 15.04.2011.
Considering all the aforesaid circumstances, there was
sufficient reason to conclude that all the Defendant’s
allegations related to the unaccounted Debit Notes
were indeed an ‘afterthought’ as strongly suggested by
the Plaintiff’s Counsel.

32. Late in the day, so to speak, the Defendant raised

another issue, namely that there was a discrepancy
between the sum stated to be owing by the Defendant
as set out in the Letter of Demand (21.04.2011) and
the sum set out in the Statement of Claim as due and
payable to the Plaintiff on 09.06.2011. It was also
pointed out that the amount in the Statement of Claim
was the same figure as shown as outstanding on
29.03.2011 in Lampiran/Enclosure A to the Statement
of Claim.

33. The Counsel for the Plaintiff explained that the amount
claimed in the Letter of Demand, namely USD
786,840.32 was without inclusion of sums due which
was still within the '60 day credit' period.
Subsequently when the final accounts were drawn up

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these were taken into consideration and the total

amount due and owing as at 29.03.2011was
USD1,382,745.85. In the Statement of Claim, that same
figure was adopted as being due on 09.06.2011; the
Writ was filed on10.06.2011.

I found the Plaintiff’s explanation to be reasonable and

acceptable. In any event, by itself such a discrepancy,
if at all, did not merit a full trial, particularly considering
t hat t he Defendant havi ng not so mu ch as di sput ed
t hat moni e s wer e i ndeed owed t o t he Pl ai nti ff, di d not
have on affi davi t what i n t he Defendant ’ s cal cul at i on
was t he pr oper su m owi ng (i f at al l ) .

34. The di scussi ons above on t he var i ous i ssues ( i n

respect of the accuracy of the amount clai med by the
Plaintiff), which the Defendant contended constituted
‘triable issues’ (to have the suit fully litigated) and/or
amounted to ‘reasonable cause of action’ (to sustain
the counterclaim of the Defendant), most definitely
bore out the fact that, firstly , there were no prima facie
or some cogent evidence that would support the
Defendant positions advanced. The claims for the so
called ‘losses’ supposedly incurred by the Defendant
lacked details and precision in any event. Secondly,
matters related to those issues were to a large

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measure effectively explained or rebutted by the

Plaintiff.

35. The Table set out at paragraph 3A of the Statement of

Defence and Counterclaim, and repeated at paragraph
30 of Enclosure 13 (Defendants 1 s t Affidavit) and also
elsewhere including in the submissions of Counsel for
the Defendant, unsupported as it was with any
elementary evidential basis to progress those claims,
did not amount to anything more than ‘bare assertions’
by the Defendant, in my assessment.

36. Counsel for the Defendant sought to convince me that

as the Defendant’s counterclaim was for a ‘large’ sum,
that fact by itself should merit a full trial of both the
claim and counterclaim by examination of witness.
This, he submitted, was a ‘legitimate expectation’ of
the Defendant. I considered this line of submission to
be mi sconceived and a desperate and unmeritorious
one at that, when there was nothing before the court in
the first place, other than the ‘bare assertions’ by the
Defendant.

37. T her e was no deny i ng the fact t hat al l i ssue s

canvassed by t he Defendant as ent i t l i ng the Defendant
to the benefit of a full trial in the matter, were all

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without exception raised only after the Notice of

Demand of 21.04.2011 to the Defendant for settlement
of the outstanding sums was issued by the Plaintiff’s
Solicitors. They were not raised prior to that and
accordingly the ‘bona fide’ of the Defendant’s defence
to the claim and/or the underlying basis of the
counterclaim were seriously suspect or questionable.

38. Ther e was not hi ng befor e me t hat i ndi cat ed t hat it was
r easonably possi bl e for t he Defendant t o succeed i f
t he count er cl ai m was br ought t o t r i al . I was t her efor e
sat i sfi ed t hat t he count er cl ai m pr esent ed by t he
Defendant was i nt ended pr i mar i l y t o fr ust r at e or del ay
t he P l ai nt i ff fr om r ecover i ng t he moni e s due and
pay abl e by t he Defendant to t he Pl ai nt i ff. T he
counterclaim was in other words plainly and obviously
unsustainable.

A priori , there was no triable issue as well and the

Plaintiff was entitled to sign final judgment against the
Defendant on the claim in the action.

Conclusion

39. I was always conscious that in dealing with the two

applications of the Plaintiff, I should not embark upon a

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trial on affidavits. I however found here that this was a

case where the straightforward issues raised in the
applications could appropriately be decided without the
need of a full trial. It is settled law that in dealing with
applications of the nature found here, the court was
required not to accept uncritically all assertions in the
affidavits filed even though they were sworn as to the
truth of them. It was in that context that the above
analyses of the rival assertions were undertaken by
me.

As discussed above, the first two broad categories of

objection raised by the Defendant (special partner-
status of Defendant in the transactions, fixed price for
PCBs supplied by Plaintiff) were bare assertions
without an iota of prima facie evidence to support
such claims by the Defendant. The ‘discrepancies’ in the
accounts argued by the Defendant to entitle them to
full trial both on the claim and the counterclaim, on a
critical analysis of the material on affidavit-evidence
before the court, was found to be also essentially ‘bare
assertions’ or had been effectively explained or
rebutted, thus making them non-issues.

40. This was apart from the fact that all those supposed
‘triable’ issues were only raised after the Plaintiff’s

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Solicitor’s Letter of Demand (21.04.2011) and against

the backdrop of an express and unreserved
acknowledgment of debt and a commit ment to make
part pay ment given by the email of 09,03,2011 from
the Defendant.

41. In the result, considering the whole situation or the

totality of the case, I found this to be proper case to
allow both the applications of the Plaintiff. No useful
purpose would have been served in the circumstances
to order a full trial of the clai m and/or counterclaim,
save that it would only have delayed judgment being
ent er ed agai nst t he Defendant and consequent
recovery of the sums rightfully owed by the Defendant
to the Plaintiff.

Accordingly, I made the following orders:

-Enclosure 12 be allowed and the Counterclaim of the

Defendant struck out;

-Enclosure 10 be allowed and leave be granted to the

Plaintiff to enter final judgment against the Defendant
as prayed.

42. Judgment was entered for the Plaintiff for:

(a) RM4,223,320.65;

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(b) Int er est on t he sai d su m at 4% per annu m as

fr om 10.06.2011 unt i l ful l set t l e ment ;

(c) One set of costs for Enclosures 10 & 12 and the

action. The Defendant to pay Plaintiff fixed
cost of RM3000.00.

Date: 19 April 2012

(VARGHESE GEORGE VARUGHESE)

Judge
High Court of Malaya @ Penang

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COUNSEL:

For the plaintiff - Choo Kian Ming; T/n See, Ramsun & Tan
Advocates and Solicitors
8 Tavoy Road
10050 Penang

For the defendant - Lok Man Shung; M/s Khoo Chye Beng &
Associates
368-3-11, Bellisa Row,
Burmah Road
10350 Penang

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