SHAOXING COUNTY BAIMEI TRADE CO. LTD KHALEEG MARKETING SDN BHD

WA-22NCC-378-08/2020 Kand. 85 25/01/2023 15:54:46 IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR (COMMERCIAL DIVISION) CIVIL SUIT NO. WA-22NCC-378-08/2020 BETWEEN SHAOXING COUNTY BAIMEI TRADE CO LTD (Company No. 9133062167163) … PLAINTIFF AND KHALEEG MARKETING SDN BHD (Company No. 199901001026 (475926)) … DEFENDANT JUDGMENT A. Introduction [1] This is a claim for goods sold and delivered. The claim is premised on an outstanding amount of USD384,981.50 (“Outstanding Amount”), set out in a statement of account dated 18 June 2019 issued by the plaintiff to the defendant (“Statement of Account”). [2] At the close of the plaintiff’s case, the defendant elected not to give evidence and made a submission of no case to answer. After considering the plaintiff’s evidence, I am satisfied that the plaintiff has proven on a balance of probabilities that an ongoing contractual 1 S/N //bmIquaY08Z7XPkSro8w **Note : Serial number will be used to verify the originality of this document via eFILING portal relationship existed between the plaintiff and the defendant, that a running account was kept between the parties and that the Outstanding Amount is due and owing by the defendant to the plaintiff. I therefore allowed the plaintiff’s claim, with costs. B. Background Facts [3] The plaintiff sold and delivered fabrics and garments (“Goods”) to the defendant. The plaintiff claimed it maintained a running account that recorded the quantity of the Goods delivered to the defendant, together with their prices. It also recorded payments made by the defendant. Statements of account were issued to the defendant on a regular basis. [4] The plaintiff’s claim is premised on the Outstanding Amount set out in the Statement of Account. The plaintiff claimed the defendant signed the Statement of Account and acknowledged the Outstanding Amount. [5] The plaintiff filed this claim, seeking the Outstanding Amount, together with costs on a solicitor-client basis. C. Assessment And Findings The Defendant’s Election Of No Case To Answer [6] In the course of trial and at the close of the plaintiff’s case, the defendant elected not to give evidence and made a submission of no case 2 S/N //bmIquaY08Z7XPkSro8w **Note : Serial number will be used to verify the originality of this document via eFILING portal to answer. The defendant submitted that the plaintiff had failed to prove its case, due to the following: a. The plaintiff had not provided evidence that it is a company formed in China, with operations in China. b. An entity with the name AR Bright Trading & Resources (“AR Bright”) was identified as a buyer in invoices issued to the defendant. However, the plaintiff did not plead that it had received instructions from the defendant for the supply and delivery of the Goods to be made to AR Bright. c. The plaintiff had failed to prove the existence of a running account between the plaintiff and the defendant. [7] On an election of no case to answer by a defendant, the testimony of the plaintiff’s witness must be presumed to be true. An adverse inference must also be drawn against the defendant for failing to offer any evidence to rebut the plaintiff’s evidence. This was explained by the Federal Court in Takako Sakao (f) v Ng Pek Yuen (f) & Anor [2009] 6 MLJ 751: “[3] … The appellant took the witness stand and gave her evidence on the terms of the arrangement and about the sums of money she had provided and the purpose for which they were provided. No evidence was called on the part of the first respondent to refute the appellant's testimony. Such an important omission was missed by both courts below. 3 S/N //bmIquaY08Z7XPkSro8w **Note : Serial number will be used to verify the originality of this document via eFILING portal [4] In our judgment, two consequences inevitably followed when the first respondent who was fully conversant with the facts studiously refrained from giving evidence. In the first place, the evidence given by the appellant ought to have been presumed to be true. As Elphinstone CJ said in Wasakah Singh v Bachan Singh (1931) 1 MC 125 at p 128: If the party on whom the burden of proof lies gives or calls evidence which, if it is believed, is sufficient to prove his case, then the judge is bound to call upon the other party, and has no power to hold that the first party has failed to prove his case merely because the judge does not believe his evidence. At this stage, the truth or falsity of the evidence is immaterial. For the purpose of testing whether there is a case to answer, all the evidence given must be presumed to be true. Now, what the trial judge did in the present case is precisely what he ought not to have done. He expressed dissatisfaction with the appellant's evidence without asking himself that most vital question: does the first defendant/respondent have a case to answer? This failure on the part of the trial judge is a serious non- direction amounting to a misdirection which occasioned a miscarriage of justice. The trial judge was at that stage not concerned with his belief of the appellant's evidence. She had given her explanation as to the discrepancies in the figures. And her evidence does not appear to be either inherently incredible or inherently improbable. In these circumstances it was the duty of 4 S/N //bmIquaY08Z7XPkSro8w **Note : Serial number will be used to verify the originality of this document via eFILING portal the judge to have accepted her evidence as true in the absence of any evidence from the first respondent going the other way. He however failed to direct himself in this fashion thereby occasioning a serious miscarriage of justice. [5] The second consequence is that the court ought to have drawn an adverse inference against the first respondent on the amount of the appellant's contribution to the purchase price as well as the existence and the terms of the mutual understanding or agreement that she had with the first respondent. Where, as here, the first respondent being a party to the action provides no reasons as to why she did not care to give evidence the court will normally draw an adverse inference. See Guthrie Sdn Bhd v Trans-Malaysian Leasing Corp Bhd [1991] 1 MLJ 33. See also Jaafar bin Shaari & Anor (suing as Administrators of the Estate of Shofiah bte Ahmad, deceased) v Tan Lip Eng & Anor [1997] 3 MLJ 693 where Peh Swee Chin FCJ said: 'The respondents had chosen to close the case at the end of the appellants' case. Although they were entitled to do so, they would be in peril of not having the evidence of their most important witness and of having an adverse inference drawn against them for failing to call such evidence should the circumstances demand it.' …” (emphasis added) 5 S/N //bmIquaY08Z7XPkSro8w **Note : Serial number will be used to verify the originality of this document via eFILING portal [8] In this case, I find that the plaintiff has discharged the burden of proving its case, and with the election of no case to answer by the defendant, the evidence of the plaintiff must be presumed to be true. The Plaintiff’s Evidence [9] There were three findings of facts I derived from the testimony of the plaintiff’s witness, Tan Guansheng (“PW-1”): a. There was an ongoing contractual relationship between the plaintiff and the defendant; b. The plaintiff kept a running account to record amounts owing and payments made by the defendant; and c. The Statement of Account was provided to the defendant and was acknowledged by the defendant. [10] On the first finding, PW-1 had testified that the plaintiff’s dealings with the defendant started in 2008. The plaintiff, through PW-1, communicated with the defendant through its directors, one Alam bin Muhammad (“Alam”) and one Shafiullah (“Shafi”). PW-1, Alam and Shafi communicated via the WeChat platform, on orders and deliveries of the Goods. PW-1 forwarded invoices issued by the plaintiff to the defendant through WeChat, and the defendant informed the plaintiff of the status of payments. It cannot be disputed that these transactions formed an ongoing contractual relationship between the parties. 6 S/N //bmIquaY08Z7XPkSro8w **Note : Serial number will be used to verify the originality of this document via eFILING portal [11] On the second finding, the plaintiff had established that a running account was maintained, which recorded the quantity of the Goods delivered to the defendant, together with their prices. The running account also recorded payments made by the defendant. These payments are considered to be payments made towards the running account or towards the total amount outstanding. [12] In his witness statement, PW-1 explained the process of the purchase of and payment for the Goods: “Q8 : Can you briefly describe the process of the Defendant purchasing the fabric materials from the Plaintiff? A : At all material times, the Defendant through Amin, Alam or Shafi would communicate with me mainly via WeChat by placing their request or order for supply of fabric materials. Upon receiving their request, I would generally forward some fabric designs for them to choose from. Once they had confirmed the design, I would then start our production and arrange for the delivery of the ordered good and issue invoices to the Defendant. From time to time, the Plaintiff would prepare and issue a Statement of Account that captured the transactions between the Plaintiff and the Defendant and the amount owing by the 7 S/N //bmIquaY08Z7XPkSro8w **Note : Serial number will be used to verify the originality of this document via eFILING portal Defendant to the Plaintiff. I also made it a point to get the Defendant’s representatives (namely Amin, Alam and Shafi) to sign on the Statement of Account whenever we had an opportunity to meet up personally. This exercise allowed both parties to compare our respective records / accounts. As this is an important exercise, I would usually get the Plaintiff to issue a Statement of Account for comparison exercise with the Defendant’s representatives after several transactions. I have produced some of these Statements of Accounts the bundle of documents for this Honourable Court’s attention. Q9 : How did the Plaintiff keep its accounting record in respect of the said dealings? A : At all material times, the Plaintiff keeps a running account for the transactions with the Defendant. All the payments made by the Defendant will be credited in the running account as part payment. The Plaintiff did not apply such payment to any specific invoice.” (emphasis added) 8 S/N //bmIquaY08Z7XPkSro8w **Note : Serial number will be used to verify the originality of this document via eFILING portal [13] The Court of Appeal in Ekuiti Setegap Sdn Bhd v Plaza 393 Management Corp (established under The Strata Titles Act 1985) [2018] 4 MLJ 284 held that an account for management charges or a management fund qualified as a running account: “[32] Before we proceed with the main issues, we wish to state at the outset that we find no appealable error in respect of the learned judge’s finding that the plaintiff’s claim is based on a running account. In Wembley Industries Holdings Bhd, it was held: … a running account is a single account and not a composite of its various parts. A payment made on account of a running account is in respect of the entire outstanding balance, with the result that time is extended for the whole of the debt. It appears, therefore that a running account will become statute- barred only if more than six years elapse between the supply of the last article under it and the last payment on account.” (emphasis added) [14] In this case, PW-1 testified that statements of account that captured the transactions between the plaintiff and the defendant were sent to the defendant from time to time. Payments made by the defendant are not applied to specific invoices issued, but are credited in the 9 S/N //bmIquaY08Z7XPkSro8w **Note : Serial number will be used to verify the originality of this document via eFILING portal statements of account. The amounts outstanding are reflected in the statements of account. [15] From the description of the transactions between the parties and payments made by the defendant, it is clear that the account maintained by the plaintiff is a running account, and the final amount due is reflected as the Outstanding Amount in the Statement of Account. [16] My third and final finding is premised on the evidence provided by the plaintiff, of the Statement of Account. The Statement of Account sets out the following details: a. The name of the plaintiff as the seller of the Goods; b. The name of the defendant as the buyer of the Goods; c. Invoices BM18705B, BM18705C and BM18705D (“Invoices”) issued by the defendant to the plaintiff, together with details associated with the Invoices, namely the contract numbers, the description of the Goods, the quantity ordered, the price per unit of the Goods and the amount outstanding for each of the Invoices; d. The total sum outstanding for the Invoices, amounting to USD251,275.10; e. Total arrears of USD173,706.40, carried forward; 10 S/N //bmIquaY08Z7XPkSro8w **Note : Serial number will be used to verify the originality of this document via eFILING portal f. Payment received of USD40,000; and g. The Outstanding Amount of USD384,981.50. [17] There is a signature at the bottom of the Statement of Account, together with the defendant’s company stamp. PW-1 testified that Alam signed the Statement of Account during a meeting between him and Alam. There is no challenge to the signature on the Statement of Account, and the defendant is thus bound by the document (see Lee Teck Seng v Lasman Das Sundra Shah [2008] 8 CLJ 317). [18] Further, I am of the view that the signature in the Statement of Account reflects the intention of the defendant to acknowledge its liability to the plaintiff for the Outstanding Amount in the Statement of Account. [19] I am guided in my view by Yam Kong Seng & Anor v Yee Weng Kai [2014] 4 MLJ 478, where the Federal Court held that a message sent to the defendant via short messaging service (“SMS”) qualifies as an acknowledgment of a loan. The message reads “Eddy sorry hear ur father death, regarding the loan repayment sorting soon not 2 wory now Im in uk, London next week.” [20] The Federal Court held as follows: “[19] We now touch on the second question for our determination. To appreciate this question it is necessary for us to refer to the chronology of events that led to the SMS being sent to the appellants by the respondent. The appellants pleaded that 11 S/N //bmIquaY08Z7XPkSro8w **Note : Serial number will be used to verify the originality of this document via eFILING portal the respondent had on behalf of himself and the company sent to the first appellant the abovementioned SMS on 5 September 2006. The SMS was a reply to the first appellant’s demand of payment of the debt and the interest due and owing to the appellants. The SMS though short, reflected the intention of the parties clearly and unambiguously. There was no difficulty in putting into effect what they had bargained for on reading the words of the SMS (Morello Sdn Bhd v Jaques (International) Sdn Bhd [1995] 1 MLJ 577; [1995] 2 CLJ 23; Central Bank of India v Hartford Fire Insurance AIR 1965 SC 1288; Setapak Heights Development Sdn Bhd v Tekno Kota Sdn Bhd [2006] 3 MLJ 131; [2006] 2 CLJ 337). The court in Kamala Devi v Seth Takhatmal AIR 1964 SC 859 opined: If the language is clear and unambiguous and applies accurately to existing facts, it shall accept the ordinary meaning, for the duty of the Court is not to delve deep into the intricacies of the human mind to ascertain one’s undisclosed intention, but only to take the meaning of the words used by him, that is to say his expressed intentions.” (emphasis added) [21] In this instant case, PW-1 had testified in the answer to question 8 in his witness statement that the Statement of Account is intended to capture and verify the transactions between the parties: 12 S/N //bmIquaY08Z7XPkSro8w **Note : Serial number will be used to verify the originality of this document via eFILING portal “… From time to time, the Plaintiff would prepare and issue a Statement of Account that captured the transactions between the Plaintiff and the Defendant and the amount owing by the Defendant to the Plaintiff. I also made it a point to get the Defendant’s representatives (namely Amin, Alam and Shafi) to sign on the Statement of Account whenever we had an opportunity to meet up personally. This exercise allowed both parties to compare our respective records / accounts. As this is an important exercise, I would usually get the Plaintiff to issue a Statement of Account for comparison exercise with the Defendant’s representatives after several transactions …” (emphasis added) [22] I am of the view that the Statement of Account, which sets out the Outstanding Amount and which has been verified and signed by Alam, a director of the defendant, clearly and unambiguously reflects the intention of the defendant to be liable for the Outstanding Amount. Issues Raised By The Defendant [23] With the defendant’s election not to call evidence and to submit no case to answer, the evidence tendered by PW-1 stands, and as such, I find that the plaintiff has proven its case. [24] I will nonetheless touch on a few issues raised by the defendant, namely, that the plaintiff had not provided evidence that it is a company 13 S/N //bmIquaY08Z7XPkSro8w **Note : Serial number will be used to verify the originality of this document via eFILING portal formed in China, with operations in China, and that AR Bright was identified as a buyer in the Invoices. [25] In raising these issues, what the defendant appears to have missed is that the plaintiff’s claim is based on the Statement of Account. As such, I find these issues to be irrelevant to the plaintiff’s claim for the Outstanding Amount. They do not invalidate the Statement of Account or the Outstanding Amount, which had been acknowledged by the defendant. [26] PW-1 had also testified that he received instructions from the defendant that the Goods are to be sent to AR Bright, and the defendant will be responsible for payment. His testimony remains unrebutted. AR Bright is also only identified as a consignee in the Statement of Account. The defendant is the party identified as the buyer. [27] The defendant had also claimed the defendant overpaid an amount of USD117,573.39 to the plaintiff. With no evidence put forward by the defendant during trial to prove this, I find the defendant has failed to establish its case on this overpayment. PW-1 also testified that the Statement of Account, which forms part of the running account between the plaintiff and the defendant, has accounted for all payments that had been made by the defendant to the plaintiff in the course of the transactions between them. 14 S/N //bmIquaY08Z7XPkSro8w **Note : Serial number will be used to verify the originality of this document via eFILING portal D. Decision [28] From the totality of the evidence before the court, I find that the plaintiff has, on a balance of probabilities, proven the defendant’s indebtedness for the Outstanding Amount as set out in the Statement of Account. It is on this basis that I allowed the plaintiff’s claim. [29] I awarded costs of RM30,000 to the plaintiff. I have however found that the plaintiff has not sufficiently shown any justification for costs to be awarded on an indemnity basis. Dated 30 December 2022 - sgd - Adlin Abdul Majid Judicial Commissioner High Court of Malaya Commercial Division (NCC6) Kuala Lumpur Counsel: Plaintiff : Tan Chong Lii (together with Tuan Earn Yee) of Messrs. Tan Chong Lii & Co Defendant : Amarjeet Singh of Messrs. Zubeda & Amarjeet 15 S/N //bmIquaY08Z7XPkSro8w **Note : Serial number will be used to verify the originality of this document via eFILING portal Cases referred to: Ekuiti Setegap Sdn Bhd v Plaza 393 Management Corp (established under The Strata Titles Act 1985) [2018] 4 MLJ 284 Lee Teck Seng v Lasman Das Sundra Shah [2008] 8 CLJ 317 Takako Sakao (f) v Ng Pek Yuen (f) & Anor [2009] 6 MLJ 751 Yam Kong Seng & Anor v Yee Weng Kai [2014] 4 MLJ 478 16 S/N //bmIquaY08Z7XPkSro8w **Note : Serial number will be used to verify the originality of this document via eFILING portal