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496 Malayan Law Journal [2014] 10 MLJ

Cobrain Holdings Sdn Bhd v Perwira Bintang Holdings Sdn A

Bhd

HIGH COURT (KUALA LUMPUR) — WRIT OF SUMMONS NO B

22C-3–04 OF 2013
MARY LIM J
1 OCTOBER 2013

C
Civil Procedure — Trial — No case to answer — Submission of no case to
answer — Counterclaim — No evidence led by plaintiff — Whether all
evidence led by defendant must be assumed to be correct

Contract — Breach — Damages — Claim for payment for works done D

— Whether plaintiff estopped from claiming for payment due to settlement agreed
at meeting — Whether unconscionable and inequitable for plaintiff to claim for
payment — Whether any misrepresentation by defendant at meeting
E
Evidence — Presumptions — Adverse inference under s 114(g) of the Evidence
Act 1950 — Non-calling of witness — Whether there was suppression or
withholding of evidence — Whether adverse inference arose

The defendant had awarded to the plaintiff RM14,150,000 worth of F

subcontract works. The works were completed. The plaintiff commenced this
suit claiming for outstanding sums of RM3,857,230.42 which were said to be
due and owing from the defendant. The defendant pleaded the defence of
estoppel on the grounds that in a meeting on 29 September 2010, the parties
had met, discussed and settled the matters pertaining the plaintiff ’s G
outstanding claims. The defendant claimed that it relied on these
representations and position of the plaintiff in dealing with other
subcontractors’ claims and arranging its financial position in respect of the
entire project. Hence, it was now unconscionable and inequitable for the
plaintiff to resile from its conduct at that meeting. The defendant H
counterclaimed for a sum of RM575,335.28 which it claimed had been
overpaid and which it claimed was agreed at that same meeting. The plaintiff
on the other hand alleged misrepresentation by the defendant; denied that
there was any settlement at the said meeting; and that its representatives who
attended the said meeting had no authority to decide on financial matters. The I
counterclaim was also disputed.

Held, dismissing the plaintiff ’s claim and allowing the defendant’s

counterclaim with costs:
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Cobrain Holdings Sdn Bhd v Perwira Bintang Holdings Sdn

[2014] 10 MLJ Bhd (Mary Lim J) 497

A (1) The irresistible inference was that the meeting in question did discuss and
settle the matters as contended by the defendant. There was agreement
reached between the parties on the terms as claimed by the defendant at
that material meeting (see para 49).
(2) The allegations that the plaintiff ’s representatives were misrepresented;
B
had no opportunity to speak at the meeting; and made to sign the
minutes, were not believable. These allegations were not borne out by
either of the testimonies of PW1 and PW2 or in the letters that were
subsequently exchanged between the parties (see para 66).
C (3) The plaintiffs witnesses were not believable or truthful and their evidence
was not credible. In contrast DW1 was a truthful witness who told it as it
was (see para 82).
(4) In relation to the non-calling of the plaintiff ’s managing director (‘MD’),
the presumption under s 114(g) of the Evidence Act 1950 could not be
D
invoked. While the plaintiff ’s MD did not attend court to testify and no
explanation had been given as to his absence, if the plaintiff ’s MD was a
material witness, it could not be readily concluded that there had been
suppression or withholding of evidence. The lack of testimony from this
person appeared to be more on account of the plaintiff ’s failure to obtain
E
evidence. Hence, the evidence of PW1 and PW2 was not corroborated by
an important and material witness (see paras 87–88 & 90).
(5) The defendant had discharged its burden of proving its counterclaim. In
a case of submission of no case to answer, the evidence led is taken as true
F and correct (see para 106).
[Bahasa Malaysia summary
Defendan telah memberi award kepada plaintif sejumlah RM14,150,000
untuk kerja-kerja subkontrak. Kerja-kerja tersebut telah siap. Plaintif telah
G memulakan guaman ini menuntut baki jumlah RM3,857,230.42 yang
dikatakan tertunggak dan perlu dibayar daripada defendan. Defendan mempli
pembelaan estopel atas alasan bahawa dalam mesyuarat 29 September 2010,
pihak-pihak telah berjumpa, berbincang dan menyelesaikan perkara-perkara
berkaitan tuntutan-tuntuan plaintif yang tertunggak. Defendan mendakwa
H bahawa ia bergantung kepada wakil-wakil tersebut dan kedudukan plaintif
dalam mengendalikan tuntutan-tuntutan subkontraktor lain dan
menguruskan kedudukan kewangannya berkaitan keseluruhan projek. Justeru,
sekarang ini ia tidak berpatutan dan tidak saksama untuk plaintif
menghentikan perlakuannya semasa mesyuarat tersebut. Defendan menuntut
I balas untuk jumlah RM575,335.28 yang didakwanya telah terlebih bayar dan
yang didakwanya telah dipersetujui semasa mesyuarat sama. Plaintif sebaliknya
mengatakan salah nyata oleh defendan; menafikan bahawa terdapat apa-apa
penyelesaian di mesyuarat tersebut; dan bahawa representasinya yang
menghadiri mesyuarat tersebut tidak mempunyai kuasa untuk membuat
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498 Malayan Law Journal [2014] 10 MLJ

keputusan berhubung perkara-perkara kewangan. Tuntutan balas juga A

dipertikaikan.

Diputuskan, menolak tuntutan plaintif dan membenarkan tuntutan balas

defendan dengan kos:
B
(1) Kesimpulan menarik adalah bahawa mesyuarat yang dipersoalkan telah
pun membincangkan dan menyelesaikan perkara-perkara sebagaimana
dihujahkan oleh defendan. Terdapat perjanjian yang tercapai antara
pihak-pihak berdasarkan terma-terma yang didakwa oleh defendan pada
mesyuarat tersebut (lihat perenggan 49). C
(2) Pengataan bahawa wakil-wakil plaintif telah disalah nyatakan; tidak
diberi peluang bercakap semasa mesyuarat; dan dipaksa menandatangani
minit-minit, tidak boleh dipercayai. Pengataan tersebut tidak dinyatakan
sama ada dalam testimoni-testimoni PW1 dan PW2 atau dalam D
surat-surat yang kemudian telah saling bertukar antara pihak-pihak (lihat
perenggan 66).
(3) Saksi-saksi plaintif-plaintif tidak boleh dipercayai mahupun bersikap
jujur dan keterangan mereka tidak boleh dipercayai. Sebaliknya DW1
adalah saksi yang boleh dipercayai yang memberitahu seperti mana apa E
yang sebenar berlaku (lihat perenggan 82).
(4) Berhubung pengarah urusan (‘PU’) plaintif yang tidak dipanggil,
andaian di bawah s 114(g) Akta Keterangan 1950 tidak boleh digunakan.
Di mana PU plaintif tidak menghadiri mahkamah untuk memberi F
keterangan dan tiada penjelasan telah diberikan berhubung
ketidakhadirannya, jika PU plaintif adalah saksi utama, ia tidak boleh
dengan mudah membuat kesimpulan bahawa terdapat penindasan atau
penahanan keterangan. Kekurangan testimoni daripada orang ini dilihat
lebih kepada kegagalan plaintif untuk memperoleh keterangan. Justeru, G
keterangan PW1 dan PW2 tidak disokong oleh saksi penting dan
material (lihat perenggan 87–88 & 90).
(5) Defendan telah melepaskan beban pembuktiannya dalam tuntutan
balasnya. Dalam kes penghujahan berhubung tiada kes untuk dijawab,
keterangan yang dikemukakan dianggap benar dan betul (lihat H
perenggan 106). ]
Notes
For a case on adverse inference under s 114(g) of the Evidence Act 1950, see
7(2) Mallal’s Digest (4th Ed, 2013 Reissue) para 2416. I
For a case on no case to answer, see 2(4) Mallal’s Digest (4th Ed, 2014 Reissue)
para 9873.
For cases on damages, see 3(2) Mallal’s Digest (4th Ed, 2013 Reissue) paras
3206–3251.
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Cobrain Holdings Sdn Bhd v Perwira Bintang Holdings Sdn

[2014] 10 MLJ Bhd (Mary Lim J) 499

A Cases referred to
Ayer Hitam Tin Dredging Malaysia Bhd v YC Chin Enterprises Sdn Bhd [1994]
2 MLJ 754, SC (refd)
Charles Grenier Sdn Bhd v Lau Wing Hong [1996] 3 MLJ 327, FC (refd)
Jaafar bin Shaari & Anor (suing as administrator of the estate of Shofiah bte
B
Ahmad, deceased) v Tan Lip Eng & Anor [1997] 3 MLJ 693, SC (refd)
Munusamy v PP [1987] 1 MLJ 492, SC (refd)
Takako Sakao (f ) v Ng Pek Yuen (f ) & Anor [2009] 4 MLJ 66; [2010] 1 CLJ
381, FC (refd)
C
Legislation referred to
Evidence Act 1950 s 114, 114(g)
James Culaz (Murugayah R Narayanasamy with him) (Muru & Partners) for the
plaintiff.
D
S Selvarajah (R Ramanathan & James Lopez with him) (Fernandez & Selvarajah)
for the defendant.

Mary Lim J:
E
[1] The defendant and the plaintiff entered into direct negotiations which
culminated in the defendant awarding to the plaintiff RM14,150,000 worth of
subcontract works. These subcontract works involved electrical installation in
respect of the defendant’s design and build contract for Kompleks KDN/KA
F and Logistics, Bukit Aman, Kuala Lumpur. The letter of acceptance is dated
30 May 2007. The works were expected to be completed on 25 July 2009,
subject to any extension of time as approved by the project manager and/or
project director. The plaintiff ’s managing director, one Eric Tan (presumably
Datuk Tan Seah Lin) and the defendant’s representative, Ong Oung Kok
G signed on the original copy of the letter of acceptance.

[2] Clause 10 of that letter provided for ‘payment, retention and period of
honouring’:
H Subcontractor is required to submit claim for work done at monthly interval. The
submission date is fixed at end of the month. The payment will be honored 45 days
from the date of certification of Main Contractor’s claim.
Progress payment shall be made in accordance with the immediate measurement of
work executed for the period subject to a minimum of ten (10) percent retention
I sum to a limit of 5% of Contract Sum.
The first moiety of retention sum shall be released upon finalisation of final account
which is limit to twelve (12) months from the date of Certificate of Practical
Completion for the Main Contract. The second moiety shall be released upon
received on Certificate of Making Good Defects for the Main Contract.
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500 Malayan Law Journal [2014] 10 MLJ

[3] On 5 December 2010, JKR issued a certificate of practical completion. A

On 21 December 2010, in accordance with the terms of the letter of
acceptance, the plaintiff issued as built drawings and forwarded them to the
defendant. At the material time, a total of 61 variation orders and 27 progress
claims had been submitted by the plaintiff together with the as built drawings.
B
[4] According to the plaintiff, despite payment certificates Nos 23 and 24
being issued, there was no payment. The present claim is for outstanding sums
of RM3,438,266.90 approved by PCR Sdn Bhd, the consultants of the project.
The plaintiff further claimed that certain sums were wrongly deducted. The net C
effect of which is that a sum of RM4,769,201.62 is now still due and owing
from the defendant.

[5] However, on the day of hearing, the plaintiff amended its claim to now
read as RM3,857,230.42 as a result of its amalgamation of sums appearing at D
paras 9(a), (b) and (d) of its statement of claim. The amendments were allowed
with no order as to costs. No consequential amendments were required of the
defence.

[6] In defence to the claim, the defendant’s principal defence is estoppel. The E
matters giving rise to this defence is a meeting on 29 September 2010 where the
parties met to discuss the plaintiff ’s outstanding claims. At that meeting, the
defendant claimed that the value of variation and additional works and certain
other issues related to the finalisation of the subcontract account were
F
ultimately settled or agreed between the parties. The defendant claimed that it
relied on these representations and positions of the plaintiff in dealing with
other subcontractors’ claims and arranging its financial position in respect of
the entire project. It was now unconscionable and inequitable for the plaintiff
to resile from its conduct at that meeting.
G
[7] The defendant summarised the effect of the meeting at para 19 of the
defence and counterclaim:

Item Amount (RM) H

(a) Sub Contract Sum 14,150,000
(b) Variation Order (as agreed at the said 205,775.50
Meeting on 29 September 2010)
(c) Variation Order for 5 omission items (as (56,128) I
submitted by the plaintiff in letter dated 7
June 2011)
(d) Revised Sub Contract Sum (d = a + b + c) 14,299,647.50
(e) Less Debit Notes 12,922,182.78
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Cobrain Holdings Sdn Bhd v Perwira Bintang Holdings Sdn

[2014] 10 MLJ Bhd (Mary Lim J) 501

A (f )Add Credit Notes for return of Worker 11,200

Passes
(g) Less Payments previously made 2,258,000
(h) Balance Amount Due (h = d - e + f - g) (869,335.28)
B (i) Contra Insurance settlement for damaged 255,500
transformer
(j) Amount owing by the plaintiff to the (613,835.28)
defendant G = h + i)

C [8] The defendant counterclaimed for a sum of RM613,835.28 which it

claimed had been overpaid and which it claimed was agreed at that same
meeting. This amount was also amended on the day of trial with the defendant
crediting the sum of RM38,500 for salvage value of transformer that was
damaged in the course of execution of the works. The defendant’s counterclaim
D now stands at RM575,335.28.

[9] In its amended reply and amended defence to the counterclaim, the
plaintiff claimed that the defence was a sham as nothing of any material
consequence transpired at the meeting. It claimed that the meeting was merely
E
a discussion on operational matters; that the plaintiff ’s representatives at the
meeting had no authority to decide on financial matters as the real mandates
was with the plaintiff ’s board of directors; that the variation sum of
RM205,775.50 was challenged subsequently by the plaintiff in its
F correspondence with the defendant; that the principle of estoppel was not
engaged where there is deception, cheating or wrongdoing on the part of the
defendant. Details of such wrongdoing were set out at paras 4, 7 to 10.

[10] These allegations of deception were subsequently abandoned when the

G plaintiff withdrew paras 4, 7, 8, 9 (the words ‘on account of the deception’) and
10 of the amended reply and amended defence to the counterclaim. In
substance, the plaintiff alleged misrepresentation by the defendant; denied that
there was any settlement at that meeting; and that its representatives had no
authority to decide on financial matters. The counterclaim was also disputed.
H
ISSUES

[11] The parties have agreed that a determination of what actually transpired
at that meeting is absolutely vital to the further conduct of the respective claims
I of the parties. Hence, the bifurcation of the proceedings. In the event the court
finds that there was no settlement reached at that meeting, then the court will
proceed to assess the plaintiff ’s claim for damages.

[12] The issues for determination in relation to the meeting therefore are:
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502 Malayan Law Journal [2014] 10 MLJ

(a) What was the purpose of the meeting on 29 September 2010? A

(b) Whether any agreement was reached at that meeting?
(c) If so, what are the terms of the said agreement?

B
TESTIMONIES OF THE THREE WITNESSES

[13] These were the persons who testified. For the plaintiff, its
representatives who attended the fateful meeting, namely, Liew Hon Lim C
(‘PW1’) and Chow Kim Meng (‘PW2’). For the defendant, it was Tan King
Lim (‘DW1’) who kept the minutes of the meeting.

[14] Both PW1 and PW2 gave almost identical evidence-in-chief as to what
transpired on 29 September 2010. This is their evidence. D

[15] PW1 was the plaintiff ’s senior site project manager. He joined the
plaintiff in May 2000. He told the court that his job was ‘reading both the
original tender design drawings of the defendant and revised drawings due to
changes in the design, raising variation orders, supervise the construction, E
implementing the changes in the design on the variation works ordered by the
defendant, issuing all progress claims for plaintiff arising from the variation
orders, responsible for drawing up as built drawings upon completion of work,
coordinating with defendant employees at the site taking and receiving
F
instruction from the management of the plaintiff, my employer’.

[16] PW2 has been with the plaintiff much longer. He has been with the
plaintiff some 24 years. He informed the court that his role in the project was
to assist PW1 in the same matters described by PW1. G

[17] PW1 testified that the defendant called the plaintiff ’s firm and
requested the plaintiff to attend a discussion on operational matters in relation
to the implementation of the project and its related matters. The meeting was
held at the defendant’s premises. PW1 attended with PW2, the plaintiff ’s other H
operational senior manager. According to him, they ‘attended the meeting in
our capacities as project managers only’.

[18] PW1 further told the court that the plaintiff ‘informed and directed’
him ‘to attend the discussion and report back matters discussed. That is the I
instruction of our employer Cobrain’. PW2 more or less echoed what PW1
said, except that unlike PW1, he told the court that the plaintiff ‘informed us
to attend the discussion and report back. That is all we were told to go by our
employer Cobrain, to attend the discussion only’.
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Cobrain Holdings Sdn Bhd v Perwira Bintang Holdings Sdn

[2014] 10 MLJ Bhd (Mary Lim J) 503

A [19] According to both PW1 and PW2’s evidence, when both of them
arrived at the defendant’s office, they were given an attendance sheet that was
prepared by the defendant. Both of them read that sheet which states:
‘Discussion between PBH and Cobrain Attendance List’. After reading the
contents of this sheet, both of them signed as attendees.
B
[20] Both of them testified that the ‘meeting commenced wherein
operational issues with regard to the project was discussed by all parties
present.’ Save for the necessary modification as to names, they gave identical
C
evidence as to what transpired next:
As we were discussing the operational matters at defendant’s office, one Tan Kar
Ling the project director of defendant was typing on his computer while the
Managing Director Dato’ Tan Kar Meng was talking in the meeting and reflecting
his views.
D Being only employees and the fact that the meeting was only for a discussion, and
for us to report back we signed the minutes of discussion and reported back to our
Managing Director Datuk Tan Seah Sim. Neither Mr Chow Kim Meng nor myself
have any authority express or otherwise whatsoever to agree on behalf of our
employer Cobrain Holdings Sdn Bhd as to any Finalisation of Accounts of the
E plaintiff with PBHSB as we were only employees, nor did we enter into any
Agreement whatsoever on financial aspect of my employer’s claim with the PBHSB
as alleged now by PBHSB.

[21] Both PW1 and PW2 observed DW1 typing ‘simultaneously as the
F meeting progressed’ but said that they did not know what was being typed.
They claimed that they had no chance to put across their views on operational
matters that were being discussed — see Q&A 27 or PW1 and Q&13 for
PW2. Both of them claimed that the defendant’s MD (Dato’ Tan) ‘was in full
control of the meeting’. Both described the MD as a ‘very forceful person’ who
G talked ‘endlessly in an authoritative manner raising all sorts of issues and
answering himself all these issues raised by him’.

[22] They also told the court that no agenda for the meeting was given prior
to the meeting. PW1 further testified that the variation orders and the
H plaintiff ’s progress claims were not discussed at this meeting. He denied
agreeing to item (I) in the minutes in relation to the value of variation works,
that a sum of RM205,775.50 is owed by the defendant to the plaintiff.
According to him, it ‘was the view of the managing director of the defendant
Dato’ Tan Kar Meng. My employer rejected that via letter dated 7 June 2011’.
I
[23] These witnesses next told the court that ‘at the conclusion of the
meeting, Dato’ Tan Kar Ming ordered us to sign a document which was typed
by Tan Kar Ling’. Both signed, PW1 after he had ‘look at the letter which was
dated 29 September 2010, which stated matters were in relation to a
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504 Malayan Law Journal [2014] 10 MLJ

discussion’; both did so ‘on the understanding, it was only minutes of A

discussion and nothing more’. Both claimed they were not given time to peruse
the document but were ‘only told to sign at the bottom of the pages as
attendees’, and leave. However, a photocopy of the document that they had
signed was given to them ‘on the spot’.
B
[24] Both of them claimed that they were not authorised ‘to make
concessions with regard to financial matters of the plaintiff during the meeting
of 29 September 2010’. The reason given by both of them was that each of their
‘job scope only involves operational matter with regard to the project. If there
be any issues in relation to settling or finalisation of accounts it is within the C
authority of our managing director or the executive director to make such
decisions’. PW2 added that ‘the defendant should liaise with the plaintiff ’.

[25] Upon their return from the meeting, both PW1 and PW2 reported to
D
their managing director, Datuk Tan Seah Lim (presumably Eric Tan referred to
at the outset). According to PW2, Datuk Tan ‘then informed the defendant
rejecting the minutes at the discussion. My Employer wrote back disputing said
minutes and associated issues raised’. Both witnesses claimed that the meeting
of 29 September 2010 was a misrepresentation and deception exercised on us
E
to call us to attend said meeting and then called it a discussion. Later after the
discussion claim it to be a meeting where as agreements is purportedly made,
when all this is untrue.

[26] Both witnesses denied entering into any agreement with regard to F
monies owed to the plaintiff, or entering into any agreement whatsoever. They
have since made separate but similar police reports on this.

[27] This is what the defendant’s witness, Tan King Lim (‘DW1’) told the
court. He was the person who prepared the minutes of that meeting. G

[28] He told the court that the parties had already had several meetings and
discussions between the technical officers of the parties to prepare for the final
meeting on 29 September 2010. According to him, the purpose of this meeting
was ‘ … firstly to settle the variation order work claims and issues related to the H
finalization of the sub contract account; secondly, to discuss issues on
maintenance and service works; thirdly, to check the submission status for
as-built drawings and O&M Manual; and finally for other matters’.

[29] By ‘settle the variation order work claims’, he meant that cl 9 of the I
terms and conditions in the letter of acceptance (pp 1–10), only the project
manager or the project director can validly instruct the subcontractor to carry
out variation work. The rate for such work shall be subject to mutual
negotiation and agreement between the subcontractor and the contractor.
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Cobrain Holdings Sdn Bhd v Perwira Bintang Holdings Sdn

[2014] 10 MLJ Bhd (Mary Lim J) 505

A These claims had been discussed earlier between the technical officers of the
plaintiff and the defendant. One of the purposes of the meeting was to confirm
once and for all the value of the VO claims based on the earlier discussions.

[30] In preparation for the meeting, DW1 ‘prepared a draft of matters to be

B discussed, a summary of the 61 VO claims and a summary of the debit notes
issued for the plaintiff ’. There were 213 debit notes to the value of
RM12,647,379.51 listed in the summary.

C [31] He confirmed that during the meeting, the parties discussed the validity
and value of the 61 variation order claims and confirmed that the total amount
for these claims was that stated in the summary sheet, that is, RM205,775.50.
Parties further confirmed that this agreed amount did not include five omission
items that were to be evaluated and included in the statement of final account.
D According to DW1, the plaintiff agreed to work out the value of these omission
items and submit them to the defendant. The final subcontract sum was to be
ascertained upon finalisation of the value of the omission items.

[32] DW1 told the court that agreement was also reached at that meeting on
E several other matters, namely:
(a) two outstanding back charge items of around RM100,000 relating to
the hot dipped galvanised iron support for facade lighting, and power
consumption used for testing and commissioning would be included
F later;
(b) the defendant ‘had the right to issue further debit notes for fines,
penalties and back-charges of the works, materials and services rendered
as they occurred during the defect liability period and the maintenance
G
period; and
(c) on the performance bond, maintenance sum, maintenance and service
works, balance amount due to the plaintiff, right of the defendant to
recover sum due, and submission status of asbuilt drawings; and O&M
manual.
H
[33] According to DW1, immediately after the meeting, he used the draft
record of matters that he had prepared earlier as a base and he included the
matters that had been discussed and agreed at the meeting. In other words, he
I
prepared the minutes of the meeting and he gave copies of the minutes to each
party to go through and make comments. He saw PW1 and PW2 signed the
minutes which stated that they had read and understood the minutes and that
they confirmed that the minutes were correct and in order. He saw PW1 and
PW2 initialed on each page of the minutes.
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506 Malayan Law Journal [2014] 10 MLJ

[34] DW1 next informed the court that the plaintiff only wrote to the A
defendant on 6 October 2010 (letter received on 12 October 2010) conveying
its disagreement with the value of the VO to be RM205,775.50 and where the
plaintiff requested for a further meeting. The defendant replied on 20 October
2010 stating that since the VOs ‘had already been discussed in detail and
concluded with the consent of representatives of both parties at the said B
meeting … there was no necessity to have a further meeting on this matter.’
Correspondence then ensued between the parties.
THE PLAINTIFF’S SUBMISSIONS
C
[35] From the evidence adduced, the plaintiff has invited the court to
consider the following factors which when put together shows that the
plaintiff ’s version of the events as told by PW1 and PW2 is more credible:
(a) the chronology of events leading to the meeting where it was the
D
defendant who telephoned the plaintiff to set a date for discussion;
(b) the plaintiff ’s witnesses attended in their capacities as the plaintiff ’s
operational managers;
(c) the attendance list states ‘discussion’;
E
(d) both PW1 and PW2 testified that there was only one person talking and
all others listening. That person was the defendant’s MD who was brash
and dictatorial and was just talking away while DW1 was typing on his
computer;
F
(e) the meeting lasted one hour;
(f) the document that PW1 and PW2 signed at the end of the meeting was
pre-prepared by DW1 on the understanding that it was only minutes of
a discussion and nothing more;
G
(g) DW1 confirmed that he had pre-prepared the minutes and no copy was
extended to the plaintiff earlier; and
(h) DW1 testified that he made changes to the pre-prepared minutes during
the meeting and had given the minutes to PW1 and PW2 to sign at the
end of the meeting. H

[36] Learned counsel also submitted that to prove the liability of a company,
it is necessary to prove that the employee who signed the documents has
sufficient authority to do so. Since PW1 had testified that he was only the
project manager, and that all matters relating to finance were within the I
jurisdiction of the Managing Director which evidence was corroborated by
PW2, therefore, without actual or ostensible authority, the acts of both PW1
and PW2 cannot bind the plaintiff in any manner whatsoever with regard to
financial and the settling of accounts. These witnesses have also testified as to
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Cobrain Holdings Sdn Bhd v Perwira Bintang Holdings Sdn

[2014] 10 MLJ Bhd (Mary Lim J) 507

A their state of mind at the material time; that they were only there on instruction
and only to discuss operational and site matters and nothing more.

[37] It is the plaintiff ’s case that since the authorised signatory of the plaintiff
is its managing director, Dato’ Tan Seah Lim, then the signing by anyone else
B is of no effect. And, that includes the minutes. The plaintiff pointed to the
correspondences between the parties prior to and subsequent to the meeting as
having been signed by that MD. If there is to be a binding agreement, then only
that MD is to sign and no one else.
C
[38] Learned counsel submitted that the minutes stood only as minutes of
the discussion only for PW1 and PW2 to refer to the plaintiff ’s board of
directors for determination; and nothing else. It could not be found to be an
agreement on the plaintiff ’s claims in respect of works pursuant to the variation
D orders. Any such finding is said to be ‘contrary to company law and practice
wherein low level employees could sign away the lawful claims of their
employer. This cannot be right as these functions must be exercised by the
board of directors who are the alter ego of the company, not its employees who
cannot bind the company’.
E
[39] In any case, the correspondence between the parties showed that there is
no consensus ad idem reached at the meeting. The plaintiff ’s letter dated
6 October 2010 was relied on in particular.
F
[40] Further, learned counsel submitted that it was a matter of common
logic that since the plaintiff ’s claim was primarily about variation works
relating to 61 variation orders, that could not possibly have been discussed in
that one hour meeting. Applying the reasonable man test as set in the Supreme
G Court’s decision in Ayer Hitam Tin Dredging Malaysia Bhd v YC Chin
Enterprises Sdn Bhd [1994] 2 MLJ 754, the plaintiff asked ‘would the plaintiff
having carried out variation works for the sum of RM3,438,266.90 sign away
all those monies for a paltry sum’. The plaintiff thereby invited the court to
answer the issues posed in its favour.
H
THE DEFENDANT’S SUBMISSIONS

[41] The defendant, on the other hand, argued that the purpose of the
meeting on 29 September 2010 was precisely as stated in the minutes as found
I in pp 12–15 of the bundle comprising the letter of award/acceptance,
correspondence and police report. As recorded, a number of issues were
discussed and agreement was reached at that meeting. The terms of agreement
were also as recorded in those minutes. The attestation to the minutes further
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508 Malayan Law Journal [2014] 10 MLJ

backs up the defendant’s position. To further corroborate its defence, the A

defendant referred to the conduct of the plaintiff before and after the meeting
as consistent with its contentions.

[42] Although no agenda was given to the plaintiff before the meeting, the
defendant submitted that that did not derogate from the fact that it was the B
defendant’s CEO who had called the plaintiff for a meeting. In response to this
call, the plaintiff ’s MD directed two of his senior project managers to attend.
The defendant suggested that it was unlikely that the plaintiff would have sent
such senior personnel just to discuss operational matters; it surely must have
C
been about finalisation of the account of the subcontract as claimed by the
defendant.

[43] Further, the defendant contended that if PW1 and PW2 were directed
to attend and discuss only operational matters, they ought to have indicated as D
much upon arrival and certainly when PW1 was given the VO summary sheets
by DW1. These sheets contained the defendant’s proposal on the validity and
value of the VO works and the summary of the debit notes. These were quite
clearly financial matters. There is no evidence of the plaintiff ’s representatives
having informed the meeting of such direction, if indeed there was any as E
claimed. Instead, the evidence shows the two representatives participating in
the entire meeting without reservation.

[44] The defendant also relied on the attestation found in the minutes. PW1
F
specifically confirmed that he had understood the minutes, especially its record
of the purpose of the meeting which included the settlement of the variation
orders. He also confirmed in court that the minutes were correct and in order;
and both he and PW2 confirmed that they were not forced or subjected to any
threats to sign the minutes. G

[45] More telling was PW1’s testimony that he had agreed to items such as
the performance bond, maintenance, debit notes, and balance. The defendant
pointed out that these other matters are actually financial and not operational
matters. To single out that he had not agreed to the variation orders which he H
claimed to have voiced his disagreement was furthermore a contradiction of the
plaintiff ’s contentions that the attendees were merely there to hear the
discussion and report back to the plaintiff ’s managing director.

[46] The defendant next relied on the correspondence exchanged between I

the parties following from the meeting. Nowhere in that exchange is there any
of the allegations made today; that the attendees were only attending a
discussion, that they were forced to sign, or that the attendees had no mandate
or authority to decide for the plaintiff. In contrast, the defendant’s claim in its
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[2014] 10 MLJ Bhd (Mary Lim J) 509

A letters to the plaintiff that agreement had been reached at the meeting has never
been corrected or challenged by the plaintiff.

[47] Then, there is this further meeting between the parties on 19 March
2012. The plaintiff was represented by its managing director and the same two
B senior project managers who testified in court. The defendant was represented
by its CEO and DW1. The matters discussed at this meeting are carried in a
letter dated 20 March 2012. This letter as well as another from the plaintiff
dated 22 March 2012 referred to the meeting of 29 September 2010 as the
‘final account meeting’. With such evidence, the defendant submitted that
C
there was no basis for the plaintiff ’s contention that the attendees to the
meeting had no requisite authority and mandate; that they were forced to sign
the minutes or that they were misrepresented by the defendant.

D [48] At the same time, the same evidence shows that agreement was reached
at the meeting on the matters recorded in the minutes. The plaintiff ’s own
action subsequent to the meeting, by extending the performance bond and
submitting the maintenance schedule that was required corroborates the
defendant’s case.
E
Findings

[49] Having heard all three witnesses, observed their demeanour and
examined their evidence against the contemporaneous documentary evidence,
F I must agree with the defendant and its submissions on the issues posed. The
irresistible inference is that the meeting in question did discuss and settle the
matters as contended by the defendant, and as testified by DW1. My reasons
are as follows.

G [50] First and foremost, it would appear that it is the plaintiff ’s primary case
that its attendees at the critical meeting were not authorised or mandated to
make decisions for the plaintiff; that that decision resides solely with the board
of directors of the plaintiff in which case, any decision taken at that meeting
does not bind the plaintiff.
H
[51] If that be the position, it would be reasonable to infer that the plaintiff
is not really challenging the existence of the decisions made or taken at that
meeting; including any or all made by its attendees. As far as the plaintiff is
concerned, it is not bound for the reasons it has offered.
I
[52] Dealing first with this, let me start by saying that the court finds as a
matter of evidence and law that there was agreement reached between the
parties on the terms as claimed by the defendant at that material meeting. As I
understand the plaintiff ’s version of the meeting, it was only a discussion with
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510 Malayan Law Journal [2014] 10 MLJ

the plaintiff ’s representatives attending only with the intention of discussing A

operational and not financial matters. PW1 and PW2 were not authorised to
discuss and decide on any financial matters. At the meeting of one hour
duration, the defendant’s MD monopolised the meeting. PW1 and PW2 were
not allowed to speak because the MD was a very forceful person. At the end of
the meeting, they signed the minutes because it was titled ‘discussion’. B

[53] In my view, it actually does not matter what the meet up between the
parties is termed; whether it was called a ‘discussion’ or a ‘meeting’. What is
important is whether it did take place. Here, the parties are at least, in
C
agreement and from the evidence of the witnesses, it can be safely drawn the
following uncontroverted facts:
(a) there was a meeting between the parties;
(b) the meeting was held on 29 September 2010; D
(c) it was held at the defendant’s office;
(d) the defendant’s managing director, one Dato’ Tan Kar Meng telephoned
the plaintiff ’s managing director to set up that meeting;
(e) the plaintiff sent its senior managers, Liew Hon Lim (PW1) and Chow E
Kim Meng (PW2);
(f) the defendant was represented by Dato’ Tan Kar Meng, Tan King Lim
(DW1), Heinko Dona Madon, Terence Ng Yew Fatt and Ho Weng
Keap; F
(g) an attendance list was taken confirming the seven names : p 17;
(h) minutes were taken at the meeting: pp 1–5;
(i) minutes were taken by DW1;
G
(j) there were attachments to those minutes: pp 5–16;
(k) the meeting lasted an hour;
(l) correspondence between the parties followed the meeting:
(i) the plaintiff ’s letter dated 6 October 2010: p 22; H

(ii) the defendant’s letter dated 20 October 2010: p 23;

(iii) the defendant’s letter dated 19 May 2011: p 24;
(iv) the plaintiff ’s letter dated 7 June 2011: p 25; I
(v) the defendant’s letter dated 15 June 2011: p 50;
(vi) the plaintiff ’s letter dated 24 October 2011: p 51;
(vii) the defendant’s letter dated 20 March 2012: p 55;
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[2014] 10 MLJ Bhd (Mary Lim J) 511

A (viii) the plaintiff ’s letter dated 22 March 2012: p 58;

(ix) the defendant’s letter dated 5 April 2012: p 60;
(x) the defendant’s letter dated 5 February 2013: p 62; and

B (xi) the plaintiff ’s letter dated 20 February 2013: p 68.

[54] Aside from the names and details of the attendees, the attendance list
which is handwritten states:
Bukit Aman
C
Discussion between PBH & Cobrain
Date: 29/9/10
Time: 1 pm
Attendance List
D
Name/signature Company Position

[55] Having determined that the discussion did take place; next is to
determine what transpired during that discussion. Here, minutes were taken
E during the discussion. As is the general purpose of minutes, it records what was
discussed.

[56] These are the minutes in question:

F Project Title: Cadangan Pembinaan Kompleks KDN/KA Dan Logistik, Bukit
Aman, Kuala Lumpur Secara ‘DESIGN & BUILT’
Sub Contract: Electrical Installation Works
______________________________________________________________
Date of Discussion: 29 September 2010 Time: 1 PM
G
Venue: Perwira Bintang Holding Sdn Bhd Office at No 48, Jalan PJS 8/6, Bandar
Sunway
______________________________________________________________
Dato’ KM Tan of Perwira Holding Sdn Bhd (herein after refers to as PBH) has called
H and invited Principal/Senior Management of the Sub Contractor, Cobrain
Holdings Sdn Bhd (herein after refers to as Cobrain) for this discussion.
The purpose of this discussion is
(1) to settle the variation order work claim and issues related to the finalisation
I of the sub contract account,
(2) to discuss issues on maintenance and service works
(3) to check the submission status for as-built drawings and O&M manual
(4) other matters
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512 Malayan Law Journal [2014] 10 MLJ

The following matters have been discussed and agreed upon, A

1. Final Revised Sub Contract Sum and Variation Orders The variation order has
been agreed at RM205,775 (see attached sheets for detail). This amount does not
include the value of omission works.
The discussion has been informed and confirmed that there are 5 omissions to be
B
evaluated and included in the Statement of Final Account in due course
(a) Manhole for Phase 2 (due to omission of Phase 2 works)
(b) Change in light fittings at L16 and L29 due to change of ceiling from 2’ x
4’ panel to plaster board ceiling
C
(c) External light (compound lighting)
(d) Facade Lighting
(e) L30 server room raise floor trunking
Cobrain has agreed to work out the value of omission and submitted to PBH by or D
before 6 October 2010 for evaluation.
The Final Sub Contract Sum will be ascertained upon finalisation of value of
omission.
2. Debit Note
E
The debit notes for fine, penalty and back charges for the works, materials and
services rendered by PBH to Cobrain has amounted to a total of RM12,647,379.51
until 16 August 2010 (see attached sheet for details).
There are 2 outstanding back charge items that have been agreed and have yet to be
included. There are F
(a) Hot dipped galvanised iron support for facade lighting
(b) Power consumption used for testing and commissioning, and it is agreed
at around RM100,000
The amount of Debit Note to date appears in the Statement of Final Account will G
not be conclusive. PBH has the right to issue further Debit Notes for fine, penalty
and back charge of the works, materials and services rendered as it occurs and
happens during the Defect Liability Period and/or maintenance period.
3. Performance Bond
H
Terms of the Sub Contract had explicitly stipulated that ‘The validity of the bond
shall be up to the Main Contract’s DLP or CMGD, whichever is the later’
In this relation, the Performance Bond Bank Guarantee shall be extended to expire
on 19 August 2012 (2 years 4 months from CPC Date of 19 April 2010). Cobrain
has agreed to comply. I
4. Maintenance Sum
JKR is withholding a Maintenance Sum for the Mechanical and Electrical Works in
the Main Contract.
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[2014] 10 MLJ Bhd (Mary Lim J) 513

A The Maintenance Sum will be paid progressively in corresponding to the

maintenance and service works carry out during the maintenance period, and will
be certified by JKR
In line with this Main Contract requirement, PBH is proposing the Sub Contract
Maintenance Sum to be fixed at an amount equivalent to 5% of the Sub Contract
B Sum. Cobrain agrees to the proposal.
It is agreed that Cobrain shall pay to PBH the total amount of deduction or
omission imposed by JKR for any of Cobrain default in carrying out maintenance
and services works.

C 5. Maintenance and Service Works

Cobrain has agreed to submit a maintenance schedule with clear and definite dates
insert on it.
Cobrain has agreed to carry out maintenance and service works strictly in
accordance to the agreed and approved schedule, and has further agreed that should
D there be any delay in carry out the maintenance and service works by 3 days from the
approved schedule, Cobrain will accept the penalty of RM2,000imposed by PBH.
Any penalty imposed by PBH shall not relieve Cobrain from their responsibility
and obligation in the Contract, and Cobrain has further agreed to be responsible
and liable and will accept all claims, cost and expenses incurred directly or indirectly
E from Cobrain default in complying the schedule and/or in carrying out
maintenance and services works.
6. Balance amount of Payment due to Cobrain
The balance amount of payment due, if any, after less from the revised Sub Contract
F Sum, the retention sum, previous payment made and such other agreed sum to be
withheld, shall be released by PBH on condition that Cobrain has deposited with
PBH the extended Bank Guarantee, submission of approved As-Built Drawings
and O&M Manual, or such other matters PBH deem necessary.
7. Right of PBH to recover Sum due
G It is agreed that for those amount that Cobrain is liable for as above described, PBH
has the right to recover the sum from the sub contract retention sum and/or from
Bank Guarantee, and/or other resource.
8. Submission Status of As-Built Drawings and O&M Manual
As-Built Drawings are ready except some outstanding drawings, Cobrain agrees to
H submit by the following day (ie on 30 September 2010). Cobrain has agreed to liaise
closely with PCR Sdn Bhd to ensure that the O&M Manual is ready for submission
to PBH by tomorrow (ie on 30 September 2010).
We are attendance to the discussion, we have read and understand the above
minutes and we hereby confirm they are correct and in order.
I
Representatives from Perwira Bintang Holdings Sdn Bhd
Dato Tan Kar Meng
CEO
Mr. Terence Ng Yew Fatt
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514 Malayan Law Journal [2014] 10 MLJ

M&E Coordinator A
Representatives from Cobrain Holdings Sdn Bhd
Mr. Raymond Liew Hon Lim
Senior Project Manager
(Emphasis added.) B

[57] It is clearly recorded that the purpose of the minutes was to discuss four
matters. Included was the matter of the variation order work claims by the
plaintiff that was related to the finalisation of the subcontract account. After
C
listening to the testimonies of all three witnesses, I find no reason to doubt the
veracity and accuracy of these minutes taken and prepared by DW1. I find him
truthful and credible.

[58] In the matter of the agenda, I actually find this of no real consequence. D
As explained by DW1 and confirmed by PW1, the parties had been meeting
long before this particular meeting, especially amongst the technical staff. It
seems the parties had held some 4 to 5 prior meetings on matters including the
variation orders. All that was left was the finalisation of the accounts which will
include settling the position of these 61 variation orders. E

[59] As for whether there was any misrepresentation by the defendant, the
answer is in the negative. While PW1 and PW2 testified in their
evidence-in-chief that they were only there to discuss operational matters, that
does not appear to have impeded them in any way. In the first place, it was only F
PW1 who told the court in his evidence-in-chief that the issues relating to the
VOs and the progress claims were not discussed at the meeting. PW2 was silent
on this.

[60] I find it hard to believe PW1 given that the parties were at the stage of G
finalising the accounts; and given that he had admitted that other matters such
as performance bonds and maintenance issues were not only discussed, but had
been agreed by him. These other matters are so closely related to the VOs and
the progress claims that there could not have been any concession on them
without the settlement of the earlier two items. H

[61] I also find it difficult to accept that the parties were still taking about
‘operational matters’ given that at that time, the project had been completed
and the CPC was underfoot leaving outstanding matters such as the variation
orders, progress claims, performance bond, maintenance, and debit notes. In I
fact, only payments on the two certificates 23 and 24 were under consideration.
Given that it was only the two certificates that were still due from the
defendant, that is, payment; I cannot see what other operational and site
matters were left for settling between the parties.
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[2014] 10 MLJ Bhd (Mary Lim J) 515

A [62] The next reason is the attestation to the minutes of the meeting. Both
PW1 and PW2 testified in English during the trial. They were proficient and
had no difficulty whatsoever understanding the questions put to them. Both
testified that they had read the attendance list and the minutes before signing
them. Both understood what they read before signing. In fact, PW1 confirmed
B that the minutes were correct and in order during cross-examination. Under
such circumstances, I cannot see how these witnesses can still come forward to
offer any other explanation save what was obviously minuted. In the minutes
are clear records of the ‘purpose of the discussion‘; details of what was ‘discussed
and agreed upon’; and most critically, the concluding words ‘that We are
C
attendance to the discussion, we have read and understand the above minutes and
we hereby confirm they are correct and in order’. These two witnesses for the
plaintiff understood perfectly what transpired at the meeting; and they
confirmed that understanding by signing on to the minutes as recorded
D without any hesitation or reservation.

[63] I further do not put much stock in the fact that DW1 had pre-prepared
a draft of the minutes. DW1 candidly admitted to this. I accept his explanation
that the technical officers of the parties had held several prior discussions and
E meetings to prepare for the meeting on 29 September 2010; which meeting
was understood as a final meeting on the accounts. The integrity of these
minutes which have been read and understood by PW1 and PW2 before
signing them and which have been confirmed again in court as correct and in
order, are not diminished or compromised by this act of DW1. The
F explanation given is reasonable and logical in the given circumstances.

[64] Although the minutes do not ascribe such details as to what was said by
each attendee at the discussion or meeting; again, I agree with the defendant
that nothing turns on this. What is significant is that both of plaintiff ’s
G witnesses informed the court that they observed DW1 typing away as the
discussion or meeting progressed. This confirms the contemporaneous nature
of the record. Both PW1 and PW2 had every opportunity of either correcting
or signing with reservations of any degree or nature; yet they did not. This
indirectly confirms the testimony of DW1.
H
[65] Further, the court cannot accept the suggestion that the minutes ought
to be rejected because they were never sent to the plaintiff officially. This is
absolutely unnecessary since the plaintiff ’s representatives brought a copy of it
back to the plaintiff ’s MD. There can be no better communication than this
I personal service of these minutes, picked up by the attendees themselves
immediately upon conclusion of meeting while everything was still fresh,
leaving minimum room for any erroneous recollection. In any case, the
plaintiff ’s MD did receive the minutes as disclosed in the plaintiff ’s
correspondence following the meeting. Furthermore, there was never any
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516 Malayan Law Journal [2014] 10 MLJ

protest that the minutes were not sent or sent ‘officially’. This is really quite A
trivial and has no bearing whatsoever to the integrity of the minutes.

[66] On the matter of allegations that the plaintiff ’s representatives were

misrepresented; had no opportunity to speak at the meeting; and made to sign
the minutes, I find this not believable. These allegations are not borne out by B
either of the testimonies of PW1 and PW2 who are senior personnel of the
plaintiff; or in the letters that were subsequently exchanged between the
parties.
C
[67] The allegations presently made of coercion or being forced to sign are
serious. Assuming for a moment that what PW1 and PW2 tell the court indeed
happened, I would have expected immediate reactions from the plaintiff.
Particularly, I would have expected the plaintiff to correct the status of the
minutes besides making their allegations. D

[68] Instead, there is a deadly silence from the time of the meeting until the
present claim where this position was assumed. A perusal of the
correspondence reveals no such claim, not even a squeak or a suggestion that
something improper had transpired at the meeting. This serves only to show E
that the plaintiff ’s present claims are but after thoughts, raised for the first time
long after the meeting of 29 September 2010 had been concluded with the
settlement as contended by the defendant.
F
[69] It was only after the plaintiff had reviewed its own financial position
that the plaintiff requested a reconsideration of the matters agreed or a further
meeting. In its letters to the defendant sent after the meeting, the plaintiff is
seen reverting on the outstanding matters such as the omissions, drawings and
the debit notes. G

[70] In these letters, the plaintiff can be seen asking the defendant for
another meeting in view of its financial status. In the plaintiff ’s letter dated 6
October 2010 (p 22) sent after the meeting, the plaintiff stated:
CADANGAN PEMBINAAN KOMPLEKS KDN/KA DAN LOGISTIK H
BUKIT AMAN, KUALA LUMPUR SECARA ‘DESIGN & BUILD’ MELALUI
RUNDINGAN TERUS
VO No 1 to 61 and Debit Notes
We refer to the meeting on 29 September 2010 concerning the abovementioned I
matter.
We have conducted a further internal review of the overall cost incurred by us in
executing the works, unfortunately, the financial statements reflects a very
discouraging scenario.
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Cobrain Holdings Sdn Bhd v Perwira Bintang Holdings Sdn

[2014] 10 MLJ Bhd (Mary Lim J) 517

A Considering the above and the vast disparity between the certified variations of
RM896,971.20 by your consultant and the evaluation of RM205,775.50 by your
project team, which we wish to regrettably inform you that we are not agreeable to
it; may we seek to have a meeting with your personally to resolve this matter.
We thank you very much for your kind consideration and look forward to meeting
B you personally soonest.

[71] The defendant responded to this request vide its letter dated 20 October
2010 (p 23) which states:
C CADANGAN PEMBINAAN KOMPLEKS KDN/KA DAN LOGISTIK
BUKIT AMAN, KUALA LUMPUR SECARA ‘DESIGN & BUILD’ MELALUI
RUNDINGAN TERUS
VO No 1 to 61 and Debit Notes
______________________________________________________
D
We have received on 12 October 2010 via facsimile transmission, your letter ref
A6808/PBHSB/10/10/RL/slc dated 6 October 2010 attention to our Dato’ Tan
Kar Meng, stated that you are not agreeable to the amount of evaluation for the VO
No 1 to 61 that have been concluded at RM205,775.50 by both parties in the
discussion held on 29 September 2010 attended by your representatives and our
E representatives including Dato’ Tan Kar Meng, and you are seeking to have a
meeting personally with Dato’ Tan Kar Meng to resolve this matter.
We have conducted a further internal review of your request, and have to reply
regrettably that as the Variation Orders (addition works) had already been discuss in
detail and conclude with the consent of both parties representatives in the said
F
meeting (please see the minutes of discussion item no. 1), as such the agreed amount
is proper and in order, there will not be any necessity to have further meeting on
this.
However, we may have a meeting to resolve Variation Order (omission works)
G which your representatives had committed to submit to us by 6 October 2010, but
until to date we have not received a copy.

[72] In this letter, the defendant categorically referred to the detailed

discussion and conclusion reached by consent of both parties’ representatives at
H the meeting on the value of the variation orders as well as to the minutes of the
meeting. There was no response or follow up from the plaintiff on this. Since
there was no protest or clarification in the plaintiff ’s previous letter, it would be
quite reasonable if not logical and natural to see some once the defendant
pointedly clarified that settlement had been achieved at the meeting of 29
I September 2010. Yet, there was none. The plaintiff did not even correct or
clarify that there was no agreement; or that PW1 and PW2 had no mandate or
authority to agree at that material meeting.
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518 Malayan Law Journal [2014] 10 MLJ

[73] In fact, there was nothing from the plaintiff until almost a year later, on A
7 June 2011 (p 25). Even then, it was after the defendant had sent a letter dated
19 May 2011 (p 24). In its letter dated 19 May 2011, the defendant said:
CADANGAN PEMBINAAN KOMPLEKS KDN/KA DAN LOGISTIK
BUKIT AMAN, KUALA LUMPUR SECARA ‘DESIGN & BUILD’ MELALUI
RUNDINGAN TERUS B
Account Status
____________________________________________
Further to the Final Account discussion held on 29 September 2010 at our office,
we would advise that, your status of account with Perwira Bintang Holdings Sdn C
Bhd is as follows:
Sub Contract Sum RM14,150,000.00
Variation Order (pending finalisation of 5 omissions) RM250,775.50
Revised Sub Contract Sum (while pending finalization RM14,355,775.50
of 5 omissions) D
Less Debit Notes to date RM12,744,269.83
Less Payment previously paid RM2,258,000.00
Balance Amount Due RM(646,494.33)
Please check your account and verify as soon as possible. Unless you could prove E
otherwise, it is obvious that we have overpaid RM646,494.33 to your account.
In view of this, we would like to have a meeting with your company to resolve this
issue.
Kindly inform us of your available time for the meeting.
F
[74] At this point, the defendant had noticed a possibility of an overpayment
of RM646,494.33 to the plaintiff from its checking of the account status. The
defendant asked the plaintiff ‘to check your account and verify as soon as
possible’. It also sought a meeting with the plaintiff ‘to resolve this issue’.
G
[75] It was in only in response to this claim of overpayment by the defendant
that the plaintiff raised for the first time, that there was no agreement at the
discussion of 29 September 2010. In its letter of 7 June 2011 which is
captioned ‘review account status’, the plaintiff stated: H
CADANGAN PEMBINAAN KOMPLEKS KDN/KA DAN LOGISTIK
BUKIT AMAN, KUALA LUMPUR SECARA ‘DESIGN & BUILD’ MELALUI
RUNDINGAN TERUS
Review Account Status
With reference to the above matter subject and your letter ref. 0090-C/11/9677 I
date 19 May 2011, we are pleased to inform you that we do not agree on the
overpaid amount due to us amounting to RM646,494.33.
Previously, we have submitted the additional variation order works (VO. 1-61)
complete with supporting drawings and site instructions to Mr. Terence Ng from
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Cobrain Holdings Sdn Bhd v Perwira Bintang Holdings Sdn

[2014] 10 MLJ Bhd (Mary Lim J) 519

A PBH and he had proposed a no. of VOs which were illegitimate during the VO
discussion on 29/12/2010 at your good office.
During the discussion in which we did not agree on the VOs that you had certified
amounting to RM205,775.50 which was a vast difference from the Consultant’s
evaluation. According to the supporting drawings and site instructions, we are
B entitled to claim the additional works (refer to revised Cobrain’s VO list) which are
not in the drawings or bill of quantities.
We attach the following lists for you to review and justify:
(1) Account Status
C (2) Cobrain’s VO list with Consultant’s validity of claim and Cobrain’s revised
VOs with reasons for Variation.
(3) Five (5) omission items from Contract
(4) Insurance claim on damaged Transformer
D
We also submit herewith the debit note list which we did not agree as they were tied
up with the additional works which had been carried out at site (inclusive of external
works).
Your kind consideration and approval to the above would definitely help to improve
E our rather dismay project account.
We thank you very much for your kind consideration and look forward to your
favorable reply.

[76] Again, this letter speaks volumes. At the penultimate paragraph of the
F letter the plaintiff is seen asking the defendant to consider and approve its
claims on the VOs which it said ‘would definitely help to improve our rather
dismay project account’.

G
[77] From these records of correspondence, it becomes apparent that the
plaintiff ’s conduct is not consistent with what it maintains presently in court.
It is in fact consistent with what has all along been contended and maintained
by the defendant; and that is the purpose of the meeting on 29 September 2010
is as recorded in the minutes kept; that agreement was reached between the
H parties at that material time; and that the terms of the agreement are as recorded
in the minutes prepared by DW1 and signed by both PW1 and PW2, after they
had read and understood its contents; confirming that the minutes were correct
and in order.

I [78] Next, the court is not persuaded that these two representatives of the
plaintiff did not have the necessary mandates or authority to decide on behalf
of the plaintiff. The evidence shows that the two personnel sent for the meeting
were indeed authorised to attend and make decisions on the plaintiff ’s behalf.
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520 Malayan Law Journal [2014] 10 MLJ

[79] These two senior personnel of the plaintiff, one of whom has at least 24 A
years experience with the plaintiff, were sent by the plaintiff ’s own managing
director. The plaintiff was fully aware of what was the purpose of the meeting
(especially since the parties have already had several meetings before this), and
had singled out these senior persons to attend. The plaintiff was also fully aware
of what had transpired at the meeting as the two attendees debriefed upon B
return from the meeting bearing their copy of the signed off minutes.

[80] Given that the calling of the meeting was agreed between the two
Managing Directors, it would be reasonable to say that the parties would have
C
ensured that the proper personnel attended. If indeed what the plaintiff
claimed today happened, that the meeting went beyond the terms or purpose,
I would have expected the plaintiff ’s MD to have picked up the phone to
protest immediately upon being briefed and shown the minutes; or put the
whole protest on paper; including claiming that PW1 and PW2 had no
D
mandates. Instead, there is this deep chasm of silence which grew longer till the
present claim was filed.

[81] In addition, the plaintiff itself had seen to various other matters that it
had agreed at that meeting. Those matters included items 3 and 5 in the E
minutes concerning the extension of the performance bond and the
submission of the maintenance schedule.

[82] In summary, the court does not find the plaintiff ’s witnesses believable
or truthful and I do not find their evidence credible. The court finds in contrast F
DW1 to be a truthful witness who told it as it is. Insofar as the minutes of the
meeting are concerned, it is observed that the plaintiff ’s objections are not as
against the total contents of the minutes but only in a limited respect.

[83] I find that highly irregular. The plaintiff cannot pick and choose which G
parts of the minutes best suits its ends. The minutes must be taken in totality.
The fact that the plaintiff went on to extend the performance bond and to
submit the requisite documents show not only financial matters were discussed
or that the attendees participated at the meeting, but that the minutes
accurately and correctly recorded the matters discussed and agreed at the H
meeting.

[84] The ensuing correspondence further fortifies this finding. In the first
letter sent shortly after the meeting, there is no protest from the plaintiff about
the matters now raised. I agree with the defendant that the plaintiff themselves I
referred to the meeting of 29 September 2010 as one on the finalisation of the
final accounts. It is reasonable and logical that that would be the very agenda as
that was what was still pending between the parties; and it would have been in
the plaintiff ’s interest to have that resolved so that it could be paid.
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Cobrain Holdings Sdn Bhd v Perwira Bintang Holdings Sdn

[2014] 10 MLJ Bhd (Mary Lim J) 521

A [85] There are still two other matters, the police reports made by PW1 and
PW2. In view of the observations and findings above, the court agrees with the
defendant that these police reports are more self-serving than anything else.
The court is concerned with how this avenue is frequently resorted to without
care as to the consequences and responsibility that come with making such
B reports. These reports were only lodged in March of this year. Both police
reports refer to the defendant’s solicitor’s letter of demand of 25 March 2013 as
containing a false claim against the plaintiff and containing an allegation that
they, PW1 and PW2, had agreed to the defendant’s claim.
C
[86] The defendant had already alluded to the detailed discussion and
conclusion reached by mutual consent of the parties’ representatives at the
meeting of 29 September 2010 as early as in its letter dated 20 October 2010.
It is reasonable to say that the plaintiff ’s MD would have verified this
contention with PW1 and PW2; and consequently PW1 and PW2 would have
D
been alerted to this ‘allegation’ at that time. That being so, there is substantial
delay in the making of these police reports that seriously undermine the truth
of their contents.

E [87] Then, there is the non-calling of the plaintiff ’s MD. This issue of
mandate or authorisation is best answered by the person who directed PW1
and PW2 to attend the fateful meeting, that is, Datuk Eric Tan Seah Lim. He
has remained conspicuously absent. No explanation has been put forth.

F [88] The defendant has sought to invoke the presumption under s 114(g) of
the Evidence Act 1950 with this absence of Datuk Tan. With respect, the court
declines. While this witness has not attended court to testify and no
explanation has been given as to his absence, it cannot be readily said that in
itself is a withholding of evidence.
G
[89] Section 114 of the Evidence Act 1950 deals with the rebuttable
presumption of facts. The court ‘may assume the existence of facts which it
thinks likely to have happened, regard being had to the common course of
natural events, human conduct, and public and private business, in their
H relation to the facts of the particular case’. Nine illustrations are given under
this section.

[90] Under s 114(g), the court may presume that the evidence which could
be and is not produced would if produced be unfavourable to the person who
I withholds it. It has long been recognised that this illustration depends on the
circumstances presented, particularly, the materiality of the witness not
produced. Although I agree that this Datuk Tan is a material witness, it cannot
be readily concluded that there has been suppression or withholding of
evidence. The lack of testimony from this person appears to be more on
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522 Malayan Law Journal [2014] 10 MLJ

account of the plaintiff ’s failure to obtain evidence. This was reminded by the A
Supreme Court in Munusamy v Public Prosecutor [1987] 1 MLJ 492. All that
the court is prepared to find in this respect is that the evidence of PW1 and
PW2 is not corroborated by an important and material witness.

[91] Be that as it may, there is ample evidence before the court, which B
evidence has already been dealt with, which leads the court to agree with the
defendant. In as much as the decisions taken at the meeting bind the plaintiff,
they also bind the defendant. Those decisions have been relied on by the
respective parties who have since acted and arranged their affairs, especially
financial affairs according to those terms. The Court of Appeal in Charles C
Grenier Sdn Bhd v Lau Wing Hong [1996] 3 MLJ 327 recognised that when
this is done, a contract binding on the parties arises. ‘The law leans in favour of
upholding bargains and not in striking them down willy-nilly’; and although
the manner in which the agreement, admission or accord exists may not be
your typical formal written contract, it does not detract from the fact that one D
exists as claimed by the defendant.

[92] It is clear and proved by the defendant that the meeting of 29 September
2010 recorded accord between the parties on the various matters in respect of
the finalisation of the accounts under the subcontract, the details of which are E
to be found in the minutes of that meeting, and in particular they are:
(a) that the variation orders had been agreed at RM205,775.50 which
amount does not include the value of the omission works which the
plaintiff was to submit its details by 6 October 2010 for evaluation; F
(b) that debit notes to the value of RM12,647,379.51 for fine, penalty and
back-charges for the works and services rendered by the defendant until
16.8.2010 have been agreed; and
(c) that there are two outstanding back charges agreed which have yet to be G
included. These two items being the hot dipped galvanised iron support
for facade lighting and power consumption used for testing and
commissioning agreed at RM100,000.

[93] I had sought clarification from both counsel before delivering judgment H
on this issue as to the effect of the court’s decision on the meeting. The plaintiff
categorically and clearly took the position that the plaintiff ’s claim must stand
dismissed in the event the court decides not in its favour. The defendant on the
other hand, opined that the remainder of the plaintiff ’s claim ought to be
proved. I

[94] In view of the fact that I have found that the meeting accords with the
matters as explained by the defendant’s witnesses, and since the plaintiff does
not see fit to prove any of the remaining matters, the court is left with no other
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Cobrain Holdings Sdn Bhd v Perwira Bintang Holdings Sdn

[2014] 10 MLJ Bhd (Mary Lim J) 523

A alternative but to dismiss the plaintiff ’s whole claim. Costs in respect of this is
reserved to the conclusion of the determination of the defendant’s
counterclaim.

THE COUNTERCLAIM
B
[95] There is still the matter of the defendant’s counterclaim. It concerns
what the defendant say is over payment, details of which are found at paras 19
and 20 of the defence.
C
[96] In relation to this, the defendant has led evidence once again through
DW1. As pointed out earlier, he is the person responsible for preparing the final
accounts. He explained that it was clear from the accounts that the plaintiff had
been overpaid for the works done under the subcontract. He told the court that
the defendant was about to initiate legal action when the plaintiff beat them to
D
it by serving the defendant with the writ in this action.

[97] DW1 proceeded to explain what items (a) to (j) at para 19 of its defence
and counterclaim meant and how the figures were arrived at. These details are
E in the table that has already been set out earlier.

[98] DW1 explained that item (a) was the subcontract sum while (b) was the
sum for the variation orders as agreed at the meeting of 29 September 2010.
Item (c) is the value of 5 omission works which the plaintiff reverted to the
F defendant through its letter of 7 June 2011 (pp 25–30); a sum of RM56,128.
This figure was accepted by the defendant without amendment, as it had
agreed at that same meeting. This figure was deducted from the subcontract
sum.

G [99] As for item (d), this was the revised subcontract sum which comprised
the earlier three items. Next, is item (e). These were the debit notes where the
sum of 12,647,379.51 was agreed to by the plaintiff at the meeting of
29 September 2010. Because the plaintiff had agreed at that meeting that the
defendant could issue further debit notes, debit notes for fines, penalties and
H back charges for the works, materials and services rendered by the defendant to
the plaintiff during the defect liability period, additional debit notes to the
value of RM174,803.27 were issued bringing the total value to
RM12,922,182.78.

I [100] This sum of RM12,922,182.78 is said to have been accepted by the

plaintiff vide its letter dated 20 February 2013 to the defendant (pp 68–74).
The plaintiff ’s own evaluation of the status of the account which was attached
to this letter acknowledged the value of the debit notes as standing to the value
of RM12,922,182.78. This is recorded in item 6 at p 70.
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524 Malayan Law Journal [2014] 10 MLJ

[101] Moving on to items (f ) and (g), the earlier is for a credit note for A
RM11,200 for the return of workers’ passes; while the latter was a sum of
RM2,258,000 which were payments previously made to the defendant. The
evidence of such payments can be found in the copies of cheques issued by the
defendant and the corresponding cheque deposit slips tendered in the bundle
of documents marked ‘interim certificates received from PBHSB’. There are B
also acknowledgements by the plaintiff of the payment of this sum as seen in
the attachments to the plaintiff ’s letters to the defendant dated 7 June 2011 and
20 February 2013.
C
[102] As for items (h),(i) and (j), DW1 explained as follow at Q&A 12 of his
witness statement:
12. Q: Can you explain Item (h)(i) and (j)?
A: Item (h) is the Balance Amount and it shows overpayment of D
RM869,335.28 to the plaintiff.
Item (i) is the insurance monies of RM255,500 received by the defendant
under an insurance claim for the plaintiff ’s equipment that had been
damaged. This amount is credited to the plaintiff.
Item (j) gives the final amount owing by the plaintiff to the defendant. E
And this works out to RM613,835.28

[103] In respect of the monies received from the insurance company, DW1
explained that the plaintiff ’s equipment was during the project. The defendant F
made a claim for RM309,000 on behalf of the plaintiff. The insurance
company evaluated the salvage value of the damaged equipment to be
RM38,500 and further deducted RM15,000 under the terms of the insurance
policy. The final amount received by the defendant from the insurers was
RM255,500. DW1 testified that this amount was taken into account in the G
preparation of the final accounts. Evidence of this payment is to be found at
pp 21–22 of the bundle of documents marked ‘damaged transformer claim and
report folder’.

[104] According to DW1, the salvage value of the damaged equipment H

totaling RM38,500 was not credited to the plaintiff ’s account because:
A: It was the Plaintiff ’s obligation to remove its damaged equipment
from the worksite under the terms and conditions of the said Letter
of Acceptance at Clauses 2.0 i, j and k, (pp 1–10 LAACPR) but the I
Plaintiff had failed to do so. The said damaged equipment
continued to be left on the worksite causing loss and damage to the
Defendant who, under the main contract, was obliged to remove all
work materials, equipment as well as scrap material from the
worksite prior to handling over to the client.
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Cobrain Holdings Sdn Bhd v Perwira Bintang Holdings Sdn

[2014] 10 MLJ Bhd (Mary Lim J) 525

A Had the Plaintiff removed the damaged equipment it could have obtained
the salvage value for itself. When it failed to do so the defendant sent the
damaged equipment to its store in Kinrara.
However when I checked again I discovered that the damaged transformer
was missing from the store and we are unable to locate it.
B
[105] Upon conclusion of DWTs evidence, the defendant closed its case in
the counterclaim. The plaintiff chose not to call evidence and submitted that
there was no case to answer. The court then put the plaintiff to election and
explained the consequences of such election in that in the event the submission
C
fails, no evidence can be led by the plaintiff. Learned counsel on behalf of the
plaintiff agreed and maintained the election.

[106] Having heard counsel and having perused the evidence, the court finds
D that the defendant has discharged its burden of proving its counterclaim. In a
case of submission of no case to answer, the evidence led is taken as true and
correct. The law here is settled — see the Supreme Court decision in Jaafar bin
Shaari & Anor (suing as administrator of the estate of Shofiah bte Ahmad,
deceased) v Tan Lip Eng & Anor [1997] 3 MLJ 693 and the Federal Court
E decision in Takako Sakao (f ) v Ng Pek Yuen (f ) & Anor [2009] 4 MLJ 66;
[2010] 1 CLJ 381, that the evidence ‘… must be presumed to be true’.

[107] In his submissions, learned counsel for the plaintiff contended that
since DW1 had admitted that a substantial number of the debit notes had not
F been acknowledged, the defendant’s counterclaim is therefore not proved.
Further, since the defendant had wrongfully withheld the sum of RM53,500
from the plaintiff which it now testifies that the sum is RM38,500 supports its
contentions. The defendant submitted that all these monies are in fact the
plaintiff ’s and the counterclaim should be dismissed.
G
[108] Dealing first with the debit notes. In this regard, the plaintiff ’s own
actions in relation to the debit notes, though not acknowledged, but over quite
a substantial period July 2008–July 2010, with the meetings and
correspondence exchanged between parties, in fact confirms DW1’s testimony.
H The correspondence reveal that the plaintiff itself was not in doubt over the
debit notes, the amount stated therein, or what they signify. As seen earlier, the
plaintiff never objected to any of these records but instead, in its
correspondence and dealings with the defendant, the plaintiff readily accepted
the sums due under the debit notes without reservation.
I
[109] As for the insurance claim of RM53,500, this sum has in fact been
amended at the start of the hearing of the counterclaim to RM38,500. The
plaintiff confirmed this amendment. With that, the defendant’s claim now
stands as RM575,335.28.
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526 Malayan Law Journal [2014] 10 MLJ

[110] DW1 was cross-examined. Despite strenuous cross-examination, he A

remained resolute, and most important, honest and sincere in his answers. I
find him candid, truthful and clear minded; this was indeed my earlier finding
and it remains the same. The court finds DW1’s testimony credible, cogent and
supported by the contemporaneous documents exchanged between the parties
at the material time. B

[111] The court has no other evidence in relation to the counterclaim save
that which was led by the defendant. Since the court believes in the testimony
of DW1, and there is no evidence to the contrary from the plaintiff in response
to the counterclaim, the court finds that the defendant has discharged its C
burden of proving on a balance of probabilities its counterclaim; and that
burden has shifted to the plaintiff to answer the claim. There is, indeed, a case
to answer or meet.

[112] Accordingly, the plaintiff ’s submission of no case to answer is dismissed; D

and the defendant’s counterclaim as prayed in para 22 of the defence and
counterclaim is allowed together with interest on the sum of RM575,335.28 at
5%pa from today to the date the realisation together with RM30,000 as costs
for the whole case.
E
Plaintiff ’s claim dismissed and defendant’s counterclaim allowed with costs.

Reported by Kanesh Sundrum

F