[2018] 5 LNS 182 Legal Network Series

AT THE SESSIONS COURT AT BINTULU

IN THE STATE OF SARAWAK

[SUIT NO BTU-A52NCVC-6/9-2016]

BETWEEN

SUSTAIN PRESENCE SDN BHD … PLAINTIFF

AND

HWONG SIEW NGI … DEFENDANT

BEFORE THE HONOURABLE SESSIONS COURT JUDGE PUAN

NORHAMIZAH BINTI SHAIFFUDDIN

DECISION

Introduction

In this case, the plaintiff claims for the following orders:

(i) the payment of the outstanding debt in the sum of

RM83,801.00;

(ii) interest on the said sum of RM83,801.00 at the rate of 3%

per annum from 20 th May 2015 until full and final
settlement;

(iii) on order that the defendant is to deliver and return the

possession of one unit of Toyota Forklift in good working
condition to the plaintiff at the defendant‟s cost within

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fourteen days from date of Judgment or the sum of

RM42,000.00 in lieu of and as damages for that Forklift
together with interest at 3% per annum on the said sum;

(iv) legal fees and disbursements incurred by the plaintiff in

enforcing payment calculated on a solicitor and client
basis; and

(v) further or such other order as the court deems fit.

The defendant on the other hand had filed a counterclaim against the
plaintiff, and prays for the following orders:

(i) that the plaintiff refunds the sum of RM154,000.00;

(ii) interest at the rate of 5% per annum on the said sum from
the sate of receiving the said sum, I,e, 4 th December 2014
until the date of full and final settlement of the said sum;

(iii) costs on full indemnity basis;

(iv) further or other reliefs.

The plaintiff has called three witnesses, namely:

PW1 – Ms Lau Yien Ling;

PW2 – Mr kong Cheh Chan; and

PW3 – Mr Jeff Anderson @ Teo Hai Soon.

The defendant called two witnesses, and they were:

DW1 – Mdm Hwong Siew Ngi; and

DW2 – Mr Yee Choo Wei @ Vincent Yee.

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Brief background of the case

The plaintiff is a company carrying on business as general trader at

Johor Bahru, Johor while the defendant is a sole proprietor trading
under the name and style of HG Trading at Bintulu, Sarawak. The
defendant had around July 2014 ordered one unit of imported Hitachi
EX200-5 excavator bearing registration no. QAA 5549K (hereinafter
called “EX200-5 Excavator”) from the plaintiff at the price of
RM140,000.00. After paying the purchase of such excavator in full,
the defendant had applied for a loan of RM154,000.00 using the same
excavator, from the defendant‟s banker, Public Islamic Bank Berhad
(hereinafter called “the Bank”), which the disbursement of the loan
money was made into the plaintiff‟s bank account.

The plaintiff claimed that at the defendant‟s request, in October 2014

the plaintiff has sold and delivered one unit of Hitachi EX200-1
Excavator (hereinafter called “EX200-1 Excavator) at the price of
RM115,000.00 and assorted spare parts to the defendant amounting to
RM14,801.00. The plaintiff also claimed that the defendant had paid a
sum of RM46,000.00 as non-refundable deposit for the EX200-1
Excavator, which had been deducted from the loan money disbursed to
the plaintiff‟s bank account. It is also the plaintiff‟s claim that the
defendant has in her possession one unit of Toyota Forklift belonging
to the plaintiff which was to be sold by the plaintiff to another party
but the defendant had failed to allow the collection of the same by the
plaintiff‟s agent at the defendant‟s premises.

The defendant denied ever placing any order for purchase of the
EX200-1 Excavator from the plaintiff, and thereby also denied taking
delivery of the same. The defendant also denied that the plaintiff had
ever delivered the said Toyota Forklift to the defendant, and negated
any knowledge over it. The defendant claimed that neither she by

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herself nor by her servant or agent ever ordered the EX200-1

Excavator and the Toyota Forklift from the plaintiff.

The defendant further made a counterclaim against the plaintiff in the

sum of RM154,000.00. The defendant pleaded that she had made full
payment for the purchase of the EX200-5 Excavator in October 2014,
before using the same vehicle to apply for a loan of RM154,000.00
from the Bank for her business turnover. The loan was approved in
December 2014 and the money was disbursed to the plaintiff.‟s bank
account. The defendant stated that the plaintiff had before the loan
application was submitted, agreed to refund the whole loan money to
the defendant immediately upon disbursement, but had failed to do so
until the date of the filing of the counterclaim.

The plaintiff however claimed that the defendant or her agent had
agreed that a part of the loan money amounting to RM100,600.00 was
to be deducted by the plaintiff as a non-refundable deposit for
ordering the EX200-1 Excavator and another excavator model EX120-
5. The plaintiff also said that the defendant had even agreed to pay the
sales tax on the difference between the actual cost of the EX200-5
Excavator and the loan amount to the plaintiff in the sum of
RM4,000.00 also by way of deduction from the loan money. The
plaintiff also pleaded that the defendant had subsequently cancelled
her order of the EX120-5 excavator, and the plaintiff agreed to deliver
only the EX200-1 Excavator together with the Toyota Forklift. It was
also pleaded by the plaintiff that the remaining sum from the loan
amounting to RM50,000.00, had been refunded to the defendant or her
agent via a cheque dated 1.7.2015.

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Issues to be tried

Both parties have agreed to several questions to be answered by this

court. However this court have taken the liberty to rearrange the
questions for the sake of easy understanding.

Question 1: Whether DW2 was authorized as the defendant’s

representative in the purchase of the EX20 0-5 Excavator

In July 2014, the defendant wanted to purchase another excavator for

her business of clearing timber camps and oil palm plantation. She
then asked the assistance of her son, DW2 to find heavy machineries
vendor who sells excavator. DW2 then carried an Internet search
where he found the plaintiff who was selling an EX200-5 excavator.
He then informed her mother, the defendant, who thought that the sale
price for the EX200-5 Excavator was cheaper than the market value,
and asked DW2 to contact the plaintiff to negotiate the purchase.
Throughout the trial, the defendant insisted that she never authorized
DW2 as her agent in the purchase of EX200-5 Excavator from the
plaintiff, other than conducting the Internet search. However, the
following facts were never disputed:

(i) That the defendant had never contacted or communicated

with the plaintiff, who is based in Johor, with
regards to the purchase of EX200-5 Excavator. Instead, it
was DW2 who conducted all the discussion and
negotiation. These negotiations led to the issuance of
quotation by the plaintiff (exhibit P3) dated 30/7/2014,
which was made for the attention of DW2.

(ii) That exhibit P3 was shown to the defendant, who had

agreed to the selling price.

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(iii) The defendant also testified that she surrendered all matter
relating to the purchase of the EX200-5 Excavator to her
son DW2, as she did not know the plaintiff‟s
representative. She also testified that all she did with
regards to the purchase of EX200-5 Excavator was signing
the Sale and Purchase Agreement, applying the bank loan
and issuing the payment cheques.

(iv) That the terms of payment were discussed between the

plaintiff and DW2, which led to the preparation of the Sale
and Purchase Agreement.

(v) That PW1 had handed exhibit D3 (Sales and Purchase

Agreement) to DW2 to be passed to the defendant for
signing. After the defendant signed exhibit D3, she passed
it back to DW2 to be returned to the plaintiff‟s
representative.

(vi) That the defendant had passed all the three payments for
the purchase of the EX200-5 Excavator via three cheques
to DW2 to be passed to the plaintiff.

(vii) That the arrangement for the defendant to pay the purchase
price of the EX200-5 Excavator before using the same for
loan application, was negotiated between the plaintiff and
DW2. Although the plaintiff said that the final decision
regarding the term of payment would be hers, initial
negotiations were done by DW2 on her behalf.

(viii) That it was DW2 who received the delivery of EX200-5

Excavator from the plaintiff, although the date of delivery
was disputed.

Section 140 of the Contracts Act 1950 provides:

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140. An authority is said to be express when it is given by words

spoken or written. An authority is said to be implied when it is
to be inferred from the circumstances of the case; and things
spoken or written, or the ordinary course of dealing, may be
accounted circumstances of the case.

From the facts above, this court hereby finds that DW2 had the
requisite authority to deal with the plaintiff on behalf of the defendant
and her company. It is noted that, as a businesswoman with more than
twenty years business experience, the defendant did not actively
engage in any sort of negotiation or even communication with the
plaintiff. Even in pursuing her own idea of using the EX200-5
Excavator to apply for the loan, she did not discuss the terms directly
with the plaintiff‟s representative. Although no express authority was
given to DW2 to act as the defendant‟s agent, the defendant had
acceded to DW2‟s action on behalf of the defendant or the defendant‟s
company in the defendant‟s dealing with the plaintiff. This court finds
that the plaintiff had reasonably believed that DW2 have such
authority to act on behalf of the defendant or the defendant‟s
company. The answer to this question is in the affirmative.

Question 2: Whether the defendant had through the plaintiff used

the EX200-5 Excavator to apply for the hire purchase facility in
the sum of RM154,000.00 from the Bank;

This point was also not disputed by both parties throughout the trial,
although the details leading towards the loan application were
different according to the testimonies of parties. DW2 testified that it
was PW3 who suggested that the defendant pay the purchase price of
the EX200-5 Excavator by cash, because the price will be much
cheaper and because the plaintiff needed money. DW2 also testified
that PW3 informed him that there were other individuals eyeing to

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buy the EX200-5 Excavator due to its cheap price, so the defendant
should buy the EX200-5 Excavator as soon as possible. DW1 testified
to the court that it was DW2 who told her and suggested to her to buy
the EX200-5 Excavator with cash, since the price will be cheaper, and
the defendant agreed to this.

DW2 in his testimonies told the court that her mother had originally
wanted to apply for a loan to buy the EX200-5 Excavator, but it was
PW3 who suggested that the defendant should buy the EX200-5
Excavator by cash, and later apply a loan using the same excavator.
DW1 however told the court that it was her idea to apply for a hire
purchase facility using the same EX200-5 Excavator for the purpose
of her business turnover.

DW1 originally testified that she applied for the loan from the Bank
on 21.10.2014, after she made the full payment for the purchase of the
EX200-5 Excavator. She stated that PW3 was present with her at the
Bank and supplied her with supporting documents for the application
such as the sales invoice exhibit D9, the Sales and Purchase
Agreement (exhibit D3), and the JPJ registration card for the EX200-5
Excavator (exhibit D7). She averred that at the bank, she had
discussed the terms of the loan with PW3 prior to submitting her loan
application, that the plaintiff was to refund the whole sum of the loan
to the defendant right after the money is disbursed into the plaintiff‟s
bank account. During the trial, the defendant was insistent that on
21.10.2014, PW3 was at the Bank with her and assisted her with the
loan application.

During cross examination, the defendant had agreed with the

plaintiff‟s counsel that the price of the EX200-5 Excavator was
differently stated in two invoices, exhibit D9 (RM140,000.00) and
exhibit D14 (RM220,000.00). She then changed her testimonies that
she actually used exhibit D14 to support her loan application. It was

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then shown to the court that the final payment for the balance of the
purchase price for the EX200-5 Excavator was actually made on
28.10.2014, which is after the date of the loan application by the
defendant. It was also shown to the court that exhibit D14 was dated
2.12.2014 and that the vehicle registration in exhibit D7 was made on
1.12.2014. It was at this juncture that the defendant changed her
testimonies that she actually applied for the loan at the Bank on
2.12.2014, but still insisted that PW3 was present with her at the
Bank. She justified the inconsistency in her testimony by stating that
she was confused with the dates as this incident happened a long time
ago.

Despite the inconsistencies on who actually proposed for the

defendant to apply for the hire purchase facility, the answer to this
question is affirmative, that the defendant had used the EX200-5
Excavator to apply for the loan from the Bank.

Question 3: Whether the defendant or her agent or servant had

ordered the EX200-1 Excavator from the plaintiff for the sum of
RM115,000.00 in 2014.

In its answer to Question 1, this court has made the finding that DW2
had the implied authority to act for the defendant in its dealing with
the plaintiff.

The defendant and DW2 denied ever placing any order for the EX200-
1 Excavator from the plaintiff. The defendant testified in court that
she owns four excavators including the EX200-5 Excavator for her
business. She also added that she only buys excavators models ending
with “-5” because these excavators use the same spare parts.

The defendant and DW2 also testified in court that there was no
payment of the deposit for such excavator. They also told the court

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that had the defendant any intention to buy the EX200-1 Excavator,
there would be a Sale and Purchase Agreement entered like exhibit
D3. There was never any discussion made between the plaintiff‟s
representative and the defendant on the purchase of the same. The
defendant also averred that exhibit P4, which was made for the
attention of DW2, was never shown to the defendant.

The plaintiff‟s witnesses on the other hand told a different story to the
court. PW3 averred that based on his discussion with DW2, it was
agreed between them that the defendant is to pay the full price for the
purchase of the EX200-5 Excavator by cash. It was also agreed that
later, the defendant will use the same excavator to apply for a hire
purchase loan from its banker, Public Islamic Bank Berhad. PW3
stated that based on his discussion with DW2, part of the loan money
is to be used as non-refundable deposit for the purchase of two other
excavators; EX200-1 and EX120-5 Excavators by the defendant. PW3
also told the court that the defendant, through DW2, had agreed to pay
for the sales tax which is the levied on the difference between the
prices of the EX200-5 Excavator in exhibit D9 and exhibit D14 which
is to be deducted from the loan money.

Considering the above, at this point it becomes necessary for the court
to explore the answer to the Question 4, in order to answer this
question.

Question 4: Whether the plaintiff had sold and delivered to the

defendant or her agent or servant the EX200 -1 Excavator for the
sum of RM115,000.00 in 2014.

The defendant testified that her son DW2 had received the delivery of
the EX200-5 Excavator on 14 th October 2014, which was before the
defendant submitted her loan application. This is supported by exhibit
D8, which is a Delivery Order issued by the plaintiff to the defendant,

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dated 14 th October 2014. The plaintiff had also issued exhibit D9,
which is the invoice for the payment for the EX200-5 Excavator,
together with exhibit D8. It was also the testimony of the defendant
that following the issuance of exhibit D8 and D9, she then issued the
final payment cheque for EX200-5 Excavator in the sum of
RM84,000.00 on 27.10.2014. The defendant averred that she already
had the EX200-5 Excavator in her possession before she submitted her
loan application.

Meanwhile, on the delivery of EX200-1 Excavator, the defendant

denied it wholly since she had never placed the order for the
excavator from the plaintiff. DW2 stated that he has no knowledge on
the EX200-1 Excavator and had never received the delivery of the
same from the plaintiff.

PW2 is an employee of a transporter company to which the plaintiff

was a client. He stated that he received instruction from PW3 to
deliver heavy machineries on two occasions. The first was on
28.10.2014 for the transport of the EX200-1 Excavator from Sibu to
Bintulu, and the second was to transport the EX200-5 Excavator and
the Toyota Forklift from Kuching to Bintulu on 12.12.2014. His
instruction was that both deliveries were to be sent to DW2.

PW2 averred that on 25.10.2014, he was delivering two excavators to

Bintulu including the EX200-1 Excavator. However, only one of the
two was delivered to a consignee, so PW2 wanted to send EX200-1
Excavator back to Sibu. On his way back to Sibu, PW3 called PW2
and informed him that a seller in Bintulu wanted to purchase the
EX200-1 Excavator so PW2 was instructed to send it to the buyer in
Bintulu. PW2 turned back to Bintulu, but his trailer broke down in
Selangau. PW2 then had the trailer repaired and resumed his journey
to Bintulu on 28.10.2014.

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It was PW2‟s testimony that when he was about to reach Bintulu, he

contacted DW2 who instructed him to meet up with DW2‟s brother
Charles Yee and to follow him to a location to off-load the EX200-1
Excavator. It was also PW2‟s testimonies that when he arrived at the
said location, he met a person whom he later knew as Vincent Yee
who personally operated the EX200-1 Excavator and off-loaded it
from the trailer.

PW2 testified that on 12.12.2014, on the instruction of DW2, he sent

the EX200-5 Excavator and the Toyota Forklift to the same location
where he delivered the EX200-1 Excavator. He said that it was also
DW2 who again personally offloaded both the heavy machineries from
the trailer. PW2 also testified that after both deliveries, he issued the
delivery notes exhibit P1 and P2 to DW2 who signed on them as the
consignee. PW2 had also produced and shown his logbook to the court
to prove that he delivered the excavators to DW2 on the dates stated.

The defendant‟s counsel raised the issue that the testimonies given by
PW2 are confusing, self-contradictory, and untruthful, but this court
finds it otherwise. It is worthy to note that PW2 is an independent
witness. He is not an employee of the plaintiff and does not have any
interest in this suit. He explained both the deliveries very clearly, and
supported them with the delivery notes and records in his logbook.

When compared to exhibit D8 and D9 that were both issued by the

plaintiff and dated 14.10.2014, the testimonies of PW2 make no sense.
However, it is important to note that DW2 admitted to receiving the
delivery of EX200-5 Excavator from PW2. He denied ever signing
either exhibit P1 or P2, but admitted that it was one of his mother‟s
worker who signed it, at least for the delivery of EX200-5 Excavator.
Neither DW2 nor the alleged defendant‟s worker disputed the details
written on exhibit P1 or P2 when these documents were signed. There
were no other deliveries made to DW2, except on 28.10.2014 and

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12.12.2014, and this court found no reason to disbelieve PW2 that he

personally delivered the excavators to DW2. The defendant also failed
to show other proof to show that the delivery of EX200-5 Excavator
was done on 14.10.2014. So while exhibit D8 and D9 remain
unexplained in light of both the deliveries as stated by PW2, this
court accepts the testimonies of PW2 as true; that there were two
deliveries of heavy machineries to DW2 on the two different dates.
The only mystery remaining is which excavator was sent when, as
PW2 admitted that he identified both the excavators as EX-200 and
could not differentiate between EX200-1 and EX200-5.

The details of exhibit D7 (JPJ registration card for the EX200-5

Excavator) were produced in court. It was shown that the registration
of the vehicle was done on 1.12.2014, and that the document bears an
endorsement that the defendant‟s banker has a claim of ownership
over the EX200-5 Excavator. The defendant has testified that she has
submitted her loan application on 21.10.2014 or around October 2014,
although later changed her testimonies to that the loan application was
submitted on 2.12.2014. The defendant also testified that the loan was
approved and disbursed in December 2014. After considering the
defendant‟s evidence, this court believed that EX200-5 Excavator was
delivered to DW2 on 12.12.2014, after the registration of vehicle was
completed on 1.12.2014. This is based on the evidences of the
defendant and DW2, that they had never sent the EX200-5 Excavator
to Puspakom for the purpose of inspection before registration, so the
more reasonable explanation is that EX200-5 Excavator was
registered under the defendant‟s company before its delivery to DW2.

Having found that the EX200-1 Excavator was delivered to DW2 on

28.10.2014, we go back to Question 3, which is whether the defendant
or her agent had ordered the EX200-1 Excavator from the plaintiff for
the sum of RM115,000.00.

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It was agreed between parties that although there was no direct

communication or negotiation between the plaintiff and the defendant
on the purchase of the EX200-5 Excavator, the procedure adopted by
both parties was clear. The transaction commenced with negotiations,
followed by issuance of quotation, and then signing of Sale and
Purchase Agreement between parties detailing the terms of purchase
and payment, and payment of the stipulated deposit by the defendant.
It was also found by the court that after the defendant paid the
purchase price of the EX200-5 Excavator in full, only then did the
plaintiff proceed with the JPJ registration before completing the
delivery on 12.12.2014.

However, it was a different set of story with EX200-1 Excavator. PW3

testified that it was negotiated between him and DW2 on behalf of the
defendant that the loan money disbursed to the plaintiff are to be used
to pay the non-refundable deposit for the purchase of EX200-1
Excavator and EX120-5 Excavator. The order for EX120-5 Excavator
was later cancelled by DW2 so it was never delivered and the
purported deposit for its purchase was forfeited by the plaintiff. The
court found that EX200-1 Excavator was delivered on 28.10.2014. It
is important to note that the delivery of the EX200 1 Excavator was
made even before the defendant submitted her loan application to her
banker. Even if it was to be believed that the defendant submitted her
loan application on 21.10.2014, it had yet to be approved by the Bank
as it was shown that the loan money was only disbursed to the
plaintiff‟s bank account in December 2014. Not only was there no
secured deposit for the purchase of the EX200-1 Excavator as the loan
application has yet to be submitted or approved, there was also no
Sale and Purchase Agreement entered between the plaintiff and the
defendant before its delivery.

Although this court believes that the EX200-1 Excavator was sent to
DW2 on 28.10.2014, there is not much evidence to believe that it was

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delivered based on the negotiation between the plaintiff and DW2 as

an agent to the defendant. At best, it was only a negotiation between
the plaintiff and DW2 in his personal capacity, although DW2 was
using the defendant‟s company‟s name. This is clear as the quotation
issued by the plaintiff for the EX200-1 Excavator was addressed to
the defendant‟s company. Considering the actions of the defendant
throughout the purchase of EX200-5 Excavator, that she was the one
who signed the Sales and Purchase Agreement, and who signed the
payment cheques, it is only reasonable to expect that she would take
similar actions in purchasing the EX200-1 Excavator.

In G Balan Govindasamy v. Lee Moi Mou & Ors and Another Appeal
[2017] 8 CLJ 530, the Court of Appeal explained the principle of
implied authority of an agent:

“To begin with, it is pertinent to note that s. 188 of the

Contracts Act 1950 is analogous to the common law doctrine of
implied warranty of authority by the agent. This doctrine which
was established in the case of Collen v. Wright [1857] 8 E & B
647, Ex Ch enunciates that an agent who impliedly warrants that
he has authority, is liable to be sued on his warranty. The duty is
grounded on an implied warranty by the agent that he has
authority and the action, being in contract, lies even if the agent
honestly believed he had authority. Section 188 reads as
follows:

Liability of pretended agent

A person untruly representing himself to be the

authorized agent of another, and thereby inducing
another person to deal with him as such agent, is
liable, if his alleged employer does not ratify his
acts, to make compensation to the other in respect of

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any loss or any damage which he has incurred by so

dealing.”

It is trite law that a principal is not bound by an act of his agent which
is outside the scope of the agent‟s express, implied or apparent
authority unless the principal had in fact authorized the agent to do
the particular act or ratified it. Considering the factor that the delivery
of EX200-1 Excavator was completed even before the loan application
was approved or even submitted to the bank, and that there was no
Sales and Purchase Agreement entered into by the plaintiff and the
defendant, this court hereby answers Question 3 in the negative. It
follows therefore, that since there was no order placed by the
defendant, the answer to Question 4 is also negative.

Question 5: Whether the defendant or her agent or servant had

ordered assorted spare parts from the plaintiff for the sum of
RM14,801.00 in 2014.

Similar to the transaction involving the EX200-1 Excavator, there was

no direct communication at all between the plaintiff and the defendant
about the assorted spare parts order. In fact, in his testimony, PW3
admitted that the defendant did not have any knowledge about the
order at all, and she was not given the quotation or invoice for the
sale of the spare parts. There was also no Sale and Purchase
Agreement entered by the parties for the purchase of the assorted
spare parts.

In the answer to Question 3 and 4, the court found that DW2 was not
acting as the defendant‟s agent during his negotiation with the
plaintiff‟s representative on the purchase of the EX200-1 Excavator.
The answer to this question is the same; that DW2 was not acting as
the defendant‟s agent when he negotiated the purchase of the assorted

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spare parts, if at all. The defendant had never, either by herself or

through an agent, ordered the assorted spare parts from the plaintiff.

Question 6: Whether the plaintiff had sold and delivered to the

defendant or her agent or servant the assorted spare parts for the
sum of RM14,801.00 in 2014.

There was no evidence shown to the court that the assorted spare parts
had been delivered to the defendant or her agent. The answer to this
question is in the negative.

Question 7: Whether the defendant or her agent or servant h ad

ordered the Toyota Forklift from the plaintiff in 2014.

PW3 in his evidence told the court that before the delivery of the
EX200-5 Excavator, PW3 had asked DW2 whether the plaintiff could
store the Toyota Forklift at DW2‟s premises and that the Toyota
Forklift was meant for transshipment to another client in Miri. PW3
averred that DW2 had agreed to this request.

Based on this piece of evidence per se, this court found that the
defendant had never, either by herself or through an agent, ordered the
Toyota Forklift from the plaintiff in 2014.

Question 8: Whether the plaintiff had delivered to Toyota Forklift

to the defendant or her agent or servant in 2014 .

PW3 averred that at the same time when the EX200-1 Excavator was
delivered to DW2 at Sungai Nyigu, PW3 had asked DW2 whether the
plaintiff could store a forklift at DW2‟s premises, and DW2 had
agreed to this. PW2 stated that he had delivered the Toyota Forklift to
DW2, at the same time when he delivered the EX200-5 Excavator, on

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12.12.2014. His testimony was supported with exhibit P2. There is

however, no documentary evidence adduced that there was any
agreement between the plaintiff and the defendant on the Toyota
Forklift. All PW3 did was asked the permission of DW2 to store the
Toyota Forklift at DW2‟s premises pending the transshipment to Miri.
It is unreasonable to believe that DW2 was acting as the defendant‟s
agent when he agreed to the request made by PW3; it was just a favor
extended to the plaintiff and was not a contract in which DW2 can act
for the defendant. This court hereby finds that the plaintiff had never
delivered the Toyota Forklift to the defendant or her agent. Since
there was no delivery, it follows therefore that the defendant, either
by herself or through an agent, had never taken possession, custody or
control over the Toyota Forklift.

Question 9: Whether the plaintiff has failed to refund and

restitute the said sum of the hire purchase facility to the defendant
in accordance with the agreement or understanding betw een the
parties.

It was not disputed that the Bank had released the sum of
RM154,000.00 to the plaintiff in December 2014. The defendant
averred that it was a term agreed between parties that the plaintiff is
to return the whole sum of the loan since the payment for the purchase
of the EX200-5 Excavator had already been made in full. This court
had found that the defendant had never, either by her own self or
through an agent, placed any order on the EX200-1 Excavator,
EX120-5 Excavator and the assorted spare parts. There was also no
proof of evidence to show that parties agreed that RM4,000.00 was to
be deducted by the plaintiff from the loan money as payment for the
sales tax.

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The plaintiff raised the issue that since the disbursement of the loan
money in December 2014, the defendant had never issued any notice
or demand to the plaintiff for the return of the loan money to her.
Although the defendant testified that she asked the assistance of DW2
to contact the plaintiff and demand the return of her money, her
demand was actually made through phone calls, which she averred
were made by DW2 on her request. She told the court that she did not
know the plaintiff, and did not know how to trace the plaintiff since
the plaintiff was based in Johor. That was the reason why she asked
for DW2‟s assistance in demanding the loan money.

The defendant stated that the monthly commitment for the repayment
of the hire purchase facility is a huge amount for her, but she did not
actively pursue the return of her money from the plaintiff because
„she did not want to make a big fuss about it‟, but was forced to file
the counterclaim when the plaintiff instituted this suit. I

PW1 and PW3 testified that at the end of January 2015, after failing
to get the balance of payment for the purchase of the EX200-1
Excavator and the assorted spare parts, and also the return of the
Toyota Forklift, both PW1 and PW3 had a meeting with the defendant
at the Promenade Hotel to discuss the matter. PW1 stated that the
defendant was surprised when they told her about the purchase
negotiated by DW2 on behalf of the defendant‟s company. It was
during this meeting that the defendant called DW2 by phone and
asked him about the matter. As the phone was put into loudspeaker,
both PW1 and PW3 stated that they heard the conversation between
the defendant and DW2, where DW2 told the defendant not to worry
about the excavators.

It is to be noted that since the meeting at Promenade Hotel to the date

of filing of this suit, more than one year has passed. There was no
document produced in court to show that the defendant had taken

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legal action against the plaintiff to recover her money. The reason
given by the defendant that she was not able to trace the plaintiff is
outrageous. The plaintiff‟s address is clearly stated in all the
quotation, invoices and the Sale and Purchase Agreement entered by
parties. It is also to be noted that in March 2015, the plaintiff had
lodged a police report against the defendant for the recovery of the
balance purchase payment and the return of the Toyota Forklift. This
was clearly the plaintiff claiming and demanding the payment from
the defendant at that point in time, which is a far cry from the
defendant‟s conduct. She had chosen not to react to it; not even by
lodging a police report against the plaintiff to demand the refund of
her money from the plaintiff.

Section 149 of the Contracts Act 1950 provides:

Right of person as to acts done for him without his authority.

Effect of ratification

149. Where acts are done by one person on behalf of another

but without his knowledge or authority, he may elect to ratify or
to disown the acts. If he ratifies them, the same effects will
follow as if they had been performed by his authority.

Section 150 of the same, provides:

Ratification may be expressed or implied

150. Ratification may be expressed or may be implied in the

conduct of the person on whose behalf the acts are done.

In the High Court case of S RM Meyappa Chettiar v. Lim Lian Koo

[1954] 1 LNS 97, Mathew CJ said this on the principle of ratification
by principal:

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“I do not consider it necessary to examine in detail the reasons

which led the learned trial Judge to hold that the deceased
Somasundaram Chettiar had ratified the agreement during his
life time for, in my view, the principle of ratification cannot
apply to this agreement. That principle only applies where the
agent has professed to contract for his principal who afterwards
ratifies. The doctrine is thus stated by Tindal CJ in Wilson v.
Tumman [1843], 6M & C 242 at p. 242:

That an act done for another, by a person, not assuming to act

for himself, but for such other person, though without any
precedent authority whatever, becomes the act of the principal,
if subsequently ratified by him, is the known and well-
established rule of law. In that case the principal is bound by the
act, whether it be for his detriment or his advantage, and
whether it be founded on a tort or on a contract, to the same
effect as by, and with all the consequences which follow from,
the same act done by his previous authority.

In this case, the agent never even professed to contract as agent

for a principal without authority – vide s. 149 Contracts (Malay
States) Ordinance, 1950.”

In the case of Bel Realty Sdn Bhd v. Kumpulan Lanjut Budi (M) Sdn
Bhd & Anor [2004] 8 CLJ 34, Low Hop Bing J (as he then was) said
this:

“[2] It was clear that in the loan agreement the second defendant
had made the plaintiff a party thereto, to which the plaintiff had
agreed by way of the execution of the loan agreement by the
plaintiff's two directors. There were also express provisions in
the loan agreement relating to the charge created in favour of
the second defendant. There could be no doubt that the plaintiff
knew and had authorised the creation of the charge. Further cl.

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10(a) of the PA expressly authorised the first defendant as donee

to charge the land for obtaining a bridging loan to finance the
development.

[3] Since there was no dispute that the plaintiff's two directors
had voluntarily and truly executed the loan agreement and the
deed of assignment together with the plaintiff's endorsement of
consent, which constituted ratification by the plaintiff, the
plaintiff should be estopped from denying having knowledge of
the charge. Further, the deed of assignment was executed to
enable the first defendant to apply to the authorities for the
surrender of the master title to the land and the re-alienation of
individual titles, which the plaintiff had, pursuant to cl. 4 of the
deed, undertaken to deliver to the second defendant. Since the
plaintiff, as donor, had ratified the first defendant's creation of
the charge, the charge became the act of the principal.”

In the present case, the court finds that the defendant initially did not
know nor did she authorize DW2 to further placed an order on the
EX200-1 and EX120-5 Excavators from the plaintiff. However, after
the plaintiff‟s representative informed her of the purchase made by
DW2 on her behalf, she confronted DW2 albeit only via phone call.
This court took notice that there was never any express ratification
made by the defendant in this case to ratify the actions taken by DW2.
There was even in invoice sent directly to the defendant dated
1.3.2015 of the purchase of the EX200-1 Excavator. However, the
absence of any demand made by the defendant since January 2015
until the institution of the present suit, in the mind of this court, is an
act of implied ratification by the defendant. This court agrees with the
contention of the plaintiff‟s counsel that the only reasonable
explanation why the defendant did not issue any notice or demand on
the plaintiff, is because she knew that the loan money was used as

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contra payment for the deposit for the purchase of both the
excavators.

As for the balance of RM50,000.00 from the loan money, PW3

testified that this has been paid to the defendant by a third party via a
cheque dated 1.7.2015. The payment was made on the plaintiff‟s
arrangement with the third party, whom with the plaintiff had business
relations. The plaintiff denied ever receiving the payment from the
third party, but did not furnish further evidence to support their claim.

The court’s finding

On the abovementioned reasons, this court hereby rules as follows:

The plaintiff‟s claim is allowed on the following terms:

(i) the payment of the outstanding debt in the sum of

RM69,000.00;

(ii) interest on the said sum of RM69,000.00 at the rate of 3%

per annum from 20 th May 2015 until full and final
settlement;

(iii) costs of RM7,000.00 excluding disbursement.

The defendant‟s counterclaim is allowed on the following terms:

(i) that the plaintiff refunds the sum of RM4,000.00;

(ii) interest at the rate of 5% per annum on the said sum from
the sate of receiving the said sum, I,e, 4 th December 2014
until the date of full and final settlement of the said sum;

(iii) costs of RM500.00 excluding disbursement.

This court hereby orders.

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(NORHAMIZAH SHAIFFUDDIN)
SESSIONS COURT JUDGE
BINTULU, SARAWAK.

Dated:11 . JULY 2018

COUNSEL:

For the plaintiff - Cecil Ha; M/s Ibrahim & Co

For the defendant - Henry Ling Kuong Meng; M/s Ling & Wong
Advocates

Case(s) referred to:

G Balan Govindasamy v. Lee Moi Mou & Ors and Another Appeal
[2017] 8 CLJ 530

S RM Meyappa Chettiar v. Lim Lian Koo [1954] 1 LNS 97

Bel Realty Sdn Bhd v. Kumpulan Lanjut Budi (M) Sdn Bhd & Anor
[2004] 8 CLJ 34

Legislation referred to:

Contracts Act 1950, ss. 140, 149, 150

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