Boustead Petroleum Marketing Sdn Bhd V M.K.K Industries Sdn Bhd.

  

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THE HIGH COURT OF MALAYA AT KUALA LUMPUR

 

(COMMERCIAL DIVISION)

 

SUIT NO: D-22-506-2009

 

BOUSTEAD PETROLEUM MARKETING SDN BHD

 

V

 

M.K.K INDUSTRIES SDN BHD. GROUNDS OF JUDGMENT

 

The Plaintiff is seeking to enter summary judgment against the Defendant pursuant to O.14 Rules of the High Court 1980 application as per Enclosure 9. The application is supported by an affidavit affirmed on 13.7.2009.

 

Facts

 

The Plaintiff entered into an agreement with the Defendant to supply and deliver Liquefied Petroleum Gas (LPG). The Defendant runs a cloth dyeing plant in Batu Pahat, Johor. The Plaintiff’s claim is for the amount of RM382,568.12 for LPG supplied and delivered to the Defendant’s plant.

 

The Defendant contends that there are triable issues namely:-

 

i. that there was a delay on the part of the Plaintiff in the delivery and supply of the LPG;

 

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ii. that the Plaintiff failed to supply and deliver the actual amount of LPG ordered by the Defendant; and

 

iii. the Defendant had suffered a loss due to the delay and the Defendant’s claim amounting to RM2 million can set off the whole of the Plaintiff’s claim.

 

The Supreme Court in Bank Negara Malaysia v. Ismail Ali Johor [1992] 1 CLJ (Rep) 14 laid down the principles for summary judgment,

 

“Under an O.14 application the duty of a Judge does not end as soon as a fact is asserted by one party, and denied or disputed by the other on affidavit. Where such assertion, denial or dispute is equivocal, or lacking in precision or is inconsistent with undisputed contemporary documents or other statements by the same deponent or is inherently improbable in itself, then the Judge has a duty to reject such assertion

 

or denial, thereby rendering the issue as not triable_the Court must

 

go one step further and determine whether they are triable.”

 

The Supreme Court in the aforesaid case went on further to say that,

 

“Where the issue raised is solely a question of law without any reference of facts or where the facts are clear and undisputed, the Court should exercise its duty under O.14.”

 

Delay in delivering and supply of the actual amount of LPG ordered

 

The Defendant required the LPG to power the Defendant’s dyeing plant. Therefore it was critical that the LPG must be supplied accordingly whenever the order was made. Any delay in the supply of the LPG would cause disruption in operation of the Defendant’s cloth dyeing

 

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plant. According to the Defendant the Plaintiff had on numerous occasions failed to deliver the actual amount of LPG ordered by the Defendant. This can be seen from the Delivery Notes and Invoices which the Plaintiff exhibited in its Affidavit in Support (LCS-1). The Defendant referred to Invoice and Delivery Note dated 31.12.2007 where the Plaintiff had only supplied 2500kg of LPG when the order was for 2775kg. However, it is interesting to note that even though the amount of LPG supplied and delivered was less than what was ordered, the Defendant never made any formal complaints to the Plaintiff. The LPG supplied and delivered even though the amount was less was accepted by the Defendant. There was also to evidence to show the Defendant had rejected the LPG supplied.

 

Section 42 of the Sale of Goods Act 1957 provided that –

 

“The buyer is deemed to have accepted the goods when he intimates to the seller that he has accepted them, or when the goods have been delivered to him and he does any act in relation to them which is inconsistent with the ownership of the seller, or when after a lapse of time, he retains the goods without intimating to the seller that he had rejected them.”

 

There was an acceptance of the supply of LPG each time it was delivered to the Defendant. In Universal Cable (M) Bhd v. Bakti Arena Sdn. Bhd & Ors [2000] 3 CLJ 375 the High Court held that when there are acceptance of the delivered goods the Defendant had lost its right to reject the goods. The Defendant having taking delivery of the goods must be held accountable for the payment of those goods.

 

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The Defendant had suffered a loss due to the delay and the Defendant’s claim amounting to RM2 million can set off the whole of the Plaintiff’s claim.

 

In the case of Permodalan Plantations Sdn Bhd v Rachuta Sdn Bhd [1985] 1 MLJ 157 the Federal Court distinguished between a counterclaim and a set-off,

 

“…a counterclaim is wider than a defence of set-off and whilst the former is a separate action by a defendant against a plaintiff, the latter is essentially a defence, although a defendant is entitled to add it as counterclaim. Being a defence to a plaintiff’s action, the matter sought to be a set off must essentially be connected with or form part of the matter upon which the plaintiff’s action is founded.”

 

The Defendant in this case before me had filed a counterclaim against the Plaintiff. The Defendant in its counterclaim stated that between January 2007 until June 2008 as a result of the failure of the Plaintiff to supply the actual amount of LPG, the Defendant suffered losses amounting to RM2 million. This includes ‘backcharges’ of about RM300,000.00 to its clients i.e. South Asia Sdn Bhd and Keza Sdn Bhd. and also overtime of its employees.

 

In Permodalan Plantations his Lordship Salleh Abbas LP said that

 

“.a set-off is a defence and that if a counterclaim consisting of matters to be set-off is added to the defence, such a counterclaim becomes a special kind of counterclaim, and that the set-off must be clearly connected with the claim.”

 

Applying the above principle the counterclaim by the Defendant is not connected to the claim advanced by the Plaintiff.

 

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The issues raised by the Defendants are not issues that need not be ventilated in a full trial as the Affidavits filed and the documents exhibited show that there is a debt owing by the Defendant for the LPG supplied and delivered by the Plaintiff. Therefore the application of the Plaintiff in Enclosure 9 is allowed with cost.

 

(HASNAH BINTI DATO’ MOHAMMED HASHIM)

 

Judicial Commissioner

 

High Court of Malaya at Kuala Lumpur.

 

17 May 2010

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