China Harbour EngineeringCompany Ltd. … PlaintiffAndLunar Shipping Agencies Sdn. Bhd. … Defendant

  

Download PDF Here

IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR (ADMIRALTY DIVISION)

 

IN THE FEDERAL TERITORY OF KUALA LUMPUR, MALAYSIA

 

SUIT NO: 27NCC-8-03/2015

 

BETWEEN

 

CHINA HARBOUR ENGINEERING

 

COMPANY LTD. … PLAINTIFF

 

AND

 

LUNAR SHIPPING AGENCIES SDN. BHD. … DEFENDANT

 

JUDGMENT

 

(pursuant to an order of the Court of Appeal)

 

A. Introduction

 

1. This claim (Plaintiff’s Claim) by the plaintiff company [a company incorporated in the People’s Republic of China (Plaintiff)], and the counterclaim (Defendant’s Counterclaim) by the defendant company [a company incorporated in Malaysia (Defendant)] had been tried and decided by the Shah Alam High Court on 20.8.2014 (SAHC’s Decision).

 

i

 

2. Both the Plaintiff and Defendant have appealed to the Court of Appeal against the SAHC’s Decision. On 4.3.2015, the Court of Appeal had ordered, among others, that this case be re-heard on its merits in the Kuala Lumpur High Court (Admiralty Division) (CA’s Order). Hence, this case before me pursuant to the CA’s Order (KLHC Proceedings).

 

B. Issues

 

3. The following questions, among others, arise in this case:

 

(1) whether the Plaintiff was the principal of PK Shipping Agency Co. Ltd., Thailand (PKSA) when PKSA entered into 2 agreements with the Defendant in respect of the ship, “MV Vital Star’ (Ship);

 

(2) whether the Defendant could deviate from the agreed journey of the Ship (to Kyauk Pyu, Myanmar) to Batu Ampar, Batam, Indonesia on the ground of the Ship’s engine problems;

 

(3) whether the Plaintiff is liable for the Defendant’s Counterclaim for freight in this case;

 

(4) whether the Defendant was entitled to a lien on the Plaintiff’s steel bars and cement carried on the Ship (Cargo);

 

(5) in respect of PKSA’s supply of bunker oil to the Ship (PKSA’s Supply of Bunker Oil), whether PKSA had acted as the Plaintiff’s agent and if

 

2

 

“yes”, whether the Plaintiff was liable to the Defendant under s 16 of the Sale of Goods Act 1957 (SGA);

 

(6) whether the Defendant is liable to the Plaintiff for the tort of detinue and/or tort of conversion in respect of the Cargo;

 

(7) whether the Plaintiff’s Claim is barred by limitation; and

 

(8) whether the Defendant can rely on an exclusion clause as a defence against the Plaintiff’s Claim.

 

C. Trial in SAHC

 

4. In SAHC –

 

(1) the Plaintiff called its only witness, Mr. Yang Shengjun (PW1); and

 

(2) the Defendant called the following witnesses –

 

(a) Dato’ Loo Son Yong (DW1);

 

(b) Mr. Loo Tzeh Ming (DW2);

 

(c) Mr. Loo Tzeh Kang (DW3);

 

(d) Encik Erwan bin Hassan (DW4); and

 

3

 

(e) Mr. Soon Jin Kim (DW5).

 

D. KLHC Proceedings

 

5. Before me, the parties agreed to a consent order dated 12.5.2015 (Consent Order). According to the Consent Order, among others –

 

(1) both parties were at liberty to –

 

(a) call new witnesses in the KLHC Proceedings; and

 

(b) re-call witness who had testified in SAHC (SAHC Witnesses), to give evidence in the KLHC Proceedings;

 

(2) all the documents filed in SAHC (SAHC Documents) were tendered as “Part B” documents in the KLHC Proceedings; and

 

(3) the notes of proceedings in SAHC (NOP) shall be admissible as evidence and may be relied on by both parties in the KLHC Proceedings.

 

6. After the Consent Order, learned counsel for both parties informed this court that –

 

4

 

(1) both parties would not call any new witness in the KLHC Proceedings. Nor would parties re-call any of the SAHC Witnesses to testify in the KLHC Proceedings; and

 

(2) both parties would rely on their written submissions in the SAHC and CA. Both parties then applied for and obtained leave of this court to file additional written submissions.

 

E. Evidence which had been adduced in SAHC trial

 

E(1). Plaintiff’s case

 

7. PW1 is a national of the People’s Republic of China and is the “Commercial Manager’ of the Plaintiff. In PW1’s witness statement, PW1 testified as follows, among others:

 

(1) the Plaintiff has on-going projects in Myanmar, one of which is “Myanmar-China Crude Oil Pipeline Project-Crude Oil Wharf and Waterway Works”. The Plaintiff had been engaged as a contractor to construct a wharf terminal and to carry out navigation channel works in Myanmar;

 

(2) the Plaintiff was the owner of the Cargo which consisted of –

 

(a) 2,275 bundles of “TIS Deformed Bar SD40” weighing 2,879.77 tons of steel bars (Steel Bars); and

 

5

 

(b) “Portland Grey Cement Type 1” weighing 1,193 tons (Cement);

 

(3) the Steel Bars were loaded on to the Ship on 30.9.2011 at the Port of Loading, Laem Chabang, Thailand, by way of a bill of lading no. 002/2011 (1st Bill of Lading). According to the 1st Bill of Lading, the Port of Discharge for the Steel Bars was Kyauk Pyu, Myanmar;

 

(4) by way of a bill of lading no. 001/2011 (2nd Bill of Lading), the Cement was loaded on to the Ship at the Port of Loading, Koh Sichang, Thailand, on 3.10.2011 and the Port of Discharge was Kyauk Pyu, Myanmar. The 1st and 2nd Bills of Lading will be collectively referred to in this judgment as the “2 Bills of Lading”;

 

(5) the Cargo was not delivered to Kyauk Pyu, Myanmar and had been detained by the Defendant. On 24.2.2014, the Plaintiff had inspected the Cargo at a place owned by Pandamar Marine Base Sdn. Bhd. (PMBSB). During this inspection –

 

(a) the Plaintiff could not take an inventory count of the Cargo without a crane or heavy equipment to lift the Cargo;

 

(b) the Steel Bars had been left exposed in an open space although there were canvasses covering the Steel Bars. The canvasses looked new and PW1 was not sure whether the Steel Bars were previously covered or left exposed. All the Steel Bars had become rusty and some of the Steel Bars showed signs of erosion as the

 

6

 

Steel Bars had been left exposed outdoor for more than 2 years; and

 

(c) the Cement had hardened;

 

(6) the Plaintiff had paid the freight charges (for the shipment of the Cargo to Myanmar) in full to PKSA. According to PKSA, the freight charges had been set-off by PKSA due to PKSA’s Supply of Bunker Oil. The Plaintiff was not involved in PKSA’s Supply of Bunker Oil. PKSA was only the Plaintiff’s agent to ship the Cargo to Myanmar. The “Contract of Affreightment’ (COA) and “Fixture Note” (FN), both dated 20.9.2011, signed by PKSA and the Defendant, did not provide for PKSA’s Supply of Bunker Oil. The Plaintiff did not authorize or instruct PKSA in respect of PKSA’s Supply of Bunker Oil. PKSA’s Supply of Bunker Oil was a “private dealing” between PKSA and the Defendant. The Defendant could claim compensation from PKSA in respect of PKSA’s Supply of Bunker Oil;

 

(7) the Plaintiff did not enter into any agreement with the Defendant. All the contracts were between PKSA and the Defendant. There was a separate contract between PKSA and the Plaintiff;

 

(8) after the Cargo had been loaded on board the Ship –

 

(a) PKSA complained about the Ship’s engine in an email dated

 

8.10.2011 by Mr. Vorawut Tangsook (Mr. Vorawut) to the Defendant (Mr. Vorawut’s Email dated 8.10.2011); and

 

7

 

(b) the Plaintiff and PKSA “started to worry” about the whereabouts of the Ship when the Defendant could not inform the estimated time of arrival (ETA) of the Ship. Mr. Vorawut sent an email dated

 

19.10.2011 to the Defendant which requested the Defendant to confirm the ETA of the Ship (Mr. Vorawut’s Email dated

 

19.10.2011);

 

(9) PKSA and the Plaintiff discovered that the Ship had deviated from the route and ended up in Batam Indonesia. The Defendant then requested for a meeting with PKSA and the Plaintiff. The first meeting took place on 3.11.2011 (Meeting on 3.11.2011) where PW1 represented the Plaintiff. At the Meeting on 3.11.2011 –

 

(a) it was clear to the Plaintiff that the dispute was between PKSA and the Defendant over a “monetary issue”;

 

(b) the Defendant stated that if PKSA did not pay the freight to the Defendant, the Defendant would not continue with the voyage of the Cargo to Myanmar. However, PKSA’s stand was that the freight had been paid to the Defendant due to PKSA’s supply of fuel oil and services to the Defendant; and

 

(c) the Plaintiff issued a letter dated 4.11.2011 to the Defendant (Plaintiff’s Letter dated 4.11.2011) which, among others, warned the Defendant of the loss to be suffered by the Plaintiff;

 

8

 

(10) there was a meeting held in Royale Chulan Hotel, Kuala Lumpur on

 

18.11.2011 (Meeting on 18.11.2011). At the Meeting on 18.11.2011 –

 

(a) PW1 represented the Plaintiff. PW1 clarified that there was a person named Ms. “Sammy’ who met the Defendant at the 2nd Meeting on 18.11.2011 but “Sammy was no longer the Plaintiff’s employee at that time and did not represent the Plaintiff’; and

 

(b) the Defendant wanted the Plaintiff to sign an “Undertaking/Indemnity’ by PKSA and Plaintiff in favour of the Defendant [Proposed Undertaking/Indemnity (18.11.2011)] before the Defendant would continue with the voyage to deliver the Cargo to Myanmar. However, after due consideration, the Plaintiff thought the terms of the Proposed Undertaking/Indemnity (18.11.2011) were “too harsh, excessive and unfair’. The Plaintiff had paid the freight charges and had “nothing to do” with the issues between PKSA and the Defendant. The Defendant had an obligation to deliver the Cargo and should not blackmail the Plaintiff. By the Defendant’s “behaviour’, the Plaintiff had no “confidence” that the Defendant would honour its promise to deliver the Cargo;

 

(11) the Defendant had illegally detained the Cargo and had no right to claim storage charges at the rate of US$2,500 per day from the Plaintiff as demanded in the Defendant’s letter dated 18.11.2011 to PKSA (Defendant’s Letter dated 18.11.2011);

 

9

 

(12) PKSA wrote letters to the Defendant which demanded, among others, the Defendant to deliver the Cargo to Myanmar or to release the Cargo to PKSA but to no avail;

 

(13) the Plaintiff had contacted law enforcement agencies in respect of this case but the Plaintiff was “pushed around” with no result. The Plaintiff then decided to appoint lawyers who sent a demand dated 7.2.2013 to the Defendant (Demand dated 7.2.2013 by Plaintiff’s Solicitors). The Demand dated 7.2.2013 by Plaintiff’s Solicitors only referred to the Steel Bars and demanded the Defendant to deliver the Steel Bars to the Plaintiff within 14 days from the date of the Demand dated 7.2.2013 by Plaintiff’s Solicitors or alternatively, to pay damages for wrongful conversion of the Steel Bars in the sum of US$2,564,194.24, failing which the Plaintiff would commence legal proceedings against the Defendant;

 

(14) the Defendant had commenced arbitral proceedings against PKSA but had discontinued such proceedings;

 

(15) before the action in SAHC, the Defendant had not issued any demand or claim for payment from the Plaintiff in respect of the Defendant’s Counterclaim; and

 

(16) in the Plaintiff’s Claim, the Plaintiff claimed for –

 

(a) the return of the Cargo, especially the Steel Bars; and

 

10

 

(b) losses suffered by the Plaintiff, namely US$72,773.00 for the Cement and US$2,564,315.05 for the Steel Bars.

 

8. During cross-examination, PW1 gave the following evidence, among

 

others:

 

(1) since 22.5.2011 PW1 had been sent to the Plaintiff’s office in Myanmar as the Plaintiff’s Commercial Manager. At the time of PW1’s crossexamination, PW1 was still working in Myanmar;

 

(2) according to PW1, Mr. Tian Huaxin (Mr. Tian) is the Plaintiff’s managing director (MD) in Myanmar;

 

(3) at the time of PW1’s email dated 29.10.2011 to the Defendant (PW1’s Email dated 29.10.2011), Ms. Sammy had already resigned as the Plaintiff’s employee and was only an interpreter or translator for PKSA and the Plaintiff. The Defendant’s learned counsel subsequently showed to PW1 an email dated 26.9.2011 from Ms. Benyapha Samphao (Ms. Sammy) to the Defendant (Ms. Sammy’s Email dated

 

26.9.2011). The Defendant’s learned counsel suggested that Ms. Sammy sent Ms. Sammy’s Email dated 26.9.2011 as the Plaintiff’s ‘‘International Project Assistant’ but PW1 “completely’ disagreed with this suggestion. There was however no documentary evidence to show that Ms. Sammy was no longer an employee of the Plaintiff;

 

11

 

(4) PW1 met DW1, DW3 and Mr. Vorawut in Novotel Bangkok (Meeting in Novotel) with Mr. Tian, Mr. Xiao Wang (Mr. Xiao) and Mr. Wai Lin Htun (Mr. Wai). At the Meeting in Novotel, PW1 did not see the signing of the COA and FN;

 

(5) PW1 knew Mr. Vorawut was the owner of PKSA. PW1 was however not aware that the Defendant had sent a draft bareboat charter to Mr. Vorawut. Nor was PW1 aware that Mr. Vorawut was in touch with Mr. Tian at the time of Mr. Vorawut’s emails dated 28.7.2011 and 31.7.2011 to the Defendant (Mr. Vorawut’s Emails dated 28.7.2011 and 31.7.2011). PW1 disagreed with the Defendant’s learned counsel that based on Mr. Vorawut’s Emails dated 28.7.2011 and 31.7.2011, Mr. Vorawut looked towards Mr. Tian to decide on matters;

 

(6) PW1 agreed that on 8.8.2011, more than a month before the execution of the COA and FN, PKSA entered into a contract with the Plaintiff [Contract Between PKSA and Plaintiff (8.8.2011)]. In respect of the Contract Between PKSA and Plaintiff (8.8.2011) –

 

(a) PW1 agreed that PKSA was the “charterof’ of the Ship while the Plaintiff was the “charterer’ of the Ship;

 

(b) the cargo to be shipped by the Contract Between PKSA and Plaintiff (8.8.2011), was the Cement and Steel Bars;

 

(c) PW1 said PW1 did not know whether the Ship was available prior to the signing of the COA and FN; and

 

12

 

(d) when PW1 signed the Contract Between PKSA and Plaintiff (8.8.2011), PW1 was not aware of that contract and only read the contract after signing it;

 

(7) PW1 was not aware of Mr. Vorawut email dated 9.8.2011 to the Defendant (Mr. Vorawut’s Email dated 9.8.2011). Nor was PW1 aware that Mr. Vorawut’s Email dated 9.8.2011 had been copied to Ms. Sammy;

 

(8) PW1 did not know of Mr. Tian’s emails dated 12.8.2011 and 24.8.2011 to the Plaintiff (Mr. Tian’s Emails dated 12.8.2011 and 24.8.2011).

 

Nor was PW1 aware of Mr. Tian’s inspection of the Ship;

 

(9) PW1 was not present at the meeting in Yangon between Mr. Tian and DW1;

 

(10) Mr. Wai was previously the Plaintiff’s staff in Myanmar but Mr. Wai had already resigned. PW1 was not aware of an email dated 8.9.2011 sent by Mr. Wai to Mr. Vorawut (Mr. Wai’s Email dated 8.9.2011);

 

(11) PW1 disagreed with the Defendant’s learned counsel that the FN provided that PKSA was “acting on behalf of the Plaintiff. PW1 got a copy of the FN at the Meeting on 18.11.2011 but did not send any letter or email to the Defendant to correct the FN that PKSA was not “acting on behalf of the Plaintiff. PW1 claimed to be not aware of the contents of the COA and FN. Furthermore, PW1 alleged that none of the terms and conditions of the COA and FN applied to the Plaintiff;

 

13

 

(12) PW1 testified that before the Ship departed from Thai waters, the Ship was repaired once. Subsequently, PW1 said that the Ship was repaired “again and again”. PW1 had his doubt on the seaworthiness of the Ship after 18.11.2011. PW1 however admitted that there was no email or document from the Plaintiff which complained that the Ship was not seaworthy;

 

(13) PW1 did not handle the insurance coverage for the Cargo as stated in the FN. According to PW1, Mr. Wai should have done the insurance coverage for the Cargo, “maybe” through PKSA. “Normally”, the Plaintiff would take out a cargo insurance. The Plaintiff did not make an insurance claim for the Cargo in this case;

 

(14) the Defendant’s learned counsel pointed out to PW1 that the COA provided all action of the Ship’s Master (Master) were carried out on behalf of the “Charterer/Cargo Owners” but PW1 alleged that such a provision was wrong. PW1 however agreed that the Master sent a letter dated 3.10.2011 to PKSA which authorized PKSA to issue the 2 Bills of Lading (Master’s Letter dated 3.10.2011);

 

(15) PW1 disagreed with the Defendant’s learned counsel that the Plaintiff was the principal charterer of the Ship who was responsible for PKSA’s Supply of Bunker Oil. According to PW1, PKSA “never’ told the Plaintiff regarding PKSA’s problem in respect of PKSA’s Supply of Bunker Oil to the Ship;

 

14

 

(16) PW1 was on board the Ship during the first sea trial and was aware that the Ship faced engine problems. After the Ship’s engine had been repaired, the speed of the Ship was “almost acceptable”. After the Ship had departed from Thailand on 8.10.2011, the Plaintiff was subsequently informed that –

 

(a) the Ship’s main engine had a breakdown;

 

(b) the Master diverted the Ship to Batam, Indonesia (Ship’s Deviation); and

 

(c) the Master and the crew had “jumped ship” (Jump Ship Incident).

 

PW1 was aware that PKSA had made a police report to the Indonesian authorities. In PW1’s Email dated 29.10.2011, PW1 admitted thanking the Defendant for solving the problem regarding the Ship’s Deviation and the Jump Ship Incident;

 

(17) the Defendant’s learned counsel showed PW1 a letter dated 4.11.2011 sent by PW1 to the Defendant (Plaintiff’s Letter dated 4.11.2011)

 

regarding the Meeting on 3.11.2011. Surprisingly, PW1 stated that the sentence in Plaintiff’s Letter dated 4.11.2011, namely “We, as the Cargo Owner, undertake to assist [Defendant] obtaining [sic] related certificates renewal in Thailand or in Myanmar, and guarantee its access to its destination port within Thailand and Myanmar waters”, was incorrect!;

 

15

 

(18) PW1 was aware that PKSA had inspected the Cargo on 16.11.2011. However, PW1 alleged that PKSA inspected the Cargo on 16.11.2011 as the Plaintiff’s shipping agent. When asked by the Defendant’s learned counsel to show where was the contract wherein the Plaintiff had appointed PKSA as the Plaintiff’s shipping agent, PW1 referred to the Contract Between PKSA and Plaintiff (8.8.2011). PW1 however admitted that the Contract Between PKSA and Plaintiff (8.8.2011) only stated that PKSA was the charteror of the Ship and was not the Plaintiff’s shipping agent;

 

(19) PW1 did not attend a meeting between the Defendant and PKSA on

 

17.11.2011 (Meeting on 17.11.2011). Ms. Sammy was present at the Meeting on 17.11.2011 to assist Mr. Voruwat who could not speak English;

 

(20) PW1 was aware at the time of the Defendant’s Letter dated

 

18.11.2011 that the Cargo was on board the Ship. The Defendant’s learned counsel asked PW1 whether there was any reply by the Plaintiff or PKSA regarding the Defendant’s Letter dated 18.11.2011 (which stated that if there was no response to the Proposed Undertaking/Indemnity (18.11.2011) by the Plaintiff and PKSA by 5 pm, 19.11.2011, the Defendant would impose charges at US$2,500 per day for the storage of the Cargo on board the Ship). PW1 answered that PW1 could not remember whether there was any reply by the Plaintiff or PKSA to the Defendant’s Letter dated 18.11.2011;

 

16

 

(21) PW1 stated that PKSA did not forward the Defendant’s letter dated 25.11.2011 to PKSA (Defendant’s Letter dated 25.11.2011). The

 

Defendant’s Letter dated 25.11.2011 stated, among others, if PKSA did not reply within 48 hours from the date of the Defendant’s Letter dated 25.11.2011, the Defendant reserved the right to take whatever action deemed necessary including discharging and storing the Cargo wherever convenient to enable the Ship to continue with its business activities;

 

(22) when the Defendant’s learned counsel referred PW1 to certain emails and letters between PKSA and the Defendant, PW1 testified that PKSA did not forward such emails and letters to PW1;

 

(23) PW1 disagreed with the Defendant’s learned counsel that if the Cargo had been discharged from the Ship, storage charges would be incurred in respect of the Cargo. This was because according to PW1, the Cargo would have been discharged illegally by the Defendant;

 

(24) the Defendant’s learned counsel suggested to PW1 that under clause 2, Part II of the COA [Clause 2 (Part II) COA], the Defendant was not liable for damage to the Cargo but PW1 replied that PW1 had no comment on Clause 2 (Part II) COA;

 

(25) PW1 was referred by the Defendant’s learned counsel to the Plaintiff’s Letter dated 4.11.2011 which stated that if the Ship did not re-sail to Myanmar before the morning of 5.11.2011, the Plaintiff would replace the Ship and PKSA would claim for all loss against the Defendant.

 

17

 

PW1 answered that the Defendant did not agree to the Plaintiff’s replacement of the Ship at the Meeting on 3.11.2011. PW1 testified that such an agreement by the Defendant was not recorded; and

 

(26) PW1 disagreed with the Defendant’s learned counsel that the Plaintiff would be liable for –

 

(a) the storage charges of the Cargo; and

 

(b) the repair work to the Ship due to PKSA’s supply of fuel to the Ship.

 

9. In PW1’s re-examination, PW1 clarified, among others, as follows:

 

(1) Ms. Sammy’s email address [Sammy.chec@gmail.com] is a private email address and is not the Plaintiff’s email address;

 

(2) the objective of the Contract Between PKSA and Plaintiff (8.8.2011) was to carry the Cargo;

 

(3) when the COA and FN were signed by PKSA and the Defendant, neither PKSA nor the Defendant send the COA and FN to the Plaintiff for the Plaintiff’s approval of the COA and FN;

 

(4) the Plaintiff could not pay the freight to the Defendant because the Plaintiff had already paid the freight in full to PKSA;

 

18

 

(5) there was no relationship between the Plaintiff and the Master;

 

(6) although Mr. Tian was put on “CC list’ in some of the emails, PW1 was not aware of any email response by Mr. Tian;

 

(7) in respect of Plaintiff’s Letter dated 4.11.2011 regarding the Plaintiff’s “guarantee” that the Ship would have access to Thailand and Myanmar, PW1 explained that the Plaintiff could assist in respect of access to Thailand and Myanmar but not for “going out’ of those countries;

 

(8) Mr. Tian was not present at the Meeting on 18.11.2011; and

 

(9) from the time the dispute started in the early part of November 2011, the Defendant had not agreed to release the Cargo without condition.

 

E(2). Defendant’s case

 

10. DW1 is the Defendant’s General Manager (GM). According to DWI’s

 

witness statement, among others –

 

(1) DW1 met Mr. Vorawut on 11.7.2011 in Seaview Sriracha Hotel, Thailand (Meeting on 11.7.2011). At the Meeting on 11.7.2011 –

 

19

 

(a) Mr. Vorawut represented to DW1 that Mr. Vorawut was the “Director/Manager/Owner” of PKSA. Mr. Vorawut had introduced himself to DW1 as the Plaintiff’s agent in Bangkok;

 

(b) the Ship was anchored in Sriracha, Thailand; and

 

(c) Mr. Vorawut stated that his client, the Plaintiff, needed a vessel to transport cargo from Thailand to Myanmar;

 

(2) DW1 emailed a draft charter party to Mr. Vorawut;

 

(3) on or about 22.7.2011, DW1 went to Bangkok to check the condition and conduct a valuation survey of the Ship. Mr. Vorawut brought DW1 to meet the Plaintiff’s representatives in Novotel Hotel (Meeting on

 

22.7.2011). At the Meeting on 22.7.2011 –

 

(a) DW1 was introduced by Mr. Vorawut to –

 

(i) Mr. Tian, the MD in the Plaintiff’s office in Myanmar; and

 

(ii) Ms. Sammy, the Plaintiff’s International Project Assistant in the Plaintiff’s office in Bangkok and Yangon;

 

(b) both Mr. Tian and Ms. Sammy represented the Plaintiff; and

 

(c) Mr. Tian informed DW1 that –

 

20

 

(i) the Plaintiff was interested to charter a vessel to carry cargo with an option to purchase the vessel; and

 

(ii) PKSA was the Plaintiff’s agent in Bangkok for the Plaintiff’s cargo matters for the Plaintiff’s project in Myanmar. Due to Mr. Tian’s busy schedule, Mr. Tian requested DW1 to deal directly with PKSA as the Plaintiff’s agent and PKSA would then liaise with Mr. Tian in respect of the charter of the vessel to transport the Plaintiff’s cargo to Myanmar;

 

(4) DW1 sent a draft bareboat charter party (Draft Bareboat Charter Party) by way of an email dated 27.7.2011 to Mr. Vorawut (Defendant’s Email dated 27.7.2011). There was no reply by Mr. Vorawut to the Defendant’s Email dated 27.7.2011. Hence, DW1 sent again the Draft Bareboat Charter Party by way of a second email dated 9.8.2011 to Mr. Vorawut (Defendant’s Email dated 9.8.2011);

 

(5) on or about 23.8.2011 to 25.8.2011, DW1 met the Plaintiff and Mr. Vorawut in Sriracha, Thailand (Meeting in August 2011). At the Meeting in August 2011 –

 

(a) the Plaintiff and Mr. Vorawut changed their mind and were interested in a COA. As such, the form of the charter party had changed from a time charter and a bareboat charter to a COA and FN;

 

21

 

(b) DW1 brought to the attention of the Plaintiff the problem of collection of freight from charterers in foreign countries. As such, the Defendant would want the COA and FN to be signed by the Plaintiff, PKSA (as the Plaintiff’s agent) and the Defendant; and

 

(c) Mr. Tian expressly stated that the Plaintiff as a big and reputable company, would undertake to pay the freight to the Defendant if the Plaintiff’s agent, PKSA, did not remit the freight to the Defendant (Mr. Tian’s Assurance). Mr. Tian maintained that the COA and FN should be signed between the Plaintiff’s agent, PKSA, and the Defendant. Based on Mr. Tian’s Assurance and with the Defendant’s full confidence that the Plaintiff would execute the undertaking to pay freight to the Defendant, the Defendant proceeded to draft the COA and FN to be signed by PKSA and the Defendant;

 

(6) Mr. Tian inspected the Ship for the seaworthiness and suitability of the Ship to carry the Cargo (Mr. Tian’s Inspection of Ship);

 

(7) Mr. Vorawut sent 2 emails dated 28.8.2011 and 30.8.2011 to the Defendant for certain repairs to be carried out on the Ship (Mr. Vorawut’s Emails dated 28.8.2011 and 30.8.2011);

 

(8) before the COA and FN were signed by PKSA and the Defendant, the Plaintiff carried out a final inspection of the Ship (Plaintiff’s Final Inspection of Ship) as stated in Mr. Tian’s email dated 18.9.2011 to the Defendant (Mr. Tian’s Email dated 18.9.2011);

 

22

 

(9) on or about 20.9.2011, DW1 and DW3 went to Bangkok for the Meeting in Novotel. At the Meeting in Novotel –

 

(a) Mr. Tian, PW1, Mr. Wai and Ms. Sammy represented the Plaintiff;

 

(b) Mr. Vorawut and one of Mr. Vorawut’s partners were present on behalf of PKSA;

 

(c) DW1 submitted a draft undertaking to Mr. Tian [Proposed Undertaking (20.9.2011)]. Mr. Tian said he would peruse the Proposed Undertaking (20.9.2011) and sign it; and

 

(d) the Defendant and PKSA signed the COA;

 

(10) as the Plaintiff did not execute the Proposed Undertaking (20.9.2011), the Defendant sent an email dated 26.9.2011 to Ms. Sammy for the Plaintiff to sign the Proposed Undertaking (20.9.2011) (Defendant’s Email dated 26.9.2011). Ms. Sammy Email dated 26.9.2011 replied to the Defendant’s Email dated 26.9.2011. According to Ms. Sammy’s Email dated 26.9.2011 –

 

(a) Mr. Tian had accepted the Proposed Undertaking (20.9.2011); and

 

(b) Mr. Tian was in China at that time and would be back the following week. Upon Mr. Tian’s return, Mr. Tian would sign the Proposed

 

23

 

Undertaking (20.9.2011) and send it to the Defendant “as soon as possible

 

(11) the FN was executed by PKSA and sent to the Defendant by way of Mr. Vorawut’s email dated 29.9.2011 (Mr. Vorawut’s Email dated

 

29.9.2011);

 

(12) DW1 alleged that there were meetings, numerous correspondence and documents which showed that PKSA acted as the Plaintiff’s agent in respect of the COA and FN;

 

(13) DW1 alleged that the following documents evidenced that PKSA was acting as the Plaintiff’s agent in respect of the Ship –

 

(a) the “Tally Department’s” documents dated 30.9.2011 and 3.10.2011 in respect of the Cargo, stated that PKSA was only an agent (Tally Department’s 2 Documents);

 

(b) the “Mate’s Receipts” dated 30.9.2011 and 3.10.2011 in respect of the Cargo, stated that PKSA was only an agent (2 Mate Receipts); and

 

(c) PW1 lodged a Jalan Dang Wangi police report on 14.5.2012 which stated that, among others, in September 2011 the Plaintiff had engaged PKSA as the Plaintiff’s shipping agent in respect of the shipment of the Cargo from Laem Chabang Port and Koh

 

24

 

Sichang Port in Thailand to Kyauk Pyu Port in Myanmar (PW1’s Police Report dated 14.5.2012); and

 

(14) the Defendant had taken all necessary steps to ensure the seaworthiness of the Ship and that the Ship was fit to undertake the voyage to carry the Cargo. In fact, the Plaintiff and/or its agent, PKSA, had inspected the Ship and had conducted sea trials (Sea Trials). After the Sea Trials, the Plaintiff and/or PKSA had made several recommendations to enhance the efficiency of the Ship which were subsequently carried out under the supervision of PKSA (Defendant’s Subsequent Rectification).

 

11. DW1 testified as follows in his cross-examination, among others:

 

(1) DWI’s wife is Puan Farina Hartanto @ Chin Pie Fong (Puan Farina). DW1 and Puan Farina are business partners and shareholders in the Defendant;

 

(2) DW1 and Puan Farina own 70% shares in PMBSB;

 

(3) DW3 is DWI’s son. DW1, DW3 and Puan Farina own all the shares in Lunar Shipping Sdn. Bhd. (LSSB). LSSB does not own any share in the Defendant;

 

(4) in view of DWI’s health problems, DW1 is no longer a director and GM of the Defendant. Puan Farina also ceased to be a director of the Defendant and PMBSB. DW1 disagreed with the Plaintiff’s learned

 

25

 

counsel that DW1 and Puan Farina resigned as directors of the Defendant and PMBSB to avoid any liability arising from this case;

 

(5) DW1 disagreed with the Plaintiff’s learned counsel that the Defendant, LSSB and PMBSB constituted a group of companies which was controlled by DW1 and Puan Farina;

 

(6) DW1 disagreed with the Plaintiff’s learned counsel that if there was a contract between the Plaintiff as PKSA’s principal and the Defendant, there was no need for the Proposed Undertaking (20.9.2011);

 

(7) the Plaintiff did not sign the Proposed Undertaking (20.9.2011) at the time PKSA and the Defendant signed the COA because the Plaintiff promised to sign the Proposed Undertaking (20.9.2011) subsequently. Besides the Defendant’s Email dated 26.9.2011 [which requested the Plaintiff to execute the Proposed Undertaking (20.9.2011)], the Defendant called the Plaintiff by telephone “a number of times” to execute the Proposed Undertaking (20.9.2011);

 

(8) DW1 agreed with the Plaintiff’s learned counsel that the Defendant only commenced arbitral proceedings against PKSA only and not against the Plaintiff;

 

(9) DW1 agreed with the Plaintiff’s learned counsel that Vital Cargo Pte. Ltd. (VCPL) is the owner of the Ship. According to DW1, The Defendant was the manager and agent of the Ship for VCPL. The Plaintiff’s learned counsel then showed DW1 a letter dated 12.7.2011

 

26

 

from VCPL to PKSA (VCPL’s Letter dated 12.7.2011). VCPL’s Letter dated 12.7.2011 stated that VCPL “would like to appoint’ PKSA as the Ship’s shipping agent. In respect of VCPL’s Letter dated 12.7.2011 –

 

(a) DW1 was not aware of VCPL’s Letter dated 12.7.2011 but explained that VCPL’s Letter dated 12.7.2011 was requested by PKSA as the Plaintiff’s agent so that PKSA could act in respect of the Ship; and

 

(b) VCPL’s Letter dated 12.7.2011 was issued by Ida, an employee of the Defendant and VCPL. DW1 however disagreed with the Plaintiff’s learned counsel that VCPL was in the same group of companies controlled by DW1’s family;

 

(10) DW1 had at least 3 meetings with Mr. Tian regarding this case. DW1 disagreed with the Plaintiff’s learned counsel that DW1’s evidence that the Plaintiff wanted to charter the Ship was not true because all the documents prepared by the Defendant did not mention about the Plaintiff;

 

(11) DW1 disagreed with the Plaintiff’s learned counsel that the Defendant had voluntarily assumed the risk of PKSA not paying the freight to the Defendant;

 

(12) DW1 agreed that the Plaintiff’s assurance to pay the freight to the Defendant, was not in writing. DW1 did not agree with the Plaintiff’s learned counsel that there was no such assurance by the Plaintiff

 

27

 

because such an assurance was never raised, referred to or mentioned subsequently;

 

(13) when the Plaintiff’s learned counsel asked DW1 why the Defendant required the Proposed Undertaking/Indemnity (18.11.2011) when the Defendant had the Plaintiff’s assurance to pay the freight to the Defendant, DW1 explained that the Plaintiff and its agent had lodged report to the Indonesian marine police when the Ship was in Batam and this had caused the Ship to be detained in Batam. Accordingly, the Proposed Undertaking/Indemnity (18.11.2011) was needed by the Defendant to “safeguard” the Ship in Myanmar. DW1 added that the Plaintiff also gave an oral assurance that when the Ship was in Myanmar, the Plaintiff would take over the Ship and change the flag of the Ship to the Myanmarese flag;

 

(14) DW1 had no idea whether the Plaintiff had paid the freight to PKSA. DW1 disagreed with the Plaintiff’s learned counsel that based on the 2 Bills of Lading, freight had already been pre-paid. DW1 however agreed with the Plaintiff’s learned counsel that under the COA, PKSA needed to pay freight and not charter fee or charter hire, to the Defendant. DW1 still maintained that there was a charter of the Ship;

 

(15) DW1 confirmed that PKSA was the Plaintiff’s shipping agent;

 

(16) the Defendant allowed PKSA to carry out repair of the Ship as requested by the Plaintiff. DW1 disagreed with the Plaintiff’s learned counsel that before the voyage, the Ship was not seaworthy and was

 

28

 

anchored in Thailand for a few months. DW1 further disagreed with the Plaintiff’s learned counsel that it was the Defendant’s duty to ensure the seaworthiness of the Ship. Subsequently, DW1 agreed that the Defendant had a duty to ensure the seaworthiness of the Ship; and

 

(17) DW1 agreed that the Defendant’s email dated 4.10.2011 to PKSA (Defendant’s Email dated 4.10.2011) was an instruction by the Defendant to PKSA to purchase bunker oil for the Ship on behalf of the Defendant. DW1 however disagreed with the Plaintiff’s learned counsel that PKSA did not supply fuel oil to the Defendant but PKSA merely carried out the Defendant’s instruction to purchase fuel oil for the Defendant.

 

12. During DW1’s re-examination, DW1 gave the following clarification, among

 

others:

 

(1) in respect of PKSA’s Supply of Bunker Oil, the Defendant relied on clause 25(b) of the “COA Rider Clauses” [Clause 25(b) (COA Rider Clauses)];

 

(2) when DW1 testified that it was the Defendant’s duty to ensure the seaworthiness of the Ship, DW1 meant that the Defendant had the duty to ensure that the Ship’s “manning certificate” was valid;

 

(3) the Ship was anchored for several months in Thai waters because the Ship was chartered to carry rice from Bangkok to East Malaysia but

 

29

 

the charter party was subsequently cancelled or delayed. Hence, the Ship waited in Thailand for the next charterer;

 

(4) the Defendant allowed PKSA to repair the Ship because under the charter, the Master and crew would be working under the command or control of the charterer and the charterer could carry out any repair to the Ship to the charterer’s satisfaction;

 

(5) DW1 clarified that when DW1 testified during cross-examination that PKSA was the Plaintiff’s shipping agent, DW1 actually meant that the Plaintiff was the charterer of the Ship and PKSA was the agent of the Plaintiff as the Ship’s charterer;

 

(6) DW1 explained that the Plaintiff chartered the whole Ship and hence, the contract was not merely a carriage of goods. Despite the name of COA, the contract in this case was a consecutive voyage charter party for 6 months. The FN was to ascertain the period of time for which the Ship was required;

 

(7) the Defendant’s Counterclaim was based on the fact that the Plaintiff was the principal of the charterer of the Ship;

 

(8) the Defendant, PMBSB and VCPL (3 Companies) are different entities because –

 

(a) the 3 Companies have different directors and personnel; and

 

30

 

(b) in Malaysia, shipping companies need Bumiputra participation in terms of shareholding, directorship and staff; and

 

(9) DW1 is close to 70 years old and has health problems. Hence, DW1 withdrew from the Defendant and not because DW1 wanted to avoid personal liability in this case.

 

13. DW2 is a director of VCPL, the owner of the Ship. DW2 is also the

 

Defendant’s “Business Development Manager’. According to DW2’s

 

witness statement, among others –

 

(1) the Defendant is the charterer and operator of the Ship. The Defendant had chartered the Ship from VCPL and the Defendant in turn, chartered the Ship to PKSA as agent for the Plaintiff;

 

(2) by way of VCPL’s Letter dated 12.7.2011, VCPL appointed PKSA as VCPL’s shipping agent for the Ship. The purpose of such an appointment was to enable PKSA to provide services to the Ship (PKSA’s Specified Services) as stated in Mr. Vorawut’s email dated 10.7.2011 (Mr. Vorawut’s Email dated 10.7.2011). This is because the COA and FN had provided for consecutive voyages for the Ship. Hence, the need for PKSA’s Specified Services between the loading ports and discharging ports for the duration of the COA and FN;

 

(3) VCPL had terminated PKSA’s appointment as VCPL’s shipping agent for the Ship with immediate effect by way of VCPL’s letter dated

 

31

 

30.5.2012 (VCPL’s Letter dated 30.5.2012). This termination was due to the fact that there were no consecutive voyages of the Ship and as such, there was no need for PKSA’s Specified Services; and

 

(4) DW2 was present at 2 meetings with the Plaintiff on 3.11.2011 (Meeting on 3.11.2011) and 4.11.2011 (Meeting on 4.11.2011). Puan Farina was present at the Meeting on 4.11.2011 but not for the Meeting on 3.11.2011. DW2 denied that at the Meeting on 4.11.2011, Puan Farina had refused the Plaintiff’s request to get another vessel to take the Cargo from the Ship and to send the Cargo to the Plaintiff in Myanmar.

 

14. When questioned during cross-examination, DW2 testified, among others,

 

as follows:

 

(1) DW2 has been employed by the Defendant as the Defendant’s Business Development Manager around 2009. DW2 is also known as TM Loo or Peter Loo;

 

(2) DW3 is DW2’s brother. DW1 and Puan Farina are DW2’s parents;

 

(3) VCPL had appointed the Defendant as a disponent owner of the Ship by way of a letter. The Defendant was supposed to pay VCPL by way of commission but VCPL had not received any payment from the Defendant;

 

(4) in respect of VCPL’s Letter dated 12.7.2011 –

 

32

 

(a) Ida who issued VCPL’s Letter dated 12.7.2011 is a “common staff’ of the Defendant and VCPL; and

 

(b) Ida issued VCPL’s Letter dated 12.7.2011 under DW2’s instruction;

 

(5) VCPL had not paid PKSA for PKSA’s Specified Services although PKSA had performed some of PKSA’s Specified Services. This was because payment for PKSA’s Specified Services should be borne by the Defendant as the disponent owner of the Ship. The Defendant did pay for PKSA’s Specified Services but DW2 could not remember how much. DW2 did not know if there is any outstanding payment due from the Defendant for PKSA’s Specified Services;

 

(6) DW2 “suspected” the Ship to be anchored in Thailand for “maybe” 2 months;

 

(7) according to DW2, PKSA acted as VCPL’s shipping agent in PKSA’s own capacity and not as the Plaintiff’s agent for a continuous period of about 10 months until VCPL’s Letter dated 30.5.2012;

 

(8) VCPL and the Defendant are run individually and are not controlled by DW2’s family. The Defendant paid for PKSA’s Specified Services because the Defendant was the disponent owner of the Ship. DW2 disagreed with the Plaintiff’s learned counsel that DW2 treated VCPL and the Defendant as one entity; and

 

33

 

(9) DW2 was also present at the Meetings on 17.11.2011 and 18.11.2011 as a representative for the Defendant and VCPL. DW2 could not recall that the Meeting on 17.11.2011 had discussed the sum outstanding from the Defendant to PKSA in respect of PKSA’s Specified Services. As such, the Plaintiff’s learned counsel put to DW2 that DW2 could also not remember what Puan Farina said at the Meeting on 4.11.2011. DW2 however disagreed with such a matter which was put to DW2 by the Plaintiff’s learned counsel. DW2 admitted that although DW2 was present at the Meetings on 3.11.2011, 4.11.2011,

 

17.11.2011 and 18.11.2011, DW2 was “not entirely’ sure what had happened at those meetings.

 

15. DW3 is the Defendant’s “Operations Manager’ since 1998. DW3 gave the following evidence, among others, in his witness statement:

 

(1) as the Defendant’s Operations Manager –

 

(a) DW3’s scope of work includes loading and unloading of the vessel, operational matters of the vessel, repairs to be carried out to the vessel and commercial matters regarding the vessel;

 

(b) DW3 also assists the Defendant at times to formalize FN’s and COA’s. In DW3’s experience as the Defendant’s Operations Manager, DW3 is familiar with chartering practice. If a shipper/customer books the whole vessel, the Defendant will use a FN to lay down the terms and conditions of the charter. If a

 

34

 

shipper/customer intends to ship loose cargo, the Defendant will use a bill of lading as the contract. If a shipper/customer has several shipments using the same vessel on a consecutive voyage basis, the Defendant will use a COA to state the terms and conditions in detail; and

 

(c) a shipping agent takes care of husbandry matters regarding the vessel at a port which includes crewing issues, signing on/off the vessel, dealing with the port authorities, matters regarding bunkering, cargo and food;

 

(2) the Defendant had sent an invoice dated 29.9.2011 to PKSA for the freight (Defendant’s Invoice). By way of the Defendant’s email dated

 

3.11.2011 to PKSA, the Defendant had reminded PKSA to pay the freight (Defendant’s Email dated 3.11.2011). The Defendant had not been paid the freight;

 

(3) DW3 was present at the Meeting in Novotel on 20.9.2011 when the COA was signed. At the Meeting in Novotel –

 

(a) DW1 and DW3 represented the Defendant while Mr. Tian, PW1, Mr. Wai and Ms. Sammy were present on behalf of the Plaintiff. Mr. Vorawut represented PKSA; and

 

(b) both Mr. Tian and PW1 read the COA before PKSA signed the COA. In fact, PW1 nodded PW1’s head in agreement before PKSA signed the COA;

 

35

 

(4) Clause 25(b) (COA Rider Clauses) provided for the provision of bunker oil for the Ship at the Defendant’s request. Prior to the Ship’s departure from Kok Si Chiang, Thailand, the Defendant had requested for PKSA’s Supply of Bunker Oil. There was a meeting in Thailand between the Plaintiff, Defendant and PKSA and it was agreed that PKSA would supply bunker oil to the Ship (Meeting in September 2011). The Defendant’s Email dated 26.9.2011 specifically requested PKSA to obtain supply of bunker oil to the Ship from Sea Oil Public Co. Ltd. (SEOCL). It was “understood” by the Defendant that PKSA’s Supply of Bunker Oil “must be in accordance with international specifications”. The Defendant was not aware as to who was the actual supplier of bunker oil to the Ship;

 

(5) the Defendant alleged that PKSA acted as the Plaintiff’s agent in respect of PKSA’s Supply of Bunker Oil because –

 

(a) the Plaintiff was present at the Meeting in September 2011 ;

 

(b) almost all the emails and correspondence regarding PKSA’s Supply of Bunker Oil, had been copied to the Plaintiff; and

 

(c) the Plaintiff did not at any time in the Plaintiff’s emails and correspondence with the Defendant, state expressly or impliedly that PKSA was not the Plaintiff’s agent in respect of PKSA’s Supply of Bunker Oil;

 

36

 

(6) upon the commencement of the voyage of the Ship on 7.10.2011, the Ship encountered engine problems on or about 10.10.2011. The Ship’s crew did some temporary repair work and the Ship continued to sail on 11.10.2011. However, the Ship’s main engine continued to give problems and the Master decided that the Ship’s Deviation was warranted because the Ship’s engine problems would pose a danger to other vessels plying the Straits of Malacca. DW3 referred to the Ship’s “Engineers’ Log” dated 7.10.2011 to 12.10.2011 (Engineers’ Log dated 7.10.2011 to 12.10.2011). In respect of the Ship’s Deviation –

 

(a) the Defendant did not know at the time regarding the Ship’s Deviation;

 

(b) the Defendant only became aware of the Ship’s Deviation when the Defendant had been informed by a friendly party that the Ship had been anchored off Batam; and

 

(c) PKSA had “unreasonably’ lodged a police report with the Indonesian authorities without prior consultation with the Defendant and this had caused the Ship to be detained by the Indonesian authorities for 2 weeks;

 

(7) PKSA did some repair work to the Ship (PKSA’s Repair Work). DW3 was not present during PKSA’s Repair Work. Nor was anyone from the Defendant present during PKSA’s Repair Work. According to DW3, the

 

37

 

Sea Trials and PKSA’s Repair Work had been undertaken by PKSA on behalf of the Plaintiff;

 

(8) after PKSA’s Repair Work on 29.10.2011, the Ship continued en route to Myanmar but the Ship’s engine continued to give problems. On

 

31.10.2011 at Tanjung Rhu, Port Klang, the Ship suffered an engine breakdown. DW3 relied to the Ship’s “Engineers’ Log” dated

 

29.10.2011 to 30.10.2011 (Engineers’ Log dated 29.10.2011 to

 

30.10.2011) ;

 

(9) at Tanjung Rhu, the Defendant repaired the Ship and conducted sea trials. On or about 14.11.2011, the Ship was ready to sail and the Defendant informed the Plaintiff and PKSA by way of an email dated

 

14.11.2011 to inspect the Ship and the Cargo (Defendant’s Email dated 14.11.2011);

 

(10) the Ship broke down on or about 21.11.2011 at Sungai Buloh as stated in the Ship’s “Engineers’ Log” dated 20.11.2011 to 22.11.2011 (Engineers’ Log dated 20.11.2011 to 22.11.2011);

 

(11) the Defendant had requested PKSA to verify the bunker oil supplied by PKSA on 5.10.2011 but PKSA had refused to do so in PKSA’s email dated 30.11.2011 to the Defendant (PKSA’s Email dated

 

30.11.2011) ;

 

(12) the Defendant sent an email dated 1.12.2011 to PKSA to invite PKSA for a joint inspection of the bunker oil on board the Ship (Defendant’s

 

38

 

Email dated 1.12.2011). PKSA refused to conduct such a joint inspection;

 

(13) the Defendant sent a letter dated 2.12.2011 to PKSA which stated, among others, that the Chief Engineer, the Second Engineer and Captain suspected the quality of the bunker oil supplied by PKSA to the Ship as the cause of the Ship’s engine problem (Defendant’s Letter dated 2.12.2011);

 

(14) the Defendant requested 3 surveys to be carried out in respect of PKSA’s Supply of Bunker Oil as follows –

 

(a) the first survey was carried out on PKSA’s Supply of Bunker Oil by Links Survey (M) Sdn. Bhd. (LSM) on 1.12.2011 and a report dated 6.12.2011 had been given by LSM (LSM’s 1st Report);

 

(b) LSM carried out a second survey of PKSA’s Supply of Bunker Oil on 2.12.2011 and a second report dated 20.12.2011 had been prepared by LSM (LSM’s 2nd Report). LSM’s 2nd Report stated that LSM was of the opinion that the “Marine Fuel Oil” (MFO) supplied by PKSA to the Ship was “not suitable for its intended purpose in sea going marine engine” (LSM’s Opinion). By a letter dated 12.1.2012, the Defendant had informed PKSA about LSM’s Opinion (Defendant’s Letter dated 12.1.2012); and

 

(c) a third survey was carried out on PKSA’s Supply of Bunker Oil by LSM on 29.12.2011 and a third report dated 18.1.2012 had been

 

39

 

given by LSM (LSM’s 3rd Report). According to LSM’s 3rd Report, the damage to the Ship’s piston and piston ring was due to “substandard” MFO;

 

(15) on 16.11.2011, PKSA inspected the Cargo on board the Ship and found the Cargo to be in good condition. This was stated in the Defendant’s letter to PKSA which was attached to the Defendant’s email dated 20.11.2011 to PKSA (Defendant’s Email dated

 

20.11.2011);

 

(16) the Defendant needed the Proposed Undertaking/Indemnity (18.11.2011) because –

 

(a) the Proposed Undertaking/Indemnity (18.11.2011) was “absolutely necessary’ for the Ship’s safe passage to and from Myanmar; and

 

(b) the Defendant had been “defamed with frivolous and baseless allegations” in respect of the Ship’s Deviation; and

 

(17) after reading LMS’s 1st to 3rd Reports, the Defendant repaired the Ship by employing an Indonesian company. In the Defendant’s Counterclaim, the Defendant claimed for the following loss and damage suffered by the Defendant –

 

(a) freight – US$106,490.28;

 

40

 

(b) main engine repair and survey services – US$214,145.00;

 

(c) return of 11 contaminated oil’ and rebunkering – US$90,627.42;

 

(d) loss of charter hire – 604 days x US$2,000 = US$1,208,000.00;

 

(e) unloading the Cargo from the Ship – RM649,432.89 (US$209,494.48);

 

(f) warehousing and open storage of the Cargo by PMBSB (from 1.12.2012 to 28.2.2014) – RM15,341,335.35 (US$4,948,817.85); and

 

(g) port dues and wharfage/foreshore charges – RM2,820.96 (US$909.99).

 

The total of the Defendant’s Counterclaim was RM21,013,303.56 (US$6,778,485.02).

 

16. DW3 testified as follows, among others, during his cross-examination:

 

(1) DW3 is a director of VCPL and LSSB;

 

(2) DW3 disagreed with the Plaintiff’s learned counsel that PKSA supplied fuel oil to the Ship as VCPL’s shipping agent because upon the signing

 

41

 

of the COA, PKSA became the Plaintiff’s agent in respect of PKSA’s

 

Supply of Bunker Oil;

 

(3) DW3 agreed that there is a difference between charter fee and freight. DW3 also agreed that the COA did not provide for charter fee. DW3 however disagreed with the Plaintiff’s learned counsel that the COA was never intended to be a charter;

 

(4) DW3 called Mr. Vorawut for the freight and Mr. Vorawut said that PKSA was waiting for payment to be cleared from the Plaintiff. Ms. Sammy was one of the translators for Mr. Vorawut;

 

(5) the Defendant’s Invoice was sent to the Plaintiff and PKSA by way of the Defendant’s email dated 29.9.2011 (Defendant’s Email dated

 

29.9.2011) . When DW3 contacted Mr. Tian for the freight, Mr. Tian asked the Defendant to contact Mr. Vorawut. DW3 was not aware that the Plaintiff had paid the freight to PKSA;

 

(6) DW3 was referred by the Plaintiff’s learned counsel to a letter dated 10.11.2011 from PKSA to the Defendant (PKSA’s Letter dated

 

10.11.2011) . PKSA’s Letter dated 10.11.2011 claimed certain sums from the Defendant. DW3 stated that the Defendant did not pay the sums demanded in PKSA’s Letter dated 10.11.2011 because the Defendant had informed PKSA in the Meeting on 3.11.2011 that such sums were incorrect. Furthermore, PKSA did not provide any supporting document to the Defendant regarding the sums claimed in PKSA’s Letter dated 10.11.2011;

 

42

 

(7) regarding PKSA’s Supply of Bunker Oil –

 

(a) DW3 testified that the Defendant did not pay PKSA for PKSA’s Supply of Bunker Oil because, among others, PKSA did not pay the freight to the Defendant;

 

(b) DW3 agreed that PKSA asked for cash before the delivery of PKSA’s Supply of Bunker Oil;

 

(c) DW3 stated that PKSA could only deduct the cost of PKSA’s Supply of Bunker Oil from the freight if the bunker oil was supplied by SEOCL. This was because SEOCL is a reputable public company. DW3 however admitted that the email did not state that PKSA could only deduct the cost of PKSA’s Supply of Bunker Oil from the freight if the bunker oil was supplied by SEOCL;

 

(d) DW3 agreed the Plaintiff’s learned counsel that the Defendant wanted cheap bunker oil but the bunker oil should meet ‘‘international standards”, namely the MFO should be under “180 CST’;

 

(e) DW3 agreed with the Plaintiff’s learned counsel that PKSA bought bunker oil on behalf of the Defendant as per the Defendant’s instruction;

 

43

 

(f) DW3 agreed that the 3 invoices issued by PKSA to the Defendant in respect of PKSA’s Supply of Bunker Oil (PKSA’s Invoices) stated that the payment for PKSA’s Supply of Bunker Oil should be deducted from the freight. DW3 further agreed that the Defendant did not dispute the payment for PKSA’s Supply of Bunker Oil as stated in PKSA’s Invoices. DW3 also agreed that the price for the bunker oil charged by PKSA was lower than the price indicated in the Defendant’s Email dated 4.10.2011 (which instructed PKSA to purchase the bunker oil);

 

(g) DW3 agreed with the Plaintiff’s learned counsel that PKSA’s Letter dated 10.11.2011 stated that the Plaintiff had paid the freight in full to PKSA and PKSA requested the Defendant to issue receipt for the payment of freight to the Plaintiff. DW3 however maintained that the Defendant could not issue receipt for payment for freight because the Defendant had not received any payment for freight;

 

(h) DW3 agreed that before PKSA’s Supply of Bunker Oil, the Ship did not even have enough bunker oil to berth for the purpose of loading the Cargo;

 

(i) DW3 disagreed with the Plaintiff’s learned counsel that PKSA’s Supply of Bunker Oil was PKSA’s obligation as VCPL’s shipping agent. DW3 relied on Clause 25(b) (COA Rider Clauses) and clause 30 of the COA Rider Clauses [Clause 30 (COA Rider

 

44

 

Clauses)] to allege that PKSA’s Supply of Bunker Oil was part of PKSA’s obligation;

 

(j) DW3 conceded that some of the emails between PKSA and the Defendant in respect of PKSA’s Supply of Bunker Oil, had not been copied to the Plaintiff. This was because PKSA’s Supply of Bunker Oil was regarding operational matters which did not concern the Plaintiff. According to DW3, PKSA was the Plaintiff’s agent for PKSA’s Supply of Bunker Oil because this was agreed by the Plaintiff, PKSA and the Defendant in the Meeting in Novotel which was chaired by Mr. Tian. Such an agreement as reached in the Meeting in Novotel, had been stated in the Defendant’s Email dated 26.9.2011. DW3 testified that Mr. Tian instructed Mr. Vorawut regarding PKSA’s Supply of Bunker Oil at the Meeting in Novotel because PKSA was the Plaintiff’s agent; and

 

(k) DW3 disagreed that the issues raised by the Defendant regarding PKSA’s Supply of Bunker Oil were to “blackmail” PKSA and the Plaintiff;

 

(8) concerning the Ship’s Deviation –

 

(a) DW3 had spoken to the crew of the Ship but not to the Master (Captain). This was because the Defendant could not trace the Master despite contacting the Marine Department of Batam to locate the Master;

 

45

 

(b) the Defendant did not know where the Ship was because the Ship’s tracking system in the Ship had been switched off. DW3 did not know who switched off the Ship’s tracking system;

 

(c) when the Ship “disappeared”, the Defendant informed PW1 by telephone on 17.10.2011;

 

(d) as stated in the Defendant’s Email dated 3.11.2011, the Ship’s certificates had expired due to the delay of 3 weeks as a result of the Ship’s Deviation. DW3 however disagreed with the Plaintiff’s learned counsel that without the certificates, the Ship could not complete the voyage to Myanmar. This was because according to DW3, on the day of departure of the Ship, the certificates would still be valid and it did not matter if the certificates expired when the Ship was en route to Myanmar. If the Ship arrives in Myanmar and the certificates are not renewed, the Ship cannot then leave Myanmar. The Ship’s owner, namely VCPL, had the obligation to renew the Ship’s certificates. DW3 testified that the Ship’s certificates were eventually renewed in early November 2011 before the expiry of those certificates. At the time of the renewal of the Ship’s certificates, the Ship’s engine was running. Nonetheless, the Defendant refused to complete the Ship’s voyage to Myanmar unless freight was paid to the Defendant and the Proposed Undertaking/Indemnity had been executed by the Plaintiff. Furthermore, the Plaintiff’s agent, PKSA, had made a police report against the Defendant in Batam. As such, the

 

46

 

Defendant needed an undertaking/indemnity from the Plaintiff to ensure the Ship’s safe passage in and out of Myanmar; and

 

(e) the Ship’s Deviation had caused delay but DW3 maintained that such a delay was still within the period to renew the Ship’s certificates and a further delay was caused by PKSA’s police report to the Indonesian authorities which led to the detention of the Ship;

 

(9) the freight would go to the Defendant and VCPL. The arrangement regarding the freight between the Defendant and VCPL is based on commission. Both the Defendant and VCPL refused to allow the Ship to continue with the voyage to Myanmar for the above reasons given by DW3. DW3 agreed that VCPL was not a party to the COA;

 

(10) DW3 testified that at the Meeting on 3.11.2011, PW1 said the Plaintiff was “very powerful’ in Myanmar and could guarantee the Ship’s safe passage even if the Ship’s certificates were not renewed. DW3 denied that the Proposed Undertaking/Indemnity was required by the Defendant because the Defendant had committed “wrongdoings” and the Proposed Undertaking/Indemnity would force the Plaintiff to relinquish all the Plaintiff’s rights against the Defendant;

 

(11) DW3 disagreed with the Plaintiff’s learned counsel that the Defendant had planned to detain and get the Cargo for the Defendant; and

 

(12) in respect of the Defendant’s Counterclaim –

 

47

 

(a) DW3 disagreed that the Defendant’s Counterclaim had been fabricated;

 

(b) DW3 did not agree that the Defendant had not mitigated its loss and damage;

 

(c) DW3 disagreed with the Plaintiff’s learned counsel that the Defendant had made a double claim against the Plaintiff in this case as follows –

 

(i) when the Defendant claimed for the freight from the Plaintiff; and

 

(ii) when the Defendant claimed for the money in respect of PKSA’s Supply of Bunker Oil so as to enable the Defendant to purchase new bunker oil for the Ship;

 

(d) in respect of the Defendant’s counterclaim for loss of charter hire, DW3 admitted that the Defendant had no evidence, letters or enquiries that someone wished to use the Ship during the relevant time period. DW3 however disagreed with the Plaintiff’s learned counsel that the Defendant had not suffered any actual loss in terms of the charter hire;

 

(e) regarding PMBSB –

 

48

 

(i) DW3 admitted that PMBSB is owned by DW3’s parents;

 

(ii) DW3 agreed that there was no proof of payment by the Defendant to PMBSB;

 

(iii) there was also no contract of storage between the Defendant and PMBSB; and

 

(iv) DW3 disagreed with the Plaintiff’s learned counsel that –

 

(iva) PMBSB was asked to store the Cargo because PMBSB was controlled by the same family;

 

(ivb) PMBSB was not a warehouse operator; and

 

(ivc) the transactions between the Defendant and PMBSB had been fabricated so as to inflate the Defendant’s Counterclaim; and

 

(f) DW3 denied that the Defendant had breached its duty to keep the Cargo in good condition by leaving the Cargo in open space.

 

17. DW3 explained as follows in his re-examination, among others:

 

(1) the term “charter fee” was not used in the COA because the “customer’ wanted the cost and cost per unit metric ton. Other than

 

49

 

these matters, the COA was “essentially a charter’. Clause 25(d) (COA Rider Clauses) provided for a minimum 4,000 metric ton charge per voyage by the Defendant;

 

(2) the Defendant considered the execution of the Proposed Undertaking (20.9.2011) as a mere formality because Ms. Sammy’s Email dated 26.9.2011 stated that Mr. Tian had agreed to sign the Proposed Undertaking (20.9.2011) when Mr. Tian returned from Mr. Tian’s overseas trip;

 

(3) DW3 relied on the COA to state that the Master was under the command of the Plaintiff as the “Charterers/Cargo Owners”;

 

(4) the Defendant did not pay for PKSA’s Supply of Bunker Oil because under Clause 25(b) (COA Rider Clauses), the freight should be paid first and then the Defendant would reimburse PKSA’s Supply of Bunker Oil;

 

(5) PKSA’s Invoices included double billing (Double Billing Allegation Against PKSA). In fact, DW3 claimed that due to the Double Billing Allegation Against PKSA, the Defendant had overpaid PKSA (Defendant’s Overpayment Allegation Against PKSA) and there was a sum outstanding to the Defendant;

 

(6) by way of the Defendant’s letter dated 26.10.2011 to PKSA (Defendant’s Letter dated 26.10.2011), the Defendant had objected

 

50

 

to PKSA setting off the freight from PKSA’s claim against the Defendant;

 

(7) DW3 denied that Ms. Sammy was a mere interpreter because Ms. Sammy was authorized to sign for the Plaintiff in respect of a “Proforma Invoice” dated 9.9.2011 for the Plaintiff to purchase steel bars worth US$2,564,315.05 from Sinkitphaiboon Lohakam Co. Ltd. (Invoice dated 9.9.2011);

 

(8) DW3 alleged that the bunker oil supplied by PKSA was more expensive than the price quoted by SEOCL as stated in the Defendant’s Email dated 3.11.2011;

 

(9) the Defendant claimed for loss of charter hire from 30.10.2011 to 25.11.2011 because the Cargo was on board the Ship until 25.11.2011. There were enquiries to charter the Ship for shipment of rice, sugar and fertilizer within the South East Asia region;

 

(10) PMBSB was appointed to warehouse the Cargo because –

 

(a) PMBSB has a wharf jetty facility which is close to PMBSB’s warehouse;

 

(b) PMBSB’s warehouse is situated in a free trade zone; and

 

(c) PMBSB is a friendly party and the Defendant will not be sued for non-payment of warehousing and storage charges; and

 

51

 

(11) the Defendant denied in failing to discharge its duty as a lien holder of the Cargo by exposing the Cargo to the weather because the Defendant had done its best to ensure the safety of the Cargo and by placing the Cargo in a free trade zone. Furthermore, the Cement had been placed indoor in a warehouse. The Steel Bars had been covered with canvas.

 

18. DW4 works as a “Technical Manager’ in LSM. DW4’s witness statement stated, among others, as follows:

 

(1) DW4 graduated as a Marine Engineer from the Malaysian Maritime Academy in 2001. DW4 joined LSM as a “Marine Surveyor’ in July, 2003. In January 2008, DW4 was promoted to be LSM’s Technical Manager;

 

(2) DW4’s scope of work as LSM’s Technical Manager consists of –

 

(a) overseeing and being in charge of LSM’s operations pertaining to marine work such as on/off hire bunker surveys, chartering of vessels, surveying bunker quantity and conducting “sampling analysis” whereby LSM’s reports would be sent to an independent laboratory for further analysis;

 

(b) conducting surveys on damage to hull and machinery of vessels for insurance companies and ship owners; and

 

52

 

(c) inspecting the general condition of vessels;

 

(3) sometime in November, 2011, DW4 was approached by the Defendant to conduct a bunker survey on the remaining bunker oil on board the Ship. LSM inspected the Ship on 1.12.2011 when the Ship was lying afloat at the “Anchorage Point Outer Port Limit’ in Sungai Buloh, Selangor [Examination (1.12.2011)]. The LSM’s 1st Report dated 6.12.21011 arose from the Examination (1.12.2011). According to LSM’s 1st Report, there were still 71.70 metric tons of MFO and 18.25 metric tons of DO on board the Ship;

 

(4) on 2.12.2011, LSM took a sample of MFO on board the Ship (Sample) and sent the Sample for analysis by an independent laboratory, “Indelab Sdn. Bhd.” (ISB). ISB issued a “Certificate of Analysis” (ISB’s Report). ISB’s Report was attached to LSM’s 2nd Report dated 20.12.2011. The Defendant did not inform LSM the reason for the sample analysis to be done in respect of the MFO on board the Ship;

 

(5) based on ISB’s Report and LSM’s 2nd Report, the MFO on board the Ship exceeded the standard specification of MFO as per “ISO 8217’ (ISO 8217 Specification) regarding the following –

 

(a) “Density at 15°C’;

 

(b) “Viscosity at 50°C’;

 

53

 

(c) “Watercontent; and

 

(d) “Ash content.

 

In view of the above reasons, LSM was of the opinion that the MFO supplied to the Ship was not suitable for the intended purpose of a sea-going marine engine;

 

(6) according to DW4, the effect of using “unsuitable” MFO is as follows –

 

(a) the main engine parts will be severely affected and this will lead to operational problems, in particular, this will lead to the presence of foreign deposits which in turn, fouls the piston rings and grooves, cylinder valve seat and the exhaust system. All these problems will lead to a deterioration in the engine’s performance and can even end in the –

 

(i) failure to start the engine; or

 

(ii) break-down of the engine during operation;

 

(b) unpurified MFO with the presence of foreign deposits will cause abrasive wear of the moving components of the engine fuel pumps. The nozzle holes of the fuel injector may be blocked by particles and this affects the injection spray pattern required for good ignition;

 

54

 

(c) the MFO’s “viscosity” influences the engine’s ignition performance. If the MFO’s “Viscosity at 50°C’ exceeds ISO 8217 Specification, when the engine runs, the combustion is often incomplete and this will lead to engine failure; and

 

(d) the higher content of Ash in the MFO, will cause abrasion and abnormal wear to fuel pumps, injection nozzles, cylinder liner walls and piston rings; and

 

(7) on 27.12.2011, the Defendant requested LSM to conduct an inspection of the Ship’s engine to investigate and assess the damage to the Ship’s engine parts. LSM inspected the Ship on 29.12.2011 when the Ship was anchored at Tanjung Karang, Kuala Selangor [Examination (29.12.2011)]. The results of the Examination (29.12.2011) were contained in the LSM’s 3rd Report dated 18.1.2012. According to LSM’s 3rd Report –

 

(a) the Ship’s pistons were severely damaged;

 

(b) the Ship’s connecting rod bearing and main bearing were damaged;

 

(c) some of the Ship’s cylinder liners were severely scratched at the inner surface; and

 

(d) severe damage to the pistons and cylinder liners will end with a breakdown of the engine from ineffective combustion, burnt

 

55

 

bearings, severely worn crankshaft and/or badly contaminated system of lubricating oil.

 

19. During cross-examination, DW4 stated, among others, as follows:

 

(1) DW4 did not personally conduct the Examination (1.12.2011). According to DW4, Encik Mohammad Zikri (Encik Zikri) conducted the Examination (1.12.2011) and presented a draft LSM’s 1st Report to DW4. Encik Zikri was no longer with LSM. DW4 checked the draft LSM’s 1st Report before DW4 finalised and signed LSM’s 1st Report;

 

(2) although DW4 was not on the Ship at the time of the Examination (1.12.2011), DW4 claimed to have personal knowledge of how the Examination (1.12.2011) was conducted because Encik Zikri was an ex-seafarer and had previously worked as a marine engineer. Encik Zikri’s qualification was the same as DW4 except that Encik Zikri had less experience than DW4;

 

(3) regarding the Sample –

 

(a) the Sample was taken from the “settling tank’ in the Ship’s engine room by DW4’s colleague. The MFO was received and stored in the storage tank which was sometimes called the “double bottom tank’. A transfer pump would transfer the MFO from the storage tank to the settling tank;

 

56

 

(b) there was an outlet pipe from the settling tank which was called the drain valve. The drain valve was opened and the Sample was obtained from the settling tank; and

 

(c) the Sample was put into a bottle and the bottle was sealed and sent to ISB for analysis;

 

(4) in respect of LSM’s 2nd Report and ISB’s Report –

 

(a) DW4 agreed that DW4’s opinion regarding the unsuitability of the MFO, was based on ISB’s Report;

 

(b) one Mr. Lai Koon Chow (Mr. Lai) signed ISB’s Report. DW4 did not have personal knowledge whether Mr. Lai analysed the Sample. DW4 had no personal knowledge how the Sample was analysed in ISB; and

 

(c) the Sample was collected by ISB’s own dispatch;

 

(5) DW4 did not know of the following –

 

(a) the Ship was anchored for at least 2 months before the voyage; and

 

(b) there were complaints about the performance of the Ship’s engine before the voyage and repair work was done to the Ship’s engine to achieve the Ship’s required speed;

 

57

 

(6) DW4 explained that LSM just reported LSM’s finding. LSM was not able to ascertain when the damage to the Ship’s engine occurred;

 

(7) DW4 did not check the Ship’s generators, boilers and other machinery which involved fuel. DW4 agreed with the Plaintiff’s learned counsel that it was important to inspect the Ship’s generators, boilers and other machinery which involved fuel so as to enable LSM to ascertain that unsuitable MFO had damaged the Ship’s engine;

 

(8) DW4 had no idea how long it would take for the Ship’s engine to be damaged by the unsuitable MFO;

 

(9) at the time of the survey, LSM did not know who supplied the MFO;

 

(10) DW4 testified that Ash in the MFO was one of the reasons which would cause abrasion and abnormal wear to fuel pumps, injection nozzles, cylinder liner walls and piston rings. DW4 however did not know of other possible reasons for such abrasion and abnormal wear. This was because in preparing LSM’s 2nd Report, DW4 discussed with LSM’s consultant engineer. As such, DW4 agreed with the Plaintiff’s learned counsel that DW4’s opinion in LSM’s 2nd Report was based on DW4’s discussion with LSM’s consultant engineers;

 

(11) LSM did not do any analysis or test on the condition of the storage tank or the settling tank. DW4 agreed that the condition of the storage

 

58

 

tank or the settling tank could have contaminated the MFO – if the tank was dirty, so would be the MFO;

 

(12) DW4 agreed with the Plaintiff’s learned counsel that it was possible for the Ship’s engine to be damaged by reasons which had nothing to do with MFO. DW4 further agreed that DW4 was not in a position to ascertain whether the Ship’s engine had been damaged by reasons other than MFO; and

 

(13) concerning LSM’s 3rd Report –

 

(a) the opinion expressed in LSM’s 3rd Report was based on a mixture of the following –

 

(i) DW4’s personal opinion;

 

(ii) Encik Zikri’s opinion;

 

(iii) the view of LSM’s consultant engineer; and

 

(iv) reference to engineering books; and

 

(b) DW4 agreed with the Plaintiff’s learned counsel that records of the condition of the Ship’s engine, its past maintenance record, past service record and past repair record, were important documents to be considered in concluding the cause of damage to the Ship’s

 

59

 

engine. DW4 admitted that LSM did not have the Ship’s records because LSM was not provided with such records.

 

20. DW4 was re-examined as follows, among others:

 

(1) ISB is an independent laboratory which has been in business for a very long time;

 

(2) the Ship’s engine is the very heart of the Ship and consumes MFO. The Ship’s generator does not use the main engine and consumes DO;

 

(3) DW4 was personally involved in discussion with the consultant engineer;

 

(4) DW4 did not think that a higher content of ash was caused by a dirty tank; and

 

(5) lack of maintenance of the Ship’s engine, was a possibility which could contribute to the damage to the Ship’s engine. High quantity of ash would have a direct impact on the Ship’s engine.

 

21. DW5 is the Defendant’s “Administration Manager’. DW5 testified as follows

 

in his witness statement, among others:

 

60

 

(1) DW5 attended the Meeting on 3.11.2011. In the Meeting on 3.11.2011

 

(a) the Plaintiff suggested that the Plaintiff would give a letter of undertaking to guarantee the Ship’s access to the destination ports within Thai and Myanmar waters;

 

(b) the Plaintiff stated that the Plaintiff could replace the Ship and have the Cargo transferred to another vessel to be delivered to the destination port; and

 

(c) the above was reflected in the Plaintiff’s Letter dated 4.11.2011;

 

(2) the Plaintiff and PKSA had failed to advise the Defendant on what the Plaintiff and PKSA would like do with the Cargo on board the Ship. The Defendant sent a letter dated 30.4.2012 to PKSA (Defendant’s Letter dated 30.4.2012) which, among others, gave notice to PKSA that the Defendant would unload the Cargo and “continue to exercise the lien” over the Cargo for unpaid charges; and

 

(3) the Defendant had exercised its lien over the Cargo. As such –

 

(a) the Cargo had been unloaded from the Ship;

 

(b) the Cargo had been stored in PMBSB’s warehouse; and

 

61

 

(c) a copy of all the invoices issued by PMBSB had been sent by the Defendant to the Plaintiff by way of the Defendant’s letter dated

 

1.4.2013 (Defendant’s Letter dated 1.4.2013).

 

22. DW5 gave the following evidence, among others, during his crossexamination:

 

(1) DW5 joined the Defendant sometime in 2006. DW5 is known as JK Soo. DW5 is also a shareholder in the Defendant because as a result of working for the Defendant, DW5 was rewarded with 200 shares in the Defendant;

 

(2) DW5 disagreed with the Plaintiff’s learned counsel that the Defendant required an undertaking from the Plaintiff because the Defendant had committed wrongdoings and wanted the Plaintiff to relinquish all its rights;

 

(3) at the Meeting on 17.11.2011 –

 

(a) DW5 disagreed that Ms. Sammy was only acting as a translator for Mr. Vorawut; and

 

(b) DW5 did not agree that the Meeting on 17.11.2011 was only between the Defendant and PKSA (and did not involve the Plaintiff);

 

62

 

(4) DW5 disagreed with the Plaintiff’s learned counsel that the COA did not provide for the Plaintiff to give an indemnity to the Defendant;

 

(5) DW5 was not involved in the discussion regarding the COA and FN;

 

(6) the issue concerning the breakdown of the Ship’s engine had been raised in the Meeting on 3.11.2011. DW5 subsequently testified that DW5 could not recall whether the breakdown of the Ship’s engine had been mentioned in the Meeting on 3.11.2011;

 

(7) on 23.9.2011, the Defendant had paid 80,000 Bhat to PKSA; and

 

(8) DW5 disagreed with the Plaintiff’s learned counsel that the Defendant was not entitled to a lien over the Cargo because the Defendant did not perform its obligations to complete the delivery of the Cargo to Myanmar.

 

F. Admissibility, weight and evaluation of evidence

 

F(1). Admissibility of documentary hearsay evidence

 

23. Both the Plaintiff and Defendant have agreed in the Consent Order that the

 

SAHC Documents are admissible as evidence in this case as Part B

 

documents. This means –

 

(1) the SAHC Documents are admissible as evidence in the KLHC Proceedings without the requirement for both parties to fulfill –

 

63

 

(a) the rule against documentary hearsay; and

 

(b) the primary evidence rule; and

 

(2) both parties are at liberty to submit on the weight of the SAHC Documents in the KLHC Proceedings

 

In KTL Sdn Bhd & Anor v Leong Oow Lai and 2 other cases [2014] MLJU 1405, [2014] AMEJ 1458, [2014] 1 LNS 427, at paragraphs 33-35, I have decided as follows:

 

“33. It is to be noted that s 58(1) and (2) of the Evidence Act 1950 (EA) allow parties in a civil suit to agree to admit any “fact” (defined widely in s 3(a) EA to include documents).

 

34. If a document is classified as a Part C Document, the party adducing that document bears the evidential burden to satisfy the court on a balance of probabilities the following 2 conditions of admissibility of that document (2 Conditions of Admissibility):

 

(a) in accordance with the rule against documentary hearsay, the maker of the Part C Document has to be called as a witness – the Federal Court’s judgment in Capital Insurance Bhd v Cheong Heng Loong Goldsmiths (KL) Sdn Bhd [2005] 4 CLJ 1, at 20, 21-25 and 28. If the maker of a Part C Document cannot be called as a witness, the party adducing that document has to satisfy the court regarding the application of any one of the exceptions to the hearsay rule such as ss 32(1)(a) to (h) [s 32(1)(i) and (j) EA only apply to criminal proceedings according to s 32(2) EA], 33 to 37, 73A(1), (2) and/or 90A(1) EA [s 90C EA provides that s 90A EA shall prevail over,

 

64

 

among others, any other provision of EA relating to the proof of evidence]; AND

 

(b) —primary evidence” of the Part C Document as understood in s 62 EA must be adduced in court as required by s 64 EA – the Supreme Court’s decision in KPM Khidmat Sdn Bhd v Tey Kim Suie [1994] 2 MLJ 627, at 631. It is to be noted that Explanation 3 of s 62 EA provides that a document produced by a computer (in compliance with s 90A EA) is primary evidence. If —primary evidence” of a Part C Document is not available, s 64 EA provides that —secondary evidence” [within the meaning of s 63(a) to (e) EA] of the Part C Document can only be admitted as evidence if there is proof of the application of any one of the paragraphs in s 65(1)(a) to (g) EA.

 

34. The 2 Conditions of Admissibility need not be fulfilled in respect of Part A Documents and Part B Documents.”

 

(emphasis added).

 

F(2). Admissibility of “without prejudice” documents

 

24. I have not overlooked the fact that some of the SAHC Documents contained the phrase “without prejudice” (Without Prejudice Documents). The Without Prejudice Documents are nevertheless admissible in this case because both parties have waived their right to object to their admissibility due to the following reasons:

 

(1) the Without Prejudice Documents had been admitted as evidence in the SAHC trial without any objection by any party;

 

65

 

(2) both parties did not object to the inclusion of the Without Prejudice Documents in the record of appeal which had led to the CA’s Order; and

 

(3) both parties had entered into the Consent Order regarding the admissibility of all documents tendered in the SAHC trial, including the Without Prejudice Documents.

 

25. The admissibility of the Without Prejudice Documents is different from the weight, if any, to be attached by this court to such documents. In Tenaga Nasional Bhd v Api-api Aquaculture Sdn Bhd [2015] 3 AMR 811, at subparagraph 24(e) (Api-api Aquaculture), I have held as follows:

 

“24(e) even if a piece of evidence, be it a fact in issue or a relevant fact, is admitted, the court may still attach no weight to such evidence. In Ng Chooi Kor v Isyoda (M) Sdn Bhd [2010] 3 MLJ 492, at 498 and 499-505, the Court of Appeal in a judgment given by Ahmad Maarop JCA (as his Lordship then was), did not give any weight to a statutory declaration and affidavit, both affirmed by one person who had not been called as a witness to testify in that case.”

 

(emphasis added).

 

F(3). Admissibility of oral hearsay evidence

 

26. In the NOP, oral evidence had been adduced by both parties, notably the Defendant, regarding what the SAHC Witnesses had heard from the

 

66

 

following persons who had not been called to testify, either in the SAHC trial or in this case:

 

(1) Mr. Vorawut; and

 

(2) Mr. Tian

 

(Oral Evidence Regarding What Was Said by Mr. Vorawut and Mr. Tian).

 

27. I am of the view that the Oral Evidence Regarding What Was Said by Mr. Vorawut and Mr. Tian, is admissible in this case for the following reasons:

 

(1) both parties had agreed in the Consent Order for the NOP (which contained the Oral Evidence Regarding What Was Said by Mr. Vorawut and Mr. Tian) to be admissible as evidence in this case. Such an agreement would admit the Oral Evidence Regarding What Was Said by Mr. Vorawut and Mr. Tian under s 58(1) and (2) of the Evidence Act 1950 (EA). Section 58 EA provides as follows –

 

“Facts admitted need not be proved

 

58(1) No fact need be proved in any proceeding which the parties thereto or their agents agree to admit at the hearing or

 

which before the hearing they agree to admit by any writing under their hands, or which by any rule of pleading in force at the time they are deemed to have admitted by their pleadings:

 

67

 

Provided that the court may, in its discretion, require the facts admitted to be proved otherwise than by such admissions.

 

(2) This section has no application to criminal proceedings ”

 

(emphasis added); and

 

(2) Oral Evidence Regarding What Was Said by Mr. Vorawut and Mr. Tian, is admissible as evidence to show that conversations with Mr. Vorawut and Mr. Tian have indeed taken place. In Api-api Aquaculture, at paragraphs 25 and 26, I have followed the Privy Council’s decision in an appeal from the Federation of Malaya in Subramaniam v Public Prosecutor [1956] 1 MLJ 220, as follows –

 

“Despite the fact that the Chinese gentleman and Encik Yusof had not been called as witnesses, SPI’s conversations with them did not constitute oral hearsay evidence and such conversations were admissible to show that such conversations had indeed taken place. This is in accordance with the Privy Council’s decision on appeal from the Federation of Malaya in Subramaniam v Public Prosecutor [1956] 1 MLJ 220, at 222, delivered by LMD De Silva as follows:

 

—Evidence of a statement made to a witness by a person who is not himself called as a witness may or may not be hearsay. It is hearsay and inadmissible when the object of the evidence is to establish the truth of what is contained in the statement. It is not hearsay and is admissible when it is proposed to establish by the evidence, not the truth of the statement, but the fact that it was made. The fact that the statement was made, quite apart from its truth, is frequently relevant in considering the mental state and conduct thereafter of

 

68

 

the witness or of some other person in whose presence the statement was made. In the case before their Lordships statements could have been made to the appellant by the terrorists, which, whether true or not, if they had been believed by the appellant, might reasonably have induced in him an apprehension of instant death if he failed to conform to their wishes. ”

 

(emphasis added).

 

SPI’s conversations with the Chinese gentleman and Encik Yusof are relevant as direct oral evidence regarding matters which have been seen, heard and perceived by SP1 under s 60(1)(a), (b) and (c) EA”

 

(emphasis added).

 

28. Needless to say, the admissibility of Oral Evidence Regarding What Was Said by Mr. Vorawut and Mr. Tian, does not necessarily mean that weight should be given to such evidence – Api-api Aquaculture, at sub-paragraph 24(e).

 

F(4). Evaluation of evidence

 

29. As stated above, both parties did not re-call SAHC Witnesses. Nor did the parties call any new witness in this case. Consequently, this court has no audio-visual opportunity to assess the demeanour of any witness, let alone the SAHC Witnesses.

 

69

 

30. In –

 

(1) resolving the conflict in the oral evidence of witnesses for the Plaintiff and Defendant in this case;

 

(2) deciding what weight, if any, to be attached to the oral evidence of witnesses as stated in the “hard cold print’ of the NOP; and

 

(3) making findings of fact regarding the credibility of any witness

 

– this court is guided by the following considerations:

 

(a) whether there is contemporaneous documentary evidence to support or contradict the oral evidence of a particular witness. I rely on Siti Norma Yaakob JCA’s (as she then was) judgment in the Court of Appeal case of Guan Teik Sdn Bhd v Hj Mohd Noor Hj Yakob & Ors [2000] 4 CLJ 324, at 330, as follows –

 

“In cases where conflicting evidence are presented before a court, it is the duty of the court not only to weigh such evidence on a balance of probabilities but it is also encumbent [sic] upon the court to look at all the surrounding factors and to weigh and evaluate contemporaneous documents that may tend to establish the truth or otherwise of a given fact. In this instance the learned trial judge discredited the evidence of the appellant, accepted the evidence of the respondents wholeheartedly and disregarded the contemporaneous documents totally. We say that he had erred as he had failed to direct his mind as to the probative effect of the contemporaneous documents. He should, after accepting the respondents’ evidence, weighed it against the contemporaneous

 

70

 

documents and evaluate whether such documents support the respondents’ oral testimony. We say that this evaluation exercise is most crucial for it must be remembered that the respondents were testifying to events that happened eighteen years ago whilst the contemporaneous documents speak of matters then existing at the time such documents, were issued ”

 

(emphasis added).

 

I must highlight the importance of emails. If there is no challenge to the authenticity of emails, weight should be attached to contemporaneous emails, especially in the following circumstances –

 

(i) when there is an “email thread” or “chain of emails” which contains a running list in chronological order of all the emails in question. It is difficult to fabricate an “email thread” wherein the emails explain and/or corroborate the other emails, either preceding or subsequent;

 

(ii) the contents of the emails are consistent with the conduct of the parties and/or witnesses; and

 

(iii) the substance of the emails is supported by actual events and/or circumstances of the case in question;

 

(b) the parties’ conduct is relevant under s 8(2) EA. In Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229, at 234, Chang Min Tat FJ delivered the following judgment in the Federal Court –

 

71

 

“For myself, I would with respect feel somewhat safer to refer to and rely on the acts and deeds of a witness which are contemporaneous with the event and to draw the reasonable inferences from them than to believe his subsequent recollection or version of it, particularly if he is a witness with a purpose of his own to serve and if it did not account for the statements in his documents and writings .”

 

(emphasis added);

 

(c) the surrounding circumstances of the case – Guan Teik Sdn Bhd, at p. 330; and

 

(d) the probabilities or improbabilities of the matter in issue, should be considered. In Muniandy & Ors v Public Prosecutor [1966] 1 MLJ 257, at 258, Ong Hock Thye FJ (as he then was) stated in the Federal Court as follows –

 

“In our view, being unshaken in cross-examination is not per se an allsufficient acid test of credibility. The inherent probability or improbability of a fact in issue must be the prime consideration.”

 

(emphasis added).

 

The above judgment in Muniandy has been followed by Anuar CJ (Malaya) in the Federal Court case of Dr. Shanmuganathan v Periasamy s/o Sithambaram Pillai [1997] 3 MLJ 61, at 82.

 

72

 

G. Jurisdiction of Malaysian court

 

31. Clause 32 of the COA Rider Clauses [Clause 32 (COA Rider Clauses)] provided as follows:

 

“Should any dispute arise between the Charteror and Charterer, the matter

 

in dispute shall be referred to Arbitration in Malaysia..English Law to

 

apply. …”

 

(emphasis added).

 

32. The Plaintiff had denied being bound by the COA [including Clause 32 (COA Rider Clauses)] as the Plaintiff was not a party to the COA. The Defendant’s Counterclaim had been filed without the Defendant commencing any arbitral proceedings against the Plaintiff. Clearly, the Defendant had waived the arbitration agreement in Clause 32 (COA Rider Clauses). The question that now arises as to whether Malaysian court has the jurisdiction to hear the Plaintiff’s Claim and the Defendant’s Counterclaim. I am of the view that the Malaysian High Court has the jurisdiction to decide the Plaintiff’s Claim and the Defendant’s Counterclaim for the following reasons:

 

(1) the Plaintiff’s Claim is based on the tort of detinue and/or tort of conversion. The Cargo is now in PMBSB’s warehouse, Klang. As such, the High Court has jurisdiction under s 23(1)(c) of the Courts of Judicature Act 1964 (CJA) to adjudicate the Plaintiff’s Claim. Section 23(1) CJA reads as follows –

 

73

 

“Civil jurisdiction – general

 

23(1) Subject to the limitations contained in Article 128 of the Constitution the High Court shall have jurisdiction to try all civil proceedings where –

 

(a) the cause of action arose, or

 

(b) the defendant or one of several defendants resides or has his place of business; or

 

(c) the facts on which the proceedings are based exist or are alleged to have occurred, or

 

within the local jurisdiction of the Court and notwithstanding anything contained in this section in any case where all parties consent in writing within the local jurisdiction of the other High Court.”

 

(emphasis added);

 

(2) the High Court also has jurisdiction under s 23(1)(b) CJA to hear this case because the Defendant’s registered address and place of business is in Klang; and

 

(3) s 24(b) CJA provides that the High Court shall have “the same jurisdiction and authority in relation to matters of admiralty as is had by the High Court of Justice in England under the United Kingdom Supreme Court Act 1981 [SCA (UK)]’. It is to be noted that the SCA (UK) is now renamed the Senior Courts Act 1981 (to avoid confusion

 

74

 

as the Supreme Court in England and Wales has replaced the House of Lords). In this judgment, I will use the abbreviation “SCA (UK)” to refer to the Senior Courts Act 1981. Section 20 SCA (UK) provides as follows –

 

Admiralty jurisdiction of High Court

 

20(1) The Admiralty jurisdiction of the High Court shall be as follows,

 

that is to say –

 

(a) jurisdiction to hear and determine any of the questions and claims mentioned in subsection (2);

 

(2) The questions and claims referred to in subsection (1)(a)

 

are –

 

(d) any claim for damage received by a ship;

 

(g) any claim for loss of or damage to goods carried in a ship;

 

(h) any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship;

 

(m) any claim in respect of goods or materials supplied to a ship for her operation or maintenance; …”

 

(emphasis added).

 

The Malaysian High Court has the jurisdiction to decide the Plaintiff’s Claim in respect of the loss or damage to the Cargo by virtue of s

 

75

 

24(b) CJA read with s 20(1)(a) and (2)(g) SCA (UK). The Malaysian High Court is also conferred with the jurisdiction to hear the Defendant’s Counterclaim for freight charges, damage to the Ship due to PKSA’s Supply of Bunker Oil and the Defendant’s exercise of lien over the Cargo, pursuant to s 24(b) CJA read with s 20(1)(a), (2)(d), (h) and/or (m) SCA (UK).

 

H. Construction of agreements

 

33. In interpreting commercial agreements, Malaysian case law is not dissimilar to English case law. I will explain later in this judgment on why I need to refer to English law. A commercial contract should be construed in a commercially sensible manner. I rely on the following judgment of Gopal Sri Ram FCJ in the Federal Court case of Berjaya Times Squares Sdn Bhd (formerly known as Berjaya Ditan Sdn Bhd) v M Concept Sdn Bhd [2010] 1 MLJ 597, at 606-607:

 

“The agreement in the present case is one that is not regulated by statute. In short, it is not a contract governed by the housing development legislation. The appellant and respondent were therefore at complete liberty, in accordance with the doctrine of freedom of contract to agree on any terms they thought fit. The role of the court is to interpret the contract in a sensible fashion. See Loh Wai Lian v SEA Housing Corporation Sdn Bhd [1987] 2 MLJ 1. As Lord Steyn said in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 at p 771:

 

In determining the meaning of the language of a commercial contract, and unilateral contractual notices, the law therefore generally favours a commercially sensible construction. The reason for this

 

76

 

approach is that a commercial construction is more likely to give effect to the intention of the parties. Words are therefore interpreted in the way in which a reasonable commercial person would construe them. And the standard of the reasonable commercial person is hostile to technical interpretations and undue emphasis on niceties of language. In contradistinction to this modern approach, Lord Greene MR’s judgment in Hankey v Clavering [1942] 2 KB 326 is rigid and formalistic.”

 

(emphasis added).

 

34. In giving a commercially sensible interpretation to a commercial contract, this court is not bound by the label of the transaction given by parties. I cite Gopal Sri Ram JCA’s (as he then was) judgment in the Court of Appeal case of Sia Siew Hong & Ors v Lim Gim Chian & Anor [1996] 3 CLJ 26, at 32, as follows:

 

“No doubt it is described as a guarantee. But in the construction of contracts the Court is not bound by the labels that parties choose to affix onto the particular document. In all such cases the duty of the Court is clear. And that duty is to construe the document as a whole and to determine from its language and any other admissible evidence its true nature and purport”

 

(emphasis added).

 

77

 

Based on Sia Siew Hong, this court is not bound by the names given by the parties to Contract Between PKSA and Plaintiff (8.8.2011), COA and FN.

 

I. Whether Plaintiff was PKSA’s principal when PKSA concluded COA and FN

 

35. The first question that arises is whether the Plaintiff was PKSA’s principal when PKSA entered into the COA and FN. I will subsequently decide whether the Plaintiff was PKSA’s principal in respect of PKSA’s Supply of Bunker Oil. The Plaintiff’s learned counsel had contended that the Plaintiff was not PKSA’s principal when PKSA entered into the COA and FN with the Defendant. According to the Plaintiff’s learned counsel –

 

(1) the Plaintiff did not enter into any contract with the Defendant. The Plaintiff only entered into the Contract Between PKSA and Plaintiff (8.8.2011);

 

(2) the Plaintiff did not sign the COA and FN. The COA and FN were also not prepared by the Plaintiff. Hence, the Plaintiff was not bound by the COA and FN. In any event, the COA and FN did not provide that PKSA signed the COA and FN as the Plaintiff’s agent. Furthermore –

 

(a) the cover page of the COA clearly provided that the COA was an agreement between the Defendant and PKSA without any qualification;

 

78

 

(b) the COA and FN named PKSA as the “Charterer’ without any qualification;

 

(c) at the signing parts of the COA and FN, PKSA signed without any qualification that PKSA was the Plaintiff’s agent; and

 

(d) the COA and FN named the Plaintiff as the Cargo owner and consignee.

 

The following cases had been cited in support of the Plaintiff’s above submission –

 

(i) the House of Lords’ judgment in Universal Steam Navigation Co Ltd v James McKelvie and Company [1923] AC 492 (Universal Steam Navigation);

 

(ii) the decision of the English King’s Bench court in Parker v Winlow (1857) 7 E & B 942; and

 

(iii) the English Court of Appeal case of HO Brandt & Co v HN Morris & Co Ltd [1916-1917] All ER Rep 925 (Brandt & Co);

 

(3) the Defendant had the legal burden to prove that the Plaintiff was PKSA’s agent when PKSA entered into the COA and FN with the Defendant. The Defendant had failed to discharge this legal onus when the Defendant had failed to –

 

79

 

(a) call PKSA as a witness in this case; and

 

(b) adduce any document to show that PKSA had authority to act as the Plaintiff’s agent to enter into the COA and FN;

 

(4) the Defendant had failed to discharge its legal burden to prove that PKSA had the ostensible authority to enter into the COA and FN on behalf of the Plaintiff. Reliance had been placed by the Plaintiff on the following English cases –

 

(a) Diplock LJ’s (as he then was) judgment in the Court of Appeal case of Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480; and

 

(b) Hirst J’s (as he then was) decision in the High Court in DB Deniz Nakliyati TAS v Jugopetrol & Anor (unreported), Official Transcripts, 3.12.1987;

 

(5) the Plaintiff did not ratify the COA and FN;

 

(6) even if the Defendant had believed that PKSA entered into the COA and FN as the Plaintiff’s agent, such a belief “was built upon recklessness, ignorance and unfounded assumption”; and

 

(7) the Defendant’s own contemporaneous conduct was consistent with the conclusion that it was never PKSA’s intention to sign the COA and

 

80

 

FN as the Plaintiff’s agent. The Plaintiff relied on the following conduct of the Defendant –

 

(a) the Defendant wanted the Plaintiff to execute the Proposed Undertaking (20.9.2011). If the COA and FN were enforceable against the Plaintiff as PKSA’s principal, there was no need for the Plaintiff to sign the Proposed Undertaking (20.9.2011);

 

(b) the Defendant initially wanted –

 

(i) a direct contract between the Plaintiff and the Defendant (Direct Contract); or

 

(ii) a tripartite agreement among the Plaintiff, Defendant and PKSA (Tripartite Contract).

 

If the Plaintiff was PKSA’s principal in respect of the COA and FN, there would not be a need for the Defendant to insist on a Direct Contract or a Tripartite Contract with the Plaintiff;

 

(c) if PKSA was the Plaintiff’s agent in respect of the COA and FN, when the Defendant was not paid the freight, the Defendant would have demanded or claimed for the freight from the Plaintiff. However, the Defendant did not do so; and

 

(d) the Defendant only commenced arbitral proceedings against PKSA (Arbitral Proceedings). The Defendant did not institute

 

81

 

any arbitral proceedings against the Plaintiff. The Defendant’s statement of claim in the Arbitral Proceedings did not allege that PKSA had entered into the COA and FN on behalf of the Plaintiff.

 

The Plaintiff now contends that the Defendant is estopped by its own aforesaid conduct from asserting that PKSA is the Plaintiff’s agent when the COA and FN are signed by PKSA. The Plaintiff relied on the Federal Court’s judgment in Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331 (Boustead Trading).

 

I(1). Defendant has legal burden to prove Plaintiff is PKSA’s principal in COA and FN

 

36. I accept the contention by the Plaintiff’s learned counsel that the Defendant bears the legal burden to prove that the Plaintiff is PKSA’s principal when PKSA signs the COA and FN. My reasons are as follows:

 

(1) to substantiate the Defendant’s Counterclaim against the Plaintiff in this case, the Defendant has the overall legal burden of proof under ss 101(1), (2) and 102 EA to prove that the Plaintiff was PKSA’s principal when PKSA concluded the COA and FN; and/or

 

(2) the Defendant wishes this court to believe that PKSA had acted as the Plaintiff’s agent in respect of the COA and FN. Accordingly, the

 

82

 

Defendant has the legal burden under s 103 EA to prove such a particular fact. Section 103 EA provides as follows:

 

“Burden of proof as to particular fact

 

103. The burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.”

 

(emphasis added).

 

I rely Mokhtar Sidin JCA’s judgment in the Court of Appeal case of Juahir bin Sadikon v Perbadanan Kemajuan Ekonomi Negeri Johor [1996] 3 MLJ 627, at 638 and 639, as follows –

 

“ The other issue before us was whether there was such an offer. It is clear that it was the appellant who asserted that Tan Sri Basir made the offer. Thus, the onus is on the appellant to satisfy the court that such an offer was ever made. This is clearly provided for by ss 101 and 103[EA]. …

 

It is clear from the above provisions [EA] on whom the onus lies. In the present case, it is the appellant who had asserted the existence of a particular fact, viz that there was an offer to sell the said land at the price between RM7,000-RM8,000. The onus is on the appellant to satisfy the court that there was such an offer.”

 

83

 

(emphasis added).

 

37. The Defendant is only required to prove on a balance of probabilities the particular fact that the Plaintiff was PKSA’s principal when PKSA entered into the COA and FN. I should point out that in ascertaining whether the Plaintiff was PKSA’s principal when PKSA entered into the COA and FN, extrinsic evidence, namely oral evidence and documentary evidence (other than the COA and FN) is admissible – in the English High Court case of Gewa Chartering BV v Remco Shipping Lines Ltd, The Remco [1984] 2 Lloyd’s Rep 205, at 209, Webster J cited a passage in the authoritative book “Scrutton on Charterparties”, 18th Edition, at p. 33, as follows:

 

“(1) Where the charterparty contains a statement leaving it ambiguous whether a particular person was intended to be personally liable under it, evidence is admissible to show who is the true principal .”

 

(emphasis added).

 

The case to admit extrinsic evidence is stronger here when the COA and FN have expressly referred to the Plaintiff as PKSA’s principal.

 

I(2). Plaintiff was PKSA’s principal when PKSA concluded COA and FN

 

38. I find as a fact that the Defendant has succeeded to prove on a balance of probabilities that the Plaintiff was PKSA’s principal when PKSA signed the COA and FN. This finding is based on the following evidence and reasons:

 

84

 

(1) in the COA’s “Summary and Abbreviations” (COA’s Summary and Abbreviations), the “Charteror’ was the Defendant while the “Charterer’ was PKSA. The COA’s Summary and Abbreviations has expressly provided that the “Charterers’ Pricipal [sic – should be principal]’ is the Plaintiff;

 

(2) the opening paragraph in the FN has expressly mentioned that PKSA acts on behalf of the Plaintiff (FN’s Opening Paragraph). FN’s Opening Paragraph has great significance because the FN is drafted in such a manner whereby all the terms and conditions of the FN are subject to FN’s Opening Paragraph. I reproduce FN’s Opening Paragraph as follows (with grammatical errors) –

 

“It is on this day (date/year of signing the FN), mutually agreed between [Defendant] … as Charteror, and [PKSA] … as Charterers acting on behalf of [Plaintiff], buyer/consignee of cargo for transportation that their respective contractual obligations, responsibilities and definitions of terms, general clauses and documents applicable in this single or single and consecutive voyage charter are as follows:

 

1. …

 

(emphasis added);

 

85

 

(3) according to DW1 and DW3, the COA was given to the Plaintiff at the Meeting in Novotel in the presence of, among others, Mr. Tian, PW1, Mr. Wai and Ms. Sammy. DW3 testified that both Mr. Tian and PW1 read the COA and PW1 nodded PW1’s head in agreement before PKSA signed the COA. At the Meeting in Novotel, Mr. Tian, PW1, Mr. Wai and Ms. Sammy did not deny the COA’s Summary and Abbreviations that PKSA was the Plaintiff’s agent in respect of the COA. Furthermore, subsequent to the Meeting in Novotel, the Plaintiff did not deny the COA’s Summary and Abbreviations that PKSA was the Plaintiff’s agent in respect of the COA;

 

(4) the draft FN had been sent to Mr. Tian by way of the Defendant’s email dated 11.8.2011 (Defendant’s Email dated 11.8.2011). Mr. Tian had acknowledged the receipt of the Defendant’s Email dated

 

11.8.2011 by way of Mr. Tian’s email dated 12.8.2011 (Mr. Tian’s Email dated 12.8.2011). Mr. Tian did not deny at any time the FN’s Opening Paragraph (that PKSA acted on behalf of the Plaintiff);

 

(5) before the COA is signed by PKSA and the Defendant in the Meeting in Novotel on 20.9.2011, the conduct of the Plaintiff supports the finding of fact that the Plaintiff is PKSA’s principal. This is because if PKSA has acted solely on its own in respect of the COA and FN, Mr. Tian, PW1, Mr. Wai, Mr. Xiao (please see NOP regarding PW1’s cross-examination) and Ms. Sammy need not have met DW1 and DW3 in the following 3 meetings –

 

86

 

(a) Meeting on 22.7.2011 (Mr. Tian and Ms. Sammy attended on behalf of the Plaintiff);

 

(b) Meeting in August 2011 (Mr. Tian represented the Plaintiff); and

 

(c) Meeting in Novotel on 20.9.2011 (Mr. Tian, PW1, Mr. Wai, Mr. Xiao and Ms. Sammy attended on behalf of the Plaintiff).

 

If the Plaintiff was not PKSA’s principal regarding the COA and FN, there would be no reason for the Plaintiff’s most senior employee who was based in Myanmar to have met DW1 in Thailand;

 

(6) the following emails (in chronological order) support the finding of fact that PKSA was the Plaintiff’s agent in respect of the COA and FN –

 

(a) Mr. Vorawut’s Email dated 28.7.2011 to the Defendant stated, among others (with a grammatical error) –

 

“1. Your charter has been concluded. I will be meeting again Mr. Tian and send to the list after finish meeting. …”

 

(emphasis added);

 

(b) in Mr. Vorawut’s Email dated 31.7.2011 to the Defendant, PKSA stated, among others (with a grammatical error) –

 

87

 

4. I will charter your vessel after I get the report from my inspector and we have to accept terms and conditions. I will inform you again after I talk to Mr. Tian.’

 

(emphasis added);

 

(c) the Defendant sent an email dated 1.8.2011 to PKSA (Defendant’s Email dated 1.8.2011) which stated (with grammatical errors) –

 

“1. Understood that you agree to charter the vessel. We propose that your charges can be offset from the charter fees.

 

2. When we can have a meeting together with Mr. Tian?’

 

(emphasis added);

 

(d) Mr. Vorawut sent an email dated 12.9.2011 to the Defendant which was copied to Ms. Sammy (Mr. Vorawut’s Email dated

 

12.9.2011). Mr. Vorawut’s Email dated 12.9.2011 concerned the draft FN. Clause 38 of the COA Rider Clauses and clause 25 FN had expressly provided that all the terms and conditions of, among others, the FN, should be “kept strictly private and confidential’. If PKSA had merely dealt with the Defendant on its own in respect of the COA and FN, there was neither justification

 

88

 

nor reason for Mr. Vorawut’s Email dated 12.9.2011 (regarding the confidential terms of FN) to be copied to Ms. Sammy;

 

(e) the Defendant sent an email dated 14.9.2011 to both Mr. Vorawut and Mr. Tian (Defendant’s Email dated 14.9.2011) which inquired from both Mr. Vorawut and Mr. Tian on when all 3 parties could have a meeting to “finalize the COA”; and

 

(f) Mr. Tian’s Email dated 18.9.2011 suggested a “final discussion” with the Defendant on an erroneous date, Tuesday, 11.9.2011. If the Plaintiff was not PKSA’s principal in respect of the COA and FN, there was neither necessity nor reason for Mr. Tian, the Plaintiff’s MD in Myanmar, to meet the Defendant;

 

(7) the following contemporaneous documents showed that PKSA did not act solely on its own in dealing with the Defendant in respect of the COA and FN but instead these documents expressly stated that PKSA acted as an agent only –

 

(a) the 2 Bills of Lading mentioned that PKSA was the agent for or on behalf of the Master of the Ship. The COA’s Summary and Abbreviations had interpreted the word of “Master’ as, among others, a person who controls the Ship and all his action and duties “are carried out on behalf of the Charterers/Cargo Owners”. The COA’s Summary and Abbreviations had referred to the Plaintiff as the principal of the “Charterer’ (PKSA) and as the “Cargo Owner’. If PKSA was an independent charterer of the Ship

 

89

 

and was not an agent of the Plaintiff, the 2 Bills of Lading would not have stated that PKSA was only an agent of the Master;

 

(b) Tally Department’s 2 Documents; and

 

(c) 2 Mate Receipts;

 

(8) PW1’s Police Report dated 14.5.2012 stated that PKSA was the Plaintiff’s shipping agent in respect of the Cargo. PW1’s witness statement also admitted that PKSA was the Plaintiff’s shipping agent concerning the Cargo. The fact that PKSA was the Plaintiff’s shipping agent for the Cargo, supports the finding that PKSA acted as the Plaintiff’s agent in respect of the COA and FN. It is incongruous, if not absurd, for PKSA to have acted as the Plaintiff’s shipping agent for the Cargo but not on the Plaintiff’s behalf in respect of the COA and FN;

 

(9) I will now refer to the one-page Contract Between PKSA and Plaintiff (8.8.2011) which is entitled “Contract For The Shipment Cargo”. The Contract Between PKSA and Plaintiff (8.8.2011) provided for, among others, as follows –

 

(a) PKSA was the charteror and disponent owner of the Ship while the Plaintiff was the charterer of the Ship;

 

(b) the details of the Contract Between PKSA and Plaintiff (8.8.2011) regarding the Ship, Cargo, 2 loading ports for the Cargo and the

 

90

 

port of discharge of the Cargo were the same as those stated in the COA and FN;

 

(c) any delay in the shipment of the Cargo shall be the responsibility of PKSA as the owner of the Ship at US$3,000 per day [Clause 19 Contract Between PKSA and Plaintiff (8.8.2011)];

 

(d) “Arbitration in Thailand and English Law to apply” [Clause 22 Contract Between PKSA and Plaintiff (8.8.2011)]; and

 

(e) PW1 signed the Contract Between PKSA and Plaintiff (8.8.2011) on the Plaintiff’s behalf while Mr. Vorawut signed that agreement on behalf of PKSA.

 

It is my finding of fact that the Contract Between PKSA and Plaintiff

 

(8.8.2011) is a sham because –

 

(i) PKSA was never the disponent owner of the Ship. DW2’s evidence clearly stated that the Defendant was at all material times the Ship’s disponent owner. PW1’s witness statement also admitted that the Defendant was the Ship’s disponent owner. VCPL’s Letter dated 12.7.2011 only appointed PKSA as VCPL’s shipping agent. VCPL’s Letter dated 12.7.2011 did not appoint PKSA as the Ship’s disponent owner. I accept DW2’s evidence that VCPL appointed PKSA as VCPL’s shipping agent for the Ship so as to enable the provision of PKSA’s Specified Services to the Ship;

 

91

 

(ii) the COA’s Summary and Abbreviations and clause 3 FN had expressly stated that the Defendant was the Ship’s disponent owner; and

 

(iii) PW1 alleged that the Plaintiff had paid the freight in full to PKSA. If the Contract Between PKSA and Plaintiff (8.8.2011) was genuine and in view of the non-delivery of the Cargo to Myanmar, PKSA would be liable to the Plaintiff for –

 

(iiia) the refund of the freight; and

 

(iiib) agreed liquidated damages at the rate of US$3,000 per day under Clause 19 Contract Between PKSA and Plaintiff (8.8.2011)

 

– yet, the Plaintiff had not demanded or commenced arbitral proceedings against PKSA in Thailand to recover the freight and agreed liquidated damages. Nor had the Plaintiff claimed third party indemnity or contribution from PKSA in the Defendant’s Counterclaim under Order 16 rule 1(1)(a) read with Order 16 rule 11 of the Rules of Court 2012 (RC) [which allows a plaintiff facing a counterclaim to issue a third party notice claiming indemnity or contribution from the third party in respect of the counterclaim].

 

92

 

I am constrained to make a finding of fact that both the Plaintiff and PKSA had concealed the Contract Between PKSA and Plaintiff (8.8.2011) from the Defendant [Concealment of Contract Between PKSA and Plaintiff (8.8.2011)]. This finding of fact is premised on the following reasons –

 

(a) despite the exchange of emails –

 

(ai) between Mr. Tian and Ms. Sammy on behalf of the Plaintiff with the Defendant; and

 

(aii) between Mr. Vorawut and the Defendant

 

– neither PKSA nor the Plaintiff inform the Defendant regarding the Contract Between PKSA and Plaintiff (8.8.2011);

 

(b) Mr. Tian, PW1 and Mr. Vorawut did not inform DW1 about the Contract Between PKSA and Plaintiff (8.8.2011) in the following meetings –

 

(ba) Meeting in August 2011;

 

(bb) Meeting in Novotel (20.9.2011) when PKSA signed the

 

COA;

 

(bc) Meeting on 3.11.2011;

 

93

 

(bd)

 

Meeting on 4.11.2011;

 

(be) Meeting on 17.11.2011; and

 

(bf) Meeting on 18.11.2011;

 

(c) PW1’s Police Report dated 14.5.2012 and PW1’s witness statement did not allude to the Contract Between PKSA and Plaintiff (8.8.2011).

 

The above 2 findings of fact, namely the Contract Between PKSA and Plaintiff (8.8.2011) is a sham and there is Concealment of Contract Between PKSA and Plaintiff (8.8.2011), clearly undermine the credibility of PW1 and show that PW1’s evidence (alleging that PKSA was acting on its own when PKSA concluded the COA and FN) cannot be given any credence. I will discuss subsequently in this judgment regarding PW1’s lack of credibility;

 

(10) if PKSA had acted on its own accord in respect of the COA and FN, the Plaintiff would not have acted as follows and would have instead, allowed PKSA to carry out the following tasks –

 

(a) by way of Mr. Wai’s Email dated 8.9.2011, the Plaintiff requested for the Ship’s insurance certificate;

 

(b) Mr. Tian’s Inspection of Ship to ensure the Ship’s seaworthiness and suitability to carry the Cargo. It is to be noted that Mr. Tian is

 

94

 

the Plaintiff’s MD in Myanmar who travelled to Thailand to inspect the Ship;

 

(c) the Plaintiff carried out Sea Trials for the Ship together with PKSA;

 

(d) the Plaintiff’s Final Inspection of Ship; and

 

(e) according to PW1 during cross-examination, the Plaintiff gave final directions on the commencement of the Ship’s voyage; and

 

(11) I find DWI’s oral evidence regarding –

 

(a) Mr. Vorawut’s representation in the Meeting on 11.7.2011 to DW1 that PKSA was the Plaintiff’s agent in Bangkok;

 

(b) Mr. Tian’s statement to DW1 in the Meeting on 22.7.2011 that PKSA was the Plaintiff’s agent in Bangkok; and

 

(c) Mr. Tian’s Assurance (given in the Meeting in August 2011)

 

– to be probable in view of the evidence and reasons given in the above sub-paragraphs (1) to (10). Furthermore, for reasons to be elaborated later, this court draws an adverse inference against the Plaintiff under s 114(g) EA for not calling, among others, Mr. Tian and Mr. Vorawut, to disprove the aforesaid evidence of DW1.

 

39. In respect of the Plaintiff’s contentions –

 

95

 

(1) whether a party acts as a principal or agent for another party in one case, depends on the particular facts and the wording of the relevant documents of that case. As such, cases on this issue are purely factual and are not binding legal precedents from the view point of the stare decisis doctrine. I quote Lord Sumner in the House of Lords in Universal Steam Navigation, at p. 499 –

 

“ The result is, that the whole question is one of the construction of the entire charter, as we have it, including the form in which it is signed – namely, in the name of James McKelvie & Co “(as agents)” ”

 

(emphasis added);

 

(2) Universal Steam Navigation, Parker and Brandt & Co can be easily distinguished from this case as the issues which arise in those cases are different from the question to be decided in this case. Similarly, The Remco [1984] 2 Lloyd’s Rep 205 (cited by the Defendant’s learned counsel), could be explained on the particular facts of that case regarding the telephone conversation in question. Furthermore, those cases do not have the same material facts to prove on a balance of probabilities that the Plaintiff was PKSA’s principal in respect of the COA and FN as elaborated in the above sub-paragraphs 38(1) to (11). I now address the above 3 cases in detail –

 

(a) in Universal Steam Navigation –

 

96

 

(i) the appellant/ship owner commenced action against the respondent who signed the charterparty as an agent for a third party charterer (who was not sued by the appellant); and

 

(ii) the House of Lords in 4 judgments given by Viscount Cave LC, Lord Shaw, Lord Sumner and Lord Parmoor, affirmed a majority decision of the Court of Appeal (which reversed the High Court’s decision) which held that the respondent was not personally liable for the charterparty. It should be noted that the appellant had wrongfully instituted action against the agent in Universal Steam Navigation. The appellant should have sued the charterer’s principal, as in this case;

 

(b) in Parker –

 

(i) the ship owner took action against the defendant who signed the charterparty without any restriction. The charterparty merely stated that the charterparty was between the ship owner and the defendant “agent for’ a third party;

 

(ii) the full coram of the English King’s Bench court (Lord Cambell CJ, Coleridge, Erle and Crompton JJ) affirmed the trial court’s decision by Martin B that despite the mere description in the charter party that the defendant was an agent for a third party, nonetheless the defendant was personally liable for the charterparty; and

 

97

 

(iii) Parker did not decide that even if the signing party was personally liable, the ship owner could not have instituted legal action against the principal of the signing party (as in this case); and

 

(c) in Brandt & Co –

 

(i) the plaintiffs bought a quantity of aniline oil from the defendants (who were manufacturers of aniline oil). The “bought note” (part of the sale of goods contract) stated that the plaintiffs bought the goods “for and on behalf of’ an American third party;

 

(ii) the defendants/vendors contended, among others, that the American third party and not the plaintiffs, was the purchaser. As such, according to the defendants/vendors, the action should fail on, among others, the ground that the American third party and not the plaintiffs, should have commenced action; and

 

(iii) the above contention of the defendants/vendors was rejected by the High Court and a majority of the Court of Appeal. It should be noted that Brandt & Co held, correctly in my view, that despite the wording in the “bought note” that the plaintiffs bought the goods “for and on behalf of’ the American third party, the plaintiffs were personally liable for the contract and could therefore take action against the defendants/vendors.

 

98

 

Brandt & Co has decided that an agent (“A”) who has personally entered into a contract and is personally liable for the contract (despite the reference in the contract that A was acting for “C”), can lawfully sue the other contracting party (“B”). This present case is the “opposite” of Brandt & Co because in this case, B has taken action against C;

 

(3) the Defendant need not call Mr. Vorawut or any witness from PKSA as there is sufficient evidence on a balance of probabilities (as explained above) to prove that PKSA was the Plaintiff’s agent in respect of the COA and FN. In fact, an adverse inference under s 114(g) EA should be drawn against the Plaintiff for failing to call Mr. Vorawut to testify in this case (which will be elaborated later in this judgment);

 

(4) the fact that the Defendant wanted but could not obtain the Proposed Undertaking (20.9.2011), Direct Contract or Tripartite Contract, did not detract from the evidence and reasons elaborated in the above subparagraphs 38(1) to (11) which had sufficiently proved on a balance of probabilities that PKSA was the Plaintiff’s agent in respect of the COA and FN;

 

(5) regarding the Plaintiff’s contention that the Defendant had not demanded the freight from the Plaintiff, the Defendant’s Invoice (for the freight) had been sent to both the Plaintiff and PKSA by way of the Defendant’s Email dated 29.9.2011 (sent to Mr. Tian and Mr. Vorawut). Even if it is assumed that the Defendant has failed to demand for the freight from the Plaintiff, there is no pre-action

 

99

 

condition or protocol that the Defendant must have demanded for the freight from the Plaintiff before the institution of the Defendant’s Counterclaim; and

 

(6) I am unable to accede to the Plaintiff’s submission that the Defendant is estopped by its own contemporaneous conduct from asserting that the Plaintiff was PKSA’s principal in respect of the COA and FN. My reasons are as follows –

 

(a) s 115 EA provides as follows –

 

“When one person has by his declaration, act or omission intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, otherwise than but for that belief he would have acted, neither he nor his representative in interest shall be allowed in any suit or proceeding between himself and that person or his representative in interest to deny the truth of that thing.”

 

(emphasis added).

 

I find as a fact that the Defendant has not by any “declaration, act or omission” “intentionally caused or permitted” the Plaintiff “to believe” that the Defendant would not claim for the freight from the Plaintiff as PKSA’s principal regarding the COA and FN. To the contrary, the Defendant’s Invoice had been sent to, among others, the Plaintiff by way of the Defendant’s Email dated 29.9.2011. As such, there is no basis to apply s 115 EA to estop the Defendant

 

100

 

from alleging and proving successfully that the Plaintiff was indeed PKSA’s agent regarding the COA and FN;

 

(b) in this case, the Defendant had not been guilty of any inequitable conduct so as to attract the application of the equitable estoppel doctrine to estop the Defendant from contending that the Plaintiff was PKSA’s principal when PKSA entered into the COA and FN;

 

(c) as explained in the above sub-paragraph 38(9), the Plaintiff had been guilty of inequitable, if not unlawful, conduct in respect of the bogus Contract Between PKSA and Plaintiff (8.8.2011). On this ground alone, Boustead Trading can be distinguished from this case. Accordingly, the Plaintiff is disentitled from resorting to the equitable estoppel doctrine by reason of either one or both of the following equitable maxims –

 

(i) one who comes to Equity must come with clean hands;

 

and/or

 

(ii) one who seeks Equity must do Equity.

 

For the application of the above equitable maxims, I rely Low Hop Bing J’s (as he then was) judgment in the High Court case of Natseven TV Sdn Bhd v Television New Zealand Ltd [2001] 4 AMR 4648, at 4666; and

 

101

 

(d) regarding the Defendant’s statement of claim in the Arbitral Proceedings which did not allege that PKSA was the Plaintiff’s agent, I am of the view that such a fact could not estop the Defendant from proving successfully on a balance of probabilities that PKSA was in fact the Plaintiff’s agent in respect of the COA and FN. Furthermore, the Arbitral Proceedings had not been commenced against the Plaintiff and had been withdrawn against PKSA. In any event, the Defendant had given a reasonable explanation regarding the Arbitral Proceedings, namely the Defendant had been wrongly advised by its then solicitors. A party cannot be estopped by the incompetence, if not professional negligence, of the party’s lawyers, from alleging what the party can lawfully prove in court or in arbitral proceedings. If otherwise, the equitable estoppel doctrine would then be inequitably applied to cause injustice.

 

J. Credibility of witnesses

 

40. I find as a fact that PW1 lacks credibility due to the following evidence and reasons:

 

(1) during cross-examination, PW1 had the audacity to testify that when PW1 signed the Contract Between PKSA and Plaintiff (8.8.2011) on behalf of the Plaintiff, PW1 was not aware of its contents and PW1 only read its contents subsequently! The Contract Between PKSA and Plaintiff (8.8.2011) falsely stated that PKSA was the disponent owner

 

102

 

of the Ship and yet, PW1 signed such an agreement on behalf of the Plaintiff. Worse still, PW1 did not take any step to correct such a false term in the Contract Between PKSA and Plaintiff (8.8.2011);

 

(2) PW1’s Police Report dated 14.5.2012 and PW1’s witness statement did not refer at all to the Contract Between PKSA and Plaintiff

 

(8.8.2011) . As explained above, the Contract Between PKSA and Plaintiff (8.8.2011) is a sham and the omission in PW1’s Police Report dated 14.5.2012 and PW1’s witness statement regarding the Contract Between PKSA and Plaintiff (8.8.2011), clearly shows that PW1 was a party to the Concealment of Contract Between PKSA and Plaintiff

 

(8.8.2011) ;

 

(3) the Plaintiff’s Letter dated 4.11.2011 was written by PW1 himself. When the Defendant’s learned counsel showed the Plaintiff’s Letter dated 4.11.2011 to PW1 during PW1’s cross-examination, incredulously, PW1 testified that the sentence in the Plaintiff’s Letter dated 4.11.2011, namely “We, as the Cargo Owner, undertake to assist [Defendant] obtaining [sic] related certificates renewal in Thailand or in Myanmar, and guarantee its access to its destination port within Thailand and Myanmar waters”, was incorrect. There was no email or letter from PW1 to correct this sentence in the Plaintiff’s the Plaintiff’s Letter dated 4.11.2011. It is difficult to believe a person who does not stand by what he or she has written and who does not subsequently rectify his or her own “erroneous” written statement; and

 

103

 

(4) when the Defendant’s learned counsel referred to PW1 certain emails adduced in this case (in the Defendant’s favour), including emails from Mr. Tian to the Defendant, PW1 conveniently claimed to be not aware of such emails. It is difficult to give credence to such evidence by PW1 when there is no allegation by PW1 and the Plaintiff that the emails adduced in this case have been fabricated.

 

41. Unlike PW1, there is no reason to doubt the veracity of DW1, DW2, DW3 and DW5. To the contrary, their oral evidence is corroborated by emails, letters, documents, meetings and conduct which have been elaborated in the above sub-paragraphs 38(1), (2), (4) and (6) (regarding the issue of whether the Plaintiff was PKSA’s principal in the COA and FN).

 

K. Adverse inference should be made against Plaintiff

 

42. The Plaintiff’s learned counsel had submitted that since the Defendant shouldered the legal burden to prove that the Plaintiff was PKSA’s principal in respect of the COA and FN, the Defendant should have called Mr. Tian, Mr. Vorawut and Ms. Sammy (3 Witnesses) to testify in this case. The Defendant’s failure to call the 3 Witnesses, according to the Plaintiff, attracts an adverse inference against the Defendant under s 114(g) EA.

 

43. Section 114(g) EA provides as follows:

 

“Court may presume existence of certain fact

 

104

 

44.

 

114. The court may presume the existence of any fact 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 relation to the facts of the particular case.

 

ILLUSTRATIONS

 

The court may presume –

 

(g) that evidence which could be and is not produced would if produced be unfavourable to the person who withholds it;”

 

(emphasis added).

 

In Orix Credit Malaysia Sdn Bhd v Raub Australian Gold Mining Sdn

 

Bhd [2015] MLJU 943, [2015] AMEJ 1712, [2015] 1 LNS 1065, at paragraphs 36-40, I have decided as follows regarding the application of s 114(g) EA:

 

—36. Firstly, the court has a discretion to draw an adverse inference under s 114(g) EA. This is clear from the use of directory term “may”, not once but twice – in the main provision of s 114 EA and in the illustration (g) of s 114 EA. As such, the invocation of an adverse inference under s 114(g) EA is not a matter of course.

 

37. Secondly, as the drawing of an adverse inference or not under s 114(g) EA is an exercise of judicial discretion dependent on the particular facts of the matter in question, decided cases on s 114(g) EA are not binding legal precedents from the view point of the stare

 

105

 

decisis doctrine – please see Mahadev Shankar JCA’s judgment in the Court of Appeal case of Structural Concrete Sdn Bhd v Wing Tiek

 

Holdings Bhd [1997] 1 CLJ 300, at 306.

 

38. In Munusamy v Public Prosecutor [1987] 1 MLJ 492, at 494, Mohd. Azmi SCJ delivered the following Supreme Court’s judgment:

 

“It is essential to appreciate the scope of section 114(g) lest it be carried too far outside its limit. Adverse inference under that illustration can only be drawn if there is withholding or suppression of evidence and not merely on account of failure to obtain evidence. It may be drawn from withholding not just any document, but material document by a party in his possession, or for non-production of not just any witness but an important and material witness to the case.”

 

(emphasis added).

 

39. Based on Munusamy, courts are “inclined” to exercise discretion to draw an adverse inference under s 114(g) EA against a party who has suppressed material evidence.

 

40. The third matter which I wish to highlight about s 114(g) EA is that even if the court draws an adverse inference, such an inference is not irrebuttable – the adverse inference may be rebutted by other evidence. I rely on the Supreme Court’s judgment delivered by Syed Agil Barakbah SCJ in Namasiyiam & Ors v Public Prosecutor [1987] 2 MLJ 336, at 343, as follows:

 

106

 

“It was submitted that the absence of Francis at the trial would raise the presumption under section 114(g) of the Evidence Act unfavourable to the prosecution. Be that as it may, in the light of overwhelming prosecution evidence as stated earlier, we do not think that the presence of Francis, had he been available, would have made any difference.” ”

 

(emphasis added).

 

45. I am aware that the Defendant alone bears the legal burden under ss 101(1), (2), 102 and 103 EA to prove that the Plaintiff was PKSA’s principal regarding the COA and FN. The Plaintiff has no legal onus to prove the contrary. Nonetheless, in civil cases (not criminal matters), the court has a discretion to draw an adverse inference under s 114(g) EA against the Plaintiff for the Plaintiff’s failure to call material witnesses as explained above. I rely on the following appellate cases:

 

(a) the Supreme Court’s judgment given by Hashim Yeop Sani CJ (Malaya) in Guthrie Sdn Bhd v Trans-Malaysian Leasing Corp Bhd

 

[1991] 1 MLJ 33, at 34-35;

 

(b) Haidar JCA’s (as he then was) judgment in the Court of Appeal case of Chan Yoke Lain v Pacific & Orient Insurance Co Sdn Bhd [1999] 1 MLJ 303, at 308-309 (Chan Yoke Lain); and

 

(c) Gopal Sri Ram’s (as he then was) decision in the Court of Appeal in Subry bin Hamid v Husaini bin Tan Sri Ikhwan [2006] 5 AMR 644, at 652-653.

 

107

 

46. I find as a fact that the 3 Witnesses are material witnesses in this case.

 

This finding is based on the following reasons:

 

(1) Mr. Tian’s importance in this case is as follows –

 

(a) Mr. Tian is the Plaintiff’s MD in Myanmar;

 

(b) DW1 had testified that –

 

(i) Mr. Tian had informed DW1 in the Meeting on 22.7.2011 that PKSA was the Plaintiff’s agent in Bangkok;

 

(ii) Mr. Tian’s Assurance was given at the Meeting in August 2011; and

 

(iii) Mr. Tian attended the Meeting in Novotel where PKSA signed the COA;

 

(c) Mr. Tian had sent the following material emails (in chronological

 

order) –

 

(i) Mr. Tian’s Email dated 12.8.2011 which acknowledged the receipt of the draft FN (sent to Mr. Tian by way of the Defendant’s Email dated 11.8.2011);

 

(ii) Mr. Tian’s Email dated 24.8.2011 regarding Mr. Tian’s Inspection of Ship; and

 

108

 

(iii) Mr. Tian’s Email dated 18.9.2011 which suggested a 11 final discussion” with the Defendant and the Plaintiff’s Final Inspection of Ship; and

 

(d) Mr. Tian had received the Defendant’s Invoice by way of the Defendant’s Email dated 29.9.2011;

 

(2) Mr. Vorawut’s evidence is material in this case because –

 

(a) as stated by PW1 and DW1, Mr. Vorawut is the owner of PKSA;

 

(b) PW1 testified that PKSA was the Plaintiff’s shipping agent in respect of the Cargo;

 

(c) according to DW1’s testimony, Mr. Vorawut represented to DW1 in the Meeting on 11.7.2011 that PKSA was the Plaintiff’s agent in Bangkok;

 

(d) the Plaintiff had alleged that the Plaintiff had paid the freight in full to PKSA. DW3 testified that PKSA had not only failed to pay the freight to the Defendant but DW3 raised the Double Billing Allegation Against PKSA and the Defendant’s Overpayment Allegation Against PKSA;

 

(e) Mr. Vorawut met DW1 in the following meetings –

 

109

 

(i) the Meeting on 22.7.2011 (Mr. Tian and Ms. Sammy were present at this meeting);

 

(ii) the Meeting in August 2011 (Mr. Tian was present at this meeting);

 

(iii) the Meeting in Novotel (where Mr. Tian, PW1, Ms. Sammy and Mr. Wai were present on behalf of the Plaintiff and Mr. Vorawut signed the COA on behalf of PKSA);

 

(iv) the Meeting on 3.11.2011 (PW1 was present at this meeting);

 

(v) the Meeting on 17.11.2011 (Ms. Sammy was present at this meeting); and

 

(vi) the Meeting on 18.11.2011 (PW1 and Ms. Sammy were present at this meeting);

 

(f) Mr. Vorawut signed on PKSA’s behalf the bogus Contract

 

Between PKSA and Plaintiff (8.8.2011);

 

(g) Mr. Vorawut signed the FN on behalf of PKSA; and

 

(h) Mr. Vorawut sent and received all the emails adduced in this case

 

on behalf of PKSA; and

 

110

 

(3) Ms. Sammy was a material witness in this case despite PW1’s unconvincing testimony that Ms. Sammy was a mere interpreter or translator for PKSA. This finding is due to the following reasons –

 

(a) the Invoice dated 9.9.2011 clearly showed that Ms. Sammy was authorized to sign for the Plaintiff in respect of the Plaintiff’s purchase of steel bars worth US$2,564,315.05. Furthermore, Ms. Sammy’s Email dated 26.9.2011 stated that Ms. Sammy was the Plaintiff’s ‘‘International Project Assistant’ at the material time;

 

(b) Ms. Sammy attended the following material meetings with DW1 –

 

(i) the Meeting on 22.7.2011 (Mr. Tian and Mr. Vorawut were present at this meeting);

 

(ii) the Meeting in Novotel (where Mr. Tian, PW1 and Mr. Wai were present on behalf of the Plaintiff and Mr. Vorawut signed the COA on behalf of PKSA);

 

(iii) the Meeting on 17.11.2011; and

 

(iv) the Meeting on 18.11.2011 (PW1 was present at this meeting); and

 

(c) by way of Ms. Sammy’s Email dated 26.9.2011, Ms. Sammy informed the Defendant that Mr. Tian had accepted the Proposed Undertaking (20.9.2011) and would sign the Proposed

 

111

 

Undertaking (20.9.2011) upon Mr. Tian’s return to Myanmar and the Proposed Undertaking (20.9.2011) would be sent to the Defendant “as soon as possible”.

 

47. I exercise my discretion under s 114(g) EA to draw an adverse inference against the Plaintiff for its failure to call the 3 Witnesses to testify in this case. Such an exercise of discretion is premised on the following reasons:

 

(1) as explained above, the evidence of the 3 Witnesses is material in this case; and

 

(2) the Plaintiff has suppressed the material evidence of the 3 Witnesses because –

 

(a) there is no evidence that the 3 Witnesses have refused to be interviewed by the Plaintiff’s solicitors. Nor is there any evidence that the 3 Witnesses have demonstrated any hostility towards the Plaintiff so as to explain why the Plaintiff cannot call the 3 Witnesses to testify in this case;

 

(b) the Plaintiff has not adduced any evidence that Mr. Tian has resigned as the Plaintiff’s MD in Myanmar. More importantly, no evidence has been tendered by the Plaintiff as to why the Plaintiff could not have applied for court subpoenas under Order 38 rule 14(1) RC to compel the 3 Witnesses to attend court to give evidence in this case;

 

112

 

(c) PW1 alleged that Ms. Sammy had resigned from the Plaintiff’s employment. No documentary evidence had been adduced regarding the fact that Ms. Sammy was no longer the Plaintiff’s employee. In any event, the fact that a witness has left the employment of a party, does not mean that the party cannot apply for a court subpoena to compel the person to attend court to give oral evidence in the case. Furthermore, there is no evidence that the Plaintiff has expended any effort, time and expense to trace Ms. Sammy for the purpose of serving a subpoenas on her for the purpose of this case; and

 

(d) I am aware that the 3 Witnesses reside and work outside Malaysia. There is no evidence of the Plaintiff’s impecuniosity which has made it financially difficult for the Plaintiff to call the 3 Witnesses to give evidence in this case. Even if it is assumed that the Plaintiff is financially distressed, there is no reason why the Plaintiff cannot propose to the Defendant to consent to a court order for the 3 Witnesses to be cross-examined through Skype while the 3 Witnesses remain in their own countries or any place convenient to the 3 Witnesses. Such a course of action saves expense and is allowed by Order 38 rule 2(1) RC. Order 38 rules 1 and 2(1) RC provide as follows –

 

“General rule: Witness to be examined orally

 

Order 38 rule 1 Subject to the provisions of these Rules and of

 

the Evidence Act 1950 [Act 56] and any other written

 

113

 

law relating to evidence, any fact required to be proved at the trial of any action begun by writ by the evidence of witnesses shall be proved by the examination of the witnesses in open Court.

 

Evidence by witness statement

 

rule 2(1) Without prejudice to the generality of rule 1, and unless otherwise provided by any written law or by these Rules, at the trial of an action commenced by writ, evidence-in-chief of a witness shall be given by way of witness statement and, unless the Court otherwise orders or the parties to the action otherwise agree and subject to such directions as the Court may make, such a witness shall attend trial for cross-examination

 

and, in default of his attendance, his witness statement shall not be received in evidence except with the leave of the Court.’

 

(emphasis added).

 

Order 38 rule 1 RC requires a witness to be cross-examined in open court. Order 38 rule 1 RC is however subject to the other provisions in the RC, in this case Order 38 rule 2(1) RC. I am of the view that the words “unless the Court otherwise orders or the parties to the action otherwise agree and subject to such directions as the Court may make” in Order 38 rule 2(1) RC allow the parties to propose to court to make a consent order that a witness may be cross-examined through Skype from a place

 

114

 

which is outside the court room. If this course of action is ordered by consent of the parties, when a witness of a party is cross-examined through Skype in the witness’ own country or a place other than the court, the representative of the other party should be entitled to be present at the place of cross-examination so as to ensure that the witness is not “assisted” or prompted during cross-examination.

 

48. I cannot find any evidence in this case which can rebut the adverse inference under s 114(g) EA against the Plaintiff for its failure to call the 3 Witnesses to testify in this case. Alternatively, even if I have erred in invoking an adverse inference against the Plaintiff and assuming an adverse inference is made against the Defendant (for not calling the 3 Witnesses), I am of the view that the overwhelming oral and documentary evidence that the Plaintiff was PKSA’s principal in respect of the COA and FN (as elaborated in the above paragraph 38) would rebut any adverse inference against the Defendant – please see on the Supreme Court’s judgment delivered by Syed Agil Barakbah SCJ in Namasiyiam & Ors v Public Prosecutor [1987] 2 MLJ 336, at 343.

 

L. Application of English law

 

49. According to Clause 32 (COA Rider Clauses), English law shall apply to any dispute between the “Charterof’ and “Charterer’. Clause 20 FN has also provided for the application of English law. The Plaintiff’s learned counsel has submitted that the Defendant is estopped from relying on

 

115

 

English law because the Defendant has not pleaded as such. I am not inclined to accept this contention because according to Order 18 rule 7(1) RC, a pleading “shall contain, and contain only, a statement in a summary form of the material facts”. Furthermore, Order 18 rule 11 RC provides that it is not mandatory to raise a point of law in a pleading.

 

50. As I have found as a fact that the Plaintiff was PKSA’s principal in respect of the COA and FN [please see the above Part I(2)], the part of Clause 32 (COA Rider Clauses) regarding the application of English law, shall bind the Plaintiff as PKSA’s principal. I am of the view that Clause 32 (COA Rider Clauses) only applies to a dispute which arises from the COA and not to all disputes between the “Charteror’ and “Charterer’. As such, this court shall only apply English law in respect of the following issues concerning the COA:

 

(1) whether the Defendant could deviate from the journey of the Ship as agreed in the COA (namely, to Kyauk Pyu, Myanmar), to Batu Ampar, Batam, Indonesia;

 

(2) whether the Plaintiff is liable for the Defendant’s Counterclaim for freight charges under the COA;

 

(3) whether the Defendant is entitled to a ship owner’s lien against the Plaintiff in respect of the Cargo; and

 

(4) whether the Defendant can rely on an exclusion clause in the COA as a complete defence against the Plaintiff’s Claim.

 

116

 

51. The following issues do not arise from the COA and hence, English law

 

does not apply:

 

(1) whether the Plaintiff was the principal of PKSA in respect of PKSA’s Supply of Bunker Oil;

 

(2) whether the Plaintiff is liable to the Defendant under s 16 SGA;

 

(3) whether the Plaintiff’s Claim is barred by limitation as provided in the 2 Bills of Lading; and

 

(4) whether the Defendant is liable to the Plaintiff for the tort of detinue and/or conversion in respect of the Cargo.

 

For the above questions, Malaysian law shall be applicable.

 

52. In matters regarding –

 

(1) evidence [such as admissibility of evidence and the application of s 114(g) EA]; and

 

(2) civil procedure

 

– Malaysian law shall apply because as explained in the above Part G, Malaysian courts have jurisdiction to adjudicate the Plaintiff’s Claim and the Defendant’s Counterclaim. In Scandinavian Bunkering (Singapore) Pte Ltd v MISC Bhd [2012] 4 MLJ 105, at 122, Hanipah

 

117

 

Farikullah JC (as she then was) had decided that a choice of law clause did not prevent Malaysian courts from having jurisdiction to decide the question of assessment of damages for breach of contract which arose in that case.

 

M. Ship’s Deviation

 

M(1). Whether Ship’s Deviation was justified

 

53. I will now discuss the Ship’s Deviation. If the Ship’s Deviation was not justified, the Plaintiff could claim that the Defendant had breached Clause 30 (COA Rider Clauses). Clause 30 (COA Rider Clauses) reads as follows:

 

“… Charteror [Defendant] warrant [sic] that during the performance of the voyage under the charter party, the [Ship]:

 

– shall proceed at reasonable dispatch to discharge port, …”

 

(emphasis added).

 

54. Clause 3, Part II of the COA [Clause 3 (Part II) COA] provided that the Ship “has liberty to call at any port or ports in any order, for any purpose, … and also to deviate for the purpose of saving life and/or property.” I am of the view that the first limb of Clause 3 (Part II) COA (liberty to call at any port or ports in any order, for any purpose) is sufficiently wide to justify the

 

118

 

Ship’s Deviation. This is the first ground for the justification of the Ship’s Deviation.

 

55. Additionally or alternatively, I accept the Defendant’s reliance on the Professor Tan Lee Meng’s book, “The Law in Singapore on Carriage by Sea”, Second Edition (1994), at p. 118, as follows:

 

“Deviation to avoid danger

 

A master is entitled and obliged to deviate where this is necessary for the safety of the adventure. However, the right to deviate does not arise in the case of a temporary danger, which can be overcome if the vessel waited for a while.

 

For a deviation to be justifiable, it is not necessary that it be made to save both ship and her cargo. The master is obliged to take into account the interests of all the parties to the adventure and if a danger faces either the ship or her cargo, reasonable steps may be taken to avoid it.

 

A master whose ship has been so damaged that repairs are necessary is entitled and obliged to make a reasonable deviation to repair the damage. … ”

 

(emphasis added).

 

56. It is to be noted that Professor Tan Lee Meng has been subsequently elevated to be a Judge of the Singapore High Court. In the above passage, Professor Tan Lee Meng cited the English Court of Appeal’s judgment in

 

119

 

Phelps, James & Co v Hill [1891] 1 QB 605. As such, Professor Tan Lee Meng’s aforesaid view is consistent with English law on this topic. In Phelps, James & Co –

 

(1) Lindley LJ (as he then was) held as follows, at p. 610-611 –

 

“ The voyage being fixed by the contract of affreightment, it is the duty of the master to proceed to the port of delivery without delay, and without any unnecessary departure from the direct and usual course. But circumstances may arise which render it necessary to depart from this usual course, and tempestuous weather injuring the ship and rendering it necessary to put into some port of repair is one of those circumstances. When a ship is thus injured it is the duty of the master to do the best he can for all concerned; but his primary duty being to complete the voyage with as little delay as possible, it follows that his first care ought to be to get his ship repaired as soon as possible, and to resume his voyage as quickly as he can.

 

The same principle may be expressed in other words, e.g., by saying that he ought to go to the nearest port where the necessary repairs can be most quickly done, or by saying that there ought to be no unnecessary departure from the proper course of the voyage and no unnecessary delay in prosecuting it. But in whatever language the rule is expressed, it must not be so worded as to exclude the element of reasonableness. By “possible” and “necessary” is meant reasonably possible and reasonably necessary, and in considering what is reasonably possible or reasonably necessary every material circumstance must be taken into account – e.g., danger, distance, accommodation, expense, time, and so forth. No one of these can be excluded. Mr. Barnes invited us to exclude the element of expense; but to say that, as a

 

120

 

matter of law, expense is to be disregarded, would be to make the rule far too rigid. … Moreover, if a master of competent skill and knowledge, and acting bona fide in the interest of all concerned, has chosen one port in preference to another, then although the Court or a jury may and ought to take a different view if they come to the conclusion that he ought to have acted differently, they ought not to come to such a conclusion on light grounds.”

 

(emphasis added);

 

(2) Lopes LJ decided as follows, at p. 613-614 –

 

“ The question in this case is whether there was a deviation. If there was a deviation, or, in other words, if the deviation was not justified, the shipowner is liable for a loss by the perils of the sea, and is not protected by the exception of perils in the contract. The voyage must be prosecuted without unnecessary delay or deviation. The shipowner’s contract is that he will be diligent in carrying the goods on the agreed voyage, and will do so directly without any unnecessary deviation. But this undertaking is to be understood with reference to the circumstances that arise during the performance of the contract. He is not answerable for delays or deviations which are occasioned or become necessary without default on his part. Where the safety of the adventure under the master’s control necessitates that he should go out of his course, he is not only justified in doing so, but it is his duty in the right performance of his contract with the owners of the cargo. The shipowner through his master is bound to act with prudence and skill and care in avoiding dangers and in mitigating the consequences of any disaster which may have happened. The

 

121

 

master is bound to take into account the interests of the cargo-owners as well as those of the shipowner. He must act prudently for all concerned. So strict is the rule with regard to deviation that, while the master may deviate to save life, he may not deviate to save property. Going into a port out of the usual course for necessary repairs, and staying till they are completed, is no deviation, provided it plainly appears that such repairs, under the circumstances and at such port, were reasonably necessary, and the delay not greater than necessary for the completion of such repairs, so as to enable the vessel to proceed on her voyage. The deviation must not be greater than a reasonable necessity demands, having regard to the respective interests of shipowner and cargo-owner. A reasonable necessity implies the existence of such a state of things as, having regard to the interests of all concerned, would properly influence the decision of a reasonably competent and skilful master ”

 

(emphasis added); and

 

(3) Kay LJ held as follows, at p. 617

 

“ Without attempting any exhaustive definition of what amounts to necessity in such cases, I think it may fairly be said necessity does not mean absolute physical necessity only, but a reasonable necessity having regard to the interest of the shipowners and also of the cargo-owners, and to all the other circumstances of the case.”

 

(emphasis added).

 

122

 

57. The Defendant’s learned counsel had relied on Brandon J’s (as he then was) judgment in the English High Court case of The Ferdinand Retzlaff [1972] 2 Lloyd’s Rep 120. With respect, I am of the view that The Ferdinand Retzlaff, at p. 121, concerns a claim by the plaintiffs for damages for the detention of the plaintiffs’ vessel (the detention of the plaintiffs’ vessel was needed to carry out repair of the plaintiffs’ vessel which had been damaged as a result of a collision between the plaintiffs’ vessel and the defendants’ ship) and can be easily distinguished from this case.

 

58. Based on the aforesaid 3 separate judgments in the English Court of Appeal case of Phelps, James & Co and Professor Tan Lee Meng’s learned view, whether the Ship’s Deviation was justified or not, depended on the following considerations:

 

(1) whether the Ship’s engine problems made it reasonably necessary for the Master to deviate the Ship; and

 

(2) whether the Ship’s Deviation to Batam was reasonably necessary –

 

(a) in the light of all the circumstances of the case; and

 

(b) in the interest of all parties in this case, including the ship owner and the owner of the cargo.

 

59. I make the following findings of fact:

 

123

 

(1) the Ship’s engine problems made it reasonably necessary for the Master to deviate the Ship. The contemporaneous documentary evidence in the form of the Engineers’ Log dated 7.10.2011 to 12.10.2011 (which recorded the Ship’s engine problems), clearly proved on a balance of probabilities the reasonable necessity for the Ship’s Deviation; and

 

(2) the Ship’s Deviation to Batam was reasonably necessary in the interest of all parties, including the Plaintiff (the Cargo owner) and the Defendant (the Ship’s disponent owner).

 

M(2). Whether Plaintiff had accepted Ship’s Deviation

 

60. Even if it is assumed that the Ship’s Deviation is not reasonably necessary and the Defendant has therefore breached Clause 30 (COA Rider Clauses) [Alleged Breach of Clause 30 (COA Rider Clauses)], I find that the Plaintiff had accepted the Alleged Breach of Clause 30 (COA Rider Clauses) in PW1’s Email dated 29.10.2011. PW1’s Email dated 29.10.2011 stated, among others, as follows (with grammatical errors):

 

“ Thanks for your kind email and your efforts in solving the incident which was unexpected.

 

Please confirm that [the Ship] has re-started, and feed back [sic] to me by email.

 

124

 

The detailed schedule for Kuala Lumpur meeting will be followed while your invitation letter and our visas are received [sic]. And you are most welcome to Yangon for our further co-operation discussion [sic] if you wish.”

 

(emphasis added).

 

61. I find as a fact that by reason of PW1’s Email dated 29.10.2011 –

 

(1) the Plaintiff has accepted the Ship’s Deviation and the Alleged Breach of Clause 30 (COA Rider Clauses);

 

(2) the Plaintiff has waived any right to claim for the Alleged Breach of Clause 30 (COA Rider Clauses); and/or

 

(3) the Plaintiff is estopped from relying on the Alleged Breach of Clause 30 (COA Rider Clauses).

 

N. Whether Plaintiff is liable to Defendant for freight

 

62. The Plaintiff’s learned counsel contended as follows in resisting the Defendant’s Counterclaim for the freight:

 

(1) the Plaintiff was not bound by the COA and FN;

 

125

 

(2) the Plaintiff did not sign the Proposed Undertaking (20.9.2011). Nor did the Plaintiff execute the Proposed Undertaking/Indemnity (18.11.2011);

 

(3) no freight was due from PKSA to the Defendant because PKSA had deducted the cost of PKSA’s Supply of Bunker Oil (payable by the Defendant to PKSA) (Bunker Oil Price) from the freight (PKSA’s Deduction). PKSA’s Deduction was allowed by the following documents –

 

(a) the Defendant’s email dated 27.9.2011 to PKSA (Defendant’s Email dated 27.9.2011); and

 

(b) PKSA’s Invoices clearly stated that the Bunker Oil Price would be deducted from freight; and

 

(4) the Plaintiff had paid the freight in full to PKSA (please see PKSA’s receipt dated 10.10.2011 for the sum of US$181,635.20). As such, even if PKSA owed the freight to the Defendant, the Plaintiff did not owe the freight to the Defendant.

 

63. As decided in the above Part I(2), the Plaintiff was PKSA’s principal in respect of the COA and FN. As such, the Plaintiff was bound by the COA and FN. As correctly submitted by the Plaintiff’s learned counsel, the Plaintiff was not bound by the Proposed Undertaking (20.9.2011) and the

 

126

 

Proposed Undertaking/Indemnity (18.11.2011) as the Plaintiff had not executed those 2 documents in the Defendant’s favour.

 

64. I am of the view that the Plaintiff is liable to the Defendant for the freight. My reasons are as follows:

 

(1) the Plaintiff as PKSA’s principal for the COA, is liable for the freight under the following provisions in the COA –

 

(a) Box no. 14 (Freight payment) of Part 1 of the COA (Box 14) referred to Clause 25 (COA Rider Clauses) which provided as follows –

 

“Clause 25 – Freight and Freight Payment Terms

 

(a) The Freight rate … are as follows (FRT is discountless)

 

(b) The freight rate … shall be on [PKSA’s] account. [PKSA] for purpose of convenient [sic] and may upon written request from [Defendant] and subject to [Defendant’s] agreement and without prejudice, may pay the bunker charges on [Defendant’s] behalf …, and such payment shall be reimbursed by [Defendant] to [PKSA] upon submission of bills/invoice, within fourteen (14) calendar days.

 

(d) 100% freight to be paid in USD by telegraphic transfer to

 

[Defendant’s] nominated bank account within three (3) banking days upon loading. …

 

127

 

(e) Freight is deemed earned on shipment of cargo discountless and non-refundable, whether ship [sic], shut-out and/or cargo lost [sic] or not lost ”

 

(emphasis added).

 

Reading together Box 14 and Clause 25 (COA Rider Clauses) in a

 

commercially sensible manner –

 

(i) the freight payable by the Plaintiff to the Defendant is “discountless” – paragraphs (a), (d) (100% freight) and (e) of Clause 25 (COA Rider Clauses). Clause 25(d) (COA Rider Clauses) had expressly provided for actual payment of the freight within a stipulated time. As such, PKSA’s Deduction was contrary to the express provisions in Clause 25(a), (d) and (e) (COA Rider Clauses);

 

(ii) according to Clause 25(b) (COA Rider Clauses), if PKSA pays the Bunker Oil Price, the Defendant shall reimburse PKSA. Clause 25(b) (COA Rider Clauses) therefore provided for actual reimbursement of the Bunker Oil Price by the Defendant and not a set-off or deduction as was done by PKSA in this case; and

 

128

 

(iiii) if the freight had been paid to the Defendant, the freight could not be refunded by the Defendant – Clause 25(e) (COA Rider Clauses); and

 

(b) clause 4(b), Part II of the COA [Clause 4(b) (Part II) COA] provided for “Prepaid” freight. Clause 4(b) (Part II) COA stated as follows –

 

“If according to Box 13 freight is to be paid on shipment, it shall be deemed earned and non-returnable, Vessel and/or cargo lost or not lost. Neither the Owners nor their agents shall be required to sign or endorse bills of lading showing freight pre-paid unless the freight due to the Owners has actually been paid.”

 

(emphasis added).

 

I am of the opinion that a commercially sensible construction of Clause 4(b) (Part II) COA envisages actual payment of the freight by the Plaintiff as PKSA’s principal. Accordingly, PKSA’s Deduction is not permitted by Clause 4(b) (Part II) COA;

 

(2) clause 12 FN provided as follows –

 

“Freight Payment: Payment of freight shall be made to

 

[Defendant] nominated bank account by [PKSA] or cargo buyer/consignee not later than 3 banking days from date of loading or

 

129

 

Bs/L signed and released. Freight deemed earned upon loading whether cargo shutour or lost.”

 

(emphasis added).

 

The use of the mandatory term “shall’ in clause 12 FN, in my view, means that freight “shall’ be paid to the Defendant and PKSA’s Deduction is therefore not allowed;

 

(3) ss 91 and 92 EA provide that no evidence, oral and documentary, can be adduced by any party to contradict, vary, add to or subtract from the terms and conditions of a written contract – please see Chang Min Tat FJ’s judgment in the Federal Court case of Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229, at 227-228. Accordingly, the Plaintiff cannot rely on the Defendant’s Email dated 27.9.2011, PKSA’s Invoices and any other extrinsic evidence to contradict, vary, add to or subtract from the clear and express terms of Box 14, Clause 25(a), (b), (d) and (e) (COA Rider Clauses), Clause 4(b) (Part II) COA and clause 12 FN.

 

I have not overlooked the 2 Bills of Lading which had expressly provided “Freight Prepaid” and “Freight Payable As Per C/P [Charterparty] Date”. As the 2 Bills of Lading were issued on 30.9.2011 and 3.10.2011, namely after the COA (20.9.2011) and FN, ss 91 and 92 EA will bar the 2 Bills of Lading from contradicting, varying, adding to or subtracting from the COA and FN;

 

130

 

(4) I find as fact that Mr. Tian’s Assurance (the Plaintiff would pay the freight to the Defendant if PKSA did not pay the freight to the Defendant) had been proven by the Defendant on a balance of probabilities. This finding of fact is based on the following evidence and reasons –

 

(a) DW1 had testified regarding Mr. Tian’s Assurance. In the above paragraph 41, I have explained that I have found DW1 to be a credible witness because DWI’s oral evidence is supported by emails, letters, documents, meetings and conduct which has been elaborated in the above sub-paragraphs 38(1), (2), (4) and (6) (regarding the issue of whether the Plaintiff is PKSA’s principal in the COA and FN);

 

(b) the Plaintiff did not call Mr. Tian as a witness to rebut DWI’s evidence regarding Mr. Tian’s Assurance. In other words, DWI’s testimony concerning Mr. Tian’s Assurance stands unrebutted and should therefore be accepted by this court; and

 

(c) an adverse inference under s 114(g) EA should be made against the Plaintiff for not calling Mr. Tian in this case (please see the above Part K).

 

The Defendant had accepted DWI’s Assurance by entering into the COA. As such, there was an oral collateral contract between the Plaintiff and Defendant that upon PKSA’s failure to pay the freight to the Defendant, the Plaintiff would pay the freight to the Defendant

 

131

 

(Oral Collateral Agreement). I am of the view that the Defendant can admit extrinsic evidence to prove the Oral Collateral Agreement by reason of either one or both of the following provisions –

 

(i) proviso (b) to s 92 EA (existence of a “separate oral agreement’ whereby the COA is silent and is not inconsistent with the COA); and/or

 

(ii) proviso (c) to s 92 EA (existence of a “separate oral agreement constituting a condition precedent to” the COA).

 

I rely on the following appellate Malaysian decisions which have admitted extrinsic evidence regarding oral collateral contracts and have given effect to such contracts –

 

(4A) the judgment of the Federal Court delivered by Raja Azlan Shah CJ (Malaya) (as His Royal Highness then was) in Tan Swee Hoe Co Ltd v Ali Hussain Bros [1980] 2 MLJ 16, at

 

19;

 

(4B) the judgment of Salleh Abas FJ in the Federal Court case of

 

Tan Chong and Sons Motor Co Sdn Bhd v Alan McKnight

 

[1983] 1 MLJ 220, at 229;

 

(4C) Mohd. Yusoff SCJ’s judgment for the Supreme Court in Eushun Properties Sdn Bhd & Ors v MBf Finance Bhd

 

[1992] 2 MLJ 137, at 141-142; and

 

132

 

(4D) the judgment of Prasad Abraham JCA in the Court of Appeal case of Good Quantum Sdn Bhd & Ors v Alliance Investment Bank Bhd (previously known as Alliance Merchant Bank Bhd) [2015] 2 MLJ 746, at 756-760.

 

I have not overlooked the need to apply English law in respect of this issue concerning freight (which arose from the COA). I must add that the above Malaysian case law on the effect of oral collateral contracts is similar to English law. Suffice it for me to cite the judgments of Lord Denning MR, Roskill LJ (as he then was) and Cumming-Bruce LJ in the English Court of Appeal case of Brikom Investments Ltd v Carr [1979] QB 467, at 485, 488 and 490, regarding oral collateral contracts in English law.

 

The Plaintiff’s learned counsel had submitted that the Defendant had failed to plead the Oral Collateral Agreement. I refer to the Supreme Court’s judgment given by Peh Swee Chin SCJ in Superintendent of Lands and Surveys, (4th Div) & Anor v Hamit bin Matusin & Ors [1994] 3 MLJ 185, at 190-191 (Hamit bin Matusin), as follows:

 

—Generally, in civil cases only, both parties can validate any mode of adducing evidence by consent, express or inferred, even when such mode is irregular, for any irregularity is deemed to be waived by such consent. Technical rules of evidence can be to a limited extent, even dispensed with by a court without such consent, please see Baerlein v Chartered Mercantile Bank [1895] 2 Ch 488; similarly with technical rules of procedure. Therefore, when such evidence represents a departure from pleadings, it should be objected to as when and where it is adduced, and it will be too late

 

133

 

when it only objected to later on, as in the final submission at the close of evidence in the instant appeal. In these circumstances, the party facing such evidence at variance from the pleadings, by failing to object, cannot be said to be taken by surprise, prejudiced, misled or embarrassed. Otherwise, the other side of the coin would be, in the event of such an objection raised at the stage of final submission being accepted by the court, that the party adducing such evidence may face the great risk of being denied leave to amend his pleadings in question at that stage.

 

Such evidence, when given without any objection by the opposing party, will further have the effect of curing the absence of such plea in the relevant pleading, in other words, the effect of overcoming such defect in such pleading. As was stated by the Federal Court in Ang Koon Kau & Anor v Lau Piang Ngong [1984] 2 MLJ 277 at p 278: ‘Evidence given at the trial can therefore in appropriate circumstances overcome defects in the pleadings where the net result of such evidence is to prevent the other side from being taken by surprise’. There is, however, at least one important exception to such curing of defect of pleading by evidence departing from such pleading without objection then and there to such evidence.

 

The exception is when such evidence represents a radical departure from the pleadings, and is not just a variation, modification or development of what has been alleged in the pleading in question, please see Waghorn v George Wimpey & Co

 

Ltd [1970] 1 All ER 474; [1969] 1 WLR 1764, which gave rise to the proposition, which was approved by Ang Koon Kau & Anor v Lau Piang Ngong, and John G Stein & Co Ltd v O’Hanlon [1965] AC 890; [1965] 1 All ER 547; [1965] 2 WLR 496.

 

Therefore, a court inevitably ought to enquire, when there is failure to object to such evidence when it is adduced, whether it is such a radical departure, if not, it is a mere variation, modification or a development, then the impropriety of admission of such evidence at variance with the pleadings is deemed to be waived and the defect in such pleadings cured.”

 

(emphasis added).

 

Based on Hamit bin Matusin, since the Plaintiff did not object to the oral evidence adduced by the Defendant regarding the Oral Collateral Agreement, such evidence had been admitted in this case and could

 

134

 

therefore be considered by this court. Furthermore, the evidence concerning the Oral Collateral Agreement cannot, in my view, be “a radical departure” from the Defendant’s pleadings which will disentitle the Defendant from relying on such evidence. In any event, the Plaintiff’s learned counsel had cross-examined DW1 regarding Mr. Tian’s Assurance (which gave rise to the Oral Collateral Agreement) and hence, there was no prejudice to the Plaintiff in respect of the Defendant’s failure to plead the Oral Collateral Agreement.

 

In view of PKSA’s failure to pay the freight to the Defendant, the Defendant is entitled to enforce the Oral Collateral Agreement against the Plaintiff in respect of the freight; and

 

(5) DW3 had testified about the Double Billing Allegation Against PKSA and the Defendant’s Overpayment Allegation Against PKSA. The Plaintiff did not call Mr. Vorawut to rebut such evidence from DW3. In view of DW3’s unrebutted evidence regarding the Double Billing Allegation Against PKSA and the Defendant’s Overpayment Allegation Against PKSA, this court is unable accept PKSA’s Deduction. Hence, the Plaintiff should be liable to pay the freight to the Defendant as elaborated above.

 

65. Premised on the above evidence and reasons, this court allows the Defendant’s Counterclaim in respect of the freight for the sum of US$106,346 as per the Defendant’s Invoice dated 29.9.2011 (Freight Sum). I will discuss later in this judgment regarding the conversion of the

 

135

 

Freight Sum from American currency to our RM as well as the prejudgment and post-judgment interest on the Freight Sum.

 

O. Whether Defendant could exercise lien over Cargo

 

66. The Plaintiff’s learned counsel had contended that the Defendant was not entitled to have a lien over the Cargo because –

 

(1) the Defendant had failed to perform the Defendant’s obligation to deliver the Cargo to Myanmar. The Defendant could not perform this obligation because the Ship’s “Minimum Safe Manning Certificate” (Ship’s Safe Manning Certificate) did not cover the port of discharge, Kyauk Pyu, Myanmar. Reliance had been placed by the Plaintiff on the High Court’s decision in JB Precision Moulding Industries Sdn Bhd (in liquidation) v Asia Commercial Finance (M) Sdn Bhd [1994] 1 MLJ 734 (JB Precision Moulding Industries);

 

(2) the Plaintiff did not owe any debt to the Defendant. As such, the Defendant could not exercise any lien over the Cargo. The Plaintiff cited the following cases –

 

(a) the High Court case of CLR International Trading GmbH v Ng Khai Huat (t/a Lasting Impressions Marketing) [2012] 7 MLJ 561 (CLR International Trading); and

 

136

 

(b) the English Court of Appeal’s judgment in Woodworth & Anor v Conroy & Ors [1976] 1 All ER 107; and

 

(3) there was no “special contract’ between the Plaintiff and Defendant. The Defendant’s claim in this case against the Plaintiff was for “advance freight’ and no lien could be created on “advance freight’. Certain paragraphs of the “Halsbury’s Laws of Malaysia”, 2012 Reissue, Volume 18, had been cited in support of this submission.

 

67. The Defendant has the legal burden to satisfy this court that –

 

(1) the Defendant has a lawful basis to exercise lien over the Cargo (Right To Lien); and

 

(2) the Defendant has lawfully exercised a lien over the Cargo (Lawful Exercise of Lien).

 

68. Clause 8, Part II of the COA [Clause 8 (Part II) COA] provided as follows:

 

“8. Lien Clause

 

The Owners shall have a lien on the cargo and on all sub-freights payable in respect of the cargo, for freight, deadfreight, demurrage, claims for damages and for all amounts due under this Charter Party including costs in recovering same ”

 

(emphasis added).

 

137

 

69. I am of the view that Clause 8 (Part II) COA provides the Defendant with a

 

Right To Lien over the Cargo for the unpaid freight which remains outstanding from the Plaintiff to the Defendant. The Right To Lien is emphasized by the use of the mandatory term “shall’ in Clause 8 (Part II) COA. In the above Part N, I have decided that the Plaintiff is liable to the Defendant for the freight. It is to be noted that Clause 25(e) (COA Rider Clauses) and Clause 4(b) (Part II) COA had expressly provided that the freight was “non-refundable” and “non-returnable” respectively.

 

Consequently, the Defendant is entitled to exercise a lien over the Cargo pursuant to Clause 8 (Part II) COA in respect of the unpaid, “discountless” and “non-refundable” freight due from the Plaintiff to the Defendant.

 

70. As to how the Defendant’s right to a lien under Clause 8 (Part II) COA can be exercised, I accept the position of English law as stated by Julian Cooke et al., “Voyage Charters”, 2nd Edition (2001), at p. 415 (cited by the Defendant’s learned counsel), as follows:

 

“ The exercise of the lien

 

17.23 There are two basic requirements for the exercise of a lien: first, a demand for the amount in respect of which it is to be exercised and second, the retention of continuous possession by the lienor.’

 

(emphasis added).

 

138

 

71. I am satisfied that the 2 aforesaid conditions for the Lawful Exercise of Lien had been satisfied by the Defendant as follows:

 

(1) by way of the Defendant’s Letter dated 26.10.2011 to PKSA, the Defendant had demanded payment of the outstanding freight. As elaborated above, the Plaintiff was PKSA’s principal in respect of the COA and FN. Accordingly, the demand for freight in the Defendant’s Letter dated 26.10.2011, was a demand on PKSA as an agent of the Plaintiff which bound the Plaintiff as PKSA’s principal. In any event, the Plaintiff could not deny having actual notice of the Defendant’s demand for the freight in view of PW1’s witness statement which admitted that at the Meeting on 3.11.2011, the Defendant had informed PW1 that if PKSA did not pay the freight to the Defendant, the Defendant would not send the Cargo to Myanmar. Furthermore, the Defendant had forwarded the Proposed Undertaking/Indemnity (18.11.2011) which clearly required, among others, the Plaintiff to undertake to pay the freight to the Defendant; and

 

(2) the Defendant’s Letter dated 25.11.2011 to PKSA had stated, among others, as follows (with grammatical errors) –

 

“We refer to our meetings held on … and our correspondences dated

 

Kindly be reminded that to date the Owners have not received the freight due for the charter of the vessel despite our repeated

 

139

 

request for remittance. Your reluctance to remit the freight is contravening [sic] [Clause 25 (COA Rider Clauses)].

 

You have been informed at the meeting held on the 18th November 2011 at Royal Chulan Hotel and followed by the letter of the same date that the Owners shall impose a detention/storage at the rate of USD2500/- per day or part thereof for cargo on board the vessel on expiry of the dateline by 5 pm on 19th November 2011. We attach herewith the detention/storage invoice for USD12,500/-incurred from 20th November 2011 to 25th November 2011. Kindly remit the payment.

 

As you have not responded to our letters of 20th and 23rd November 2011, we kindly request that you let us know what you intend to do with your cargo on board the [Ship] within 48 hrs from the date of this letter.

 

In the event you fail to communicate within the stipulated time, we reserve the right to take whatever actions deem [sic] necessary including discharging and storing the cargo wherever convenient to enable our vessel to continue with its business activities, and recover all the charges incurred in such operations and freight, detention, loss of earnings and other related charges from the lien on the cargo.

 

Kindly be notified. ”

 

(emphasis added).

 

140

 

As the Plaintiff was PKSA’s principal for the purposes of the COA and FN, the Defendant’s Letter dated 25.11.2011 to PKSA as the Plaintiff’s agent would constitute notice to the Plaintiff as PKSA’s principal. It is to be noted that PKSA replied to the Defendant’s Letter dated 25.11.2011 by way of a letter dated 28.11.2011 (PKSA’s Letter dated

 

28.11.2011) which contained, among others –

 

(a) allegations that the Defendant had committed a “criminal act’ and PKSA had notified INTERPOL (International Criminal Police Organization) and coordinated with the Thai Embassy in Malaysia, Indonesia, Singapore and Myanmar to arrest the Defendant’s employees; and

 

(b) a demand for the Defendant to pay a total of US$5,168,333.00 for 4 kinds of loss and damage.

 

72. With respect, I am not able to accede to the above contentions of the Plaintiff’s learned counsel for the following reasons:

 

(1) as explained above, by virtue of Clause 25(d) (COA Rider Clauses), the Defendant was entitled to the freight within 3 banking days upon the loading of the Cargo. As such, the freight due from the Plaintiff to the Defendant was not “advance freight’ but was freight which was already due and payable by the Plaintiff to the Defendant under Clause 25(d) (COA Rider Clauses);

 

141

 

(2) as elaborated in the above Part M(1), the Ship’s Deviation was justified. Hence, the Defendant did not breach Clause 30 (COA Rider Clauses) or any other clause in the CA and FN. More importantly, the Plaintiff had breached Clause 25(d) (COA Rider Clauses) by not paying the freight to the Defendant within 3 banking days upon the loading of the Cargo (Plaintiff’s Breach). In view of the Plaintiff’s Breach, the Defendant was not obliged under the COA and FN to send the Cargo to Myanmar. As such, the Defendant had not breached the COA and FN by refusing to deliver the Cargo to Myanmar;

 

(3) I find that the Plaintiff’s reliance on the Ship’s Safe Manning Certificate is an afterthought because neither the Plaintiff nor PKSA refer to the Ship’s Safe Manning Certificate in any email, letter or meeting with the Defendant. PKSA’s Letter dated 28.11.2011 is a significant document because PKSA’s Letter dated 28.11.2011 replied to the Defendant’s Letter dated 25.11.2011 (regarding the Lawful Exercise of Lien). PKSA’s Letter dated 28.11.2011 did not allude at all to the Ship’s Safe Manning Certificate;

 

(4) JB Precision Moulding Industries did not concern the exercise of a ship owner’s lien over cargo on board the ship based on unpaid outstanding freight;

 

(5) in CLR International Trading, Mary Lim J (as she then was) correctly held that the defendant could not claim a lien over the German plaintiff company’s machine as the plaintiff company did not owe any debt to the defendant;

 

142

 

(6) Woodworth concerned the issue of whether the defendants/accountants who had previously acted on behalf of the plaintiffs, could resist the plaintiffs’ application to court for an order to inspect the plaintiffs’ files (in the defendants’ possession wherein the defendants claimed a lien for outstanding fees allegedly due from the plaintiffs to the defendants); and

 

(7) in any event, CLR International Trading and Woodworth can be

 

easily distinguished from this case as the transactions in these cases did not have provisions similar to Clause 25(d) (COA Rider Clauses) and Clause 8 (Part II) COA.

 

P. Consequences of Lawful Exercise of Lien

 

73. Upon the Lawful Exercise of Lien (as explained in the above Part O), the question that arises is whether the Defendant can counterclaim under English law for all cost and expense incurred by the Defendant in respect of the Lawful Exercise of Lien. The Defendant’s learned counsel submitted in the affirmative and relied on the English Court of Appeal case of Metall Market OOO v Vitorio Shipping Co Ltd, “The Lehmann Timber” [2013] 2 Lloyds Rep 541 (The Lehmann Timber). I accept this submission. In The Lehmann Timber, at paragraphs 1 and 127, Sir Bernard Rix (concurred by Arden and Patten LJJ) held as follows:

 

“[1] This appeal raises two questions of some importance relating to general average. … The other is whether the exercise by

 

143

 

the shipowner of his lien for general average contribution prevented him from recovering the costs involved in exercising that lien in terms of the continuing expense of looking after the cargo instead of being able to discharge it.

 

[127] Shipping is performed on the basis that time is money and that a ship is a floating and travelling warehouse for which cargo must pay either in the form of agreed freight or hire, or by way of damages for any breach of contract. If the ship is delayed by the cargo owner’s failure to arrange timely discharge: whether that failure is his breach in facilitating the vessel’s arrival in berth where she may become an arrived ship (and thus start the laytime clock running which may in due course lead to demurrage), or whether he has incurred demurrage under the laytime code; or whether there is no laytime or demurrage code, but merely a general obligation to discharge according to the custom of the port or with customary dispatch; or whether he has delayed discharge by refusing to discharge a lien for freight or any other payment for which the ship has a lien and has thereby given invalid instructions to discharge; then the contractual arrangement contemplates that either by the means of the liquidated damages known as demurrage, or by means of general damages for detention, the cargo owner must pay (subject of course to any express exceptions to his liability). That is the commercially just result, and the authorities reflect the search for the just and reasonable result. Thus the exercise of a lien must be reasonable and there must be no failure to mitigate damages, but subject to such commercially sensitive principles, the exercise of a lien is no excuse from contractual liability. Even if the Somes principle were prima facie capable of applying, the contractual context, as contemplated in Somes’s case itself, would take the case out of it. And if the contract comes to an end, as in the ENE Kos 1 case, then the ship will in any event be entitled to claim the cost of taking care of cargo and to continue to enforce any lien it has ”

 

(emphasis added).

 

144

 

74. The Lehmann Timber has been considered by Males J in the recent English High Court case of Sang Stone Hamoon Jonoub Co Ltd v Baoyue Shipping Co Ltd, “Bao Yue” [2015] EWHC 2288 (Comm) (Bao Yue). I will discuss about Bao Yue later in this judgment.

 

75. Based on The Lehmann Timber, if the Defendant had not failed to take reasonable steps to mitigate loss, the Defendant could counterclaim for all reasonable cost and expense in respect of the Lawful Exercise of Lien. In view of the Defendant’s Letter dated 25.11.2011, I find as a fact that the Defendant had not failed to take reasonable steps to mitigate the Defendant’s loss as a result of the Plaintiff’s Breach. Accordingly, the Defendant’s Counterclaim for the following items is allowed (subject to my subsequent discussion on their quantum):

 

(1) port dues and wharfage/foreshore charges (Port Charges);

 

(2) cost to unload Cargo from the Ship (Unloading Charges); and

 

(3) cost of warehousing and open storage of the Cargo by PMBSB (Warehousing Charges).

 

76. I allow the Defendant’s Counterclaim for Port Charges in the sum of US$909.99 (Port Charges Sum).

 

77. In respect of the Unloading Charges and Warehousing Charges, there is no proof of payment by the Defendant of such items. As such, I am

 

145

 

constrained to order an assessment of the quantum of the Unloading Charges and Warehousing Charges by the learned Registrar pursuant to Order 37 rule 4(a) RC (Assessment).

 

78. As regards Unloading Charges, I hold that the Defendant is entitled to claim at the Assessment all Unloading Charges which have been actually paid by the Defendant (Unloading Charges Sum).

 

79. Regarding Warehousing Charges, premised on The Lehmann Timber, I am of the view that the Defendant is entitled to a reasonable amount of Warehousing Charges incurred by the Defendant from 31.12.2012 to 17.4.2013. I chose 31.12.2012 because this was the date of the first invoice issued by PMBSB to the Defendant. The Defendant’s Counterclaim was filed on 17.4.2013 and hence, I exercise my discretion to fix this date as the last date for the Defendant to claim Warehousing Charges. Accordingly, I ordered that the Defendant is entitled to claim at the Assessment a reasonable sum of Warehousing Charges incurred by the Defendant from 31.12.2012 to 17.4.2013.

 

80. I have not overlooked the Plaintiff’s contention that the Defendant is “related” to PMBSB as follows:

 

(1) DW1 and DWI’s wife, Puan Farina, are substantial shareholders in the Defendant. DW1 and Puan Farina were the Defendant’s directors until August 2013;

 

146

 

(2) DW2 and DW3 are the sons of DW1 and Puan Farina;

 

(3) DW2 is the Business Development Manager of the Defendant;

 

(4) DW3 is the Defendant’s Business Development Manager; and

 

(5) DW3 admitted during cross-examination that –

 

(a) PMBSB is owned by DW3’s parents, namely DW1 and Puan Farina;

 

(b) there was no contract of storage of the Cargo between the Defendant and PMBSB; and

 

(c) there was no proof of payment of Warehousing Charges by the Defendant to PMBSB.

 

81. I am not able to accede to the above submission by the Plaintiff because it is trite company law that under s 16(5) of the Companies Act 1965, the Defendant is a legal entity which is separate from PMBSB. To lift or pierce the corporate veil of the Defendant and PMBSB, 3 Federal Court judgments require the Plaintiff to fulfil a two-fold requirement, namely the Plaintiff has to satisfy the court that –

 

(1) the piercing or lifting of a corporate veil is in the interest of justice; and

 

147

 

(2) there exists special circumstances to pierce or lift the corporate veil of

 

the Defendant and PMBSB, such as –

 

(a) the Defendant and PMBSB had perpetrated actual fraud or Common Law fraud against the Plaintiff;

 

(b) equitable fraud or constructive fraud has been committed by the Defendant and PMBSB against the Plaintiff;

 

(c) to prevent the Defendant and PMBSB from evading liability due to the Plaintiff; or

 

(d) to prevent an abuse of corporate personality by the Defendant and PMBSB.

 

1 rely on the following 3 Federal Court judgments which have laid down the

 

2 above conditions –

 

(i) Hasan Lah FCJ’s judgment in Solid Investment Ltd v Alcatel Lucent

 

(M) Sdn Bhd [2014] 3 CLJ 73, at 92;

 

(ii) the decision of Richard Malanjum CJ (Sabah & Sarawak) in

 

Gurbachan Singh s/o Bagawan Singh & Ors v Vellasamy s/o

 

Pennusamy & Ors [2015] 1 MLJ 773, at paragraphs 96-99; and

 

148

 

(iii) Richard Malanjum CJ (Sabah & Sarawak)’s judgment in Giga Engineering & Construction Sdn Bhd v Yip Chee Seng & Sons Sdn Bhd & Anor [2015] 9 CLJ 537, at paragraphs 39, 44 and 45.

 

82. I am not satisfied that the 2 above conditions to lift the corporate veil of the Defendant and PMBSB have been satisfied in this case, especially when the Plaintiff had –

 

(a) entered into a sham Contract Between PKSA and Plaintiff (8.8.2011);

 

(b) taken part in the Concealment of Contract Between PKSA and Plaintiff (8.8.2011); and

 

(c) committed the Plaintiff’s Breach.

 

83. As I have allowed the Defendant’s Counterclaim for Warehousing Charges,

 

I hereby grant leave to the Plaintiff to take possession of the Cargo provided that the Plaintiff pays the necessary charges for the release of the Cargo, if any. Such a consequential order is in the interest of justice in view of the above decision to allow the Defendant’s Counterclaim for Warehousing Charges.

 

84. Before turning to the next issue, I cannot allow loss of charter hire to be claimed as a consequence of the Lawful Exercise of Lien. The Defendant’s Counterclaim for loss of charter hire is only possible if the Defendant can

 

149

 

prove that the Plaintiff was PKSA’s principal in respect of PKSA’s Supply of Bunker Oil and the Plaintiff is liable to the Defendant under s 16 SGA.

 

Q. Whether Plaintiff was liable to Defendant for PKSA’s Supply of Bunker

 

Oil

 

85. In respect of the Defendant’s Counterclaim regarding PKSA’s Supply of Bunker Oil, the following 2 questions arise:

 

(1) was PKSA an agent for the Plaintiff in respect of PKSA’s Supply of Bunker Oil?; and

 

(2) if the answer to the aforesaid question is “yes”, has the Defendant proven the Plaintiff’s liability under s 16 SGA?

 

86. It is clear that the Defendant has the legal burden under s 101(1), (2) and 102 EA to prove on a balance of probabilities that the above 2 issues should be resolved in the Defendant’s favour. These 2 issues will be decided based on Malaysian and not English law.

 

Q(1). Was PKSA acting as agent for Plaintiff in respect of PKSA’s Supply of Bunker Oil?

 

87. A party (“A”) may have –

 

150

 

(1) express actual authority within the meaning of s 140 of the Contracts Act 1950 [CA (1950)];

 

(2) implied actual authority as understood in s 140 CA (1950); or

 

(3) ostensible or apparent authority

 

– to act for one party (“B”) in the dealings between A and another party (“C”) and A’s act shall then bind B as A’s principal in respect of A’s liability towards C.

 

I refer to the Federal Court’s judgment delivered by Syed Agil Barakbah FJ in Chew Hock San & Ors v Connaught Housing Development Sdn Bhd

 

[1985] 1 MLJ 350, at 353, as follows:

 

“Now, the difference between an actual and an apparent or ostensible authority and the principles applicable thereto are adequately explained by Diplock L.J. in Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480, 502-504 from page 502 to page 504 as follows:

 

“It is necessary at the outset to distinguish between an “actual” authority of an agent on the one hand, and an “apparent” or “ostensible” authority on the other. Actual authority and apparent authority are quite independent of one another. Generally they co-exist and coincide, but either may exist without the other and their respective scopes may be different. As I shall endeavour to show, it is upon the apparent authority of the agent that the contractor normally relies in the ordinary course of business when entering into contracts.

 

151

 

An “actual” authority is a legal relationship between principal and agent created by a consensual agreement to which they alone are parties. Its scope is to be ascertained by applying ordinary principles of construction of contracts, including any proper implications from the express words used, the usages of the trade, or the course of business between the parties. To this agreement the contractor is a stranger; he may be totally ignorant of the existence of any authority on the part of the agent. Nevertheless, if the agent does enter into a contract pursuant to the “actual” authority, it does create contractual rights and liabilities between the principal and the contractor…

 

An “apparent” or “ostensible” authority, on the other hand, is a legal relationship between the principal and the contractor created by a representation, made by the principal to the contractor, intended to be and in fact acted upon by the contractor, that the agent has authority to enter on behalf of the principal into a contract of a kind within the scope of the “apparent” authority, so as to render the principal liable to perform any obligations imposed upon him by such contract. To the relationship so created the agent is a stranger. He need not be (although he generally is) aware of the existence of the representation but he must not purport to make the agreement as principal himself. The representation, when acted upon by the contractor by entering into a contract with the agent, operates as an estoppel, preventing the principal from asserting that he is not bound by the contract. It is irrelevant whether the agent had actual authority to enter into the contract.

 

In ordinary business dealings the contractor at the time of entering into the contract can in the nature of things hardly ever rely on the “actual” authority of the agent. His information as to the authority must be derived either from the principal or from the agent or from both, for they alone know what the agent’s actual authority is. All that the contractor can know is what they tell him, which may or may not be true. In the ultimate analysis he relies either upon the representation of the principal, that is, apparent authority, or upon the representation of the agent, that is, warranty of authority. ” ”

 

152

 

(emphasis added).

 

88. Firstly, I accept the Plaintiff’s contention that the COA and FN did not provide for PKSA’s Supply of Bunker Oil. In fact, Clause 25(b) (COA Rider Clauses) had expressly provided that the Defendant should request in writing for bunker oil from PKSA.

 

89. I am not able to find any email, letter or evidence which showed that PKSA had –

 

(1) express actual authority; or

 

(2) implied actual authority

 

– from the Plaintiff for PKSA’s Supply of Bunker Oil.

 

90. There is no proof on a balance of probabilities that PKSA had the ostensible or apparent authority to act for the Plaintiff as regards PKSA’s Supply of Bunker Oil. This is due to the following reasons:

 

(1) PKSA is not in the business of supply of bunker oil; and

 

(2) the Defendant’s Email dated 4.10.2011 clearly showed that the Defendant had given certain instructions to PKSA in respect of PKSA’s

 

153

 

Supply of Bunker Oil. Hence, PKSA was merely following the Defendant’s instructions regarding PKSA’s Supply of Bunker Oil.

 

91. Despite the above finding of fact that PKSA had no authority to act for the Plaintiff, be it express actual authority, implied actual authority or ostensible authority, I am of the view that the Plaintiff had expressly ratified PKSA’s Supply of Bunker Oil by way of the Plaintiff’s Letter dated 4.11.2011. The Plaintiff’s Letter dated 4.11.2011 stated, among others (with grammatical errors):

 

The two issues those [sic] raised by you [the Defendant] during the [Meeting on 3.11.2011], as:

 

1) Economic Issue:

 

The expenses incurred in Thailand and paid by [PKSA] instead of your company [the Defendant] could be discounted at the reasonable & acceptable basis. We, as the cargo owner, will try to compensate [PKSA], as the expenses have actually incurred, even the prices and re-payment terms were agreed by you [the Defendant] previously.”

 

(emphasis added).

 

92. Sections 149 and 150 CA (1950) provide as follows:

 

154

 

“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.

 

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.’

 

(emphasis added).

 

93. In Chan Yoke Lain, at p. 307, Haidar JCA (as he then was) held as follows in the Court of Appeal:

 

“Since the matter of agency was before him, the learned judge should have considered s 149 [CA (1950)].

 

Even though the proposal form for the PA policy was not signed by the deceased, it was ratified by him when the premium for the policy was paid and for which a receipt was sent to the deceased (by the respondent company) acknowledging the payment .”

 

(emphasis added).

 

94. In view of the Plaintiff’s express ratification of PKSA’s Supply of Bunker Oil by way of the Plaintiff’s Letter dated 4.11.2011 [as understood in ss 149

 

155

 

and 150 CA (1950)], I will now discuss whether the Defendant has proved on a balance of probabilities that the Plaintiff as PKSA’s principal for PKSA’s Supply of Bunker Oil, is liable in respect of MFO which was not fit for the purpose of the Ship’s engines.

 

Q(2). Was Plaintiff liable under s 16 SGA?

 

95. The bunker oil, including MFO, falls within the definition of “goods” in s 2 SGA. Section 16(1) and (2) SGA provide as follows:

 

“Implied condition as to quality or fitness

 

16(1) Subject to this Act and of any other law for the time being in force, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale, except as follows:

 

(a) Where the buyer, expressly or by implication makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller’s skill or judgment, and the goods are of a description which it is in the course of the seller’s business to supply (whether he is the manufacturer or producer or not) there is an implied condition that the goods shall be reasonably fit for such purpose:

 

Provided that, in the case of a contract for the sale of a specified article under its patent or other trade name there is no implied condition as to its fitness for any particular purpose.

 

156

 

(b) Where goods are bought by description from a seller who deals in goods of that description (whether he is the manufacturer or producer or not) there is an implied condition that the goods shall be of merchantable quality:

 

Provided that if the buyer has examined the goods, there shall be no implied condition as regards defects which such examined ought to have revealed.

 

(2) An implied warranty or condition as to quality or fitness for a

 

particular purpose may be annexed by the usage of trade .”

 

(emphasis added).

 

96. I am of the view that the Plaintiff is not liable to the Defendant under s 16(1) and/or (2) SGA. This decision is based on the following evidence and reasons:

 

(1) s 16(1)(a) SGA only applies to goods which are of “a description which it is in the course of the seller’s business to supply (whether he is the manufacturer or producer or not)”. In this case, PKSA was not in the business of supplying MFO. For this same reason, s 16(1)(b) SGA does not apply to PKSA who was not a “seller who deals in goods of that description (whether he is the manufacturer or producer or not)’’;

 

157

 

(2) s 16(2) SGA only applies if the “usage of trade” in respect of the Ship provides for the quality or fitness of MFO for a particular purpose. In this case, the Defendant has not adduced any evidence of a “usage of trade” which concerns the Ship, much less a “usage of trade” regarding the quality or fitness of MFO for a particular purpose;

 

(3) there is no evidence on a balance of probabilities to prove that the MFO supplied by PKSA was not fit to be used by the Ship’s engines. This is clear from the following –

 

(a) ISB’s Report concerned only the Sample. The Defendant did not call the person who took the Sample (Sample Collector) as a witness to testify in this case. The evidence of the Sample Collector is material regarding the integrity of the Sample. The credibility of ISB’s Report depends on, among others, the integrity of the Sample. The Defendant did not adduce any evidence to explain why the Defendant could not have applied for a subpoena to compel the Sample Collector to give evidence in this case. Nor is there any evidence that the Defendant has expended time, effort and expense to trace the Sample Collector. In the circumstances, this court draws an adverse inference under s 114(g) EA against the Defendant for suppressing the Sample Collector’s material testimony;

 

(b) DW4 did not analyse the Sample. DW4 did not know how the Sample was analysed. The Sample was analysed by ISB and ISB’s Report had been signed by Mr. Lai. Mr. Lai however was not

 

158

 

called by the Defendant to testify in this case. As such, I am constrained to make an adverse inference under s 114(g) EA against the Defendant for suppressing Mr. Lai’s material evidence because –

 

(i) Mr. Lai is clearly a material witness in respect of the analysis of the Sample; and

 

(ii) no evidence had been led by the Defendant as regards the time, effort and expense incurred by the Defendant to trace Mr. Lai and why a subpoena had not been applied by the Defendant to compel Mr. Lai to testify in this case;

 

(c) the Sample had not been produced in court as an exhibit. Nor is there evidence adduced by the Defendant to explain why the Sample could not be tendered by the Defendant in this case. The Plaintiff has a right to appoint its own expert to analyse the Sample in resisting the Defendant’s Counterclaim based on s 16 SGA. Once again, an adverse inference under s 114(g) EA is drawn against the Defendant for suppressing the Sample in this case;

 

(d) in view of the Defendant’s failure to call Mr. Lai to testify in this case, I am not inclined to give any weight to ISB’s Report. Consequently, I find that there is no evidence on a balance of probabilities to prove that the MFO on board the Ship at the material time, had exceeded ISO 8217 Specifications in respect of

 

159

 

“Density at 15°C”, “Viscosity at 50°C’, “Water content and “Ash content’ (Non-conformity of MFO); and

 

(e) there is no evidence that DW4 is sufficiently competent under s 45(1) EA to give an expert opinion on the Non-conformity of MFO.

 

Section 45 EA provides as follows –

 

“Opinions of experts

 

45(1) When the court has to form an opinion upon a point

 

of foreign law or of science or art, or as to identity or genuineness of handwriting or finger impressions, the opinions upon that point of persons specially skilled in that foreign law, science or art, or in questions as to identity or genuineness of handwriting or finger impressions, are relevant facts.

 

(2) Such persons are called experts ”

 

(emphasis added).

 

I refer to the following judgment of the Supreme Court by Mohamed Azmi SCJ in Junaidi Abdullah v Public Prosecutor [1993] 3 MLJ 217, at 229:

 

—In our view, the test to be applied for the purpose of s 45 [EA] 1950 is this. First, does the nature of the evidence require special skill? Second, if so, has the witness acquired the necessary skill either by academic qualification or experience

 

160

 

so that he has adequate knowledge to express an opinion on the matter under enquiry? The answer to both questions must necessarily depend on the facts of each particular case. The speciality of the skill required of an expert witness under s 45 would depend on the scientific nature and complexity of the evidence sought to be proved. The more scientific and complex the subject matter, the more extensive and deeper will the court be required to enquire into the ascertainment of his qualification or experience in the particular field of art, trade or profession. But in the final analysis in a non-jury trial, it is for the trial judge himself as both judge of fact and law to determine the weight to be attached to such evidence notwithstanding the outstanding qualification or experience (or the lack of it) of the expert. To use the words of Suffian LP at p 323 in Muhamed bin Sulaiman when he applied the case of PP v Virammal, the jurors themselves, ‘could have used a magnifying glass, or their own eyes and their own mind to the evidence and [verify] the results submitted to them’ by the expert witness. The lack of qualification or experience on the part of the expert must necessarily affect the weight of the evidence rather than admissibility. But where the evidence is of a complex and scientific nature, the absence of both qualification or experience can certainly affect admissibility. No hard and fast rule should be laid down on the issue of the competency of an expert witness. In an uncomplicated matter, considerable laxity must however be applied in practice (see the judgment of Abdoolcader FJ in Dato Mokhtar bin Hashim’s case 15 at p 278).”

 

(emphasis added); and

 

(4) the Defendant had not adduced any evidence to show that DW4 was an expert under s 45(1) who could opine that the Non-conformity of MFO could damage the Ship’s engines and did damage the Ship’s engines. In any event, there is no proof on a balance of probabilities that “but for’ the MFO, the Ship’s engines would not have been damaged at the material time. During cross-examination, DW4 admitted as follows –

 

161

 

(a) there were complaints about the performance of the Ship’s engines even before the commencement of the Ship’s voyage (presumably, before PKSA’s Supply of Bunker Oil);

 

(b) the condition of the bunker oil storage tank in the Ship could have contaminated the MFO. Hence, there was a possibility that the chain of causation in this case had been broken in the sense that PKSA’s Supply of Bunker Oil was not the “causa causans” for the damage to the Ship’s engines; and

 

(c) DW4 did not ascertain whether the Ship’s engines could be damaged by reasons other than the MFO. Furthermore, DW4 was not provided with the records concerning the condition of the Ship’s engines, such as past maintenance record and past service record of the Ship’s engines.

 

97. Based on the above reasons, I have no hesitation to dismiss the Defendant’s Counterclaim as regards PKSA’s Supply of Bunker Oil. Accordingly, the Defendant could not counterclaim from the Plaintiff for loss of charter hire and cost for the return of “contaminated oil’ and rebunkering.

 

R. Whether Defendant is liable to Plaintiff for tort of detinue and/or conversion

 

162

 

98. Malaysian and not English law is applicable to the Plaintiff’s Claim based on the tort of detinue and tort of conversion. In this matter, there is no room to apply the United Kingdom’s Torts (Interference with Goods) Act 1977 [TA (UK)]. It is to be noted that s 2(1) TA (UK) has abolished the tort of detinue in the United Kingdom.

 

R(1). Has Plaintiff pleaded tort of detinue?

 

99. The Defendant had contended that the Plaintiff had failed to plead expressly the tort of detinue. With respect, I am unable to accede to such a submission because –

 

(1) paragraphs 8.1 and 8.2 of the Statement of Claim (SOC) had clearly pleaded the material facts to support an allegation that the Defendant had committed the tort of detinue in respect of the Cargo; and

 

(2) even if it is assumed that the SOC had failed to plead the tort of detinue, PW1 had given evidence regarding such a tort. The Defendant did not object to PW1’s testimony in support of the tort of detinue. Accordingly, based on Hamit bin Matusin, PW1’s evidence regarding the tort of detinue is admissible and can be considered by this court. Furthermore, the Defendant’s learned counsel had cross-examined PW1 regarding such a tort. There was therefore no prejudice to the Defendant in respect of the omission to plead such a tort in the SOC.

 

R(2). Defendant is not liable to Plaintiff for tort of detinue

 

163

 

100. In Perbadanan Kemajuan Negeri Selangor v Teo Kai Huat Building Contractor [1982] 2 MLJ 165, at 167 (PKNS), Abdul Hamid FJ (as he then was) explained the tort of detinue as follows:

 

“We now turn to consider the question of the correct measure of damages. Before we do so, it would be useful to examine briefly the law to find support for our finding that the respondents’ claim was substantially a claim in detinue.

 

With reference to an action in detinue, Bullen & Leake 12th Edn: No. 5 has stated at page 358 that—

 

“An action lies for the specific recovery of personal chattels wrongfully detained from the person entitled to the possession of them, and also for damages occasioned by the wrongful detainer (3 Bl Com 151). The technical name of this action is ‘Detinue’. The gist of the action is the wrongful detention of goods, and, in general, therefore, it is an action for a wrong independent of contract, and is founded on tort (see Bryant v Herbert (1878) 3 CPD 389); there must be ‘some definite act or deliberate withholding as a necessary preliminary to the arising of this cause of action’ (Clayton v Le Roy [1911] 2 KB 1031 at 1048).”

 

And at page 359 speaking of right of action it is stated that –

 

“To support the action, the plaintiff must have the right to the immediate possession of the goods at the time of commencing the action, arising out of an absolute or a special property;

 

The injurious act being the wrongful detention of the goods, and not the original taking or obtaining of the possession, it is immaterial whether they were obtained by the defendant by

 

164

 

lawful means, as by a bailment or finding, or by a wrongful act, as by a trespass or conversion. The usual evidence of the detention is that the defendant, having the possession or control over the goods, does not deliver them to the plaintiff when demanded (Jones v Dowle (1841) 9 M & W 19). Where there was neither demand nor refusal, no action lay (Clayton v. Le Roy, ante).””

 

(emphasis added).

 

101. Based on PKNS, the Plaintiff’s Claim for the tort of detinue in respect of the Cargo, cannot succeed as there was no wrongful detention of the Cargo by the Plaintiff. This is because of the Lawful Exercise of Lien (please see the above Part O). In view of the Lawful Exercise of Lien, the Plaintiff is not entitled to the possession of the Cargo.

 

102. It is to be noted that the Demand dated 7.2.2013 by Plaintiff’s Solicitors did not mention about the Cement. This is another reason why the Defendant could not be liable for the tort of detinue in respect of the Cement.

 

103. The Defendant had contended that at the time of the Demand dated 7.2.2013 by Plaintiff’s Solicitors, the Cargo had been stored by PMBSB. Hence, the Plaintiff should have taken action for the tort of detinue against PMBSB (and not the Defendant). I am not able to accept this submission because if there is no Lawful Exercise of Lien, I will have no hesitation to allow the Plaintiff’s Claim based on the tort of detinue only in respect of the Steel Bars (there was no demand by the Plaintiff for the Cement). This is because the 2 conditions to pierce the corporate veil of PMBSB and the Defendant will have been fulfilled, namely –

 

165

 

(1) the piercing of the corporate veil of PMBSB and the Defendant is in the interest of justice; and

 

(2) to prevent the Defendant and PMBSB from evading liability due to the Plaintiff or to prevent an abuse of corporate personality by the Defendant and PMBSB.

 

R(3). Defendant is not liable to Plaintiff for tort of conversion

 

104. In Zung Zung Wood Products Sdn Bhd & Ors v Kwan Chee Hang Sdn

 

Bhd & Ors [2014] 2 MLJ 799, at paragraph 53 (Zung Zung Wood Products), Jeffrey Tan FCJ delivered the following judgment of the Federal Court regarding the tort of conversion:

 

“[53] A conversion is a voluntary act by one person inconsistent with the ownership rights of another. ‘A conversion is the act of wilfully interfering with movable property without lawful justification whereby any person entitled thereto is deprived of the possession

 

of it … And that the defendant’s act may amount to conversion although he has not acted on his own account or converted to his own use … In order that this article may apply to suits for relief in respect of property acquired by conversion, it is not necessary that the conversion should have been a dishonest one’ (The ALR Manual (4th Ed), Vol 24 p 821). ”

 

(emphasis added).

 

166

 

105. Based on Zung Zung Wood Products, the Defendant could not be liable for the tort of conversion in respect of the Cargo because of the Lawful Exercise of Lien. This finding is supported by the following 2 cases:

 

(1) in Antariksa Logistics Pte Ltd & Ors v McTrans Cargo (S) Pte Ltd

 

[2012] 4 SLR 250, at paragraphs 105, 110, 115 and 120, Belinda Ang Siew Ean J in the Singapore High Court allowed a claim for the tort of conversion against the defendants because the defendants could not prove a possessory lien over the goods in question, be it a contractual lien, warehouseman’s lien or freight forwarder’s lien; and

 

(2) the English High Court dismissed a suit by a shipper of iron ore in Bao Yue, in paragraph 52, for the tort of conversion of the iron ore because the defendant (charterer of the vessel) had a valid lien in the iron ore.

 

S. Whether Plaintiff’s Claim is barred by limitation

 

106. The Defendant’s learned counsel advanced a two-pronged submission based on limitation. According to the Defendant’s learned counsel –

 

(1) clause 1 of the back page of the 2 Bills of Lading [Clauses 1 (BL)] provided that the “Hague Rules contained in the International Convention for the Unification of certain rules relating to Bills of Lading dated Brussels the 25th August 1924” (Hague-Visby Rules) shall apply to the 2 Bills of Lading. Article 3 rule 6 Hague-Visby Rules states, among others, as follows –

 

167

 

“Subject to paragraph 6bis the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods, unless suit is brought within one year of their delivery or of the date when they should have been delivered. …”

 

(emphasis added).

 

Article 3 rule 6bis Hague-Visby Rules concerns action for indemnity against a third party and does not apply in this case; and

 

(2) clause 2 of the back page of the 2 Bills of Lading [Clauses 2 (BL)] stipulated that the 2 Bills of Lading and all rights and liabilities thereunder “shall be governed by and interpreted and construed” in accordance with Thai law and in so far as Thai law does not apply, English law. The written submission of the Defendant’s learned counsel referred to s 46 of Thailand’s Carriage of Goods By Sea Act [CGSA (Thailand)] which provides for a one-year limitation period.

 

107. Article 3 rule 6 Hague-Visby Rules has been interpreted by the House of Lords in Aries Tanker Corporation v Total Transport Ltd, “The Aries”

 

[1977] 1 Lloyds Rep 334 (The Aries). As explained in the above Part L, English law does not apply to the 2 Bills of Lading. Having said that, I am of the view that there is no objection to resort to The Aries to interpret Article 3 rule 6 Hague-Visby Rules. Such a resort is permissible because my research is unable to reveal any Malaysian case which has applied Article 3 rule 6 Hague-Visby Rules. Furthermore, in the interest of certainty and

 

168

 

predictability, Malaysian case law should not differ from cases in other jurisdictions regarding the interpretation of multilateral treaties, especially in commercial matters.

 

108. Lord Salmon decided as follows in The Aries, at p. 342:

 

“… The material words of [Article 3 rule 6] are:

 

There can certainly be no doubt that if the charterers bring no suit making a claim in respect of loss or damage within the time stipulated in [Article 3 rule 6], they are time-barred and the carrier and the ship are discharged from liability to pay any compensation in respect of the loss or damage. Since, in English law, the charterers can make no deduction in respect of freight, and cannot rely on loss or damage caused by the carriers as a defence, the only way in which they could have recouped themselves in respect of any loss or damage caused by the fault of the carriers or the ship was by bringing a suit against them. In the present case the charterers did not bring their suit within the stipulated time. Accordingly, the liability of the carriers and the ship was extinguished; and for this reason also, the charterers have failed in their appeal. …”

 

(emphasis added).

 

109. According to the 2 Bills of Lading, the delivery date of the Cargo was 21.10.2011. The one-year limitation period as provided in Article 3 rule 6 Hague-Visby Rules as incorporated into the 2 Bills of Lading by reason of Clauses 1 (BL), would have expired on 22.10.2012. The Plaintiff’s Claim had only been filed on 10.6.2013. As such, the Plaintiff’s Claim had been

 

169

 

filed out of time for more than 7 months and is therefore time-barred under Article 3 rule 6 Hague-Visby Rules. The Hague-Visby Rules do not provide for any extension or postponement of the one-year limitation period.

 

110. I am not able to accept the Defendant’s submission based on Thai law and Clauses 2 (BL). This is because the court cannot take judicial notice of Thai law under s 57(1) EA and what constitutes Thai law is a question of fact which can only be proven by expert testimony of an expert in Thai law under s 45(1) EA. I rely on Abdoolcader J’s (as he then was) judgment in the High Court case of Mak Sik Kwong v Minister of Home Affairs, Malaysia (No 2) [1975] 2 MLJ 175, at 180, as follows:

 

“Mr. Mohideen thereupon submits that there was no evidence that these matters were or are in fact rights accorded exclusively to citizens of China and suggests that I should take judicial notice of the law of China, but when I evinced horror at the suggestion and referred him to the provisions of section 45 [EA] he resiled and promptly applied for an adjournment to file affidavits by experts on Chinese law as to rights accorded exclusively to Chinese citizens and specifically to show that attending educational institutions and entering China without the necessary documents and residing there as well as leaving that country with the permission of its authorities are not such rights.

 

I refused the request for an adjournment for this purpose for two reasons. Firstly, the applicant obtained leave in these proceedings on November 20,

 

1973, and filed the substantive motion on December 3, 1973. The applicant therefore has had some twenty months at least to do what he thinks should now be done. Secondly, foreign law on a particular topic is a question of fact. An opinion upon a point of foreign law can be proved by evidence

 

170

 

of experts [s 45(1) EA] and in this connection statements as to any law of any foreign country contained in law books, printed or published under the authority of the Government of that foreign country, are relevant[s 38 EA].”

 

(emphasis added).

 

In this case, the Defendant did not call any expert in Thai law to testify on s 46 CGSA (Thailand) as required by s 45(1) EA. Nor did the Defendant’s learned counsel refer under s 38 EA to any book published under the authority of the Thai Government in respect of s 46 CGSA (Thailand).

 

111. The Plaintiff’s learned counsel referred to the Malaysian Carriage of Goods by Sea Act 1950 [CGSA (Malaysia)] and submitted that the CGSA (Malaysia) did not apply to this case. I agree. The Defendant only relied on Article 3 rule 6 Hague-Visby Rules read with Clauses 1 (BL) and s 46 CGSA (Thailand) read with Clauses 1 (BL).

 

T. Whether Defendant could rely on exclusion clause

 

112. Clause 2 (Part II) COA reads as follows:

 

“ 2. Owners ’ Responsibility Clause

 

And the Owners are not responsible for loss, damage or delay arising from any other cause whatsoever, even from neglect or default of the Master or crew or some other person employed by the Owners on board or ashore for whose acts they would, but for this

 

171

 

Clause, be responsible, or from unseaworthiness of the Vessel on loading or commencement of the voyage at any time.”

 

(emphasis added).

 

Clause 23(c) FN provides as follows (with grammatical and spelling errors):

 

“23. Other Terms and Conditions: …

 

c) Owners/Charteror shall not be responsible for any losses or damage to the cargo due to damage or loss of quantity or quality or force majeure or sea accidents or delay of delivery for cargo carry [sic] on board ”

 

(emphasis added).

 

113. The application or otherwise of Clause 2 (Part II) COA and clause 23(c) FN, was not one of the “Agreed Issues” to be decided in this case. However, PW1 had been cross-examined by the Defendant’s learned counsel on Clause 2 (Part II) COA. Furthermore, the application of Clause 2 (Part II) COA and clause 23(c) FN is a question of construction and does not depend on any evidence or finding of fact. Before deciding on the applicability of Clause 2 (Part II) COA and clause 23(c) FN, I invited further submission from learned counsel for both parties. This is an accordance with the following cases:

 

172

 

(1) in Hoecheong Products Co Ltd v Cargill Hong Kong Ltd [1995] 1 WLR 404, an appeal to the Privy Council from Hong Kong, Lord Mustill delivered the following opinion, at p. 408-409 –

 

“The principles which inhibit the parties from raising new points on appeal, particularly where the facts have not been investigated at the trial, are so well established that it is unnecessary to quote from authorities such as Tasmania (Owners of) v. City of Corinth (Owners of) (1890) 15 App.Cas. 223, Connecticut Fire Insurance Co v Kavanagh [1892] AC 473 and Esso Petroleum Co Ltd v Southport Corporation [1956] AC 218. These principles apply equally where it is the court, rather than the parties, which seeks to introduce the new legal issue. If in the present case the matter had been ventilated in open court it would, their Lordships believe, soon have become apparent that there had been insufficient exploration of the facts at the trial to permit the application of whatever law might have emerged from an examination of the authorities. In the event, however, even this modest examination did not take place. The point appears to have been an afterthought. It does, of course, happen from time to time that a court comes to learn of a statute or authority bearing importantly on an issue canvassed in argument but, through an oversight, not then brought forward. The court may wish to take the new matter into account. Before doing so it should always ensure that the parties have an opportunity to deal with it, either by restoring the appeal for further oral argument, or at least by drawing attention to the materials which have come to light and inviting written submissions upon them .”

 

(emphasis added); and

 

173

 

(2) in the House of Lords case of Hadmor Productions Ltd & Ors v Hamilton & Anor [1983] AC 191, at 233 (Hadmor Productions), Lord Diplock held as follows –

 

“Under our adversary system of procedure, for a judge to disregard the rule by which counsel are bound has the effect of depriving the parties to the action of the benefit of one of the most fundamental rules of natural justice: the right of each to be informed of any point adverse to him that is going to be relied on by the judge and to be given an opportunity of stating what his answer to it is. In the instant case counsel for Hamilton and Bould complained that Lord Denning MR had selected one speech alone to rely on out of many that had been made in the course of the passage of what was a highly controversial Bill through the two Houses of Parliament, and that if he, as counsel, had known that Lord Denning MR was going to do that not only would he have wished to criticise what Lord Wedderburn had said in his speech in the House of Lords but he would also have wished to rely on other speeches disagreeing with Lord Wedderburn if he, as counsel, had been entitled to refer to Hansard ”

 

(emphasis added).

 

The above passage of Lord Diplock in Hadmor Productions had been cited by our Court of Appeal in a judgment delivered by Abdul Malik Ishak JCA in Boustead Naval Shipyard Sdn Bhd v Dynaforce Corporation Sdn Bhd [2014] 4 AMR 317, at 329.

 

174

 

114. As stated in the above Part L, English law applies to matters which arise in respect of the COA. Consequently, I invited submission from both parties on the following questions:

 

(1) is there any provision in the United Kingdom’s Unfair Contract Terms Act 1977 [UCTA (UK)] which restricts or invalidates Clause 2 (Part II) COA and clause 23(c) FN?; and

 

(2) if the answer to the above question is “no” and assuming the Defendant is liable for the tort of detinue and/or conversion, can Clause 2 (Part II) COA and clause 23(c) FN exclude the Defendant’s liability for those torts?

 

115. In respect of English Acts of Parliament, s 57(1)(b) EA allows the court to take judicial notice of such legislation.

 

116. Learned counsel for both parties submitted that UCTA (UK) does not restrict or invalidate Clause 2 (Part II) COA and clause 23(c) FN. My own research also reveals the same position.

 

117. A literal reading of Clause 2 (Part II) COA and clause 23(c) FN leaves no ambiguity that the parties intended these provisions to exclude liability on the Defendant’s part for –

 

(1) the “delay arising from any other cause whatsoever” [Clause 2 (Part II) COA]; and/or

 

175

 

(2) “any losses or damage to the cargo due to … delay of delivery’ [clause 23(c) FN).

 

118. In construing Clause 2 (Part II) COA and clause 23(c) FN, I took into account that this transaction is a purely commercial matter where there is no inequality of bargaining power. Based on the above reasons, I am satisfied that Clause 2 (Part II) COA and clause 23(c) FN would provide a complete defence against the Plaintiff’s Claim.

 

U. Miscellaneous

 

U(1). Whether Defendant could obtain judgment sum in American currency?

 

119. The Defendant’s Counterclaim had prayed for a judgment sum in American currency as well as in Ringgit at the date of the Defendant’s Counterclaim. The court clearly has jurisdiction to give a judgment sum in a foreign currency – please see Abdul Malik Ishak J’s (as he then was) judgment in the High Court case of Den Norske Bank ASA v The Owners of the Ship or Vessel “Forum Akasaka” [1998] 3 CLJ Supp 10, at 34-39. In this case, the Defendant’s learned counsel is satisfied to pray only for a judgment sum in Ringgit and I so order.

 

U(2). Whether Defendant was entitled to interest on items allowed in Defendant’s Counterclaim

 

176

 

120. Section 11 of the Civil Law Act 1956 (CLA) and Order 42 rule 12 RC provide as follows:

 

“Power of Courts to award interest on debts and damages

 

11. In any proceedings tried in any Court for the recovery of any debt or damages, the Court may, if it thinks fit, order that there shall be included in the sum for which judgment is given interest as such rate as it thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment:

 

Provided that nothing in this section –

 

(a) shall authorize the giving of interest upon interest;

 

(b) shall apply in relation to any debt upon which interest is payable as of right whether by virtue of any agreement or otherwise; or

 

(c) shall affect the damages recoverable for the dishonour of a bill of exchange.

 

Interest on judgment debts

 

Order 42 rule 12 Subject to rule 12A, except when it has been

 

otherwise agreed between the parties, every judgment debt shall carry interest at such rate as the Chief Justice may from time to time determine or at such other rate not exceeding the rate aforesaid as the Court determines, such interest to be calculated from the date of judgment until the judgment is satisfied ”

 

177

 

(emphasis added).

 

121. In Lim Eng Kay v Jaafar Mohamed Said [1982] CLJ (Rep) 190, at p. 200-201, the Federal Court awarded pre-judgment interest as follows:

 

—The ordering of interest to be included in a sum awarded for damages is a judicial discretion. Section 11 of the Civil Law Act 1956 (Malaysia Act 67) gives a fairly wide discretion to the Court to order interest on a sum adjudged by the Court in cases where a claimant succeeds in proceedings for the recovery of debts or damages. The English equivalent to our s. 11 of the Civil Law Act 1956 was s. 3(1) of the Law Reform (Miscellaneous Provisions) Act 1934. But this section was repealed and replaced by s. 22 of the Administration of Justice Act 1969 which came into effect on 1 January 1970. The change in the law simply means that the Court in England is now obliged, instead of being at its discretion, to award interest; but the principles as to how and in what manner interest is awarded remain the same (per Lord Denning MR in Jefford v. Gee [1970] 1 All ER 1202). Thus although in England interest is compulsory but because the principles by which the Court awards interest are not changed the result is very much the same as before and therefore similar to the position obtaining in our law. Prior to the passing of the Law Reform (Miscellaneous Provisions) Act 1934, under common law the Court had always had discretion to award interest as a compensation for a party who has been deprived of the use of its money to which it is legally entitled. The enactment of the judicial discretion by the statute simply gives statutory effect thereto, one of which is that it is not necessary for a plaintiff to claim interest in his pleadings as the Court can award interest without any claim being made in the pleadings. (Riches v. Westminster Bank Ltd. [1943] 2 All ER 725).”

 

(emphasis added).

 

178

 

122. In BHS Book Printing Sdn Bhd v Penerbitan IMT Sdn Bhd [2016] 1 AMR 753, at paragraph 33, I have decided as follows in granting summary judgment to a vendor of goods against the purchaser:

 

“ … The court has a discretion under s 61(2)(a), (b) SGA [Sale of Goods Act 1957], s 11 CLA and Order 42 rule 12 RC to award interest or otherwise in a particular case. If the court exercises its discretion to award interest in a case, the court has further discretionary powers to decide –

 

(IA) the amount of debt on which interest shall be imposed;

 

(IB) the rate of interest; and

 

(IC) the time period for which interest shall be ordered, namely whether interest shall commence on the date of delivery of the goods, the date of expiry of the credit period in question, the date of demand for payment of the price or the date of filing of the suit.’

 

(emphasis added).

 

123. Regarding pre-judgment interest under s 11 CLA –

 

(1) I have decided to exercise my discretion to exclude pre-judgment interest for –

 

(a) Freight Sum;

 

179

 

(b) Port Charges Sum;

 

(c) Unloading Charges Sum (to be assessed); and

 

(d) a reasonable amount of Warehousing Charges (to be assessed)

 

– for the period between 20.8.2014 (date of the SAHC’s Decision) and 1.12.2015 (my oral judgment in this case). This is because both parties should not be penalized in terms of pre-judgment interest for that period of time;

 

(2) pre-judgment interest on the Freight Sum at the rate of 5% per annum is awarded for the period from 7.10.2011 [within 3 banking days from the loading of the Cement on 3.10.2011 as provided in Clause 25(d) (COA Rider Clauses)] to 20.8.2014 (date of SAHC’s Decision);

 

(3) pre-judgment interest at the rate of 5% per annum on the Port Charges Sum is awarded for the period from 29.3.2013 to 20.8.2014;

 

(4) pre-judgment interest at the rate of 5% per annum on the Unloading Charges Sum (to be assessed) is awarded for the period from 31.12.2012 to 20.8.2014; and

 

(5) pre-judgment interest at the rate of 5% per annum on the reasonable amount of Warehousing Charges (to be assessed) is awarded for the period from 31.12.2012 to 20.8.2014.

 

180

 

124. I award post-judgment interest at the rate of 5% per annum on the –

 

(a) Freight Sum;

 

(b) Port Charges Sum;

 

(c) Unloading Charges Sum (to be assessed); and

 

(d) a reasonable amount of Warehousing Charges (to be assessed)

 

– at the rate of 5% per annum for the period from 1.12.2015 (the date of the oral judgment in this case) to the date of full payment of the above sums.

 

U(3). Costs of Plaintiff’s Claim and Defendant’s Counterclaim

 

125. The court has the discretion to award costs and its quantum after the trial of this case under Order 59 rule 19(1) RC. I exercise my discretion to grant costs to the Defendant because the Plaintiff’s Claim is dismissed and the Defendant’s Counterclaim is partially successful.

 

126. The amount of costs to be awarded to the Defendant is on the standard basis as provided in Order 59 rule 19(2) read with Order 59 rule 16(2) RC. I allow all disbursement incurred by the Defendant in this case. In respect of the quantum of costs –

 

181

 

(1) an “initial’ sum of RM300,000 is fair and reasonable, considering the following factors as follows –

 

(a) this case is a complicated matter involving novel and/or difficult issues regarding agency principles, shipping law (in particular the ship owner’s lien over cargo for unpaid freight and deviation of ship), application of English law, limitation of suit and application of exclusion clauses [please see under Order 59 rule 16(1)(a) RC];

 

(b) skill, specialized knowledge and responsibility of a senior counsel was required in this case for the Defendant [please see under Order 59 rule 16(1)(b) RC];

 

(c) voluminous documentary evidence had been adduced in this matter [please see under Order 59 rule 16(1)(c) RC]; and

 

(d) the trial of this case took a considerable time;

 

(2) out of the above initial sum of RM300,000.00 as costs, I award 2/3 of this sum to the Defendant considering that the Defendant’s Counterclaim based on s 16 SGA did not succeed. As such, the Defendant is entitled to RM200,000 as costs (excluding disbursement); and

 

182

 

(3) pursuant to Order 59 rule 24 RC, I award interest at the rate of 5% per annum on the total amount of costs and disbursements from 1.12.2015 until the date of full payment of this sum.

 

V. Summary of court’s decision and order

 

127. In summary, the court’s decision is as follows:

 

(1) the Plaintiff was PKSA’s principal when PKSA entered into the COA and FN with the Defendant;

 

(2) an adverse inference under s 114(g) EA should be made against the Plaintiff for the Plaintiff’s failure to call the 3 Witnesses to give evidence in this case;

 

(3) the Ship’s Deviation was justified under –

 

(a) Clause 3 (Part II) COA; and/or

 

(b) English case law on the ground that the Ship’s Deviation was reasonably necessary;

 

(4) the Plaintiff was liable for the freight to the Defendant by virtue of –

 

(a) Box 14, Clause 25(a), (b), (d) and (e) (COA Rider Clauses), Clause 4(b) (Part II) COA and/or clause 12 FN; and/or

 

183

 

(b) the Oral Collateral Agreement;

 

(5) the Defendant had a Right To Lien under Clause 8 (Part II) COA and there was a Lawful Exercise of Lien which entitled the Defendant to counterclaim for –

 

(a) Port Charges;

 

(b) Unloading Charges; and

 

(c) a reasonable amount of Warehousing Charges;

 

(6) the Plaintiff had ratified PKSA’s Supply of Bunker Oil but the Defendant has nevertheless failed to prove the Plaintiff’s liability under s 16 SGA;

 

(7) the Defendant was not liable to the Plaintiff for the tort of detinue and/or tort of conversion in respect of the Cargo;

 

(8) the Plaintiff’s Claim is time-barred pursuant to Article 3 rule 6 Hague-Visby Rules read with Clauses 1 (BL); and

 

(9) the Defendant may rely on Clause 2 (Part II) COA and clause 23(c) FN as a complete defence to the Plaintiff’s Claim.

 

184

 

128. Premised on the above reasons, the following court order is made:

 

(1) the Plaintiff’s Claim is dismissed;

 

(2) the Defendant’s Counterclaim for the Freight Sum of RM330,119.97 is allowed with interest at the rate of 5% per annum to be calculated on the Freight Sum for the following time periods –

 

(a) from 7.10.2011 to 20.8.2014; and

 

(b) from 1.12.2015 until full payment of the Freight Sum;

 

(3) the Defendant’s Counterclaim for the Port Charges Sum is allowed with interest at the rate of 5% per annum to be calculated on the Port Charges Sum for the following time periods –

 

(a) from 7.10.2011 to 20.8.2014; and

 

(b) from 1.12.2015 until full payment of the Freight Sum;

 

(4) the Defendant’s Counterclaim for Unloading Charges is allowed and the Defendant is entitled to claim the Unloading Charges Sum at the Assessment with interest at the rate of 5% per annum to be calculated on the Unloading Charges Sum for the following time periods –

 

(a) from 31.12.2012 to 20.8.2014; and

 

185

 

(b) from 1.12.2015 until full payment of the Unloading Charges Sum;

 

(5) the Defendant’s Counterclaim for Warehousing Charges is allowed and the Defendant is entitled to claim at the Assessment a reasonable sum of Warehousing Charges incurred by the Defendant from 31.12.2012 to 17.4.2013 (Warehousing Charges Sum) with interest at the rate of 5% per annum to be calculated on the Warehousing Charges Sum for the following time periods –

 

(a) from 31.12.2012 to 17.4.2013; and

 

(b) from 1.12.2015 until full payment of the Warehousing Charges Sum;

 

(6) total costs and disbursement of RM206,469.40 (Costs Sum) is awarded to the Defendant with interest at the rate of 5% per annum on the Costs Sum from 1.12.2015 until full payment of the Costs Sum;

 

(7) the Plaintiff is granted leave to take possession of the Cargo from PMBSB’s warehouse provided that the Plaintiff pays all the necessary charges, if any; and

 

(8) the parties are given leave to apply in respect of the execution of this judgment.

 

W. Epilogue

 

186

 

129. I thank learned counsel from both parties for their clear and detailed written submission, without which this judgment is not possible.

 

130. In closing, I must express the view that in similar cases in the future, pending the court disposal of the dispute in question –

 

(1) parties may consider minimizing loss and damage to the goods by agreeing to the release of the goods to a particular party (Claimant of Goods) with the condition that the Claimant of Goods pays an adequate sum of money (Stakeholder Sum) into an interest-bearing bank account in the joint names of the parties’ solicitors and the Stakeholder Sum shall be paid in accordance with any order or judgment which may be made in the case; and

 

(2) if parties cannot agree in respect of the Stakeholder Sum, the Claimant of Goods may apply to court to recover the goods under Order 29 rule 6 RC. Order 29 rule 6 RC provides as follows –

 

“Recovery of movable property subject to lien

 

Order 29 rule 6 Where the plaintiff, or the defendant by way of counterclaim, claims the recovery of specific movable property and the party from whom recovery is sought does not dispute the title of the party making the claim but claims to be entitled to retain the property by virtue of a lien or otherwise as security for any sum of money, the Court, at any time after the claim to be so entitled appears

 

187

 

DATE: 15 APRIL

 

Counsel for Plaintiff: Counsel for Defendant:

 

from the pleadings, if any, or by affidavit or otherwise to its satisfaction, may order –

 

(a) the party seeking to recover the property be at liberty to pay into Court, to abide the event of action, the amount of money in respect of which the security is claimed and such further sum, if any, for interest and costs as the Court may direct; and

 

(b) upon such payment being made, the property claimed be given up to the party claiming it, but subject to the provisions of the Exchange Control Act 1953.’

 

(emphasis added).

 

WONG KIAN KHEONG

 

Judicial Commissioner High Court (Commercial Division) Kuala Lumpur

 

2016

 

Mr. Choon Hon Leng & Mr. Joshua Chong Wan Ken (Messrs Raja Darryl & Loh) Mr. Felix Dorairaj & Ms. Annette Rachel Edwin (Messrs Dorairaj, Low & Teh)

 

188

PDF Source: http://kl.kehakiman.gov.my