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1. Tien Ngai Machinery Sdn Bhd v Actan (Malaysia) Sdn Bhd [2023] MLJU 1649
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 TIEN NGAI MACHINERY SDN BHD v ACTAN (MALAYSIA) SDN BHD
CaseAnalysis
| [2023] MLJU 1649

Tien Ngai Machinery Sdn Bhd v Actan (Malaysia) Sdn Bhd [2023] MLJU
1649
Malayan Law Journal Unreported

HIGH COURT (KUALA LUMPUR)

LIZA CHAN SOW KENG J
SUIT NO WA-22NCC-193-04 OF 2021
18 July 2023

Vinodhan Kuppusamy (Vinodhan Kuppusamy) for the plaintiff.

Chiam Jia Yann (Teoh Pek Wei) for the defendant.

Liza Chan Sow Keng J:

GROUNDS OF JUDGMENTINTRODUCTION

[1]In this action, the Plaintiff claimed the sum of RM57,112.00 from the Defendant being the balance sum
outstanding for supply of a machine known as Sky 7-2. The Defendant denied liability and counterclaimed for:
(a) A Declaration that the Plaintiff has breached the material and fundamental conditions in the sale and
purchase agreement between the Plaintiff and the Defendant for the Machines (Sky 7-1 and Sky 7 -2) and
for the agreement to be repudiated and/or rescinded as at the date of the Order;
(b) The Plaintiff be ordered to take back the said Machines from the Defendant and that the Plaintiff is to return
a sum of RM706,178.13 plus RM37,000.00, being additional costs paid by the Defendant to the Plaintiff to
rectify Sky 7- 1 within 14 days from the date of the Order;
(c) In addition and/or alternatively, general damages to the Defendant to be assessed by the Court for the
losses suffered by the Defendant resulting from the Plaintiff’s breach, including but not limited to the
expenses incurred and loss of profit suffered by the Defendant.

[2]During trial agreed to be conducted virtually online by using the Zoom video conferencing platform, lasting 4
days, the Plaintiff called 1 witness to adduce evidence whilst the Defendant called 4 witnesses in support of the
Defence and Counterclaim.

[3]I had on 15.5.2023 allowed the Plaintiff’s claim and dismissed the Defendant’s Counterclaim. This judgment
contains the reasons for my decision.
Background facts

[4]Pursuant to a quotation dated 20.9.2017 from the Plaintiff to the Defendant, the Defendant placed an order with
the Plaintiff on 27.9.2017 for a slit and rewind paper roll machine known as “Sky 7-1 Machine” to be built by the
Plaintiff at the price of RM379,000.00. The Sky 7-1 Machine was delivered to the Defendant on 1.6.2018. Full
payment was made by the Defendant for the Sky 7-1 Machine.

[5]The Defendant claimed that sometime in April 2019, the Plaintiff represented that Sky 7-2 Machine purportedly
has better and upgraded functions and designs which are better than the said Sky 7-1 Machine and relying upon
the said representations, the Defendant had agreed to purchase the Sky 7-2 Machine from the Plaintiff and agreed
for the Plaintiff to repair and/or upgrade Sky 7-1 at an additional cost of RM37,000.00. It is not disputed that the
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Tien Ngai Machinery Sdn Bhd v Actan (Malaysia) Sdn Bhd [2023] MLJU 1649

Defendant’s representatives had attended two demonstrations on how the Sky 7-2 Machine performed before
placing the order for the Sky 7-2 Machine.

[6]The specifications of the Sky 7-2 Machine were set out in the Quotation dated 12.4.2019. The final price after
discount is RM384,290.13.

[7]It is an agreed fact in Enc. 45 of the Statement of Agreed Facts that the Sky 7-2 Machine was delivered to the
Plaintiff on 14.5.2019.

[8]The Plaintiff also took back the Sky 7-1 Machine on 24.10.2019 for repair /upgrade purposes and Sky 7-1 was
returned to the Defendant on 5.2.2020. The Defendant has made full payment for the additional costs of
RM37,000.00 for repair and/or upgrade of the Sky 7-1 Machine.

[9]The Defendant made part payment of RM327,178.13 for the Sky 7-2 Machine by instalments, leaving a balance
of RM57,112.00

[10]The quotation for the Sky 7-1 Machine embodied a 1 year limited warranty for manufacturing defects, whilst in
the quotation for the Sky 7-2 Machine, the warranty period is stated to be one year from the date of purchase.

[11]In October 2020, the Plaintiff made a few demands that the Defendant pay the balance sum of RM57,112.00 for
the Sky 7-2 Machine.

[12]Following a series of unfruitful correspondences between the parties, this action was filed by the Plaintiff the
balance sum of RM57,112.00 for the Sky 7-2 Machine culminating in the Counterclaim by the Defendant.
Defendant’s contentions

[13]The Defendant alleged it made many complaints to the Plaintiff regarding the problems and defects of both
Machines and had requested the Plaintiff to repair the same.

[14]The Defendant argued that it had through, among others, the Defendant’s letter dated 4.11.2020 and
30.11.2020 requested the Plaintiff to repair the said Machines before the Defendant make payment for the balance
purchase price for the Sky 7-2 Machine.

[15]In the Defendant’s letter dated 30.11.2020, the Defendant had also requested the Plaintiff to repair the
Machines within 14 days and if the defects cannot be repaired, the Defendant also demanded that the Plaintiff take
back the said Machines and return all the monies paid by the Plaintiff for the Machines. The Defendant also
reserved rights to claim for damages from the Plaintiff resulting from the Plaintiff’s breach of obligations and a list of
losses suffered by the Defendant was set out in the said letter.

[16]The Defendant’s Defence and Counterclaim alleged amongst others:

16.1 The sale and purchase of the said Machines by the Plaintiff to the Defendant is a sale by description and it is an
implied condition that: -

16.1.1 the said Machines supplied by the Plaintiff to the Defendant must correspond with the descriptions and
specifications of the said Machines as agreed between the parties;

16.1.2 the said Machines must be reasonably fit for the Defendant’s business purposes, which was within the
Plaintiff’s full knowledge at all the material times;

16.1.3 the said Machines supplied by the Plaintiff to the Defendant must have merchantable quality.

16.2 The Plaintiff has breached the aforesaid implied conditions of the sale and purchase agreement of the said Machines
and/or breached the representations made by the Defendant to the Plaintiff, as the Machines had many problems and
defects which cannot be fully repaired at all;

16.3 As a result from the breach of the implied conditions and/or the representations by the Plaintiff:
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Tien Ngai Machinery Sdn Bhd v Actan (Malaysia) Sdn Bhd [2023] MLJU 1649

16.3.1 the Defendant is entitled to terminate and/or repudiate the agreement for the sale and purchase of the
Machines;

16.3.2 as a result of the termination and/or repudiation of the agreement, the Defendant is not liable to pay the Plaintiff
for the balance purchase price of RM57,112.00 as demanded by the Plaintiff;

16.3.3 instead, the Defendant is entitled to demand the Plaintiff to take back the Machines from the Defendant and
demand that the Plaintiff return the sum of RM706,178.13, which is the purchase price paid by the Defendant to the
Plaintiff for the said Machines;

16.3.4 the Defendant is also entitled to demand that the Plaintiff to return the additional costs of RM37,000.00 which
was paid by the Defendant to the Plaintiff to repair or upgrade the Sky 7-1 Machine;

16.3.5 in addition, the Defendant is also entitled to claim for damages against the Plaintiff for all the losses suffered by
the Defendant resulting from the Plaintiff’s breach;

16.3.6 alternatively, the Defendant is entitled to set off the sum of RM57,112.00 from the Defendant’s Counterclaim
against the Plaintiff.

[17]The Defendant submitted that pursuant to s. 15 and s. 16 of the Sales of Goods Act 1957 (“SOGA”) there is an
implied condition that the Machines shall correspond with the description, and that the Machines shall be
reasonably fit for the purpose which were made known to the Plaintiff, and that the Machines shall be of
merchantable quality;

[18]The Defendant stressed that, pursuant to s. 12(2) SOGA, the breach of a condition gives rise to a right to treat
the contract as repudiated; citing s. 40 of the Contracts Act 1950 and Pacific Inter-Link Sdn Bhd v Aikbee Timbers
(Sabah) Sdn Bhd [2009] 6 MLJ 673.
The Issues

[19]As I see it, the issues can be condensed into the following:

19.1 Whether the Defendant owes the sum of RM57,112.00 to the Plaintiff?

19.2 Whether the Defendant has accepted the Machines which were delivered and if so, is only restricted to a claim for
breach of warranty, for damages if any?

19.3 If issue 2 is answered in the affirmative, whether breach of warranty has been proven?

19.4 Whether the Plaintiff is liable for damages and loss to the Defendant

Findings and decision

[20]The Plaintiff bears the legal and evidential burden to prove on a balance of probabilities of establishing its claim
against the Defendant throughout the trial whilst the Defendant bears the same burden to prove its Counterclaim. In
the case of Dr Shanmuganathan v Periasamy s/o Sithambaram Pillai [1997] 3 MLJ 61, the Federal Court held:

“Sections 101, 102, 103 and 106 of the Evidence Act 1950 deal with the burden of proof. Under s 101, it is provided that
whoever desires any court to give judgment as to any legal right or liability, dependent on the existence of facts
which he asserts, must prove that those facts exist. Under s 102 the burden of proof lies on that person who would
fail if no evidence at all were given on either side. Under s 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. Under s 106, when any fact is especially within the knowledge of any person the burden of proving
that fact is upon him.”

[21]Before delving into the issues, the delivery date of the Sky 7--2 Machine should at the outset be resolved as the
Defendant contended in evidence and submissions that it was 24.10.2019. In this regard, of significant importance
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Tien Ngai Machinery Sdn Bhd v Actan (Malaysia) Sdn Bhd [2023] MLJU 1649

to note, is that it was an agreed fact at paragraph 11 of the Statement of Agreed Facts in enc. 45 that the delivery
date is 14.5.2019. That is a judicial admission and puts paid the assertion that the date is otherwise. In Johandra
Realty Sdn Bhd & Anor v Ketua Pengarah Jabatan Pengairan dan Saliran Malaysia & Ors [2017] 10 MLJ 1, the
Court held that an admission is admissible against the party making it, and the same principle applies to a
statement of agreed facts. I am in accord with that view, otherwise the purpose of having a statement of agreed
facts will be rendered otiose. The Defendant having in fact taken a factual position which was agreed by the
Plaintiff, there cannot be any reopening of the agreed fact. It would not be just. In addition, this agreed fact was
neither withdrawn or amended before the trial commenced or during the course of the trial and still remains as an
agreed fact. Be that as it may, the fact that the Sky 7-2 Machine was purchased and kept initially at the Plaintiff’s
premises do not change the delivery date although physical delivery took place 5 months later.
Whether the Defendant owes the sum of RM57,112.00 to the Plaintiff

[22]This question is answered in the affirmative since the balance sum of RM57,112.00 owing for Sky 7-2 Machine
is not disputed. That the Defendant owed and was accountable to pay this sum was in fact tacitly admitted and
acknowledged by the Defendant in its letters dated 4.11.2020 and 30.11.2020 and in the agreed facts. The real nub
of the action lies in determining whether the Defendant is entitled to withhold payment and/or to set off the said sum
from the Defendant’s Counterclaim against the Plaintiff.
Whether the Defendant has accepted the Machines which were delivered and if so, is only restricted to a claim for
breach of warranty, for damages if any

[23]At the outset, I ought to state that I do not agree with the Defendant’s submission that it is at this late stage,
entitled to terminate the sale and purchase of the Machines and claim for a refund of monies paid as well as
damages.

[24]This court has taken note that the Defendant has used and kept the Machines for its business for a period of 2
years and 6 months for Sky 7-1 and 1 year and 7 months for Sky 7-2 from the date of their respective delivery when
the Defendant wrote the letter of 30.11.2020 requesting for the 1st time in writing that the Plaintiff take the Machines
back if the Plaintiff cannot repair the defects within 14 days.

[25]Since the Defendant has invoked s. 40 of the Contracts Act 1950, I have in mind the principle encapsulated in
Hongkong Fir Shipping Co Ltd v Kawasaki Kaisha Ltd [1962] 2 QB 26, that where it is clear that the breach if at all,
was not so great as to frustrate the entire contract, nor was the breach regarded as a condition, going to the root of
the contract which would entitle the other party at once to treat the contract as at an end, militates against the
Defendant.

[26]The right to rescind a contract by way of termination only arises when there had been a total failure of
consideration, see Berjaya Times Square Sdn Bhd v M-Concept Sdn Bhd [2010] 1 MLJ 597 where the Federal
Court speaking through Gopal Sri Ram FCJ stated:

“[17] That said, it is now settled that there is, at common law, a right to rescind a contract in very limited circumstances. In
essence it is the quasi- contractual remedy of restitution in cases where there has been a total failure of consideration.
In Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 at p 48, Viscount Simon LC said:

“...in the law relating to the formation of contract, the promise to do a thing may often be the consideration, but when
one is considering the law of failure of consideration and of the quasi-contractual right to recover money on that
ground, it is, generally speaking, not the promise which is referred to as the consideration, but the performance of the
promise. The money was paid to secure performance and, if performance fails the inducement which brought about
the payment is not fulfilled.

If this were not so, there could never be any recovery of money, for failure of consideration, by the payer of the money
in return for a promise of future performance, yet there are endless examples which show that money can be
recovered, as for a complete failure of consideration, in cases where the promise was given but could not be fulfilled...”

[18] What has to be added to the learned Lord Chancellor view is the qualification:

...that failure of consideration does not depend upon the question whether the promise has or has not received
anything under the contract ... but rather whether the promisor has performed any part of the contractual duties in
respect of which the payment is due (Stocznia Gdanska SA v Latvian Shipping Co & Ors [1998] 1 All ER 883 per Lord
Goff of Chieveley).
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In other words, when deciding whether there is in a given case total failure of consideration, the court must first
interpret the promise as a whole and next view the performance of the promise from the point of view of the party in
default. The test is not whether the innocent party received anything under the contract. The test is whether the party
in default has failed to perform his promise in its entirety. The facts of Stocznia Gdanska SA v Latvian Shipping Co &
Ors [1998] 1 All ER 883 illustrate the proposition”.

[27]In Sik Hong Photo Sdn Bhd v Ch’ ng Beng Choo (suing for and on behalf of Ng Hua’s estate, deceased) [2010]
3 MLJ 633, the Court of Appeal gave examples of the remedy of rescission:

“[29] The common law right to rescind and the quasi-contractual remedy of restitution have been applied in:

(a) Chye Fook & Anor v Teh Teng Seng Realty Sdn Bhd [1989] 1 MLJ 308; [1988] 1 LNS 213: a house purchaser
had entered into an agreement with the developer who was to complete the house within 24 months but at the
material time the developer had not constructed the building. The developer had not done any of the things it had
promised to do within the time specified in the contract. The High Court granted the equitable remedy of
rescission in favour of the purchaser.
(b) Tan Yang Loong & Anor v Newacres Sdn Bhd [1992] 1 MLJ 289; [1992] 1 CLJ 211 (HC): several purchasers
had, pursuant to an agreement to purchase a house with vacant possession with 36 months from the date of the
agreement, made payments to the developer. The developer had never constructed the house at all, and had
failed or refused to perform his promise in its entirety within the 36 months, even until the date of the trial of the
purchasers’ action. Shankar J (as he then was) followed Chye Fook & Anor, and held that there was a total failure
of consideration, and granted the purchasers’ claim for a declaration that they were no longer bound by the
agreement, with a consequential order, inter alia, for a refund of the sums paid by them.
(c) Law Ngei Ung v Tamansuri Sdn Bhd [1989] 2 CLJ 181 (HC): there was an abandonment of the project by the
developer due to the developer’s failure to complete the complex in which the purchaser had purchased a shop
lot. The High Court granted rescission by reason of total failure of consideration and directed a restitution in
integrum by way of a refund of the monies the purchaser had paid the developer”.

[28]Whether an innocent party can treat a contract as repudiated is a question of fact. In Damansara Realty Bhd v
Bungsar Hill Holdings Sdn Bhd [2011] 6 MLJ 464 at pg. 486, the Federal Court had this to say:

“[57] Whether or not an innocent party can treat the contract as having been repudiated is a question of fact. It depends on
the facts and circumstances of each case. The main consideration is whether or not there has been a total failure of
consideration. This can be derived from s40 of the Contracts Act 1950 where the words ‘his promise in its entirety’ appear.”

[29]Reverting to the instant case, having retained the Machines for such a long period of time, and used them,
without intimating to the Plaintiff that the Defendant reject the Machines, and bearing in mind too that the warranty
period of one year for both Machines have expired, I am of the respectful view that the right to reject the Machines
is lost as the Defendant is deemed to have accepted the Machines - s.42 SOGA which reads:

“42. Acceptance

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

[30]Section 13 (2) SOGA provides that if the Machines were accepted, the Defendant can only treat the breach by
Plaintiff as a breach of warranty and entitled to sue the Plaintiff for damages only. Even if there is breach of
specifications, these are treated merely as a breach of warranty and the Defendant is not entitled to repudiate the
contract of sale and cannot demand for a full refund. S. 13 SOGA reads:

“13. When condition to be treated as warranty

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Tien Ngai Machinery Sdn Bhd v Actan (Malaysia) Sdn Bhd [2023] MLJU 1649

(1) Where a contract of sale is subject to any condition to be fulfilled by the seller the buyer may waive the condition
or elect to treat the breach of the condition as a breach of warranty and not as a ground for treating the contract
as repudiated.
(2) Where a contract of sale is not severable and the buyer has accepted the goods or part thereof, or where the
contract is for specific goods of the property in which has passed to the buyer, the breach of any condition to be
fulfilled by the seller can only be treated as a breach of warranty, and not as a ground for rejecting the goods and
treating the contract as repudiated, unless there is a term of the contract express or implied to that effect.
(3) Nothing in this section shall affect the case of any condition or warranty the fulfilment of which is excused by law
by reason of impossibility or otherwise.

[31]The remedy for breach of warranty is set out in s. 59 SOGA:

“(1) Where there is a breach of warranty by the seller, or where the buyer elects or is compelled to treat any breach of a
condition on the part of the seller as a breach of warranty, the buyer is not by reason only of such breach of warranty
entitled to reject the goods; but he may –
(a) set up against the seller the breach of warranty in diminution or extinction of the price; or

(b) sue the seller for damages for breach of warranty.

(2) The fact that a buyer has set up a breach of warranty in diminution of the price does not prevent him suing for the same
breach of warranty if he has suffered further damage.”

[32]The Defendant having taken delivery and deemed to have accepted the Machines is thus compelled to treat
any breach of a condition on the part of the seller as a breach of warranty. The issue is answered in the affirmative.

[33]Here, the sale of the Sky 7-1 was long completed, and only a sum of RM57,112.00 is due for Sky 7-2 Machine.
It then becomes a question of whether the Defendant in view of the alleged breach of warranty was entitled to set-
off the said sum from its claim for breach of warranty OR

sue the Plaintiff for damages for breach of warranty which it did here by way of Counterclaim.
Whether breach of warranty has been proven?

[34]In considering the evidence, whether to accept the version of the Plaintiff or that of the Defendant, I have
reminded myself of the approach taken by the Federal Court in Tindok Besar Estates Sdn Bhd v. Tinjar Co [1979] 2
MLJ 229 1 LNS 119, to rely on the witnesses’ acts which were contemporaneous with the event and to draw
reasonable inferences from them; that judicial reception of evidence requires that the oral evidence be critically
tested against the whole of the other evidence and circumstances of the case, and that plausibility should never be
mistaken for veracity:

“For myself, I 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. Judicial
perception of the evidence requires that the oral evidence be critically tested against the whole of the other evidence and
the circumstances of the case.”

[35]As “evidence” is not confined to documents and the Court is enjoined by s. 3 of the Evidence Act 1950 to
consider oral statements by witnesses, the evaluation and assessment of the credibility (or otherwise), of the
witnesses were crucial to the present case. This Court has to consider the following factors as expounded by
various authorities:

35.1 The inherent probability or improbability of representations of fact;

35.2 The presence of independent evidence tending to corroborate or undermine any given statement of fact;

35.3 The presence of contemporaneous records;

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35.4 The demeanour of witnesses;

35.5 The frailty of the population at large in accurately recollecting and describing events in the distant past;

35.6 Whether the witness takes refuge in wild speculation or uncorroborated allegations of fabrication;

35.7 Whether the witness had a motive for misleading the court; and

35.8 Weigh up one witness against another.

[36]In assessing the facts in issue on the basis of their “inherent probability or improbability” I am also guided by the
Federal Court in Md Zainudin Bin Raujan v Public Prosecutor [2013] 3 MLJ 773:

“[33] It is trite that the inherent probability or improbability of a fact in issue must be the prime consideration in deciding
whether a witness is credible or not. It is the duty of the court to sieve the evidence and to ascertain what are the parts of
the evidence tending to incriminate the accused which he accepted. In Public Prosecutor v Dato’ Seri Anwar bin Ibrahim
(No 3) [1999] 2 MLJ 1 at p 79 Augustine Paul J (as he then was) summed up the tests for determining the credibility of a
witness as follows:

The Privy Council has stated that the real tests for either accepting or rejecting the evidence of a witness are how
consistent the story is with itself, how it stands the test of cross-examination, and how far it fits in with the rest of the
evidence and the circumstances of the case (see Bhojraj v Sitaram 1936 AIR PC 60). …It must, however, be
observed that being unshaken in cross-examination is not per se an all-sufficient acid test of credibility. The inherent
probability or improbability of a fact in issue must be the prime consideration (see Muniandy & Ors v Public Prosecutor
[1966] 1 MLJ 257). It has been held that if a witness demonstrably tells lies, his evidence must be looked upon with
suspicion and treated with caution, but to say that it should be entirely rejected would be to go too far (see Khoon
Chye Hin v Public Prosecutor [1961] MLJ 105). It has also been held that discrepancies and contradictions there will
always be in a case. In considering them, what the court has to decide is whether they are of such a nature as to
discredit the witness entirely and render the whole of his evidence worthless and untrustworthy (see De Silva v Public
Prosecutor [1964] MLJ 81). The Indian Supreme Court has pointed out that one hardly comes across a witness
whose evidence does not contain a grain of untruth or at any rate exaggerations, embroideries or embellishments (see
Ugar v State of Bihar 1965 AIR SC 277). It is useful to refer to Public Prosecutor v Datuk Haji Harun bin Haji Idris (No
2) [1977] 1 MLJ 15 where Raja Azlan Shah FJ (as His Highness then was) said at p 19:

In my opinion, discrepancies there will always be, because in the circumstances in which the events happened,
every witness does not remember the same thing and he does not remember accurately every single thing that
happened … The question is whether the existence of certain discrepancies is sufficient to destroy their
credibility. There is no rule of law that the testimony of a witness must either be believed in its entirety or
not at all. A court is fully competent, for good and cogent reasons, to accept one part of the testimony of a
witness and to reject the other.

In the absence of any contradiction, however, and in the absence of any element of inherent improbability, the
evidence of any witness, whether a police witness or not, who gives evidence on affirmation, should normally be
accepted (see Public Prosecutor v Mohamed Ali [1962] MLJ 257).”

[37]In this regard, it is to be noted here that, the contemporaneous documents show a flurry of written complaints in
writing after the Plaintiff chased for payment of the balance purchase price of RM57,112.00 in October 2020 at
which point of time, it is observed that ample time was already given by the Plaintiff to settle the outstanding sum,
and this is long after the expiry of the warranty period for both Machines. That the request in writing to take back the
Machines was made after the Plaintiff chased for payment together with the lack of registered complaints must be
thrown into the balance when considering the inherent probabilities of the case.

[38]The evidence shows the Defendant knew that the Sky 7-1 Machine was the first machine of its kind built by the
Plaintiff. The Plaintiff do not agree that the extent of defects is substantial, and that fundamental specifications
agreed were not met.
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[39]I find that the complaints that the Machines had defects, of unmerchantability and not fit for their purpose have
not been established by the Defendant. The Defendant sought to rely on the minutes of the 30.5.2018 meeting and
letters of November 2020. However there is nothing in between these dates to show further complaints. DW1, the
Defendant’s director admitted in cross-examination when he was referred to the November 2020 letters, that official
complaint in writing was made only in November 2020; to which special attention must be made, that it was after
the Plaintiff chased for the balance payment:

“VK Mr Tan, you have mentioned that you have had problems with Sky- 1, 24 since the beginning, which is June 2018 or
May 2018, and Sky- 2, starting October 2019 until today. That is your statement. But this is the first letter that you have sent
out to the Plaintiff, to demand for fix it or change or like, whatever demand. This is the first letter?

TAN Officially. Yes, officially.

VK Ok. Thank you. Mr Tan, I put it to you that the reason this is the first letter of demand you have given out, is because
before this there was no issues with the Plaintiff’s machines.

TAN Disagree.”

[40]Thus it is reasonable to infer that, as and when there is a problem, the Plaintiff would have attended to it and
resolved it and that the problems were not serious. This inference is made against the backdrop that DW2 had
testified in cross examination that the Machines were used every day.

“VK: Ok, when did you take this photo, Mr Ng?

NG: At the point of time when the error occurred and because the error occurred many times and always occur, that’s why I
cannot remember the exact date.

VK: Ok. The problem occurred once or twice a month, right, Mr Ng? NG: Yes.

VK: Do you use the machine once or twice a month or more times?

NG: We are using it nearly on average every day”

[41]The inference can also be supported by DW1’s evidence in cross-examination on the gap on no complaints in
the Chronology of Events (“Chronology”) pertaining Sky 7-1:

VK: Ok. So thank you, Mr Tan. This call log, I mean this chronology over here, you can confirm with me, you can confirm
that this chronology stops at, chronology for Sky-1 stops on July 2018 and then only continues in February 2020. Correct?

TAN: Yes.

VK: So I put it to you that based on your record there is no details of a chronology of what happened from July 2018 until
January 2020 24 during this period.

TAN: Yes.

[42]DW1’s evidence in re-examination stated that “I wish to apologise again here because maybe my employee
failed again to express and list down the problems here in the chronology.” is flimsy and untenable because the
Machines are expensive Machines. It safely draws only one inference that it is inherently probable that, after the
Defendant was chased for payment, the written complaints including the Chronology which surfaced in November
2020 were fanciful and contrived, rather than real.

[43]Testing the Defendant’s witnesses’ evidence against the totality of the contemporaneous documents and
looking at the surrounding circumstances and the conduct of the parties towards each other, support the conclusion
that there can be no doubt that breach if any is minor and not so serious as to affect the Machines’ functionality,
could be fixed and not rendered useless for any purpose for which they are normally used.
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[44]This court also finds it unfathomable as to why if indeed the Machines had the problems as asserted by the
Defendant, there was no request to extend the warranty period nor was there any rejection of the Machines during
the warranty period. It would have been common sense to do so, whichever way one slices it.

[45]In sum, there was insufficient contemporaneous evidence to back up the complaints. DW1 has no personal
knowledge of the problems with the Machines:

“VK I screen sharing for the benefit. So, this is Question & Answer 16. Just to recap the issues that I mentioned earlier, but
this is for both Sky-1 and Sky-2 together. So Mr Tan, because you did not operate the machines directly, whatever problem
and defects that is in Answer 16, is informed to you by your staff. Correct?

TAN Yes.”

[46]DW2’s evidence does not assist the Defendant’s case; he claimed to have prepared the Chronology but the
following evidence is illuminating:

“VK Yes, how long did these two staff William and Ratna operate this machine after it arrived?

NG I am printing supervisor, so, I am basically only overseeing. So, the handling and the operation of the machines were
handled by them ever since it was delivered by the Plaintiff. So, after they went back, the machines were passed to me to
fully handle thereafter.

VK So, you only handled the machine after they left. Is it around February 2020? Is that correct?

NG Yes. At that point of time, I was just merely assisting, I didn’t really focus into the machine.

VK Ok, sorry. So, in February 2020, the witness only assisted but did not what?

NG I was just merely assisting and didn’t really focus into the machines.

…………..

VK After the problems happened. Ok. Mr Ng, I put it to you that you couldn’t have filled all the information before February
2020 because you did not handle the machine. So, whatever that is before February 17 2020 which is from pages 42
backwards is not filled by you, because you didn’t handle this machine. Correct?

NG Agree. So, when things happened, I merely go and see because my English is not that good. So, that time, I went to my
company’s colleagues to understand the problems and to jot down records.

VK Ok. So, does that mean whatever that is before February 2020, the way you prepared it is by asking your colleagues
what is the problem and then, you put it on this document. Is that correct?

NG Yes.

[47]It is patently obvious that DW1 and DW2’s evidence on the Machines’ defects remain hearsay evidence and
inadmissible. Further, it cannot be disputed that DW2 is not familiar with English. In fact, when he needed to amend
his witness statement, he said he cannot write English (pg. 54 NOE Enc. 70). The burning question then arises as
to how he could have prepared the Chronology? And I can be forgiven for thinking his evidence sounds very
contrived when he used big words like “fundamental” as appearing in his witness statement Q&A 15:

“These are the fundamental design flaws and defects of the Sky 7-1 and Sky 7-2 Machines from the beginning until todate.”

[48]Although DW3 prepared the Chronology regarding the Sky 7-2 Machine, he did not have first hand knowledge
of the said Machine; his role as he puts it is to liaise with the Plaintiff on problems. His role in how own words “is to
basically inform them about the problems which occur again after they fix. So, anything regarding to the machine
specifically, yes you need to ask Mr Ng but I’m the one who have prepared this report.”. He also claimed that the
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Machines were not used after September 2020 which contradicts DW2’s evidence that the Machines are in use
daily as alluded to in paragraph 40 earlier.

[49]Added to that, it was unfortunate that William and Ratna who operated the Machines were not called as
witnesses, which directly undermines the Defendant’s case. Topping this up with DW2’s evidence that the
Machines were used daily, blew holes into the Defendant’s alleged complaints.

[50]For good measure, DW4 was specifically engaged by the Defendant to give his opinion on the condition of the
Machines. With respect, I find the so called expert evidence of DW4 was of no help. He was never involved in the
printing industry, nor has he operated any SKY 7 series machines. With utmost respect, I am not satisfied that he
possessed the necessary skills within the requirements as set out in Yoong Sze Fatt v Pengkalen Securities Sdn
Bhd [2010] 1 MLJ 85 and Public Prosecutor v Muhamed bin Sulaiman [1982] 2 MLJ 320 at p 332 [1982] CLJ 292
(Rep) [1982] CLJ 540. DW4 inspected the Machines in July 2022 which is 4 years after the Sky 7-1 Machine was
purchased and used, and 3 years after Sky 7-2 Machine was purchased and used. In fact, he candidly admitted in
cross-examination that his report will not be able to ascertain when the problem started for the Machines. His report
concerns the status of Sky 7-1 and Sky 7-2 as of the date of inspection on July 2022. Bearing in mind it is the
Defendant’s case here that the Machines were unuseable/unmerchantable from the beginning, I am deeply
skeptical of his evidence and do not find his evidence helpful at all. The court is in no better position than it was
before hearing him. As a result, I have no hesitation to reject his evidence as he does not qualify as an expert in
printing or slit and rewind paper roll machines or Sky 7 Machines. I do not consider there is any reliable basis in his
evidence nor any weight should be accorded to his report. These parts of his evidence is telling:

“VK Alright. Ok Dr Danny how long have you been involved in the printing industry?

DANNY For me myself I’m not in the printing industry. So, my background is actually on teaching on mechatronics and also
running consultancy projects for automation and printing machines.

VK I see. So, does that mean that using of this Sky 7 printing machines is the first time you’ve encountered printing
machine. Is that fair to say?

DANNY For printing machine, yes. However, in terms of like the parts and the automation devices used within the machine
I’m familiar with that.

VK Ok. Have you sighted any other Sky 7 machines besides the two machines at the Defendant’s premise?

DANNY No

…..

VK Ok. So, is it fair for to me say that you are not familiar with what an optimum functioning Sky 7 machine would look like?

DANNY Yes.

VK Dr Danny, your inspection of both machines were done in July 2022. Is that correct?

DANNY Yes

…..

VK Ok. Are you aware that the date that conducted your inspection is approximately four years after Sky 7-1 was
purchased and used and three years after Sky 7-2 was purchased and used. Are you familiar with the facts?

DANNY Yes.

VK So, I put it to you that the findings in your affidavit or in your report only revealed the status of Sky 7-1 and Sky 7-2 as of
the inspection on July 2022 only.

DANNY Yes
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Tien Ngai Machinery Sdn Bhd v Actan (Malaysia) Sdn Bhd [2023] MLJU 1649

………

VK Correct. Now I put it to you that your report would not be able to 1provide any insight on the functionality of both
machines at the time of purchase. Is that correct?

DANNY If you put it at the time of purchase, yes. Because I did the inspection last year which was after the purchase. Not
at the time.

VK Correct. So, that means you agree with me that it is only as of that date and not at the time of purchase, right.

DANNY Yes

VK So, I also put it to you that because this is the case, your report unfortunately won’t be able to ascertain when did
whatever problems the Defendant have raised started materializing. Correct?

DANNY Please explain a bit more.

VK I rephrase it. Ok sure. So, given your answer previously I put it to you that your report won’t be able to ascertain when
the problem started for the machines.

DANNY Yes. Because I can only see it what’s the problem at the point when I’m at site.”

[51]In sum, after hearing and observing the Defendant’s witnesses, I find their evidence to be self-serving. In
deciding this action, I state for the record that I accept the Plaintiff’s evidence given through PW1. His evidence will
have to prevail over the Defendants’ witnesses’ evidence which I assign less probative value particularly when they
have no personal knowledge of the functionality of the Machines, see Bulyah binti Ishak & Anor v Ambank (M) Bhd
and another appeal [2017] MLJU 1531 CA:

“[31] As SD1 has no personal knowledge pertaining to the facts surrounding the sale and purchase of the Property and / or
the execution of Exhibit P2 and P3, having come to the scene many years after Exhibits P1, P2 and P3 were executed and
had no documents with him, he would not be in the position to offer evidence to the contrary to disprove the Plaintiffs’
case.”

[52]I found the evidence of the Plaintiff’s only witness accord with the inherent probabilities that the Defendant was
satisfied with the Sky 7-1 Machine and then proceeded to buy the Sky 7-2 Machine, and at the same time, paid to
upgrade the Sky 7-1 Machine. I accept his evidence. The purchase of the Sky 7-2 Machine goes to show there was
no loss of confidence in the Plaintiff.

[53]The Defendant relied on Yeo Seng (t/a Yeo Seng Design) & Anor v Cas Systems (M) Sdn Bhd [2019] MLJU
147 which I find distinguishable. In that case, the problems with the cutting Machine delivered on 13 August 2016
were immediate and were catalogued - PW3 testified that until 9 November 2016 i.e. 3 months later, the problems
relating to the Cutting Machine were not solved and by December 2016 had rejected the machines. In the instant
case, the Defendant even assuming IF it had legitimate grievances, sat on the matter for a very long time by any
reasonable standard - 2 years and 6 months for Sky 7-1 and 1 year and 7 months for Sky 7-2 from the date of their
respective delivery before asking the Plaintiff to take back the Machines. Assuming non-compliance with the
specifications tantamount to a breach of implied condition under s. 16 (1) (b) SOGA which entitled the Defendants
to rescind the contract, the Defendant did nothing of the sort. The Defendant did not reject the Machines within a
reasonable time.

[54]The Defendant also relied on the case of Puncak Niaga (M) Sdn Bhd v NZ Wheels Sdn Bhd [2012] 1 MLJ 27
where the Court of Appeal has allowed the plaintiff to reject a Benz car after almost about 1 year of driving it as the
Benz car could not start on 7 occasions. With respect, I do not find that case helpful here as (i) s. 42 SOGA was not
brought to the court’s attention; (ii) second, the car not being able to start was found to be a fundamental problem;
and (iii) the Defendant here did not reject the Machines for a very much longer period than one year.

[55]Whilst Pacific Inter-Link Sdn Bhd v Aikbee Timbers (Sabah) Sdn Bhd [2009] 6 MLJ 673 says partial failure of
performance may entitle the contract to be discharged “the failure must occur in a matter which goes to the root of
the contract”. The case is also distinguishable as the plaintiff there had not even inspected the goods, nor accepted
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the goods – property had not passed. In the present case, the breach (if any) did not go to the root of the contract
and the Machines were used daily.

[56]The point to be stressed is, as the Machines were in use, they are not unmerchantable. The Defendant’s
remedy if any, is under s. 59 SOGA and is not entitled to rescission.

[57]The following passages in Berjaya Times Square Sdn Bhd explains when rescission may avail:

“[20] Absent a total failure of consideration, the common law right to rescind does not exist. Goff & Jones The Law of
Restitution (6th Ed) which is the leading text on the subject has this to say at p 502, para 20-007:

A breach of contract may be so fundamental that it deprives the ‘party who has further undertakings still to perform of
substantially the whole benefit which it was the intention of the parties as expressed in the contract that he should
obtain as the consideration for performing those undertakings (Hong Kong Fir Shipping Co Ltd v Kawasaki Kaisen
Kaisha Ltd [1962] 2 QB 26). The innocent party has then an election. He may affirm the contract or he may bring it to
an end. In the latter event, if he has paid money to the defendant under the contract, he can, as an alternative to
claiming damages, sue for recovery of the money provided that the consideration for the payment has wholly failed if
the consideration has partially failed, his only action is for damages. (Emphasis added)

In other words, where there has been a total failure of consideration, the innocent party has the alternative remedy of suing
to recover monies paid under the contract to the guilty party. But he can under no circumstances have his money returned
and claim damages. And if the consideration has only partially failed, he may only claim damages. What is important is that
this limited common law right to rescind should never be equated with the equitable remedy of rescission earlier discussed.
I may add for completeness that in this country the equitable remedy of rescission has received statutory force. See ss 34 –
37 of the Specific Relief Act 1950.

…..

[24] It is my considered judgment that the position is no different in Malaysia. Section 40 of the Act is a restatement of the
English common law position. It provides as follows:

When a party to a contract has refused to perform, or disabled himself from performing, his promise in its entirety, the
promisee may put an end to the contract, unless he has signified, by words or conduct, his acquiescence in its
continuance.

Special attention should be paid to the phrase ‘his promise in its entirety’. Under the section the right in a non-defaulter
to repudiate a contract only accrues when the defaulter has refused to perform or has disabled himself or herself from
performing the whole of his promise. If there is part performance by the defaulting party, the innocent party may not
put an end to the contract.

[36] The last authority relied upon by the respondent is Law Ngei Ung & Anor v Tamansuri Sdn Bhd [1989] 2 CLJ 181
where rescission was granted by the High Court for failure on the part of the defendant to complete the business complex in
which the plaintiff had purchased a unit shop lot. That case, however, is supportable on the ground that there had been an
abandonment of the entire project because of a dispute between the defendant and its contractor. It is a plain and obvious
case of a total failure of consideration. Had the High Court stopped with directing a restitutio in integrum, there can be no
complaint. It however went on to direct the assessment of damages. That on the authorities is clearly unsupportable. The
plaintiff in a case of total failure of consideration may have a refund of the monies he or she may have paid the defendant.
In the alternative, he or she may claim damages. But what the plaintiff cannot do is to have both rescission and damages.
For, that results in the plaintiff being unjustly enriched.”

Whether the Plaintiff is liable for damages and loss to the Defendant?

[58]Even if I was wrong to find that defects or breach of warranty were not proven, I am nevertheless of the view
that the Defendant has failed to prove actual loss, causation and remoteness.

[59]The trial was not bifurcated in that the court was to decide on liability first then assessment of damages will be
decided after liability is determined. The burden is on the Defendant to prove the fact and quantum of its losses. In
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this regard, the principles that emerge from the Court of Appeal’s decision in Sony Electronics (M) Sdn Bhd v Direct
Interest Sdn Bhd [2007] 2 MLJ 229 on proving loss or damages are instructive:
(i) the Plaintiff must produce all necessary supporting documents. In Sony’s case the plaintiff failed to produce
the documents to support the audited statements of account. This proved to be fatal;
(ii) the Plaintiff must lead evidence on the computation or breakdown of the loss. The plaintiff failed to do so in
Sony;
(iii) the causal connection must also be shown. In Sony’s case, the plaintiff failed to prove the contents of the
reduction in the volume of services and how this related to the alleged breach of the agreement;
(iv) a summary of particulars or sheet of calculations or summary of accounts do not prove the contents. They
are nothing more than conclusions. They must be proven by calling the maker to explain the facts and
basis of calculation. In addition, the books to support the calculation must be in evidence.

[60]Sony’s case was cited in another Court of Appeal case of Bekalan Sains P & C Sdn Bhd v Bank Bumiputra
Malaysia Bhd [2011] 5 MLJ 1. In Bekalan Sains, the Court of Appeal dismissed the appellant’s appeal for, among
other things, these reasons:
(i) failure to provide precise evidence on damages;
(ii) failure to lead evidence of actual loss;
(iii) no substantiation of figures;
(iv) “plucking figures out of the air”;
(v) self-serving statements by the appellant’s own officers without calling independent witnesses;
(vi) claims for losses not suffered by the appellant for charged lands. The charged lands did not belong to the
appellant. It belonged to PW2 but the appellant was claiming damages for the sale of the charged land;
(vii) appellant’s failure to mitigate its loss.

[61]The Court of Appeal in Bekalan Sains held:

“[189] The person who is claiming damages must prove his case. Thus, the claimant in order to justify an award of
substantial damages he must satisfy the court as to the fact of damage and as to its quantum (Senate Electrical
Wholesalers Ltd v Alcatel Submarine Networks Ltd (Formerly STC Submarine Systems Ltd) [1999] 2 Lloyd&#x2019s Law
Reports 423 (CA)).If the claimant fails to satisfy the court on the fact of damage and quantum, then his action must fail or
at the very least he would be awarded nominal damages where his right has been infringed.

[190] Put in another way, the claimant must show actual loss and evidence must be led in that direction. It is submitted that
the appellant has failed to prove damages with precise evidence (Sony Electronics (M) Sdn Bhd v Direct Interest Sdn Bhd
[2007] 2 MLJ 229; ; [2007] 1 CLJ 611, (CA); and Ban Chuan Trading Co Sdn Bhd & Ors v Ng Bak Guan [2004] 1 MLJ 411;
[2003] 4 CLJ 785, (CA)) and that the appellant has also failed to lead evidence to show actual loss.”

[62]The Defendant must show a causal connection between the Plaintiff’s breach and loss. Causation was stressed
in Popular Industries Limited v Eastern Garment Manufacturing Sdn Bhd [1989] 3 MLJ 360:

“A word now about general principles. When a plaintiff claims damages from a defendant, he has to show that the loss in
respect of which he claims damages was caused by the defendant’s wrong, and also that the damages are not too remote
to be recoverable.”

[63]Here, not an iota of evidence was adduced to support the Defendant’s claim for damages. In this regard, it is
appropriate to refer to Popular Industries Ltd where Edgar Joseph Jr J (as he then was) said at p 369:

“In all the circumstances, reason and justice point to the inevitable conclusion that although the plaintiffs had shown the fact
of damage, no evidence or no sufficient evidence has been adduced as to its amount with the perhaps unfortunate result
that it is virtually impossible to assess damages (see Dixon v Deveridge (1825) 2 C & P 109 172 ER 50 and Twyman v
Knowles 138 ER 1183).
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Tien Ngai Machinery Sdn Bhd v Actan (Malaysia) Sdn Bhd [2023] MLJU 1649

In this context, I am reminded of Lord Goddard’s dictum in Bonham-Carter v Hyde Part Hotel (1948) 64 TLR 177 at p 178
quoted with approval by Thomson CJ in Lee Sau Kong v Leow Cheng Chiang [1961] MLJ 17, namely, that:

‘Plaintiffs must understand that if they bring actions for damages it is for them to prove their damage; it is not enough
to write down the particulars, and so to speak, throw them at the head of the court, saying, “This is what I have lost, I
ask you to give me these damages”. They have to prove it.’

[64]In the circumstances, I find the Plaintiff has proven its claim on a balance of probabilities. Judgment is entered
for the Plaintiff as claimed in prayer a, b, c with costs subject to allocator.

[65]In my judgment, the Defendant has failed to discharge its burden of proof’ under ss 101 and 102 of the
Evidence Act on the Counterclaim on a balance of probabilities, and as such is not entitled to the relief sought. I
therefore dismissed the Defendant’s Counterclaim.

End of Document