1. law, govt and politics

DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR
DALAM WILAYAH PERSEKUTUAN, MALAYSIA
GUAMAN NO: 27NCC-63-10/2014
ANTARA
…
DYNA SEGMEN SDN. BHD
(No. Syarikat:
665073 –A)
PLAINTIF
DAN
SANDAKAN OFFSHORE (M) SDN BHD
…
DEFENDAN
(sebelum ini dikenali sebagai Gryphon Energy (M) Sdn Bhd)
(No. Syarikat: 833359 –M)
Grounds of Decision
Azizah Nawawi. J:
Application
[1]
This is an application filed by the Plaintiff against the Defendant
under Order 14 Rules of Court 2012 for summary judgment to be
entered against the Defendant in the sum of USD1,181,000.00 and
RM150,415.48 respectively, with interests and costs.
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[2]
After hearing the submission of the parties, the Plaintiff’s application
was allowed in part, that is, summary judgment was entered against
the Defendant for the sum of USD1,181,000.00 (only) with costs
and interest.
Salient Facts
[3]
From the submission of the parties, the facts disclosed that the
Defendant had entered into an agreement with PETRONAS for the
leasing, operation and maintenance of a Mobile Offshore Operating
Unit (‘MOPU’) and other related facilities for the Bekok C platform
restoration project and the subsequent demobilization of the MOPU
(the ‘Works’). The MOPU was used to extract gas from Bekok C.
For this purpose, the Defendant had entered into a lease
agreement, a bareboat charter, with Garuda Energy (L) Inc
(‘Garuda’) for the MOPU, the “RUBICONE” with the Defendant as
the charterer.
[4]
The operation and maintenance portion of the Works (‘O&M Works’)
for the MOPU was subcontracted by the Defendant to the Plaintiff
and to expedite the commencement of this O&M Works, the parties
executed a letter of appointment dated 5-7-2011 (the ‘Letter of
Appointment’).
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[5]
The Plaintiff and the Defendant continued negotiations to finalise
the terms of the agreement between the parties for the performance
of the O&M Works for the MOPU as the Letter of Appointment did
not contain any terms for payment or the scope of the O&M Works.
[6]
The Plaintiff and Defendant did not execute a formal Agreement for
the provision of the O&M Works for the MOPU as the Defendant
had not executed a formal agreement with PETRONAS.
[7]
However, the Plaintiff states in paragraph 10 and 11 of the affidavit
affirmed by Faiz Hussin bin Hussin on 16.10.2014 that a set of
agreed terms for the scope of O&M Works and the payment clause
had been agreed by the parties by this time, as per exhibit “A-5”.
In paragraph 9 of Defendant’s affidavit affirmed by Nagendran C
Nadarajah on 17.12.2014, the Defendant disputes the same, but
alternatively states that the scope of work of the Plaintiff is
contained in Exhibit “A-5”.
[8]
In any event, it is common ground that the Defendant did not
dispute nor challenge the Plaintiff’s scope of O&M Works and its
performance of the same over a period of approximately two (2)
years as the Defendant had paid for the Plaintiff’s invoices between
August 2011 to October 2013.
Added to that, the Plaintiff has
provided its maintenance and outstanding reports to the Defendant
on a monthly basis and the Defendant did not challenge the same.
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[9]
The Plaintiff claims that Defendant had wrongfully and in breach of
the express and/or implied terms of their agreement with the Plaintiff
for the provision of O&M Works, defaulted in its full or part payment
of the invoices issued to the Defendant for works done in the
months of July and September 2013. Hence, the Plaintiff sued the
Defendant for the sum of USD1,181,000.00 and RM150,415.48
premised on the invoices issued to the Defendant.
[10]
The Works was carried out, and at the end of the PETRONAS
Contract, the Rubicone was to be demobilized from Bekok-C. The
Defendant claims that the Rubicone suffered hull leaks and
hydraulic system malfunction which causes the Defendant to suffer
losses due to delay and repair in the sum of USD338,055.00. The
Defendant claims that since it has contracted the Plaintiff to operate
and maintain the Rubicone, then the Plaintiff is liable to indemnify
the Defendant for any loss or liability to Garuda in respect of the
Rubicone. The Defendant then counterclaim the Plaintiff for the sum
of USD2,000,000.00 as general damages.
The Findings of the Court
[11]
Having considered the submission of the parties and the evidence
before this Court, I agree with the Plaintiff that the Defendant had
admitted to the debt due and owing to the Plaintiff premised on the
following facts:
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(i)
the Defendant did not dispute nor contested the scope of the
Plaintiff’s O&M Works when the same was performed by the
Plaintiff for the Defendant for a period of approximately 2
years;
(ii)
the Defendant did not dispute nor contested the issuance of
invoices to it for the Plaintiff’s O&M Works;
(iii)
the Defendant acknowledged that payment of the outstanding
amounts would be made to the Plaintiff once they have
received payment from PETRONAS in full;
(iv)
that the Defendant has submitted a statement of account to
show the sum owing to the Plaintiff in the sum of
USD1,281,000.00 on 4.12.2013; and
(v)
the Defendant had made part payment of the sum of
USD100,000.00 on or around 30.12.2013 towards the
satisfaction of the sums due and owing to the Plaintiff.
[12]
When the invoices were issued to the Defendant, the Defendant did
not respond to the invoices. After repeated requests for payments,
the Defendant admitted to financial difficulties and that payment is
forthcoming once they receive full payment from Petronas. In an
email dated 4.12.2013, the Defendant admitted that they owe the
Plaintiff the sum of USD1,281,000.00, the sum derived from their
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account books. The said email dated 4.12.2013, from the Defendant
to the Plaintiff reads as follows:
“From: Ravi Pillai
Sent:
Wednesday, 4 December 2013 6:05pm
To:
Azhar Mahathir
Subject:
Payment to Dyna Segment
Dear Azhar,
We are very badly awaiting for final payment from Petronas for
the decom and demob fees. We hope to receive the payment by
end of December 2013 at the latest.
Unfortunately, we will not be able to do anything until this payment
is received. In the meantime, please see below the amount due
to D5 as per our books. Please let me know if you have any
comments.
Oct’ 12 O&M
Nov’ 12 O&M
Dec’ 12 O&M
October’12
O&M
Spares
over
deducted by
Dyna
Segmaen now
billed back
Sub-total
July’ 13 O&M
Sept’ 13 O&M
Sub-total
Retention
Net due to
Dyna Segmen
42,000
30,000
31,000
31,000
61,000
195,000
372,000
348,000
915,000
366,000
1,281,000
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[13]
In reply to the above email from the Defendant, the Plaintiff writes
as follows in an email dated 5.12.2013:
“Dear Mr. Ravi,
Glad to inform you that I got no comment in the figure you just
presented as it is the same in our books too.
As agreed earlier that Gryphon would want to pay Dyna a certain
amount of USD upfront.
I really hope that if possible that Gryphon could pay some of the
debt first next week as promise earlier.....”
[14]
Subsequently, the Defendant made payment of USD100,000.00 on
30.12.2013, leaving the balance of USD1,181,000.00, the amount
which the Plaintiff now claims against the Defendant.
[15]
From the email dated 4.12.2013, the sum due to the Plaintiff in the
Defendant’s financial books stand at USD1,281,000.00. I find that
the said email is an admission by the Defendant of the sum owing to
the Plaintiff. This is supported by the decision of the Court of Appeal
in Sgagajuta (Sabah) Sdn Bhd v Trane Malaysia Sales and
Services Sdn Bhd [2013] 1 LNS 1425, where the Court of Appeal
agreed with the decision of the trial judgment that there is no triable
issue and dismissed the appeal against the order for summary
judgment as there was a clear admission of the debt premised on
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an audit certification request to confirm the sum owing in the
financial books. In paragraph (19) and (20) of the Judgment, the
court held as follows:
“19. The learned judge also relied on the audit
certification request dated 21 June 2010 made by the
Appellant’s group accountant. Paragraph 1of the said
audit certification reads: “Our auditors are now engaged
in an examination of our financial statements. In this
connection, they wish to confirm the balance due
from your account as 31 December 2010, which was
shown in our record as RM3,887,555.12.
20.
In short, the significance of the audit certification
request can be seen from the statement contained
therein. If specifically states that in the Appellant’s
financial book, the amount due to the Respondents is
RM3,887,555.12. This is a clear admission of debt
based on the amount stated as at the date 31
December 2010. An audit confirmation request is an
important step in an audit of a company financial account.
It is a way of ensuring that the amount as appears in the
company’s book is correct and the only manner to confirm
this amount is by way of confirmation by the creditor
concerned.” (emphasis added)
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[16]
On the issue raised by the Defendant that there is triable issue on
the exact terms of the contract as there was no formal contract
signed by both parties, I find that Exhbit “A – 5” shows the terms
that are binding on the parties and the contract has since been
executed and completed on those terms over the two years. On the
issue of the crane system, the hull and the hydraulic system, the
same is the subject matter of the counterclaim.
[17]
On the issue of the O&M daily charter rate of USD12,000.00, the
Defendant has failed to complain and/or dispute the same over the
two years. If they fail to complain then they cannot simply raise the
issue now to avoid paying for the services rendered. In David
Wong Hon Leong v Noorazman bin Adnan [1995] 4 CLJ 155, the
Court said as follows at page 159:
“During argument we registered our surprise at the
learned judge’s reluctance to enter judgment for this sum
of RM100,000. After all, the appellant has failed to
respond to the letter of 17 December 1991. If there had
never been an agreement as alleged, it is reasonable to
expect a prompt and vigorous denial. But, as we pointed
out, there was no response whatsoever from the
appellant.”
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[18]
Therefore, premised on the admission by the Defendant, application
for summary judgment is allowed in the admitted sum of
USD1,181,000.00 only, with interest at 5% from 4.12.2013 and cost
of RM4,000.00.
(AZIZAH HAJI NAWAWI)
JUDGE
HIGH COURT MALAYA
(Commercial Division)
Kuala Lumpur
Dated: 11 May 2015
For the Plaintiff
: Nimisha Jaya Gobi
Messrs Wong & Partners
Kuala Lumpur.
For the Defendant
: Jeremy Khalif
Messrs Khalif Lee
Putrajaya.
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