- 原告借了300万令吉给被告(friendly loan)。由于被告还欠下250万令吉，原告发出律师信，要求后者在14天内还清欠款。由于一直没有收到回复，原告因此提起诉讼。高等法庭批准了原告的申请。被告提出上诉。
- 法庭表示，身为一名商人，如果被告认为律师信中的内容不属实，他就必须回复；而并非选着视而不见。Courts have taken notice that, in the ordinary course of business, if one man of business states in a letter to another that he has agreed to do certain things, the person who receives that letter must answer it if he means to dispute the fact that he did so agree. PECD Construction Sdn Bhd v Freehold Point Sdn Bhd  MLJU 127
- 由于被告收到律师信后却选择不理会，这对他的辩护非常不利。 The non-response to the latter documents is fatal to the defendant. Being a person of business, the defendant could not have been unaware of the grave implications to himself by not responding to and repudiating the contents of both the letters.“
- 这是因为被告没有回复律师信的举动，表示他已经默认有关律师信的内容是属实的… failure to respond to the plaintiff’s letter and the solicitor’s letter of demand seals the fate of the defendants the non-response was deemed an admission. Mohd Zin bin Omar & Anor v Jentayu Padu Sdn Bhd  MLJU 407;  1 LNS 403, CA (refd)
- This was an appeal by the appellant (‘defendant’) against the decision of the judicial commissioner (‘JC’) dated 3 December 2019 dismissing the defendant’s application (encl 40) to set aside the judgment/order of the High Court dated 12 July 2019 given under O 14 of the Rules of Court 2012 (‘the ROC 2012’).
- The plaintiff and defendant were well known to each other and had had previous business dealings with each other. The plaintiff’s claimed against the defendant for recovery of a sum of RM2.5m being the balance of a friendly loan which was given by the plaintiff to the defendant and entered summary judgment on which the JC granted order in terms for the said application on 12 July 2019.
- The defendant applied to set aside the judgment/order via encl 40 on the basis that the judgment/order was a nullity, that the judgment/order was procured through concealment of facts by the plaintiff, that there were elements of equitable fraud, the plaintiff had no cause of action, the plaintiff lacked the requisite locus standi and finally, that the defendant had discovered details of the transactions which were alluded to by the plaintiff in the pleadings and affidavits and which apparently gave a clear picture of the true nature of these transactions.
- The JC then dismissed the encl 40. Hence, the issues appealed before before this court were:
(a) whether summary judgment order can be set aside by means of O 42 r 13 of the ROC 2012;
(b) whether the non response of letter of demand would be fatal to defendant; and
(c) whether the court in summary judgment order was functus officio. Hence the present appeal.
Held, dismissing the appeal with cost of RM10,000:
- Order 42 r 13 of the ROC was only applicable in respect to the provisions under the ROC which specifically provide for a setting aside or varying any order or judgment in a situation provided under O 13 r 8 of the ROC (setting aside judgment in default of appearance to a writ) (see para 29).
- The judgment/order dated 12 July 2019 was an not a default or consent judgment but rather it was an order/judgment that was obtained on merits after the court had considered all the cause papers.
- The High Court’s interpretation as to the purpose, scope and ambit of O 42 r 13 of the ROC 2012 was correct and the law in this regard had been accurately and lucidly stated. The court was of the view that the defendant’s application to set aside the judgment/order dated 12 July 2019 pursuant to O42 r 13 of the ROC 2012 was fundamentally flawed. Order 42 r 13 of the ROC 2012 did not apply to an inter partes order which was made pursuant to an application which had been heard on merits. As such, O 42 r 13 of the ROC 2012 was not an avenue for an unsuccessful party to seek a ‘review’ of the adverse decision.
- The court concluded that having made the judgment/order on 12 July 2019, the High Court was functus officio and had no jurisdiction to consider encl 40 as it was not predicated on the exceptions which were stated by the Federal Court in Badiaddin Mohd Mahidin & Anor v Arab Malaysian Finance Bhd  1 MLJ 393. The matter was in fact barred by res judicata.
- The defendant had admitted via his defence dated 12 March 2019 and in his affidavit affirmed on 23 May 2019 in opposition to the summary judgment application, that he had indeed borrowed RM3m from the plaintiff and that the loan had been fully paid by way of cash and tranfer of shares in a public listed company. Thus, the defendant’s suggestion that the borrower was Cekal Teguh and lender was Tekad Mulia was inherently improbable, was an afterthought and was in stark contrast to the contemporaneous documents and contradicts the defendant’s earlier stance per his defence and affidavit.
- The defendant’s failure to respond to the plaintiff’s letter and the solicitor’s letter of demand seals the fate of the defendant as the non-response was deemed an admission.
- The appeal was therefore devoid of merits.
- Next, we note that the defendant did not respond to the plaintiff’s letter dated 19 October 2018 and to the solicitor’s letter of demand dated 4 December 2018. The non-response to the latter documents is fatal to the defendant. Being a person of business, the defendant could not have been unaware of the grave implications to himself by not responding to and repudiating the contents of both the letters.
- In this regard, it becomes relevant and necessary to refer to the Court of Appeal’s decision in Mohd Zin bin Omar & Anor v Jentayu Padu Sdn Bhd  MLJU 407, CA:
“ We had during the course of submissions by the Plaintiff, had our attention drawn to the Letter of Demand sent by the Plaintiff in this case (see Common Core Bundle pg. 208). There was no response from the Defendants. In our view that would have presented the Defendants the best opportunity to present the version of the Defendants but it was not done.
- We refer to the Court of Appeal decision of Small Medium Enterprise Development Bank Malaysia (formerly known as Bank Perusahaan Kecil dan Sederhana Malaysia Bhd) v Lim Woon Katt  5 MLJ 220 where His Lordship Hamid Sultan JCA held:
(a) in the instant case, it was not in dispute that the respondent did not respond to the demand notice of the plaintiff and the defence alleging that he was not liable was only raised in the statement of defence. Evidently, failing to respond to the plaintiff’s letter of demand, that too when the defence case was related to forgery, as well as the fact that the respondent did not lodge a police report upon receiving the demand, weakened the probative force of the defence case. In Wong Hon Leong David v Noorazman bin Adnan  3 MLJ 283, the Court of Appeal went to the extreme end to say that failure to respond on the facts of the case should lead to entering of judgment. Justice Gopal Sri Ram JCA at p 159 had this to say:
“On December 17, 1991, the respondent wrote to the appellant confirming an agreement between them whereby the former was to receive an additional fee of RM100,000 if he assisted in resolving the problem regarding the access. It is the respondent’s case that he did in fact obtain the required access through his exertions. The appellant, however, denies any agreement to pay the additional fee. In respect of this sum, the learned Judge granted leave to defend. We would digress for a moment to say a few words about this latter order of the learned judge.
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 had failed to respond to the letter of 17 December. If there had never been an agreement as alleged, it is reasonable to expect a prompt and vigorous denial. But, as we have pointed out, there was no response whatsoever from the appellant.”
(b) in abundance of caution we must say that failure to respond must not be equated to admission of the claim under Section 17 of the Evidence Act 1950 (EA 1950). Failure to respond will relate to conduct under Section 8 of the EA 1950. Conduct is a relevant fact for the court to take into account to give the relevant probative force to the version of the plaintiff and/or defendant’s case. It is well settled that not all demand notices must be responded. In Wiedmann v Walpole  2 QB 534, in an action for breach of promise of marriage, it was held, that the mere fact that the defendant did not answer letters written to him by the plaintiff in which she stated that he had promised to marry her, was no evidence corroborating the plaintiff’s testimony in support of such promise;
(c) it must also be noted that in commercial cases (not civil), Courts have taken notice that, in the ordinary course of business, if one man of business states in a letter to another that he has agreed to do certain things, the person who receives that letter must answer it if he means to dispute the fact that he did so agree. (See PECD Construction Sdn Bhd v Freehold Point Sdn Bhd  MLJU 127);
(d) there is a latin maxim which says ‘silence amount to consent’. (See Quit tracet consentire videtur). However, this is not part of our law of evidence. Failure to respond goes to conduct and is a relevant fact and not an admission as stated in illustration (g) of Section 8 of the EA 1950, which reads as follows:
“(g) the question is whether A owes B RM10,000:
The facts that A asked C to lend him money, and that D said to C in A’s presence and hearing: ‘I advise you not to trust A for he owes B RM10,000,’ and that A went away without making any answer are relevant facts”
(e) in the instant case, the learned trial judge failed to take into account that the appellant’s demand notice in a commercial matter was not responded to. Further there was no reason or justification for not responding to it. The omission of the learned trial judge to do so in our view compromised the decision making process.
- In Tan Cheng Hock v Chan Thean Soo  2 MLJ 479:
“In Wiedemann v Walpole  2 QB 534 at p 537 an action for breach of promise of marriage, it was held, that the mere fact that the defendant did not answer letters written to him by the plaintiff in which she stated that he had promised to marry her, was no evidence corroborating the plaintiffs testimony in support of such promise.
Lord Esher MR, in his judgment, remarked, ‘Here, we have only to see whether the mere fact of not answering the letters, with nothing else for us to consider is any evidence in corroboration of the promise’. (Emphasis supplied.) Earlier, in his judgment, he said, ‘Now there are cases — business and mercantile cases in which the courts have taken notice that, in the ordinary course of business, if one man of business states in a letter to another that he has agreed to do certain things, the person who receives that letter must answer it if he means to dispute the fact that he did so agree’. (Emphasis added.)”
- Lastly, the defendant’s failure to respond to the plaintiff’s letter and the solicitor’s letter of demand seals the fate of the defendant as the non-response is deemed an admission. See: Mohd Zin Omar’s case and Tan Cheng Hock’s case.
Source: Halim bin Saad v Chan Yok Peng  3 MLJ 717. Court of Appeal Putrajaya. Kamardin Hashim, Nantha Balan and Che Mohd Ruzima JJCA
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