WIT INK CREATIVE SDN BHD v DK-MY PROPERTIES SDN BHD

Case Significance

Confirms that a contractual claim for late-payment interest should not be dismissed on the basis of unpleaded defences such as waiver and estoppel, and that a clearly-provided contractual interest rate is recoverable where the computation is set out in the pleadings.

This High Court decision at Shah Alam concerns an appeal from a Sessions Court judgment that had refused a supplier's claim for contractual late-payment interest, and the impact of unpleaded defences on such a claim. The plaintiff had sued in the Sessions Court to recover the unpaid balance of two invoices issued for services rendered, together with late-payment interest charged at three per cent per month as provided in the invoices, and costs. The Sessions Court dismissed the late-payment interest claim on the grounds of waiver and estoppel, and also treated the claim as an afterthought. On appeal several questions arose: whether the court could consider a ground of appeal not stated in the memorandum of appeal, whether the plaintiff was entitled to recover the late-payment interest, whether that interest was excessive for exceeding a rate referable to the Moneylenders Act 1951, and whether the claim was genuinely an afterthought. The Court held that the defences of waiver and estoppel on which the Sessions Court had relied had not been pleaded, so they could not properly defeat the claim. It considered that late-payment interest at three per cent per month was not unprecedented in the reported authorities, and it rejected the suggestion that the claim was an afterthought, noting that the computation of the interest was straightforward because the parameters of the calculation were clearly set out in the pleadings, even though the witness had left the arithmetic to the plaintiff's solicitors. Concluding that the Sessions Court had erred, the Court overturned that judgment and allowed the plaintiff's claim for late-payment interest on the invoices, with costs of RM10,000. The decision illustrates that a court should not dismiss a contractual claim on the basis of defences, such as waiver and estoppel, that were never pleaded, and that a clearly-provided contractual interest rate may be recovered.