1. ) KUSATEX SDN BHD 2. ) SHAFIQURRAHMAN BIN HAJI SHAMSUDDIN v WIRA FOAM INDUSTRIES SDN BHD

Case Significance

Illustrates appellate intervention where a Sessions Court misappreciated the evidence on the existence of a supply contract, and the interplay between the burden of proof under the Evidence Act 1950 and the adverse inference for withheld evidence in a goods-supply dispute.

This High Court decision at Shah Alam is an appeal from the Sessions Court after a full trial in a contractual dispute over the supply of goods. In the court below, the plaintiff, Wira Foam Industries Sdn Bhd, had sued the defendants, Kusatex Sdn Bhd and an individual associated with it, claiming RM576,285.79 for the supply of hospital linen materials to the first defendant; the Sessions Court allowed the plaintiff's claim in that sum and dismissed the defendants' counterclaim and their third-party proceedings. The defendants appealed. The issues on appeal were whether the Sessions Court judge had misdirected herself in the appreciation of the evidence, whether the plaintiff had proved the existence of a valid contract in the absence of documentary evidence under sections 2(a) and 2(b) of the Contracts Act 1950, and how the burden of proof under sections 101 and 102 of the Evidence Act 1950 and the adverse-inference provision in section 114(g) fell to be applied where a party had withheld evidence. The court reviewed the evidence and concluded that appellate intervention was warranted on the main claim, being satisfied that the Sessions Court had erred in finding the supply contract and the sum owing proved to the requisite standard. It allowed the defendants' appeal on the main claim, with costs of RM15,000 here and below, so that the monetary award against the defendants could not stand, while the defendants' counterclaim for conspiracy and unlawful interference remained dismissed, with costs of RM10,000. The judgment is a useful illustration of appellate intervention where a first-instance court has misappreciated the evidence on the existence of a contract, and of the interplay between the burden of proof and the adverse inference for withheld evidence. The court reiterated that an appellate court is slow to disturb the findings of a trial judge who has had the advantage of seeing and hearing the witnesses, but that it will intervene where the trial court has plainly misappreciated the evidence or failed to apply the correct legal test to the existence of a contract. The dismissal of the counterclaim for conspiracy and unlawful interference was left undisturbed, so that the net effect of the appeal was to undo the monetary award while leaving the parties' other positions unchanged.