DATAPREP MALAYSIA SDN BERHAD v NEWTEC ENGINEERING (M) SDN BHD

Case Significance

Illustrates that a strained construction of a payment-before-delivery term does not create a triable issue defeating summary judgment where the buyer ordered goods, paid a deposit and then failed to request delivery.

This High Court decision in the Commercial Division at Kuala Lumpur concerns an appeal against summary judgment in a claim for the balance of the price of goods sold. The respondent seller had sued the appellant buyer in the Sessions Court for the balance owing on goods, being Viral Transportation Media, ordered by the buyer under a purchase order dated 25 January 2022 at a price of RM540,000, and the Sessions Court granted summary judgment; the buyer appealed to the High Court. The central question was whether the buyer had raised a triable issue warranting a full trial. The buyer relied on a term of the purchase order providing for a 50% balance before delivery, contending that delivery was to be effected only when the buyer issued a request for delivery or payment. The court rejected that construction as absurd, reasoning that having ordered the goods and made the initial payment, the buyer could not simply keep silent for an inordinate time while the goods languished in the seller's warehouse; indeed, even by the time the claim was filed in November 2022, months after the January 2022 order, the buyer had still made no request for delivery, and it had exhibited no evidence of any past practice of requesting delivery on similar terms to support its interpretation. The court also disregarded an argument on mitigation of damages, which counsel admitted had not been pleaded. Finding that the buyer's defence was neither plausible nor meritorious and raised no triable issue, the court held that the Sessions Court had been entirely correct to grant summary judgment and dismissed the appeal. The judgment is a useful illustration that a strained construction of a payment-before-delivery term will not create a triable issue where the buyer has ordered goods, paid a deposit and then failed to request delivery.