Tangshan New Resource Ecological Sci and Tech Co., Ltd v ROCKWILLS TRUSTEE BERHAD

Case Significance

Illustrates how a settlement inferred from a part-payment and a party's subsequent inaction extinguishes a debt claim, and the limits of a deceased trader's estate's liability for invoices to which the deceased's business was not privy.

This High Court decision at Kuala Lumpur, delivered by Eddie Yeo Soon Chye JC after a full trial, concerns a claim for the price of goods sold. The plaintiff, a company incorporated in China engaged in exporting vegetables and fruits to various countries including Malaysia, sued Rockwills Trustee Berhad — a trust corporation carrying on the business of professional will-writing, estate planning and management — in its capacity as administrator of the estate of a deceased sole proprietor who had traded under the name and style of CH Leong Enterprise. The plaintiff claimed a total of USD$416,359 (approximately RM1,703,865.94) said to remain outstanding for goods supplied.

The dispute turned on whether the outstanding sums had been settled and on the effect of contemporaneous documents. The Court examined the contractual and evidential framework, referring to the Sale of Goods Act 1957 (including sections 31 and 33 on delivery and acceptance), section 63 of the Contracts Act 1950 on the acceptance of a different or partial performance, and sections 91 and 94 of the Evidence Act 1950 on documentary evidence, together with the doctrine of unjust enrichment. It weighed the burden of proof against the documents and the parties' conduct over time.

The Court found that a settlement had been reached: a payment of USD$80,000 made on 2 September 2016, together with the plaintiff's inaction over a lapse of time, pointed to the irresistible conclusion that the plaintiff and the deceased's business had settled all outstanding amounts. It further found that the deceased's business was neither privy nor party to invoices issued to third-party companies and so bore no liability for them. Concluding that all outstanding sums had been abrogated by the settlement payment, the Court dismissed the plaintiff's claim of USD$416,359 with costs of RM60,000 subject to allocatur. The judgment is a useful illustration of how a settlement inferred from a part-payment and a party's subsequent inaction extinguishes a debt claim, and of the limits of liability of a deceased trader's estate for invoices to which the deceased's business was not privy.