The delivery of goods under a contract imposes an implied condition of merchantable quality, regardless of 'as is where is' terms, unless acceptance is clearly established.

Introduction

[1] After a full trial, judgment was entered on May 9, 2025, for the plaintiff for RM522,231.24, together with interest thereon at 5% per annum from 19 February 2020, until full settlement for the refund of money paid for goods found to be defective. This sum excludes a claim for a sum of RM6,640.00 for scrap handling, which was abandoned.

[2] For the defendant's counterclaim, this court allowed a sum of RM12,869.00 for the P27-Rapid Manpower Invoice, with interest thereon at 5% per annum from 14 August 2020 until full settlement. However, the defendant's counterclaim for damages, special damages and general damages was dismissed.

[3] As judgment was entered in favour of the plaintiff and the plaintiff had substantially succeeded in defending the counterclaim, costs of RM50,000.00 only was awarded to the plaintiff after taking into account that the defendant has succeeded in one part of its counterclaim.

[4] Dissatisfied, the defendant has filed its notice of appeal on 3 June 2025 and these are the grounds of judgment.

Parties

[5] Poratha Corporation Sdn Bhd is a private company incorporated in Malaysia. It is the plaintiff in the original action, and the defendant in the counterclaim, it shall be referred to as the "plaintiff'.

[6] Dscaff Engineering Sdn Bhd is a private company incorporated in Malaysia, which is the defendant in the original action and the plaintiff in the counterclaim. It shall be referred to as the "defendant".

Agreed Facts (Enel 37, Marked As "D")

[7] The plaintiff is a company incorporated in Malaysia under the Companies Act 1965 with its address for service at No 3A, Jalan Indah 16/12 Taman Bukit Indah, 81200 Johor Bahru, Johor Darul Takzim.

[8] The defendant is a company incorporated under the Companies Act 1965 with its registered address at F-2-11, 2nd Floor, Block F, Pusat Komersil Jalan Kuching, 51200 Kuala Lumpur and business address at No 13A-1, Premier Suite, Menara 1 MK, Kompleks 1 Mont Kiasa, No 1 Jalan Kiara, Mont Kiara, 50480 Kuala Lumpur.

[9] The parties entered into agreement around 3 June 2019 and 2 July 2019 where the defendant was to supply scaffolding materials (a large portion of which were "Metal Decks") for the plaintiff's work in United Arab Emirates ("UAE").

[10] Both parties had dealt with similar transactions prior to this action.

[11] During early inspection on 10 June 2019, the plaintiff's representative found that part of the 4-meter Metal Decks were heavily corroded.

[12] The defendant agreed to separate, wash, paint, pack and load the Metal Decks before they were to be sent to the UAE.

[13] Following inspection on 10 June 2019, the plaintiff's representative conducted follow-up inspections on 14 June 2019 and 5 July 2019.

[14] The Metal Decks in question, complained of by the plaintiff, among other items ordered by the plaintiff were loaded onto the vessels on 5 July 2019 and 12 July 2019. They arrived in the UAE on 24 July 2019 and 31 July 2019 respectively.

[15] The plaintiff had on several occasions informed the defendant of the corroded Metal Decks and the resulting losses through letter dated 16 November 2019, 19 November 2019, 22 November 2019, 16 December 2019, 6 January 2020 and via a Notice dated 5 February 2020, through its solicitors.

[16] The defendant denied liability towards the plaintiff by letter dated 17 December 2019 and 9 June 2020.

Agreed Issues To Be Tried

[17] The agreed issues to be tried between parties for the origin