A supply contract is binding, and claims for outstanding payments can lead to summary judgment if the plaintiff meets the required legal criteria.

JUDGMENT

Ahmad Fairuz Zainol Abidin J:

Introduction

[1] The Plaintiff initiated the present Suit to claim for the outstanding sums due and owing for the supply of quarry products together with interest thereon from the Defendant. Enclosure 13 is the Plaintiff's application for summary judgment to be entered against the Defendant pursuant to O 14 of the Rules of 2012 which was allowed by this Court on 26 November 2020.

[2] Dissatisfied with the decision, the Defendant appealed. These are the full reasons of this Court.

Background Facts

[3] The background facts have been set out in the submissions. This Court adopts the salient facts as set out herein below.

[4] The Plaintiff and the Defendant entered into a written Supply Contract dated 1 January 2019 for the supply of quarry products by the Plaintiff to the Defendant ("the Supply Contract"). The quarry products were for construction works on the 'Electrified Double Track Project from Gemas to Johor Baharu' where the Defendant was the Sub-Contractor appointed by the Main Contractor, Syarikat Pembenaan Yeoh Tiong Lay Sdn Bhd ("SPYTL"), the Third Party abovenamed.

[5] Subsequent to the execution of the Supply Contract, the Plaintiff issued a letter dated 26 February 2019 signed by the Plaintiff, Defendant and SPYTL ("the Side Letter"). In the said Side Letter, it was stated that, inter alia, the terms, conditions and stipulations of Appendix 9 of the Site Clearance and Embankment Earthwork Project Contract which is a contact entered between SPYTL as the Main Contractor and the Defendant as the Sub-Contractor ("Works Contract") is to apply to the purchase of quarry products by the Defendant from the Plaintiff.

[6] It was submitted by the Plaintiff that all the quarry products ordered by the Defendant pursuant to the Supply Contract were duly delivered to the Defendant. The receipt of the goods were duly acknowledged by the Defendant in the numerous delivery orders. This was followed by the issuance of invoices and a statement of account by the Plaintiff. The Defendant made partial payment in the amount of RM106,459.32 and failed to settle the balance payment due and owing to the Plaintiff.

[7] Despite the issuance of letter of demand dated 16 December 2019 against the Defendant, the Defendant failed to pay the amount due.

[8] Accordingly, the Defendant was indebted to the Plaintiff in the amount of RM2,701,390.01 with interest of RM152,115.28 thereon as at 30 November 2019. The interest on the principal amount is ongoing at the rate of 1.5% per month from 1 December 2019 until the date of full and final settlement.

[9] The Defendant argued that there was a tri-partite agreement when the Side Letter was signed by all three parties. The Defendant purported to rely on cl 9 of Appendix 9 of the Side Letter and alleged that in the event of the Defendant's failure to make payment to the Plaintiff, SPYTL shall make payment directly to the Plaintiff for any amount due and owing from the Defendant to the Plaintiff.

[10] The Defendant alleged that it has not received payment on Interim Payment Certificate No 1 and No 2 from SPYTL and hence, it alleged that the payment for the supply of quarry products was not due and owing until payment on Interim Payment Certificate No 1 and No 2 is received by the Defendant from SPYTL. The Defendant argued that the application should be dismissed as there were triable issues.

The Law on Summary Judgment

[11] In an application for summary judgment, this Court is guided by the principles laid down in National Company for National Company for Foreign Trade v. Kayu Raya Sdn Bhd , 1984 MarsdenLR 58 , where it was stated by the Federal Court as follows:

"...We think it appropriate to remind ourselves once again that in every application under O 14, the first considerations are (a) whether the case comes within the order and (b) whether the plaintiff has satisfied the preliminary requirements for proceeding under O 14. For the purposes of an application under O 14, the prelim