RK Nathan J:

Fact

[1] This is an appeal against the decision of the learned Deputy Registrar allowing the plaintiff to enter summary judgment for the sum of RM1,014,132.15 and interest at 1.5% per month on the overdue invoices.

[2] The short facts are as alleged in the defendant's defence and written submission. The defendant purchases concrete from the plaintiff and in return the defendant supplies the plaintiff labour and sand. Each party was supposed to debit each other's account pertaining to these supplies and make payments for the rest.

[3] In para 6 of the plaintiff's affidavit in support of the application for summary judgment, the plaintiff stated that since 31 May 1997, the defendant was indebted to the plaintiff in the sum of RM1,456,753.57 and that the plaintiff's solicitors had sent a letter of demand dated 16 June 1997 demanding for the said sum. The letter of demand was exhibited to the affidavit as "YKC-2". The defendant's solicitors' reply dated 27 June 1997 to the plaintiff's solicitors' letter of demand forms the basis upon which the plaintiff is now seeking to enter summary judgment. It is noted that even though the basis of the application rests on the admission allegedly made in the reply, the plaintiff is not proceeding under O 27 r 3 of the Rules of the High 1980 (RHC) but under O 14 r 1 RHC. The defendant's solicitors' letter was marked "Without Prejudice" and it contains the following admission:

Our client further informs us that since November 1995 to November 1996,your clients Daya Anika Sdn Bhd has been delivering concrete worth RM1,848,851.65. Our clients have made payments for RM616,289.50. As your clients have also been supplied by our client, there are debit notes amounting to RM218,430.00. This leaves an outstanding sum of RM1,014,132.15.

[4] At p 2 of the written submission of the defendant, the solicitors stated "there was another letter dated 27 June 1997 from the appellant/defendant's solicitors forwarded together with the 'Without Prejudice' letter denying all liabilities". However, this other letter of 27 June 1997 was never produced to the Court. As such, the Court cannot accept this submission or allegation.

Whether To Lift The "Without Prejudice" Veil Or Not

[5] The submission of the defendant is that the "without prejudice" letter of 27 June 1997 is privileged and not admissible. She also submitted that a dispute was already present when the respondent/plaintiff's solicitors had sent theletter of demand dated 16 June 1997 to the appellant/defendant.

[6] The law on the admissibility or otherwise of documents has been clearly laid down in several cases. The defendant had cited the case of Wong Nget Thau & Anor v. Tay Choo Foo, [1994] 3 MLJ 723. Ian Chin J had in that case referred to the Federal Court decision of Malayan Banking Bhd v. Foo See Moi; [1981] 2 MLJ 17 where Chang Min Tat FJ in delivering the judgment of the Federal Court held at p 18 as follows:

It is settled law that letters written without prejudice are in admissible in evidence of the negotiations attempted. This is in order not to fetter but to enlarge the scope of negotiations, so that a solution acceptable to both sides can be more easily reached.

[7] In Oh Kuang Liang v. Associated Wood Industry Sdn Bhd, [1995] 4 MLJ 390 the learned judge after perusing various authorities summed up the law at pp 964 - 965 as follows:

I am of the considered view that the 'without prejudice rule' applies generally to exclude all negotiations genuinely aimed at settlements. A prudent and competent solicitor will always be on guard and will always label any negotiating correspondence with the words 'without prejudice' - to make known and to make clear beyond doubt that in the event the negotiations fell through, they are not to be referred to at the subsequent trial. I think the correct approach to resolve the 'without prejudice rule' would be by balancing two different public interests, namely, the public interest in promoting settleme