Gopal Sri Ram JCA:

[1] We heard and dismissed this appeal on 4 December 1995, without calling upon Counsel for the respondent to address us. The reasons for our decision now follow.

[2] The respondent carries on the business of an insurance agent. Its case in the Court below rested on the fact that it had appointed the appellant as its subagent to sell policies of Mercantile Insurance Sdn Bhd to members of the public generally. The respondent claimed that under the aforesaid appointment, the appellant, as sub-agent, was authorised to receive proposal forms and to issue cover notes to vehicle owners who wished to purchase insurance cover.

[3] It was also part of the respondent's pleaded case that under the terms of the sub-agency, the appellant was to effect sales of cover notes on a "cash before cover" basis. By that expression is meant that the ultimate consumer will not have his vehicle covered by insurance until and unless he paid for it in advance. The respondent also claimed that the appellant was, under the terms of its appointment as sub-agent, authorised to receive premiums in respect of the cover notes it had sold. From these sums, the appellant was entitled to deduct the commission due to it for making the sales. However, it was under an obligation to pay over the balance to the respondent.

[5] The respondent waited for payment, but none came. It consulted solicitors who wrote to the appellant a letter before action, dated 22 December 1992, demanding payment of the aforesaid sum.

[6] Upon receiving this demand the appellant too consulted solicitors. They replied on 4 January 1993, denying any knowledge on the part of their client of the claim and requesting copies of several documents, including the agreement of sub-agency and a statement of account.

[7] The respondent then caused writ to be issued and moved for summary judgment. The appellant delivered a defence in which it denied the sub-agency. It then went on to allege, among other matters, that the sub-agency was illegal because it contravened the provisions of the Co-operative Societies Act, 1948 and the Insurance Act, 1963 as well as the subsidiary legislation made under the latter. These other defences were not taken as alternative pleas. Instead they follow, one upon the other, in seriatim.

[8] The way in which the appellant pleaded its case reveals a singular inconsistency of approach. By no stretch of the imagination could it be said that a sub-agency agreement which, according to the defence, never existed could be illegal. The way in which the defence has been cast left us with the distinct impression that it is an embarrassing pleading and delivered purely to delay the respondent from obtaining judgment in the action.

[9] The learned Judge who heard the respondent's summons for judgment found no triable issues. He accordingly entered judgment in favour of the respondent.

[10] Those are then the relevant facts.

[11] In arguing the appeal, Encik Darshan Singh, of Counsel, said that the Judge was wrong in entering summary judgment and that he had overlooked two vital points in his client's favour. He said that if the learned Judge had addressed his mind to these two matters, he would have granted the appellant unconditional leave to defend the action. The two points are as follows.

[12] First, the respondent had not produced any written agreement to support its claim that the appellant had been appointed as its sub-agent. Second, the appellant had, at the first available opportunity, when it received the letter before action, promptly asserted that it was in no way liable to the respondent. We were also