1. Action for recovery of payment for goods sold and delivered — Application to set aside judgment in default — Dispute over service of process. (Para 3 , 4 )
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2026 MarsdenLR 1422
HIGH COURT MALAYA KOTA BHARU
MOHD ROSLI YUSOFF, J
VERTEX CENTRAL INDUSTRIES SDN BHD & ORS – Appellant
Versus
POSIM MARKETING SDN BHD – Respondent
[Civil Appeal No: DA-12ANCC-3-10/2025]
Petitioner Advocates:Altaf Akma Anuar,Raihana Ashikeen Ramlan ,Respondent Advocate: Seok Mae Jane
Contractual deeming provisions for the service of legal documents are binding and effective regardless of actual delivery if agreed upon. Furthermore, an unambiguous admission of debt operates as an estoppel under Section 31 of the Evidence Act 1950, precluding a party from disputing the claim.
Headnote:(A) Evidence Act 1950 - Section 31 - Admission of debt - A clear and unambiguous admission of debt in writing operates as an estoppel under the provisions of the Act, preventing the party from subsequently contending otherwise. (Paras 23, 24)
(B) Civil Procedure - Service of process - Contractual deeming provisions - Where parties agree that service of legal documents by prepaid registered post to the last known address shall be deemed effective upon the expiry of a specified period notwithstanding any proof to the contrary, such service is valid and effective even if the delivery is not completed. (Paras 16, 19)
Facts of the case:
An action was commenced for the recovery of payment for goods sold and delivered. The writ and statement of claim were served via prepaid registered post to the addresses specified in the credit facility application and guarantee agreements. Although the postal tracking system indicated that delivery was not completed due to missed delivery cards or the recipient having moved, the contracts contained deeming provisions for service. The defendants, after a judgment in default was recorded against them, applied to set aside the judgment on the grounds of defective service and the existence of a meritorious defense regarding the failure to utilize a bank guarantee and a dispute over the final amount claimed.
Findings of Court:
The court found that the service was proper as it complied with the contractual terms agreed upon by the parties, and the defendants were estopped from challenging the mode of service. On the merits, the court found that the defendants had made part payments and explicitly admitted the debt in a letter, which precluded them from challenging the respondent's claims.
Issues: Whether the service of the writ and statement of claim was defective despite the postal remark "unable to complete delivery" and whether the appellants possessed a meritorious defense to set aside the judgment in default.
Ratio Decidendi: Parties are bound by contractual agreements regarding the mode of service of legal documents; once the agreed method is followed, the service is deemed effective regardless of actual delivery if the contract specifies it is so notwithstanding any proof to the contrary. Furthermore, an explicit admission of debt serves as an estoppel against the debtor pursuant to Section 31 of the Evidence Act 1950.
Result: Appeal dismissed with costs.
Legal Category Hierarchy
Table of Contents
2. Whether judgment in default should be set aside due to defective service and whether a meritorious defense exists regarding bank guarantees and debt amounts. (Para 5 , 6 )
3. Contractual deeming provisions for service are binding and written admissions of debt operate as estoppels under the Evidence Act. (Para 19 , 24 )
4. Parties are bound by contractual agreements regarding the manner of service of legal documents and admissions of debt operate as estoppels. (Para 19 , 24 )
5. Appeal dismissed with costs. (Para 26 )
6. Does a contractual agreement that service is deemed effective after a certain period regardless of proof to the contrary bind the parties?
Yes. If parties execute a contract agreeing to a specific manner of service and a deeming provision, they are estopped from contending the service was defective, provided the process was sent via the agreed method. (Para 7 , 8 , 9 , 15 , 16 , 19 )
7. Can a deemed service clause be rebutted by showing the delivery was not completed?
Not when the contract explicitly states service is deemed effective notwithstanding any proof to the contrary. The court held that such contractual terms preclude the defendant from proving non-receipt. (Para 12 , 13 , 14 , 16 , 17 , 19 )
8. What is the legal effect of a written admission of debt when a party later disputes the claim?
Under Section 31 of the Evidence Act 1950, admissions are not conclusive proof but may operate as estoppels, preventing a party from contradicting their previous admission of debt. (Para 22 , 23 , 24 )
JUDGMENT
Introduction
[1] This is an appeal by the appellants against the order of the Sessions Court Judge (SCJ) dismissing their application to set aside a judgment in default recorded against them on 7 July 2025.
[2] Upon hearing both parties' argument and upon perusing their respective written submissions, this Court dismissed the appellants' appeal and affirmed the decision of the learned SCJ. Hence, the appellants further appeal to the Court of Appeal.
Background
[3] The respondent commenced this action against the appellants to recover the payment for goods sold and delivered. The respondent's writ and statement of claims were served to the appellants at their respective address as follows:
(i) To the 1st Appellant, at the address as stated in the application form for credit facilities dated 9 October 2018 i.e at Tingkat 2, P.T. 178, Jalan Hamzah, 15050, Kota Bharu, Kelantan;
(ii) To the 2nd Appellant, at the address as stated in the Continuing Guarantee and Indemnity dated 2 October 2018 i.e at PT 763, Taman Hijrah, Padang Rokma, 16250 Wakaf Bharu, Kelantan; and
(iii) To the 3rd Appellant, at the address as stated in the Continuing Guarantee and Indemnity dated 2 October 2018 i.e at No 20, Taman Binjai Manis, 16450 Ketereh, Kelantan.
[4] The appellants failed to enter appearance and a judgment in default was entered against them accordingly.
The Appellants' submission
[5] The appellants submitted that their appeal to set aside the judgment in default was based on 2 grounds namely the service of the writ and statement of claims upon them were defective for the reason "unable to complete delivery", thus, the judgment in default recorded against them should be set aside as of right.
[6] Secondly, it was submitted that the appellants had a good defence to the claims where the respondent failed to act upon the security of bank guarantee before taking legal action against the appellants and that the appellants disputed the final amount claimed by the respondent.
Analysis And Finding Of The High Court
Service Of The Writ And Statement Of Claims
[7] On the issue whether the service of the writ and statement of claim on the appellants was a good and proper service, this Court found that the writ and statement of claims were served on the 1st Appellant as the principle debtor pursuant to the terms of the credit facilities application form executed by the 1st Appellant dated 9 October 2018 and on the 2nd and 3rd Appellants respectively as the guarantors pursuant to the terms of the Continuing Guarantee and Indemnity dated 2 October 2018 executed by the 2nd and the 3rd Appellants.
[8] Paragraph (i) of the credit facilities application forms provides as follows:
"Agree that the service process of all legal and non legal documents and notices in respect of any action arising out of or connected with supply of goods/services by you may be effected by prepaid registered post to the last known address as shown herein and shall be deemed to have been served upon expiry of 5 days from the date of posting notwithstanding any proof to the contrary."
[9] Paragraph 18 of the Continuing Guarantee and Indemnity provides as follows:
".... The Guarantor further agrees that service process of all Court documents, notices whatsoever related to the Guarantee or connected to the Guarantee shall be effected by prepaid registered post to the last address known as shown in First Schedule and shall be deemed to have been served upon expiry of 5 days from the date of posting notwithstanding any proof to the contrary."
[10] It was not disputed that the respondent had served the writ and statement of claims to the appellants by prepaid registered post to the address as stipulated in the contract respectively. The service on the 1st Appellant was made through registered parcel No RY636527197MY whereas the registered parcel for the 2nd and 3rd Appellants was RY636527206MY and RY636527020MY respectively. However, the delivery of all the parcels was not comple
