JUDGMENT

Jeffrey Tan J:

This is the plaintiff's appeal to judge-in-chambers against the decision of the learned senior assistant registrar dismissing, on 5 July 2001, the application of the plaintiff, pursuant to O 14 of the Rules of the High Court 1980, for summary judgment against the defendant.

Basically, the plaintiff claims that one Gan Siong Phew (Gan) t/a Terry Industries, by a factoring agreement dated 29 April 1997 and entered between Gan as assignor and the plaintiff as assignee, had assigned all his book debts to the plaintiff, that Gan, by notice of assignment dated 30 April 1997, notified the defendant of his assignment, and, that the defendant, by reason of such assignment, is therefore indebted to the plaintiff in the sum of RM584,873.88. And basically the defendant contends in his defence, that he was not indebted to Gan, that the invoices towards proof of his so-called debt were all falsified by Gan, and that he had reported the fraud to the police.

Miss Moy Saw Han for the defendant, in her submission, thus sketched the defence. To begin with, Miss Moy concurred with Mr A. s Chandrasegram for the plaintiff that Gan was the sole proprietor of Terry Industries Miss Moy accepted the existence of the factoring agreement dated 30 July 1997 and notice of assignment dated 30 July 1997. But Miss Moy contended that the defendant had not acknowledged any notice of assignment. She said that the notice of assignment was a piece of blank paper when it was signed by the defendant, and the defendant's cheque for RM30,000 and payable to the plaintiff was a blank cheque when it was signed by the defendant. On that basis, Miss Moy contended, that the so-called acknowledgement of the notice of assignment (see encl 5 exh HCH3) and the cheque (see encl 15 exh HCH2) were not that of the defendant.

Mr Chandrasegaram argued however that the factoring agreement had assigned Gan's book debts to the plaintiff, and that the plaintiff pursuant to the factoring agreement had furnished statements of accounts to the defendant. Mr Chandrasegram contended that the defence is the fraud committed by a 3rd party, which fraud, on the authority of ; [1989] 1 CLJ (Rep) 307 and ; [1996] 2 MLJ 251; [1997] 1 CLJ 123; [1996] 2 AMR 1886, is of no concern to the plaintiff as the plaintiff was not a party to the alleged fraud, and that there is no triable issue "with the plaintiff".

In reply, Miss Moy tendered the authorities of ; [1995] 3 MLJ 331; [1995] 4 CLJ 283; [1995] 3 AMR 2871 and ; [1996] 2 MLJ 369; [1996] 3 CLJ 635; [1996] 2 AMR 2261, and submitted that what was assigned was subject to all defects in the title of the assignor The defendant protested (see encl 13 exhs A6-A8) to the plaintiff, against the statements of accounts When the statement of accounts was received in early 1998, the defendant questioned Gan who admitted his fraud (see encl 13 exh A2). On 15 September 1998, the defendant reported Gan's fraud to the police (see encl 13 exh A4). The defendant was an innocent victim who had not taken the goods stated on the invoices nor owed any monies to Gan. Lastly, Miss Moy submitted that the assignment was an equitable assignment and not a legal assignment, and that Gan must be brought in as an additional defendant.

In response to the second last point made by Miss Moy, Mr Chandrasegarain tendered the authority of Arab-Malaysian Merchant Bank Bhd v. Boustead Trading (1985) Sdn Bhd[1994] 1 MLJ 628 and commented that a separate assignment was not necessary, which submission prodded Miss Moy to tender the further authority of ; [1992] 2 CLJ (Rep) 93, and to respond that there must be a separate assignment.

The word 'factoring' comes from the word 'factor' who is "a mercantile agent who in the ordinary course of business is entrusted with possession of goods or of the documents of title thereto" (Halsbury's Laws of England,4th edn para 712). "A factor is an agent, but an agent of a different kind. He is an agent entrusted with the possession of good