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2025 MarsdenLR 4676
HIGH COURT MALAYA GEORGETOWN
CERAMTEC INNOVATIVE CERAMIC ENGINEERING (M) SDN BHD – Appellant
Versus
ICONIC MEDICARE SDN BHD – Respondent
[Civil Suit No: PA-22NCVC-124-07/2023]
The court established that time was of the essence in the contract, and the Plaintiff's failure to deliver on time constituted a breach, justifying the Defendant's counterclaim for additional costs incurred.
Headnote:(A) Contracts Act 1950 - Breach of contract - The Plaintiff, a manufacturer of Ceramic Formers, failed to deliver the agreed quantities to the Defendant, leading to the Defendant procuring from alternative suppliers - The Defendant's counterclaim for losses due to delays was partially upheld. (Paras 1, 49, 135)
(B) Time of essence - The court found that time was of the essence in the contract due to high demand for medical-grade gloves during the pandemic, despite no explicit clause stating so. (Paras 76, 80)
(C) Mitigation of losses - The Defendant was found to have taken reasonable steps to mitigate losses by sourcing from alternative suppliers after the Plaintiff's delays. (Paras 110, 118)
Facts of the case:
The Plaintiff and Defendant entered into a contract for the supply of Ceramic Formers, with the Plaintiff failing to deliver on time, leading the Defendant to seek alternative suppliers and incur additional costs. (Paras 1-46)
Findings of Court:
The Plaintiff's claim was dismissed as they failed to establish a breach by the Defendant, while the Defendant's counterclaim for RM583,800.00 was allowed due to the Plaintiff's breach. (Paras 135-136)
Issues: The court addressed whether the Defendant was liable for the Plaintiff's claimed costs and whether the Plaintiff was liable for the Defendant's losses due to delays. (Paras 49, 135)
Ratio Decidendi: The court ruled that the Plaintiff breached the contract by failing to deliver on time, and the Defendant's actions to mitigate losses were justified. (Paras 135-136)
Result: Plaintiff's claim dismissed; Defendant's counterclaim partially allowed.
JUDGMENT
Introduction
[1] This is yet another case involving an alleged breach of contract between two companies with both alleging to have suffered loss and damage arising from each other's breach/conduct.
[2] I will in this judgment set out the salient background facts, the parties' respective contentions as well as my analysis of the same based on the available evidence before me in determining if the Plaintiff's claim and conversely the Defendant's counterclaim are with merits.
Background Facts And Chronology Of Events
[3] The Plaintiff is a manufacturer and supplier of Ceramic Formers that are used in the manufacturing of, inter alia, disposable medical grade gloves.
[4] The Defendant is a company that, in 2020, ventured into the business of manufacturing Personal Protective Equipment (PPE), such as face masks, medical-grade rubber gloves, and rapid test kits for testing coronavirus.
[5] On 16 December 2020, the Plaintiff's sales team led by its managing director, Mr G. Ravichandran (hereinafter referred to as "Mr.Ravi") met with Dato' Tan, representative of the Defendant at the Defendant's office to discuss the purchase of 366,000 pieces of 'Ceramic Formers' (hereinafter referred to as "formers") from the Plaintiff.
[6] The Plaintiff's sales team were briefed about the Defendant's requirements and their plans to install 12 disposable medical grade glove manufacturing lines in 2 phases at their factory in Juru Seberang Perai Selatan, Penang.
[7] The Plaintiff pleads that phase 1 would consist of 6 lines to be fitted with formers from July 2021 onwards and phase 2, would also consist of 6 lines to be fitted with formers from October 2021 onwards.
[8] After the said discussions with the Defendant, the Plaintiff, vide an e-mail dated 18 December 2020, confirmed that they could supply the following quantities of formers in accordance with the timeline for delivery of the formers as stipulated therein:
[9] It is pertinent to note at this juncture that Mr. Ravi had in his email dated 18 December 2020 when agreeing to supply the above quantities had stated that having checked their capacity situation "which as explained is booked out even till 2022, as consequence resulting in us having to "manage" capacity".
[10] The price of the formers quoted by the Plaintiff was RM18.25 a piece under phase 1, and RM18.00 a piece under phase 2. The Plaintiff also provided the Defendant with 2 proforma invoices Nos 20/113 and 20/114 dated 18 December 2020 which affirmed its commitment to supply the formers according to the timeline stated therein.
[11] On 19 December 2020, DW1 confirmed the purchase of the formers from the Plaintiff and indicated that the Defendant was ready to pay the 10% deposit, and further requested the Plaintiff to lock in the formers for the Defendant.
[12] Thereafter, the Defendant placed orders for 168,000 pieces of formers of various sizes from the Plaintiff vide PO 48 dated 18 December 2020, for installation in 6 glove manufacturing lines that were being assembled under phase 1. The Plaintiff agreed to deliver the said formers in 3 batches of 56,000 pieces each month, beginning from July 2021 to September 2021. The total price of the said formers was RM3,066,000.00.
[13] Vide an e-mail dated 21 December 2020, MrJoe Tan, (DW1) responded to Mr.Ravi's e-mail dated 18 December 2020 by informing him that he had read the quotation, and would prepare the Purchase Order (hereinafter referred to as "the PO").
[14] The Defendant then ordered a further 168,000 pieces of formers of various sizes, vide PO 50 dated 21 December 2020, for installation in 6 additional glove manufacturing machines to be assembled under phase 2, which the Plaintiff agreed to deliver in batches of 56,000 pieces a month, in October, November and December 2021, at the total cost of RM3,024,000.00.
[15] Following the placement of the POs, a deposit sum of RM609,000.00 (10%) was paid to the Plaintiff on 24 December 2020 for the purchase of 336,000 formers
