The court upheld that a contract must have a clear meeting of minds to be valid; a renewal was not established, and claims for damages must be strictly proven.

(Appeal Against The Sessions Court's Decision)

Raja Ahmad Mohzanuddin Shah J:

Preliminary

[1] A notice of appeal has been filed by the plaintiff/appellant against the learned Sessions Court Judge's decision to dismiss the plaintiff/appellant's claim with costs of RM10,000.00.

[2] This decision resulted in the plaintiff/appellant's claims for the following relief being dismissed:

(a) RM784,519.00 for the price of unsold school uniforms;

(b) RM24,549.00 being storage costs incurred since 27 May 2021 for the said unsold uniform stock, which continues at RM167.00 per day;

(c) 5% interest per annum on the judgment sum from the filing date until full realisation;

(d) General damages to be assessed; and

(e) Costs.

[3] Starting with the basics, let me now go back to the origin story to describe what prompted the plaintiff/appellant to file the action against the defendant/respondent in the first place.

[4] The parties will be referred to as they were at the Sessions Court from here on out.

Background Facts Leading To This Appeal

Parties' Relationship

[5] A contract was entered into between the plaintiff and the defendant on 30 November 2016 for the plaintiff to operate a shop (school uniform shop) on the defendant's premises and to supply and sell uniforms designed specifically for the school as well as the related merchandise from the defendant.

[6] As a private secondary school, the defendant allegedly has a specific uniform design that makes it distinctive from other schools.

[7] As part of what I will refer to as the original contract, the following terms were included:

(a) Original contract period was 1 December 2016 to 30 November 2019, subject to renewal [Clause 1];

(b) There must be mutually agreed terms and conditions for the renewal [Clause 1];

(c) The plaintiff agreed to pay the defendant RM2,200.00 per month as rent [Clause 2];

(d) School uniforms would be sold at a price authorised by the defendant [Clause 3];

(e) In the event of any breach or default of any of the original contract terms, the parties may terminate the original contract within one (1) year of receiving notice to do so [Clause 5]; and

(f) A termination would result in all stocks being absorbed by the defendant [Clause 6].

Plaintiff's Causes Of Action

[8] At the end of the original contract terms, there was an alleged consensus ad idem or meeting of the minds between both parties that the original contract would be renewed for another three (3) years.

[9] From 30 November 2019 to 11 May 2021, the plaintiff operated the school uniform shop based on such a belief.

[10] It then claimed that during such alleged renewed term, the defendant had rejected the plaintiff's attempts to formalise the new contract.

[11] It was alleged that the defendant had attempted to change the terms of the original contract in an effort to exclude or limit its responsibility under cl 6.

[12] Since the plaintiff was not in agreement with the defendant's proposed change, the parties agreed on 15 May 2020 to terminate the renewal after a year in accordance with cl 5.

[13] Consequently, the plaintiff vacated the school uniform shop premises on 11 May 2021.

[14] Pursuant thereto, the plaintiff informed the defendant that it would send the remaining school uniform stocks to the defendant.

[15] Despite two attempts to return all the stocks, the defendant refused to accept them on 17 May 2021 and 20 May 2021.

[16] As a result, an action was filed at the Sessions Court claiming all the relief mentioned above.

Defendant's Defences

[17] Before the end of the original contract, the parties explored the possibility of renewing it. The discussion was held on 26 November 2019.

[18] Despite their efforts, both parties could not agree on the revised terms since the defendant did not agree to include cl 5 and 6 Clause in the new contract.

[19] As a result, the original contract expired at the end of its term.

[20] Following that, the parties negotiated the process of winding down and ceasing the plaintiff's operations on the def