The unlawful termination of a contract cannot be justified based on legally impossible requirements, and waiver of rights occurs through conduct that accepts non-compliance.

Ahmad Fairuz Zainol Abidin J:

Introduction

[1] This is a claim by the Plaintiff, Sky Blue Media ("SBM") for an unlawful termination of Billboard Advertising Agreement ("the Agreement"). At the conclusion of the trial, I ruled that the Defendant's termination of the Agreement was unlawful and awarded damages to SBM. In so doing, I dismissed the Defendant's counterclaim.

The Claim

[2] SBM, a company involved in the provision of advertisement billboards, entered into an agreement to build a 60' wide x 60' tall LED billboard (60'x60' LED billboard) on a property purportedly belonging to the Defendant, Goh Sin Teck ("Goh"). In return, a revenue sharing arrangement between the two parties was agreed on. A LED billboard for a size of 60'x40' (60'x40' LED billboard) was however constructed by SBM. The Agreement signed on 19 September 2017 and a notice of termination by Goh issued on 28 August 2018. Goh then terminated the Agreement for alleged breach by SBM as SBM failed to deliver a 60' x 60' LED billboard. The LED billboard was thereafter brought down by the local authority, Dewan Bandaraya Kuala Lumpur ("DBKL").

[3] SBM contended that the Agreement was unlawfully terminated and sought the following reliefs:

a) a declaration that the notice of termination by Goh dated 28 August 2018 is false and/or unlawful;

b) a declaration that the Agreement remain valid and continuous;

c) an order for "specific performance" against Goh for the performance of the Agreement and to do all such actions necessary to re-establish the billboard on the site until the date of the auto-renewed extension;

d) an order to prevent the Goh from taking possession and/or interfere with the commercial use and/or use of billboard on the site in any way until the completion of this action and/or as the Court deems fit;

e) damages due to the removal and destruction of the billboard be assessed and paid by Goh;

f) damages for the loss of revenue of the billboard be assessed and paid by Goh;

g) alternatively, the order that the deposit of RM50,000.00 be returned to SBM; and/or

h) reimbursement of RM1,092,652.00 and all monies spent by SBM to perform the obligations in the Agreement.

i) general damages assessed by the Court;

j) further and/or alternatively indemnity for loss of revenue, goodwill assessed by the Court;

k) further and/or alternatively damages for economic duress;

l) general damages or sums assessed by this Court in respect of losses suffered by SBM as a result of the billboard's being removed and destroyed;

m) costs;

n) interest; and

o) such other further reliefs deemed appropriate and appropriate by the Court.

[4] Goh filed a counterclaim alleging that he suffered losses amounting to RM3,491,505.54 due to SBM's continuous and wrongful occupation on the billboard site.

The Issue

[5] There were several issues listed by the parties as issues to be tried. However, I am of the view that the sole issue to be determined is:

Whether The Termination Of The Agreement By Goh Was Lawful.

Analysis

[6] It is my view that the termination of the Agreement was unlawful. I say this for the reasons enumerated below.

Licensing And Regulatory Compliance

[7] The question of licensing lies at the heart of this dispute. The evidence reveals a clear progression that demonstrates both the legal impossibility of a 60'x60' LED billboard and Goh's knowledge of these constraints. DBKL only allowed a 60'x40' structure.

[8] A key witness during the trial was a Licensing Department officer from DBKL, Kaza Karina Binti Mohd Khalid ("PW1"). She testified that she was responsible for the processing of all billboard licensing applications. She explained that the applicable guidelines were the Undang-Undang Kecil Iklan (Wilayah Persekutuan) 1982. In her carrying out her duties as the processing officer, she used the said guidelines as the base document. Anything that detracted from the said guidelines will not be recommended for approval.

[9] I find the evidence of the PW1 to be critical in determining the actual