The court found no breach of contract by the defendant, as the plaintiffs failed to meet sales targets, constituting a breach themselves, and upheld the defendant's counterclaims for trespass and harassment.

Abdul Wahab Mohamed J:

Introduction

[1] This dispute arises from the Plaintiffs' claim against the Defendant, Carlsberg Marketing Sdn Bhd (hereinafter "Carlsberg") in relation to the Outlet Agreements, particularly regarding Kafe 338, Restoran 3388, and Restoran 677. The Plaintiffs contend that the Defendant has failed to honour its commitment to provide upfront disbursements as stipulated in the Outlet Agreements executed for the supply of Carlsberg products and associated promotional support. Additionally, the 1st Plaintiff claims that he was induced into signing the agreements under fraudulent misrepresentation and deceit.

[2] The Defendant, in response, denies any breach of contract and asserts that the Plaintiffs had themselves failed to fulfil the conditions precedent under the agreements ie they had failed to meet the sales targets specified under the Outlet Agreements.

[3] The Defendant has also filed a counterclaim against the 1st Plaintiff for acts of vandalism committed against its property on two separate occasions. The Defendant claims that these acts amount to trespass to goods, harassment, and intimidation.

[4] After careful consideration of the evidence adduced and submissions made by both parties, the Court now proceeds to examine the pertinent legal and factual issues before arriving at its decision.

Background Facts

[5] The 1st Plaintiff is a sole proprietor engaged in the food and beverage industry and operates two outlets, namely Kafe 338 and Restoran 3388. The 2nd Plaintiff is also a sole proprietor and operates Restoran 677. The 2nd Plaintiff and the 1st Plaintiff share a business relationship, wherein the 1st Plaintiff has control and/or access to the management of Restoran 677, as affirmed by the 2nd Plaintiff.

[6] The Defendant, Carlsberg Marketing Sdn Bhd, is a well-established distributor of alcoholic beverages in Malaysia, particularly Carlsberg beer products. In furtherance of its business expansion, the Defendant regularly enters into outlet agreements with F&B proprietors to promote the sale of its products through various incentives, including upfront disbursements.

[7] The Plaintiffs operate food and beverage establishments under the trade names Kafe 338, Restoran 3388, and Restoran 677. As part of their business model, they entered into promotional agreements with beverage suppliers, including the Defendant, Carlsberg Malaysia. These agreements typically involved upfront financial disbursements by the Defendant in exchange for exclusivity and the achievement of sales targets for Carlsberg products.

[8] Sometime in February 2018, the 1st Plaintiff was approached by one Foong, a sales representative of the Defendant, who proposed an outlet agreement to incentivize the sale of Carlsberg products at the 1st Plaintiff's establishments. Upon expressing his interest, Foong sought the necessary approvals from his superior, Eugene, the Defendant's Sales Manager, to generate a formal proposal.

[9] The proposal offered an initial upfront disbursement structured as follows:

(i) RM100,000.00 upon execution of the Outlet Agreement

(ii) RM100,000.00 upon achieving 50% of the total sales target

(iii) Total: RM200,000.00

[10] The first of such agreements was Outlet Agreement 338, executed between the 1st Plaintiff and the Defendant on 1 March 2018, for Kafe 338. The material terms required Kafe 338 to achieve a minimum monthly sales target of 30.02 hectolitres and a total sales target of 720.58 hectolitres. In addition, Kafe 338 was required to execute a letter of guarantee, undertaking to refund all amounts received in the event of a material breach.

[11] The Outlet Agreement 3388, relating to Restoran 3388, was similarly processed around the same time. However, upon conducting a CTOS search, the Defendant discovered that the 1st Plaintiff was involved in an ongoing legal dispute with Tenaga Nasional Berhad (TNB). This prompted the Defendant to reject Outlet Agreement 3388 outright and reconsider the implementation