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2022 MarsdenLR 2624
HIGH COURT MALAYA KUALA LUMPUR
BESTINET SDN BHD – Appellant
Versus
GHL EPAYMENTS SDN BHD – Respondent
[Suit No: WA-22-NCVC-692-09/2019]
A valid and binding contract existed between parties despite the absence of a formal executed agreement, as essential contract elements were met.
Headnote:(A) Contracts Act 1950 – Sections 10, 14, and 18 – Validity of Contract – Court finds a valid and binding contract existed despite lack of a single written instrument recording detailed terms of the contract. Essential elements such as consensus ad idem, offer, acceptance, and consideration were met. (Paras 26, 28, 40)
(B)
Misrepresentation – Plaintiff failed to establish misrepresentation as the burden of proof lies with the Plaintiff. The evidence indicates that the Defendant successfully completed its obligations under the contract and that the responsibility for obtaining approvals lay with the Plaintiff, not the Defendant. (Paras 42, 48, 80)
(C)
Damages – Court awarded nominal damages to the Defendant due to unlawful termination of contract by the Plaintiff after finding the latter's claims unproven. (Paras 108, 126)
Facts of the case:
This dispute arose from a contract between the Plaintiff and the Defendant for the development of an e-wallet application. The Plaintiff claimed the Defendant made false representations about its authority and abilities regarding the e-wallet.
Findings of Court:
The Court found that the Defendant had indeed completed its contractual obligations and that the termination of the contract by the Plaintiff was unlawful.
Issues
: The main issues included the establishment of a valid contract, allegations of misrepresentation by the Defendant, and the subsequent termination of the contract by the Plaintiff.
Ratio Decidendi:
The court concluded that a valid contract existed and that the Plaintiff did not fulfill its obligations to obtain necessary approvals, among other findings.
Result:
The Court dismissed the Plaintiff's claim and recognized the Defendant's entitlement to damages for the unlawful termination.
JUDGMENT
A. Introduction
[1] The dispute between the Plaintiff and the Defendant arises out of the contract executed based on the quotation dated 5 April 2017 to develop, manage and maintain an e-wallet white labelling application platform.
B. Issues In Dispute
[2] Parties agreed that the following issues are to be determined by this Court:
2.1 Whether there was a valid and binding contract between the Plaintiff and the Defendant?
2.2 Whether the Defendant has made the following wrong representations to the Plaintiff?
(a) That the Defendant is the provider of the e-wallet licensed by Bank Negara Malaysia.
(b) That the Defendant failed to infoRMthe Plaintiff that MRuncit is the e-wallet provider licensed by Bank Negara Malaysia and will be managing the project for the Plaintiff.
(c) That the Defendant represented a larger capacity of the e-wallet.
(d) That the Defendant is able to complete the Phase 2 project by February 2018.
(e) That the Defendant can obtain the approval for the e-wallet from Bank Negara Malaysia.
(f) That the Defendant is authorized and licensed to obtain the necessary approvals for the e-wallet from Bank Negara Malaysia to increase the capacity of the e-wallet.
[3] Although this was not stated in the Issues to be Tried by parties, I note that the following issues should be determined by this Court based on the pleadings. They are:
3.1 Whether the Defendant breached the contract by failing to prepare, manage, and maintain the application (e-wallet) for the Plaintiff under the terms of the contract.
3.2 Whether the Defendant breached the contract by failing to obtain the approval from Bank Negara Malaysia for the said application (e-wallet).
3.3 Whether the termination of the contract by the Plaintiff is wrong.
3.4 Whether the Plaintiff is contractually bound to pay the Defendant for the invoices issued dated 31 December 2018 and 31 May 2019.
[4] Corollary to the above issues, this Court will also determine whether the Plaintiff or the Defendants are entitled to the damages and remedies pleaded in their Statement of Claim and the Defence and Counterclaim.
C. Facts
[5] The representatives of the Plaintiff and the Defendant met sometime in January 2017 to explore and discuss the proposal to develop an e-wallet for the Plaintiff's use.
[6] The said meeting was attended by the following individuals:
(a) Representatives from the Plaintiff;
- Azril Rizal bin Abdullah.
- Azizul Othman
(b) Representatives from the Defendant;
- Kenneth Yoh Khai Siang
- Tee Kean Kang
(c) Parties could not agree whether the representatives of MRuncit Commerce Sdn Bhd were present at the said meeting. The Defendant contends that the one Aaron Lee Chin Wee, the Chief Executive Officer of MRuncit and one William, a freelance advisory of the said company.
[7] Parties agreed that the Plaintiff issued a quotation dated 5 April 2017 and this was agreed to by the Defendant.
[8] The quotation contained, inter alia, the following terms:
8.1 The Plaintiff agreed to a one-time fee of RM800,000.00 for the Bestpay Mobile Customer App, Merchant CRMApplication, Database and Customer / Administration Web Portal Access for Membership Administration, Maintenance and Reporting.
8.2 A one-time fee of RM75,000.00 for system design and project implementation management based on 3 months projected timeline.
8.3 All the fees chargeable are subject to applicable GST at the material time.
8.4 These one-off fees are to be paid following the following timelines
- 20% of total costs (RM175,000.00) is to be paid by the Plaintiff on the kick-off date of the project.
- 20% of total costs (RM175,000.00) is to be paid by the Plaintiff upon SIT (system integration testing) readiness / UAT (user acceptance test) readiness.
- 20% of total costs (RM175,000.00) is to be paid by the Plaintiff upon the completion of UAT and the production acceptance for phase 1.
- 20% of total costs (RM175,000.00) is to be paid by the Plaintiff upon the completion of UAT and the production acceptance for
