The court determined that the first defendant's failure to procure charter flights constituted a total failure of consideration, entitling the plaintiffs to a refund and nominal damages, while the third defendant was protected under the privity of contract doctrine.

JUDGMENT

Su Tiang Joo J:

Introduction

[1] After having paid a sum of RM1,353,550.00 representing 25% of the contract sum, both the plaintiffs asserted that they have been defrauded in a contract for the charter of two flights to Gold Coast, Australia, they sued for, inter alia, total failure of consideration, breach of contract, fraud, negligence and misrepresentation by the defendants for the monies that were paid to and received by the first defendant. The plaintiffs claim for the monies be returned to them, loss of profit, general damages, aggravated and exemplary damages, interest on the monies and damages with costs. Besides resisting the claim, the first defendant counterclaimed for payment in the sum of RM541,420.00 being a further 10% of the invoiced amount as its cancellation fees.

[2] After a trial conducted over 6 days with a total of 5 witnesses called, judgment was pronounced in favour of only the first plaintiff and the counterclaim of the first defendant was dismissed. These are the grounds for the decision made.

Issues To Be Determined

[3] The following are the parties' agreed issues to be determined in this action (Enclosure 293) as crafted by them:

For the main action

i) Whether the plaintiffs engaged the services of the 1st defendant to obtain 2 charter flights as stated in the quotation dated 28th February 2016:

a) If the issue in paragraph 1 is answered in the affirmative, whether there is total failure of consideration by the first defendant for failing to obtain/confirm the said 2 charter flights.

b) If the issue in paragraph 1 is answered in the affirmative, whether the first defendant and/or the second defendant and/or the third defendant made representations to the plaintiffs as stated in paragraphs 20.1 to 20.19 of the Amended Statement of Claim dated 1st March 2022, to induce the plaintiffs to engage the services of the first defendant.

ii) Whether the plaintiffs or the first and/or the second and/or the third defendants have failed/neglected/ refused to confirm the charter flights after receiving the advance payment of 25% from the plaintiffs.

a) Whether, as a result of the continued failure/refusal/neglect of the first and/or second and/or third defendants to fulfil their obligations as mentioned above, the plaintiffs decided not to proceed with the charter flights.

i. If it is the plaintiffs, whether the plaintiffs are entitled to obtain reliefs.

ii. If it is the first defendant, whether the third defendant is personally liable.

b) If the issue in paragraph ii above is answered in the affirmative, whether the plaintiffs are entitled to the refund of the 25% advance payment, from the first defendant.

iii) Whether the defendants manipulated the payment schedule in the charter flight agreement dated 22nd April 2016.

a) If above issue is answered in the affirmative, whether the first and/or second and/or third defendants did so to conceal the unavailability of charter flight to Guangzhou, which was known by the first and/or second and/or third defendants as early as 7th March 2016.

iv) Whether the second and the third defendants are the alter ego of the first defendant.

a) If the above is answered in the affirmative, whether the first defendant's corporate veil should be lifted to consider the liability of the second and third defendants as individuals, towards the plaintiffs.

v) Whether the first and/or second and/or third defendants are jointly and/or severally liable to pay RM3,993,000.00 to the plaintiffs as loss of income and/or loss of profit.

For The 1st Defendant's Set Off And Counterclaim

vi) Whether the first plaintiff had breached the contract with the first defendant by failing to provide confirmations as requested by the third defendant and by contacting AirAsia X Berhad to express the intention to withdraw from the Passenger Service Agreement dated 22nd April 2016 (DB 3 129 to 140).

a) If the above issue is answered in the affirmative, whether the first defendant is entitled to forfeit the 25% advance payment