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2024 MarsdenLR 90
HIGH COURT MALAYA SHAH ALAM
FAIZAH JAMALUDIN, J
NS SENG SDN BHD – Appellant
Versus
SYARIKAT GEMILANG & ORS – Respondent
[Writ Summons No: BA-22NCVC-491-11/2020]
The court upheld the validity of the Supply Agreement, finding no evidence of inequality in bargaining power, and awarded nominal damages due to the plaintiff's failure to prove the quantum of claimed damages.
Headnote:(A) Supply Agreement - Breach of contract - Plaintiff sought damages for loss of profit due to alleged breach - Defendants counterclaimed that the Supply Agreement was void due to inequality of bargaining power - Court found no evidence of inequality or unfair advantage - Supply Agreement upheld as valid and binding. (Paras 13, 25, 32, 96)
(B) Damages - Burden of proof - Plaintiff failed to prove the quantum of damages claimed - Nominal damages awarded instead. (Paras 11, 96)
Facts of the case:
This suit arose from a breach of a supply agreement dated 1 March 2008, where the plaintiff alleged the defendants revoked the agreement due to low commission and lack of confidence in a new brand. The plaintiff sought RM2,047,239.16 in damages but was only awarded nominal damages of RM10,000.00. (Paras 1-12)
Findings of Court:
The court found that the Supply Agreement was not null and void, and the defendants had breached it by revoking it without just cause. The plaintiff did not provide sufficient evidence to support the claimed damages. (Paras 13, 32, 96)
Issues: The court addressed whether there was inequality of bargaining power, whether the Supply Agreement was void, whether D1 breached the agreement, and whether the plaintiff suffered loss of profit. (Paras 15-34)
Ratio Decidendi: The court ruled that the defendants failed to prove their claims of inequality or unfair advantage, and the plaintiff did not substantiate its claim for substantial damages. (Paras 25, 32, 96)
Result: Judgment for the plaintiff with nominal damages of RM10,000.00 awarded. (Paras 99-100)
Introduction
[1] This is a suit by the plaintiff against the defendants for breach of a supply agreement between the plaintiff and the first defendant ("D1") dated 1 March 2008 (the "Supply Agreement").
[2] D1 is the operator of a service station located on EMR 4750, Lot No 1974, Mukim Tanjong Duabelas, Daerah Kuala Langat, Selangor ("Land"). It retails fuel and petroleum products to the general public at the service station located on the Land. D1 is a partnership established on 6 March 1987 under the Partnership Act 1961.
[3] Haji Amer bin Risman (referred to in this Judgment as "Hj Amer" or "DW2") is the registered owner of the Land. He is the founder of D1 and the service station business operated by D1 on the Land. He is the father of the second, third and fourth defendants ("D2", "D3" and "D4"). D2, D3 and D4 are partners of D1.
[4] The plaintiff is a private limited company. It carries on the business of supplying petroleum products to, among others, dealer-owned dealeroperated petrol stations such as D1, for a commission. The petroleum products are sourced from nominated oil companies or companies licensed to supply petroleum products ("NOCs").
[5] The plaintiff had been supplying petroleum products to D1 since 1987 — first under the brand "BP" and then under the brand "BHP Petroleum" after British Petroleum's business in Malaysia was purchased by Boustead Petroleum Marketing Sdn Bhd ("BHP").
[6] The dispute between the parties arose after the plaintiff wrote to D1, through letters dated 5 February 2020, 11 February 2020 and 7 October 2020, informing D1 that it intended to source the petroleum products for supply to D1 from Five Petroleum Malaysia Sdn Bhd ("Five Petroleum") as the NOC in place of BHP.
[7] D1 in its letter dated 11 October 2020 entitled "Pembatalan Perjanjian Pembekalan Minyak Petrol dan Diesel dan Pembatalan Proses Pertukaran Penjenamaan kepada Five di Stesen Minyak BHP Bukit Changgang" informed the plaintiff that it was not interested in continuing with the Supply Agreement with the plaintiff because (i) the rate of commission offered was too low and (ii) it lacked confidence in the new brand Five Petroleum.
[8] In a subsequent letter dated 5 November 2020 to the plaintiff, D1 asked for feedback from the plaintiff on the process to revoke the Supply Agreement. It asked the plaintiff to list settlement steps with regards to the revocation of the Supply Agreement, failing which D1 will deem the Supply Agreement as revoked within 14 days from the date of the letter.
[9] The plaintiff did not reply to D1's letter. Thus, based on its letter of 5 November 2020, D1 deemed the Supply Agreement revoked as at 19 November 2020.
[10] The plaintiff filed this writ action against D1 on 23 November 2020 for breach of the Supply Agreement. It subsequently amended its writ and statement of claim to include D2, D3 and D4 as defendants.
[11] The plaintiff seeks a declaration that the defendants had breached the Supply Agreement and damages for loss of profit in the sum of RM2,047,239.16.
[12] The defendants in turn counterclaim for a declaration that the Supply Agreement is void and invalid.
[13] After full trial, based on the evidenced adduced before this Court and the testimonies of witnesses, this Court found that the plaintiff successfully proved that the Supply Agreement was not null and void, and that the defendants had breached the Agreement. However, the plaintiff failed to prove the quantum of damages claimed. Accordingly, this Court gave judgment to the plaintiff, dismissed the defendants' counterclaim and awarded the plaintiff nominal damages of RM10,000.00 only.
[14] The full reasons for this Court 's decision are set out in this Judgment.
Issues To Be Tried
[15] The primary issues for this Court 's determination are:
(a) whether there was inequality of bargaining power which gave the plaintiff an unfair advantage in the Supply Agreement?
(b) whether the Supply Agreement is null and void
