The judgment emphasizes the fiduciary and contractual duties of General Managers in statutory bodies and the implications of failing to present a defense in legal proceedings.

[1] This claim, which was commenced way back in 2009, by the Port Klang Authority ('PKA') is against the PKA's erstwhile General Manager ('GM'), one Datin Paduka Phang Oi Choo @ Phang Ai Tu ('OC Phang') for several alleged breaches of duties which allegedly caused losses to the Authority amounting to some RM4 billion.

Agreed Facts

[2] In order to appreciate the basis and background of the Plaintiff ('PKA')'s claim, it would be useful to reproduce in full the Statement of Agreed Facts acknowledged by both parties:

(1) The Plaintiff, Port Kelang Authority ('PKA'), is a statutory corporation under the jurisdiction of the Ministry of Transport ('MOT'). PKA was established on 1 July 1963 pursuant to the Ports Authorities Act 1963 ('PAA') to take over the administration of Port Klang from the Malayan Railway Administration.

(2) Section 2 (4)of the PAA provides that PKA shall consist of a Chairman, a General Manager and another 5 to 9 members. PKA is conferred the power under the PAA to do all things necessary or incidental to the discharge of its functions, namely to operate or otherwise maintain Port Klang and to operate any port-related activities approved by the Minister of Transport.

(3) The Defendant, Datin Paduka Phang Oi Choo ('OC Phang') resides at 17, Lorong Kemanis Satu, Bukit Bandaraya, 59100 Kuala Lumpur.

(4) OC Phang was the General Manager of PKA from September 1997 to June 2008.

(5) OC Phang had a contract of employment with PKA.

(6) Pursuant to s 2(2) of the PKA is conferred with the power to enter into contracts and shall have a common seal. Section 2 (3) provides that the Second Schedule to the PAA shall have effect with respect of PKA.

(7) The relevant paragraphs of the Second Schedule are:

4.2.1 Paragraph 2(1)

"The quorum of the authority shall be four"

4.2.2 Paragraph 2(6)

"The seal of the authority shall be authenticated by either the Chairman and the General Manager or General Manager and any one officer duly authorised by the authority to act in that behalf and any document purporting to be sealed with the said seal, authenticated as aforesaid, shall until the contrary is shown be deemed to have been validly executed."

4.2.3 Paragraph 4

"The authority may delegate to the Chairman or to any member or officer of the authority to or any committee any of their functions."

(8) Pursuant to the Ports (Privatisation) Act 1990, PKA divested its port undertakings in North Port and South Port to Northport (Malaysia) Berhad (a merger between Klang Container Terminal Berhad and Kelang Port Management Sdn Bhd). PKA also transferred its port undertakings in West Port to Westport Malaysia Sdn Bhd. (formerly known as Kelang Multi Terminal Sdn Bhd.)

(9) Some time in 1998, KDSB offered to sell 400 acres of the Land to PKA at the price of RM28 psf. KDSB's offer to sell to PKA the 400 acres of Land was rejected by PKA on 31 December 1998.

(10) Some time in December 1998, the idea to develop the Port Klang Free Zone ('PKFZ' or the 'Project') was conceptualized as part of the Government's strategic plan to transform Port Klang into a national load centre and regional transshipment hub. In order to do so, PKA required additional land at Pulau Indah.

(11) PKA had entered into the following 8 key agreements with KDSB from 2002 to 2006 in relation to the Project:

(i) Sale and Purchase Agreement dated 12 November 2002 ('LA1');

(ii) Development Agreement dated 27 February 2003 ('DA1');

(iii) Supplemental Agreement to DA1 dat