Back
2011 MarsdenLR 2690
HIGH COURT MALAYA JOHOR BAHRU
KAYU UTAMA SDN BHD – Appellant
Versus
ABD SALIM ABDUL RAHIMAN – Respondent
[Civil Suit No: 22-819-2009]
The court ruled that contract terms must be enforced as written, without judicial alteration or assumption of new contracts based on third-party representations.
Headnote:(A) Contract Law - Breach of Contract - Plaintiff sought RM212,000.00 for unpaid balance under contract for logging rights - Defendant claimed breach due to shortfall of logging area. The court emphasized the principle that courts must enforce the clear terms of the contract without importing new terms. It ruled no new agreement was established despite alleged representations by a third party. (Paras 4, 6, 36)
(B) Agency Law - The onus lies on the party alleging the existence of an agency relationship to prove it - Court held no evidence existed to establish agency between plaintiff and its parent company. (Paras 8, 11, 19)
Facts of the case:
The plaintiff, a limited company, entered into a contract with the defendant concerning logging rights on a specified land area, with total consideration of RM990,000.00. The defendant only paid RM778,000.00, leading to the claim for the remaining RM212,000.00. Defence claimed the plaintiff failed to deliver the full logging area, justifying non-payment.
Findings of Court:
The contract terms were clear, indicating D’s obligation to pay the full amount upon conditions stipulated, independent of the alleged shortfall in area. The shortfall did not constitute a breach.
Issues: 1. Was D liable for the balance payment? 2. Did P breach the contract by failing to supply the full logging area? 3. Is D entitled to damages?
Ratio Decidendi: The court found that the defendant failed to establish both a breach of contract by the plaintiff and the existence of any new agreement or agency.
Result: Judgment entered for the plaintiff; defendant's counterclaim dismissed.
| Table of Content |
|---|
| 1. contract execution and payment obligations. (Para 1) |
[1] The plaintiff ('P'), a limited company and the defendant ('D'), an individual trading under his own name, entered into a contract on 10 August 2005 whereby P granted to D the rights to fell timber on a plot of jungle land known as Kompartment 94, Hutan Simpan Ulu Sedeli, Mersing. In consideration thereof, D was obligated to pay P a total sum of RM990,000.00 according to the schedule of payment laid down in the written agreement. The logging licence was issued by the director, Johor Forestry Department. However, D did not make full payment but only paid RM778,000.00 leaving a balance of RM212,000.00 which is the subject of P's claim for breach of contract.
