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2022 MarsdenLR 97
HIGH COURT MALAYA KUALA LUMPUR
CTMCC ENGINEERING (M) SDN BHD – Appellant
Versus
YES JOST MACHINERY SDN BHD – Respondent
[Civil Suit No: WA-22NCVC722-11-2018]
The case reinforces that contractual obligations, particularly regarding delivery and required approvals, must be strictly adhered to in order to avoid breach.
Headnote:(A) Contracts Act 1950 – Section 74 – Breach of contract – Plaintiff's claim for refund of advance payment and damages due to non-delivery of passenger hoists by the defendant. The plaintiff had paid an advance of RM235,320.00 but the 2 Passenger Hoists were never officially received due to lack of approvals. The court found that the failure to deliver amounts to a breach, allowing partial judgment in favor of the plaintiff, namely, the return of the advance payment (para 82).
(B)
Contract terms – Importance of securing necessary approvals before delivery as per contract stipulations. The court emphasized that contractual obligations must be strictly adhered to, including the need for regulatory approvals (para 40).
(C)
Counterclaim – The court dismissed the defendant's counterclaim for additional expenses as it was not substantiated by a binding contract or contractual terms (para 66).
Facts of the case:
The plaintiff alleged failure by the defendant to deliver two passenger hoists as agreed upon in the purchase order and contract terms; the defendant argued they were duly delivered but for temporary storage which the plaintiff rejected.
Findings of Court:
The court concluded that the plaintiff had proven breach of contract due to non-delivery and granted partial judgment in favor of the plaintiff.
Issues
: Main questions included whether the 2 Passenger Hoists were delivered and if the defendant met its contractual obligations.
Ratio Decidendi:
The court ruled that due to lack of essential approvals, there was no valid delivery or acceptance of the hoists, thereby confirming a breach of contract.
Result:
Plaintiff's claim partially allowed; defendant to refund RM235,320.00.
JUDGMENT
A. Introduction
[1] This is the plaintiff's claim ('this Suit') against the defendant for the alleged failure by the latter to fulfil its obligation under the purchase order dated 26 April 2016 ('the PO') and the Passenger Hoist Contract Terms ('the said Contract Terms').
(i) Background
[2] Both parties are companies duly incorporated in Malaysia. The plaintiff is a property developer, contractor, and sub-contractor. According to the defendant, the plaintiff is a 'State-owned company in China'. The plaintiff is the developer for the 'Greenland Danga Bay' project in Johor Bahru, Johor Darul Takzim. On the other hand, the defendant is trading as a 'supplier/ rentor of machineries, machines, machinery parts, and tools and hardware'.
[3] On 26 April 2016, the plaintiff had ordered 2 units of passenger hoists ('the 2 Passenger Hoists') from the defendant vide the PO for the project at Greenland Danga Bay for the price of RM784,400.00. Subsequently, on 30 April 2016 the PO was signed by the defendant. Both parties had also agreed on the terms stated in the said Contract Terms.
[4] Under the said Contract Terms, the plaintiff should make an advance payment of RM222,000.00 being 30% of the purchase price of the 2 Passenger Hoists as per the PO within 7 days after receiving the PO. Around June 2016, the plaintiff has made a total payment of RM235,320.00 to the defendant. This is not disputed by the parties.
[5] The dispute arose when the plaintiff averred that the 2 Passenger Hoists were never duly delivered by the defendant and have not been accepted and/or received by the plaintiff because the 2 Passenger Hoists were not approved by the Professional Engineering Design ('PE Design'). The plaintiff further claimed that under the PO and the said Contract Terms, the defendant must deliver the 2 Passenger Hoists on or before 24 June 2016, namely, eight (8) weeks from the signing of the PO.
[6] In this Suit, the plaintiff is, in essence, seeking the following:
(a) that the defendant return the sum of RM235,320.00 to the plaintiff;
(b) special damages in the sum of RM767,000.00 calculated at the daily rate of RM1,000.00 from 25 June 2016 to 31 July 2018;
(c) as an alternative, general damages to be assessed by the Court;
(d) interest at the rate of 8% per annum on paras (a) and (b) above from 31 July 2018 to the date of judgment;
(e) interest at the rate of 5% per annum on the total judgment sum from the date of judgment until the date of payment or realisation;
(f) costs; and
(g) other and/or further relief in which the Court thinks fit and just.
[7] In response to the plaintiff's claim, the defendant had filed a counterclaim against the plaintiff praying for the following reliefs:
(a) RM956,105.77 being the costs of designing, planning, engagement of professional engineers, manufacturers and/or fabrication of the 9 passenger hoists
(b) RM111,667.02 being the miscellaneous charges incurred concerning the 2 Passenger Hoists including bank charges, custom and tax duties;
(c) RM520,000.00 being the loss of rental revenue in respect of the 2 passenger hoists;
(d) Costs of redelivery incurred in respect of 2 Passenger Hoists from the Project site;
(e) Interest at the rate of 5% per annum on the Judgment Sum from the date of filing of this claim until the date of full settlement;
(f) Costs; and
(g) Further or any other reliefs deemed fit and proper by this Court.
(ii) The Trial
[8] The plaintiff called one (1) witness during the trial, while the defendant called six (6) witnesses respectively. The seven (7) witnesses were:
PW1 - Yao Xiao Hung
DW1 - Lee Yi Chan
DW2 - Guo Shi Chao
DW3 - Zhou Xiaoling
DW4 - Lee Ah Thong
DW5 - Tan Chung Hong
DW6 - Zhang Yun Hui
(iii) The Plaintiff's Case
[9] The plaintiff's case is that the defendant has never duly delivered the 2 Passenger Hoists, nor has the plaintiff accepted and/or received the 2 Passenger Hoists. The 2 Passenger Hoists sent have not been approved by the Malaysian authorities althou
