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2010 MarsdenLR 2771
HIGH COURT, MUAR
METROD (MALAYSIA) BERHAD – Appellant
Versus
MGS TRANSPORT SDN BHD – Respondent
[Guaman Civil No: 23-9-09]
A party cannot enforce a contract unless they are a direct party to it, reaffirming the principle of privity of contract.
Headnote:(A) High Court Rules 1980 - Order 18 Rule 19(1)(b) and (c) - Transportation Contract dispute - Plaintiff claims losses due to stolen goods; Defendant argues lack of privity of contract - Court clarifies that contract was solely between Defendant and Metrod (OFHC) Sdn. Bhd., excluding Plaintiff - Hence, Plaintiff lacks locus standi to sue Defendant. (Paras 10, 13, 15)
(B) Contract Law - Privity of Contract - Court highlights essential principle that a party cannot enforce a contract unless they are a party to it - This principle is supported by established case law. (Paras 11-12)
Facts of the case:
Plaintiff engaged Defendant for the transportation of goods, but they were stolen while in Defendant's custody. Plaintiff was compensated by its insurer, who subsequently filed a claim on Plaintiff's behalf.
Findings of Court:
The Court found that the Transportation Contract was strictly between Metrod (OFHC) Sdn. Bhd. and the Defendant, rendering the Plaintiff's claim unsustainable due to lack of direct contractual relationship.
Issues: Whether the Transportation Contract was between the Plaintiff and Defendant, and thus whether the Plaintiff had the standing to pursue the claim.
Ratio Decidendi: The Court determined that contractual rights only accrue to the parties involved in the contract, thereby dismissing claims from those not party to such contract, solidifying the principle of privity of contract.
Result: Application allowed; Plaintiff's case struck out.
| Table of Content |
|---|
| 1. robbery during transportation and insurance claims (Para 3 , 4 , 5) |
| 2. locus standi and contractual relationships (Para 6 , 7 , 8) |
| 3. interpretation of the transportation contract (Para 9 , 10 , 11 , 12 , 13 , 14) |
1. The Defendant applied (in enclosure (5)) under the Court's existing jurisdiction and or under Order 18 rule 19(1)(b) or (c) or (d) of the Rules of the High 1980 (" RHC ") to strike off the Plaintiff's Writ of Summons and Statement of Claim dated 29.4.2009 (in enclosure (2)).
2. The grounds of the Application are that the Plaintiffs claim is scandalous, frivolous or vexatious; or an abuse of the process of the Court, and therefore should be struck off.
B. BRIEF FACTS:-
3. It was the contention of the Plaintiff that the Plaintiff, together with Metrod (OFHC) Sdn Bhd. ("Metrod OFHC"), had used the services of the Defendant for the transportation of goods, namely copper wires, belonging to both the Plaintiff and Metrod OFHC. This arrangement was as provided in the Transportation Contract dated 16.3.2001 in Exhibit "TCH-1" of the Afidavit in support of the Defendant's application affirmed by Teh Chin Hua on 3.6.2009 in enclosure 5A ("Transportation Contract").
4. Whilst transporting the Plaintiff's goods from Shah Alam to Johor Bahru in the Defendant's lorries bearing registration numbers JDD 3678 T/J 4330 and WET 2716 T/W 3452 ("the said lorries") via Muar and whilst the said lorries were stationed at the Defendant's premises in Muar, there was a robbery at the Defendant's premises ( "the said robbery" )and the said goods were stolen from the said 2 lorries while the said goods were in the custody of the Defendant (see paragraphs 5 and 6 of the Statement of Claim). As a result of the said robbery, the Plaintiff suffered losses and damages.
5. The Plaintiff made a claim for the losses suffered to its insurer Uni. Asia General Insurance Berhad ("the Insurer") and was compensated by the Insurer. The Plaintiff then signed the Subrogation Form dated 6.1.2004 (Exhibit "HWK-1", Plaintiff's Affidavit in Reply (2) enclosure 12), subrogating all its rights and remedies in respect of the subject matter insured in accordance with laws governing the contract of insurance. Hence, the Writ of Summons and the Statement of Claim were filed by the Insurer in the Plaintiff's name under the Insurer's right of subrogation.
THE DEFENDANT'S CASE:-
6. The Defendant contended that the Plaintiff did not have the locus standi to make any claim against it under the Transportation Contract as the Transportation Contract was between the Defendant and Metrod (OFHC) Sdn. Bhd. and not between the Defendant and the Plaintiff. This was further reinforced by the Final Report of the General Adjustment Expertise Sdn. Bhd. as exhibited in Exhibit "TCH-2" of enclosure 5A ("the Adjuster's Report").
THE PLAINTIFF'S CASE:-
7. The Plaintiff contended that the Transportation Contract was between the Defendant and "Metrod", that is, Metrod (Malaysia) Berhad and Metrod (OFHC) Sdn. Bhd. Reference was made to paragraphs 1 and 2 of the Transportation Contract in support of this contention. Further, the Plaintiff contended that the Transportation Contract was signed by Metrod (Malaysia) Berhad and Metrod (OFHC) Sdn. Bhd with the Defendant and thus bound both Metrod companies with the Defendant.
8. The Plaintiff further referred to the Adjuster's Report in support of its contention, where it is stated that the Plaintiff and Metrod OFHC are the insured under the Insurance Policy No. KLCA3000010 ("said Insurance Policy").
DECISION:-
9. It was not disputed by the Plaintiff that the basis of its claim against the Defendant was the Transportation Contract. In view of this, the Court agrees with the submission of the learned counsel for the Defendant that the issue which this Court has to decide is whether the Transportation Contract is between the Plaintiff and the Defendant. In order to decide on the issue, the Court needs to peruse the contents of t
