A party claiming damages for breach of contract must provide evidence of actual loss; failure leads to nominal damages only.

Lee Swee Seng JCA:

[1] This appeal explores the issue of how to assess damages for breach of a contract when it was terminated after three months into the contract that was agreed to be for five years. The contract was for services to be provided consisting of rental of ten used storage containers and two other items consisting of a forklift and a crane to be operated by the plaintiff's workers.

[2] The plaintiff was in the business of letting out used storage containers and machines and had fixed rate of rental for the containers and the machines in a forklift and a crane with even a minimum use expressed in the number of times the machines are to be used per month.

[3] The defendant is a cooperative of the Royal Customs of Malaysia. The plaintiff said its loss is not just the amount invoiced for the first three months for which payment had not been made but also damages calculated based on the whole of the contract period of five years, being the rental it would have received had the contract being performed to its expiry date.

[4] The defendant said that while it is liable to pay for the amount invoiced for the first three months of the contract, the plaintiff must prove its loss arising from the defendant's breach. To award damages based on the rental, which the plaintiff could have collected if there had been no breach when it had taken back the storage containers and the machines would be to allow double recovery of the loss and over compensating and enriching the plaintiff as a result.

[5] The Registrar on 24 April 2019 granted only nominal damages of RM100,000.00 on the ground that the plaintiff had failed to adduce evidence to prove the loss suffered. Interest was also granted at the rate of 5% per annum from 16 April 2018 (date of writ) to realisation and costs of RM1,000.00 to the plaintiff. The Registrar was not satisfied that the loss may be quantified based on the number of years of the contract multiplied by the agreed rental rate.

[6] On appeal, the High Court on 25 June 2019 reversed the decision of the learned Registrar and awarded a sum of RM3.6 million with interest at 5% per annum from 16 April 2018 (date of writ) to realisation and costs of RM5,000.00.

[7] The defendant, being dissatisfied with the decision of the High Court, had appealed to the Court of Appeal.

[8] There was an earlier summary judgment filed for which the High Court had granted judgment for the liquidated sum of RM143,877.90 and a refund of the commitment fee of RM40,000.00 from 27 December 2017 and general damages to be assessed. It is the amount of damages assessed that is in issue here.

[9] The parties shall be referred to as they were in the High Court as plaintiff and defendant. The plaintiff is the appellant before us and the defendant is the respondent.

Whether The Terms Of The Contract Allow For Damages To Be Claimed For The Unexpired Period Of The Contract Based On The Agreed Monthly Rental?

[10] The plaintiff had given two quotations to the defendant. The salient terms of the First Quotation dated 19 September 2017 are as follows:

(a) The plaintiff will rent out seven units of used 20' storage container to the defendant and the rental rate is fixed at RM100.00 per day or RM700.00 per month and rent out three units of used 20' reefer containers and the rental rate is fixed at RM300.00 per day or RM1,750.00 per month (hereinafter referred to as "the Containers");

(b) A corporate guarantee by the defendant is to be issued with an amount minimum of RM600,000.00, which is valid for five years to the plaintiff upon confirmation of this quotation; and

(c) All prices and quotes shall be valid within 1,825 days (which is equivalent to five years) from the date of this quotation letter.

[11] The Second Quotation, also dated 19 September 2017 has the following key terms:

(a) The plaintiff will rent out one unit of forklift at the rental rate of RM70.00 per lift and one unit of crane at the rental rate of RM120.00 per lift to the defendant (herei