The court established that a breach of contract does not automatically negate a party's entitlement to payments unless explicitly stated, emphasizing contractual clarity and rights.

JUDGMENT

Darryl Goon Siew Chye JCA:

[1] This was an appeal by the appellant, the 2nd defendant in the High Court. The appellant's appeal was only against part of the decision of the learned High Court Judge.

[2] Although this appeal was limited in its scope, it is nevertheless necessary that the background to the entire dispute be disclosed to some limited extent so that not least, the context of the appeal may be appreciated.

[3] Due to the nature of the suit brought, the claims made, the counter claim and the limited appeal, for the avoidance of confusion as to the parties, they will be referred to in their respective capacities in the suit before the High Court.

[4] It is also necessary to state at the outset, and by way of a caveat, that the decision of this Court, and the grounds set out, are strictly limited to the specific issues raised in this appeal. This is because there exists another appeal out of the same suit and judgment of the High Court, and that is Civil Appeal No W-02(NCC)(W)-2434-11-2013 which was brought by the plaintiff.

[5] After considering both the oral and written submissions of learned counsel for the parties, the Record of Appeal and the supplementary documents filed, the appeal was dismissed with costs. The reasons for doing so are herein set out. This is the judgment of the Court.

The Suit And The Parties

[6] The suit brought in the High Court was a derivative action. The derivative action was commenced by the plaintiff, Urban Domain Sdn Bhd for the benefit and on behalf of the 1st defendant, PINS OSC & Maintenance Services Sdn Bhd, against the 2nd and 3rd defendants namely Perak Integrated Network Services Sdn Bhd (the appellant in this appeal) and one Dato' Seri Dr Abdullah Fadzil Che Wan.

[7] As is the nature of a derivative action, the causes of action and the remedies sought were in actual fact those of the 1st defendant levelled against the 2nd and 3rd defendants.

[8] From the pleadings, it appears that the plaintiff had also sought to maintain the action for and on its own behalf, though ultimately, for the purposes of this appeal, nothing turns on that.

[9] The 1st defendant was a joint venture company. Its shareholders were the plaintiff and the 2nd defendant, each holding 50% of the shares in the 1st defendant.

[10] The 3rd defendant was a director in both the 1st and the 2nd defendants.

[11] The plaintiff's claim on behalf of the 1st defendant was for certain payments to be made to the 1st defendant by the 2nd and the 3rd defendants based on the terms of contracts that had been entered into by the parties.

[12] The basis of the plaintiff's claim against the 3rd defendant was premised on alleged breaches of his fiduciary duties owed to the 1st defendant, as a director of the 1st defendant. The claim against the 3rd defendant was dismissed. However, this appeal does not concern the 3rd defendant.

[13] Apart from defending the claim against it in the suit, the 2nd defendant also mounted a counterclaim against the 1st defendant for inter alia payment of a sum of RM3,224,904.10, as damages for breach of contract and a declaration that the 1st defendant was not entitled to any payments under any of the relevant contracts entered into between the parties.

[14] Following the trial, the learned trial judge held as follows:

"(A) the 2nd defendant is, in accordance to Clause 4.1 of the Management Agreement dated 21 May 2007 ("Management Agreement") and Clause 3.1 of the First Supplemental Agreement dated 27 May 2007, liable to pay to the 1st defendant Maintenance Fee calculated at the rate of 20% from the Rental Proceeds and Other Payments received from the Operators (Group A Operators) and Other Telecommunication Providers (Group B Operators) for the 87 Towers which was constructed and maintained by the 1st defendant for the period from 21 May 2007 (the Management Agreement date) until the expiry of the period as stated in Clause 8.1.1 of the Management Agreement for the Operators (Group A Operators) and the Othe