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2009 MarsdenLR 1852
K ANANTHAM
IMATERA DIGITAL IMAGE SERVICES SDN BHD – Appellant
Versus
TAHAN INSURANCE MALAYSIA BHD – Respondent
A plaintiff must establish a reasonable cause of action against a defendant, which requires a direct contractual relationship, as determined by principles of offer and acceptance.
Headnote:(A) Civil Procedure - Order 18 Rule 19 (1)(a) of the Rules of the High Court 1980 - Application to strike out claim for failure to disclose reasonable cause of action - Court found that plaintiff's cause of action was against PICT Solution Sdn. Bhd and not the defendant - Relationship established was only based on a purchase order accepted by the plaintiff, which does not create a contract with the defendant. (Paras 3-6)
(B) Contract Law - Principles of offer and acceptance - A contract arises from an offer and acceptance, emphasizing that the contract in this case is between the plaintiff and PICT only, with no direct nexus to the defendant. (Paras 5-6)
Facts of the case:
The plaintiff's claim against the defendant was based on the supply of goods after a purchase order from PICT, which was the actual party in the contract with the plaintiff. The letter of intent from the defendant was directed to PICT, highlighting the lack of standing for the plaintiff's claim against the defendant.
Findings of Court:
The court ruled that the plaintiff failed to establish a reasonable cause of action against the defendant due to lack of contractual relationship, leading to the acceptance of the application to strike out the claim with costs awarded to the defendant.
Issues: Whether the plaintiff disclosed a reasonable cause of action against the defendant based on the provided claim details and correspondence.
Ratio Decidendi: The court concluded that mere supply of goods does not establish a cause of action against a party that did not initiate the purchase order, reinforcing the principle that a legal obligation arises only from contractual agreements directly established.
Result: Application to strike out the claim allowed.
Enc 5 is an application by the Defendant to strike out the Plaintiffs' claim on the ground that it does not disclose a reasonable cause of action against the Defendant. An examination of the statement of claim will reveal that the Plaintiffs' cause of action, if any, against the Defendant is pleaded in paragraphs 3 to 6 of the statement of claim. My examination of these paragraphs reveal that the Plaintiff's cause of action is against PICT Solution Sdn. Bhd (PICT) and not the Defendant. I opine to this effect because the Defendant's letter of intent for the supply of computer equipment was addressed to PICT and not to the Plaintiff. The purchase order for the supply of the same equipment to the Defendant, according to paragraph 5 of the statement of claim originated from PICT and was accepted by the Plaintiff. In other words, the only nexus between the Plaintiff and the Defendant is that the Plaintiff supplied the goods to the Defendant after accepting the purchase order issued by PICT (see paragraph 6 of the statement of claim).
In my judgment, the supply of the goods by the Plaintiff to the Defendant cannot vest a cause of action in the Plaintiff against the Defendant for the price of the goods since the purchase order was from PICT and accepted by the Plaintiff. Accordingly, applying contract principles that a contract comes into existence when there is an offer and acceptance, the contract on the facts of this case is between the Plaintiff and PICT. Counsel for the Plaintiff in paragraph 4.4 of her submission submits that there exists correspondence exchanged between the Plaintiff, the Defendant and PICT whereby the Defendant agreed to pay the Plaintiff for the computer equipment supplied by it. With respect, for the Plaintiff to have a cause of action based on such correspondence, the Plaintiff has to plead such correspondence and why such correspondence vests a cause of action in the Plaintiff against the Defendant. Absent such a plea, the Plaintiff's statement claim does not disclose a reasonable cause of action against the Defendant and runs foul of O. 18 r. 19 (1)(a) of the RHC 1980 . Accordingly I allow Enc. 5 with cost. I order the Plaintiff to pay the Defendant the sum of RM2,500 towards costs of Enc. 5.
