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2025 MarsdenLR 4103
HIGH COURT MALAYA KUALA LUMPUR
ULTIMATE PALMS SDN BHD – Appellant
Versus
MENA JAYA SDN BHD – Respondent
[Civil Appeal No: WA-12BNCC-17-06/2024]
The court affirmed that contracts must be interpreted within the context of prior communications, and Parties are bound to agreed terms, including renewal options based on conduct and correspondence.
Headnote:(A) Contracts Act - Sections 74 - Contractor obligations - Appeal against Sessions Court decision regarding damages awarded and contract interpretation. The court determined that the parties intended for a contract renewal option to be enforceable despite the Defendant's claims to the contrary. Evidence indicated a mutual agreement for a long-term relationship and renewal under the initially agreed terms. Defendant’s failure to respond constituted an admission of the Plaintiff’s claims regarding renewal rights. Damages assessed at RM 414,060.00 with interest awarded. The Defendant's appeal dismissed. (Paras 18-66)
(B) Appellate intervention - Standard of review - The appellate court has limited grounds for intervention unless a lower court's decision is plain error or unreasonable, and must evaluate facts without disturbing lower court findings absent compelling justification. (Paras 20-21)
| Table of Content |
|---|
| 1. introduction and overview of appeals (Para 1 , 2 , 3) |
| 2. court finds case suitable for intervention (Para 4) |
| 3. background on contract negotiation and emails (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13) |
| 4. dispute over renewal option and counterclaim (Para 14 , 15 , 16 , 17) |
| 5. sessions court's findings and decision (Para 18 , 19 , 20 , 21 , 22) |
| 6. error in the reasoning and law on contractual terms (Para 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32) |
| 7. implications of silence in commercial agreements (Para 33 , 34 , 35 , 36 , 37) |
| 8. judicial standards for interpretation of contracts (Para 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45) |
| 9. consideration of the context in disputes (Para 46 , 47 , 48 , 49 , 50) |
| 10. procedural issues of pleading and evidence (Para 51 , 52 , 53 , 54 , 55 , 56) |
| 11. conclusion on plaintiff's appeal and damages (Para 57 , 58 , 59) |
A.Introduction
[1] This is the Appellant's appeal against the decision of the Sessions Court Judge that had allowed the Plaintiff's / Appellant's claim but only allowed damages to be paid by the Respondent / Defendant to the sum of RM 116,299.60.
[2] This Appeal was also heard together with the Respondent's Appeal bearing number WA-12BNCC-19-07/2024. The Respondent's appeal is on the basis that the learned Sessions Court Judge should not have allowed the Plaintiff's / Appellant's claim in toto.
[3] For ease of reference, the Appellant shall be referred to as the Plaintiff and the Respondent shall be referred to as the Defendant.
[4] After hearing arguments by counsels for the Plaintiff and the Defendant, this Court finds that this is a suitable case for this Court to vary the orders of the Sessions Court and dismiss the Defendant's appeal.
B. Background Facts
[5] This Appeal arises out of the emails that were exchanged between the representative of the Plaintiff and the Defendant between 10 December 2021, 13 December 2021 and 30 December 2021.
[6] In the email dated 10 December 2021, Mr Ron Thoe on behalf of the Defendant had stated as follows:
"In the meeting, we Mena Jaya Sdn Bhd would like to generate a long terms business relationship with your company for the secondary palm oil products....
As per mention, we are exporting the products to our client in Europe, hence we will sponsor a certification, called NIS (National Italian Scheme) to your mill, this certificate used to certify the products' point of origin, and used for sustainability and traceability purposes.
...
While waiting on the certificate, Mena Jaya Sdn Bhd still will purchase your secondary products with market price plus our premium (RM 30.00 to RM 50.00). We are committed to this for this 5 years period."
[7] This was followed up with the email from Ron dated 13 December 2021 and a response from Jo Yee from the Plaintiff dated 27 December 2021. This culminated in the final email dated 30 December 2021 issued by Jo Yee for the Plaintiff:
1. Long Term Contract confirmation on 30 December 2021
Buyer: Mena Jaya Sdn Bhd
Seller: Ultimate Palms Sdn Bhd
Mills: Rompin Palm Oil Mill and Endau Palm Oil Mill
Product: Palm Fiber Oil
Price mechanism before obtaining National Italian Scheme (NIS) certificates: Based on monthly Peninsular
Malaysia MPOB monthly CPO average price with discount of 5% + premium at RM55.00/MT
Price mechanism after obtaining National Italian Scheme (NIS) certificates: Based on monthly Peninsular
Malaysia monthly CPO average price with discount of 5% + premium at RM60.00/MT
Duration: January - December 2022. The renewal of long term contract in 2023 will be at Seller's option
Quantity: monthly 160MT (to be split evenly between Rompin and Endau)
Price basis: Ex- mill basis
Payment term: Full payment before collection
Specification: FFA 8%, M & I 0.5%
Remark: The preliminary contract and proforma invoices will be based on Peninsular Malaysia MPOB monthly CPO average price for the previous month + premium of RM55.00/MT or RM60.00/MT. Difference will be settled after the release of Peninsular Ma
