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2025 MarsdenLR 2420
SESSION COURT SHAH ALAM
3BUMI TRADING SDN BHD – Appellant
Versus
MOHD HAFIZAN JAMALUDIN; MOHD NASARUDDIN AHMAD & ANOR (THIRD PARTY) – Respondent
[Civil Suit No: BA-B52NCC-97-07/2021]
A party must fulfill contractual obligations, and failure to do so, especially alongside fraudulent practices, results in joint liability for damages incurred.
Headnote:(A) Contract Law - Breach of Contract - The court emphasizes that a party is liable for failure to deliver goods as per contractual obligations, highlighting evidence showing that the Defendant received RM720,000 but only refunded RM200,000, leaving RM520,000 outstanding (Paras 1-6, 26).
(B) Liability - The court found that the Defendant, along with third parties who were complicit in the financial misconduct, is equally liable for the Plaintiff's losses due to misappropriation of funds and failure to meet delivery standards (Paras 58-67).
Facts of the case:
The Plaintiff, having paid a substantial sum for a contract with an assurance of delivery, experienced significant financial detriments due to the Defendant’s failure to uphold the contract terms, leading to legal action for the recovery of outstanding payments (Paras 1-5, 26).
Findings of Court:
The Plaintiff's claim was validated, with the court ruling in favor of the Plaintiff for RM520,000, holding the Defendant and associated parties jointly liable for financial damage caused (Paras 58-67).
Issues: The main issues included the validity of the Defendant's delivery claims, assessment of liability involving Third Parties, and the justification of financial losses incurred by the Plaintiff due to Defendant's actions (Paras 8-9).
Ratio Decidendi: The court expressed disapproval of the Defendant's claims of innocence, asserting that he was complicit in a fraudulent scheme orchestrated with the Third Parties, concluding that all parties played significant roles in breaching the contract and misusing funds (Paras 60-66).
Result: The Plaintiff's claim was allowed with a cost of RM30,000, and the Defendant, along with the Third Parties, was held jointly liable.
| Table of Content |
|---|
| 1. plaintiff's burden of proof on contract breach (Para 1 , 3 , 4 , 5 , 6) |
| 2. plaintiff's claim for damages and repayment (Para 10 , 11) |
| 3. defendant's argument against claims (Para 12 , 13 , 14 , 15) |
| 4. third parties' disconnection from the contract (Para 16 , 17 , 18 , 19) |
| 5. third parties' defense and involvement (Para 20 , 21 , 22 , 23 , 24 , 25) |
| 6. court's findings from evidence presented (Para 26 , 27 , 28 , 29 , 30) |
| 7. defendant's active role in transactions (Para 31 , 32 , 33 , 34 , 35) |
| 8. implications of executions of fraudulent actions (Para 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49) |
| 9. fraud and liability among parties (Para 50 , 51 , 52 , 53 , 54 , 55 , 56) |
| 10. joint liability in fraudulent contracts (Para 57 , 58) |
| 11. legal precedent on fraudulent liability (Para 59) |
| 12. final judgment and order for claim (Para 60 , 61 , 62 , 63 , 64 , 65 , 66) |
(Full Trial)
A. Introduction
[1] This is a contractual claim arising from the Plaintiff's assertion that the Defendant breached contractual obligations by failing to deliver goods and misusing funds. The Plaintiff paid RM720,000.00 for an order - of which only RM200,000.00 was refunded - leaving RM520,000.00 outstanding. Evidence, including testimony from SP1, established that the Defendant not only failed to deliver the goods but was also directly involved in the misappropriation of funds. Concurrently, third-party proceedings were brought against Nasaruddin (first Third Party) and Hasimah (second Third Party), who played pivotal roles in the fraudulent transaction.
[2] After a full trial, this court allowed the Plaintiffs claim, awarding costs of RM30,000.00 and holding the Defendant and the implicated third parties equally liable.
B. Salient Facts
[3] On 9 November 2020, under Purchase Order No 2020/0000657 issued by Koperasi Sahabat Amanah Malaysia Berhad (the Plaintiffs customer), the Plaintiff was contracted to supply 400,000 kilograms of Chicken Boneless Breast (THAI) at a total value of RM2,880,000.00. Subsequently, on 7 December 2020, the Plaintiff placed an order with the Defendant to supply the same product at RM7.05 per kilogram (totaling RM2,820,000.00), with instructions that the goods be delivered to the Plaintiff's customer.
[4] For the first delivery of 100,000 kilograms, the Defendant issued an invoice for RM705,000.00 on 10 December 2020, which was fully paid by the Plaintiff on 27 December 2020. The delivery was confirmed on 15 January 2021, and the Plaintiff invoiced its customer RM720,000.00 for this batch, which was subsequently paid in full.
[5] For the second delivery of 100,000 kilograms, the Defendant issued another invoice for RM705,000.00 on 15 January 2021, and the Plaintiff made full payment on 3 February 2021. However, the Plaintiff's customer later allegedly rejected this delivery - citing delayed delivery and non-compliance with the standards set by the Department of Quarantine and Inspection Malaysia - and formally cancelled the original order on 7 April 2021.
[6] As a result of the failed delivery, the Plaintiff incurred losses, including the full payment of RM705,000.00 to the Defendant for the second batch and a lost profit of RM15,000.00 from the related customer invoice. Although the Defendant admitted on 5 April 2021 that the goods were delivered but rejected due to quality issues and provided cheques totaling RM720,000.00 only partial payments were received. To date, an outstanding amount of RM520,000.00 remains unpaid by the Defendant.
[7] Plaintiff initiated a suit against the Defendant for the outstanding balance. Defendant subsequently issued a third-party notice to the two third parties and averred that the third parties shall be held liable for the Plaintiff's claim.
C. Agreed Issues To Be Tried
[8] Agreed issues to be tried for the main suit (filed vide encl 54) are as follows:
(i) Whether the Defendant made the second delivery of 100,000 kilograms of Chicken Boneless Breast (THAI) to the
