JUDGMENT

Elaine Yap Chin Gaik JC:

Introduction

[1] In this action, the plaintiff claims damages for wrongful termination of a written contract dated 14 December 2023 between the plaintiff and defendant ("Contract"). The Defendant contends that it validly terminated the Contract on 26 February 2024 and counterclaims for damages for pre-contractual misrepresentation and breach of Contract.

[2] Under the Contract, the plaintiff was appointed by the defendant to supply services relating to the disposal of solid effluent, cleaning of treatment ponds and sale of scum oil from an oil palm factory presumably owned and/or operated by ST Palm Oil Mill Sdn Bhd ("STPO Mill"). The scope of works also included the provision of workers, workers' housing, machinery and equipment, diesel and transportation.

[3] The Defendant contends that the plaintiff had represented that scum oil prices in the market would not exceed RM1,900.00 per tonne and that this, and the plaintiff's representation on its cost of operations, were false justifications for only paying the defendant RM400.00 per tonne, and STPO Mill RM150.00 per tonne of scum oil extracted and sold by the plaintiff.

Background Facts

[4] The Contract was made in the form of a letter agreement dated 14 December 2023, and the material terms agreed were as follows:

"3. Generacres Sdn Bhd harus mengeluarkan invois kepada Brogass (M) Sdn Bhd bagi tujuan pembayaran sebanyak RM400.00 per tan kepada Generacres Sdn Bhd mengikut tiket timbangan yang dikeluarkan oleh pihak kilang seperti yang telah dipersetujui kedua belah pihak. Pembayaran invois tersebut akan dilakukan dalam masa 48 jam ke dalam akaun Generacres Sdn Bhd.

5. Brogass (M) Sdn Bhd juga bersetuju untuk membeli 'Scum Oil" dari kilang dengan harga RM150.00 per tan. Bagi harga belian yang melebihi atau kurang RM150.00 per tan, perkara tersebut akan dibincangkan semula oleh kedua belah pihak Generacres Sdn Bhd dan Brogass (M) Sdn Bhd bagi persetujuan bersama."

[5] Five (5) transactions for the purchase and sale of a total of 140.72 tonnes of scum oil by the plaintiff were carried out between January and February 2024, as evidenced by invoices issued by the defendant to the plaintiff for these transactions on scum oil at unit price of RM550.00 per tonne. This represented the RM400.00 per tonne payable to the defendant, and RM150.00 per tonne payable to STPO Mill.

[6] According to DW1, the presence on site of employees from Garuda Palm Ventures ("Garuda") became known to the defendant around February 2024. According to PW1, Garuda was engaged to assist because of the urgency in extracting the scum oil to allow cleaning works to be completed within six (6) months, and that its role was limited. However, the defendant allegedly discovered certain facts from Garuda, ie that Garuda was paying the plaintiff market price for the scum oil, performing part of the Contract scope of works and bearing its own cost at a much lower price.

[7] On 23 February 2024, the defendant wrote to the plaintiff to complain that the transaction price of RM1,900.00 per tonne for scum oil was too low compared to current market prices and accused the plaintiff of being unethical and deceiving the defendant. Referring to price offers from another company (probably Garuda), the defendant offered to revise the sale price of scum oil to the plaintiff to RM2,200.00 per tonne and in the meantime, instructed the plaintiff to cease all works because the defendant would take it over with immediate effect.

[8] On 24 February 2024, the plaintiff responded to state, inter alia, that it on-sells scum oil at the market price, which fluctuates. It did not agree to the offer of price revision for the Contract. The Plaintiff also explained that the differential sum between its market sale price and the RM550.00 paid to the defendant and STPO Mill represents the plaintiff's costs and that it bore the risks of any fall in the market price.

[9] On 26 February 2024, the defendant notified the plaintiff of