The need for a causal link between breach of contract and claimed losses is essential, and failure to adhere to this principle can lead to overcompensation, thereby rendering the decision untenable.

Kamaludin Md Said JCA:

Introduction

[1] The appellant Guinness Anchor Marketing Sdn Bhd appeals against part of the decision of the Seremban High Court dated 31 July 2018 which had inter alia:

(i) Dismissed the appellant's appeal against the respondent's loss of goodwill in the sum of RM 416,900.00;

(ii) Allowed the respondent's loss of profit of RM 500,885.97 as follows:

(a) RM 175,125.64 for the year 2002;

(b) RM 175,125.64 for the year 2003; and

(c) RM 150,634.69 for the year 2004.

(iii) Allowed the respondent's appeal for claim of loss of profit in the sum of RM 648,800.69 for the year 205 to 2006.

[2] Initially, the respondent raised a preliminary objection to the appellant's appeal contending that the appellant only filed one Notice of Appeal despite there being two appeals and separate orders ie Enclosure 12 and encl 15. The appellant has failed to specify which order they are appealing against. The appellant reacted by abandoning their appeal on paragraph (iii) above and will confine their appeal against the decision in paragraph (i) and (ii) only. Since the appeal in paragraph (iii) above, which order is made in respect of encl 15, is not the subject matter of appeal anymore, the Notice of Appeal before this Court is an appeal against one order ie Enclosure 12 order. Hence, the preliminary objection has become academic.

[3] On record, this is the second time this case came before the Court of Appeal of which the earlier Court of Appeal panel (COA) had dismissed the appellant's appeal and the case was sent back to the High Court for an assessment of the damages. The assessment of damages was conducted by the Deputy Registrar of the High Court (DR) whose decision was later appealed to the judge in chambers. The High Court judge heard the appellant's appeal in encl 12 dated 23 February 2017 and respondent's appeal in encl 15 dated 6 March 2017 respectively and made his decision. The appellant is not satisfied with part of the decision of the High Court judge hence this present appeal before this Court.

Common Agreed Facts

[4] The appellant entered into a Distributorship Agreement dated 3 February 1997 with Man Seng Marketing for the sale of the appellant's products to Man Seng Marketing. By a Goodwill Agreement dated 9 May 2002, the respondent purchased the assets of Man Seng Marketing including its goodwill ("Goodwill Agreement"). Subsequently, the appellant and the respondent entered into a Distributorship Agreement dated 1 July 2002 ("Distributorship Agreement"), whereby the respondent was the exclusive distributor of the appellant's products for specific territories as stated in the Distributorship Agreement.

[5] By a notice of termination dated 9 July 2004, the appellant terminated the Distributorship Agreement. The respondent claimed that the termination was unlawful and there were encroachment of the respondent's exclusive territories by the appellant's other distributors.

[6] The respondent then commenced this action against the appellant and claimed for the following:

(a) Loss of goodwill for the sum of RM 416,900.00;

(b) Loss of bank guarantee deposit for the sum of RM 400,000.00;

(c) Loss of profit for the sum of RM 27,000.00 per month and continually; and

(d) General damages for breach of contract.

[7] The appellant disputed the claim and filed a counterclaim against the respondent as follows:

(a) The sum of RM 468,483.29; and

(b) General damages for breach of contract.

[8] After the trial, the High Court judge allowed the respondent's claim and the damages to be assessed by the Registrar, and the appellant's counterclaim was allowed partially. Dissatisfied with the outcome, the appellant then appealed to the Court of Appeal and the respondent filed a cross appeal. The appellant's appeal was dismissed and the cross appeal was withdrawn.

[9] The matter was subsequently remitted to the Registrar for damages to be assessed. The Deputy Registrar allowed the respondent's (plaintiff) claim in part as follows:

(1) The loss of goodw