The legality of the agreement between parties was affirmed despite alleged violations of statutory provisions, emphasizing the enforceability of contracts in practical contexts.

[1] There are three appeals before us. The first appeal is filed by the appellant/defendant in respect of the judgment entered by the High Court for the plaintiff in the amount of RM612,000.00; the second appeal by the appellant/defendant relates to the finding of the High Court on liability with damages to be assessed and the third appeal is filed by the appellant/plaintiff against part of the order of the High Court in dismissing part of the plaintiff's claim.

[2] For ease of reference, in this judgment, parties will be referred to as they were in the High Court.

Background

[3] The defendant, Tabung Ekonomi Kumpulan Usaha Niaga (Tekun) Nasional, is an agency under the Ministry of Agriculture & Agro-based Industry ("the Ministry"). It approves and disburses loan and collects repayment of these loans. At the material time, the defendant had approximately 300,000 borrowers.

[4] The collection of monies from borrowers had been done manually. The defendant's officers physically collect loan repayments from borrowers and physically issue receipts. This process was prone to abuse. The monies collected by the defendant's officers may not be recorded in time or at all and the defendant's record of repayment through the computer system may not be updated.

[5] To overcome the abuse, the plaintiff proposed to the defendant that collection of repayment be done via a device called the mobile gadget and a system of auto debit of borrowers' bank account, called the standing instruction system. The plaintiff's proposals were made through two letters dated 3 July 2014 and 12 August 2014 respectively.

[6] The mobile gadget is a hand held device which is linked to the defendant's computer system. The defendant's officers responsible for the collection would take the mobile gadget along during collection of monies. The borrower has the option of paying by cash, cheque, credit card or debit card. Any payment information which is keyed in or obtained by swiping the payment card through the mobile gadget will be updated real time in the defendant's computer system. The mobile gadget will electronically issue a receipt and a short message service will be sent to the borrower to confirm the transaction. This would reduce the chances of misappropriation of the monies collected and the risk of undetected misappropriation.

[7] As for the standing instruction system, the defendant's borrowers would sign up with the bank and their accounts would be automatically debited and credited into the defendant's account.

Proceedings In The High Court

[8] The plaintiff filed two suits against the defendant (Suits No 382 and 618), claiming different reliefs arising out of the mobile gadget and the standing instruction, respectively. For Suit No 382, the plaintiff's claim is for RM29,829,132.40 and other reliefs including a claim for indemnity for damages payable to sub-contractor, general damages for breach of contract and aggravated damages. In Suit No 618, the plaintiff is claiming for RM612,000.00 for successfully installing and commissioning the standing instruction system. Both suits were consolidated.

The Plaintiff's Case

[9] It is the plaintiff's case that by a letter of appointment dated 29 August 2014, the defendant appointed the plaintiff to develop the entire core system infrastructure of the defendant which consisted of upgrading the loan repayment facility by introducing the mobile gadget and standing instruction system. Thereafter, by an agreement dated 18 September 2014 ("the agreement"), the defendant awarded the plaintiff the contract to develop and implement the mobile gadget system. By cl 8.1, the duration of the agreement was fixed for a period of 15 years.

[10] The plaintiff's obligation under the agreement was to draft, design, develop and supply all hardware, software a