- 原告是一家提供建筑用钢丝网的公司。他在2003年开始提供钢筋供应给被告，来完成建筑项目。合约提到原告将提供150千的信用限度, 并征收1.5%逾期付款利息。第二和第三被告则担保被告将支付所拖欠的债务。
- 由于被告违反所谈妥的信用限度， 原告停止向被告供应BRC钢筋。由于原告已向被告提供价值RM675,368.51 的 BRC钢筋，他因此向被告做出追讨包括1.5%逾期付款利息. The Appellant had in the meantime supplied to the 1st Respondent BRC goods worth RM675,368.51 and on the allegation that the 1st Respondent had breached the credit limit, the Appellant stopped the supply of BRC goods to the 1st Respondent.
- Before us is an appeal by the Plaintiff/Appellant and a cross appeal by the 1st Defendant/1st Respondent against the High Court’s decision in which the learned judge made the following orders:
(a) Allowed the Appellant’s claim of RM675,368.51 as against the 1st Respondent (1st Respondent’s Cross Appeal);
(b) Dismissed the Appellant’s claim for loss of profits of RM91,198.53 (the Appellant’s Appeal);
(c) Dismissed the claim against the 2nd Defendant/2nd Respondent and 3rd Defendant/3rd Respondent as guarantors (the Appellant’s Appeal);
(d) Dismissed the 1st Respondent’s counterclaim for alleged loss suffered in the sum of RM215,454.41 (1st Respondent’s Cross Appeal).
- The Appellant’s appeal was in respect of the learned judge’s dismissal of claim for loss of profits of RM91,198.53 and against the 2nd and 3rd Respondents as guarantors.
- The 1st Respondent’s cross appeal was in respect of the judgment of RM675,368.51 against it and the dismissal of the alleged loss suffered in the sum of RM215,454.41.
- We heard the appeal and cross appeal and after having heard and given due consideration to respective submissions of counsel, we dismissed both the appeals with no order as to costs. We now give our reasons for our decision.
- In 2003, the Appellant and the 1st Respondent had entered into an agreement for the supply of reinforced steel fabric (BRC) via an execution of a Credit Application Form dated 19.2.2003 (2003 agreement). The 1st Respondent needed the supply for a building project known as Bandar Mutiara in Penang.
- Apart from the 2003 agreement, the 2nd and 3rd Respondents were required and did execute letters of guarantee in favour of the Appellant to pay on demand for all monies due by the 1st Respondent.
- Sometime in 2007, the 1st Respondent had obtained another contract from IJM Construction Sdn Bhd (IJMC) to construct a 20 storey service apartment block and 16-unit shop houses at Mukim Petaling. Pursuant to the aforesaid contract, the 1st Respondent entered into an arrangement with the Appellant for the supply of BRC which gave rise to the 2007 agreement evidenced in the Appellant’s letter dated 13.8.2007 and 1st Respondent’s letter dated 15.9.2007.
- As the supply of the BRC was in larger quantities, the 1st Respondent needed a bigger credit limit than the RM150,000.00 agreed in 2003 agreement. The Appellant proposed a credit limit of RM400,000.00 which was rejected by the 1st Respondent which requested for a credit limit of RM600,000.00 but rejected by the Appellant.
- The Appellant had in the meantime supplied to the 1st Respondent BRC goods worth RM675,368.51 and on the allegation that the 1st Respondent had breached the credit limit, the Appellant stopped the supply of BRC goods to the 1st Respondent.
Our grounds of decision
- Premised on the above facts, the learned Judge had listed 5 issues to be determined and we dealt with the questions posed by her as our answers to those issues took care of the complaints made by the Appellant and 1st Respondent in their respective appeals.
- The five issues were these:
(a) Whether the terms of the “2003 Agreement” are also applicable to the “2007 Agreement”?
- The learned Judge answered this issue in the negative premised on her construction of two letters dated 13.8.2007 and 15.9.2007. It was her view that these two letters contained the terms and conditions for the supply of BRC and since they did not refer to the 2003 agreement she found that the 2003 agreement had been superseded. She had also relied on two differences between the 2003 agreement and 2007 agreement, namely the absence of credit limit and the Appellant’s right to terminate the agreement if payment was not made within 95 days from the statement date. In view of this finding, the learned Judge then proceeded to hold that the 2nd and 3rd Respondents were not liable under the letters of guarantee signed pursuant to the 2003 agreement. 高庭的法官觉得2003年和2007年的合约的条款有两个不同点，2007年的合约并没有信用限度和如果被告没有在95天内付款，原告有权利取消合约。所以2003年的合约已经无效，只有2007年的合约有效而已。因此第二和第三被告在2007年的合约里，不再是担保人。
- Learned counsel for the Appellant had complained that the learned Judge erred when she failed to consider that invoices for the 2003 agreement and 2007 agreement contained the same account number 30K0/013. This factor in the view of learned counsel inferred that the 2003 agreement’s terms and conditions remained in effect despite the 2007 agreement.
- Learned counsel also submitted that the learned Judge failed to take into account clause 2 of Letter of Guarantee which stated:
“This Guarantee and indemnity shall be without prejudice to and shall not be affected by nor shall l/we be released or exonerated by any of the matters following, whether with or without consent by or notice to me/us:
(i) the refusal of any further supplies of goods to the Customer or determination, increase or variation of any credit or terms of credit to the Customer.
- In view of the aforesaid failure, learned counsel submitted that the learned Judge was wrong to apply Section 86 of the Contracts Act, 1950 which states as follows: “Any variance made without the surety’s consent, in the terms of the contract between the principal debtor and the creditor, discharges the surety as to transactions subsequent to the variance.”
- With respect to learned counsel, we disagreed and our reasons these. The use of the 1st Respondent’s account number in the invoices must be considered in the context of the aforesaid letters dated in 2007. There was no dispute that the supply of BRC had been effected and paid for by the 1st Respondent. The relevant BRC supply involved in this dispute was pursuant to the 2007 agreement. That by itself in our view had evinced an intention to enter into a new arrangement for the supply of BRC. As pointed out by the learned Judge and correctly so, there was no mention of the 2003 agreement terms and there were two marked differences between the two agreements. Had the Appellant wanted to continue to apply the 2003 agreement terms, it could have been done easily by adding a clause in the 2007 agreement stating that the 2003 agreement remained as valid and binding on the Respondents. It is trite law that when terms and conditions had been put into written form, the natural inference is simply that parties intend to be bound by those written terms. Any other inferences would not make commercial sense. 如果原告有意愿将2003年的条款延申/连接/捆绑至2007的合约，原告应该在2007的条款里注明2003合约一样有效并捆绑被告。
- Further, we find that the 2007 agreement concerned a much bigger supply of BRC, hence the value to be guaranteed would be much more than the RM150,000.00 provided for in the 2003 agreement. Such major variance in the relationship between the Appellant and 1st Respondent must not only be made known to the 2nd and 3rd Respondents, their written consent must be obtained. As no such consent was obtained, we agree with the learned Judge’s application of section 86 of the Contracts Act, 1950. 2003年的合约，第二和第三被告只担保150千，2007年被告需要更大量的BRC，所以担保数额肯定超过150千。那么大的数额改变，双方都必须先得到第二和第三被告的文字同意担保更高的数额。如果没有文字同意，第二和第三被告是不会自然成为担保人的。
- Learned counsel for the Appellant had also submitted that the defence premised on section 86 of the Contracts Act, 1950 had not been pleaded at all by the 1st Respondent and should not be considered by the learned Judge. With respect, we do not agree. What we have here is the 1st Respondent’s reliance on a specific provision of the Contracts Act premised on facts adduced in Court. The law only requires pleadings to include facts and specific laws need not be pleaded.
(b) Whether the Plaintiff/Appellant had delivered to the 1st Defendant/1st Respondent the BRC goods valued at RM675,368.51?
- The learned Judge had sustained the claim of the Appellant premised on an admission by counsel for the Respondent. That admission can be found in the notes of proceedings at page 59 – 60 of the core bundle of documents which read as follows:
Mahkamah: Ok why don’t we just don’t go into that because just in terms of whether or not you dispute the invoices in Page 110 to 111, that there was amount of outstanding RM675,368.51 which is in accordance with the 2007 agreement. You dispute these invoices?
Peguam Defendant (PD): These invoices are not disputed Yang Arif.
Mahkamah: Not disputed?
PD: Because the very fact is that the Plaintiff had a right to withhold deliveries only upon 95 days.
Mahkamah: You dispute the time period when you can withhold but you did not dispute that the amount that you owe. Let’s not talk about the 95 days period, but the amount that is due and owing. done.
PD: Yes, these were the deliveries that we have done.
Mahkamah: Which has not been paid so far?
PD: Yes, which has not been paid?
- The above notes of proceedings were clear example of “res ipsa loquitor”.
- Learned counsel for the Respondent had submitted that the imposition of the 5% per month on the amount due was not provided for in the 2007 agreement. With respect, learned counsel had ignored what was provided in the invoices and that was “overdue interest charges to be charged at 1.5% per month calculated on a daily basis on all overdue amounts”. It was our view that the Respondent knew the aforesaid provision and had not protested this claim at all when the invoices were presented to the Respondent. We were therefore of the view that the Appellant was entitled to claim such interest.
(c) Whether the 2nd and 3rd Defendants/Respondents were liable as guarantors for the 1st Defendant/1st Respondent for the outstanding debt of RM675,368.51?
- The learned Judge answered in the negative premised on section 83 of the Contracts Act, 1950 and for reasons set out by us in issue (a), we concurred with her decision.
(d) Whether the Plaintiff/Appellant is entitled to its claim of loss of profit of RM91,183.53 together with interest at the rate of 1.5% per month when the Plaintiff/Respondent was forced to mitigate its losses by selling the balance of the BRC goods ordered by the 1 st Defendant/1 st Respondent to a third party, IJM Construction Sdn Bhd?
- The learned Judge held that the Appellant was not entitled for the loss premised on the simple ground that the 2007 agreement (Clause (c)) provided that the 1st Respondent had a 95-day period from the date of the statement to effect payments and that provision had not been breached by the 1st Respondent. It was undisputed that the Appellant stopped delivery of BRC goods in July 2008 despite the fact that the 95-day period would only be exceeded on 5.8.2008.
- It was submitted that the Appellant however did not premise its decision to stop supply on the 95-day period but on the contention that the credit limit had been breached. The difficulty with this contention was that there was no firm agreement as to what the credit limit was. The relevant letters unfortunately did not show that there was an agreement. All they showed was a proposal and counter proposal of the credit limits of the respective parties. Again we saw no error on the part of the learned Judge.
(e) Whether the Plaintiff/Appellant is liable for the losses of RM215,454.41 suffered by the 1 st Defendant/1 st Respondent as a result of the Plaintiff/Respondent’s wrongful termination of delivery of the BRC goods to the 1 st Defendant?
- The learned Judge’s reasoning in rejecting this claim was premised on the fact that the 1st Respondent had failed to prove its loss. This was what her Ladyship said in her grounds: “In their submissions, the 1st Defendant had referred to Ex D44 at pages 141 -147 (B4). However, no witness from CHSB gave evidence to confirm the above figures. There is also insufficient satisfactory explanation of figures stated for me to make a finding that the Defendant has proven its counterclaim on the balance of probabilities”
- What the learned Judge did was to apply the trite principle of what had been stated in the case of Popular Industries Ltd. v. The Eastern Garment Manufacturing Co. Sdn. Bhd.  2 CLJ (Rep) 635 where Edgar Joseph J (as he then was) at page 648, said this:
“The normal course of proving market value in the case of a resale of goods in bulk would be to call the customers or at the least (and if the parties agree to documentary proof) to tender documents showing the existence of and a dealing with such customers. In the case of a (say wholesale) distribution to a number of customers, a plaintiff would at least be required to produce books or documents showing that he had a business in the course of which he might reasonably have distributed these goods and the price he would have obtained. The plaintiffs in this case did none of these things, producing no business books or accounts or documents showing the existence of and a dealing with customers or even income tax returns.
To put it another way, a plaintiff’s unsupported assertion or that of his accountant, that he would have got such and such a price for the goods does not prove market value. It must be proved aliunde – that is to say, in order to prove that someone would have been prepared to pay the price, you call the man who would have paid. Any plaintiff can say “I could have sold my goods for $X had it not been for what the defendant did.” If that is enough to prove market value, it would, in effect, dispense with proof of quantum altogether.
In all circumstances, reason and justice point to the inevitable conclusion that although the plaintiffs had shown the fact of damage, no evidence or no sufficient evidence has been adduced as to its amount with the perhaps unfortunate result that it is virtually impossible to assess damages. (See Dixon v. Deveridge (ibid) and Twyman v. Knowles (ibid)) .
In this context, I am [sic] [reminded] of Lord Goddard’s dictum in Bonham-Carter v. Hyde Park Hotel  WN 89 quoted with approval by Thomson CJ in Lee Sau Kong v. Leow Cheng Chiang  MLJ 17 (CA), namely that:
Plaintiffs must understand that if they bring actions for damages it is for them to prove their damage; it is not enough to write down the particulars, and so to speak, throw them at the head of the Court, saying ‘This is what I have lost, I ask you to give me these damages’. They have to prove it.”
- Regrettably this was not the first time that we had to remind counsel of this mandatory requirement of proving the damages suffered.
- This was a case where the learned Judge had made findings of facts premised on established evidence. Hence in such circumstances, we saw no reason to intervene.
- Accordingly, we dismissed both the appeal and the cross appeal with no order as to costs.
Source: Kuantan Wire Products Sdn Bhd v Kim Construction Sdn Bhd & Ors  MLJU 1682. Court of Apeeal Putrajaya. David Wong, Umi Kalthum and Abdul Rahman Sebli JJCA.
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