154-01/2016] ANTARA SEDIABENA SDN BHD (No.

[2017] 1 LNS 2042 Legal Network Series

1

DALAM MAHKAMAH RAYUAN MALAYSIA

(BIDANG KUASA RAYUAN)

[RAYUAN SIVIL NO: B-02(NCVC)(W)-154-01/2016]

ANTARA

SEDIABENA SDN BHD

(No. Syarikat: 085679-H) ... PERAYU

DAN

CHINA COMSERVICE (HONG KONG) LIMITED

... RESPONDEN

(disatukan dengan)

DALAM MAHKAMAH RAYUAN MALAYSIA

(BIDANG KUASA RAYUAN)

[RAYUAN SIVIL NO: B-02(NCVC)(W)-152-01/2016]

ANTARA

CHINA COMSERVICE (HONG KONG) LIMITED ... PERAYU

DAN

SEDIABENA SDN BHD

(No. Syarikat: 085679-H) ... RESPONDEN

[Dalam Perkara Mahkamah Tinggi Malaya di Shah Alam

(Bahagian Sivil)

Guaman Sivil No: 22NCVC-254-05/2014

Antara

China Comservice (Hong Kong) Limited ... Plaintif


2

Dan

Sediabena Sdn. Bhd.

(No Syarikat: 085679-H) ... Defendan]

CORAM:

NALLINI PATHMANATHAN, JCA

PRASAD SANDOSHAM ABRAHAM, JCA

ZABARIAH MOHD YUSOF, JCA

CONTRACT: Breach - Terms and conditions - Breach of obligations -

Failure to provide documents to enable verification of payment - Damages

- Whether there was breach of a fundamental term - Whether plaintiff was

entitled to withhold payment to defendant - Whether party who had suffered

from breach was entitled to claim for loss

TRUSTS: Trusts - Existence of - Express trust - Absence of express words

creating trust - Whether express trust may be created without using word

‘trust’ - Whether court will look at surrounding circumstances to determine

intention of a party to be trustee - Whether standard of proof of existence

of an express trust is very high - Whether intention to create a trust must

be expressed in clear language - Whether elements of fiduciary duties and

trust could be imported into contractual commercial contexts

[Appeals dismissed with no order as to costs.]

Case(s) referred to:

ESPL (M) Sdn Bhd v. Radio & General Engineering Sdn Bhd [2004] 4 CLJ

674 CA

Frame v. Smith [1987] 42 DLR 81 (refd)


3

Geh Cheng Hooi & Ors v. Equipment Dynamics Sdn Bhd [1991] 1 CLJ Rep

133 SC (refd)

Hospital Products Limited v. United States Surgical Cooperation [1984]

CLR 41 (refd)

MMC Oil & Gas Engineering Sdn Bhd v. Tan Bock Kwee & Sons Sdn Bhd

[2016] 4 CLJ 665 CA (refd)

Perman Sdn Bhd & Ors v. European Commodities Sdn Bhd & Anor [2005]

4 CLJ 750 CA (refd)

Poh Geok Sing v. HB Enterprise Sdn Bhd [2006] 1 CLJ 765 CA (refd)

Re Kayford Ltd [1975] 1 AER 604 (refd)

Steven Phoa Cheng Loon & Ors and other appeals [2003] 1 MLJ 567 (refd)

Legislation referred to:

Contracts Act 1950, s. 74

JUDGMENT

1. The claim by the Plaintiff against the Defendant, in the High Court,

is for, inter alia, the following reliefs:

a) a declaration that the Defendant had breached its express

obligations under the Strategic Alliance Agreement dated 23.12.2010

(SAA);

b) a declaration that the Defendant acted in breach of its implied

obligations under the SAA;

c) a declaration that the Defendant acted in breach of its fiduciary

duties and obligations as a trustee;


4

d) Damages, as consequential relief;

e) Costs.

2. The Defendant counterclaimed against the Plaintiff, inter alia, for a

declaration that the Plaintiff had breached the SAA, and sought an order or

compensation for the breach committed.

3. At the end of the trial, the learned trial Judge allowed the Plaintiff’s

claim in part, as follows:

“(1) it is declared that the Defendant acted in breach of its

expressed obligations under the Strategic Alliance

Agreement dated 23rd December 2010;

(2) damages are to be assessed and paid by the Defendant to the

Plaintiff;

(3) the Defendant shall pay to the Plaintiff interest on such

sums as awarded to the Plaintiff at the rate of 4% per

annum from the date of judgment until the date of full

settlement; and

(4) the Defendant shall pay to the Plaintiff costs of RM50,000.00.”

4. The claim of the Plaintiff that sought a declaration that the Defendant

acted in breach of its implied obligations under the SAA and a

declaration that the Defendant acted in breach of its fiduciary duties

and obligations in respect of its duties as a trustee were dismissed by

the learned trial Judge.

5. The counterclaim by the Defendant was also dismissed.

6. The Plaintiff appealed to the Court of Appeal against that part of the

decision of the learned trial Judge that disallowed the Plaintiff’s

claim. Whereas the Defendant appealed against the whole of the said


5

decision.

7. After hearing both parties and after perusing the Appeal Records, we

unanimously dismissed both Appeals with costs and affirmed the

decision of the learned trial Judge of the High Court.

8. Herein below are our grounds. Parties shall be referred to, as they

were in the High Court.

BACKGROUND:

9. On 15.2.2010, the Defendant and Dewarisan Holdings Sdn. Bhd.

(DHSB) entered into a “Smart Partner Project Agreement” (SPPA)

with Maxis Broadband Sdn. Bhd. (Maxis). Pursuant to this SPPA,

Maxis appointed the Defendant and DHSB for the supply, delivery,

construction, installation, testing, commissioning and

decommissioning and maintenance of network infrastructure and

facilities for Maxis for a period of 3 years (Works). Maxis has the

option to renew the SPPA for another 2 years.

10. The scope of work undertaken by the Defendant under the SPPA is

for the supply, delivery, construction, installation, testing,

commissioning and decommissioning of network infrastructure

(Defendant’s Works), whilst DHSB undertook the maintenance

portion of the works.

11. With regards to the Works including the Defendant’s Works, the

provisions of the SPPA (which are relevant to our present appeal),

are as follows:

(i) Clause 14 provides that such works as required by Maxis are

requisitioned by way of “Work Orders” in the form of Purchase

Orders or Departmental Release Orders (DROs);

(ii) Clauses 36 and 37 provide that, when such works have been


6

completed and accepted, Maxis will be invoiced by the

Defendant. Subsequently, Maxis will make payments of the

invoiced amount into a Nominated Joint Account (NJA) of

DHSB and the Defendant. From the NJA, the Defendant’s

portion will be paid to the Defendant.

12. The Plaintiff came into the picture when it entered into a SAA on

23.12.2010 with the Defendant for the Defendant’s Works under the

SPPA. These being the Work Orders issued by Maxis as of the date

of the SAA and defined thereto in the SAA as “On-Going Projects”

(2010 DROs).

13. Clause 2.1 of the SAA provides that the Defendant is to be the sole

and exclusive project manager for the Defendant’s Works under the

SPPA.

14. The SAA also provides that:

A. The Defendant shall, inter alia:

(i) allocate all work orders received from Maxis for

execution; (Clause 3.1 (a));

(ii) not issue any invoices for the Project Works without the

prior consent of the Plaintiff (Clause 3.1 (f));

(iii) provide the Plaintiff with all invoices issued to Maxis

and updates on all payments received from Maxis

(Clause 3.1 (f)).

B. The Plaintiff shall inter alia:

i) execute the works with due skill and care and in a

professional manner (Clause 3.2 (b));

ii) be responsible for all financing including operational


7

and capital expenses (Clause 3.2 (c));

iii) offer employment to all the Defendant’s employees as

may be determined by the Plaintiff (Clause 3.2 (d));

C. The Defendant warrants and represents that:

i) the aggregate contract value of the 2010 DROs is no

less than RM16,643,694.00 all of which is fully

recoverable from Maxis (Clause 4.1 (c));

ii) as at 23.12.2010 the works for the 2010 DROs duly

performed and carried out is no less than

RM8,321,847.00 all of which is fully recoverable from

Maxis (Clause 4.1 (d));

iii) all payments from Maxis can only be paid into the NJA

operated jointly by DHSB and the Defendant with the

Defendant’s portion thereafter credited into the

Defendant’s account by way of a standing instruction

issued jointly by DHSB and the Defendant (Clause 4.1

(e) and (f)).

D. Pursuant to the SAA, the Plaintiff was to implement the DROs

issued after the SAA was entered into, i.e. the post 2010

DROs, including financing all operational and capital

expenses incurred in that regard.

15. As for the 2010 DROs, it is not disputed that the implementation and

all operational and capital expenses incurred thereof, were the

responsibility of the Defendant. For these 2010 DROs, the Plaintiff

was to provide assistance to the Defendant with funding and that the

Defendant was required to complete the 2010 DROs. In this regard

the Plaintiff agreed to contribute no more than RM15,811,509.00 to

assist the Defendant in its commitment under the 2010 DROs, or On-


8

Going projects. The contribution was to be made in 3 Tranches which

as follows:

a) First Tranche - no more than RM8,321,847.00 to be paid on

24.12.2010;

b) 2nd Tranche - no more than RM5,825,293.00 to be paid when

the total amount of the invoices issued by the Defendant to

Maxis amounts to no less than RM12,482,771.00;

c) 3rd Tranche - no more than RM1,664,369.00 to be paid after

the Plaintiff has received RM16,643,694.00 from the On-

Going Projects (2010 DROs) paid by Maxis.

16. Upon payment of the 1st and the 2nd Tranches by the Plaintiff, the

Defendant was to complete the 2010 DROs within the time stipulated

and to invoice Maxis for the same.

17. Further, Clause 5.7 of the SAA provides that the Plaintiff is entitled

to RM16,643,694.00 from the 2010 DROs payable from 90% of all

payments received by the Defendant from Maxis for 2010 DROs,

with any excess amount going to the Defendant and any shortfall to

be paid by the Defendant to the Plaintiff.

18. Clause 6.1 (a) of the same, states that if the total payments received

from Maxis in relation to the Projects Works is less than RM200

million, the Plaintiff gets 90% of those total payments received.

Clause 6.1 (b) states that if the total payments received from Maxis

in relation to the Project Works is more than RM200 million, the

Plaintiff gets 95% of those total payments received.

The above is termed as the “Agreed Benefit Ratio”.

19. The Defendant agreed and undertook that all monies received by it

from Maxis would be paid into a “Dedicated Account”, which is the


9

Defendant’s dedicated current account. There was to be, after the

payment of the 1st and the 2nd Tranches, a Standing Instruction for

all monies in the Dedicated Account to be paid out to the Plaintiff

and Defendant according to the Agreed Benefit Ratio (Clause 6.1 (a)

and (b) of the SAA)).

20. It is not disputed that the Plaintiff had only paid the 1st Tranche to

the Defendant. The dispute is as to the 2nd Tranche which the Plaintiff

did not release to the Defendant. The Defendant contends that by

early August 2011, the total amount of invoices issued to Maxis

amounted to no less than RM12,482,771.00 and hence this triggered

the release of the 2nd Tranche payment, which the Defendant alleged

the Plaintiff failed to make.

21. However, the Plaintiff asserts that:

i) the total amount invoiced by the Defendant to Maxis and also

the payments received by the Defendant from Maxis could not

be verified by the Plaintiff;

ii) the Plaintiff was neither kept updated nor given copies of the

invoices issued out to Maxis;

iii) the Plaintiff was not kept informed of the payments received

from Maxis.

Premised on the above reasons, the Plaintiff could not release the 2nd

Tranche.

22. Parties attempted to resolve the dispute and find an amicable

solution. However, all attempts at resolution failed. The Plaintiff

alleged that despite its numerous requests for the invoices issued to

Maxis or evidence of payment to Maxis, it fell to deaf ears.

23. Subsequently, at a meeting on 25.7.2012, the Plaintiff gave notice to


10

the Defendant that it is withdrawing from the SAA (refer to page

563-564 of ACB Volume 2). It is not disputed that the Plaintiff had

completely withdrawn itself from the SAA between June/July 2012.

The Plaintiff pleaded that on or around 28.7.2012 the SAA was

terminated.

24. The Plaintiff initiated a suit in the High Court seeking a declaration

that the Defendant had acted in breach of its obligations under the

SAA and also in breach of its fiduciary duties and obligations as

trustee. This is the subject of the Appeal before us.

25. The main complaint of the Plaintiff is reflected in paragraph 11 of

the Statement of Claim. The Plaintiff claims that notwithstanding

that it had performed its obligations, including advancing the First

Tranche of RM8,321,847.00 and incurring a further sum of RM13

million plus towards operational and capital expenditure for the

Project Works, the Defendant committed various breaches of its

obligations under the SAA and/or its fiduciary/trustee duties and

obligations. The particulars of the breaches are:

(i) the Defendant attempted to put all of its employees on the

Plaintiff’s payroll regardless of whether they were deployed

for the Project Works;

(ii) From and around October 2011, the Defendant failed to obtain

the Plaintiff’s consent before invoices were issued to Maxis;

(iii) the Defendant failed to keep the Plaintiff informed and updated

on the invoices issued to Maxis;

(iv) the Defendant failed to keep the Plaintiff informed and updated

on the payments received from Maxis;

(v) the Defendant failed to account to the Plaintiff and keep the

Plaintiff informed and updated of all and any monies


11

transferred to the Dedicated Account;

(vi) the Defendant failed to account and pay to the Plaintiff the

Plaintiff’s share of the payments and monies received from

Maxis in the Agreed Benefit Ratio or at all;

(vii) the Defendant failed to issue the requisite Standing Instruction

to authorize immediate payments out of the Dedicated Account

to the Plaintiff according to the Agreed Benefit Ratio.

26. The Plaintiff alleged that, by reason of the said breaches by the

Defendant, the Plaintiff was put to suffer loss and damage. The

particulars of loss and damage claimed by the plaintiff are as follows:

a) RM16,643,694.00 being the sum the Plaintiff is entitled to

(Clause 5.7 of the SAA));

b) RM8,321,847.00 being the 1st Tranche of funding advanced by

the Plaintiff;

c) RM13,657,844.00 being the further sums incurred by the

Plaintiff towards the operational and capital expenditure for

the Project Works;

d) 90% of all sums received by the Defendant from Maxis by

which the Plaintiff is entitled to by Clause 6.1 (a) of the SAA;

and

e) RM1,388,217.52 being finance and other costs incurred by the

Plaintiff for the funding and expenditure as aforesaid.

27. Whereas, the counterclaim by the Defendant is as follows:

a) A declaration that the Plaintiff had breached the SAA;

b) An order for compensation of RM20,000.00 to be paid to the


12

Defendant by the Plaintiff for the breach committed by the

Plaintiff;

c) A declaration that the Plaintiff has no right over the monies in

the Dedicated Account in Maybank;

d) An Order for payment of RM14,353,611.88 being the

operational costs incurred by the Defendant from 24.12.2010

until 31.5.2012 (and still accruing);

e) An Order for payment of RM5,504,613.50 for advances made

by the defendant for expenses incurred for the Plaintiff;

f) An Order for payment of RM1,062,288.98 being the loss of

income suffered by the defendant for the On-going Works;

g) An Order for payment of RM386,914.54 for the reduced

claims;

h) A declaration that the Plaintiff is not entitled to 15%

shareholding in the Defendant’s company that has been

charged to the Plaintiff according to the Share Charge

Agreement dated 23.12.2010;

i) An Order to compel the Plaintiff to sign the Form of Transfer

of Securities in favour of Mr. Chew Wai Choy for the 15%

shares 7 days from the date of this Order;

j) In the alternative for an order that the amount of

RM16,643,694.00 being the amount of the shares be

considered as a set off if the Plaintiff’s claim is successful;

k) Loss and damages to be assessed; and

l) Costs and interest.


13

Issues:

28. The main issues to be determined were as follows:

i) Whether the Plaintiff/Defendant had breached the SAA;

ii) Whether the Defendant is a trustee on the monies paid by

Maxis in the Dedicated Account. If so, whether the Defendant

had acted in breach of its implied/fiduciary duties and

obligations under its trustee’s duties under the SAA.

The Decision of the High Court:

29. The primary issue before the Court was who was in breach of the

SAA. The contention of the Plaintiff was that it was the Defendant

who did not keep the Plaintiff informed of the invoicing to, and

payments received from, Maxis.

30. On the other hand, the Defendant maintained that it was the Plaintiff

who failed to advance the 2nd Tranche payment of RM5,825,283.00.

The Defendant contended that the undisputed evidence showed that

the Plaintiff abandoned works and failed to comply with its

obligations under the SAA and accordingly, it was the Plaintiff who

had committed a repudiatory breach of the SAA.

31. The trial proceeded on liability. The learned trial Judge found that

the Defendant was the one who had breached its obligations under

Clause 3.1 of the SAA. It was her finding that the Defendant had

failed to provide the Plaintiff with copies of Maxis’s invoices to

allow the Plaintiff to verify that the total amount of invoices issued

by the Defendant to Maxis had reached the threshold sum of

RM12,482,771.00 under Clause 5.2 of the SAA. Consistent with her

findings, she also found that:

a) the Defendant could only issue invoices with the prior consent


14

of the Plaintiff; and

b) the Defendant did not obtain the prior consent of the Plaintiff

before issuing invoices.

32. The first Tranche of RM8,321,847.00 was already paid. It is only the

2nd Tranche which was withheld by the Plaintiff. It was only payable

when the total invoice for the 2010 DROs was “no less than

RM12,482.00”. The Plaintiff was unable to verify the financial

progress of the Project nor the trigger point for the release of the 2nd

Tranche. Hence, the learned trial Judge found that the Plaintiff was

therefore entitled to withhold the 2nd Tranche.

33. The learned trial Judge also found that the breach by the Defendant

of such obligations constituted a breach of a fundamental term of the

agreement. However, she disallowed the Plaintiff’s

“fiduciary/trustee duties claim” premised, essentially on the fact that

the 2nd Tranche payment had yet to take place.

FINDINGS:

Whether the Plaintiff/Defendant had breached the SAA:

34. The learned trial Judge found that the Defendant failed to comply

with Clauses 3.1 (e) and (f) and was therefore in breach of a

fundamental term and hence was entitled to withhold the 2nd Tranche

payment to the Defendant and ultimately to terminate the SAA on

28.7.2012. The learned trial Judge preferred the evidence of the

Plaintiff whom she viewed as “more credible” in support of their

contention, as compared to the witnesses of the Defendant who were

“evasive and blowing hot and cold in responding to questions in

relation to the failure in providing the invoices in question as in so

much it had portrayed untruthfulness on their part and also lack

transparency as the parties to the agreement”.


15

35. It is trite law that findings of the credibility of witnesses by the trier

of the court of first instance, who has audio visual advantage, is

rarely disturbed by an appellate court, unless it can be shown that the

trier of fact is plainly wrong in arriving at its conclusions and

decision.

(refer to Steven Phoa Cheng Loon & Ors and other appeals [2003] 1

MLJ 567; MMC Oil & Gas Engineering Sdn Bhd v. Tan Bock Kwee

& Sons Sdn Bhd [2016] 2 MLJ 428). Was the learned trial Judge

wrong in her findings?

36. A perusal of the provisions of the SAA discloses the following.

Clause 3.1 (e) and (f) of the SAA provides for the general obligations

of the Defendant:

“3.1 The general Obligations of SSB

Subject to the terms and conditions herein contained, SSB

shall:

(e) not issue any invoices with respect to the Project Works

without the prior consent of CCSHK and where such

consent has been obtained, to do so in the form and

manner to be determined by CCSHK;

(f) subject to Clause 3.1 (e), to provide CCSHK with all

invoices issued to MBSB and an update on all payments

received therefrom;”

37. According to the SAA, the 2nd Tranche was only payable when the

total amount of invoices issued by the Defendant to Maxis for the

2010 DROs are not less than RM12,482,771.00.

38. The logical question to ask would be, how would the Plaintiff be able

to verify that the amount of the invoices issued by the Defendant to


16

Maxis for the 2010 DROs are not less than RM12,482,771.00.

39. Clauses 3.1 (e) and (f) appear to be the mechanism for the Plaintiff

to keep track of the payments made by Maxis to the Defendant. This,

consequently would have an effect on the funding obligations (the

Tranche payments) on the part of the Plaintiff for the Defendant’s

2010 DROs entitlement pursuant to the SAA. By this, the Plaintiff

would be able to monitor the contractual payments made by Maxis

by reference to the payments updates provided by the Defendant.

40. From the evidence, it is not in dispute that the Plaintiff’s consent to

the Defendant’s invoicing for the Project Works was by a

representative of the Plaintiff who would sign the invoices for

onward transmission to Maxis. From the testimony of the Plaintiff’s

representative, SP 3 (Li Wen) the Plaintiff was only given few

invoices to sign and it was never anywhere close to what ought to

have been invoiced to Maxis given the number of DROs received

from Maxis (refer to Tab 22 of the RCB Q & A No 10).

41. As a result, the Plaintiff queried repeatedly, as evidenced by the e-

mails dated 15.3.2011 and 21.4.2011, requesting that the Defendant

send to the Plaintiff the invoices before the issuance to Maxis for the

Plaintiff’s signing and records.

42. The Plaintiff had insisted that they be given an account of the actual

amount invoiced to and payment received from Maxis before the 2nd

Tranche could be released. Instead the Plaintiff was only given

listings of what the Defendant alleged to be invoices and payments.

43. The Defendant’s witness, Encik Zahar (SD 1) sought to justify the

failure to obtain the signature of the Plaintiff’s representative before

delivering it to Maxis, by alleging that this was due to the

unavailability of the Plaintiff’s representative. However, in the same

breath, he admitted that it was easy to call the Plaintiff for the


17

signature. It is the Plaintiff’s case that its representatives were

available at all material times and there is no evidence to suggest

otherwise. The Defendant continued to issue invoices to Maxis

without the Plaintiff’s consent, in total disregard of the provision of

Clause 3.1 (e) of the SAA. Hence, the learned trial Judge correctly

made the finding that the Defendant had breached Clause 3.1 of the

SAA. (Refer to para 34 of her grounds).

44. Evidence further showed that the Plaintiff continued to make further

requests from the Defendant for the invoices that were issued to

Maxis, as can be seen from the following documents:

a) e-mail on 21.4.2011 (Tab 4 page 31 of the RCB);

b) e-mail on 6.10.2011 (Tab 10 page 95 of RCB);

c) e-mail dated 28.6.2012 (Tab 14 at page 111 of RCB);

d) letter dated 13.7.2012 (Tab 15 at page 112-113 of RCB);

e) letter dated 6.8.2012 ( Tab 16 at page 114-115 of RCB);

f) letter dated 10.10.2012 (Tab 17 at page 116-118 of RCB);

g) letter dated 17.10.2012 (Tab 18 at pages 120-121 of RCB).

Therefore, the submissions by the Defendant that there was no

evidence to support the finding of the learned trial Judge that there

were repeated requests for the verification of the invoices was

misplaced.

45. The Defendant could, at the very least, have provided true copies of

the invoices issued to Maxis, to the Plaintiff. That would have been

sufficient to enable the Plaintiff to keep track of the amounts

invoiced. This is provided in Clause 3.1 (f) of the SAA.


18

46. Even SD 1 admitted that as at October 2011, the Plaintiff was still

asking for the justification of the total bill that the Defendant had

billed Maxis and total receivables based on the invoice or value.

However, the Plaintiff’s request was not acceded to, by the

Defendant, save and except for 9 or so invoices which were signed

by the Plaintiff’s representative.

47. The Defendant contended that it had provided to the Plaintiff, via e-

mail on 26.4.2011, scanned copies of letters which were sent to

Maxis by the Defendant purportedly enclosing the invoices issued.

However, a perusal of such e-mailed letters show that the invoices

were never enclosed. Clearly, the letters alone would not reflect the

actual amount or value of the invoices which were sent to Maxis.

Without the actual invoices, the Plaintiff would not be able to verify

the amount billed to Maxis by the Defendant. In any event, from the

e-mailed letters, the invoices were only for the period before

26.4.2011.

What happened to the invoices after that date? These invoices were

never provided to the Plaintiff.

48. The Defendant also asserted that it had provided a compilation of

invoices to the Plaintiff’s representative, Webb Wei (SP 4) on

30.7.2011. This was evidenced from the letter of the Defendant dated

22.8.2011 (Refer to tab 7 page 86 of the RCB). However, the Plaintiff

denied ever receiving such a letter and averred that it did not have

record of it. In any event, we agree with the submission of the

Plaintiff that it is unsafe to accept as conclusive that the delivery of

such letter had been made to the Plaintiff, because:

a) The letter did not state anywhere that a “compilation of

invoices” was enclosed. At best it states a “compile (d) invoice

summary” was given to Webb Wei (SP 4) on 30.7.2011;


19

b) The Defendant was not certain when exactly this alleged

“compile (d) invoice summary” was handed to the Plaintiff.

The Defendant’s witness, SD 2 who is the Managing Director

was evasive when cross examined on this, contradicting the

contents of his own letter. (refer to Tab 25 at page 166-168 of

RCB);

c) What is more damaging is that on the day, 30.7.2011, which

was the day the letter says the alleged “compile (d) invoice

summary” was purportedly handed to the Plaintiff, Webb Wei

(SP 4), it was not disputed that Webb Wei was not in Malaysia.

Hence the letter dated 22.8.2011 relied upon by the Defendant does

not help its case at all. In addition, a compiled summary of invoices

which is a summary obviously prepared by the Defendant, is

insufficient for purposes of verification of the actual amount

invoiced to Maxis.

49. Clause 3.1 (f) of the SAA places further obligations on the Defendant

to provide the Plaintiff with updates on all payments received from

Maxis, with the Plaintiff and the Defendant receiving the Agreed

Ratio Benefit of either 90:10 or 95:5.

50. It is agreed that all monies paid by Maxis which parties are entitled

to, are to be ultimately transferred into the Dedicated Account. Hence

it follows that such evidence of monies received from Maxis would

be reflected in the bank statements of the Dedicated Accounts itself.

51. However, until the conclusion of the trial, the bank statements of the

Dedicated Account had not been given to the Plaintiff, despite

numerous requests being made to the Defendant, be it oral or written.

This was the evidence that was produced at trial:

a) SP 3 e-mailed the Defendant on 24.8.2011 requesting that all


20

“project account receipts” are to be e-mailed to him to enable

the Plaintiff to verify the payments received from Maxis, with

such information to be on a fortnightly basis. SP 3 was

referring to the bank statements in the Dedicated Account.

b) However, what the Defendant did was to e-mail a summary of

what the Defendant said were payments received from Maxis

in an excel spreadsheet which was prepared by the Defendant,

as was conceded by SD 1 (Zahar). Surely this spreadsheet was

prepared based on the primary documents i.e. bank statements.

52. After the e-mail dated 24.8.2011, SP 3 approached the Defendant

through its representative, Mr. Deva who was in charge of the

Defendant’s finances. Mr. Deva was informed that the spreadsheet

was insufficient and that the actual bank statements were required

for the Plaintiff to verify the payments received from Maxis. Again

there was no response from the Defendant. Instead the Defendant

continued to send more summaries of the payment received from

Maxis in excel spreadsheets.

The Defendant denied that such a request was ever made to Mr. Deva.

However, Mr. Deva of the Defendant was never called to testify and

no reason given for such failure. The burden was on the Defendant

to call Mr. Deva, as it was the Defendant who asserted that no such

request was ever made to Mr. Deva of the Defendant. As Mr. Deva

was not called, the denial was a bare one.

53. As such, the failure of the Defendant to provide the necessary

documents to enable the Plaintiff to verify the payments received

from Maxis amounts to a breach of Clause 3.1 (f) of the SAA as was

the finding of the learned trial Judge in her grounds at page 204 para

57 at tab 27 RCB. It cannot therefore be said that the learned trial

Judge erred in arriving at her conclusion.


21

The 2nd Tranche Payment:

54. According to the SAA, the Plaintiff is to release this 2nd Tranche to

the Defendant when the total amount of invoices issued by the

Defendant to Maxis for the 2010 DROs is no less than

RM12,482,771.00.

55. The learned trial Judge found that the “the evidence shows that the

refusal by the plaintiff to release the 2nd Tranche is because the total

amount invoiced by the defendant to Maxis and also the payment

received by the defendant from Maxis could not be verified by the

plaintiff. The plaintiff was never kept informed of the payment nor

given copies of invoices issued to Maxis”. The Defendant submitted

that this finding of the learned trial Judge was wrong.

56. However, we are not with the Defendant in this respect. As had been

shown in the preceding paragraphs, the Defendant was the one which

had failed to provide the Plaintiff with the invoices to Maxis and the

updated payments received from Maxis. Without the Plaintiff being

able to verify the actual amount from the invoices to Maxis and the

updated payments received from Maxis, how could the Plaintiff

determine the trigger point for the release of the 2nd Tranche, as it

would only trigger at no less than RM12,482,771.00? The learned

trial Judge correctly observed that the built-in mechanism housed in

Clause 3.1 of the SAA provides the agreed method for the Plaintiff

to independently verify and monitor the amount invoiced to/and paid

by Maxis.

57. The Defendant submitted that BG Lim (the alleged agent of the

Plaintiff - which was never proven) would be able to give

confirmation and verification that the collections from Maxis had

reached the threshold of about RM14 million as at November 2011.

This can be seen from his e-mail of 23.11.2011. Later, this amount

was revised upwards to RM15 million in his e-mail of 20.12.2011.


22

However, a perusal of the e-mail dated 23.11.2011 does not show

that BG Lim had confirmed nor verified the collections from Maxis.

The e-mail shows that it was a mere summary of the discussion in

the meeting between the parties on 23.11.2011 (refer to ACB-2 at

page 446-447). Similarly, the e-mail of 20.12.2011 was also a

summary of the discussion between BG Lim, SP 1 and SD 2 on

20.12.2011 (refer to ACB-2 at page 447). Moreover, the issue

whether such collections were verified by the Plaintiff or BG Lim at

the meeting on 23.11.2011 and/or 20.12.2011 was never the case of

the Defendant and never put to any of the witnesses. Therefore the

Defendant’s argument that the collections from Maxis have reached

the threshold of RM14 million is baseless.

58. The Defendant also submitted that the court should invoke an adverse

inference against the Plaintiff for failure to call this BG Lim to court

as a witness. We are of the view that if at all an adverse inference is

to be made, it should be invoked against the Defendant, as it was the

Defendant who asserted that the invoices have reached the threshold.

In any event, BG Lim is not a material witness, given that the

evidence in relation to the invoice and evidence in relation to BG

Lim has all been reduced to writing (which are in part B and hence

not disputed).

59. Finally, as no determination could be made as to the amount of the

invoices, the Plaintiff is entitled to withhold the release of the 2nd

Tranche of RM5,825,847.00. The Defendant is the author of this

predicament. The Plaintiff has no basis to release the 2nd Tranche

payment. This was the finding of the learned trial Judge, which we

agreed to be correct.

Whether the breach by the Defendant constitutes a breach of a

fundamental term of the SAA:

60. The learned trial Judge after considering the evidence arrived at a


23

finding that the conduct of the Defendant constituted a breach of

Clause 3.1 (e) of the SAA. The learned trial Judge found that the

act of providing the invoices is fundamental to the SAA, which

justified the Plaintiff taking the steps of not releasing the 2nd

Tranche and terminating the SAA on 28.7.2012. Hence her finding

that the termination of the SAA was valid. The Defendant submitted

that the learned trial Judge did not explain in her grounds as to how

she came to the conclusion that the various obligations under Clause

3.1 of the SAA (which is an omnibus clause entitled “the General

Obligations of SSB”) constituted a “fundamental condition”. The

Defendant asserted that the SAA does not expressly classify any of

the obligations under Clause 3.1 as conditions. It was also not the

pleaded case of Plaintiff that Clause 3.1 was in the nature of

conditions. The Defendant submitted that any breach of Clause 3.1

(f) could not, in law, constitute a ground for termination. This,

according to the Defendant, was the error committed by the learned

trial Judge.

We, however, are in total agreement with the finding of the learned

trial Judge in this regard. In construing a clause of the SAA, regard

must be given to the words used in their factual and commercial

context. The clauses of the SAA must be viewed and assessed in

light of the overall purpose of the SAA. Clauses 3.1 (e) and (f) are

essential and go to the root of the entire SAA, without which the

ultimate purposes of the SAA are impossible to achieve. It is clear

that without the invoices, the Plaintiff could not verify the amount

billed to Maxis, which in turn affected the 2nd Tranche payment.

The Plaintiff had raised its concerns on the problem of collection

for the Defendant’s repayment for the 1st Tranche

(RM8,321,847.00) at the meeting on 25.7.2012 (refer to page 563

of ACB Volume 2), which caused difficulty to the Plaintiff to

continue the Project after these losses. Therefore, one cannot deny


24

the importance of these clauses, which are fundamental to the SAA,

a breach of which, by the Defendant, entitles the Plaintiff to

terminate the SAA.

61. It was argued by the Defendant in its submission that there was no

clear notice of the Plaintiff’s termination of the SAA. However, a

perusal of the minutes of meeting dated 25.7.2012 clearly show that

the Plaintiff did give a notice to the Defendant that the Plaintiff

would withdraw from the SAA and reasons were given for the

withdrawal (refer to page 563 and 564 of ACB Volume 2). Ultimately

the Plaintiff completely withdrew from the SAA between June/July

2012. This was never disputed at trial in the High Court.

Consequential relief to the Plaintiff as a result of the breach by the

Defendant:

62. The learned trial Judge further found that the Plaintiff had not

breached the SAA by withholding the 2nd Tranche as claimed by the

Defendant. The Plaintiff had already committed and contributed a

sum of RM8,321,847.00 in the 1st Tranche but had yet to receive any

returns whilst the Defendant had gained financial benefit derived

from Maxis Smart Partner Project. It therefore follows that the

Defendant’s counterclaim must fail as it is premised upon the

Plaintiff terminating the SAA. The Plaintiff is entitled to

compensation for any loss or damage which arose from the breach by

the Defendant. By virtue of section 74 of the Contracts Act 1950, the

Plaintiff who was the party who had suffered from the breach is

entitled to claim for whatever loss that it suffered as a result thereof.

63. We are of the view that the learned trial Judge had made the correct

findings in this respect and we find no reason to disturb the same.

Whether the Defendant is a trustee of the monies paid by Maxis in the

Dedicated Account. If so, whether the Defendant had acted in breach


25

of its fiduciary duties and obligations under its trustee’s duties under

the SAA

64. The learned trial Judge refused this claim on the basis that, inter alia,

the 2nd Tranche had yet to take place and that the claim for an account

and inquiry requested would only be relevant when the payment of

the 2nd Tranche was made. The Plaintiff submitted that the learned

trial Judge fell into error in law and fact, in that having determined

that the Plaintiff’s inability to release the 2nd Tranche was due to the

conduct of the Defendant when it failed to provide the Plaintiff with

the invoices issued to Maxis and the payments made by Maxis, she

disallowed the Plaintiff’s breach of fiduciary/trustee duties claim.

65. The Plaintiff submitted that nowhere in the SAA does it state that the

Plaintiff’s entitlement to the monies in the Dedicated Account is

dependent upon payment of the 2nd Tranche and/or securing the

replacement Bank Guarantee Facility. To say that it is, is reading into

the SAA terms which are plainly not there, which the law disallows.

Thus, the Plaintiff submitted that its entitlement is in no way

qualified or made conditional upon the payment of the 2nd Tranche

and/or any other condition.

66. The Plaintiff submitted that the learned trial Judge did not reject the

existence of a trust in the present Appeal. The Defendant submitted

that there was certainty of the subject matter of the trust as far as the

present appeal is concerned. The Defendant submitted that the

cumulative effect of Clauses 5.7, 6.1 and 6.2 disclose:

a) An intention to create a trust; the agreement sets out that the

Defendant agrees to receive and hold all payments and monies

from Maxis on trust for inter alia the Plaintiff in the Dedicated

Account;

b) there was certainty of object; it being clear that it is the


26

payments of Maxis to which the Plaintiff was entitled to in

accordance with the ratio in the SAA, and thus the Plaintiff is

a beneficiary of it; and

c) there was certainty of subject matter; it being clear that the

trust attaches itself to all the monies received by the Defendant

from Maxis pursuant to the SPPA dated 15.2.2010 which will

then be transferred and credited into the Dedicated Account.

For clarity and convenience, Clauses 5.7, 6.1 and 6.2 are set out

below:

Clause 5.7 of the SAA provides as follows:-

“For the avoidance of doubt, [the Plaintiff] is entitled to

receive RM16,643,694.00 from the On-Going Projects and

shall be paid from 90% of all payments and proceeds

accruing and received by [the Defendant] under the On-

Going Projects to be distributed in accordance with the

Agreed Benefit Ratio under the dedicated account...”


“6.1. Agreed Benefit Ratio

Subject to the terms and conditions herein, the parties

agree and acknowledge that contractual payments for

the Project Works shall be apportioned in the

following manner:

(a) so long as the cumulative aggregate contractual

payments for the Project Works (which does not

include the contractual values of the On-Going

Projects) received is less than

RM200,000,000.00 and such sums are or will be


27

credited into the Dedicated Account, the parties

shall apportion the same as follows:

(i) 90% to [the Plaintiff]; and

(ii) 10% to [the Defendant].

(b) in the event, the cumulative aggregate

contractual payments for the Project Works

(which does not include the contractual value of

the On-Going Projects) received is more than

RM200,000,00.00 and such sums are or will be

credited into the Dedicated Account, the

apportionment for the next gross contractual

payment received for the Project Works shall be

apportioned in the following manner:

(i) 95% to [the Plaintiff] and;

(ii) 5% to [the Defendant].

The Parties agree and acknowledge that the respective

apportionment under Clause 6.1 above shall be carried out by

way of SI under the Dedicated Account.”


“Dedicated Account

(a) [The Defendant] has already established and is operating

a dedicated current account in Malayan Banking Berhad

(Company No: 3813-K) at the branch in Tapah, Perak.

(b) [The Defendant] agrees and undertakes to transfer the

SSB Portion from the Nominated Joint Account into the

Dedicated Account. [The Defendant] agrees and


28

acknowledges that [the Defendant] shall ensure that all

monies to be received from [Maxis] under the [SPPA]

will be credited only into the Dedicated Account.

(c) With respect to the Dedicated Account, the parties shall

upon the First Tranche and Second Tranche being paid

in accordance with Clause 5.2, issue to Malayan

Banking Berhad a SI to be effectively immediately

authorising all payments credited to this Dedicated

Account to be immediately remitted to [the Plaintiff]

and [the Defendant] in the Agreed Benefit Ratio. The

parties agree and acknowledge that no changes to the

Dedicated Account or any instruction to the bank shall

be made without the prior written consent of [the

Plaintiff].

(d) Upon the First Tranche and Second Tranche being paid

in accordance with Clause 5.2 and the replacement bank

guarantee facility being made available in accordance

with Clause 5.6, the parties agree that all the cheque

and/or operating signatories to the Dedicated Account

shall be nominated and appointed by [the Plaintiff].

(e) [The Defendant] and [the Plaintiff] agree and undertake

that no payments, transfers, remittance or withdrawals

shall be made from the Dedicated Account unless it is

done under the SI with payments only to [the Plaintiff]

and [the Defendant] in accordance with their respective

Agreed Benefit Ratio.”

67. The Plaintiff submitted that, given that the Defendant is a trustee of

the monies in the Dedicated Account and the Plaintiff is a beneficiary

thereof, the Defendant thus owes fiduciary duties to the Plaintiff. It

was also submitted that, even if there is no trust, the Plaintiff owes


29

fiduciary duties as the relationship between the Plaintiff and the

Defendant is one that possesses the 3 general characteristics of a

fiduciary obligation as set out in Frame v. Smith [1987] 42 DLR 81

ie,:

“Relationships in which a fiduciary obligation have been

imposed seem to possess three general characteristics:

(1) the fiduciary has scope for the exercise of some

discretion or power;

(2) the fiduciary can unilaterally exercise that power or

discretion so as to affect the beneficiary’s legal or

practical interests;

(3) the beneficiary is peculiarly vulnerable to, or at the

mercy of, the fiduciary holding the discretion or power.”

Thus the Plaintiff contended that the Defendant has breached its

express and/or implied obligations under the SAA and its fiduciary

duties and obligations and/or its express and/or implied duties as

trustees when:

a) it failed to obtain consent from the Plaintiff before invoices

were issued to Maxis;

b) it failed to keep the Plaintiff informed and updated on the

invoices issued to Maxis and to keep the Plaintiff updated on

the payments received from Maxis;

c) it failed to account to the Plaintiff and keep the Plaintiff

informed and updated of all monies transferred to the

Dedicated Account;

d) it failed to account and pay to the Plaintiff the Plaintiff’s share

of the payments and monies received from Maxis in the Agreed


30

Benefit Ratio or at all; and

e) it failed to issue the requisite Standing Instruction to authorize

immediate payments out of the Dedicated Account to the

Plaintiff according to the Agreed benefit Ratio.

68. The argument advanced by the Plaintiff was premised on express

trust where the 3 certainties were referred to. In the course of the

Plaintiff’s argument to support the proposition of the existence of a

trust, the cases of ESPL (M) Sdn Bhd v. Radio & General

Engineering Sdn Bhd [2005] 2 MLJ 422 and Re Kayford Ltd [1975]

1 AER 604 were referred to us. We noted that, in those cases, there

was evidence of an express intention to create a trust. For example,

in ESPL (M) Sdn Bhd v. Radio & General Engineering Sdn Bhd

[2005] 2 MLJ 422 the word “trust” was used. None of those cases

imposed conditions that had to be fulfilled before the beneficiary’s

interest crystallized.

69. It is noted that an express trust may be created without using the

words “trust”. In the absence of express words creating such an

express trust, the Court will look at the surrounding circumstances to

determine whether the party intended to constitute itself a trustee, as

illustrated by this Court in ESPL (M) Sdn Bhd v. Radio & General

Engineering Sdn Bhd (supra) where there was a clear and an express

Clause 27.1 in the sub contract which stated “....Sub-Contractor will

receive the payment made by the Contractor and will hold the right

to receive such payments as a trust fund to be applied first to the

payment of labourers, suppliers, Sub-sub-Contractors and others

responsible for the Works justifying such payments....”. In that case

the said clause together with the contemporaneous correspondence

and the surrounding circumstances showed that the plaintiff clearly

“intended to constitute itself a trustee for the defendant”.

70. Similarly, Re Kayford Ltd [1975] 1 AER 604 is another authority that


31

illustrates the proposition that the intention of the parties is to be

gathered from the totality of the circumstances of the case, including

the words written or spoken and the conduct of parties, in the

determination of the existence of a trust. Megarry J held that

although no imperative words were used in any of the documents, it

was clear that the intention was that “there should be a trust”. He

said as follows:

“Now there are clearly some loose ends in the case. Mr. Kay,

advised to establish a “customers’ trust Deposit Account”,

seems to have thought that it did not matter what the account

was called so long as there was a separate account; and so the

dormant deposit account suggested by the bank manager was

used. The bank statement for this account is before me, and on

the first page, for which the title is simply “Deposit Account

Kayford Limited”, nearly 26 Pound is credited. The second and

third pages have the words “Customer Trust Deposit Account”

added after the previous title of the account; and Mr. Joel’s

payment was made after these words had been added. Mr. Kay

also left matters resting on a telephone conversation with the

bank manager until he wrote his letter of 12 December to the

bank. That letter reads: “We confirm our instructions regarding

the opening of the deposit account for customers deposits for

new orders”; and he then makes some mention of other

accounts with the bank. The letter goes on; Please ensure the

re-opened deposit account is titled “Customer Trust Deposit

Account”. Then he gives the reference number and asks for

confirmation that this has been done. Nevertheless, despite the

loose ends, when I take as a whole the affidavits of Mr.

Wainwright, Mr. Kay and Mr Hall (the bank manager) I feel no

doubt that the intention was that there should be a trust. There

are no difficulties. The property concerned is pure personality,


32

and so- called “three certainties” of a trust. The subject matter

to be held on trust is clear, and so are the beneficial interests

therein, as well as the beneficiaries. As for the requisite

certainty of words, it is well settled that a trust can be created

without using the words “trust” or “confidence” or the like; the

question is whether in substance a sufficient intention to create

a trust has been manifested.”

71. Gunn Chit Tuan SCJ in Geh Cheng Hooi & Ors v. Equipment

Dynamics [1991] 1 MLJ 293 applied Re Kayford Ltd (supra) where

he said:

“Although we would agree with the view that a trust should not

normally be imported into a commercial relationship, yet we

would hold that in cases such as those involved in these appeals

the court could and should consider the facts to determine

whether a fiduciary relationship existed. We therefore agreed

with Mr. Wong that in the present cases we must consider the

circumstances concerning the relationship between the parties.

We were satisfied and agreed with the learned judge that in the

circumstances of these cases a trust can be implied even where

the agreements themselves do not contain an express clause

that the proceeds of sale should be held on trust as it is clearly

manifested in the agreements and the correspondence

concerned that it was the intention of the parties that the

Emporium or its outlets as licensors should, after deduction of

the fees and commissions agreed to be paid to them, make over

to the concessionaires or consignors all payments by third

party customers (emphasis added).”

72. As far as the present appeal is concerned, there is nothing in the

testimonies of the witnesses to show that the true intention of the

parties was to create a trust, as this issue was never addressed by the


33

witnesses of the Plaintiff nor suggested via cross-examination of the

Defendant’s witnesses.

73. The Plaintiff sought to rely on the cumulative effect of Clauses 5.7,

6.1 and 6.2 of the SAA to show that there was a trust. However, we

failed to see how such provisions of the SAA can be interpreted to

create a trust. The entire structure of the SAA was such that, the

Plaintiff would only earn the right to repay themselves from the

Dedicated Account once the Plaintiff has paid the 1st Tranche and

the 2nd Tranche. It is not in dispute that the 1st Tranche was paid,

but not the 2nd Tranche.

If one is to read Clause 5.6 of the same, which provides that if the

Plaintiff failed to replace the bank guarantee facility of the

Defendant by 15.1.2011, then the Defendant shall be entitled to

utilize the funds in the Dedicated Account for that purpose. Such a

provision cannot be compatible with the existence of a trust as

contended by the Plaintiff.

74. This Court in Perman Sdn Bhd v. European Commodities Sdn Bhd

& Anor [2005] 4 CLJ 750) has held that the standard of proof of the

existence of an express trust in given circumstances is very high.

The rationale in law is that, no person’s property should be burdened

with the interest of another in the absence of the clearest of proof.

The law requires an intention to create a trust to be expressed in

clear language.

75. The relationship between the Plaintiff and the Defendant is strictly

governed by the SAA. There are no clear stipulations in the SAA as

to creation of a trust. What is clear, is the dispute in relation to the

alleged breaches by the parties of the provisions of the SAA. The

cause of action is breach of a commercial contract i.e. the SAA

which was entered between 2 business entities. A further

examination of the relevant provisions of the SAA discloses the


34

following:

a) Clause 6.2 (c) provides that after paying the 1st Tranche and

the 2nd Tranche, a Standing Instruction will be issued to

Maybank to authorize the remittance of the monies in the

Dedicated Account upon the Agreed Benefit Ratio;

b) It is from this Dedicated Account that the Plaintiff was to seek

repayment of the advances it was to make to the Defendant in

the form of the 1st Tranche and the 2nd Tranche, together with

the notional top up, to the extent of RM16,643,694.00. Hence

the right to seek repayment will only accrue upon payment of

the 2nd Tranche; and

c) Clause 5.7 provides that, if for whatever reason, the proceeds

of the On-Going Projects should be insufficient to repay the

Plaintiff, the Defendant was not to make any payment to cover

the shortfall from its own coffers. Instead, the shortfall was

to be covered from the profits derived from any future

collaboration between the Plaintiff and the Defendant.

The abovementioned provisions of the SAA militate against the

existence of a trust.

76. In addition, it is trite law that we do not import elements of fiduciary

duties and trust into contractual commercial contexts. In the case of

Hospital Products Limited v. United States Surgical Cooperation

[1984] CLR 41, Maison J summarized the contractual and fiduciary

relationship between contracting parties, where he held at page 97:

“That contractual and fiduciary relationships may co-exist

between the same parties has never been doubted. Indeed, the

existence of a basic contractual relationship has in many

situations provided a foundation for the erection of a fiduciary


35

relationship. In these situations it is the contractual foundation

which is all important because it is the contract that regulates

the basic rights and liabilities of the parties. The fiduciary

relationship, if it is to exist at all, must accommodate itself to

the terms of the contract so that it is consistent with, and

conforms to them. The fiduciary relationship cannot be

superimposed upon the contract in such a way as to alter the

operation which the contract was intended to have according to

its true construction.”

77. Hence, upon a true construction of the SAA, it is clear that the

repayment of the advances made by the Plaintiff (in the form of the

1st and the 2nd Tranches together with RM16,634,694.00) from the

Dedicated Account was after the 1st and the 2nd Tranches were paid.

An express/implied trust cannot be inferred to have been created in

these situations. The entitlement of the Plaintiff to the repayment

from the Dedicated Account did not crystallize, unlike the facts in

ESPL (M) Sdn Bhd v. Radio & General Engineering Sdn Bhd

(supra), Re Kayford (supra), Geh Cheng Hooi & Ors v. Equipment

Dynamics (supra). Ultimately, our present Appeal is a case of breach

of contract.

78. Therefore, we found that the learned trial Judge had not erred when

she dismissed the claim of the Plaintiff that the Defendant acted in

breach of its implied obligations under the SAA or that the

Defendant acted in breach of its fiduciary duties and obligations

under its trustees’ duties.

The purported departure by the Plaintiff from its pleadings:

79. The Defendant argued that the Plaintiff had departed from its pleaded

case when it argued that it was not able to verify the invoices issued

by Maxis. The Defendant submitted that the learned trial Judge‘s

finding that the Defendant had not provided the actual invoices and


36

payments, is at variance with the Plaintiff’s pleaded case. However,

this argument by the Defendant is without merit as the Plaintiff has

pleaded these material facts at:

i) para 7 (d) (iv) in the Statement of Claim which reads:

“(d) The Defendant shall.... (iv) provide the Plaintiff with

all invoices issued to maxis and updates on all

payments received from maxis (Clause 3.1 (f))”

ii) para 11 (c ) and (d) of the Statement of Claim which read:

“(c) The Defendant failed, in particular from in and

around October 2011, to keep the Plaintiff informed

and updated on the invoices issued to Maxis.”

(d) The Defendant failed, in particular from in and

around October 2011, to keep the Plaintiff informed

and updated on the payments received from Maxis.”

80. Subsequently, the Plaintiff adduced evidence at trial to support these

material facts, i.e. that such information or update on the invoices

must surely be that which is reasonably and objectively verifiable,

given that these two parties here are commercial business entities

entering into an agreement for the first time. It has been established

through evidence that there have been no invoices to Maxis,

provided to the Plaintiff for verification, which is an obligation

stipulated under the SAA. The invoices are the best evidence for the

said purpose, not the summaries or listings as provided by the

Defendant. Evidence from the Defendant’s witnesses who said that

they have provided the invoices to the Plaintiff are inadequate to

verify the actual amount of the invoices billed to Maxis. Similarly,

as to payments which the Defendant received from Maxis, the best

evidence would be the bank statements of the Dedicated Account.


37

81. Hence, we found that the Plaintiff’s case was in accordance to its

pleaded case and the argument that the Plaintiff had departed from

the same holds no water.

The Counterclaim by the Defendant:

82. The Defendant argued that as the Plaintiff had purportedly breached

the SAA, the Plaintiff cannot take advantage of its own wrong. The

Defendant referred us to the case of Poh Geok Sing v. HB Enterprise

Sdn Bhd [2006] 1 CLJ 765 in support of its proposition that a contract

breaker, being responsible for the breach of an agreement, “cannot

seek to recover any benefit he may have conferred upon the innocent

party where he is himself guilty of a breach of the contract. Were it

otherwise, a contract breaker will be in a position to take advantage

of his own wrong”.

83. However, the facts in Poh Geok Sing (supra) are distinguishable

from the facts in the Appeal before us for the following reasons:

(a) Firstly, the Plaintiff in the present Appeal is not the contract

breaker. We have found that it was the Defendant which

breached the SAA when it failed to comply with Clause 3.1 (e)

and (f) of the SAA, as there cannot be a determination on the

amount which had been invoiced to Maxis, thus making it

impossible for parties to determine that the payment for the 2nd

Tranche has been triggered. Hence, the Plaintiff could not be

faulted for withholding the 2nd Tranche payment to the

Defendant. The Plaintiff is not in breach of the SAA for

withholding of the 2nd Tranche.

(b) Secondly, in Poh Geok Sing (supra), there was a clear

termination of the contract by the defendant therein, which the

court held to be justified and lawful, and hence the defendant

therein was entitled to claim for damages. In our present


38

Appeal, the Defendant never terminated the SAA. If at all, in

fact it affirmed the SAA.

(c) In addition, in Poh Gek Sing (supra), the case involved a “lump

sum contract” where the contract requires the completion of an

entire project before payment becomes due, which is not the

situation in our present Appeal. Nowhere in the SAA was it

stated that the Plaintiff is to complete the Project Works before

it is entitled to receive payments. The SAA provides that the

Plaintiff is entitled to receive:

i) RM16,643,694.00 from 90% of the 2010 DROs;

ii) 90%/95% of the proceeds from the post 2010 DROs;

as and when these monies are paid into the Dedicated Account

by Maxis. This happened whenever Maxis issued a DROs, the

Plaintiff/Defendant will complete the DROs and the

Defendant will then invoice Maxis who will then make

payment.

(d) In Poh Gek Sing (supra), it was also found that the defendant

therein had not conferred any benefit upon the plaintiff therein

pursuant to the contract. It was held that the structures built by

the plaintiff were in fact a burden. This Court held in Poh Gek

Sing (supra) that in the absence of such finding of benefit, the

plaintiff was not entitled to claim for the benefits bestowed

upon the defendant therein. In the present Appeal, the Plaintiff

has carried out the works as issued out from the DROs in 2011,

and in the process expended a sum of RM13,657,844.00 in

capital and operational expenses. On the other hand, the

Defendant had in fact received payments from Maxis, and has

thus received benefits.


39

84. Consequently, the declaration sought by the Defendant in the

counterclaim was rightly dismissed by the learned trial Judge.

Conclusion:

85. We therefore dismissed both the appeals with no order as to costs.

The decision of the learned High Court Judge is affirmed.

(ZABARIAH MOHD YUSOF)

Judge

Court of Appeal

Putrajaya

Dated: 31 OCTOBER 2017

Counsel:

Appeal B-02(NCVC)(W)-152-01/2016

For the appellant - Conrad Young, K Thavanesan, Tan Shang Neng; M/s

Sreeneevasan Young

For the respondent - Michael Chow & TP Teh; M/s Michael Chow

Appeal B-02 (NCVC)(W)-154-01/2016

For the respondent - Conrad Young, K Thavanesan, Tan Shang Neng; M/s

Sreeneevasan Young

For the appellant - Michael Chow & TP Teh; M/s Michael Chow

154-01/2016] ANTARA SEDIABENA SDN BHD (No.

Documents