Sinniah A/L Mookiah v United Plantations Berhad (B-02(NCVC)(W)-2042-10/2017)

VIJENDRAN A/L SINNIAH (membawa saman sebagai rakan kongsi di bawah nama dan gaya PADMASEENI ENTERPRISE) ... PERAYU-PERAYU DAN UNITED PLANTATIONS BERHAD ... RESPONDEN (Dalam Mahkamah Tinggi Malaya Di Shah Alam Guaman Civil No : BA-22NCVC-133-03/2016

VIJENDRAN A/L SINNIAH (membawa saman sebagai rakan Kongsi di bawah nama dan gaya PADMASEENI ENTERPRISE) ... PLAINTIF KEDUA DAN UNITED PLANTATIONS BERHAD ... DEFENDAN) CORAM : VERNON ONG LAM KIAT, JCA YEW JEN KIE, JCA HAS ZANAH MEHAT, JCA JUDGMENT OF THE COURT INTRODUCTION [1] This is an appeal by the appellants/plaintiffs against the learned High Court Judge's decision after a full trial in dismissing the appellants/plaintiffs' claim against the defendant/respondent for unlawful termination of contract, damages, interest and costs. [2] It is unfortunate that we do not have the benefit of a written grounds of judgment as the learned trial Judge had since retired. Pursuant to section 69 of the Court of Judicature Act 1964, we heard this appeal by way of rehearing and our determination will be based on our analysis of the evidence on the record. [3] In the appeal parties are referred to as they were in the High Court. BACKGROUND FACTS [4] The first plaintiff is the father of the second plaintiff, both of whom are partners in the partnership styled Padmaseeni Enterprise. The partnership business is the management of farm or plantation, purchase and sale of coconuts, agricultural products, livestock and grocery retailers. The defendant is a public listed company carrying on the business of coconuts cultivation and processing and owns an estate known as Ladang Sungai Bernam in Sabak Bernam, Selangor ("the Estate"). [5] Pursuant to an agreement dated 1.7.2008 between the defendant and the plaintiffs, it was agreed between the parties that the plaintiffs are to harvest and purchase the coconuts from the Estate for a fixed period from 1.7.2008 until 31.12.2012 ("the Agreement"). The Agreement contained no provision for early termination. [6] The first plaintiff had engaged both local and foreign workers to assist in the harvesting and the husking of the coconuts. The first plaintiff had also purchased and/leased several vehicles including lorries and tractors for the said purpose. [7] On 19.6.2010, twenty (20) bags of the defendant's fertilizers and used empty fertilizer bags were discovered by the defendant in the shack on the first plaintiff's land. A police report was thereafter lodged on the same day by an auxiliary policeman attached with the defendant (DW2). Although the plaintiffs were independent contractors, an inquiry was conducted by the defendant's estate manager (DW1), where five persons were called. [8] By a letter dated 28.6.2010 the defendant issued a three (3) months' notice of termination of the Agreement to the first plaintiff ("the Termination Notice"). THE PLAINTIFFS' CASE [10] It is the plaintiffs' case that the Agreement was a fixed term contract and the parties were bound to it until the expiry of its agreed tenure. Therefore, it was not lawfully open to the defendant to terminate the Agreement on 28.6.2010 and by doing so the defendant had committed a breach of contract. The plaintiffs further contended that trust and confidence cannot be implied in commercial or mercantile contract. THE DEFENDANT'S CASE [11] The defendant argued that the Agreement was lawfully terminated as the first plaintiff was given a reasonable three (3) months' notice. The defendant also contended that it was an implied term of the contract that the Agreement was entered based on trust and confidence. The plaintiff had broken the mutual trust and confidence between both parties when 20 bags of fertilizer belonging to the defendant were found in the shack on the first plaintiff's land without the defendant's permission. In an inquiry conducted by the defendant, no plausible or acceptable explanation was given by the plaintiffs. Based on that inquiry, the defendant concluded that the plaintiffs were illegally in possession of the defendant's fertilizers. Hence, the defendant's right to terminate the Agreement based on the aforesaid reason. The defendant further contended that the plaintiffs had admitted to the contents of the Termination Notice by placing it in Part A of the bundle of documents. OUR DECISION [12] For convenience, the relevant clauses of the Agreement (RR Jilid 7, page 1333) and the Termination Notice (RR Jilid 7, page 1341) are reproduced as follows: The Agreement "SATU PERJANJIAN dibuat pada 1HB JULAI 2008 di antara SUNGEI BERNAM ESTATE, 36009 TELUK INTAN, PERAK yang merupakan "SYARIKAT" di satu pihak dan PADMASEENI ENTERPRISE, Sungei Bernam Estate, 36009 Teluk Intan, Perak yang merupakan "KONTRAKTOR" di satu pihak lain untuk jangkamasa dari 1hb Julai 2008 hingga 31hb Disember 2012. Seperti yang telah dipersetujui bersama, berikut adalah terma dan syarat Kontrak Belian yang telah dimaktubkan:-

Setiap belian hendaklah dibuat dalam bentuk bayaran tunai secara 'online' ke akaun bank Syarikat kami seperti berikut:- No. Akaun : 508065811862, Malayan Banking Berhad.

Salinan Deposit Bank (Bank Pay In) hendaklah dibawa bersama ke ladang ini sebagai bukti bayaran sebelum bekalan buah kelapa dibawa keluar daripada ladang kami.

Jenis Spesis/hybrid buah kelapa muda yang telah dipersetujui bersama untuk dibekalkan dan harga (tertakluk kepada pindaan) adalah seperti berikut:- JENIS:SYMG(0.53)SYMG(B)(0.49)SYD(G)(52.0)SYD(0.40)SYD(S)(0.26)SYM(0.49)SUMG(A)(0.52)SUMG(B)(0.36)SUMG®(0.15)SUMG(C)(0.48)SUM(0.32)SUM©(0.45)SUM®(0.15)SUD(G)(0.295)SUD®(0.13)SUT(0.48)SUM(L/N)(0.47) 4 ...

Ladang tersebut di atas adalah milik United Plantations Berhad di mana keluasannya 2,293 hektar.

KONTRAKTOR dikehendaki menyediakan pekerja sendiri untuk menuai dan mengopek buah kelapa tersebut dan menggunakan pengangkutan sendiri untuk memunggah kelapa tersebut keluar daripada ladang tersebut di atas.

Waktu bekerja : 6.30 pagi hingga 2.30 petang.

KONTRAKTOR mesti bertanggungjawab menyelenggara kawasan penuaian pada tahap yang terbaik.

KONTRAKTOR akan mengeluarkan Surat Pengesahan Jualan (Sales Confirmation) pada setiap bulan bagi mengesahkan jualan kepada Syarikat tuan.

Pusingan penuaian pada 45 hari (untuk kelapa tua) dan 21 hari (untuk kelapa muda) mesti dipatuhi sebagaimana diarahkan oleh Pengurusan.

KONTRAKTOR bersetuju untuk menggunakan pekerja sendiri untuk melaksanakan kontrak.

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KONTRAKTOR akan memastikan beliau mengambil mandor/kangani untuk menyelia pekerja-pekerja yang berkerja di bawah kontrak.

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Kualiti dan kerosakan buah kelapa yang di ambil adalah tanggungjawab pekerja-pekerja KONTRAKTOR dan pihak Syarikat kami tidak akan menerima pemulangan balik buah yang telah dirosak ("reject nuts").

KONTRAKTOR hendaklah melantik pekerja-pekerja yang terlatih dan mahir untuk mengelakkan penuaian buah kelapa yang rosak sama ada terlalu muda atau tua.

Sekiranya menghadapi masalah berkaitan terma-terma kontrak ini sama ada melanggar syarat-syarat yang telah dimaktubkan, kedua belah pihak boleh berbincang dari masa ke semasa untuk faedah kepentingan, dan kemajuan bersama." [Emphasis added] The Termination Notice "Mr. M. Sinniah Coconut Buyer Sungei Bernam Estate 36009 Teluk Intan 28/06/2010 Dear Sir, TERMINATION OF COCONUT SALE AGREEMENT I refer to our police report No. Sungei Air Tawar/000403/10 dated 19/6/2010 and several discussions between yourself and the undersign regarding the above subject. You have sent several persons to my office to give me information related to the missing fertilizers from our fertilizer store. We found that the information given by them were inconsistent and contradicting each other especially on the date and time the incident took place and there was no concrete evidence given to support their claims. The fact that the 20 bags of fertilizer which belong to UP Bhd were found in your store located on your land, we have no alternative but to believe that you have illegally kept these stolen fertilizers on your land without our knowledge and permission. We have no trust or confidence to further continue our business with you and therefore regret to inform that the estate will stop your coconut sale agreement. We hereby give you three months' notice with effect from 29th June 2010 to terminate the contract." [Emphasis added] [13] Based on the established authorities and legal principles, implying a term in a contract is an exercise of the court's interpretive jurisdiction. In this case before us, looking at the clauses of the Agreement, the contract is a commercial/mercantile contract which contained no provision prohibiting early termination with reasonable notice or justification. There is also nothing in them that point towards permanence. As such, we are of the view that it must therefore be regarded as determinable upon reasonable notice. We adopt the earlier decision of this court in Masjaya Trading Sdn Bhd v. Kedah Cement Sdn Bhd [2004] 4CLJ 18, that it is perfectly legitimate for a court to imply into a contract containing no provision for determination, a term that it is determinable on reasonable notice. Therefore, we hold that the Termination Notice dated 28.6.2010 was valid and lawful. [14] We are also of the view that it is not necessary to plead the implied term of the contract that reasonable notice of termination may be given, as we have stated earlier, implying a term in a contract is an exercise of the court's interpretive jurisdiction. [15] We also find that the termination is valid based on reasonable ground or justification as there was a breach of an implied term of contract by the plaintiffs when the plaintiffs had broken the trust and confidence which formed the basis of the Agreement between the two parties. We support our finding based on the following evidence on record adduced at the trial:

the long-standing relationship between the first plaintiff and the defendant where the first plaintiff was a former employee of the defendant;

(ii) after the first plaintiff retirement in 2002, he was appointed as a contractor in the defendant's Estate;

(iii) six (6) years later, the defendant decided to enter into the Agreement with Padmaseeni Enterprise, the partnership of the first plaintiff and his son, the second plaintiff;

(iv) the plaintiffs were invited by the defendant to enter into the Agreement in good faith;

the Agreement requires the counting of thousands of coconuts by the plaintiffs for payment without the supervision of the defendant (clause 6 of the Agreement);

(vi) DW1 in his evidence confirmed that trust and confidence was of importance in the relationship because essentially the plaintiffs were to discharge their duty to harvest and process the coconut to the end consumer by themselves (Q&A 14, RR Jilid 2 page 88). This evidence remains unchallenged; and

(vii) the first plaintiff himself admitted during cross examination on 28.11.2016 that the Agreement was entered by both parties with trust and confidence (RR Jilid 2 page 131). [16] It is plainly clear from the above evidence that the plaintiff was allowed to be on the Estate unsupervised purely based on good faith that the plaintiff would do only one thing whilst on the Estate, and that is to pluck the coconuts and then count them for payment and nothing else. Thus, we accept the defendant's evidence that they have loss the trust and confidence in the plaintiffs when 20 bags of the defendant's fertilizers were found on the first plaintiff's land and the plaintiffs offered no plausible or reasonable explanation of the same. [17] Further, we noted that the Termination Notice was put in Part A of the bundle of documents, which means that the parties have agreed to its authenticity as well as the contents. It is an undisputed document (Tiow Weng Theong v Melawangi Sdn Bhd [2018] and Raja Lob Sharuddin bin Raja Ahmad Terzali & Others v Sri Selta Sdn Bhd [2008]2 MLJ 87). In our view, the plaintiffs claim must also fail based on this ground as the plaintiffs did not dispute the contents of the Termination Notice which tantamount to agreeing that the notice and its contents are true (Dream Property Sdn Bhd V Atlas Housing Sdn Bhd [2015] 2MLJ 441; Wong Hon Leong David v Noor Azman bin Adnan [1995] 3 MLJ 283; [1995] 4 CLJ 155). [18] We are of the view that it was an afterthought on the part of the plaintiffs when the plaintiffs only filed the action five (5) years and nine (9) months after the Termination Notice was issued. [19] On the claim for damages, the plaintiffs in paragraph 9 of the statement of claim, pleaded that as a result of the unlawful termination, the plaintiffs suffered great loss and damage, both financial and personal, including mental distress. To support their claim, the plaintiffs relied only on two types of documents, namely, monthly statement of accounts from the defendant which merely show the number of coconuts the plaintiffs bought (RR Jilid 7 pages 1393) and the bank statement of the plaintiffs' joint overdraft accounts (RR Jilid 2 pages 1412 to 1435). All these documents were in Part C of the bundle of documents and they were not marked as an exhibit. The plaintiffs also failed to adduce cogent oral evidence to support their claim for loss and damage, both financial and personal, including mental distress. [20] In light of the foregoing, we find that the plaintiffs have also failed to prove their damages. [21] For all the reasons set out above, we are unanimous in our decision that this appeal must be dismissed with costs. The decision of the learned trial Judge is hereby affirmed. DATED: 22 MAC 2019 HAS ZANAH MEHAT COURT OF APPEAL JUDGE MALAYSIA Counsel/Solicitors: For the Appellant: M. Lavendran and Farah Azaliya Mahadi with him (Messrs Peters Chambers) For the Respondent: Rajan A Applasamy (Messrs Maxwell Kenion Cowdy & Jones)