Classic Palm Oil MILL Sdn Bhd v Berjaya Sompo Insurance Berhad (WA-22NCC-584-08/2023)

This is a trial heard over 4 days in 2025. Oral submissions by counsel were held before me on 23-05-2025 and on 06-08-2025. On 08-10-2025 I delivered my decision as follows-i. I allowed the plaintiff’s claim for the sum of RM 220,725 based on a fire policy. [Enclosure 16 B1 pages 23 - 43]; and ii. I dismissed the claim for RM 3,919,991.42 for fire consequential loss based on a fire consequential policy. [Enclosure 16 B1 page 48].

An appeal was filed by the plaintiff on 06-11-2025 to the Court of Appeal against the dismissal of its claim for RM 3,919,991.42 for fire consequential loss. These are my Grounds of Judgment in respect of the claim for fire consequential loss only. Relevant facts

A fire occurred on 27-08-2020, causing damage to the furnace area and biogas burner in the water-tube steam-generating boiler at the plaintiff’s business premise at Lot 514 & 5,5, Kampung Tiong, 73400 Gemas, Negeri Sembilan.

Due to the fire, Boiler no 2 was not operational from 27-08-2020 to 03-01-2021, a period of 129 days. Only Boiler no 1 was operational.

The plaintiff claims RM 3,919,991.42 for fire consequential loss caused by Boiler no 2 being not operational from 27-08-2020 to 03-01-2021, a period of 129 days. Basis for plaintiff’s quantum

The plaintiff’s director PW6, Tan Choo Soon, in Q&A 27 - 34 of his Supplementary Witness Statement [WS-PW6-(B)], [Enclosure 61] explained the basis for the plaintiff’s claim of RM 3,919,991.42. under the Fire Consequential Loss Policy.

PW6 testified the plaintiff used actual audited financial performance for the financial years 2017 to 2020. The methodology is as follows.

Computing the average net profit(loss) before tax for a three-year period and specifically for the corresponding months (of interruption), namely: - i. September 2017 - January 2018; ii. September 2018 - January 2019; and iii. September 2019 - January 2020

Comparing the said average net profit against the actual net profit/(loss) recorded during the disruption period from September 2020 to January 2021, when Boiler No. 2 was rendered inoperable and only Boiler No. 1 was operational.

PW6 concludes his testimony by saying-

Q: What is the basis and calculations that led to the derivation of RM3,919,991.42? A: The basis and calculations underlying the derivation of RM3,919,991.42 involve taking the average profit/(loss) for the period from September 2017 to January 2020 and S/N EEyvoqV5gk2ewErtiUlfw subtracting the profit/(loss) for the corresponding period September 2020 to January 2021 during the period when the boiler was non-functional. Defendant’s contention

The defendant contends audit accounts, by themselves, do not show a reduction in turnover/sales caused by the fire. The defendant says there is no evidence of cancellation of orders due to the plaintiff not able to meet the orders due to having only one boiler operational. Court’s analysis

It is elementary and trite law that a plaintiff bringing an action for damages bears the burden to prove that he has suffered the damage and prove the quantum of the damages that are claimed. [See Datuk Mohd Ali Hj Abdul Majid & Anor v Public Bank Bhd [2014] 6 CLJ 269, FC].

In Datuk Mohd Ali Hj Abdul Majid & Anor v Public Bank Bhd [2014] 6 CLJ 269, FC, the Federal Court said: [31] The object of an award of damages is to give the claimant compensation for the damage, loss or injury he has suffered. The general principle governing the measure of damages has its origin in the words of Lord Blackburn in Livingstone v. Rawyards Coal Co [1880] 5 App Cas 25 where he said: … that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation. [32] It is trite law that a claimant claiming damages must prove that he has suffered the damage. The claimant has the burden of proving both liability and quantum of damages, before he can recover the sum claimed. This follows from the general rule that the burden of proving a fact is upon him who alleges it and not upon him who denies it, so that where a particular allegation forms an essential part of a person’s case, the proof of such allegation falls on him. (See s. 103 of the Evidence Act 1950). If he fails to prove both the liability and the quantum of damages, he loses the action. [33] Therefore, in a claim for damages, it is not sufficient for the plaintiff to merely state the amount of damages that he is claiming, he must prove the damage that he had in fact suffered to the satisfaction of the court. This principle is borne out in the case of Bonham-Carter v. Hyde Park Hotel [1948] 64 TLR 177 where Lord Goddard CJ observed: 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: S/N EEyvoqV5gk2ewErtiUlfw ‘This is what I have lost, I ask you to give me these damages’. They have to prove it. This statement was cited with approval by Edgar Joseph JR FCJ in Tan Sri Khoo Teck Puat & Anor v. Plenitude Holdings Sdn Bhd [1995] 1 CLJ 15; [1994] 3 MLJ 777. [34] The claim by the plaintiff in the present case is for general and special damages arising out of breach of contract and/or negligence. Therefore, the burden rests on the plaintiff to prove the damages and it is not sufficient for the plaintiff to merely assert that he had suffered such damages without proving it. (See The Susquehanna [1926] AC 655 and Bolag v. Hutchison [1905] AC 515). [Emphasis added] Application to facts Quantum of alleged loss not proven

In my view, the quantum of alleged loss is not proven. Proof of loss must be actual. Therefore, the plaintiff has failed to prove the fact that boiler no 2 was not operational had indeed caused a loss of profits.

It is the plaintiff’s burden to show exactly the loss suffered by them for the 129 days [i.e. from 27-08-2020 until 03-01-2021] when S/N EEyvoqV5gk2ewErtiUlfw boiler no 2 was out of order. The plaintiff clearly did not do this and this was confirmed by the plaintiff’s own witness PW6 as follows: - NADA Yes, no is there anything shown in these accounts, loss sustained due to in operation of boiler 2? PW6 From the audited account, no. Audited account is based on what happened in the particular financial year. It does not take into account any differences. (NOP at page 236) No evidence of any drop of sales

Further, no evidence was led by the plaintiff’s witness PW6 that the plaintiff had to reject orders due to only having one boiler working. PW6 did not produce any emails or correspondence from buyers placing orders and replies from the plaintiff that the orders had to be rejected due to the non-operation of boiler no 2.

PW6 testified under cross-examination that he has no evidence of any drop of sales supported by any documents-S/N EEyvoqV5gk2ewErtiUlfw NADA Okay, to the Court you have also not submitted other than this the audited accounts? PW6 In Court I only submitted my audited account and no other supporting documents. (NOP at page 239) Adverse inference

Section 114 Illustration (g) of the Evidence Act 1950 reads as follows-Court may presume existence of certain fact

The court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct, and public and private business, in their relation to the facts of the particular case. ILLUSTRATIONS The court may presume—

…

that evidence which could be and is not produced would if produced be unfavourable to the person who withholds it; S/N EEyvoqV5gk2ewErtiUlfw [Emphasis added]

The failure of PW6 to adduce supporting documents can only give rise to an adverse inference under section 114 Illustration (g) of the Evidence Act 1950 that such evidence would affect the plaintiff adversely. [See Sabah Shell Petroleum Co Ltd & Anor v The Owners of and/or Any Other Persons Interested in the Ship or Vessel the ‘Borcos Takdir’ [2012] 5 MLJ 515 at [92], HC, per Nallini Pathmanathan J and Marappan A/L Muthusamy v R Sivam A/L Ramasamy [2014] 4 MLJ 428 at [28], CA, per Rohana Yusuf JCA]. Methodology used by the plaintiff is not supported by real data

Further, the net profits for the prior year from 9/2019 to 1/2020 [when boiler no 2 was working] was in fact lesser than the period when boiler 2 was not working i.e. from 9/2020 to 1/2021. This shows the methodology used by the plaintiff cannot be used to prove quantum of loss.

If the net profits for the prior year from 9/2019 to 1/2020 [when boiler no 2 was working], was in fact more than the period when S/N EEyvoqV5gk2ewErtiUlfw the boiler no 2 was not working i.e. from 9/2020 to 1/2021, then arguably the plaintiff’s assertion that the court should use a 3-year period as net average can be entertained.

In conclusion, I dismiss the plaintiff’s claim of RM 3,919,991.42 for fire consequential loss.

For the reasons above, I dismiss the plaintiff’s claim for RM 3,919,991.42 for fire consequential loss based on the Fire Consequential policy. Dated: 12th November 2025 …………(signed)…………….. Leong Wai Hong Judge High Court of Malaya Kuala Lumpur (NCC 6) S/N EEyvoqV5gk2ewErtiUlfw Counsel for plaintiff: Terence Chan Kah Meng and Clarence Hng Ying Hui. Lim Kian Leong & Co. (Kuala Lumpur) Counsel for defendant: V. Nadaraja and Vinoshini S. Isharidah Ho Chong & Menon (Kuala Lumpur) CASES REFERRED TO: 1) Bolag v. Hutchison [1905] AC 515. 2) Bonham-Carter v. Hyde Park Hotel [1948] 64 TLR 177. 3) Datuk Mohd Ali Hj Abdul Majid & Anor v Public Bank Bhd [2014] 6 CLJ 269, FC. 4) Livingstone v. Rawyards Coal Co [1880] 5 App Cas 25. 5) Marappan A/L Muthusamy v R Sivam A/L Ramasamy [2014] 4 MLJ 428, CA. 6) Sabah Shell Petroleum Co Ltd & Anor v The Owners of and/or Any Other Persons Interested in the Ship or Vessel the ‘Borcos Takdir’ [2012] 5 MLJ 515, HC. 7) Tan Sri Khoo Teck Puat & Anor v. Plenitude Holdings Sdn Bhd [1995] 1 CLJ 15; [1994] 3 MLJ 777, SC. 8) The Susquehanna [1926] AC 655. S/N EEyvoqV5gk2ewErtiUlfw LEGISLATION REFERRED TO: 1) Evidence Act 1950 Section 114 Illustration (g). S/N EEyvoqV5gk2ewErtiUlfw