Fuji Xerox Asia Pacific Pte Ltd v Destine Mei Sdn Bhd (WA-22NCvC-426-07/2020)

DESTINE MEI SDN. BHD

ZAINOL MAHARIQ BIN ZAINOL HARIS (I/C NO.: 720718-02-5529) ...DEFENDANTS GROUNDS OF JUDGMENT [After Full Trial] Introduction [1] The Plaintiff filed this suit against the 1st Defendant due to the allege breach of contract and against the 2nd Defendant being a guarantor to the 1st Defendant. [2] After careful consideration and on the balance of probabilities, I find that the Plaintiff had successfully established its case against the Defendants. Therefore, I allow parts of the Plaintiff’s claim. Background Facts [3] The Plaintiff is a company incorporated in Singapore and registered under the Companies Act 2016 with its registered address at Ground Floor, Axis Business Park, Block C, No. 10, Jalan Bersatu 13/4, Petaling Jaya, Selangor. At all material times, the Plaintiff carries on the business of services of lease rental marketing and servicing of xerographic copiers, duplicators, office equipment and related suppliers. 20/05/2024 09:55:08 WA-22NCvC-426-07/2020 Kand. 108 [4] The 1st Defendant is a company incorporated in Malaysia under the Companies Act 2016. At all material times, the 1st Defendant carries on business as a provider of Information Technology Services. The 2nd Defendant is a Malaysian citizen and at all material times, a director and guarantor of the 1st Defendant. [5] The Plaintiff had agreed to provide the rental/usage and services of the Plaintiff’s Equipment/Software to the 1st Defendant pursuant to a “Document Services and Product Agreement” dated 21.9.2016 (“1st Agreement”). [6] The Plaintiff and the 1st Defendant entered into 3 supplementary agreements respectively dated 21.9.2016, 24.1.2017 and 8.6.2017 to amend the 1st Agreement (collectively, “Supplementary Agreements”). [7] The Plaintiff had agreed to continue to provide the rental/usage and services of the Plaintiff’s Equipment/Software to the 1st Defendant pursuant to another “Document Services and Product Agreement for Equipment Rental” dated 21.5.2019 (“2nd Agreement”). [8] The 2nd Defendant had entered into a “Continuing Guarantee and Indemnity” dated 21.5.2019 (“Guarantee Agreement”) to guarantee payment of all sums of money or liabilities due or owing by the 1st Defendant to the Plaintiff pursuant to the 2nd Agreement. [9] The 1st Defendant had sub-rented the Plaintiff’s Equipment/Software to Malaysian Government, for the purpose of the Ministry of Defence (“MINDEF”). The Plaintiff’s Equipment/Software were installed at various premises occupied by MINDEF (All the abovementioned agreements would herein refer to collectively as “Agreements”) [10] Based on the terms of the Agreements, the Plaintiff had agreed to provide “Value Added Services” to the 1st Defendant at MINDEF’s premises during the period of the Agreements. The Plaintiff had also agreed to supply and deliver consumables to the 1st Defendant at MINDEF’s premises. Besides, the Plaintiff had agreed to provide “Help Desk support for In-Scope Devices” for the Equipment rented by the 1st Defendant. [11] In this case, it is undisputed that the Plaintiff has performed its part by, among others, supplying the Plaintiff’s Equipment/Software and issuing invoices to the 1st Defendant pursuant to the terms of the Agreements. [12] Despite being aware of its contractual obligations to pay and settle the invoices by the Plaintiff within the stipulated period, the 1st Defendant had failed, refused and/or neglected to make payment towards the invoices incurred under the Agreements. [13] To facilitate and explore the payment terms, the 1st Defendant sent a letter dated 5.12.2019 to the Plaintiff. On 11.12.2019, there was a meeting held between the Plaintiff and the 2nd Defendant. The 1st Defendant then sent a letter dated 12.12.2019 to the Plaintiff stating the proposals for the settlement of debt. By a letter dated 19.12.2019 from the Plaintiff to the 1st Defendant, the Plaintiff informed the 1st Defendant that the 1st Defendant’s proposals for the settlement of debt were rejected. The letter further specified the conditions for the payment of the debt due to the Plaintiff to be complied by the 1st Defendant. [14] On 9.1.2020, the Plaintiff and the 2nd Defendant held another meeting. Then, in a letter dated 9.3.2020 from the Plaintiff to the 1st Defendant, the Plaintiff informed the 1st Defendant that the Plaintiff was unable to accept the 1st Defendant’s settlement proposal tabled at the meeting on 9.1.2020. Once again, the letter stipulated the conditions for the payment of the debt due to the Plaintiff by the 1st Defendant. [15] Unsatisfied, a “Notice of Demand cum Termination” dated 6.5.2020 was sent by the Plaintiff’s solicitors to the 1st Defendant. A “Notice of Repossession” dated 18.6.2020 from the Plaintiff’s solicitors was then sent to the 1st Defendant’s previous solicitors, Messrs. Naqiz & Partners. [16] Subsequent thereto, letters dated 19.6.2020 and 23.6.2020 were exchanged between the Plaintiff’s solicitors and the 1st Defendant’s previous solicitors. [17] Finally, on 1.7.2020, the Plaintiff’s solicitors sent a “Notice of Demand” to the 2nd Defendant. Also, the Plaintiff’s solicitors sent a “Notice of Repossession” dated 4.7.2020 to MINDEF stating that the Plaintiff had terminated the Agreements with the 1st Defendant. In the letter, the Plaintiff also informed MINDEF that the Plaintiff’s representatives and/or officers would be present at MINDEF’s premises for the purpose of recovering the Plaintiff’s Equipment/Software from 8.7.2020 onwards. However, MINDEF did not respond to the said Notice. [18] As at 16.7.2020, the amounts owing by the 1st Defendant to the Plaintiff for invoices issued was RM430,698.47. As at 6.7.2020, the amounts owing by the 1st Defendant and the 2nd Defendant under the 2nd Agreement was RM2,010,050.34. [19] Therefore, the Plaintiff filed this action against the Defendants. In return, the Defendants filed a counterclaim against the Plaintiff. The Trial [20] During the trial, the Plaintiff and the Defendant each called one (1) witness: PW1 Ng Wai Ling DW1 Zainol Mahariq bin Zainol Haris Issued to be Tried [21] Before the trial, the Parties had agreed on the following issues to be trial:-

Whether the Agreements were terminated by the Plaintiff’s solicitors, Messrs Skrine’s Notice of Demand Cum Termination dated 6.5.2020 or by the Plaintiff’s letter dated 19.12.2019?

Whether the Plaintiff had only put on hold the supply of consumables around August/September 2019 but the Plaintiff’s employees who have been assigned to certain MINDEF sites continued to provide other services until May 2020?

Whether the Defendants are estopped from disputing their liability to pay the outstanding Invoices for payments due and outstanding to the Plaintiff under the Agreements since they had made proposals for settlement of debt on various occasions?

Whether the 1st and 2nd Defendants had made clear admissions of debt are estopped from denying the same?

Whether the 1st Defendant is liable to pay the sum of RM430,698.47 as at 16.7.2020 being the Outstanding and Default Interest for Monthly Basic Charge and Meter Usage Invoices under the 1st Agreement together with further interests?

Whether the 1st and 2nd Defendants are jointly and severally liable to pay the sum of RM1,822.727.05 being the Outstanding and Default Interest for Basic Monthly Rental Invoices as at 6.7.2020 together with further interests, RM186,711.09 being the Outstanding and Default Interest for Value Added Services Invoices as at 6.7.2020 together with further interests, RM52.50 being the Outstanding and Default Interest for Labour Charges as at 6.7.2020 together with further interests, and RM500 being the Admin Fee as at 11.5.2020 together with further interests.

Whether the 1st Defendant has committed a tort of conversion of the Equipment/Software?

Whether the 1st Defendant has committed a tort of detinue of the Equipment/Software?

Whether the Plaintiff is liable to pay the sum of RM429,132.55 to the Defendants? Findings and Decision of the Court [22] The case before me is simple. The Plaintiff claimed that they have provided the services as per the Agreements, but the Defendants have failed to honour its obligations under the Agreements to pay for the services provided. It is my finding that the Plaintiff had successfully proved and established its claim on the balance of probabilities. I shall address the issues in turn. [23] The law is trite that the Plaintiff bears the burden of proof to prove its claim against the Defendant (Section 101(1) and 103 of the Evidence Act 1950). Also, in the Federal Court case of Inas Faiqah Helmi (A Child Suing Through Her Father and Next Friend; Mohd Helmi Abdul Aziz) v. Kerajaan Malaysia & Ors [2016] 2 CLJ 885, Abdul Hamid Embong FCJ (as he then was) in delivering the judgment of the court held (at page 892): “The standard of proof in civil cases is the legal standard to which a party is required to prove its case, namely on a balance of probabilities. In civil litigation, the question of the probability or improbability of an action occurring is an important consideration to be taken into account in deciding whether that particular event had actually taken place or not.” [24] To understand the issues at hand, I shall discuss in turn the parties’ submission in the following sub-topics. Whether the Defendants are bound by the Agreements and the Guarantee Agreement [25] In this case, the Defendants are not disputing the Agreements. The Agreements are also categorized as Part A in the Bundle of Documents, and this was confirmed by the Defendants’ counsel during the trial. [26] Accordingly, I find that the Defendants are bound by the terms and conditions of the Agreements. This includes, inter alia, the terms pertaining to invoices, the default of payments and termination of Agreements. The 1st Defendant is not disputing its liability and the outstanding invoices amounts due under the 1st Agreement [27] The Plaintiff submitted that the 1st Defendant is not disputing its liability under the 1st Agreement, and the outstanding amount due from the invoices issued under the 1st Agreement of RM430,698.47 (as at 16.7.2020). This amount is inclusive of the monthly basic charges and late payment interest incurred until 16.7.2020. [28] The Plaintiff also referred to Clause 6 of the 1st Agreement which provides that: [Refer Bundle of Documents Vol. B1, Page 2] “DEFAULT. Without prejudice to Fuji Xerox’s other rights under this Agreement, if Customer does not pay Fuji Xerox the monthly basic charge within the stipulated period pursuant to the Agreement, Fuji Xerox shall:- a. charge a late payment fee at the rate of 0.04% per day on due sum to the date Customer pays in full and disclose default payment information to solicitors and credit bureau for the recovery of payment.” [Emphasis added] [29] Based on the above, the Plaintiff submitted that the Plaintiff is also entitled to further late payment interest at the rate of 0.04% applicable per day on the said outstanding amount starting from 17.7.2020 until full payment. [30] The Plaintiff further referred to the Notes of Proceedings at page 153 as follows: Encik Zainol, saya nak rujuk kepada perjanjian pagi ini. So, saya nak rujuk pada bundle B1 kerana dalam kes ini ada dua perjanjian. Saya akan deal dengan perjanjian pertama. Secara umumnya perjanjian pertama itu jumlah-jumlah yang telah diinvois itu tidak dipertikaikan. Betul? Betul. [31] On this, I agree with the Plaintiff that the 1st Defendant had failed to deny the amount as per invoices issued by the Plaintiff. The law is trite that when a party fails to raise any objection on the invoice of which they have been served relating to any transaction, it is estopped from denying that payment is due from them. I refer to the Federal Court case of Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331 where the late Gopal Sri Ram JCA (as his Lordship then was) held that: “[1] A reasonable man in the respondent’s position would be entitled to assume that the appellant had agreed to imposition of the 14-day period as it did not merely remain silent by not objecting to it but had in fact made payment on some invoices. The appellant should not be allowed to question the validity of the indorsement after seven months as it would be unconscionable and inequitable for it to do so. [2] The doctrine of estoppel is a flexible principle by which justice is done according to the circumstances. It is a doctrine of wide utility and has been resorted to in varying fact patterns to achieve justice… … “The width of the doctrine has been summed up by Lord Denning in the Amalgamated Investment case ([1982] 1 QS 84 at p. 122; [1981] 3 All ER 577 at p 584; [1981] 3 WLR 565 at p 575 as follows: The doctrine of estoppel is one of the most flexible and useful in the armoury of the law… When the parties to a transaction proceed on the basis of an underlying assumption – either of fact or of law – whether due to misrepresentation or mistake makes no difference – on which they have conducted the dealings between them – neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so. If one of them does seek to go back on it, the courts will give the other such remedy as the equity of the case demands”. [Emphasis added] [32] I further refer to the High Court case of Jurudaya Construction Sdn Bhd v Castwell Industries (M) Sdn Bhd [2021] MLJU 794 where Zaleha Rose Pandin JC (now High Court Judge) held: “[21] Upon reading the pleadings and written submission of both parties, it is clear that the issues raised by the Appellant to do not amount to a triable issue based on the followings: … The law is clear, where a party fails to raise any objection on the invoice of which they have been served relating to any transaction, it is estopped from denying that payment is due from them. In short, it is the duty of the Appellant to object to the invoices that had been issued and received by them, and having failed to do so, the same principle of estopped will apply. … Therefore, it is not open to the Appellant now to raise issues which were never raised at that point in time when those issues should have been raised. Meaning to say, since there was no dispute raised, there can be no serious issues related to the invoice. To my mind, the issues raised by the Appellant is a sheer afterthought.” [33] Having failed to object to the invoices issued by the Plaintiff pertaining to the 1st Agreement, the principle of estoppel will apply. As such, the Plaintiff’s claim pursuant to the 1st Agreement is allowed. The Defendants are liable for the outstanding amount due under the 2nd Agreement [34] For the 2nd Agreement, the Plaintiff once again premised that the Defendants are not disputing their liability, including the 2nd Defendant’s liability under the Guarantee Agreement. [35] Under the 2nd Agreement, the Plaintiff was entitled to charge the 1st Defendant for, inter alia, a monthly basic charge of RM163,350.00 which consisted of RM139,184.00 for equipment rental and RM24,166.00 for value added services. These can be seen in Attachment 3 of the 2nd Agreement in Bundle of Documents, Vol. B1 at page 208. [36] Accordingly, the Plaintiff has issued monthly invoices under the 2nd Agreement for the total amount of RM1,890,854.00 starting from 1st May 2019 until the alleged termination date of the 2nd Agreement in May 2020. [37] However, the Defendants are disputing the quantum of the invoices issued under the 2nd Agreement. The Defendants alleged that the Plaintiff had wrongly invoiced them for services which were suspended starting September 2019 until the termination date of the 2nd Agreement. The Defendants also alleged that the Plaintiff had terminated the 2nd Agreement on 21.12.2019 pursuant to the Plaintiff’s letter dated 19.12.2019 and therefore is not entitled to claim anything beyond that. [38] The Plaintiff argued that the Defendants’ allegations are baseless and misconceived for the following reasons: i) The Plaintiff has complied with the terms in the 2nd Agreement when issuing invoices, and there is no valid dispute on the invoiced amount, or the invoices issued by the Plaintiff; ii) There is basis for the Plaintiff to suspend the services starting in December 2019 due to the defaults of the 1st Defendant; and iii) The Plaintiff has only effectively terminated the 2nd Agreement in May 2020 and not earlier. [39] The crucial issue here is with regard to the termination date of the 2nd Agreement. The Plaintiff argued that there was no actual termination on 21.12.2019 notwithstanding the letter dated 19.12.2019. The Defendant however premised that the letter dated 19.12.2019 had indeed terminated the 2nd Agreement. To have a clear picture of this, the relevant content of this 19.12.2019 letter is now referred (pp.96-98, Encl. 57, in particular page 97-98):- “4. KINDLY TAKE NOTICE that unless that the Debt is paid to us in accordance with the terms and conditions of this letter and all the three (3) post-dated cheques amounting to RM1,246,745.78 is received by us on 20 December 2019 without any deferment, this letter shall serve as a termination notice and the Agreement shall be terminated immediately and consequently, we shall repossess the equipment (if applicable) and commence legal proceedings against you for the recovery of all sums due and/or will become due under the Agreement in which event you shall be additionally liable for late payment/default interest, costs and legal fees incurred thereon.” [Emphasis added] [40] The wordings of this letter are clear: 2nd Agreement would be terminated unless payments were made in accordance with the terms stated in the letter by 20th December 2019. Since there was no such payment, it is clear that the 2nd Agreement had duly been terminated after 20th December 2019, namely, on 21st, December, 2019 . The Plaintiff had also immediately terminated the services after that. How could the Plaintiff now claim that they were only temporarily suspending the services in December 2019 and that they were only effectively terminating the 2nd Agreement in My, 2020? There had not been any contemporary documents to establish or prove or suggest this. What is clear evidentially is Para 4 quoted earlier and the conduct of the Plaintiff in terminating the service thereafter. All these suggest a proper termination on 21.12.2019. Therefore, in the absent of any other evidence to support this allegation (that there was actually no termination in December 2019 and that it was only a temporary suspension), it is my finding that the 2nd Agreement was duly terminated on 21.12.2019 and not any time after that. [41] The Plaintiff then submitted that it was agreed by the parties that all invoices issued by the Plaintiff are final and conclusive evidence for all purposes. This can be seen in Clause 5 of the 2nd Agreement in Bundle of Documents, Vol. B1, at page 182: “PRICING AND PAYMENT. …Any statement in writing or invoices issued by Fuji Xerox or certified true copy thereof signed by any manager or Fuji Xerox’s authorised representative to the amount due and owing from the Customer shall be final and conclusive evidence against the Customer for all purposes.”. [42] It is to be reminded that it was the parties who agreed to the terms of Agreements and the Agreements were never dispute by the parties. This Court has no power to improve upon the instrument which it is called upon to construe. This Court cannot introduce terms to make it fairer or more reasonable. I am concerned only to discover what the instrument means. I refer to the Federal Court case of SPM Membrane Switch Sdn Bhd v. Kerajaan Negeri Selangor [2016] 1 MLJ 464 at page 486 as follows: “The court does not make a contract for the parties. The court will not even improve the terms which the parties have made for themselves, however desirable the improvement might be. The court’s function is to interpret and apply the contract which the parties have made for themselves. If the express terms are perfectly clear and free from ambiguity, there is no choice to be made between different possible meanings: the clear terms must be applied even if the court thinks some other terms would have been suitable. An unexpressed term can be implied if and only if courts finds that the parties must have intended that term to form part of their contract.”. [43] It was further submitted by the Plaintiff that all the invoices issued to the 1st Defendant have expressly stipulated that any discrepancy or dispute on the invoice was to be highlighted in writing within fourteen (14) days from the date of the invoice. This can be seen at Bundle of Document, Vol. B2, pages 9 -18, 20 – 34, 36 – 70, 72 – 81, 83 – 90, 99 – 106, 108 – 124, 132 – 141 and 165 – 170 which states: “Kindly highlight any discrepancy in writing within 14 days from date of this invoice otherwise this invoice shall be deemed to be correct. Payment is due and payable pursuant to terms and conditions of the agreement. Penalty for late payment will be charged at 0.04% per day on overdue balance from due date till full settlement.” [44] The Plaintiff further submitted that despite being properly served and notified, the Defendants never raised any issue or dispute any of the invoices issued by the Plaintiff. [45] During cross examination, the 2nd Defendant has admitted that the Defendants have never disputed any of the Plaintiff’s invoices nor highlighted any discrepancy in writing. I refer to the Notes of Proceedings at page 108 – 109: Dan juga yang sama, untuk invois bagi bulan September 2019, tidak ada apa-apa pertikaian bertulis daripada Defendan Pertama. Betul? Betul. Oleh kerana pihak Defendan Pertama tidak membuat sebarang pertikaian bertulis untuk invois bulan 9 dan 10 tahun 2019, saya katakan pada Encik Zainol bahawa invois-invois yang saya rujuk itu tidak ada bermasalah. Setuju atau tidak? Nak jawab, boleh jawab… Yes or no, saja. Then, based on that, yes. Perkara yang sama juga kalau kita rujuk bagi invois untuk service bulan November, saya tak akan rujuk dokumen, juga samakan ada invois bagi monthly basic charge, bersama denga napa yang kita katakana PPI lah, “print per impression”. Dan juga ada invois untuk Value Added Service. Bagi bulan November juga, tidak ada pertikaian bertulis kepada Defendan Pertama, betul, based on document? Kalau bertulis, betul lah. Saya juga katakan perkara sama juga berlaku bagi bulan 12 sehinggalah invoice yang telah diterima oleh pihak Defendan yang terakhir iaitu invois untuk charge bagi bulan April 2020. Betul? Betul, kalau bertulislah. [46] Based on the above, the Plaintiff claimed that the Defendants have never disputed the invoices issued after December 2019 and thus they are estopped to dispute now. However, I am in agreement with the submission by the Defendants that the final conclusive clause would be appliable if the issuer is entitled to collect the payment due under the invoices in the first place. If the issuer is not legally entitled to the payments, there could be nothing final and conclusive to that. Since the 2nd Agreement had been duly terminated on 21st December, 2019, the Plaintiff is not entitled to claim any payment between December, 2019 and May 2020. They cannot use the final and conclusive clause as a sward to enforce what is not legally and rightfully theirs. [47] It is established legal principle that when a contract is terminated, all of the parties’ obligations in the contract come to an end and are replaced, by operation of law, by an obligation (on the part of the contract breaker) to pay damages. This principle was reaffirmed by Gopal Sri Ram JCA (as he then was) in the Court of Appeal’s decision in Poh Geok Sing v HB Enterprise Sdn Bhd [2006] 1 CLJ 765: “[13]…But in cases where a contract is broken, the contract is valid not void. What happens is that the obligation to perform the promises made is replaced by operation of law by an obligation to pay damages. But those damages fall to be assessed with regard to the nature of the promises exchanged between the parties. [14] As Lord Reid said in Moschi v. Lep Air Services Ltd [1973] AC 331: The Court of Appeal reached the same result by a different route. I am unable to accept some of their reasoning as to what happens when a contract is broken. In particular I cannot agree that after accepted repudiation the contractual obligations still exist as obligations. For the breach of any contract the normal remedy is damages in money. The contract may have been to deliver say 100 tons of wheat. If the party fails to deliver somehow that obligation disappears and by operation of law is replaced by an obligation to pay money. So it appears to me that when a contract is brought to an end by repudiation accepted by the other party all the obligations in the contract come to an end and they are replaced by operation of law by an obligation to pay money damages. The damages are assessed by reference to the old obligations but the old obligations no longer exist as obligations. Were it otherwise there would be in existence simultaneously two obligations, one to perform the contract and the other to pay damages. But that could not be right. The only legal nexus remaining is the obligation to pay the damages; so here when the respondents elected to end the company’s contract by treating their fundamental breach as a repudiation and accepting it, their right against the company became a right to get damages.” [Emphasis added] Whether the Plaintiff is entitled to claim for general damages against the Defendants [48] Beside the outstanding under all the invoices, late payment interest and administrative fee, the Plaintiff is also claiming for general damages against the Defendants arising from the 1st Defendant’s breach which led to the termination of the 2nd Agreement. [49] The Plaintiff submitted that under the 2nd Agreement, the initial term agreed between the Plaintiff and the 1st Defendant was for 24 months commencing from 1 May 2019. [50] The total contract sum anticipated from the 2nd Agreement was at least RM3,920,400.00. However, due to the termination of the 2nd Agreement prior to the completion of the initial term, the Plaintiff has suffered losses on the amounts anticipated from carrying on with the 2nd Agreement. [51] However, the Defendants premised that the Plaintiff is not entitled to any general damages. The Defendants submitted that damages for breach of contract must be explicitly pleaded and proven. Since the exact amount can be quantified precisely, the Plaintiff’s claim falls under the classification of special damages rather than general damages. The Defendants referred to the Federal Court case of Ong Ah Long v. Dr. S. Underwood [1983] CLJ (Rep) 300 at page 305 where Lee Hun Hoe CJ held that: “It is a well-established principle that special damages in contrast to general damages, have to be specifically pleaded and strictly proved. They are recoverable only where they can be included in the proper measure of damages and are not too remote (see Halsbury's Laws of England 4th Edn., Vol. 11 p. 218 para. 386). ... The reason that special damages have to be specifically pleaded is to comply with its object which is to crystallise the issue and to enable both parties to prepare for trial (per Edmund Davies LJ in Domsalla v. Barr [1969] WLR 630, 634). In special damages claims the exact loss must be pleaded where the precise amount of item of damages has become clear before the trial either because it has already occurred and so become crystallised or because it can be measured with complete accuracy (MacGregor on Damages 14th Edn., p. 1012 para. 1498).” [Emphasis added] [52] In Shen & Sons Sdn Bhd v Jutawarna Development Sdn Bhd [2016] 3 MLRH 479 S Nantha Balan JC (as he then was) reiterated this principle and went on to explain that evidence on special damages cannot be led at the trial if they are not specifically pleaded: “[70] The body of case law is clear and unambiguous. The procedural rule relating to pleading special damages is simple but strict. Special damages must be specifically pleaded. If the statement of claim is devoid of any pleading on special damages, then evidence on specials damages cannot be adduced. I cannot over emphasize that the rule is strict in its application.” [53] On this issue, I have to agree with the Defendants. Although the Plaintiff is claiming for general damages, during the submission, the Plaintiff submitted that the general damages is for the total contract sum anticipated from the early termination of the Agreements. To my view, the nature of the Plaintiff’s claim falls squarely under the special damages as it is quantifiable and easily calculated. As such, the law dictates that claim for special damages must be specifically pleaded and strictly proved. Since the Plaintiff have failed to plead such damages, the claim for this damages must fail. Interest [54] The other interesting aspect of this case is with regard to interest chargeable. It was brought to my attention that the Plaintiff has been charging interest on compounding basis. It is my finding that the Agreements do not provide mechanism for the collection of compounding interest (See for example Clause 6 of the 1st Agreement quoted above). Hence, I have deducted out the compounding component of the interests due and instead allow only a simple interest mechanism. This to me is in line with the language of the relevant clauses in the Agreements. The Defendant’s Counterclaim [55] In this case, the Defendants are counterclaiming for the amount of RM429,123.55 which consists of consumables supply from December 2019 until June 2020, consumables delivery charges through courier from December 2019 until June 2020, third party service charges, value added service charges and helpdesk assistance to MINDEF management costs. [56] It is my finding that, unlike the Plaintiff’s claim which is based on the Agreements, the Defendants’ counterclaim have no basis whatsoever. [57] Even supposedly under the 2nd Agreement where the Defendants alleged that the Plaintiff had failed to provide consumables and value-added services, the Defendants have admitted that there is no basis to make these claims due to their default in making payments in the first place. [58] Under Clause 6 of the 2nd Agreement (at Bundle B1, page 182), a default in payment by the 1st Defendant would entitle the Plaintiff to, inter alia, suspend services. “DEFAULT. Without prejudice to Fuji Xerox’s other rights under this Agreement, if Customer does not pay Fuji Xerox the monthly basic charge within the stipulated period pursuant to the Agreement, Fuji Xerox shall: - a. … b. suspend services and or repossess the Equipment / Software or end this Agreement”. [59] During cross examination, the 2nd Defendant has admitted that the Plaintiff is entitled to suspend services due to the non-payment/default on the Plaintiff’s invoices (Notes of Proceedings at pages 193 – 194): Saya katakan pada Encik Zainol, apa-apa penamatan yang berlaku adalah disebabkan ketidakbayaran oleh Syarikat Encik Zainol kepada invois-invois? Itu daripada awal lagi kita tak dispute, dari awal lagi that one tak ada dispute. Oleh itu, seperti yang saya telah tunjukkan, pihak Plaintif berhak untuk suspend dan atau reposses mesin-mesin ataupun menamatkan perjanjian kerana ada default. Betul? Betul. Dan berkenaan dengan suspension ini, Plaintif boleh suspend consumbales ataupun apa-apa services, betul, kalau ikut perjanjian? Kalau ikut perjanjian, ya. [60] As the Plaintiff’s termination of services and supply of consumables is in accordance with the 2nd Agreement, I find that by doing so, the Plaintiff did not commit any breach of the 2nd Agreement, and therefore, the Defendants’ counterclaim has no basis whatsoever under the 2nd Agreement. [61] As such, the Defendants’ counterclaim shall fail. Conclusion [62] To sum up, this Court find that the Plaintiff has proven to this Court on the balance of probabilities that the Defendants are in breach of the Agreements. However, the Plaintiff had failed to prove to this Court that they could claim any general damages. On the other hand, the Defendants have failed to establish their counterclaim. [63] Therefore, I allow a part of the Plaintiff’s Claim and order that: a) the 1st Defendant to pay an amount of RM609,880.06 due and owing to the Plaintif as at 7.11.2023 with an interest rate of 5% per annum from 8.11.2023 until full and final settlement; b) the 1st Defendant and the 2nd Defendant to pay, jointly and severally, an amount of RM1,913,360.30 due and owing to the Plaintiff as at 7.11.2023 with an interest rate of 5% per annum from 8.11.2023 until full and final settlement; and c) the 1st Defendant and the 2nd Defendant to pay, jointly and severally, admin fee of RM500.00 to the Plaintiff. [64] The Plaintiff’s claim for general damages is hereby dismissed. Similarly, the Defendants’ Counterclaim is dismissed. I also award the cost of RM35,000.00 (subject to allocator) which is to be paid by the Defendants to the Plaintiff. Dated: 13th May, 2024 Dr. John Lee Kien How @ Mohd Johan Lee Judge High Court of Malaya Kuala Lumpur For the Plaintiff Joshua Teoh Beni Chris & Cedric Chan Yew Messrs. Skrine Advocates & Solicitors For the Defendant Karlos Israphil bin Bendlin Messrs. Amin Karlos Advocates & Solicitors Table of Authorities Cases Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331 Inas Faiqah Helmi (A Child Suing Through Her Father and Next Friend; Mohd Helmi Abdul Aziz) v. Kerajaan Malaysia & Ors [2016] 2 CLJ 885 Jurudaya Construction Sdn Bhd v Castwell Industries (M) Sdn Bhd [2021] MLJU 794 Ong Ah Long v. Dr. S. Underwood [1983] CLJ (Rep) 300 Poh Geok Sing v HB Enterprise Sdn Bhd [2006] 1 CLJ 765 Shen & Sons Sdn Bhd v Jutawarna Development Sdn Bhd [2016] 3 MLRH 479 SPM Membrane Switch Sdn Bhd v. Kerajaan Negeri Selangor [2016] 1 MLJ 464 Statutes Section 101(1), Evidence Act 1950 Section 103, Evidence Act 1950