Ivory Associates Sdn Bhd v AST MACHINERY (M) SDN BHD (PA-12BNCvC-6-12/2022)

In early 2013, the Appellant was developing a housing project known as “The Latitude at Lebuhraya Halia Mount Erskine” (Project). For the said Project, the Appellant engaged the Respondent for the rental and supply of three (3) tower cranes, referred to as TC1, TC2 and TC3.

The Respondent commenced proceedings in the Sessions Court seeking recovery of outstanding rent for the unexpired minimum rental period of 25 months, while the Appellant counterclaimed for the refund of the deposit. After the trial, the learned SCJ found in favour of the Respondent. The Appellant then appeals against liability and quantum. Appellant’s Contention [5] The Appellant contended that although the learned SCJ correctly found that the contract provided for a rental period of 25 months, the S/N rikA3VOyDUecgYrgV21fg **Note : Serial number will be used to verify the originality of this document via eFILING portal 3 learned SCJ erred in failing to see that the contract was actually a mutually early termination.

The Appellant further contended that the contract does not contain any provision prohibiting early termination, nor does it contain any provision entitling the Respondent to claim rental for the shortfall period upon early termination. The Appellant also contended that the Respondent had accepted the early termination without protest by dismantling and collecting the three (3) tower cranes from the project site on 25.1.2015, 6.4.2015 and 11.6.2015 respectively.

It was further contended that the Respondent only alleged the existence of minimum rental charges more than one year later, after the Appellant demanded a refund of the deposit. The Appellant asserts that the Respondent’s explanation for the delay is a bare assertion unsupported by documentary evidence before the Sessions Court.

The Appellant averred that the Respondent’s conduct of dismantling and collecting the tower cranes amounts to acceptance of early termination, and that the learned SCJ failed to appreciate the evidence by accepting the Respondent’s assertion that dismantling was compulsory or involuntary. The Appellant then contended that there was no evidence of any contractual obligation, penalty, or charge requiring the Respondent to dismantle the cranes upon request.

On quantum, the Appellant contended that the learned SCJ erred in awarding damages for the unexpired rental period. The Appellant submitted that the Respondent failed to mitigate its losses, failed to prove the commencement dates and dismantling dates relied upon, and failed S/N rikA3VOyDUecgYrgV21fg **Note : Serial number will be used to verify the originality of this document via eFILING portal 4 to prove the accuracy of the sum claimed. The Appellant also contended that the award of damages contradicts the fundamental principle that an award of damages should not put the victim in a better position than if the contract had been entirely performed. Respondent’s Contention [10] The Respondent in reliance on the case of Chinese Airlines Ltd v Maltran Air Corp Sdn Bhd (formerly known as Maltran Air Services Corp Sdn Bhd) and anor appeal [1996] 2 MLJ 517 contended that the finding of facts of the learned SCJ should not be disturbed-

That the documents show that there is an agreement for the Appellant to rent the tower cranes for a minimum of 25 months, and the Appellant was not in any way mistaken/confused about the rental term;

(ii) That the Respondent has no choice but to dismantle the tower cranes upon receiving the Appellant’s instructions because it would possibly cause obstruction to the Project and incur a penalty;

(iii) That the minimum rental period of the said tower cranes is 25 months;

(iv) That the Respondent’s quantum of claim is accurate;

That the Appellant had breached its contractual duty and is not entitled to deposit. [11] The Respondent also contended that the Appellant is bound by the clear and unambiguous terms of the contractual documents, which stipulate that the tower cranes were to be rented for a minimum period of 25 months. S/N rikA3VOyDUecgYrgV21fg [12] The Respondent’s case is that the Appellant had unilaterally and prematurely terminated the rental by instructing the dismantling of the tower cranes before the expiry of the minimum rental period. The Respondent denies that there was any mutual termination and asserts that they had no choice but to dismantle the tower cranes in order to avoid obstruction at the project site and possible penalties. [13] The Respondent further contended that the Appellant is prevented by virtue of promissory estoppel from denying its liability to pay for the outstanding rental for the unexpired rental terms. The Respondent alleged that they had spent effort and monetary expenses in providing the tower cranes demanded by the Appellant, including to procure new cranes. Thus, the Appellant must be held liable for the Respondent’s loss of profit arising from the breach of the minimum rental period by the Appellant. [14] On quantum, the Respondent submitted that they suffered losses in the form of unpaid rental for the unexpired rental period, amounting to RM885,052.01. The Respondent contended that the calculation of the outstanding rental is accurate, and that the Appellant had failed to specifically plead or prove any alternative computation to the alleged amount. Thus, the Appellant’s dispute on the calculation of the amount is merely an afterthought. [15] The Respondent further contended that the Appellant is not entitled to any refund of deposit and that the SCJ was correct in dismissing the Appellant’s counterclaim as the amount of deposit claimed have never been proved by the Appellant. S/N rikA3VOyDUecgYrgV21fg Decision of the Sessions Court Judge [16] The learned SCJ identified and determined three principal issues, namely:

Whether there existed a contractual term requiring a minimum rental period of 25 months;

(ii) Whether the Plaintiff/Respondent had proven its loss and whether there was any failure to mitigate such loss; and

(iii) Whether the Defendant/Appellant was entitled to the refund of the deposit paid. [17] On the first issue, the SCJ found that the contractual documents clearly provided for a minimum rental period of 25 months. The Sessions Court accepted the Plaintiff’s reliance on the quotations issued, which expressly stated “Rental – Min 25 months”, and further found that the Defendant’s purchase orders explicitly incorporated the terms and conditions of the said quotations. The Court in deciding on the issue relied to the case of Xhou Xin Chen v Dato’ Ong Eng Lock & Ors [2017] 1 LNS 871 where it was held that – “Again, where terms of an agreement is clear and unaumbigious the court must always construe the contract in its literal and natural meaning within the four corner of the document. Once the term is clear the court is in no position to improve or to make the term fairer or reasonable because the court must only be concerned with what it means, as enuciated in Berjaya Times Square Sdn Bhd v M-concept Sdn Bhd [2010] 1 CLJ 309 [2010] 1 MLJ 597 (See also Mulpa Pacific Sdn Bhd v Paramount Corporation Berhad [2003] 4 CLJ 294.” [18] The Sessions Court is satisfied that the quotation terms were clear, unambiguous, and admitted of only one meaning. Thus, the Sessions Court found that the Defendant was aware of, understood, and accepted the rental terms when issuing the purchase orders. The Court further S/N rikA3VOyDUecgYrgV21fg found no evidence that the Defendant was confused or mistaken as to the meaning of the minimum rental period. [19] The Sessions Court rejected the Defendant’s contention that the Plaintiff had accepted early termination by dismantling and receiving the tower cranes. The Sessions Court found that the dismantling was carried out pursuant to the Defendant’s instructions and that the Plaintiff had no real choice but to comply in order to avoid obstruction to the project and possible penalties. Accordingly, the Sessions Court held that the dismantling did not constitute mutual termination or the Plaintiff's acceptance of termination. [20] The Sessions Court referred to the case of Berjaya Times Square Sdn Bhd v Twingems Sdn Bhd & Anor and another action [2012] 9 MLJ : “It is trite that parties are bound by the terms of the written agreement entered into between them and shall not introduce and or bring extrinsic evidence to vary or contract the clear terms of the agreement. Section 91 of the Contract Act 1950 provides that when the term of the contract are reduced into writing by consent of the parties, no evidence shall ne given in proof of the terms of the contract except the document itself.” [21] On the second issue, the learned SCJ is satisfied that the Plaintiff had sufficiently proven its loss arising from the Defendant’s failure to rent the tower cranes for the minimum period. The Sessions Court accepted the Plaintiff’s evidence that the cranes were purchased to meet the Defendant’s requirements and that the returned cranes were not easily rentable due to size and project-specific suitability. S/N rikA3VOyDUecgYrgV21fg [22] The Sessions Court further held that, in the circumstances of the case, there was no substantive issue of mitigation, and that the Plaintiff was entitled to claim damages for the unexpired rental period resulting from the Defendant’s non-compliance with the contractual terms. [23] In regards to the Defendant’s challenge to the commencement and dismantling dates of the tower cranes, the Sessions Court accepted the Plaintiff’s explanation that the discrepancies arose from clerical errors, which were subsequently corrected, and found that the Defendant had never disputed the remaining rental period forming the basis of the Plaintiff’s claim. Thus, the Sessions Court held that the quantum claimed was proven and not genuinely disputed. [24] On the third issue, the learned SCJ dismissed the Defendant’s counterclaim for the refund of the deposit in the sum of RM80,000.00. The Sessions Court held that the Defendant had failed to fulfil the contractual obligations under the rental agreement and, as such, was not entitled to the refund sought. [25] Consequently, the learned SCJ allowed the Plaintiff’s claim and awarded damages for outstanding rental for the unexpired rental period. The Defendant’s counterclaim was dismissed. ANALYSIS AND FINDINGS Appellate Intervention [26] The “plainly wrong” test is the test applicable when determining whether an appellate Court should intervene with the lower courts’ decision. The “plainly wrong” test means when the “learned trial Judge had gone plainly wrong … in the sense that it could not reasonably be S/N rikA3VOyDUecgYrgV21fg explained or justified and so was one which no reasonable Judge could have reached.” (See: Tengku Dato' Ibrahim Petra bin Tengku Indra Petra v Petra Perdana Bhd & Another Appeal [2018] 2 MLJ 177; [2018] 2 CLJ 641; [2018] 1 AMR 517; [2018] 1 MLRA 263 (FC), Ng Hoo Kui & Anor v Wendy Tan Lee Peng, Administrator Of The Estates Of Tan Ewe Kwang, Deceased & Ors [2020] 12 MLJ 67; [2020] 10 CLJ 1; [2020] 8 AMR 227; [2020] 6 MLRA 193 (FC), Gan Yook Chin (P) & Anor v Lee Ing Chin @ Lee Teck Seng & Ors [2005] 2 MLJ 1; [2004] 4 CLJ 309; [2004] 6 AMR 781; [2004] 2 MLRA 1 (FC). [27] Further, in Merita Merchant Bank Singapore Ltd v Dewan Bahasa dan Pustaka [2014] MLJU 1807; [2014] 9 CLJ 1064 (FC), it was held- “[45] It is trite law that an appellate court will not readily interfere with the findings of fact arrived at by the court of first instance to which the law entrust the primary duty of evaluation of the evidence. However, the appellate court is under a duty to intervene in a case where the trial court has so fundamentally misdirected itself. In our judgment, we find that there was insufficient judicial appreciation by the learned trial Judge of the pleadings and contemporaneous evidence in the instant case when she allowed Merita’s claim. Such erroneous finding warranted appellate interference which the Court of Appeal rightfully done so, and we have no reason to disagree.” [28] Additionally, the Appellant’s claim is contractual in nature. It is trite that parties are bound by the four walls of their contract (see Royal Selangor Golf Club v. Anglo-Oriental (Malaya) Sdn Bhd [1990] 3 CLJ Rep 37; [1990] 2 MLJ 163; [1990] 2 MLRH 383; Antara Vista Sdn Bhd v Rumaya Properties Sdn Bhd [2017] 1 LNS 1876; [2017] MLJU 2247; [2017] MLRAU 495). [29] The duty of the Court is to give effect to the clear intention of the parties as expressed in the agreement (see also Bank Pertanian S/N rikA3VOyDUecgYrgV21fg Malaysia Berhad v Fiskal Fantasi Sdn Bhd & Anor [2011] 1 LNS 678; [2011] 7 MLRH 150; Ang Beng Tee (sebagai pentadbir De Bonis Non bagi harta pusaka Ang Lam Hong @ Ang Lum Hong, simati) v Lee Yit Hoe (sebagai pentadbir bagi harta pusaka Teoh Poo Choo (f), simati) & Ors [2018] 1 LNS 1111; [2018] MLJU 1056; Dato’ Sivananthan a/l Shanmugam v Artisan Fokus Sdn Bhd [2016] 3 MLJ 122; [2015] 2 CLJ 1062; [2015] 4 MLRA 674; [2015] 3 AMR 104). [30] This Court is satisfied that from the evidence adduced, there was a breach of contract by the Appellant. This Court has perused the grounds of the SCJ and found that it is not necessary to interfere with the SCJ’s decision. The SCJ has clearly stated- “[16]… …Berdasarkan dokumen-dokumen yang dikemukakan di mahkamah, mahkamah mendapati terma sebutharga adalah jelas di mana sebutharga telah menyatakan bahawa “min-25 month”. Malahan Defendan sendiri di dalam purchase order telah dengan jelas menyatakan “Scope of work, terms and conditions refer to your Quotation”. Menunujukkan Defendan tahu dan menerima terma dan syarat di dalam sebutharga tersebut. Melihat kepada sebutharga tersebut ianya adalah satu terma yang jelas dan hanya satu terma yang mudah dan tidak mempunyai apa-apa makna lain seperti dihujahkan Defendan. Defendan di dalam keterangannya sendiri juga tidak langsung menunjukkan bahawa mereka telah keliru dengan terma tersebut. Oleh itu, hujahan Defendan atas isu ini adalah tidak bermerit. [19] Di dalam kes ini adalah jelas terma sewa adalah selam minima 25 bulan dan Defendan tidak boleh membawa keterangan lain untuk mengubah terma-terma tersebut. Dalam situasi ini, Defendanlah yang tidak mematuhi terma tersebut apabila telah meminta Plaintif untuk menanggalkanya sebelum cukup tempoh. [20] Walaupun Defendan menghujahkan bahawa perbuatan Plaintif ini adalah satu perbuatan yang tidak adil kerana mereka telah memulangkan kren tetapi masih diminta untuk membayar sewaan tersebut dan juga meruoakan satu perbuatan kekayaan tidak berpatutan (unjust enrichment) S/N rikA3VOyDUecgYrgV21fg tetapi ianya adalah hak Plaintifyang diiktiraf di dalam undang-undang untuk membuat tuntutan sebegitu rupa. Terdapat beberapa siri nas undang-undang berkaitan isu ini dan telah diputuskan bahawa plaintif berhak untuk menuntut sewa yang belum cukup tempoh … Oleh itu Plaintif boleh membuat tuntutan tersebut. [27] Mahkamah mendapati tempoh baki sewaan disini sememangnya tidak dipertikaikan. Oleh itu, Plaintif telah berjaya menunjukkan jumlah sewaan yang tertunggak didalam kes ini tanpa apa-apa pertikaian. Maka, Plaintif berhak kepada jumlah tuntutan tersebut. [28] Defendan didalam kes ini memohon untuk deposit yang telah dibayar mereka bagi penyewaan kren-kren tersebut sebanyak RM80,000. Mahkamah di dalam kes ini menolak tuntutan balas tersebut memandangkan kontrak penyewaan di dalam kes ini telah gagal dipenuhi. Oleh itu tuntutan Balas Deefdan adalah ditolak.”. [31] As such, this Court is of the view that there is no error of law and facts from the decision of the SCJ. CONCLUSION [32] For all the reasons aforesaid, this Court finds that there is no merit to warrant appellate intervention (See Ong Leong Chiou v. Keller (M) Sdn Bhd (FC) [2021] 4 MLRA 211; [2021] 3 MLJ 622; [2021] 4 CLJ 821, Tengku Dato’ Ibrahim Petra Tengku Indra Petra v. Petra Perdana Berhad & Another Case (FC) [2018] 1 MLRA 263; [2018] 2 MLJ 177; [2018] 2 CLJ 641, Ng Hoo Kui & Anor v. Wendy Tan Lee Peng & Ors, (FC) [2020] 12 MLJ 67; [2020] 6 MLRA 193 and MMC Oil & Gas Engineering Sdn Bhd v. Tan Bock Kwee & Sons Sdn Bhd (COA) [2016] 3 MLRA 144; [2016] 2 MLJ 428; [2016] 4 CLJ 665). [33] Therefore, the appeal is dismissed and the decision of the Sessions Court is affirmed and ordered accordingly. S/N rikA3VOyDUecgYrgV21fg Dated: 1 January 2026 -SGD- (SUZANA BINTI MUHAMAD SAID) Judicial Commissioner of The High Court OCVC 2 Pulau Pinang For the Appellant : Wong Xian Zheng Messrs. CK Lim Law Chambers For the Respondent : Loh Cien Zea, Teoh Hui Chyuan and Lim Yeong Quan Messrs. Zen, Chyuan & Farliza S/N rikA3VOyDUecgYrgV21fg