KT Harvest Sdn Bhd v Vicmeta Sdn Bhd (BA-22NCC-47-03/2020)

By way of several agreements executed between the parties, they agreed to develop a piece of land belonging to the Defendant. Unfortunately, the performance of their respective obligations under the agreements became a subject matter of dispute with each party alleging breach on the other’s part. They now claim remedies consequent to the alleged breaches.

A history of litigation precedes the two consolidated suits before me. KT Harvest Sdn Bhd. (“Plaintiff”) first commenced proceedings against Vicmeta Sdn Bhd (“Defendant”) in the High Court vide BA-22NCC-77-02/2018 (“Suit 77”). In response, the Defendant filed its Defence and Counterclaim.

Subsequent thereto, the Plaintiff withdrew its claim in Suit 77 on 17.2.2020 with liberty to file afresh, leaving the Defendant’s counterclaim in Suit 77 to remain. However, as the value of its counterclaim fell within the jurisdiction of the Sessions Court, the High Court ordered it to be transferred to the Sessions Court and the Defendant’s counterclaim was registered as BA-B52NCVC- 154-07/2020 (“Suit 154”).

The Plaintiff then re-commenced the present action vide BA-22 NCC-47-03/2020 (“Suit 47”). The Defendant then applied to transfer Suit 154 from the Sessions Court to the High Court to consolidate it with the present suit. The application was allowed on S/N cjcUpVhlIkmEANBG0qLxng **Note : Serial number will be used to verify the originality of this document via eFILING portal 3

26.1.2021 and the Defendant’s counterclaim was registered in the High Court as BA-22NCC-133-11/2021 (“Suit 133”), where it is the Plaintiff instead. [5] Both suits are now heard together in the present proceedings. For ease of reference, parties will be referred to the Plaintiff and Defendant in Suit 47. Factual background [6] The Defendant is a locally incorporated company. It is the owner of land identified as H.S (M) 20214, PT 81, Mukim Tanjung Dua Belas, Daerah Kuala Langat, Negeri Selangor Darul Ehsan (“said land”). The Plaintiff is also a locally incorporated company whose nature of business is investment holding. [7] On 12.12.2013, upon prior discussion between both the directors of the Plaintiff and the Defendant (PW1 and DW3 respectively), parties agreed to enter into a Joint Venture Agreement (“JVA”) to develop the said land. The Plaintiff was appointed as a developer for the purpose of undertaking the construction and development of the said land into semi-detached factories. [8] The salient terms of the JVA provide inter alia, that:-

Vacant possession was to be delivered to the Plaintiff upon the execution of the JVA; S/N cjcUpVhlIkmEANBG0qLxng

(ii) The Defendant was to execute a Power of Attorney in favour of the Plaintiff to enable it to perform all necessary acts to develop the said land;

(iii) The Defendant was to be paid cash of RM 5,200,000.00 (in which case all the factories and buildings to be built on the said land shall belong to the Plaintiff) or in kind (in the form of factories and buildings to be built on the said land) or partly in cash or partly in kind. Parties were however allowed to vary the mode of payment;

(iv) The Plaintiff was to commence construction and development of the said land within 12 months from the date all relevant approvals from the authorities are obtained (“Commencement Date”) and that the development of the said land shall be completed within four years from the Commencement Date;

The Plaintiff was to finance the development of the said land either by bank financing or bridging loan; and

(vi) In the event of default of either party, each shall have the right to terminate the JVA. [9] In addition to the above, the Plaintiff was expressly allowed full liberty and discretion to design and construct the buildings/factories including engaging the necessary consultants and contractors. S/N cjcUpVhlIkmEANBG0qLxng [10] A day after the JVA, on 13.12.2013, parties entered into another agreement titled Supplementary Agreement (“Supplementary JVA”). The crucial clause amended pertained to the Defendant’s entitlement. Instead of the RM 5,200,000.00 payment to be made by the Plaintiff in cash, parties agreed to reduce the Defendant’s entitlement to RM 2,800,000.00, provided that such payment was made within a period of two years from the Commencement Date. [11] In furtherance of its obligations under the agreement, the Plaintiff then took various actions. It applied for a Development Order which was granted on 3.11.2014. In 2015, the Plaintiff applied for subdivision of the said land, which was approved vide letter dated 20.8.2015 from the Kuala Langat District land office. Consequent thereto, the said land was subdivided into five lots as follows:

HS(D) 40234 PT 84 (Lot 4);

(ii) HS(D) 40235 PT 85 (Lot 3);

(iii) HS(D) 40236 PT 86 (Lot 2);

(iv) HS(D) 40237 PT 87 (Lot 1); and

HS(D) 40238 PT 88 (Lot TNB). [12] The lot identified as HS(D) 40238 PT 88 is not in issue here as it was designated for the location of the TNB station. Titles to all the lots were issued on 31.12.2015 in the name of the Defendant. S/N cjcUpVhlIkmEANBG0qLxng [13] Between the years of 2014 to 2016, the Plaintiff applied for and was issued various approvals by the authorities. The building plan approval was obtained on 17.9.2015. Subsequent thereto, the approval for the commencement of the building construction was also granted on 1.10.2015. The Plaintiff then carried out preliminary works i.e earth works on the said land. [14] On 10.10.2015, parties entered into yet another agreement titled, Second Supplementary Agreement (“2nd JVA”). The terms of the Supplementary JVA was varied to provide for the respective party’s entitlement to the sub-divided lots. [15] By this 2nd JVA, it was provided inter alia, that:-

The Plaintiff was appointed to build two units of factories for the Defendant, referred to as Lot 1 and Lot 2. These were to be built on PT 87 and PT 86 respectively, at a cost of RM 3,500,000.00;

(ii) The Defendant in turn agreed to transfer PT 84 and PT 85 (referred to as Lot 4 and Lot 3 respectively) to the Plaintiff for a cash payment of RM 1,400,000.00 upon the Defendant receiving a letter of confirmation from the Plaintiff’s financier that the latter’s loan had been approved;

(iii) The Defendant’s entitlement of RM 2,800,000.00 was to be reduced to RM 1,400,000.00 only which shall be paid by the Plaintiff within twenty-four months from the Commencement Date; and S/N cjcUpVhlIkmEANBG0qLxng

(iv) Parties had to furnish their respective sureties to guarantee performance of their obligations. [16] To protect its interest in Lot 3 and 4, the Plaintiff lodged a private caveat. Litigation pertaining to the removal of the caveat has since ended. The Court of Appeal allowed the caveat to remain until the conclusion of the present suit. [17] Subsequent to the execution of the 2nd JVA, events transpired which led to the present dispute. Apart from the earthworks which were carried out, the development of the said land did not proceed further. The factories were not constructed. The reason as to the Plaintiff’s failure to construct is the crux of the present dispute. The Plaintiff’s case [18] The Plaintiff contends that the Defendant’s conduct prevented it from proceeding with its performance of the contract. [19] Mr Lee Kok Tian (PW1), a director of the Plaintiff testified that after the building plan was approved on 17.9.2015, DW3 (a director of the Defendant) proposed to delay commencing with further development of the said land for one year as he was unable to finance the construction costs. The Plaintiff was further informed that the Defendant planned to either sell its entitlement namely Lot 1 and 2, or to apply for financing. [20] By the time the Plaintiff received the instruction to delay construction, it had already appointed Pangkat Beruntung Sdn S/N cjcUpVhlIkmEANBG0qLxng Bhd. (“Pangkat Beruntung”), to manage the development project. By a letter of appointment dated 3.4.2014, Pangkat Beruntung was appointed the project consultant for the construction of four units of three storey semi-detached office factory. It was to be responsible for applying, submitting, and securing all relevant approvals, permits, licences from the authorities. Its team comprised a planner, architect, civil, structural, mechanical and electrical engineer as well as a quantity surveyor. However, in view of the Defendant’s instruction to delay commencing with construction, it had no choice but to instruct Pangkat Beruntung to halt the carrying out of further works. [21] Sometime in 2016, DW3 informed PW1 that he would use his company Foamcrete Cornice Sdn Bhd (“Foamcrete”) to apply for financing from Maybank. PW1 then reminded DW3 that the agreed one year delay to commence construction was expiring soon and it was necessary to finalize the commencement date for construction. This was to primarily avoid costs escalation arising from further delay. [22] Both parties then agreed to meet on 11.8.2017 to discuss and finalize the commencement date for construction. At the meeting, both PW1 and Pangkat Beruntung’s representative, Mr Chua Teck Choon (PW2) and DW3 were present. Both PW1 and PW2 proposed to erect a fence surrounding the project site to facilitate further preliminaries works as all the requisite approvals had been obtained. The proposal was refused by DW3. S/N cjcUpVhlIkmEANBG0qLxng [23] Instead, a few days later, DW3 by his letter dated 15.8.2017, instructed the Plaintiff not to commence construction on PT 86 and PT 87 (Lot 2 and 1 respectively). These lots were provided as the Defendant’s entitlement under the 2nd JVA. [24] A week later, on 22.8.2017, DW3 attached Maybank’s letter to Foamcrete informing that it could not accept the Plaintiff as its appointed contractor to undertake the construction. PW1 expressed surprise at the information as it was never the contractor for the project. At all material times, it acted as the developer. It would then in turn appoint its own contractors. The Plaintiff had, by then, appointed United Asia Development Sdn Bhd for the preliminary and earth works and was in the process of appointing a contractor specifically for the construction of the factory buildings. PW1 then requested DW3 to clarify with Maybank as to its role. However, the latter flatly refused to do so. [25] By a letter dated 27.9.2017, the Defendant notified the Plaintiff that as it had yet to commence construction works, it offered to sell PT 84 and PT 85 to the Plaintiff for RM 1,400,000.00 subject to the fulfillment of certain conditions. Upon the acceptance of the Plaintiff to the offer, all prior agreements entered into shall be considered terminated. [26] Parties then instructed their respective solicitors to communicate further on the terms to be agreed upon. Unfortunately, the offer by Defendant for the Plaintiff to purchase PT 84 and PT 85 did not materialize as parties could not agree to the detailed terms and conditions. S/N cjcUpVhlIkmEANBG0qLxng [27] The delay in commencing construction meant that some of the prior approvals had to be renewed, leading to costs escalation. The Plaintiff regarded the series of conduct on the part of DW3 as evincing an intention not to proceed with the development of the said land as earlier agreed. [28] As the Plaintiff was left with no other option in the matter, it then instructed its solicitor to terminate the joint venture agreements. By its solicitor’s letter of 2.1.2018, the Defendant was informed that its acts in preventing the Plaintiff from commencing construction amounted to a serious breach of the agreements entered into. Consequent thereto, the Plaintiff exercised its rights of termination under the agreements. [29] The Plaintiff claims that Defendant’s intention in not wanting to proceed with the agreements entered into came to light subsequently when it discovered the Defendant to have engaged with a third party, one Tu Leong Chay (DW2) to develop the said land. [30] DW2 is known to PW1. In a chance meeting, DW2 enquired from PW1 regarding the caveat entered into by the Plaintiff as well as the lots which were the subject matter of the agreements. PW1 was surprised at the enquiries as DW2 was a stranger to the agreements. It then suspected the Defendant to have entered into discussions to develop the said land. [31] The Plaintiff’s position in this suit is that it had performed its obligations under the JVA, Supplementary JVA and 2nd JVA by S/N cjcUpVhlIkmEANBG0qLxng obtaining the requisite approvals, including carrying out preliminary works. It was at all material times, ready to commence construction. The Defendant was the party obstructing it from proceeding with the construction by refusing to finalise the Commencement Date for construction and instead attributing it to Maybank’s refusal to provide financing as it could not agree with the Plaintiff as the contractor for the project. Finally, the Defendant’s counterclaim that the Plaintiff was in breach because it failed to commence construction is unfounded and wholly without basis. [32] In the result, the Defendant’s breach had caused the Plaintiff to suffer various losses. It had incurred much expense in the preliminary works undertaken. Thereupon it claims the following reliefs in this action:-

a declaration that the Defendant had breached the JV agreements;

(ii) special damages of RM 1,116,908.71;

(iii) special damages of RM 2,200,000.00 arising from the loss of Lot 3 and Lot 4 calculated by deducting the cost of the land of RM 1,400,000.00 from the market value of RM 3,600,000.00 as at 5.3.2018;

(iv) general damages of RM 2,200,000.00 for breach of contract or in lieu of thereof, the Defendant is to transfer Lot 3 and Lot S/N cjcUpVhlIkmEANBG0qLxng 4 at a cost of RM 1,400,000.00 in accordance with the terms of the 2nd JVA; and

Interest and costs. The Defence case [33] The Defendant disputes the Plaintiff’s version of events. It contends instead that the Plaintiff was the defaulting party. The allegation of breach is primarily premised on the following facts. [34] The main witness for the defence was DW3. He agreed that pursuant to clause 3 of the 2nd JVA, the Defendant had agreed to pay the Plaintiff RM 3,500,000.00 as agreed construction costs for Lot 1 and 2. To finance the construction, the Defendant (through Foamcrete) applied for a loan from Maybank. Maybank then requested for the details of the developer/contractor before it could disburse the monies. However, the Plaintiff failed to provide the particulars/documents. This led to Maybank issuing a letter on 17.8.2017 to Foamcrete to inform that it was not able to accept the Plaintiff as its appointed contractor for PT 86 and PT 87. [35] In view of the Plaintiff’s to provide the necessary documents requested by Maybank, the Defendant initiated a meeting which was held on 11.8.2017. At the meeting, the Defendant discovered that the Plaintiff had failed to commence construction notwithstanding all the approvals had been obtained. The approvals referred to were the Development Order dated 3.11.2014, Kelulusan Permit Sementara Bagi Cadangan S/N cjcUpVhlIkmEANBG0qLxng Pembangunan Kilang dated 2.6.2015 and Kelulusan Pelan Bangunan dated 17.9.2015. Although an extension for the building plan was and granted for another year from 17.9.2016 to 17.9.2017, the Plaintiff still failed to commence construction without any reasonable grounds. [36] Following the meeting, and while waiting for a response from Maybank, DW3 issued the letter of 15.8.2017 to instruct the Plaintiff not to commence construction on the Defendant’s lots. [37] Parties again attempted to resolve the deadlock at a further meeting held on 25.9.2017. Following the meeting, the Defendant made an offer to sell the Lot 3 and Lot 4 to the Plaintiff at a price of RM 1,400,000.00. The proposal was not only rejected by the Plaintiff, it also proceeded to unilaterally terminated the JV Agreement vide its solicitor’s letter of 2.1.2018. [38] The Defendant denied the Plaintiff’s accusation that it had an ulterior motive to breach the agreements entered into as it was in discussion with a third party to develop the said land. In support of its denial, the Defendant called DW2, the alleged third party. DW2 stated that the discussion to develop the Defendant’s land only took place in June 2019. At that time, he was informed by DW3 that the Plaintiff’s claim by its earlier suit filed in court, was only a monetary one. It presented no impediment to a collaboration to develop the said land. However, upon learning that the present suit also involves a claim on Lot 3 and Lot 4, the proposed development was aborted. S/N cjcUpVhlIkmEANBG0qLxng [39] The Defendant now claims that the failure of the Plaintiff to commence and complete construction had caused it to suffer losses. It now has to bear higher construction costs compared to the RM 3,500,000.00 as stipulated in the 2nd JVA. The costs of construction have escalated by RM 800,000.00. It further incurred costs of RM 12,067.00. It prays for judgment to be given in respect of these amounts in Suit 133. [40] In Suit 47, apart from pleading defence, the Defendant has also pleaded a counterclaim. The Defendant claims as follows:-

as a result of the Plaintiff’s failure to construct on Lot 1 and 2, it has lost the opportunity to profit an amount of RM 2,200,000.00 from the sale of the factories;

(ii) loss of potential rental at the rate of RM 1.20 psf;

(iii) general damages arising from the caveat entered by the Plaintiff; and

(iv) exemplary damages. [41] In support of its claims in Suit 47 and Suit 133, the Defendant called DW3, a consultant quantity surveyor to testify. DW3 presented his computation in his report which was referred to at the trial. S/N cjcUpVhlIkmEANBG0qLxng Issues to be tried [42] I find the central issue in this case to be confined to only this; which party is in breach of e agreements entered into. It is immediately apparent that both parties have very different versions in relation to the events which transpired. [43] In my view, the case would turn upon the following broad factual issues, which would have a direct bearing on the liability of the parties. They are as follows:-

Whether the Defendant was in breach by its conduct in preventing the Plaintiff from commencing construction; and

(ii) Whether the Plaintiff was in breach by failing to commence construction, and failing to furnish the documents required by Maybank. [44] In my view, both issues are in fact related, in that the determination of one will directly determine the other. If the Plaintiff succeeds in proving breach, the Defendant’s defence and counterclaim fails and vice versa. Upon determination the party in breach, the court will then decide on the consequential reliefs the innocent party is entitled to. Analysis and decision of this court [45] It is trite law that a plaintiff bears the burden of proof on a balance of probabilities. This principle was well enunciated in the Federal S/N cjcUpVhlIkmEANBG0qLxng Court case of Letchumanan Chettiar Alagappan @ L Allagappan (as executor to SL Alameloo Achi alias Sona Lena Alamelo Acho, deceased) & Anor v Secure Plantation Sdn Bhd [2017] 4 MLJ 697). If on the evidence, the Plaintiff succeeds in establishing a prima facie case, the burden then shifts to the Defendant to rebut the case against it by credible evidence in an attempt to tilt the balance in its favour. The same principle applies to the Defendant with regard to its counterclaim. The credibility of the evidence adduced is weighed by considering its plausibility in light of the circumstances of the case. Whether the Defendant prevented the Plaintiff from commencing construction [46] Upon an analysis of the evidence adduced, I find the allegations of the Plaintiff to have merit. [47] The documentary evidence before me supports the Plaintiff’s case that it was ready to commence construction. From 2014 after the Supplementary JV was entered into until 2017, the Plaintiff applied for and obtained various approvals to facilitate and commence construction. The department and agencies which gave approvals are amongst others, TNB, Indah Water, Jabatan Pengairan dan Saliran Selangor, Pejabat Jurutera Daerah, Jabatan Kerja Raya, Kuala Langat, Jabatan Mineral & Geosains Selangor, and Majlis Daerah Kuala Langat. These approvals pertain to works related to the construction of the factories. S/N cjcUpVhlIkmEANBG0qLxng [48] Some of the above approvals were only valid for a specific time frame. As construction work had not commenced, the Plaintiff was obliged to apply for an extension for certain approvals as follows:-

Permohonan kelulusan lanjut tempoh pelan bangunan from 17.9.2016 to 16.9.2017; and

(ii) Permohonan kelulusan lanjut permit bangunan sementara from 8.6.2016 to 1.11.2016. [49] The intention to commence work is further evidenced by the submission of Borang B which is a notice to commence building works. It was submitted on 16.3.2017 to Majlis Daerah Kuala Langat, notifying that Plaintiff was ready to start work. This notice was submitted within the time frame stipulated in the extension approvals. [50] The discussion at the meeting on 11.8.2017 contained in the minutes further substantiates the Plaintiff’s assertion that it was keen to commence construction. The relevant minutes recorded is reproduced as follows: “TC Chua said already submitted the B Form, want to confirm the commencement date of construction. Once commencement date confirm, the project must complete within 2 years. …. Must confirm the commencement date before expired of 2nd extension plan approval (16.9.2017). It will incur additional consultation fees RM 19k and fine if further extension plan approval.” S/N cjcUpVhlIkmEANBG0qLxng [51] From the above, it can be reasonably inferred that the Plaintiff was anxious to impress upon the Defendant that construction works must commence to avoid further costs escalation in the event of a delay. The Defendant was then pressed to confirm the Commencement Date as the extension date for Building Plan approval was due to expire in a month’s time on 16.9.2017. [52] The minutes also reveal that the Defendant was the party stalling on the commencement of the construction. The Plaintiff wanted to proceed to fence the area, but the Defendant refused. The reason was that the loan application by Foamcrete was still pending The minutes show, To do the fencing and signboard on the land. Take picture and inform the authority the commencement date. … LTL (DW3) not agreed to do fencing on the land provided loan approved and LA (letter of approval) to KT Harvest. LTL not to conclude the commencement date provided Maybank approve to release the loan due to Thein Seng Chan bankruptcy matter. … Must obtain approval from LTL if want to do fencing on the land. [53] From the minutes of the meeting I surmise that the Plaintiff was anxious to progress further with the development. The Defendant on the other hand, refused to commit until the matter of the loan approval by Maybank is resolved. [54] The Defendant however alleged that at the meeting, he learnt of the Plaintiff’s breach. DW3’s evidence was that “Through the first S/N cjcUpVhlIkmEANBG0qLxng meeting on 11.8.2017, Vicmeta had found out, among others, that KT Harvest had failed to commence the construction of the project as agreed in the JV Agreement even though all the relevant approvals had been obtained from Majlis Daerah Kuala Langat vide, among others, the letters dated 3.11.2014, 2.6.2015 and 17.9.2015.” [55] Apart from this bare assertion by DW3 that the Plaintiff failed to commence construction, no evidence was furnished to substantiate his allegation. He also failed to give any basis for saying so. I find DW3’s statement inexplicable as it was totally contrary to what is borne out by the minutes of the meeting. The minutes clearly suggest that the Plaintiff was eager to start construction but the Defendant was the party holding back. [56] Therefore, the Plaintiff’s claim that the Defendant was reluctant to commence is more credible in the light of the recorded discussion. [57] The Defendant attempted to explain its hesitancy to proceed with the development by attributing it to the Maybank’s reservations on the Plaintiff being the contractor. However, by the terms of the agreement, the obligation is on the Defendant to obtain financing for the construction of Lot 1 and 2. [58] Clause 3 of the 2nd JVA states,

LANDOWNER’S ENTITLEMENT AND OBLIGATIONS S/N cjcUpVhlIkmEANBG0qLxng The Builder and the Landowner hereby further agreed that the Landowner hereby appoint the Builder to build the two (2) units of the factory known as Lot 1 & 2 based on the price and construction costs to be mutually agreed by both parties in writing subject always to the Bill of Quantity (BQ) to be prepared and finalized by the appointed consultant. For this purpose, the Landowner hereby irrevocably agreed to pay to the Builder the sum of RM 3.5 million (thereinafter referred to as “the Agreed Sum”) being the agreed construction costs for the construction and building of two (2) factories based on the approved building plan as annexed hereto on a progressive payment basis and subject to any further variation (if any) to be mutually agreed by both Landowner and the Builder in writing and Provided always subject to clause 4 below. [59] The above clause stipulates that the Plaintiff’s costs of construction on Lots 1 and 2 was to be RM 3,500,000.00. The Defendant had to therefore source for financing as the construction cost was not insubstantial. The responsibility lies with the Defendant. [60] Maybank had, on 3.11.2016 approved the loan amount of RM 3,740,000.00 subject to inter alia, the bank being satisfied with the Defendant’s contractor upon submission of the contractor’s profile. Even if Maybank could not agree to the Plaintiff as the contractor, the Defendant still bears the responsibility to finance the construction. It is not for the Defendant to now turn the tables on the Plaintiff for its inability to obtain financing. It is but a poor attempt to deflect liability on its part. [61] Upon considering the totality of the evidence before me, I find it more likely than not that the Defendant was in breach in preventing the Plaintiff, without any basis, from proceeding with the construction. The letter DW3 issued to the Plaintiff dated 15.8.2017 S/N cjcUpVhlIkmEANBG0qLxng soon after the meeting cannot be any clearer in its import. It was to expressly instruct the Plaintiff not to proceed with construction on Lot 1 and 2. It states, “Please do not start any construction work on Vicmeta S/B land unit (PT 86, PT 87) before we are getting bank loan.” [62] Shortly thereafter, on 22.8.2017, it attached Maybank’s letter informing of the latter’s reservations on the Plaintiff as its contractor. However, as the financing of the construction is the responsibility of the Defendant, the reason for Maybank not approving the loan cannot be a breach attributable to the Plaintiff. [63] The Defendant then made an offer a month later by letter dated 27.9.2017 to the Plaintiff to buy Lot 3 and 4 at RM 1,400,000.00. This only fortifies the suspicion that the Defendant was trying to extricate itself from the situation where it was reluctant to go ahead with the development of the said land. [64] To reiterate, on the totality of the evidence before me, I find that it was the Defendant’s conduct that constituted a breach of the joint venture agreements. Consequently, the relief for a declaration that the Defendant had breached the said agreements must be allowed. The corollary to this is that the Defendant’s claim of breach, and the reliefs flowing from the consequences, must be dismissed. Damages [65] The Plaintiff also seeks an award of damages. The Plaintiff has quantified the special damages to be RM 1,116,908.71. S/N cjcUpVhlIkmEANBG0qLxng [66] It is trite law on that he who makes a claim must prove that he has actually suffered the loss claimed and the loss is due to the actions of the opposing party, failing which he is not entitled to the claim. (Morello Sdn Bhd v Jacques (International) Sdn Bhd [1995] 2 CLJ 23; [1995] 1 MLJ 577 (FC); Qed Systems Sdn Bhd v Global Minerals (Sarawak) Sdn. Bhd. and another appeal [2020] MLJU 940 (CA). [67] Special damages are quantifiable, out of pocket expenses. They are not assessed and the Plaintiff is obliged to adduce evidence to support the claim. The Plaintiff has in the witness statement of PW1, itemized the special damages, and referred to the corresponding documents to substantiate his claim. [68] Having perused the documents referred, I am satisfied with the documentary proof in support the items of claim. They pertain to the preliminary works it had performed through its consultant as well as the expenses it was contractually bound to bear. Defence counsel in his cross examination of PW1 sought to challenge the credibility of these claims. However, PW1 stood firm in his evidence and was uncontroverted in his response. [69] PW2 was called to give details of the expenses incurred. He was the project manager, invited to come on board by both PW1 and DW3. He gave details of the preliminary works and the documents to substantiate the payment for all costs incurred. Having considered his testimony both oral and witness statement, I find no reason to reject his evidence. S/N cjcUpVhlIkmEANBG0qLxng [70] In view of the Defendant’s breach and the termination of the contract, I find that the Plaintiff is entitled to be reimbursed these expenses incurred. I therefore allow the following:-

Fees of Pangkat Beruntung and payments made to authorities RM 157,968.48;

(ii) Consultation fee of Pangkat Beruntung calculated at 5% of the contract price for the construction of the factories (RM 7,806,226.03) amounting to RM 390,163.30;

(iii) Earthworks RM 364,978.09;

(iv) Payment of salaries for its employees engaged in relation to the project RM 188,410.04; and

Other costs/expenses comprising of quit rent and assessment RM 15,388.30. [71] Apart from the claim for special damages, the Plaintiff has also made a claim for RM 2,200,000.00 being the value of Lot 3 and 4 less the amount of RM 1,400,000.00 which the Plaintiff was obliged to pay the Defendant in the 2nd JVA. This amount is in lieu of the transfer of Lot 3 and 4. [72] The Plaintiff’s basis to claim for the transfer of Lot 3 and 4 is that the nature of the joint venture agreements had been changed to a sale and purchase agreement between the parties. Subsequent to informing the Plaintiff that Maybank did not agree to its S/N cjcUpVhlIkmEANBG0qLxng appointment as a contractor, the Defendant offered to sell Lot 3 and 4 at RM 1,400,000.00. [73] However, I find nothing to have been concluded from the exchange of correspondence between the solicitors appointed by the parties. There were conditions stipulated which were not agreed to. It therefore misconceived on the part of the Plaintiff to claim that parties had agreed conclusively to buy and sell Lot 3 and 4. [74] The entitlement of the Plaintiff to Lot 3 and Lot 4 must therefore be on the basis of the joint venture agreements. Having terminated the agreements, the Plaintiff cannot insist on the applicability of its provisions. Its remedy is only for damages, which must be proved. In any event, the relevant clause is subject to conditions to be fulfilled by the Plaintiff. Clause 1 of the 2nd JVA states,

CONSIDERATION In consideration of the terms and conditions herein contained, the Landowner and the Builder hereby agree to vary the terms and conditions of the said JV Agreement and the First Supplemental Agreement whereby the Landowner will transferred to the Builder and/or Builder nominee(s) two (2) plot of the subdivided lots known as Lot 3 and Lot 4 (“Builder’s Lot”) more specifically highlighted in red in the layout plan annexed hereto as Appendix “A” upon the Landowner received letter of confirmation from the Builder or Builder nominee’s Financier that the Builder or Builder nominee’s loan has been approved according to the respective Sale and Purchase Agreement entered provided always subject to the terms and conditions hereinafter contained. S/N cjcUpVhlIkmEANBG0qLxng [75] Clause 1 is then followed with clause 2, which in summary provide for the Defendant’s entitlement from the transfer of Lot 3 and 4 to be RM 1,400,000.00. [76] There is no evidence that the Plaintiff had paid the Defendant the amount of RM 1,400,000.00. Neither is there evidence that the Plaintiff had obtained a loan in fulfilment of clause 1 of the 2nd JVA. In view of this, the question of the Plaintiff’s entitlement to Lot 3 and 4 doesn’t arise. [77] In the same vein, the claim for damages in lieu thereof amounting to RM 2,200,000.00 is without basis. Further, I find no evidence led at the trial to support the computation of this amount. [78] As for the claim for general damages to be assessed, it is unclear as to the basis for this claim from the evidence adduced. For this reason, it is not necessary for this court to even consider assessing damages. Conclusion [79] Premised on the findings as aforesaid, the claim of the Plaintiff in Suit 47 is allowed. The counterclaim of the Defendant in Suit 47 and claim in Suit 133 is dismissed. [80] In the result, I grant the following orders:-

A declaration that the Defendant had breached the joint venture agreements entered into with the Plaintiff; S/N cjcUpVhlIkmEANBG0qLxng

(ii) The Plaintiff is entitled to judgment for the sum of RM 1,116,908.71 together with interest at the rate of 5% from the date of judgment until realization;

(iii) The other reliefs prayed for in the Statement of Claim at paragraph 50 (c), (d), (f) and (g) are not allowed;

(iv) The counter claim of the Defendant in Suit 47 is dismissed;

The claim of the Defendant (referred to as Plaintiff) in Suit 133 is dismissed; and

(vi) Costs of RM 40,000.00 is to be paid by the Defendant to the Plaintiff. Dated : 7th day of May 2025 -sgd- …………….………… Alice Loke Yee Ching Judge High Court in Malaya at Shah Alam S/N cjcUpVhlIkmEANBG0qLxng Counsel for Plaintiff : Ms. SG Gan (Ms. Peggy Ang with her) Tetuan Yong Dan Rakan-Rakan Counsel for Defendant : Mr. Wong Chiang Kiat (Ms. Rosamirah Insyirah binti Zamri with him) Messrs. C.S Tan, Seah & Partners S/N cjcUpVhlIkmEANBG0qLxng