in the event of a fundamental breach of this Agreement which cannot be rectified; [13] The Plaintiff submitted that no KPI were given by the Defendant upon the execution of the APSA. Nowhere under the APSA stipulates that the job scope of the Plaintiff was to achieve the KPI. Schedule 1 of APSA describes the Services to be provided by the Plaintiff, broadly as content update and management of the Webzine. The visitor tracking is not the same as attracting visitors to the websites, and there was no mention of any KPls of 100,000 database members per year with an increase of 100,000 each year required to be achieved by the Plaintiff in Schedule 1. 9 [14] The Plaintiff submitted that the involvement of League of Strangers (LOS) to assists them was done after the execution of APSA and does not prove that the 100,000 members per year were KPI that were given to the Plaintiff to be achieved upon execution of APSA. The KPI of 100,000 were set by the Plaintiff themselves and not by the Defendant to help them to have a clear target and objectives of the project done by them for the Defendant. The Plaintiff submitted that the Defendant has failed to show or prove that the Defendant has provided the Plaintiff with KPI which contain quantifiable measures that are reasonable upon execution of APSA as per the requirement of Clause 8(2) which gives power to the Defendant to terminate the APSA. [15] The APSA did not make any reference to any KPI and or target stated in Business Plan (D54) thereof and it was not part of APSA for the parties to perform. It was merely a Business Plan or proposal prior to the execution of APSA where subsequently APSA supersedes and cancelled the Business Plan. The Plaintiff refers to Clause 22 APSA which reads:- “22. Entire Agreement This Agreement constitutes the entire agreement and understanding between the parties relating to the subject matter. Except as may be expressly stated in this Agreement, it supersedes and cancels all prior agreements, statements, 10 representations, understandings, negotiations and discussions, whether oral or written between the parties. Each of the parties acknowledges and agrees that in entering into this Agreement it does not rely on any statement, representation, warranty or understanding made prior to this Agreement save to the extent that such statement, representation, warranty or understanding is incorporated into this Agreement. Each of the parties acknowledges and agrees that in entering into this Agreement it has not relied on (or has been induced to enter into this Agreement by) any statement, representation, warranty or understanding made prior to this Agreement.” [16] Therefore pursuant to Clause 22 APSA, the agreement between the Plaintiff and the Defendant is clear from ambiguity and as such, no importation of any implied term into APSA should be made. Any subjective intent of the Defendant such as requirement to achieve KPI’s of 100,000.00 members by the Plaintiff should be disregarded by this Court. [17] The Plaintiff also submitted that the parties are not entitled to rely on the Business Plan as the measures of the performance of APSA since the Plaintiff’s obligations are well stipulated under Clauses 4(1) and 5(1) APSA. The Plaintiff main obligation under the APSA is only confined to 3 principles aims to provide the services to the Defendant in promoting the Defendant’s Products, improve the consumer image of the Defendant and the Products 11 throughout Malaysia and to raise public awareness of the Products. Therefore, the objective of APSA is to promote the Defendant’s Product and not to attract significant traffic to create member database. It is nowhere stated in APSA that requires the Plaintiff to attract members to the Webzine as the whole purpose is to promote and raise awareness of the Defendant’s Products. The Defendant may on ad hoc basis require the Plaintiff to conduct events or activities to advertise market or promote the Defendant’s Product. In the finality, the Plaintiff submitted that she had fully performed and executed the obligations under Clause 5(1) APSA by organizing contest, promotion and events successfully in order to promote and to raise public awareness of the Defendant’s Products especially the brand Chivas Regal. (See Exhibit P3 and P4 until P32). Therefore, there was no valid reason at the time of termination by the Defendant as the Plaintiff did not breach the APSA by failing to achieve any KPI. As such the Defendant’s termination of APSA with reference to Clause 8(2) is bad in law and invalid. 12 F. Defendant’s Submission [18] The Defendant submitted that the Plaintiff was informed of the KPI which contained quantifiable measures. The Plaintiff and the Defendant had already a pre-existing business relationship where the Plaintiff had a proven track record in hardcopy publications. There were always discussions held between parties and pursuant to a discussion, a Business Plan was presented by the Plaintiff which met with the Defendant’s approval. Based on this Business Plan, the parties agreed to enter into the APSA. The targets as set out in the Business Plan were discussed and accepted and formed the basis for entering into the APSA. It is these targets that were the carried through into discussions and meeting after the execution of the APSA such that there was no doubt in the minds of the Plaintiff and the Defendant that these were the numbers that the Plaintiff needed to work towards. The evidences of SD1, SD3 and SD4 consistently said that the target as set out in the Business Plan was the starting point of all discussion with the Plaintiff after the execution of APSA. [19] The Defendant also submitted that the Business Plan itself which was the Plaintiff, who presented it, is not in dispute. The Business Plan contains the concept, the target members, KPI on Advertising revenue and other income. It was the Plaintiff who presented the Business Plan which 13 contains the following information; (Refer to Bundle B1 Page 30, 32, 36 and 38) i. The concept: “Chic, Lifestyle Digital Magazine with a Wow Factor +Contemporary Urban Class for Sophisticated Affluent Gentlemen”. ii. The target members: Age : Late 20s-early 50s Race : 70% Chinese, 25% Indian, 5% Others Location : Cities & major towns Education : Tertiary, Internet-savvy Profession : Executives, Management, Professionals, Entrepreneurs Income : From RM60k annually iii. KPI on Advertising revenue and other income: Description Year 1 Year 2 Year 3 Year 4 Year 5 Ad revenue 120,000 180,000 300,000 480,000. 720,000 Other income 120,000 180,000 300,000 480,000. 720,000 KPI on database members: 100,000 database members per year with an increase of 100,000 each year. 14 [20] The Defendant contended that the Plaintiff failed to meet the KPI and/or target stated in the Business Plan (D54) which is 100,000 database members per year with an increase 100,000 per year. The Defendant further contended that the said target is the ultimate KPI and business objective expected from the Plaintiff and this was well within the Plaintiff knowledge and the Plaintiff’s own representation. [21] The Defendant submitted that the Plaintiff was aware of the targets where the Plaintiff’s own email to LOS which refers to the KPI of 100,000 members [Exhibit D55A] upon a request made by LOS (Exhibit D55). The KPI stated in the email were set by the Defendant as the whole purpose of LOS’ engagement was to help the Plaintiff to achieve the KPI. The involvement of LOS was to review the Webzine and to give the view on how to improve the Webzine in order to achieve the KPI. Therefore the Plaintiff was fully aware of the KPI it was meant to achieve. The Defendant contended that as the Plaintiff continued in failing to achieve its KPI, the Defendant had to set short terms / ad hoc KPI for the Plaintiff other than the initial KPI of 100,000 members in the Business Plan. Upon the Plaintiff’s failure to achieve the KPI pursuant to Clause 8(2) the Defendant is justified in terminating the APSA. 15 G. Evaluation and Finding [22] It is a settled law that the burden of proof rests upon the party who desires any court to give judgment as to any legal rights or liability dependent on the existence of facts which he asserts. (see Section 101(1) Evidence Act 1950. Therefore the onus of establishing that the Defendant had invalidly terminated the APSA rests on the Plaintiff as stipulated in Section 102 Evidence Act 1950. This was also reiterated in Tenaga Nasional Berhad v Perwaja Steel Sdn Bhd [1995] 4 MLJ 673. [23] It is also trite law that the parties to a contract are bound by the terms of the contract entered between them to perform their respective promises unless the performance is dispensed with or excuse under the law as in Section 38 Contract Act 1950. In Anuar bin Abu Bakar v Samsuri bin Booyman [2016] 6 MLJ 96); [2016] 8 CLJ 317 the Court of Appeal held that: “…under s. 38 of the Contracts Act 1950, a party to a contract must, unless excused under the Contracts Act or any other law, be bound by the terms of the contract so entered between them. The parties are therefore estopped from denying what had been agreed between them.” 16 [24] I am mindful with the guidelines set out by the Federal Court in Berjaya Times Squares Sdn Bhd v M concept Sdn Bhd [2010] 1 MLJ 597 when interpreting a private contract that the court is not confined to the 4 corners of the document. The Court is entitled to look at the factual matrix forming the background to the transaction which includes all material that was reasonably available to the parties and disregards any part of the background that is declaratory of subjective intent only. Finally, the Court should adopt an objective approach in when interpreting and in any event it must be construed in a way that gives the said contract business logic. At the end of the day, the correct test to apply is the test of a reasonable man and this is said to be the stamp of an objective approach as opposed to the subjective view of a party to the contract. Of course, emphasis is always placed on the words used in the contract but where the words used lead to a conclusion that defies business logic, then the contract must be construed in such a way as to make it conform to business logic. (see Court of Appeal in Kwan Chew Holdings Sdn Bhd v Kwong Yik Bank Bhd [2006] 6 MLJ 554. 17 [25] I am reminded that the Court must always construe APSA in its literal and natural meaning and is in no position to improve or to make the term fairer or reasonable and only be concerned with what it means.(see Court of Appeal in The Government of Malaysia v Imej Warisan Sdn Bhd [2018] 2 MLJ 791). [26] The only issue here is whether the Defendant had validly terminated the APSA pursuant to Clause 8 APSA. It is an undisputed fact that APSA entered and executed between the Plaintiff and Defendant. It was not disputed also that the Plaintiff had received the letter termination (D44). The Defendant submitted it has the right to terminate APSA where the Plaintiff’s business objective and/or KPI’s is below the expectation and satisfaction and invoked Clause 8(2) APSA for the termination which reads:- “PRM (Defendant) shall be entitled to terminate this agreement by giving EJC (Plaintiff) thirty (30) days written notice where the achievement of the Plaintiff’s Business Objective and/or KPI is below the expectation and satisfaction of the Defendant provided that the Defendant shall have informed the Plaintiff of their expected and reasonable standard or achievement as guideline for the Plaintiff. For avoidance of doubt the Defendant shall provide KPI which contain the quantifiable measure that reflects the Defendant’s requirement to the Plaintiff upon execution of the agreement”. 18 [27] Having perused Clause 8 of APSA, it clear that under Clause 8(1) the termination can be executed by either party by giving 30 days’ notice in the event sub clause (a) and (b) occurs. I am unable to agree with the Plaintiff that Clause 8(2) should be read conjunctively with Clause 8(1) because Clause 8(2) only refers to the right of the Defendant and not the Plaintiff in terminating the APSA whereas Clause 8(1) can be terminated by either party. The termination of APSA can be either executed by either party under Clause 8(1)(a)(b) or by the Defendant under Clause 8(2). Here, the Defendant has chosen to invoke Clause 8(2) for the purpose of terminating the APSA which is permissible for the Defendant to do so for a particular reason which is in this case the failure of the Plaintiff to achieve the Defendant’s business objective or KPI. Under Clause 8(2), the Defendant is not obliged to issue a 30 days’ written notice to warn the Plaintiff of the possibility of termination of the APSA and at the same time, the said notice affords the Plaintiff an opportunity to remedy any default complained of as required under Clause 8(1)(a)(b) before the APSA can be terminated. [28] Having said the above, it is pertinent to look at Clause 8(2) APSA in order for the APSA to be validly terminated for the below performance of the Plaintiff. The 3 requirements that need to be fulfilled by the Defendant under Clause 8(2) are:- 19 [a] whether the written notice of termination was given by the Defendant 30 days’ notice prior to the intended date of termination to the Plaintiff where the achievement of the Defendant business objective and/or KPI is below the expectation and satisfaction of the Defendant. [b] whether the Defendant had informed the Plaintiff of its’ expected and reasonable standard or achievement as guideline to the Plaintiff. [c] whether the Defendant had provided the KPI’s which contain the quantifiable measures that reflect the Defendant’s requirements to the Plaintiff upon execution of the APSA. [29] It is incumbent on the Defendant under Clause 8(2) to issue a 30 days written notice to the Plaintiff before the termination of APSA can take effect. There is no requirement for the Defendant to fulfill the requirement of Clause 8(1)(a)(b) APSA. Having perused P44, it is clear that the Defendant had issued a written notice to the Defendant on 10.12.2014 for the purpose of termination of APSA with effect 15.1.2015. On this score, I am satisfied that P44 was issued 30 days prior to the intended termination and therefore, I find that the Defendant had fulfilled the 1st requirement under Clause 8(2) APSA. 20 [30] The next question to be determined is whether the Defendant has provided the KPI which contained the quantifiable measure that reflects the Defendant requirement to the Plaintiff upon execution of APSA on 20.12.2012. The key point here is that the Defendant shall provide KPI which contain the quantifiable measure that reflects the Defendant’s requirement to the Plaintiff upon execution of the APSA. [31] Taking from the perspective of business transaction, I am of the view that the Plaintiff’s obligation is not just to promote the Defendant’s business but also to meet the requirement of Webzine with a certain target members. Obviously, there must be quantified target members in this kind of business transaction. In fact the Plaintiff herself has set 100,000 target members for the 1st year. In the absence of such target members as KPI, I am of the view that it will not be prudent for any business entities to engage with such business arrangement. SD1 also confirmed that other than initial KPI of 100,000 members in the Business Plan, there were adhoc KPI set by the Defendant and this was admitted by the Plaintiff. In fact the Plaintiff herself had revised the initial numbers of KPI to a realistic figure. I have no doubts that these numbers that the parties needed to refer and work with. Thus, when the Plaintiff in her own testimony mentioned that she had performed and executed her obligation under the APSA that she had achieved the 21 target in recruiting the membership with the purpose to bring awareness to the targeted market of the Defendant’s product, I am of the view that the Plaintiff is referring to the intended target which is the KPI. At this juncture, I am convinced that the Plaintiff is aware of the KPI intended by the Defendant. [32] Furthermore, the awareness of the Plaintiff as to the KPI can also be seen in D55A, the Plaintiff own email to LOS referring to 100,000 members although the arrangement with LOS to assist the Plaintiff was never crystallized. Despite of the status, I am of the view that what is important here is that LOS has requested the Plaintiff to provide the KPI which is expected of them and what are the KPI the Plaintiff was subjected to by the Defendant as highlighted in D55. SD2 confirmed that the KPI stated in D55A sent by the Plaintiff to LOS were set by the Defendant as the whole purpose of LOS engagement was to help the Plaintiff to achieve the KPI and to contribute the Webzine due to the Plaintiff’s continuous failure in achieving the KPI. Looking at the above situation, it is reasonable to conclude that the Plaintiff knew the KPI intended by the Defendant for the purpose of entering the APSA. With the intended appointment of LOS to assist the Plaintiff it manifested the Defendant’s dissatisfaction that the KPI is below the expectation and satisfaction of the Defendant. It is immaterial 22 whether the arrangement of LOS to assist the Plaintiff materialized or otherwise but the fact still remain that the Plaintiff is very much aware of the KPI set and agreed upon by the Plaintiff and Defendant as in Business Plan prior concluding the APSA. [33] At the same time, I am satisfied that the KPI were not met by the Plaintiff as envisioned in the APSA. There were also sufficient evidences before me that the KPI were not met by the Plaintiff. It was not disputed by the Plaintiff and confirmed by SP1 and SP4 that by year 2, the Plaintiff was supposed to have 200,000 members but only achieved less than 10% of this target and even the adhoc KPI target was also never met by year end 2013 despite the Defendant had already paid out nearly RM3 million to the Plaintiff and the Plaintiff had admitted to receive the same. Even at the peak of the Plaintiff’s achievement, as at June 2014, some 2 years after the commencement of the APSA the database of members only stood at 13,741 members [Exhibit P34]. [34] Upon the above evaluation, I have no doubt that the Defendant had informed the Plaintiff of their expected and reasonable standard or achievement as the guideline for the Plaintiff. I am also satisfied that the Plaintiff had provided the KPI which contain the quantifiable measures that reflect the Defendant’s requirements to the Plaintiff upon execution of the 23 APSA as per the Business Plan submitted by the Plaintiff and agreed by the Defendant. Clause 8(2) APSA does not require a document and that the Plaintiff must have been informed of quantifiable KPI since the Plaintiff was informed of the quantifiable KPI by oral testimony through meetings and communication as well as contemporaneous documents. I am of the view that the Plaintiff was fully aware of the KPI and business objectives operating on her and that she fell far short of these expectations notwithstanding the Defendant’s significant efforts in helping and assisting the Plaintiff achieve these objectives by appointing LOS. The Defendant therefore is justified in terminating the APSA following the failure of the Plaintiff to achieve its KPI pursuant to Clause 8(2) APSA. The Defendant is entitled to terminate the APSA by giving the Plaintiff 30 days written notice via letters dated 10.12.2014 [Exhibit P44] and 23.12.2014 [Exhibit D62] whereby the termination date was 15.1.2015 as stated in the letters. [35] Therefore, I find that the Defendant had validly terminated the APSA under Clause 8(2) for reason that the Plaintiff had acted below the expectation and satisfaction of the Defendant despite the Defendant have informed the Plaintiff of their expected and reasonable standard or achievement as guideline for the Plaintiff by providing the KPI which 24 contain the quantifiable measure that reflects the Defendant’s requirement to the Plaintiff upon execution of the agreement. [36] Having heard the evidences before me and submissions from both learned counsels and after having given much consideration, I, on the balance of probabilities, dismissed the Plaintiff’s claims with costs of RM30,000.00 to the Defendant subject to allocator. ROZANA ALI YUSOFF JUDICIAL COMMISSIONER SHAH ALAM HIGH COURT Dated: 22 February 2019 25 Counsels for the Plaintiff: Encik Tan Lee Kiat Othman Hashim & Co Peguambela Dan Peguamcara 6th Floor Wiasma Kah Motor 566 Bt3 1/2, Jalan Ipoh 51200 Kuala Lumpur Counsels for the Defendant: Cik Ziang Wen En Tetuan Skrine Unit No.50-8-1, Tingkat 8 Wisma UOA Damansara No.50 Jalan Dungun, Damansara Heights 50490 Kuala Lumpur 26 References:- Case(s) referred to: