Ocean Glory Seafood Sdn. Bhd. v Gch Retail (Malaysia) Sdn Bhd (WA-22NCC-248-04/2024)

This is a writ action for breach of contract and recovery of unpaid debts arising from the sale and delivery of frozen seafood. The Plaintiff, Ocean Glory Seafood Sdn Bhd, is a wholesale seafood supplier. The Defendant, GCH Retail (Malaysia) Sdn Bhd, is the operator of a chain of retail supermarkets trading under the names "Giant", "Cold Storage", and "Mercato".

The Plaintiff's claim arises from two alleged contracts: a First Contract for the supply of 860 cartons of Saba Mackerel, and a Second Contract for the supply of approximately 220,000 kilograms of Coho Salmon to be delivered in ten full container loads ("FCL"). The Plaintiff contends that both contracts were formed by an exchange of email correspondence between the Plaintiff and the Defendant's Head of Procurement.

The reliefs originally prayed for in the Statement of Claim are as follows: (a) USD 11,648.00 for the balance of Saba Mackerel stock under the First Contract; (b) RM 85,690.34 for an alleged shortfall in payment for the first FCL of Coho Salmon — expressly abandoned by the Plaintiff's witness at trial; (c) RM 891,879.60 for unpaid Invoice No. 1015SI23000877 ("Invoice 877") in respect of the second FCL of Coho Salmon delivered ("FCL-2"); and (d) USD 599,384.24 for mitigated losses arising from the Plaintiff's on-sale of the remaining Coho Salmon stock to a third party — the quantum of which was revised downwards to USD 330,923.24 at trial without amendment to the pleadings.

For the reasons set out below, this Court finds as follows: (a) binding contracts were formed between the parties by way of email correspondence, but the obligation to perform in respect of any specific tranche of goods was subject to the condition precedent of the Defendant's issuance of an individual Purchase Order for that tranche; (b) the Plaintiff's claim for the unpaid FCL-2 invoice in the sum of RM 891,879.60 is allowed; and (c) all remaining claims are dismissed.

The Plaintiff and the Defendant had an established commercial relationship spanning more than two decades, commencing in or around the year 2000. The customary course of dealing between the parties was as follows: the Plaintiff would source and procure seafood; the Defendant would issue a Purchase Order ("PO") specifying the quantity and delivery instructions; the Plaintiff would deliver the goods to the Defendant's Central Distribution Centre; the Defendant would issue a Goods Receiving Note ("GRN") acknowledging receipt; the Plaintiff would thereafter issue an invoice; and the Defendant would pay.

In or around August 2022, the Defendant, through its Head of Procurement (referred to in the proceedings as "Alice"), invited the Plaintiff to participate in a tender for the supply of Coho Salmon. On or about 23 September 2022, Alice awarded the tender to the Plaintiff by email at a price of USD 7.98 per kilogram for approximately 220,000 kilograms, to be delivered over ten FCLs. This email award forms the basis of the alleged Second Contract.

In or around January 2023, the Plaintiff submitted a quotation for 860 cartons of Saba Mackerel at a price of USD 20.80 per carton. On or about 18 January 2023, Alice responded by email stating, materially, "Saba Mackerel is fine". This email response forms the basis of the alleged First Contract.

8.

Invoice 877 has not been paid. On 5 October 2023, the Defendant provided a delivery schedule for FCL-3 and FCL-4. Thereafter, the Defendant went silent and refused to issue any further POs for the remaining balance of either the Saba Mackerel or the Coho Salmon. The Plaintiff did not issue any formal written notice to the Defendant before taking steps to deal with the remaining stock.

The Plaintiff subsequently claims to have destroyed 560 cartons of Saba Mackerel after the stock expired, and to have on-sold the remaining Coho Salmon to a third party, Lotus's, at USD 6.10 per kilogram against the agreed contract price of USD 7.98 per kilogram. In 2024, the Plaintiff commenced a second suit (Suit No. WA-22NCvC-93-02/2024, "Suit 93") in which Invoice 877 was also referenced. The Plaintiff contends that Invoice 877 was subsequently withdrawn from Suit 93 to avoid any question of double recovery. The Defendant, by its witness at trial, admitted that payment of Invoice 877 was being withheld on account of an alleged overpayment in Suit 93. III. PARTIES' SUBMISSIONS The Plaintiff's Case 11. The Plaintiff contends that Alice's email responses constituted valid and binding acceptances, thereby forming overarching contracts for the entirety of the stipulated quantities. Reliance is placed on Charles Grenier Sdn Bhd v Lau Wing Hong and Prism Leisure v Lumut Marine Resort for the proposition that courts ought to give effect to commercial bargains concluded in informal fashion, without requiring technical formalities.

On the question of Alice's absence from the witness box, the Plaintiff invites this Court to draw an adverse inference under Section 114(g) of the Evidence Act 1950 against the Defendant for failing to call Alice, who authored the material email acceptances. Reliance is placed on Takako Sakao v Ng Pek Yuen.

In respect of the unpaid FCL-2 invoice, the Plaintiff submits that the debt is irrefutably evidenced by the Defendant's own bank statements. The Defendant's sole witness, DW1, admitted to withholding payment for reasons entirely extraneous to these proceedings, and an unpleaded set-off is legally untenable. The Defendant's Case 14. The Defendant contends that no binding overarching contracts existed. Consistent with the parties' long-standing course of dealing, no legal obligation to accept any specific tranche of goods arose unless and until the Defendant issued a specific PO for that tranche. Because no POs were issued for the remaining 560 cartons of Saba Mackerel or for FCL-3 to FCL-10 of the Coho Salmon, the Defendant submits it incurred no liability in respect of those quantities.

On evidentiary matters, the Defendant raises the following objections. In respect of the GRNs, the Defendant submits they are computer-generated documents printed from a "B2B" system approximately one year after the transactions and are inadmissible without a certificate of compliance under Section 90A of the Evidence Act 1950, relying on Lim Peng Hock & Anor v Chuah Peng San & Anor. In respect of the 11 January 2023 quotation, the Defendant submits it is hearsay because the named maker, Naoki Kaneko, was not called to testify, relying on Live Capital Sdn Bhd v Pioneer Conglomerate Sdn Bhd.

On the Plaintiff's damages claims, the Defendant submits: (a) the Saba Mackerel destruction claim is unpleaded and wholly unsupported by documentary evidence, relying on RHB Bank Bhd v Kwan Chew Holdings Sdn Bhd; (b) the Coho Salmon mitigation claim fails because the Plaintiff produced no invoices, POs, or payment receipts from Lotus's, called no witness from Lotus's, and admitted to giving no notice to the Defendant before the alleged on-sale, contrary to The "Asia Star" and Eikobina (M) Sdn Bhd v Mensa Mercantile (Far East) Sdn Bhd. IV. ISSUES FOR DETERMINATION The following issues fall for determination:

Issue 1: Whether binding contracts were formed by the exchange of email correspondence in respect of the First Contract (Saba Mackerel) and the Second Contract (Coho Salmon); and if so, whether the obligation to perform was subject to the condition precedent of the issuance of individual Purchase Orders.

Issue 2: Whether the Defendant is liable to pay the sum of RM 891,879.60 for the delivered FCL-2 of Coho Salmon.

Issue 3: Whether the Plaintiff is entitled to recover USD 11,648.00 for the alleged destruction of the balance of Saba Mackerel stock.

Issue 4: Whether the Plaintiff is entitled to recover USD 330,923.24 as mitigated losses arising from the alleged on-sale of the remaining Coho Salmon to Lotus's.

Issue 5: Whether the computer-generated GRNs are admissible in the absence of a certificate under Section 90A of the Evidence Act 1950; and what evidential weight is to be accorded to the 11 January 2023 quotation.

Issue 6: Whether the Defendant may rely on an unpleaded set-off arising from Suit 93 as a defence to the FCL-2 claim. V. PRINCIPLES OF LAW A. Burden and Standard of Proof 23. The burden lies on the Plaintiff to establish its case on a balance of probabilities. The standard is that stated by Denning J (as he then was) in Miller v Minister of Pensions [1947] 2 All ER 372: "If the evidence is such that the tribunal can say: we think it more probable than not — the burden is discharged, but, if the probabilities are equal, it is not." B. Formation of Contract 24. A contract is formed upon the coincidence of offer, acceptance, consideration, and an intention to create legal relations. The Court of Appeal affirmed in Charles Grenier Sdn Bhd v Lau Wing Hong [2007] 2 CLJ 1 that commercial bargains concluded in a summary or informal fashion are not invalid merely because the parties have not reduced their agreement to a formal document.

Where parties have established a course of dealing governing the mechanics of performance, that course of dealing qualifies the manner in which obligations under the agreement are to be discharged, without negating the existence of the agreement itself. A course of dealing goes to the mode of performance, not to the existence of the contractual undertaking. C. Strict Adherence to Pleadings 26. The Federal Court in RHB Bank Bhd v Kwan Chew Holdings Sdn Bhd [2010] 2 MLJ 260 reaffirmed that parties are bound by their pleadings, and that a court has no jurisdiction to award a remedy in respect of a cause of action that has not been pleaded. A material fact that first surfaces in oral testimony, without having been pleaded, does not thereby become part of a party's case. D. Admissibility of Computer-Generated Documents 27. Section 90A of the Evidence Act 1950 provides, in material part, as follows: "In any proceeding a statement contained in a document produced by a computer shall be admissible as evidence of any fact stated therein of which direct oral evidence would be admissible, if it is shown that the conditions in subsection (2) are satisfied in relation to the statement and computer in question." Subsection (2) stipulates that the conditions are satisfied if, among other things, the computer was used regularly to store or process information for activities regularly carried on over the relevant period, and the information was supplied to the computer in the ordinary course of those activities. Section 90A(3) provides that these conditions may be established by a certificate signed by a responsible officer. The Court of Appeal in Lim Peng Hock & Anor v Chuah Peng San & Anor [2017] 5 CLJ 361 affirmed that compliance with Section 90A is a mandatory prerequisite for the admissibility of computer-generated documents as substantive evidence. E. Hearsay and the Maker of Documents 28. A document tendered to prove the truth of the facts asserted therein is hearsay if the maker is not called to testify. In Live Capital Sdn Bhd v Pioneer Conglomerate Sdn Bhd [2008] 6 MLJ 577, the Federal Court affirmed that where a party seeks to admit a document as substantive evidence, the maker must ordinarily be called so that the opposing party may cross-examine as to its contents and authenticity. F. Mitigation of Loss and the Duty to Notify 29. An aggrieved party is under a duty to take all reasonable steps to mitigate loss consequent upon a breach. Where the mitigation measure involves an on-sale to a third party at a differential price, commercial fairness requires that the defaulting party be put on notice before such a measure is executed, so that the defaulting party has an opportunity to respond. In The "Asia Star" [2010] 2 SLR 291, the Singapore Court of Appeal held that a seller proposing to on-sell goods to a third party at a loss ought first to notify the buyer. The Supreme Court applied similar reasoning in Eikobina (M) Sdn Bhd v Mensa Mercantile (Far East) Sdn Bhd [1993] 3 MLJ 369. G. Adverse Inference for Failure to Call a Witness 30. Section 114(g) of the Evidence Act 1950 provides that the court may presume "that evidence which could be and is not produced would, if produced, be unfavourable to the person who withholds it". In Takako Sakao v Ng Pek Yuen & Anor [2009] 6 MLJ 751, the Federal Court affirmed that an adverse inference is warranted where a party fails to call a witness who is within that party's knowledge and control and whose evidence would be material to the issues in dispute. H. Unpleaded Set-Off 31. A set-off, being a substantive defence reducing or extinguishing the plaintiff's claim, must be specifically pleaded. A party may not advance at trial a set-off that was not pleaded, as to do so deprives the opposing party of the opportunity to traverse and meet that case: RHB Bank Bhd v Kwan Chew Holdings Sdn Bhd. VI. ANALYSIS AND FINDINGS Issue 1: Formation of Contracts 32. The Defendant's primary position is that no binding contracts existed at all, and that Alice's emails were merely preliminary discussions without legal force. This Court rejects that position.

The evidential record establishes, on a balance of probabilities, that binding contracts were formed by the exchange of email correspondence. For the First Contract, the Plaintiff issued a quotation specifying goods, quantity, and price, which Alice accepted in clear and unambiguous terms: "Saba Mackerel is fine". For the Second Contract, Alice invited a tender, the Plaintiff submitted a quotation, and Alice awarded the contract by email at the stated price. The elements of offer, acceptance, consideration, and an intention to create legal relations are all present and identifiable from the documentary record.

The Defendant's assertion that the documents were irregular, unauthorised, and not genuine is rejected. DW1 admitted under cross-examination that no police report was ever lodged in respect of the alleged forgery or fraud. A party alleging fraud bears a heavy evidential burden. A bare denial by a witness who was not personally involved in the negotiations, unsupported by any corroborating evidence, does not come close to discharging that burden.

More critically, the Defendant did not call Alice to testify. She was the author of the material email acceptances, and her evidence would have been determinative of the contract formation issue. She was within the Defendant's knowledge and, as former Head of Procurement, within the Defendant's power to produce. No explanation was offered for her absence. This Court draws an adverse inference under Section 114(g) of the Evidence Act 1950, consistent with Takako Sakao v Ng Pek Yuen. The inference is that, had Alice been called, her evidence would have confirmed that she did authorise and execute the email acceptances and that those acceptances were intended by both parties to be binding commitments.

The existence of binding contracts does not, however, resolve the extent of the performance obligations crystallised thereunder. The parties' course of dealing — spanning over two decades — required the Defendant to issue a specific PO before any particular tranche of goods would be delivered and before any payment obligation arose. POs were the mechanism by which the parties operationalised each delivery tranche. The obligation to deliver, accept, and pay for any specific tranche therefore arose only when a PO was issued for that tranche. In other words, the contracts were binding, but the obligation to perform in respect of any given tranche was subject to the condition precedent of PO issuance.

Contracts were accordingly formed and subsisted in respect of each tranche for which a PO was in fact issued. Tranches for which no PO was issued did not attract a crystallised performance obligation. This finding provides the legal framework for the assessment of the specific claims below. Issue 2: The Unpaid FCL-2 Invoice (RM 891,879.60)

A PO (No. 7105023635) was issued by the Defendant for the FCL- 2 delivery. A performance obligation crystallised. The Plaintiff delivered the goods. GRN No. 156354 was issued by the Defendant acknowledging receipt. Invoice 877 was thereafter raised. The Defendant does not dispute that the goods were received. The debt is prima facie established.

On the admissibility of GRN No. 156354, the technical objection under Section 90A is addressed under Issue 5. It does not defeat this claim. The existence and quantum of the FCL-2 debt are independently and conclusively established by two pieces of evidence that require no reliance on the GRN: the Defendant's own bank statements, which reflect the debt continuously from September 2023 to November 2024, and the oral testimony of DW1 himself.

DW1 did not deny that FCL-2 was received. He did not deny that Invoice 877 was unpaid. His explanation for non-payment was that he believed the Defendant had overpaid the Plaintiff in connection with Suit 93, and that this alleged overpayment justified withholding payment of Invoice 877.

That explanation is, in substance, a plea of set-off. A set-off must be specifically pleaded in the Statement of Defence. It was not. The Defendant cannot introduce by way of oral testimony at trial a substantive defence that was never raised in its pleadings. The unpleaded set-off is disregarded: RHB Bank Bhd v Kwan Chew Holdings Sdn Bhd.

The Defendant also contended that pursuing Invoice 877 in this suit while it was also referenced in Suit 93 constitutes an abuse of process by way of double recovery. This Court rejects that argument. The Plaintiff adduced evidence that Invoice 877 was withdrawn from Suit 93 prior to trial in these proceedings specifically to avoid duplicity. The double recovery argument fails on the facts.

Judgment is accordingly entered for the Plaintiff on Issue 2 in the sum of RM 891,879.60. Issue 3: Destruction of Saba Mackerel (USD 11,648.00)

The Plaintiff claims USD 11,648.00 for the loss of 560 cartons of Saba Mackerel, arising from the alleged destruction of those cartons after the stock's lifespan expired. This claim is dismissed on two separate and independently sufficient grounds.

The first ground is that the destruction of the stock was not pleaded. The Statement of Claim pleads a loss arising from the balance of Saba Mackerel that the Defendant failed to collect. It does not plead that the goods expired. It does not plead that the goods were destroyed. These are material facts going to both liability and quantum which form no part of the Plaintiff's pleaded case. As the Federal Court held in RHB Bank Bhd v Kwan Chew Holdings Sdn Bhd, a court cannot award damages on a factual basis that was not pleaded.

The second ground is that the claim is factually unproven. PW1 admitted under cross-examination that there is no documentary evidence before this Court to establish that the 560 cartons were in fact destroyed. There are no inventory records, no disposal certificates, no accounting write-offs, and no internal communications referring to the destruction. A court cannot award damages in respect of a loss that has not been proved. The claim fails on the evidence independently of the pleading defect. Issue 4: Coho Salmon Mitigation Losses (USD 330,923.24)

The Plaintiff claims USD 330,923.24 as the differential loss arising from the on-sale of the remaining Coho Salmon (FCL-3 to FCL-10) to Lotus's at USD 6.10 per kilogram, against the contract price of USD 7.98 per kilogram. This claim is dismissed.

The dismissal follows in the first instance from the contract formation finding in Issue

No POs were issued for FCL-3 to FCL-

No crystallised performance obligation therefore arose in respect of those FCLs. If there was no breach in respect of those tranches, there is no recoverable loss attributable to a breach.

The mitigation claim fails, in any event, for three further and independent reasons. First, the sale to Lotus's has not been proved. The Plaintiff produced no purchase orders from Lotus's, no invoices issued to Lotus's, no delivery records, and no bank receipts or payment confirmations evidencing that Lotus's paid for the goods. No representative from Lotus's was called as a witness. A plaintiff must prove the fact of its loss, not merely assert it. The alleged loss of USD 330,923.24 rests entirely on PW1's oral assertion, uncorroborated by any documentary evidence.

Second, the Plaintiff failed to give notice to the Defendant before executing the alleged mitigation sale. PW1 conceded this under cross-examination. The requirement in The "Asia Star" and Eikobina (M) Sdn Bhd v Mensa Mercantile (Far East) Sdn Bhd is not a technicality. It reflects the substantive requirement of commercial fairness: the defaulting party must be afforded an opportunity to respond — whether by taking the goods, finding an alternative buyer, or agreeing to a different arrangement — before the aggrieved party acts unilaterally to on-sell. The failure to notify the Defendant before the alleged Lotus's sale is a fatal defect in the mitigation claim.

Third, the quantum is unreliable. The Statement of Claim pleads USD 599,384.24 as the mitigated loss. At trial, PW1 testified to USD 330,923.24 — a reduction of approximately USD 268,000. No amendment was made to the pleadings to reflect this change. No documents were produced to support either figure. The unexplained reduction of USD 268,000 is not accompanied by any satisfactory explanation and severely undermines the credibility of the claim. Issue 5: Admissibility of GRNs and the 11 January 2023 Quotation 52. In respect of the GRNs, the Defendant's objection is technically well-founded. The GRNs were generated from the Defendant's "B2B" system and printed approximately one year after the transactions they purport to record. No Section 90A certificate was tendered. On strict application of Lim Peng Hock & Anor v Chuah Peng San & Anor, the GRNs are not admissible as primary proof of delivery or receipt.

That finding is, however, of limited practical consequence. The facts that the GRNs might otherwise have established — in particular, that FCL-2 was received and that Invoice 877 is outstanding — are independently established by the Defendant's own bank statements and DW1's admissions, as found under Issue 2. The inadmissibility of the GRNs does not affect the outcome of any issue in these proceedings.

In respect of the 11 January 2023 quotation, the document names Naoki Kaneko as its maker. Naoki Kaneko was not called. The Plaintiff called PW2 (Hoshihiro Kimura) in his stead. PW2 is not the named maker of the document. The hearsay defect is not fully cured. This Court admits the quotation but gives it minimal weight. It is not determinative of any issue in these proceedings. The formation of the contracts has been established by Alice's email responses, and the quotation adds nothing that alters any finding made above. Issue 6: Unpleaded Set-Off 55. For completeness, the Defendant's attempt to rely on the alleged overpayment in Suit 93 as a basis for withholding payment of Invoice 877 is, in substance, a plea of set-off. A set-off must be specifically pleaded. It was not pleaded. The defence is accordingly disregarded. This finding is consistent with and reinforces this Court's conclusion on Issue 2.

For the reasons set out above, this Court makes the following Orders: a) Order 1 — Judgment is entered for the Plaintiff against the Defendant in the sum of RM 891,879.60, being the amount of Invoice 877 for the FCL-2 delivery of Coho Salmon Stock, together with interest thereon at the rate of 5% per annum from the date of the judgment until the date of full settlement. b) All other claim are dismissed. c) Costs of this action are awarded to the Plaintiff in the sum of RM35,000.00 subject to allocator.

This Court records its appreciation to learned counsel for both parties for their able assistance. Dated 7hb July 2026 (MOHAMAD REDZUAN BIN IDRUS) JUDICIAL COMMISSIONER KUALA LUMPUR HIGH COURT NCC 5 WILAYAH PERSEKUTUAN KUALA LUMPUR APPEARANCES For the Plaintiff: Jennifer Jayalalitha Chandran (Vaasan Chan & Chandran (Kuala Lumpur)) For the Defendant: Sri Dev Nair, Felix Saw Chia Hui & Muhammad Izzaaz Abdul Aziz (Felix Saw (Kuala Lumpur))

Charles Grenier Sdn Bhd v Lau Wing Hong [2007] 2 CLJ 1 2. Eikobina (M) Sdn Bhd v Mensa Mercantile (Far East) Sdn Bhd [1993] 3 MLJ 369 (Supreme Court)

Lim Peng Hock & Anor v Chuah Peng San & Anor [2017] 5 CLJ 361 (Court of Appeal)

Live Capital Sdn Bhd v Pioneer Conglomerate Sdn Bhd [2008] 6 MLJ 577 (Federal Court)

Miller v Minister of Pensions [1947] 2 All ER 372 6. Prism Leisure v Lumut Marine Resort [2002] 5 CLJ 391 7. RHB Bank Bhd v Kwan Chew Holdings Sdn Bhd [2010] 2 MLJ 260 (Federal Court)

Takako Sakao v Ng Pek Yuen & Anor [2009] 6 MLJ 751 (Federal

The 'Asia Star' [2010] 2 SLR 291 (Singapore Court of Appeal)

Evidence Act 1950 — Section 90A (Admissibility of computer generated documents)

Evidence Act 1950 — Section 114(g) (Adverse inference for withholding evidence)