Online Dynamics (M) Sdn Bhd v TM Net Sdn Bhd (WA-22NCvC-163-03/2021)

1.1 The plaintiff is seeking from the defendant a supposed total loss of business allegedly income arising under an agreement amounting to RM6,416,674.00 and RM550,000.00 for early termination of staff, 25 cost of operation, interest, and costs.

1.2 The defendant denies the claim grounded on the premise that there is no legal basis or cause of action as the agreements between parties were lawfully terminated.

1.3 On 24.08.2023, I found no merits in the plaintiff's suit against the defendant and dismissed it with costs of RM30,000.00 to be paid within 30 days. 35 1.4 Aggrieved, the plaintiff filed this appeal against my decision, and these are my reasons: 14/11/2023 16:38:48 Kand. 57 S/N dF4cstdEnkyubgt09C53/g BRIEF FACTS: [2] Parties have filed agreed facts (encl.11), and in narrating the brief facts, I will also refer to documents available before me. In examining the 40 evidence at the trial for the parties, I found as follows: The parties:

2.1 The first principal agreement for the production, supply and broadcasting of “The Capital channel on TM IPTV” subject to agreed terms and conditions, was entered on 10.10.2011 with a contract 45 tenure of three years, expiring on 31.10.2014 (encl.12, BOD B pp 7- 27).

2.2 Grounded in this first principal agreement, the parties entered into a first supplementary agreement (encl.12, BOD B, pp.28-39) to extend the scope of services of the plaintiff subject to agreed terms 50 and conditions.

3 The two agreements above ran their course and expired naturally as contracted on 31.10.2014. [3] Upon the expiry of the first two agreements above:

1 The parties, on 01.11.2014, entered into a second principal agreement (encl. 12, BOD B, pp.40-62) for a contract tenure of three years, expiring on 31.10.2017, to supply a news program under the defendant Hypp TV platform subject to agreed terms and conditions.

3.2 Likewise, on 08.02.2018, the parties entered a second 60 supplementary agreement (encl. 12, BOD B, pp.66-73) with a contract tenure targeted to expire on 31.10.2020. S/N dF4cstdEnkyubgt09C53/g

3.3 The issue with this second supplementary agreement is that the drafter referred to the first principal and supplementary agreement, which had already expired naturally on 31.10.2014, more than three 65 years earlier and was no longer of concern between the parties. I observed that:

The plaintiff unsupported postulation that that the term of the previous agreement used therein had supposedly extended the terms of these long-expired agreements.

It is my considered judgment to be an erroneous and misconceived attempt to provide a legitimate foundation for its action in the present suit. It is disharmonious to the facts leading to an absurd conclusion (encl12. BOD B pg 64). It cannot be taken that the second supplementary agreement is 75 supplemental to the first principal agreement that had already lapsed several years prior, together with the first supplementary agreement on 31.10.2014.

The drafting of preambles A and B certainly leaves much to be desired. Hence, it calls for a finding on a term (previous 80 agreements) used in the second supplemental agreement. Did it concern the second principal agreement (2014) or the first principal agreement (2011) that had already expired more than three years prior?

Evidence was given by the plaintiff's director at trial that the 85 second supplementary agreement was premised under the second principal Agreement in 2014 and not the first principal agreement in 2011. S/N dF4cstdEnkyubgt09C53/g [4] Clause 4 of the second supplementary agreement incorporates the 90 reference to clause 19.3(ii) of the second principal agreement to allow for an early termination of the agreement by the parties mutually or unilaterally:

4.1 It gives either party a right to terminate the agreement by giving the 95 other party a sixty-day notice indicating such an intention to terminate. It is only exercisable after the 1st anniversary of the second supplementary agreement.

4.2 Under those provisions, the defendant issued a formal notice of 100 termination of the second supplementary agreement on 02.11.201 (encl.12, BOD b, pp.74-75):

The plaintiff claimed the termination was unlawful based on the defendant’s cost rationalising exercise and strategy to review the company’s activities.

This early termination adversely impacted the financial position of the plaintiff, who had invested money, human resources, overheads, and other resources to meet its financial obligations under the second supplementary agreement (encl.12, BOD B, pp.66-73).

In meeting its monthly financial obligation during the contract period, the plaintiff had resorted to borrowings from the financial institution (encl.12, BOD B, pp.76-82).

In meeting its internal monthly financial commitments, it relies primarily on the execution and running of the agreements with 115 the defendant. S/N dF4cstdEnkyubgt09C53/g

In such circumstances, it would be unconscionable to allow the defendant a right to a premature termination of the agreement after one year of operation.

The plaintiff is entitled to a legitimate expectation that the 120 defendant would honour its part of the bargain in the agreement.

Consequently, the plaintiff claimed to have suffered prematurely ending its office tenancy, letting go of all its workers, and still having to meet its financial obligations with the bank.

4.3 The plaintiff adduced no compelling evidence that it protested this early termination upon service of the termination notice. The plaintiff had accepted the last payment on 31.12.2018 on its final invoice with no protest on the early termination of the Agreement.

4.4 The plaintiff only protested two (2) years later after the defendant demanded the refund of the commitment fee paid under the expired first principal agreement under clause 10.1(iii) of the said agreement. It remained unpaid till this day. The defendant's 135 counterclaim on this sum had been withdrawn with liberty because the plaintiff is presently a company in liquidation.

4.5 It then escalated to this suit by the plaintiff claiming an unlawful early termination of the second supplementary agreement, claiming 140 RM6,416,672.00, amongst others, of the balance twenty-two months of the contract tenure left in the second supplementary agreement. The plaintiff also claimed RM550,000.00 for the cost incurred in terminating the workforce it employed and other operational expenses. 145 S/N dF4cstdEnkyubgt09C53/g [5] On 18.03.2021, the plaintiff filed the present suit against the defendant, claiming as follows: “a. Jumlah kerugian pendapatan perniagaan dibawah perjanjian yang masih berbaki 22 bulan sebanyak RM291,667.00 150 sebulan berjumlah RM6,416,674.00 b. Jumlah kos kerugian akibat penamatan pekerja-pekerja, bakat luar, kontraktor, dan kos-kos operasi lain berkaitan berjumlah RM550,000.00. c. Faedah keatas gantirugi khas pada kadar 5% setahun keatas 155 jumlah diperenggan a dan b diatas dari tarikh penyampaian Writ sehingga tarikh Penghakiman d. Faedah pada kadar 5% setahun keatas jumlah Penghakiman dari tarikh penghakiman sehingga penjelasan sepenuhnya. e. Kos tindakan ini. 160 f. Lain-lain relief yang Mahkamah anggap adil dan sesuai” [6] In its defence and counterclaim (later withdrawn with liberty), the defendant took the position that:

The defendant acknowledges:

The first principal agreement with the plaintiff (10.10.2011) was for the production, supply, and broadcast of the Capital Channel on TM IPTV.

(ii) The first supplementary agreement (01.05.2013) was for the production, supply, and broadcast of the Capital on TM IPTV.

(iii) The first principal agreement contract period was from 01.11.2011 to 31.10.2014 (three years).

(iv) The monthly license fee of RM270,000.00 under the first principal agreement was due from the defendant to the plaintiff throughout the contract period, save where it is sooner terminated. A refundable 175 commitment fee of one month of the license fee (RM270,000.00) was paid to the plaintiff on 15.12.2011 (1 ½ months after executing the first principal agreement). S/N dF4cstdEnkyubgt09C53/g

The said commitment fee was to be refunded by a deduction from the last month of the license fee payable to the plaintiff during the 180 contract period.

(vi) The first principal agreement and the first supplementary agreement provide for an early termination clause by either party by giving the other a sixty-day written notice intimating an intention to terminate the contract (clause 16.3 in the first principal agreement, encl.12, 185 BOD B, pg.21, and clause 2.13 in the first supplementary agreement, encl.12, BOD B, pg.36).

(vii) The two foregoing agreements lasted throughout its contract period and naturally expired on 30.10.2014, releasing the parties from its terms and conditions.

Slightly less than a month after the expiry of the first principal and supplementary agreements, the parties entered into a second principal agreement on 24.11.2014 (encl.12, BOD B, pp.40-62) for the production and supply of the news program 195 and the Capital Channel for distribution on Hypp TV. Likewise, the parties entered into a second supplementary agreement (encl.12, BOD B, pp.66-73) for the production and supply of Channel W for distribution on Unifi TV:

The second principal agreement with the plaintiff (24.11.2014) lasted 200 three years, from 01.11.2014 to 31.10.2017. It allows for early termination by either party by giving the other a sixty-day written notice intimating an intention to terminate the contract after the 1st anniversary of the agreement (clause 19.3(ii) (encl.12, BOD B, pg.54). In this event, the defendant is only obligated to make 205 payment for the contract value or revenue share up to the termination date on a pro-rated basis (clause 19.5, encl.22, BOD B, pg.55).

(ii) The second supplementary agreement was for three years, from 01.11.2017 until 31.10.2020, which was also subject to an early termination provision under clause 4, in making reference to the 210 foregoing clause 19.3(ii) of the second principal agreement.

(iii) This second supplementary agreement is in addition to and not in derogation of the parties' obligations. This second additional S/N dF4cstdEnkyubgt09C53/g agreement is supplemental to the second principal agreement that expired on 31.10.2017.

(iv) The first principal and supplemental agreements are separate and distinct from the second principal and supplementary agreements.

The defendant further contends that:

The drafting of the preamble in the second supplementary 220 agreement was inaccurately drawn up. It caused unnecessary confusion (see preamble A and B, encl.12, BOD B, pg.64). My observation: I examined the preamble and found that the drafting leaves much to be desired.

(ii) The preamble to the second supplementary agreement had erroneously referred to the first principal agreement (10.10.2011) that had lapsed naturally on 30.10.2014 (approximately over three years before the execution of the second supplementary agreement) 230 as the principal agreement of the second supplementary agreement when in fact it was intended to be referred to the second principal agreement (encl.12, BOD B pp.40-62).

(iii) The drafter termed the first and second principal agreement as the previous agreement. However, the drafter in the preamble made no 235 mention of the first supplementary agreement that had also lapsed naturally with the first principal agreement on 30.10.2014.

(iv) This mix-up is further compounded when the second supplementary agreement continues to refer to the previous agreement and that all terms and conditions of the previous agreement shall remain in full 240 force and effect.

It cannot be taken that the second supplementary agreement is supplemental to the first principal agreement that had already lapsed several years prior, together with the first supplementary agreement on 31.10.2014.

(vi) The term previous agreement must, in the premise, be taken in its actual and proper context to refer to the second principal agreement leading to the second supplementary agreement to make logical sense.

(vii) The early termination of the second supplementary agreement was 250 subject to Clause 4 of the second supplementary agreement S/N dF4cstdEnkyubgt09C53/g (encl.12, BOD B, pg.66) in citing Clause 19.3(ii) of the second principal agreement.

(viii) There was no alleged extension of the agreements as claimed by the plaintiff.

The second supplementary agreement contains a provision allowing monitoring of the channel's viewership to ensure that it produces good-quality programs. Key performance indicators were specified in Appendix 2 (encl.12, BOD B, pg.73) of the second supplementary agreement. It was found that the 260 viewership of the channel was not satisfactory throughout the first anniversary of the second supplementary agreement tenure.

The defendant elected to go for an early termination of the 265 second supplementary agreement under clause 4, referring to clause 19.3(ii) of the second principal agreement after its first anniversary by giving a sixty-day written notice on 02.11.2018. It was agreed that parties in the second supplementary agreement could terminate the contract sooner by providing a 270 sixty-day notice to the other.

Concerning the impact of the foregoing termination, the defendant asserts that:

The defendant is not responsible for the plaintiff's alleged 275 investments and internal operational expenses as they do not concern the defendant in any way.

(ii) The defendant has paid all its financial obligations arising under the expired first principal and first supplementary agreements.

(iii) Under the first principal agreement, the plaintiff had defaulted on 280 refunding the commitment fee of RM 270,000.00 paid on 15.12.2011. S/N dF4cstdEnkyubgt09C53/g

(iv) As required under clause 19.5(iii) of the second principal agreement, the defendant had made payment up to the date of the termination on a pro-rated basis (RM309,167.02) on 31.12.2018.

The plaintiff accepted the payment without objection or protest on 285 the early termination. It has neither disputed, replied, nor denied the notice of termination.

(vi) In the premise, the defendant asserts that the plaintiff is not entitled to the relief prayed. 290 [7] The list of witnesses at the trial is as follows: -

Plaintiff’s witness:

SP1 Noor Azman bin Yusof@ Mohd Jusoh

Defendant’s witness:

SD1 Abdul Rahman bin Mohammad Ghazali THE PLAINTIFF’s SUBMISSIONS [8] The plaintiff submitted as follows: 300 8.1 The learned counsel for the plaintiff informed the Court that the plaintiff had been wound up via two High Court orders dated 15.02.2022 and 08.03.2022. The Insolvency Department of Malaysia had granted a written sanction dated 01.03.2023 to pursue this action against the defendant.

8.2 Upon being informed that the plaintiff is in liquidation, the defendant had withdrawn with liberty its counterclaim on the return of the commitment fee. 310 8.3 The plaintiff argued that the second supplementary agreement was supposed to run for three years from 01.11.2017 to 31.10.2020:

The plaintiff was supposed to receive a total revenue of RM10,500,000.00. S/N dF4cstdEnkyubgt09C53/g

The plaintiff had performed its duties and responsibilities as 315 required under the second supplementary agreement.

All the previous agreements were extended upon expiry through three separate agreements, excluding the second supplementary agreement.

The defendant had wrongly terminated the second 320 supplementary agreement on 02.11.2018 by claiming to exercise its contractual right under clause 19.3(ii) of the second principal agreement. The reason accorded for the termination was: “Upon further internal deliberation by TM Nets management on cost 325 rationalising exercise and strategy to review the company’s activities in consent, we hereby exercise our contractual right under clause 19.3(ii) of the Agreement for the Production and Supply of news program and the Capital Channel for Distribution on HyppTV dated 24.11.2014 (including the Supplementary Agreement dated 8.2.2018 (“Agreement”) by giving 330 you the requisite sixty (60) days’ notice to terminate the Agreement. The notice period shall be calculated from the date of this letter, and the effective termination date shall be 1 January 2019 (Effective date of termination).” 335

The plaintiff was encouraged by the continuance of the same services by entering into allegedly three consecutive separate agreements and believing that the defendant would continue to the end of the contract period. 340

The defendant had breached the second supplementary agreement. The defendant had never issued the plaintiff any notice of default in rendering its services.

As a consequence of the defendant’s breach, the plaintiff suffered losses and defaulted on its banking facility. 345 In my observation: S/N dF4cstdEnkyubgt09C53/g

There is simply no convincing evidence that the defendant had breached the second supplementary agreement in any way from the facts during the trial.

(ii) It is misguided to argue that the defendant is liable for the internal 350 expenses, banking issues, and purported investments arising from the plaintiff's operation. It is too remote and improbable to pass the buck to the defendant.

8.4 In supporting the position it has taken, the plaintiff, claimed that:

Preamble D of the second supplementary agreement (Enclosure 12, Part B Documents, P’s Bundle, pg.64) clarified that it refers to the previous agreement, meaning the first principal and first supplementary agreement. In my observation:

This argument by the plaintiff cannot hold as I had addressed in paragraph 3.3 (a)-(d) hereof.

(ii) I have also observed it in paragraph [6] (c) (i)-(viii).

(iii) To allow it would make nonsense of the second supplementary agreement. The Court must construe it in the correct context based 365 on the fact and actual perspective of the case lest it led to an absurd or irrational conclusion. That legal position is trite: Berjaya Times Square, FC.

The plaintiff also argued that the agreements are not separate 370 and distinct from. It is a continuation. In my observation:

There is no compelling evidence from the plaintiff to support this argument other than conjectures.

(ii) It is inconsistent with the facts before the Court and is a 375 misconceived unsupported postulation that I am inclined not to believe.

(iii) The agreements are all separate and distinct from each other. The issue of extension of agreements cannot be supported or substantiated by the facts at trial. It is a misguided argument by the 380 plaintiff.

The plaintiff took the position that the defendant failed to read conjunctively clauses 19.3(i) and (ii) of the second principal agreement in the exercise of its right to terminate. 385 S/N dF4cstdEnkyubgt09C53/g In my observation:

This argument is misconceived.

(ii) Clause 19.3(i) requires giving 30 days’ notice to rectify purported breaches in the second supplementary agreement, failing which the said agreement may be terminated.

(iii) While Clause 19.3(ii) states that the party may elect to terminate the second supplementary agreement after the first anniversary by giving sixty-day notice. There is no requirement to assign any reason.

(iv) The two provisions are poles apart.

There is clarity about what the parties had signed on to.

(vi) To read it in any other way to angle support for the plaintiff's position would be inconsistent with the parties' agreement.

(vii) One cannot read an inconsistent intent to a term in the agreement that was never intended, nor was it there in the first place.

(viii) Be it for the Key Performance Index or cost rationalising issue, it cannot detract from the fact that parties had agreed in Clause 19.3(ii) that either party may terminate after the first anniversary of the second supplementary agreement by giving a sixty-day notice.

(ix) The Court will always ensure that parties are bound to their bargains 405 and cannot renege from them.

The plaintiff submitted extensively to address the first principal agreement (2011) and the first supplementary agreement that expired in 2014. 410 In my observation:

There is no tangible or cogent definitive evidence was produced to establish that the two said agreements had been renewed, extended, or resurrected in any way.

(ii) The Court is only concerned with the alleged unlawful termination of 415 the second supplementary agreement that is presumed to provide the foundation for this action by the plaintiff. It is my considered judgment that the plaintiff failed to show compelling evidence to establish that position other than conjectures.

(iii) I remain unconvinced, and the evidence scale does not tilt in its 420 favour.

8.5 The plaintiff postulated to the Court that the defendant is not entitled to Clause 19.3(ii) to terminate the second supplementary agreement and can only terminate because the plaintiff failed to achieve the 425 S/N dF4cstdEnkyubgt09C53/g agreed KPI in the contract. Before doing so, the defendant must give the plaintiff thirty days' notice to remedy the poor viewership issue under Clause 19.3(i). Only then can the defendant terminate. In my observation:

Grounded on the facts and observations in the foregoing, I can’t quite 430 agree with the plaintiff on this argument.

(ii) It goes against the totality of the evidence before the Court.

8.6 To support its position:

The plaintiff places reliance on the Federal Court decision in 435 Arkitek Tenggara Sdn Bhd v Mid Valley City Sdn Bhd [2007] 6 CLJ 93, FC that espoused the principle of a right to terminate contained in the agreement.

The plaintiff argued that the second supplementary agreement did not expressly provide for early termination.

The Federal Court decision in Catajaya Sdn Bhd v Shoppoint Sdn Bhd & Ors [2021] 2 MLJ 374, FC was also cited that ruled a termination was not allowed unless expressly provided for under the agreement.

It was argued that the defendant was wrong in invoking Clause 445 19.3(ii) of the expired second principal agreement to terminate the second supplementary agreement and for providing an invalid reason that had occasioned the termination. Though the agreement did not stipulate that reason for termination ought to be given, the defendant elected to explain the termination in its 450 notice (02.11.2018) in encl. BOD B, pp.74-75). In my observation:

I have observed on this point in paragraph 3.3 (a)-(d) and paragraph [6] (c)(i)-(viii) above and will not repeat it.

(ii) With that finding of fact, the arguments above by the plaintiff would 455 not hold in the premise. S/N dF4cstdEnkyubgt09C53/g

(iii) Consequently, Arkitek Tenggara Sdn Bhd v Mid Valley City Sdn Bhd [2007] 6 CLJ 93, FC, would not assist the plaintiff.

8.7 The plaintiff argued that on the totality of the evidence, they had 460 proven the claim on a balance of probability:

The notice of termination (2.11.2018) is invalid.

Invoking Clause 19.3(ii) if the second principal agreement to terminate the second supplementary agreement is wrong.

The defendant is moved to terminate by reference to the 465 provisions of the second principal agreement to avoid compensating the plaintiff by reliance on Clause 19.5(v) (consequences of termination) that provide for payment on a pro-rated basis up to the date of the termination.

The defendant had breached the second supplementary 470 agreement and is liable to the plaintiff for damages under s.74

Contracts Act 1950. Arkitek Tenggara Sdn Bhd v Mid Valley City Sdn Bhd [2007] 6 CLJ 93, FC was cited that when a party sustains loss because of a breach of a contract, so far as money can do it, he is to be placed in the same position 475 concerning damages, as if the agreement has been performed. In the circumstances, the P prays for an order in terms of its prayers in the Statement of Claim with costs. 480 THE DEFENDANTS’ SUBMISSIONS (L42, L46) [9] The defendant submitted as follows:

9.1 SD1, amongst others, gave evidence: S/N dF4cstdEnkyubgt09C53/g

Confirming that the preambles in the second supplementary agreement were inaccurate and that it should refer to the 485 second principal agreement.

Terminating the second supplementary agreement was under Clause 19.3(ii) of the second principal agreement by giving a sixty-day notice.

As required under clause 19.5(iii) of the second principal 490 agreement, the defendant had made payment up to the date of the termination on a pro-rated basis on 31.12.2018, which the plaintiff accepted with no protest to the early termination of the second supplementary agreement.

The plaintiff did not deny or dispute the agreement's termination 495 notice. Only about two years later, when the defendant issued a letter of demand on 07.11.2019 for the return of the commitment fee paid under the first principal agreement did the plaintiff suddenly dispute the notice of termination of the second supplementary agreement, leading to the present action.

The contract between the parties was not continuous (distinct and separate from each other), and they were never extended, as argued by the plaintiff.

9.2 The defendant argues:

The term “previous agreement” in the second supplementary 505 agreement must necessarily refer to the second principal agreement.

I have addressed this issue in the foregoing paragraph 3.3 (a)-

(d), and paragraph [6] (c) (i)-(viii) hereof. S/N dF4cstdEnkyubgt09C53/g

The defendant asserted that during the trial, the plaintiff’s 510 witness, SP1 himself, admitted that the drafting of the preamble was confusing.

The Federal Court ruling in Berjaya Times Squares Sdn Bhd v M Concept Sdn Bhd [2010] 1 MLJ 597, FC, was cited, which, in a nutshell, ruled where the terms of an agreement are 515 ambiguous, the background facts giving rise to the agreement ought to be examined to ascertain the intention of the parties concerned and that a commercial contract ought to be construed in a commercially sensible manner. The Court must

construe an agreement confined itself to the four corners of 520 the document but look at the factual matrix forming the background to the transaction, (2) include all materials reasonably available to the parties, (3) it must disregard any part of the background that is declaratory of subjective intent only, and (5) the Court should adopt an objective approach 525 when construing the private contract: “The meaning of the agreement is to be discovered from the words which they have used and read in the context of the circumstances in which they made the agreement. The exercise is not one where there are strict rules, but one where the solution is to be found by considering the language 530 used by the parties against the background of the surrounding circumstances.” This position was followed by the Federal Court in SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor 535 [2016] 1 MLJ 464, FC in holding that the words of each clause should be construed harmoniously with one another to avoid leading to ambiguity or absurdity: [46] This objective approach to interpretation is the ‘ascertainment of the meaning which the document would convey to a reasonable person 540 having all the background knowledge which would reasonably have S/N dF4cstdEnkyubgt09C53/g been available to the parties in the situation which they were at the time of the contract’ (K Lewison, The Interpretation of Contracts (5th Ed, 2011), Sweet and Maxwell, at p 1.03).” 545

The High Court in Daya Cmt Sdn Bhd v Yuk Tung Construction Sdn Bhd [2018] MLJU 871, HC, referred to Polygram Records Sdn Bhd v The Search & Anor [1994] 3 MLJ 127, HC in holding that the test to ascertain whether an old contract has been extinguished is this: If a new contract is 550 entered into by the parties, whatever its terms, the old contract is extinguished.

In the circumstances, the first principal agreement and the first supplementary agreement had expired on 31.10.2014 and, therefore, been extinguished before the second principal 555 agreement was entered slightly less than a month later, with dissimilar purposes and independent from the expired first principal agreement. It would be absurd to associate the expired agreement in the preambles with defining the term “previous agreement” for the second supplementary 560 agreement.

SP1, in his email on 10.11.2017 (encl.16, pg.156), agreed that the second supplementary agreement was constructed as supplemental to the second principal agreement (2014). Considering this fact, cognisance must be taken that preamble 565 B of the second supplementary agreement refers to an agreement dated 24th November 2014 (encl.12, pg. 64). It is an admitted fact by SP1 that the only contract executed in 2014 was the second principal agreement. DW1 corroborated this. The Federal Court decision in Wong Yee Boon v Gainvest 570 Builders (M) Sdn Bhd [2020] 2 CLJ 727, FC was cited that S/N dF4cstdEnkyubgt09C53/g had ruled that to ascertain the intention of the parties, the Court must read the terms of the contract as a whole. The basic rule is that effect must be given to the parties' intention. This requires an objective test and not a subjective approach. It is 575 an objective approach that is needed, and a solution that is both reasonable and realistic should be found.

9.3 In light of the foregoing, the defendant argues that:

That the defendant validly terminated the second supplementary 580 agreement under Clause 4 of the said agreement in rightfully referencing Clause 19.3(ii) of the second principal agreement, which provides for early termination after the first anniversary of the agreement. It is an agreed term available to both parties in the agreement by giving a sixty-day notice to the other 585 (acknowledged by SP1 in his evidence).

The defendant cited the Court of Appeal in Seven Seas Industries Sdn Bhd v Philips Electronic Supplies (M) Sdn Bhd & Anor [2008] 5 MLJ 157, CA that had said it is a well- 590 established principle that where the terms of a contract are clear and free from ambiguity, the court will not impose any implied terms. In the present case, clause 19.3(ii) is unambiguous and should not attract any drama in its application.

This present action by the plaintiff is an afterthought:

Close to two years after the issuance of the notice of termination (from 02.11.2018 to 23.6.2020), the plaintiff did not dispute or protest the notice as being unlawful.

(ii) Fourteen days after the defendant issued a letter of demand 600 (07.11.2019) in encl.16, pp.139-142, concerning the return of the commitment fee, did the plaintiff suddenly object to the termination when it is within their knowledge of the impending winding up the S/N dF4cstdEnkyubgt09C53/g plaintiff by the two High Court order dated 15.02.2022 and 08.03.2022.

(iii) This suit by the plaintiff is wholly an afterthought.

(iv) The defendant cited the Court of Appeal in David Wong Hon Leong v Noorazman bin Adnan [1995] 4 CLJ 155, CA, that found in that case that the appellant had failed to respond to the letter of 17th December. If there had never been an agreement as alleged, it is 610 reasonable to expect a prompt and vigorous denial. But, as we have pointed out, there has yet to be a response from the appellant. This decision was cited and followed by the Court of Appeal in Jetra Sdn Bhd v Maju Holdings Sdn Bhd [2007] 3 CLJ 41, CA.

Contrary to the plaintiff's arguments in the present case, Clause 615 19.3(ii) makes no contractual obligation to assign any reason for the early termination of the agreement. SP1 admitted in his evidence that after the first anniversary of the second supplementary agreement, either party may terminate the contract without giving any reason.

(vi) Also contrary to the argument of the plaintiff in claiming that Clause 19.3(i) and (ii) must be read conjunctively. It is a misplaced argument. Citing the Federal Court in Catajaya Sdn Bhd v Shoppoint Sdn Bhd & Ors [2021] 2 MLJ 374, FC that ruled where the terms of a contract are clear, the Court should not alter the 625 meaning of the terms.

(vii) The Court of Appeal was cited in Parkwell Department Store Sdn Bhd v ICSD Ventures Sdn Bhd [2020] 9 CLJ 107, CA that held that in the interpretation of contracts, the general principle is for such interpretation to be constructive and to afford business efficacy to 630 such provisions.

9.4 The plaintiff:

Cannot claim RM6,416,674.00 being the balance twenty-two months of the contract period for the second supplementary 635 agreement (January 2019 to October 2020), when it had been lawfully terminated after the first anniversary under Clause 19.3(ii) of the contract.

The claim for RM550,000 being alleged losses occasioned by the termination of workers, outside talent, contractors, and 640 other operating costs are too remote and clearly without basis: Tahan Steel Corporation Sdn Bhd v Bank Islam Malaysia S/N dF4cstdEnkyubgt09C53/g Bhd [2011] 1 CLJ 755, HC. The plaintiff failed to produce any cogent evidence to establish the said amount, and SP1 admitted this in his evidence. The burden lies on the plaintiff to 645 prove its losses before it is allowed. It is axiomatic that a plaintiff seeking substantial damages must establish the facts and the quantum of damages before recovering. If proven neither, the action will fail, or he may be awarded only nominal damages upon proof of infringement of a right: Popular Industries Ltd v 650 The Eastern Garment Manufacturing Co Sdn Bhd [1990] 2 CLJ (rep) 635, HC.

9.5 There is no breach on the defendant's part concerning the terms of the second supplementary agreement and its termination. The 655 plaintiff's reliance on the Federal Court’s decision in Arkitek Tenggara Sdn Bhd v Mid Valley City Sdn Bhd [2007] 6 CLJ 93, FC does not assist the plaintiff’s case. The agreement between the parties in the present case did not prescribe any express right of termination, and thus, no reason would need to be provided by the 660 terminating party: “The lawfulness or otherwise of the termination of the plaintiff's services by the defendant would, in the first place, depend on whether the agreement between them contains a right to terminate. The agreement between the parties does not prescribe any express right of termination. The question of whether such a 665 term can be implied would depend upon the intention of the parties as collected from the words of the agreement and the surrounding circumstances. It must be presumed that the plaintiff had knowledge of the Conditions of Engagement in the Fourth Schedule. He is bound to adopt them. The defendant was under the impression that he was entitled to terminate the agreement at any time. This 670 in substance is the right contained in r 7. A right to terminate the agreement on any ground is, therefore, the obvious but unexpressed intention of the parties, thereby making it into an implied term. The Conditions of Engagement in the fourth Schedule also constitute implied terms in order to give business efficacy to the agreement by virtue of being a custom or practice of the architectural 675 profession. It follows that the agreement between the plaintiff and the defendant may be terminated at any time by either party upon reasonable notice being given (see paras 41–42, 48–49).” S/N dF4cstdEnkyubgt09C53/g Consequences are the same for SPM Membrane Switch Sdn Bhd 680 v Kerajaan Negeri Selangor [2016] 1 MLJ 464, FC, and Catajaya Sdn Bhd v Shoppoint Sdn Bhd & Ors [2021] 2 MLJ 374, FC about whether valid reason is needed for termination in the present case is inapplicable. 685 In the circumstances, it is submitted that the plaintiff has failed to discharge their burden, and its action must be dismissed with costs. THE LAW [10] It is trite in law that all cases are decided on the legal burden of proof 690 being discharged. It is the acid test applied in any particular case.

10.1 Lord Brandon in Rhesa Shipping Co.SA v Edmunds [1985] 1 WLR 948 at 955 said: “No judge likes to decide cases on the burden of proof if he can legitimately avoid having to do so. There are cases, however, in which, owing to the 695 unsatisfactory state of the evidence or otherwise, deciding on the burden of proof is the only just course to take.”

10.2 In Britestone Pte Ltd v Smith & Associates Far East, Ltd [2007] 4 SLR(R) 855 it was said that: “The Court’s decision in every case will depend on whether the party concerned 700 has satisfied the particular burden and standard of proof imposed on him. Since the terms ‘proved’, ‘disproved’, and ‘not proved’ are statutory definitions contained in the Evidence Act (Cap 9), 1997 Rev Ed), the term ‘proof’. Wherever it appears in the Evidence Act and unless the context otherwise suggests, means the burden to satisfy the Court of the existence or non- 705 existence of some fact, that is, the legal burden of proof”.

10.3 The burden of proof in establishing its case is on the plaintiff. It is not the Ds' duty to disprove it. The evidentiary burden is trite that those who allege a fact are duty-bound to prove it (see s.101, 102, 710 and 103 of the Evidence Act 1950). S/N dF4cstdEnkyubgt09C53/g

10.4 Selvaduray v Chinniah [1939] 1 MLJ 253, 254 (CA) held: "The burden of proof under section 102 of the Evidence Enactment is upon the 715 person who would fail if no evidence at all were given on either side and accordingly, the plaintiff must establish his case. If he fails to do so, it will not avail him to turn around and say that the defendant has not established his. The defendant can say it is wholly immaterial whether I prove my case or not. You have not proved yours".

10.5 Johara Bi bt. Abdul Kadir Marican v. Lawrence Lam Kwok Fou & Anor [1981] 1 MLJ 139, (FC) held: "It was all a matter of proof and that until and unless the plaintiff has discharged the onus on her to prove her case on a balance of probabilities, the burden did 725 not shift to the defendant, and no matter if the defendant's case was completely unbelievable, the claim against him must in these circumstances be dismissed. With respect, we agree with this judicial approach." [11] Berjaya Times Square Sdn Bhd v M-Concept Sdn Bhd [2010] 1 730 CLJ 269, FC. The distilled principles, among others, are:

11.1 Where an agreement is not regulated by statute, parties are at complete liberty, under the doctrine of freedom of Contract, to agree on any terms they think fit.

11.2 The role of the Court is to interpret the Contract sensibly (a commercially sensible construction). See Loh Wai Lian v SEA Housing Corporation Sdn Bhd [1987] 1 LNS 37, PC. 740 11.3 The starting point is for the Court to recognise that in an action for a breach of Contract, it is for the Court to determine who is the innocent party and who is the guilty party.

11.4 A contract breaker must pay damages to the innocent party. 745 However, if he has made any payment under a contract (not being a true deposit for the purchase of movable or immovable property), the contract breaker is entitled to have that payment set off against the damages he has to pay. However, he cannot seek to recover S/N dF4cstdEnkyubgt09C53/g any benefit he may have conferred upon the innocent party where 750 he is guilty of breach of Contract. Were it otherwise, a contract breaker could take advantage of his wrong. This is against the principle and the policy of the law.

11.5 The FC cited Attorney General of Belize v. Belize Telecom 755 Limited [2009] UKPC 11, where when delivering the Advice of the Board, Lord Hoffmann said: “The Court has no power to improve upon the instrument which it is called upon to construe, whether it be a contract, a statute or articles of association. It cannot introduce terms to make it fairer or more reasonable. It is concerned 760 only to discover what the instrument means. However, that meaning is not necessarily or always what the authors or parties to the document would have intended. It is the meaning which the instrument would convey to a reasonable person having all the background knowledge which would reasonably be available to the audience to whom the instrument is addressed: see Investors 765 Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, 912-913. It is this objective meaning which is conventionally called the intention of the parties, or the intention of Parliament, or the intention of whatever person or body was or is deemed to have been the author of the instrument.” 770

11.6 A contract is to be interpreted in accordance with the following guidelines:

A Court interpreting a private contract is not confined to the four corners of the document. It is entitled to look at the factual 775 matrix forming the background of the transaction.

The factual matrix that forms the transaction's background includes all material reasonably available to the parties.

The interpreting Court must disregard any part of the background that is declaratory of subjective intent only and 780

The Court should adopt an objective approach when interpreting a private contract. See Investors Compensation Scheme Ltd v. West Bromwich Building Society [1998] 1 All ER 98. As Lord Clyde said in 785 Bank of Credit and Commerce International SA v. Munawar Ali [2001] 2 WLR 735: S/N dF4cstdEnkyubgt09C53/g “The knowledge reasonably available to them (that is to say, the parties to the Contract) must include matters of law as well as matters of fact. The 790 problem is not resolved by asking the parties what they thought they intended. It is the imputed intention of the parties that the Court is concerned to ascertain…. The meaning of the agreement is to be discovered from the words which they have used and read in the context of the circumstances in which they made the agreement. The exercise is 795 not one where there are strict rules but one where the solution is to be found by considering the language used by the parties against the background of the surrounding circumstances”. 800 [12] The Federal Court in Michael C. Solle v United Malayan Banking Corporation [1986] 1 MLJ 45, FC observed that the principles of construction to be applied are that the parties' intentions are gathered from the language used. They are presumed to have intended what they say. The common universal principle is that an agreement ought to receive that 805 construction, which its language will admit, that will best effectuate the parties' intention to be collected from the whole agreement. The Courts are to give effect to the terms of the Contract (if any). FINDINGS 810 [13] I have examined all-cause papers, the evidence and/or the lack thereof at the trial, and the parties' respective submissions in canvassing for their position in the present suit. The general principle in litigation has always been that a claim is only as good as its evidence. 815 Considering my observation in the totality of the evidence and in particular in paragraph 3.3 (a)-(d), paragraph [6] (c) (i)-(viii) and my observations in the parties' respective arguments in paragraphs [9] 9.1-9.5, and [8] 8.1-

8.7 hereof, in addition to and in amplification thereof, it is my considered determination that: 820 S/N dF4cstdEnkyubgt09C53/g

13.1 In consonance with the principles espoused by the Federal Court in Berjaya Times Square Sdn Bhd v M-Concept Sdn Bhd [2010] 1

The starting point is for the Court to recognise that in an action 825 for a breach of Contract, it is for the Court to determine who is the innocent party and who is the guilty party.

A breach of Contract is said to occur when a party to a Contract expressly or impliedly fails or refuses to perform or fails to perform satisfactorily one or more of his contractual obligations.

By and large, the plaintiff failed to discharge its burden of proof to establish the claim in its SoC as required under ss 101-103 Evidence Act 1950.

The plaintiff needed to adduce the required compelling evidence to tilt the scale of evidence in its favour but failed to 835 do so. Besides bare assertions, no convincing evidence was adduced to establish the allegations against the defendant.

I have perused the Bundles of Documents of parties (L12, L14, and L16) and considered the respective arguments by the respective learned counsel, but I can't find such probative 840 materials that can persuade me to find for the plaintiff.

13.2 In the circumstances of the facts of the case, a commercially sensible construction on the intention of the parties would point to the term previous agreement as stated in the second 845 supplementary agreement to mean the second principal agreement

and not to the first principal agreement (2011) that had already expired more than three years prior. It would be ludicrous to hold otherwise as it leads to absurdity. 850 S/N dF4cstdEnkyubgt09C53/g

13.3 Consequently, the defendant had every right to exercise its right for an early termination of the second supplementary agreement under Clause 4 in referencing Clause 9.3(ii) of the second principal agreement. In the circumstances, the early termination is legal as it arises from a term binding the parties in the second supplementary 855 agreement. The arguments by the plaintiff on the issue are overstretching and too farfetched in the circumstances.

13.4 With the valid termination of the second supplementary agreement, the issue of damages as claimed by the plaintiff does not arise and has no legal foundation to stand on. 860 13.5 In clearly failing to prove its claim, I would like to borrow what was said by the Court of Appeal in Selvaduray v Chinniah [1939] 1 MLJ 253, 254, CA that where the plaintiff fails to prove his case, it will not avail him to turn around and say that the defendant has not established his. The defendant can say it is wholly immaterial 865 whether I prove my case or not. You have not proved yours. I would also like to reiterate what was said in Johara Bi bt. Abdul Kadir Marican v. Lawrence Lam Kwok Fou & Anor [1981] 1 MLJ 139, that it was all a matter of proof and that until and unless the plaintiff has discharged the onus to prove his case on a balance of 870 probabilities, the burden did not shift to the defendant, no matter how unbelievable the defence might be. The claim against the defendant must, in these circumstances, be dismissed.

13.6 The legal burden lies on the plaintiff throughout the proceedings to prove its case, in which case the plaintiff herein had failed: Yui Chin 875 Song & Ors v Lee Ming Chai & Ors [2019] 6 MLJ 417. It is not for S/N dF4cstdEnkyubgt09C53/g the Ds to establish their defence in such a circumstance: Selvaduray v Chinniah [1939] 1 MLJ 253. [14] The parties:

14.1 Are bound to the terms of their sealed bargains and will not be 880 allowed to renege from them. It is my judgment that the defendant is within its rights to exercise its rights to terminate the Contract under Clause 19.3(ii). It is what they have expressly agreed to, as was said by the Federal Court in Michael C. Solle v United Malayan Banking Corporation [1986] 1 MLJ 45, FC, that the 885 Courts are to give effect to the terms of the Contract.

14.2 I agree with Chan Whye & Sons Contractors (Suing as a Firm) v Sarawak Shell Bhd [2003] 5 MLJ 68, HC that where the termination clause is explicit, the Court must not rewrite the Contract or audit the bargain between the parties but instead hold them to it. See also 890 SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor [2016] 1 MLJ 464, FC.

14.3 To reiterate what was said by the Federal Court in Berjaya Times Square Sdn Bhd v M-Concept Sdn Bhd [2010] 1 CLJ 269, FC, that the starting point is for the Court to recognise that in an action 895 for a breach of Contract, it is for the Court to determine who is the innocent party and who is the guilty party. In the present case, anchored from my observation of the facts before me, I find no breach on the defendant's part. The allegation by the plaintiff in the premises is wholly misguided. 900 14.4 I am in no doubt and inclined from the greater weight of evidence to hold against the plaintiff concerning the impugned second S/N dF4cstdEnkyubgt09C53/g supplementary agreement leading to its lawful termination grounded on the covenants in the said agreement. 905 CONCLUSION [15] All things considered:

15.1 After appraising the evidence, all the relevant cause-papers and the written submissions by the respective parties, I find that the plaintiff had failed to discharge its burden on a balance of probabilities.

15.2 Therefore, the plaintiff’s claim is dismissed against the defendant with costs of RM30,000.00 (global) to be paid within 30 days from the date of this order. 915 Dated 14.11.2023. HAYATUL AKMAL ABDUL AZIZ 920 JUDGE HIGH COURT OF MALAYA KUALA LUMPUR 925 Counsels: Mohd Fairuz Bin Abdullah Messrs. Mohd Najid & Partners Counsel for the plaintiff 930 Oazair Huneid Tyeb, together with Choy Moon Moon, Nik Aimi Nabilah Nur Aisyah Ezam (PDK) Messrs. Shahrizat Rashid & Lee Counsels for the defendant 935 S/N dF4cstdEnkyubgt09C53/g