Oriental Steel Pipe Sdn Bhd v United Security Services Sdn Bhd (BA-B52NCvC-3-01/2023)

This case concerns a claim for negligence brought by the Plaintiff, Oriental Steel Pipe Sdn Bhd, against the Defendant, United Security Services Sdn Bhd, following a theft incident at the Plaintiff's factory.

The Plaintiff seeks damages for the loss of cables, alleging the Defendant's security guards failed to perform their duties. The Defendant denies liability, relying on a contractual limitation of liability and asserting that the Plaintiff failed to prove ownership of the stolen assets.

The Defendant further brings a counterclaim for outstanding security service fees at a separate site. Conversely, the Plaintiff urges the court to dismiss the Defendant's counterclaim for unpaid service fees, citing a lack of evidence and its relevance to a separate location.

Lonpac Insurance Berhad, the Third Party, was brought into the suit by the Defendant seeking indemnity under a professional liability policy.

On 19 April 2021, the Plaintiff appointed the Defendant to provide security services for its premises in Iskandar Puteri, Johor via a written agreement.

On or around 23 June 2021, a theft occurred at the factory while it was non-operational due to the Movement Control Order (MCO).

A large quantity of industrial cables (estimated at 6 tons) was cut and removed from various machinery, including gantry cranes and switch boards.

During the material time, it was alleged that the CCTV cameras had been covered with plastic without the guards detecting the same. It was further alleged that the guards submitted photographs taken during the daytime as reports for the night shift, were not present at their assigned posts while on duty, and failed to provide updates when requested.

The Plaintiff filed a suit for RM352,082.00 (as amended). The Defendant counterclaimed for RM58,749.44 for services provided at a different factory in Pulau Indah, Selangor.

The Plaintiff subsequently abandoned its claim for breach of contract against the Defendant and elected to proceed solely on its cause of action in negligence.

At the trial, the Plaintiff called three witnesses to prove its claim. The Defendant, on the other hand, called only one witness, whereas the Third Party did not call any witness to testify.

Plaintiff's issues to be tried (filed vide Enclosure 9-Bundle K) are as follows: a. Sama ada kejadian kecurian kabel-kabel di kilang Plaintif adalah disebabkan oleh kecuaian dan kelalaian Defendan dan/atau pekerja dan/atau ejen Defendan dalam menjalankan tanggungjawab mereka dengan baik dan berhati-hati; b. Sama ada Defendan dan/atau pekerja-pekerjanya telah gagal dalam melaksanakan dan/atau memungkiri kewajipan berjaga-jaga yang munasabah ("reasonable duty of care") dalam menjaga dan/atau mengawal kilang Plaintif; c. Sama ada Defendan bertanggungjawab untuk membayar jumlah RM352,082.00 (jumlah dipinda secara rasmi oleh Plaintif pada 04.11.2025 dengan kebenaran Mahkamah, asalnya RM426,449.00), iaitu kos ganti dan pemasangan semula kabel-kabel yang hilang akibat kejadian kecurian bertarikh 23.06.2021, atau ganti rugi sedemikian untuk dinilai oleh Mahkamah; dan d. Sama ada tuntutan balas Defendan sebanyak RM58,749.44 adalah bermerit.

Defendant's issues to be tried (filed vide Enclosure 14-Bundle N) are as follows: a. Sama ada Plaintif gagal, memaklumkan kepada Defendan bahawa terdapat kecurian yang pernah berlaku dikilang tersebut. b. Sama ada Defendan akan memberi perkhidmatan kawalan keselamatan kepada Plaintif jika mempunyai pengetahuan mengenai kecurian sebelum peristiwa ini dikilang tersebut. c. Sama ada Plaintif telah memberi "full and frank disclosures" kepada Defendan sebelum melantik perkhidmatan Defendan. d. Sama ada Defendan berhak menuntut daripada Plaintif jumlah RM58,749.44 iaitu jumlah yang terhutang untuk perkhidmatan kawalan tersebut. e. Sama ada Plaintif bertanggung sendiri untuk tuntutan Plaintif akibat daripada kecuaian Plaintif. f. Sama ada Defendan telah melaksanakan tanggungjawab dan tugasnya secara teratur dan/atau seperti yang diperuntukkan.

The Plaintiff argues that the Defendant, as a professional security provider, owed a duty of care independent of the contract. They contend that the theft was caused by the gross negligence of the guards, as admitted by the Defendant's General Manager (SD1), who acknowledged that guards failed to adhere to the Standard Operating Procedures (SOP) and were not at their posts when the noise of the theft would have been audible.

The Plaintiff submits that Clause 7(b) of the agreement, which limits liability to RM10,000, is void under Section 29 of the Contracts Act 1950 as it absolute restricts the Plaintiff's right to enforce its legal rights for a core breach of the contract.

The Plaintiff maintains they have proven their loss through evidence from their Maintenance Manager (SP3) and third-party quotations, adjusting the claim to reflect the actual cost of restoration.

The Plaintiff asserts the counterclaim should be dismissed as it relates to a separate contract and location, and the Defendant failed to call the relevant operations manager (Mr. Roshan) to prove the alleged non-payment.

The Defendant argues the Plaintiff failed to prove the guards were negligent, asserting that the factory's large size (4.5 acres) made it impossible for a single guard to monitor all areas simultaneously.

The Defendant contends that the Plaintiff produced no inventory or asset list to prove ownership of the cables prior to the theft, thus lacking the legal standing to claim for their loss.

The Defendant further asserts that the cables might have been removed by the Plaintiff's own lorries, agents or employees.

The Defendant submits that even if negligence is found, the parties are bound by the "four walls of the contract," which explicitly limits any claim for theft to a maximum of RM10,000.

The Defendant argues that because the Plaintiff's witnesses did not challenge the invoices for the Pulau Indah site during cross-examination, the debt is deemed admitted under the principle in Wong Swee Chin v PP.

The Third Party submits that its own investigation concluded that the Defendant's guards were not negligent; therefore, no indemnity is triggered under the policy.

The Third Party contends that, since Edmund was the Plaintiff's employee who was on-site to oversee deliveries during the daytime throughout the MCO period, the Plaintiff's failure to call him as a witness warrants the drawing of an adverse inference pursuant to section 114(g) of the Evidence Act 1950.

The Third Party argues that the Plaintiff failed to prove its loss, noting that many quotations were only marked for identification (ID) and carry no probative value as the makers were not called to testify.

They highlight that Clause 9(ii) of the security agreement required the Plaintiff to obtain its own burglary insurance, which the Plaintiff failed to confirm doing, raising the risk of double compensation or subrogation issues.

In the alternative, the Third Party submits that its total liability to the Defendant is capped at RM100,000 per the terms of the insurance policy.

This Court does not propose to address each of the issues to be tried individually, except to the extent that they are relevant to the present trial and have been canvassed in the parties' submissions.

Having considered the pleadings, the oral and documentary evidence adduced at trial, the submissions of parties and the applicable law, this Court finds that the Plaintiff has successfully established its claim in negligence against the Defendant on a balance of probabilities. Duty of care

There is no dispute that the Defendant was engaged as a professional security services provider to safeguard the Plaintiff's factory premises and the contents therein. By accepting such appointment, the Defendant owed a duty of care to the Plaintiff to exercise the degree of care, skill and diligence expected of a reasonable security services provider in carrying out its security obligations.

The existence of such duty is further reinforced by the contractual relationship between the parties and the Defendant's assumption of responsibility for the security of the Plaintiff's premises and assets. Accordingly, the first element of negligence is clearly established.

In relation to breach, this Court finds that the Plaintiff has adduced cogent evidence demonstrating that the Defendant failed to exercise reasonable care in the performance of its duties.

Most significantly, the Defendant's own witness admitted during cross-examination that the Defendant's guards had failed to comply with the applicable SOP whilst carrying out their duties. Such admission is highly material and carries considerable evidential weight as it emanates from the Defendant's own representative.

The evidence before this Court further reveals that: a. the guards failed to detect that the CCTV camera had been covered with plastic (p.15,16,321 and 322 Notes of Proceedings (NOP)); b. the guards failed to send photographs evidencing their patrols as required/no real time monitoring (p.223 and 317 NOP); c. the guards were found not to be at the guardhouse or at the designated locations where they were required to be stationed during working hours/ the guards were found entered into office and resting inside without permission (p.17 and 319 NOP); and d. no satisfactory explanation was provided for these failures.

These matters are not mere procedural lapses or minor irregularities. Rather, they go to the very core of the security functions which the Defendant had undertaken and was contractually engaged to perform. A security company engaged specifically to safeguard premises against theft cannot be said to have exercised reasonable care where its guards failed to carry out basic patrol duties, failed to properly monitor the premises, and failed to detect obvious signs of interference with the surveillance system, including the covering of CCTV cameras with plastic.

What is particularly troubling is the evidence that emerged during the reexamination of the Defendant's witness. At page 45 of the Notes of Proceedings, the Defendant's witness admitted that the photographs appearing at pages 17, 18, 19, 20, 21, 23, 24, 25, 26, 27 and 28 were in fact images obtained from the CCTV cameras. This admission prompted the Court to closely scrutinise the reliability and authenticity of the Whatsapp patrol records purportedly relied upon by the Defendant as this evidence suggest that the guards could have just skipped the patrol and reporting by merely uploading a photo taken from the CCTV monitor.

Such a revelation raises serious concerns as to whether the patrols were genuinely conducted at all. It also casts substantial doubt on the credibility of the patrol records produced by the Defendant and the competency, diligence and good faith of the guards entrusted with the security of the Plaintiff's premises. If patrol photographs could be generated merely by reproducing images from the CCTV monitor without the guards actually attending the designated patrol locations, then the entire purpose of the patrol verification system would be defeated.

In this Court's view, this evidence significantly weakens the Defendant's assertion that proper security measures were being implemented and further strengthens the Plaintiff's contention that the guards were not discharging their duties in the manner expected of a reasonably competent security service provider.

This Court therefore finds that the Defendant breached its duty of care owed to the Plaintiff. Failure to Call Material Witnesses and produce relevant documents

This Court also draws an adverse inference against the Defendant arising from its failure to call material witnesses.

The evidence shows that one Jumary Bin Md Noor (Jumary) was key personnel involved in the security operations. His name appeared prominently in the WhatsApp communications and he was directly involved in the day-to-day management of the security services provided to the Plaintiff as he is the supervisor to the two Nepalise guards who were placed at the Plaintiff's site and he was the person who prepared a report regarding the incident (D40 -p. 41 Bundle E) and lodged the police report (P3 - p. 54 Bundle D) after the theft.

The Defendant sought to explain the absence of certain guards on the basis that they had left the country. However, no satisfactory explanation was provided regarding Jumary, who is a local resident. The Defendant merely asserted that he had left the company.

No evidence whatsoever was adduced to show: a) that Jumary was uncontactable. On the contrary, Jumary's contact details were readily available and clearly stated in P3, namely the police report (Tel: 012- 27716081; Address: Blok F 04-15, Jalan Persiaran Cemerlang, Taman Desa Cemerlang, 81800 Ulu Tiram, Johor, Malaysia); b) that any genuine or reasonable efforts had been made to contact, trace, or secure his attendance as a witness; c) that any attempt had been made to serve him with a subpoena or otherwise compel his attendance before this Court.

In the circumstances, the Defendant cannot simply rely on the bare assertion that Jumary had left its employment to justify his non-attendance. The failure to call a material witness who was apparently available and contactable warrants the drawing of an adverse inference against the Defendant.

Jumary was clearly a material witness who could have shed light on the contemporaneous WhatsApp communications, including instances where the guards were questioned and reprimanded regarding their performance. Significantly, the Court notes that there was no contemporaneous rebuttal from the guards in response to those allegations in the WhatsApp messages. For example, see page 23 and 55 of the Notes of Proceeding: Page 23 My question is, so do you agree from the WhatsApp conversation, it shows that the guard wasn't in their patrolling station? Yes. Okay. Now, since the guard is not in the patrolling station, you can see from page 35. So, you can see from page 35, the Plaintiff asked, why you got in the office? I'm very disappointed of your company. And En. Jumary replied, ya, saya dah call dia. Saya sedang tengok dalam CCTV. And his next response was OK. Do you agree that the responses from En. Jumary is an admittance that your security guard was sleeping in the guard post and wasn't in their patrolling station? This is office. Sorry, office. You agree? Yes. (SD1 menganggukkan kepala) Page 55 "Mahk: Because on the 22 $ ^{nd} $ June, at page 15, you asked why from 12.00AM to 07.00AM no pictures and there's no reply right? SP1 : Yes, no reply." Yet, none of these individuals were called to testify.

Further, pursuant to Clause 15 of the Contract, the Defendant had exclusive possession, custody and control of the security log books, duty rosters and other operational documents maintained in the course of providing security services. Notwithstanding that such documents were plainly relevant to the issues before the Court and were capable of substantiating the Defendant's defence or rebutting the Plaintiff's case, the Defendant failed to produce any of them in evidence. For ease of reference, Clause 15 provides as follows: Clause 15 "It is mutually agreed that all security log books, duty rosters of the guards and any other documents provided by the Company shall be the sole property of the Company. The Customer shall have no right to demand or examine the above log book, duty rosters and any other documents."

The significance of this clause is that the relevant records were within the Defendant's exclusive knowledge, possession and control. If such records existed and were favourable to the Defendant's case, one would reasonably expect them to have been produced at trial.

In these circumstances, the Court is entitled to invoke section 114(g) of the Evidence Act 1950 and draw an adverse inference that the evidence of the absent witnesses, as well as the unproduced documents, would not have assisted the Defendant's case and would, if produced, have been unfavourable to the Defendant. Accordingly, the Plaintiff's evidence on the issue of negligence remains substantially unrebutted. Whether the Plaintiff's withdrawal of its contractual claim precludes its remaining cause of action in negligence

This Court is of the view that the Plaintiff's withdrawal of its claim founded in breach of contract does not extinguish or otherwise affect its separate and independent cause of action in negligence. It is trite that breach of contract and negligence are distinct causes of action, each founded upon different legal principles and giving rise to separate rights and remedies.

Whilst the contractual arrangement between the parties may be relevant in establishing the nature of the relationship between them, the existence of a contract is not a prerequisite to the imposition of a duty of care in negligence. The law of negligence may impose an affirmative duty upon a person who undertakes to perform a task or function, particularly where it is reasonably foreseeable that a failure to exercise reasonable care in the performance of that undertaking may cause loss or damage to another.

In this regard, the Court accepts the principle stated in Principles of the Law of Tort in Malaysia (Malayan Law Journal Sdn Bhd, 1998) at p.42 that: "The developing law nevertheless has resulted in several circumstances where affirmative duty has been imposed. These circumstances may arise: first, where a person undertakes to do a job, i.e a pre-existing duty, perform a function or has induced a person to rely upon him doing so. (see for eg Barnett v Chelsea & Kensington Hospital Management Committee [1969] 1 QB 428; White & Anor v Jones & Ors [1995] 1 All ER 691)”

This means an affirmative duty may arise where a person undertakes to do a job, perform a function, or induces another to rely upon him doing so. The duty is therefore not solely derived from contract but may arise independently under the general law of negligence.

In Tenaga Nasional Berhad v Batu Kemas Industri Sdn Bhd & Anor [2018] 6 CLJ 683, the Federal Court observed that: "（1）In a claim based on the tort of negligence, it must be shown that the defendant owed a duty of care to the plaintiff and once the duty existed, the plaintiff must show that the defendant had breached it. In order for a duty of care to arise in negligence (i) harm must be reasonably foreseeable as a result of the defendant's conduct; (ii) the parties must be in a relationship of proximity; and (iii) it must be fair, just and reasonable to impose liability ('Caparo 's three-fold test'). (paras 33 & 50)"

It is significant that, in setting out the requirements for the existence of a duty of care, the Federal Court made no reference whatsoever to the existence of a contractual relationship between the parties. Rather, the Court held that the existence of a duty of care depends upon the satisfaction of the threefold test of foreseeability, proximity, and whether it is fair, just and reasonable to impose liability. It follows that a duty of care in negligence may arise independently of any contractual relationship. Accordingly, the Defendant's contention that the Plaintiff's withdrawal of its claim for breach of contract necessarily extinguishes its claim in negligence is plainly misconceived and legally untenable.

In my judgment, the withdrawal or abandonment of a claim for breach of contract does not, in and of itself, defeat or extinguish a separate and independent cause of action in negligence. So long as the requisite elements giving rise to a duty of care are established, a claim founded in the tort of negligence remains maintainable notwithstanding the absence of a contractual claim.

Accordingly, even in the absence of a subsisting contractual claim, this Court finds that the Defendant had undertaken the responsibility of carrying out the relevant security functions and thereby assumed an affirmative duty to exercise reasonable care in the performance of those functions. Once such a duty is established, a failure to take reasonable care in carrying out the undertaking constitutes negligence if loss or damage of the kind suffered by the Plaintiff was reasonably foreseeable.

The issue before this Court is therefore not whether the Defendant is contractually liable, but whether the Defendant breached the duty of care imposed by the law of negligence. The withdrawal of the contractual cause of action does not affect the Court's determination of that question.

The Defendant sought to rely on evidence that theft incidents had occurred previously at the Plaintiff's premises. This Court finds such argument to be without merit.

The Defendant was fully aware of the previous theft incidents before accepting the appointment. The evidence clearly demonstrates that the Defendant inspected the premises, was informed of the prior incidents and was aware of the geographical characteristics, size of the factory and the attendant security risks.

Despite such knowledge, the Defendant voluntarily accepted the engagement. The following evidence from the Defendant's witness at page 150 of the Notes of Proceedings is instructive: "S: Previous incidents. So, here are the facts of the case, you knew there were theft earlier on but you accepted the appointment, I mean appointment from the Plaintiff's company. J: Yes. S: So why is that so? Can you explain that? J: As a businessman or as a security provider, any business opportunities I think we will grab and we were careful to move it in the business. Thus, we agree upon that."

Having accepted the engagement with full knowledge of the circumstances, the Defendant cannot subsequently rely on those very circumstances as a justification for its failure to perform its obligations.

In essence, the Defendant accepted the assignment on an "as is where is" basis. The Defendant knew the risks, knew the physical layout of the premises, knew the previous theft history and nevertheless agreed to undertake the responsibility of safeguarding the Plaintiff's assets.

In Walter Pathrose Gomez v Sentul Raya Sdn Bhd [2007] 3 CLJ 176, the High Court held that: "The general principle of construction of contracts applies to all contracts whether or not they are building contracts, and in every case the meaning of any clause in a particular contract has to be ascertained by looking at that contract as a whole and giving effect so far as possible to every part of it: City Investment Sdn Bhd v. Koperasi Serbaguna Tanggungan Bhd [1985] 1 MLJ 285, 288. The purpose of doing so is to give effect to the intention of the parties as at the time they entered into the contract, to obtain as between the contracting parties the highest degree of certainty and predictability towards the practical realization of their intentions expressed in the contract as is necessary to make commercial enterprises possible. It is premised upon the assumption that in arriving at their bargain the contracting parties have considered and accepted certain risks in the performance of the contract, and are therefore bound by their promises."

In Kejutaan Holdings Sdn Bhd v Magnum 4D (Perak) Sdn Bhd [2010] 3 MLJ 827, the High Court observed that: "It is a well-established principle sanctioned by the doctrine of sanctity of contract that parties who make agreements must adhere to their terms. The law does not permit excuse from performance save in very rare circumstances. There is no power in any court to interfere with contractual relations lawfully established or to cancel obligations voluntarily assumed.

Similarly, this Court rejects the Defendant's contention that the guards could not hear noises or observe activities occurring at the location of the theft because the factory occupied approximately four acres.

Such matters were within the Defendant's expertise and knowledge when it accepted the assignment. The manner in which security services were to be organised and implemented fell squarely within the Defendant's professional competence.

It was incumbent upon the Defendant to deploy sufficient and effective security measures to address any limitations arising from the size and configuration of the premises. Significantly, it can be seen from D40 (Laporan Kejadian) that, following the theft incident, the Defendant itself recommended the installation of eight additional clocking points, an increase in the frequency of patrols to once every two hours, and the identification of further areas requiring additional spotlights.

These post-incident recommendations demonstrate that the existing security measures were inadequate and that further precautions were both necessary and reasonably foreseeable. Had the security arrangements been sufficient in the first place, there would have been no need for the Defendant to propose such enhancements after the incident.

Moreover, the evidence shows that the Plaintiff's factory was fully enclosed by perimeter fencing and had only a single entry and exit point. Given the controlled nature of access to the premises, this Court is unable to accept the Defendant's suggestion that the theft could have been carried out without any opportunity for detection. The removal of a substantial quantity of heavy industrial cables would necessarily have required movement through or in the vicinity of the only access point to the premises.

This Court is of the considered view that the removal of such a large quantity of cables from a guarded facility is an occurrence which ordinarily would not happen in the absence of some failure in surveillance, monitoring, access control, patrol duties, or other security measures. The fact that such activities went entirely unnoticed by the Defendant's guards is indicative of a serious lapse in the performance of their security duties and therefore raises a prima facie inference of negligence.

In other words, the circumstances surrounding the theft are such that the incident speaks for itself. No satisfactory explanation has been provided as to how a substantial quantity of heavy industrial cables could have been cut, removed and transported out of the Plaintiff's premises without detection by the security personnel specifically engaged to prevent such occurrences. The Court finds as a matter of common sense and probability that the removal of large quantities of heavy cables could not have occurred instantaneously. Such activity would necessarily have taken place over a period of time and would have involved cutting, handling and transportation. The fact that none of these activities were detected by the Defendant's guards strongly points towards negligence on their part. Whether the Defendant and the Third Party have established that the cables were removed by the Plaintiff or its authorised personnel, and whether the Plaintiff's failure to call Edmund as a witness warrants the drawing of an adverse inference pursuant to section 114(g) of the Evidence Act 1950

The Defendant's suggestion that the cables might have been removed by the Plaintiff's own lorries, agents or employees is wholly unsupported by any credible evidence. More importantly, such allegation was never pleaded in the Defence and therefore does not form part of the Defendant's pleaded case.

This contention only surfaced during the course of the trial after evidence emerged that certain vehicles had been permitted access into the Plaintiff's premises during the relevant period. The Plaintiff, through SP1, provided a straightforward explanation for such access. SP1 testified at page 56 of the Notes of Proceedings as follows: "SP1: I also got one employee that come on daytime just in case we got any request, like got visitors or got deliveries. I mean, got all kind of activities that we need the employee then we will ask the employee to do. ..., our SOP during the Covid times, whatever visitors, they first need to, either we inform them or they inform us. There is the security, we will pre-inform them if there is a visitor. If those visitors are invited by us, the security have to tell us that there is a visitor that come without our informing. So, whether we accept, allow them to enter or not~ Mahk: So, from the period of $ 2 1^{st} $ to $ 2 4^{th} $ , did you receive any call from your security regarding any unauthorized person who came over? To the site?

The Court accepts this explanation as entirely consistent with the operational requirements of a factory during the material period, particularly during the Covid- 19 pandemic where only limited personnel were present on site. The mere fact that an employee, namely Edmund, was tasked with attending to visitors, deliveries and operational matters during daytime does not, without more, give rise to any reasonable inference that he was involved in the theft of the cables.

However, having realised the existence of such evidence, the Defendant and the Third Party now seek to invoke section 114(g) of the Evidence Act 1950 based on the Plaintiff's failure to call Edmund as a witness and further speculate that the cables may have been removed by the Plaintiff itself. In the view of this Court, such submission is misconceived.

Firstly, pursuant to section 103 of the Evidence Act 1950, the burden of proving any particular fact lies upon the person who wishes the Court to believe in its existence. If it is now the Defendant's and Third Party's case that the cables were removed by the Plaintiff, its employees or its authorised vehicles, then the burden rests squarely upon them to prove such allegation.

Secondly, section 114(g) is not intended to relieve a party from discharging its own burden of proof. An adverse inference cannot be used as a substitute for evidence. Before such an inference can be invoked, there must first exist a factual foundation supporting the allegation sought to be advanced. In the present case, there is none.

The Defendant and the Third Party cannot merely raise a speculative theory and thereafter attempt to shift the burden onto the Plaintiff to disprove it. If they genuinely believed that Edmund possessed evidence favourable to their case, nothing prevented them from calling him as their witness or securing his attendance by way of subpoena. No attempt was made to do so.

Thirdly, the Court notes that this allegation only emerged after the trial had progressed and after it became apparent that the Defendant faced considerable difficulty explaining how a substantial quantity of cables could have been removed from a fully fenced factory with a single entry and exit point without being detected by the security personnel. The timing of this allegation further diminishes its credibility.

In the circumstances, this Court regards the contention that the cables were removed by the Plaintiff itself as no more than speculation. It is unsupported by pleadings, unsupported by evidence and unsupported by any witness testimony. It appears to be an attempt to construct a defence after the fact rather than a genuine explanation founded upon proven facts.

Accordingly, this Court rejects the Defendant's and the Third Party's submission in its entirety and finds that no adverse inference ought to be drawn against the Plaintiff for not calling Edmund as a witness.

In any event, the Defendant has failed to establish this allegation on a balance of probabilities.

The Defendant and the Third Party submit that the Plaintiff has failed to prove legal ownership of the cables allegedly stolen and therefore lacks the necessary standing to maintain the present claim. Reliance was placed on Leigh & Sillavan Ltd v Aliakmon Shipping Co Ltd [1986] 2 All ER 145; The 'Aliakmon' and American Express Sdn Bhd v Dato Wong Kee Tat & Ors. [1990] 1 MLJ 91. With respect, this Court is unable to agree with such submission.

In the circumstances of the present case, the issue is not whether the Plaintiff has established an indefeasible title to the cables in the strict proprietary sense. Rather, the relevant question is whether the Plaintiff has established, on a balance of probabilities, that the cables existed within the Plaintiff's factory premises prior to the theft and that such cables subsequently went missing whilst the Defendant was entrusted with the responsibility of providing security services.

In the Court's view, once the Plaintiff has demonstrated the existence and presence of the cables within the factory compound prior to the theft, the evidential burden in relation to this issue has been discharged.

Having reviewed the evidence as a whole, this Court is satisfied that the Plaintiff has successfully established the existence of the missing cables.

Firstly, SP3, who was the Plaintiff's Maintenance Manager and the person directly responsible for maintenance, repairs and the relevant machinery within the factory, gave detailed evidence regarding the installation, existence and subsequent disappearance of the cables following the theft incident. The Court finds SP3 to be a competent witness on this issue given the nature of his duties and responsibilities.

Secondly, the photographic evidence, in particular photographs P19 to P29 clearly depicts the cables and cable installations forming part of the Plaintiff's machinery, equipment and electrical infrastructure before and after the theft incident. The photographs provide objective corroboration of SP3's testimony.

Thirdly, the Court notes the evidence of SP1 that the Plaintiff conducted annual inventory and stock verification exercises through third-party auditors every January or February. Whilst the inventory records themselves were not produced before this Court, the evidence nevertheless supports the Plaintiff's contention that the assets and equipment within the factory were periodically monitored and accounted for.

Further, photographs found in the bundles, including those depicting freshly cut copper cables, provide compelling contemporaneous evidence that cables previously installed within the factory had in fact been removed. The Court is therefore satisfied that the existence of the cables prior to the theft has been proven.

More importantly, this Court finds that the Defendant's and Third Party's insistence that the Plaintiff must further prove strict legal ownership of every cable is inconsistent with the very contractual relationship relied upon by the Defendant itself.

The Security Services Agreement expressly required the Defendant to safeguard the Plaintiff's premises and the contents therein. The contractual obligation was not limited only to assets for which the Plaintiff could produce documentary proof of legal title.

The Agreement (Bundle D p. 71-74) expressly refers to the Defendant's obligation to protect the premises and the contents thereof. Clause 16 of the Agreement "The Customer shall for all purposes be and treated as the sole beneficial owner of all property the protection of which is the subject of this contract. Accordingly, if any other person shall in respect of any such property make any claim upon the Company its servants or agents outside or beyond the liability of the Company to the Customer under the terms hereof in respect of such property then the Customer shall indemnify the company and its servants or agents in respect of such claim and all costs thereof."

The Defendant therefore undertook responsibility to safeguard the contents situated within the Plaintiff's factory premises. The contract does not require the Plaintiff, in the event of theft, to first establish strict legal ownership of each individual item before invoking the Defendant's duty of care.

To impose such a requirement would amount to introducing a condition that was never agreed upon by the parties and is unsupported by the terms of the contract itself.

The Court further notes that throughout the material period, the Defendant treated the factory and its contents as assets requiring protection. There was never any suggestion that the cables belonged to a third party or that the Defendant's obligation extended only to property for which formal title documents could be immediately produced.

Accordingly, this Court finds that the Defendant's present argument seeks to impose a burden that goes beyond the parties' contractual bargain.

The authorities relied upon by the Defendant are also distinguishable. In particular, Leigh & Sillavan Ltd v Aliakmon Shipping Co Ltd concerned a highly specific commercial shipping context involving goods in transit where the claimant had not yet acquired legal ownership or possessory title to the goods and sought to sue a third-party carrier in tort.

The present case bears little resemblance to those facts. Here, the cables were physically installed within the Plaintiff's factory premises and formed part of the machinery, electrical systems and operational infrastructure of the factory. The Plaintiff was in actual possession and control of the premises and the contents therein. Unlike the claimant in Aliakmon, the Plaintiff in the current case had clear possessory title over the property situated within its factory and was the very party for whose benefit the Defendant undertook the contractual obligation of security and protection.

For these reasons, this Court finds that Leigh & Sillavan Ltd v Aliakmon Shipping Co Ltd is plainly distinguishable and does not assist the Defendant.

Accordingly, this Court is satisfied that the Plaintiff has proven the existence and presence of the cables within the factory prior to the theft incident and that the Defendant's duty extended to safeguarding those contents. The Defendant's and Third Party's submission that the Plaintiff must further establish strict legal ownership of the cables is therefore rejected.

The Defendant also raised issues concerning the precise date on which the theft occurred.

This Court finds that such issue is immaterial as Plaintiff's witness had explained that he was not sure when exactly the theft occurred but he is claiming losses over that period. See page 16-17 of the Notes of Proceeding.

Whether the theft occurred on 21 June 2021, 23 June 2021, or over a period spanning those dates, the undisputed fact remains that the theft took place during the period in which the Defendant was responsible for providing security services at the Plaintiff's premises.

The Defendant's duty of care remained operative throughout the entirety of the relevant period. In the circumstances, any discrepancy regarding the precise date of the theft is not material and does not affect this Court's finding on liability. What is material is that the loss occurred whilst the Plaintiff's premises were under the Defendant's security supervision and control.

This is a civil action founded on negligence and not a criminal prosecution. Unlike a criminal charge, where particulars such as the exact date and time of the alleged offence may be of critical importance to ensure that an accused person is not deprived of the opportunity to advance a defence of alibi, the present proceedings concern the determination of liability on a balance of probabilities. The Court is therefore concerned with the substance of the evidence and whether the theft occurred during the period when the Defendant owed and was required to discharge its duty of care to the Plaintiff.

In the present case, regardless of whether the theft occurred on 21 June 2021, 23 June 2021, or over several days in between, the Defendant remained the party entrusted with the responsibility of safeguarding the Plaintiff's premises. Consequently, the issue of the exact date of the theft does not assist the Defendant and does not detract from the Court's finding that the Defendant's negligence materially contributed to the Plaintiff's loss.

Taking into consideration: a. the admissions made by the Defendant's own witness regarding non-compliance with SOP; b. the failure to detect the covering of CCTV cameras; c. the failure to conduct and document proper patrols; d. the absence of guards from their designated stations; e. the Defendant's failure to call material witnesses or produce documentary evidence capable of rebutting the Plaintiff's evidence; f. the adverse inference arising under section 114(g) of the Evidence Act 1950; g. the Defendant's prior knowledge of the security risks before accepting the appointment; and h. the circumstances surrounding the theft; this Court is satisfied that the Plaintiff has proven, on a balance of probabilities, that the Defendant breached its duty of care and that such breach materially contributed to the loss suffered by the Plaintiff.

Accordingly, the Court finds the Defendant liable in negligence and judgment is entered in favour of the Plaintiff. Additional issue raised by the Defendant and Third Party: Whether the Plaintiff's statement of "no objection" at the commencement of trial constituted a clear and unequivocal admission of the contents of Bundle I as agreed Part A documents, thereby binding the Plaintiff to the truth and correctness of those documents despite its pleaded case alleging the Defendant's negligence.

Both the Defendant and the Third Party submitted that the letter at pages 11-12 of Bundle I, issued by the Third Party's insurer, is material to the determination of this issue. In particular, paragraph 11 of the said letter states that: "There was no evidence of negligence on the part of your guard ..."

It was contended that, by virtue of the Plaintiff's statement of "no objection" to Bundle I being admitted as agreed Part A documents, the Plaintiff is bound by the contents of the letter, including the insurer's finding that there was no evidence of negligence on the part of the Defendant's security guards.

The Court has carefully considered the Plaintiff's Supplemental Written Submission dated 11.06.2026 as well as the Third Party's reply thereto.

The principal issue concerns the classification of Bundle I, being the Third Party's Bundle of Documents, and whether the statement "I have no objection" uttered by learned counsel for the Plaintiff at the commencement of trial amounted to a concession that the entirety of Bundle I was agreed and admitted as Part A documents.

Having considered the Notes of Proceedings as a whole, this Court is unable to accept the Third Party's contention.

Firstly, the Court is mindful that the Plaintiff's entire case against the Defendant is founded upon the allegation that the Defendant had failed to exercise reasonable care in the discharge of its security obligations. Bundle I contain documents generated between the Defendant and the Third Party insurer and includes material which is plainly adverse to the Plaintiff's case.

In those circumstances, it would be wholly improbable that the Plaintiff, while actively prosecuting its claim premised upon the Defendant's negligence, simultaneously intended to concede the truth and correctness of documents which substantially undermine that very allegation. Had the Plaintiff indeed admitted the contents of Bundle I without qualification, much of the factual dispute ventilated during the trial would have become unnecessary. The Court agrees with the Plaintiff that such a construction would render substantial portions of the trial redundant.

Secondly, Bundle I was not a bundle generated by the Plaintiff. It consisted primarily of communications and documents exchanged between the Defendant and the Third Party. The fact that the Defendant and the Third Party may have agreed to the contents of those documents cannot automatically bind the Plaintiff. An agreement between two parties as to the authenticity or contents of their own documents does not necessarily amount to an admission by another party whose interests are adversely affected by those documents.

The Court is of the view that, at its highest, the Plaintiff's statement that it had "no objection" can only reasonably be construed as an absence of objection to the procedural inclusion of Bundle I as an agreed bundle of documents. Such a statement cannot, without more, be elevated into a clear, unequivocal and informed admission that every statement contained in Bundle I was true, accurate and accepted by the Plaintiff.

Thirdly, even assuming for the sake of argument that there was some ambiguity arising from the exchange recorded in the Notes of Proceedings, the Court must examine the surrounding circumstances and the conduct of the parties throughout the trial. The Plaintiff consistently challenged the Defendant's position regarding negligence and relied upon evidence which was inconsistent with the contents of certain documents found in Bundle I.

The Plaintiff sought to rely on additional email correspondence exchanged between the parties (see Bundle F, pages 1-13 - ID11) concerning the adjuster's findings to demonstrate its dissatisfaction with, and dispute of, those findings. The Defendant nevertheless objected to the admission of those documents and they were accordingly placed under Part C, the Plaintiff ultimately failed to satisfy the applicable rules of admissibility, with the result that the documents were not admitted into evidence.

Nevertheless, notwithstanding the inadmissibility of those documents, the Plaintiff's attempt to adduce the said email correspondence is wholly inconsistent with the Defendant's contention that the Plaintiff had accepted the truth or correctness of the contents of the insurer's letter in Bundle I. Had the Plaintiff truly accepted the adjuster's findings, there would have been no reason for it to seek to adduce the email correspondence evidencing its dissatisfaction with, and dispute of, those findings. The Court therefore finds that the Plaintiff never made any clear and unequivocal admission of the contents of Bundle I.

More importantly, this Court is guided by the well-established principle that a litigant ought not to be deprived of a substantive right merely by reason of an inadvertence, mistake or oversight on the part of counsel, unless such error has occasioned irreparable prejudice to the opposing party.

In the present case, no such prejudice has been demonstrated. Neither the Defendant nor the Third Party was misled by the Plaintiff's statement of "no objection". On the contrary, both parties fully ventilated their respective cases and advanced comprehensive submissions to contend that there was no negligence on their part. It cannot therefore be said that they were deprived of the opportunity to address the issue or that the manner in which they conducted their cases would have been materially different.

Indeed, had they genuinely believed that the Plaintiff had unequivocally admitted the truth of the adjustor's findings, there would have been little necessity for them to vigorously contest the issue of negligence throughout the trial. Instead, both parties adduced evidence, cross-examined witnesses, and advanced detailed submissions to establish that the Defendant had not been negligent. This conduct is wholly inconsistent with the contention that they had understood the Plaintiff's "no objection" statement to constitute a binding admission of the truth of the contents of Bundle I.

Accordingly, this Court is of the considered view that the dispute ought to be determined on its substantive merits rather than by shutting out the Plaintiff on a technical or procedural point. The administration of justice is better served by resolving the real issues in controversy between the parties than by treating an inadvertent procedural omission as a conclusive admission of the truth of the contents of Bundle I.

Hence, even if the Court were to assume that counsel for the Plaintiff had failed to object with sufficient clarity during the marking exercise, such omission, viewed in the context of the entire trial, would not justify a finding that the Plaintiff had abandoned a central plank of its pleaded case. The Court is not prepared to punish the Plaintiff for what may have been no more than an inadvertent procedural oversight by counsel.

For these reasons, the Court rejects the Third Party's contention that Bundle I must be treated as a Part A bundle binding upon the Plaintiff in respect of all its contents. The strongest point, in my view, is not whether Bundle I should technically be Part A or Part B, but that there was never any clear, unequivocal and informed concession by the Plaintiff that the Defendant was not negligent. A court should be slow to infer such a concession from a brief procedural exchange, particularly where the entire conduct of the trial demonstrates the exact opposite. QUANTUM OF LIABILITY issue whether the Plaintiff has proved the quantum of liability or its special damages

Having found that the Defendant was negligent, the next issue that arises is whether the Plaintiff has successfully proven the quantum of loss claimed.

It is trite law that special damages must not only be specifically pleaded but must also be strictly proved (Ong Ah Long v Dr. S Underwood [1983] 2 MLJ 324; Johore State Economic Development Corp v Queen Bee Sdn Bhd [1995] 4 MLJ 371; Karumas Development Sdn Bhd v Pollution Engineering (M) Sdn Bhd [2025] CLJU 2509 referred). The burden lies upon the Plaintiff to establish, through admissible and credible evidence, the actual loss suffered and the amount claimed. Mere assertions, estimates or approximations are insufficient.

This Court agrees with the submissions of the Defendant and the Third Party that the Plaintiff has failed to discharge this burden in respect of the sum of RM352,082.00 claimed.

The Plaintiff's claim is primarily based on an estimated cost schedule appearing at pages 24 and 25 of Bundle F. However, upon careful scrutiny of the evidence, numerous deficiencies emerge, rendering the reliability and accuracy of the computation relied upon by the Plaintiff highly questionable.

Firstly, several items in the computation were purportedly derived from quotations issued by companies named Idearnech, Nusajaya, Weldstrong and revised quotations from Minda. However, the relevant quotations themselves were never produced before this Court. In the absence of those source documents, the Court is unable to verify the basis upon which the figures were derived.

Secondly, with regard to certain items said to be based on quotations from Onealpha, SP3 himself candidly admitted during cross-examination that he was unable to confirm whether the estimated figures were accurate. Such evidence inevitably diminishes the evidential value of the computation relied upon by the Plaintiff.

Thirdly, several items were said to have been based on previous purchases made by the Plaintiff. However, no purchase orders, invoices or supporting documents were produced to substantiate those figures. The Court is therefore left with bare assertions unsupported by documentary evidence.

Fourthly, the evidence reveals discrepancies between the figures appearing in certain quotations and the amounts ultimately adopted in the Plaintiff's computation. In relation to the Gantry Crane items, SP3 acknowledged that there were differences between the quotation figures and his own calculations. No satisfactory explanation was provided for these discrepancies.

More importantly, the Court notes that many of the quotations relied upon by the Plaintiff were merely marked for identification ("ID") and were never formally admitted as exhibits. Invoices documents from page 83-94 of Bundle D which were categorised under Part C remain as ID 6-ID10 after conclusion of the trial. It is well established that documents marked for identification do not constitute evidence unless and until they are properly proven and admitted as exhibits. Consequently, such documents cannot be relied upon by the Court in determining the quantum of damages.

The cumulative effect of these deficiencies is that the Court is unable to ascertain with any degree of certainty the accuracy of the Plaintiff's computation of RM352,082.00.

The Court further agrees with the Defendant's and Third Party's submission that there is a fundamental distinction between an estimated loss and an actual expenditure incurred. Even assuming that the estimated figures were accurate, the Plaintiff has failed to adduce evidence demonstrating that it actually incurred the expenditure now claimed. No payment vouchers, receipts, invoices, bank records or other documentary evidence were produced to establish that the Plaintiff had in fact spent RM352,082.00 on repairs, replacement works or the purchase of replacement cables.

In other words, the Plaintiff has not proven that the sum claimed represents an actual loss incurred as opposed to a projected or estimated cost. This Court is mindful of the authorities cited by the Third Party, including Karumas Development Sdn Bhd v Pollution Engineering (M) Sdn Bhd, which reiterate the settled principle at page 165 that: "[27] Even assuming that liability could be established, the plaintiff has nonetheless failed to prove that it made actual payment of the sums claimed. The law is settled that special damages must be supported by clear proof of actual expenditure. [28] The mere production of quotations is insufficient to sustain a claim for special damages. A claimant must produce cogent evidence showing that the expenditure was in fact incurred. Without such proof, the claim cannot succeed. [29] In Tenaga Nasional Bhd v Big Man Management Sdn Bhd, the Court of Appeal observed that in order to justify a claim for special damages, there must be evidence of a credible paper trail to show that payment was made."

As observed in those authorities, it is insufficient for a party to merely produce estimates, quotations or computations without establishing, through credible evidence, that the loss was actually suffered and that the amount claimed is accurate.

Having considered the entirety of the evidence, this Court finds that while the Plaintiff has succeeded in establishing liability against the Defendant, the Plaintiff has failed to prove the specific sum of RM352,082.00 claimed as special damages. Accordingly, the claim for RM352,082.00 cannot be allowed. Whether The Defendant's Liability Is Limited to RM10,000.00

Having found that the Defendant was negligent in the discharge of its security duties, the next issue for determination is whether the Defendant's liability is contractually limited to RM10,000.00 pursuant to the terms of the Security Services Agreement.

The Plaintiff had pleaded at Paragraph 12 in Jawapan Terpinda Kepada Pembelaan Terpinda (pg. 22 of Bundle C) that the clauses in the said Agreement is unreasonable and not fair to the Plaintiff and there was unequal bargaining power. The Plaintiff submits that the limitation clauses ought not to be enforced. However, after considering the pleadings, evidence and submissions of parties, this Court is unable to agree with the Plaintiff on this issue.

The evidence before this Court reveals that this was not the first occasion on which the parties had entered into such a security arrangement. The evidence establishes that substantially similar agreements containing the same limitation clauses had been executed between the parties on previous occasions. Significantly, no objection, dissatisfaction or reservation was ever expressed by the Plaintiff regarding these clauses either before execution, during the subsistence of the agreements, or even after the occurrence of the theft. The Plaintiff conceded that it continued to engage the Defendant's services even after the theft had occurred.

This Court finds that both parties are corporate entities dealing at arm's length and on equal commercial footing. The Plaintiff has failed to establish that the security services agreement was effectively non-negotiable, that it was placed in a position of substantially weaker bargaining power, or that the Defendant enjoyed such a dominant bargaining position as to deprive the Plaintiff of any meaningful opportunity to negotiate the terms of the contract.

Further, the Plaintiff has failed to demonstrate that it had no reasonable alternative but to contract with the Defendant. On the contrary, the Court is satisfied that the Plaintiff had access to a range of security service providers in the market and was at liberty to engage any provider of its choosing. Notwithstanding the occurrence of the theft, the Plaintiff elected to continue utilising the Defendant's services.

In the circumstances, there is no evidence that the Defendant exploited any alleged inequality of bargaining power or took advantage of a significantly weaker party to procure a harsh, oppressive, or unconscionable bargain. Rather, the evidence demonstrates that both parties were fully aware of the contractual terms and voluntarily entered into the agreement.

Applying the principles enunciated in Saad Marwi v Chan Hwan Hua & Anor [2001] 3 CLJ 98, this Court finds that the Plaintiff has failed to establish any significant disparity in bargaining power, any absence of meaningful choice, or any unconscionable conduct on the part of the Defendant that would justify the Court's intervention. Accordingly, the Plaintiff's contention founded on unequal bargaining power is without merit and must be rejected.

The Court notes that the challenge to the limitation clauses surfaced only after the commencement of the present proceedings. The Defendant's witness i. e. SD1 had testified as follows: "Q: Do you agree that the Plaintiff company never raised any issue about this clause (limiting liability of Defendant to RM10,000.00)? A: Yes. Q: If the Plaintiff did not agree with this clause (limiting liability of Defendant to RM10,000.00), would your company have entered into this Agreement with the Plaintiff company? A: No. Q: Would I be right to say that the Plaintiff company never raised any issue about this clause at all until this claim was filed in court?

In the circumstances, the Court finds merit in the Defendant's contention that the Plaintiff's present objection is an afterthought.

The evidence also shows that the Plaintiff voluntarily executed the agreement and was aware of its contents. There is no evidence of fraud, misrepresentation or concealment on the part of the Defendant. Accordingly, the ordinary principle that a party who signs a contractual document is bound by its terms becomes applicable.

More importantly, the limitation clauses are expressed in clear, unambiguous and comprehensive language. Clause 5(i) of the Agreement provides: "The Company shall, so far as concerns any loss suffered by the Customer through burglary, theft, fire or any other cause ... be liable only if and so far as such loss is caused by the sole negligence of the Company's employees acting within the course of their employment."

Thus, the parties expressly contemplated that liability could arise even in cases involving negligence resulting in theft. The extent of such liability is then expressly limited by Clause 7(b), which provides: "Not exceeding a maximum of Malaysian Ringgit Ten Thousand (10,000.00) for the consequences of any incident involving fire, theft, or any other cause of liability in the Company under the terms hereof."

The wording of Clause 7(b) is clear. It does not merely limit liability arising from breach of contract. Rather, it applies to any incident involving theft or any other cause of liability contemplated under the agreement.

The limitation is further reinforced by Clause 9(i), which states: "The potential losses that might be caused or be alleged to be caused by the failure by the Company or its servants or agents to perform any of the acts or said services, or to take any particular precaution or care (whether as a result of breach of contract or negligence)... are so great in proportion to the sums which can reasonably be charged hereunder by the Company that the Company and its servants or agents cannot and will not assume any liability whatever in respect of any loss or damage howsoever caused outside or beyond the express provisions of these Conditions."

Clause 9(ii) further provides: "The losses that might be sustained in consequence of any negligence or breach of contract or other wrongful act whatever on the part of the Company its servants or agents must, if the Customer requires such cover, be covered by insurance to be obtained separately by the Customer..."

The parties therefore expressly agreed that losses arising from negligence, breach of contract or other wrongful acts exceeding the agreed contractual allocation of risk were to be separately insured by the Plaintiff if additional protection was required.

Most significantly, Clause 9(iii) expressly provides: "The liabilities which the Company is willing to assume and discharge are set out above, but the Company will not and cannot accept liabilities beyond them."

Similarly, Clause 24 reiterates: "The Customer is fully aware that the liability of the Company herein is limited only to certain types of loss and damages. Further the Company, where liability has been proven will only be liable to the amounts stated above."

When Clauses 5,7,9 and 24 are read together, the contractual intention of the parties is unmistakably clear. The parties expressly contemplated situations involving negligence and theft, and agreed that the Defendant's liability, even where established, would be subject to the contractual limitation stipulated in the agreement.

This Court is mindful that courts should not re-write contracts freely entered into by commercial parties. The role of the Court is to interpret and enforce the bargain struck by the parties, not to substitute it with a bargain that the Court considers more reasonable. In Sotella Fund Pte Ltd v Bamboo Quest Sdn Bhd & Anor [2025] CLJU 2335, the High Court stated as follows: [74] As observed by the Federal Court in City Investment Sdn Bhd v Koperasi Serbaguna Cuepacs Tanggungan Bhd [1985] I MLJ 285 cited by the Plaintiff, the cardinal rule in contractual interpretation is that courts must be bound by the four corners of the agreement and must give effect to the plain meaning of the words ... [75] In Michael C Solle v United Malayan Banking Corporation [1986] 1 MLJ 45, cited by the Plaintiff, the court emphasized that parties are bound by the terms of the contract that they have entered into, and the intentions of the parties are to be gathered from the language used. They are presumed to have intended what they said. The duty of the court is to give effect to the clear intention of the parties as expressed in the agreement. [76] The Court of Appeal in Setapak Heights Development Sdn Bhd v Tekno Kota Sdn Bhd [2006] 3 MLJ 131, as cited by the Plaintiff, established that if the words are clear, unambiguous and in unmistakable language, there is very little the Court has to do. The Court must give effect to the plain meaning of the words however much it may dislike the result ... [77] Similarly, in Syarikat Binaan Utara Jaya (a firm) v Koperasi Serbaguna Sungai Gelugor Bhd [2009] 2 MLJ 546, the Court of Appeal held that the words used in a contract must be interpreted literally and without the aid of the principles of natural justice. The Court cannot construe words in an entirely different sense from their natural and grammatical meaning, and must give effect to every provision of the contract to avoid superfluity. [80] The Federal Court in Berjaya Times Square Sdn Bhd v M Concept Sdn Bhd [2010] 1 MLJ 597, adopting the principle in Investors Compensation Scheme (supra) confirmed that the court has no power to improve upon the instrument being construed and cannot introduce terms to make it fairer or more reasonable ...”

In Azura Ibrahim v Yuan Trading & Agency Sdn Bhd [2025] CLJU 2699, the High Court stated as follows: [76] As established by Mairin Idang J in Desa Cargill Sdn Bhd v Lo So Jung [2021] 7 MLJ 766, a party who executes a written agreement is generally bound by its terms, regardless of whether they fully understood them: "Now, it had been decided that illiteracy of those signing is not a defence, neither their failure to read or that they were careless or not bothered to find out the contents of a document, or that they relied completely upon others to complete the same; they would still be held responsible for their own actions and are prevented from denying that the contents of the document do not bind them" [77] Thus, unable to understand the language, terms or content of the signed documents does not render that party to be free of the terms agreed upon. A party who signed an agreement is bound by it unless there is an element of fraud or misrepresentation ...

In Timur Raya Resources Sdn Bhd v Ahmad Kamel Hj Mat & 3 Others [2025] CLJU 2808, the High Court stated as follows:

Manakala Mahkamah Persekutuan dalam kes SPK Membranes Switch Sdn Bhd v Kerajaan Negeri Selangor [2016] 1 MLRA 1 telah memutuskan seperti berikut: "[45] ... the court does not make a contract for the parties. The court will not even improve the terms which the parties have made for themselves, however desirable the improvement might be. The court's function is to interpret and apply the contract which the parties have made for themselves. If the express terms are perfectly clear and free from ambiguity, there is no choice to be made between different possible meanings; the clear terms must be applied even if the court thinks some other terms would have been suitable ...”

Having regard to the clear language of the Agreement, the prior course of dealings between the parties, and the Plaintiff's acceptance of substantially similar agreements on previous occasions, this Court finds that the limitation of liability clause is valid and binding upon the parties.

Having considered the foregoing, this Court notes that the Plaintiff, in reliance on CIMB Bank Bhd v Anthony Lawrence Bourke & Anor [2019] 2 CLJ 1 further contends that the said limitation clause contravenes section 29 of the Contracts Act 1950 and is therefore void. For ease of reference, section 29 of the Contracts Act 1950 is reproduced below: "Agreements in restraint of legal proceedings void

Every agreement, by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void to that extent."

This Court finds that the Plaintiff's reliance on CIMB Bank Bhd v Anthony Lawrence Bourke & Anor [2019] 2 CLJ 1 is misplaced, as that case is clearly distinguishable on its facts. As observed by the Federal Court, all the courts below had found that the impugned Clause 12 in that case effectively restricted the plaintiffs from bringing any claim against the defendant for loss and/or damage arising under the contract. The clause operated to negate the plaintiffs' right to pursue an action for damages and encompassed all forms of claims, whether arising from breach of contract or negligence.

In those circumstances, the Federal Court held that Clause 12 amounted to an absolute restriction on the plaintiffs' right to enforce their legal rights and was therefore void pursuant to section 29 of the Contracts Act 1950.

In the present case, however, the impugned clause does not extinguish or prohibit the parties from enforcing their rights under the Agreement. Rather, it merely limits the quantum of damages recoverable in the event liability is established. The Plaintiff remains at liberty to commence proceedings and seek relief against the Defendant notwithstanding the existence of the limitation clause.

Accordingly, this Court is satisfied that the clause in question is a limitation of liability clause and not an exclusion of the right to sue. It does not amount to an absolute restraint of legal proceedings and therefore does not fall within the category of agreements contemplated and prohibited by section 29 of the Contracts Act 1950.

For the foregoing reasons, the Plaintiff's contention that the limitation of liability clause is void under section 29 of the Contracts Act 1950 is without merit and is accordingly rejected.

Accordingly, although this Court finds that the Defendant was negligent and liable for the Plaintiff's loss, such liability is contractually capped pursuant to Clause 7(b) of the Agreement. The Plaintiff is therefore entitled to judgment against the Defendant in the sum of RM10,000.00 only.

The Defendant's counterclaim seeks the recovery of RM58,749.44 for security services provided to the Plaintiff at their Pulau Indah Industrial Park premises, pursuant to an agreement dated 2 September 2021 (Exhibit D18). The Defendant's Counterclaim concerns outstanding service charges for the period from 31.12.2021 to 30.6.2022. The First Defendant, through his witness statement (Enclosure 57 WSSD1), particularly from question 32 onwards, has adduced evidence establishing the basis of the Counterclaim.

The Plaintiff contended that SD1 was not the proper witness to be cross-examined on the Counterclaim, asserting instead that En. Roshan, being the person in charge of the billing and issuance of invoices, ought to have been called. However, it is pertinent to note that all the relevant invoices were included in Part B and admitted into evidence as D42. These invoices can be found at pages 10 to 40 of Bundle E and Bundle H, and constitute the very invoices relied upon in support of the Counterclaim.

The Plaintiff further argued that the Notice of Termination did not state that the termination was occasioned by non-payment. In this regard, the Plaintiff referred to its cross-examination of SD1 at page 335 of the Notes of Proceedings, where the following exchange took place: "S: So, why are you saying that this letter says so? that this termination is because of non-payment? J: Verbal discussion with the client."

This Court is of the considered view that the Plaintiff merely challenged the reason for the termination, namely whether it was due to non-payment, but did not challenge the existence or quantum of the indebtedness itself.

The subsequent cross-examination further demonstrates this point: "S : In this letter no? J: No. My client knew that the termination is due because of non-payment. S: But you never mentioned in this letter? J:No. S: Is there any evidence saying that you told the Plaintiff's that the determination because of non-payment? J: Yes, we told verbally many times. S:Only verbal? J: Many times. We had meeting in their main office in Pulau Indah as well."

There was no suggestion put to SD1 that the invoices were incorrect, that the amounts claimed were not due, or that the Plaintiff had in fact settled the outstanding sums. The Plaintiff's cross-examination was confined solely to the issue of whether the termination was based on non-payment.

Since the Defendant has produced invoices (Exhibit D42) and a summary of the outstanding amount. The Defendant's General Manager (SD1) had also testified to the validity of these debts. The Court notes that these specific invoices and the underlying debt were not effectively challenged or cross-examined by the Plaintiff during the trial. Applying the principle in Wong Swee Chin v PP 1 MLRA 125, the Plaintiff's failure to challenge the evidence relating to the indebtedness amounts to an acceptance of that evidence. Accordingly, there is no genuine dispute as to the Defendant's entitlement to the outstanding service charges.

This court also notes that the Plaintiff resists this counterclaim on the basis that it pertains to a separate contract and a different geographical location from the main suit, which concerns the Iskandar Puteri factory.

However, this Court finds the Plaintiff's objection to the counterclaim on the grounds of "different location" to be procedurally late and legally untenable. It is a matter of record that the Plaintiff did not apply to strike out the counterclaim under Order 18 of the Rules of Court 2012. Had the Plaintiff truly believed that the counterclaim was so distinct as to embarrass or delay the fair trial of the main action, or that it was otherwise an abuse of the court's process to join these two matters, the appropriate remedy was a timeous application for striking out.

By failing to move for such a striking out and instead proceeding to a full trial on both the claim and the counterclaim, the Parties are deemed to have agreed that both causes of action should be dealt with and disposed of within the same trial. To allow the Plaintiff to challenge the inclusion of the Pulau Indah claim only at the submission stage would be to permit an ambush on procedural grounds that have long been waived.

Furthermore, the Plaintiff's argument that the witnesses in charge of the respective sites (Encik Fauzi for the Plaintiff and Mr. Roshan for the Defendant) were not called does not invalidate the counterclaim. While the operational personnel at the sites may differ, the undisputed fact remains that both the claim and the counterclaim involve the exact same legal entities: Oriental Steel Pipe Sdn Bhd as the Plaintiff and United Security Services Sdn Bhd as the Defendant. A company, being a single legal person, is responsible for its liabilities across all its operational branches.

Consequently, as the parties are identical and the Plaintiff failed to challenge the joinder of these actions through the proper procedural channels of Order 18, the counterclaim is found to be properly before this Court and proved on a balance of probabilities.

In the premises, the Defendant's Counterclaim is allowed with costs.

The Defendant, United Security Services Sdn Bhd, brought in Lonpac Insurance Berhad as the Third Party to this suit, seeking indemnity or contribution for any sums the Defendant might be ordered to pay the Plaintiff. The Third Party is the Defendant's insurer under a professional liability policy.

The Third Party's primary defense was that its investigation concluded the Defendant's guards were not negligent; therefore, no liability for indemnity was triggered under the insurance policy. They further argued that the Plaintiff failed to prove its loss "to the hilt," as many quotations were merely marked for identification (ID) and lacked probative value.

Having considered the evidence, this Court has already found that the Defendant was negligent in the performance of its security duties. Notwithstanding its reliance on the adjuster's report, the Third Party did not call the adjuster who prepared that report to testify or to substantiate its conclusion that no negligence had occurred. As such, the contents of the report remain unproven and are incapable of displacing this Court's findings on negligence. Consequently, the Third Party's defense that no negligence occurred is rejected by this Court.

Regarding the quantum of indemnity, the Third Party correctly submitted that the Defendant's liability—and by extension, the insurer's liability—is governed by the four corners of the security agreement. This Court has upheld the validity of Clause 7(b), which caps the Defendant's liability for theft at RM10,000.00.

The Third Party further argued that its own liability to the Defendant is subject to the terms and limits of the insurance policy, which is capped at RM100,000.00. As the Court has determined the Defendant's liability to the Plaintiff is limited to RM10,000.00, this sum falls well within the Third Party's policy coverage.

The Third Party also raised concerns regarding double compensation, noting that the Plaintiff should have obtained its own burglary insurance under Clause 9(ii) of the agreement. However, since the Court has limited the damages to the contractual cap of RM10,000.00, the risk of unjust enrichment is mitigated.

Following the finding of liability against the Defendant in the main suit, the Court hereby allows the Defendant's claim for indemnity against the Third Party.

The Third Party is ordered to indemnify the Defendant for the judgment sum of RM10,000.00 awarded to the Plaintiff, together with the applicable interest and costs

In light of the evidence presented and the applicable law, this Court has reached the following conclusions regarding the three components of this suit:

Main Claim: The Plaintiff successfully proved that the Defendant was negligent in providing security services, leading to the theft at the Iskandar Puteri factory. However, the Court upheld the contractual limitation of liability under Clause 7(b) of the Security Services Agreement. Consequently, judgment is entered for the Plaintiff in the limited sum of RM10,000.00.

Counterclaim: The Defendant's counterclaim for outstanding service fees at the Pulau Indah site is allowed in full for the sum of RM58,749.44, as the debt was proved and the Plaintiff's procedural objections were waived.

Third-Party Proceeding: The Defendant's claim for indemnity against Lonpac Insurance Berhad is allowed. The Third Party is ordered to indemnify the Defendant for the RM10,000.00 judgment sum awarded to the Plaintiff. ORDER FOR INTEREST

The Court further orders that interest at the rate of 5% per annum shall be paid on the judgment sums of RM10,000.00 (Main Claim) and RM58,749.44 (Counterclaim), calculated from the date of this decision until full realization.

The Court hereby makes the following orders as to costs:

For the Plaintiff's Claim: The Defendant shall pay the Plaintiff costs in the sum of RM20,000.

For the Defendant's Counterclaim: The Plaintiff shall pay the Defendant costs in the sum of RM5,000.

For the Third-Party Proceeding: The Third Party shall pay the Defendant costs in the sum of RM5,000. Dated: 1 July 2026 (YONG LEOU SHIN) Judge Session Court Shah Alam Selangor Counsel for the Plaintiff Ho Yuk Yuen, Amirah Najihah Ameruddin & Azirn Akif bin Saiful Bahari Tetuan Y. Y. Ho & Lee Kuala Lumpur Counsel for the Defendant Dato' Mandave Singh Gill & Nasyitah Zafirah binti Salleh Tetuan K. Siladass & Partners Kluang, Johor Counsel for the Third Party Ratha Davi a/p Rada Krisnan Tetuan S. G. Lingam & Co Kuala Lumpur