VIGILANT VENTURES SDN BHD v Lembaga Kemajuan Ikan Malaysia (LKIM) (K-01(NCvC)(W)-391-07/2023)

This appeal arises from the decision of the Alor Setar High Court delivered on 14 June 2023, wherein the learned High Court Judge allowed the Respondent's claim against the Appellant and dismissed the Appellant's Counterclaim with costs of RM30,000.00. Being dissatisfied with the said decision, the Appellant has appealed to this Court.

The factual matrix of this case is largely undisputed, though the parties diverge significantly on the interpretation and legal effect of the agreements entered into between them.

The Respondent (Plaintiff in the High Court) is a statutory body established under the Lembaga Kemajuan Ikan Malaysia Act 1971. The Respondent is the registered proprietor of several parcels of land situated in Pantai Merdeka, Kedah, measuring a total of 128.82 hectares, which formed the site of a fisheries and aquaculture project involving prawn and fish farming and a hatchery centre ("the said Aquaculture Project").

The Appellant (Defendant in the High Court) is a company incorporated under the Companies Act 2016. In 2006, the Appellant approached the Respondent with various proposals to take over and operate the said Aquaculture Project.

By way of letter dated 8 May 2006, the Appellant submitted a privatisation proposal and a strategic collaboration paper to the Respondent, seeking to rehabilitate and operate the said Aquaculture Project. In that proposal, the Appellant made various representations to the Respondent, including that:

Based on these representations, the Respondent by letter dated 9 July 2007 offered to allow the Appellant to take over the operations of the said Aquaculture Project. Pursuant to this offer, the parties entered into two principal agreements:

Under the Collaboration Agreement, the parties agreed to collaborate to realise the proposed business venture, known as the Prawn/Fish Farming and Prawn/Fish Hatchery Centre Project, Pantai Merdeka, Kedah. The Respondent was to provide basic infrastructure facilities on the said land.

The material terms of the Collaboration Agreement included the following: "It is the intention of the parties that this Agreement shall survive for thirty (30) years ("Lease Period") with one (1) year grace period from the date of this Agreement ("Grace Period"). Pending execution of the Lease Agreement, this Agreement shall survive for a minimum period of three (3) years from the date of this Agreement ("the Trial Period") BUT SUBJECT ALWAYS TO the compliance with key performance index as set out by the parties within the Trial Period then this Agreement shall be extended for a term of three (3) years ("the 1st Extension") and thereafter, an automatic extension for a further term of three (3) years ("the 2nd Extension") from the expiry date of the 1st Extension. It is hereby agreed that this Agreement shall be extended for a further term and/or any other extended date as mutually agreed upon by the parties in writing upon expiry of the 2nd Extension and the same is renewable once in every three (3) years up to a maximum of fifteen (15) years ("the Future Extension"). The Trial Period, the 1st Extension, the 2nd Extension and the Future Extension shall collectively be referred to as "the Duration"."

Pursuant to this clause, the specific periods were:

Trial Period: 5 May 2008 to 4 May 2011 (three years);

The 1st Extension: 5 May 2011 to 4 May 2014 (automatic, three years);

The 2nd Extension: 5 May 2014 to 4 May 2017 (automatic, three years); and

Future Extension: after 4 May 2017, subject to mutual written agreement for each three-year term up to a maximum of fifteen years. Prohibition against assignment or subletting (Clause 6.1(h)) [10] Clause 6.1(h) provided that the Appellant shall not: "assign or sublet or part with the possession of or share the occupation or use of the said Lot or any part thereof;" Technology transfer and training (Clause 9) [11] Clause 9 obligated the Appellant to provide training and technology transfer to the Respondent's personnel, with all costs to be borne by the Appellant. Profit guarantee (Clause 10) [12] Clause 10 provided that the profit guarantee for the proposed business venture shall be based on gross sales value of all marine produce sold and delivered ("Gross Income"), to be distributed as follows:

97% of the Gross Income to be retained by the Appellant;

3% of the Gross Income to be paid to the Respondent ("the Profit Guarantee");

The Profit Guarantee to be paid within 30 days from the Appellant's submission of its approved audited accounts to the Companies Commission of Malaysia. The Tenancy Agreement dated 20 February 2014 [13] Following the Collaboration Agreement, the Appellant and Respondent entered into the Tenancy Agreement dated 20 February 2014, which was expressed to be in force for three years from 5 May 2011 to 4 May 2014. Under this agreement:

the Appellant was required to pay rental of RM400.00 per month for each hectare of the said land, payable annually from the date of possession;

the Tenancy Agreement was not renewed after its expiry on 4 May 2014, although the Respondent allowed the Appellant to continue occupying the land throughout the 2nd Extension period under the Collaboration Agreement (i.e., until 4 May 2017);

clauses 8.1 and 8.2 required the Respondent to serve written notice identifying any specific breach and grant the Appellant a prescribed period to remedy such breach before termination could be effected. Post-Agreement Events [14] By letter dated 31 January 2017, the Appellant applied to the Respondent for an extension of the Tenancy Agreement from 5 May 2017. This application was not approved by the Respondent. [15] Upon the expiry of the 2nd Extension on 4 May 2017, the Appellant continued to occupy the said land and paid monthly rental at the same rate. The Respondent accepted these payments. [16] On 13 August 2017, the Respondent conducted a site visit to the said Aquaculture Project and found it to be in an abandoned state and not properly managed by the Appellant. This led to a meeting of the Respondent's Aquaculture Projects Technical Committee. [17] By letter dated 5 October 2017, the Respondent informed the Appellant that:

the Tenancy Agreement and Collaboration Agreement had expired on 5 May 2017;

the Appellant was permitted to continue operations pending any new offer, subject to continued payment of rental; and

the Appellant was required to submit a New Proposal Paper for the operation of the said Aquaculture Project. [18] The Appellant failed to submit the New Proposal Paper within the stipulated time, despite reminders. The new Proposal Paper was eventually submitted and presented on 27 February 2019. During the presentation, the Appellant informed the Respondent of the need to bring in new investors with modern aquaculture technology, as local technology had become outdated. [19] By a letter dated 2 May 2019, the Respondent rejected the New Proposal Paper and gave the Appellant 30 days' notice to deliver vacant possession of the said Aquaculture Project site. [20] The Appellant appealed to the Respondent against this decision by letter dated 10 May 2019, but the appeal was rejected. [21] Subsequently, by a Notice of Demand dated 24 February 2020, the Respondent demanded that the Appellant pay outstanding rental and deliver vacant possession of the said land. The Appellant failed to comply with the Notice of Demand. C. PROCEEDINGS AT THE HIGH COURT The Respondent's Claim [22] The Respondent filed the instant suit in June 2020, seeking, inter alia:

a declaration that the Collaboration Agreement dated 5 May 2008 had ended and/or was void and/or was not binding on the parties;

a declaration that the Tenancy Agreement dated 20 February 2014 had ended and/or was not binding on the parties;

an injunction to restrain the Appellant from bringing in or appointing third parties to conduct any activities on the said land or to operate the said Aquaculture Project;

an order for the Appellant to immediately deliver vacant possession of the said land to the Respondent;

general damages to be assessed arising from the Appellant's negligence and/or failure to implement the said Aquaculture Project;

general damages to be assessed arising from fraudulent misrepresentation and/or misrepresentation and/or fraud committed by the Appellant against the Respondent;

general damages to be assessed arising from the failure of the said Aquaculture Project to achieve production capacity as represented by the Appellant;

general damages to be assessed for the loss of the Respondent's right to enjoy and develop the said land from 1 June 2019 until the date of delivery of vacant possession;

special damages for loss of guaranteed profits by the Appellant at 3% per annum amounting to RM171,804.78 for the years 2014 to 2019;

exemplary damages;

outstanding rental of RM37,640.55 as at 21 December 2019;

interest at 5% per annum; and

costs. The Appellant's Defence and Counterclaim [23] The Appellant, in its Defence, denied the Respondent's claims and asserted, inter alia, that:

the Collaboration Agreement was intended to last for 30 years until 2038, with one year's grace period;

the Appellant had successfully completed the Trial Period, and the Respondent had extended the Collaboration Agreement and entered into the Tenancy Agreement, evidencing satisfaction with the Appellant's performance;

the Appellant had paid all rentals, profit guarantees and other sums due to the Respondent;

the Appellant had expended substantial sums to rehabilitate and improve the project site, which was handed over in an unkempt condition;

the Respondent was fully aware of and had consented to the Appellant's collaboration with third parties, including Oakdale Aquatech Sdn. Bhd. and Dongjia Inc.;

the Respondent had failed to comply with its obligations under the Collaboration Agreement, including failing to provide proper infrastructure, failing to form a Management Committee, and failing to provide a new agreement as promised;

the allegations of fraudulent misrepresentation were baseless and an afterthought, as they were never raised throughout the 9 year duration of the project and only surfaced during trial. [24] The Appellant also filed a Counterclaim seeking, inter alia:

a declaration that the Collaboration Agreement dated 5 May 2008 remains in force until 4 May 2038;

an order that the Appellant be permitted to continue the said Project until 4 May 2038;

alternatively, if the Collaboration Agreement is terminated, general damages to be assessed;

exemplary damages;

interest at 5% per annum; and

costs. The High Court Decision [25] After a full trial with three witnesses for the Respondent and two witnesses for the Appellant, the learned High Court Judge:

allowed the Respondent's claim against the Appellant;

dismissed the Appellant's Counterclaim with costs of RM30,000.00;

granted declarations that the Collaboration Agreement and Tenancy Agreement had expired and/or were void and/or not binding;

ordered the Appellant to deliver vacant possession within 7 days, failing which the Respondent was permitted to enter and take over the project site;

awarded global general damages of RM2,400,000.00;

awarded special damages of RM171,804.78 for loss of guaranteed profits from 2014 to 2019;

dismissed the claims for exemplary damages and outstanding rental. [26] Regarding the validity of the contracts, the High Court found that both the Collaboration Agreement and the Tenancy Agreement were lawfully and voluntarily entered into by the parties without any element of fraud or misrepresentation at the time of formation. Consequently, both agreements were valid, enforceable, and binding on the parties according to their terms. [27] On the crucial issue of the contract duration, the High Court interpreted Clause 4 of the Collaboration Agreement. It held that the agreement was not automatically for a period of 30 years. Instead, it consisted of a specific structure: an initial three-year trial period (2008-2011), a first automatic three-year extension (2011-2014), and a second automatic three-year extension (2014-2017). Crucially, after the expiry of this second extension on 4 May 2017, any further extension was subject to the mutual written agreement of both parties for subsequent three-year terms, up to a maximum of 15 years. The Tenancy Agreement, which ran from 2011 to 2014, was not renewed after its expiry, and the Defendant's subsequent occupation was based on the second extension of the Collaboration Agreement. [28] The High Court found that the Respondent had successfully proven that the Collaboration Agreement was not extended or renewed after it expired on 4 May 2017. This decision was communicated to the Appellant in a Technical Committee meeting and via a letter dated 5 October 2017. The Appellant's subsequent appeal to renew the agreement was rejected by the Respondent. At this juncture, the High Court noted that the Appellant's act of appealing the non-renewal was an acknowledgment that the agreement had indeed expired and was not being extended. [29] The High Court also found that the Appellant had breached the terms of the Collaboration Agreement. These breaches included: subletting the project site to a third party, Oakdale Aquatech Sdn. Bhd., without the Respondent's consent (in violation of Clause 6.1(h)); failing to provide training to Respondent's staff as required under Clause 9; and failing to make the annual 3% profit guarantee payment to the Respondent as stipulated in Clause 10, having made only two such payments in nine years. [30] Furthermore, the High Court found that the Respondent had proven fraud and misrepresentation by the Appellant. The representations made by the Appellant in its initial business proposal regarding its expertise, experience, and network in high-technology aquaculture, were found to be untrue. The Appellant lacked the professed expertise, which ultimately led it to engage a third party to run the project, and some of the partner companies named in its proposal did not exist. This misrepresentation induced the Respondent to appoint the Appellant to operate the project. [31] The High Court rejected the Appellant's defence and counterclaim. It found that the Appellant's claims of the Respondent's failures (i.e., to provide infrastructure or form a management committee) were unproven and did not provide a meritorious defence. The Appellant's argument that the agreements were intended to last 30 years was rejected by the High Court based on the clear wording of Clause 4. [32] In its final judgment, the High Court granted the following remedies:

declarations that both the Collaboration Agreement and the Tenancy Agreement had expired and were no longer binding;

an injunction restraining the Appellant from bringing in third parties;

an order for the Appellant to immediately vacate the premises;

global general damages of RM2.4 million for the claims of negligence, misrepresentation, and loss of use of the land; special damages of RM171,804.78 for the loss of the 3% guaranteed profit from 2014 to 2019; and interest at 5% per annum. [33] The claims for exemplary damages and outstanding rent were dismissed. The Appellant's counterclaim was dismissed in its entirety. D. ANALYSIS AND FINDINGS [34] Having set out the factual background, this Court will now proceed to consider the merits of the appeal based on the grounds raised in the Appellant's Written Submissions, bearing in mind the need for appellate intervention only where the learned High Court Judge has erred in law or fact, or where his findings are plainly wrong or against the weight of the evidence. [35] This appeal raises the following principal issues:

whether the learned High Court Judge made contradictory or inconsistent findings regarding fraud, misrepresentation, breach and expiry;

whether the learned High Court Judge erred in interpreting Clause 4 of the Collaboration Agreement, specifically whether the agreement expired on 4 May 2017;

whether the learned High Court Judge erred in awarding general damages of RM2.4 million and special damages of RM171,804.78; and

whether the learned High Court Judge erred in dismissing the Appellant's counterclaim. Issue 1: Whether the learned High Court Judge erred in making contradictory and inconsistent findings regarding the Collaboration Agreement. [36] The Appellant submitted that there was contradictory and inconsistent findings pertaining to contract expiry, misrepresentation and fraud by the learned High Court Judge. It was argued that the High Court had found the two agreements had been lawfully and voluntarily entered into by parties, yet the High Court later found that there existed fraud and misrepresentation by the Appellant which had induced the Respondent into appointing the Appellant to operate the Project. [37] In this regard, the Appellant argued that the findings of the learned High Court Judge were mutually exclusive and conflicting. [38] The High Court had further erred, according to the Appellant, when the High Court had found the Collaboration Agreement had expired and/or was void and/or non-binding. Reference was made to section 66 of the Contracts Act 1950 and the Federal Court case of Tan Chee Hoe & Anor v Code Focus Sdn. Bhd. [2014] 3 MLJ 301. [39] The Appellant further contended that there were contradictory and inconsistent findings by the High court pertaining contract expiry and breach. This contention was substantiated by paragraph 63 of the High Court's Grounds of Judgement which stated that the Collaboration Agreement had expired on 4 May 2017 and was no longer valid as of 5 May 2017. The High Court had also found that the Appellant had breached the terms of the Collaboration Agreement which therefore entitled the Respondent to terminate the Collaboration Agreement. [See paragraphs 76 of the Grounds of Judgment]. It is the Appellant's submission that the non-continuation of the Collaboration Agreement is an expiry of effluxion of time, therefore cannot be considered a termination due to a breach. To support this contention that the decision of the High Court ought to be set aside due to contradictions, the Appellant cited the case of Eversuccess Sdn. Bhd. v Syarikat Takaful Malaysia Berhad & Anor [2016] CLJU 1542. [40] Furthermore, the Appellant argued that no written notice of default or termination was ever issued by the Respondent against the Appellant. The Respondent did not issue a letter of termination as per clause 17 of the Collaboration Agreement which required a written notice of termination. [41] The Respondent had argued that there was breach of contract by the Appellant. It is the Appellant's position that any claims of breaches of contract was made belatedly and an afterthought. Hence, it was submitted by the Appellant that there was absence of any contractual breach/es by the Appellant. [42] The High Court had found breaches by the Appellant in the form of failure by the Appellant to meet the Key Performance Index (KPI) as a justification to terminate the Collaboration Agreement. The KPI was applicable during the three-year probationary period. It was submitted that the High Court had erred in this regard of finding the KPI as a valid and continuing obligation post 2011. [43] The Respondent, on the other hand, submitted that the learned High Court Judge had not erred when his Lordship found the Collaboration Agreement had expired and did not bind parties after 4 May 2017. Reference was made to clause 4 of the Collaboration Agreement which provides for the duration of the Collaboration Agreement for 30 years is subject to further terms in the Collaboration Agreement. See also: Nortel Networks (Asia) Ltd & Ors v Sapura Holdings Sdn. Bhd. & Anor [2012] 8 CLJ 296; and The New Straits Times Press (Malaysia) Bhd. v Aideah Communication Sdn. Bhd. [2025] 5 CLJ 661. [44] Founded on these authorities, the Respondent submitted that extension of the Collaboration Agreement (after the first automatic extension) shall be by way of the written agreement between parties. [45] In his Grounds of Judgment, the learned High Court Judge had stated that the two agreements had been lawfully and voluntarily entered into by parties. Nonetheless, at paragraphs 77 and 78 of the High Court Grounds of Judgment, the High Court found that there existed fraud and misrepresentation by the Appellant which had induced the Respondent into appointing the Appellant to operate the Project. We reproduced the High Court's Grounds of Judgment as follow:

Kelima, berdasarkan keterangan dalam Mahkamah ini, Mahkamah ini berpuas hati dan mendapati bahawa Plaintif telah berjaya membuktikan secara konklusif, kukuh dan afirmatif bahawa wujudnya fraud dan salah nyata oleh Defendan semasa membuat representasi kepada Plaintif mengenai Business Proposal tersebut sehingga mendorong Plaintif untuk melantik Defendan mengoperasikan Projek Akuakultur Pantai Merdeka tersebut, iaitu antara lain seperti yang berikut:

Defendan sebenarnya langsung tidak mempunyai kepakaran, pengalaman, pengetahuan dan keupayaan dalam bidang berkaitan dengan akuakultur serta penternakan ikan dan udang menggunakan sistem teknologi tinggi dan hasil marin. Oleh kerana itu, Defendan telah melantik pihak ketiga, iaitu syarikat Oakdale Aquatech Sdn. Bhd. untuk melaksanakan Projek Akuakultur Pantai Merdeka tersebut tanpa kebenaran dan persetujuan Plaintif; dan

Defendan sebenarnya tidak mempunyai sokongan rangkaian niaga, teknologi dan pengurusan bagi menjayakan Projek Akuakultur Pantai Merdeka tersebut. Ini kerana, nama syarikat rakan kongsi yang dinyatakan dalam Business Proposal tersebut sebenarnya tidak wujud seperti Fika Marketing Sdn. Bhd., KNR Sdn. Bhd. dan Itikad Bakti Sdn. Bhd..

Oleh itu, pada pendapat Mahkamah ini, tindakan Defendan membuat representasi Business Proposal yang tidak benar tersebut kepada Plaintif sehingga mendorong Plaintif untuk melantik Defendan untuk mengoperasikan Projek Akuakultur Pantai Merdeka tersebut adalah terjumlah kepada fraud dan salah nyata dan ia memberikan hak kepada Plaintif untuk menamatkan dan tidak melanjutkan Collaboration Agreement tersebut.” [46] Although the High Court stated that the agreements were lawfully and voluntarily entered into, it also found that fraudulent misrepresentation induced the Respondent to appoint the Appellant. These findings are not necessarily contradictory because a contract induced by fraud remains valid until rescinded. However, the High Court did not rescind the contract, rather, it held that the contract expired by effluxion of time. To avoid confusion, we clarify that the finding of fraud is relevant only to the claim for damages, not to the issue of contractual expiry [47] Additionally, because we have found that the Collaboration Agreement expired on 4 May 2017 by operation of Clause 4 (effluxion of time), the provisions on termination for breach (including notice and cure) are irrelevant. The Respondent was not required to issue any notice of default or termination. The agreement simply came to an end. Issue 2: Whether the Collaboration Agreement ought to have been extended after 04 May 2017 up to the total contract tenure of 30 years. [48] The issue before us is whether the learned High Court Judge had wrongly concluded that the Collaboration Agreement had expired in 2017. [49] Succinctly, the Appellant argued that the Collaboration Agreement clearly shows the parties intended a long-term collaboration. The Collaboration Agreement was intended for a total duration of 30 years. A Lease Agreement was supposed to be executed, but the Respondent had not yet prepared it. The Collaboration Agreement operated in 3-year terms. Initially, it ran as a 3-year probationary period until the Lease Agreement is executed. If successful, it continues through successive 3-year extensions (first, second, and further extensions). Further extensions were to continue in 3-year blocks. It was also the Appellant's case that any extension beyond 3 years (up to a maximum of 15 years) requires mutual written agreement. [50] The Appellant contended that in essence, clause 4 provides that the Collaboration Agreement is to continue after the expiry of the second automatic extension, and that written consent from both parties is only necessary where an extension exceeds three years. It does not confer on the Respondent any unilateral right to refuse continuation of the Collaboration Agreement after the second extension ended on 4 May 2017. The Respondent's right to refuse an extension arose only immediately after the probationary period, which the Appellant had successfully completed. [51] We have considered the provision of clause 4 of the Collaboration Agreement [Enclosure 19, page 64 pdf]. For ease of reference, it is reproduced below: "It is the intention of the parties that this Agreement shall survive for thirty (30) years ("Lease Period") with one (1) Year grace period from the date of this Agreement s("Grace Period"). Pending execution of the Lease Agreement, this Agreement shall survive for a minimum period of three (3) years from the date of this Agreement ("the Trial Period") BUT SUBJECT ALWAYS TO the compliance with key performance index as set out by the parties within the Trial Period, then this Agreement shall be executed for a term of three (3) years ("the $ 1^{st} $ Extension") and thereafter, an automatic extension for a further term of three (3) years ("the $ 2^{nd} $ Extension") from the expiry of the $ 1^{st} $ Extension. It is hereby agreed that this Agreement shall be extended for a further term and/or any other extended date as mutually agreed upon by parties in writing upon expiry of the $ 2^{n d} $ Extension and the same is renewable once in every three (3) years up to a maximum of fifteen (15 years) ("the Future Extension"). The Trail Period, the 1 $ ^{st} $ Extension, the 2 $ ^{nd} $ Extension and the Future Extension shall collectively be referred to as "the Duration." [52] From a perusal of clause 4 as above, it is clear that the plain and unambiguous meaning of Clause 4 is as follows:

the parties expressed an intention that the agreement would survive for 30 years, but that intention was made subject to a detailed mechanism;

the Trial Period (2008-2011) was conditional on KPI compliance.

the 1st Extension (2011-2014) and the 2nd Extension (2014- 2017) were automatic; and

after the 2nd Extension expires, any further extension (the "Future Extension") must be mutually agreed upon by the parties in writing. Each such extension is for three years, up to a maximum of 15 years. [53] The critical phrase is "as mutually agreed upon by the parties in writing". If the parties had intended automatic renewal after the 2nd Extension, they would have used the same language as they did for the 1st and 2nd Extensions (i.e., "automatic extension"). The deliberate contrast in language is significant. The requirement of mutual written agreement means that neither party has a unilateral right to compel an extension after 4 May 2017. [54] This interpretation was confirmed by the Appellant's own witness during cross-examination. The Appellant's witness (SD2) gave the following material testimony (as recorded in the appeal records): "PP (Respondent's counsel): "Selepas tamatnya tempoh itu, mesti ada mutual agreement, mutual consent antara pihak-pihak secara bertulis untuk projek ini diteruskan oleh Defendan?" SD2 (Appellant's witness): "Betul, Yang Arif." The witness agreed that after the 2nd Extension ends, mutual written agreement is required for the project to continue. This evidence was not challenged or contradicted in re-examination. [55] The Appellant's argument that mutual written agreement is only required for extensions exceeding three years is untenable. There is no textual support for such an interpretation. The clause clearly states that the agreement "shall be extended for a further term ... as mutually agreed upon by the parties in writing upon expiry of the 2nd Extension". The words "further term" refer to the three-year blocks. Each such block requires mutual written agreement. [56] Further, the Respondent's letter of 5 October 2017 made it clear that the Collaboration Agreement had expired and that the Appellant was only permitted to continue operations pending a new offer, subject to a new proposal paper. The Appellant submitted a new proposal, which was rejected on 2 May 2019. No mutual written agreement to extend the Collaboration Agreement was ever reached after 4 May 2017. [57] The learned High Court Judge correctly interpreted Clause 4. We adopt his findings at paragraphs 60 to 63 of his grounds of judgment, where he held: "63. Berdasarkan klausa 4 Collaboration Agreement tersebut dan seksyen 4, Jadual Pertama, Perjanjian Penyewaan tersebut serta segala keterangan yang ada dalam Mahkamah ini, Mahkamah ini berpuas hati dan mendapati bahawa Plaintif telah berjaya membuktikan secara konklusif, kukuh (cogent) dan afirmatif bahawa selepas Pelanjutan Kali Kedua Collaboration Agreement tersebut tamat pada 4 Mei 2017 dan tidak lagi sah dan berkuat kuasa pada 5 Mei 2017 dan seterusnya, Collaboration Agreement tersebut tidak pernah dilanjutkan dan diperbaharui oleh Plaintif dan keterangan ini telah gagal disangkal oleh Defendan. Alasan Plaintif untuk menamatkan Collaboration Agreement tersebut adalah seperti yang dinyatakan dalam perenggan 75 hingga 78 di bawah.

Keputusan Plaintif untuk tidak melanjutkan dan memperbaharui Collaboration Agreement tersebut selepas ia tamat pada 4 Mei 2017 telahpun dimaklumkan kepada Defendan semasa Mesyuarat Jawatankuasa Teknikal Projek-Projek Akuakultur Bil. 4/2017 dan juga melalui surat Plaintif kepada Defendan bertarikh 5 Oktober 2017.

Walaupun Defendan ada membuat rayuan kepada Plaintiff untuk melanjutkan dan membaharui Collaboration Agreement tersebut, namun ia telah ditolak oleh Plaintiff.

Pada pendapat Mahkamah ini, tindakan Defendan membuat rayuan tersebut menunjukkan bahawa Defendan mengakui dan mengetahui bahawa Collaboration Agreement tersebut telah tamat pada 4 Mei 2017 dan ia telah tidak dilanjutkan dan diperbaharui oleh Plaintiff." [58] Accordingly, we hold that the Collaboration Agreement expired on 4 May 2017 by effluxion of time. No further extension was agreed in writing. The Appellant's claim that the agreement continues automatically for 30 years is rejected. Issue 3: Whether the learned High Court Judge erred in awarding Special Damages and General Damages to the Respondent. Wrongful Award of Special Damages Amounting to RM171,804.78 [59] According to the Appellant, the High Court erred in allowing the Respondent's claim in Paragraph (i) of the Statement of Claim by awarding special damages of RM171,804.78. The award was premised entirely on a speculative extrapolation of harvest yields from a single year, relying on Clause 10 of the Collaboration Agreement to justify the Respondent's entitlement. [60] However, the Appellant contended that the learned Judge failed to consider that:

clause 10 applies only where the Appellant had in fact generated revenue;

the award unfairly prejudices the Appellant by arbitrarily treating the 2013 revenue share as a constant for the years 2014 to 2019, despite the well-established principle that revenue fluctuates annually; and

the use of the 2013 harvest yield of RM28,634.13 as a fixed multiplier renders the award purely estimative in nature. [61] It was argued by the Appellant that such an approach is inconsistent with the settled principle that special damages must be specifically pleaded and strictly proven. They cannot be granted on the basis of conjecture, inference, or by mechanically applying a single year's performance to subsequent years without supporting documentary evidence. [62] It is well established that a claim for special damages must be strictly proved. Such claims should be supported by proper documentary evidence, including invoices, receipts, and other relevant records, to substantiate the actual amount incurred by the patient. The production of these documents enables the trial judge to verify the expenses claimed and to assess their reasonableness. Consequently, only those amounts that are adequately supported by the evidence adduced before the High Court will be allowed as special damages. [63] The learned High Court Judge in his Grounds of Judgment at paragraph 84 (f) awarded the Respondent special damages guaranteed by the Appellant for 3% per annum amounting to RM171,804.78 for the period of 2014 to 2019. This was based on the hasil tuaian for the year 2013 which was RM28,634.13 only. [64] We have considered the Appellant's argument that special damages must be strictly proved. However, we note that the Respondent's claim was for loss of guaranteed profits - not for actual revenue generated. Clause 10 entitled the Respondent to 3% of the Appellant's gross income. The Appellant failed to produce any audited accounts or sales records for the years 2014-2019. The burden of proving the actual gross income (and therefore the 3% due) lay on the Respondent. The Respondent adduced no documentary evidence of the Appellant's sales. [65] In the absence of strict proof, the award of special damages cannot be sustained. We therefore set aside the award of RM171,804.78 for special damages. This ground of appeal is allowed in part. [66] Hence, we find that the special damages awarded was not substantiated with receipts or documentary evidence and therefore we respectfully find the High Court had erred in this regard. There is therefore merit in this ground of appeal. Wrongful Award of General Damages Amounting to RM2.4 million [67] It is the Appellant's contention that the learned High Court Judge erred in granting the Respondent's claims under paragraphs (e), (f),

(g), and (h) of the Statement of Claim by awarding global general damages amounting to RM2.4 million. This sum was calculated based on payments allegedly received by the Appellant through its collaborations with third parties, namely Oakdale Aquatech Sdn. Bhd. and Dongjia Inc. [68] However, in assessing damages, a party is required to elect between reliance loss (i.e. loss of profits) and expectation loss (i.e. wasted expenditure or costs incurred in preparing to perform the contract), as established by the Court of Appeal in Ban Chuan Trading Co Sdn. Bhd. v Ng Bak Guan [2004] 1 MLJ 411 and Peninsular Home Sdn. Bhd. v Ko Lim Tristar Sdn. Bhd. [2024] 2 MLJ 623. [69] Under clause 10 of the Collaboration Agreement. Under this clause, the Respondent's maximum entitlement is limited to 3% of the Appellant's annual gross income. Accordingly, general damages cannot include sums allegedly earned by the Appellant through thirdparty collaborations (such as with Oakdale Aquatech Sdn. Bhd. and Dongjia Inc.). Additionally, the Respondent did not plead any claim for secret profits or unjust enrichment. [70] The learned High Court Judge had at paragraph 84 (e) the Grounds of Judgment, allowed the Respondent's claim for general damages. The High Court had awarded the sum of RM2,400,000.00 to the Respondent. [71] At paragraph 75 (c) of the Grounds of Judgment, the High Court had stated the Appellant had breached and repudiated Clause 10 of the Collaboration Agreement by failing to pay 3% of its annual gross revenue to the Appellant each year. Based on the Appellant's evidence, which was not challenged or rebutted by the Respondent, the Respondent was required to make the said 3% payment annually within 30 days from the date its financial statements were approved. However, the Respondent made the said 3% payment only twice to the Appellant over the nine (9) years during which the Collaboration Agreement was in force, namely a sum of RM33,549.51 on 31 December 2013 and a sum of RM28,634.13 on 1 December 2014. [72] Based on the findings in paragraph 75 (c) of the Grounds of Judgment, the High Court found that the Respondent had breached the terms of the Collaboration Agreement, which allowed the Appellant to terminate the Collaboration Agreement. [73] We find several difficulties with this award. First, the Respondent did not plead a claim for an account of profits or unjust enrichment. Second, clause 10 of the Collaboration Agreement limits the Respondent's contractual entitlement to 3% of the Appellant's gross income from marine produce - not third-party collaboration payments. Third, the Respondent did not prove any actual loss directly caused by the alleged misrepresentation with the requisite particularity. [74] However, the High Court found that the Appellant had committed fraudulent misrepresentation. Under section 19 of the Contracts Act 1950, the Respondent could have rescinded the contract and claimed restitution, or affirmed the contract and claimed damages for deceit. The Respondent did neither; instead, it claimed general damages on an unparticularised basis. [75] In the absence of a proper legal basis and proper proof, the award of RM2.4 million in general damages cannot stand. We therefore set aside the award of RM2.4 million for general damages. This ground of appeal is also allowed in part. [76] It is prudent to establish here, that the setting aside of the damages awards does not affect the core findings that the Collaboration Agreement expired on 4 May 2017 and that the Respondent is entitled to vacant possession. The damages were ancillary and were not strictly proved. Issue 4: Whether the learned High Court Judge erred in dismissing the Appellant's Counterclaim. [77] Whether the dismissal was a direct consequence of the errors in the findings on the primary claims. [78] Whether the Appellant had established a prima facie right to remain in possession based on the correct interpretation of the contract's duration and the Respondent's failure to issue proper termination notices. [79] It is the Appellant's contention that the High Court's dismissal was based on the erroneous finding that the Collaboration Agreement and Tenancy Agreement were induced by fraud and misrepresentation and had consequently expired in 2017. Counsel for the Appellant submitted that the learned High Court Judge failed to accord adequate weight to the Appellant's counterclaim, which was grounded on its right to remain in possession pursuant to the 30-year contractual tenure and the automatic extension mechanism under Clause 4 of the Collaboration Agreement. [80] Having held that the Collaboration Agreement expired on 4 May 2017 and was not extended by mutual written agreement, the Appellant's counterclaim has no foundation. The Appellant has no right to remain in possession under the expired agreements. The High Court correctly dismissed the counterclaim. [81] The Appellant's alternative claim for damages (if the agreement was terminated) does not arise because the Collaboration Agreement had expired, not terminated. [82] The order for vacant possession is affirmed. The Appellant has been holding over without any lawful basis since 4 May 2017. The Respondent is the registered proprietor of the land and is entitled to vacant possession. E. CONCLUSION [83] For all the foregoing reasons, we make the following orders:

the appeal is dismissed in part and allowed in part as follows:

the appeal against the declarations of expiry and the order for vacant possession is dismissed;

(ii) the appeal against the awards of general damages and special damages is allowed - the awards of RM2,400,000.00 (general damages) and RM171,804.78 (special damages) are set aside (to be discussed with panel member); and

(iii) the appeal against the dismissal of the appellant's counterclaim is dismissed;

the High Court's declarations that the Collaboration Agreement dated 5 May 2008 and the Tenancy Agreement dated 20 February 2014 expired on 4 May 2017 and are no longer binding are affirmed;

the High Court's order for vacant possession is affirmed and the Appellant shall deliver vacant possession of the subject land to the Respondent within 60 days from the date of this judgment if the Appellant fails to do so, the Respondent is at liberty to enter and take possession; and

the Appellant's counterclaim is dismissed. [84] Each party is to bear their own cost here and below. Dated:24 June 2026 sgd (SHAHNAZ BINTI SULAIMAN) Judge Court of Appeal Malaysia Putrajaya Counsel: For The Appellant Saravanesh Supramaniam Siti Norain binti Mohamed (Messrs. Allen Chee Ram) For The Respondent: Fatimah Azzahrah binti Rumaizi (Messrs. Hazizah & Co)