Visi Melati Sdn Bhd v Spnb Aspirasi Sendirian Berhad (WA-22NCvC-258-05/2018)

Liability in this matter has been established by the High Court and affirmed by the Court of Appeal, leaving this Court with the sole task of assessing the quantum of damages. Following the principles that damages should be compensatory - placing the innocent party in the position they would have occupied had the contract been performed - the Plaintiff bears the burden of proving actual loss on a balance of probabilities.

To ensure a comprehensive judgment, this Court's assessment is broken down into two primary categories: Land Cost and Construction Cost.

The Plaintiff seeks a total sum of RM23,536,772.40 for damages related to Land Costs. This figure is derived from a total claim of RM30,136,772.40, minus the RM6,600,000.00 already paid by the Defendant. That total claim amount (RM30,136772.40) is subdivided into two distinct heads:

Loss of profit on the Land in the sum of RM25,260,500.00

(ii) Wasted Expenditure/Costs of RM4,876,272.40 which includes

(a)Forfeited 10% deposit of RM4,068,495.00

(b)Late payment interest of RM753,227.40

Legal fees of RM54,550.00

Loss of Profit on the Land [4] For the claim of RM25,260,500.00 as loss of profit component for Land Cost, the Plaintiff's formula is this; the sum of the contractual entitlement of RM66,000,000.00 minus the actual acquisition costs. The actual acquisition costs according to the Plaintiff is the purchase price of RM40,684,950.00 plus the legal fees of RM54,550.00 which makes up to RM46,739,500.00. Summarily: Contracted Land Acquisition RM66,000,000.00 Deduct Acquisition Costs RM40,739,500.00 [5] The Plaintiff relied on the following evidence and contractual provisions. One is the contractual entitlement under Clause 6.1(a) of the Development Agreement (DA). Under this clause, the Defendant has undertaken to pay RM66,000,000.00 for the acquisition of the project land. Clause 3.1 of the Supplementary Development Order (SDA) explicitly allows the Plaintiff to claim for "entire loss of profits" and "all other losses, damages, costs and expenses incurred" in the event of a default. [6] Next, the Plaintiff asserts that its failure to complete the Sale and Purchase Agreement (SPA) with the landowners was a direct consequence of the Defendant's breach. Specifically, the Defendant failed to pay RM46,000,000.00 as required upon the fulfillment of Condition Precedent, which deprived the Plaintiff of the funds necessary to pay the balance purchase price to the landowners, leading to the forfeiture of its deposit. [7] PW1 provided factual testimony regarding the acquisition efforts and the expenditure incurred. He served as the Plaintiff's project manager. His testimony was supported by a substantial volume of documentary evidence organized into multiple bundles (B1 to B11). [8] The DA dated 16.10.2014 established the appointment of the Plaintiff as a turnkey contractor and fixed the total development cost at RM222,000,000.00, including the RM66,000,000.00 for land acquisition. The SDA dated 12.12.2017 preserved the Plaintiff's role and detailed the rights to claim for "entire loss of profits" in the event of a breach. The SPA dated 29.4.2015 entered between the Plaintiff and the original landowners for the purchase of the project land at RM40,684,950.00. [9] The Defendant produced a redacted version of this SPA found at pages 71-74 of Bundle B9, demonstrating that the purchase price had been hidden when originally forwarded to them. [10] For proof of expenditure and wasted costs-a CIMB Bank Berhad Cheque Request Form and an Official Receipt from Messrs. Alex Pang & Co (solicitors for the landowners) confirming the payment of the 10% deposit (RM4,068,495.00). A quotation and proforma invoice from the Plaintiff's solicitors amounting to RM54,550.00 for legal fees and disbursements related to securing title was produced as proof of legal fees incurred. There is also documentary evidence on the late payment interest in Bundle B3 that showed interest incurred by the Plaintiff under the SPA in the sum of RM573,227.40. [11] As to evidence of termination and loss, a letter from Messrs. Alex Pang & Co dated 17.1.2024 stating that the SPA was terminated due to the Plaintiff's "inordinate delay" in paying the balance purchase price, resulting in the absolute forfeiture of the deposit was adduced. So was a letter dated 27.5.2015 that proved the Plaintiff had received the executed Memorandum of Transfer from the landowners. [12] This Court had sight of the company searches from the Companies Commission Malaysia (CCM) to show that the Plaintiff was a RM2.00 company with no recorded profits between 2012 and 2021. A calculation sheet was prepared to show the loss of profit on land - RM25,260,500.00 in Buncle B8. There is a table detailing the RM156,000,000.00 construction cost and projected profits in B1. During cross-examination, PW1 admitted that he did not prepare these calculations himself, stating that they were like done by a Quantity Surveyor who was not called as a witness. [13] The Defendant contests this category on several grounds. It argues that the Plaintiff is improperly seeking both loss of profit and wasted expenditure concurrently. Based on the leading authority of Delpuri-Harl Corp JV Sdn Bhd v PKNS decided by the Court of Appeal, Tan Sri Khoo Teck Puat v Plenitude Holdings Sdn Bhd 3 MLJ 777 decided by the Supreme Court and SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor 1 MLJ 464, a plaintiff must elect between. Being put in the position as if the contract had not been made (wasted expenditure) or as it if had been performed (loss of profit). Claiming both is viewed as double recovery. [14] The Defendant highlights that the Plaintiff redacted the actual land purchase prince in the SPA produced to this Court. It was not just the purchase price but also all related terms pertaining to the land cost in the SPA forwarded to the Defendant. Without disclosing the purchase price, the Defendant argues the Plaintiff cannot prove the actual profit margin, rendering the RM25,200,000.00 claim speculative and inflated. [15] It is the assertion of the Defendant that the Plaintiff was a RM2.00 company with no track record and poor cash flow, suggesting that they would have been unable to complete the land purchase even if he Defendant had not breached the contract. [16] A 2023 valuation by Jabatan Penilaian Perkhidmatan Harta (JPPH) valued the land at RM27,280,000.00, significantly lower than the RM66,000,000.00 cited in the DA, further suggesting the Plaintiff's profit margin is unrealistic. This Court's Conclusion on Land Cost [17] This Court concludes that while the Defendant's liability for breaching Clause 6.1(a) of the DA is res judicata, the Plaintiff has not fully proven the quantum sought for Land Cost on a balance of probabilities. [18] The primary legal hurdle is the failure to elect between loss of profit and wasted expenditure. By pursuing both, the Plaintiff has rendered the claim for profit uncertain. This conclusion is formulated upon a strict application of established legal principles and contract law that do not allow the Plaintiff for double recovery. Here, the Plaintiff claims for both RM25,200,000.00 for loss of profit and RM4,800,000.00 for wasted expenditure concurrently as the total Land Cost. PW1 admitted in crossexamination that the Plaintiff was claiming for both and had not made an election. [19] The legal consequence of the failure to elect as per Dalpuri-Hal (supra) renders the claim inherently uncertain and defective because it is not for this Court to make the election on the Plaintiff's behalf. [20] Furthermore, the redaction of the purchase price in the SPA is a fatal evidentiary gap, as this Court cannot calculate a net profit without the primary cost data. Thus, while the fact of damage (the forfeited deposit) is clear, the claim for RM25,200,000.00 in profit is unsubstantiated. The burden of proving damages remains with the Plaintiff. It is simply not enough to "throw particulars at the court", damages must strictly be proven with primary evidence - see Bonham-Carter v Hyde Park Hotel Ltd [1948] 64 TLR 177 at p 178. The Plaintiff produced a version of the SPA where the actual purchase price paid to the landowners was redacted. To calculate net profit, this Court must subtract the acquisition cost from the contract price (RM66,000,000.00). Without the redacted acquisition price, this Court cannot determine the actual profit margin, making the RM25,200,000.00 claim speculative and unsubstantiated. [21] This Court takes into account that the contract price of RM40,684,950.00 was confirmed by PW1. There is also the mathematical calculation that points to the same with reference to the deposit paid of RM4,086,495.00. Also, the Defendant's own counsel carved a put question suggesting to the figure to PW1: "Q: The purchase price of that was was for the amount of RM40 million. Wait, Yang Arif. RM40,684,950.00. Agree? A: Yes, agree." [22] This Court notes that the confusion may arise because the Defendant argued that the redaction of the price in the copy it received in 2015 created a fatal evidentiary gap regarding foreseeability and calculation of profits. However, through trial, the actual figure itself was disclosed and admitted during the assessment trial. What the Plaintiff failed to prove was the entirety of the land cost calculation (including additional factors like subdivision and conversion costs) and the reasonableness of the resulting RM25,536,772.40 loss of profits. [23] Whilst the land purchase price this Court opines is no longer a missing fact, it is insufficient to prove the quantum of damages sought. This Court cannot use RM40,684,950.00 figure to arrive at RM25,260,500.00 loss of profit because that calculation is factually incomplete. It failed to deduct the necessary development costs (subdivision, conversion, etc.) that PW1 admitted would have been incurred. Without a complete breakdown of all acquisition and development expenses, the claim for RM25,260,500.00 remains an unproven and speculative figure. [24] This Court considers the project land valuation of RM27,280,000.00 conducted by JPPH a reference only because it was secondary to the specific land cost already established in the contract. The parties had already legally agreed to a land cost of RM66,000,000.00. The Defendant produced the JPPH valuation for its primary argument that the Plaintiff's claim for RM25,200,000.00 in profit was inflated and unrealistic as the market value was far below the price the Defendant had agreed to pay. The valuation was a benchmark used to challenge the reasonableness of the damages sought but it did not override the established contractual obligations that were already res judicata. [25] Although the fact of damage which the forfeited deposit is clear, the quantum of the profit claim itself is not. The Plaintiff has failed to prove the specific amount of damage suffered - see Guan Soon Tin Mining Co v Wong Fook Kum and the Court of Appeal's decision in Tan Ah Chio & Ors v Lua Kim Soon & Ors [2015] 1 MLJ 334. [26] There is clear evidence (the termination letter from the landowners' solicitors) that the 10% deposit was forfeited. This Court is inclined to accept the Defendant's argument that this forfeiture was a result of the Plaintiff's own "financial incapacity" and failure to secure independent financing, rather than the Defendant's breach. This is because the Plaintiff was a RM2.00 company with a total share capital of only RM2,00. The CCM financial comparison reports reveal that the Plaintiff did not record any profits between 2012 and 2021. For the year 2020, the Plaintiff specifically recorded a loss of RM2,561.00. The records showed the Plaintiff had no ongoing or completed construction projects during the decade leading up to the assessment trial. PW1 admitted that as of 2020, the Plaintiff did not have a good cash flow. He conceded that it was possible the Plaintiff could not have acquired the project land without the Defendant's involvement. He confirmed that between 2014 and 2017, the Plaintiff had no other projects apart from the one with the Defendant. [27] The SPA with the landowners explicitly allowed the Plaintiff to seek independent bank financing under Clause 9 but the Plaintiff chose not to apply for a loan or pursue bank financing to pay the balance of the purchase price. This Court agrees with the Defendant's contention that given the Plaintiff's history of consistent losses, obtaining such financing from a bank would have been impossible in any event. [28] This Court considers the Plaintiff's counter-argument that it was illogical as the Defendant voluntarily chose to contract with the Plaintiff knowing that it was a RM2.00 company, the fact of the Plaintiff's limited financial resources and lack of independent funding is proven on a balance of probabilities through the CCM's records and PW1's testimony. [29] This Court finds that the Plaintiff has only managed to prove on a balance of probabilities that it suffered a loss but fails to prove the exact amount or a clear causal link to the breach for a specific head of damages. Therefore, this Court is limited to what it can award. Accordingly, it awards only nominal damages or a heavily reduced sum for Land Costs. [30] In this Court's considered opinion, premised on the above, only nominal damages is allowed. Without uncertainty, the Plaintiff has proven that a right had been infringed (the fact of damage), it only failed to prove the specific amount of loss or failed to make the necessary proper election. In the present case, the Plaintiff has identified and proven on a balance of probabilities, the sum of RM4,876,272.40 as its total wasted expenditure/costs. That comprises of:

Forfeited 10% deposit: RM4,068,495.00

(ii) Late payment interest: RM753,227.40

(iii) Legal fees: RM54,550.00 Construction Cost [31] The Plaintiff seeks damages for loss of profit on construction amounting to RM31,606,800.00. This figure represents an estimated 20.3% profit margin based on the total project construction cost of RM156,000,000.00 as stipulated in Clause 6.1(b) of the DA. Additionally, Clause 3.1 SDA explicitly grants the Plaintiff the right to claim the "entire loss of profits" in the event of the Defendant's default. [32] PW2, the Plaintiff's expert provided a report using a best estimate methodology. He calculated the profit by taking the RM156,000,000.00 revenue and deducting an estimated construction cost of RM124,393,200.00. PW2 utilized the published JKR rates for various components, including building works, infrastructure, and piling, to arrive at his cost estimates. PW1 testified that a profit margin of RM25% to 30% is standard for developers in the industry. Making the 20% to 30% appear reasonable. [33] The Defendant, in its argument that the claim is speculative, unproven and excessive, asserts that the Plaintiff as a RM2.00 company with no track record of completed projects and consistent financial losses since 2012 was fundamentally incapable of completing a RM222,000,000.00 turnkey project. The Defendant highlighted that PW2 consistently adopted lowest available rates (eg. Kota Kinabalu rates instead of Sandakan rates) to maximize the projected profit margin. [34] PW2 conceded during his cross-examination that his calculations omitted mandatory project components required by the approved building plans, such as rainwater harvesting tanks (an under-allowance of over RM442,000.00), tempered glass railings for shop houses and full height wall tiles for apartment units (PW2 only allowed for half-height). [35] PW1 admitted during cross-examination that he did not prepare the calculations himself and was unsure who did - the QS was not called to testify at trial. [36] DW1 (the Defendant's expert) testified on the contrary that the project would likely have generated negative profits for the Plaintiff if all risks and industry-standard costs were properly factored in. This Court's Conclusion on Construction Cost [37] Under the principle enunciated in Tan Sri Khoo Teck Puat (supra), this Court's objective is to place the Plaintiff in the position it would have occupied had the contract been performed, while strictly avoiding unearned windfall. Because the project never commenced, the claim for RM31,606,800.00 in construction profit is based on a future event that never happened. The Supreme Court in Tan Sri Khoo Teck Puat (supra) emphasized for damages depending on future events, this Court must "make an estimate as to what are the chances that a particular thing will happen". [38] In this case, the chances of the Plaintiff (a RM2.00 company) with no track record of completed projects and turnkey projects are, on a balance of probabilities, extremely low. This Court cannot assume 100% certainty of completion when the Plaintiff lacked the financial and operational infrastructure to deliver the project. [39] The application of the Federal Court's ruling in SPM Membrane Switch Sdn Bhd (supra) dictates that loss of profit must be calculated net all expenses that would have been reasonably incurred. PW2 conceded in cross-examination that his best estimate methodology used non-local lowest rate. He admitted to omitting mandatory construction components required by the approved building plans, such as rainwater harvesting tanks, tempered glass railings, and full-height bathroom tiling. By failing to deduct these essential costs, the Plaintiff's projected profit margin of 20.3% is not a net profit as required by SPM Membrane Switch Sdn Bhd (supra). Rather, it is a speculative gross figure that inflates the actual loss. [40] Under the authority of Court of Appeal in Lay Hong Food Corp Sdn Bhd v Tiong Nam Logistics [2018] 2 MLJ 66, Malaysian courts have consistently rejected claims for damages that rest on mere summaries or general estimations without primary supporting evidence. The Plaintiff initially sought to prove its RM39,000,000.00 profit claim via a single sheet of internal calculation (Bundle B1) at p42. But during PW1's crossexamination, he admitted that he did not prepare these calculations and was unsure who did, as the QS was never called as a witness. [41] Similar to the facts in Era Kemuncak Jaya (M) Sdn Bhd v Tenaga Switchgear where a 15% profit margin was rejected as unproven, the Plaintiff here failed to provide audited accounts or project-specific data to justify why a 20.3% profit margin was realistic for a company of its standing. [42] The Court of Appeal in Dalpuri-Harl (supra) faced nearly identical scenario: a claimant seeking a phenomenal profit (30.26%) while failing to call relevant witnesses to prove the cost of completion. Because the claim was inherently uncertain and speculative, the Court of Appeal rejected the multi-million Ringgit Malaysia claim and awarded RM100,000.00 as nominal damages to recognize that a legal right was infringed without rewarding an unproven loss. [43] Upon a thorough assessment of all before this Court, it is this Court's findings that the Plaintiff has not proven the quantum for the loss of profit on construction on a balance of probabilities. Aside for the Defendant's breach, which is not a point of contention, the Plaintiff's claim for RM31,600,000.00 is based on the hypothetical completion of a project that never commenced. Under the principle in Tan Sri Khoo Teck Puat (supra) this Court must estimate the actual chances of that profit being realized. Given the Plaintiff's proven financial incapacity and the fatal evidentiary gaps in the expert report, specifically the use of non-local lowest rates and the omission of mandatory construction items, the profit margins remain hypothetical. [44] Following the approach in Dalpuri-Harl (supra) where an excessive and speculative profit claim was rejected in favour of a recognition of the breach, this Court awards only nominal damages for Constructions Costs which acknowledge the legal wrong without granting the Plaintiff an unearned windfall. This Court considers, given the facts and circumstances in this case at hand, that it is just to grant nominal damages in the sum of RM100,000.00. This Court's Orders [45] The High Court on 16.12.2020 affirmed by the Court of Appeal on 25.8.2023 found in favour of the Plaintiff on liability, holding that the DA was not rescinded and conditions precedent were fulfilled. The prayer for specific performance was dismissed. The Defendant's counterclaim was dismissed with costs. [46] Based on the assessment of damages conducted by this Court as stipulated above, this Court orders the following the Defendant pays to the Plaintiff the following:

For Land Costs-a total of RM4,876,272.40 for wasted expenditure/costs

(ii) Construction Costs-nominal damages of RM100,000.00

(iii) Interest of 5% on the judgment calculated from today until the date of full and final settlement

(iv) Costs of this assessment proceedings in the sum of RM80,000.00 subject to allocator DATED 30 APRIL 2026 ROZ MAWAR ROZAIN JUDGE HIGH COURT OF MALAYA KUALA LUMPUR For the Plaintiff: Dato' Seri Rajan Navaratnam together with Nur Irdina Syahirah binti Mohammad Wardi Surend Mokhzani & Partners For the Defendant: Ahmad Fadzly bin Abdul Gani together with Jasneeta Kaur Bhullar Azmi Fadzly Maha & Sim