IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR
COMMERCIAL DIVISION
SUIT NO.: D-22-1555-2001
BETWEEN
…
PLAINTIFF
…
DEFENDANT
RICHCON (M) SDN.BHD
(Company No. 143677-T)
AND
SAFUAN GROUP BERHAD
(Company No. 262210-V)
Didengar bersama dengan
SUIT NO.: 22-NCC-624-2010
BETWEEN
PDLD LAND SDN.BHD
…
PLAINTIFF
…
DEFENDANT
…
THIRD PARTY
AND
RICHCON (M) SDB.BHD
AND
SAFUAN GROUP BERHAD
GROUNDS OF DECISION
1
SUIT NO. D2-22-1555-2001
The plaintiff’s case
1.
The plaintiff’s claims against the defendant is for wrongful retention of
machineries and equipments of the plaintiff at Lot 72, Port Dickson, Negeri
Sembilan (“Project Site”) for which the plaintiff seeks damages.
2.
The machineries and equipments having been returned to the plaintiff
in the year 2006. As part of the damages sought in this action, the plaintiff
seeks the loss of rental income as the plaintiff being the owner of the
machineries and equipments was deprived from hiring them out.
3.
The plaintiff also seeks as part of the damages sought in this action
the losses suffered by the plaintiff because the years of wrongful retention
of the machineries and equipments has resulted in the machineries and
equipments being in bad condition and therefore could only be disposed of
as scrap metal.
2
4.
The defendant on the other hand strongly contested the plaintiff's
claim by stating that the plaintiff has wrongfully brought the above
proceeding against the defendant and the rightful party which the plaintiff
should have pursued the above legal action is Port Dickson Land
Development Sdn Bhd ("PDLD Sdn Bhd”) which was wound up on
19.1.2001.
The defendant’s case
5.
PDLD Sdn Bhd is the beneficial and registered proprietor of the land
hold under title Lot No. 72 H.S[D] 7295 Port Dickson Negeri Sembilan,
where the project of Water Front Centre to be developed.
6.
The defendant content that the plaintiff’s claim against the defendant
is fictitious, vexatious and an abuse of process of court based on the
following reasons:
(i)
At all material times, neither the defendant has involved in the
above project nor having knowledge about the rental of
machineries to one Wing Construction Sdn Bhd (“Wing
3
Construction”) by the plaintiff. In fact the plaintiff has never
communicated with the defendant before the machineries were
transferred to the site of the above project.
(ii)
The plaintiff should have filed this claim against PDLD Sdn Bhd
or dealt with the Official Receiver as the Liquidator for PDLD
Sdn Bhd in order to take possession of the machineries at the
site of the above project.
(iii)
The plaintiff has negligent, failed or refused to adduce any
evidence in order to show that the plaintiff is the registered
owner for the abandoned machineries at the site of the above
project from the very beginning to avoid any doubts on the
status of the registered owner of those machineries.
(iv)
The plaintiff has failed with due and reasonable diligence and in
accordance with the law to redeem or take possession of those
machineries from the party involved even though the defendant
has informed the plaintiff to redeem those machineries directly
from PDLD Sdn Bhd.
4
(v)
The plaintiff has failed to mitigate its losses specifically and the
plaintiff is now put under strict proof for the claim.
(vi)
The defendant and PDLD Sdn Bhd are two separate entities
and from the very beginning the plaintiff should have dealt with
the Official Receiver as the Liquidator for PDLD Sdn Bhd in
order to redeem and/or to take possession of those
machineries which are alleged to be owned by the plaintiff. As
such the plaintiff’s claim should not have been initiated against
the defendant.
Issues
7.
Based on the pleadings and evidence adduced, the issues to be
determined by the court are as follows :
(i)
Whether the plaintiff is the owner of the equipments;
(ii)
Whether the defendant prevented the plaintiff from taking away
the equipments from the Project Site when demanded by the
plaintiff ; and
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(iii)
Whether the plaintiff suffered damages due to the wrongful
detention of the equipments.
Whether the plaintiff is the owner of the equipments and machineries
8.
The plaintiff has pleaded in paragraph 4 of its Statement of Claim that
they are the registered owner of the equipments. The defendant on the
other hand argued that the Sales and Purchase Agreement as seen on
page 40-45 of Bundle B did not show that the plaintiff is the lawful
registered owner of those equipments.
9.
I have carefully perused the documents on page 40-45 of Bundle B
and I accept the submission of learned counsel for the defendant that the
Sales and Purchase Agreement in respect of the equipments are flawed
with discrepancies. At page 41, 43, and 45 of Bundle B, the terms and
conditions of the Agreement states that the balance 90% of the purchase
price shall be be paid subject to the transfer of title of the said vehicle to the
new owner. However, the plaintiff did not adduce any document of title to
show the ownership of these machineries has been transferred to them. In
6
fact, no proof of receipt of payment of purchase price made by plaintiff to
the vendor of the equipments was produced as evidence before the court.
10.
Further, the Sale and Purchase Agreement was not signed by the
Directors for both the vendor's and purchasers despite the fact that both
Companies are registered as "Sdn Bhd" and "Pte [Ltd] Companies" and the
Article of Associations of the company, requires either a common seal of
the company or a director in executing the said documents. The court
notes that neither of this is found in the Sale and Purchase Agreement.
11.
In this regard, the plaintiff has also failed to produce either the
vendors or the purchasers as the maker of the documents. Page 40-45 of
Bundle B are only marked as "ID-10" and not as an exhibit. Again there
should be no weight to be attached to this documents. As such, the plaintiff
has failed to prove the said document in order to be admitted as evidence.
12.
In the absence of the maker of the documents being called and the
plaintiff's failure to rectify and explain those various defects existing in the
Sale and Purchase Agreement and also by not producing the registered
title together with the receipt of purchase price paid to the vendors, the
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court finds that the only irreversible conclusion that can be drawn against
the plaintiff is that plaintiff has failed, to show the true ownership towards
the said machineries.
Whether the plaintiff was prevented from taking the equipments from
the Project Site when demanded from the defendant
13.
The next question to be considered is whether the plaintiff was
prevented from taking the equipments from the Project Site when it
demanded to take it away.
14.
PW1 during examination in chief said that the plaintiff was prevented
from taking away the equipments from the Project Site.
15.
It is not disputed between the parties that the registered owner of the
Project Site where the equipments, machineries were kept is PDLD Land
Sdn Bhd (refer to pg 25 of Bundle C).
16.
During cross-examination, PW1 did not agree to the question by the
defendant’s counsel that neither the plaintiff nor Wing Construction
8
approached or wrote to the defendant for the release of the equipments
from the Project Site. However when question further, PW1 admitted that
the plaintiff did not write to PDLD Land for the release of the equipments.
17.
At paragraph 6 of the plaintiff's Statement of Claim, the plaintiff
pleaded that they have written a letter dated 15.1.2001 to the defendant
demanded for the return of the equipments. However, despite referring to
paragraph 6 during the trial, the plaintiff has failed to produce the said letter
to support its case.
18.
On this issue, learned counsel for the defendant submitted that the
plaintiff's failure in not producing such letter despite being pleaded clearly
goes on for the court to draw an presumption of adverse inference against
the said letter dated 15.1.2001 under Section 114 [g] of the Evidence Act
1952 wherein the said letter if produced would be unfavourable to the
plaintiff who withholds it.
19.
In this respect, the court agrees that the adverse inference should be
drawn against the plaintiff for not producing the said letter. In fact the letter
9
was clearly reflected under the defendant's letter of reply dated 26.2.2001
(D20).
20.
It is the defendant’s case that at all material times, the plaintiff and
Wing Construction are fully aware that the registered proprietor in which the
machineries were kept is Port Dickson Land Development Sdn. Bhd. Thus,
the plaintiff has sued the wrong party.
21.
The court notes that based on the evidence adduced by DW1, the
defendant vide a letter dated 26.2.2001 (D20), even prior to the
commencement of this suit has notified the plaintiff that the defendant were
not the registered proprietor and had no control over the Project Site (Lot
72).
22.
Paragraph 3 of the defendant letter states as follows :
3. We have informed you specifically that the Registered Proprietor for the
above project site is Port Dickson Land Development Sdn. Bhd. which was
wound-up on 19.1.2001 and we have nothing to do as far as your
machineries is concerned which you have stated that they have been placed
at the project site as both companies are different in their entities.
10
23.
However, in cross-examination the defendant denied receiving the
plaintiff’s letter dated 26.2.2001 and they were not aware that the Port
Dickson Land has been wound-up.
24.
In this case, the court is faced with conflicting testimony of PW2 and
DW1 as to whether the plaintiff received the letter dated 26.2.2001.
25.
The court in thus faced with the task of having to choose whose
evidence to believe. In discharging this task, I am guided by the decision of
the following authorities in Tindok Besar Estate Sdn Bhd v Tinjar Co
[1979] 2 MLJ 229 where Justice Chang Min Tat (as he then was) said:
“For myself, I would with respect feel somewhat safer to refer to and rely on
the acts and deeds of a witness which are contemporaneous with the event
and to draw the reasonable inferences from them than to believe his
subsequent recollection or version of it, particularly if he is a witness with a
purpose of his own to serve and if it did not account for the statements in his
documents and writings. Judicial reception of evidence requires that the oral
evidence be critically tested against the whole of the other evidence and the
circumstances of the case. Plausibility should never be mistaken for
veracity.”
11
26.
The above approach was also applied by James Foong J (as he then
was) in Industrial Concrete Products [2001] 8 CLJ 262 and Low Hop
Bing J (as he then was) in the case of Nuri Asia Sdn Bhd (Supra).
27.
Further, in Noorianti Zainol Abidin & Ors. v Tang Lei Nge [1990] 1
CLJ 943 Lim Beng Choon J (as he then was) had occasion to say that the
trial judge should not approach the case on the basis of deciding which
story out of the conflicting stories that should be believe, but rather to
consider which version was inherently probable or improbable. All things
being equal, it is trite law that if the version of one of the parties is
inherently probable, then the judge has no choice but to accept the version
forthwith (see Chua Chong Cher v Teo Lang Keow & Ors [1970] 2 MLJ
27. Abdul Kadir bin Mohamad v Kamarulzaman bin Mohd Zin & Anor
[2000] MLJU 658).
28.
In Muniandy & Ors v Public Prosecutor [1966] 1 LNS 110; [1966]
1 MLJ 257, the trial judge accepted the evidence of certain witnesses
because they had remained unshaken in cross examination. Based on that
evidence he convicted the appellant. The Federal Court reversed the
decision, Ong Hock Thye FJ said:
12
“In the instant case, it is stated by the learned trial judge as the ground for
his belief in the main prosecution witnesses, that they had been unshaken in
cross-examination. In our view, being unshaken in cross examination is not
per se an all-sufficient acid test of credibility. The inherent probability or
improbability of a fact in issue must be the prime consideration. The
fact that the trial judge believed implicitly in the truthfulness of Nagarachnam
and Ramasamy does not preclude closer scrutiny of their evidence and this
we have done.”
29.
Returning to this issue, PW1 in his evidence claims that he was not
aware of the defendant’s letter dated 26.2.2001. On the contorary, DW1
pointed in the second paragraph of the defendant’s letter dated 28.2.2001
that the plaintiff had made reference to the plaintiff’s letter dated 28.6.2000
and 15.1.2001. In paragraph 6 of the Statement of Claim, the plaintiff had
made reference to the said letter. As such, the court finds that it would be
highly improbable for the plaintiff not to know about the letter dated
28.2.2001. In fact no evidence was led by the plaintiff to rebut this fact.
30.
The
plaintiff
contended
that
the
plaintiff’s
equipments
and
machineries were not being retained by PDLD Sdn Bhd or PDLD Land but
13
by the defendant.
This is evident by paragraph 2 of the Letter of
Undertaking and Indemnity at page 46 in Bundle B which states that :
In connection with the removal of the equipments and the materials listed in
the Annexure hereto from the Lot by us with the knowledge and consent of
the said Safuan Group Berhad.
31.
The question that arises is whether based on this Letter of
Undertaking can the court conclude that the defendant has the control and
custody of the Project Site and thus prevented the plaintiff from taking away
the equipments.
32.
Since it is the plaintiff who alleged that the defendant has the control
and custody of the Project Site and it prevented the plaintiff from removing
those equipments on the Project Site, based on section 101, 102 and 103
of the Evidence Act, the burden of proof lies with the plaintiff.
33.
In this regard, the court agrees with the submission of learned
counsel for the defendant that the plaintiff has been advised vide a letter
dated 28.2.2001 to forward their claims to the liquidator of PDLD Sdn Bhd.
14
However the court finds that for reasons known to the plaintiff, the plaintiff
did not to do so.
34.
In fact in cross-examination, PW1 agreed that the plaintiff did not take
any actions such as injunctive relief to remove the machineries from the
Project Site. There is also no evidence to show that the plaintiff wrote to
seek the liquidator’s consent to remove the said machineries from the
Project Site.
35.
Based on the evidence adduced by all parties, in my judgment, the
plaintiff has not proof on the balance of probabilities that the defendant has
full control and possession of the Project Site and that it did not deliver the
equipments to the plaintiff when demanded that it should be released. The
court finds that the plaintiff has not produced any evidence to show that the
defendant has deliberately withhold the equipments for the plaintiff to
support its cause of action for detinue.
36.
In the case of Perbadanan Kemajuan Negeri Selangor, the Federal
Court referred to Lord Diplock’s decision in General and Finance
15
Facilities, Ltd v Cooks Cars (Romford), Ltd [1963] 2 All ER 314, where
at page 317, it was held that :
"There are important distinctions between a cause of action in conversion
and a cause of action in detinue. The former is a single wrongful act and the
cause of action accrues at the date of the conversion; the latter is a
continuing cause of action which accrues at the date of the wrongful refusal
to deliver up the goods and continues until delivery up of the goods or
judgment in the action for detinue. ... Demand for delivery up of the chattel
was an essential requirement of an action in detinue and detinue lay
only when at the time of the demand for delivery up of the chattel made
by the person entitled to possession the defendant was either in actual
possession of it or was estopped from denying that he was still in
possession."
37.
I must stress that the plaintiff has not proved on the balance of
probabilities that the defendant has the actual possession of the Project
Site and that it refused to allow the plaintiff to remove the equipments when
demanded to do so by the plaintiff. It is not safe for the court to rely on the
letter of Undertaking and Indemnity to conclude that the defendant had full
control and custody of the equipments at the Project Site.
16
38.
The court notes that the Letter of Undertaking and Indemnity was
issued by the plaintiff to Port Dickson Land Development Sdn. Bhd. and not
to the defendant. DW1 explained during cross-examination that the reason
why he was at the Project Site during the material time of inspection by the
authorised representative of the plaintiff was because he has to protect the
interest of the defendant because of the ongoing legal suit against the
defendant.
39.
Based on the facts and circumstances of this case, I accept the
defendant’s submission that the plaintiff has sued the wrong party in this
suit.
40.
From the evidence adduced, PDLD Sdn Bhd has sold off their shares
of RM40,000,000.00 in the defendant’s company on 28.11.1997 i.e. even
before the commencement of this proceedings (pg 4-20 of Bundle B). This
evidence was never rebutted by the plaintiff. Even if defendant were to
share common management, the defendant company is a legal entity by
itself.
17
41.
In the case of People’s Insurance Co (M) Sdn Bhd v People’s
Insurance Co Ltd & Ors [1986] 1 MLJ 68 at p 69 which was cited by the
defendant, Zakaria Yatim J (as he then was) held on page 69 as follows :
“The plaintiff company is a legal entity by itself. Although it is a subsidiary of
the first defendant company, the plaintiff company maintains its own
separate entity. In Ebbw Vale Urban District Council v South Wales Traffic
Area Licensing Authority [1951] 2 KB 366,Cohen L.J. said:
"Under the ordinary rules of law, a parent company and subsidiary
company, even a 100 percent subsidiary company, are distinct legal
entities ...”
Losses suffered by the plaintiff
42.
Since I have decided that the plaintiff has failed to proof that the
defendant has wrongfully detained the equipments therefore, the issues of
losses by the plaintiff do not arise.
43.
Even if I am wrong in deciding that there is no cause of action by the
plaintiff against the defendant for detinue, the question that arises is
18
whether the plaintiff has proved that it has suffered losses due to the
wrongful detention of the equipments by the defendant.
44.
In paragraph 5 of its Statement of Claim, the plaintiff has pleaded that
it has entered into a Rental Agreement with Wing Construction to lease out
the equipments and machineries. The monthly charges appeared under
Schedule A at page 4 of Bundle B. However, because of the wrongful
detention, it was unable to rent it to Wing Construction.
45.
On this issue, the court has perused the Rental Agreement (pg 1 of
Bundle B) and finds that it is flawed with few discrepancies if it to be
accepted as evidence.
46.
In my view, the discrepancies are as follows :
(i)
It is not stamped in accordance with the Stamp Ordinance for it
to be admitted as evidence in court.
(ii)
It was not signed by the director or shareholders of the plaintiff.
PW1 admitted that “Ragawan” who signed the Rental
19
Agreement was the supervisor of the plaintiff and he is not even
a director or shareholder of the plaintiff.
(iii)
47.
It was not executed with the plaintiff’s common seal.
The court finds that the plaintiff has not adduced any evidence to
prove that it has suffered losses by hiring machineries elsewhere. All the
invoices on page 1-7 of Document D involve Wing Construction. In this
respect, Wing Construction is not a party to this suit.
48.
Thus, the court finds that the plaintiff has failed to prove that it has
suffered losses. It is trite law that damages have to be proven.
49.
Referring to the decision of Lord Goddard in Bonham-Carter v Hyde
Park Hotel Ltd. 64, TLR 177, 178; Edgard Joseph JR. FCJ in the case of
Tan Sri Khoo Teck Puat & Anor. v Plenitude Holdings Sdn. Bhd. 1995
1 CLJ 15 said as follows :
... plaintiffs must understand that if they bring actions for damages it is for
them to prove their damage; it is not enough to write down the particulars, so
20
to speak, throw them at the head of the Court, saying: 'This is what I have
lost, I ask you to give me these damages'. They have to prove it.
This dictum was referred to and applied by our Court of Appeal in John v.
Dharmaratnam[1961] 1 LNS 35 7.
And, in Popular Industries Limited v. Eastern Garment Manufacturing Sdn.
Bhd. [1989] 3 MLJ 360, the Court had occasion to say this (at p.367):
It is axiomatic that a plaintiff seeking substantial damages has the, burden of
proving both the fact and the amount of damages before he can recover. If
he proves neither, the action will fail or he may be awarded only nominal
damages upon proof of the contravention of a right. Thus nominal damages
may be awarded in all cases of breach of contract (see Marzetti v. William ).
And, where damage is shown but its amount is not proved sufficiently or at
all, the Court will usually decree nominal damages. See, for example Dixon
v. Deveridge and Twyman v. Knowles .
In Malaysian Rubber Development Corporation Bhd. v. Glove Seal Sdn. Bhd.
[1994] 3 MLJ 569, at 582 E to F, Mohd Dzaiddin, SCJ, speaking for the
Supreme Court quoted, with approval, the above passage in the Popular
Industries case.
21
50.
At all material times, plaintiff and Wing Construction are fully aware
that the Registered Proprietor in which the machineries were kept is PDLD
Sdn Bhd.
51.
The court finds that the defendant's letter dated 26.2.2001 (D20)
even prior to the commencement of the legal proceeding has notified the
plaintiff to liase directly with
the Official Receiver of PDLD Sdn Bhd.
Despite such notification, the plaintiff and his previous solicitors did not
write to the Official Receiver seeking for consent for the release of the
equipments.
52.
The plaintiff witness further admitted during trial, that had only the
plaintiff has taken reasonable measures within a reasonable period of time,
the plaintiff would have taken out the equipments from the Project Site.
Instead of doing what is practical to mitigate plaintiff losses, the plaintiff
witness testified that the plaintiff left to the hands of their solicitor who did
not do anything for the past 8 ½ years.
53.
Having full knowledge of the whereabouts of the machineries and
also knowing who is the rightful proprietor of Lot 72, the plaintiff elected and
22
choose not to do the needful but instead proceeded to commence legal
proceeding against the defendant, a wrongful party.
54.
As for the prayer at page 8 of Bundle A, the plaintiff did not plead
specifically for a claim on General Damages. Since parties are bound by
their pleading, plaintiff claim for General Damages must fail and should not
be allowed especially when plaintiff has failed to proof its case against the
defendant.
55.
Based on the above reasons, the plaintiff’s claim in Suit No. D2-22-
1555-2001 is dismissed with costs.
Civil Suit D-22-NCC-624-2010
56.
The plaintiff in Civil Suit No. D-22-NCC-624-2010 (NCC Suit) is the
majority shareholder in PDLD Sdn Bhd and commenced the above cause
of action against the defendant for the losses it has incurred whilst the
equipments were kept on PDLD Project Site due to the defendant’s failure
to remove those equipments.
23
57.
Based on the evidence adduced by all parties, the court finds that the
plaintiff in NCC Suit has failed to proof on the balance of probabilities that
they suffered losses of rental, cost of fencing and cost of security.
58.
It is the plaintiff’s contention that the project was abandoned in May
1998 and until the date the machineries were removed by the defendant in
18.12.2006, the plaintiff has suffered the following losses :
(a) Loss of Rental
-
RM8,973,360.00
(b) Cost of Fencing
-
RM18,560.00
(c) Cost of Employing Security Guards Total
59.
RM164,800.00
= RM9,156,720.00
With regard to the security and fencing costs, the court agrees with
the defendant contention that the costs incurred by the plaintiff in respect of
the security and the fencing costs was solely for the protection of the
plaintiff’s machineries and equipments. The plaintiff’s witness in NCC Suit
(Mohd Iskandar bin Mohd Isa) admitted during cross-examination that the
project was abandoned and there were piles on the ground. Therefore the
24
fencing and the security would be for the protection of the whole project
area.
60.
With regard to the loss of rental, the plaintiff claims that the
machineries and equipments were at prime spot of the land and therefore
that portion of the land could not be rented out and therefore it is claiming
for loss of rental to that area.
61.
The court finds that the total area of the land is 36.38 acres. The
area to be rented out by the plaintiff shows that only 10,000 sq ft in area
was occupied by the defendant’s equipments/machineries. If the spot is
required to be rented out, the plaintiff should have mitigated its losses by
removing the equipments/machineries from the spot to other area of the
land.
There is no evidence to show that the plaintiff has mitigated its
losses. Hence, the court finds that due to its failure, the plaintiff cannot
claim the losses from the defendant.
62.
Based on the foregoing reasons, the court finds that the plaintiff in
NCC Suit has failed to prove on the balance of probabilities that it has
25
suffered the losses as claimed in prayer 15 (a) and (b) of its Statement of
Claim. Thus, the plaintiff’s claim is dismiss with costs.
(Hanipah binti Farikullah)
Judicial Commissioner
Commercial Division
Kuala Lumpur High Court
Dated : 8.2.2011
26
Solicitors for the Plaintiff
Ajit Kumar
Messrs Ajit & Company
Suite 8-10-7, 10th Floor
Menara Mutiara Bangsar
Jalan Liku Off Jalan Bangsar
59100 Kuala Lumpur
Solicitors for the Defendant
Joshua T. Sambanthan
Messrs Joshua Sambanthan & Associates
No. 3A-20, blok A3, No. 9, Jalan PJS 8/9
46150 Petaling Jaya
Selangor Darul Ehsan
27