IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR
IN THE STATE OF WILAYAH PERSEKUTUAN, MALAYSIA
(COMMERCIAL DIVISION)
CIVIL SUIT NO: 22NCC-1014-06/2012
BETWEEN
LEONG HUP CONTRACT FARMING SDN. BHD.
(COMPANY NO: 180014-P)
... PLAINTIFF
AND
1.
2.
3.
4.
5.
6.
LIM KIAN PAI
(I/C NO: 620217-01-5391)
LIM KIAN TIONG
(I/C NO: 630329-01-6013)
LIM KIAN CHON
(I/C NO: 650613-01-5657)
LIM KIAN SOON
(I/C NO: 660904-01-5509)
LIM KIEN YONG
(I/C NO: 690212-01-5919)
SIOW LIN HUAT
(I.C NO: 741226-01-5239)
... DEFENDANTS
GROUNDS OF DECISION
Background facts
[1]
The parties have a contract farming arrangement that has been in
place for a period of time. Upon the Defendants’ request, the Plaintiff
1
supplied day-old chicks [DOC], feed and services to the Defendants.
These chicks were delivered over various dates to the Defendants’ three
breeding farms in Johor. The farms and their upkeep including the costs
and labour for the same are the Defendants’ responsibility.
[2]
Under the contract farming arraignments, the Defendants would
rear the DOC supplied by the Plaintiff until these DOC reached maturity
as broiler chickens. The broiler chickens would then be sold back to the
Plaintiff.
[3]
A total of nine batches of DOC were requested and delivered to
the Defendants. The details can be found at pages 1 to 31 of Bundle B
and are summarised below:
FARM BATCH
B
A
C
B
A
B
A
C
C
[4]
1
1
1
2
2
3
3
2
3
DATE OF
DELIVERY
OF DOC
27.4.2010
05.06.2010
15.06.2010
21.08.2010
03.09.2010
04.11.2010
01.12.2010
31.12.2010
21.05.2011
DATE OF SALE OF
BROILER CHICKEN
DATE OF
STATEMENT
19.07.2010
27.07.2010
04.08.2010
14.10.2010
24.10.2010
25.12.2010
21.01.2011
11.02.2011
06.07.2011
26.08.2010
26.08.2010
05.10.2010
22.11.2010
01.12.2011
24.01.2011
03.03.2011
12.04.2011
06.11.2011
The total cost of supplies for the DOC was RM630,739.50. The
details of the deliveries can be found in the debit notes issued from
31.12.2010 to 27.1.2011.
The Plaintiff’s present claim is for the
outstanding sum of RM398,517.51 together with interest and costs.
2
[5]
The Defendants denied the debt. They claimed that at the end of
2010, and before the DOC and feed were supplied to the Defendants,
the Plaintiff, through its Sales Manager, one Aw Kin Soo [Aw], had
informed the 4th Defendant that there was an outbreak of a disease
known as Newcastle Disease. As a result of this outbreak, the Plaintiff
through Aw represented that the DOC to be delivered to the Defendants
would be vaccinated; and that the vaccine would be effective and protect
the DOC from the disease until the resale to the Plaintiff. Relying on
those representations, the Defendants claimed that they then agreed to
receive the DOC for rearing in their farms. A total of 4 batches of DOC
were delivered: Batch 3 for Farms A and B; and Batches 2 and 3 for
Farm C.
The Defendants further claimed that the Plaintiff was to
arrange for a technical coordinator to visit their farms from time to time
and advise them whenever there was any outbreak of any disease that
may affect their poultry.
[6]
82.11% of the DOC delivered to the Defendants after Aw’s
purported representations died from Newcastle Disease.
Farm C
suffered the highest casualty with most of the DOC delivered dying after
the 14th day.
The Defendants claimed that the deaths of those DOC
was caused by the Plaintiff’s breach of duty.
[7]
Further, the Defendants claimed that by letter dated 1.4.2011, the
Plaintiff acknowledged that the Defendants had suffered losses to the
value of RM429,910.81 as a result of that outbreak; agreed to share
those losses in the proportion of 70:30; and that the balance of
RM128,973.24 due would be deducted from the Defendants’ subsequent
profits. By reason of that acknowledgment, the Defendants claimed that
the Plaintiff is estopped from making its present claim. By letter dated
3
12.4.2011, the Plaintiff is also said to have given for RM302,001.03 as
financial incentives to the Defendants. The Defendants have asked for a
set off against the Plaintiff’s claim and have further counterclaimed for
losses allegedly suffered as a result of the Plaintiff’s misrepresentations.
[8]
In defence to the Counterclaim, the Plaintiff denied the
representation especially that the DOC will be protected from the
disease; pleaded that the DOC in question were delivered to the
Defendants vaccinated, healthy and in good condition. In relation to the
technical coordinator, such visits were intended to be at random and any
veterinary services were to be upon request from the Defendants. The
Plaintiff further pleaded that it should not be liable for the deaths of the
DOC since the DOC were under the safekeeping and control of the
Defendants at the material time.
[9]
As far as the letter of 1.4.2011 was concerned, the Plaintiff claimed
that it was intended to be a gratuitous act on its part. The parties had
been doing business together for some time by then and it was also to
ensure that such relationship endured. To show that it was sincere in its
intent, a statement for Batch 1 dated 12.4.2011 with a 70% discount was
included through credit note FPOC01940. However, not only was the
letter neither signed nor returned to the Plaintiff, the Defendants never
took any more DOC from the Plaintiff after Batch 3. Consequently, the
Plaintiff withdrew the credit note.
[10] The claim for the outstanding sum of RM398,517.51 as seen in
exhibit P15 is for the amount due for Batch 2 sent to Farm C. According
to PW2, the sum due for Batch 1 had been settled while that due from
Batch 3 had been set off from the Defendants’ profits.
4
Issues
[11] There are two issues for determination.
First, whether the
Defendants are entitled to a set off as a result of the discount allegedly
agreed by the Plaintiff. Second, whether the Plaintiff had represented to
the Defendants that the DOC were vaccinated and/or the vaccine was
effective and could protect the DOC until the DOC were resold to the
Plaintiff.
Testimonies
[12] A total of 11 witnesses testified. The Plaintiff called Dr. Eng Kheng
Boon [PW1], Aw Kin Soo [PW2], Tee Soon Chai [PW3], Tay Kong Howe
[PW4] and Mazzelan bin Manas [PW5].
The Defendants called
Professor Dr Mohd Hair bin Bejo [DW1], Lee Chah Lim [DW2], Steven
Soh Wee Sian [DW3], Lim Kian Soon [DW4], Kwan Chih Ko [DW5]; and
Lim Kien Yong [DW6]. I will deal with the evidence of PW1 and DW1
together.
[13] PW2, Aw is the relevant Sales Manager. He has worked with the
Plaintiff for over 20 years. He was the Sales Manager who dealt with the
Defendants, in particular the 4th Defendant who testified as DW4. He
told the Court that the parties starting dealing with each other from 2009.
Although the Defendants have three farms, the Plaintiff started off
delivering the DOC only to Farm C as Farms A and B were not in
operation yet. Farm C was known as Ladang Phoenix to the Plaintiff. It
had two chicken coops in 2009 but this was increased to four in 2010.
5
[14] PW2 testified that the Defendants agreed to take five batches per
year. This was nothing unusual as the Plaintiff has similar arrangements
with other farms.
Defendants.
However, only three batches were taken by the
Insofar as representations to DW4, PW2 informed the
Court that he told DW4 that as a result of an outbreak of Newcastle
Disease at the end of 2010, the DOC had been vaccinated. But, he
denied having told DW4 that the vaccine would be effective and protect
the DOC until the DOC was sold back to the Plaintiff. He said that
“Tiada orang boleh memberi jaminan bahawa suntikan vaksin boleh
melindungi anak-anak ayam sehingga dijual semula kepada Plaintiff”.
He added that he told DW4 that the Defendants had to cooperate by
carrying out biosecurity measures and field vaccines.
[15] PW2 was also able to enlighten the Court as to the reasons behind
the writing of the letter dated 1.4.2011. He told the Court that DW4
called him repeatedly for assistance as the Defendants had suffered
losses as a result of the disease. The letter was written after PW2 had
spoken with Tay Kong Howe [PW4] and the management of the Plaintiff.
After internal discussions, the Plaintiff decided to assist the Defendants
so that the Defendants could continue rearing batches of DOC supplied
by the Plaintiff. However, the Defendants did not sign any acceptance of
the letter. Neither did the Defendants continue to take DOC from the
Plaintiff after Batch 3 was delivered to the Defendants.
[16] PW2’s evidence was corroborated by PW4 who is actually the
Senior Operations Manager of the Plaintiff. He had worked with the
Plaintiff for over 23 years.
He explained that the Plaintiff is in the
business of buying and selling DOC, poultry feed, medicine and broiler
chickens; and also renting of buildings. The way the Plaintiff carried out
6
its business is like this:
it trades with broiler growers to rear newly
hatched broiler chicks, referred to in the industry as DOC, until the DOC
reaches marketable size broiler birds.
[17] PW4 also told the Court that the Plaintiff started supplying DOC to
the Defendants on 15.4.2009. The Plaintiff usually supplies 5 batches of
DOC per year.
This DOC will be reared using the Plaintiff’s poultry
feeds. When the broilers have attained marketable size, the broilers will
be caught at a fixed price and marketed by the Plaintiff to the potential
customer.
[18] According to PW4, the arrangements between the parties is such
that payment for the sale of the DOC is not due until after the batch is
completed with the catching of the marketable size broiler birds. Each
batch comprises 59,000 DOC.
The profit for rearing a batch is
RM65,893.30. A statement of account is then issued stating the profit or
loss, as the case may be, for the batch. The Defendants’ remuneration,
if any, will be the difference between the total market value of harvested
birds bought by the Plaintiff less the cost of DOC, poultry feed and
hatchery vaccination supplied by the Plaintiff.
If there is a loss the
Defendants will have to pay the Plaintiff the sum stated in the statement.
If there is a profit, the Plaintiff will have to pay the profit to the
Defendants.
[19] The Plaintiff’s present claim is for DOC, vaccine and feed sold to
and delivered to the Defendants in respect of Batch 2 Farm C. There
were three batches delivered to the Defendants’ Farm C of which only
Batch 2 Farm C is relevant for the present proceedings.
148,000 DOC were delivered as Batch 2 for Farm C.
7
A total of
The delivery
orders, debit advices, credit advices, feed return/transfer forms, and a
list of the summary of sales of DOC (vaccines included) and feeds to the
Defendants were tendered in court as exhibits “P-5”, “P-6” and “P-7”.
Similarly, the Plaintiffs tendered the relevant delivery orders, credit notes
and debit notes of the marketable size broiler birds caught and bought
by the Plaintiff, and a summary list of these purchases as exhibits “P-8”
and “P-9”.
[20]
PW4 further testified on the corresponding deliveries and
purchases for Batch 3 and the relevant documents can be found in
exhibits “P-10”, “P-11”, “P-12” and “P-13”. In addition, PW4 explained
the calculation of gross profit of RM31,393.30 that the Defendants made
from Batch 3. This sum was used to set off the losses or balance of the
purchase price that the Defendants owed the Plaintiff for Batch 2 – see
exhibit “P-14”.
As a result of this set off, the Defendants thereby
currently owed the Plaintiff the sum of RM398,517.30.
[21] In relation to why the Plaintiff’s letter of 1.4.2011, aside from
confirming PW2’s evidence, PW4 also explained that the Plaintiff had
agreed to share in the Defendants’ losses as it was “looking at it on a
long term basis”. At the material time, the Defendants had only taken 2
batches when compared to the agreed 5 batches per year. To reflect
the Plaintiff’s good faith, the Plaintiff had issued a credit note for
RM300,937.57 and had incorporated the same into the statement of
account for Batch 2 which can be found at page 25 of Bundle B. When
the Defendants refused to sign and return the letter dated 1.4.2011 and
refused to continue doing business with the Plaintiff, the credit note was
cancelled. The sum due from the Defendants for Batch 2 is therefore
RM429,910.81 together with interest.
8
[22] PW3 is the Senior Hatchery Manager of Leong Hup Poultry Farm
Sdn Bhd. This company breeds and hatches DOC to the Plaintiff and
other broiler customers. He has worked with Leong Hup Poultry Farm
Sdn Bhd for over 23 years.
He explained how after the DOC were
pulled out of hatchers, the DOC were immediately selected and graded.
“Quality DOC will then be boxed into plastic containers and then all DOC
meant for vaccination will be held in a well-ventilated room.
The
vaccinated DOC will then be delivered the same day to the respective
address as instructed by the Plaintiff, which in this case, the
Defendants”.
[23] According to PW3, the DOC delivered to the Defendants’ three
farms were vaccinated. Two types of vaccination were carried out at
Leong Hup Poultry Farm Sdn Bhd, the Zoo-Techniques Automatic
Vaccinator and the coarse spray method.
The Zoo-Techniques
Automatic Vaccinator is a machine which does the vaccination whereas
the coarse spray method uses cabinet sprayer to perform the
vaccination.
[24] In the case of the Zoo-Techniques Automatic Vaccinator, the DOC
are held by workers who place the neck skin onto the Automatic
Vaccinator. The Automatic Vaccinator will then inject vaccine into the
DOC. The Automatic Vaccinator has a counter which will keep count of
the number of vaccinations done. Apparently, the Automatic Vaccinator
can only inject 100 DOC before the counter needs to be reset. This
allows Leong Hup Poultry Farm Sdn Bhd to cross check on the number
of DOC vaccinated. Alternatively, vaccination can be ascertained by the
9
presence of a “visible white mark …found at the neck skin of the DOC
after vaccination”.
[25] As for the coarse spray method, a cabinet sprayer is used. A box
containing the DOC is placed under a “big nozzle”.
PW3 explained
further that “usually, as the area of the nozzle is quite big compared to
the size of the box, not only will the DOC be wet, the whole box will be
wet too”.
[26] PW5 was the technical coordinator concerned.
Like the other
witnesses called by the Plaintiff, he, too has worked with the Plaintiff for
a substantial period. He started work with the Plaintiff in 1999. He was
the technical coordinator for about 10 to 15 farms. His job required him
to visit the farms on a weekly basis for the purpose of ascertaining the
condition of the farms, and check on the weight of the birds, their feed
and health. He had visited Farm C. In fact, as he frequently does; he
visited the farm the second day after Batch 2 was delivered.
[27] According to PW5, he did not find the condition of Farm C
satisfactory. By this, he explained that the biosecurity of the farm was
not satisfactory in that there was no vehicle spray, and no permanent
foot dip. The chicken coops were also not in a good state. Specifically,
he explained that the Defendants only used a feed tray when feeding
paper ought to have been used as it would be easier for the DOC to
feed. Also, the coops only used a light bulb as a source of heat instead
of gas heaters or infrared lights.
PW5 told the Court that he had
mentioned such matters before to the Defendants through its supervisor,
Mr. Siow but his advice was not heeded.
10
[28] When the DOC started to die off in Farm C, Mr. Siow had got in
touch with him around the time when the DOC were between 16 to 18
days old. He then visited the farm with a veterinarian, Dr. Ting who
conducted post mortems on the dead DOC. Dr. Ting concluded that the
DOC had died from Newcastle Disease. Not all the DOC in Batch 2
died. Those that survived and reached maturity were caught and sold to
the Plaintiff who bought them for a total price of RM132,496.01 [RM3.64
per kilo x 26,484 birds].
[29] These are the testimonies of the Defendants’ six witnesses.
[30] I shall start with DW4 who was the Defendants’ principal witness.
He was the person who was the represented the Defendants in all their
dealings with the Plaintiff. He was the person who spoke with PW2.
[31] He told the Court that Aw, PW2 telephoned him on 4.11.2010
[1.11.2010 at 13:09] to inform him that the Plaintiff would be carrying out
a ND program on the DOC. The ND program meant that all vaccination
and spray would be affected by the Plaintiff. Before this, the Defendants
did their own vaccination. Specifically, he said that Aw told him that:
“… plaintif melaksanakan suntikan dan semburan ND kerana lebih
berkesan memandangkan Plaintiff mempunyai pakar-pakar yang
boleh melaksanakan kerja-kerja ini dan juga boleh melindungi
DOC daripada wabak ND”.
[32] The cost of the vaccination and spray was RM0.08 per DOC
bringing up a total cost of RM11,840.00.
Prior to this incident, the
Defendants carried out their own vaccination and spray at the cost of
11
RM0.007 per DOC. Hence, the testimonies of DW2, DW3 and DW5. If
the Defendants had done the same this time, it would have only cost
them RM1,036.00.
[33] According to DW4, the Defendants accepted the proposal and
agreed to pay the higher costs because of the representations from the
Plaintiff’s representative, Aw. DW4 testified that the Defendants who
were less educated chicken farmers believed that the Plaintiff “lebih
pakar dalam melaksanakan vaksinasi ke atas DOC”. In fact, the Plaintiff
are said to have also agreed to be liable for any losses in the event of an
outbreak of Newcastle Disease.
[34] DW4 also testified as to the biosecurity conditions in the farms,
especially Farm C. He explained that Farm C was a new farm and that
the Farm had the latest biosecurity measures in place. He told the Court
about 6 different measures that were in place in Farm C:
i.
bahagian luar reban ayam tersebut adalah dikelilingi dengan
dawai bentuk heksagon untuk mengelakkan burung liar
daripada memasuki kawasan reban ayam tersebut;
ii.
bahagian luar ladang penternakan ayam pula dikelilingi
dengan pagar “voltan tinggi” untuk mengelakkan anjing liar
dan orang yang tidak berkenaan daripada memasuki ladang
penternakan ayam tersebut;
iii.
pintu masuk ladang penternakan ayam tersebut juga
mempunyai tempat pembasmian kuman untuk membasmi
kuman pada kereta dan kenderaan menghantar makanan
12
ayam yang memasuki ke kawasan penternakan ayam
tersebut;
iv.
setiap reban ayam juga dipasang penyembur disinfeksi
elektrik supaya anak ayam pada hari pertama sehingga hari
ke 25 akan dibasmi kuman sekali pada setiap 7 hari dan
pada hari ke 26 dan seterusnya akan dibasmi kuman sekali
setiap dua hari;
v.
setiap reban ayam juga ada tapak membasmi kuman bagi
pekerja membasmi kuman pada dirinya sebelum memasuki
reban ayam tersebut; dan
vi.
ladang penternakan ayam juga mempunyai 16 buah CCTV
camera DVR sistem untuk menyelia keadaan ladang
penternakan ayam tersebut.
[35] In his submissions, learned counsel for the Defendants added that
Farm C had a licence issued by the Veterinary Department and that the
survival rate of Batch 1 at Farm C was 97.82%.
[36] DW4 was of the view that the sums owing to the Plaintiff need not
be paid as the Defendants’ losses far exceeded that sum. When asked
why the Defendants had not replied to the Plaintiff’s letter of 1.4.2011,
he explained that because the parties had never reduced their business
relationship into writing, there was no need to respond to that letter.
[37] DW4 also testified as to the various expenses incurred by the
Defendants.
This can be seen at Q&A 31 and 32 of his witness
13
statement. The Defendants offered evidence of their losses in the form
of invoices for medicines purchased; water and electricity bills [exhibit
D33] and costs of labour or workers employed [exhibit D25].
[38] DW6 did not have direct personal knowledge of the events relating
to Batch 2 Farm C. He was there to confirm the losses suffered by the
Defendants and how the sums were calculated. DW4 and DW6 are
brothers. Actually, the first five Defendants are siblings together with
Siow Lin Huat, their brother-in-law trade under the name of Penternakan
Phoenix; and are sued as such.
[39] DW2, DW3 and DW5 are sales representatives from the
companies that sold vaccine and various veterinary medicine to the
Defendants.
They were in Court to confirm the purchases of the
Defendants and the payments made by the Defendants for those
purchases.
[40] Now, the evidence of the two experts.
[41] PW1 is a registered veterinarian. He used to work with the same
company where PW3 is, the farm that supplies the Plaintiff the DOC. He
is now with another associate company, Leong Hup (G.P.S.) Farm Sdn
Bhd.
[42] He explained that Newcastle Disease is an acute rapid spreading
chicken disease of all ages caused by a virus affecting at least 241
domestic and wild bird species. Unfortunately, there is no cure for this
disease. It could however, be prevented by adopting two measures.
The first which is the most effective is to have a Newcastle Disease
14
Contingency Plan which is really a nationwide exercise. Next, is to take
preventive and control measures.
[43] In the latter measure, there are three key components; namely
isolation of farms from other farms, public roads, distances between
buildings in the farms etc; biosecurity measures that can or should be
taken to prevent disease causing agents or disease carriers from
entering, surviving and infecting or endangering the well-being of the
poultry flock; and vaccination.
[44] He explained that there are two types of vaccination, hatchery and
field. Hatchery vaccination is that which is done at the hatchery whereas
field vaccination is carried out at the broiler farm by the broiler grower.
PW1 told the Court that vaccination is only “one of the preventive tools
to help reduce the chance of outbreak of Newcastle Disease.” There
can be an outbreak of Newcastle Disease if the host, that is, the birds
are not in good condition. If the birds are subjected to cold stress, the
birds will not be able to generate adequate amount of antibody
compared to healthy birds. Birds can suffer from cold stress if there is
“early removal of floor bedding material, caked litter condition, side walls
inadequately/inappropriately covered by side canvasses, etc”.
PW1
further added that the health of the birds can be affected by water and
food intake, environment of the farm, vaccination, condition of growing
and many more. He gave illustrations of what conditions ought to be
like. For example, there must be sufficient heat especially during the
first week of age. Gas heaters ought to be used instead of light bulbs;
and that feeding papers ought to be used besides feeding trays; the
latter to absorb moisture effectively to prevent cold stress.
15
[45] PW1 explained too, that the condition of the farm was important as
without these, even though the host or birds may be “at par”, “the birds
could still be subject to the outbreak of Newcastle Disease, especially if
the antibody level is inadequate.” PW1 testified that he had visited Farm
C when the “flock age was 3 days old”.
He found the “brooding
condition of the house was not that good and a good biosecurity system
does not exist in the farm at that period”. By this, he meant that the
condition was not “conducive”. He had complained to the supervisor of
his observations and concerns.
[46] Like PW1, DW1 is a veterinarian. His evidence was not dissimilar
from PW1.
However, unlike PW1, DW1 had absolutely no personal
knowledge, including never having visited any of the Defendants’ farm,
especially Farm C; at the material time, or ever.
His evidence is
theoretical. This is what he told the Defendants in his report prepared
after the case was filed:
FAKULTI PERUBATAN VETERINAR
28 December 2012
A.B. NG & Associates
Advocates & Solicitors
No 10 & 12, Jalan Melaka Raya 28,
75000 Melaka
(Attn: Mr. Ng Aik Beng)
Dear Sir,
RE:
KUALA LUMPUR HIGH COURT, CIVIL SUIT NO. 22 NCC-101406/2012
LEONG HUP CONTRACT FARMING SDN. BHD.
… PLAINTIFF
LIM KIAN PAI & 5 OTHERS T/A PENTERNAKAN PHOENIX …
DEFENDANT(S)
16
Kindly refer to your letter dated 03 December 2012 (AB/LIT/J/9627/2012) of the
above matter.
The specialist report on the issue as required is as follows:
1.
The first outbreaks of Newcastle disease (ND) occurred in 1926, in
Java, Indonesia and Newcastle-upon-Tyne, England. Infection may take place
by either inhalation or ingestion and that the spread from one chicken to
another depends on the availability of virus in an infectious form. The virus
particles may be inhaled and attached into the mucous membrane resulting
infections.
2.
The mode of spread of ND virus (NDV) can be through movement of
NDV infected live birds, movement of NDV contaminated people, equipments,
chicken products and feed, as well as airborne spread. The incubation period
of NDV infection after natural exposure vary from 2 to 15 days (average 5 – 6
days).
3.
The clinical signs of infected chickens with viscerotropic velogenic NDV
(vvNDV) Pathotype, often begin with listlessness, increase respiration, and
weakness, ending with prostration and death. The virus may also cause
oedema around the eye and head. Green diarrhea is frequently seen in
chickens that do not die early in infection, and prior to death muscle tremors
may be apparent. Mortality frequently reaches 100% in flocks of fully
susceptible chickens Haemorrhagic lesions in the proventriculus, caecal tonsils
and lymphoid aggregates of the intestinal tract are the prominent lesions during
ND outbreaks.
4.
Control and prevention of ND outbreak in chickens can be achieved in
principle with proper vaccination programmes and biosecurity. Biosecurity
encompasses management practices needed to prevent the spread of the virus
between farms and between buildings within a farm. It may be difficult and
expensive to maintain a high level of biosecurity at all times, and thus effective
vaccination programme is the important method to prevent vvNDV infection and
outbreaks. Failure of the vaccination programme could lead to highly
susceptible chickens to vvNDV infection and outbreaks which frequently
reaches up to 100% death.
5.
Live, killed and/or recombinant ND vaccines are commonly use to
control and prevent vvNDV infection or outbreaks in chickens. The common
routes of vaccination can be via intranasal, eye drops, drinking water, spray or
injection. Day old chicks (DOCUMENT) vaccinated against ND may have high
risk of vvNDV infection in the later age leading to ND outbreaks with high
mortality (up to 82% or above). A booster dose of vaccination is commonly
practice when the chicks are at 10 to 14 days of age following DOC vaccination
to ensure high ND antibody titre in the chicks and protect the chicks against
vvNDV infection and outbreaks.
Thank you
17
“WITH KNOWLEDGE WE SERVE”
Yours sincerely,
t.t.
PROFESSOR DR MOHD HAIR BIN BEJO
Dean
Professor of Veterinary Pathology / Avian Pathology
[47] DW1 came to Court to explain his report set out above.
[48] With respect, having examined DW1’s report and having heard his
evidence, the Court did not find his evidence useful. This is evident from
the contents of the report itself. Further, DW1 never examined any of
the DOC, nor did he even visit any of the Defendants’ farms. That being
so, his evidence has to be treated with much caution. More so, when
compared to PW1 who had visited the farm and was able to testify on
what happened, and also give evidence on the status of biosecurity
measures in any of the Defendants’ farms, in particular, Farm C. As
compared to PW1, the Court will prefer the evidence of PW1 for obvious
reasons.
[49] There was however, this coincidence of views on the part of both
experts: there was a need to have adequate and suitable biosecurity
measures. I shall deal with this later when addressing and considering
the issues.
First issue
[50] The first issue concerns the matter of set off; whether the
Defendants are entitled to rely on the letter sent by the Plaintiff offering
18
to bear a substantial portion of the costs of the DOC in question. This is
the letter written by the Plaintiff on 1.4.2011:
Date: 01st April 2011
Penternakan Phoenix – C
No. 5, Jalan Budaya Jaya 2/1,
Taman Budaya Jaya 2, Parit Besar,
83000 Batu Pahat, Johor
Attn: Mr. Lim Kian Soon
RE: Repayment of Debt for Penternakan Phoenix – C
The above matter refers.
Penternakan Phoenix – C has suffered losses of RM 429,910.81 at batch 2
(31/12/10 – 11/02/11) due to outbreak of Newcastle Disease at age 14.
After discussion, the management has agreed to share your losses as the
proportion shown below:-
%
of
Absorption:
Amount to be
beared by:
Farmer
LHCF
Total
30%
70%
100%
128,973.24
300,937.57
429,910.81
In line with the arrangement above, the management would like to propose
to offset the debt amount of RM128,973.24 through the farm’s profit. Please
find the deduction plan as below:Gross Profit (RM)
RM 0.90
RM 1.00
RM1.10
Deduction for Debt (RM)
RM 0.10/Bird
RM 0.20/Bird
RM 0.30/Bird
We hope this proposal is agreeable by your end.
Thank you.
Yours sincerely,
Yours sincerely,
Agreed and accepted by,
t.t
_____________
___________
_________________
Tay Kong Howe
Aw Kin Soo
(Senior Operations Manager) (Sales Manager)
19
[51] The Plaintiff’s witnesses had testified as to how this letter came
about. To recap, PW2 testified that he had finally brought up with the
Plaintiff’s management the matter of the Defendants wanting the Plaintiff
to help out with the payments due as the Defendants had suffered
losses. This was after he had been repeatedly approached by DW4 for
assistance on the matter. PW2 testified that the Plaintiff’s management
decided to help the Defendants in view of their relationship and the
Plaintiff wanting to maintain this relationship. Learned counsel for the
Defendants had submitted that this was not believable because of the
substantial write off and that the two year relationship was really not
such a long relationship as to generate goodwill as claimed by the
Plaintiff. It was the Defendants’ submission, too, that this preparedness
to write off such an amount of the outstanding debt indicates the element
of guilt or responsibility on the part of the Plaintiff; and that it confirms
the Defendants’ version of the conversation between PW2 and DW4.
[52] To start with, the Defendants owe the Plaintiff for the DOC
supplied. That is a debt due to be paid by the Defendants. That is
undeniable.
That debt amounts to RM429,910.81.
Because the
Defendants had difficulty paying the sum, the Plaintiff’s assistance was
sought. Again, this was denied by the Defendants, especially DW4 as
can be seen from his evidence in chief [see Q&A 33] where he told the
Court that he had repeatedly contacted PW2 to discuss the matter of the
losses sustained by the Defendants.
[53] Further, there is nothing in this letter that says that the parties were
making arrangements on the basis of whose fault it was that the DOC
died from Newcastle Disease. It seems to me that the whole overture
20
from the Plaintiff is more consistent with what PW2 and PW4 told the
Court – that the letter was written after the numerous approaches from
DW4 for the Plaintiff’s help in bearing the losses suffered from the
unfortunately high mortality of the DOC sent to Farm C. There is no
reference or any acknowledgement of responsibility or liability for the
losses in this letter. The subject matter of the letter is the matter of
repayment of the Defendants’ debt. The Court is therefore unable to
accept the Defendants’ version of the events.
[54] As far as the letter is concerned, the Plaintiff’s agreement to share
in the Defendants’ losses is however, not unconditional. The Plaintiff
proposed to “offset the debt amount of RM128,973.24 through the farm’s
profit”. As the Defendants’ gross profit increase, the deduction for the
debt would correspondingly increase.
[55] As explained by PW2 and PW4, this deduction or the Defendants’
share can only come about if the Defendants were to continue in their
business arrangements with the Plaintiff; and to continue to take batches
of DOC from the Plaintiff. So long as the Defendants did that, then there
will be the opportunity or occasion to deduct the Defendants’ share of
the debt from their profits. Otherwise, where would the payment come
from? It is not as if the Defendants are offering to pay from some other
source. Hence, the Plaintiff’s version of the facts is more credible.
[56] In any case, in answering the first issue, it is the finding of the
Court that the Defendants are not entitled to the set off as offered in the
Plaintiff’s letter dated 1.4.2011. The reasons are as follow.
21
[57] There was no acceptance on the part of the Defendants. Although
the parties’ arrangements were substantially oral, there is a difference
here. The Plaintiff’s offer was in writing unlike the previous orders. The
offer or proposal in the letter required the Defendants to respond on
whether the Plaintiff’s terms were acceptable to the Defendants. The
Defendants did not respond.
Neither of the Defendants’ witnesses,
especially DW4 and DW6 testified that they had indicated to the Plaintiff
their acceptance. All that the Court hears from the Defendants is their
contention that just because the Plaintiff had put the offer or proposal on
the table, it was entirely up to the Defendants to decide whether they
wish to accept it. None of the Defendants’ witnesses indicated how the
Plaintiff was to read or understand the Defendants’ response given there
was none.
The Defendants cannot expect the Plaintiff to read their
mind, or worse, leave the proposal for an indefinite period.
In fact,
learned counsel for the Defendants even went so far as to submit that
because there was no time limit set in the letter, it was open for the
Defendants to decide whenever they chose to accept, or reject the
Plaintiff’s offer.
[58] With respect, the Court disagrees. The Court is of the view that if
there is no acceptance after a lapse of reasonable time, the Defendants
must be taken to have rejected the proposal; and not accept the same.
Since the Defendants did not honour their part of the bargain by
continuing with the future orders or placements for DOC, the Defendants
are not entitled to hold the Plaintiff to their offer.
[59] Further, the Defendants did not complain when the offer was
retracted. This indicates that the Defendants were well aware that the
offer was subject to them keeping their end of the bargain. Since they
22
did not, they cannot expect the Plaintiff to keep the offer open
indefinitely; or to retract the same.
[60] Against this factual background and for all the reasons set out, the
first issue is therefore answered in the Plaintiff’s favour.
Second issue
[61] This issue relates substantively to the Defendants’ Counterclaim.
The Defendants claim that there have been misrepresentations by the
Plaintiff which had induced them into purchasing the relevant DOC; and
which inducement had led them to suffer loss and damage.
The
Defendants’ witnesses have substantially testified as to the losses and
how they were incurred, especially in the matter of costs of vaccine,
labour and salaries.
[62] The law on misrepresentations are well set out in the following
decision of the Court of Appeal in Sim Thong Realty Sdn Bhd v Teh
Kim Dar [2003] 3 CLJ 227, 234:
“Now the elements of an actionable misrepresentation are well
settled. They are set out as follows in Professor McKendrick’s
Contract Law, 3rd edn, a leading work on the subject:
A
misrepresentation
may
be
defined
as
an
unambiguous, false statement of fact which is addressed
to the party misled and which materially induces the
contract. This definition may be broken down into three
distinct elements.
The first is that the representation
23
must be an unambiguous false statement of fact, the
second is that it must be addressed to the party misled
and the third is that it must be a material inducement to
entry into the contract.
Section 18 of our Contracts Act 1950 defines “misrepresentation”
as follows:
‘Misrepresentation’ includes:
(a)
the positive assertion, in a manner not warranted
by the information of the person making it, of that
which is not true, though he believes it to be true;
(b)
any breach of duty which, without an intent to
deceive, gives an advantage to the person
committing it, or anyone claiming under him, by
misleading another to his prejudice, or to the
prejudice of anyone claiming under him; and
(c)
causing, however innocently, a party to an
agreement to make a mistake as to the substance
of the thing which is the subject of the agreement.
This section is ipsissima verba s. 18 of the Indian Contract Act
1872. It is to be noted at once that the definition in that section is
inclusive or open-ended and not exclusive.
Hence, the
circumstances set out under each of its three paragraphs are not
the only instances of misrepresentation to which the section is
24
confined. In our judgment, it is the duty of a court to find the facts
and then determine whether those facts fall within one or more of
the three paragraphs under s. 18. If they do, then the statement
complained of is an actionable misrepresentation.
This is the
approach adopted in one of the leading cases on the section.
In re Nursey Spinning and Weaving Co Ltd [1881] ILR 5 Bom.
92, 97, Sargeant J said:
Now here we have the Company by their Directors
acting in their authority, and admittedly in perfect
assurance, selling a bill to the Bank of behalf of the
Company as a bill upon which the Company was liable,
which, however, turns out to be one upon which the
Company was not liable.
I say, acting within their
authority, for the transaction was in its very nature, and
was understood by the Bank to be, one for the purpose
of raising money for the Company, as provided by
clause 102 of the Articles of Association; and, indeed, it
was, I think, admitted to be one of the ordinary modes by
which spinning and weaving companies, in the course of
their business, anticipate the sales of their yarn and
piece-goods exported to the China markets. The only
difference between the cases I have referred to and the
present case is that, in the former, the bill sold was
different from what, on the face of it, it purported to be,
while in this case it is different from what it was expressly
represented to be by the agents of the Company in the
ordinary course of business which they authorised to
25
transact. In all three cases what was sold was different
from what the vendor professed to sell; in other words,
there was a misrepresentation within the meaning of
section 18 of the Indian Contract Act, which, coupled
with section 19, provides that a contract shall be
voidable when there has been a misrepresentation,
‘causing, however innocently, a party to an agreement to
make a mistake as to the substance of the thing which is
the subject of the agreement.’
It was said that the
exception to section 19, which excludes from the
operation of the section the case where the party whose
consent was obtained by misrepresentation had the
means of discovering the truth with ordinary diligence, is
applicable to the present case. But no ordinary diligence
would have enabled the Bank to discover that the
Company was not liable on this bill.
...
We now turn to s. 19 of the Contracts Act 1950 which reads:
19.
(1)
When consent to an agreement is caused by
coercion, fraud, or misrepresentation, the
agreement is a contract voidable at the
option of the party whose consent was so
caused.
(2)
A party to a contract, whose consent was
caused by fraud or misrepresentation, may, if
26
he thinks fit, insist that the contract shall be
performed, and that he shall be put in the
position in which he would have been if the
representations made had been true.
Exception - If
such
consent
was
caused
by
misrepresentation or by silence, fraudulent
within the meaning of section 17, the
contract, nevertheless, is not voidable, if the
party whose consent was so caused had the
means of discovering the truth with ordinary
diligence.
Explanation- A fraud or misrepresentation which did not
cause the consent to a contract of the party
on whom the fraud was practised, or to
whom the misrepresentation was made,
does not render a contract voidable.
It is clear from s. 19(1) that it reproduces the English common law
whereby a misrepresentation, whether innocent or fraudulent,
would entitle the innocent party to rescind a contract.
The
Explanation to s. 19(1) enacts the common law requirement that
the misrepresentation must induce the contract. Now we think that
we should say a word about this point. It has to do with the onus
of proof. As a general rule, the burden is on a representee to
show that the misrepresentation induced him to enter into the
contract: Kuppuswami Chettiar v Arumugam Chettiar AIR [1967]
27
SC 1395. But this general rule should not be taken too far. This is
because in a particular case
where
the
defendant
has
made
a
material
misrepresentation calculated to induce the plaintiff to act
as he or she has acted, and where the loss is consistent
with the plaintiff having acted on the misrepresentation
as alleged, the legal burden of proof shifts to the
defendant to prove that the plaintiff did not rely, at all, on
the misrepresentation. (per Finch J in Sidhu Estate v
Bains (1996-06-07) BCCA V02469), citing Anderson JA
in Parallels Restaurant Ltd v Yeung’s Enterprises Ltd
[1990] 4 CCLT (2d) 59). (emphasis added).
See also, Redgrave v Hurd [1881] 20 Ch. D 1.
...
Now, it is trite that the expression “misrepresentation” is merely
descriptive of a false pre-contractual statement that induces a
contract or other transaction. But it does not reflect the state of
mind of the representor at the relevant time. The state of mind of
the representor at the time he made the representation to the
representee varies according to the circumstances of each case.
It may be fraudulent. It may be negligent. Or it may be entirely
innocent, that is to say, the product of a mind that is free of deceit
and inadvertence. See, Abdul Razak bin Datuk Abu Samah v.
Shah
Alam
Properties
Sdn
Bhd.
Put
another
way,
a
misrepresentation is innocent “where the representor believes his
28
assertion to be true and consequently has no intention of deceiving
the representee.” (Cheshire & Fifoot, Law of Contract, 6th edn.) It
is the particular state of mind of the representor that determines
the nature of the remedy available to the representee. So, if the
misrepresentation is made fraudulently, then the representee is
entitled to rescission and all damages directly flowing from the
fraudulent inducement.”
[63] Similarly, in Tan Chong & Sons Motor Co Sdn Bhd v Alan
McKnight [1983] CLJ (Rep) 394, 397, the Federal Court decided that:
“For the purpose of determining whether these words and conduct
amount to a warranty enforceable at the suit of the respondent, we
can do no better than be guided by the test laid down by Lord
Denning MR in Dick Bentley Productions, Ltd. & Anor v Harold
Smith (Motors), Ltd [1965] 2 All ER 65 at 67 – a test which he had
followed and applied in subsequent cases. The test is this-
Looking at the cases once more, as we have done so
often, it seems to me that if a representation is made in
the course of dealings for a contract for the very purpose
of inducing the other party to act on it, and it actually
induces him to act on it by entering into the contract, that
is prima facie ground for inferring that the representation
was intended as a warranty. It is not necessary to speak
of it as being collateral. Suffice it that the representation
was intended to be acted on and was in fact acted on.
But the maker of the representation can rebut this
29
inference if he can show that it really was an innocent
misrepresentation, in that he was in fact innocent of fault
in making it, and that it would not be reasonable in the
circumstances for him to be bound by it”. [1965] 2 All ER
at p. 67.
One of the ways to rebut this prima facie inference is for the maker
of the representation to show that he honestly believed on
reasonable grounds that it was true. Chess (Oscar) Ltd v William,
[1957] 1 All ER 325 and Heilbert, Symens & Co. v Buckleton
[1913] AC 30.
[64] Again, in Balakrishnan Devaraj & Anor v Admiral Cove
Development Sdn Bhd [2010] 7 CLJ 152, the Court of Appeal said at
page 160:
“[17] It is quite common that in the course of the formation of a
contract, one party may make representation to another party.
Thus, a representation is a statement by one party (the
representor) to the other party (the representee) which relates to
an affirmation, a denial, a description of a certain fact, present or
as to the future. And it the representation is untrue it is termed as
a misrepresentation.
[18] Put in another way, a misrepresentation must be a false
statement of existing fact which is normally made prior to, or during
30
the preliminary stages of a contract and is made with the intention
of and has the effect of inducing the party to whom it is made to
enter into the contract with the representor.
[19] Of course, it is always incumbent upon the representee, in
order to obtain relief under the doctrine of misrepresentation, to
prove to the court the actionability of the misrepresentation. And
for a misrepresentation to be actionable, that misrepresentation
must be a false statement of fact which induces the representee to
enter into the contract.
It must not be forgotten that the
misrepresentation must be material in nature in that a reasonable
man would be influenced by it.
[20] According to the case of Arnison v Smith [1889] 41 Ch. D
348, a statement made by a representor which induced the
representee to enter into a contract with him is considered a
misrepresentation if it was false or conveyed a false impression to
the representee (per Cotton LJ at p. 371 thereof).
[21] The motive of the representor, or his state of mind, is
immaterial in determining whether or not his statement is a
misrepresentation, although the state of mind is looked at in
ascertaining whether a misrepresentation is fraudulent or not.
According to Jessel MR in Smith v Chadwick [1881-81] 20 Ch. D
27, at p. 44, CA, that whatever his motive, the representor is liable
upon his false statement, and “he cannot be allowed to escape
merely because he had good intentions, and did not intend to
defraud”.
31
[22] Neither can the representor argue that the representee was
not sufficiently diligent in examining the statement simply because
the representor did not realise the untruthfulness of the statement
(Aaron’s Reefs, Limited v Twiss [1896] AC 273, at p. 281, HL).
[23] It must be borne in mind that the representor’s statement
which has affected the mind of the representee and has induced
him to make the contract in question, must be a statement of fact,
either existing or part (Eaglesfield v Marquis of Londonderry [187677] 4 Ch. D 693, and at p. 709 thereto, James LJ aptly said, “Of
course the misrepresentation, if misrepresentation there be, must
be a misrepresentation of a matter of fact, ... .”)
[24] Misrepresentation under the Contracts Act 1950 would
include:
(a)
the positive assertion in a manner not warranted by the
information of the person making it, of that which is not true,
though he believe it to be true (s. 18(a) of the Contracts Act
1950);
(b)
any breach of duty which, without an intent to deceive, gives
an advantage to the person committing it, or anyone claiming
under him, by misleading another to his prejudice, or to the
prejudice of anyone claiming under him (s. 18(b) of the
Contracts Act 1950); and
(c)
causing, however innocently, a party to an agreement to
make a mistake as to the substance of the thing which is the
32
subject of the agreement (s. 18(c) of the Contracts Act
1950).
[25] It is quite apparent that misrepresentation as defined in the
Contracts Act 1950 covers situations of innocent misrepresentation
as understood in common law.
The difference between
misrepresentation and fraud is this. In fraud, the person making
the representation does not himself believe in its truth.
In
misrepresentation, the representor may believe the representation
to be true.
[26] By virtue of s. 19(1) of the Contracts Act 1950, a contract
entered into by a party either through innocent or fraudulent
misrepresentation is voidable at the option of the party whose
consent was so obtained. Thus, the innocent party who had been
induced
to
enter
into
the
contract
through
an
innocent
misrepresentation, may choose to set aside the contract of his own
accord or by seeking the assistance of the court under the Specific
Relief Act 1950 (Abdul Razak Datuk Abu Samah v. Shah Alam
Properties Sdn Bhd & Anor Appeal [1999] 3 CLJ 231 CA).
[27] To trigger an inducement, two essential elements are
necessary.
Firstly, the representee must in fact rely on the
representor’s statement in the contract concerned. Secondly, the
representor at the time of entering the contract, must have the
intention, or at least realise, that the statement will, or probably
will, be relied upon by the representee.
33
[28] Thus, both the representee’s reliance on a misstatement and
the representor’s intention to induce are material in cases of
misrepresentation.
The court would infer that the representor
intended to induce by looking at the circumstances in which the
representation was made. In William Smith v David Chadwick,
John Oldfield Chadwick, Ebenezer Adamson, And Edwin Collier
[1883-84] 9 App. Cas. 187, at p. 190, HL, the Earl of Selborne LC
had this to say:
the intention which the law justly imputes to every man to produce
those consequences which are the natural result of his acts ... .
[29] In I.B. Coaks, C.J. Buyon, F.E, Watson, W. Cadge, E. K.
Harvey, C. Bailey, And J. Cross v. J.F. Boswell and Others [1886]
11 App. Cas. 232, at p. 236, the House of Lords observed through
Earl of Selborne that:
A man is presumed to intend the necessary or natural
consequences of his own words and acts; and the evidential rei
would therefore be sufficient without other proof of intention.
[30] A representation is said to be material if by its nature, it
displays a tendency to induce the representee to enter into the
contract. In Smith v Chadwick [1881-82] 20 Ch D 27, at p. 44, CA,
Jessel MR aptly said that the representation was:
of such a nature as would induce a person to enter into the
contract, or would tend to induce him to do so, ... .
34
[31] All the representee has to prove is that he was, in fact,
induced to enter into the contract by the representor.”
[65] Therefore, in order to succeed in its Counterclaim, the Defendants
will have to prove all the elements of misrepresentation. It must be
mentioned here that the Defendants have not identified whether they are
looking at the manner of the misrepresentation, whether it was innocent,
negligent or fraudulent. Regardless, what the Defendants have to prove
is the existence of the representation itself, that it is “an unambiguous
false statement of fact”; before going on to show that the representation
was addressed to the party misled; and ultimately showing that there
was “material inducement to entry into the contract”.
[66] On the first matter of the representation itself, whether the
representations did indeed take place; that the Plaintiff’s Aw or PW2
represented to the Defendants [DW4] that the DOC were vaccinated
and/or the vaccine was effective and could protect the DOC until they
were resold to the Plaintiff, the Court finds that although there were
conversations between PW2 and DW4, there were no representations at
all in the terms claimed by the Defendants. PW2 denied representing
that the vaccination given by the Plaintiff to the DOC would protect the
DOC till they were resold to the Plaintiff. Since there were no such
representations, the subsequent question of reliance or inducement to
buy the relevant batch of DOC therefore does not even arise.
[67] Since the Court is dealing with oral representations, it is for the
Court to determine whose evidence it finds more credible. In this regard,
the Court finds the Plaintiff’s witnesses, especially PW2 honest, clear
35
and of assistance as to the material facts here.
consistent, cohesive and reasonable.
I find his evidence
He answered questions posed,
especially in cross-examination calmly, confidently and truthfully. His
evidence as discussed earlier was also corroborated by the other
witnesses called. PW2 told the Court that he had told DW4 about the
outbreak of Newcastle Disease; and that is a true fact.
[68] As for the vaccination of the DOC supplied to Farm C, these DOC
were indeed vaccinated using the methods described by PW3 [Tee
Soon Chai].
PW3’s evidence that he was “sure” that Batch 2 DOC
delivered to the Defendants’ Farm C had been vaccinated stands
uncontroverted.
[69] By contrast, I found the evidence of the Defendant’s fourth
witness, DW4 in particular, to be self-serving, often inconsistent, and
incredulous. Given that the Defendants themselves are industry players
familiar with the business of poultry farming, it seemed somewhat
incredulous to the extent of being unbelievable, that the Defendants
would have been misrepresented; or would have believed that there was
almost a guarantee from the Plaintiff that the DOC will either not contract
or die from Newcastle Disease.
The Defendants are no small time
farmers by any stretch of the imagination. They have several farms and
are familiar with the industry and with what is required including ensuring
that the sight biosecurity measures are properly emplaced.
In this
regard, the Court does not find the second issue proved.
[70] From the evidence, it would appear to the Court that it was all a
pure business decision on the part of the Defendants that had nothing to
do with any representation from the Plaintiff. I further do not find any
36
reliance by the Defendants on any representation made by the Plaintiff
or its representative as required by sections 18 and 19 of the Contracts
Act 1950.
[71] As testified by both PW1 and DW1, there is no cure for Newcastle
Disease. What is accepted universally is the need for the three pronged
approaches; vaccination, biosecurity and host. Both experts agree that
proper and appropriate biosecurity measures had to be in place. What
those required measures are will surely depend on the conditions at the
relevant farm. The evidence points more towards there being a lack of
adequate biosecurity measures in the nature explained by the Plaintiff’s
witnesses, especially PW5 that can be attributed the blame for the high
mortality rate in the DOC in Batch 2 in Farm C. This absence of the
proper
and
particular
biosecurity
measures
required
in
the
circumstances at Farm C had been pointed out to the Defendants; and
the evidence reveals that the Defendants were aware of this.
[72] Specifically, the Defendants had been advised as to the need for
feeding paper and infrared lights so as to promote healthy conditions for
the DOC. Despite being so advised by PW5, the Defendants did not
appear to have put any of these measures in place; and this persisted
right up to the time of the DOC in question. While the Defendants may
have had in place the six measures identified by DW4, it is quite
noticeable that these relevant and necessary measures highlighted by
PW5 in his visits to Farm C were not put in place.
In fact, these
measures were not addressed by DW4; nor was there any claim by the
Defendants that those measures were indeed in place. The Court is of
the view that the Defendants have only themselves to blame for the
outbreak in their Farm C. I must add that the Defendant’s argument that
37
this issue of the lack of biosecurity measures should be disregarded
because it was not pleaded, is without basis: see paragraph 3 of the
Reply to the Defence and Counterclaim.
[73] In any event, the Defendants’ losses are not proved.
The
testimonies of DW2, DW3 and DW5 are really of no assistance because
the Defendants’ purchases totalling some RM44,400.00 include
purchases
for
periods
other
than
the
relevant
period
under
consideration. Further, such purchases cannot be said to be purchases
meant for Farm C alone. Since the losses are related to Farm C, it must
either be shown the proportion of those purchases which relate to Farm
C; or how the purchases are shared or distributed between all the farms
owned by the Defendants. Some of these purchases are further not for
medical expenses but are costs generally incurred in rearing DOC; and
which are not recoverable as reasonable costs.
[74] As for the charges for utilities, once again, the bills are for periods
that include irrelevant dates and for farms other than Farm C. It is not
for the Court to sort out the individual expenses in claims of this nature.
It is for the Defendants to specifically prove their loss. The same can be
said for the claims for loss of profits and cost of labour; and I agree with
the submissions of the Plaintiff in this regard.
[75] This second issue is therefore also answered in the Plaintiff’s
favour. There were no representations as alleged by the Defendants;
and no losses proved to the satisfaction of the Court.
[76] The upshot of the Court’s consideration and determination of the
two issues leads me to further find that the Plaintiff has proved its case
38
on a balance of probabilities.
Consequently, the Plaintiff’s claim is
allowed with interest at the rate of 5% per annum from the date of
judgment to the date of realisation; the Counterclaim is dismissed.
Further, the Court finds it appropriate to make a single order of costs of
RM70,000.00 to be paid to the Plaintiff. The Court finds this a suitable
amount bearing in mind inter alia the issues involved, the number of
witnesses, and the length of trial.
Dated: 20 November 2014
(DATO’ MARY LIM THIAM SUAN)
JUDGE
HIGH COURT KUALA LUMPUR
Solicitors:
Aimee S.H. Liew for the Plaintiff
Messrs YH Teh & Quek
Ng Aik Beng for the Defendants
Messrs A.B. Ng & Associates
39