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1. Sindora Trading Sdn Bhd & Anor v Top-range Products (M) Sdn Bhd [2010] MLJU 1735
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 SINDORA TRADING SDN BHD & ANOR v TOP-RANGE PRODUCTS
(M) SDN BHD
CaseAnalysis
| [2010] MLJU 1735

Sindora Trading Sdn Bhd & Anor v Top-range Products (M) Sdn Bhd
[2010] MLJU 1735
Malayan Law Journal Unreported

HIGH COURT (JOHOR BAHRU)

VERNON ONG, J
GUAMAN SIVIL NO (MT-1) 22-371-2006
20 December 2010

Vinoben Mathiavaranam and Reginald Vallipuram (Tetuan Reginald Vallipuram & Co.),
Tarlochan Singh Dhaliwal (Tetuan A S Dhaliwal)

VERNON ONG, J

GROUNDS OF JUDGMENT

The plaintiffs' claim is for the purchase price of RM108,177.04 for laminated boards sold and delivered to the
defendant. The defendant is counterclaiming for RM2,870,558.00 in damages.

Brief account of the facts

The 1st plaintiff is the manufacturer of the laminated boards whilst the 2nd plaintiff is the 1st plaintiff's trading arm.
Pursuant to the defendant's purchase order nos. 5743 and 5794 to the 2nd plaintiff, the 1st plaintiff sold and
delivered 2 consignments of laminated boards to the defendant. The defendant took delivery of the following
consignments from the 1st plaintiff.

Purchase Order No. Invoice no. Delivery Order No. Amount

5743 ST/340/2003 D-022/2003 RM48,869.15

5794 ST/362/2003 D-042/2003 RM59,307.89

Total RM108,177.04

Plaintiff's claim

The first consignment of the laminated boards were accepted by the defendant. The defendant did not reject any of
the laminated boards. The defendant also accepted the second consignment of the laminated boards. After the
defendant complained that 162 of the 1,500 laminated boards were de-laminated due to high moisture the plaintiff
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Sindora Trading Sdn Bhd & Anor v Top-range Products (M) Sdn Bhd [2010] MLJU 1735

sent another consignment of 162 laminated boards to the defendant. But the defendant rejected this replacement
consignment on the grounds of high moisture content. The plaintiff sent another consignment of 112 laminated
boards. Although the defendant complained that the 112 laminated boards had high moisture content, the
defendant did not reject or return the laminated boards. As the defendant has taken delivery of all the laminated
boards, the defendant is liable to pay the purchase price.

Defendant's defence and counterclaim

The defendant contends that due to the defects in the laminated boards the defendant is not liable to pay the
purchase price. The defendant is counterclaiming against the plaintiffs for losses and expenses incurred as a result
of the defective laminated boards.

Findings of the Court

Khairuddin Bin Salleho (PW1) the 1st plaintiff's marketing manager at the material time produced the purchase
orders, delivery orders and invoices relating to the 2 consignments of laminated boards. PW1's evidence on this
was not challenged or contradicted. The fact that the purchase orders were issued by the defendant and that the
laminated boards were delivered to the defendant is not disputed.

1st consignment

There were no complaints about the first consignment of 1,230 laminated boards under invoice no. ST/340/2003.
As the defendant has taken delivery of the first consignment, the defendant is obliged to pay the purchase price for
it. Therefore, the defendant is liable to pay to the plaintiffs the purchase price of RM48,869.15 for the first
consignment under invoice ST/340/2003 dated 7.2.2003 (s 31 of the Act; Panglima Aces Sdn Bhd v Highway Brick
Works (Serendah) Sdn Bhd [2006] 3 CLJ 628; Mukand Limited v Malaysia Steel Works (KL) Sdn Bhd [2010] 5 CLJ
282 (CA)).

2nd consignment

Notwithstanding the defendant's complaints about the 2nd consignment, the defendant's obligation to pay the
purchase price is unaffected. The defendant had accepted delivery of the second consignment. It had converted the
laminated boards when it utilised them in the process of manufacturing its furniture (s 42 of the Act). On the
authority of Panglima Aces Sdn Bhd. supra and Mukand Limited, supra, the defendant is liable to pay
RM59,307.89. The issue of the damages for alleged defects is the subject matter of the defendant's counterclaim.

Defendant's counterclaim

The defendant's counterclaim is for the following heads of damages:

(i) costs of replacing laminated boards/completed items ......... RM 11,114.00

(ii) costs of replacement works ......... RM 21,030.00

(iii) loss of productivity ......... RM 180,000.00

(iv) external warehouse costs ......... RM 600.00

(v) payment to American Homes ......... RM 2,900.00

(vi) freight charges ......... RM 1,200.00

(vii) loss of business ......... RM1,080,000.00

(viii) loss of reputation ......... RM1,573,714.00

Total RM2,653,714.00
 Page 3 of 4
Sindora Trading Sdn Bhd & Anor v Top-range Products (M) Sdn Bhd [2010] MLJU 1735

According to the facts as disclosed in the evidence, it is not disputed that some of the laminated boards under the
second consignment were defective. The defective laminated boards had become delaminated and cracked. When
the plaintiff was informed of the defects, the plaintiff initially delivered a replacement consignment of 162 laminated
boards. The defendant rejected this replacement consignment because of high moisture content. Subsequently, the
plaintiff delivered another replacement consignment of 112 laminated boards to the defendant. The defendant's
witness Kamarulzaman Bin Alias (DW1) had written to the 2nd plaintiff on two occasions: on 17.4.2003 when the
defendant wrote to the plaintiff complaining about the cracks, and again on 3.5.2003 referring to the defendant's
rejection of the 162 replacement laminated boards and to the defects in the 112 replacement laminated boards.
DW1 also produced a letter from its customer in South Africa complaining about the furniture. DW1 also produced
photographs depicting the delamination and cracks in the finished and semi-finished furniture. DW1 also wrote to
the 2nd plaintiff on 18.7.2003 informing that the defendant was unable to assess the damages as a result of the
cracking problem. On the evidence as a whole, the Court is satisfied that the defendant has shown that there were
defects in the laminated boards.

To prove its counterclaim for damages, DW1 produced a letter dated 29.9.2003 to the plaintiff. It contains the
particulars of the damages incurred by the defendant over the last 5 to 6 months amounting to RM264,596.84. By
another letter dated 1.10.2003 DW1 informed the plaintiff that they will be visiting their customers overseas to
ascertain the impact of the problems. By a letter dated 17.11.2003, DW1 informed that they received another
complaint from their customers. DW1 also testified that the defendant suffered losses related to loss of productivity,
reworking on the furniture, detention charges, haulier charges, transport costs, accommodation for workers, loss of
reputation and loss of future business amounting to RM2,870,558.00.

It is settled law that in order for the defendant to succeed in its counterclaim the defendant must show that the
abovementioned loss and damages is due to the breach of contract by the plaintiff. Once that is established, the
defendant has the additional burden of proving the damages. The law on the recovery of damages has been
succinctly enunciated by Ramly Ali J (now JCA) in PB Malaysia Sdn Bhd v Samudra (M) Sdn Bhd [2009] 7 MLJ 681
at 697. It may be summarised as follows:
(1) The party seeking the claim bears the burden of proof to prove the facts and the amount of damages (Hock
Huat Iron Foundry (suing as a firm) v Naga Tembaga Sdn Bhd [1999] 1 MLJ 65 (CA); Bonham-Carter v
Hyde Park Hotel Limited (1948) 64 TLR 177; Popular Industries Limited v Eastern Garment Manufacturing
Sdn Bhd [1989] 3 MLJ 360 and Sony Electronics (M) Sdn Bhd v Direct Interest Sdn Bhd [2007] 2 MLJ 229
(CA)).
(2) The damages must be proved with real or factual evidence. Mere particulars, summaries, estimations or
general conclusions will not suffice (Lee Sau Kong v Leow Che Chiang [1961] MLJ 17 (CA)).

Other than DW1's testimony and the statements contained in the faxes and letters written by DW1, the defendant
did not prove any facts or produce any evidence to substantiate their claim for items (i) to (vi) of the counterclaim.
Accordingly, the defendant has failed to satisfy the burden of proving the aforesaid items of damages.

Similarly, the defendant's claim under item (vii) for loss of business for RM1,080,000.00 must also be proved by real
or factual evidence. Apart from DW1's testimony there is no real or factual evidence in support of the claim. At the
very least the defendant ought to have produced the list of customers and statements of account for the
corresponding periods before and after the breach of contract occurred as evidence of loss of business. As the
burden of producing such evidence lies on the defendant, the failure to adduce any supporting evidence shows that
DW1's assertion is unsubstantiated.

The defendant's last item of claim (viii) is for loss of reputation for RM1,573,714.00. As a general rule damages for
loss of reputation will not be awarded for breach of contract (see Subramaniam Paramasivam & Ors v Malaysian
Airlines System Bhd [2002] 1 CLJ 230 where Kang Hwee Gee J (now JCA) cited a passage by Selvam JC in Haron
bin Mundir v SAAA [1992] 1 SLR 18 at 30H). What we have here is a principally commercial transaction between
two commercial entities. As with contracts of this nature non-pecuniary loss such as frustration, mental distress,
loss of reputation and injured feelings suffered by a party as a result of the breach are not generally regarded as
matters that arose in the natural course of event or which were within the contemplation of the parties when they
entered into the contract. If, however, the contract is not primarily a commercial contract, in the sense that it affects
 Page 4 of 4
Sindora Trading Sdn Bhd & Anor v Top-range Products (M) Sdn Bhd [2010] MLJU 1735

not the defendant's business interests, but his personal, social and family interests, then the door should not be
closed to awarding damages for mental suffering (or any other non-pecuniary loss) if the court thinks that in the
particular circumstances of the case the parties to the contract had such damage in their contemplation (McGregor
on Damages 1997 edn, paras. 92 & 99). In the circumstances the claim for loss of reputation is remote and not
recoverable.

Conclusion

For the reasons adumbrated above the plaintiff's claim is allowed in prayers (a), (b) with costs of RM12,000.00. As
the defendant has failed to satisfy the legal and evidential burden of proving the damages, the defendant's
counterclaim is dismissed with costs of RM5,000.00.

End of Document