‭TUTORIAL DAMAGES‬

‭ n‬ ‭25‬ ‭September‬ ‭2019,‬ ‭Bellamy‬ ‭,‬ ‭a‬ ‭luxury‬ ‭yacht‬ ‭builder‬ ‭entered‬ ‭into‬ ‭a‬ ‭yacht‬ ‭building‬
O
‭contract‬ ‭with‬ ‭Wonkru‬ ‭Inc.,‬ ‭a‬ ‭company‬ ‭wholly‬ ‭owned‬ ‭by‬ ‭Marcus‬ ‭Ong.‬ ‭Bellamy‬ ‭agreed‬ ‭to‬
‭construct‬ ‭and‬ ‭deliver‬ ‭a‬ ‭50‬ ‭metre‬ ‭eco-friendly‬‭yacht‬‭with‬‭a‬‭serial‬‭number‬‭FB256‬‭to‬‭Wonkru‬
‭Inc.‬‭The‬‭agreed‬‭price‬ ‭for‬‭the‬‭yacht‬‭was‬‭RM18‬‭million.‬‭It‬‭was‬‭also‬‭agreed‬‭for‬‭Wonkru‬‭Inc.‬‭to‬
‭pay the first instalment of 10% of the price due on 17 October 2019.‬

‭ o‬ ‭design‬ ‭and‬ ‭build‬ ‭a‬ ‭superyacht,‬ ‭Bellamy‬ ‭informed‬ ‭Marcus‬ ‭that‬ ‭they‬ ‭need‬ ‭at‬ ‭least‬ ‭three‬
T
‭years‬‭to‬‭complete‬‭the‬‭yacht‬‭but‬‭Marcus‬‭insisted‬‭the‬‭yacht‬‭must‬‭be‬‭completed‬‭and‬‭delivered‬
‭on‬‭30‬‭November‬‭2021.‬‭Marcus‬‭had‬‭intended‬‭to‬‭charter‬‭the‬‭yacht‬‭to‬‭the‬‭state‬‭government‬‭in‬
‭conjunction with Visit Malaysia 2022.‬

I‭n‬‭order‬‭to‬‭speed‬‭up‬‭the‬‭building‬‭of‬‭the‬‭said‬‭yacht,‬ ‭in‬‭November‬‭2019,‬‭Bellamy‬‭had‬‭verbally‬
‭promised‬ ‭Skyhall‬ ‭Ship‬ ‭Builder‬ ‭to‬ ‭(the‬‭SSB)‬‭subcontract‬‭parts‬‭of‬‭the‬‭building‬‭process‬‭while‬
‭retaining‬ ‭ultimate‬ ‭responsibility.‬ ‭The‬ ‭SSB‬ ‭would‬ ‭be‬ ‭responsible‬ ‭for‬ ‭tank‬ ‭tester,‬ ‭vibration‬
‭analysis‬ ‭and‬ ‭painting.‬ ‭Bellamy‬ ‭had‬ ‭also‬ ‭purchased‬ ‭eco-friendly‬ ‭material‬ ‭fibre-reinforced‬
‭plastic‬ ‭(FRP)‬ ‭from‬ ‭Sifeng‬‭Yacht‬‭Supplies.‬‭Though‬‭the‬‭process‬‭of‬‭building‬‭yacht‬‭using‬‭FRP‬
‭required‬ ‭more‬ ‭skilled‬ ‭labour‬‭and‬‭knowledge‬‭compared‬‭to‬‭steel,‬‭aluminium‬‭or‬‭polyethylene,‬
‭FRP‬‭composite‬ ‭material‬‭provided‬‭better‬‭return‬‭of‬‭investment‬‭on‬‭account‬‭of‬‭their‬‭longer‬‭life,‬
‭recyclable‬ ‭and‬ ‭have‬ ‭no‬ ‭adverse‬ ‭effects‬ ‭on‬ ‭the‬ ‭marine‬ ‭ecosystem.‬ ‭This‬‭has‬‭resulted‬‭in‬‭an‬
‭increase of 20% from the initial cost planned.‬

‭ y‬‭17‬‭October‬‭2019,‬‭Bellamy‬‭had‬‭not‬‭received‬ ‭any‬‭payment‬‭for‬‭the‬‭agreed‬‭first‬‭instalment‬
B
‭i.e‬‭RM1.8mil.‬‭After‬‭several‬ ‭demands‬ ‭made‬‭for‬‭the‬‭payment,‬‭Bellamy‬‭eventually‬‭terminated‬
‭the contract on 22 January 2020.‬

‭ ellamy‬ ‭comes‬ ‭to‬ ‭you‬ ‭for‬ ‭an‬ ‭advice‬ ‭on‬ ‭the‬ ‭likelihood‬ ‭of‬ ‭success‬ ‭in‬‭claiming‬‭the‬‭available‬
B
‭remedies. Bellamy wishes to claim for:‬

i‭)‬ ‭ ost of purchasing FRP (and the 20% increase of expenditure); and‬
C
‭ii)‬ ‭Loss of profit‬
‭TUTORIAL DAMAGES‬

‭1.‬ T‭ o what extent can the person who caused the loss be held responsible‬
‭where the injured party suffers financial loss and sues him for damages‬
‭for breach of contract?‬

‭2.‬ ‭What is the impact of the English case‬‭Hadley v Baxendale‬‭(1854)‬

‭3.‬ ‭What is a test of foreseeability?‬

‭4.‬ W
‭ hat is the degree of knowledge imposed on the defendant to‬
‭determine whether the damage/loss lies within the contemplation of his‬
‭mind?‬

‭5.‬ W
‭ hat is the significance of the English case‬‭Victoria‬‭Laundry v Newman‬
‭Industries‬‭(1949) to the principle of remoteness?‬‭What is the key‬
‭principle of the case?‬

‭6.‬ W
‭ hat is your understanding on the principle/concept of limitations on‬
‭recovery of damages in contract law? (Limitations of liability and‬
‭reasonableness)‬

‭7.‬ F‭ or all your answers above (QS 1-6), support them with the Malaysian‬
‭cases.‬