RCBUMINIAGA SDN BHD v SAWIT KINABALU SDN BHD

Case Significance

A breach-of-contract claim dismissed because the plaintiff sued the wrong party — the dealings were with a separate company, not the named defendant — and failed to plead the essential terms; the conditional counterclaim fell with it. A cautionary application of the separate-legal-entity principle.

This High Court (Shah Alam) decision follows a civil trial of a claim for breach of contract concerning the installation of a plantation-system software, in which the central difficulty was that, on the evidence, the wrong party had been sued. The plaintiff, RC Buminiaga Sdn Bhd, sued the defendant, Sawit Kinabalu Sdn Bhd, for an alleged breach of contract, with the quantum of the claim being RM1,345,000. The background lay in the failure of pilot projects for the software, under which three proposals had been received by another entity, Borneo Samudera Sdn Bhd, with pilot projects undertaken at indirect subsidiary companies. The key feature represented by the plaintiff was that the software could be customised and integrated with a particular accounting package, which was not achieved, and Borneo Samudera discontinued the project in February 2020.

The defendant's counterclaim was conditional, relevant only if the court found a contract between the plaintiff and the defendant. Only if such a contract were found would the defendant have a direct cause of action for misrepresentation and breach of contract in respect of the represented features of the software.

On all the evidence, the court found that there was no subsisting contract between the plaintiff and the defendant, and that all the dealings pertaining to the pleaded claim had been with Borneo Samudera, not the defendant. The court also observed that the pleaded case lacked particularity, that the sum claimed was not particularised, and that the terms of the contract, including offer and absolute acceptance, had not been pleaded, so that the existence of the contract was not established. On that footing the claim was dismissed with costs. Because there was no subsisting contract between the plaintiff and the defendant, the conditional counterclaim also fell and was dismissed with costs. The judgment illustrates the consequences of suing the wrong contracting party and of failing to plead the essential terms of the alleged contract.