EASTERN PACIFIC INDUSTRIAL CORPORATION BERHAD v A.D METAL TRADING & TRANSPORT SDN BHD

Case Significance

Distinguishes trespass to goods from conversion and detinue, confirms that reasonably foreseeable pure economic loss is recoverable for trespass to goods, and holds that a claimant recovers its own foreseeable loss rather than the value of goods it did not own outright.

This Court of Appeal decision arises from consolidated appeals in a dispute over the tort of trespass to goods and the damages recoverable for it. The plaintiff, a metal-recycling company, had contracted with a third company to transport materials from a supply base used for the decommissioning and dismantling of offshore petroleum platforms, and its claim against the defendant concerned interference with those materials. The judgment distinguishes trespass to goods from the related torts of conversion and detinue and addresses the measure of damages, including whether pure economic loss is recoverable and how a plaintiff's election between claiming costs and expenses or loss of profits operates.

On the law, the court accepted that pure economic loss may be claimed for the tort of trespass to goods, provided that the losses are reasonably foreseeable, distinguishing trespass, an interference with possession, from conversion, a dealing inconsistent with the owner's title, and detinue, a wrongful detention. The characterisation of the wrong mattered because it shaped which losses could be recovered and on what basis.

Applying those principles, the court scrutinised the individual heads of damage claimed by the plaintiff. It held that the claim for the total value of the materials remaining on site, in a sum exceeding two and a half million ringgit, was not properly recoverable by this plaintiff, because under the governing letter of award the bulk of the sale proceeds would have been payable to the third company that owned the materials, the plaintiff being entitled only to a fixed margin based on tonnage; the plaintiff's true loss was accordingly its margin, not the whole value. The court also examined a claimed penalty sum against the terms of the letter of award. The judgment is a useful illustration of the distinctions between trespass to goods, conversion, and detinue, and of the principle that a claimant recovers its own foreseeable loss, not the value of goods it did not own outright.