Case review

1. ESTATE & FORESTRY CONSULTING
MANAGEMENT
v
KOPERASI PERMODALAN
MELAYU NEGERI JOHOR
[2010] 3 MLJ 840

2. PARTIES TO THE CASE
DEFENDANT
KOPERASI
PERMODALAN
MELAYU NEGERI
JOHOR
(KPMJ)
PLAINTIFF
ESTATE &
FORESTRY
CONSULTING
MANAGEMENT
(EFCM)

3. FACTS OF THE CASE
Terms included:
1. Upon completion, D pays RM40M to P
2. D to provide security deposit of RM 25M to bank for P’s loan.
3. D to provide P with a banker's letter of guarantee of RM15m
payable upon the completion of the project
The Defendant appointed Plaintiff to undertake the
development and the planting of oil palm on D’s land
which is to be completed in 3 years.

4. PLAINTIFF’S CONTENTION
The Defendant had only placed a security
deposit of up to RM13m which affected the
drawdown by the bank to the plaintiff.
The defendant failed to provide the
banker's letter of guarantee of
RM15M.
The defendant failed to pay to the
plaintiff the total development costs
leaving a balance of RM8,467,712.35.

5. DEFENDANT’S CONTENTION
The plaintiff have failed to complete the project to
develop and maintain the oil palm plantation on
defendant's land in accordance with the agreement.
There was delay in the progress of the development
of the plantations & overall poor performance in
developing the plantations.
Plaintiff’s failure to make progress reports despite
various reminders.
Plaintiff had done felling activities in contravention of
s 34A of the Environmental Quality Act 1974.

6. PRAYER TO COURT
PLAINTIFF DEFENDANT
1. Balance of total cost of
development
(RM8,467,712.35)
1. Loss of potential income
(RM13,750,000)
2. Loss of income (RM10,308,00) 2. Land rental paid to YAKIN
(RM717,797)
3. Damages for termination of
contract.
3. Loss of security deposit (RM 13M)
4. Interest and Costs 4. Damages for breach of contract
(RM27,482,090)

7. ALLOWED
COUNTERCLAIM 1: RM13,750,000
• It must have been within the contemplation of the parties when they
entered into the agreement that the defendant would likely suffer a loss
of income from the harvesting and sale of the oil palm fruit from the
plaintiff's breach of the agreement. Applying the principles enunciated,
this loss is recoverable.
COUNTERCLAIM 3: RM13,000,000
• As the plaintiff had failed to repay the loan facility thus the bank debited/
set off defendant's money to settle the plaintiff's debts. The loss of the
security deposit of RM13M is liable to be reimbursed by the plaintiff
under the express provisions of the agreement.

8. REJECTED
COUNTERCLAIM 2: RM717,797
• The rental is not a loss or damage which arose in the usual course of
things from the breach. At all material times the lands were leased to
the defendant and the defendant enjoyed and continued to enjoy the
possession of the lands as a lessee.
• The defendant did not suffer any loss as a lessee. This is also not
what the court would consider as a loss or damage which falls under
the second limb of s 74 CA. Claim is not recoverable.

9. COUNTERCLAIM 2: RM27,482,090
• DW2 said that based on a report prepared by Intra Harta
Consultants (South) Sdn Bhd dated 23 July 2005 the market value
of the completed oil palm estate which is about three years of age
is valued at RM41,164,000.
• After deducting the costs incurred of RM13,681,910 the loss
suffered by the defendant is RM27,482,090. Intra Harta did not
prepare a formal report. The claim is not proven and is not
recoverable.
REJECTED

10. END