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Case Update: Unraised Points of Law at Trial cannot be raised on Appeal

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13 October 2023

CIVIL PROCEDURE
Breach of Contract – Implied Terms – Regulatory Approvals – Points of Law – Trial – Appeal

Bestinet Sdn Bhd v GHL ePayments Sdn Bhd
Civil Appeal No. W-02(NCVC)(W)-1204-07/2022 | Court of Appeal
- see the grounds of judgment here

Facts Bestinet Sdn Bhd (the ‘Appellant’) operates a centralised system to manage foreign worker applications into Malaysia. The Appellant engaged GHL ePayments Sdn Bhd (the ‘Respondent’) to provide an e-wallet application for foreign workers whose work permits were managed by the Appellant. It was represented to the Appellant that the Respondent was an e-wallet service provider that was licensed by Bank Negara Malaysia and that the Respondent was able to obtain the approval of Bank Negara for the proposed e-wallet application. No formal contract was entered into between the parties, however, the parties had proceeded upon the basis of a quotation issued by the Respondent. Soon after, it came to the knowledge of the Appellant that the Respondent had engaged a third party to provide the e-wallet service. The Appellant claimed that it was not informed of this fact by the Respondent. The Appellant claims that both parties had agreed to a timeline for the e-wallet to be operational. The timeline was not met and the Appellant sought to terminate the contract. A suit was then initiated by the Appellant for the return of the sum of money paid to the Respondent.  Subsequently, the Respondent counterclaimed for a declaration that the termination of the contract by the Appellant was unlawful and claimed for loss of profits. The High Court dismissed the Appellant’s claims on the grounds that the reason why the timeline was not met was because Bank Negara was not furnished with certain information and documents to grant the approval. The High Court held that Appellant was responsible to furnish these information and documents. Unsatisfied, the Appellant appealed to the Court of Appeal. Hence, this appeal.

Issues 1. Whether there was an implied term in the contract that the Respondent was responsible for obtaining regulatory approvals and the failure by the Respondent to obtain such an approval constituted a breach of contract.

Held In dismissing the appeal, YA Dato’ Azizul Azmi Adnan, Judge of the Court of Appeal first stated that the existence of an implied term was not specifically pleaded in the statement of claim. Despite this, the Court of Appeal was of the view that the statement of claim contained sufficient facts to support a claim for breach of contract premised upon an implied term. The Court of Appeal held that points of law entitling the party raising them to judgement must be made at trial, and if they are not then made, they cannot be raised at the appeal stage. Nevertheless, the Court of Appeal having carefully considered the surrounding circumstances of the case, came to the conclusion that they were unable to discern how justice would be best served by permitting the arguments on implied terms to be raised for the first time in this appeal. The Court of Appeal further held that even if they were to come to the finding that it was in the interest of justice to permit the question on implied terms to be raised for the first time on appeal, the Court of Appeal would have in any event dismissed the appeal. This is because on the facts of the case, there did not exist any justification for the Court of Appeal to disturb the finding of fact by the trial judge that the Appellant, had failed to provide the necessary documents to Bank Negara in a timely manner. Hence, the appeal was dismissed in its entirety.

Zul Rafique & Partners
{13 October 2023}

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