Sunday, April 01, 2012

why NLFCS lost court case

Case lost because key witnesses did not come to court

The National Land Finance Cooperative Society after losing a million ringgit breach of contract suit in the high court must now explain to its shareholders why the defence was poorly represented.

Tan Sri Somadundaram
 According to law experts who were following the case closely the Judge Datuk Abdul Aziz had no choice but to invoke Section 114g of the Law of Evidence Act 1950 as the defence failed to produce its three material witnesses.

Now why fight a case when NLFCS is not prepared to go all the way. Is this not poor fiduciary judgement? Are they not answerable to the shareholders? But then again what do these poor rubber tappers know! Least we forget, it is the raison d'etre for the existence of NLFCS.

Datuk Sahadevan
Now it seems NLFCS have to pay the plaintiff, a project management company special damages, cost and general damages which may come to around RM8 million with the interest of 8 per cent the court had ordered from the day the defendant went into an agreement with the plaintiff in 1999.

From the onset of the case the defence listed NLFCS chairman Tan Sri R.K. Somasundaram, its CEO Datuk M.Sahadevan and its former executive K.Vadivelu as key witnesses in the case.

But they never produced any of them to rebut whatever adverse claims made by the plaintiff. Why?

Under such circumstances the judge had no choice but to draw an adverse inference against the defendant whose key witnesses who were parties to the transaction with the plaintiff, both oral and written, failed to testify.

After hearing the submissions from both sides, the court had no choice but to rule in favour of the plaintiff as the defence 's attempts to shift the burden of liability to the plaintiff added up to nothing as it first and foremost failed to produce its material witnesses in court to counter the claims by the plaintiff. 

Neither did the defendant made available officers from the "appropriate authority" to counter the claims of the plaintiff that he was stalled into carrying out its part of the agreement to built houses on a plot of land belonging to the defendant as the defendant had not got all the relevant papers in order , including a separate land title.

 The court decision:

KUALA LUMPUR: The High Court has ordered the National Land Finance Co-operative Society (NLFCS) to pay damages to a project managing company after finding the co-operative had breached a contract involving a housing project in Sungai Petani, Kedah.
Justice Datuk Abdul Aziz Abdul Rahim ruled the co-operative had failed to provide the original land title as agreed upon in the terms of agreement with Westingmont Holdings Sdn Bhd, resulting in the expiry of the agreement.
"The original title was never given to the plaintiff, resulting in the housing project unable to proceed further. Furthermore, the defendant had also not acted in good faith in providing the title," he said.
Abdul Aziz ordered NLFCS to pay special damages amounting to RM305,500 and legal costs amounting to RM70,000 to the plaintiff.
He also allowed the plaintiff's claim of eight percent interest from the date of judgement until the final date of settlement.
On general damages, Abdul Aziz said it would be assessed by a registrar and set April 2 for mention.
On counter claims filed by NLFCS, Abdul Aziz allowed only two claims, including RM150,000 for loan obtained by the plaintiff to clear nearly 100 squatters from the 5.28ha land in Kampung Tukang, about three kilometres from the Sungai Petani town.
The other claim involved RM4,500 paid by the co-operative to the project managing company in carrying out the feasibility study of the project.
However, Abdul Aziz did not allow other counter claims of the defendant amounting to RM300,000, mostly on legal fees in converting the agriculture land to housing project and ex-gratia payment to the squatters.
"Most of these expenses occurred before the commencement of this project and therefore, the defendant should pay for it," he added.
The plaintiff filed the action in court last August after NLFCS informed the company that the agreement signed in 1998 to develop the plot located next to a booming township had expired.


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