A Brief Overview Of Harapan Ramai Sdn Bhd v Wan Kuari Sdn Bhd
Brief facts of the case
Harapan Ramai entered into a contractual agreement with Wan Kuari whereby Harapan Ramai engaged Wan Kuari as its contractor to execute drilling and blasting of granite blocks at the defendant’s quarry at Bukit Lunchu, Masai, Johor.
Unfortunately, an uncontrolled explosion occurred at the quarry, killing one person and damaging nearby properties in the process. Harapan Ramai also incurred significant losses stemming from the incident. As a result, Harapan Ramai terminated the contract and refused to pay the balance due under the contract to Wan Kuari, claiming that the explosion was due to the negligence of Wan Kuari’s agents/ workers.
In response, Wan Kuari sued Harapan Ramai in the High Court, claiming for the balance which is due to them by Harapan Ramai. In return, Harapan Ramai filed a counterclaim claiming for the loss suffered as a result of Wan Kuari’s negligence.
The decision of the High Court
The High Court allowed Harapan Ramai’s claim. However, the judge only awarded a nominal sum of RM10 against Wan Kuari, citing the fact that Harapan Ramai has failed to prove its claim against Wan Kuari. Dissatisfied with the decision, Harapan Ramai appealed the matter to the Court of Appeal.
The decision of the Court of Appeal
In the Court of Appeal, the court allowed part of Harapan Ramai’s claim. The court held that Harapan Ramai has successfully proven their claim in regards to the appointment of consultants to determine the loss of profits and the estimated loss of profits. However, the court did not allow Harapan Ramai’s claim in regards to the wages of its employees who had to cease working for 10 months as a result of the closure of the quarry.
In coming to its decision, the court held that there was evidence (and was not challenged by Wan Kuari) to show that there was the proper payment made to the consultants for the services rendered by them and that the loss of profits can never be proven by documentary evidence as it concerns a future event. In this regard, when there are no other ways/ suggestions on how it should be calculated, any calculation is acceptable so as long as the calculation is the best formula available to determine the loss of profit.
The court also rejected Harapan Ramai’s claim in regards to the wages that they have to pay their employees. This was based on the fact that they were no evidence to show that the bank had paid the employee’s wages, nor were any employees asked to testify in court to confirm that they have received payment for their wages.