Assessment of Damages in Malaysia (General overview)

1.  In the case Taiping Poly (M) Sdn Bhd v Kong Wah Trading Co on the loss of goodwill, the Court held:

Now, on the loss of goodwill and reputation it is trite law that it is presumed and that the sum to be awarded is a matter of discretion.

2.  The Court has decided in the Court of Appeal jurisdiction that the matter shall be accessed by discretion. However, does this mean the Court has the unlimited power over the assessment of damages?

3.  In the case Daro (M) Sdn Bhd V. Chan Tse Yuen & Others the Court held that:

The task of undertaking an assessment of damages is essentially an exercise of discretion. However, this discretion is not an unfettered and unprincipled discretion and so must be exercised by reference to established judicial principles, having regard to the facts and circumstances unfolded in the evidence adduced before me.

4.  In awarding damages, the Court is bound by the principle laid down in the Clerk & Lindsell on Torts 16th edn, at p 254 para 5-04 that has been referred in the case Uda Holdings Bhd V. Koperasi Pasaraya Malaysia Bhd & Other Appeals:

The general object of an award of damages is to compensate the plaintiff for the losses, pecuniary and non-pecuniary, sustained as a result of the defendant's tort. More specifically, the assessment process is said to aim at restitutio in integrum . The general principle is, in the oft-quoted words of Lord Blackburn, that the court should award 'that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation.' The principle admits of application to losses which are capable of reasonable precise calculation in money terms.

5.  Since the assessment of damages is a matter of discretion, the Court needs to take a thorough examination and consideration towards the case that has been brought to.

6.  In the case Mkc Corporate & Business Advisory V. Cubic Electronics Sdn Bhd & Ors, the Court has summarised on how the Court applies its discretionary power.

In assessing damages, it is generally accepted that the court must abide by the principle of fairness. To this end, certain principles have emerged in the case laws. I shall refer to some of these cases as they serve a very useful guidance.

[61] In Subramaniam Paramasivam & Ors v. Malaysian Airline System Berhad [2001] 4 MLRH 174; [2002] 1 MLJ 45; [2002] 1 CLJ 230; [2002] 1 AMR 254, the Court held: "In attempting to measure the damages that may be awarded to the plaintiffs, two basic principles of assessment must first be understood. The first is with respect to its function, As Lord Blackburn said in Livingstone v. Rawyard Coal Co [1880] App Cas 25 at 39, damages is: that the sum of money which will put the party who has been injured, or who has suffered in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation. The second is a corollary of the first that in awarding damages, the plaintiff should not be allowed to profit by it.."

[62] In Arkitek Tenggara Sdn Bhd v. Mid Valley City Sdn Bhd [2007] 2 MLRA 584; [2007] 5 MLJ 697; [2007] 6 CLJ 93, the court held: "The general principle for assessment of damages is compensatory, ie the innocent party is to be placed, so far as money can do, in the same position as if the contract had been performed,"

[63] In Cheng Hang Guan & Ors v. Perumahan Farlim (Penang) Sdn Bhd & Ors [1993] 3 MLRH 332; [1993] 3 MLJ 352; [1994] 1 CLJ 19; [1994] 1 AMR 201, Edgar Joseph Jr SCJ held: "When a plaintiff claims damages from a defendant, he has to show that the loss in respect of which he claims damages was caused by the defendant's wrong and also that the damages are not too remote to be recoverable. Where precise evidence is obtainable, the court naturally expects to have it, where it is not, the court must do the best it can."

[64] The Court of Appeal in Lembaga Kemajuan Tanah Persekutuan (Felda) & Anor v. Awang Soh bin Mamat & Ors [2009] 2 MLRA 1; [2009] 9 MLJ 610; [2009] 5 CLJ 1; [2010] 1 AMR 285 provided a guide on how damages are to be assessed for cases not involving breach of contract: "It is our view that for a claim based on fraud and conspiracy to defraud, the plaintiffs should be entitled to the loss suffered as the result of the deprivation of their income or profit caused by the wrong committed by the defendants after taking into account the foresee ability factor - see para 1138 Halsbury's Laws of England (4th Ed), Vol 12. Here the plaintiff's third witness has given creditable and uncontradicted evidence on how the amount of losses was arrived at and this has been accepted by the High Court. Though each plaintiff was not called to testify on their respective loss, we see no reason for this requirement since in this FELDA scheme all the plaintiffs have agreed to sell their crops to the third defendant and the profits derived there from shared collectively by them with the first defendant."

7. Hence, it is a settled law that the Court has a discretionary power in assessing damages, but the power is subject to just principle caught in the above cases.