Court orders Naza Wheels to pay damages over breach of contract

 The Court of Appeal awards the contractor GSIB Sdn Bhd RM50,000 in costs and wants damages to be assessed.

Naza Wheels had appointed GSIB Sdn Bhd to build a car showroom and service centre in Kuantan, Pahang, about 10 years ago but terminated the contract later on ‘grounds of frustration’. (NZ Wheels pic)

PUTRAJAYA:

 The Court of Appeal has ordered car distributor Naza Wheels Sdn Bhd to pay damages to a contractor after it terminated a deal to build a showroom and a service centre on grounds of frustration.

A three-member bench chaired by Justice Lim Chong Fong said Naza Wheels had breached its contract, and ordered for the damages to be assessed.

It awarded the appellant, GSIB Sdn Bhd, RM50,000 in costs.

ustices Azhahari Kamal Ramli and Ahmad Kamal Shahid also heard the appeal.

GSIB had in 2019 sued Naza Wheels in the Shah Alam High Court, where it sought damages of RM2.7 million.

According to the facts of the case, Naza Wheels appointed GSIB to build a car showroom and service centre in Kuantan, Pahang, about 10 years ago.

Both parties signed an agreement to complete the work by April 16, 2016.

GSIB had just started earth and substructure works, when the contract was terminated by Naza Wheels on grounds of frustration after it failed to obtain a waiver from local authorities to surrender a road leading to the showroom and the service centre.

GSIB contended it was not frustration but a termination of the contract, which resulted in losses, including loss of profit.

The High Court only partially allowed the company’s claim and rejected the claim for loss of profit, which led GSIB to challenge the decision in the appellate court.

Lawyers Hairul Azam Hambali and Muhammad Al-Muazzim appeared for Naza Wheels, while lawyer R Kengadharan appeared for GSIB. - FMT