CASE:
HARRISONS & CROSSFIELD ( NZ ) LTD V LIAN AIK HANG ( SUED AS A FIRM )
[ 1987 ] 2 MLJ 286, HC (SINGAPORE )
FACTS:
The defendants agreed to sell to the plaintiffs a maximum of 314 metric tons of peanut kernel of 60/70 pieces per ounce TBS ( ie Thai Brown Skin ) to be packed in new jute bags to be delivered to Auckland, New Zealand. The peanut kernels were to be form the ‘1980 Thailand Crop’ and payment was to be against the draft and bill of lading accompanied by ( a ) an Aflatoxin-free Certificate issued by the Singapore government; ( b ) a Certificate of Crop 1980; and ( c ) a Certificate that the goods were packed in sound clean bags not previously used for any purpose ( aflatoxins are carcinogenic toxins produced mainly by the mould known as aspergillus flavus )
After shipment of the goods, the defendants presented by the requisite documents (including an Aflatoxin-free Certificate issued by the Department of Scientific Service, Singapore) and were paid for the consignments.
When the goods arrived in Auckland, the plaintiffs rejected the goods on the grounds that the goods did not correspond with the samples and were of seriously inferior quality. They also alleged that the goods were not from the 1980 Thailand Crop and that some 20% of the peanut kernels were form an older crop. They further alleged that the goods were ‘unfit for human consumption and were by reason of the mould aflatoxin, age and degree of infestation by insects, of unmerchantable quality’. The defendants disputed this allegation and refused to reimburse the plaintiffs.
The evidence showed that all the shipments of peanut kernels contained a high level of aflatoxin, far in excess of the permissible limit of 15 parts per billion. The cause of problem was the condition of the peanut kernels and the presence of insects before shipment. The plaintiffs claimed the sum of US$535,244.08, or, alternatively, damages, interest and costs.
HELD:
The court was not satisfied that the samples delivered to the Departments of Scientific Service were representative of the peanut kernels shipped to the plaintiffs. The sale was a sale by sample, a fact not in dispute, and some 20% of what was tendered to the plaintiffs consisted of shriveled peanut kernels that were not aflatoxin-free. All three shipments contained aflatoxin far in excess of the permissible limit of 15 parts per billion. The goods supplied did not correspond to the description or sample. Judgment was entered for the plaintiffs.
Monday, April 26, 2010
CASE:
WEE LIAN CONSTRUCTION SDN BHD V INGERSOLL - JATI MALAYSIA SDN BHD [2005] 1 MLJ 162
FACTS:
The plaintiff and the defendant had entered into an agreement (‘the agreement’) for the sale of a used machine, an Ingersoll-Rand CM 351 Crawlair Drill fitted with a VL140 Drifter (‘the machine’) at a price of RM130,000 subject to the terms and conditions contained in the purchase order. The machine was inspected and accepted by the plaintiff without objection. The plaintiff did not elect to engage their own independent technical advisers for a second opinion on the machine despite being accorded the opportunity to do so by the defendants. It was stated that the machine was fitted with a VL140 drifter prior to delivery to the plaintiff. The agreed warranty period was for six months and no complaint was raised during that time. After the expiry of the six months’ warranty period, the defendant continued to provide goods, after-sales service and repairs on the used machine, as and when requested by the plaintiff. 22 months later, the plaintiff complained that the machine was fitted with a VL120 drifter and not VL140, and refused to settle there pair costs.
HELD:
In determining the difference between a VL120 Drifter and a VL140 Drifter an application of the‘finger test’ or ‘visual test’ would have easily revealed the differences. The difference between both types of drifters also could have been easily verifiable upon the plaintiff obtaining a second opinion. The plaintiff elected not to do despite the defendant’s advice. Further, the plaintiff had sufficient time to see if the Drifter was VL120 or a VL140 but had chosen to complain after using the said machine for 22 months. Accordingly, there was no breach of s 15 of the SOGA as claimed by the plaintiff. The time and place of delivery is prima facie an important factor and, dependent upon the circumstances of each case. The plaintiff had been given the opportunity to inspect the machine even after delivery. The plaintiff’s conduct of purchasing another new drifter which had been modified to suit the machine and then sought to claim damages for non-conformity with description and alleged under-production loss, long after the expiry of the six-month warranty period was unwarranted. Therefore, once a buyer is deemed to have accepted the goods, he loses his right to reject the same for breach of conditions.
WEE LIAN CONSTRUCTION SDN BHD V INGERSOLL - JATI MALAYSIA SDN BHD [2005] 1 MLJ 162
FACTS:
The plaintiff and the defendant had entered into an agreement (‘the agreement’) for the sale of a used machine, an Ingersoll-Rand CM 351 Crawlair Drill fitted with a VL140 Drifter (‘the machine’) at a price of RM130,000 subject to the terms and conditions contained in the purchase order. The machine was inspected and accepted by the plaintiff without objection. The plaintiff did not elect to engage their own independent technical advisers for a second opinion on the machine despite being accorded the opportunity to do so by the defendants. It was stated that the machine was fitted with a VL140 drifter prior to delivery to the plaintiff. The agreed warranty period was for six months and no complaint was raised during that time. After the expiry of the six months’ warranty period, the defendant continued to provide goods, after-sales service and repairs on the used machine, as and when requested by the plaintiff. 22 months later, the plaintiff complained that the machine was fitted with a VL120 drifter and not VL140, and refused to settle there pair costs.
HELD:
In determining the difference between a VL120 Drifter and a VL140 Drifter an application of the‘finger test’ or ‘visual test’ would have easily revealed the differences. The difference between both types of drifters also could have been easily verifiable upon the plaintiff obtaining a second opinion. The plaintiff elected not to do despite the defendant’s advice. Further, the plaintiff had sufficient time to see if the Drifter was VL120 or a VL140 but had chosen to complain after using the said machine for 22 months. Accordingly, there was no breach of s 15 of the SOGA as claimed by the plaintiff. The time and place of delivery is prima facie an important factor and, dependent upon the circumstances of each case. The plaintiff had been given the opportunity to inspect the machine even after delivery. The plaintiff’s conduct of purchasing another new drifter which had been modified to suit the machine and then sought to claim damages for non-conformity with description and alleged under-production loss, long after the expiry of the six-month warranty period was unwarranted. Therefore, once a buyer is deemed to have accepted the goods, he loses his right to reject the same for breach of conditions.
CASE:
AILSA CRAIG FISHING CO LTD VS MALVERN FISHING CO & ANOR [1983] WLR 964
FACTS:
The appellant boat owners were members of an association which had contracted with one of the respondents, a security company, for the provision of security services for boats berthed in a particular place. The contract provided that even if there was a total failure to provide the services that had been contracted for, the respondent’s liability was limited to the sum of ₤1,000. The respondents were found to be at fault for an event that resulted in the sinking of the appellant’s boat. The appellants claimed, inter alia, that there had been a total failure to provide security and thus the respondents could not assent the limitation of liability contained in the contract.
HELD:
The strict principles that apply when constructing an exemption clause, particularly where there has been a total breach of contract, do not apply in their full rigour when the clause merely limits liability.
[Clauses limiting liability] will of course be read contra proferentem and must be clearly expressed, but there is no reason why they should be judged by the specially exacting standards which are applied to exclusion and indemnity clauses. The reason for imposing such standards on these clauses is the inherent improbability that the other party to a contract including such a clause intended to release the proferens from a liability that would otherwise fall upon him. But there is no such high degree of improbability that he would agree to a limitation of the liability of the proferens, especially when the potential losses that might be caused by the negligence of the proferens or its servants are so great in proportion to the sums that can reasonably be charged for the services contracted for.
AILSA CRAIG FISHING CO LTD VS MALVERN FISHING CO & ANOR [1983] WLR 964
FACTS:
The appellant boat owners were members of an association which had contracted with one of the respondents, a security company, for the provision of security services for boats berthed in a particular place. The contract provided that even if there was a total failure to provide the services that had been contracted for, the respondent’s liability was limited to the sum of ₤1,000. The respondents were found to be at fault for an event that resulted in the sinking of the appellant’s boat. The appellants claimed, inter alia, that there had been a total failure to provide security and thus the respondents could not assent the limitation of liability contained in the contract.
HELD:
The strict principles that apply when constructing an exemption clause, particularly where there has been a total breach of contract, do not apply in their full rigour when the clause merely limits liability.
[Clauses limiting liability] will of course be read contra proferentem and must be clearly expressed, but there is no reason why they should be judged by the specially exacting standards which are applied to exclusion and indemnity clauses. The reason for imposing such standards on these clauses is the inherent improbability that the other party to a contract including such a clause intended to release the proferens from a liability that would otherwise fall upon him. But there is no such high degree of improbability that he would agree to a limitation of the liability of the proferens, especially when the potential losses that might be caused by the negligence of the proferens or its servants are so great in proportion to the sums that can reasonably be charged for the services contracted for.
Partnership
It is important to differential the actual authority and apparent authority. Actual authority arises where the principal's words or conduct reasonably cause the agent to believe that he or she has been authorized to act. Apparent or ostensible authority exists where the principal's words or conduct would lead a reasonable person in the third party's position to believe that the agent was authorized to act, even if the principal and the purported agent had never discussed such a relationship.
Apparent authority of partner in a firm has mention in Section 7 Partnership Act 1961. It provides that Every partner is an agent of the firm and his other partners for the purpose of the business of the partnership; and the acts of every partner who does any act for carrying on in the usual way business of the kind carried on by the firm of which he is a member bind the firm and his partners, unless the partner so acting has in fact no authority to act for the firm in the particular matter, and the person with whom he is dealing either knows that he has no authority or does not know or believe him to be a partner.
That has four conditions to determine whether a partner has the apparent authority. The first condition is where the act done must be of the type of business that is carried out by the firm. Second condition is the act will bind the firm if it is done in usual and ordinary manner. If not, the act would not bind the firm or other partners. Third condition is the third party know or believe that the partner has authority or power to act and fourth condition is third parties enter into a transaction and he now that the person does not have authority to act, the firm will not be liable.
As a whole, there are four conditions to determine the apparent authority of partners. The four conditions will be binding on the firm. However, the apparent authority is used to determine the position of the partner as an agent of the company.
Apparent authority of partner in a firm has mention in Section 7 Partnership Act 1961. It provides that Every partner is an agent of the firm and his other partners for the purpose of the business of the partnership; and the acts of every partner who does any act for carrying on in the usual way business of the kind carried on by the firm of which he is a member bind the firm and his partners, unless the partner so acting has in fact no authority to act for the firm in the particular matter, and the person with whom he is dealing either knows that he has no authority or does not know or believe him to be a partner.
That has four conditions to determine whether a partner has the apparent authority. The first condition is where the act done must be of the type of business that is carried out by the firm. Second condition is the act will bind the firm if it is done in usual and ordinary manner. If not, the act would not bind the firm or other partners. Third condition is the third party know or believe that the partner has authority or power to act and fourth condition is third parties enter into a transaction and he now that the person does not have authority to act, the firm will not be liable.
As a whole, there are four conditions to determine the apparent authority of partners. The four conditions will be binding on the firm. However, the apparent authority is used to determine the position of the partner as an agent of the company.
Contract of sale of goods
Contract of sale of goods is defined in section 4 of the Sales of Goods Act 1957 as a contract in which sellers transfer ownership of, or agree to transfer ownership rights of such goods to the buyer with the replies mentioned the price. A contract of sale may be in the form of absolute or conditional.
Sales contract also includes an agreement to sell and sales. Sales occur when under the contract of sale the property to the goods transferred from the seller to the buyer but an agreement to sell the property to occur when the goods will only be moved at a time before or after the conditions are complied with. Differences both sales agreement is the transfer of ownership occurs while the agreement to sell the property transfer occurred at a time before. This difference is particularly important in terms of transfer of risk of these and from the corner of the remedies can be claimed.
When sales occur in the contract description, then there is a known condition that goods sold shall meet the given subject. The extent that goods sold must meet the description must be viewed from the angle of the principle that says de minis non curat lex, that "law is not a trivial matter concerned".
Sales usually happen when the buyer through the description agreed to buy goods based on the description given by the seller. Sometimes buyer see the goods to be purchased, but is sometimes considered as sales through description. Example in the case of Taylor vs. Beale. In case a buyer was interested in an ad selling a car that describe the car as a 1961 model. Buyers inspect the car before purchase. After buying the car he found semi-car model 1961 car models and half earlier.
Court decided the seller had violated the conditions known about the subject because even though the buyer has seen the car, buyers are still dependent on the subject given by the seller in making the decision to buy. Determining the facts in section 15 Sale of Goods Act where goods are coincide exactly with the subject. The quality and quality does not arise. According to section 12 (2) Sale of Goods Act failure to provide goods seller described the actual contract allows the buyer rejects.
Sales contract also includes an agreement to sell and sales. Sales occur when under the contract of sale the property to the goods transferred from the seller to the buyer but an agreement to sell the property to occur when the goods will only be moved at a time before or after the conditions are complied with. Differences both sales agreement is the transfer of ownership occurs while the agreement to sell the property transfer occurred at a time before. This difference is particularly important in terms of transfer of risk of these and from the corner of the remedies can be claimed.
When sales occur in the contract description, then there is a known condition that goods sold shall meet the given subject. The extent that goods sold must meet the description must be viewed from the angle of the principle that says de minis non curat lex, that "law is not a trivial matter concerned".
Sales usually happen when the buyer through the description agreed to buy goods based on the description given by the seller. Sometimes buyer see the goods to be purchased, but is sometimes considered as sales through description. Example in the case of Taylor vs. Beale. In case a buyer was interested in an ad selling a car that describe the car as a 1961 model. Buyers inspect the car before purchase. After buying the car he found semi-car model 1961 car models and half earlier.
Court decided the seller had violated the conditions known about the subject because even though the buyer has seen the car, buyers are still dependent on the subject given by the seller in making the decision to buy. Determining the facts in section 15 Sale of Goods Act where goods are coincide exactly with the subject. The quality and quality does not arise. According to section 12 (2) Sale of Goods Act failure to provide goods seller described the actual contract allows the buyer rejects.
Sale of Goods
SALE OF GOODS
INTRODUCTION
The sale of goods by description is provided for by section 15 of the SOGA which reads:
The Sales of Goods Act 1957 governs the law with respect to the sale of goods. It deals with such matters as contracts for the sale of goods, the passing of ownership and the risk of goods sold, and the remedies of the buyers and sellers for breaches by the other party.
The Sales of Goods Act does not extend to the states of East Malaysia, ie to Sabah and Sarawak. The two states would seem to continue to be subject, as far as the law on the sale of goods is concerned, to the UK Sale of Goods Act 1979. Meanwhile, Sabah and Sarawak are excluded from the ambit of the Sales of Goods Act by Section 5 (2) of the Civil Law Act, 1956 and still adopt the principle of English law relating to sales of goods.
INTRODUCTION
The sale of goods by description is provided for by section 15 of the SOGA which reads:
The Sales of Goods Act 1957 governs the law with respect to the sale of goods. It deals with such matters as contracts for the sale of goods, the passing of ownership and the risk of goods sold, and the remedies of the buyers and sellers for breaches by the other party.
The Sales of Goods Act does not extend to the states of East Malaysia, ie to Sabah and Sarawak. The two states would seem to continue to be subject, as far as the law on the sale of goods is concerned, to the UK Sale of Goods Act 1979. Meanwhile, Sabah and Sarawak are excluded from the ambit of the Sales of Goods Act by Section 5 (2) of the Civil Law Act, 1956 and still adopt the principle of English law relating to sales of goods.
Wednesday, April 21, 2010
Income Tax Law
BASIS OF TAXATION
Income tax is generally imposed on a territorial basis in that only income accruing in or derived from Malaysia is liable to tax. However, resident individuals and other non-corporate entities are also taxed on foreign-sourced income remitted into Malaysia. Foreign-sourced income received by resident companies are not subject to tax even if such income is remitted to Malaysia.
Income derived by tax residents from businesses of banking, insurance and air/sea transport operations are assessable on a world income scope.
Relief from double taxation of foreign-sourced income is available by means of bilateral credit if there is a tax treaty or unilateral relief if there is no tax treaty. The relief is restricted to the lower of Malaysian tax payable on the foreign-sourced income or foreign tax paid if there is a treaty or one-half of the foreign tax paid there is no treaty.
Sources of Income Liable to Tax
Sources of income which are liable to income tax are as follows:
Gains and profits from trade, profession and business
Salaries, remunerations, gains and profits from an employment
Dividends, interests or discounts
Rents, royalties or premiums
Pensions, annuities or other periodic payments/li>
Other gains or profits of an income nature not mentioned above.
Chargeable income is arrived at after adjusting for expenses incurred wholly and exclusively in the production of the income. Specific provisions or reserves for anticipated losses or contingent liabilities are not tax deductible. No deduction for book depreciation is allowed although capital allowances are granted. Unabsorbed losses may be carried forward indefinitely to offset against future income.
Personal Income Tax
All individuals are liable to tax on income accrued in, derived from or remitted to Malaysia. The rate of tax depends on the resident status of the individual which is determined by the duration of his stay in the country (as stipulated under Section 7 in the Income Tax Act 1967).
Income tax is generally imposed on a territorial basis in that only income accruing in or derived from Malaysia is liable to tax. However, resident individuals and other non-corporate entities are also taxed on foreign-sourced income remitted into Malaysia. Foreign-sourced income received by resident companies are not subject to tax even if such income is remitted to Malaysia.
Income derived by tax residents from businesses of banking, insurance and air/sea transport operations are assessable on a world income scope.
Relief from double taxation of foreign-sourced income is available by means of bilateral credit if there is a tax treaty or unilateral relief if there is no tax treaty. The relief is restricted to the lower of Malaysian tax payable on the foreign-sourced income or foreign tax paid if there is a treaty or one-half of the foreign tax paid there is no treaty.
Sources of Income Liable to Tax
Sources of income which are liable to income tax are as follows:
Gains and profits from trade, profession and business
Salaries, remunerations, gains and profits from an employment
Dividends, interests or discounts
Rents, royalties or premiums
Pensions, annuities or other periodic payments/li>
Other gains or profits of an income nature not mentioned above.
Chargeable income is arrived at after adjusting for expenses incurred wholly and exclusively in the production of the income. Specific provisions or reserves for anticipated losses or contingent liabilities are not tax deductible. No deduction for book depreciation is allowed although capital allowances are granted. Unabsorbed losses may be carried forward indefinitely to offset against future income.
Personal Income Tax
All individuals are liable to tax on income accrued in, derived from or remitted to Malaysia. The rate of tax depends on the resident status of the individual which is determined by the duration of his stay in the country (as stipulated under Section 7 in the Income Tax Act 1967).
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