Majlis Perbandaran Seremban v Era Baru Sdn Bhd (N-02(NCVC)(W)-1245-07-2017 Heard Together with N-02(NCVC)(W)-1398-07/2017)

2.1 Jumlah sumbangan untuk 1 meter = Kos Projek Panjang Jalan = RM2,880,596.80 950 =

2.2 Jumlah sumbangan yang perlu dibayar oleh Era Baru Sdn Bhd dan Maljis Perbandaran Seremban adalah RM3032,3071 x 575m : RM1,743,519.20 50% = RM1,743,519.20 2 :

Sila pihak tuan mengemukakan cadangan jadual pembayaran untuk tindakan pihak Majlis selanjutnya.”. [5] The plaintiff responded to the defendant’s request for the schedule of payment vide a letter dated 4.11.2003. In the said letter, the plaintiff stated that: “Sukacita kami mencadangkan jadual pembayaran seperti berikut:- Civil Appeals No. N-02(NCVC)(W)1245, 1398-07/2017 4

Jumlah kos pembinaan mengikut skop kerja dan pelan … yang disertakan adalah sebanyak RM2,880,596.80

Jumlah sumbangan ERA BARU SDN BHD:- = RM2,880,596.80 x 575 x ½ 950 = RM3.032,2071 x 575 x ½ = RM 871,759.60

Baki kos kontrak yang berjumlah RM2,008,837.20 hendaklah dibayar kepada ERA BARU SDN BHD oleh Majlis Perbandaran Seremban untuk kerja-kerja pembinaan jalan tersebut. Daripada jumlah kos ini, Syarikat Panji Timor Sdn Bhd perlu membayar RM2,880,596.80 x 375 = RM1,137,077.60 950 kepada Majlis Perbandaran Seremban.”. [6] The total cost to be shared by the parties therefore were as follows: a. Plaintiff – RM871,759.60 b. Defendant – RM871,759.60 c. PTSB – RM1,137,077.60 [7] The defendant subsequently paid the sum of RM871,759.60 to the plaintiff. PTSB however failed to pay its share of contribution for the project. The plaintiff turned to the defendant for assistance. These culminated in a meeting on 25.4.2007 between the plaintiff, the defendant and PTSB. What was agreed in the meeting was confirmed by the plaintiff through its letter dated 4.5.2007 to the defendant set out below: Civil Appeals No. N-02(NCVC)(W)1245, 1398-07/2017 5 “3. Hasil daripada perbincangan yang tersebut di atas, pihak Era Baru Sdn. Bhd. dan pihak Panji Timor Sdn. Bhd. telah bersetuju bahawa kos sumbangan menaiktaraf Jalan Labu Lama, Bandar Seremban sepanjang 375 meter ditetapkan pada RM670,000-00 dan pembayaran akan dibuat kepada Era Baru Sdn. Bhd. secara ansuran iaitu selama enam bulan bermula dari bulan Mei 2007 sehingga bulan Oktober 2007 seperti berikut:

(i) RM110,000-00 pada atau sebelum 31hb Mei 2007;

(v) RM110,000-00 pada atau sebelum 30hb September 2007; dan

Pada 25.4.2007, satu perbincangan telah diadakan di bilik mesyuarat Defendan yang dihadiri oleh wakil-wakil bagi pihak Plaintif, Defendan dan PTSB. Dalam perbincangan tersebut, Plaintif dan PTSB telah bersetuju bahawa kos sumbangan menaiktaraf Jalan Labu Lama Bandar Seremban sepanjang 375 meter tersebut ditetapkan pada RM670,000.00 dan pembayaran tersebut akan dibuat kepada Plaintif secara ansuran selama enam bulan bermula dari bulan Mei 2007 sehingga Oktober 2007. Plaintif telah menyatakan hasil perbincangan tersebut dalam suratnya bertarikh 4.5.2007 kepada Defendan. … …

Memandangkan PTSB telah gagal untuk menjelaskan jumlah sebanyak RM670,000.00 tersebut dan Defendan pula telah gagal dan/atau enggan untuk menuntut bayaran sebanyak RM670,000.00 daripada PTSB, Plaintif melalui surat bertarikh 6.3.2009 telah menuntut daripada Defendan Jumlah Civil Appeals No. N-02(NCVC)(W)1245, 1398-07/2017 7 Sumbangan tersebut yang merupakan jumlah sumbangan yang dipersetujui pada 4.11.2003. … … …

Kegagalan Defendan untuk menjalankan tanggungjawabnya dalam memastikan PTSB membayar Jumlah Sumbangan tersebut kepada Plaintif telah menyebabkan Plaintif mengalami kerugian yang besar. … Defendan telah gagal, enggan dan/atau ingkar untuk menepati janjinya dalam memastikan Plaintif mendapat Jumlah Sumbangan tersebut.”. [12] The defendant denied the plaintiff’s claim on two grounds. First, that the plaintiff had no cause of action against the defendant and second, that the plaintiff’s claim is barred by limitation. [13] On the first ground, the defendant contended that the plaintiff’s claim should be brought against PTSB based on an agreement reached between the plaintiff and PTSB on 25.4.2007. [14] On the second ground, the defendant’s plea of limitation arose from the fact that the project was completed on 30.3.2004 and the Certificate of Practical Completion was issued on 13.8.2004. The plaintiff’s claim was filed in January 2015. Findings of the High Court [15] The learned JC considered the following issues: Civil Appeals No. N-02(NCVC)(W)1245, 1398-07/2017 8

(i) whether the defendant was responsible to claim from PTSB the sum of RM1,137,077.60 and to pay the said sum to the plaintiff;

(i) whether in the light of the agreement reached on 25.4.2007, the plaintiff had a cause of action against the defendant;

(i) cost for the said project for a total length of 950 metres of road was to be borne by three parties, i.e. the plaintiff, the defendant and PTSB.

(i) the plaintiff’s contract in respect of the project was with the defendant;

(i) the agreement to reduce the contribution sum from RM1,137,077.60 to RM670,000.00 was null and void as PTSB has failed, refused and/or neglected to acknowledge the terms and conditions of the plaintiff’s letter dated 4.5.2007;

(v) there had been no novation, rescission and/or alteration in the agreement between the plaintiff and the defendant. [29] Having perused the appeal records, we were unable to agree with the defendant. The learned JC in our judgment was plainly wrong in her conclusion that the defendant was responsible to pay the plaintiff RM670,000.00. We found that her Ladyship did not sufficiently evaluate the evidence, especially the contemporaneous documentary evidence which did not lend support to the defendant’s case. The error on the part of the learned JC warrants appellate intervention (see Sivalingam a/l Periasamy v Periasamy & Anor [1995] 3 MLJ 395). [30] To reiterate, there was an agreement between the plaintiff and PTSB reached in the meeting held on 25.4.2007 where PTSB was to pay the plaintiff RM670,000.00. No issue of acknowledgement by PTSB of the plaintiff’s letter dated 4.5.2007 arose. PTSB’s representative was present in the meeting. PTSB had agreed to pay the plaintiff and had agreed to the payment schedule. [31] Of course there was no privity of contract in so far as the project for the construction of the road itself was concerned. But there certainly was privity of contract between the plaintiff and PTSB for the payment of contribution as agreed by PTSB and the plaintiff on 25.4.2007. Whether the reduction of the contribution was upon the suggestion of the defendant’s representative was neither here nor there. What matters was the plaintiff and PTSB had agreed to the sum and the payment terms. Civil Appeals No. N-02(NCVC)(W)1245, 1398-07/2017 14 [32] In any event, from the evidence of SP1, it was PTSB who requested that the contribution sum be reduced. It cannot be denied that PTSB was bound by this agreement. And that must be the basis upon which the plaintiff issued two demands to PTSB on 10.8.2007 and 15.2.2008. But for reasons best known to the plaintiff, it chose not to file an action against PTSB to enforce its rights under the agreement reached on 25.4.2007. For the plaintiff to now contend that there was no privity of contract between the plaintiff and PTSB is therefore devoid of any merit. [33] The learned JC found that “… Apabila PTSB telah gagal membuat bayaran kepada plaintif sebagaimana dipersetujui adalah menjadi tanggungjawab defendan untuk melunaskan bayaran sebanyak RM670,000.00 sebagaimana dipersetujui oleh plaintif.”. In this respect, her Ladyship relied on the oral evidence of SP1 who testified on the plaintiff’s grievances arising out of the defendant’s failure to collect payment from PTSB and to make payment of the same to the plaintiff. [34] With respect, we found no evidence to support the learned JC’s finding that the defendant was responsible to pay the plaintiff. There were no terms reached that the defendant was responsible to claim from PTSB and to pay the said sum to the plaintiff or that it was the defendant’s obligation to ensure that PTSB pay the plaintiff. Neither was there any agreement that in the event PTSB failed to adhere to the agreed terms of payment, the defendant will be responsible to pay the plaintiff first. The agreement stipulates payment by PTSB direct to the plaintiff. Put another way, there was nothing in the contemporaneous documents which recorded further agreement on 25.4.2007 between the plaintiff, the defendant and PTSB that in the event PTSB failed to pay the said contribution to the plaintiff, then the defendant will make good PTSB’s default. Civil Appeals No. N-02(NCVC)(W)1245, 1398-07/2017 15 [35] What was apparent from the contemporaneous document was that despite the plaintiff’s requests, the defendant had taken a consistent stand that it was not its obligation to collect the contribution from PTSB or to pay the plaintiff the said contribution. For example, the minutes of meeting held on 12.5.2010 read: “3.1.3 Era Baru Sdn Bhd meminta MPS supaya mendapatkan baki kos menaiktaraf Jalan Labu Lama … yang sepatutnya ditanggung oleh Syarikat Panji Timur Sdn. Bhd. dan didahulukan oleh Syarikat Era Baru Sdn. Bhd. atau meminta MPS membayar kos tersebut dan kemudian menuntut kepada pihak Panji Timur Sdn. Bhd.

3.1.4. Pihak Era Baru Sdn Bhd turut mencadangkan supaya pihak Majlis membenarkan jumlah hutang tersebut dikontra dengan cukai taksiran pihak Era Baru Sdn Bhd pada masa akan datang. Namun pihak Majlis tidak bersetuju dengan cadangan ini.

3.1.5 Pihak MPS tidak menjanjikan apa-apa berhubung dengan isu bayaran seperti yang diminta oleh Syarikat Era Baru Sdn. Bhd. kerana tiada sebarang perjanjian yang dibuat dengan Syarikat Panji Timur Sdn. Bhd. berhubung perkara ini.”. [36] On 22.9.2010, the defendant wrote to the plaintiff as follows: “2. Sukacita dimaklumkan pentadbiran Majlis ingin menegaskan isu yang dibangkitkan di atas telah pun dijelaskan dalam mesyuarat bersama pihak tuan pada 12 Mei 2010 bahawa pentadbiran Majlis tidak menjanjikan sebarang jaminan berhubung tuntutan bayaran baki kos pembinaan menaiktaraf Jalan Labu Lama … Civil Appeals No. N-02(NCVC)(W)1245, 1398-07/2017 16

Untuk makluman pihak tuan, pihak MPS sebelum ini tidak pernah menyatakan sebarang persetujuan atau mengikat sebarang perjanjian dengan syarikat Era Baru Sdn Bhd dan syarikat Panji Timur Sdn Bhd untuk mendahulukan bayaran kos pembinaan menaiktaraf jalan tersebut.

Bagi mengatasi masalah ini adalah dinasihatkan supaya syarikat Era Baru Sdn Bhd dapat membuat tuntutan secara terus atau berunding dengan syarikat Panji Timur Sdn Bhd untuk menyelesaikan masalah ini.”. [37] Again, in its letter dated 12.11.2010 to the plaintiff, the defendant maintained the same position when it said: “2. Sepertimana yang pihak tuan sedia maklum, kos pembinaan jalan tersebut akan dibahagikan dan dijelaskan sendiri oleh pihak tuan, MPS dan juga Panji Timur Sdn.Bhd. Oleh yang demikian, pihak tuan sedia maklum bahawa pihak MPS tidak bertanggungan untuk menjelaskan bayaran yang perlu dijelaskan oleh pihak Panji Timur Sdn. Bhd. tersebut.

Pihak MPS juga percaya bahawa pihak tuan sedia maklum bahawa kos tersebut perlu dijelaskan sendiri oleh pihak Panji Timur Sdn. Bhd. berdasarkan rundingan dan persetujuan yang dibuat oleh pihak tuan dan Panji Timur Sdn. Bhd. sepertimana yang dinyatakan di dalam dua (2) surat tuan bertarikh 4 Mei 2007 yang dialamatkan kepada MPS dan juga kepada Panji Timur Sdn Bhd …

Berhubung dengan surat kami bertarikh 27 Oktober 2003 yang dirujuk oleh pihak tuan, perenggan tersebut secara jelas tidak menunjukkan sebarang niat oleh pihak MPS untuk menjelaskan jumlah tersebut bagi pihak Panji Timur Sdn. Bhd. Perenggan tersebut hanya meminta pihak tuan untuk mengemukakan cadangan jadual pembayaran kepada pihak MPS.”. Civil Appeals No. N-02(NCVC)(W)1245, 1398-07/2017 17 [38] In light of the above contemporaneous document, we found that the learned JC erred in holding that the defendant was responsible to the plaintiff for PTSB’s contribution in the sum of RM670,000.00. It is trite that judicial reception of evidence requires that the oral evidence be critically tested against the whole of the other evidence and that it was always safer to rely on contemporaneous documentary evidence (see Tindok Besar Estate Sdn Bhd v Tinjar Co [1979] 2 MLJ 229). Had the learned JC considered the documentary evidence, her Ladyship would have concluded that there was never any agreement between the parties for the defendant to pay the plaintiff the sum that was to be paid by PTSB. [39] On limitation, the learned JC found that the plaintiff’s claim was not statute barred under section 6(1) of the Limitation Act on the ground that there were discussions and negotiations between the parties from 2003 right until 2011. [40] Under section 6(1) of the Limitation Act, the plaintiff had six (6) years to file its claim from the date on which the cause of action accrued. The plaintiff admitted that the cause of action arose in year 2004 but argued that because there had been on-going communications between the plaintiff and the defendant via correspondences, meetings and discussions since the year 2003 until 2011, the plaintiff’s claim was not time-barred. Learned counsel for the plaintiff relied on sections 26 and 27 of the Limitation Act. [41] Section 26 of the Limitation Act provides for fresh accrual of action on acknowledgement or part payment of debt and subsection 2 reads: Civil Appeals No. N-02(NCVC)(W)1245, 1398-07/2017 18 “(2) Where any right of action has accrued to recover any debt or other liquidated pecuniary claim, or any claim to the personal estate of a deceased person or to any share or interest therein, and the person liable or accountable therefor acknowledges the claim or makes any payment in respect thereof, the right shall be deemed to have accrued on and not before the date of the acknowledgment of the last payment: Provided that a payment of a part of the rent or interest due at any time shall not extend the period for claiming the remainder of the rent or interest then due, but any payment of interest shall have effect, for the purposes of this subsection only, as if it were a payment in respect of the principal debt.”. [42] While section 27 states: “(1) Every such acknowledgment as is referred to in section 26 or in the proviso to section 26 of this Act shall be in writing and signed by the person making any acknowledgment.