Benarel International Sdn Bhd v Menteri dalam Negeri Malaysia (W-01(NCvC)(W)-410-07/2023)

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KETUA PENGARAH JABATAN IMIGRESEN MALAYSIA KERAJAAN MALAYSIA ... RESPONDEN-RESPONDEN [Dalam Perkara Mengenai Mahkamah Tinggi Malaya Di Kuala Lumpur Guaman Sivil No. WA-21NCvC-69-10/2019 Antara Benarel International Sdn Bhd (No. Syarikat: 977578-W) ... Plaintif

Menteri Dalam Negeri, Malaysia

Ketua Pengarah Jabatan Imigresen Malaysia

Kerajaan Malaysia ... Defendan-Defendan 06/10/2025 10:43:41 W-01(NCvC)(W)-410-07/2023 Kand. 38 CORAM: SUPANG LIAN, JCА NOORIN BINTI BADARUDDIN, JCA AHMAD FAIRUZ BIN ZAINOL ABIDIN, JCA GROUNDS OF JUDGMENT Introduction [1] This appeal arises from the decision of the High Court of Malaya at Kuala Lumpur dated 5.7.2023, wherein the learned High Court Judge ("HCJ") dismissed the Appellant's claim against the Respondents for the sum of RM67,909,169.20. [2] Having carefully considered the appeal record, the written and oral submissions of the parties and after much deliberation, we unanimously dismiss this appeal. Our reasons are found in the paragraphs below. Background Facts [3] The appeal concerns services allegedly rendered by the Appellant to the Respondents related to ad-hoc data processing and analysis of foreign nationals from China and Bangladesh. [4] The genesis of the Appellant's claim against the Respondents stems from the REGISTA system (Pelaksanaan Sistem Pengenalan Diri bagi Pekerja-Pekerja Asing) proposed by the Appellant which was intended to enable Malaysian employers to register and identify foreign workers. [5] The Respondents agreed to the Appellant conducting two (2) Proof of Concept demonstrations ("POC-1" and "POC-2") for the REGISTA system. It was an express condition that these POCs would be conducted at no cost to the Respondents. [6] The Appellant claims that in October 2017, after completing POC-2, it was requested by the Second Respondent through certain officers to perform "ad hoc services" outside the scope of the POCs. These services allegedly involved analyzing historical data from 2014 to 2016 on the entry of foreign nationals from China and Bangladesh. [7] The Appellant alleges that it processed 91,234,726 data entries and is entitled to payment at the rate of RM0.70 per entry for data processing (amounting to RM63,864,308.20) and RM1.00 per entry for profiling services on a subset of the data (amounting to RM4,044,861.00), totalling RM67,909,169.20. [8] On 12.3.2019, the First Respondent issued a letter to the Appellant terminating the REGISTA system project. [9] The Appellant subsequently demanded payment for the ad hoc services, which the Respondents refused, leading to this litigation. Issues Before This Court [10] During the course of this appeal, the Appellant counsel focused on issues pertaining to the following: a) whether the learned HCJ erred in law and/or fact when she did not allow the quantum meruit claim for the ad hoc work; b) whether the learned HCJ erred in law and/or fact in finding that there was no contractual agreement between the parties concerning the ad hoc services; and c) whether the learned HCJ erred in law and/or fact in finding that the Appellant failed to discharge its burden of proof regarding the quantum of data processed and the agreed rates. Analysis and findings The issue on appeal [11] During the course of the appeal, the Appellant focused on the failure of the learned HCJ to consider the quantum meruit issue. The court was also informed that the Appellant was not pursuing the claim amounting to RM 63,864,308.20 as found in paragraph 33.1 of the Statement of Claim but will only be focusing on the claim at paragraph 33.2 of the Statement of Claim for the sum of RM 4,044,861. This to our mind was big shift in position. Quantum meruit [12] Quantum meruit has been codified and is reflected in section 71 of the Contracts Acts 1950. Section 71 provides for a just compensation as the measure of the work done as opposed to contractual damages (see Seow Yong Fatt, Craven-Ellis v. Cannons Ltd [1936] 2 KB 403). [13] Liability under section 71 is not based on any existing contract between the parties. Rather, it is based on the equitable principle of conscionable conduct and restitution to prevent unjust enrichment by one party at the expense of another party (see Tanjung Teras Sdn Bhd v. Kerajaan Malaysia [2015] 9 CLJ 1002). [14] It is critical to emphasize that a party seeking to rely on quantum meruit must give sufficient notice to the opposing party. This means, the pleadings must outline the material facts leading to the demand for the work done. [15] This is primarily because a claim for quantum meruit is borne out of work done. Therefore, the factual circumstances which led to the work being done must be laid down as material facts in the pleadings. [16] Our examination of the pleadings shows that the Appellant framed its case on the basis of a contractual agreement, claiming that the Respondents had requested the ad hoc services and agreed to pay for them at specific rates. Nowhere in the Statement of Claim did the Appellant plead an alternative claim based on quantum meruit. [17] The issue of quantum meruit was raised for the first time in the Appellant's Written Submissions in this appeal and was not pursued at the trial. It is settled law that a party cannot raise a new point on appeal that was not pleaded or pursued at trial. [18] This Court in Lembaga Tabung Haji & Anor V. Encap Sdn Bhd [2024] 2 CLJ 728 had made it abundantly clear that parties ought to be bound by their pleadings and none of the parties or even the court should be allowed to rely on an argument for quantum meruit if parties have admitted to not have pleaded or even submitted facts or a case under section 71 of the Contracts Act 1950. [19] Be that as it may, even if we were to consider the quantum meruit argument, it is our finding that the Appellant has failed to establish the essential elements required for such a claim to succeed. The following paragraphs will demonstrate our reasoning. [20] The Privy Council in Siow Wong Fatt v. Susur Rotan Mining Ltd & Anor [1967] 1 MLRA 53 outlined the four (4) conditions that must be satisfied to establish a claim under section 71 of the Contracts Act 1950. The statutory embodiment of quantum meruit are – (i) The act must be lawful; (ii) The act must be done for another person; (iii) The act must not be intended to be done gratuitously; and (iv) The other person must enjoy the benefit of the act. All the conditions must be fulfilled. First Condition - The act must be lawful [21] There is no dispute about the lawfulness of data processing services. However, we find the Second to the Fourth Conditions to be glaringly unproven. Second Condition - The act must be done for another person [22] The evidence suggests that the ad hoc services were performed not solely for the benefit of the Respondents but also to demonstrate the effectiveness of the REGISTA system to obtain approval for its implementation. [23] The Second Respondent's officer, SD-4, consistently testified that the ad hoc analysis was requested as a sample case to show the capabilities of the REGISTA system to the upper management. This dual purpose undermines the assertion that the act was done exclusively for the Respondents. Third Condition - The act must not be intended to be done gratuitously [24] The Appellant has failed to establish that the ad hoc services were not intended to be done gratuitously. The evidence shows that— a) throughout the POC-1 and POC-2 phases, it was clearly understood that all services would be provided at no cost to the Respondents; b) there was no formal written agreement on rates or payment terms for the ad hoc services; c) the officers of Jabatan Imigresen Malaysia (“JIM”) who allegedly agreed to the rates did not have the authority to bind the Government in contracts with financial implications; and d) no invoices were issued by the Appellant contemporaneously with the services. [25] What the Appellants argue to be the binding documents are documents which were in the form of Memos issued by the Appellant and acknowledged by SD3. [26] It was argued by the Appellant that the Respondents knew very well that the ad hoc services were to be charged and costs would be incurred. Appellant counsel referred to the Laporan Taklimat dated 31.1.2018 as proof that there was an agreement for the ad hoc work to be charged. The cost stipulated was RM1 and RM0.70 respectively for the identified work. [27] The learned Senior Federal Counsel (“SFC”) however denied that this was in any manner an agreement that could bind the Respondents into paying for the ad hoc work. The learned SFC read the paragraph which is reproduced as follows: [28] We cannot disagree with the learned SFC that this paragraph is a paragraph that outlines the obligation between parties if the REGISTA system is implemented. Refence to the word “bakal” simply means an act in the future. Apart for this paragraph, Appellant counsel failed to refer this Court to any other documents that could signify an agreement for the ad hoc work to be chargeable. [29] We cannot also disagree with the learned SFC when she explained that the Laporan Taklimat was purely an update by JIM to the Ministry of Home Affairs (“Ministry”/“KDN”) (Bahagian Hal Ehwal Imigresen). Specifically, the said Laporan Taklimat was to udpdate JIM’s Bahagian Visa, Permit dan Pas’s (“VPP”) views on the effectiveness of the REGISTA system. A read of the entire note would show there was acceptance by the Bahagian VPP of the said system. The Director General (“DG”) of JIM had also endorsed the system. [30] However, the said Laporan Taklimat did not contain any commitment apart from it being an update to the Ministry. It therefore does not support the Appellant’s contention that it was the document that specified the price to be paid by the Respondents for the ad hoc work and such work was not gratuitous. Fourth Condition - The other person must enjoy the benefit of the act [31] The Respondents strongly contest that they received any meaningful benefit from the ad hoc services provided by the Appellant, as evidenced by several documents and testimony in the record. Among them were—

Limited Use for Internal Briefings Only SD-4's testified during trial that the analysis was exclusively used during closed briefings with the DG of JIM on November 7 and December 11, 2017 and was never shared with or utilized by other divisions within JIM.

(ii) Sample Case Study Only SD-4 clearly stated in his testimony that the ad hoc services were merely requested as sample case studies to demonstrate the REGISTA system's capabilities: "Ad-hoc analisis itu atas saya punya inisiatif bagi meyakinkan pihak KDN dan juga pengurusan JIM pada ketika itu". This confirms that the ad hoc analysis was initiated specifically to convince the management of KDN and JIM about the REGISTA system's effectiveness, not as an independent service needed by the Respondents.

(iii) Failed to Address Core Business Issues SD-4 also stated that the results of the ad hoc analysis did not succeed in resolving the core business issues of JIM: "Atas keadaan tersebut, SD-4 menyatakan bahawa hasil analisa ad hoc oleh Plaintif itu tidak berjaya menyelesaikan masalah core business di JIM memandangkan kedua-dua kerja analisa tersebut hanyalah sample case untuk dibentangkan di hadapan KP JIM mengenai Sistem Regista yang dicadangkan oleh Plaintif ini." There was no rebuttal to all the issues raised by the Respondents’ witnesses that could at least demonstrate otherwise.

(iv) Termination of the REGISTA System The letter dated 12.3.2019 officially terminated the REGISTA system project. This termination rendered the ad hoc analysis, which was intended to demonstrate the system's capabilities, essentially valueless to the Respondents. As stated in SD-2's testimony "Segala aspek berkaitan dengan Sistem Regista oleh syarikat Plaintif adalah terbatal secara keseluruhannya sebaik sahaja pihak KDN menamatkan sesi POC dan seterusnya tidak meneruskan perlaksanaan sistem Regista di peringkat Kementerian, termasuklah di Jabatan Imigresen Malaysia".

No Implementation of Recommendations The Respondents maintain that they did not implement any of the recommendations arising from the ad hoc analysis. The testimony of SD-3 who testified that "Apa yang dimaksudkan dengan implikasi kewangan dalam kedua-dua laporan tersebut bukan berkaitan kerja-kerja analisa adhoc... Laporan yang disediakan oleh SD-4 bertarikh 31.1.2018 (dan telah dipersetujui KP JIM pada 5.2.2018) ini telah menjadi akademik dan tidak terpakai memandangkan Sistem Regista secara keseluruhannya sama ada POC termasuk kerja-kerja analisa adhoc telah terbatal dengan pengisuan Surat Penamatan KDN yang bertarikh 12.3.2019 tersebut.". This effectively meant that all the work carried out during the POCs and the ad hoc works were all not utilised.

(vi) No Continued Use of the Data or Analysis From the memo of re-submissions of processed data which was checked, verified and accepted by JIM on 19.7.2018, there is no indication that the data or analysis was subsequently used by the Respondents for any operational purposes or decision-making after the initial presentations. In short, there was no evidence presented by the Appellant that the data they produce during the entire engagement was utilised by the Government. [32] These specific references from the documents demonstrate that the Respondents did not obtain any substantive or lasting benefit from the ad hoc services allegedly provided by the Appellant. The services were at most used for demonstration purposes in two closed briefings, were never integrated into the JIM’s operations, and ultimately became irrelevant when the REGISTA system was terminated. [33] To suggest that the data produced as a result of the ad hoc work was sufficient to show that JIM benefited from the ad hoc work carried out is mischievous. This because the entire exercise of POC 1 and POC 2 as well as the ad hoc work was to test the viability of the system. Naturally work had to be done by the Appellant in order to convince JIM and eventually the Government to accept the said system. If in the event that the system is not accepted and is rejected, then the terms and conditions of the initial engagement must be the fall-back position of the parties. [34] The lack of benefit defeats the Appellant's claim under the principles of quantum meruit. The effect of the termination by KDN [35] The termination of the REGISTA project is a pivotal factor that undermines the Appellant's claim as it effectively nullified any potential ongoing benefit from the ad hoc services. A detailed examination of the termination letter provides conclusive evidence of this position. [36] The First Respondent issued a formal termination letter to the Appellant dated 12.3.2019. This letter contains several critical elements that directly impact the Appellant's claim –

Complete termination of the REGISTA System [37] The letter explicitly stated that the Ministry had decided not to proceed with the implementation of the REGISTA system. The termination was comprehensive and unequivocal, bringing an end to all aspects of the project. [38] The termination letter specifically referred back to the original terms and conditions set out in the earlier letter dated 18.1.2017. This critical linkage was highlighted in the Respondents' Written Submissions at paragraph 29: "Surat bertarikh 12.3.2019 ini harus dibaca bersama dengan kandungan Surat KDN yang bertarikh 18.1.2017 No. Rujukan KDN

(S): 03/700/1 Jld.4 (19) di Para 2 (vii) yang menjelaskan bahawa Kerajaan berhak (reserves the right) untuk tidak meneruskan atau menangguhkan perlaksanaan cadangan projek dan Kerajaan tidak akan bertanggungan terhadap apa-apa kos yang ditanggung oleh pihak Syarikat sekiranya projek tidak diteruskan.".

(ii) Explicit waiver of financial liability [39] The 18.1.2017 letter, which was incorporated by reference in the termination letter, contained a specific provision in paragraph 2(vii) that explicitly protected the Government from any financial liability— "Kerajaan juga berhak (reserves the right) untuk tidak meneruskan atau menangguhkan perlaksanaan cadangan projek atau menukar/mengubah perlaksanaan cadangan projek sama ada dari segi skop dan kos projek. Dalam keadaan ini, Kerajaan tidak bertanggungan terhadap apa-apa kos atau perbelanjaan yang ditanggung oleh Benarel sekiranya projek tidak diteruskan, ditangguhkan atau perlaksanaan projek ditukar/diubah atau apa-apa kelewatan di pihak Kerajaan berhubung perlaksanaan cadangan projek dan keadaan tersebut tidaklah dengan apa-apa cara sekalipun melayakkan Benarel untuk membuat sebarang tuntutan ganti rugi atau pampasan terhadap Kerajaan.". [40] This clause expressly stated that the Government would not be liable for any costs incurred by the Appellant if the project was not continued, and that such circumstances would not in any way entitle the Appellant to make any claims for damages or compensation against the Government.

(iii) No distinction made for ad hoc services [41] Significantly, the termination letter made no distinction between the POC work and the alleged ad hoc services. SD-2's testimony explicitly clarified that the termination applied comprehensively— "Segala aspek berkaitan dengan Sistem Regista oleh syarikat Plaintif adalah terbatal secara keseluruhannya sebaik sahaja pihak KDN menamatkan sesi POC dan seterusnya tidak meneruskan perlaksanaan sistem Regista di peringkat Kementerian, termasuklah di Jabatan Imigresen Malaysia.". [42] This statement confirms that all aspects related to the REGISTA system by the Appellant were cancelled entirely as soon as KDN terminated the POC session and decided not to continue implementing the REGISTA system at the Ministry level, including at JIM. Impact on the Appellant's Claim [43] The termination letter fundamentally undermines the Appellant's claim for several reasons: a) It confirms that no ongoing benefit was derived from any aspect of the REGISTA system, including the ad hoc services, as the entire project was abandoned. b) It reinforces that the Government had expressly reserved its right not to proceed with the project without incurring any liability for costs or expenses. c) It demonstrates that any alleged approvals or recommendations by the DG of JIM (including those in reports dated 3.11.2017, and 31.1.2018) were rendered moot by the Ministry's decision not to proceed with the implementation. d) It shows that the Appellant was well aware from the outset of the project (via the 18.1.2017 letter) that the Government could terminate the project without financial implications, yet proceeded with the alleged ad hoc services without securing proper contractual protection. [44] The termination letter therefore serves as conclusive evidence that the Respondents derived no lasting benefit from the ad hoc services, and that they had explicitly protected themselves from financial liability in precisely such a scenario. This further strengthens the position that the fourth condition for quantum meruit (that the other person must enjoy the benefit of the act) has not been satisfied. Absence of Contractual Agreement [45] We find no error in the learned HCJ's conclusion that there was no contractual agreement between the parties regarding payment for the ad hoc services. [46] The documents relied upon by the Appellant to establish an agreement on rates (memos dated 23.10.2017 and 11.12.2017) were unilateral documents prepared by the Appellant and signed by a junior officer (SD-3) who had no authority to bind the Government. [47] Sections 2 and 3 of the Government Contracts Act 1949 clearly stipulate that contracts on behalf of the Government shall be made in the name of the Government and signed by a Minister or any public officer duly authorized in writing by a Minister. There is no evidence that SD-3 or SD-4 had such authorization. [48] The Federal Court in Suwiri Sdn Bhd v Government of Malaysia [2008] 1 CLJ 123 has held that contracts purportedly executed without proper authorization from the Minister are void ab initio. This principle was reiterated in Macrotac Enterprise & Ors v Pengarah Pendidikan Negeri Selangor & Ors [2010] 8 CLJ 592. [49] The Appellant's reliance on Syarikat Sebati Sdn Bhd v Pengarah Jabatan Perhutanan & Anor [2019] 2 MLRA 171 misses the point. In that case, there was clear evidence of the Government's receipt and utilization of benefit, which is not established in the present case. Burden of proving quantum of Special Damages [50] During the course of the appeal, the Appellant counsel informed this Court that they are abandoning their claim for RM 63,864,308.20 as the data could have intermingled with the data in POC 1 and POC 2. [51] They however were only pursuing the quantum meruit portion. This sum was RM 4,044,861. [52] Counsel further explained that they had to be upfront and informed the Court that the final sum should be RM 3,209,669 taking into account the duplication of PATI in the China and Bangladesh figures. [53] Even if we were to accept the Appellant's claim in principle, the Appellant has failed to discharge its burden of proving the quantum of its claim with the specificity as required for Special Damages. [54] We find the sums claimed unsubstantiated. The calculations were clearly submissions from the bar. The witnesses of the Respondents were not given an opportunity to verify the Appellant’s claim during trial. [55] During the course of the appeal, it was candidly admitted by the Appellant counsel that the applicable rates were unclear. There were no specific agreed rates that could be shown to this Court. Counsel was unable to pinpoint the exact rate they were relying on safe for arguing that they referred to the Laporan Taklimat rates. The Laporan Taklimat was never referred in the pleadings. In fact, a different rates was pleaded in the Statement of Claim when compared to the Laporan Taklimat. We do not attribute any blame onto counsel who repeatedly explained that she had only taken over conduct of the matter on appeal. However, she is caught by what has been pleaded. [56] The Federal Court in Ong Ah Long v Dr S Underwood [1983] 2 MLJ 324 emphasized that special damages must be specifically pleaded and strictly proved. [57] It is not open for the Appellant to depart from its original claim merely by counsel submissions. Not only is it a departure from the original contractual claim as pleaded but it is also a demand that they be paid for a cause of action (quantum meruit) which they did not plead to begin with. [58] This Court in Logical Operations Consortium Sdn Bhd v Abdul Rahim bin Abdul Razak [2017] MLJU 1330 held that a party claiming compensation on the basis of quantum meruit must establish - a) The market value of comparable or similar works; b) The reasonable or objective value of the services rendered; or c) At the very least, the usual sum imposed on other clients for similar services. [59] We find that the Appellant failed to provide any such evidence, relying instead on its own unilateral documentation of rates and quantities. No appellate intervention required [60] We are of the view that the learned HCJ did not commit any appealable errors that merits appellate intervention. [61] We must take cognisant of the advantage the trial court had on being able to hear and observe the demeanour of the witness during trial. The first-hand ability to assess the witnesses “in the heat of the moment” in person is a critical advantage that an appellate court does not enjoy. [62] We are guided by the decision of the Federal Court decision in Ng Hoo Kui & Anor V Wendy Tan Lee Peng, Pentadbir Kepada Harta Pusaka Tan Ewe Kwang, Simati & Ors [2020] MLJU 1469 where the Federal Court held that in applying the "plainly wrong" test, a higher court can overturn a lower court's decision if it finds the lower court's factual findings to be demonstrably incorrect or unreasonable. This test essentially means that an appellate court will only interfere with a trial court's decision if it is so clearly wrong that no reasonable judge could have reached that conclusion based on the evidence presented. [63] Applying the "plainly wrong" test, it is our view that the learned HCJ had properly considered all relevant evidence. She did not make any significant errors in interpreting the law, or reached a conclusion that is not supported by the facts on the record. Conclusion [64] For the reasons stated above, we find that the learned HCJ did not err in law or fact in dismissing the Appellant's claim. The learned HCJ correctly found that the Appellant failed to establish a legal basis for its claim and did not discharge its burden of proof. [65] The appeal is therefore dismissed and the High Court decision is affirmed with costs of RM30,000.00 to the Respondents subject to allocator. (AHMAD FAIRUZ BIN ZAINOL ABIDIN) Judge Court of Appeal Malaysia Dated: 20th May 2025 For the Appellant - 1. Rajashree Suppiah 2.Rex Kuan Kai Tat 3.Amira Nur Nadia bt Azhar (Tetuan Rajashree) No. 17-2, Jalan Radin Bagus 6 Sri Petaling, Sri Petaling 57000, Kuala Lumpur For the Respondents - Husniyyah Binti Hanapi (Peguam Kanan Persekutuan) Jabatan Peguam Negara Bahagian Guaman, Aras 6 No. 45, Persiaran Perdana Presint 4, 62100 Putrajaya