Big Man Management Sdn Bhd v Tenaga Nasional Berhad (02(f)-16-05/2024(J))

This is an appeal by Big Man Management Sdn Bhd (Big Man) against Tenaga Nasional Berhad (TNB) regarding the assessment and grant of damages. Big Man sued TNB for wrongful disconnection of electricity, trespass, wrongful interference with business, defamation, and breach of statutory duty. The two main issues in this appeal relate to whether special damages were proved, and whether exemplary damages may be awarded against TNB.

The background facts are not substantially in dispute. TNB disconnected electricity supply to an ice-making factory operated by Big Man after discovering and rectifying meter tampering. Both the High Court and the Court of Appeal found these disconnections to be wrongful, relying on the principle that TNB cannot disconnect supply under Section 38(1) of the Electricity Supply Act 1990 (ESA) once meter tampering has been rectified. Notwithstanding this, no damages were awarded on the basis that there was insufficient proof of loss.

The Court of Appeal reversed the High Court's award of special damages, arguing that they were not “strictly proven”. We find that the term “strictly proved” does not impose a higher standard of proof than the usual civil standard of a balance of probabilities. It means providing clear, robust, and convincing evidence of the fact and quantum of damages. Upon a review of the evidence presented by Big Man regarding the rental and purchase of generators and diesel we find that the documentary and oral evidence, including invoices, payment vouchers, and witness testimony, were sufficient to establish these losses. There is also sufficient evidence for the indemnity payment made by Big Man to Ice Man, i.e. the 2 management agreement and witness testimony. The full judgment goes into more detail but briefly:

(A) Generators

Photographs produced by TNB themselves show a generator at the factory;

Oral evidence from a director of the generator supplier (Lim Yong Chiang, a director of Kuang Yi Machinery testifying as PW-2) confirmed transactions and identified the generators in the photographs;

Documentary evidence including invoices from the supplier (Kuang Yi Machinery) detailing rental periods, prices, and signed/stamped by both parties were adduced as exhibits;

Payment vouchers issued by Big Man, matching the invoices and showing a payment process with signatures from both Big Man and the supplier, were also presented;

The authenticity of these documents was not disputed, and the makers testified in court. Therefore, the Court of Appeal’s conclusion that there was “no evidence” of generator use or payment is not supported by the material evidence.

(B) Diesel

Both invoices and payment vouchers supporting the diesel purchases were presented;

While the diesel suppliers did not testify, the general manager of Big Man (Ser Boon Hwa or James, PW-7) confirmed the payments and produced supporting documents;

Invoices from various suppliers bore signatures evidencing receipt of diesel;

Evidence of payment through specific Public Bank cheques by Big Man was presented

Matching payment vouchers specifically referencing invoice numbers, stated they were for diesel usage for generators, and included cheque numbers; 3

Ice-Man’s cheque stubs also indicated payments for diesel (later reimbursed by Big Man);

The above documentation represents records of business conducted during the period of disconnection and is admissible under section 32(1)(b) of the Evidence Act 1950. It forms a consistent trajectory of business operations and are not simply random documents;

TNB did not cross-examine witnesses to suggest the documents were fictitious or fabricated;

There is no evidential basis for TNB’s suggestion that the diesel was used for Big Man’s lorries. PW-7’s evidence about “indent” cards for subsidised diesel for the lorries was unrefuted.

(C) Indemnity

The Management and Administrative Services Agreement stipulated Big Man’s liability to indemnify Ice Man for losses due to operational disruption;

The Court of Appeal was concerned about the lack of “actual proof of payment” by PW-8 (Goh Tack Lik, CEO of Big Man and shareholder/director of Ice Man);

However, PW-8 testified explaining the mode of payment: cash advanced from an affiliated Singaporean company (Unitat) to Big Man, then remitted to Ice Man via money changers. His testimony on this point was not challenged during cross-examination;

Given the close relationship between the companies and PW-8's role in both, PW-8’s knowledge of whether Ice Man was reimbursed is significant;

Therefore, the Court of Appeal’s finding that PW-8’s evidence was “questionable” is not justified considering the holistic evidence and the companies’ operational methods.

Assessing damages is not a robotic mechanical or arbitrary process and requires a close examination of all evidence. An appellate court should be slow to reverse findings of fact based on a chain of evidence unless the documentary evidence is clearly a sham. Here, the evidence on which the findings of the High Court were based were not effectively 4 challenged. We find that Big Man succeeded in discharging its evidentiary burden for special damages on a balance of probabilities. Therefore, we order that the High Court's award for special damages be reinstated.

The next issue is whether exemplary damages are claimable against TNB for wrongful disconnection. Parties submitted at length on this issue, Big Man urging the court to award exemplary damages but TNB taking the stance that the weight of authorities does not allow so. We found that exemplary damages are generally not awarded for breach of contract in the UK, Australia, and Singapore, but are available in Canada, albeit rarely in contract cases. We will not reiterate the case law here as it is set out in our full judgment.

In the present case, the High Court awarded exemplary damages based on tort, while the Court of Appeal held that exemplary damages are not available for this type of breach of contract claim.

However, Big Man’s claim is not solely based on breach of contract. In the Statement of Claim, Big Man pleaded material facts that give rise to a cause of action for breach of statutory duty under the ESA. TNB, as the sole supplier of electricity for Peninsular Malaysia, has a statutory duty to supply electricity, and its unlawful disconnection of electricity constitutes a breach of this duty.

TNB’s conduct warrants exemplary damages due to its monopolistic position, the unlawful nature of the disconnections, the deliberate prolongation of the first disconnection, TNB’s refusal to engage with Big Man, and the second disconnection despite pending litigation. We find that TNB’s actions, aimed at forcing payment of arrears, were a misuse of its power and demonstrated mala fides.

We have discussed in our full grounds of judgment the law on exemplary damages beginning in the UK case of Rookes v Barnard [1964] AC 1129 and the subsequent case of Kuddus v Constable of Leicestershire Constabulary [2001] UKHL 29 (‘Kuddus’). While 5 Kuddus primarily dealt with misfeasance in public office, Lord Nicholls’ comments in Kuddus suggest that entities exercising significant power, even if not governmental officials or the like, could be liable for oppressive conduct. We are of the view that TNB, as the sole body tasked under the Federal Constitution to supply electricity, is a body that holds a monopoly on the supply of electricity in Peninsular Malaysia. It wields significant power and cannot be equated to a private company.

The sentiments expressed in the unreported Federal Court decision in Tenaga Nasional Bhd v Mayaria Sdn Bhd & Anor (‘Mayaria’), Civil Appeal No. 02(f)-28-03/2017(W) (Mayaria), affirmed by the Federal Court in Tenaga Nasional Bhd v Chew Thai Kay & Anor [2022] 2 MLJ 25 (FC) (Chew Thai Kay), and the Court of Appeal judgment in Mayaria, Tenaga Nasional Bhd v. Mayaria Sdn Bhd & Anor [2019] 8 CLJ 786, make it very clear that TNB cannot use disconnection to compel payment of arrears and must pursue civil action. These cases reinforce our finding that TNB’s actions were in breach of its statutory duty. The egregious nature of TNB’s conduct warrants the grant of exemplary damages in this case. The purpose is to deter TNB from similar conduct and emphasise its statutory duty under the ESA to consumers of electricity.

Regarding the quantum of exemplary damages, the High Court’s approach of calculating it as a percentage of special damages is misguided. Instead, the amount should be based on the specific facts of the case, and has the aim to signify the court’s disapproval of the conduct in the particular case. We therefore award the sum of RM100,000 as exemplary damages, considering the deliberate and repeated disconnections to an ice-making factory, done with knowledge of the impact on the business and to pressure Big Man into paying arrears.

An ancillary issue is the Court of Appeal’s decision to dismiss Big Man's claim for general damages for wrongful interference with business, as Big Man did not appeal this point. We agree with the Court of Appeal and further, find that the award of special damages we make is sufficient compensation. It is trite that that damages are compensatory in nature and a plaintiff should not be unjustly enriched by an award of damages. 6

We turn to the issue of costs. While costs are generally awarded to the successful party, Big Man was dissatisfied because although the Court of Appeal found TNB liable for wrongful disconnection, the Court of Appeal then awarded costs to TNB.

It is trite that the award of costs is at the discretion of the courts and that such judicial discretion must be exercised according to settled principles. We note that although Big Man was successful for wrongful disconnection, the Court of Appeal reversed the damages awarded and found against Big Man on other claims. This is not a case where it can be said that the Court of Appeal’s award of costs to TNB was plainly wrong in principle for us. Neither was the quantum of costs awarded by the Court of Appeal excessive.

However, since we have now overturned the Court of Appeal’s decision on damages, the Court of Appeal’s award of costs to TNB is also set aside.

In conclusion, we set aside the Court of Appeal's decision on damages for wrongful disconnection, reinstated the High Court's award of special damages, and award Big Man RM100,000 in exemplary damages for TNB’s breach of statutory duty.

We have answered questions 1 & 2 in our full grounds of judgment and found that it is not necessary to answer questions 3, 4 & 5. Accordingly, we declined to answer those questions.

The court will now hear parties on costs.