Karun Klasik Sdn Bhd v Tenaga Nasional Berhad (W-02(NCC)(W)-636-04/2017)

(i) The Federal Court agreed with the Court of Appeal’s finding that r. 5 of the Rules of the Court of Appeal (RCA) 1994 provided for an appeal to be lodged against the whole or part of any judgment or order of court, and such an appeal in contrast to a cross-appeal is by way of a re-hearing. The word "re-hearing" used clearly anticipated a review or regurgitation before the appeal court of all the points and arguments taken at the court below. Hence, if it was the substantive finding of the court that was intended to be attacked, the party aggrieved should file a proper notice of appeal;

(a) In respect of the first period namely from 3 May 2007 until 26 January 2011, the sum of RM1,579,981.35; and

(b) For the second period, namely from 26 January 2011 until 16 March 2011, the sum of RM52,582.94

(c) The total sum claimed amounted to RM1,632,564.29 [21] The defendant denied owing the sums claimed, albeit in part or in its entirety. It maintained that it had not, either through its employees or principals, tampered with the meter. The defendant further contended by way of its defence and counterclaim, inter alia, that the inspection/s carried out by the plaintiff were unlawful and disclosed no wrongdoing or tampering on the defendant’s part. The basis for such allegations are set out in the defence and counterclaim in full and will be considered further on in the judgment. The defendant consequently refused to pay for electricity which it maintained had not been supplied to it. It further maintained that the basis for calculation 9 of the amounts due was arbitrary and excessive. The electricity bills of the defendant after the removal of instruments allegedly utilised to tamper with the meter disclosed that the quantum of billing remained the same as that prior to such removal. [22] In its counterclaim, the defendant sought damages for losses accruing to its business as a consequence of the wrongful disconnection of the electricity supply to its factory on 24 April 2011. In this context, the defendant operated a factory in Kolam Udang, Kg Assam Jawa in Kuala Selangor. The nature of its business was the processing and packaging of prawns. The processed frozen prawns were stored in a cold room pending export and sale. [23] It therefore claimed damages for the loss of stock that had been stored in its coldroom, loss of income and profits, loss of reputation, customers and orders, as the factory had to be closed down. The defendant claimed the sum of RM5,382,139-56 and USD85,000-00. The Chronology of Facts [24] The plaintiff’s case is that on 26 January 2011, its representatives inspected the meter installation at the plaintiff’s premises in the presence of the defendant’s representative (‘the 1st inspection’). The plaintiff maintains that it discovered signs indicative of meter tampering. [25] This is disputed by the defendant. The defendant denied receiving any notification of the 1st inspection. Further, the defendant pointed out that the said premises were closed at the time of the 10 inspection which was around 4.30 - 6 am. The defendant alleged that the plaintiff’s representatives trespassed and broke into the said premises, damaging the gate and lock to the meter room in the process, leaving the defendant’s premises unsafe and unsecured. The defendant lodged a police report to that effect on the following day, 27 January 2011. [26] The plaintiff’s reply to that was that the 1st inspection was part of “Ops Mancing” where the plaintiff’s team was accompanied by auxiliary police. The plaintiff admitted conducting the 1st inspection outside of office hours but justified it by stating that the trend was to steal electricity outside of office hours, and that it was legally entitled to conduct the inspection. Further, the plaintiff claimed that the defendant’s gate was already broken at the material time and that the meter room was not locked, but only latched. Therefore, the uniformed team did not have to break the gate and lock to enter the said premises. [27] In any event, the plaintiff’s representative’s recorded findings included the following:

(i) The power readings on the display of the main meter and the check meter differed from the actual readings of power consumption for all 3 phases of the said meter;

(i) There was a mark on the TNB sticker, suggestive of tampering;

(v) The neon fuse of the yellow phase had blown. [30] The 2nd inspection showed that the percentage of error for both the main and the check meter was -100% (negative one hundred percent). In monetary terms, the plaintiff found that the sum of RM52,582-94 had not been billed for the period from 26 January 2011 to 16 March 2011. [31] From its findings pursuant to the 1st and 2nd inspections, the plaintiff concluded that the meter did not record an accurate reading of electricity utilised by the defendant at the said premises. [32] It is the defendant’s contention however that the problem with the meter at the second inspection was an inherent problem and could not possibly constitute evidence of any “tampering” on its part. [33] The plaintiff sent the defendant several notices regarding the total outstanding back charges but the defendant refused to pay. [34] On 20 April 2011, the plaintiff sent the defendant a letter and a notice under section 38(1) of the ESA. Both documents make reference to the second inspection conducted on 16 March 2011. [35] The letter made a demand from the defendant of the sum of RM1,579,981-35 being the arrears of monies owed to the plaintiff for electricity which it computed had been consumed by the defendant 13 but which had not been paid for. In the event the defendant failed to pay this sum on or by 4 May 2011 the electricity supply would be cut. [36] Vide a notice under section 38(1) of the ESA the plaintiff stipulated that pursuant to the inspection conducted on 16 March 2011, the electricity supply to the premises would be disconnected on 21 April 2011 at 2.30 p.m. [37] The defendant’s representatives met with the plaintiff’s representatives on the morning of 24 April 2011 to assert that they did not tamper with the meter. In that meeting, they gave the plaintiff notice that if the plaintiff proceeded to disconnect the electricity supply, the defendant would hold the plaintiff responsible for the losses suffered as a result of the disconnection. [38] The plaintiff proceeded to disconnect the electricity supply on the afternoon of 24 April 2011. The defendant claimed that this was contrary to another notice issued by the plaintiff, also dated 20 April 2011, that the plaintiff would only disconnect the defendant’s electricity supply after 4 May 2011 if the sum of RM1,579,981-35 was not paid (this notice was not in the record of appeal). [39] The defendant’s representatives met the plaintiff’s representatives immediately after the disconnection to request for a restoration of the electricity supply. However, the plaintiff only reconnected the electricity supply 12 days later, on 3 May 2011. 14 [40] The plaintiff lodged police reports on 28 January 2011 and 11 May 2011, claiming that the reason for the inaccurate reading was due to the tampering of the meter on the said premises. [41] The plaintiff then filed this action, claiming that the defendant had, in breach of the terms of the electricity supply contract and of the relevant laws, tampered with the meter resulting in the failure of the meter to record an accurate reading. The plaintiff claimed back charges amounting to RM1,632,564-29. [42] The defendant denied tampering with the meter on the said premises and alleged that the amount claimed by the plaintiff as back charges is exorbitant, arbitrary and unreasonable. In its defence, the defendant further claimed that its usage of electricity fluctuates from time to time because it is dependent on several factors, such as the quantity of raw ingredients being processed and the country to which the prawns were being exported. [43] The defendant also filed a counterclaim for the trespass and damage caused by the plaintiff to the said premises, and for the loss of business profits which it suffered as a result of the plaintiff cutting the electricity supply to the said premises. The defendant claimed special damages in the sum of RM5,382,139-56 and US$85,000-00 with interest, general damages, and costs on a solicitor-client basis. [44] The defendant maintained that despite taking steps to mitigate its losses, it ultimately failed to revive its business. The defendant closed its factory and ceased its business around December 2011 or January 2012. 15 The Decision of the High Court [45] The High Court dismissed both the plaintiff’s claim and the defendant’s counterclaim. The primary issues before the High Court were whether:

(a) the plaintiff had lawfully ‘backbilled’ the defendant for the supply and usage of electricity;

(b) the subsequent disconnection of the supply of electricity, by reason of non-payment of such bills, was lawful.

(c) the defendant was entitled to damages under the counterclaim for damages, loss of profits etc. [46] The grounds of judgment are, with respect, wholly comprehensive and we do not propose to paraphrase the same here. In summary, the reasons set out by the learned trial judge are, inter alia, as follows:

(i)

(a) the meter installation in the defendant’s premises had been tampered with at the time of the first (albeit unlawful) inspection;

(b) the meter had not been tampered with at the time of the second inspection, on a balance of probabilities. The meter was faulty.

(v) The learned trial judge also held that pursuant to the second inspection in respect of which she had found no tampering, the plaintiff was entitled to recover monies due to it, but only under Regulation 11(2) of the LSR 1990. As the second limb of the plaintiff’s claim was for the period prior to the three months stipulated in the regulations, it was not recoverable1.

(a) It was the plaintiff’s duty and obligation to supply electricity to the defendant’s premises premised on the written contract between the parties. Further such an obligation was also statutorily based pursuant to section 24 of the ESA. By disconnecting the defendant’s electricity supply on 21 April 2011, the plaintiff, it was contended, had breached not only its contract with the defendant, but also its statutory duty, thereby giving rise to remedies to the defendant in both contract and tort, in damages;

(b) There had been no urgency nor circumstances warranting a disconnection of the electricity supply on 21 April 2011, particularly in light of the tampered meters having been replaced, and the defendant having been accorded further time to pay the sum claimed;

(c) The plaintiff had exercised its powers wrongfully under section 38(1) because in reality the disconnection was due to the defendant’s failure to pay the sums demanded by the plaintiff, rather than any tampering of the main and check 19 meters (as evident from the plaintiff’s pleaded case at paragraph 29 where it had stipulated that the defendant was aware that its supply would be disconnected in the event of a failure to pay the sums due). The plaintiff was only entitled to disconnect the electricity supply pursuant to section 38(1) of the ESA if a consumer was found to have tampered with the meters;

(d) There was nothing found in the second inspection on 16 March 2011 which suggested that an offence under section 37 of the ESA had been committed. The evidence, through PW-3, it was submitted, showed that rather than tampering, the problem appeared to be an inherent defect of the meter. As such it could not be the case that an offence relating to meter tampering had been committed. In the absence of tampering with the meter there could be no lawful disconnection of the electricity supply to the defendant;

(e) More significantly it was argued that the power given by section 38(1) ESA to the plaintiff is a discretionary power that is not absolute. This was evident from the use of the word “may” in the section. As such, the plaintiff did not have an unfettered right as a licensee under the ESA 1990 to disconnect electricity supply based on an opinion formed subjectively, without having regard to the serious repercussions such a disconnection may have on its consumers. 20 [50] The thrust of the defendant’s appeal was that a purposive interpretation of the provision of section 38(1) of the ESA discloses that the discretionary power to disconnect electricity is to prevent an offence of meter tampering from continuing. The following cases were cited in support of this proposition:

(a) Claybricks & Tiles Sdn Bhd v Tenaga Nasional Bhd [2007] 1 MLJ 217 at 223H (‘Claybricks’) where this court held, inter alia, that the purpose of the section was to give power to the plaintiff to halt an ongoing offence instantly or speedily.

(b) Xin Guan Premier Sdn Bhd v Tenaga Nasional Berhad [2016] 1 CLJ 318 at 331 D where it was held that Tenaga Nasional Berhad could only lawfully disconnect the electricity supply to a consumer’s premises “when the offence is still continuing and conversely cannot if it has since ceased”;

(c) Mayaria Sdn Bhd & Anor v Tenaga Nasional Berhad [2015] 6 CLJ 788 at 811 I to 812A and Modernria Plastic Industries (M) Sdn Bhd v Tenaga Nasional Bhd [2015] 3 CLJ 825 at 836D, where it was held that once the impugned meter had been replaced and the offence under section 37 of the Act was no longer continuing, then there was no power to issue the notice to disconnect as the act of replacing the impugned meter with a new meter had brought the nefarious conduct or activity to an end, and there was no longer a basis or justification for 21 disconnection of electricity as a statutorily prescribed response to an offence under section 37 of the Act. [51] It therefore followed, it was submitted, that once the meters were changed or had been repaired (as was the case here on 16 March 2011), the purported offence had ceased and there was no longer any offence in respect of which the plaintiff could exercise its powers under the section to disconnect the electricity supply. The learned judge had made a finding of fact that there was no tampering of the meters at the time of the second inspection. Accordingly it was argued for the defendant that the plaintiff’s powers under section 38(1) had been wrongly exercised. The plaintiff’s submissions [52] For the plaintiff, learned counsel Mr. Balvinder Singh Kenth maintained that the learned judge had not erred. He submitted in summary that:

(a) The plaintiff is entitled under section 38(1) of the ESA as well as clauses 10 and 21 of its supply contract with the defendant to disconnect the electricity supply2; 2 Clauses 10 and 21 provide respectively as follows: “Clause 10. NO INTERFERENCE OF SUPPLY TO OTHER CONSUMERS. To use electiricty supply so as not to interfere with the supply of electricity to any other Consumers and TNB may disconnect the supply if such interference occurs.” “Clause 21. DISCONNECTION OF SUPPLY. TNB shall have the right to disconnect the supply of the Consumer without giving any notice in any situations mentioned below:-

(a) the Consumer fails to pay monthly bill as mentioned under clause 17(a); (b) any default by the Consumer under clause 23 and such default are are not remedied within the stipulated period; (c) By Court Order/Judgment; (d) If in the opinion of TNB that the continuation of the supply will jeopardize the safety, reliability or security of TNB’s system or presents an imminent physical threat or endangers the safety, life or health of any person; (e) Any right to disconnect the supply without notice as provided under the Electricity Act 1990.” 22

(b) Although the court had concluded that tampering was not made out on the second inspection, the plaintiff was, at the material time i.e. after the 2nd inspection, of the opinion that tampering had occurred;

(c) Pursuant to section 38(1), the plaintiff’s officer, PW-3, had formed an opinion that an offence under section 37 had in fact been committed. Once he was of such opinion, section 38(1) empowered him to disconnect the supply with 24 hours notice;

(d) The trial judge found that on the basis of what was perceived to be tampering, the officer had sufficient justification to form the opinion that an offence under section 37 of the ESA had been committed;

(e) Section 38(1), as statutorily construed, allowed the plaintiff to exercise its powers to disconnect the electricity supply when its officer had formed an opinion that an offence had been committed. Accordingly the disconnection was lawful. [53] In support of such a construction, reference was made to:

(i) WRP Asia Pacific Sdn Bhd v Tenaga Nasional Berhad & Anor Appeal [2011] 4 CLJ 838 (‘WRP Asia Pacific’) where this Court held that the section provided specifically for the preservation of Tenaga Nasional Berhad’s interests and empowered it to act expeditiously to prevent misuse, such as the theft of electricity supplied by it. No offence 23 needed to be proved in court before the power under the section could be invoked. This was in order to ensure swift action could be taken to immediately avoid the further illegal usage by the perpetrator. [This decision was upheld by the Federal Court in WRP Asia Pacific Sdn Bhd v Tenaga Nasional Berhad [2012] 4 CLJ 478.].

(a) There is doubt and ambiguity in the plain reading of section 38(1) because an interpretation disregarding the prupose of section 38(1) as stipulated in Claybricks and WRP Asia Pacific could lead to the situation that despite rectification of the meter that had been tampered with, TNB could still invoke its power to disconnect electricity supply 29 to the offending consumer long after the inspection which resulted in the discovery and subsequent rectification. This could continue for years;

(b) The scheme does not envisage that the right to claim loss of revenue under section 38(3) or the power to disconnect under section 38(1) are not sine qua non of one another. As such TNB may choose to disconnect the supply even without claiming back charges for the loss of revenue. Equally it might also effect disconnection even after payment has been made in full of backcharges;

(c) The power to disconnect electricity supply was not enacted with a view to punishing for meter tampering or electricity theft because such a course of action should only be pursued in accordance with the provisions of the ESA on criminal proceedings;

(d) The provisions of section 38(1) are clear that the power to disconnect supply to the premises of consumers in cases such as meter tampering is both immediate and interim in nature. Any such disconnection is also intended to be temporary as subsection (2) provides that disconnection should not exceed three months. [64] The learned judge then went on to consider possible scenarios that could arise in the event section 38(1) is construed as according to TNB it has the discretion to disconnect electricity even after the 30 “rectification” of the offence believed or viewed to have been committed under section 37. His Lordship went on to state as follows:

(e) The purposive approach ought to be utilised in construing section 38(1) of the ESA;

(f) Reference was made to the provisions in the United Kingdom Electricity Act 1989 which expressly provides that the supplier of electricity may discontinue such supply “until the matter has been remedied and remove the meter in respect of the offence was committed.” [65] Premised on the foregoing the learned Judge, adopting and agreeing with the approach in Modernria and Mayaria held that disconnection could only be effected until such time as the tampered meter has been remedied or removed. Once the impugned meter has been remedied and further losses halted, the statutory power accorded to TNB can no longer be lawfully exercised. [66] Having examined the relevant case-law submitted to us and considered the same we turn to consider section 38, more particularly the construction to be accorded to the power to disconnect accorded to a licensee under section 38(1) of the ESA. [67] For ease of reference, section 38 provides as follows: “38. Disconnection of supply of electricity

(a) tampering or the adjustment of installations which might cause danger to human life – section 37(1);

(b) the dishonest abstraction, consumption or use of electricity or the alteration of any meter or other instrument or the prevention of such meter or instrument from recording the consumption of electricity – section 37(3); 32

(c) causing damage to any meter or installation utilised in the recording of the output or consumption of electricity. (emphasis ours) [69] Section 38(1) provides for the disconnection of the supply of electricty to a consumer’s premises:

(i) by the licensee or a person duly authorised by the licensee (the plaintiff)

(a) The word ‘after’ in section 38(1), read in the context of the commissions of an offence under section 37, cannot mean in perpetuity after discovery of the ‘offence’. Following from Claybricks and WRP Asia, it was held in these cases, that the word ‘after’ must mean at a relatively short time 34 after or immediately after the discovery of the commission of the offence.

(b) Apart from this however, these cases also go on to construe the section such that upon remedying the act of tampering, the offence is effectively halted and thereafter the power to disconnect ceases to subsist. [73] With respect to the construction that ‘after’ cannot mean in perpetuity, we would concur. Notwithstanding this, the word ‘after’ is a relative term and does not necessarily only mean immediately upon discovery of the offence. The section does not circumscribe, albeit expressly or impliedly, that disconnection is to be undertaken immediately upon discovery of an offence. [74] The word ‘after’ ought to be given a reasonable, judicious and rational construction which will depend to a large extent on the particular facts of a case. It would be futile to prescribe a specified period as amounting to the outer limits of time accorded to the licensee, save to state that the section clearly does not envisage a period that is too long in the context of a particular case, and far less, perpetuity. [75] The interpretation accorded in the triad of cases namely Modernria, Mayaria and Xin Guan have also read into section 38(1) the additional condition that the power to disconnect ceases upon removal of the impugned matter on the rationale that the “commission” of the offence under section 37 has ceased. Such an interpretation is not consonant with the literal meaning of the section. 35 It is however argued in the foregoing cases that such a meaning is in accord with the legislative intent if the purposive approach to statutory construction is adopted. [76] The plain meaning rule it will be recalled, requires the interpreter to consider on an informed interpretation of the statute and the section in question, whether there is any real doubt that the grammatical or literal meaning is the one intended by the legislator. This in itself requires deliberation on the purpose and intent of the ESA, more particularly Part IX which deals with offences and penalties and contains section 38(1). [77] The ESA 1990 is an Act to consolidate the laws relating to, inter alia the generation, transmission, distribution, trading and the use of electricity, to ensure supply of electricity to consumers nationwide in all areas, the rationalisation of electricity tariffs and to promote the development of the electricity supply industry. These multiple objectives which are key to the needs of our citizens, as well as the efficient working and economy of our nation, are undertaken by the Commission. The Commission strives to promote and facilitate the transmission of electrical supply economically and efficiently, so that all consumers and all parts of the nation enjoy electricity supply and that tariffs are reasonable. The unauthorised theft and use of electricity is untenable to the development of the industry or in meeting the objectives set out above. In point of fact, the theft of electricity is a scourge that is sought to be brought down to a minimum, if not eliminated. It detracts from the economical and efficient utilisation of electricity. 36 [78] For that reason Part IX subsists to set out in full the offences and penalties attracted by such unlawful or unauthorised activities in relation to electricity supply. Part IX specifically creates an offence where there is unlawful abstraction or theft of electricity. This is clearly spelt out, particularly in sections 37(3) and (14), which are relevant to the facts of the instant case. The power to disconnect electricity supply appears to us to clearly follow as an incidental, ancillary and necessary adjunct to the power to halt and penalise offences under section 37. Section 38 is in itself circumscribed as the power to disconnect is restricted to circumstances specifically when theft is found, in the opinion of the licensee’s employee, to have been perpetrated. Moreover such disconnection must be effected with notice. It is pertinent to note that it does not state that the offence has to be continuing in order for the power to disconnect to be exercised. A reading of section 38(1) and section 37 accords with such a purposive construction or legislative intent, namely that it serves to preclude or halt the continued unlawful abstraction or theft of electricity when, after an inspection the consumer is found to have committed such an offence by pilfering electricity. [79] Having deliberated on the matter carefully, we are of the view that an informed interpretation of the ESA as a whole, as well as Part IX, more particularly sections 37 and 38(1), raises no real doubt that applying the plain meaning rule of construction, the intention to be ascribed to the rational legislator is that the plaintiff is entitled to disconnect the electricity supply even after the tampered meter had been removed or the theft of electricity appears to have ceased at the close of the inspection. 37 [80] In so concluding we reiterate that the word ‘after’ as stated above, ought to be accorded a reasonable and rational meaning. It cannot mean in perpetuity because that would lead to absurdity. Neither can it mean literally ‘immediately’ upon the rectification of the impugned meter after the inspection because that would be circumscribing the powers accorded to the licensee under the statute unduly. There is no qualification to the word ‘after’ such as ‘immediately’ or ‘shortly’. As such the word ‘after’ is to be construed as referring to a reasonable length of time. The term ‘reasonable’ in turn, should be construed in the context of the particular facts of a case. No intention to prescribe a short or immediate period of time after replacing or rectifying a tampered meter can, in our view, be ascribed by the use of the word ‘after’. [81] In relation to the contention in the triad of cases (supra) that the power to disconnect ceases upon the tampering being rectified or removed, as the case may be, we are unable to concur with the reasoning there. Firstly as stated above, to read into the plain words of section 38, such a limitation, would be to afford the section a strained construction which does not appear to be in keeping with the intention and purpose of the legislation. [82] Secondly, construing section 38(1) in the manner proposed in the triad of High Court cases, does not, with respect, satisfy the purposive rule of construction. Such a construction envisages that upon removal of the offending meter, the commission of the offence ceases. That is not necessarily the case. Once the inspection is over, the offence may be repeated, either in some other or a similar manner. It would not be tenable to envisage the licensee having to 38 maintain continual or perpetual supervision on the offending consumer to ascertain this for a fact, and then take remedial measures repeatedly. [83] More pertinently, such a construction appears to import into section 38(1) the need for the plaintiff to make a choice between either rectifying the unlawful consumption of electricity by removing the offending meter or staying its hand and electing to disconnect the electricity supply with notice. This follows from the rationale in the trio of cases above that once the tampered meter is removed, there is no further power to disconnect. This necessarily means that the licensee, i.e. the plaintiff, on inspection, is accorded two mutually exclusive choices. The licensee either:

(a) notes the tampering and theft of electricity but leaves the tampered meter to continue to operate, and then gives the consumer 24 hours’ notice of its intention to disconnect; or

(b) halts the tampering by removing the offending meter, and then loses the power to disconnect the electricity supply to the offending consumer’s premises. [84] Following the reasoning in Modernria, Mayaria and Xin Guan, it would not be possible to undertake both courses of action. To our minds this gives rise to a somewhat unsatisfactory result in terms of construction. It effectively stultifies the powers accorded to the licensee to halt or stop electricity theft. Such a construction is rendered less edifying by the fact that the removal of the tampering 39 device is not mentioned in section 38 and such removal is not stated to be a bar to the disconnection of the electricity supply. [85] Neither does section 38(1) provide that the power to disconnect is contingent upon the continuation or perpetuation of the offence under section 37. On the contrary the words used are “…an offence has been committed…”. An interpretation importing such a construction would require the inclusion, by implication, of the words “and continues to be committed”. Such a phrase would, to our minds, have been expressly included if such indeed was the legislative intent. [86] In any event, it does not necessarily follow, as stated above, that because the tampered meters were remedied or removed, the offence under section 37 has come to an end. This must be a question of fact in any given case, and cannot be imputed or determined definitively simply because the tampered meter has been removed. [87] Even if it is assumed that the consumer does not attempt to pilfer or steal any more electricity, the fact of the matter is that the consumer was found to have stolen electricity at the time of the inspection in the subjective opinion of the licensee’s employee. This in turn means that electricity was unlawfully utilised and not paid for. When electricity is utilised, electricity being an intangible form of energy, the licensee recoups money by way of consideration for that usage. Where there is theft, such money remains unrecouped, giving rise to the arrears or backcharges billed to the consumer. 40 [88] In other words the monies claimed are representative of the electricity stolen or unlawfully abstracted by the consumer and utilised for his own benefit. After all, the stolen electricity cannot be returned to the licensee, as would be the case with regard to the theft of tangible property. Here the stolen electricity is ‘recovered’ as it were, in terms of the backcharges. [89] Until that consumer has repaid the arrears or backcharges for the electricity that has been stolen or unlawfully abstracted and utilised, it cannot be said that the act of unlawful abstraction or consumption ceases to subsist. This is because the stolen electricity, now represented by the backcharges, remains unpaid. That in turn represents the electricity stolen. [90] Until the backcharges are paid, the electricity effectively remains consumed but unpaid for and therefore remains an unlawful act or offence under s. 37. Once the backcharges are paid, the consumer remedies the fact of consumption of electricity without payment, meaning that all electricity consumed is then paid for. Only then does it follow that there is no continuing offence of the unlawful abstraction or theft of electricity. In short, the removal of the impugned meter or rectification of the same does not in itself remedy the offence of unlawful abstraction. So the failure to make good the monies due as a consequence of the pilfering, which represents the stolen electricity, warrants the construction that the offence was committed and remains unremedied. [91] We are therefore unable to concur with the decisions in Modernria and Mayaria that the power to disconnect electricity under 41 s. 38(1) cannot be utilised when tampering has been rectified and there is only an amount due and outstanding by the consumer to the licensee. [92] This is further borne out by the fact that even for consumers who have not stolen electricity, the failure to pay their electricity bills within stipulated time periods, can lawfully be utilised as a basis to disconnect electricity supply under the terms of the contract between the plaintiff and the defendant. What more when there has been theft or pilferage of electricity. [93] Finally section 38(1) and Part IX ought to be considered in the light of the mischief for which Parliament actually legislated. That mischief is clear, namely to stop the theft or illegal and unlawful abstraction and consumption of electricity. Can it be said that the mischief is remedied once a tampered meter is removed after an inspection? In our considered view that cannot be the case, because:

(a) The fact of tampering has not been dealt with;

(b) The consequences of such tampering, namely the failure to pay for such stolen electricity remains outstanding (unless the consumer pays in full for such theft, which is rarely the case). [94] By allowing the licensee the discretion or power to disconnect the electricity supply after the commission of the offence, the licensee is empowered by statute, as circumscribed, to exercise such power that is essentially incidental to the power of inspection, which serves 42 the purpose of detecting and precluding the theft of electricity. The disconnection cannot be in perpetuity as subsection (2) prescribes a maximum statutory period of 3 months. [95] Such an interpretation is also in accord with Claybricks and WRP Asia as it recognises the need for the licensee, the plaintiff here, to have sufficient powers to address and remedy the mischief of the theft of electricity. This construction also accords with the purposive construction approach as explained earlier. Footnote [96] We were unable to address the subject matter of the plaintiff’s appeal by reason of our earlier determination that the plaintiff erred in failing to file an independent notice of appeal, and because the cross-appeal it subsequently filed, did not allow it to raise matters which did not arise out of, or as a consequence of, the defendant’s appeal. [97] The plaintiff’s appeal related to the issue of whether the learned High Court judge was correct in allowing the preliminary objection raised by the defendant, namely that the plaintiff’s failure to plead sections 37 and 38 of the ESA 1990 was fatal to its claim. In other words, the plaintiff’s claim stood effectively dismissed for a failure to plead specific statutory provisions in its claim. [98] However, the learned judge went on to consider the merits of the plaintiff’s claim in full, and concluded that the plaintiff had proved its claim. But by reason of its defective pleadings, the plaintiff’s claim was dismissed. 43 [99] We feel bound to make the following limited comments on this aspect of the case as it is of general significance in relation to the practice of drafting pleadings. A perusal of the plaintiff’s statement of claim discloses that it is premised on contract, rather than on sections 37 and 38 of the ESA. It is moot whether those sections found a cause of action, unlike for example a claim for damages for personal injury arising from non-compliance with the Factories and Machinery Act 1967 or a claim under the Civil Law Act 1956. [100] The preamble to the ESA describes it, inter alia, as an act to provide for the regulation of the electricity supply industry, the supply of electricity at reasonable prices to a variety of consumers, the licensing of any electrical installation, the control of any electrical installation, plant and equipment with respect to matters relating to the safety of persons and the efficient use of electricity and for purposes connected therewith. [101] As such the ESA deals with the electricity supply industry as a whole. It does not purport to regulate the private law relationship between a licensee and its consumer. Such a relationship, as is the case here between the plaintiff and the defendant, is governed by contract. [102] Sections 37 and 38 of Part IX of the ESA deal with offences and penalties. Section 37 deals with a catenation of offences while section 38 is concerned primarily with the power accorded to a licensee to disconnect electricity supply when an offence has been committed. 44 [103] As such, these sections of the ESA do not appear to afford in themselves, a statutory basis on which to found a cause of action between the licensee and a consumer. And that was not the manner in which the claim in this appeal was brought, as is evident from a perusal of the pleadings. Here, the contract between the parties determines the primary rights and obligations between them. Sections 37 and 39 comprise the statutory provisions according the licensee the power to disconnect the supply of electricity and to take consequential action to recover revenue lost. It would not appear to be necessary to expressly plead these sections in the course of a recovery action where there has been tampering, particularly where the contractual terms between the parties allow for recovery of arrears and disconnection. In this context, sections 37 and 38 provide the statutory basis for the licensee to disconnect a consumer’s electricity supply and to that extent, do not in themselves found the cause of action in the instant case. Therefore, the failure to plead the precise statutory provisions, namely sections 37 and 38 ought not to result in a dismissal of the claim. [104] Even if the pleading of these statutory provisions is thought to be essential, it ought to be borne in mind that Order 18 Rule 7 requires that all material facts necessary to support a claim are to be pleaded. If a party’s case is premised on a statue, then it is incumbent upon that party to plead all material facts necessary to bring itself within the ambit of that particular statute (see Malaysian Civil Procedure 2015, Volume 1 published by Sweet & Maxwell). Conversely, it would be entirely inadequate for such a party to plead a particular statute but not then plead the necessary facts to fall within its ambit. As such a court should be slow to strike out a claim for simply failing to set out 45 a specific provision of a statute when the material facts allowing the claimant to fall within the ambit are sufficiently clear. (This does not apply to matters which are required to be specifically pleaded as set out in Order 18 Rule 8 and which deals with pleadings subsequent to a statement of claim for example limitation, fraud, performance and release etc. Nor would it be the case when the cause of action arises solely from a statute). [105] The function of pleadings is to ensure that neither party in the adversarial system is taken by surprise or unfairly prejudiced by one party suddenly relying on a claim which had not been envisaged, thereby occasioning such adversary an unfair advantage. [106] It is pertinent in the instant case that the plaintiff had pleaded a full and properly particularized claim premised on contract. Although reference was not made specifically to sections 37 and 38, the material facts were fully evident from the claim. It does not appear, in the instant case that any prejudice at all was occasioned to the defendant, as the trial proceeded fully on the basis of, inter alia, those statutory provisions. In point of fact, the requirement to plead section 38, if at all, lay more properly on the defendant, whose entire counterclaim was premised on an unlawful disconnection of electricity supply. [107] Finally, if it is concluded that a failure to plead a relevant statutory provision is fatal to a claim, it should not be necessary to proceed to deal with the merits of such a fatally defective claim. 46 Conclusion [108] On the appeal before us, we are satisfied that the learned Judge did not err in concluding that the plaintiff as licensee was entitled to, and did no wrong in disconnecting the electricity supply after removing the tampered meter and having issued the requisite notice under section 38(1). It follows that the defendant is not entitled to make claim for any of its losses from the plaintiff. We therefore upheld the learned trial judge’s decision. The appeal of the defendant was therefore dismissed. We further ordered costs of RM10,000-00 to be paid by the defendant to the plaintiff, subject to payment of allocatur. The deposit is refunded to the defendant. Nallini Pathmanathan Judge Court of Appeal Malaysia Dated: 27th October 2017 For the Appellant : Jack Yow (Vincy Wong with him) Tetuan Rahmat Lim & Partners Peguambela & Peguamcara Suite 33.01 Level 33 The Gardens North Tower Mid Valley City Lingkaran Syed Putra 59200 Kuala Lumpur Signed 47 For the Respondent : Balvinder Singh Kenth (Gurmel Singh and Nur Zalika Mohd Asri with him) Tetuan Kenth Partnership Peguambela & Peguamcara Suite J-03-7 Solaris Mont Kiara 2 Jalan Solaris 50480 Kuala Lumpur