Kemajuan Masteron Sdn Bhd v Chong Nge Wei & 6 Lagi (B-03(IM)-19-03/2019)

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CHEW HOCK CHUAN ... RESPONDENTS [In the Matter of the High Court in Malaya at Shah Alam

Chong Nge Wei

Belinda Yap Li Fung

Wong Wann Shin

Tan Leng Aun

Loh Boon Sen

Chan Mee Yoke

Chew Hock Chuan … Plaintiffs 2 And 1. Kemajuan Masteron Sdn Bhd (Company No. 228939-X)

Yayasan FAS (Company No. 194311-W)

Lee Be-Hsin (Practising as B-Lee Architect) … Defendants] CORAM: MARY LIM THIAM SUAN, JCA HAS ZANAH BINTI MEHAT, JCA VAZEER ALAM BIN MYDIN MEERA, JCA JUDGMENT OF THE COURT [1] The single issue in this appeal is on the question of whether damages had been proved. The learned Senior Assistant Registrar [SAR] who conducted the assessment was satisfied that damages had been proved and that decision was affirmed on appeal. We did not agree with both of them after full consideration of the grounds, notes of proceedings, submissions and the records of appeal, so we allowed the appeal and set aside both decisions. These are our reasons in full. 3 Factual matrix [2] The 7 respondents, two or whom are husband and wife, are purchasers of 6 apartment units of a housing project known as Golden Heights or Taman Mas Sepang, Phase 3 developed by the appellant. The sale and purchase agreements [SPAs] entered into between the parties were statutory contracts of sale under the Housing Development (Control and Licensing) Act 1966 [Act 118]. Delivery of vacant possession was to be within 36 months from the date of the sale and purchase agreements failing which the appellant would have to pay liquidated damages [LAD] under clause 22 of the SPAs. If the appellant fails to complete the common facilities within that same time frame, it must also pay LAD under clause 24 of the SPAs. [3] The appellant failed to deliver vacant possession as well as complete the common facilities within the stipulated time and it refused to pay LAD. The appellant was also alleged to have breached clause 12 of the SPAs when it changed the building material for the outer brick wall from autoclaved aerated concrete building block to flexcore without the prior consent in writing of the respondents. [4] The respondents sued the appellant together with the landowner and the architect who are not parties to this appeal, claiming inter alia for LAD under clauses 22 and 24, or alternatively damages for breach of contract. 4 [5] After a full trial, the respondents’ claims for LAD were allowed on 31.5.2012. The High Court also allowed the respondents’ claim for damages for breach of clause 12. There was no appeal against these orders. [6] The order related to the award of damages for breach of clause 12 reads as follows:

Defendan Pertama dan Defendan Ketiga adalah bertanggungan secara bersama dan/atau berasingan untuk membayar gantirugi Plaintif-Plaintif bagi kemungkiran kontrak bagi Klausa 12 perjanjian jual beli dengan Plaintif-Plaintif masing-masing bersama dengan faedah keatasnya pada kadar 8% setahun dari tarikh kemungkiran tersebut sehingga tarikh pembayaran penuh.

Gantirugi serta faedah yang diperintahkan dalam perenggan 2 di atas hendaklah ditaksirkan oleh Pendaftar Mahkamah Tinggi. The assessment of damages [7] The respondent filed a Notice for Directions only on 11.9.2017, more than 5 years after the order for assessment was made. It is unclear the reasons for the delay. This is despite the provisions of Order 37 rules 1 and (5) of the Rules of Court 2012 which requires directions for assessment of damages to be applied for within one month from the date of 5 order or judgment; or six months from of the date of judgment for the appointment of assessment of damages. [8] On 19.4.2018, after evaluating the affidavits filed, the learned SAR assessed damages to be in the sum of RM380,500.00 together with interests and costs. It is also unclear why the assessment was conducted through an exchange of affidavits although learned counsel for the respondents submitted that it was “as agreed it was directed that the evidence was to be given by way of affidavits”. Be that as it may, the respondents authorized the 1st respondent to file an affidavit on their behalf whilst the appellant’s General Manager filed an affidavit in reply – see pages 101 to 107 of the record of appeal. Curiously and this is both unclear and unexplained in the record of appeal why and how this occurred, counsel for the respondents, Avtar Singh a/l Prem Singh affirmed an affidavit on behalf of his clients in response to the appellant’s affidavit-in-reply. [9] In substance, the respondents claimed a sum of RM380,500.00 for replacement/repair costs of their 6 units under clause 12 of the SPAs and tendered a quotation prepared by their contractor as evidence of their claim. The appellant objected to the amount arguing that it was excessive [keterlaluan] and unreasonable; that it was only a quotation and more quotations ought to have been tendered to ascertain the necessity for the particular works in the quotation, and said that the assessment ought to be conducted through viva voce evidence. Avtar Singh’s affidavit appears to have been filed in response to this. In his affidavit, Avtar Singh insisted 6 that the sum of RM380,500.00 was not excessive and was a fair sum representing the costs of the repairs/replacements. [10] According to the learned SAR, because the appellant had offered no alternative quotation, “the court is left with no choice but to accept the plaintiffs’ quotation.” That sum was accordingly awarded as damages. There was an additional claim for RM20,000.00 for distress, discomfort and inconvenience which was disallowed on the basis that this was not awarded by the learned Judge on 31.5.2012. Decision of the High Court [11] On appeal, the learned Judicial Commissioner was of the “considered view that the Defendants/Appellants have no excuse but to honour payment of damages to the Plaintiffs/Respondents as already ordered subject to this assessment being done in order to quantify the amount of damages to be paid.” On what was labelled as a “sub-issue: award of damages – how much??” the learned JC found– i. that the learned SAR had rightly rejected the appellant’s challenge to the respondents’ costs of repairs and applied the correct measure of damages under clause 12, which is the cost of erecting a wall to the contract specification on his own land and not the amount by which the plaintiffs’ land as an investment property was diminished”; 7 ii. that the appellant did not rebut the quotation relied on by the respondents by providing an alternative quotation from another independent contractor to suggest that the costs of RM380,500.00 as repair/replacement costs “is excessive and wrongful”; iii. that the appellant offered a “bare challenge” with a failure to offer rebuttal evidence; iv. that the sum of RM380,500.00 “is an acceptable amount of damages for the repair and replacement cost to put right the defects.” According to the learned JC, “this is because the amount of damages to be paid, would be the measure of damages for breach of the term to build the units sold to the Plaintiffs/Respondents is the costs of erecting or putting the correct material instead of the defective material so supplied or fixed to the units of the Plaintiffs/Respondents.” [12] Despite there being no appeal on the refusal to award damages of RM20,000 for distress, discomfort and inconvenience, the learned JC went on to allow the sum, holding that the sum of RM3,300.00 for each set of plaintiffs is “reasonable and acceptable to be awarded” – see paragraph 14 of the grounds of decision at pages 46 and 47 of the record of appeal. This is however, not reflected in the order of the High Court dated 21.2.2019 – see pages 27 to 28 of the record of appeal. Our decision 8 [13] The central point made by the appellant is that the respondents did not discharge their burden of proving the quantum of damage suffered; that the quotation dated 10.10.2013 which was prepared by N-Tatt Construction Sdn Bhd for ‘repair and construction of new brick wall to replace all existing Flexcore wall of six (6) unit apartments’ for a total sum of RM380,500.00 was not evidence of the damages suffered by the respondents because– i. there was no further evidence adduced by the respondents to show that repair works were indeed done to repair the units; and ii. a quotation is merely an offer to undertake the requisite work. [14] There was really no conclusive evidence led to show that repair works were done to the units; there were not even photographs or proof of payments made for the repairs tendered to prove the damage suffered. From the terms of the quotation, it was only an offer which lapsed after 30 days if not accepted by the respondent; and there was no evidence of any concluded or binding contract between the respondents and N-Tatt Construction Sdn Bhd based on that quotation. [15] The respondents argued that the SPA is a statutory contract where its terms and conditions must be complied with. See M.K. Retnam Holdings Sdn Bhd v Bhagat Singh [1985] 2 MLJ 212; and LSSC Development Sdn Bhd v Thomas Iruthayam & Anor [2007] 2 CLJ 434. Further, clause 12 is a “damages clause” where there is no requirement to prove actual loss. The recent Federal Court decision in Cubic Electronics Sdn Bhd (in 9 liquidation) v Mars Telecommunications Sdn Bhd [2019] 6 MLJ 15 and the decision of Radford v De Froberville [1977] 1 WLR 1262 as applied in Dodd Properties Ltd v Canterbury City Council [1980] 1 WLR 433 were cited in support. [16] Learned counsel submitted that since the measure of damages relating to substandard or defective material used in the construction industry is and always has been the “cost of cure” or cost of erecting or replacing the defective material with the corrected material, all that the respondents need to do is produce the costing involved from a building contractor; the quotation meets that purpose. With no rebuttal evidence from the appellant, the respondents are entitled to the cost of repair or replacement for the “substandard or defective material of the external walls of the units. The RM380,500.00 is said to be compensation for a genuine loss and not to secure a profit arising from the breach. [17] The respondent further submitted that since the parties were in dispute over the amount of compensation, it did not make commercial sense to carry out the repairs first before recovering the award of compensation. The decisions of Radford v De Froberville [supra] and Alcoa Minerals of Jamaica v Herbert Broderick [2002] 1 AC 371 were again cited in support. [18] The task of assessing damages is part and parcel of the exercise of judicial discretion and power. That discretion requires a sound knowledge of the relevant law and principles, both substantive and evidentiary; and the 10 evaluation of evidence tendered. To do that effectively and properly, the underlying claim and in the case of this interlocutory judgment, the relevant order must be borne in mind. The order can only be in relation to what was claimed and then allowed by the learned Judge. [19] The damages to be assessed were only those in relation to breach of clause 12. The damages representing LAD in relation to breach of clauses 22 and 24 were already assessed and ordered by the learned Judge herself at the time of pronouncement of decision on 31.5.2012. It is the damages for breach of clause 12 that the learned Judge left and ordered such damages to be assessed by the learned SAR. [20] It was imperative that both the learned SAR and the learned Judge hearing the appeal understand what the respondents’ complaints on clause 12 was about, how or why it was found to have been breached and what was ordered by the learned Judge. Otherwise, it would be near impossible to conduct the assessment properly in law and on the facts; how to deal with the questions concerning the measure of damages for this breach of clause 12; and what exactly would the damages be intended to compensate for. [21] In fact, we cannot see how any assessment of damages can be properly conducted devoid of an understanding and appreciation of the underlying claim or dispute. In appreciating the claim, there is no call for determination of liability or truth as that has already been undertaken in the first order. The Court or adjudicator is only required to assess what and 11 how much damages are to be paid. At all times, however, the burden of proving the truth on the fact and amount of damages remains to be discharged by the respondents. [22] This has been the repeated refrain in a great number of decisions of which we need to only cite two: Tan Sri Khoo Teck Puat & Anor v Plenitude Holdings Sdn Bhd [1994] 3 MLJ 777 and Popular Industries Limited v Eastern Garment Manufacturing Sdn Bhd [1989] 3 MLJ 360. It is not for the appellant to prove that there was no loss, or that there is a more reasonable sum. There is no burden to offer rebuttal of evidence unless and until the respondents have discharged their burden of establishing damages. [23] The Federal Court decision of Tan Sri Khoo Teck Puat is most relevant in point. The appeal there arose from an assessment of damages for wrongful termination which had been ordered by the trial judge in addition to the order of specific performance of a sale and purchase agreement of certain lands of over 1,000 acres at the purchase price of over RM47 million. One of the “vitally important” preliminary matters emphasized by Edgar Joseph Jr, FCJ, writing for the Federal Court which His Lordship held should “be kept in the forefront of our minds as failure to do so will lead to confusion and injustice” was this – that a purchaser who has been awarded damages to be assessed for the wrongful termination of the agreement, with the decision affirmed on appeal, nevertheless has to prove loss and damages; that– 12 “…can in no way relieve the purchaser of satisfying the fundamental requirement of having to prove its loss (if any) arising from those breaches. To hold otherwise would amount to dispensing with proof of quantum altogether, and that cannot be the law. In so saying, we are reminded of the words of Lord Goddard in Bonham-Carter v Hyde Park Hotel Ltd 64 TLR 177 at p 178: …plaintiffs must understand that if they bring actions for damages it is for them to prove their damage; it is not enough to write down the particulars, so to speak, throw them at the head of the court, saying: ‘This is what I have lost, I ask you to give me these damages’. They have to prove it.” [24] His Lordship cited his earlier decision in Popular Industries Limited v Eastern Garment Manufacturing Sdn Bhd [supra] where the High Court had reminded that: “It is axiomatic that a plaintiff seeking substantial damages has the burden of proving both the fact and the amount of damages before he can recover. If he proves neither, the action will fail or he may be awarded only nominal damages upon proof of the contravention of a right. Thus nominal damages may be awarded in all cases of breach of contract (see Marzetti v William). And, where damage is shown but its amount is not proved sufficiently or at all, the court will usually decree nominal damages. See, for example Dixon v Deveridge and Tayman v Knowles.” [25] In Popular Industries Limited, the plaintiff was only allowed nominal damages for its claim for non-delivery of goods due to the failure to produce the account books from which estimated losses had been 13 prepared. The High Court viewed the accountant’s evidence of a sheet of calculations as insufficient to prove the exact amount of losses. Similarly, in Tan Sri Khoo Teck Puat, the Federal Court inter alia set aside damages representing loss of profits for want of proof. [26] This basic principle is trite, that a claiming party has to prove both the fact and quantum of damage; yet this principle has required reminding as many still fail to abide by it. See for instance Datuk Mohd Ali Hj Abdul Majid & Anor v Public Bank Bhd [2014] 6 CLJ 269; Lim Tze Sian v Coverright Surface Malaysia Sdn Bhd [2017] 1 MLJ 418. [27] This whole exercise of judicial discretion is more difficult where the judge conducting the assessment of damages is not the same judge who heard and determined the substantive claim. What more when the assessment is conducted by a registrar of the High Court. With respect, the judge conducting the assessment will most probably have no idea what the claim, defence, evidence and decision are unless and until all the relevant cause papers, judgment and orders are considered and properly appreciated. On this issue, it is opportune for us to stress that at all times, the judge hearing the merits of the substantive dispute ought to also hear and determine the question of damages and the appropriate quantum to order. The two issues are intrinsically inter-related and unless the existence of damage is proved, especially in a claim founded in tort, the cause of action is not even actionable. When considering whether to award general damages and how much, factors other than monetary figures of loss may be relevant and more material considerations, and 14 evidence on these matters may have already been given in the earlier course of proceedings on liability. Unless there is clear agreement to bifurcate proceedings, or directions to that effect given before the commencement of trial, the judicial assessment and determination of damages ought not to be conducted separately, or worse, by a person other than the trial judge. Assessment of damages by registrars ought to be confined to the simplest of cases with few heads of claims in contention. This appeal does not fall into that category. [28] Returning then to the present appeal, in the assessment of damages, the issue of liability to pay is no longer in issue; it is only the quantum of damages. However, we do not believe it is a simple matter of considering the contents of the affidavits against the submissions made and then decide. There is more to the assessment, much more; and the judicial exercise of determining the measure, extent and quantum of damage becomes trickier where the exercise is broken up into separate exercises, undertaken at different times and by different persons. [29] Thus, what needs to be done is this. The judge or registrar must necessarily return to the pleadings as we have done, especially to the Statement of Claim. The claim in relation to clause 12 may be found at paragraphs 4(a); 5(a), 5(b); and 6, and for which the respondents sought damages:

Perjanjian tersebut memperuntukkan terma-terma berikut: a. Klausa 12, Perjanjian tersebut menyatakan: 15 12. Materials and workmanship to conform to description The said Parcel together with all the common property shall be constructed in a good and workmanlike manner in accordance with the description set out in the Fourth Schedule hereto and in accordance with the plans approved by the Appropriate Authority which description and plans have been accepted and approved by the Purchaser, as the Purchaser hereby acknowledges. No changes thereto or deviations therefrom shall be made without the consent in writing of the Purchaser except such as may be required by the Appropriate Authority. The Purchaser shall not be liable for the costs of such changes or deviations and in the event that the changes or deviations involved the substitution or use of cheaper materials or the omission of works originally agreed to be carried out by the Vendor the Purchaser shall be entitled to a corresponding reduction in the purchase price herein or to damages in respect thereof.

Plaintif-Plaintif mengatakan bahawa atas adanya peruntukan-peruntukan seperti dinyatakan dalam perenggan 4 di atas sini, Defendan Pertama telah memungkiri peruntukan perjanjian tersebut seperti berikut: Butir-Butir Kemungkiran Defendan Pertama a. Dalam memungkiri Klausa 12, Defendan Pertama tanpa memperolehi kebenaran bertulis terlebih dahulu daripada Plaintif-Plaintif telah menukar-ganti bahan binaan yang digunakan di bahagian dinding luar daripada “Brick Wall (autoclaved aerated concrete building block)” kepada jenis “Flexcore” (“bahan tersebut”); dan/atau b. Dalam memungkiri Klausa 12, Defendan Pertama telah melakukan tukar ganti bahan binaan dengan bahan tersebut, walaupun yang sama tidak dikehendaki untuk ditukar ganti oleh Pihak Berkuasa; dan/atau…

Akibat daripada kemungkiran yang disebut dalam perenggan 5(a) dan/atau 5(b) di atas sini, Plaintif-Plaintif telah mengalami kerugian dan kehilangan dan berhak untuk menuntut gantirugi terhadap Defendan Pertama termasuk faedah. 16 [30] In the reliefs sought, the respondents claimed: A. Terhadap Defendan Pertama dan Defendan Kedua secara yang bersama dan/atau berasingan seperti berikut:

Suatu deklarasi …

Gantirugi dibayar oleh Defendan Pertama dan Defendan Kedua kepada Plaintif-Plaintif jumlah yang perlu ditaksirkan oleh Mahkamah menurut perenggan 6 di atas sini. B. Terhadap Defendan Pertama dan Defendan Ketiga secara yang bersama dan/atau berasingan seperti berikut:

Gantirugi dibayar oleh Defendan Pertama dan Defendan Kedua kepada Plaintif-Plaintif jumlah yang perlu ditaksirkan oleh Mahkamah menurut perenggan 6 di atas sini. [31] We understand there were no written grounds of judgment given for the decision rendered on 31.5.2015; and there was no appeal. That is not at all fatal as it is the sealed order of Court which is paramount. Both the order of the High Court dated 31.5.2012 in relation to breach of clause 12 and clause 12 itself have already been set out. [32] The issue for consideration is whether in having his damages for a breach of clause 12 assessed, are the respondents required to prove actual loss. In our view, the answer is clearly in the affirmative. Clause 12 is by no means a damages clause; clauses 22 and 24 are. Clause 12 merely provides for rights and obligations of the parties and the remedy available in the event of breach. The respondents are thus obliged to prove their loss or damage. Consequently, if there is no proof of damage 17 or loss, the claim, though allowed by the learned Judge will not resound in any sum being awarded. Nominal damages may be awarded in such circumstances, but that is a matter of discretion; and we did not find discretion in favour of the respondents for reasons which we will explain shortly. [33] Guidance on the assessment of damages may be found in LSSC Development Sdn Bhd v Thomas Iruthayam & Anor [supra] where at paragraph 13, the Court of Appeal opined that “where there is a breach of contract there is no right in an innocent party to reverse the transaction to status quo ante, there is only a right to recover damages for breach of contract… [19] Of course, the plaintiffs were supplied with a defective house out of time. As for the defects, this is something for which they were entitled to be compensated. And as for the delay in delivery, the contract itself contains a clause which provides the formula for the compensation that the defendant must pay for its lateness. This is the clause to which the plaintiffs must have recourse as it created a contractual obligation to pay a single sum by way of liquidated damages for the period during which they were kept out of the building for which they had already paid, such sum being calculated upon the basis set out in the agreement. See, Loh Wai Lian v SEA Housing Corporation Sdn Bhd [1987] 2 MLJ 1.” [34] Now, if clause 12 is examined just a little closer, it will be readily discerned that it deals with the appellant’s obligation to ensure that both the subject property and the common property are constructed in a good and workmanlike manner, according to the description in the agreement and as 18 approved by the relevant authority. The appellant was not supposed to change or deviate from the agreed description. If there was any change or deviation, the written consent of the respondents was required and the respondents are not liable for the related costs. [35] Should there be any change or deviation which involves substitution or use of cheaper materials or even the omission of works that were originally agreed, clause 12 entitles the respondents to “a corresponding reduction in the purchase price herein or to damages in respect thereof”. There is a choice of either a corresponding reduction in the purchase price or a claim for damages for the breach. [36] Given that clause 12 has spelt out the specific conditions when a complaint may properly be brought and the reliefs available, it was imperative that the learned SAR, and also the learned JC, appreciate what exactly was the true nature of the respondents’ cause of action under clause 12, what were the respondents’ complaints under clause 12; substitution or use of cheaper materials, or omission of works originally agreed; and which remedy was ordered by the Court? How the assessment is to be conducted and how damages are to be measured will thus, depend on what was pleaded and what the learned Judge ordered, interpreted against the pleaded claim. [37] As pleaded at paragraphs 5(a) and (b), the respondents alleged that the appellant failed to obtain their written consent prior to the change of materials for the “Brick Wall (autoclaved aerated concrete building block)” 19 to “Flexcore”; and that such change was not required by the appropriate authority. At reliefs A(2) and B(8), the respondents opted for damages for this breach, not looking for a corresponding reduction in the purchase price. On 31.5.2012, the learned Judge found this allegation of breach proved and ordered the appellant “membayar gantirugi Plaintif-Plaintif bagi kemungkiran kontrak bagi Klausa 12 perjanjian jual beli”; with a further order for those damages to be assessed. [38] It is thus clear that proof was required; had it been otherwise, the learned Judge would have ordered the appropriate sum, as was done in the case of the LAD. [39] It then comes down to the question of whether any evidence was led to prove the extent of that loss. What did the respondents suffer as a result of the appellant’s failure to obtain their written consent for the change of materials? The respondents could very well have claimed for a corresponding reduction in the purchase price of the subject property if the effect of the change affected that value. This was well within their entitlement under clause 12. They did not. Instead, they opted for damages; again which they were entitled to under clause 12. [40] It is our view that this brings about an inference, and a reasonable one we would say, that the change did not have any adverse effect, not even a reduction in the value or purchase price of the subject property. More so when one appreciates the type of properties purchased by the respondents. The respondents are owners of six different units of a 10 20 storey block of apartments [Block D], each of them at different levels, for instance 2nd, 4th and 8th floor. Each of them own and occupy their respective units together with other owners who, at least not that we are aware of, are not claimants, and who may very well have no issue with the changed external wall. And, from what we can see, the necessary certificates of fitness for occupation must have been issued even with the changed materials, as the respondents have all already gone into occupation. The “Court should not wear blinkers and ignore” obvious facts - see Tan Sri Khoo Teck Puat, page 795, speaking of ensuring that there is no double recovery, that claimants should not be making substantial profits only because of a breach of contract, or putting claimants in a better position than they would have been in if the contract had been performed. [41] This is what we mean when we say that the assessment and award of damages is a judicial exercise of discretion that must be properly conducted on correct principles of law and supported by valid, admissible evidence. That is not to say that there is no breach as far as the respondents are concerned because there is; it just needs to be proved. Still, the respondents’ complaints were of damage caused by reason of the change in materials used for their external walls and each of them must prove their damage. [42] Hence, whilst the breach was proved and the respondents were entitled to compensation in the form of damages, the respondents needed to adduce evidence on what exactly were their losses and the quantum. 21 [43] The respondents must have realized this burden otherwise there would have been no need for assessment almost five years later, not even to tender the quotation. The respondents’ affidavit affirmed by the 1st respondent [pages 101 to 103 of the record of appeal] indicated that the respondents contemplated replacing the outer brick wall that was affected with the original specifications:

Beralaskan perkara di atas, Plaintif-Plaintif yang lain dan saya berhak kepada gantirugi setakat kos pembaikan unit-unit hartanah tersebut mengikut deskripsi atau spesifikasi bahan binaan yang dinyatakan dalam perjanjian-perjanjian jual beli dengan Defendan Pertama. Bagi maksud pembaikan unit-unit hartanah tersebut dengan bahan binaan yang mengikut deskripsi atau spesifikasi untuk mengatasi kerosakan serta penukaran bahan binaan, bahagian struktur bangunan akan diganti dan dibina semula dengan menggunakan bahan binaan mengikut deskripsi atau spesifikasi asal yang dipersetujui atau dijangka mengikut perjanjian jual beli dengan Defendan Pertama.” [44] Paragraph 7 was challenged by the appellant as follows:

Sebagai balasan terhadap perenggan 7 – 8, saya telah dinasihati oleh peguamcara Defendan Pertama dan Ke-3 dan sesungguhnya percaya bahawa pihak Plaintif tuntut jumlah sebanyak RM380,500.00 sebagai gantirugi (jumlah yang dituntut).

Saya ingin menyatakan bahawa jumlah yang dituntut adalah keterlaluan.

Tambahan lagi, jumlah yang dituntut diperolehi daripada sebut-harga daripada satu (1) syarikat sahaja iaitu N-Tatt Constructions. Tanpa pertimbangan/sebut harga daripada syarikat-syarikat lain, tiadanya kepastian bahawa adanya harga yang lebih berpatutan atau kerja-kerja yang dicadangkan oleh N-Tatt Constructions diperlukan.

Ianya adalah tidak adil untuk membuat keputusan berdasarkan satu sebut-harga daripada satu (1) syarikat sahaja.

Memandangkan bahawa jumlah yang dituntut adalah keterlaluan, saya telah dinasihati oleh peguamcara Defendan Pertama dan Ke-3 dan sesungguhnya percaya bahawa perkara ini seharusnya dibicarakan dengan pemanggilan saksi-saksi daripada N-Tatt Constructions untuk mereka memberi keterangan terhadap butiran sebut-harga mereka.

Ini juga membolehkan pemanggil saksi-saksi daripada syarikat lain untuk mendapat kepastian sekiranya terdapat sebut-harga yang lebih berpatutan. [45] Following this affidavit in reply from the appellant, the respondents’ counsel filed an affidavit, a course of action which we find most peculiar and do not condone. At page 108 of the record of appeal, Avtar Singh deposed that he had been authorized by his clients to affirm the affidavit on their behalf, that the contents of his affidavit were based on his own knowledge based on information and instructions received from his clients and/or from documents to which he had access. [46] In response to the above paragraphs 6 to 10 of the appellant’s affidavit, he deposed that he had been instructed by the respondents to disagree and refute them; that the amount claimed [RM380,500.00] is not an excessive amount but a fit, reasonable and just amount in the circumstances as explained by the 1st respondent [berpatutan, munasabah dan memadai dalam hal keadaan kes ini seperti yang dijelaskan dalam perenggan-perenggan 4 hingga 9 Afidavit Sokongan Chong Nge Wei…” [47] So, in terms of evidence of damages, the single piece of evidence is the quotation sent by N-Tatt Construction Sdn Bhd dated 10.10.2013: 23 Our Ref: NTC/Quo/003-10/13 Date: 10th October 2013 1) MR. CHONG NGE WEI 5) MR LOH BOON SEN 2) MS BELINDA YAP LI FUNG 6) MS CHAN MEE YOKE 3) MR WOND WANN SHIN 7) MR CHEW HOCK CHUAN 4) MR TAN LENG AUN Dear Sirs / Madam, PROJECT: GOLDEN HEIGHTS APARTMENTS AT 3RD PHASE OF TAMAN MAS PUCHONG SUBJECT: QUOTATION FOR REPAIR AND CONSTRUCTION OF NEW BRICK WALL TO REPLACE ALL EXISTING FLEXCORE WALL OF SIX (6) UNIT APARTMENTS We refer to the above said matter and are pleased to offer herewith our cost to repair all the six (6) unit apartments of the project as bellows: Item Description UNIT RATE (RM) AMOUNT 1 Preliminary 1.1 Mobilization of plants, machineries, equipment, materials, workforce, etc. L/sum 8,000.00 8,000.00 1.2 Preparation of access, setting out, etc. L/sum 5,000.00 5,000.00 1.3 Protection work prior to the commencement of builder’s work L/sum 10,000.00 10,000.00 2 Builder’s Work 2.1 Erection of external and internal scaffolding L/sum 38,000.00 38,000.00 2.2 Setting up of plants, machineries, and equipment L/sum 35,000.00 35,000.00 2.3 Dismantling existing wall L/sum 55,000.00 55,000.00 2.4 Construction of brick wall including of all internal and external plastering work and all painting work L/sum 135,000.00 135,000.00 2.5 Doors and windows L/sum 9,000.00 9,000.00 2.6 Repairing work of floor, ceiling and all tiling work L/sum 22,000.00 22,000.00 3 Mechanical & Electrical Work 3.1 Reconnection work of piping, plumbing and sanitary work L/sum 10,000.00 10,000.00 24 3.2 Wiring and cabling work include all necessary electrical fitting work L/sum 8,500.00 8,500.00 4 Demobilise, Clearing & Cleaning Work 4.1 Dismantling of scaffolding and all other temporary work L/sum 25,000.00 25,000.00 4.2 Removal of all construction debris L/sum 12,000.00 12,000.00 5 Handing Over Work 5.1 Testing and commissioning L/sum 5,000.00 5,000.00 5.2 All necessary inspection for handover purposes L/sum 3,000.00 3,000.00 TOTAL 380,500.00 Terms of payment: 30% upon award, 50% upon completion of dismantling existing wall and balance 20% is upon completion of all works. Validity:30 days Thank you Yours faithfully, N-TATT CONSTRUCTION SDN BHD …………………. WILLIAM CHAN Director: … H/Phone: … [48] The above quotation does not suffice as evidence of damage. We say that for several reasons. [49] First, as pointed out earlier, the burden of proof lies with the respondents to establish the nature of their loss or damage and its extent, meeting the conditions set down under section 74 of the Contracts Act 1950:

(1)When a contract has been broken, the party who suffers by the breach is entitled to receive, from the party who has broken the contract, compensation for 25 any loss or damage caused to him thereby, which naturally arose in the usual course of things from the breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.

Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. [50] The appellant does not owe a duty to show that the damage is unreasonable or excessive; that there is another contractor who is capable of doing it for a different price. [51] Further, the quotation itself stipulates its terms and conditions; particularly on its availability and validity. It was procured after judgment had been entered in favour of the respondents on 31.5.2012. Yet, by the time of the assessment in 2018, this quotation dated 10.10.2013 remained very much a quotation. No repairs or replacement had been carried out during the intervening years; certainly none that may be discerned from the quotation itself or from the affidavit affirmed by the 1st respondent. In any case, the respondents’ case is that none of them have to incur that expense in order to be compensated; that they should not be put out to incur any expense first before recovering. However, both the terms of clause 12 and the pleadings do not bear up to that construction. [52] Next, the quotation had also lapsed and no evidence was lead to show that it was still valid and available, 5 years after it was first quoted. William Chan did not affirm any affidavit to give any indication of an extension of the validity of the quotation. 26 [53] The quotation was also never accepted by any of the respondents. There is no assertion to that effect in the 1st respondent’s affidavit filed in support of the assessment; neither was there any in Avtar Singh’s affidavit. With no acceptance or evidence of acceptance by the respondents themselves, it cannot be said that the quotation represents relevant and material evidence of the respondents’ damage. [54] The appellant had challenged the quotation as being excessive and unreasonable; and had called for the maker to be made available via viva voce testimony. William Chan, the director and signatory of the quotation from N-Tatt Construction ought to have affirmed an affidavit explaining the details in the quotation, and why these items were required. Instead, Avtar Singh, counsel for the respondents, affirmed the respondents’ second affidavit. With respect, we do not find how his affidavit can be of any assistance; he was only telling what he was told to say by his clients. [55] Having examined the quotation, and we did not see either the learned SAR or even the learned JC doing this with the earlier accepting its contents lock, stock and barrel; we further find that the quotation “for repair and construction of new brick wall to replace all existing flexcore wall of six

unit apartments” did not indicate any replacement with the original materials of “Brick Wall (autoclaved aerated concrete building block)”; neither were the costs for such materials quoted. The quotation merely sets out preliminary, builder’s work, mechanical & electrical work, 27 demobilization, clearing & cleaning work and handing over work; without explaining how or why such work was called for. [56] If one were to examine the Fourth Schedule of the SPAs setting out the building description under clause 12, it will be seen that the external wall comes under “Structure”. As alluded to earlier, the respondents own six different units in the 10 storey-block of apartments; and the respondents proposed that their external walls be replaced. Since the intent of damages in contract is to put the parties post contract, that is, the position the parties would have been in had the contract been performed, the quotation ought to contain details of the materials for the “Brick Wall (autoclaved aerated concrete building block)” and the related costs. As we can see from the quotation, there is none. Had the learned SAR and the learned JC examine the quotation, it would have become readily apparent to them. [57] We must add that aside from the problems associated with the quotation, there was actually no explanation forthcoming from the respondents as to why the repairs or construction of the external wall with the “original” materials were not undertaken after judgment had been entered, and the quotation procured, almost five years earlier. The duty to mitigate is upon the respondents and there were no suggestions from the respondents that it was due to their lack of funds or inability to proceed with the repair works for any other reason. The respondents merely said that they were not obliged to spend their own funds to right the appellant’s breach, relying on the decisions of Radford v De Froberville [1977] 1 28 WLR 1262, Dodd Properties v Canterbury City Council [1980] 1 WLR 433, Alcoa Minerals v Herbert Broderick [2002] 1 AC 371. [58] With respect, we must disagree. These cases do not alter the principles already discussed including the obligation of the respondents to mitigate; and where they are unable to do so, to offer a valid and credible explanation. We do not see how the explanation of just waiting for the appellant to pay is acceptable decision; more so when the lapse of time between judgment, quotation and the time of assessment is substantial, as was the case here. In any case, there were explanations offered in both Alcoa Minerals and Dodd Properties and the considerations there were entirely different from the factual circumstances presented in this appeal. [59] We must further add that the decision in Radford v De Froberville fortifies the above principles. The issue that arose as a preliminary point, before an assessment of damages got underway was, what was the measure of damages in an action for breach of contract? To illustrate the importance of what we have explained above, one will see Oliver J examining first the underlying dispute between the parties; Radford’s cause of action; complaint and specific remedy that he was seeking. Radford had sold part of his land to the defendant on terms that the defendant was to build a house according to specifications which Radford had obtained planning permission for and also a wall separating the new house from the rest of his property. There were several other peculiar covenants in the contract of sale. The house and wall were never built and the defendant, with Radford’s knowledge, sold the land to a 3rd party, Miss Lange, with a 29 covenant by way of indemnity, that Miss Lange was to observe the covenants that the defendant had promised Radford, so far as they were still subsisting and capable of taking effect. The land was transferred to and registered in Miss Lange’s name. She, too, did not build the house or the wall. Radford sued the defendant for breach of covenant to develop. The defendant issued a 3rd party Notice on Miss Lange, and then admitted the allegations, except the damage sustained. Judgment was entered on liability and the matter proceeded to assessment of damages. [60] At the hearing of the summons to proceed with the assessment, the issue of what was the correct measure of damages arose; as well as the related question of where the wall should be erected, on Miss Lange’s land or on Radford’s remaining land; and the questions were referred to the judge for determination. Although these questions were between the defendant and Radford, Oliver J pointed out that “the person ultimately affected by the award is Mr. Sher’s client, the third party, and it is he, therefore, who has borne the brunt of the argument.” [61] Radford’s counsel argued that “the proper measure of damage is the cost to which Radford will now be put in providing for himself on his own land that which, as part of the consideration for the transfer of the adjoining land, the defendant undertook to provide on that land.” [62] Miss Lange’s counsel, on the other hand argued that there was “a critical difference between the contract between A and B for the erection by B of a building on A’s land and a contract between the same parties for the 30 erection by B of a building on his own land. In the former case, if the contract is not performed, A’s loss is to be measured by the cost of making alternative arrangements for the addition to his land of the building which he ought to have, but has not. In the latter case, however, if the contract is not performed, A has not lost a building, for he never had one. He has merely lost the advantage of having a building on the adjoining land. The building, if erected in accordance with the contract, would not have added one penny piece to the value of the plaintiff’s land except in so far as it (a) provided an additional amenity not previously in existence and (b) relieved the plaintiff from the necessity of erecting for himself any physical barrier along the boundary line. The measure of damages is therefore, the amount by which the value of the plaintiff’s land as an investment property is diminished by the absence of that amenity. [63] To these submissions, Oliver J opined that the proper question to ask is what had Radford “actually lost by the breach?” He had “contracted for the supply of the wall bounding his property as part of the consideration for the transfer and the effect of the transaction was that he paid for it in advance, because he transferred his land before the work was done. That price cannot, of course, be restored to him nor can the defendant’s part of the bargain be specifically performed, because she has sold the land to a stranger to the contract. Why should he not now be compensated by awarding him the sum which is required to enable him to carry out, as nearly as possible, for himself what the defendant has failed to do for him?” 31 Conclusion [64] Consequently, we are hard pressed to agree with both the learned SAR and the learned JC. The award of RM380,500.00, with respect, has no proper basis in law. The respondents’ quotation and say so cannot be accepted just because the appellant did not produce a different quotation for comparison. Every judicial authority must evaluate evidence presented, even if it is the only piece before the Court. It must never be taken without question just because there was no rebuttal evidence. [65] We have examined and evaluated that single piece of evidence and we have found it extremely wanting in so many respects, as explained. Since the respondents’ evidence, whether of the affidavits or the quotation, was challenged, they were put on notice. It was therefore imperative on their part to ensure that their burden of proof was discharged. As explained, they have not and are therefore not entitled to the sum quoted by N-Fatt Construction Sdn Bhd. [66] We were not inclined to award any nominal damages either. And, really it was for the same reasons why the award of RM380,500.00 cannot be upheld. It is back to the basic cause of action under clause 12; what the respondents have pleaded as their claim; that there is a breach of clause 12 because their written consent was not obtained before the appellant changed the materials used for the exterior wall. While there is no evidence or suggestion that it was at the request of the appropriate 32 authority, there is clearly and surely no allegation that the new material, Flexcore, is cheaper or of inferior quality. [67] Again, as already pointed out, the respondents did not allege that the new material, “Flexcore” diminished the value of their respective properties. Had that been the case, the claim would have been for a corresponding reduction of the purchase price. The fact that the claim was for damages to be assessed speaks volumes. [68] For all these reasons as adumbrated above, we were compelled to conclude, with respect, that the basis upon which the learned SAR and the learned JC had assessed the damages for breach of clause 12 cannot be supported in law and on the facts. [69] We were therefore compelled to allow the appeal and to set aside both the decisions of the learned SAR and the learned JC and we do so accordingly with no order as to costs. Dated: 12th April 2020 Sgd (MARY LIM THIAM SUAN) Judge Court of Appeal Malaysia 33 Counsel/Solicitors For the appellant: Ashok Kandiah a/l K Shanmuganathan (Cheong Sue Fyenn with him) Messrs. Kandiah Partnership Suite 6.01, 6th Floor Menara Choy Fook 1B, Jalan Yong Shook Lin 46050 Petaling Jaya, Selangor For the respondents: Amarjeet Singh (Avtar Singh a/l Prem Singh with him) Messrs. Avtar No. 12, 1st Floor Jalan SS 3/35 47399 Petaling Jaya, Selangor