Law Song Ting v 1. ) Tenaga Nasional Berhad (BA-12BNCvC-65-10/2024)

TENAGA NASIONAL BERHAD

HLK (CHAIN STORE) ELECTRICAL APPLIANCES SDN BHD

AFFINITY DESIGNS SDN BHD (NO. SYARIKAT: 350454-M) …RESPONDEN-RESPONDEN [DALAM MAHKAMAH SESYEN DI SHAH ALAM DALAM NEGERI SELANGOR DARUL EHSAN SAMAN NO: BA-B52NCvC-135-05/2021 ANTARA TENAGA NASIONAL BERHAD (NO. SYARIKAT: 199001009294) …PLAINTIF 20/05/2025 09:18:25 BA-12BNCvC-65-10/2024 Kand. 34 LAW SONG TING (NO. K/P: 670518-13-5990) …DEFENDAN

HLK (CHAIN STORE) ELECTRICAL APPLIANCES SDN BHD

AFFINITY DESIGNS SDN BHD (NO. SYARIKAT: 350454-M) …PIHAK-PIHAK KETIGA] GROUNDS OF JUDGMENT Introduction [1] In the Court below, the 1st Respondent/Plaintiff (“TNB”) had sued the Appellant/Defendant as the registered account holder of the electricity meter at 2-1-1, Jalan Setia Prima Q U13/Q, Setia Alam, 40170 Shah Alam, Selangor (“Property”) for meter tampering. [2] On 10-10-2024, the Sessions Court allowed TNB’s claim against the Appellant for RM436,575.80 in unrecorded electricity usage for the period 16-5-2010 to 16-5-2015, and dismissed the Appellant’s third party claim for indemnity against the 2nd and 3rd Respondents, the Appellant’s tenant and the current proprietor of the Property respectively. [3] On 7-4-2025, this Court dismissed the Appellant’s appeal against TNB and allowed in part, her appeal in respect of the third party claim, having found as a matter of law, that the 3rd Respondent was liable to indemnify the Appellant for TNB’s claims from the completion of the 3rd Respondent’s purchase of the Property on 29-11-2011. [4] The 3rd Respondent appealed to the Court of Appeal against this decision. These grounds of Judgment are limited to the relevant considerations for the appeal by the 3rd Respondent as no appeals have been filed by the other parties. Analysis and findings [5] A right of indemnity may arise when a party is bound by a contract to indemnify, when an obligation is imposed by written law or when it is equitable to do so (Malayan Banking Bhd v Sepakat Computer Consultant Sdn Bhd & Ors [2012] 8 MLJ 660). In contract, the right to an indemnity may be express or implied. [6] The 3rd Respondent’s liability turned on the sole question of whether, under the Sale and Purchase Agreement dated 18-5-2011 (“SPA”) for the sale of the Property to the 3rd Respondent, the Defendant has a right of indemnity in respect of the liability to TNB. To this question, this Court answered in the affirmative based on the following provision of the SPA: “15.3 Upon the completion of the Agreement, the Purchaser(s) [3rd Respondent] shall at their own cost and expense proceed with the change of name at the relevant utilities authorities. If the Purchaser(s) fails to settle the said change of name the Vendor(s) [Appellant] shall have the right to apply for the termination of the supply of service on the said Property and to obtain refund of the deposit (if any) from the said department or authorities.” and based on first principles for when a term may be implied per Sababumi (Sandakan) Sdn Bhd v Datuk Yap Pak Leong [1998] 3 CLJ 503: “Reverting to the first type of implied term which is dependent on a court's drawing an inference as explained above, there are two tests to fix the parties with such an intention i.e. that the parties must have intended to include such an implied term in the contract. The first test is a subjective test as stated by the Mackinnon, LJ in Shirlaw v. Southern Foundries (1928) Ltd. [1939] 2 KB, 206, 227, that such a term to be implied by a court is "something so obvious that it goes without saying so that, if, while the parties were making their bargain, an officious bystander were to suggest some express provision for it in the agreement, they would testily suppress him with a common 'Oh, of course'." The second test is that the implied term should be of a kind that will give business efficacy to the transaction of the contract of both parties. The test was described by Lord Wright in Luxor (Eastborne) v. Cooper [1941] AC 108, 137, that in regard to an implied term, "... it can be predicated that 'It goes without saying', some term not expressed but necessary to give the transaction such business efficacy as the parties must have intended." Business efficacy in my opinion, simply means the desired result of the business in question. … Both tests in my opinion must be satisfied before a court infers an implied term. …” [7] Clause 15.3 of the SPA obliged the 3rd Respondent to change the name of the account holder for the TNB meter at the Property. On a reasonable and objective interpretation of the clause, the primary obligation to do so was on the 3rd Respondent. It could not have been intended that the 3rd Respondent should benefit from its own breach as all else being equal, the 3rd Respondent would have been exactly in the Appellant’s position had it complied with Clause 15.3 of the SPA. [8] It is true that the Appellant could have effected the name change herself, but it would not have been immediately apparent to the Appellant if the 3rd Respondent had elected to continue utilizing the Appellant’s account on the sly. In such circumstances, it could not have been within reasonable contemplation that liabilities related to the 3rd Respondent’s failure to comply with clause 15.3 of the SPA may arise without recourse. [9] As a matter of law therefore, it was so obvious that it did not need articulation in the SPA by reason of clause 15.3 of the SPA, that the 3rd Respondent assumes primary responsibility for the consequences of not effecting the change of account; and this was necessarily the desired result in the transfer of ownership in the Property. [10] The 3rd Respondent’s obligation to indemnify the Appellant is not premised on any finding of fault in the underlying liability. To the extent that it may come up as an aside in the appeal, this Court dismissed the Appellant’s appeal against the 2nd Respondent for the following reasons. [11] The indemnity clause in the Tenancy Agreement dated 2-10-2007 between the Appellant and the 2nd Respondent, was expressed to only apply to “summonses and fines from the relevant authorities arising from the nature of the Tenant’s business.” As a matter of construction, this Court was of the view that the contractual indemnity in the Tenancy Agreement did not apply to incidents of meter tampering when read in the context of whole clause which deals with the Tenant’s covenant to comply with “the requirements of any government or public or local authority under the provisions of any Act or Enactment, or of any regulations or bye-laws of public and/or local authorities, or of any written law ....in so far as such requirements relate to the Tenant.” [12] In the absence of circumstances justifying the invocation of the express contractual indemnity, that is to say, the tenant’s non-compliance with any requirements of the law, the Sessions Court Judge was right in finding that the 2nd Respondent’s liability to indemnify the Appellant would only arise if in fact, the 2nd Respondent was the party that tampered with the meter. On that, there was no proof. Conclusions [13] Consistent with the above reasoning, this Court held that the obligation by the 3rd Respondent to indemnify the Appellant covered the period from the completion of the SPA when the 3rd Respondent assumed ownership of the Property but omitted to change the account holder’s name with TNB as contemplated. [14] This Court further ordered costs to follow the event, awarding costs of RM5,000.00 to the Appellant in the appeal, to be paid by the 3rd Respondent as the unsuccessful party. Bertarikh : 20 Mei 2025 SGD ELAINE YAP CHIN GAIK PESURUHJAYA KEHAKIMAN MAHKAMAH TINGGI MALAYA SHAH ALAM Peguam Untuk Perayu: Voon Su Huei, Messrs Thomas Philip Untuk Responden Pertama: Surianti Binti Mohamed Ghazali, Messrs Goh Rafidah Tan Untuk Responden Kedua: Tee Kuo Ying, Messrs Hisham Yoong - K C Lim Untuk Responden Ketiga: Lim Jae Han, Messrs Lim Yeoh & Partners