Madu Jaya Development Sdn Bhd v Kosbina Konsult (K) Sdn Bhd (WA-22C-12-02/2016)

“THE AWARDS-UNJUST ENRICHMENT OF DEFENDANT

The Defendant has therefore received benefits at the expense of the Plaintiff from the value of Works done and also costs incurred for the Project which formed the basis of the Interim Award and the Final Award.

The Defendant has been unjustly enriched at the expense of the Plaintiff.” [12] The Plaintiff also pleaded constructive trust in paragraph 19 of the Amended Statement of as follow suit: “CONSTRUCTIVE TRUST

Further and/or in the alternative, by reason of the matters set out above, the Plaintiff will contend that the Defendant is holding or otherwise accountable to the Plaintiff to the extent of RM11,420,791.73 as a constructive trustee to the Plaintiff.” Prayers [13] The Plaintiff had prayed for inter alia the following:

a Declaration that the Defendant is holding RM11,420,791.73 on constructive trust for the Plaintiff;

a Declaration that the Defendant has been unjustly enriched for the amount of RM11,420,471.73 at the expense of the Plaintiff or such other sum or sums as the Court shall deem fair, just and reasonable;

the Defendant do pay to the Plaintiff the amount found due on the taking of account;

an Order that the Defendant do restore the benefit of RM11,420,791.73 received in the Interim Award and Final Award, to the Plaintiff or such other sum or sums as the Court shall deem fair, just and reasonable; 7

Interest at such rate and on such amount and for such period as the Court deems just, fair and reasonable;

costs; In the alternative -

an order that the Defendant do restore the benefit received in the Interim Award and Final Award to the Plaintiff less 8% being the Defendant’s fees. Principles [14] It is for the Plaintiff to formulate their claim as either based on breach of contract or as in this case, a claim founded on unjust enrichment or further and in the alternative, breach of constructive trust with respect to the proceeds from the Arbitral Award. The previous 2014 Suit brought in the name of MJE was dismissed on inter alia that limitation has set in with respect to their claim in contract where the cause of action is said to have arisen upon the date of termination of the contract by the Government of Malaysia. The date of Notice of Termination was on 21.2.2007 and the 2014 Suit was filed only in 2014. 8 [15] The question is whether the Plaintiff has a valid claim under unjust enrichment or breach of constructive trust. [16] Unjust enrichment is a specie of cause of action which gives rise to a restitutionary relief and it is independent from other causes of action. The learned authors Goff & Jones in their treatise “The Law of Unjust Enrichment” Eighth Edition, Sweet & Maxwell, at page 62, paragraph 3-45 opined that: “...The law of unjust enrichment is independent of the law of contract, and there is no reason why the different bases on which liability arises should yield the same outcome. Unlike the situation when damages for breach of contract might be formulated in terms of expectation or reliance loss, there is no compelling policy reason why a claimant in such circumstances should not be able to avail himself of the law of unjust enrichment in order to escape from a bad bargain.” (emphasis added) [17] See Woolwich Equitable Building Society v Inland Revenue Commission [1992] 3 All ER 737 (HL). By the same token, even if a cause of action in contract has expired because of limitation having set in, it does 9 not prevent a claimant from pursuing his claim in unjust enrichment if that cause of action is still subsisting. [18] The pre-requisites of this cause of action are the following: a) that the Defendant has been enriched; b) that the enrichment is gained at the expense of the Plaintiff and c) this enrichment is unjust. See BP Exploration Co (Libya) Ltd v Hunt (No 2) [1982] 1 All ER 925. [19] It was held in Davis Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 378-9;109 ALR 57 that unjust enrichment is a benefit for which the recipient is required to make restitution to the person at whose expense it was obtained. An enrichment is unjust if for example, the enrichment was provided by mistake, under duress or undue influence, or the enrichment was obtained as a result of breach of fiduciary duty. [20] Little wonder that the cause of action in unjust enrichment is often discussed in the context of a breach of constructive trust. 10 [21] The Federal Court in the decision of Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 MLJ 441, has expounded on the ingredients for the cause of action in unjust enrichment and the nature of the remedy in restitution where it was inter alia held as follows: “[117] The above passages from the judgments of the House of Lords are instructive and are significant contribution to the development of law of unjust enrichment. The principle underlying the cases of Banque Financiere de la Cite v Parc (Battersea) Ltd and Sempra Metals Ltd (formerly Metallgesellschaft Ltd) v IRC is that, in the context of the present case, a cause of action in unjust enrichment can give rise to a right to restitution where it can be established that:

the plaintiff must have been enriched;

the enrichment must be gained at the defendant's expense;

that the retention of the benefit by the plaintiff was unjust; and

there must be no defence available to extinguish or reduce the plaintiff's liability to make restitution. [118] Nearer home, there is now no longer any question that unjust enrichment law is a new developing area of law which is recognised 11 by our courts. That the principle of unjust enrichment is the basis to justify an award of restitutionary relief can be seen in Sediperak Sdn Bhd v Baboo Chowdhury [1999] 5 MLJ 229 and in Air Express

International (M) Sdn Bhd v MISC Agencies Sdn Bhd [2012] 4 MLJ Nevertheless, it has to be said that despite the increase in judicial reference to the expression of unjust enrichment to justify an award of restitutionary reliefs, the law of unjust enrichment is still in its formative stage in our jurisdiction (see article entitled 'An Introduction to the Law of Unjust Enrichment' [2013] 5 MLJ i by Alvin W-L See). In our view, the time has come for this court to recognise the law of unjust enrichment by which justice is done in a range factual circumstances, and that the restitutionary remedy is at all times so applied to attain justice. [119] Applying those principles, we now turn to consider whether the defendant has made out a cause of action in unjust enrichment: the plaintiff has been enriched, that this enrichment was gained at the defendant's expense, that the plaintiff's enrichment at the defendant's expense was unjust, and whether there are any special defences to the claim.” (emphasis added) 12 [22] Learned counsel for the Plaintiff referred to a more recent decision of the UK Supreme Court in Benedetti v Sawiris and others [2014] AC 938 where the Court had occasion to deal with the quantification of the award to be made in a claim for unjust enrichment. In that case too, there was an initial agreement which parties then abandoned but the plaintiff had nevertheless proceeded to render valuable services to the defendant. The Judgment of Lord Reed JSC at paragraph 85 and 86 page 979 of the decision is reproduced as follows: “86. There is no doubt that Mr. Sawiris was enriched by the provision of Mr. Benedetti’s services; that the enrichment was at the expense of Mr. Benedetti, in the sense that he expended his labour to provide those services, and his labour was a marketable commodity; and that, in the absence of some reward for those services, the circumstances called for restitution by Mr. Sawiris, since he accepted Mr. Benedetti’s services in the knowledge that Mr. Benedetti expected to be rewarded for providing them. There was, on that footing, what is sometimes described as a failure of consideration (not using that term in its strict contractual sense): the services were provided on the basis that arrangements would be agreed for 13 Mr. Benedetti to be rewarded, but no such arrangements eventuated.” [23] As for constructive trust, the learned authors Robert Pearce, John Stevens & William Barr in “The Law of Trusts and Equitable Obligations” Fifth a Edition, 2010, Oxford University Press, at page 299 explained as follows: “(a) The ‘institutional’ constructive trust. An institutional constructive trust is a trust that is brought into being on the occurrence of specified events, without the need for the intervention of the court. The trust comes into being if the facts that are necessary to give rise to it are proved to have occurred. It exists from the time the relevant events occurred. The court does not impose the trust, but rather recognizes that the beneficiary enjoys a pre-existing proprietary interest in the trust property. The court has no discretion to decide whether or not the property should be subject to a trust. Since an institutional constructive trust does not arise from the judgment of the court, it is capable of gaining priority over any interests acquired by third parties in the trust property during the 14 period between the creation of the trust and its recognition by the court.” [24] The learned authors went on to explain the relationship between what is called ‘remedial’ constructive trust and unjust enrichment as follows at page 299: “(b) The ‘remedial’ constructive trust In contrast to the ‘institutional’ constructive trust, some other jurisdictions have come to regard constructive trusts as one of a range of remedies to facilitate restitution where a defendant has been unjustly enriched at the expense of a plaintiff. Having found that there has been an unjust enrichment, the court can, in its discretion, impose a constructive trust over assets representing any remaining enrichment in the hands of the defendant if appropriate, or alternatively award a monetary sum. A remedial constructive trust is imposed by the court, which does not merely recognize a pre-existing proprietary right. The trust arises from the date of the court’s judgment and it will not therefore gain automatic priority over the rights of third parties...” 15 Whether the Plaintiff had done all the Works under the Letter of Agreement between the Plaintiff and the Defendant such that all the Works of the Defendant under their Main Contract with the Government of Malaysia were done by the Plaintiff [25] The Subcontract between the Defendant and the Plaintiff is in local parlance a “total-sub” where the Defendant as Main Contractor in Clause 1 of the said Letter of Agreement agreed to appoint the Plaintiff as a Subcontractor to execute the Works until completion for the sum of RM48,325,771.65 which is the same contract sum as in the PWD 203A Contract between the Defendant and the Government of Malaysia. [26] As stated though the Letter of Agreement was with MJE, for all practical purposes it is now read as referring to the Plaintiff as the Plaintiff was in effect the party carrying out the Works, as can be seen in the finding of facts of the High Court in the 2014 Suit which finding was affirmed in the Court of Appeal. [27] Clause 2 of the Letter of Agreement is thus clear on the commission in that the Defendant’s entitlement is 8% of the sums paid by the Government of Malaysia under the Main Contract with the Defendant and the payments shall be deducted from the Progress Payments and Final 16 Payment made by the Government of Malaysia to the Defendant as the Main Contractor. [28] It cannot be seriously disputed that the Plaintiff is the party which executed the Works for the Project. The Defendant had not contended otherwise and neither had the Defendant led any evidence with respect to any Works not done by the Plaintiff or done by some other Subcontractors. Learned counsel for the Defendant had also not asserted otherwise throughout his Submission. In fact, learned counsel for the Defendant submitted that the Defendant is not disputing that the ingredients of the Arbitral Award are the input of the Plaintiff in that it was the Plaintiff who did the Works. [29] I can believe the Plaintiff’s explanation by its Managing Director PW 2 Madam Angie Ng that the arrangement on the ground, consistent with the said Letter of Agreement, essentially mirrored the express terms of the said Letter of Agreement particularly in relation to the sharing of the payments received from the Government of Malaysia. Her evidence on this point was not challenged under cross-examination. She said in paragraph 1 of her witness statement as follows: 17 “The arrangement with the Defendant was that we would carry out all the works leaving the Defendant as the main contractor on record dealing with the Government of Malaysia. For their role, they would retain 8% of all payments received from the Government of Malaysia”. [30] To a question from the Court, she clarified that what happened was that the Plaintiff was only paid when the Defendant had received payment from the Government of Malaysia and, later on, from Ambank pursuant to the factoring arrangement that the Defendant had in due course, entered into to ease cashflow. [31] On the balance of probabilities cash flow, I had held that the Plaintiff had proved that they had executed all the Works required of them in the Main Contract between the Government of Malaysia and the Defendant which the Defendant had totally Subcontracted to the Plaintiff for the same contract sum and accepting 8% only of the contract sum as their commission. [32] Indeed, in the grounds of judgment of Justice Mary Lim J (now JCA) found at pages 244 to 285 of the Plaintiff’s Core Bundle of Documents(“PCBOD”), her Ladyship found that the initial Subcontract 18 between MJE and the Defendant was “abandoned by both parties and a new agreement for the execution of the works under the Project was entered into between MJD [i.e. the Plaintiff in this case] and Kosbina [i.e. the Defendant in this case]”. [33] Her Ladyship also found that the actual Works in respect of the Project were done by the Plaintiff at paragraphs 49 and 55 of her Grounds of Decision. Whether the Plaintiff has proved its claim under unjust enrichment [34] There was an event not expressly addressed and was not provided for in the 92:8 Sharing Formula in the said Letter of Agreement. What had happened was that the Government of Malaysia terminated the Main Contract with the Defendant on ground of the failure of the Defendant to carry out the Works regularly and diligently. Frankly I do not see how having been terminated by the Government of Malaysia and having to pursue Arbitration to realize the sums due for the Works done can substantially change the underlying basis of the 92:8 Formula Sharing that would have applied had the Main Contract be carried out to completion and the Government of Malaysia had paid all the sums due under the Main Contract to the Defendant. 19 [35] I am satisfied that after the said termination, it was at the instance and initial initiative of PW2, that the legal firm of DW2 was approached for advice on formulating the claim against the Government of Malaysia for unlawful termination. The 1st meeting in this regard was between PW2 and her sister, on the one hand, and DW 2 Mr Ong Chin Siong, the solicitor approached by the Plaintiff, on the other hand, at the latter’s office. According to PW2 it was this meeting that DW2 pointed out that since the Plaintiff was the Subcontractor, it was not in the position to advance any claim against the Government of Malaysia for unlawful termination and that the proper party to do so would be the Defendant (see: Q&A 2 of PW2- WS). A subsequent meeting was then arranged with DW2 where PW2 brought along DW1 together with Encik Fauzi, who was the Managing Director of the Defendant and the brother of DW1. [36] As the Works were carried out by the Plaintiff, it would appear that the fault would be that of the Plaintiff if indeed it was true that the Defendant had vis-a-vis the Government of Malaysia failed to carry out the Works regularly and diligently such that the Government of Malaysia would justify the termination of the Main Contract. [37] If the Plaintiff and the Defendant had agreed to together pursue in arbitration to claim for the amount outstanding to the Defendant in the 20 Progress Certificates, the Variation Works and related claims for the Works done as well as the losses arising from what they said is unlawful termination, this and the 2014 Suit would probably not have been filed. [38] If they had obtained an Arbitral Award in their favour then there is no doubt that the proceeds of the Arbitral Award would be divided according to the 92:8 Sharing Formula with the Plaintiff footing the fees, costs and expenses of the Arbitration and recovering whatever fees, costs and expenses they could in the event that costs were awarded to them in the event of an Award in favour of the Defendant. [39] Be that as it may, the initial understanding manifested by both the Plaintiff and the Defendant, consistent with the overall scheme of the said Letter of Agreement, was that the Plaintiff would be footing the bill where the fees, costs and expenses of the Arbitration is concerned. The evidence before the Court was that in the light of the problem arising from the termination of the Main Contract by the Government of Malaysia, both the Plaintiff and the Defendant shall cooperate to formulate and pursue their common claim against the Government of Malaysia; united in a common opposition against the Government of Malaysia where the consequences flowing from the unlawful termination is concerned. 21 [40] The evidence for this is overwhelming at pages 73 – 74 of the Notes of Proceedings for 11.10.2016 even from the testimony of DW 1 himself. Learned counsel for the Plaintiff had summarized it as follows:

as evidenced by the correspondence, upon the Defendant receiving a request for payment, whether in terms of legal fees or fees for the Arbitration centre, the KLRCA, the Defendant, acting through DW1 would simply forward such requests to the Plaintiff for the Plaintiff to effect the necessary payments (see: for example the letter from the Defendant to the Plaintiff dated 22.5.2007 at pages 27 to 28 of PCBOD);

the Defendant reinforced its position that the responsibility for such payments was squarely upon the shoulders of the Plaintiff by going so far as to informing the Plaintiff that should the Plaintiff fail to make payment, the Defendant will then make such payment and the amount deducted from the Project sum (“…kami tiada pilihan terpaksa membuat bayaran terus dan jumlah tersebut akan dipotong dari projek puan.”) (see: letter from Defendant dated 4.6.2007 at page 31 of PCBOD); 22

at the outset, DW2 had asked for an initial fee of RM10,000.00 “to account of our initial fees and disbursements prior to the issue of the said notice” (the said notice being the Notice of Arbitration) (see: page 28 of PCBOD) but was then paid a reduced amount of RM5,000.00 by the Plaintiff after PW2 had spoken to DW2 (see: page 32 of PCBOD) being the Plaintiff’s letter dated 6.6.2007 addressed to the DW2’s firm and which letter described the payment “being initial disbursement for the above legal fee as agreed by your good self”. The letter went on to remind DW2 to keep the Plaintiff informed of the development of the arbitration however, as it turned out, this was not done with DW2, not even taking the trouble to respond to the Plaintiff (see: page 32 of PCBOD);

the issue of the payments to be made by the Plaintiff came to a head when subsequently, more than a year later after the initial meeting, DW2 through his firm by letter dated 22.9.2008 made the following fee “quote”, which the Plaintiff perceived as more like a demand, for the conduct of the Arbitration (see: page 64 of PCBOD):

RM600,000.00 in the event of settlement being reached; 23

(ii) in the event the matter proceeded to arbitration the fees would be RM1.5 million of which RM200,000.00 was to be paid before 26.3.2009.

the Defendant then “requested” for the Plaintiff to make the payment as demanded in DW2 said letter of 22.9.2008 (see: pages 63A to 64 of PCBOD).

as a result of what the Plaintiff considered to be a very exorbitant fee quote (see: line 25 at page 5 to line 18 at page 7 of Notes of Proceedings for 1.12.2016), the Plaintiff was naturally alarmed and called for a meeting to discuss the matter. However the meeting was not at all as the Plaintiff had expected. This is how PW2 described the meeting: “The conduct of Mr. Ong Chin Siong shocked me. He said at the very beginning of the meeting that I had to give him a clear answer as to the payments to be made to the KL Regional Center and also, in particular, his legal fees. He said that unless I agree to the payments then there was nothing further to discuss. He wanted an answer there and then. I said in reply that I wanted to know what was 24 his strategy and that since he was asking me to pay such a substantial amount of money, I was entitled to have more information from him. However, Mr. Ong Chin Siong said that I had to agree to the payment first and then the rest can be discussed”.

It was following this meeting that the Plaintiff wrote the letter dated 13.11.2008 at pages 65 to 66 of PCBOD with reference to the meeting of 22.10.2008 where, inter alia, the Plaintiff reiterated its willingness to continue working with the Defendant on the Arbitration. [41] Learned counsel for the Plaintiff pointed out that after the Plaintiff’s letter of 13.11.2008, there was no direct response from either the Defendant nor the DW2 as solicitors. As DW1 confirmed, at no time did the Defendant write to the Plaintiff to inform the Plaintiff that the co-operation between the Plaintiff and the Defendant was at an end (see: from line 12 at page 23, line 1 to 36 of page 24 Notes of Proceedings for 14.11.2016) or, more importantly, that the Plaintiff had somehow forfeited their entitlement to the payment for Works done in respect of the Project. [42] On the contrary, the Defendant wrote the following 2 letters: 25

a letter dated 20.11.2008 to the Plaintiff reminding the Plaintiff that the Plaintiff was allegedly in breach of the terms of the agreement which stated that any costs were that of the responsibility of the Plaintiff (see: page 67 of PCBOD);

the letter dated 24.11.2008 to the Plaintiff and copied to DW2’s firm as well as the Plaintiff’s then solicitors placing the responsibility to meet the damages purportedly arising from the termination in respect of the Main Contract in the event that the termination was lawful (see: pages 67A to 67G of PCBOD). [43] Indeed it is provided in Clause 8 of the Letter of Agreement that in the event the Subcontractor shall fail to complete the Project then all Payments and Claims shall be borne by the Subcontractor and any damages claim shall be paid by the Subcontractor. Further in Clause 13 thereof the Subcontractor agreed to be the guarantor to the Main Contractor for all that is required of the Main Contractor in relation to the said Project. [44] Very unfortunately, both the Plaintiff and Defendant could not agree on the way forward with respect to commencing Arbitration against the Government of Malaysia where the solicitors to be acting for them are concerned and their fees are concerned. The Plaintiff could not agree on 26 the initial deposit to the fees for Arbitration and the quotation as to the overall fees for the Arbitration as requested by the solicitors Messrs Siong & Rita that both parties had met with respect to pursuing Arbitration to claim for all outstanding sums due and losses arising out of the unlawful termination of the Main Contract by the Government of Malaysia. [45] Any Arbitration against the Government of Malaysia has to be in the name of the Defendant for they are the contracting party with the Government of Malaysia under the Main Contract that suffered termination by the Government of Malaysia. There was no irrevocable Power of Attorney given by the Defendant to the Plaintiff to commence Arbitration in the name of and on behalf of the Defendant against the Government of Malaysia. [46] Without such a facility and device the Plaintiff could only at best wait by the sideline or finishing line to see what the outcome of the Arbitration would be. [47] The Defendant decided to proceed on its own steam and resources with the Arbitration. They decided not to involve the Plaintiff at all, much less to keep them informed as to the progress and outcome. In fact the way things proceeded, the Defendant was bent on axing the Plaintiff altogether 27 from the Arbitration and certainly from any participation in the proceeds from eventual Award if given in their favour. The Defendant chose not to disclose whether they had received the payments from the Government of Malaysia after the latter‘s unsuccessful challenge to set aside the Arbitral Award which was dismissed with costs of RM20,000.00 on 19.9.2013 by the Kuala Lumpur High Court in 24NCC(ARB)–57–12/2012. [48] They also chose not to disclose the fees, costs and expenses spent in the Arbitration and in opposing the setting aside of the Arbitral Award in the High Court by the Government of Malaysia. DW 1, Encik Nasron bin Md Noor, the Project Manager of the Defendant and the brother of the Managing Director of the Defendant, said he was not familiar where matters of legal fees of Arbitration and Court proceedings were concerned. DW 2 Mr Ong Chin Siong, learned counsel for the Defendant in the Arbitration relied on solicitor-client privilege with respect to non-disclosure of the legal fees paid in the Arbitration. The case of Rex v Chhoa Mui Sai

1 MLJ 236 was cited as authority for the above proposition. [49] Encik Fauzi Bin Md Noor, the Managing Director of the Defendant, who was present throughout this trial in Court, chose not to give evidence. 28 [50] I am quite certain that if the Defendant had allowed the Plaintiff to be in the driving seat of the Arbitration against the Government of Malaysia, the Plaintiff would still be proceeding with the funding of the Arbitration and the further cooperation with the Defendant in preparing for the Arbitration and presenting the evidence through a firm solicitors with whom they could agree on the fees. [51] I cannot imagine why anyone in the position of the Plaintiff, faced as it is with Certificates of Payment not paid and Works done and not certified and a Termination that is said to be unlawful, would not want to pursue and proceed with Arbitration to claim what is fairly and justly what one had worked for and the losses arising out of an unlawful termination of the Contract. [52] I can understand that any further advance of fees towards Arbitration would further stretch the financial resources of the Plaintiff but that is the harsh reality of all contractors when assailed with an unlawful termination. [53] I can appreciate the Plaintiff’s concerns where the further outlay of fees for Arbitration is concerned. DW 2 had quoted a sum of RM1.5 million as his fees for the Arbitration and a sum of RM600,000.00 if the matter is settled. There was also the initial deposit of another RM200,000.00 by 29 26.3.2009 before proceeding with the Arbitration on top of the initial deposit of RM5,000.00 already paid by the Plaintiff. [54] The Plaintiff’s resources for further outlay of legal fees was doubtless constrained by the exasperation expressed at times when they raised numerous complaints to the Defendant as to both the delays in the payments made to the Plaintiff as well as to the amounts of such payment being less than what the Plaintiff was entitled to pursuant to the 92:8 Sharing Formula. See from line 18 at pages 12 to line 17 of page 16 of Notes of proceedings dated 11.10.2016 and pages 8, 9 11 to 18 and 22 of PCBOD. [55] As highlighted by the Plaintiff, while the Defendant had been paid RM36,091,119.00 until Progress Payment No. 48, the payments made to the Plaintiff for the corresponding work done were only RM27,797,529.00. See the Final Award at paragraph 2.2.5.21 of page 110 of PCBOD. [56] Learned counsel for the Plaintiff would castigate the current conduct of the Defendant in refusing to pay to the Plaintiff the undisputed work done by the Plaintiff as an extension of the recalcitrant behaviour that the Defendant had demonstrated throughout the currency of the Project. 30 [57] As stated, the Managing Director of the Defendant had deployed his brother DW 1 to testify on behalf of the Defendant. DW1’s knowledge of the Project with respect to the amount outstanding to the Plaintiff is either limited or that he was not candid in his testimony. He asserted that no sums were due from the Defendant to the Plaintiff (See: pages 25-26 of the Notes of Proceedings for 14.11.2016). [58] DW1’s evidence flies in the face of the evidence of PW3, Encik Ahmad Rani bin Mohd Noor, the auditor who confirmed that on the books of the Defendant, a sum of RM1,355,778.00 was as at 31.12.2007 owed to the Plaintiff by the Defendant (see: pages 62 to 63 of PCBOD and from line 4 of page 32 to line 29 of page 33 of Notes of Proceedings for 11.10.2016). This amount was still captured in the 2010 audited accounts of the Defendant (See: PBOD 5 and from line 15 of page 50 to line 32 of page 51 of Notes of Proceedings for 11.10.2016). [59] I agree that such a substantial amount could easily have been applied by the Defendant to pay off even the fee quoted from DW2 and at the very least the initial deposit of RM200,000.00. [60] Given the stand as expressed by the Defendant in its letter dated 4.6.2007 (see: page 31 of PCBOD), it would be perfectly understandable if 31 the Defendant were to proceed to deduct all fees incurred from the Defendant’s Account with the Plaintiff which included this sum of RM1,355,778.00 standing in favour of the Plaintiff as being owing by the Defendant to the Plaintiff. By the said letter of 4.6.2007 the Defendant had given an ultimatum to the Plaintiff that if the legal fees were not paid within 3 days from the date of the said letter, then the Defendant would have no alternative but to make payment of the fees direct to the solicitors and the said sum paid shall be deducted from the Plaintiff’s Project. [61] Whilst cashflow is every contractor’s problem, it impinges in this case more the Plaintiff as Subcontractor where they are both out of pocket for Works done as at termination and suffering a shortfall for not having been paid by the Defendant in full in accordance with the 92:8 Sharing Formula, not forgetting to mention the further sum of RM1,355,778.00 still owing by the Defendant to the Plaintiff since 2007. [62] Whilst this matter of the sum of RM1,355,778.00 still owing from the Defendant to the Plaintiff since 2007 was not pleaded by the Plaintiff, I would still be able to have regard to it as relevant evidence to be considered when evaluating the respective conduct of the parties and in assessing their gumption in proceeding with the Arbitration with respect to their respective appetite for risk in any Arbitration or Litigation. 32 [63] In a very real sense the Defendant was less out of pocket compared to the Plaintiff who had incurred costs and expenses in finishing the Works and still have not been fully paid compared to the Defendant who would get a clean commission of 8% without the need to fund the Project. It would not be unfair to say that should the Defendant fail in the Arbitration they would say the fault is with the Plaintiff who must have been guilty of failing to proceed regularly and diligently with the Works for that was the ground for the Government of Malaysia terminating the Main Contract. They would as already indicated by them in their letter of 20.11.2008 at page 67 of PCBOD look to the Plaintiff for all fees, costs and expenses incurred in the Arbitration should they fail in getting an Award in their favour. More importantly in the event that the Defendant is made to pay the Government of Malaysia damages for their default in failing to proceed regularly and diligent with the Works, they will again look to the Plaintiff to pay as warned by them in their letter to the Plaintiff dated 24.11.2008 at pages 67A-67G of PCBOD. [64] Fortunately for the Defendant and correspondingly for the Plaintiff as the Plaintiff was the party that performed the Works, their stand of unlawful termination by the Government of Malaysia was vindicated by the Arbitrator when he held that the Main Contract had been substantially performed and 33 that the termination was premature and unlawful. It was also a finding of the learned Arbitrator that 93% of the Works had been completed when the termination was effected. [65] The initial Award was for RM6,376,702.12 (see: paragraph 4.2.1 at page 87 PCBOD) and a further final Award of RM13,797,007.68 (see: paragraph 4.5 of page 193 PBCOB) which together give the total Award Sum of RM20,173,709.80. This amount of RM20,173,709.80 was arrived at after deducting the limited counterclaim by the Government of Malaysia which was allowed by the learned Arbitrator for remedial works amounting to RM295,000.00. [66] Here is where the problem began! Having obtained an Award in its favour and a very substantial one at that even though the entire Works were done by the Plaintiff as Subcontractor, the Defendant was bent on excluding the Plaintiff altogether from any share in the proceeds of the Award. Such an audacious argument has arisen more out of avarice than a breakdown in the Letter of Agreement. Not unlike Adam and Eve in the Garden of Eden after having partaken of the forbidden fruit, the Defendant’s eyes were “opened” to the prospects of keeping the whole sum of the Award, and by no means a small sum, of RM20,173,709.80 to themselves! The Malay proverbial expression of an “avalanche of durians” 34 or “durian runtuh” in the original language would aptly describe what the Defendant is avid about. [67] The Defendant had justified it on a few grounds. It was argued by the Defendant that the Award is their proprietary right and that the 92:8 Sharing Formula has fallen through as the Plaintiff did not pursue with the funding of the Arbitration and the preparation and pursuing of the claim in Arbitration. The Plaintiff was in breach of the Letter of Agreement as they did not agree to the fees quoted by the said solicitors DW 2 and did not pay the said fees to proceed with the Arbitration. It is akin to arguing that the payment of the solicitors’ fees for the Arbitration was a condition precedent to the Letter of Agreement such that if that is not complied with, the whole of the 92:8 Sharing Formula would crumble with it. [68] It was further argued that there is no partnership or joint venture agreement to justify any proceeds of Award sharing under the 92:8 Sharing Formula or any Formula for that matter! It was obvious, according to the Defendant, that the Plaintiff contributed nothing to the Arbitration as they were not required to and did not give any evidence at all. The Arbitration was all the sweat of their brow and toil under the noonday sun so to speak and so they alone should eat the bread thereof! 35 [69] We must give credit where it is due. The Works were properly and diligently performed by the Plaintiff for if not, the Defendant would not be able to subsequently mount a substantial claim for both wrongful termination and also for the Works done against the Government of Malaysia culminating in a substantial favourable Arbitral Award totalling RM20,173,709.80 which the Defendant secured against the Government of Malaysia (see: pages 93 to 234 of the PCBOD for the Arbitral Award. [70] It would be totally unconscionable and grossly unfair and most unreasonable to have the Defendant keeping the whole of the Award sum to themselves in complete disregard of the expressed intention of the 92:8 Sharing Formula. [71] The law governing unjust enrichment is such that the Court maintains that flexibility of making the necessary adjustment such that so much as may be considered as unjust enrichment needs to be coughed out to meet the demands of fairness, reasonableness, justice and equity. [72] Human nature being what it is, both the Plaintiff and the Defendant seem to be suffering from some myopic disability in not looking at the big picture in focus the moment they see the many zeros behind the Award 36 Sum of RM20,000,000.00 plus. It is only too true that money has a way of changing the colour of things and the character of those who behold it. [73] Now the Plaintiff had pleaded that they could still insist on their entitlement to 92% of the Award Sum with the Defendant keeping the balance 8% in line with the agreed arrangement as reflected in the said Letter of Agreement. I do not think that would be fair in a claim for unjust enrichment as some premium must be given to the Defendant who launched ahead with the Arbitration, taking in its wake the risks that come with every Arbitration and Litigation. [74] Whilst it is true that the Defendant could look to the Plaintiff should they fail in the Arbitration and ending up bearing the fees, costs and expenses of the Arbitration and the liability of paying the Government of Malaysia should it be found that the Government had rightly and lawfully terminated the Main Contract, the Defendant would still have to face the initial brunt and burden of the Award against it before they could seek an indemnity from the Plaintiff and in the event the Plaintiff is unable to pay, the indemnity would be of no practical benefit to the Defendant. [75] Granted the said Letter of Agreement did not refer to what the Sharing Formula would be like if the Defendant had to proceed with 37 Arbitration to recover the sums owing and the damages arising out of an unlawful termination by the Government of Malaysia. However the need to proceed with Arbitration should not be an excuse to discard the whole of the 92:8 Sharing Formula. Clause 15 of the Letter of Agreement alluded to a case where legal action by JKR or third parties is commenced against the Defendant, then all expenses and legal fees in relation to the Project shall be borne by the Subcontractor. A Counterclaim in the Arbitration proceedings is surely within the meaning of a legal action by JKR. One cannot be so pedantic as saying then that the 92:8 Sharing Formula crumbles completely once the Defendant has to commence Arbitration against the Employer, the Government of Malaysia. [76] One must put in proper perspective the relevant factor of the risks that the Defendant had to assume in proceeding with Arbitration. As we all know any Court proceedings or Arbitral proceedings is such that no one can guarantee the outcome. [77] A premium must be placed on the Defendant for proceeding with the risks in that should the Award be against the Defendant and the Defendant is held liable to pay the Government of Malaysia, then the Defendant would still have to pay first before looking to the Plaintiff for recovery of the sums paid. 38 [78] Looking at the circumstances of this case, here is a situation where the Plaintiff would not be able to talk of a claim on a share of the Arbitral Award if not for the Defendant assuming the risks and proceeding with Arbitration to success. [79] Conversely the Defendant would not have succeeded if not for the fact that the underlying Works which is the subject matter of the Arbitration was undeniably the Works done by the Plaintiff and properly and diligently executed to completion such that the termination on ground of a failure to proceed with the Works regularly and diligently was held to be wrongful and unlawful in the circumstances of the case. [80] The Defendant now says that it could keep the whole Award to itself as the Award is its proprietary right. It is a new creature altogether and as the Plaintiff had not sued in contract within limitation, they had lost their rights altogether for their cause of action arose from the date of unlawful termination on 21.2.2007 and this Suit was only commenced in 2016. [81] This Court is uncomfortable with this proposition as it cannot be denied that it was the Plaintiff who did the Works under an original 92:8 Sharing Formula of the monies to be received from the Government of Malaysia. 39 [82] No doubt material circumstances might have changed in the termination of the Main Contract by the Government of Malaysia and the need to go for Arbitration and also limitation setting where the Plaintiff‘s contractual rights are concerned. [83] This is where the flexibility and with it the beauty of the concept and common law claim of unjust enrichment comes into play. The law would not allow a party to keep that to himself if to do so would result in that party being unjustly enriched at the expense of another that has some legal relationship with the party enriched in that the other party now claiming has made a substantial contribution to the party enriched. [84] The question now is what is a fair portion that the Defendant should not keep for themselves but that should be disgorged and paid over to the Plaintiff. [85] Looking at the overall circumstances of this case it would be fair, reasonable and just for the Defendant to be able to retain 50% of the Arbitral Award and balance 50% is to be released to the Plaintiff. [86] A further adjustment will have to be made to 2 items that ought to be deducted from the 50:50 sharing formula. There are the items on Head Office expenses of RM1,720,422.00 and the revocation of CIDB license of 40 RM1,732,941.00 which are incurred purely by the Defendant and they together amounted to RM3,453,363.00. [87] This is to be deducted from the total principal sum of Interim Award and Final Award combined sum of RM20,173,709.80 giving a balance RM16,720,346.80. [88] This sum subject to the 50:50 formula yielding a sum of RM8,360,173.40 which sum this Court grants judgment in favour of the Plaintiff against the Defendant under a claim for unjust enrichment. Whether the Plaintiff has proved breach of constructive trust with respect to the sum payable under the Arbitral Award [89] There is basis also for the Plaintiff to assert that a constructive trust has come into being where the Arbitral Award is concerned as it would be unjust and unconscionable for the Defendant to keep the whole proceeds from the Award to itself to the exclusion of the Plaintiff. [90] The fact that the cooperation between the Plaintiff and the Defendant broke down does not negate the incontrovertible truth that the Works done which form the stratum of the successful Award obtained by the Defendant are that of the Plaintiff. The Plaintiff did not do the Works gratuitously. They expected to be paid and the payment was captured and contained in the 41 92:8 Sharing Formula from the proceeds that the Defendant as Main Contractor would receive from the Government of Malaysia as the Employer. [91] Here the proceeds had been obtained, though via a more circuitous and convoluted route of having to proceed with Arbitration with its attendant expenditure of time, energy and money. The law would not allow the Defendant to keep the whole of the proceeds from the Award to themselves as it would be unconscionable, unfair and unjust to do so especially bearing in mind that it was the Plaintiff who had effectively “funded” the Project from the supply of labour, equipment, machinery and material to the completion of the various Progress Payment Claims until they were terminated unlawfully; at which point 93% of the Works had been completed as found by the learned Arbitrator. [92] A constructive trust arises by operation of law, whenever the circumstances are such that it is unconscionable for a party to assert beneficial rights over property and in the course of it, to deny beneficial rights of the rightful party. See: The Federal Court’s decision in Malaysian International Trading Corporation Sdn Bhd v RHB Bank Bhd [2016] 2 CLJ 717 at paragraph 79. 42 [93] It has also been held by the Federal Court in the case of CIMB Bank Bhd v Maybank Trustees Bhd [2014] 3 MLJ 169 at paragraph 129 that constructive trust is a trust imposed by equity in order to demand justice and good conscience, without reference to any express or presumed intention of the parties: “[129] In the circumstances, this court must intervene by imputing a constructive trust upon Murnina (as well as Rafie) for her role in misapplying the trust monies. Constructive trust is 'a trust which is imposed by equity in order to satisfy the demands of justice and good conscience, without reference to any express or presumed intention of the parties' (per Arifin Zakaria Chief Justice in Hassan bin Kadir & Ors v Mohamed Moidu bin Mohamad & Anor [2011] 4 MLJ 190; [2011] 4 AMR 677). Equity therefore demands that Murnina (and Rafie) must not be allowed to keep those monies and in the process unjustly enrich herself (see Fernrite Sdn Bhd v Perbadanan Nasional Bhd [2012] 1 MLJ 1; [2012] 5 MLRA 421).” (emphasis added) See also: Takako Sakao (f) v Ng Pek Yuen (f) & Anor (No. 3) [2009] 6 MLJ 751. 43 [94] Taking into consideration the risk assumed by the Defendant in proceeding with Arbitration and also the time, effort, energy and costs involved and also that the Award would not have been a reality if not for the work done by the Plaintiff, this Court would lean on the principle that equity tends towards equality. [95] I would order the same minor adjustments for the same reasons when addressing a claim for unjust enrichment. [96] The Plaintiff’s claim in constructive trust is quintessentially a claim in equity. According to Millets J in Lonrho Plc v Fayed and others (No. 2) [1991] 4 All ER 962, equity must retain its inherent flexibility and capacity to adjust to new situations: “Equity must retain what has been called its 'inherent flexibility and capacity to adjust to new situations by reference to mainsprings of the equitable jurisdiction': see Meagher, Gummow and Lehane Equity: Doctrines and Remedies (2nd edn, 1984) para

All courts of justice proceed by analogy, but a court of equity must never be deterred by the absence of a precise analogy, provided that the principle invoked is sound. As long 44 ago as 1838 Lord Cottenham LC remarked in Taylor v Salmon 4 My & Cr 134 at 141–142, 41 ER 53 at 56: 'I have before taken occasion to observe that I thought it the duty of this Court to adapt its practice and course of proceeding as far as possible to the existing state of society, and to apply its jurisdiction to all those new cases which, from the progress daily making in the affairs of men, must continually arise, and not, from too strict an adherence to forms and rules established under very different circumstances, decline to administer justice, and to enforce rights for which there is no other remedy'. [97] Our Court of Appeal has observed in Sinar Wang Sdn Bhd v Ng Kee Seng [2005] 2 MLJ 42, inter alia, held as follows: “Equitable remedies and doctrines are therefore flexible and adaptable to particular circumstances. The Court of Equity may therefore mould the relief that is to be granted on particular facts”. [98] Therefore the fact that the Defendant had refused to disclose the fees, costs and expenses incurred in pursuing and proceeding with the 45 Arbitration and getting an Award in its favour does not prevent this Court from moulding a relief that would meet the demands of justice and equity. [99] Learned counsel for the Plaintiff referred to the English Court of Appeal in Banner Homes Group plc v Luff Developments Ltd and another [2000] 2 All ER 117 which made reference to the case of Chattock v Muller (1878) 8 Ch.D 177. The Court of Appeal held that when there was any uncertainty, the court may resolve the dispute by referring to the earlier arrangement that the parties have agreed upon. It observed as follows: “In a case like this, where the Defendant has acquired the estate or part of it by a fraud on the Plaintiff, I think that the Court would be bound, if possible, to overcome all technical difficulties in order to defeat the unfair course of dealing of the Defendant, and I should not, in my opinion, be going too far if I compel the Defendant to give the whole estate to the Plaintiff at the price given for it, rather than that he should succeed in retaining it on account of any uncertainty as to the part which the Plaintiff is entitled to have. But I think the memorandum in the handwriting of the Defendant, which was given 46 to the Plaintiff at the interview of the 20th of June, relieves the Court in this case from any difficulty.” [100] In some jurisdictions their Legislature has deemed and designated this amount that has been carved out by a Main Contractor or Subcontractor for work done as trust money when the money should have been received by the Employer or the Main Contractor as the case may be. It is a statutory trust recognized by the relevant statute. [101] In Ontario, Canada, there is the Construction Lien Act, R.S.O. 1990, c. C.30 which recognizes the following situations of trust in their section 7 for Main Contractor and section 8 for Subcontractors as follows: “7. (1) All amounts received by an owner, other than the Crown or a municipality, that are to be used in the financing of the improvement, including any amount that is to be used in the payment of the purchase price of the land and the payment of prior encumbrances, constitute, subject to the payment of the purchase price of the land and prior encumbrances, a trust fund for the benefit of the contractor. R.S.O. 1990, c. C.30, s. 7 (1). Amounts certified as payable 47

Where amounts become payable under a contract to a contractor by the owner on a certificate of a payment certifier, an amount that is equal to an amount so certified that is in the owner’s hands or received by the owner at any time thereafter constitutes a trust fund for the benefit of the contractor. R.S.O. 1990, c. C.30, s. 7 (2). Where substantial performance certified

Where the substantial performance of a contract has been certified, or has been declared by the court, an amount that is equal to the unpaid price of the substantially performed portion of the contract that is in the owner’s hands or is received by the owner at any time thereafter constitutes a trust fund for the benefit of the contractor. R.S.O. 1990, c. C.30, s. 7 (3). Obligations as trustee

The owner is the trustee of the trust fund created by subsection

(1), (2) or (3), and the owner shall not appropriate or convert any part of a fund to the owner’s own use or to any use inconsistent with the trust until the contractor is paid all amounts related to the improvement owed to the contractor by the owner. R.S.O. 1990, c. C.30, s. 7 (4). 48 Contractor’s and subcontractor’s trust

Amounts received a trust

All amounts,

owing to a contractor or subcontractor, whether or not due or payable; or

received by a contractor or subcontractor, on account of the contract or subcontract price of an improvement constitute a trust fund for the benefit of the subcontractors and other persons who have supplied services or materials to the improvement who are owed amounts by the contractor or subcontractor. R.S.O. 1990, c. C.30, s. 8 (1). Obligations as trustee

The contractor or subcontractor is the trustee of the trust fund created by subsection (1) and the contractor or subcontractor shall not appropriate or convert any part of the fund to the contractor’s or subcontractor’s own use or to any use inconsistent with the trust until all subcontractors and other persons who supply services or materials to the improvement are paid all amounts related to the improvement owed to them by the contractor or subcontractor. R.S.O. 1990, c. C.30, s. 8 (2).” (emphasis added) 49 [102] Norms of fairness, justice and equity are fairly universal and more so with countries that share an English common law base unless local peculiarities and customs have modified it. [103] One can draw by way of analogy from the true character of retention sums held by an employer in the Court of Appeal case of Qimonda Malaysia Sdn Bhd v Sediabena Sdn Bhd & Anor [2011] 8 CLJ 269. Retention sums like certified progress claims are carved out and consigned for payment to honour one’s commitment to pay to the rightful person. [104] I agree that the test remains that of the intention of the parties, which has to be assessed in the context of the relevant relationship as opined by the learned authors Mohsin Hingun and Wan Azlan Ahmad in Equity and Trusts in Malaysia (Second Edition) at [2.021]-[2.027] of page 28-31. [105] The “retention sum” as explained in Qimonda case (supra) is for the specific purpose viz. for making good the defects only and the parties’ clear intention to create “trust” is manifested from the outset the contractor is the beneficial owner of the “retention sum”: “[18] The purpose of the deduction is to make provision for making good the defects only. If they are not applied for that purpose, it was 50 understood that they would be returned to the contractor after the expiry of the defect liability period. The usage of the word "deduction" for the creation of the retention monies from the certified sum under cl. 22 of the contract further support the fact that the parties recognized that the retention monies are contractor's monies. All the requisites of a valid trust were present and the parties had manifested a clear intention to create a trust since from the outset, the whole purpose of what had been done had been to ensure that the monies remained in the beneficial ownership of the respondents; and a trust is the obvious means of achieving this. As such the retention monies held by the appellant (employer) do not belong to the appellant (employer).” (emphasis added) [106] I fail to understand how that, just because the Defendant chose not to keep the identified 92% for release to the Plaintiff as agreed in the Letter of Agreement but to seek to keep the whole 100% to themselves, can change the character of the certified sums received from the Government of Malaysia and later received pursuant to a successful Award in their favour. The intention is clear and the sums identifiable and the purpose is clearly to pay the Plaintiff as the Defendant’s Subcontractor for the Works done. There is no good reason here why a trust should only be confined to 51 retention sum which may be used to set off costs of rectification works and not to certified progress claims sums or sums in the Arbitral Award which is quantified, final and binding. [107] Bearing in mind the risk involved in pursuing with Arbitration and the fact that the Plaintiff had been excluded from this exercise by the Defendent and considering it is the Plaintiff’s Works that form the stratum and subject matter of the Defendant’s claim against the Government of Malaysia, I would apply the equitable maxim of equity tends towards equality where the Sharing Formula is concerned and I would order an equal sharing of the total proceeds of the Award save for the 2 items identified above for the Head Office expenses and the loss of the CIDB License. The Defendant should further be allowed to keep the costs and expenses awarded in the Arbitration for themselves as the Plaintiff did not make any contribution towards that. [108] Admittedly both sides naturally gravitated towards downplaying, if not denying the role of the other altogether in the run up towards a successful Award in favour of the Defendant. The Defendant argued that the Plaintiff did not have to testify at all and was spared the rigors of preparation for the Arbitration and if I may the heat of cross-examination. However we all know that where construction work is concerned, most of the important items 52 would have been minuted in Site Daily Report, Minutes of Progress Meetings, Progress Claims submitted with supporting documents, certified claims, Variation Orders instructed and SO’s instructions and the like. If the Plaintiff’s documentations for the Works done had been lacking or not complete, it is doubtful if the Defendant could have succeeded. [109] In fact in a construction dispute arbitration, there should be little reliance on oral testimony and most of the key issues would have been reduced into writing. [110] On the other hand the Plaintiff’s insistence on the original 92:8 Sharing Formula would be unrealistic as it is the Defendant here that would have to spend hours preparing the documentations for the Arbitration and the general preparation with the solicitors in answering the Counterclaim of the Government of Malaysia and its justification that the termination had been lawful. Coupled with this is the risk that the Defendant has to take by way of a first line of payment should they fail with the corresponding consequence of having to pay the Government of Malaysia for the loss arising out of having to engage another contractor to complete the Works and the loss and expense arising out of the delay. 53 [111] I agree with the Plaintiff that in a constructive trust, a trust is imposed by equity in order to satisfy the demands of justice and conscience. As such, the intention of the parties and the terms in the trust relationship is immaterial though in this case the Court will hold the parties to the terms they originally bargained for as closely as possible bearing in mind always the different parameters that the parties are now assailed by. [112] Weighing the respective factors taken together as a whole, an equal apportionment of the proceeds of the Arbitral Award would tend towards meeting the demands of reasonableness, fairness, justice and equity. [113] The claim under constructive trust should yield a result no different from that under unjust enrichment where a further refinement to meet the demands of fairness and equity is concerned. The final fine-tuning of the reliefs shall be considered at the end of this judgment. Whether the Plaintiff’s claim for Unjust Enrichment is barred by Limitation. [114] The cause of action in unjust enrichment would arise differently from that of a breach of contract. In a case of a breach of contract the cause of action would have arisen from the date of breach of contract. 54 [115] The cause of action in unjust enrichment would arise from the date the Defendant here is enriched. See BP Exploration Co (Libya) Ltd v Hunt (No 2) [1982] 1 All ER 925. To insist that a cause of action in unjust enrichment must arise from the date of the breach of the Letter of Agreement or the termination of the Main Contract by the Government of Malaysia on 21.2.2007 would be both unrealistic and unfair not only on the Plaintiff but also on the Defendant. [116] Given the particular factual matrix of this case, the Defendant would not be having an Award in its favour until they proceeded with Arbitration and obtained the Interim Award and Final Award on 6.7.2011 and 10.10.2012 respectively and successfully resisted the Government of Malaysia’s application to set it aside. [117] This action brought in February 2016 was well within the 6 years period of limitation. [118] Until then, the Defendant cannot realistically and justifiably be said to be unjustly enriched. To require the Defendant to make payments to the Plaintiff before it receives the Award sum would be grossly unfair for at the point of termination and during the period running from that point in time, 55 not only had the Government of Malaysia not paid up any further sums due for Works done but they also had a Counterclaim against the Defendant. [119] In fact even if the Plaintiff’s action had been founded on contract, which in this case is not, it would be open to the Plaintiff to argue that the implied term of the Letter of Agreement was that in the event the Plaintiff had to pursue Arbitration with the cooperation of and in the name of the Defendant against the Government of Malaysia, the Defendant would only need to pay the Plaintiff upon receipt of payments from the Government of Malaysia. [120] Likewise if there is no Award in its favour and instead the whole of the Counterclaim of the Government of Malaysia is allowed, then there would be no cause of action in unjust enrichment but only the Defendant’s action against the Plaintiff for all the losses they have to suffer and pay the Government of Malaysia. [121] The learned author Low Weng Tchung in his book “The Law of Restitution and Unjust Enrichment in Malaysia” from whom learned counsel for the Defendant had taken the liberty to quote copiously, also opined as follows at paragraph [12.16] as follows: 56 “The better view is that a claim for restitution accrues at the date when the enrichment is received or the date the ground of restitution is established, whichever is the later.” [122] I am aware that in the Federal Court case of Globe Engineering Sdn Bhd v Bina Jati Sdn Bhd [2014] 7 CLJ 1, where there was “pay when paid” clause, it was held: “[33] ...But with termination of the sub-contract, the work thereunder would not progress any further. Given that work under the sub-contract would not progress any further, there was no further purpose for stage payments to finance work that had ceased and would not progress further, such that the purpose of para. 14 and cl. 11(b), indeed all provisions to do with interim certificates, had no further application, as the facts on the ground had moved beyond the purview of those provisions, which were spent and passe, to the stage of cl. 19. If the liability of the respondent were contingent, cl. would reflect that. Contingent liability was not reflected. Clause 19 merely provided that upon termination of the appellant's employment, the appellant would be paid the value of the sub-contracted works completed at the date of termination. Effect must be given thereto.” (emphasis added) 57 [123] I do not read Globe Engineering (supra) as prohibiting both parties from agreeing to a scheme where even if there has been termination of the Main Contract by the Employer, as between the Main Contractor and the Subcontractor, they can have the understanding that the Subcontractor would not demand for payment until the Main Contractor is paid at the end of a successful Arbitration. Whether the Plaintiff’s action in Constructive Trust is barred by Limitation [124] As for constructive trust, the trust relationship only arises at the earliest after the Interim Award was given to the Defendant on 6.7.2011 when the Defendant has unconscionably asserted its right to the whole of the monies which had been awarded for Works done in the Project by the Arbitrator. It arises from the time when the Defendant deprived the right of the Plaintiff as the beneficial owner to a share of the Award Sum. The decision to deprive the Plaintiff of his just entitlement to the Award Sum is clearly seen in the avowed intention to refuse to keep the Plaintiff posted on the progress of the Arbitration and to conceal from the Plaintiff’s knowledge the fact of the Interim and Final Award having been made in favour of the Defendant and even right up to the end of the trial, in refusing 58 to disclose when the Award Sum was paid or what were the legal fees, costs and expenses that were incurred by the Defendant in the Arbitration. [125] At no material time have the Defendants denied that they have come into the possession of the Award Sum which the Plaintiff asserted in held in trust for the Plaintiff for a part of it. [126] Section 22 (1) of the Limitation Act 1953 provides: “Limitation of actions in respect of trust property.

No period of limitation prescribed by this Act shall apply to an action by a beneficiary under a trust, being an action—

in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy; or

to recover from the trustee trust property or the proceeds thereof in the possession of the trustee, or previously received by the trustee and converted to his use.

Subject as aforesaid, an action by a beneficiary to recover trust property or in respect of any breach of trust, not being an action for which a period of limitation is prescribed by any other 59 provision of this Act, shall not be brought after the expiration of six years from the date on which the right of action accrued: Provided that the right of action shall not be deemed to have accrued to any beneficiary entitled to a future interest in the trust property, until the interest fell into possession.

No beneficiary as against whom there would be a good defence under this Act shall derive any greater or other benefit from a judgment or order obtained by any other beneficiary than he could have obtained if he had brought the action and this Act had been pleaded in defence." (emphasis added) [127] The following passage in the judgment of her Ladyship Nallini Pathmanathan J (now JCA) in Abdul Razak Sheikh Mahmood & Anor v Bhupinder Singh s/o Avtar Singh & 7 Ors [2012] 2 AMR 129 is both instructive and illuminating: "[34] The plaintiffs here in like manner seek to rely on s 22(1)(b) of the Limitation Act 1953 which prescribes that no limitation period is stipulated in the Act for the recovery of trust property from a trustee. Extrapolated to the present context, the plaintiffs argue that D1–D6 and D7 and/or D8 are the trustees who hold the Fabrika Technology 60 Sdn Bhd shares and the shop house on trust for them as beneficiaries. Accordingly they contend that the limitation period prescribed in s 6 does not apply to preclude their claim as they fall neatly within s 22(1)(b). The textbook Lewin on Trusts (18th edn) in the opening passages of chapter 44 on Limitation of Actions states, in relation to the policy of the English Limitation Act 1980 which has sections equipollent to the Limitation Act 1953 in Malaysia, and is therefore arguably applicable here, as follows: … Very broadly, the policy of the Act is to accord special treatment to cases in two categories: first, no protection is to be given for a fraudulent breach of trust and, secondly, a trustee is never to be allowed to keep trust property for himself. The Act therefore provides that no period of limitation prescribed by it should apply to claims in either category, which are left subject to no limitation period at all. In other cases, there is a six year time limit for bringing an action … [35] As s 22(1)(b) is pari materia with s 21(1)(b) of the English Act, the foregoing reasoning as to the policy behind the statute appears entirely cogent. In the instant case therefore the plaintiffs maintain that they have founded their claim essentially on the existence of a 61 trust whereby the defendants have in their possession trust property belonging to the plaintiffs as beneficial owners. There is, therefore, no limitation period prescribed they maintain, for the recovery of their own property held in trust for their benefit." (emphasis added) [128] I agree that section 22(2) of the Limitation Act 1953 is inapplicable for cases of constructive trust. Assuming for a moment that it is applicable, the constructive trust in the present claim only commence after the Interim Award and Final Award was given on 6.7.2011 and on 10.10.2012. The present suit is filed on 16.2.2016. As such, the Plaintiff’s claim is still within time. [129] Learned counsel for the Defendant also drew the Court’s attention to the decision of In Re Robinson; Mclaren v Public Trustee [1911] 1 Ch. 502 that limitation period is not applicable in three (3) situations provided that there is no improper on the part of the claimant:

if there are funds belonging to the person who has been overpaid, the Court may so adjust the rights as to rectify the overpayment; 62

a person has received a trust fund, and it is still in his hands, and still impressed with a trust, and of course he holds it as trustee and is bound to transfer it to the proper person;

where the trust funds or the proceeds of the trust funds have been received by a person with knowledge that they are wrongly paid to him; there, even though the funds do not remain in his hands, he must at all events be treated as a constructive trustee and liable to repay the value of the trust funds wrongly paid to him [130] In the present claim, the limitation bar ought not to be applicable because the unconscionable act of withholding monies belonging to the Plaintiff only occurred after the Interim Award was given on 6.7.2011 and the Final Award was given on 10.10.2012. [131] The Plaintiff had been taking steps to recover such monies, albeit wrongly, in the MJE suit and this suit was immediately filed after the Court of Appeal dismissed the Plaintiff’s appeal on 13.1.2016. [132] I would therefore hold that the Plaintiff’s action under Constructive trust is not barred by limitation. 63 Whether the Plaintiff’s claim for unjust enrichment is a claim for special damages that have to be specifically pleaded [133] Learned counsel for the Defendant submitted that the Plaintiff’s specific claim of RM11,420,791.73 falls squarely under the head of Special Damages. Hence, it ought to be pleaded specifically and strictly proved (See Ong Ah Long v Dr S Underwood [1983] CLJ Rep 300). Learned counsel further highlighted that the particulars of the sum claimed of RM11,420,791.73, however is completely omitted in the pleadings. [134] Learned counsel for the Defendant further relied on the commentary at page 334 of “Malaysian Rules of Court 2012- An Annotation 1” by LexisNexis with respect to particulars which must be pleaded pursuant to Order 18 rule 12(3) of Rules of Court 2012 (“ROC 2012”): “(5) Special damages:

Evidence of special damage cannot be led at the trial unless it is specifically pleaded: see Hayward v Pullinger & Partners [1950]1 All ER 581; cf general damages in MGG Pillai v Tan Sri Dato Vincent Tan Chee Yioun [1995] 2 MLJ 493; 64

even if pleaded, it must be adequately particularised: Ilkiw Samuels [1963] 1 WLR 991; in accident cases, particulars must be given so that the defendant is able to identify the accident and to know what case he has to answer: Pang Kim Guan v Lee Cheng Liam [1968] 2 MLJ 132; Gwee Kim Bock v Singapore Glass Manufacturers

particulars of facts which make the calculation of damages possible should also be pleaded: Perestrello E Companhia Limitada v United Paint Co Ltd, Same v

where the facts relied on do not support the claim for damages, the claim may be struck out: AB v South West Water Services Ltd [1993] 1 All ER 609, [1993] 1 QB 507; see also Rookes v Barnard [1964] AC 1129…” (emphasis added) [135] I have no quarrel with the above principle for cases of a claim for special damages. However the Plaintiff is not suing under tort and they are not seeking damages either in tort or contract. 65 [136] I agree with learned counsel for the Plaintiff that a claim for unjust enrichment is qualitatively different from that of damages. The Federal Court in Dream Property (supra) insightfully clarified through his Lordship Azahar Mohamed FCJ what is often mistakenly asserted as a claim for compensation or damages as follows: “[106] The passage above raises some vexed issues. On this, we have two observations. The first is that the majority of the Court of Appeal used the term 'compensation' in relation to the relief granted to the defendant. With respect, that term is inaccurate in the context of the right to restitution based on the law of unjust enrichment. As stated by Goff & Jones on The Law of Unjust Enrichment (8th Ed), (para 4- 01), 'the law of unjust enrichment is concerned with transfers of value between claimants and defendants, and a claim in unjust enrichment is 'not a claim for compensation for loss, but for recovery of a benefit unjustly gained by a defendant at the expense of the claimant''. In this way, the usage of the term 'restitution' should be contrasted with the term 'compensation'...” (emphasis added) 66 [137] Further the Federal Court in Dream Property (supra) cited with approval a passage taken from Goff & Jones where it was specifically stated that “the remedy of restitution differs from that of damages” as follows: “[132] The following critical question then arises: what proper remedy should be awarded to the defendant? On the remedy issue, it is instructive to refer again to Goff & Jones on The Law of Unjust Enrichment para 36-02, where it is stated: In every case where a defendant is unjustly enriched at a claimant's expense, English law gives the claimant a right to restitution from the defendant. The courts sometimes use the word 'restitution' to describe a measure of compensation for civil wrongdoing, and when it is used in this sense the word means 'restoring the claimant to the position he occupied before he was caused a loss by the defendant's wrong'. In this context, however, the word 'restitution' means something different, namely 'restoring the value received by the defendant to the claimant'. There is an obvious danger of confusion here, and these two meanings of the word must be kept separate. As Lord Hope said in Sempra Metals Ltd v IRC, 'the law of restitution is the 67 law of gain-based recovery, just as the law of compensation is the law of loss-based recovery' and 'the remedy of restitution differs from that of damages. It is the gain that needs to be measured, not the loss to the claimant. The gain needs to be reversed if the claimant is to make good his remedy'. (emphasis added) [138] At any rate the Plaintiff’s Claim is crafted broadly enough for the Court to mould a relief that would accord with and accommodate the justice of the case as follows in prayer (b) of their Amended Statement of Claim as follows: “(b) a Declaration that the Defendant has been unjustly enriched for the amount of RM11,420,471.73 at the expense of the Plaintiff or such other sum or sums as the Court shall deem fair, just and reasonable; ... In the alternative:

an order that the Defendant do restore the benefit received in the Interim Award and Final Award to the Plaintiff less 8% being the Defendant’s fees.” (emphasis added) 68 [139] I am further satisfied that the Plaintiff has explained how the sum of RM11,420,471.73 had been arrived at based on the various heads of claim as allowed by the learned Arbitrator. At any rate it has not been shown how the apportionment of the various heads of claims as allowed by the learned Arbitrator has prejudiced the Defendant in terms of being taken by surprise either by the application of the 92:8 Sharing Formula and an equal division from a so-called common pool heads of claims as allowed. [140] Since this claim of RM11,420,471.73 is not allowed for the reasons already given, I shall not labour on it any further. Whether laches apply to bar the Plaintiff’s claim in unjust enrichment and constructive trust. [141] Section 32 of the Limitation Act 1953 provides as follows:

“Acquiescence Nothing in this Act shall affect any equitable jurisdiction to refuse relief on the ground of acquiescence, laches or otherwise.” [142] I find no merits in the Defendant’s submission that laches apply to bar the Plaintiff’s Claim. In the first place, the Plaintiff’s causes of action 69 accrued only on 6.7.2011, at the earliest and given PW2’s evidence that she only learned of the Arbitration Award during the trial of the previous suit in 2015, then clearly there was no delay on the part of the Plaintiff in filing this action in 2016 (see: Q&A 8 to 15 PW – 2 DW, line 29 to 30 of page 30 and line 15 to 18 at page 33 of Notes of Proceedings for 20.9.2016). Hence, I would agree with the Plaintiff that there is no inaction or lack of action on the part of the Plaintiff as alleged. [143] In any event, the law is that delay by itself is never sufficient and more so when by all counts the Plaintiff’s cause of action is not time barred as argued above. I recall the case of Cheah Kim Tong & Anor v Taro Kaur [1989] 3 MLJ 252 at page 254 where it was observed as follows: “The word 'laches' is one of the most over-worked words in legal arguments before the courts and it does not seem to have been fully appreciated for its nature. It means definitely something more than a mere delay; it means such delay amounting to acquiescence. Here the word acquiescence is not quite the same acquiescence as used in equitable estoppel, where, generally a plaintiff stands by watching a violation of his right in progress and keeping silent, but here, there is a completed violation of a right and a plaintiff has become aware of it. He either assents to it, or his delay in asserting his right has been so long 70 as to give rise to an inference of such assent. Regard must be had to the change in a defendant's position which has resulted from a plaintiff's delay in bringing an action. On the facts in the instant case the plaintiffs had not been guilty of laches in the sense just stated, though I had a suspicion that counsel was speaking merely of mere inordinate delay. However, in this case, the court also observed that there was a provision of a statutory bar, i.e. s 9 of the Limitation Act 1953, and the defence of laches would not have applied in any event for the plaintiffs should be entitled to the full statutory period before their claim became unenforceable. Please see Re Pauling's Settlement Trusts, Younghusband v Coutts & Co [1962] 1 WLR 86 at p 115 and Tan Tuan Kiat & Anor v Pritam Singh Brar [1987] 1 MLJ 276.” (emphasis added) [144] In the case of Abdul Razak Sheikh Mahmood & Anor v Bhupinder Singh s/o Avtar Singh & Ors [2012] 3 MLJ 348 it was held that even where there had been considerable delay, the Court must still determine whether such delay had detrimentally affected the Defendant. “[71] While considerably more is said on this subject in the learned treatise, suffice to say that since the 19th century laches has been determined by applying the test put forward in the Lindsay Petroleum 71 Co v Hurd (1874) LR PC 221 (above) case by Lord Selborne as enunciated above. Applied to this case while there is indeed considerable delay amounting to about 13 years, the crucial factor is to determine whether such delay has resulted in any acts which detrimentally affect particularly the defendant. This in turn will determine where the balance of justice lies. On the facts of this case, and based on the evidence before this court, particularly the audited annual reports of D7 where a clear notation is made that the subject property is held on trust, it appears that no steps have been taken by the defendant to deal with the property. There was no evidence of any disposition to a third party. In fact such evidence as there is discloses that the property to date is still held by D8 as the legal registered owner. All requisite taxes have been paid and it would appear that the shop house has been utilised for by D7 and/or D8 throughout the years since the execution of the second agreement. To that extent it is the sums of monies paid out by D7 in respect of the property that disclose any such 'detriment' or pecuniary loss suffered by D7 and/or D8.” (emphasis added) 72 [145] I note that the Defendant did not plead or lead any evidence of detriment arising from the delay alleged so that the allegation of laches remain mere allegation. [146] If at all the delay, if any, has allowed the Defendant an extended period to enjoy the whole of the Award Sum to the exclusion of the Plaintiff. This is clearly not a fit case to apply the equitable principle of laches to cause injustice to the Plaintiff and to bar them of their claim altogether. Pronouncement [147] For all the reasons given above the Defendant cannot claim and keep the whole of the Award Sum to themselves. That would cause them to be unjustly enriched at the expense of the Plaintiff who did the whole of the Works under the Project. [148] I have stated that this is a fit and proper case where I may apply the principle that equity tends towards equality in deciding on the extent of restitutionary relief and the amount held in constructive trust. [149] There are, however, 2 items that ought to be deducted from the 50:50 sharing formula. These are the items on Head Office expenses of RM1,720,422.00 and the revocation of the Defendant’s CIDB license of RM1,732,941.00 which together amounts to RM3,453,363.00. 73 [150] This is to be deducted from the total principal sum of interim award and final award combined Award Sum of RM20,173,709.80 giving a balance RM16,720,346.80. [151] This sum subject to the 50:50 formula yielding a sum of RM8,360,173.40 which sum this Court grants judgment in favour of the Plaintiff against the Defendant under unjust enrichment or alternatively under breach of constructive trust. [152] This Court has left untouched the Costs of the Award and the Arbitration as these are that incurred by the Defendant who had borne the costs and expenses of Arbitration. As the Defendant had chosen not to give any evidence with respect to their solicitors’ fees, this Court would not be in a position to assist the Defendant further other than allowing it to keep for itself the Costs of the Award and the Arbitration Costs as ordered by the learned Arbitrator. [153] The said sum shall carry interest at 5% per annum from the date of the Statement of Claim i.e.16.2.2016 to date of realization. [154] After hearing the parties and looking at the days of trial and the documents submitted, the Court has granted costs of RM50,000.00 to be paid by the Defendant to the Plaintiff. Under the Rules of Court 2012, 74 interest shall run at the rate of 5% per annum on costs from the date of judgment to date of realization. (O59 r 24 ROC 2012) Dated: 29 September 2017. Sgd Y.A. LEE SWEE SENG Judge Construction Court High Court Malaya For the Plaintiff : Michael Chow and CK Foong (Messrs Foong & Tan) For the 1st Defendant : Liow Si Khoon together with Teo Ming Ho (Messrs Liow & Co.) Date of decision: 19 April 2017