Pearson Hardman Industries (M) Sdn Bhd v Mes Technoservice Malaysia Sdn Bhd (JA-22NCvC-40-02/2020)

This is the Plaintiff’s claim (“this Application”) for alleged unlawful termination and breach of contract, and the Defendant’s counterclaim for the Plaintiff’s purported failure to complete the work pursuant to such contract.

The Plaintiff company was appointed as a sub-contractor by the Defendant company to do retrofitting work on four rubber-tyred gantry cranes (RTGs) for an agreed price of MYR7 million (“the Business Contract”). The work commissioned was pursuant to the Defendant’s contract with Johor Port Berhad (“JPB”). After a deposit of MYR2.8 million had been paid to the Plaintiff, it had commenced work on the first RTG (“TC13”) in August 2019. The Defendant, however, sometime in October 2019, terminated the Business Contract for the Second to Fourth RTGs, and instructed the Plaintiff to leave the site after completing work on TC13. [3] The Plaintiff continued to work on TC13, and, according to the Plaintiff, completed it in November 2019. The Plaintiff left the site in December 2019, and thereafter issued a bill for MYR1.2 million for the work they had done on TC13. The Defendant, however, refused to pay on the basis that the Plaintiff had delayed and eventually had not completed the work. [4] The Plaintiff filed its claim on 13 February 2020, for the following: 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 3 a) Damages for expenses purportedly incurred by the Plaintiff for the purchase of parts, materials and various services for the Business Contract for the four RTGs; b) Damages for parts wrongfully taken by the Defendant; c) Payment for the work completed on TC13; d) General damages for loss of profit; and e) Aggravated damages

The Defendant, on the other hand, counterclaimed for the price difference allegedly incurred in completing the work on TC13, on the premise that the Plaintiff had failed to complete such work.

The Plaintiff’s claim was allowed only for damages to be assessed on a quantum meruit basis, whilst the Defendant’s counterclaim was dismissed, for the following reasons. Contentions, evaluation, and findings

The nub of the Plaintiff’s contention was that the termination of the Business Contract for the three RTGs was unlawful as it was not bona fide, and was premised on unsubstantiated allegations. The Plaintiff further claimed that despite completing the work on TC13, it had not been paid, and was not allowed to remove its inventory, when it left the site.

The Defendant’s case was that the Plaintiff had failed to meet the deadline for delivery of the parts by the purported deadline of 12 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 4 September 2019, and had failed to complete TC13 within 50 days from the date of commencing work on it, as prescribed by the Business Contract. The Defendant further claimed that the inventory had belonged to the Defendant, and hence it had not allowed the Plaintiff to remove it. The Defendant’s counterclaim was premised on the additional costs incurred to complete the work on TC13.

A perusal of the correspondence indicated that two notices of termination were issued. The first was an email sent by the Defendant’s Senior Project Engineer, one Mr Amirtamanickam (“DW2”) to one Madhan Kaliappan, the Operations Manager and Director of the Plaintiff (“PW1”) on 1 October 2019 (“Notice of Termination dated 1 October”) 2019 found at page 81 of the Agreed Bundle of Documents, stating that the Defendant had planned to manage the work on their own from the Second RTG onwards, and had instructed the Plaintiff to calculate their expenses. The Notice of Termination dated 1 October read: Beginning 2nd RTG, we plan to manage site work and other job by our own. Please calculate the expenses for parts and site work/ labours. We have calculated all our expenses for parts and site work. Before the end of this week, we need to discuss the expenses for both sides. Thus far we have released the amount mentioned below. 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 5 [10] The Plaintiff had objected to such termination, and as a result thereof, a second notice was issued on 11 October 2019 (“Letter of Termination dated 11 October”) found at page 88 of the Agreed Bundle of Documents, wherein DW1 had attempted to elaborate the reasons for terminating the Business Contract for the Second, Third and Fourth RTGs. The Letter of Termination dated 11 October read: RE: TERMINATION OF BUSINESS CONTRACT Based on project title “The Retrofitting Works to 4 Units RTG at Johor Bort Berhad”, we regret to inform you that Pearson Hardman Industries (M) Sdn Bhd (PHI) business contract will be terminated for the 2nd, 3rd, and 4th RTG for above mention project. Based on the feedback from our site engineer, Mr Amirthamanickam A/L Manickam Radhakrishnan, PHI as the sub-contractor for the project failed to fulfil the requirement and did not meet the deadline for parts delivery without any satisfactory explanation and relevant documents. Please confirm the receipt of this letter as termination of our business contract and the closing of our account. [Emphasis added]

The issue that arose was which notice of termination was the one that had terminated the contractual relationship between parties. The Plaintiff contended that it was the Notice of Termination dated 1 October which was devoid of reasons, whilst the Defendant submitted that the Letter of Termination dated 11 October was the one relied upon, wherein the justification for such termination was provided.

The following were observed regarding the Notice of Termination dated 1 October. The first was that it had made no reference to 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 6 terminating the Business Contract for the First RTG, namely, TC13. This meant that the Plaintiff was obliged to complete the work on TC13.

Secondly, the Notice of Termination dated 1 October had a tone of finality to it, as the language employed in such email contained no room for negotiation. I was, therefore, unable to agree with the Defendant’s contention that the Notice of Termination dated 1 October was merely a notice of intention to terminate, and that the termination was in actual fact the Letter of Termination dated 11 October. In any event, if the Notice dated 1 October was merely an intention to terminate, surely the Plaintiff would have been given a chance to remedy the purported breach. In this case, clearly there was no such opportunity was given, which was indicative that the Notice of Termination dated 1 October was the actual notice of termination.

The Plaintiff’s argument that the Letter of Termination dated 11 October was a mere afterthought was fortified by the earlier email dated 8 October 2019 from one Hideki Ishii, the Managing Director of the Defendant (“DW1”) to PW1, which referred to the fact that there would not be any negotiations pertaining to the termination. The email read: Regarding Retrofitting 4 Mitsubishi RTGs Project for JPB, we regret to inform you that we will do the job by ourselves from 2nd RTG onward and cancel/ modify the existing PO accordingly. Our engineers have informed every issue to you, and such issues were also reported to us by our engineers and also JPB. Therefore, there 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 7 cannot be any negotiations to cancel the PO and to change the agreed price. [Emphasis added]

Thirdly, the Notice of Termination dated 1 October did not contain any reason for the termination. This by itself rendered unlawful the termination of the Business Contract for the Second to Fourth RTGs.

On this note, I found instructive the Federal Court case of SPM Membrane Switch Sdn Bhd v. Kerajaan Negeri Selangor [2016] 1 CLJ 177, where it was stated that athough a notice of termination would not necessarily be bad in law in all cases if reasons are not provided in it, nonetheless, there are certain circumstances in which, as a matter of construction of contract, the recipient of the notice is entitled to have the reasons for termination communicated to it by the terminating party, especially where the contract provides for a 'grace period' in which the alleged defaulting party is entitled to remedy its allegedly defective performance to the satisfaction of the terminating party. This is clearly because a party that is afforded the opportunity to remedy deficiencies in performance cannot do so unless it has notice of the deficiencies, either actual or constructive.

Reference was also made to a plethora of authorities including the Court of Appeal cases of Joo Seng Trading Co v Commercial Importers and Distributors Sdn Bhd [2007] 2 CLJ 25, and Silver Concept Sdn Bhd v Brisdale Rasa Development Sdn Bhd [2005] 3 CLJ 259 on the importance of providing reasons for terminating a contract. 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 8 [18] At this juncture, it was apt to bear in mind that although the Plaintiff was the party who had claimed for unlawful termination, it was the Defendant who had the legal burden to justify the lawfulness of such termination. This was pursuant to section 103 of the Evidence Act, which reads: Section 103 – Burden of proof as to particular fact The burden of proof as to any particular fact lies on that person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person. [Emphasis added]

I was, therefore, unable to accept the Defendant’s contention that a breach remained a breach and that it was immaterial that the Notice of Termination dated 1 October had not provided the reasons for termination.

Last but not least, my observation of the chronology of events led to the irresistible inference that the Letter of Termination dated 11 October was issued only because the Plaintiff had strenuously objected to the Notice of Termination dated 1 October.

In the final analysis, after perusing the correspondences from the Defendant beginning 1 October 2019, my conclusion was that the Letter of Termination dated 11 October, could not be relied upon as it was an afterthought and lacked bona fide. 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 9 Whether the Defendant had proved Plaintiff’s failure to meet deadline

The Defendant further contended that the Letter of Termination dated 11 October was the proper notice of termination to be relied upon, as it had provided the reasons for such termination.

As alluded to earlier, my view was that the actual notice of termination was the one dated 1 October 2019, which had not contained any reference to the reasons for the termination of the Business Contract, let alone non-compliance with a deadline.

Even if I had agreed with the Defendant and taken cognisance of the Letter of Termination dated 11 October, my observation was that even in that notice of termination, no reference whatsoever was made to any deadline of 12 September 2019 for the parts delivery, that the Plaintiff had purportedly failed to adhere to.

The Defendant, however, drew the Court’s attention to the schedule that was attached to the email dated 4 June 2019, found at page 61 of the Agreed Bundle of Documents, to explain all the timelines provided to the Plaintiff. After scrutinising the schedule in the context of the chronology of events, I was of the view that there was no finality provided in these timelines. In fact, it was not disputed that most of these dates were not even adhered to by the parties, which rendered these schedules merely tentative, and unreliable for the purpose of imposing timelines on the Plaintiff. It was, therefore, inequitable for the Defendant to now claim that the Plaintiff had not complied with the deadline provided, namely 12 September 2019. 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 10 [26] In fact, DW2 himself was confused when he repeatedly referred instead to 11 August 2019 instead of 12 September 2019 as the deadline. This fortified the ambiguity of the purported deadline, which in my view was unilaterally imposed by DW2.

In the upshot, after perusing the correspondence and documents referred to by both the Plaintiff and Defendant, I was of the view that the deadline of 12 September 2019 had not been established.

The Plaintiff further submitted that in any event, the Defendant was estopped from claiming that such deadline was not adhered to, bearing in mind that even after such date, no action was taken. I agreed with the Plaintiff on this point, since by failing to object when the purported deadline had passed, the Defendant had adopted an inconsistent stand, which amounted to approbation and reprobation.

As such, it was my view that the Defendant, by its conduct, was estopped from relying on any such deadline, if at all.

The Defendant claimed that it was the Plaintiff who had elected not to proceed with the whole Business Contract although it was given the option to continue with the four RTGs, but that the Plaintiff had chosen to leave after completing TC13. The Defendant claimed that this was reflected in the minutes of the meeting between the parties dated 22 October 2019 (“Minutes of Meeting”) found at page 121 of the Agreed Bundle of Documents. 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 11

In my view, the Defendant’s contention was untenable for the following reasons. First and foremost, as alluded to earlier, the Notice of Termination dated 1 October was final and non-negotiable, and hence improbable for the Defendant to have given the Plaintiff the option to continue to work on the Second to Fourth RTGs.

Secondly, after the Notice of Termination dated 1 October was issued, the correspondence from the Defendant contained numerous and repeated complaints and dissatisfaction, with no indication that the Defendant had any intention for the Plaintiff to work on the Second to Fourth RTGs.

Thirdly, the Minutes of Meeting was not an accurate account of what had actually transpired, as acknowledged by DW1, as he himself claimed that the Minutes of Meeting was scanty, brief and did not contain any details.

Fourthly, the Defendant, in the meantime, had already engaged a new contractor to start work on the Second to Fourth RTGs. It was, therefore, improbable for the Defendant to have intended, or provided an opportunity for the Plaintiff to continue the Business Contract for the Second to Fourth RTGs.

As alluded to earlier, the Notice of Termination dated 1 October had merely stipulated that ‘Beginning 2nd RTG, we plan to manage site work and other job by our own’. This was indicative that there was no 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 12 termination with regard to the work on the First RTG, namely TC13. Even the Letter of Termination dated 11 October merely stipulated that the “business contract will be terminated for the 2nd, 3rd, and 4th RTG for above mention project.”. The Plaintiff, therefore, continued to work on TC13, and this fortified the Plaintiff’s contention that the Defendant had no issue about the work on TC13.

However, subsequent to 1 October 2019, the correspondence between the parties contained complaints which included the purported delay in completing the work on TC13.

It was undisputed that the Plaintiff had 50 days to complete the work on TC13 commencing 13 August 2019, but that it had only completed the same on 28 November 2019. Although there was in fact delay in the completion of work on TC13, a scrutiny of the evidence pointed to the fact that the pauses in the work by the Plaintiff were due to repairs performed by Papilla Sdn Bhd (“Papilla”), which was the warranty provider of TC13.

At this juncture, it must be underscored that TC13 was not amongst the original four RTGs initially identified for the Plaintiff to work on. TC13 was a damaged non-functional crane, which the Plaintiff was instructed to work on. TC13, therefore, had to be repaired by Papilla and retrofitted by the Plaintiff. It was admitted by DW1 that PW1 had been instructed by him to accommodate the repair work by Papilla, and the time taken by Papilla for the repair work was acknowledged by DW1 during cross-examination. 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 13 [39] This was fortified by the weekly progress reports from 17 September 2019 to 24 September 2019, and 24 September 2019 to 1 October 2019, produced by the Defendant, which indicated that Papilla had completed its repairs on TC13 only on 30 September 2019. It was palpable, therefore, that the delay could not be attributed solely to the Plaintiff. As such, it was inequitable for the Defendant to now claim that the Plaintiff had not met its deadline with regard to the work on TC13.

The Plaintiff further submitted that, in any event and as alluded to earlier, the Defendant was estopped from claiming that such deadline was not adhered to, bearing in mind that even after such date, no action was taken. At this juncture, I found instructive the Federal Court case of Boustead Trading (1985) Sdn. Bhd. v. Arab-Malaysian Merchant Bank Berhad [1995] 4 CLJ 283, where it was stated by Gopal Sri Ram JCA: The fundamental principle is that stated by Lord Cairns LC, viz, that the representor will not be allowed to enforce his rights where it would be inequitable having regard to the dealings which have thus taken place between the parties. To establish such inequity, it is not necessary to show detriment; indeed, the representee may have benefited from the representation, and yet it may be inequitable, at least without reasonable notice, for the representor to enforce his legal rights. Take the facts of Central London Property Trust Ltd v. High Trees House Ltd. [1946] 1 All ER 256, [1947] K.B. 130, the case in which Denning J breathed new life into the doctrine of equitable estoppel. The representation was by a lessor to the effect that he would be content to accept a reduced rent. In such a case, although the lessee has benefited from the reduction in rent, it may well be inequitable for the lessor to insist on his legal right to the unpaid rent, because the lessee has conducted his affairs on the basis that he would only have to pay rent at the lower rate; and a Court might well think 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 14 it right to conclude that only after reasonable notice could the lessor return to charging rent at the higher rate specified in the lease. Furthermore, it would be open to the Court, in any particular case, to infer from the circumstances of the case that the representee must have conducted his affairs in such a way that it would be inequitable for the representor to enforce his rights, or to do so without reasonable notice.

As such, the Defendant was estopped from raising the issue of the delay, since it had not taken action even after the expiry of 50 days from 13 August 2019. In fact, the Plaintiff continued to work unhindered on TC13 until November 2019. By failing to object when the purported deadline had passed, the Defendant had acquiesced to the continuation of the work by the Plaintiff, and to now claim that the Plaintiff had failed to comply with the deadline, amounted to approbation and reprobation, and was prejudicial and extremely inequitable to the Plaintiff.

The Defendant had not only contended that the delay with regard to TC13 was caused solely by the Plaintiff, but it had also counterclaimed that the Plaintiff had not completed the work on TC13, and as a result thereof, it had to engage another contactor to do so.

It was also observed that the complaints expressed by the Defendant subsequent to the Notice of Termination dated 1 October had never been raised all this while, ever since the Plaintiff had commenced work on TC13 beginning August 2019 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 15

The Plaintiff, therefore, continued to work on TC13 as instructed, with constant communication with the Defendant. TC13 had even undergone and passed an endurance test held by JPB. In fact, the Defendant had issued an endurance completion certificate that was also verified by JPB, with an endorsement that the work was ‘satisfactorily completed’.

The Defendant, in response, contended that although TC13 had completed the endurance test, there were several outstanding issues, and that there was an agreement with JPB to settle the same. In my view, this argument was untenable bearing in mind that the endorsement on the endurance completion certificate indicated that the work on TC13 was ‘satisfactorily completed’, and that there was no documentary evidence indicating any ‘outstanding issues’ regarding TC13. Furthermore, the Defendant had failed to adduce any evidence of any agreement with JPB to settle the alleged outstanding issues.

As such, it was inequitable for the Defendant to now claim that the work on TC13 had not been completed and to refuse to settle the amount of money incurred by the Plaintiff for work done on TC13.

In the present case, the importance of contemporaneous documents had to be underscored since there was substantial contradiction 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 16 between the oral testimony of DW1 and DW2, and the documentary evidence adduced.

It is trite law that when there is a conflict between contemporaneous documentary evidence and self-serving oral evidence, the court should accept the former. This was established by the Court of Appeal in Guan Teik Sdn Bhd v. Hj Mohd Noor Hj Yakob & Ors [2000] 4 CLJ 324, where it was stated by Siti Norma Yaakob JCA in the following passage: In cases where conflicting evidence are presented before a court, it is the duty of the court not only to weigh such evidence on a balance of probabilities but it is also incumbent upon the court to look at all the surrounding factors and to weigh and evaluate contemporaneous documents that may tend to establish the truth or otherwise of a given fact. In this instance the learned trial judge discredited the evidence of the appellant, accepted the evidence of the respondents wholeheartedly and disregarded the contemporaneous documents totally. We say that he had erred as he had failed to direct his mind as to the probative effect of the contemporaneous documents. He should, after accepting the respondents' evidence, weighed it against the contemporaneous documents and evaluate whether such documents support the respondents' oral testimony. We say that this evaluation exercise is most crucial for it must be remembered that the respondents were testifying to events that happened eighteen years ago whilst the contemporaneous documents speak of matters then existing at the time such documents, were issued... [Emphasis added]

In this case, the evidence of both DW1 and DW2 did not correspond with the contemporaneous documents. In fact, DW1 had admitted, during cross-examination that there was no documentary proof of the alleged complaints and deadlines. He was unable to explain why that was so, except to say that he had wanted to keep written 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 17 communication to a minimum, which in my view was not a satisfactory explanation. As such, reference was made to Tindok Besar Estate Sdn. Bhd. v. Tinjar Co. [1979] 1 LNS 119, where Chang Min Tat FJ had stated: ... the learned trial judge expressed himself to be completely satisfied with the veracity of the respondent's witnesses and their evidence. He purported to come to certain findings of fact on the oral evidence but did not notice or consider that the respondent's oral evidence openly clashed with its contemporaneous documentary evidence. For myself, I would with respect feel somewhat safer to refer to and rely on the acts and deeds of a witness which are contemporaneous with the event and to draw the reasonable inferences from them than to believe his subsequent recollection or version of it, particularly if he is a witness with a purpose of his own to serve and if it did not account for the statements in his documents and writings. Judicial reception of evidence requires that the oral evidence be critically tested against the whole of the other evidence and the circumstances of the case. Plausibility should never be mistaken for veracity. [Emphasis added.] [50] I also found instructive the case of Eastern & Oriental Hotel (1951) Sdn Bhd v. Ellarious George Fernandez & Anor [1989] 1 MLJ 35, where Wan Hamzah SCJ in the Supreme Court, after quoting with approval the observation made in "The Ocean Frost” [1985] 1 Lloyds Rep 1, had stated: It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents to the witnesses' motives, and to the overall probabilities can be of very great assistance to a judge in ascertaining the truth, said: 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 18 In commercial cases there is usually a substantial body of contemporary documentary evidence. This is not strictly speaking a commercial case, but the relevancy of contemporaneous documents nevertheless holds true. [Emphasis added.]

In my view, therefore, guided by the cases of Sivalingam v. Periasamy [1996] 4 CLJ 545, [1995] 3 MLJ 395, Len Min Kong v. United Malayan Banking Corp Bhd & Anor Appeal [1998] 2 CLJ 879 and Majlis Perbandaran Seremban v. Era Baru Sdn Bhd & Another Appeal [2018] 1 LNS 829, and after critically and holistically testing the oral evidence adduced through DW1 and DW2 with the contemporaneous evidence, I was of the view that it would be unsafe to rely on their testimony.

In the final analysis, based on all that have been submitted above and the contemporaneous documents produced before this Court, it was patently clear that the Defendant had failed to prove non-completion of the work on TC13.

Based on the principles distilled in the cases above, I was required to critically test the oral evidence of the Defendant’s witnesses against the whole of the other evidence and the circumstances of the case.

It is trite law that, apart from applying the standard of proof required by law, a trier of fact, in order to arrive at a decision according to law, 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 19 must judicially appreciate the evidence led before him upon the issue called for resolution. ‘Judicial appreciation is concerned with the process of evaluating the evidence for the purpose of discovering where the truth lies in a particular case. It includes, but is not limited to, identifying the nature and quality of the evidence, assigning such weight to it as the trier of fact deems appropriate, testing the credibility of oral evidence against contemporaneous documents as well as the probabilities of the case and assessing the demeanour of witnesses’: per Gopal Sri Ram JCA (as he then was) in Boonsom Boonyanit v Adorna Properties Sdn Bhd [1997] 2 MLJ 62.

With regard to the credibility of witnesses, reference is made to section 146 of the Evidence Act, which reads: Section 146 — Questions lawful in cross-examination When a witness may be cross-examined, he may, in addition to the questions hereinbefore referred to, be asked any questions which tend —

to test his accuracy, veracity or credibility;

to discover who he is and what is his position in life; or

to shake his credit by injuring his character, although the answer to such questions might tend directly or indirectly to criminate him, or might expose or tend directly or indirectly to expose him to a penalty or forfeiture. [Emphasis added.] 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 20 [56] In the present case, I had to take into consideration the witnesses’ power of observation, their accuracy for recollection, and capacity to explain what they remember. [57] I also found instructive the cases of Sean Thornton (a minor by his mother and next friend) v Northern Ireland Housing Executive [2010] NIQB 4 and McAllister v Campbell [2014] NIQB 24, where the following factors in assessing and evaluating a witness were considered: a) The inherent probability or improbability of representations of fact; b) The presence of independent evidence tending to corroborate or undermine any given statement of fact; c) The presence of contemporaneous records; d) The demeanour of witnesses; e) The frailty of the population at large in accurately recollecting and describing events in the distant past; f) Whether the witness take refuge in wild speculation or uncorroborated allegations of fabrication; and g) Whether the witness had a motive for misleading the court. 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 21 [58] At this juncture, I am also guided by Zabariah Mohd Yusof JCA (as she then was) in the Court of Appeal case of Sediabena Sdn Bhd v China Comservice (Hong Kong) Limited [2017] 1 LNS 2042, in the following words: …The learned trial judge preferred the evidence of the plaintiff whom she viewed as ‘more credible’ in support of their contention, as compared to the witnesses of the Defendant who were ‘evasive and blowing hot and cold in responding to questions in relation to the failure in providing the invoice in question as in so much it had portrayed untruthfulness on their part and also lack transparency as the parties to the agreement … [59] I also found extremely useful the observation of Sir George Farwell in the Privy Council case of Bombay Cotton Manufacturing Company v Motilal Shivlal ILR 1915 39 Bom 386, PC, where in addressing the credit of a witness upon cross-examination, he said that ‘it is most relevant in a case where everything depends on the judge’s belief or disbelief in the witness’ story.’ [60] Bearing in mind the aforesaid principles, I found DW2, especially, to be evasive and circuitous, and on several occasions during cross-examination, he was very defensive. His evidence was also marked by inconsistencies and confusion over the alleged deadline that he had supposedly communicated to PW1. I, therefore, found him unconvincing. I would have to also add that DW2, whilst testifying, took every opportunity to besmirch and blame PW1 for everything that had happened between the Plaintiff and Defendant. [61] DW1 was also an unconvincing witness. On several occasions, he had admitted that he had no proof of what he had averred to, and 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 22 even alluded to the fact that the issues between the Defendant and the Plaintiff was largely handed by DW2. [62] PW1, on the other hand, was candid in his answers. He conceded to certain facts such as the delay on the work on TC13 but had convinced me with his justification. I found him to be forthright and consistent as he did not mince his words or evade questions. In my view, he was earnest in his explanation, and did not strike me as someone whose evidence I had to view with circumspection. Although he had a tendency to veer into irrelevant matters, his evidence was intact, even after cross-examination. Discrepancies in his evidence, if at all, were minor, and on the whole, he was a convincing witness. [63] In a nutshell, therefore, the Defendant’s case was severely compromised not only by lack of contemporaneous documents but also by its witnesses, whose testimony was circumspect. Whether Defendant had proved its counterclaim [64] Bearing in mind that it was the Defendant which had the burden of proving that the termination of the Business Contract was lawful, it must be underscored that the standard of proof on the Defendant was on a balance of probabilities, a term which was described in Miller v Minister of Pensions [1947] 2 All ER 372 by Denning J (as he then was) as ‘more probable than not’ and which is ‘not so high as required in a criminal case…but if the probabilities are equal, it is not discharged’. Miller v Minister of Pensions has been assimilated into 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 23 Malaysian jurisprudence through several cases including Inas Faiqah bt Mohd Helmi (an infant suing through her father and next friend, Mohd Helmi bin Abdul Aziz) v Kerajaan Malaysia & Ors [2016] 2 MLJ

[65] The concept of balance of probabilities was further explained in Unsung Rasad v. PP [2019] 1 LNS 662, in which Abang Iskandar Abang Hashim JCA (as he then was), in adopting the English case of Re B [2008] UKHL 35, stated in the following passage: In the celebrated case of Miller v. Minister of Pensions [1947] 2 All ER 372, Denning J (as he then was) said: If the evidence is such that the tribunal can say 'we think it more probable than not' the burden is discharged, but if the probabilities are equal it is not. [17] That would invariably require that party involved having to lead or adduce affirmative evidence to prove his case, as the court shall presume the absence of those circumstances, to reach a level of proof of at least 51% probability against his adverse party. We would cite the English case of Re B [2008] UKHL 35, where Lord Hoffman had used a mathematical analogy to illustrate what needed to be proven by a party desirous of having judgement entered in his favour, like so: If a legal rule requires a fact to be proved (a 'fact in issue'), a judge or jury must decide whether or not it happened. There is no room for a finding that it might have happened. The law operates a binary system in which the only values are 0 and 1. The fact either happened or it did not. If the tribunal is left in doubt, the doubt is resolved by a rule that one party or the other carries the burden of proof. If the party who bears the burden of proof fails to discharge it, a value of 0 is returned and the fact is treated as not having happened. If he does discharge it, a value of 1 is returned and the fact is treated as having happened. [Emphasis added.] 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 24 [66] In the final analysis, it was my view that the reasons the Defendant had adduced for terminating the Business Contract were afterthoughts and that the complaints they averred to were not supported by documentary evidence. There was unlawful termination of the Business Contract for the Second to Fourth RTGs and breach of such contract for failing to pay the Plaintiff for the work done on TC13. The Defendant had failed to prove non-completion of the work on TC13, and as such its claim for additional costs incurred to complete TC13 was not justified. Whether Plaintiff was entitled to loss of profit [67] The subsequent issue that arose was what was the actual loss of profit suffered by the Plaintiff as a result of the unlawful termination of the Business Contract with regard to the Second to Fourth RTGs. [68] It is apt, at this juncture, to bear in mind that ‘it is not enough to write down the particulars and throw them at the head of Court, saying, “This is what I have lost; I ask you to give me this damages’: per Lord Goddard in Bonham-Carter v. Hyde Park Hotel Ltd [1948] The 64 TLR 177 cited in Sum Kum v Devaki Nair & Anor [1964] 3 MLJ 74. [69] Although the Business Contract for the Second to the Fourth RTGs was unlawfully terminated, the Plaintiff had not provided any document to prove loss of profit for such termination. As such, the claim for this item was not allowed. 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 25 Whether Plaintiff was entitled to aggravated damages [70] The concept of aggravated damages was explained by Lord Diplock in Broome v Cassell [1972] AC 1027 as ‘compensation for the injured feelings of the plaintiff, where the sense of injury resulting from wrongful physical act is justifiably heightened by the manner in which or motive for which the defendant did it.’ This definition has been approved and adopted by several Malaysian cases including Roshairee bin Abdul Wahab v Mejar Mustafa bin Omar & Ors [1996] 3 MLJ 337 and Sambaga Valli K R Ponnusamy v. Datuk Bandar Kuala Lumpur & Another Appeal [2017] 1 LNS 500, where in the latter case, it was stated by Mohd Zawawi Salleh JCA (now FCJ): …aggravated damages are classified as a species of compensatory damages, which are awarded as additional compensation where there has been intangible injury to the interest of personality of the plaintiff, and where this injury has been caused or exacerbated by the exceptional conduct of the defendant. [71] The authorities are indicative that whatever hurt, pain or insult that a plaintiff suffers is predicated on the contumelious behaviour and conduct of the defendant. Since the Plaintiff in this case is a corporation, and a non-human legal entity with no soul, it could only be injured, if at all, in its pocket, but could not have suffered personal injury to feelings and integrity: Rubber Improvement Ltd v. Daily Telegraph Ltd [1964] AC 234. [72] Although in the UK, it was held by Caulfield J in Messenger Newspapers Group Ltd v. National Graphical Association [1984] IRLR 397, that aggravated damages could be awarded to companies for 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 26 injury to feelings, the English courts have, slowly but surely, departed from Messenger Newspapers Group Ltd v National Graphical Association, and the trend is now that as displayed in Eaton Mansions (Westminster) Ltd v Stinger Compania de Inversion SA [2013] EWCA Civ 1308, where the English Court of Appeal, in its unanimous decision delivered through Patten LJ, held: The decision in Messenger on aggravated damages has not been followed by other judges at first instance; most notably by Gray J in Collins Stewart Ltd v. The Financial Times Ltd (No. 2) [2006] EMLR 5 at [30]-[32] and by Tugendhat J in Hays plc v. Hartley [2010] EWHC 1068 (QB) at [24] and Metropolitan International Schools Ltd v. Designtechnica Corp [2010] EWHC 2411 at [14]. We should, in my view, take the opportunity to hold that it was wrongly decided. Aggravated damages are not recoverable by a limited company for the reasons I have stated. [Emphasis added.] [73] In fact, in the Singapore case of Golden Season Pte Ltd and others v Kairos Singapore Holdings Pte Ltd and another [2015] 2 SLR 751, George Wei JC explained that the decision in Messenger Newspapers was actually based on exemplary damages rather than aggravated damages. Whilst the English High Court in Messenger Newspapers Group Ltd v National Graphical Association [1984] 1 All ER 293 (“Messenger Newspapers”) case awarded aggravated damages to a corporate plaintiff, the court there was more concerned with the need to punish the defendant for his deliberate wrong doing (see also Gatley 2013 at para 9.20). On this basis, Messenger Newspapers is really a decision on exemplary damages rather than aggravated damages. [Emphasis added.] 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 27 [74] On the above-mentioned grounds, the Plaintiff being a corporate entity, was disentitled to claim for aggravated damages. Conclusion [75] Although the Plaintiff had established that the Business Contract was unlawfully terminated and that it had not been paid for work done on TC13, it must also be borne in mind that the Plaintiff had received from the Defendant a deposit of MYR2.8 million. Hence, it was my view that damages should be assessed on a quantum meruit basis only. [76] In the upshot, based on the aforesaid reasons, and after careful scrutiny and judicious consideration of all the evidence before this Court, and written and oral submissions of both parties, the Defendant’s counterclaim was dismissed, the Plaintiff’s claim was allowed in principle with costs, only for damages to be assessed on a quantum meruit basis. Dated: 18 December 2021 SIGNED …………………………………………. (EVROL MARIETTE PETERS) Judicial Commissioner High Court, Johor Bahru 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 28 Counsel: For the Plaintiff – R Jayabalan and Hidayah Hashim; Messrs R Jayabalan For the Defendant – Jimmy SY Liew; Messrs Shearn Delamore & Co Cases referred to: ➢ Bombay Cotton Manufacturing Company v Motilal Shivlal ILR 1915 39 Bom 386, PC ➢ Bonham-Carter v. Hyde Park Hotel Ltd [1948] The 64 TLR 177 ➢ Boonsom Boonyanit v Adorna Properties Sdn Bhd [1997] 2 MLJ 62. ➢ Broome v Cassell [1972] AC 1027 ➢ Eaton Mansions (Westminster) Ltd v Stinger Compania de Inversion SA [2013] EWCA Civ 1308 ➢ Eastern & Oriental Hotel (1951) Sdn Bhd v. Ellarious George Fernandez & Anor [1989] 1 MLJ 35 ➢ Golden Season Pte Ltd and others v Kairos Singapore Holdings Pte Ltd and another [2015] 2 SLR 751 ➢ Guan Teik Sdn Bhd v. Hj Mohd Noor Hj Yakob & Ors [2000] 4 CLJ 324 ➢ Inas Faiqah bt Mohd Helmi (an infant suing through her father and next friend, Mohd Helmi bin Abdul Aziz) v Kerajaan Malaysia & Ors [2016] 2 MLJ 1 ➢ Joo Seng Trading Co v Commercial Importers and Distributors Sdn Bhd [2007] 2 CLJ 25 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 29 ➢ Silver Concept Sdn Bhd v Brisdale Rasa Development Sdn Bhd [2005] 3 CLJ 259 ➢ Kwang Boon Keong Peter v Public Prosecutor [1998] 2 SLR 592 ➢ Len Min Kong v. United Malayan Banking Corp Bhd & Anor Appeal [1998] 2 CLJ 879 ➢ Majlis Perbandaran Seremban v. Era Baru Sdn Bhd & Another Appeal [2018] 1 LNS 829 ➢ McAllister v Campbell [2014] NIQB 24 ➢ Messenger Newspapers Group Ltd v. National Graphical Association [1984] IRLR 397 ➢ Miller v Minister of Pensions [1947] 2 All ER 372 ➢ Roshairee bin Abdul Wahab v Mejar Mustafa bin Omar & Ors [1996] 3 MLJ 337 ➢ Rubber Improvement Ltd v. Daily Telegraph Ltd [1964] AC 234 ➢ Sambaga Valli K R Ponnusamy v. Datuk Bandar Kuala Lumpur & Another Appeal [2017] 1 LNS 500 ➢ Sean Thornton (a minor by his mother and next friend) v Northern Ireland Housing Executive [2010] NIQB 4 ➢ Sediabena Sdn Bhd v China Comservice (Hong Kong) Limited [2017] 1 LNS 2042 ➢ Sivalingam v. Periasamy [1996] 4 CLJ 545, [1995] 3 MLJ 395 ➢ SPM Membrane Switch Sdn Bhd v. Kerajaan Negeri Selangor [2016] 1 CLJ 177 ➢ Sum Kum v Devaki Nair & Anor [1964] 3 MLJ 74 ➢ "The Ocean Frost” [1985] 1 Lloyds Rep 1 ➢ Tindok Besar Estate Sdn. Bhd. v. Tinjar Co. [1979] 1 LNS 119 ➢ Unsung Rasad v. PP [2019] 1 LNS 662 18 December 2021 ……………………………………………………………………………………………… ________________________________________________________________________ 30 Legislation referred to: ➢ Evidence Act 1950 – sections 103, 146