PERUNDING IZA'D SENDIRIAN BERHAD v Ketua Setiausaha Kementerian Pertahanan Malaysia (KA-12BNCvC-7-10/2024)

SECRETARY GENERAL OF THE

GOVERNMENT OF MALAYSIA --- RESPONDENTS (In The Matter Of Suit No: KA-B51NCVC-4-09/2018 In The Sessions Court At Alor Setar, Kedah Darul Aman) BETWEEN PERUNDING IZA’D SENDIRIAN BERHAD (Co. No: 365496-V) --- PLAINTIFF 28/01/2026 23:27:51 KA-12BNCvC-7-10/2024 Kand. 38

SECRETARY GENERAL OF THE

GOVERNMENT OF MALAYSIA --- DEFENDANTS GROUNDS OF JUDGMENT

This appeal concerns a claim for professional consultancy fees arising from the Projek Pembinaan Kem Batalion Infantri, Tok Jalai, Kedah. It traverses the intersection of procedural compliance, the strict doctrine of privity in "Design and Build" procurement models, and the finality of litigation under the principle of res judicata.

The Appellant, Perunding Iza’d Sendirian Berhad, a firm of mechanical and electrical engineers, seeks to overturn the decision of the Sessions Court, which dismissed its claim against the Government of Malaysia (Respondents). The core of the Appellant's grievance is the contention that it completed 80% of the requisite consultancy work— comprising tender-ready designs and Bills of Quantities—and is thus entitled to remuneration beyond the 1.15% preliminary fee previously adjudicated.

The factual matrix is complicated by the Appellant’s prior litigation against the main contractor, Usima Sdn Bhd, which concluded in the Court of Appeal in 2016. The Appellant now seeks to leverage findings from that 2016 judgment to anchor a fresh cause of action against the Government. The Respondents resist this, invoking limitation, privity of contract, and estoppel

The Appellant was appointed by the Ministry of Defence (“MINDEF”) on 15 May 2002 to provide professional consultancy services for the project. Subsequently, the Ministry of Finance directed that the project be implemented under a Design and Build procurement model. As a result, the Plaintiff was required to be absorbed into the organisation of the main contractor, Usima Sdn Bhd, and no longer contracted directly with

After a prolonged delay, the project was revived in 2006. During this period, the Plaintiff prepared design and schematic drawings and Bills of Quantities (“BQ”), which were utilised by Usima in negotiating the project price with MINDEF.

Shortly thereafter, the relationship between the Plaintiff and Usima deteriorated, culminating in a mutual termination agreement dated 1 November 2007. MINDEF approved the Plaintiff’s withdrawal from the project on the condition that all design work be surrendered and the formal termination letter be delivered. Following the Plaintiff’s exit, Metrik Bersekutu was appointed as the replacement consultant. Earlier Proceedings Against Usima 7. In 2011, the Plaintiff commenced proceedings against Usima to recover outstanding professional fees amounting to approximately RM1.03 million. Although the High Court allowed the claim, the decision was reversed by the Court of Appeal on 10 May 2016 (“2016 Court of Appeal’s Grounds of Judgment”). The Court of Appeal held that MINDEF, and not Usima, was responsible for the Plaintiff’s appointment and the payment of professional fees. The Court further held that the Plaintiff was only entitled to fees of 1.15% under the JKR Scale of Fees, being the applicable rate for the completion of the initial design and schematic stage. Present Action Against the Government 8.. Relying on the findings in the 2016 Court of Appeal’s Grounds of Judgment, the Plaintiff commenced the present action in Suit No. KA-B51NCvC-4-09/2018 against the Ketua Setiausaha Kementerian Pertahanan Malaysia and the Government of Malaysia. The Defendants raised, inter alia, the defences of limitation under the six-year statutory period, res judicata on the basis that the issues had already been finally determined in the Usima litigation, and the absence of a valid cause of action, contending that the grounds of judgment in the earlier case did not give rise to any fresh or independent cause of action against non-parties to that suit. Decision of the Sessions Court and this Appeal 9. In this present action, after deciding to accept the Defendants’ objections, the Sessions Court dismissed the Plaintiff’s claim. Unsatisfied with this decision, the Plaintiff appealed to this Court.

The central issue on appeal is whether the learned Sessions Court Judge has erred in failing to recognise that the Plaintiff had completed approximately 80% of the consultancy work, allegedly evidenced by the delivery of tender-ready designs and complete Bills of Quantities and was therefore entitled to professional fees beyond the 1.15% allowed for preliminary design work.

In limine, the Respondents raised a Preliminary Objection (PO) regarding the Appellant’s use of Form 111 instead of Form 111A. The essence of the PO was that the Appellant’s Notice of Appeal was defective as it was filed using the incorrect format.

The Respondents argued that, as the appeal was against a decision other than one made after a full trial (contending the Sessions Court decision was based on legal thresholds rather than merits), the Appellant should have used Form 111A under Order 55 Rule 5 of the Rules of Court 2012, rather than Form 111 under Order 55 Rule 3. They contended that this procedural non-compliance rendered the appeal incompetent.

In response, the Appellant argued that the Respondents had waived their right to object. They pointed to the fact that the Respondents’ solicitors had approved the draft Index of the Record of Appeal without raising any concerns about the format of the Notice of Appeal. The Appellant relied on the principles of waiver and estoppel, as discussed in Puncak Alam Housing Sdn Bhd v Menta Construction Sdn Bhd & Anor [2013] 1 LNS 148.

Furthermore, the Appellant cited Siti Nur Aishah Ishak v Golden Plus Holdings Berhad [2018] 1 LNS 2162, asserting that the Respondents failed to provide the mandatory 4-day written notice of their intention to raise a PO as required by Rule 11.04 of the Rules and Rulings of the Bar Council.

This Court dismissed the PO. It is a settled principle of modern civil procedure, enshrined in Order 1A of the Rules of Court 2012, that technical non-compliance should not trump the overriding interest of justice. The Respondents were fully apprised of the grounds of appeal; no substantial miscarriage of justice or prejudice occurred that could not be remedied by costs. To shut out a litigant on a mere defect of form would be to prioritize pedantry over substance. The Appeal 16. In the present appeal, the Appellant challenges the decision of the Sessions Court dismissing its claim for outstanding professional consultancy fees. The appeal is premised on several alleged errors of fact and law.

First, the Appellant contends that the learned Sessions Court Judge erred in finding that the Appellant failed to prove completion of 80% of the consultancy work. The Appellant relies on the evidence of SP1, which was not materially challenged, that the Appellant had prepared the designs, completed the schematic drawings, and produced the Bills of Quantities. These documents were subsequently used by Usima Sdn Bhd to negotiate the project price with MINDEF, resulting in the award of a RM92 million contract. The Appellant maintains that this stage of work constitutes 80% completion in accordance with the Registration of Engineers Act 1967 (Notification of Scale of Fees).

Second, the Appellant argues that the doctrine of res judicata barred the issue of work progress and ought not to have been revisited at the full trial. The Respondents had earlier raised the same contention that the Appellant failed to prove 80% completion during interlocutory applications to strike out the writ. Those applications were dismissed, and the Court of Appeal upheld the dismissals. The Appellant submits that the issue had therefore been finally determined, rendering it impermissible for the trial court to rely on the same point to dismiss the claim after trial.

Third, the Appellant submits that the learned Judge misdirected himself in interpreting the 2016 Court of Appeal’s Grounds of Judgment arising from the earlier litigation against Usima Sdn Bhd. The Appellant contends that the 2016 decision had conclusively determined that MINDEF or the Government, and not Usima, was the party responsible for the Appellant’s appointment and payment of professional fees. Liability was therefore no longer in issue, and the only remaining matter for determination in the present proceedings was quantum. In addition, the Appellant disputes the finding that the payment of RM285,266.13 made by Metrik Bersekutu constituted a full and final settlement. There was no evidence to support the conclusion that this sum represented complete satisfaction of the Appellant’s entitlement for the work performed.

Fourth, the Appellant challenges the learned Judge’s acceptance of the Respondents’ witness (SD1) that the Appellant’s work was limited to a 15% schematic design phase. This position, the Appellant argues, is internally inconsistent and mathematically unsustainable. The Respondents asserted that 15% of the consultancy fees amounted to RM149,387.19, yet the Appellant had already been paid RM285,266.13. The Appellant submits that this discrepancy demonstrates that the work completed necessarily exceeded the schematic phase and supports the Appellant’s claim that the actual progress had reached the 80% stage.

Finally, the Appellant highlights that a condition imposed upon its withdrawal from the project was that it remained professionally responsible for the designs it had prepared until completion of the project. The Appellant argues that it is illogical and unjust for it to continue bearing professional liability for the design work while being denied payment for work that was completed, accepted, and utilised by MINDEF.

The Respondents, namely the Ketua Setiausaha Kementerian Pertahanan Malaysia and the Government of Malaysia, submit that the learned Sessions Court Judge was correct in dismissing the Appellant’s claim, as the Appellant has no legal basis to recover any further professional fees. The Respondents rely on the following principal grounds.

First, the Respondents contend that no lawful cause of action arises from the 2016 Court of Appeal’s Grounds of Judgment in the earlier litigation involving Usima Sdn Bhd. They submit that a judgment operates only as a determination of rights and liabilities between the parties before the court and does not constitute a statement of facts capable of creating new rights or liabilities against non-parties. As the Respondents were not parties to the Usima litigation and had no opportunity to defend themselves, to call witnesses, or to challenge the evidence, it is legally impermissible to treat the 2016 judgment as the foundation of liability against them.

Second, the Respondents submit that there is a complete absence of privity of contract between the Appellant and the Respondents. The project was implemented under a design-and-build procurement model, under which the contractual relationship existed solely between the Government and the main contractor, Usima Sdn Bhd. The Appellant was merely a sub-consultant absorbed into Usima’s organisation. Under the doctrine of privity of contract, any claim for professional fees lies against Usima and not the Government. Further, a mutual termination agreement (“MTA”) was entered into between the Appellant and Usima, thereby confirming the absence of any direct contractual nexus between the Appellant and the Respondents. On this basis, the Respondents argue that the Appellant has sued the wrong parties.

Third, the Respondents contend that the Appellant’s claim is barred by statutory limitation under the Limitation Act 1953, which prescribes a six-year limitation period for contractual claims. They submit that the cause of action accrued, at the latest, on 13 January 2010 when MINDEF formally rejected the Appellant’s claim for payment. As the present suit was only commenced in 2018, the claim is said to be fatally out of time and ought not to have been entertained.

Fourth, the Respondents dispute the Appellant’s assertion that it had completed 80% of the consultancy work. They submit that, under the BEM/JKR Scale of Fees, the schematic design phase constitutes only 15% of the total consultancy work. There is no evidence that the Appellant proceeded to the tender or construction stages, and the Appellant’s own witness (SP1) admitted under cross-examination that the Appellant only completed the design and schematic drawings. The Respondents characterise the Appellant’s claim of 80% completion as a bare and self-serving assertion, unsupported by contemporaneous documentary or objective evidence.

Fifth, the Respondents maintain that the payment of RM285,266.13, made through the replacement consultant, Metrik Bersekutu, constituted a full and final payment for the work actually performed by the Appellant. They submit that, based on the applicable 1.15% fee entitlement for the schematic phase, the Appellant was only entitled to RM149,391.24. Accordingly, the Appellant has already been fully paid and is, in fact, arguably overpaid. On this footing, the Respondents contend that no outstanding sum is due.

Finally, the Respondents argue that the present action amounts to a re-litigation of matters that were, or ought to have been, raised in the earlier 2011 proceedings. Relying on the principle articulated in Lin Wen-Chih & Anor v. Pacific Forest Industries Sdn Bhd & Anor [2023] 8 CLJ 671; [2023] 3 MLJU 1770, the Respondents submit that the dismissal of earlier interlocutory striking-out applications does not preclude them from raising the defence of res judicata at the trial stage. The Appellant’s attempt to bring a subsequent suit against the Government is said to constitute “litigation by instalment” and amounts to an abuse of the court’s process. Court’s Findings 29. Having reviewed the Record of Appeal and the extensive submissions from both learned counsel, this Court finds no appellate merit in the Appellant's case. The decision of the learned Sessions Court Judge is affirmed. My reasons are structured as follows.

Before addressing the substantive merits, I must address a preliminary issue raised by the Appellant in their Written Reply and Oral Submissions. The Appellant submitted that the parties had agreed, via the "Statement of Agreed Issues" (Document J), to limit the trial in the Sessions Court to the issue of quantum only. Relying on CIMB Bank Bhd v. Goh Ah Thiam [2023] 7 CLJ 171, the Appellant argued that the agreed issues bind the Court and cannot traverse beyond them to decide on liability.

I am unable to agree with this submission. A perusal of the Record of Appeal shows that liability remained a live issue. The fundamental principle of res judicata concerns the Court's jurisdiction to hear the claim. If the cause of action is barred by res judicata or limitation, there can be no "quantum" to assess, regardless of any pre-trial case management documents. A court cannot proceed to assess damages on a claim that has no basis in law or has already been adjudicated. Therefore, the Sessions Court Judge was not precluded from dismissing the claim on the issue of liability and estoppel.

Distinct from the procedural bars, the Appellant’s claim suffers from a fundamental substantive defect: the absence of privity of contract. A hallmark of this model is the "absorption" of consultants into the main contractor's organization—in this case, Usima Sdn Bhd.. There was no direct contractual nexus between the Appellant and the Government. As such, any claim for professional fees lies against the main contractor, not the Respondents. Consequently, the Appellant’s contractual recourse lay solely against Usima. The mutual termination agreement dated 1 November 2007 was executed between the Appellant and Usima, further evidencing that the legal relationship was confined to those two parties. By suing the Government, the Appellant has sued a stranger to the contract. The doctrine of privity remains a cornerstone of our contract law; absent a direct contract or a novation, no liability can attach to the Respondent.

While this finding alone is sufficient to dispose of the appeal, I shall nonetheless address the findings on res judicata and the merits for completeness.

Concerning the main issues of the appeal, the legal principles governing appeals are well settled. An appellate court is slow to interfere with a trial court's findings of fact and will do so only where there has been an apparent misdirection or the decision is plainly wrong.

This principle was affirmed by the Federal Court in Ng Hoo Kui & Anor v Wendy Tan Lee Peng (administratrix for the estate of Tan Ewe Kwang, deceased) & Ors [2020] 12 MLJ 67, adopting the “plainly wrong” test as articulated by the UK Supreme Court in McGraddie v McGraddie [2013] WLR 2472. The principle dictates that a trial judge's findings, derived from the unique privilege of seeing and hearing witnesses— observing their demeanour, hesitation, and nuance—are entitled to great respect. An appellate court, relying solely on the printed record, should not interfere unless it can affirmatively conclude that the trial judge was plainly wrong.

The rationale for this principle is that the trial judge has the advantage of seeing and hearing the witnesses, an advantage not available to an appellate court, which relies solely on the written record. Unless the appellate court is satisfied that the trial judge was plainly wrong, it must defer to the findings made at trial.

Accordingly, this Court is bound to exercise caution and restraint before disturbing the factual findings of the trial court. This Court agrees that the learned Sessions Court Judge had fully considered the evidence adduced by the parties, including the documentary exhibits, and did not confine himself merely to the arguments previously raised by the Respondents in the earlier striking-out application.

The mere existence of grounds or observations in a written judgment does not, by itself, constitute a valid cause of action. In the present case, the Appellant’s claim was premised on findings made in earlier judicial proceedings, notwithstanding that the Respondents were not parties to those proceedings.

The Supreme Court in Government of Malaysia v Lim Kit Siang [1988] 2 MLJ 12 defined a “cause of action” as a set of facts showing that the act or omission of the defendant has infringed a plaintiff’s legal right.

Accordingly, any cause of action asserted by the Appellant against the Respondents must be established through proper evidential procedures. This requirement was not satisfied in the present case.

In contrast, counsel for the Respondents submitted that the Appellant’s failure to include the Respondents in the 2011 action against Usima Sdn Bhd gives rise to estoppel. The Appellant is therefore precluded from reviving claims that have effectively been determined earlier by commencing fresh proceedings against different parties.

The Appellant selectively relied on portions of the earlier judgments favourable to its case and attempted to re-litigate matters already decided, particularly the finding that the Appellant had only completed works up to the design and schematic drawings stage. The Appellant’s attempt to recharacterise the scope of work and fee scale based on the Registration of Engineers Act is, in substance, an impermissible re-litigation of settled issues.

In Brijnandan Singh Bhar @ Brijnandan Singh Bhar a/l Gurcharan Singh v BMW Malaysia Sdn Bhd & Ors [2019] MLJU 1737, the court reaffirmed the distinction between cause of action estoppel and issue estoppel, as articulated by the Supreme Court in Asia Commercial Finance (M) Bhd v Kawal Teliti Sdn Bhd [1995] 3 MLJ 189. The law on this subject is settled. As elucidated by the Supreme Court, the doctrine of res judicata serves two fundamental policy objectives: interest rei publicae ut sit finis litium (that there should be an end to litigation) and nemo debet bis vexari pro eadem causa (that no one should be vexed twice for the same cause). However, its application distinguishes between ' cause of action estoppel’ and ‘issue estoppel’. Cause of action estoppel bars a plaintiff from bringing a fresh suit on a cause of action that has already been determined in a final judgment. Issue estoppel is wider; it precludes a party from re-agitating any issue of fact or law that was a necessary ingredient in a prior judicial determination, even if the subsequent suit involves a different cause of action. In the present case, the Appellant faces the insurmountable hurdle of both.

The Respondents submit that only after the Appellant’s claim against Usima Sdn Bhd failed, including the refusal of leave to appeal, did the Appellant commence the present action against the Respondents. This supports the application of estoppel and the prohibition against multiplicity of proceedings.

It is the finding of this Court that the present action is barred by res judicata in its broader sense. The issues concerning the stage of work completed and the applicable scale of fees had already been determined on their merits by the Court of Appeal in the 2016 Usima decision. Permitting the Appellant to pursue the same issues in a subsequent suit against different parties would amount to litigation by instalments, which constitutes an abuse of the court’s process.

The Appellant vigorously contended that the Respondents were estopped from raising the defence of res judicata at trial because their earlier interlocutory application to strike out the suit on the same ground had been dismissed. Relying on Hartecon JV Sdn Bhd & Anor v Hartela Contractors Ltd [1997] 2 CLJ 104 and the Court of Appeal’s decision in Lin Wen-Chih & Anor v. Pacific Forest Industries Sdn Bhd & Anor [2021] 4 MLJ 367, the Appellant submitted that the earlier dismissal of the Respondents' striking-out application was a binding interlocutory order that conclusively determined the issue of res judicata, thereby preventing the trial court from revisiting it. In Lin Wen-Chih (supra), the Court of Appeal held that the dismissal of a striking-out application lacks the requisite finality to find a plea of res judicata.

With respect, the Appellant failed to appreciate that the legal position has been clarified by the Apex Court in the subsequent appeal of Lin Wen-Chih & Anor v. Pacific Forest Industries Sdn Bhd & Anor [2023] 8 CLJ 671; [2023] 3 MLJU 1770. The Federal Court held that the dismissal of a striking out application is interlocutory and lacks the finality required to prevent the trial court from re-evaluating the issue of Res Judicata after hearing full evidence. A refusal to strike out a case summarily merely means the case is not "plain and obvious" at that early stage; it does not preclude the trial judge from finding, after a full trial, that the doctrine of Res Judicata indeed applies. Therefore, the Sessions Court Judge was correct in law to consider and uphold the plea of Res Judicata at the conclusion of the trial.

Furthermore, the application of res judicata here is not merely technical but rooted in the specific facts before this Court. During oral submissions, when queried by this Court, Counsel for the Appellant explicitly admitted that the "schematic drawings" and designs—which the Appellant now relies upon to justify the claim for 80% completion fees— were indeed placed before the Court of Appeal in the previous Usima litigation.

Since the Court of Appeal in 2016 had the opportunity to view these exact documents and determined that the Appellant was only entitled to 1.15% (which was paid), the Appellant’s attempt to use the same schematic drawings to now claim a different percentage (80%) in a fresh suit against the Government constitutes a classic abuse of process and litigation by instalment. The issue of the value and extent of these drawings has been adjudicated with finality.

Finally, even if this Court were to disregard the procedural bars and examine the factual matrix, I find no appellate merit in the Appellant's contention. The learned Sessions Court Judge made findings of fact based on a proper appreciation of the viva voce evidence. The assertion of 80% completion was contradicted by the Appellant’s own witness and the documentary record. As there was no manifest error or conclusion that was 'plainly wrong', this Court finds no basis to interfere with the trial court’s factual determination that the Appellant’s work was limited to the 15% schematic phase.

For the foregoing reasons, the appeal is dismissed with costs. Dated: 28th January, 2026 -------------------------------------------------------------------- DR. HJ JOHN LEE KIEN HOW @ MOHD JOHAN LEE JUDGE HIGH COURT OF MALAYA ALOR SETAR Solicitor : Zamri Ibrahim For The Appellant Messrs Zamri Ibrahim & Co Solicitor : FC Nurul Waheda Abd Rahman For The Respondents Attorney General Chamber Table of Authorities Cases Asia Commercial Finance (M) Bhd v Kawal Teliti Sdn Bhd [1995] 3 MLJ 189 Brijnandan Singh Bhar @ Brijnandan Singh Bhar a/l Gurcharan Singh v BMW Malaysia Sdn Bhd & Ors [2019] MLJU 1737 CIMB Bank Bhd v. Goh Ah Thiam [2023] 7 CLJ 171 Government of Malaysia v Lim Kit Siang [1988] 2 MLJ 12 Hartecon JV Sdn Bhd & Anor v Hartela Contractors Ltd [1997] 2 CLJ 104 Lin Wen-Chih & Anor v. Pacific Forest Industries Sdn Bhd & Anor [2021] 4 MLJ 367 Lin Wen-Chih & Anor v. Pacific Forest Industries Sdn Bhd & Anor [2023] 8 CLJ 671; [2023] 3 MLJU 1770 McGraddie v McGraddie [2013] WLR 2472 Ng Hoo Kui & Anor v Wendy Tan Lee Peng (administratrix for the estate of Tan Ewe Kwang, deceased) & Ors [2020] 12 MLJ 67 Puncak Alam Housing Sdn Bhd v Menta Construction Sdn Bhd & Anor [2013] 1 LNS 148 Siti Nur Aishah Ishak v Golden Plus Holdings Berhad [2018] 1 LNS 2162