Phenom Interior Design Sdn. Bhd v Chandra Bosh A/L Muniandi (JA-12BNCvC-1-01/2026)

2 KB 716]. Where the statute imposes a penalty for a regulatory purpose, the position is different. The court asks whether the statute means to prohibit contracts at all, and whether there is a sufficient nexus between the statutory requirement and the contract. A breach that is merely incidental and is punishable by a penalty, does not void the contract. The court is slow to imply the further consequence of voiding contracts and it will not add to the penalty that Parliament has set. [See : Asia Television Ltd & Anor v Viwa Video Sdn Bhd & Connected Cases [1984] 2 MLJ 304 and St John Shipping Corporation v Joseph Rank Ltd [1957] 1 QB 267]. 13. Section 25(1) Act 520 is a regulatory provision. It is aimed at the contractor's registration status. It is not aimed at the lawfulness of the work. Renovating a house is a lawful object. The section does not say that contracts are void. The Act provides its own sanctions. These are the fine under section 29 Act 520 and the stop-work notice under section 30 Act 520. Our courts are slow to strike down commercial transactions for illegality. They examine the purpose of the statute first. Both parties referred me to Stecon Sdn Bhd v Eco Tower Sdn Bhd [2015] MLJU 2050 and Pasukhas Constructions 8 Sdn Bhd & Anor v. MTM Millennium Holdings Sdn Bhd [2015] CLJU 591, in which the courts held that non-registration under Act 520 does not avoid the contract. I respectfully agree with that conclusion. Our appellate courts have likewise examined the purpose of the statute before striking down a transaction for illegality and have done so even where the contravention carries a criminal penalty. [See : Liputan Simfoni Sdn Bhd v Pembangunan Orkid Desa Sdn Bhd [2019] 4 MLJ 141 and Tan Keen Keong @ Tan Kean Keong v Tan Eng Hong Paper & Stationery Sdn Bhd & Ors and other appeals [2021] 3 MLJ 914]. The purpose of the CIDB regime is to develop and regulate the industry and to protect the public. That purpose is served by the Act's own penalties. It is also served by holding the defaulting contractor to its bargain. It is not served by releasing the parties from a contract they made and largely performed. 14. It is trite that this court must consider illegality of its own motion. [See : Merong Mahawangsa Sdn Bhd & Anor v Dato' Shazryl Eskay bin Abdullah [2015] 5 MLJ 619]. I have done so. For the reasons above, the want of CIDB registration did not void the contract. It exposed the First Defendant to the statutory penalty. I uphold the SCJ on Issue (a). It follows that the Plaintiff's alternative claim for restitution of the price under section 66 of the Contracts Act 1950 [Act 136] does not arise, because the contract is not void. 9 Issue (b) : the First Defendant's liability for breach 15. The SCJ made several findings. She found that – (a) the First Defendant did not carry out the works with reasonable skill and care; (b) it did not rectify the defects after notice; (c) the defects were not minor and undermined the usability of the premises. 16. These are findings of fact. They rest on the evidence and on her view of SP1 and SD1. The appellants' challenge in Grounds 1 and 3 is really an invitation to re-try the facts. Applying Gan Yook Chin and UEM Group Bhd, I am not persuaded that the findings are plainly wrong. I affirm the finding that the First Defendant is liable to the Plaintiff for breach of contract. The appellants' contention that the quotations obtained by the Plaintiff show much of the work to have been acceptable does not go to the fact of breach. I turn to that next. Issue (c) : the RM184,000.00 and the assessment of damages 17. The award of RM184,000.00 cannot stand. There are two reasons, and both are legal reasons. 10 18. The first is that it was not the pleaded claim. The pleaded money claim was for special damages of RM500,000.00 and general damages to be assessed. The cost of completion, RM542,787.50, appeared in the particulars. RM184,000.00 is the sum the Plaintiff paid. It was not pleaded as a claim. It entered the case only when counsel announced during the trial that the pleaded sum was not pursued. The Defendants admitted that RM184,000.00 had been paid and the fact appears in the agreed facts. But an admission as to the sum paid is not the same thing as a pleaded claim for its return. 19. The general prayer does not cure this. The Plaintiff relied on the general prayer at paragraph 25(e) of the Amended Statement of Claim and on the line of authority beginning with Lim Eng Kay v Jaafar bin Mohamed Said [1982] 2 MLJ 156 and Tan Tek Seng v Suruhanjaya Perkhidmatan Pendidikan & Anor [1996] 1 MLJ 261, as collected in Ritz Garden Hotel (Cameron Highlands) Sdn Bhd v Balakrishnan a/l Kaliannan [2013] 6 MLJ 149 and Kembang Serantau Sdn Bhd v Perbadanan Putrajaya and another appeal

MLJU 945. Those cases hold that the omnibus prayer is not a mere ornament and that a court may mould relief to fit the case it has tried. They do not permit a court to award a remedy of a different character from any that was claimed, resting on a factual basis that was never pleaded. 20. The second reason is that a refund of the price is the wrong measure. The contract is valid and is sued on for breach. Damages are therefore assessed on the expectation measure. The aim is to place the Plaintiff, so far as money can, in the position he would have been in if the contract had been performed. [See : section 74 (Act 136)] 11 The measure of his loss is the cost of rectifying and completing the works, or the loss in value of the premises. It is not the return of what he paid. The Plaintiff relied on the rescission measure in Abdul Razak bin Datuk Abu Samah v Shah Alam Properties Sdn Bhd and another appeal [1999] 2 MLJ 500. That measure applies where a contract is rescinded for fraud. Here, there was no rescission and no finding of fraud. So it does not apply. 21. Both parties argued quantum in full at trial. I therefore assess the damages rather than remit them. On the correct measure the Plaintiff had to prove the cost of rectifying and completing the works. He put that cost at RM542,787.50. He relied for it on a quotation from Dewani Design Sdn Bhd dated 20 November 2020. That quotation was not proved. Its maker was never called. Counsel for the Plaintiff stated during the trial that he would not call Dewani and withdrew the witness statement that had been filed to prove the document, substituting a witness from the CIDB directed to a different issue. Nor was the figure proved by any other means. SP1 accepted that he is not an expert in construction. He had pleaded that a firm of surveyors and engineers, Datalis Services, had been engaged to investigate the defects. In cross-examination he knew nothing of that engagement and no such report was produced. His counsel explained that the surveyor had not carried out his task, which was why nothing was tendered. 22. The Plaintiff also relied on quotations from South Edge Design and Build dated 28 November 2021 and Eglass Global Construction Sdn Bhd dated 21 January 2021. No maker was called for either. SP1 agreed in cross-examination that Darren Tang of South Edge, Mr Tim 12 Tee of Eglass and Encik Marcus Hong of Dewani were all absent from the witness box and that neither South Edge nor Eglass was mentioned in his pleading at all. 23. The difficulty of assessing damages precisely is not by itself a reason to award no substantial damages, where real loss is shown. But the Plaintiff had to lay an evidential foundation for the loss he claimed. On the correct measure, he did not do so. In the course of cross- examination counsel for the Defendants had SP1 add up those items in the First Defendant's invoice which do not appear in the Dewani quotation. SP1 agreed that they total RM192,486.00. He did not accept that works of that value had been passed by Dewani. When that proposition was put to him he answered "Tidak". He explained that the Dewani quotation was directed at rectification and was expressed for the house as a whole rather than item by item, so that the absence of an item from it did not signify acceptance of the First Defendant's work on that item. He said the same thing in re- examination. I do not treat that exchange as an admission of the value of what the Plaintiff received and I make no finding to that effect. What the exchange does show is that the Plaintiff's case on the cost of putting the works right rested entirely on a document that was never proved and that no witness spoke to the value of what had and had not been done. 24. I should deal with one further matter. By a letter dated 2 July 2026 the Plaintiff forwarded a compact disc of nine videos and invited me to view them to. The videos are said to show water leakage and damage at the premises. They therefore go to the existence and extent of the defects. That is not a live question on this appeal. The 13 SCJ found the defects proved and not trivial, the Appellants' challenge to that finding fails and I have affirmed it. The videos could not, whatever they show, establish what it would cost to make the defects good and it is on that question alone that the Plaintiff's claim founders. I have not found it necessary to view them. The Plaintiff also invited me to infer that the Appellants did not wish the court to see the disc. No such inference is called for. The disc formed part of the record throughout, and the Appellants' failure to hand a copy to the court is a matter of conduct, not of evidence. 25. I now assess the damages. The Plaintiff proved that the First Defendant broke the contract. The SCJ's findings that the defects were real and not trivial stand and I have affirmed them. But breach and loss are separate matters and each must be proved. The correct measure of the Plaintiff's loss was the cost of putting the works right. He pleaded that cost at RM542,787.50 and led no admissible evidence of it. He offered no alternative measure. There is accordingly no material on which I could fix any substantial figure and it is not open to me to select one at large. Some money would no doubt be needed to make good the defects. How much, the Plaintiff did not show. In those circumstances he is entitled to nominal damages only. I assess the Plaintiff's damages at RM1,000.00. Interest on that sum is to run at 5% per annum from the date of the Sessions Court's decision until realisation. 26. I therefore set aside the award of RM184,000.00 and the interest ordered on it. In its place I award the Plaintiff nominal damages of RM1,000.00, with interest as stated above. The appeal on Issue (c) succeeds to that extent. 14 Issue (d): the position of the Second and Third Defendants 27. The order below was made against all three Defendants together. That lifted the corporate veil and held the directors personally liable. That step was not open on the basis given. The starting point is Salomon v A Salomon & Co Ltd [1897] AC 22. It is now found in section 20 of the Companies Act 2016 [Act 777]. A company is a legal person separate from its directors. In Ong Leong Chiou & Anor v Keller (M) Sdn Bhd & Ors [2021] 3 MLJ 622 the Federal Court adopted the concealment and evasion principles from Prest v Prest and others [2013] 4 All ER 673. It approved Law Kam Loy & Anor v. Boltex Sdn Bhd & Ors [2005] 3 CLJ 355. It held that a court may not pierce the veil merely because it appears just to do so. Fraud, or conduct amounting to fraud, is required. 28. The SCJ lifted the veil for three reasons. The directors controlled the project. They failed to give evidence and she drew an adverse inference under section 114(g) of the Evidence Act 1950. And she thought it would be unjust to let them shelter behind the company. But control is the ordinary incident of directorship. The avoidance of injustice is the very ground that Law Kam Loy and Ong Leong Chiou hold to be insufficient. The adverse inference goes to the finding of facts. It does not supply the legal test for piercing. The Plaintiff did plead particulars of fraud. But the SCJ made no finding of fraud. Fraud would have to be proved to the standard in Sinnaiyah & Sons Sdn Bhd v Damai Setia Sdn Bhd [2015] 5 MLJ 1. 15 29. The Plaintiff did not stop there. He invited me to make the finding of fraud myself, on the footing that this is a rehearing and that the Second and Third Defendants gave no evidence, so that his account of their representations stands uncontradicted. I decline the invitation. Fraud must be pleaded with particularity and proved on the balance of probabilities on evidence directed to it. [See : Sinnaiyah & Sons Sdn Bhd]. The failure of the Second and Third Defendants to testify permits an inference adverse to them on matters within their knowledge. It does not relieve the Plaintiff of the burden of adducing evidence from which fraud can be found. The evidence here went to the quality of the works and to the want of CIDB registration. It did not establish that the Second and Third Defendants made representations they knew to be false or that they used the First Defendant as a device to conceal or evade an existing liability. The threshold in Ong Leong Chiou is therefore not met on any footing. Accordingly, the appeal on Issue (d) succeeds. The order against the Second and Third Defendants is set aside. Issue (e) : The Counterclaim 30. The SCJ dismissed the counterclaim on the facts. She found that the termination was justified, because the First Defendant had breached first. She found that the First Defendant had not proved the RM50,436.00 balance said to be owing. She found that it had not proved its right to the return of materials. Those findings disclose no error. I affirm them. The appeal on Issue (e) fails. 16 CONCLUSION 31. Based on the foregoing reasons, the appeal succeeds in part. I make the following orders – (a) the finding that the First Appellant is liable to the Respondent for breach of contract is affirmed; (b) the order that the First Appellant pay the Respondent RM184,000.00 is set aside. The interest on that sum is also set aside. In its place I award the Plaintiff nominal damages of RM1,000.00, with interest as stated above; (c) the appeal of the Second and Third Appellants is allowed. The Sessions Court order against them is set aside in full; (d) the dismissal of the counterclaim is affirmed; and (e) since the appeal succeeds in part, I make no order as to the costs of this appeal. Dated : 6 July 2026 -signed- (DR NORADURA BINTI HAMZAH) Judicial Commissioner High Court Civil 2 Johor Bahru 17 Counsel for the Appellants/Defendants : : Kwan Dai Wei (together with Rajita Bose a/p P Rajabose) Messrs. Kwan Dai Wei & Associates Counsel for the Respondent/Plaintiff : : Tan Meng Khong Messrs. G.K. Sritharan & Co.