Regal Elite Letrik Sdn Bhd v Country Garden Danga Bay Sdn Bhd (JA-22NCvC-64-05/2021)

ISKANDAR WATERFRONT SDN BHD [Company No. : 200601032346 (752105-H)]

PEMBINAAN KS TEBRAU SDN BHD [Company No. : 200701035943 (793972-U)] 01/04/2026 16:16:54

LEADER HARVEST CONSTRUCTION SDN BHD [Company No. : 201101034184 (962319-W)] …FIRST, SECOND AND THIRD, THIRD PARTIES DAN HORIZON DIG TECHNOLOGY SDN BHD [Company No. : 201201023353 (1007845-A)] …FOURTH, THIRD PARTIES

This is the Plaintiff’s claim against the Defendant for the sum of RM1,620,546.02, alleged to be the cost of rectification and diversion works carried out following the failure of a 33 kV underground cable on 4 June 2015 at the Defendant’s development project known as Country Garden Danga Bay, Johor Bahru. The works were originally carried out by the Plaintiff pursuant to a Letter of Award dated 20 August 2014 for the installation, testing, and commissioning of a 33kV underground cable system.

The Defendant denies liability, contending that the cable was not laid in conformity with the approved plan, that the deviation was the cause of the failure, and that the Plaintiff remained responsible for rectification during the Defects Liability Period (DLP)(which ran from 28 March 2015 to 28 March 2017, within which period the cable failure occurred).

The trial commenced before Justice Nurulhuda Nur’aini binti Mohamad Nor, who heard the evidence of the Plaintiff’s first witness (SP1) in part. Following her transfer, the case proceeded before me. I hear the remaining evidence, including cross-examination of SP1 and the Defendant’s witnesses (SD1 and SD2), and concluded the trial.

The Plaintiff called one witness, Mr. Liew Choon Kin (SP1) its Managing Director. The Defendant called two witnesses, namely Mr. Syed Rafiszan (SD1), a Tenaga Nasional Berhad (TNB) engineer who was involved in the investigation of the cable failure, and Mr. Fei Yunbo (SD2), the Defendant’s project manager.

In arriving at this decision, this Court has considered all relevant cause papers filed and referred to at the trial, the CMS audio recordings of the proceedings (including those conducted before Justice Nurulhuda Nur’aini binti Mohamad Nor), as well as the written and oral submissions and the bundles of authorities. This is the Court’s decision and its grounds.

Under the Letter of Award dated 20 August 2014, the Defendant appointed the Plaintiff to carry out the supply, installation, testing, and commissioning of underground cables at Phase 1B2, Country Garden Danga Bay, Johor. The contract price was RM1,620,546.02, with a completion period of 16 weeks. The works were to be executed strictly in accordance with drawings and specifications approved by the Consultant Engineer (TEK Konsult Sdn Bhd).

The works were completed and energised by TNB on 18 April

On 4 June 2015, a fault occurred, resulting in a feeder trip, which TNB traced to cable damage between PMU JBCC and Temporary SSU. Upon excavation, TNB found that the cable had been damaged by third-party pipe-jacking works and was situated outside the approved alignment.

Following the incident, TNB issued letters dated 8 and 21 June 2015 instructing that the cable be diverted to its approved route and directing the developer to bear the cost. The Plaintiff subsequently carried out diversion works and claimed RM1,620,546.02 from the Defendant, asserting that the works were requested and that the Defendant benefited from them.

Before determining these issues, the Court notes the relevant procedural history. In June 2020, the Plaintiff filed Suit No. JA- 22NCvC-68-06/2020 against Iskandar Waterfront Sdn Bhd and Leader Harvest Construction Sdn Bhd, claiming the same sum of RM1,620,546.02 as rectification costs. That suit was struck out on 31 March 2021 and withdrawn on 20 April 2021. The present suit was filed on 2 May 2021. The Defendant applied to strike out this claim on grounds of res judicata and judicial estoppel. On 30 January 2022, the High Court allowed the striking out. The Plaintiff appealed. On 26 October 2022, the Court of Appeal allowed the appeal and set aside the striking out order. This Court now determines all issues on their merits after a full trial.

The main issues before this Court are –

whether the Plaintiff laid the 33 kV underground cable in accordance with the alignment approved by TNB and TEK Konsult, or whether there was a deviation;

whether the deviation, if any, was the cause of the cable failure;

whether the Plaintiff remained contractually responsible to rectify such deviation during the Defects Liability Period;

whether the Plaintiff is entitled to claim compensation under Section 71 of the Contracts Act 1950 [Act 136] on the basis of quantum meruit; and

whether the Plaintiff has proved the quantum of its claim. Court Analysis Issue (a) : whether the Plaintiff laid the 33 kV underground cable in accordance with the alignment approved by TNB and TEK Konsult, or whether there was a deviation.

Clauses 17.3 and 17.4 of the Letter of Award read – “Clause 17.3 - Execution under Engineer’s Direction The Contractor shall carry out and complete the Works under the direction and to the satisfaction of the Engineer, and shall comply with and adhere strictly to the Engineer’s instructions on all matters concerning the Works. Clause 17.4 - Rectification and Notification of Discrepancy The Contractor shall, at its own cost, make good any deviation, defect or discrepancy discovered during the progress of the Works or notified by the Engineer. The Contractor shall also notify the Engineer immediately upon discovery of any discrepancy or inconsistency in the drawings or specifications”.

Both provisions impose upon the Plaintiff a duty to execute the works under the direction and to the satisfaction of the Engineer and to rectify any deviation at its own cost. The same clauses further require the contractor to notify the Engineer of any discrepancy or variation discovered during the execution of the works.

Clause 20.2 extends this responsibility throughout the Defects Liability Period (“DLP”). The provision read – “Clause 20.2 - Defects Liability Period During the Defects Liability Period, the Contractor shall make good any defect, imperfection, shrinkage or other fault whatsoever, whether due to materials, workmanship or otherwise, which may appear and shall bear all costs in connection therewith”.

Therefore, the contractor must make good any defect or non-conformity “whether due to materials, workmanship or otherwise”.

Under Clause 20.2, materials or workmanship not in accordance with the Contract must be removed, replaced, and rectified by the Contractor at his expense. The Plaintiff's obligation to rectify arises from deviation from contractual specifications itself, regardless of whether the deviation was functional or caused immediate problems. The phrase 'whether due to materials, workmanship or otherwise' in Clause 20.2 extends this responsibility beyond defective materials or workmanship to include any non-compliance with contractual specifications, including deviation from approved routes.

On the fact of this case, it is not in dispute that TEK Konsult Sdn Bhd was appointed as the consultant engineer responsible for supervision and that TNB approved the technical design and energisation of the line. However, both TEK Konsult and TNB acted in limited capacities, where the former provided design and supervision, and the latter ensured electrical safety and network compatibility. The Plaintiff, as the executing contractor, physically carried out the trenching and laying of the 33 kV underground cable. The Plaintiff thus had direct operational control over the route taken by the cable and was the only party capable of verifying that the alignment on site matched the approved plan.

On evidence, SP1, testified that the alignment had been pegged on site by TEK Konsult and approved by TNB before works commenced. He claimed that his company followed that pegged route and that the cable was laid accordingly.

However, under cross-examination, SP1 conceded that no as-built survey or coordinate verification was conducted by the Plaintiff before the trenches were backfilled. He also admitted that no record of as-built submission was sent to TEK Konsult or TNB for post-completion verification. His evidence further revealed that the Plaintiff relied entirely on visual guidance and site pegs rather than verified coordinates, a practice inconsistent with engineering norms for underground installations of this voltage class.

SD1, confirmed that TNB’s approval pertained only to the electrical and safety aspects of the system, and that the physical alignment fell within the purview of the contractor and the consultant. He stated expressly that “TNB tidak meluluskan jajaran sivil,” and that its inspection during energisation was limited to jointing integrity and earthing. This Court is of the views that this evidence demonstrates that ultimate responsibility for the cable’s physical position lay with the Plaintiff, not TNB.

SD2, testified that the Defendant relied on TEK Konsult for design supervision and on the Plaintiff for execution. He confirmed that the Defendant did not issue any instruction for deviation or variation and that there was no record of any site meeting or correspondence seeking approval for a changed alignment. His testimony also explained that the Defendant, being the project developer, had no technical personnel qualified to detect or approve such deviation and therefore depended entirely on the Plaintiff’s compliance with the approved route.

On the totality of this evidence, the Court finds that the Plaintiff bore the primary and continuing duty to ensure that the cable was laid precisely in accordance with the approved drawings. While TEK Konsult’s supervision and TNB’s inspection were part of the contractual framework, their involvement did not transfer or dilute the Plaintiff’s core obligation of accuracy and compliance. Moreover, Clause 4.5 of the Letter of Award expressly provides that no certificate shall relieve the Contractor from liability to rectify defects, a principle affirmed by the Court of Appeal in Jumsar (Sarawak) Sdn Bhd.

The Plaintiff submitted that the evidence of SD2, the Defendant’s project manager, was hearsay as he did not personally witness the incident in 2015. While SD2 lacked personal knowledge of the initial installation in 2014-2015, his testimony served multiple purposes –

he produced and identified contemporaneous documents from the Defendant's records, which are admissible as business records under Section 90A Evidence Act 1950 [Act 56];

he testified based on his direct involvement in coordinating rectification works with TNB and TEK Konsult following the incident, which he personally participated in; and

his testimony was corroborated by contemporaneous correspondence, TNB's letters, and photographic evidence.

To the extent SD2 offered factual testimony about events he did not personally witness, this Court gives such testimony no weight. However, the Court's findings on deviation do not depend on SD2's testimony alone but rest primarily on –

the Plaintiff's own witness SP1's admissions;

TNB's independent investigation findings (SD1);

the shop drawings themselves; and

the Plaintiff's failure to produce any as-built verification or to call TEK Konsult as a witness.

The objection of hearsay is therefore overruled. The Court finds SD2's evidence admissible where it relates to documents, his own involvement in post-incident coordination, and corroborated facts, and gives it appropriate weight accordingly.

In this case, a threshold issue is whether the shop drawing dated 12 September 2014 (bearing only TEK Konsult's signature) or the shop drawing dated 20 March 2015 (bearing signatures of all three parties) establishes the contractually approved route. The Plaintiff argues that the 12 September 2014 drawing must be the approved route because –

it was approved by TEK Konsult as required by Clause 1.2 of the Letter of Award;

the 20 March 2015 drawing was created only 8 days before practical completion (28 March 2015), making it chronologically impossible to have guided works that commenced in August 2014; and

the 20 March 2015 drawing was merely a 'claim drawing' prepared for final payment purposes, not a construction specification.

This Court rejects the Plaintiff's contentions and finds that the approved route is established by the shop drawing dated 20 March 2015 for the following reasons –

First, the 20 March 2015 drawing bears the signatures and official stamps of all three parties: the Plaintiff, the Defendant, and TEK Konsult. SP1 testified under re-examination that this drawing was prepared after representatives of all three parties "went to the site and measure the route and confirmed the distance of the cables. And upon confirming, they will sign on the drawing". This describes a verification exercise establishing agreed specifications for final payment purposes;

Second, and most critically, SP1 admitted under cross-examination that the 20 March 2015 drawing shows the cable route turning at "Section 9 and Section 10," and that these turning points are "different from" the as-built route which turned at Sections 8 and 9. This admission is fatal to the Plaintiff's case. If the 20 March 2015 drawing was merely documenting what was actually built (as the Plaintiff now claims), it would show the same turning points as the as-built drawing. The fact that it shows different turning points proves it represents the approved specification (what should have been built), not a record of what was actually built.

The Plaintiff's argument that the 20 March 2015 drawing could not have been the approved route because it was dated after works commenced conflates two separate questions –

which route did the Plaintiff relied to during installation; and

which route was approved per the contract?

The timing argument addresses only question (a), not question (b). In construction practice, it is common for preliminary drawings to be submitted early for consultant review, for works to proceed based on those preliminary drawings, and for final specifications to be confirmed after completion through site verification by all parties for payment calculation purposes. The fact that the final specification drawing was dated after substantial completion does not render it invalid for establishing what the contractual requirements were.

The critical point is that the 20 March 2015 drawing shows a different route from what was actually built, proving it represents the approved specification, not merely a record of construction.

Where two documents exist purporting to establish the same fact, the Court must prefer the document that is most authentic, reliable, and complete. The 20 March 2015 tripartite-signed drawing is plainly superior to the 12 September 2014 consultant-only drawing for establishing the approved contractual specifications.

This principle is established in Ang Game Hong & Anor v Tee Kim Tiam & Ors [2018] 4 MLJ 432 and Cempaka Johan Sdn Bhd v Merchant Synergy Sdn Bhd [2024] CLJU 3311. The 12 September 2014 drawing lacks the Plaintiff's own endorsement and the Defendant's approval. It was a preliminary drawing submitted for consultant review. The subsequent tripartite-signed drawing represents the final agreed specification.

The Plaintiff failed to call TEK Konsult as a witness. TEK Konsult was the sole signatory of the 12 September 2014 drawing and the only person who could explain –

the status and purpose of the 12 September 2014 drawing;

why it should prevail over the subsequent tripartite-signed drawing; and

whether the 12 September 2014 drawing was superseded or modified.

Under Section 114(g) Act 56, adverse inference is drawn that TEK Konsult's evidence would not have supported the Plaintiff's position that the 12 September 2014 drawing constituted the binding approved route.

The Plaintiff's own letter dated 3 September 2014 to SJIC Bina Sdn Bhd stated the cable route would "merentasi Jalan Setiabakti Dalam dan Jalan Straits View 6". SP1 admitted under cross-examination that this showed "the turning of the cable is after Jalan Strait View 6". This contemporaneous document corroborates that the intended route was to turn AFTER Jalan Straits View 6, not at Sections 8-9.

Even assuming TEK Konsult approved the 12 September 2014 drawing, Clause 4.5 of the Letter of Award expressly provides that no certificate shall relieve the Contractor from liability to rectify defects. As held by the Court of Appeal in Jumsar (Sarawak) Sdn Bhd v Robin Dockyard & Engineering Sdn Bhd and Another Appeal [2025] 1 MLJ 864, certification of practical completion is not conclusive evidence that there were no defects. Similarly, consultant approval of a preliminary drawing does not override subsequent tripartite agreement on specifications, particularly where the contractor itself submitted the later drawing for final payment.

This Court finds that the shop drawing dated 20 March 2015, signed by the Plaintiff, Defendant and TEK Konsult, establishes the approved route for the cable installation showing the route turning at Sections 9 and 10 after Jalan Straits View 6. The Plaintiff's installation at Sections 8 and 9 (as admitted by SP1 and confirmed by the as-built drawing) constitutes a deviation from this approved route by one full section, positioning the cable on the drainage works corridor rather than the approved cable alignment.

The Plaintiff sought to rely on Sykt. Tan Thian Siong Sdn. Bhd. v. Sykt. Siaw Teck Hwa Realty & Development Sdn. Bhd. [1983] 1 CLJ 256, submitting that because no complaint was raised at the time of completion, the works must be deemed to have been accepted. In that case, the court held that an employer who takes possession of completed works without objection is deemed to have accepted them, unless the defect is latent and undiscoverable.

To this Court’s mind, Sykt. Tan Thian Siong Sdn. Bhd. must be distinguished and is inapplicable in this case. Here, the alleged deviation was underground and thus latent. Therefore, the defect is not visible, unlike a patent defect, which is visible upon inspection. Hence, this Court is of the view that the principle of acceptance by silence applies only where the defect could reasonably have been detected at handover, and not in this case, where the defect is unviewable.

The Defendant, on the other hand, referred to Ruxley Electronics and Construction Ltd v Forsyth [1996] AC 344 and Jumsar (Sarawak) Sdn Bhd, both of which establish that deviation from contractual specification constitutes defective performance, even if the work remains functional. The principle in Ruxley Electronics and Construction Ltd affirms that contractual conformity, not mere functionality, is the measure of performance. Jumsar (Sarawak) Sdn Bhd further clarifies that latent defects discovered within the DLP remain the contractor’s responsibility, even if undetected earlier.

Applying these authorities, the Court finds that the Plaintiff’s failure to ensure compliance with the approved alignment amounted to a latent defect under the contract. The deviation was not observable during completion or energisation and was only discovered upon excavation following the incident. The contractual and evidential matrix assigns primary responsibility to the Plaintiff.

TEK Konsult’s failure to detect or report the deviation reflects a lapse in supervision but does not absolve the Plaintiff of liability. The Plaintiff, as the contractor, remained under a continuing obligation to ensure that the cable was laid in accordance with the approved route and to notify the Engineer of any discrepancy. Its failure to do so constitutes a breach of that obligation.

Moreover, Clause 4.5 of the Letter of Award expressly provides that 'No certificate shall be considered as conclusive evidence nor shall it relieve the Contractor from his liability to amend and make good all defects’. TEK Konsult's issuance of the Recommendation of Practical Completion on 28 March 2015 did not, therefore, relieve the Plaintiff of its obligation to ensure the cable was installed in accordance with the approved route. The purpose of the 24- month Defects Liability Period is precisely to allow for discovery and rectification of latent defects after practical completion. Issue (b) : whether the deviation, if any, was the cause of the cable failure

It is common ground that prior to the failure, the 33 kV line had been successfully energised by TNB on 18 April 2015 and had operated normally for approximately seven weeks without interruption. There is no evidence, in the form of a site report, correspondence, or inspection note from TNB, TEK Konsult, or the Defendant, suggesting that anyone had detected or complained about any deviation or non-compliance before that date.

The Plaintiff argues that this successful operation and absence of complaints prove that no deviation existed. However, as found in Issue (a) above, the deviation from the approved route constituted a latent defect - one that existed from installation but was not discoverable by visual inspection until excavation. The question for determination is whether this latent deviation caused or contributed to the cable failure on 4 June 2015.

The TNB Fault Report (D4) records that a feeder trip occurred at 4:36 a.m. on 4 June 2015 due to a fault along the cable between PMU JBCC and SSU Sementara Country Garden. The report classified the event as a mechanical failure and recommended immediate excavation to determine the cause. Subsequent investigation on 8 June 2015 revealed that the cable had been physically damaged near the drainage corridor, where concurrent pipe-jacking works were being carried out by a third-party contractor engaged for the development’s storm-water system.

SD1 testified that he was part of the inspection team dispatched on 8 June and 16 June 2015. His evidence was that the excavation exposed a section of the cable lying within the drainage reserve instead of the approved utility corridor. In his view, had the cable been laid within the approved alignment, the third-party pipe-jacking works would not have intersected it. TNB therefore concluded that the damage occurred because the cable had deviated from the approved route.

SD1 further stated that, following inspection, TNB issued its letters dated 8 June 2015 (D5) and 21 June 2015 (D6) directing the developer to divert the affected cable and bear the cost of reinstatement. He acknowledged that the finding of deviation was based on visual inspection of the exposed section and that no coordinate survey was carried out, but maintained that the physical evidence of misalignment was clear.

Under cross-examination, SD1 accepted that no representative from the Plaintiff was present during TNB’s inspection and that the deviation assessment covered only the exposed section. Nonetheless, his evidence was corroborated by photographic documentation annexed to D6 showing the cable trench abutting the drainage line. He also confirmed that the deviation was subsequently verified when the cable was realigned under TNB’s supervision.

The Plaintiff’s witness, SP1 disputed TNB’s conclusion. He testified that the damage was caused solely by unauthorised excavation by the drainage contractor and had nothing to do with alignment. He maintained that the route laid by the Plaintiff corresponded to the one pegged by TEK Konsult and that the deviation alleged by TNB was an afterthought, raised only after the incident. SP1 argued that TNB’s investigation was unilateral, conducted without notifying the Plaintiff and therefore lacked probative value. He insisted that the cable’s position was consistent with the site pegs and that any apparent deviation was the result of subsequent civil works by others.

SD2, the Defendant’s project manager, corroborated TNB’s view. He testified that after excavation, he personally observed that the damaged section of the cable lay within the drainage reserve and outside the approved utility alignment. SD2 stated that the drainage reserve was a known “no-lay” zone designated for future civil infrastructure, and that the approved drawings clearly located the 33 kV cable along the northern boundary. In his opinion, the Plaintiff’s placement of the cable within the drainage corridor rendered it vulnerable to mechanical interference.

The Court finds, on the evidence of SD1 and SD2 supported by the TNB correspondence (D5 and D6), that the immediate physical cause of the cable failure was mechanical damage inflicted by the third-party pipe-jacking activity. However, the underlying cause, that is, the condition which allowed such interference to occur, was the cable’s improper positioning outside the approved alignment. The evidence of deviation is consistent, contemporaneous, and uncontradicted by any as-build plan from the Plaintiff. The Plaintiff did not produce any additional documentary evidence, such as a coordinate survey, photographic log, or certification from TEK Konsult, to demonstrate that the cable had been laid strictly in accordance with the approved plan.

Based on the analysis above, the Court rejects the Plaintiff’s contention that the issue of deviation was an “afterthought.” The series of TNB letters (D5 and D6) issued within days of the incident expressly refer to the cable’s misalignment and the need for diversion. The absence of complaint prior to 4 June 2015 is explained by the latent nature of the deviation, which could not reasonably have been detected without excavation. This is consistent with the principle in Jumsar (Sarawak) Sdn Bhd, where the court held that latent defects discovered within the DLP remain the contractor’s responsibility, even if unobserved at completion. The doctrine of acceptance in Sykt. Tan Thian Siong Sdn. Bhd. applies only to patent defects discoverable on reasonable inspection, which this was not.

Accordingly, this Court finds that:

the cable deviation was a latent defect existing since installation;

the deviation positioned the cable on the drainage works corridor (Sections 8-9) rather than the approved cable route (Sections 9-10), exposing it to third-party pipe-jacking activity;

the immediate physical cause of the failure was mechanical damage inflicted by third-party pipe-jacking;

the underlying cause was the Plaintiff's non-compliance with the approved alignment, which created the vulnerability that was subsequently exposed.

The Defendant relies on the principle established in Sandy Island Pte Ltd v Thio Keng Thay [2020] SGCA 86, submitting that where a party's breach creates a situation of vulnerability that is subsequently exploited by intervening events, the original breach remains the underlying cause of the resulting loss. The Singapore Court of Appeal in that case held: "the plaintiff's breach remains the underlying cause of the losses claimed, notwithstanding the intervening events. The question is whether the breach was an effective cause of the loss, not whether it was the sole cause".

This Court accepts and applies that principle. The Plaintiff's deviation from the approved route was an effective cause of the cable failure. Had the cable been installed at Sections 9-10 as approved (turning after Jalan Straits View 6), it would not have been positioned on the drainage works corridor where third-party piling was occurring. The deviation created the vulnerability; the third-party piling exploited that vulnerability. The chain of causation is not broken by the involvement of third parties.

The discovery of deviation during the 24-month Defects Liability Period triggered the Plaintiff's contractual obligation under Clauses 17.3, 17.4, and 20.2 of the Letter of Award to rectify the defect at its own cost. The absence of any prior objection does not relieve the Plaintiff of this responsibility. Issue (c) : whether the Plaintiff remained contractually responsible to rectify such deviation during the Defects Liability Period

At the outset, the Letter of Award dated 23 October 2014, defines the scope of the Plaintiff’s duties in clear and unambiguous terms as follows –

Clause 6.1 required the Plaintiff to execute the works “strictly in accordance with the drawings and specifications approved by TNB”;

Clauses 17.3 and 17.4 required the works to be performed “under the direction and to the satisfaction of the Engineer (TEK Konsult)” and imposed a continuing duty to “notify the Engineer of any discrepancy and to rectify any deviation or non-conformity at the Contractor’s own cost”; and

Clause 20.2 extended that obligation throughout the DLP, stipulating that the Contractor “shall make good any defect or non-conformity, whether due to materials, workmanship or otherwise.”

On the evidence, the DLP commenced on 28 March 2015, the date of practical completion, and extended for twenty-four (24) months thereafter. The incident on 4 June 2015 occurred well within this period. Therefore, any defect or deviation discovered at that time clearly falls within the Plaintiff’s rectification responsibilities under the contract. The Plaintiff’s obligation to make good was active and enforceable at the material time.

The Defendant’s submissions (Enclosure 167 and Enclosure 175) emphasised that the DLP provisions establish a comprehensive framework for the contractor’s post-completion liability. Relying on Jumsar (Sarawak) Sdn Bhd, counsel argued that the discovery of a latent defect within the DLP automatically triggers the contractor’s obligation to rectify at its own cost, irrespective of whether the defect was previously detected.

The Counsel for the Defendant also referred to Ruxley Electronics and Construction Ltd, underscoring that contractual conformity, not mere functionality, is the measure of performance. These authorities affirm that the DLP operates as an extended warranty period ensuring that defects, once discovered, remain the contractor’s responsibility.

The Plaintiff, however, contended that the post-incident rectification and diversion works were performed at the Defendant’s request and fell outside the original contract, entitling the Plaintiff to payment on a quantum meruit basis under Section 71 of the Contracts Act 1950 [Act 136]. According to the Plaintiff, the works carried out after the failure were additional or remedial in nature and therefore constituted new scope beyond the obligations of the Letter of Award. The Plaintiff further argued that since the cable had already been energised and accepted by TNB, the contract must be treated as completed and closed. Hence, the rectification fell outside its contractual duties.

This Court is unable to agree with that contention. The contract expressly stipulates that the Plaintiff’s responsibility extends beyond energisation and into the DLP. The Plaintiff’s reliance on practical completion and energisation is misplaced. The energisation by TNB was not an acknowledgment of perfect conformity with the approved alignment. Rather, it signified electrical safety and operational readiness. It did not waive the Plaintiff’s continuing contractual duty to ensure alignment compliance. Clauses 17.4 and 20.2 make it plain that defects discovered after completion, whether latent or apparent, remain within the contractor’s obligation to rectify.

The Plaintiff’s argument that the rectification amounted to “new work” also finds no support in the evidence. The works performed after 4 June 2015 were not variations or additions to the scope but corrective works to restore compliance with the approved alignment. The direction to divert the cable and reinstate the supply was a natural consequence of the Plaintiff’s own deviation. The Defendant’s letter referring to rectification was not a variation order but a directive requiring the Plaintiff to fulfil its contractual obligations. The issuance of such a directive does not convert an obligation into a new contract or an extra-contractual promise to pay.

This Court is guided by the Court of Appeal decision in Tanjung Teras Sdn Bhd v. Kerajaan Malaysia [2015] 9 CLJ 1002, where it held that a contractor cannot claim quantum meruit for performing corrective works required under a subsisting construction contract. The Court in that case reasoned that corrective work performed pursuant to a contractual duty cannot be treated as voluntary or outside contract, even if the employer benefits from it. To this Court’s mind, the same reasoning applies here. The Plaintiff’s post-incident works were corrective in nature, not additional, and therefore fall squarely within the DLP regime.

In light of these findings, this Court holds that the Plaintiff remained contractually bound under the Letter of Award to rectify any non-conformity discovered during the DLP, including the deviation found after the 4 June 2015 incident. The contractual language leaves no room for ambiguity. The obligation to make good any defect or deviation was continuing, mandatory, and unconditional. Consequently, the Plaintiff’s failure to ensure conformity with the approved alignment and its subsequent attempt to claim payment for corrective works constitute a breach of contract rather than a compensable service. The Defendant was entitled, in law and under contract, to require the Plaintiff to bear the full cost of rectification.

For completeness, The Defendant contended that the Plaintiff is estopped from maintaining this action by reason of Suit No. JA- 22NCvC-68-06/2020 ("Suit 68"), wherein the Plaintiff pursued the same rectification costs against Iskandar Waterfront Sdn Bhd and Leader Harvest Construction Sdn Bhd. That suit was struck out on 31 March 2021 and withdrawn on 20 April 2021. The Defendant subsequently applied to strike out the present claim on grounds of res judicata and judicial estoppel. The High Court allowed that application on 30 January 2022. On appeal, the Court of Appeal set aside the striking out order on 26 October 2022 and permitted this matter to proceed to trial. Neither party has tendered the Court of Appeal's grounds of judgment to this Court.

The technical requirements of res judicata are not satisfied in this case. Suit 68 involved different parties, was struck out and withdrawn without trial, and there was no final judgment on the merits determining liability for the rectification costs. There is no identity of parties or prior adjudication on the issue.

As to the broader question of judicial estoppel and abuse of process, this Court finds it unnecessary to make a definitive determination. The Plaintiff's claim fails on its substantive merits as determined in Issues (a), (b), and (c) above: the Plaintiff deviated from the approved route, the deviation was the underlying cause of the damage and the Plaintiff bore contractual responsibility during the DLP to rectify at its own cost. Since the claim is dismissed on these substantive grounds, the outcome is the same regardless of whether judicial estoppel applies. The Court of Appeal has permitted this matter to proceed to trial and having conducted a full trial, this Court rests its decision on the substantive contractual grounds rather than on estoppel.

Accordingly, no further finding on res judicata or judicial estoppel is required. Issue (d) whether the Plaintiff is entitled to claim compensation under Section 71 of Act 136 on the basis of quantum meruit

The Plaintiff’s alternative claim is premised on Section 71 of Act 136, which codifies the equitable doctrine of quantum meruit. The Plaintiff contends that, even if the works performed after the 4 June 2015 incident were not part of the original contract, they nevertheless conferred a benefit on the Defendant by restoring power supply and enabling continuation of the Defendant’s development project. On this premise, the Plaintiff argues that it is entitled to reasonable remuneration for the said works.

Section 71 of Act 136 reads as follows— “Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.”

This provision applies where a benefit is conferred outside a contractual relationship, or where the original contract has been discharged, frustrated, or otherwise rendered inoperative. It is a restitutionary remedy, not a substitute for contractual payment.

In the present case, the Plaintiff’s claim under Section 71 Act 136 arises from the works carried out between June and August 2015, which is described as the “diversion and reinstatement works.” The Plaintiff’s Final Account (P7) claims RM1,046,820.00 as the reasonable value for those works. The Plaintiff’s witness, SP1, testified that those works were undertaken following instructions from TEK Konsult and the Defendant to restore the damaged cable and that no new Letter of Award or variation order was issued. He stated that his company acted promptly to minimise losses to the Defendant and completed the rectification within three weeks. According to him, since the Defendant benefitted from the reinstatement, equity demands that payment be made.

The Defendant, however, disputes that any quantum meruit obligation arises. It submits that the Plaintiff's works were not voluntary or extra-contractual, but were performed pursuant to a continuing contractual obligation under Clauses 17.3, 17.4 and 20.2 of the Letter of Award. Counsel for the Defendant submits that quantum meruit is inapplicable where the works form part of a subsisting contractual obligation and that rectification works within a DLP are remedial obligations, not extra-contractual acts. The Defendant relies on authorities including Tanjung Teras Sdn Bhd v Kerajaan Malaysia [2015] 9 CLJ 1002 and Jumsar (Sarawak) Sdn Bhd [2025] 1 MLJ 864.

The distinction between contractual and restitutionary liability was succinctly explained in Syarikat Binaan Utara Jaya (A Firm) v Koperasi Serbaguna Sungai Glugor Bhd [2009] 2 MLJ 546, where the Court of Appeal held that quantum meruit presupposes either –

absence of a valid contract; or

performance beyond the scope of a concluded contract. If the contract governs the relationship, the contractor’s remedy lies strictly within its terms. If the contract governs the relationship, the contractor's remedy lies strictly within its terms.

Applying those principles, this Court finds that the Plaintiff’s post-incident works were not voluntary but performed in discharge of its continuing contractual duty to rectify defects during the DLP. The works arose directly from the Plaintiff’s non-compliance with the approved alignment, which constituted a latent defect. Rectification of that deviation was not a separate or gratuitous act; it was an express obligation under Clauses 17.4 and 20.2. Accordingly, the statutory elements of Section 71 of Act 136 are not met. The act was not done “lawfully for another person” outside contract, but was done under contract and in fulfilment of the Plaintiff’s own obligations.

Furthermore, the evidence does not support the contention that the Defendant expressly or impliedly agreed to pay for the rectification. The correspondence adduced (see D5, D6, and D9) shows that TNB and TEK Konsult directed the Plaintiff to bear the cost of diversion and reinstatement. There is no documentary record of any variation order, quotation acceptance, or acknowledgment of a new contractual promise to pay. The Plaintiff’s reliance on internal invoices and self-prepared summaries is therefore insufficient to establish entitlement under Section 71 of Act 136.

This Court also notes that the equitable basis of quantum meruit requires clean hands. A contractor who seeks restitutionary relief must not have caused the very defect necessitating the remedial work. In Tanjung Teras Sdn Bhd, the Court of Appeal rejected a similar claim where the plaintiff sought payment for rectification of defects arising from its own breach. The same rationale applies in this case. A party cannot invoke equity to profit from its own non-performance.

In the circumstances, this Court finds that the Plaintiff’s claim under Section 71 of Act 136 is misconceived. The post-incident works were remedial, contractual, and corrective of the Plaintiff’s own deviation. The Defendant derived no benefit beyond what the Plaintiff was already obligated to provide. Accordingly, no restitutionary right arises and the Plaintiff’s quantum meruit claim is dismissed.

For completeness, the Plaintiff particularised its monetary claim in three limbs, namely –

RM1,620,546.02 as the alleged total cost of diversion and reinstatement works following the incident;

RM1,046,820.00 as the ‘Final Account’ value which the Plaintiff says reflects the reasonable cost of those works; and

RM346,500.00 said to be an outstanding balance wrongfully withheld by the Defendant. The Defendant disputes liability for all three limbs. Issue (e) : whether the Plaintiff has proved the quantum of its claim.

The Plaintiff’s complaint is that the Defendant wrongfully withheld the balance of the contract sum, amounting to RM346,500.00, contending that such withholding constituted a breach of payment obligation. The Defendant, in turn, asserts a right of set-off and retention, on the basis that it incurred rectification and consequential costs due to the Plaintiff’s deviation and failure to perform in accordance with the approved plan.

The relevant contractual provision governing payment and retention appears at Clause 23.1 of the Letter of Award, which reads as follows – “Clause 23.1 - Payment All progress claim shall be subject to certification by the Engineer. Payment shall only be made for works duly completed, verified and certified as satisfactory by the Engineer”.

Clause 23.4 of the Letter of Award further allows the Employer to retain or set-off amounts necessary to cover “any costs, damages or expenses incurred in rectifying defects, deviations, or non-performance by the Contractor”. The provision read as follows – “Clause 23.4 - Retention / Set-off The Employer shall be entitled to withhold or set off such sums as may be necessary to cover the cost of rectifying defevts, deviations or any failure of the Contractor to perform in accordance with this Letter of Award, including any expenses incurred in completing or making good such works”.

The plain wording of the clause confers a clear contractual right of retention in the event of defective or non-conforming works.

On evidence, SD2 testified that after the 4 June 2015 incident, the Defendant incurred substantial expenses in coordinating with TNB, engaging safety personnel, and restoring power to the affected areas. The Defendant also had to deploy resources to supervise the Plaintiff’s diversion works and bear consequential project delays. SD2 stated that the total cost associated with these remedial actions exceeded RM400,000.00, which the Defendant set off against the Plaintiff’s outstanding payment claim. His evidence was corroborated by internal cost summaries and correspondence exchanged with TNB and TEK Konsult (see D8-

In cross-examination, SD2 conceded that the Defendant did not obtain a formal certification from the Engineer (TEK Konsult) before effecting the set-off. However, he explained that TEK Konsult was involved throughout the rectification process and had verbally confirmed that the deviation originated from the Plaintiff’s non-compliance. The absence of formal certification, in his view, did not negate the Defendant’s entitlement to exercise contractual set-off under Clause 23.4 of the Letter of Award, given the circumstances of breach and ongoing defect.

Lastly, the Plaintiff contends that the Defendant wrongfully withheld RM346,500.00 from the contract sum. However, Clause 23.4 of the Letter of Award expressly provides: "The Employer shall be entitled to withhold or set off such sums as may be necessary to cover the cost of rectifying defects, deviations or any failure of the Contractor to perform in accordance with this Letter of Award, including any expenses incurred in completing or making good such works".

Given this Court's findings that –

the Plaintiff deviated from the approved route (Issue a);

the deviation was the underlying cause of the cable failure (Issue b); and

the Plaintiff bore contractual responsibility during the DLP to rectify at its own cost (Issue c). the Defendant was entitled under Clause 23.4 to withhold payment to cover costs incurred as a result of the Plaintiff's non-compliance. The evidence shows the Defendant incurred substantial costs in coordinating rectification, engaging safety personnel and managing the consequences of the cable failure. The Defendant's retention was therefore contractually authorized and justified. There is no basis to order release of the retained sum.

Beyond the issue of set-off, this Court must address whether the Plaintiff has proven the quantum of its claim of RM1,620,546.02. Even if this Court were to find that the Plaintiff had established liability (which it has not), the Plaintiff's quantification is fundamentally flawed and cannot be sustained.

First, the Plaintiff's witness SP1 judicially admitted under cross-examination that the Plaintiff's claim "does not fully or completely follow the rates in the bill of quantities. This is a fundamental breach of Clause 2.5 of the Letter of Award, which expressly mandates: "Variations shall be calculated at the prices and rates in accordance with the bill of quantities".

In Hercules Engineering Sdn Bhd v Naim Engineering Sdn Bhd [2013] MLJU 284, the court held that strict compliance with contractual pricing mechanisms is required. A contractor cannot unilaterally depart from agreed pricing provisions. Where the contract establishes a specific method for calculating variations or additional works, that method must be followed. The Plaintiff's failure to calculate its claim in accordance with the Bill of Quantities rates constitutes a fundamental breach of the contractual pricing mechanism.

Second, the claimed amount of RM1,620,546.02 is identical to the entire original contract price. Yet the claim relates only to rectification and diversion of one section of the cable route, not to complete re-laying of the entire cable system. It is mathematically implausible that rectifying a partial section would cost precisely the same amount as the original complete installation from inception to energisation. This coincidence strongly suggests that the quantum is not based on genuine cost assessment but represents an opportunistic attempt to recover the full contract sum a second time.

Third, the Plaintiff's Reply Submissions acknowledge that the claim includes a markup of approximately RM378,687.58 (representing approximately 30.5% above actual costs incurred), which the Plaintiff seeks to justify on grounds of urgency, cash payment requirements and expected delay in recovery.

These justifications are rejected. The Letter of Award provides a specific contractual pricing mechanism under Clause 2.5. The Plaintiff cannot unilaterally add a substantial markup beyond contractual rates regardless of the circumstances. Moreover, any urgency in rectifying the damage arose from the Plaintiff's own deviation from the approved route during installation. A party cannot profit from urgency created by its own breach. Cash flow management and dealing with subcontractors are ordinary business risks borne by contractors. The contract does not provide for markup to compensate for such costs. Under the DLP framework, the Plaintiff bears the cost of rectifying defects discovered during the DLP at its own expense. Allowing a 30.5% markup would convert a cost obligation into a profit opportunity, contrary to the contractual scheme.

Fourth, the evidence reveals other quantum defects. The Defendant points to items claimed but not actually incurred (such as certain permits, insurance premiums and GST components) and instances of apparent double-charging (such as cable joints where the amount claimed significantly exceeds amounts actually paid to subcontractors). While this Court need not make detailed findings on each disputed line item, the pattern of discrepancies undermines confidence in the Plaintiff's overall quantification.

Accordingly, even if liability were established (which it is not), the Plaintiff would be entitled to recover only actual reasonable costs calculated in accordance with the Bill of Quantities rates under Clause 2.5, properly documented and proven. The Plaintiff has failed to discharge this burden. The claimed sum of RM1,620,546.02 is not proven and must be rejected.

Having carefully considered the pleadings, notes of evidence, bundle of documents, submissions and bundle of authorities of both parties, on the balance of probabilities, this Court findings is summarise as below – On Issue (a), the Court finds that the Plaintiff, as the executing contractor, bore the primary and continuing duty to ensure that the 33kV underground cable was laid strictly in accordance with the approved alignment. The contractual terms under Clauses 17.3,

17.4, and 20.2 of the Letter of Award are clear and unequivocal. The Plaintiff’s reliance on visual pegging without as-built verification or coordinate checks constitutes a serious omission and a breach of its contractual obligations. The evidence of SP1, read together with the testimonies of SD1 and SD2, confirms that the Plaintiff failed to ensure compliance with the approved plan. The deviation, though latent, was a non-conformity attributable to the Plaintiff. On Issue (b), the Court accepts the evidence of SD1 (TNB) and SD2 (Defendant) that the immediate cause of the 4 June 2015 failure was mechanical damage by a third-party contractor engaged in drainage works. However, the root cause of the damage was the cable’s deviation from the approved alignment, which placed it within the drainage reserve. This deviation rendered the cable vulnerable to interference and constituted a latent defect under the contract. The absence of complaint prior to the incident does not exonerate the Plaintiff, as the defect was not discoverable without excavation. On Issue (c), the Court finds that the Plaintiff remained bound under the Letter of Award to rectify any deviation or defect discovered during the Defects Liability Period (“DLP”). The 4 June 2015 incident occurred well within the DLP and the Plaintiff’s obligation to make good such defects was active and enforceable at that time. The Plaintiff’s attempt to characterise the rectification as “new work” or “extra-contractual” is inconsistent with the plain terms of the contract and settled principles of law. The works were corrective in nature and part of the Plaintiff’s continuing obligations. Accordingly, the Plaintiff was contractually liable to bear the cost of rectification. On Issue (d), the Plaintiff’s reliance on quantum meruit under Section 71 of the Contracts Act 1950 is misplaced. The post-incident diversion and reinstatement works were not voluntary or independent of the contract but carried out in discharge of the Plaintiff’s continuing contractual duty. Section 71 does not apply to acts done pursuant to an existing contract. Further, a party who caused the defect cannot invoke equity to seek restitution for remedying its own breach. The Plaintiff’s quantum meruit claim is therefore dismissed. On Issue (e), the Court finds that the Plaintiff has not proven the quantum of its claim. The quantification does not comply with the contractual pricing mechanism under Clause 2.5 and the claimed sum of RM1,620,546.02 (identical to the entire original contract price) is mathematically implausible for partial rectification works. Moreover, the Defendant was entitled under Clause 23.4 of the Letter of Award to retain and set off sums to cover costs incurred due to the Plaintiff's deviation. The retention was lawful and justified

Taking the evidence and contractual framework as a whole, the Court concludes that the Plaintiff failed to discharge its contractual obligations in ensuring the proper laying of the cable and that the resulting deviation was the root cause of the 4 June 2015 incident. The Plaintiff remained contractually bound during the DLP to rectify such defect at its own cost. Its subsequent claim for payment under quantum meruit or otherwise is without merit. Conversely, the Defendant acted within its rights in withholding payment corresponding to rectification expenses and in relying on contractual set-off provisions.

For the foregoing reasons, this Court therefore dismisses the Plaintiff’s claim in its entirety with costs of RM 60,000.00 subject to allocator.

The Defendant’s retention and set-off are affirmed as contractually valid. Dated : 30 October 2025 -signed-Dr. Noradura Binti Hamzah Judicial Commissioner High Court Civil 2 Johor Bahru Plaintiff’s Solicitor : Tetuan Nadzarin Kuok Puthucheary & Tan Defendant’s Solicitor : Tetuan Izad Kazran & Co. First and Second, Third Parties’ Solicitor : Tetuan Dennis Nik & Wong Third, Third Parties’ Solicitor : Tetuan Lee & Koh Fourth, Third Parties’ Solicitor : Tetuan Soong & Chang