S.G. Cables Sdn Bhd v Transmission Technology Sdn. Bhd. (WA-22NCC-501-11/2021)

In this action the Plaintiff is claiming for the sum of RM2,491,220.81 against the Defendant arising from a Bill of Quantities and “Final Revised Quotation for Erection & Stringing Works” dated 25.3.2021.

The main issue in the present case is whether a binding contract existed between the parties.

The trial of this action took 3 days in which a total of 5 witnesses had testified (3 for the Plaintiff and 2 for the Defendant).

The Plaintiff is a company specialising in cable works and related construction services. Page 2 of 14 [5] The Defendant is engaged in transmission line construction projects.

Before the dispute arose, on 9.10.2020, both parties entered into a Manpower Supply Agreement (“Supply Agreement”) which was originally scheduled to expire on 31.12.2020, but was subsequently extended until May 2021. The Supply Agreement formed the basis of the parties’ initial business relationship.

Under the terms of the Supply Agreement, the Defendant had appointed the Plaintiff to supply workers to the Defendant for work in relation to a project known as “Mainhead B - Double Circuit 500KV Transmission Line from Point A (Mukim Jabi, Daerah Segamat) to Point B (Mukim Sorting Ilir, Daerah Jempol)” (“Project”). The work carried out by the Plaintiff’s workers under the Supply Agreement was for tower erection and stringing works.

In so far as the Supply Agreement is concerned, it is not disputed and is also not an issue in this case that all payment obligations of the Defendant under the said Agreement had been fulfilled.

The sequence of events that led to this dispute is as follows: i) On 24.3.2021, the Defendant issued a Request for Quotation (“Defendant’s Request for Quotation”) regarding “Completion of Tower Erection, Stringing Works and Other Associated Works for Section 3, 4, 5, 6, 7, 8, 9 & 9A” (“Proposed Sub-Contract”) in relation to the same Project. ii) In issuing the Request for Quotation, the Defendant provided the Plaintiff with a Bill of Quantities (“Defendant’s Bill of Quantities”) for the Plaintiff’s reference. iii) The Plaintiff responded to the Defendant’s Request for Quotation and submitted the Plaintiff “Final Revised Quotation for Erection & Stringing Works” on 25.3.2021 (“Plaintiff’s Final Revised Quotation”) iv) Thereafter, the Defendant held tender clarification meetings with the Plaintiff on 30.3.2014 and 12.4.2021 to ascertain the Plaintiff’s capability to carry out the work required under the Proposed Sub-Contract, followed by a final meeting on 16.4.2021. Page 3 of 14 v) On 19.4.2021, the Defendant formally notified the Plaintiff that they were not successful in securing any award in relation to the Proposed Sub-Contract. (the above events in paragraphs (i) to (iv) shall be referred to as “the request for quotation exercise”) vi) Subsequently, on 3.5.2021, the Defendant entered into a formal contract with Amaliena Construction Sdn Bhd to carry out the Sub-Contract.

The Plaintiff then commenced this action against the Defendant on 16.11.2021 for the sum of RM2,491,220.81 in relation to works it had allegedly carried out in respect of the Proposed Sub-Contract.

The Plaintiff claims that despite being informed that their bid was unsuccessful, the Plaintiff has nevertheless: i) Taken over the Defendant's store inventory; ii) Appointed security guards; iii) Commenced work based on various communications between March and April 2021.

The Plaintiff further claims that it had proceeded to: i) Submit a Final Statement of Account dated 27.8.2021, claiming RM2,491,220.81; ii) Issue a demand letter through its solicitors on 24.9.2021.

The issues to be tried in the present case can be summarised as follows: Page 4 of 14 i) Whether there was a valid contract in existence between the Plaintiff and the Defendant for the Plaintiff to carry out work in relation to the Proposed Sub-Contract under the Project. ii) If there was a valid contract between the Plaintiff and the Defendant, whether: a) the Defendant had issued any instructions to the Plaintiff to carry out work under the Proposed Sub-Contract; b) And if so, whether any work had been carried out in accordance with those instructions.

It is not in dispute that: i) There Supply Agreement is not an issue in this case and that the Defendant’s payment obligations under the said Agreement had been fulfilled; ii) The Proposed Sub-Contract (New Contract) is another part of the Project separate from the Supply Agreement. iii) There is no written agreement entered between parties in respect of the Proposed Sub-Contract.

Therefore, the Court is to determine the existence of this New Contract by way of the documents produced, namely the exchange of correspondences between parties and via oral testimony of the witnesses.

The Plaintiff’s pleaded case is that the Defendant’s Bill of Quantities and Plaintiff’s Final Revised Quotation is evidence of the New Contract (paragraph 3 of the Statement of Claim). These are the 2 main documents the Plaintiff relies heavily on to establish that the New Contract is in existence.

First and foremost, the Statement of Claim in itself is not clear and is devoid of particulars.

There is a fundamental flaw in the Plaintiff’s case and that is the complete failure to identify the contract upon which their claim is based. This failure manifests itself in several critical ways as will be detailed below.

In their Statement of Claim, the Plaintiff merely references the Defendant’s Bill of Quantities and the Plaintiff’s Final Revised Quotation. No specific contract is pleaded. This vagueness in pleading would be concerning enough on its own, but the matter is compounded by the evidence presented at trial.

The evidence presented at trial revealed multiple contradictions and inconsistencies: i) The Plaintiff's director (PW-1), testified that “The Defendant want my company to do Sub Contract Work starting 18.3.2021”. This directly contradicts the pleaded case which relies on the Plaintiff’s Final Revised Quotation (dated 25.3.2021). No explanation was offered for this fundamental contradiction. ii) PW-1 claimed work had already commenced by 25.3.2021, however, the Plaintiff’s Final Revised Quotation of the same date was described as being “to value our Subcontract work to avoid any misunderstanding”. This creates an illogical sequence of events where work allegedly began before the very document claimed to form the New Contract. The relevant part of PW-1’s testimony is reproduced below: “… to value our Subcontract work to avoid any misunderstanding between Plaintiff and Defendant. On 25.3.2021, my company already under work progress on the site” (own emphasis added) iii) During cross-examination, PW-1 admitted the claimed sum of RM2,429,220.81 was based on a bill of quantities discussed Page 6 of 14 on 12.4.2021. This contradicts the reliance on the Plaintiff’s Final Revised Quotation as the sums in these two documents were different.

Most troublingly, when PW-1 was confronted with the question, during cross-examination, that it was impossible for the Plaintiff to have received instructions to commence work on 18.3.2021, PW- 1 simply refused to answer the question posed to him.

These contradictions are not mere technical discrepancies, they go to the very foundation of the Plaintiff’s claim.

Even if it were to be accepted that the Plaintiff’s Revised Final Quotation constituted an “offer”, the evidence conclusively demonstrates that there was no “acceptance” by the Defendant for a contract to be formed.

The law on contract formation is well settled. For a binding contract to exist, there must be: i) A clear and definite offer; ii) An absolute and unqualified acceptance; and iii) Communication of that acceptance.

Through cross-examination of PW-1, he admitted the following: i) No letter of award was issued following the 4 bills of quantities submitted between 4.3.2021 to 25.3.2021; ii) Similarly, no letter of acceptance was issued after any of these submissions.

The Defendant’s request for quotation was simply a tender exercise which was neither an “offer” nor an “acceptance” of an offer.

Perhaps the most damaging evidence came from PW-1 himself, who admitted during cross-examination that the Defendant’s Bill of Quantities required the Defendant’s approval. This admission directly contradicts any suggestion of a concluded contract. Page 7 of 14 [28] In the present case, the correspondence between the parties during the quotation exercise clearly demonstrates that: i) the quotations submitted by the Plaintiff were never approved or accepted by the Defendant; ii) the Plaintiff was fully aware that its quotations were subject to the Defendant’s acceptance; and iii) the Plaintiff understood that the Defendant had not communicated any acceptance at any time during the request for quotation exercise.

Consequently, there was no “absolute and unqualified” acceptance by the Defendant of any offer made by the Plaintiff. In the absence of such acceptance, no valid and binding contract existed between the Plaintiff and the Defendant (Seni Jaya Sdn Bhd & Anor v. Dato’ Hj Ahmad Tarmizi bin Hj Puteh & Anor [2019] 2 MLJ 154 (FC); The Ka Wah Bank Ltd v. Nadinusa Sdn Bhd & Anor [1998] 2 CLJ 486 (FC)).

It is also well-established in law that an invitation to tender for a project constitutes merely an invitation to treat, not an offer capable of acceptance by the offeree (Chia Fai Chee (trading under the name and style of Golden Land Construction) v. Romspect Sdn Bhd [2022] MLJU 2899). In Seroja Anggerik Development Sdn Bhd v. MHNB Reka Sdn Bhd [2017] 10 MLJ 436) it was held as follows: “[38] Invitations to tender are not offers but are invitations to treat. This tender process was aptly put by Bingham LJ in the case of Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195 at p 1202: “A tendering procedure of this kind is, in many respects, heavily weighted in favour of the invitor. He can invite tenders from as many or as few parties as he chooses. He need not tell any of them who else, or how many others, he has invited. ... The invitation to tender may itself, in a complex case, although again not here, involve time and expense to prepare, but the invitor does not commit himself to proceed with the project, whatever it is; ...” (own emphasis added)

Further, the evidence established through PW-1’s testimony during cross-examination demonstrated that a contract of this nature, the New Contract (or Proposed Sub-Contract), would require numerous additional terms and conditions beyond mere pricing. When shown the Letter of Acceptance between the Defendant and Amaliena Construction Sdn Bhd, PW-1 admitted that: i) A proper contract would contain multiple essential documents; ii) These necessary contractual documents were never agreed between the Plaintiff and the Defendant; iii) The Plaintiff’s position relied solely on Defendant’s Bill of Quantities without other essential contractual terms.

The Defendant’s Bill of Quantities and the Plaintiff’s Final Revised Quotation cannot, in any way, constitute the terms of the New Contract, especially when compared to the comprehensive Letter of Acceptance (contract) between the Defendant and Amaliena Construction Sdn Bhd.

It is therefore abundantly clear that no binding New Contract exists between the Plaintiff and the Defendant.

As I have determined that no contract (New Contract) exists between the parties, there is no necessity to deal with the issue of whether the Defendant had issued instructions for work to be carried out thereunder.

However, for completeness, I will address this issue below.

The Defendant maintains that there were no instructions issued by the Defendant to the Plaintiff in relation to the purported Proposed Page 9 of 14 Sub-Contract. This position is supported by the evidence led at trial that: i) The only agreement between the Plaintiff and the Defendant during March, April and May 2021 was the Supply Agreement; and ii) Any instructions issued by the Defendant during that time period were instructions under the Supply Agreement, and not anything to do with what was being discussed during the request for quotation exercise.

The Plaintiff failed to provide evidence to prove that any of the work they performed during March, April, and May 2021 formed part of the Proposed Sub-Contract (New Contract) or was distinct from the work covered under the Supply Agreement.

In this regard, it was crucial for the Plaintiff to demonstrate that any work performed fell within the scope of the Defendant’s Bill of Quantities. The testimonies of PW-1 and PW-2 (the Plaintiff’s Human Resources Executive) were insufficient, not only due to their lack of specificity but also because proving this required detailed material evidence. Such evidence would need to substantiate the nature and scope of the actual work performed, which neither witness was able to provide. Additionally, the documentary evidence produced was insufficient to prove the Plaintiff’s claim.

The evidence conclusively proved that any instructions issued during the relevant period were under the existing Supply Agreement: i) PW-1 admitted the Supply Agreement was extended until May 2021; ii) The Supply Agreement explicitly covered “Supply Manpower for Tower Erection and Stringing Works”; Page 10 of 14 iii) All three of the Defendant’s witnesses consistently maintained that the 9.4.2021 instructions pertained to the Supply Agreement.

Through cross-examination, PW-1 repeatedly and consistently admitted that the Supply Agreement was the only contract in existence between the parties during the relevant period. This admission was made no less than seven times during cross-examination (Notes of Proceedings (“NOP”) dated 4.10.2022, pages 35, 37, 38, 42, 45-46). Most tellingly, when specifically questioned about the period between 30.3.2021 and 12.4.2021, PW-1 confirmed that “there was no contract between the parties, apart from the manpower supply agreement”. This unequivocal admission by the Plaintiff's own director fundamentally undermines any claim based on the purported New Contract.

The logical consequence is that no instructions could have been issued pursuant to a non-existent contract. Any work performed during this period necessarily fell under the existing Supply Agreement, for which the Plaintiff has already been fully paid.

This finding alone is sufficient to dispose of the Plaintiff's claim in its entirety.

The Plaintiff’s reliance on the letters dated 9.4.2021 and 19.4.2021 as evidence of a new contract is misconceived. A careful examination of these documents, coupled with the witness testimony, leads to the opposite conclusion: i) The 19.4.2021 letter contained specific conditions precedent that needed to be satisfied before any contractual relationship could materialise. ii) PW-1 admitted during cross-examination that the Plaintiff neither accepted these conditions nor was able to fulfil them (NOP dated 4.10.2022, lines 29-6, pages 51-52). Page 11 of 14 iii) It is a fundamental principle of contract law that conditions precedent must be satisfied before a contract can come into existence.

As for the 9.4.2021 letter, all three of the Defendant’s witnesses consistently testified that this communication pertained solely to work under the existing Supply Agreement. DW-1 explained that “any instructions given to a contractor has to be under an existing agreement” and that “in the 9th of April, the only existing agreement between the parties is the Manpower Supply Agreement” (NOP dated 5.10.2022, lines 4-23, page 188). This testimony was corroborated by DW-2 and DW-3, with DW3 specifically clarifying that “the only contract we have between us and S.G. Cables is the, was the manpower supply” (NOP dated 6.10.2022, lines 32-11, pages 235-236). Significantly, the Plaintiff failed to challenge or rebut this consistent testimony during cross-examination. The uncontroverted evidence therefore establishes that the 9.4.2021 letter was merely an operational instruction under the existing Supply Agreement rather than evidence of any new contractual relationship.

Given my finding above, this negates any necessity to deal with the quantum of the Plaintiff’s claim. However, again, notwithstanding the above, the Plaintiff has also fundamentally failed to prove: i) Any contractual basis for the amounts claimed; ii) Any certification of the work allegedly performed; iii) Any documentary evidence supporting the quantum claimed (Chia Fai Chee (supra); Buildcon Concrete Sdn Bhd v. Mammoth Empire Construction Sdn Bhd & Ors [2021] 11 MLJ 666; Tan Kuan Yau v. Suhindrimani [1985] 2 MLJ 22, (FC)); iv) Any coherent explanation of how the sums claimed were calculated. In this regard it was held in Chia Fai Chee (supra) as follows: Page 12 of 14 “[16] There are voluminous documents of invoices and supporting documents from pages 23 to 327 of CBOD Part C which are produced in Court but again there is no explanation on the contents of these documents by the Plaintiff’s witnesses. The Plaintiff cannot throw these documents to the Court expecting the Court to do the calculation on the Plaintiff’s behalf to ensure that the sum claimed in the Debtor’s statement is tallied with all the invoices. It is the duty of the Plaintiff to prove that she is entitled to what she is claiming for the work done which is not sufficiently proven in the present case.’ (own emphasis added)

This failure of proof on quantum would be fatal to the Plaintiff's claim even if a contract had been established, which it has not.

For the reasons stated above, I dismissed the Plaintiff’s claim with costs of RM60,000- in favour of the Defendant. Dated this 23rd day of December, 2024 -SGD- (WAN MUHAMMAD AMIN BIN WAN YAHYA) Judge High Court of Malaya, Kuala Lumpur (Commercial Division (NCC 3)) Page 13 of 14 COUNSEL FOR THE PLAINTIFF Nyanasambantha Thevar Subramaniam Messrs S. Thevar & Co. No. 401, Tingkat 1, Jalan Haruan 4/2, Oakland Commercial Centre, 70300 Seremban, Negeri Sembilan Tel: 06-7621000/012-2745466 Emel: sthevar2012@yahoo.com COUNSEL FOR THE DEFENDANT Harish Nair (Tai Wei Jeat, Maxine Lim and Casper Tey Zhi Pei (pupil-in-chambers) together with him) Messrs Juen, Jeat, Nic & Nair B-7-5, Tingkat 7, Corporate Suites, Gateway Kiaramas 1, Jalan Desa Kiara, 50480 Kuala Lumpur Tel: 03-64136218 Emel: general@jjnn.com.my CASES CITED

Buildcon Concrete Sdn Bhd v. Mammoth Empire Construction Sdn

Chia Fai Chee (trading under the name and style of Golden Land Construction) v. Romspect Sdn Bhd [2022] MLJU 2899

Seni Jaya Sdn Bhd & Anor v. Dato’ Hj Ahmad Tarmizi bin Hj Puteh &

Seroja Anggerik Development Sdn Bhd v. MHNB Reka Sdn Bhd [2017] 10 MLJ 436

The Ka Wah Bank Ltd v. Nadinusa Sdn Bhd & Anor [1998] 2 CLJ 486

Tan Kuan Yau v. Suhindrimani [1985] 2 MLJ 22