Tenaga Nasional Berhad v Ata Industrial (M) Sdn Bhd (J-02(NCvC)(W)-2232-10/2018)

The Appellant/Plaintiff’s claim is based on Sec 38 (3) of the Electricity Supply Act 1990 (‘the Act’) for its loss of revenue for the supply of electricity to the Respondent/Defendant due to meter tampering which was allegedly caused by the Defendant and/or its 10 agent.

Plaintiff claimed that on 20.2.2014, the Plaintiff’s representatives went to two premises and discovered that the electricity meters installed at both premises had been tampered with. There were 15 extra cables which connect directly from the transformer rooms to the main switch boards without passing through the electricity meters which resulting the actual consumption of the electricity would not be accurately recorded by the meters at both premises. Based on Plaintiff’s estimated calculation, it had suffered a total 20 loss of an estimated value of RM 5,089,623.63 (“the loss amount”) for the two premises for the period between 1.3.2009 and 20.2.2014.

The Defendant had contended that the two TNB’s accounts for the 25 two premises do not belong to the Defendant. They belong to a company known as Jabco Filter System Sdn Bhd and that the two premises bear a postal address as No. 7 and 9, Jalan Hasil 1, Kawasan Perindustrian Jalan Hasil, Tampoi, 81200 Johor Bahru, Johor not as No. 7 and No. 18 as claimed by the Plaintiff. It was 30 3 also contended that it was impossible for the Defendant to tamper 5 with the meter because firstly, only the Plaintiff’s employee(s) has the keys to the locked transformer rooms and secondly, the Defendant did not have the means to carry out the installation of the extra cables without first switching off the supply of the electricity to the two premises. The Defendant further stated that 10 the Plaintiff’s employee(s) came to inspect the two premises sometime around 2011 as there were several complaints made to TNB that the supply of electricity to the two premises was frequently interrupted and the Plaintiff’s employee did not find any tampering at that time. In the event if the Plaintiff was able to prove 15 that the Defendant was liable for the tampering of the meters, the Defendant then challenged the estimated loss amount. Decision of High Court 20 [4] Having heard the evidence of witnesses and perusal of contemporaneous documents given during full trial, the High Court dismissed the Plaintiff’s claim with costs of RM30,000.00 to be paid to the Defendant. 25 [5] The High Court found the claim for the estimated loss amount against the Defendant for customer account at property 18 is tainted with uncertainty. The Court observed that the Plaintiff’s employees stated the address for the place of inspection was 4 property No. 18 but it actually took place at premise No. 9. 5 Furthermore, the Plaintiff’s monthly invoices which were address to property No. 18 did not state what serial number of the meter is. However, on this issue, the Court is equally baffled as to why the Defendant did not protest the monthly invoices it had received all those years or attempt to seek clarification from the Plaintiff, and 10 why the Defendant had paid the monthly invoices although they were addressed to property 18.

On the issue of tampering, the Court is of the view that the tampering could not have been committed by the Defendants’ 15 representative(s) and/or its agents alone without any assistance being offered by the Plaintiff’s employee(s) and/or its agent(s) because of the following reasons:

The extra cables which were fixed or connected to the 20 transformers in the transformer rooms were conspicuously large in size. One could not miss or overlook that extra cables were connected to the transformers.

In the event the extra cables were installed after 25 commissioning of the transformer, this Court accepts the Defendant’s submission that in order to connect the extra cables to the transformers, the supply of the electricity has to be shut down completely by TNB. 30 5 5

The keys to the transformer rooms were kept at all times by the Plaintiff’s employees. Even if the Defendant’s representative(s) could unlock the transformer rooms, the Defendant’s representative could not connect the extra cables to the transformer if the electricity is not shut down. 10 [7] The Defendant’s Counsel submitted that the doctrine of ex turpi causa non oritur actio should avail to its defence since the Plaintiff’s employee was part of the illegal act, the Plaintiff ought to be vicariously liable. However, the Court was of the view that the 15 doctrine could not apply because the object of the Plaintiff and Defendant in entering into illegal agreement was not intended to carry out any illegal act neither would the performance of the contract contravene any law in the country. 20 [8] Based on the evidence of PW13 and two defective written statements, the Court was of the view that the Plaintiff’s claim ought to fail in limine for non-compliance with Section 38(4) of the Act. 25 [9] On the issue of limitation, the Plaintiff claimed the estimated loss amount from the period from 1.3.2009 to 20.2.2014. However, the action was taken out on October 2017. If the Plaintiff took 1.3.2009 as the starting point of the time the breach occurred, then the limitation would set in on 2.3.2015. 30 6 5 [10] The Court also found that the Plaintiff’s method of calculation and the manner in which it derived the amount as the estimated loss amount was grossly unjust and arbitrary. THE APPEAL 10 [11] There are twenty (23) grounds of appeal as stated in the memorandum of appeal filed by the Plaintiff. However, at the outset, the Plaintiff’s counsel took the stand that the appeal only concerned two (2) main issues i.e. the issues of tampering of the 15 electricity meters which is an offence under the Act and statutory demand for the loss amount due to the offence committed under the Act. [12] Parties agreed that the issue of statutory claim for estimated loss 20 amount provided under the Act shall be first dealt with. We also agreed with the approach since we viewed the issue is very crucial to the Plaintiff’s case. The learned judge had stated in his grounds of judgment that the two (2) written statements were defective and with that reason alone the Plaintiff’s claim for estimated loss 25 amount ought to fail in limine for non-compliance with Section 38(4) of the Act. Certainly, we will look into the learned judge’s finding whether it had been correctly made. Consequently, in the event we agreed with the learned judge that the written statements relied by the Plaintiff were in fact defective, it becomes unnecessary for us to 30 7 deal with the second issue and if otherwise we will proceed to deal 5 with the next issue. [13] The Plaintiff and the Defendant had filed in their written submissions and also made the oral submissions before us. We were also referred to the Records of Appeal and relevant 10 documents to support the arguments. We have also read the learned judge’s grounds of judgment. [14] Having heard and considered the appeal, we agreed with the learned judge’s finding that the written statements relied by the 15 Plaintiff purporting to claim for loss estimated amount for the offence of tampering electricity meters under the Act is defective for non-compliance with section 38(4) of the Act. We were of the same view with the learned judge on this particular issue that the written statements are defective for non-compliance with section 20 38(4) of the Act. In consequences, if the written statements are defective, then there is no proper claim for estimated loss amount before the Court. [15] We agreed that based on this issue alone the Plaintiff’s claim of 25 estimated loss amount ought to be dismissed. We did not consider other grounds as necessary for further discussion and it was also our view that even if we agreed with the Plaintiff that the tampering of electricity meters was proven against the Defendant, the claim for the estimated loss amount must also be proved by the Plaintiff. 30 8 The Defendant had challenged the estimated loss amount and the 5 learned judge had made a finding that the Plaintiff had failed to comply with the requirements for making a statutory claim under section 38(4) of the Act. [16] There is no appealable error in the High Court’s judgment that 10 merit our intervention. Therefore, it is our unanimous decision that the appeal was dismissed with costs of RM 10,000.00 subject to allocator fee. We gave our reasons. OUR DECISION 15 [17] From the very beginning, the Plaintiff’s made it clear that it was relying specifically on the presumption in section 38(3) of the Act. Subsection (3) provides as follows – 20 “(3) The licensee may require the consumer to pay him for the loss of revenue due to the offence committed under subsections 37(1), (3) and (14) and any reasonable expenses directly incurred by the licensee under this section including expenses incurred in respect of reconnection of electricity in 25 the manner as have been directed by the Commission: Provided that and subject to subsection (4), if the licensee does not proceed with a claim for such loss of revenue and expenses in court, the licensee may only claim against the 30 9 consumer for the said loss of revenue and expenses for a 5 period not exceeding six months retrospectively from the date the offence was discovered under subsection (1). [18] The Plaintiff’s claim for estimated loss amount is made under section 38(3) of the Act. The Plaintiff made the necessary demand 10 for the estimated loss amount to be paid by the Defendant. The Plaintiff's claim against the Defendant is for the sum of RM 5,089,623-63 being the total sum of estimated loss amount and expenses (Para 15(a) of the statement of claim). The Plaintiff also claimed for interest on the total sum of RM 5,089,623-63 at an 15 interest rate of 5% per annum from the date of judgment until full settlement, solicitor-client costs, costs and any other relief deemed fit by this Court. [19] The crux of the Plaintiff's claim against the Defendant is that 20

the amount of loss of revenue or the reasonable expenses incurred by the licensee; (aa) the manner of calculation of the loss of revenue and 15 items of expenses; and

the person liable for the payment thereof, shall be prima facie evidence of the payment that has to be 20 made by the consumer under subsection (3) and such written statement shall be notified to the consumer within fourteen working days or any period as extended with the written approval of the Commission after the disconnection”. 25 [25] It is very clear that in order for the demand to be valid, the requirement under subsection (4) must be complied with. Our preliminary view is that the demand for payment to be made by the Defendant to the Plaintiff must contain such particulars in the written statement duly certified by the Plaintiff. If the requirements 30 13 are met, then it shall be prima facie evidence of the payment that 5 has to be made. [26] The Federal Court case of Tenaga Nasional Bhd v lchi-Ban Plastic (M) Sdn Bhd & Other Appeals (2018) 3 CLJ 557 is binding on this Court. This case has basically settled the law in 10 respect of the statutory presumption in section 38(3) of the Act and is binding on this Court. It was held as follows - “(1) TNB's right to claim its loss of revenue is under s. 38(3) and not s. 38(4) of the Act. Section 38(4) is a provision relating 15 to the mode of proof where TNB makes a claim for loss of revenue under s. 38(3) of the Act. A written statement by an employee duly certified by TNB or by a person authorised by TNB stating (i) the amount of loss of revenue or the expenses incurred by TNB; and (ii) the person liable for the payment, 20 shall be prima facie evidence of the payment that has to be made by the consumer under s. 38(3) of the Act. A criminal conviction of an offence under s. 37(1), (3) or (14) of the Act is not a pre-condition for TNB to pursue its claim for loss of revenue under s. 38(3) of the Act. This right is a separate right 25 independent of its right to disconnect the supply of electricity under s. 38(1) of the Act. (para 33)

The written statement issued by TNB must satisfy the first five conditions under s. 38(4) of the Act in order for it to be 30 14 accepted as a prima facie evidence of the payment that has to 5 be made by the consumer. In cases where a written statement was not issued in compliance with s. 38(4) of the Act, TNB loses advantage of the presumption of a prima facie evidence but it does not lose the right of recovery given statutorily under s. 38(3) of the Act. However, TNB has to prove its claim based 10 on the civil burden and the standard of proof of balance of probabilities. (paras 62,65 & 66).

Due to the nature of the claim, there may be difficulty in obtaining the evidence for the claim under s. 38 of the Act. 15 Nevertheless, it would be unwise to use this occasion to say anything which might be taken as specifying or limiting the nature and extent of the evidence necessary to establish a claim for loss of revenue under s.38 of the Act. Where precise evidence is available, ie, if there is a special device to 20 measure the loss of revenue due to the tampering of electricity supply, naturally the court expects to have it , but where it is not, the court must do the best it can. In other words, there could be other evidence in lieu of precise evidence. For example, approximation or estimation may be used provided it 25 is reasonable and fair. This would depend on the quality of evidence adduced to support that approximation or estimation. (para 86). 15

As an alternative or in addition to the statutory cause of 5 action under s. 38(3) of the Act for recovery for loss of revenue, TNB is entitled to legally pursue the claim based on a cause of action in unjust enrichment. If TNB elects to pursue relief for unjust enrichment then, there must be a proper and specific plea in the statement of claim that its cause of action 10 is founded. Further, material particulars that give rise to unjust enrichment must be provided in the pleadings. In this regard, the court should not decide on an issue that was not pleaded by the parties. Parties are required to set out the factual bases of their respective cases in the pleadings. The most important 15 purpose of pleadings is to plead reasonable cause of action, define the issues of fact and questions of law to be determined by the court. Pleadings enable both parties to know in advance the averments being made against them so that they will not be taken by surprise during the trial. In the present 20 appeals, TNB did not plead that its cause of action was founded on the law of unjust enrichment. Unjust benefit was not a pleaded issue. The submission on the benefit/unjust enrichment was misconceived. (para 96). 25 [27] It is very clearly stated in the above case that the civil burden and the standard of proof of balance of probabilities mentioned above means the Plaintiff must plead and prove unjust enrichment. However, in this case we found the Plaintiff has failed completely to plead unjust enrichment in their statement of claim. At para 30 16 [96] at page 595 of the case of Tenaga Nasional Berhad v. lchi- 5 Ban Plastic (M) Sdn Bhd (supra) it was held by the Federal Court that this is fatal. [28] Based on the above decision of lchi-Ban Plastic which is binding on this Court, the Plaintiff must prove that there was a written 10 statement stating the amount of estimated loss amount or expenses incurred. At para 62 of the decision it was held that for a written statement to have effect of a prima facie evidence, it must be issued in compliance with the requirements of section 38(4) of the Act. 15 [29] The Court of Appeal in Tenaga Nasional Bhd v Dunia Raya Enterprise Sdn Bhd [2015] 6 CLJ 751, Hamid Sultan Abu Backer JCA delivering the judgment of the Court of Appeal, at p.757, held that – 20 “[5] What is important to note under s. 38 is that, Tenaga is not deprived of making a claim against its customers for breach of contract and/or tort for loss of revenue in consequence of a tampered meter. If they do so they must prove that the 25 customer tampered with the meter and in consequence Tenaga suffered loss of revenue. That is to say Tenaga must prove according to law the liability as well as quantum. 17 [6] However, if Tenaga relies on s. 38, they need not prove 5 that the customer tampered with the meter. It is sufficient if they can show that the meter has been tampered. In terms of quantum they can rely on certified written statement to establish their case. That does not mean the respondent cannot challenge the quantum. For the appellant to rely on a 10 written statement, the following must have taken place: i. the appellant must have calculated the loss of revenue and reduce it into a document and written statement; ii. an employee and/or duly authorised person of the 15 appellant must have perused the document as well as the written statement to certify the written statement; iii. the certified written statement must contain the particulars in s. 38(4) of ESA 1990; 20 iv. for a valid certificate, the name of the employee or authorised person of the appellant must appear in the statement and duly signed; 25 v. if a proper certified statement is issued, it needs to be served on the customer and if the customer does not pay, then civil action can be taken. Thus, it is a condition precedent for initiation of civil action in reliance of s. 38 for 18 Tenaga to issue a certified written statement according to 5 law, before civil action can be commenced”. [30] It is very clear that before the Plaintiff in our case can even claim for alleged estimated loss amount, if it is relying on the statutory presumption under section 38(3) of the Act, strict and stringent 10 requirements in respect of a written statement which is provided for in section 38(4) of the Act must be complied with. This is a mandatory condition precedent. 15 [31] The Plaintiff submitted that section 38(4) of the Act does not require for a written statement to be certified as true and correct as being held by the Judge. What is required under section 38(4) is that the written statement is duly certified by the licensee. The Plaintiff was referring to the two written statements, one issued by 20 the Plaintiff dated 26.7.2016 and the other is the solicitor letter dated 28.2.2017 and in particular the written statement dated 26.7.2016 where is written the words “Diperakukan oleh Mohd Latif Bin Md. Kadir (PW13)”. 25 [32] It was submitted that Kamus DwiBahasa, Edisi Kedua, Dewan Bahasa dan Pustaka defines the word "certify" as follows:-

Certify-

Memperakui: 2. Mengesahkan Eg: I certify that this is a true copy (Saya memperakui 30 19 bahawa ini adalah salinan yang sah) 5 [33] According to the Plaintiff, the word certify as defined by Kamus DwiBahasa as memperakui has been clearly stated in the letters issued by the Plaintiff to the Defendant. No where in the act that states the letters have to be certified as true and correct 10 ("memperakui sebagai sah dan betul"). [34] It was the Plaintiff’s case that the Plaintiff had satisfied the requirements as laid down in the above authority, for it to be accepted as a prima facie evidence of the payment that has to be 15 made by the Defendant. It was further submitted that the burden is shifted upon the Defendant to rebut the prima facie evidence "by acceptable evidence to the contrary". [35] Sarkar Law of Evidence, Malaysia Edition, Volume 1 defines 20 prima facie evidence as evidence which, if accepted, appears to be sufficient to establish a fact unless rebutted by acceptable evidence to the contrary. It is not conclusive. [36] Halsbury's Laws of England, Fourth Edition, Volume 17 25 defines prima facie evidence and conclusive evidence as follows - "Prima facie evidence" means evidence which, if not balanced or outweighed by other evidence, will suffice to establish a particular contention. 30 20 5 "Conclusive evidence" means that no contrary evidence will be effective to displace it, unless the so-called conclusive evidence is inaccurate on its face, or fraud can be shown”. 10 [37] Based on the above submission, it was the Plaintiff’s stand that there was no acceptable evidence to the contrary produced by the Defendant to rebut the prima facie evidence under section 38(4) to justify the low electricity consumption at the Defendant's factory for the period claimed. 15 [38] We had considered the Plaintiff’s argument. However, we disagreed with the Plaintiff. The Plaintiff has failed to comply with the same. We referred to the purported written statements or statutory demand issued by the Plaintiff at pages 611-612 and 613 20 dated 26.7.2016 of the Record of Appeal Vol.4. Plaintiff read the word used in the Act as “certify” means “Diperakukan”, or “disahkan”. In our view this cannot be correct because subsection

says that a written statement by an employee of the licensee duly certified by the licensee or any person authorized by the 25 licensee specifying paragrah (a), (aa) and (b). At para [64] of the Federal Court case of Tenaga Nasional Berhad v lchi-Ban Plastic (M) Sdn Bhd as cited earlier hereinabove it was held that the words "duly certified by the licensee" in section 38(4) of the Act would carry the plain and literal meaning. The Oxford 30 21 Advanced Learner's Dictionary defines "certify" as to declare 5 something formally in writing and in the present context to declare that the amount in the written statement is true and correct. Every written statement under section 38(4) of the Act which is not certified by TNB, can be certified by any person authorised by TNB. 10 [39] The word "certify" in section 38(4) of the Act requires a declaration from PW 13 that the amount in the written statement is true and correct. This is conspicuously missing in both the notices of demand. As such it is our view that one of the pre-condition of section 38(4) was not complied with rendering the two 15 notices of demand/ written statement defective. [40] We are bound by the above decision that the words “duly certified” in section 38 (4) of the Act is to declare that the amount in the written statement is true and correct. Therefore, the Plaintiff’s 20 argument that section 38(4) of the Act does not require for a written statement to be certified as true and correct cannot be accepted and is misconceived. By perusing both notices which are the purported "written statement", there appears to be non-compliance with a requirement of section 38(4) of the Act. There is nothing in 25 both notices of demand to "declare that the amount in the written statement is true and correct" as held at para 64 of the case of Tenaga Nasional Berhad v lchi-Ban Plastic (M) Sdn Bhd. 22 [41] On the evidence, PW13 had only issued the two notices of demand 5 and had no knowledge of the method to be used for calculation whereas section 38(4) of the Act requires as a pre-condition that the method of calculation of losses and expenses be stipulated. [42] In cross-examination, the evidence of PW13 on this issue is as 10 follows:- : En Latif, tugas kamu adalah untuk issuance of letter of demand for premise no. 7 and 18? 15 SP12 : Ya. : Setuju samada kaedah untuk mendapatkan jumlah tuntutan tersebut bukan di dalam pengetahuan kamu? SP`0 : Betul. 20 : Kaedah pengiraan itu pun tidak ada didalam pengetahuan kamu? SP12: Setuju. 25 [43] At para [65] of Tenaga Nasional Berhad v lchi-Ban Plastic (M) Sdn Bhd, the Federal Court agreed with the decision of the Court of Appeal in Tenaga Nasional Bhd v. Dunia Raya Enterprise Sdn Bhd (supra) that the written statement issued pursuant to section 30 23 38(4) of the Act by TNB must satisfy the first five conditions 5 mentioned in that case (para 62 of this judgment) in order for it to be accepted as a prima facie evidence of the payment that has to be made by the consumer. [44] Based on this alone the entire claim of the Plaintiff falls and that the 10 Plaintiff's claim must be dismissed since the Plaintiff purports to rely on the statutory presumption under section 38(3) of the Act but had not satisfied the requirements or conditions attached to it. It means that in cases where a written statement was not issued in compliance with section 38(4) of the Act, the Plaintiff loses 15 advantage of the presumption of a prima facie evidence but it does not lose the right of recovery given statutorily under section 38(3) of the Act. However, the Plaintiff has to prove its claim based on the civil burden and the standard of proof of balance of probabilities. The Plaintiff could still avail itself of a civil claim for breach of 20 contract in particular unjust enrichment. However in this case the Plaintiff has failed to plead the same in their statement of claim. [45] In para (4) at page 558 in the Federal court case of Tenaga Nasional Bhd v lchi-Ban Plastic (M) Sdn Bhd, it was held that 25 the most important purpose of pleadings is to plead reasonable cause of action, define the issues of fact and questions of law to be determined by the court (see: Saiman Umar v Lembaga Pertubuhan Peladang [2015] 9 CLJ 153). It was also held that as an alternative or in addition to the statutory cause of action 30 24 under section 38(3) of the Act for recovery for loss of revenue, TNB 5 is entitled to legally pursue the claim based on a cause of action in unjust enrichment. If TNB elects to pursue relief for unjust enrichment then, there must be a proper and specific plea in the statement of claim that its cause of action is so founded. 10 [46] At para [96] of Ichi-Ban's case, it was held that it is well-settled legal principle that the court should not decide on an issue that was not pleaded by the parties. Parties are required to set out the factual basis of their respective cases in the pleadings. The most important purpose of pleadings is to plead reasonable cause of 15 action, define the issues of fact and questions of law to be determined by the courts. Pleadings enable both parties to know in advance the averments being made against them so that they will not be taken by surprise during the trial. Tellingly, in the present appeals, TNB did not plead that its cause of action was founded on 20 the law of unjust enrichment. Unjust benefit was not a pleaded issue. With respect, the submission on the benefit/unjust enrichment question by learned counsel for TNB is, therefore, misconceived. 25 [47] It is trite law that parties are bound by their own pleadings and that a party stands or falls by the four corners of his pleadings. The court shall only decide on issues which were pleaded and not otherwise (see: The Court of Appeal case of Tan Leng Choo v Law Teck Huat (2009) 1 MLJ 820; Hong Leong Bank Berhad v 30 25 Asakura Industry Sdn Bhd & Ors (2011) 9 MLJ 723) 5 [48] We also referred to the Court of Appeal case of Sukatno v. Lee Seng Kee & Anor (Civil Appeal No. A-04-76-2008) cited by the Defendant where, it was held as follows - 10 "[36] According to Bret L.J. in Philipps v. Philipps And Others (1878-79) 4 Q.B.D. 127, at 133, C.A., "If parties were held strictly to their pleadings under the present system they ought not to be allowed to prove at the trial, as a fact on which they would have to rely in order to support their case, any fact which 15 is not stated in their pleadings." It simply means that each party must plead all the material facts on which he proposes to rely at the trial; otherwise that party is not entitled to give any evidence of those material facts. 20 [37] According to the case of Waghorn v. George Wimpey & Co. Ltd. {1969} 1 W.L.R. 1764 where the evidence adduced at the trial establishes facts which are different from those pleaded by the Appellant as constituting negligence-in fact a radical departure, the action will be dismissed forthwith. Even if the 25 Appellant were to succeed at the trial based on findings of fact by the trial court, that judgment will not be allowed to stand and the appellate court will dismiss the action". 30 26 CONCLUSION 5 [49] Based on the aforesaid and in the result, the Plaintiff’s appeal has no merit. We were unanimous in our decision that the Plaintiff’s appeal is dismissed with costs of RM10,000.00 to the Defendant subject to allocatur. 10 Dated this 24 Sept., 2019 Sgd KAMALUDIN MD. SAID 15 JUDGE COURT OF APPEAL MALAYSIA PUTRAJAYA 20 Parties

Izatunlina Jamaludin and Azizi Ahmad Shaghir for the Appellants (Messrs Othman Hashim & Co.,)

G.K Sritharan for the Respondent (Messrs G.K Sritharan & Co.,) 30