DALAM MAHKAMAH RAYUAN MALAYSIA D1 PUTRAJAYA dalam mahkamah rayuan malaysia d1 putrajaya (bidang kuasa

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    DALAM MAHKAMAH RAYUAN MALAYSIA D1 PUTRAJAYA

    (BIDANG KUASA RAYUAN) RAYUAN SIVIL NO.W-01-134-04/2013

    ANTARA

    TANJUNG TERAS SDN BHD … PERAYU

    DAN

    KERAJAAN MALAYSIA … RESPONDEN

    [DALAM PERKARA MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR (BAHAGIAN SIVIL)

    SAMAN PEMULA NO: S-21-286-2009

    ANTARA

    KERAJAAN MALAYSIA … PLAINTIF

    DAN

    TANJUNG TERAS SDN. BHD … DEFENDAN]

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    CORAM:

    ABDUL WAHAB PATAIL, JCA ALBERT LINTON, JCA

    LIM YEE LAN, JCA

    JUDGMENT OF THE COURT

    Introduction

    [1] This is an appeal by the Appellant/Defendant against the decision

    of the Kuala Lumpur High Court dated 28.2.2013 which dismissed

    the Appellant/Defendant’s counter-claim for the sum of

    RM3,009,254.23 against the Respondent/Plaintiff.

    [2] We heard the appeal on 13 August 2014, after which we

    adjourned the matter for consideration and decision. We now give

    our decision.

    [3] In this judgment, the parties will be referred to as they were in the

    High Court.

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    Background facts

    [4] The chronology of events leading to the counter-claim of the

    Defendant can be summarised as follows:

    (1) The Plaintiff entered into a Sale and Purchase Agreement

    dated 24.5.2003 (“the Agreement”) with a company known

    as Jeram Permata (Cheras Sdn Bhd) (“JP”), in which, in

    consideration of JP agreeing to sell a piece of land and

    constructing on the said land 226 medium cost apartments

    as staff quarters for the Jabatan Bomba Dan Penyelamat

    Malaysia (JBPM), under the Ministry of Housing and Local

    Government, the Plaintiff will pay a purchase price of

    RM50,548,000 (out of which RM4.44 million represents the

    price of the said land) to JP (“the project”).

    (2) A sum of RM16 million had been paid to JP by the Plaintiff

    under the Agreement, which included the price of the said

    land. The said land had since been transferred to the Plaintiff

    and registered in the name of the Federal Lands

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    Commissioner under a document of title known as

    HS(D):99285 Lot No. 5194 Mukim of Kuala Lumpur.

    (3) Under clause 27.1 of the Agreement, the project must be

    completed by JP within 24 months from the date of the

    building plans approvals given by DBKL on 12.11.2004,

    which brings the completion date of the project to

    11.11.2006.

    (4) There was delay on the part of JP in completing the project,

    despite 7 warning letters issued by the Plaintiff on various

    dates between 24.4.2006 and 14.11.2006.

    (5) By a letter dated 21.5.2007, the Plaintiff gave a notice of

    breach of the Agreement to JP. The said notice further

    stated that if the breach is not remedied by JP within 30

    days, the Agreement would be terminated.

    (6) By a letter dated 13.7.2007, the Plaintiff issued a letter of

    termination to JP.

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    (7) The Defendant was appointed by JP as its sub-contractor

    vide a Letter of Acceptance dated 15.2.2007 (“LOA”) to

    construct the “super structure works” under the project (see

    AR Jilid 2(2) (Bahagian C LOA on p. 276).

    (8) After the termination of the Agreement the Defendant

    refused to leave the project site.

    (9) Vide a letter dated 13.9.2007 the Plaintiff gave a notice to

    the Defendant to vacate the project site within 14 days of the

    letter and further informed the Defendant that the Plaintiff will

    not be making any payment to the Defendant after the

    Agreement was terminated on 13.7.2007. The Defendant

    refused to vacate the site despite the notice.

    (10) The Plaintiff then filed an action against the Defendant

    vide an Originating Summons (“OS”) dated 12.10.2009

    seeking the following reliefs:

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    (i) a declaration that it is the owner of the said land and is

    entitled to vacant possession of the said land;

    (ii) a declaration that the Defendant as the sub-contractor

    of the main contractor, JP, are trespassers on the said

    land after the Agreement was terminated ; and

    (iii) an order that the Defendant to vacate the said land

    within 14 days from the date of the Court’s order.

    (11) The Defendant in its affidavit in reply opposed the

    Plaintiff’s OS on the ground that there were many disputes of

    facts which could be resolved only through hearing the oral

    evidence of witnesses under a writ. Amongst the disputed

    facts were whether the termination of the Agreement

    between Plaintiff and JP was wrongful as there were

    representations made by the Plaintiff’s agents from JBPA

    and the Ministry of Housing and Local Government to JP

    and the Defendant that extension of time would be granted

    to JP to complete the project; whether there were

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    representations made by the Plaintiff’s agents from JBPA

    and the Ministry of Housing and Local Government to the

    Defendant that direct payment to the Defendant would be

    made if the Defendant could procure JP’s architect’s

    certificate to certify the work done. It was further alleged by

    the Defendant that the unlawful termination of the

    Agreement had jeopardized the Defendant in the sense that

    payment to the Defendant for work done under the LOA was

    on a back to back basis, i.e. Defendant would be paid only if

    JP is paid and the unlawful termination of the Agreement

    had resulted in loss and damage to the Defendant as it was

    not paid a single sen for the work done on the project for

    which the Defendant intended to pursue a counter-claim of

    RM50 million against the Plaintiff.

    (12) In its affidavit in reply, the Plaintiff averred, inter alia, that

    it had no contractual relation with the Defendant and no

    approval was given to JP for the appointment of the

    Defendant as a sub-contractor as was required under the

    Agreement; that it was not aware of the appointment of the

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    Defendant as JP’s sub-contractor and did not know the

    nature of the work the Defendant was contracted by JP to

    carry out on the project. The Plaintiff also maintained that

    neither the Plaintiff nor its representatives had at any time

    given any representation to the Defendant that direct

    payment would be made if the Defendant could procure the

    architect to certify the work carried out by it.

    (13) The Defendant, in its affidavit in reply, while

    acknowledging that no consent was obtained by JP for the

    appointment of the Defendant as its sub-contractor,

    maintained that the Plaintiff was fully aware of the

    Defendant’s appointment as the Defendant had to take

    instructions not only from JP but its architect, civil structural

    engineer, mechanical and electrical engineer, quantity

    surveyor and also the Plaintiff’s representatives from JBPA.

    (14) On 10.3.2010, the Kuala Lumpur High Court granted

    order in terms of the Plaintiff’s OS and the Defendant, its

    workers and agents were ordered to vacate the said land

    within 30 days from the date of the Order.

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    (15) The High Court also directed the Defendant’s counter-

    claim to go for trial and further directed that all existing

    affidavits filed by the parties in respect of the OS to stand as

    pleadings.

    (16) The counter-claim was heard before the present High

    Court Judge. During the trial, the Defendant confined its

    counter-claim against the Plaintiff to a sum of

    RM3,009,254.23 as certified by JP’s architect under 3

    interim certificates.

    Issues to be tried

    [5] During the trial parties had agreed to the two following issues to

    be tried:

    (a) Whether the Plaintiff has an obligation under the law to pay

    the Defendant as a sub-contractor for the works that have

    been completed on the said project;

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    (b) If the answer to the 1st issue is in the affirmative, what are

    the sums due to the Defendant?

    Decision of the High Court

    [6] At the conclusion of the trial, the learned High Court judge

    dismissed the Defendant’s counter-claim based on the following

    findings.

    [7] In regard to the first issue, the learned trial Judge accepted the

    submission of learned counsel for the Defendant that since there

    was no contractual relationship between the Plaintiff and the

    Defendant, the Defendant’s counter-claim was not a contractual

    claim but a claim premised on section 71 of the Contracts Act,

    which reads as follows:

    Section 71 - obligation of person enjoying benefit of non-gratuitous act.

    Where a person lawfully does anything for another, 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 re