Tech Art Sdn Bhd

[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 1

TECH ART SDN BHD

v.
METROPOLITAN BUMI SDN BHD

High Court Malaya, Kuala Lumpur

Aliza Sulaiman J
[Suit No: WA-22C-10-02/2018]
25 January 2023

Case(s) referred to:

Ang Koon Kau & Anor v. Lau Piang Ngong [1984] 1 MLRA 488; [1984] 2 MLJ
277; [1985] CLJ (Rep) 24 (refd)
Gerard Jude Timothy Pereira v. Kasi KL Palaniappan [2018] 3 MLRA 97; [2017]
6 MLJ 54 (refd)
Globe Engineering Sdn Bhd v. Bina Jati Sdn Bhd [2014] 5 MLRA 363; [2014] 5
MLJ 145; [2014] 7 CLJ 1; [2014] 4 AMR 793 (refd)
Kiaw Aik Hang Co Ltd v. Tan Tien Choy [1963] 1 MLRA 335; [1964] 1 MLJ 99
(refd)
Kosma Palm Oil Mill Sdn Bhd & Ors v. Koperasi Serbausaha Makmur Bhd [2003]
1 MLRA 536; [2004] 1 MLJ 257; [2003] 4 CLJ 1 (refd)
Lee Ah Chor v. Southern Bank Bhd [1990] 2 MLRA 6; [1991] 1 MLJ 428; [1991]
1 CLJ (Rep) 239 (refd)
Lee Ing Chin @ Lee Teck Seng & Ors v. Gan Yook Chin & Anor [2003] 1 MLRA
95; [2003] 2 MLJ 97; [2003] 2 CLJ 19; [2003] 2 AMR 357 (refd)
Mat Lim & Anor v. Ho Yut Kam & Anor [1966] 1 MLRH 682; [1967] 1 MLJ 13
(refd)
Ming Ann Holdings Sdn Bhd v. Danaharta Urus Sdn Bhd [2002] 1 MLRA 214;
[2002] 3 MLJ 49; [2002] 3 CLJ 380; [2002] 3 AMR 2867 (refd)
Nirumalan K Pillay & Ors v. A Balakrishan [1997] 1 SLR 322 (refd)
OSK Securities Bhd v. Probo Pacific Leasing Pte Ltd & Anor [2008] 3 MLRA
787; [2009] 3 MLJ 712 (refd)
Romar Positioning Equipment Pte Ltd v. Merriwa Nominees Pty Ltd [2004] 4
SLR 574 (refd)
Sim Siok Eng & Anor v. Poh Hua Transport and Contractor Sdn Bhd [1980] 1
MLRA 618; [1980] 2 MLJ 72 (refd)
Sivalingam Periasamy v. Periasamy & Anor [1995] 2 MLRA 432; [1995] 3 MLJ
395; [1996] 4 CLJ 545; [1996] 3 AMR 3506 (refd)
Superintendent of Lands and Surveys (4th Div) v. Hamit Matusin [1994] 1 MLRA
300; [1994] 3 MLJ 185; [1994] 3 CLJ 567; [1994] 3 AMR 1882 (refd)
Tan Ah Kow & Anor v. Tan Chaui En [2017] 6 MLRA 141; [2017] 6 MLJ 297;
[2018] 2 CLJ 610 (refd)
Tara Singh v. PP [1948] 1 MLRA 187; [1949] MLJ 88 (refd)
Tengku Mahmood v. PP [1974] 1 MLRH 347; [1974] 1 MLJ 110 (refd)
Tey Por Yee & Anor v. Protasco Bhd [2020] MLRAU 69 (refd)
The Government of Malaysia v. Datuk Kadir Mohamad Mastan & Another Case
[1993] 3 MLRH 207; [1993] 3 MLJ 514; [1993] 4 CLJ 98 (refd)
 Tech Art Sdn Bhd
pg 2 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

Legislation referred to:

Evidence Act 1950, ss 13, 34, 91
Rules of Court 2012, O 18, rr 7(1), 8(1), 10, 13, O 45, r 11, O 92, r 4

Counsel:
For the plaintiff: K Selva Kumaran (Shankar Gunaratnam and Yau Jie Luan with
him); M/s Rose Hussin
For the defendant: Balbir Singh (Daniel Ong with him); M/s Najiana Wan Balbir

[Order accordingly.]

JUDGMENT

Aliza Sulaiman J:

[1] The need for legal practitioners to have a firm grasp of the rules of
pleadings cannot be understated. This case serves as yet another reminder on
the significance of pleadings in civil suits. Basically this case involves the claim
for costs, fees and other items by the Plaintiff, who is the main contractor for
the construction of a university campus in Rembau, Negeri Sembilan, against
the Defendant, the sub-contractor for the project. The Defendant denied
liability for the claims and it also pleaded the right to set off the amount of the
Plaintiff's claim against the higher amounts which was purportedly owed by
the Plaintiff to the Defendant.

[2] This Grounds of Judgment contains the full reasonings of the Court in
respect of the following:

(a) the decision after full trial where:

(i) the final sum to be paid by the Defendant to the Plaintiff is

RM745,161.18 (out of the pleaded claim of RM6,512,019.49)
with interest at the rate of 5% per annum from the date of
judgment (as pleaded) until the date of full settlement;

(ii) t h e D e f e n d an t ' s c o u n t er c l a i m f o r t h e su m o f
RM6,838,927.08 was allowed with interest at the rate of 5%
per annum from the date of filing of the Counterclaim (on 3
October 2018) until full settlement. This amount was allowed
to be set off against the sum as stated in subpara (i) above; and

(iii) costs of RM60,000.00 to be paid by the Plaintiff to the

Defendant, subject to allocatur; and

(b) the decision to allow a stay of the nett judgment sum of

RM5,713,247.03 pending the disposal of the appeal by the Court of
Appeal on condition that this amount is deposited with the
Defendant's solicitors as stakeholder in an interest-bearing account
within 30 days from the date of the decision of the Plaintiff's
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 3

application in encl 153. The said sum and the accrued interest thereon
shall be released in accordance with the order that will be made by the
Court of Appeal. Cost was ordered to be in the cause of the Plaintiff's
appeal.

The Salient Facts

[3] The Plaintiff is a company incorporated under the laws of Malaysia and
has its main business address at B-5-7, 5th Floor, Block H, Ostia Bangi
Premier Business Avenue, Jalan Ostia Utama, Seksyen 14, 43650 Bandar Baru
Bangi, Selangor Darul Ehsan.

[4] The Defendant is similarly a company incorporated under the laws of

Malaysia and has a registered address at 36-2, Medan Setia 2, Plaza
Damansara, Bukit Damansara, 50490 Kuala Lumpur, Wilayah Persekutuan.
The Defendant's nature of business is in general trading, land and property
investment and investment holding.

[5] Konsesi Kota Permatamas Sdn Bhd ('KKP') had, vide the Letter of Award
dated 8 May 2013 ('KKP's LoA'), appointed the Plaintiff as the main
contractor of the total development for the project known as "Proposed
Development & Construction of UiTM Campus On Lot 472, Mukim Kundor,
District of Rembau, Negeri Sembilan Darul Khusus On Private Finance
Initiative (PFI) Basis" ('Project') for the lump sum fixed price of RM230
million. The construction period was 30 months from the date of site
possession.

[6] On the same date, the Plaintiff issued the Letter of Award to irrevocably
appoint the Defendant as the Sub-Contractor, Management Consultants and
Payment Agents for a range of works ('LoA').

[7] Clause A(i) of the LoA states that the contract sum shall be a lump sum
fixed price of RM108,811,854.83. The detailed scope of works can be found in
the same clause which is re-produced below:
 Tech Art Sdn Bhd
pg 4 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

(iii) Nominated Sub-Contractors (NSC)

We grant you the rights to nominate Sub-Contractors (NSC) for us to

award for the following scope of works for which we will be paid
Profit & Attendance of 2% of the respective amounts awarded to them
as instructed by you.

In the event of a default termination of any NSC's employment, we

will not be made responsible to complete the Works under any of the
above NSC contracts and to bear extra costs incurred to complete the
Works. You shall be responsible and bear all costs in completing the
above Works in an orderly and timely manner to ensure completion of
the Project. We reserve the rights to claim for any loss and/or extra
expenses incurred due to any delay caused by this event.".

[8] The Financial Arrangement as between the Plaintiff and Defendant is

stipulated in Clause C of the LoA and of importance to the determination of
this dispute are the following subparas thereunder:

"C....

...

2. Payments for all works under Item A above including all differences
between our contract sum to you and the contract sum to NSCs shall
be made to you within 7 working days from the receipt of our claims
subject to 3 (a), (b), (c) and (d) below and such payments to the NSCs
appointed by you at the contract sum determined by you and after the
proportionate deduction of our 2% profit and attendance.
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 5

3. We hereby confirm our undertaking to you that:

...

c. You agree to reimburse us an amount equivalent to 47.3%

of the following expenses incurred by us for the Project:

i. CIDB levy;

ii. Premium for insurances under the Contract;

iii. Stamp Duty of the Contract between us and the

Employer, and

iv. Any another costs related to the project."

[9] Among the agreed facts for purposes of the trial are that

(a) the Defendant does not dispute the percentage rate of 47.3% as
stated in the LoA;

(b) the Defendant agreed to pay the Plaintiff the profit and attendance
fee for all the subcontractors which were nominated by the Defendant
to carry out the works at site for the sum of RM447,972.48;

(c) the Plaintiff has the right to profit and attendance fee on the
following subcontractors nominated by the Defendant:

(i) Stitec M & E Sdn Bhd ('Stitec');

(ii) ASC Synergy Sdn Bhd ('ASC'); and

(iii) Nova Nexus Design Studio ('Nova Nexus');

(d) at the Defendant's request, the Plaintiff had advanced the sum of
RM2.5 million to the Defendant to help the Defendant to bear the
expenses for the Project ('Loan');

(e) the Project Architect had issued the Certificate of Practical

Completion ('CPC') on 23 September 2016; and

(f) the Plaintiff is continuing with arbitral proceedings initiated by

KKP and that as a result of the directions by the mutually agreed
replacement Arbitrator, the Plaintiff became the claimant in the
arbitration (see the Supplementary Fact).

[10] It is the Plaintiff's case that:

 Tech Art Sdn Bhd
pg 6 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

(a) it had paid the following amounts:

(i) RM120,708.09 for the insurance premium;

(ii) RM136,250.00 for the CIDB levy; and

(iii) RM109,000.00 as stamp duty;

(b) it is entitled to profit and attendance fees upon the contractors

nominated by the Defendant as follows:

(i) RM178,000.00 for Stitec;

(ii) RM123,972.48 for ASC; and

(iii) RM146,000.00 for Nova Nexus; and

(c) the Defendant has to pay the Plaintiff:

(i) for the difference in the Gross Floor Area ('GFA')

amounting to RM4,291,071.76; and

(ii) a sum of RM1,237,500.01 being the repayment of a loan

taken out by the Defendant from the Plaintiff to assist the
Defendant to bear the expenses of the Project.

[11] The Plaintiff had filed an application for summary judgment against the
Defendant. On 2 October 2018, Lee Swee Seng J (now JCA) allowed the
Plaintiff's application whereby the Defendant is to pay to the Plaintiff, among
others, as follows:

(a) RM31,599.54 for the Contractors All Risk insurance premium;

(b) RM37,250.58 for payment of the levy to CIDB;

(c) RM29,808.48 for stamp duty;

(d) profit and attendance fees of:

(i) RM178,000.00 for Stitec;

(ii) RM123,972.48 for ASC; and

(iii) RM146,000.00 for Nova Nexus; and

(e) RM717,194.55 for the Loan.

[12] The learned Judge had summarily decided that the Plaintiff was entitled
to 27.4% of the total amount which was claimed by the Plaintiff for the
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 7

insurance premium, CIDB levy, stamp duty and the Loan and the rest (19.9%
of the amount as prayed) is to be decided at the trial. Hence, for these items,
the only issue is on quantum as the issue of liability has been decided by the
learned Judge.

[13] In the Annexure to the Agreed Issues For Trial, the Defendant does not
dispute liability for the following claims:

(a) CIDB levy in the sum of RM98,726.92 (RM135,987.50 -

RM37,260.58);

(b) stamp duty in the sum of RM78,981.54 (RM108,790.00 -

RM29,808.46); and

(c) the outstanding amount for the Loan in the sum of RM520,305.46
(RM1,237,500.01 - RM717,194.55).

[14] The total sum that was admitted by the Defendant is thus RM698,013.92.

The Trial And The Issues To Be Tried

[15] The trial was held for 14 days where the Court heard the evidence of the
following witnesses:

[16] The Issues To Be Tried which were agreed by the parties are as follows:
 Tech Art Sdn Bhd
pg 8 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

" The Plaintiff's Claim

1. Whether the Plaintiff had paid the amounts claimed towards the
Contractor's All Risk Policy for this Project?

2. Whether the Defendant is liable to pay the Plaintiff for the provision
of the Hyundai Starex, Perodua Kembara and rental cars under the
Letter of Award?

3. Whether the Defendant is liable to pay the Plaintiff for the Gross
Floor Area difference under the Letter of Award? And if so, how
much?

The Defendant's Counterclaim

4. Whether the Defendant has shown that the Plaintiff owes any
amounts to the Defendant under the Letter of Award for the Project?

5. And if so, whether such amounts are due and payable to the
Defendant at the time of filing of the counterclaim.

6. If due and payable, whether such amount can be set-off against the
Plaintiff's claim (if successful).".

I. The Plaintiff's Claim

1st Issue: Whether The Plaintiff Had Paid The Amounts Claimed Towards
The Contractor's All Risk Policy For This Project?

[17] The Defendant admits its liability to reimburse the Plaintiff for this
expense, however the Plaintiff is put to strict proof in terms of quantum (see
paras 16 and 17 of the Amended Statement of Defence And Counter-Claim
('Amended Defence and CC') and the decision in the summary judgment
application).

[18] Midway through the trial and for the purpose of narrowing the issues, the
Defendant agreed not to dispute the percentage rate of 47.3%. This means that
the quantum representing 47.3% of the expenditure for the insurance premium
is RM115,326.86.

[19] The sole challenge raised by the Defendant in this regard was that the
policy or its cover-note was not produced at the trial. Furthermore, even
though the Plaintiff did produce the receipts of payments issued by MAA
Takaful Berhad ('MAA') (see pp 71 - 75, B1), none of the receipts show that
the sums received by MAA were in respect of the "Contractor All Risk" Policy
as alleged by PW3 in her answer to Question 7, WS-PW3.

[20] The Defendant submitted that, while the receipts show that some sort of
payment was made to MAA, there is no evidence that MAA received the same
in consideration of any purpose related to the Project as envisaged by Clause
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 9

C.3.c. of the LoA. Hence, the claim for the reimbursement of 47.3% of the
alleged insurance premium payment has not been made out.

[21] I have considered the oral evidence of PW3, PW4 and DW3 on this
matter and the documentary evidence at pp 71 - 75, B1 and I find that there
are:

(a) a copy of MAA's invoice dated 26 August 2013 for

"CONTRACTOR ALL RISK Situation of risk @ UiTM Rembau, Lot
472, Mulim Kundor District of Rembau, Negeri Sembilan (Sum
Covered of RM230,000,000.00) - (refer Cover Note TG13-0004176)"
in the sum of RM207,240.00;

(b) a copy of the Plaintiff's Payment Voucher dated 2 September 2013

for the sum of RM207,240.00 in respect of "Cadangan pembangunan
kampus universiti teknologi mara di atas sebahagian lot 472 seluas 80
ekar, mukim kundur daerah rembau, negeri sembilan darul khusus
(package) Contractor All Risk (26/08/201325/08/16) + 24 month
maintenance period"; and

(c) copies of two receipts issued by MAA on 12 September 2013 being

payments via two MBB cheques for:

(i) Cover Note TG13 - 0004175 in the sum of RM36,580.00;

and

(ii) Cover Note TG13-0004176 in the sum of RM207,240.00.

[22] At the clarification session with the learned counsels, the Court had
pointed out the absence of MAA's invoice and the Plaintiff's Payment Voucher
for the sum of RM36,580.00.

[23] MAA's receipt dated 12 September 2013 merely shows that it is payment
for Cover Note TG13 - 0004175 whereas the invoice issued by MAA dated 26
August 2013 for the total sum of RM207,240.00 and the receipt dated 12
September 2013 for that amount shows that it is not only payment for Cover
Note TG13-0004176, but the words "Contractor All Risk" and the name of the
project are stated in MAA's invoice for the sum of RM207,240.00 and the
Plaintiff's Payment Voucher dated 2 September 2013.

[24] It is also observed that, vide letter dated 2 October 2013 to DBA Akitek
(M) Sdn Bhd and copied to KKP, the Plaintiff had forwarded the original
insurance policy for Contractor's All Risks and Workmen's Compensation to
the Architect for safekeeping (see p 70, B1). The original or a copy of the
insurance policy was not tendered in court.

[25] As the Defendant had pleaded that the Plaintiff is put to strict proof as to
quantum and the Plaintiff has not discharged the burden of proof to establish
that the MAA receipt dated 12 September 2013 was issued for the Contractor's
All Risk premium for the Project, the Court had allowed the Plaintiff's claim
 Tech Art Sdn Bhd
pg 10 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

for the trial sum of RM83,727.26 (RM115,326.86 - RM31,599.54; the

attention of the Plaintiff's counsel was drawn to the error in the figure
"RM83,767.26" as stated in subparas 14(a) and 101(a) of the Written
Submissions) less RM36,580.00 ie in the sum of RM47,147.26 only.

2nd Issue: Whether The Defendant Is Liable To Pay The Plaintiff For The
Provision Of The Hyundai Starex, Perodua Kembara And Rental Cars Under
The Letter Of Award?

[26] As opposed to the 1st Issue, the quantum in relation to the Plaintiff's
claim as to the provision of vehicles is not disputed and the Defendant's
challenge is on the aspect of liability.

[27] It is an agreed fact that the Plaintiff has:

(a) provided the Hyundai Starex (W 5635 D) for the UiTM staff;

(b) provided the Perodua Kembara (NBE 7773) for the use of the
Consultants for the Project; and

(c) rented vehicles for attendance at the site meetings.

[28] In addition, the Defendant agreed that, if the Defendant is found liable for
this claim, the sum to be paid is as pleaded in para 10 of the Amended
Statement of Claim ('Amended SoC') ie RM96,422.15 on 100% basis
(RM67,451.00 for the Hyundai Starex, RM25,158.60 for the Perodua
Kembara and RM3,812.55 for the rental of cars).

[29] Mr Balbir Singh's argument for the Defendant was mainly premised on
the point of pleadings. The attention of the Court was drawn to para 9 of the
Amended SoC and the fact that the relevant clause of the LoA on which this
liability arises is not mentioned.

[30] Para 9 of the Amended SoC [Emphasis Added] reads:

"Selaras dengan Surat Awad tersebut, Defendan telah bersetuju untuk

bersama-sama dengan Plaintif menanggung kos kenderaan yang
diperlukan untuk Projek tersebut serta kos pengangkutan."

(English translation:

"Pursuant to the Letter of Award, the Defendant has agreed with the
Plaintiff to jointly bear the vehicle costs which are necessary for the
Project as well as transportation costs.").

At the clarification session, Mr K Selva explained that the words "Pursuant to

the Letter of Award" means "Based on the Letter of Award".

[31] The Defendant's counsel then referred to WS-PW3 and the answer to
Question 21 in contending that, at the trial, the Plaintiff completely abandoned
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 11

its pleading and sought to justify the claim on a different and unpleaded basis
that the Defendant had instructed the Plaintiff to provide the vehicles. The
relevant excerpt from the Witness Statement is shown below:

"21: Why did the Plaintiff charge the whole costs of transportation to
the Defendant?

A: This is due to the fact that the agreement between the Plaintiff and
the Defendant does not provide for the costs for the transportation to
be borne by the Plaintiff. In fact, as for the Hyundai Starex, I was
instructed by Nik and Datin Salmah to procure the said vehicle for the
use of the UiTM staff. As for the Perodua, I was instructed by Puan
Yasmin bin Zolkifly to purchase the said vehicle for the usage of the
project consultants. I was instructed by the Plaintiff's Board of
Directors to charge the Defendant for the entire costs of transportation
including the rental.".

[32] In the Plaintiff's Written Submission in Reply, it was acknowledged that

there is no provision in the LoA for transportation costs. Nevertheless, the
Plaintiff contended that the Defendant remains liable for the costs of vehicles
for the Project on the following grounds:

(a) the cause of action is pleaded in paras 9 to 11 of the Amended SoC

and specifically, the fact that the Defendant is bound to pay the
transportation cost under the contract between the Plaintiff and the
Defendant. As such, the Defendant is not caught by surprise;

(b) that PW3 had testified during re-examination that the provision of
the vehicles was not in the Plaintiff's preliminaries and so, it must be
the balance of the contract. PW3 is said to have given a correct version
of the events surrounding the provision of transportation which is
uncontroverted by the Defendant;

(c) that PW4 had given the following evidence in her Witness
Statement:

"20. Q: How are the charges being made as for the

transportation costs?

A: The Defendant has instructed my office to purchase

Hyundai Starex on their behalf to accommodate solely on the
usage by KKP's Client, UiTM staff. The purchase of Kembara
was also instructed by them solely for the usage by their
Consultants. Same goes for the car rental request by them for
site meetings between and UiTM which did not include our
participation. These items were never priced for in our
contract. The purchase and usage were entirely based on the
Defendant's decision and instructions. Therefore, they have to
pay the entire transportation costs. And this has been made
known to the Defendant during the entire course of the
 Tech Art Sdn Bhd
pg 12 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

project."; and

(d) the presumption in s 114(g) of the Evidence Act 1950 [Act 56]
should be invoked against the Defendant for its failure in not calling
Datin Salmah as a witness.

[33] The Court has considered the submissions of the parties concerning this
claim and is in agreement with the Defendant that the Plaintiff has failed to
prove, on a balance of probabilities, that the Defendant is liable for this claim.
The justifications for this finding are as follows:

(a) The Plaintiff submitted that the basis for the claim is the fact that DW3 and
Datin Salmah, who is DW3's wife, had requested and/ or instructed for the
transportation to be provided. Consequently, the Plaintiff had procured, and
the Defendant's staff and consultants had used, the vehicles. As the costs for
the transportation were not factored into the LoA, these would have to be
borne by the Defendant pursuant to the relationship created between the
Plaintiff and Defendant under the LoA.

It is obvious that the alleged request and/ or instruction by DW3 and Datin
Salmah is nowhere to be found in the Amended SoC and the Amended Reply
and Defence to Counterclaim. It is clear from paras 9 to 11 of the Amended
SoC that the basis for the claim as contended by the Plaintiff at the trial is not
reflected therein. This has led the Defendant to plead its defence in the manner
as can be seen in paras 19 to 28 of the Amended Defence and CC, namely
that:

(i) even if the Defendant is to reimburse the Plaintiff for the value of
the Hyundai Starex and Perodua Kembara, the Defendant's liability is
only until 3 January 2017 and the value of the vehicles as at that date
must be accounted for;

(ii) the Plaintiff's liability to account for the value of the two vehicles
arises because the Defendant has acquired a right of ownership to the
vehicles and the Plaintiff would otherwise be unjustly enriched (s 71 of
the Contracts Act 1950 [Act 136] was cited); and

(iii) it is an implied term of the LoA that the Plaintiff must account for
the value of the two vehicles if the Defendant is to indemnify the
Plaintiff for the cost of the acquisition and maintenance of the
vehicles, the particulars of which were pleaded in para 24C.

By pleading the Plaintiff's case in the way that it did, the Defendant
had no opportunity, and in fact had no good reason, to plead its case
in defence to the allegations surrounding the request and/ or
instruction by DW3 and Datin Salmah and what were the terms of the
agreement between the parties, if any, on the costs associated with the
provision of the transportation. If this Court was to decide in favor of
the Plaintiff as to liability for this claim, there would be a failure of
natural justice as the Defendant is denied the right to present its case
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 13

fully on the unpleaded issue before the decision is made. It is not the
duty of the court to make a case for a party when that party does not
raise or wish to raise a point in the litigation (see Janagi v. Ong Boon
Kiat [1971] 1 MLRH 360; [1971] 2 MLJ 196 and RHB Bank Bhd
(substituting Kwong Yik Bank Bhd) v. Kwan Chew Holdings Sdn Bhd
[2009] 3 MLRA 162; [2010] 2 MLJ 188; [2010] 1 CLJ 665).

Further, Mr Balbir Singh had aptly relied on the following passage

from the judgment of the Court of Appeal in Ketua Pengarah Jabatan
Kerja Raya v. Strongkota Development Sdn Bhd & Another Appeal
[2016] 3 MLRA 605; [2016] 6 MLJ 512; [2016] 3 CLJ 741; [2016] 2
AMR 413:

"[16] From the submissions of the learned counsel for the

Appellants, it was clear that the main thrust of this appeal had
centered upon whether the trial Judge had correctly adjudged
this case according to the parameters as set out by the parties
well before trial. This set parameters could be seen from what
was pleaded in the pleadings of parties. The Statement of
Claim would set out the cause or causes of action of the
Plaintiff against the Defendant. The Statement of Defence
would, of necessity, set out basically what the answer to that
claim would be. By the close of pleadings, parties would know
exactly what is being claimed by the Plaintiff and what the
answer to that claim would be. Pleadings therefore prevents
surprises during trial as both parties are sure and certain as to
what they are supposed to do in terms of establishing their
respective positions in court. There is no element of trial by
ambush where a party would be taken by surprise by the other
party introducing evidence outside the contemplation of what
had been the pleaded cause or causes of action or of defence.
It is trite law that parties to a suit are bound by what have
been pleaded in their respective pleadings. To further refine
the dispute, parties would normally agree with each other as
to what are the issues to be tried. Although the pleadings
would expressly bind parties, it has the effect of also limiting
the power of the adjudicating court, in that the decision of the
court, at the end of the trial of the suit, must be in consonance
with what had been pleaded by the parties. The reliefs granted
by the court must therefore be tailor-made, so to speak, to fit
into what had been agreed by the Plaintiff as per his Statement
of Claim, in particular based on his cause of action. In other
words, if the cause of action had been premised upon the
negligent act of the Defendant, then once proven by evidence
to be so, the court must then proceed to grant the damages to
compensate for the losses suffered by the Plaintiff as a result of
the negligent conduct of the Defendant. It would be amiss if
the court were to give relief to the Plaintiff against the
Defendant, for a cause of action which was not pleaded, even
remotely, in the Plaintiff's Statement of Claim. As such,
 Tech Art Sdn Bhd
pg 14 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

pleadings have the effect of not only binding the parties, inter
se, but it also operates to ensure that the court only grants the
reliefs that have been prayed for as pleaded as forming the
Plaintiff's causes or causes of action. There may be exceptions
to this rule of the thumb, but only rarely will the courts depart
from this crucial rule of civil litigation.".

[Emphasis Added]

Applying the legal principles as above quoted to the instant case, there
is no doubt in my mind that the Plaintiff had abandoned its pleaded
case and set up an entirely new case during the trial.

(b) With regards to PW3's evidence on the Plaintiff's preliminaries, the

Defendant's counsel had correctly submitted that there is an item on
"Preliminaries" in KKP's LoA but there is none in the LoA between the
Plaintiff and the Defendant.

(c) Section 114(g) of the Evidence Act 1950 [Act 56] provides that:

"Court may presume existence of certain fact

114. The court may presume the existence of any fact which it thinks
likely to have happened, regard being had to the common course of
natural events, human conduct, and public and private business, in
their relation to the facts of the particular case.

The court may presume:

...

(g) that evidence which could be and is not produced would if

produced be unfavourable to the person who withholds it;

..."

However, the Court is of the view that the application of the presumption in
the circumstances of this case is not justified because the fact that Datin
Salmah had requested and/ or instructed for the purchase and rental of the
vehicles was not even pleaded by the Plaintiff. Moreover, DW1 was called to
testify for the Defendant and yet the Plaintiff's counsel did not question DW1
as to the request and/ or instruction which he allegedly gave to PW3 as well
on the procurement of the Hyundai Starex and whether there was any
agreement between the parties on the issue of costs for the provision of the
vehicles, and if so, what were the terms of the agreement.

3rd Issue: Whether The Defendant Is Liable To Pay The Plaintiff For The
Gross Floor Area Difference Under The LoA? And If So, How Much?
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 15

- The Basis Of The Claim

[34] The same issue on pleadings bears relevance to the 3rd Issue. In para 15 of
the Amended SoC [Emphasis Added], the Plaintiff pleaded as follows:

"Melalui Surat Awad tersebut, Defendan perlu membayar Plaintif

perbezaan harga kontrak akibat perubahan dalam ukuran kasar
kawasan lantai ("Gross Floor Area"). Perubahan Gross Floor Area ini
menyebabkan Defendan perlu membayar Plaintif wang sebanyak
RM4,291,071.76."

(English translation:

"Through the Letter of Award, the Defendant has to pay the Plaintiff
the difference of contract sum as a result of the changes in the
measurement of Gross Floor Area. The changes of this Gross Floor
Area caused the need of the Defendant to pay the Plaintiff for the sum
of RM4,291,071.76").

[35] As the aforesaid statement makes reference to the LoA, the Defendant
firstly denied the Plaintiff's averments and went on to plead that:

"32A.... Liability in respect of the Gross Floor Area, if any, which is

denied, is not covered under the Letter of Award and is not with
regard to the distribution of work or indemnity between the Plaintiff
and the Defendant. The Defendant also disputes the calculation of the
difference in floor area and the formula by which the sum of
RM4,291,071.76 RM1,426,184.20 was calculated.

32B. Further, todate, the Plaintiff has yet to provide the 'as-built
drawing' and other plans to show fully what is the actual gross floor
area that was constructed. Therefore, even if the Defendant is to
indemnify the Plaintiff, the Defendant is unable to study what the new
area is."

(see paras 15 and 16 of the Amended Defence and CC).

[36] In its Amended Reply, the Plaintiff stated that it will refer to the
correspondence between the parties to prove its claims during the trial and that
all the as-built drawings had been provided to KKP, which is the Defendant's
alter ego.

[37] Basically, the Plaintiff claimed for the difference between the Agreed
GFA and the Actual GFA on site, which was calculated by PW1, the
Quantity Surveyor who was appointed by the Plaintiff vide the letter dated 19
March 2019 to calculate the GFA for the Project. In order to carry out his task,
PW1 was furnished with the as-built drawings which are listed in Appendix C
to PW1's Expert Report (see PB4 and PW1's Affidavit as the Plaintiff's expert).

[38] The Agreed GFA of 51,161 m² can be seen in Appendix 1 to the
 Tech Art Sdn Bhd
pg 16 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

Plaintiff's letter dated 19 September 2013 to the Defendant titled

"Confirmation of Contract Amount of RM121 million For The Relevant Work
Scope" ('19 September 2013 Letter'). The 19 September 2013 Letter was sent
pursuant to Clause F of the LoA which reads as follows:

"Proposal for Joint Venture

We also wish to refer to our discussions relating to your proposal for a

joint venture for the total scope of our work packages as follows:

a. Package 1 - Site Clearance & Earthworks

b. Package 2 - Piling, Infrastructure & Building Works (incl. internal

plumbing)

c. Package 3 - Electrical Works

d. Package 5 - Fire Protection Works

e. Package 6 - Lift Services

We hereby agree that within 6 weeks from the date of our receipt of
the full contract drawings and pricing document from our Employer
but not later than 15th of July 2013, we shall confirm whether we
could agree to your proposal for the joint venture. Upon our
confirmation in writing to you of our election to undertake our scope
of works totally on a joint venture with you, you shall be bound to
irrevocably accept the same on the following terms and conditions:

...".

[39] As the 19 September 2013 Letter is significant in the current discussion,

the salient part is re-produced below for ease of reference:

"We wish to refer to Clause Item F - Proposal for Joint Venture in our
Letter of Award to you dated 8 May 2013 with regards to the above
matter.

We wish to confirm herewith that we would like to decline to your JV

proposal and will complete the Relevant Work Scope (Appendix 1)
ourselves with the contract amount of RM 121 million.

We list herewith the following qualifications to be included in our

confirmation of the contract amount above:

1. The contract amount for the Building Works is derived

from the agreed GFA which is as per Appendix 1.

...".
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 17

[40] Appendix 1 to the 19 September 2013 Letter sets out the breakdown of the
preliminary cost estimate for, among others,:

(a) Item A: "KEMUDAHAN BERPUSAT DAN PELBAGAI" with

the GFA of 12,056 m² and the price of RM13,898,892.00;

(b) Item B: "KEMUDAHAN AKADEMIK with the GFA of 15,200

m² and the price of RM18,808,480.00; and

(c) Item C: "KOMPLEKS ASRAMA DAN KEDIAMAN

KAKITANGAN' with the GFA of 23,905 m² and the price of
RM25,468,920.00.

[41] The Agreed GFA of 51,161 m² is also set out in the copy of the
Preliminary Detailed Abstract which was enclosed to the Plaintiff's letter dated
30 May 2017 to the Defendant regarding the claim for differences in GFA.

[42] In PW4's Supplementary Witness Statement (WS(S1) - PW4), the witness

had prepared a table showing the Agreed GFA of 51,161 m², the Actual
GFA based on as-built drawings as calculated by PW1 which is 54,982.47
m², the GFA difference of 3,821.47 m² and the cost difference of
RM4,291,071.76 which is being claimed by the Plaintiff in this suit.

[43] The Defendant's first line of defence against this claim is, again, on
pleadings. It was submitted that, contrary to the Plaintiff's own pleading, there
is nothing in the LoA which provides for any additional payment to the
Plaintiff by the Defendant arising from any increase in the GFA.

[44] The Plaintiff seems to accept this position since, in para 35 of its Reply
Submission, the Plaintiff "... reiterates that the right to claim the difference in
the GFA arises from the letter dated 19 September 2013...", however this "...
should be read with the Letter of Award to the Defendant dated 8 May 2013
specifically in response of Clause F - Proposal for Joint Venture.".

[Emphasis Added]

[45] The Plaintiff further contended that:

(a) the Defendant did not reply or make any objections to the 19
September 2013 Letter. Hence, by relying on the decision by the Court
of Appeal in David Wong Hon Leong v. Noorazman Adnan [1995] 1
MLRA 708; [1995] 3 MLJ 283; [1995] 4 CLJ 155 wherein reference
was made to the judgment of Lord Esher MR in Wiedemann v.
Walpole [1891] 2 QB 534 where His Lordship said that, in business
and mercantile cases, the courts have taken notice that "... in the
ordinary course of business, if one man of business states in a letter to
another that he has agreed to do certain things, the person who
receives that letter must answer it if he means to dispute the fact that
he did so agree." (see too, Small Medium Enterprise Development Bank
Malaysia v. Lim Woon Katt [2017] 1 MLRA 206; [2016] 5 MLJ 220;
 Tech Art Sdn Bhd
pg 18 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

[2016] 9 CLJ 73), the Plaintiff posited that the non-denial of the 19
September 2013 Letter means that the Defendant had agreed to pay
the difference in the GFA;

(b) the Defendant also did not reply or make any objections to the
letter dated 30 May 2017 from the Plaintiff to the Defendant ('30 May
2017 Letter'). In the 30 May 2017 Letter, the Plaintiff referred to the
LoA and the 19 September 2013 Letter, specifically to item 1 which ".
qualifies that our confirmation of contract amount for building works
is to be derived from the agreed GFA...". The Plaintiff claimed for
RM1,426,184.20 for the differences of 1,191 m2 between the agreed
GFA and the actual on site based on the consultants' latest drawings.
The non-denial of the claim in the 30 May 2017 Letter shows that the
Plaintiff could charge the Defendant for the difference in GFA;

(c) the Plaintiff has sufficiently pleaded its claim for the difference in
GFA in the Amended SoC;

(d) the Defendant failed to request further and better particulars with
regards to the Amended Reply. Therefore, the Plaintiff is entitled to
refer to the 19 September 2013 Letter and the 30 May 2017 Letter
which constitute a separate or collateral contract and exists side by
side with the LoA. Citing the cases of Tindok Besar Estate Sdn Bhd v.
Tinjar Co [1979] 1 MLRA 81; [1979] 2 MLJ 229, Industrial &
Agricultural Distribution Sdn Bhd v. Golden Sands Construction Sdn Bhd
[1993] 5 MLRH 610; [1993] 3 MLJ 433 and Tan Swee Hoe Co Ltd v.
Ali Hussain Bros [1979] 1 MLRA 71; [1980] 2 MLJ 16, the device of
collateral contract "... does not offend the extrinsic evidence rule
because the oral promise is not imported into the main agreement.
Instead it constitutes a separate contract which exists side by side with
the main agreement."; and

(e) the findings and tabulations on to the difference between the

Agreed GFA and Actual GFA as calculated by PW1 and resulted in
the GFA claim as tabulated in WS(S1) - PW4 are not disputed by the
Defendant.

[46] Having considered the evidence and submissions of the parties, it is

apparent that the basis for the claim for the difference in the GFA is not the
LoA, as was pleaded by the Plaintiff. Clearly, there is no express provision in
the LoA which stipulates the Defendant's obligation to pay the Plaintiff for the
difference in the GFA. All that Clause F of the LoA says is that the Defendant
has proposed for a joint venture for the total scope of the Plaintiff's Package 1
to Package 6 works and that the Plaintiff shall confirm its agreement or
otherwise within the specified timeline. As it turned out, the Plaintiff turned
down the Defendant's proposal.

[47] There is absolutely no mention of the 19 September 2013 Letter and the
30 May 2017 Letter in the Amended SoC. Whilst the Plaintiff states in its
Amended Reply that it will refer to "the correspondence between the parties to
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 19

prove its claims during the trial", this goes to show the Plaintiff's intention of
producing certain correspondence as evidence, the details of which were
undisclosed, but as submitted by the Plaintiff, the Defendant could have
applied for further and better particulars. Nevertheless, this does not invalidate
the Defendant's argument that the Plaintiff must specifically plead and identify
its cause or causes of action against the Defendant in the SoC (see Yap Seong
Yee v. Eureka Property Management Sdn Bhd and another appeal [2018] 4
MLRA 560; [2018] 6 MLJ 799; [2018] 8 CLJ 713).

[48] In this regard, O 18, rr 7(1), 8(1) and 10 of the Rules of Court 2012 ('RC
2012') provide that:

"Facts, not evidence to be pleaded

7. (1) Subject to the provisions of this rule and rr 10, 11 and 12, every
pleading shall contain, and contain only, a statement in a summary
form of the material facts on which the party pleading relies for his
claim or defence, as the case may be, but not the evidence by which
those facts are to be proved, and the statement shall be as brief as the
nature of the case admits.

...

Matters which shall be specifically pleaded

8. (1) A party shall in any pleading subsequent to a statement of claim

plead specifically any matter, for example, performance, release, any
relevant statute of limitation, fraud or any fact showing illegality:

(a) which he alleges makes any claim or defence of the

opposite party not maintainable;

(b) which, if not specifically pleaded, might take the opposite

party by surprise; or

(c) which raises issues of fact not arising out of the preceding
pleading.

...

Departure

10. (1) A party shall not in any pleading make an allegation of fact or
raise any new ground or claim inconsistent with a previous pleading of
his.

(2) Paragraph (1) shall not be taken as prejudicing the right of a party
to amend, or apply for leave to amend, his previous pleading so as to
plead the allegations or claims in the alternative.".
 Tech Art Sdn Bhd
pg 20 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

[49] It is trite law that a plaintiff must not set up in his reply a new cause of
action which was not raised in the Writ or the SoC, or in other words, the
reply must not contradict or depart from the SoC (see Mat bin Lim & Anor v.
Ho Yut Kam & Anor [1966] 1 MLRH 682; [1967] 1 MLJ 13). A plaintiff who
intends to set up a new or an alternative basis to his claim is required to make
an application to amend the SoC and he cannot, supplement his SoC by
including in his reply, matters which ought to have been included in the SoC
(see the function of a reply in the overall scheme of pleadings in a civil action
as elucidated in Nirumalan K Pillay & Ors v. A Balakrishan [1997] 1 SLR 322
and Romar Positioning Equipment Pte Ltd v. Merriwa Nominees Pty Ltd [2004]
4 SLR 574).

[50] In this case, the Plaintiff did not exercise its right to amend the SoC and to
plead that the 19 September 2013 Letter and the 30 May 2017 Letter constitute
a collateral contract. Reliance on this correspondence is a major shift from the
Plaintiff's Amended SoC which simply states that the LoA, standing alone,
stipulates that the Defendant has to pay for the differences in the GFA.

[51] Therefore, the evidence given at the trial is, in my considered opinion, a
radical departure from the Plaintiff's pleaded case and is not a "mere
development, variation or modification of pleadings" (see Ang Koon Kau &
Anor v. Lau Piang Ngong [1984] 1 MLRA 488; [1984] 2 MLJ 277; [1985] CLJ
(Rep) 24 and Superintendent of Lands and Surveys (4th Div) v. Hamit Bin
Matusin [1994] 1 MLRA 300; [1994] 3 MLJ 185; [1994] 3 CLJ 567; [1994] 3
AMR 1882).

[52] In the Plaintiff's submission, it sought to rely on part of PW4's evidence

where she had:

(a) outlined the "origin of the whole arrangement' between the Plaintiff
and the Defendant and their intention at the onset of the relationship
based on the letter issued by the Plaintiff to KKP dated 30 April 2013
('30 April 2013 Letter'); and

(b) explained that at the time of the issuance of KKP's LoA and the
LoA between the Plaintiff and the Defendant, the drawings have not
been finalised.

[53] The 30 April 2013 Letter regarding the appointment of the Plaintiff as a
Total Development Contractor ('TDC') and Project Management Consultant
states, among others, that:

"...

We wish to inform that we are very keen and enthusiastic to accept

your offer of appointing us as the Total Development Contractor for
the above project based on the terms and conditions that have been
discussed earlier at your office on Thursday, 25 April 2013 which is
also attached herewith.
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 21

We also note that the softcopy of the drawings and BQ which you
have given to us on the same day will be further revised to meet the
agreed proposed contract amount of RM127 million as discussed.

...".

and the proposed Terms and Conditions were enclosed thereto.

[54] However, as was submitted by the learned counsel for the Defendant, the
30 April 2013 Letter was issued before the execution of the LoA. It would thus
be caught by the parol evidence rule as expressed in s 91 EA 1950 as follows:

"Evidence of terms of contracts, grants and other dispositions of

property reduced to form of document

91. When the terms of a contract or of a grant or of any other

disposition of property have been reduced by or by consent of the
parties to the form of a document, and in all cases in which any matter
is required by law to be reduced to the form of a document, no
evidence shall be given in proof of the terms of the contract, grant or
other disposition of property or of the matter except the document
itself, or secondary evidence of its contents in cases in which
secondary evidence is admissible under the provisions hereinbefore
contained.".

Hence, no evidence can be accepted by the Court of the terms of the contract
except the contract itself, namely, the LoA.

[55] Assuming for a moment that this Court has erred and the issue of
pleadings ought to be determined in the Plaintiff's favour, the other aspect of
this claim which requires consideration is whether, as a matter of evidence, the
Plaintiff has proven its claim on a balance of probabilities.

[56] The Defendant contended that there is no provision under the LoA which
involves building works where the question of addition to the GFA would
become relevant. The scope of the Defendant's work is as quoted in para 7
above. The fact that the express provision on building works can only be found
in Clause F of the LoA on the proposal for the joint venture is indisputable.

[57] Mr Balbir Singh had conveniently provided the relevant pages of the
Notes of Evidence ('NoE') of PW4's and DW'3 evidence in his Written
Submissions (No 2). Based on PW4's evidence, it can be summarised that the
alleged agreement between the parties as to the Plaintiff's obligation to carry
out the building works and for the Defendant to pay the Plaintiff the difference
between the Actual GFA and the Agreed GFA is premised on the 30 April
2013 Letter, KKP's LoA, the LoA between the parties and the 19 September
2013 Letter, all read together.

[58] DW3 was asked about the Plaintiff's position on this matter in Q 32 of his
 Tech Art Sdn Bhd
pg 22 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

Witness Statement and this was his answer:

"The letter of 30 April 2013 was a JV proposal.

But after this meeting, there was a change of heart on all three sides.

On KKP's side, time was running short - they needed to conclude an

agreement as KKP needed the same to furnish the same to the bank to
secure financing. Financing was a condition precedent for the
Concession Agreement with the Government and UiTM to become
unconditional and this condition precedent had to be met by 23
August 2013.

However, to conclude the terms of a JV would be too tedious and

would take time.

As such, some time before the letters of award dated 8 May 2013 were
issued, I spoke to Zolkifly (PW2) and I was told by Nik (DW1) that he
too spoke to Zol. The end result was that we all agreed that a direct
award would be issued, meaning there will be an award by KKP to the
Plaintiff for RM230 million and another award from the Plaintiff to
the Defendant for RM108 million.

The contents of such awards would be exactly what was said in it,
namely that it created a client-contractor and contractor-subcontractor
relationship.

That JV proposal was however still kept open as an alternative to the

Defendant's award. Because time was of the essence, the option was
given to the Plaintiff to accept or reject the JV proposal by 15 July
2013.

They did not do this and this was the end of any JV proposal.

The 19 September 2013 letter merely stated the obvious which was
that there won't be any JVA and is consistent with what I stated
above. It provided for the demarcation of works, the appointment of
the NSCs (to be under the purview of the Defendant) and did not
provide for any liability on the Defendant for any increase in the
GFA.

Having rejected the JVA, and thereby accepting the terms of the
Letters of Award as they should be accepted, there is no basis to say
that liability for any dues to the NSC or for increase in the GFA
should be borne by the Defendant whether with or to the exclusion of
KKP.".

[59] Crucially, DW3's evidence as above quoted was not challenged by the
Plaintiff's counsel as the cross examination was limited to merely confirming
the contents of the 19 September 2013 Letter. It is essential that a party's case
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 23

be expressly put to his opponent's material witness when they are under cross-
examination lest the party may be barred from raising it in submissions at the
end of the trial (see Sivalingam A/L Periasamy v. Periasamy & Anor [1995] 2
MLRA 432; [1995] 3 MLJ 395; [1996] 4 CLJ 545; [1996] 3 AMR 3506).
Moreover, as submitted by the Defendant, there is nothing incredible,
implausible or unreasonable about DW'3 account of the events. In
comparison, PW4's evidence is a clear departure from the Plaintiff's pleaded
case.

[60] Having scrutinised these pages and the NoE in its entirety together with
the contemporaneous documents, this Court is persuaded to find that:

(a) there are no documents or correspondence that connects the

Defendant's scope of works under the LoA to the building works or to
establish that there is any superintendence of the Defendant's alleged
obligations relating to any work affecting the GFA;

(b) PW4 had testified that "So, despite the fact that we have been
awarded RM230 million contract, we are supposed to undertake only
item (2) which is the relevant construction works.". GFA is part of the
construction works. Hence, the claim for the difference of contract
sum arising from the difference in the Actual GFA and the Agreed
GFA in fact relates to the contract sum under KKP's LoA. Surely, the
Defendant cannot be made liable for any price variation to the main
contract between KKP and the Plaintiff, and more so pursuant to the
unpleaded 19 September 2013 Letter.

At this juncture, it is pertinent to mention two points. Firstly, the

Plaintiff has commenced arbitration proceedings against KKP
whereby Claim No 10 in para 41 of the Points of Claim is in respect of
the alleged failure by KKP and/ or the Defendant to pay the Plaintiff
for the increase of the GFA amounting to RM4,291,071,76. The
Plaintiff has evidently taken the stance that the liability for this claim is
joint and several as between KKP and the Defendant, contrary to the
pleadings in this civil suit.

Secondly, at the trial, the Plaintiff pursued the "alter ego" issue which
was pleaded in para 9 of the Amended Reply to rebut the Defendant's
statement in para 32B of the Amended Defence and CC. These
pleadings are set out below for the ease of reference:

"32B. Further, todate, the Plaintiff has yet to provide the 'as-
built drawing' and other plans to show fully what is the actual
gross floor area that was constructed. Therefore, even if the
Defendant is to indemnify the Plaintiff, the Defendant is
unable to study what the new area is."; and

"9. Paragraph 32B of the Defendant's Defence (Third

Amendment) is denied and the Plaintiff insists that all the 'as-
built' drawings had been provided to the Employer which is
 Tech Art Sdn Bhd
pg 24 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

the Defendant's alter ego.".

However, in the Points of Claim for the arbitration, the Plaintiff stated
that:

"10. The Claimant did not have control over MB [the

Defendant in this case] and/or the parties nominated by the
Respondent [KKP] and/or MB as they were controlled and
managed by the Respondent and/or MB. The Respondent
and/or MB had agreed to be responsible for the Remainder
Works and only the Claimant's Works were to be the
Claimant's responsibility. MB is effectively the alter ego of the
Respondent with respect to the Project.".

In the Plaintiff's Written Submissions before this Court, it made the

same submission as it had done in the arbitration viz. that the
Defendant is the alter ego of KKP. Strangely, in para 80 of the Written
Submissions, the Plaintiff stated that it had pleaded the fact that the
Defendant is the alter ego of the Plaintiff in para 9 of the Amended
Reply.

The basis for the assertion on "alter ego" can be found mainly in
PW1's Witness Statement wherein the following relationships are said
to exist:

• DW3 is also KKP's Director

• The Plaintiff's founder and former Managing Director

is DW3's elder brother

According to PW1, KKP and the Defendant were represented by the

same group of people ie DW3, DW1 (DW3's son), Datin Salmah
(DW3's wife) and Mohd Adfzal (DW3's son and KKP's Director). In
his evidence, DW3 admitted that he was the promoter for the changes
in KKP's shareholding. The Plaintiff contended that at most times,
DW1 and DW3 dealt with the Plaintiff and there was a blurring of the
lines as to whether they were representing KKP or the Defendant (see
too, KKP's Corporate Structure at p 5, DB4).

In my considered view, the Plaintiff has glaringly taken inconsistent

positions as to which company is the alter ego of another company.
The Plaintiff cannot be allowed to abandon its pleading and to now
seek to establish a different fact.

Furthermore, even though Mr K Selva conceded that the Plaintiff's

claim is purely contractual and that it is not attempting to pierce the
corporate veil, the very allegation that either KKP or the Defendant is
the alter ego of the Defendant or KKP, respectively, must necessarily
involve the lifting of the corporate veil (see Aspatra Sdn Bhd & 21 ors v.
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 25

Bank Bumiputra Malaysia Bhd & anor [1987] 1 MLRA 198; [1988] 1
MLJ 97; [1987] CLJ (Rep) 50). In such circumstances, the cases of
Alcatel-Lucent (M) Sdn Bhd (formerly known as Alcatel Network
Systems (M) Sdn Bhd) v. Solid Investments Ltd and another appeal
[2012] 2 MLRA 731; [2012] 4 MLJ 72; [2013] 2 CLJ 734, Law Kam
Loy and anor v. Boltex Sdn Bhd and others [2005] 1 MLRA 521; [2005]
3 CLJ 355; [2005] 4 AMR 525, Giga Engineering & Construction Sdn
Bhd v. Yip Chee Seng & Sons Sdn Bhd & Anor [2015] 6 MLRA 686;
[2015] 6 MLJ 449; [2015] 9 CLJ 537; [2015] 6 AMR 765 as cited by
the Defendant on the requirement to plead actual or equitable fraud
are applicable (see too, the decisions by the Court of Appeal in Tenaga
Nasional Bhd v. Irham Niaga Sdn Bhd & Anor [2010] 3 MLRA 126;
[2011] 1 MLJ 752; [2011] 1 CLJ 491, Theta Edge Bhd v. Infornential
Sdn Bhd & Another Appeal [2017] 3 MLRA 669; [2017] 2 MLJ 34;
[2017] 7 CLJ 53; [2017] 2 AMR 901 and Takashimaya Construction &
Development Sdn Bhd & Anor v. My Influx Sdn Bhd & Other Appeals
[2019] MLRAU 168; [2020] 2 CLJ 92). It is incontrovertible that the
Plaintiff did not plead fraud in this case;

and

(c) having adverted to the position of the 30 April 2013 Letter vis-à-vis
s 91 EA 1950, in so far as the 19 September 2013 Letter goes, s 92 of
the same statute bears relevance and it stipulates that:

"Exclusion of evidence of oral agreement

92. When the terms of any such contract, grant or other

disposition of property, or any matter required by law to be
reduced to the form of a document, have been proved
according to s 91, no evidence of any oral agreement or
statement shall be admitted as between the parties to any such
instrument or their representatives in interest for the purpose
of contradicting, varying, adding to, or subtracting from its
terms:

Provided that:

...

(c) the existence of any separate oral agreement

constituting a condition precedent to the attaching of
any obligation under any such contract, grant or
disposition of property, may be proved;

(d) the existence of any distinct subsequent oral

agreement, to rescind or modify any such contract,
grant or disposition of property, may be proved except
in cases in which the contract, grant or disposition of
property is by law required to be in writing, or has
 Tech Art Sdn Bhd
pg 26 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

been registered according to the law in force for the

time being as to the registration of documents;

...".

[Emphasis Added]

Based on the foregoing, proviso (c) or (d) is clearly not applicable to

the present case as the 19 September 2013 Letter is in writing and it
cannot be said to be an "agreement".

[61] In summary, the Court finds, as it did with the 2nd Issue, that the Plaintiff
must be held to the causes of action as pleaded in the Amended SoC. The
Defendant has successfully defended itself against the Plaintiff's claim for the
difference in the GFA on the grounds of both pleadings and evidence.

[62] In the upshot, the Court held that the final sum that must be paid by the
Defendant to the Plaintiff is RM745,161.18 (RM47,147.26 + RM698,013.92)
with interest at the rate of 5% per annum from the date of judgment (as
pleaded) until the date of full settlement.

II. The Defendant's Counterclaim

The Issues:

Whether The Defendant Has Shown That The Plaintiff Owes Any Amounts
To The Defendant Under The LoA?

And If So, Whether Such Amounts Are Due And Payable To The Defendant
At The Time Of Filing Of The Counterclaim

If Due And Payable, Whether Such Amount Can Be Set-Off Against The
Plaintiff's Claim (If Successful)

[63] The crux of the Defendant's counterclaim is that the final contract sum
between the parties is RM63,018,535.83 and the Defendant is entitled to the
amount which remains outstanding, after taking into account Progress
Payment Nos 1 to 33 in the total sum of RM54,141,102.65, pursuant to the
issuance of the CPC. In addition, the Defendant claimed for other amounts
which it alleged were owed by the Plaintiff.

[64] The particulars of the Defendant's counterclaim is tabulated in para 45 of

the Amended Defence and Counterclaim. A summarised version of the table
was prepared by the Defendant's counsel in his Written Submissions (No 2)
and is re-produced below:
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 27

[65] With reference to Item No 6 above, it is an agreed fact that the Defendant
owes the Plaintiff the sum of RM1,237,500.01 whilst Item No 5 was naturally
not disputed by the Plaintiff and the minor calculation error for Item No 7
(which should be RM3,251,314.00) was acknowledged by the Defendant's
counsel.

[66] In the resolution of the issues related to the counterclaim, the Court had
to undertake a meticulous examination of the Draft Final Account (Revision
4) - 31 October 2019 which was prepared by PW4 and marked as p 522(A),
Bundle B2 ('Plaintiff's Draft FA'), the Defendant's Revised Table with
comments denoted in green at p 522(A), B1 in Annexure 'A' to WS-DW3
('Defendant's Table') and the table of payment amounts disbursed by KKP and
received by, among others, the Plaintiff, the Defendant and the NSCs as
annexed to WS-DW2 ('DW2's Table').

[67] The issues which were raised by the parties in respect of the counterclaim
are addressed in the following part of this judgment.

- The Plaintiff's Pleaded Defence To The Counterclaim

[68] In what has become a dominant feature of this case, the issue of pleadings
is again foremost in the Defendant's submissions at the end of the trial.

[69] The Defendant invited the Court to peruse the Defence to the
Counterclaim which consists of three paragraphs of denials to the Defendant's
allegations on the counterclaim. Even when read with the averments made in
 Tech Art Sdn Bhd
pg 28 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

the Amended Reply (see para 13 of the Defence to the Counterclaim), no

material facts to defend the counterclaim were pleaded apart from the
statement that "... the Plaintiff does not owe to the defendant and therefore the
Defendant has no right to any set-off of any sums with the Plaintiff.".

[70] Mr Balbir Singh had earlier referred to O 18, rr 7, 8 and 10 RC 2012 and
for present purposes, the learned counsel also cited O 18, r 13 which reads:

"Admissions and denials

13. (1) Subject to paragraph (4), any allegation of fact

made by a party in his pleading is deemed to be admitted by the

opposite party unless it is traversed by that party in his pleading or a
joinder of issue under r 14 operates as a denial of it.

(2) A traverse may be made either by a denial or by a statement of

non-admission and either expressly or by necessary implication.

(3) Subject to paragraph (4), every allegation of fact made in a

statement of claim or counterclaim which the party on whom it is
served does not intend to admit must be specifically traversed by him
in his defence or defence to a counterclaim, as the case may be; and a
general denial of such allegations or a general statement of non-
admission of them is not a sufficient traverse of them.

(4) Any allegation that a party has suffered damage and any allegation
as to the amount of damages is deemed to be traversed unless
specifically admitted.".

[71] In addition, the learned counsel cited the compelling authorities of Kiaw
Aik Hang Co Ltd v. Tan Tien Choy [1963] 1 MLRA 335; [1964] 1 MLJ 99, Lee
Ah Chor v. Southern Bank Bhd [1990] 2 MLRA 6; [1991] 1 MLJ 428; [1991] 1
CLJ (Rep) 239 and Gerard Jude Timothy Pereira v. Kasi a/l KL Palaniappan
[2018] 3 MLRA 97; [2017] 6 MLJ 54 to support the submissions, among
others, that the Plaintiff's bare denial is not a sufficient traverse of the
counterclaim; it is not the duty of the Court to invent a defence which was not
pleaded under the guise of doing justice; and a judgment on issues which are
not raised by the pleadings is susceptible to being set aside.

[72] The Plaintiff's sole point of rebuttal is found at para 76 of its Submissions
In Reply wherein the Plaintiff maintains that it has sufficiently pleaded its
defence and emphasised that, by virtue of s 13 EA 1950, it is for the Defendant
to prove its counterclaim.

[73] The Plaintiff's assertion that it has sufficiently pleaded its defence flies in
the face of the Amended Reply and Defence to Counterclaim. It is irrefutable
that the Plaintiff's defence to the counterclaim is a bare denial and hence, it has
the effect as contended by the Defendant, namely that the Plaintiff is deemed
to have admitted the factual matters as pleaded in the Amended Defence and
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 29

CC and it cannot rely on any evidence having the effect of mounting a positive
answer to the counterclaim. However, as acknowledged by the Defendant, by
raising a negative defence, the Plaintiff has, at best, put the Defendant to prove
its counterclaim on the legal issues as opposed to the factual issues.

[74] Nevertheless, for purposes of this Grounds of Judgment, I shall provide

my analysis of the issues as raised by the Plaintiff in the event that I am found
to be wrong in my conclusion on pleadings.

- Whether The Contract Sum Is Reduced From RM108,811,854.83 to

RM63,018,535.83 As A Result Of The Appointment Of The Nominated Sub-
Contractors

[75] The Defendant's pleaded case in paras 9 to 13 of the Amended Defence

and CC may be summarised as follows:

(a) that at the time before, during and after the acceptance of the LoA,
it had been agreed among PW4, DW1 and DW3 that, if the contract
value between the parties under the LoA was reduced, a percentage of
the costs to be reimbursed by the Defendant would also reduce;

(b) the aforesaid agreement is binding on the parties as an implied

term or alternatively, a collateral agreement or a pre-condition to any
liability of the Defendant to reimburse the Plaintiff for any expenses
contained in the LoA;

(c) the implied term, the collateral agreement or the pre-condition are
as follows:

(i) the value of the 47.3% which the Defendant must bear was
achieved by rounding the percentage of the contract sum
under the LoA (RM108,811,854.83) compared to the contract
sum under KKP's LoA (RM230 million); and

(ii) since the Defendant is granted the right to nominate the

Nominated Sub-Contractors ('NSCs') under Clause A(iii) of
the LoA for the Plaintiff to award for the scope of works as
stated therein, the Plaintiff will be paid profit and attendance
fees of 2% of the respective amounts awarded to the NSCs;
and

(d) after the execution of the LoA, the contract sum was reduced by
RM45,793,319.00 upon the nomination by the Defendant, and the
corresponding award by the Plaintiff to Stitec, ASC, Nova Nexus and
Super Sun Sdn Bhd ('Super Sun') for various scope of works.

[76] The Defendant's position is neatly encapsulated in its Case Summary by

way of the following table:
 Tech Art Sdn Bhd
pg 30 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

[77] Apart from Clause A(ii) of the LoA, the Defendant drew support for its
position by referring to:

(a) Clause C.2 of the LoA which provides that it is the Plaintiff who
will pay the NSCs. The said clause reads [With My Added Emphasis]:

"Payments for all works under Item A above including all

differences between our contract sum to you and the contract
sum to NSCs shall be made to you within 7 working days
from the receipt of our claims subject to 3 (a), (b), (c) and (d)
below and such payments to you shall be alter deducting our
payments to the NSCs appointed by you at the contract sum
determined by you and after the proportionate deduction of
our 2% profit and attendance";

Since the obligation to pay the NSCs is on the Plaintiff, the Plaintiff
would not need to pay the Defendant and hence, the Defendant's
contract sum is lowered by that amount paid or payable by the
Plaintiff to the NSCs;

(b) DW3's Witness Statement which has established, as he was not

contradicted on this, that the Defendant did exercise the said right of
nomination and the Plaintiff had then issued the awards to Stitec,
ASC, Nova Nexus and Super Sun as the NSCs for the Project. With
the nomination and these awards, the obligation to pay the NSCs
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 31

became vested with the Plaintiff pursuant to the doctrine of privity of

contract; and

(c) the summary judgment which was entered by the Plaintiff against
the Defendant for profit and attendance fees for Stitec, ASC and Nova
Nexus (see subpara 11(d) above). The Plaintiff benefitted from the
arrangement, and it affirmed the same by applying for, and obtaining,
the said summary judgment. As such, the Plaintiff cannot, through the
testimony of PW4 and the Plaintiff's Draft FA, contend that payment
for any sum due under the nominated subcontracts to these NSCs was
never its responsibility, and that the Defendant's sub-contract price
was not reduced correspondingly by the value of the sub-contracts
awarded to these NSCs and remained at the original sum of
RM108,811,854.83.

[78] The Plaintiff's retort by way of its pleadings was, as outlined previously, a
bare denial. Legally, the Plaintiff is not allowed to set up a positive case. In
any event, the Plaintiff's reliance on the second part of Clause A(iii) of the
LoA in submitting that the scope of works remains under the Defendant's
responsibility and that the contract sum is not reduced by virtue of the NSCs'
contracts, is totally misconceived. The relevant part of Clause A(iii) of the
LoA states as follows:

"In the event of a default termination of any NSC's employment, we

will not be made responsible to complete the Works under any of the
above NSC contracts and to bear extra costs incurred to complete the
Works. You shall be responsible and bear all costs in completing the
above Works in an orderly and timely manner to ensure completion of
the Project. We reserve the rights to claim for any loss and/or extra
expenses incurred due to any delay caused by this event.".

[79] By reading the clear words in the said part of Clause A(iii) of the LoA, it
is obvious that it does not apply in the factual matrix of this case because there
is no "default termination of any NSC's employment'. In such situation, the
sums due to the Defendant will be reduced corresponding to the amounts paid
or payable to the NSCs. In effect, the Plaintiff does not have to pay the
Defendant that part of the NSCs' contract sum as it is the Plaintiff who will
pay the NSCs. It is only in the event of default of any NSCs resulting in
termination of the NSCs' employment that the remaining scope of works
which is left unfinished by the NSCs becomes the Defendant's responsibility to
complete.

[80] Mr Balbir Singh has rightfully articulated that the Plaintiff's argument is
circular, in that the net effect is still the same as what the Defendant is
contending. Instead of saying that the Defendant's contract sum has been
reduced, it can be expressed that the amount due to the Defendant has been
reduced. In both cases, the sums due to the NSCs must be paid. In the end, the
monies will end up in the NSCs' pockets, only by a different route.

[81] Based on the oral and documentary evidence, the Court is satisfied that
 Tech Art Sdn Bhd
pg 32 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

the Defendant has proven, on a balance of probabilities, that the contract sum
has been reduced to RM63,018,535.83.

- Whether The Counterclaim Is Premature In View Of Clause C.2 Of The LoA

[82] Proceeding next to the Plaintiff's contention that the counterclaim is

premature, this argument was premised on Clause C.2 of the LoA as quoted
earlier, specifically the words "Payments for all works under Item A above
including all differences between our contract sum to you and the contract sum
to NSCs shall be made to you within 7 working days from the receipt of our
claims subject to 3 (a), (b), (c) and (d) below..." [Emphasis Added]. According
to the Plaintiff, its obligation to pay the Defendant the amount due upon the
issuance of the CPC does not arise until the Plaintiff and all the NSCs are paid
first. PW4 had testified that up to the stage of the issuance of the CPC, the
Plaintiff did not receive payment from KKP in the sum of RM25 million,
inclusive of Goods and Services Tax.

[83] The Defendant takes the position that Clause C.2 of the LoA is a "pay
when paid" clause as opposed to a "pay if paid" clause.

[84] In Globe Engineering Sdn Bhd v. Bina Jati Sdn Bhd [2014] 5 MLRA 363;
[2014] 5 MLJ 145; [2014] 7 CLJ 1; [2014] 4 AMR 793, Jeffrey Tan FCJ, in
delivering the judgment of the Federal Court, extensively discussed the
approach of the courts within the country and beyond in determining whether
a contractual provision is a "when" clause or an "if" clause and legal articles
which have been written on this matter. The Court finally answered the first
leave question that upon proper construction of the clause in question, it was a
provision that merely fixed time for payment but did not absolve the
respondent of liability to pay the amount certified and attributable to the work
executed by the appellant. In the course of the analysis, the Court held:

"[32] Time to honour payment to the appellant was contingent upon

the time that the respondent would receive payment from the
employer. That which was contingent was time for payment. But the
fact that time for payment was so contingent could not reasonably
extend to mean that even liability of the respondent was contingent, in
the sense that the respondent would walk free MP the employer
defaulted on the contract. For such a construction, there must be clear
and unambiguous provisions to the effect that the liability of the
respondent to pay the appellant, as opposed to time for payment, was
contingent upon receipt of payment by the respondent from the
employer. It must be universal truth that it need not even be said
between contracting parties, that goods and services will naturally be
paid by the receiving party. That is self-evident. 'So when one is
concerned with a building contract one starts with the presumption
that each party is to be entitled to all those remedies for its breach as
would arise by operation of law, including the remedy of setting up a
breach of warranty in diminution or extinction of the price of material
supplied or work executed under the contract. To rebut that
presumption one must be able to find in the contract clear unequivocal
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 33

words in which the parties have expressed their agreement that this
remedy shall not be available in respect of breaches of that particular
contract (Gilbert-Ash (Northern) Ltd v. Modern Engineering (Bristol) Ltd
[1974] AC 689 at p 718 per Lord Diplock). The burden is on the party
who proposes otherwise, to show that payment was on an NP basis.
Hence, the burden was on the respondent to show that liability for
payment was contingent. Since there were no such provisions to that
effect or from which that could be so construed, it could not be so read
into the subcontract where it was silent, that the liability of the
respondent was contingent. Time for payment of the certificates was
contingent. But under para 14 and cl 11(b), the liability of the
respondent was not contingent. The respondent was liable even MP
the employer defaulted on the contract (for an analogy, see Scobie &
Mcintosh Ltd v. Clayton Bowmore Ltd (1990) 23 ConLR 78, where it
was held that with repudiation of the subcontract by the main
contractor and which was accepted by the subcontractor, the primary
obligations of the party in default which remained unperformed was
substituted by a secondary obligation to compensate the subcontractor
for loss sustained in consequence of the non-performance of the
primary obligations).".

[Emphasis Added]

[85] Guided by the aforementioned case of high authority, I have considered

the wordings in Clause C.2 of the LoA and in my view, it is undoubtedly a
"pay when paid" clause as it speaks of the time for payment rather than of
there being a condition precedent that the Plaintiff will only pay the Defendant
if KKP pays the Plaintiff and if all NSCs are paid first. There are no words in
Clause C.2 of the LoA which allows for it to be interpreted in the manner as
urged by the Plaintiff upon this Court. The Plaintiff has clearly not discharged
the burden of proving that payment to the Defendant is contingent on the
Plaintiff receiving payment from KKP.

[86] It follows from the above finding that the Defendant's counterclaim is not
premature because the Plaintiff's liability to pay the Defendant is not
contingent on the Plaintiff having received payment from KKP or on an
outcome of the arbitration in the Plaintiff's favor. And nor can the Plaintiff
contend that "... payment can only be made to the Defendant after deducting
out the Plaintiff's payment to the NSCs" (see para 76 of the Plaintiff's Written
Submissions) as this Court has held that the obligation to pay the NSCs lies on
the Plaintiff and the Plaintiff cannot take the benefit of its own wrong in not
paying the NSCs to claim that the Defendant's counterclaim is premature.

[87] Moreover, by relying on PW4's evidence and Clause C.2 of the LoA, the
Plaintiff was attempting to prove the facts which have the effect of mounting a
positive answer to the counterclaim. This the Plaintiff cannot do when all that
it has pleaded is a negative defence.

- Whether The Total Amount Paid By The Plaintiff To The Defendant As

Progress Payments Is RM54,141,102.65 (Defendant's Version) Or
 Tech Art Sdn Bhd
pg 34 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

Rm54,291,102.64 (Plaintiff's Version) Resulting In The Difference Of

RM149,999.00

[88] The Plaintiff asserted that it has paid RM149,999.00 (or RM150,000.00 as
was stated by PW4 in her evidence) to the Defendant for project management
fees under KKP's LoA. This payment was made following correspondence
from Datin Salmah.

[89] The Defendant's counsel drew the attention of the Court to PW4's and
DW2's evidence and the documents showing the amount which was disbursed
to the Defendant. Under Claim No 1 for the Certificate of Payment dated 26
July 2013 for the amount of RM10,988,086.11 in the Annexure to WS-PW4,
the payment received by the Defendant on 30 September 2013 is stated as the
same amount as the Certificate of Payment. Although KKP, in the Form of
Disbursement Notice dated 26 July 2013 issued to Malaysia Building Society
Berhad ('MBSB'), had requested that RM10,988,086.11 be disbursed to the
Defendant, the Plaintiff's General Ledger 1 for the entry on 31 December 2015
shows an adjustment of account for the Project in the sum of
RM10,838,086.11. In the Statement of Account issued by MBSB to KKP,
among the particulars for 4 September 2013 are the disbursement in the sum of
RM10,838,086.11 to the Defendant and RM150,000.00 to the Plaintiff.

[90] It can thus be safely concluded that the Defendant received

RM10,838,086.11, and not RM10,988,086.11 as alleged by the Plaintiff. This
means that the total amount paid by the Plaintiff to the Defendant as progress
payments is as per the Defendant's version, namely RM54,141,102.65.

[91] At this juncture, it would be appropriate to mention that the Plaintiff did
attempt to convince the Court to disregard DW2's evidence on the ground of
bias as DW2 had previously represented the Defendant in this suit and he
admitted that he wants to assist the Defendant. It was also contended that
DW2's evidence is replicated by DW3 as both had produced a statement of
account laying out the quantum that is owed by the Plaintiff to the Defendant.

[92] The Plaintiff submitted that the statement of account is the only evidence
that the Defendant has provided to support its claim and hence, by virtue of s
34 EA 1950 and the decisions in Sim Siok Eng & Anor v. Poh Hua Transport
and Contractor Sdn Bhd [1980] 1 MLRA 618; [1980] 2 MLJ 72 and Tey Por
Yee & Anor v. Protasco Bhd [2020] MLRAU 69 this evidence on its own is
insufficient as proof of the Plaintiff's liability for the counterclaim. Section 34
EA 1950 provides that:

"Entries in books of account when relevant

34. Entries in books of accounts regularly kept in the course of

business are relevant whenever they refer to a matter into which the
court has to inquire, but the entries shall not alone be sufficient
evidence to charge any person with liability.

ILLUSTRATION
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 35

A sues B for RM1,000 and shows entries in his account books showing
B to be indebted to him to this amount. The entries are relevant, but
are not sufficient without other evidence to prove the debt.".

[93] The above statutory provision speaks of entries in a book of accounts. In

Sim Siok Eng (supra), the Federal Court said at pp 619 - 620:

" The law does not prescribe any special type or form of books of
account to be kept by a businessman, nor does it specify any system by
which these books are to be kept. Of course it is far more satisfactory if
books are kept in a generally recognised form or system showing debts
and credits entries between the parties, thus indicating on the face of
the account the liability of the party against whom the account is
tendered. A book of account kept by an illiterate tradesman is just as
admissible as that kept by a highly educated merchant and banker. All
that is necessary to show to the Court is that the book must be one that
is "regularly kept in the course of business". This expression implies
some sort of system which is followed in the making of entries in the
book in question, although such system need not be elaborate (Kesheo
Rao v. Ganesh AIR 1926 Nag 407). Where there is a system, the fact
that entries in the book are not entered hour by hour or day by day as
transactions took place does not mean that the book is not "a book of
account regularly kept in business"...".

[94] The purported "statement of account" which is said to have been

produced by DW2 and DW3 is actually DW2's Table. The documents which
were used as a refence in the preparation of DW2's Table are the Annexure to
WS-PW4, the Plaintiff's General Ledger 1 and General Ledger 2 and the
Disbursement Notices. The General Ledgers and the Disbursement Notices
were included in the Common Bundle of Documents ('CBoD') for the trial
marked as "B2". The Annexure to WS-PW4 was used as a base and the parts
highlighted in yellow indicate the alleged errors in PW4's Annexure, green
indicate the correct figure as contended by the Defendant and blue indicate
further additions arising out of Interim Payment Certificate 34. DW2's Table is
clearly not a "statement of account" or entries in a book of accounts which
would attract the application of s 34 EA 1950.

[95] As for DW2's evidence, I am not persuaded by the Plaintiff's reasons in

asking the Court to ignore his testimony. In WS-DW2, the witness had
explained that:

(a) he prepared DW2's Table to reconcile the various figures in the

documents as these have a direct bearing to the counterclaim;

(b) although the Defence to Counterclaim has not traversed the figures
pleaded by the Plaintiff in the counterclaim, the Plaintiff had filed WS-
PW4 with the Annexure and had produced the Plaintiff's Draft FA
and the General Ledgers. This indicates that the Plaintiff intends to
dispute the figures stated in the Counterclaim; and
 Tech Art Sdn Bhd
pg 36 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

(c) the entries in the Annexure to WS-PW4 is unhelpful as it only has

the headings for payments received by the Plaintiff, the Defendant and
others. A breakdown was thus prepared to assist the Court in
determining the correct figures in relation to each heading and in the
process, DW2 had to reconcile the figures.

[96] I found that DW2's Table contains a more detailed breakdown of the
amounts which were received by the Plaintiff, the Defendant, the NSCs, LK
Construction and the Consultants and these were extremely helpful in the
determination of the issues related to the counterclaim. Moreover, I did not
simply accept the figures in DW2's Table at face value. The parts highlighted
in green carried the reference to the relevant pages in the CBoD and the figures
as stated were checked against the documents with the outcome that the
figures as inserted in DW2's Table represent the correct amounts. For
completeness, the Court also took cognizance of paras 105 - 110 in the
Defendant's Reply Submissions, including the table which sets out the
summary of DW3's criticisms of the Plaintiff's Draft FA when compared
against the contemporaneous documents.

- Whether The Plaintiff Is Liable For The Payments Which Were Made By
The Defendant On Behalf Of The Plaintiff To Nova Nexus And Super Sun

[97] Among the items in the counterclaim is the sum of RM924,994.00 and
RM2,326,320.00 which the Defendant alleged that it had paid Nova Nexus
and Super Sun, respectively, before they were appointed as the Plaintiff's sub-
contractors. The total sum which was paid is RM3,251,314.00.

[98] The Plaintiff's stance at the trial was that it was under no obligation to pay
these amounts as it is unaware of where the payments originated from and the
Plaintiff did not consent to the payments and nor was it informed of the same.
The Plaintiff asserted that it was natural for it to be wary of the purported
payments by the Defendant as these were made before the Plaintiff issued the
Letters of Award As NSC to Nova Nexus on 2 January 2014 and to Super Sun
on 23 June 2015.

[99] Based on DW3's evidence and the documents produced at the trial, the
Defendant paid Super Sun between the months of February 2014 to April 2015
(see the Defendant's Public Islamic Bank Statement of Accounts dated 28
February 2014, 31 July 2014, 31 October 2014, 31 December 2014, 28
February 2015 and 30 April 2015 and Super Sun's Official Receipts dated 5
February 2014, 11 July 2014, 23 October 2014, 12 December 2014, 13
February 2015 and 13 April 2015 at pp 26 - 37, DB1).

[100] The Defendant does not deny that at the time that it paid Nova Nexus
and Super Sun, these NSCs were not the Plaintiff's sub-contractors yet. In this
regard, the contention that the Defendant must obtain the Plaintiff's prior
consent before making the payments to Nova Nexus and Super Sun simply
does not arise.
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 37

[101] As for the Plaintiff's allegation that it was not informed and has no
knowledge of these payments, the Defendant has proven, on the balance of
probabilities, that it is in fact the opposite. In the case of:

(a) Nova Nexus, based on PW4's, DW2's and DW3's testimonies, the
Court finds that PW4 had signed the undated letter to Nova Nexus
and had placed her initial on the first page of the letter and on each
page of the attachments (which PW4 testified was sent by registered
post to Nova Nexus on 19 October 2016) and, among others, enclosed
"our record of payments to you".

In Attachment 2 to the letter, the Payment Record for Nova Nexus

shows in the first two items, Payment Nos 1 and 2 by the Defendant in
the sum of RM450,000.00 and RM474,994.00, respectively (totaling to
RM924,994.00; see pp 19 - 25, DB1). It is incredulous for PW4 to
disagree to the suggestion by the Defendant's counsel that she was well
aware of the payment by the Defendant to Nova Nexus when she had
already admitted to have co-operated in the preparation of the letter
and to propose that the Payment Record be enclosed with the letter. In
an e-mail dated 10 October 2016 from PW to DW2 and copied to
DW1 (at p 4, DB3), PW4 said "i suggest we state and attach the
account statement for furniture works and outstanding amount based
on our records. The argument seems to be on the non-payment.".
During the cross-examination of DW2, the Plaintiff's counsel asked,
"... When she says "our" she could be meaning "our" collectively
meaning KKP, Metropolitan, Tech Art's record. Our record as
opposed to Nova Nexus's record....". This question itself shows that
the Plaintiff admits that "ourrecord" includes the Plaintiff's record; and

(b) Super Sun, the Tax Invoice issued by Super Sun to the Plaintiff
dated 9 July 2018 shows that Super Sun has received payments in the
sum of RM18,853,97285 and that it has a total claim of
RM6,936,680.90. The sum of RM18,853,97285 includes the amounts
which were paid by the Defendant to Super Sun between February
2014 to April 2015 as alluded to earlier (see pp 512 and 670, B2).

Further, in the Plaintiff's Draft FA, a sum of RM6,936,680.90 is

shown as being owed to Super Sun. Hence, the Plaintiff has clearly
taken into consideration the sum of RM2,326,320.00 which was paid
by the Defendant to Super Sun.

[102] In the light of the above discussion of the oral and documentary
evidence, the sum of RM3,251,314.00 which was paid by the Defendant to
Nova Nexus and Super Sun were treated by the Plaintiff as though it were
payments made by itself to these NSCs. In this sense, the Plaintiff enjoyed the
benefit of these payments as it reduced the amount which it would otherwise
be obligated to pay to Nova Nexus and Super Sun. This Court is satisfied that
the Defendant has established its counterclaim for this head of claim.

- The "Alter Ego" Argument

 Tech Art Sdn Bhd
pg 38 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

[103] The Plaintiff relied on the same "alter ego" argument as was alluded to in
respect of the Plaintiff's claims in denying any liability for the counterclaim for
the reason that "there seems a blurring of lines between the Defendant and
KKP in the counterclaim" (see para 88 of the Plaintiff's Written Submissions).

[104] In my view, the Plaintiff cannot go far with this argument for the simple
and, what has become a repeated reason in the determination of the dispute
between the parties, that it was not pleaded by the Plaintiff. As was shown in
para 60(b) above, the fact as to "alter ego" was pleaded in para 9 of the
Amended Reply in the context of the as-built drawings. It was certainly not
expressly pleaded as one of the defences to the counterclaim.

- Demeanor Of The Witnesses

[105] The Plaintiff's counsel dedicated a whole section of his written

submissions on this aspect, insisting that the Defendant's witnesses were vey
evasive during cross-examination, feigning ignorance and giving contradictory
answers. The excerpts from the NoE which were relied upon by the Plaintiff in
support of this contention are in respect of DW1's and DW3's testimonies on
the issue of "alter ego".

[106] Similarly, throughout the written submissions of the Defendant's

counsel, he had highlighted the occasions when PW4's credibility is
questionable and how her evidence is self-serving and orchestrated to avoid
liability on the counterclaim.

[107] On this note, I am reminded that demeanour is not always the

touchstone of truth and it is only one ingredient in arriving at a finding of
credibility. Any impression as to the demeanour of any of the witnesses in the
trial must be critically tested against the totality of the evidence given by the
witness concerned (see Tara Singh v. Public Prosecutor [1948] 1 MLRA 187;
[1949] MLJ 88 and Tengku Mahmood v. Public Prosecutor [1974] 1 MLRH
347; [1974] 1 MLJ 110).

[108] In Lee Ing Chin @ Lee Teck Seng & Ors v. Gan Yook Chin & Anor [2003]
1 MLRA 95; [2003] 2 MLJ 97; [2003] 2 CLJ 19; [2003] 2 AMR 357, the Court
of Appeal elucidated at p 116 that:

"A judge who is required to adjudicate upon a dispute must arrive at

his decision on an issue of fact by assessing, weighing and, for good
reasons, either accepting or rejecting the whole or any part of the
evidence placed before him. He must, when deciding whether to
accept or to reject the evidence of a witness, test it against relevant
criteria. Thus, he must take into account the presence or absence of
any motive that a witness may have in giving his evidence. If there are
contemporary documents, then he must test the oral evidence of a
witness against these. He must also test the evidence of a particular
witness against the probabilities of the case. A trier of fact who makes
findings based purely upon the demeanour of a witness without
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 39

undertaking a critical analysis of that witness' evidence runs the risk of

having his findings corrected on appeal. It does not matter whether the
issue for decision is one that arises in a civil or criminal case: the
approach to judicial appreciation of evidence is the same.".

[109] Later, the same Court, this time constituted of a different panel of
judges, expounded the following in Tan Ah Kow & Anor v. Tan Chaui En
[2017] 6 MLRA 141; [2017] 6 MLJ 297; [2018] 2 CLJ 610 at p 306:

"[20] Having considered the judgment of the learned JC, we are of the
view that the learned JC erred in making her decision based mainly on
the demeanour of the first appellant, and the learned JC's perception
of the lack of credibility of the first appellant. We agree that
demeanour and credibility are important in determining which of the
two versions of the parties can be believed and accepted. However, we
are of the view that the trial judge should first of all determine, on a
balance of probabilities, whether the plaintiff has discharged the
burden of proving his case. This will then be considered by the trial
judge, and taking into account at the same time the demeanour and
credibility of the witnesses. The demeanour and credibility of
witnesses should not be accorded such disproportionate weight by the
trial judge to the extent of ignoring and not giving due weight and
importance to the facts established from the totality of the evidence.".

[110] By applying the legal principles derived from the above said cases and
following from the analysis of the Court on the issues which arose for
consideration as discussed thus far, I do not think that the evidence given by
any of the witnesses at the trial should be rejected in their entirety purely on
the ground of his or her demeanour. In weighing the evidence in the course of
determining whose version of the events to believe and whether the Plaintiff or
the Defendant has discharged the burden of proof, as the case may be, I have
considered the totality of the evidence and have tested the oral testimonies of
the witnesses against the contemporaneous documentary evidence which is in
abundance in this case (see OSK Securities Bhd v. Probo Pacific Leasing Pte Ltd
& Anor [2008] 3 MLRA 787; [2009] 3 MLJ 712).

[111] As both the Plaintiff and the Defendant are pursuing their respective
claims, it is not safe to rely solely on the demeanour of, especially PW4, DW 1
and DW3, as the barometer in the final outcome of the dispute.

In Tindok Besar Estate Sdn Bhd v. Tinjar Co(supra, at p 234) Chang Min Tat
FCJ said:

"... For myself, I would with respect feel somewhat safer to refer to
and rely on the acts and deeds of a witness which are
contemporaneous with the event and to draw the reasonable
inferences from them than to believe his subsequent recollection or
version of it, particularly if he is a witness with a purpose of his own to
serve and if it did not account for the statements in his documents and
writings. Judicial reception of evidence requires that the oral evidence
 Tech Art Sdn Bhd
pg 40 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

be critically tested against the whole of the other evidence and the
circumstances of the case. Plausibility should never be mistaken for
veracity....".

- Ancillary Matter

[112] In its Written Submission in Reply, the Plaintiff submitted that Clause
A(ii)(6) of the LoA on the scope of works relating to "Management, Structural
Consultancy and Risk Management Fees" in the sum of RM26,190,200.43 is a
sham in that the risk management scope was merely for the purpose of
withdrawing project funds. The Defendant retorted, once again, that this fact
was not pleaded by the Plaintiff. I agree.

Conclusion

[113] Based on all the foregoing considerations, the Defendant's counterclaim

for the sum of RM6,838,927.08 was allowed with interest at the rate of 5% per
annum from the date of filing of the Counterclaim until full settlement. This
amount was allowed to be set off against the sum of RM745,161.18 which was
awarded pursuant to the Plaintiff's claim resulting in the nett judgment sum of
RM5,713,247.03.

[114] On the issue of cost, the Plaintiff's counsel prayed for cost in the cause
since "the Plaintiff won some and lost some and the Defendant won on its
counterclaim".

[115] The Defendant's counsel disagreed, giving the reason that what the
Plaintiff won was already conceded before the trial, and the fact that the
Defendant succeeded in the substantive part of the case which revolve on the
GFA related claim and the counterclaim. A sum of RM100,000.00 as costs
was sought in view of the length of the trial, the amount of work that was
dedicated to this case and the change of solicitors which happened thrice.

[116] The Plaintiff's solicitors then suggested the sum of RM60,000.00 as costs
and this was duly ordered as the Court viewed it as a befitting amount in the
circumstances of the case. The order for costs was made subject to the
payment of the standard allocatur fees.

III. The Plaintiff's Application For Stay Of Execution Of The Judgment

[117] Soon after the decision after the full trial was pronounced, the Plaintiff
filed the application in encl 153 for, among others, a stay of the execution of
the judgment pursuant to O 45, r 11 RC 2012 and/ or the Court's inherent
jurisdiction under O 92, r 4 RC 2012, including the winding up of the Plaintiff,
pending the final determination of the Plaintiff's appeal against the judgment
('Appeal').

[118] On the date of the hearing of the application, the Plaintiff's counsel
informed the Court that the Plaintiff does not wish to pursue prayer 2 in encl
153 which is an order for stay of the execution of the judgment pending the
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 41

determination by the Arbitrator in the arbitration proceedings between KKP

and the Plaintiff.

[119] The cause papers for the application are as follows:

(a) the Plaintiff's Affidavit In Support ('AIS') affirmed by PW4 (encl

154);

(b) the Plaintiff's Additional Affidavit affirmed by the same deponent

(encl 164);

(c) the Defendant's AIR (No 1) affirmed by DW3 (encl 172); and

(d) the Plaintiff's Affidavit In Reply ('AIR') affirmed by the same

deponent (encl 171).

[120] After an oral hearing and taking into consideration the evidence on
affidavit and the submissions of the parties, the Court had allowed the
Plaintiff's application for stay of the execution of the judgment sum pending
the disposal of the appeal by the Court of Appeal on condition that this
amount is deposited with the Defendant's solicitors as stakeholder in an
interest bearing account within 30 days from the date of the order
('Condition'). The said sum and the accrued interest thereon shall be released
in accordance with the order that will be made by the Court of Appeal.

[121] As the Defendant did not appeal against the decision of this Court in
respect of encl 153 and the Plaintiff's current appeal is only against the
Condition, I now provide the full justifications to warrant the order for the
Condition.

[122] O 45, r 11 RC 2012 stipulates that:

"Matters occurring after judgment: Stay of execution

11. Without prejudice to O 47, r 1, a party against whom a judgment

has been given or an order made may apply to the Court for a stay of
execution of the judgment or order or other relief on the ground of
matters which have occurred since the date of the judgment or order,
and the Court may by order grant such relief, and on such terms, as it
thinks fit."

[123] The Plaintiff accepts that it has the burden to prove the existence of
special circumstances which render the order for stay of execution necessary in
line with the high authorities and all the subsequent cases which have applied
the legal principles accordingly (see Ming Ann Holdings Sdn Bhd v. Danaharta
Urus Sdn Bhd [2002] 1 MLRA 214; [2002] 3 MLJ 49; [2002] 3 CLJ 380; [2002]
3 AMR 2867 and Kosma Palm Oil Mill Sdn Bhd & Ors v. Koperasi Serbausaha
Makmur Bhd [2003] 1 MLRA 536; [2004] 1 MLJ 257; [2003] 4 CLJ 1).

[124] Special circumstances mean something exceptional in character,

 Tech Art Sdn Bhd
pg 42 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

something that exceeds or excels in some way that which is usual or common.
There is a myriad of circumstances that could constitute special circumstances
and the list of factors that could establish such circumstances is not closed (see
The Government of Malaysia v. Datuk Kadir Mohamad Mastan & Another Case
[1993] 3 MLRH 207; [1993] 3 MLJ 514; [1993] 4 CLJ 98). It is trite that merits
of the appeal against the judgment and fear of execution are not special
circumstances.

[125] Having read the Defendant's AIR and submission, it is apparent that it
admits that it has not filed its annual statement of accounts. In this situation,
the Defendant's financial standing and the ability to repay the judgment sum to
the Plaintiff (which was calculated as RM7,870,430.37 inclusive of interest and
cost, less the full judgment of RM2,157,183.35 in favor of the Plaintiff,
resulting in the sum of RM5,713,247.03; see para 6, encl 172), if the Plaintiff's
appeal is allowed, is indeed questionable. The Defendant contended that
nonetheless, a blanket stay should not be granted because:

(a) an appeal does not automatically attract a stay of execution;

(b) the Court should not lend a hand to grant a stay which has the
mere effect of facilitating the Plaintiff to avoid or delay the execution
or the Plaintiff's legal obligation to honour the judgment debt;

(c) the Plaintiff has not disclosed in its AIS and AIR the state of its
finances such as its fixed and current assets, the amounts payable to its
creditors in the immediate and medium term, the conduct of its
payment to these creditors and whether it is facing any threat of
execution or winding-up by its other creditors;

(d) the Plaintiff was not willing to give an undertaking to preserve its
assets when the Plaintiff sought an order for an ad interim stay until
encl 153 was heard and disposed and further, the Plaintiff did not give
any assurance to the Court that it is able to meet the judgment sum in
the event the appeal is unsuccessful and to fortify the assurance with
evidence; and

(e) there is a risk that the Plaintiff may suffer execution or winding- up
in the hands of some other creditor. The Defendant, as execution
creditor, is entitled to the fruits of its litigation being first in time to
realise the assets of the judgment creditor. Applying the decision in the
case of Pritchard v. Westminister Bank Ltd [1969] 1 AII ER 199, the
Defendant does not need to share the fruits of its diligence with other
creditors.

[126] It is observed that, when the Court heard the Plaintiff's application for an
ad interim stay on the first date of case management for encl 153, the
undertaking by the Plaintiff that it will not dispose of its assets pending the
disposal of encl 153 was not immediately given. The matter was stood down to
enable Mr K Selva to obtain instructions from his client. The undertaking was
then obtained and later formalised by way of the Plaintiff's averment in para 5,
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 43

encl 164.

[127] Having considered the submissions of the parties, the Court was inclined
to agree with the Defendant that this is a case suited for a conditional stay for
the following reasons:

(a) After outlining the Plaintiff's efforts in claiming the amounts which
were purportedly due and owing by KKP to the Plaintiff vide two
adjudication proceedings and an arbitration proceeding, the Plaintiff
then affirmed in para 21 of the AIS that "... by virtue of the non-
payment of KKP, the Plaintiff is constrained in their ability to settle
the dues to their sub-contractors including the nominated sub-
contractors...". By its own averment, the Plaintiff admits that there are
sums of monies owing to the subcontractors and this lends credence to
the Defendant's contention of a threat of execution or winding up by
the Plaintiff's other creditors in future and the risk that the Plaintiff
may dispose of its assets and leave the Defendant with a barren
judgment.

(b) If a blanket stay is granted and there is an intervening winding up

of the Plaintiff while waiting for the Plaintiff's appeal to be heard, the
Defendant will lose its ranking as being the first in time to realise the
assets of the Plaintiff. It is likely that the Plaintiff will end up being
ranked in pari passu with other creditors. The Defendant would be
deprived of the benefit of execution of the judgment, and this will
occasion an irreparable prejudice to the Defendant.

(c) In Jaya Harta Realty Sdn Bhd v. Koperasi Kemajuan Pekerja- Pekerja
Ladang Bhd [2000] 1 MLRH 316; [2000] 6 MLJ 493; [2000] 3 CLJ
361; [2000] 3 AMR 3693, the High Court, in allowing the plaintiff's
application to stay the execution of an order setting aside a
garnishment order and the return of the garnished money to the
garnishees, pending the disposal of the plaintiff's appeal to the Court
of Appeal, had, at pp 499 - 501, expounded that:

"The terms in which the court's jurisdiction is conferred on

stay of execution pending an appeal are general and
unlimited. How the judicial discretion conferred by that
jurisdiction should be exercised must be guided by proper
rules founded on principle.

The justice of the case on stay is arrived at by striking a

judicious and equitable balance between the principle that the
successful party in the litigation ought to be allowed to reap
the fruits of that litigation and not obtain a mere barren
success, and the countervailing principle that should the
unsuccessful party in litigation be ultimately successful in his
appeal, he ought not be deprived of the fruits of his litigation
due to the result of his appeal being rendered nugatory. Yet, it
must always be borne in mind that the successful party in
 Tech Art Sdn Bhd
pg 44 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

litigation has acquired a vested interest in the outcome of his

case whereas the other party who appeals only has an interest
contingent upon a successful outcome on his appeal -
obviously, one has to be mindful that such considerations
pertaining to the compelling concept of 'fruits of litigation' is
wholly irrelevant to stay of proceedings applications. And, it is
primarily for this latter reason and the implied caveat that
courts should discourage parties who lose their cases upon
merits, from wrenching the fruits of litigation from the
successful parties - by keeping the litigation alive through
spurious appeals without any real prospect of success and
simply in a hope of gaining respite against immediate
execution upon the judgment - that the courts have been and
are only moved to grant such stay upon a set of certain
requirements which, for want of a more appropriate term, the
courts have been driven to use, quite rightly, the expression
'special circumstances'. Thus, 'special circumstances' does not
mean very special or exceptional or peculiar circumstances but
is a term to denote a combination of certain determining
factors that are demonstrated by affidavit evidence to persuade
the court that it is a just and appropriate case to grant a stay of
execution in the circumstances....

In Alexander v. Cambridge Credit Corp Ltd, although Kirby P,

when delivering the judgment of the Court of Appeal of New
South Wales, had frowned upon the use of the expression
'special or exceptional circumstances' in preference to 'an
appropriate case', he nevertheless quite correctly (in my view)
set out the following three essential ingredients (the traditional
core ingredients) that are necessary to demonstrate 'an
appropriate' case to warrant the exercise of discretion in
favour of a stay, namely:

(i) where 'the balance of convenience' is in favour of

the applicant/appellant (see also AG v. Emerson &
Ors; Clyne v. Deputy Commissioner of Taxation); and
such balance of convenience may sometimes be
maintained by the stay being made subject to certain
conditions imposed by the court (as per provision...
may order... on such terms as it thinks fit', in O 45 r 11
of the Rules, and also see Andrews & Anor v. John
Fairfax & Sons Ltd);

(ii) where 'it is apparent that unless a stay is granted

an appeal will be rendered nugatory...' (see also
Wilson v. Church No 2 and Scarborough v. Lew's
Junction Stores Pty Ltd); and

(iii) that the applicant/appellant 'has an arguable'

appeal.
 Tech Art Sdn Bhd
[2023] MLRHU 134 v. Metropolitan Bumi Sdn Bhd pg 45

In my view, shorn of its contending terminology, the courts

here and in the Commonwealth jurisdictions have in essence
traditionally adopted as its core ingredients the above three
generic ingredients for granting stay, with some variations
where appropriate depending on the peculiar facts and
circumstances of the case. One may term it 'special
circumstances' or 'appropriate case' yet the basic ingredients
for granting stay bears insignificant variation from the said
three traditional core ingredients....".

[Emphasis Added]

The common feature of applications of this nature is the need to strike

the appropriate balance between the competing interests of the parties.
In the instant case, there is on one hand, the Defendant who has
obtained judgment after a full trial, and on the other hand, the Plaintiff
who has cast doubt on the Defendant's ability to repay the judgment
sum if the Plaintiff's appeal is successful. I should add that I am not
persuaded by any of the Plaintiff's arguments premised on the
rehashed issue of "alter ego" for the reasons already elaborated under
Part I of this judgment.

Critically to the Defendant, its objective is to ensure that whatever

actions that may be taken by the Plaintiff's other creditors against the
Plaintiff do not affect the Defendant. In my considered view, the
balance of convenience in the circumstances of this case can be
achieved by subjecting the order for stay of execution to the
Condition.

(d) The learned counsel for the Plaintiff cited the case of Perkapalan
Dai Zhun Sdn Bhd & Anor v. Formosa Plastics Marine Corporation &
Ors & Another Case [2021] 2 MLRH 199 to illustrate a case scenario
where there was some evidence in the form of the 2015 financial
statement of the company concerned, albeit there was no information
at all for the four years after that, as compared to the present case
where the state of the Defendant's finances was not made known at
all.

The admiralty court was of the view that there were special
circumstances to warrant the exercise of the court's discretion to stay
the execution of the judgment. The court found that the defendant's
financial resources were such as to raise serious doubts as to their
ability to repay the judgment sum to the plaintiffs in the event the
appeal was allowed. The court thus allowed the stay application
subject to two conditions, one of which was for the plaintiffs to make
cash payments over three consecutive months into a joint stakeholder
account to be maintained jointly by the partners of the plaintiffs' and
defendants' solicitors. The court further ordered that in the event any
of the conditions are not complied with, the stay order is set aside.
 Tech Art Sdn Bhd
pg 46 v. Metropolitan Bumi Sdn Bhd [2023] MLRHU 134

[128] The Court, having decided that a conditional stay is the most appropriate
order to be made given the present set of facts, then addressed the issue of cost.

[129] Mr Balbir Singh prayed for RM10,000.00 as cost on the ground that it
was a highly contested application. However, the Court agreed with the
Plaintiff that it is befitting for cost to be in the cause of the Plaintiff's appeal.

Order accordingly.