CommonLII Home | Databases | WorldLII | Search | Feedback

High Court of Sabah and Sarawak
You are here:  CommonLII >> Databases >> High Court of Sabah and Sarawak >> 2011 >> [2011] MYSSHC 343

Database Search | Name Search | Recent Decisions | Noteup | LawCite | Download | Help [Context] [Hide Context]

M/S: Syarikat Am Enterprise, Syarikat Pembangunan Bumiputra, Syarikat Azamurni, Syarikat Dorban, Syarikat Tuah Utama, Syarikat Naza Enterprise Vs Tuan Wilson Anak Kakap, Ketua Polis Negara, Goverment Of Malaysia [2011] MYSSHC 343 (5 September 2011)

MALAYSIA

IN THE HIGH COURT OF SABAH AND SARAWAK AT KUCHING

SUIT NO.: 21-7-2009-I/III

BETWEEN

.

M/S. SYARIKAT AM ENTERPRISE

...

ST PLAINTIFF

.

SYARIKAT PEMBANGUNAN BUMIPUTRA

...

ND PLAINTIFF

.

SYARIKAT AZAMURNI

...

RD PLAINTIFF

.

SYARIKAT DORBAN

...

TH PLAINTIFF

.

SYARIKAT TUAH UTAMA

...

TH PLAINTIFF

.

SYARIKAT NAZA ENTERPRISE

...

TH PLAINTIFF

AND

.

TUAN WILSON ANAK KAKAP

...

ST DEFENDANT

.

KETUA POLIS NEGARA

...

ND DEFENDANT

.

GOVERMENT OF MALAYSIA

...

RD DEFENDANT

CONSOLIDATED WITH

SUIT NO.: 22-171-2009-III/II/III

BETWEEN

1. RAMBLI BIN AMAT (TRADING AS SOLE ... 1ST PLAINTIFF PROPRIETOR UNDER THE NAME AND
STYLE OF KHAM ENTERPRISE -29370),
2. RAMBLI BIN AMAT (TRADING AS SOLE ... 2ND PLAINTIFF

PROPRIETOR UNDER THE NAME AND STYLE OF LONG S.U.N ENTERPRISE - 57294)

AND

.

ASP WILSON KAKAP

ST DEFENDANT

.

THE INSPECTOR GENERAL OF POLICE

...

ND DEFENDANT

.

THE GOVERNMENT OF MALAYSIA

...

RD DEFENDANT

Introduction

JUDGMENT

There are a total of seven plaintiffs in the two consolidated Suits, i.e. six plaintiffs in the first Suit and one plaintiff in the second Suit. The defendants

are the same in both Suits. The seven plaintiffs averred that they were invited to perform emergency civil engineering works at the Police Training Centre (better known by its Malay acronym as PULAPOL). However, they claimed that they received only partial payment for work done. Even that partial payment was only made after the alleged appeals to the relevant

authorities which included private secretaries of Ministers. The claim in the instant two actions is for the balance of the payments under the invoices issued by the plaintiffs. The defence is that the completed works were valued at less than half the invoiced claim and that the plaintiffs had agreed to accept a lesser amount in accordance with the JKR’s valuation.

Facts of the Plaintiffs’ Claim

At the outset, it may be appropriate for me to identify the plaintiffs in the two
Suits. In Suit 21-7-2009-I the plaintiffs are as follows:
1. Syarikat A. M Enterprise (a firm) - 1st Plaintiff
2. Syarikat Pembangunan Bumiputra (a firm) - 2nd Plaintiff
20 3. Syarikat Azamurni Enterprise (a firm) - 3rd Plaintiff
4. Syarikat Dorban (a firm) - 4th Plaintiff
5. Syarikat Tuah Utama (a firm) - 5th Plaintiff
6. Syarikat Naza Enterprise (a firm) - 6th Plaintiff
All the above plaintiffs are firms. In Suit 22-171-2009-III, originally Rambli
25 bin Amat was intituled twice as the 1st plaintiff and 2nd plaintiff, trading
respectively as Kham Enterprise and as Long S.U.N. Enterprise. Subsequently, by way of amendment, Rambli bin Amat was made the sole plaintiff trading as Kham Enterprise and as Long S.U.N. Enterprise.
A total of six witnesses testified on behalf of the various plaintiffs. They are:

.

Awang Hassan Bin Awang Sah (P.W. 1) - Owner of Syarikat A.M Enterprise.

.

Jafri Bin Mohamad Su’ut (P.W. 2) – Owner or shareholder of Syarikat Azarmurni, Syarikat Naza, Syarikat Dorban, and Syarikat Tuan Utama

.

Victive anak Mesin (P.W. 3) – Sub-contractor of the plaintiffs.

.

Rambli Bin Amat (P.W. 4) – owner of Kham Enterprise and Long

S.U.N. Enterprise.

.

Mazlan bin Abdul Wahap (P.W. 5) – Consultant of the plaintiffs.

.

Mohamad Fadzlan Mohamad Shahibi (P.W. 6) – Quantity Surveyor

engaged by the plaintiffs

The main witness for all the plaintiffs was Awang Hassan. He outlined the common case of all the plaintiffs. Awang Hassan, Jafri Bin Mohamad Su’ut and Rambli Bin Amat either owned, managed or had interest in all the eight

firms which had submitted claims to PULAPOL, Kuching, after having completed the works in question. Awang Hassan’s testimony can be summarized as follows. He owned Syarikat Am Enterprise. He also managed Syarikat Pembangunan Bumiputra. He and the other contractors have Class F contractor’s licence. They often exchanged information on

projects. Awang Hassan was told by one ASP Wilson Kakap in February of

2004 that there were a number of works that must be undertaken on an urgent basis. ASP Wilson Kakap was at the material time the Financial Officer of PULAPOL. He referred to the works as “emergency works”. This is because the Inspector General of Police (IGP) was due to attend a passing out

parade of police recruits in June of 2004. Awang Hassan told Jafri Bin Mohamad Su’ut and Rambli Bin Amat about the works because he could not complete the works by himself within the time frame stipulated by ASP Wilson Kakap. The emergency works involved civil engineering works such as road clearing, leveling, construction and repairs to buildings in 13 separate

10 locations in PULAPOL. On 2nd February 2004, ASP Wilson Kakap issued a
letter assigning various works in the 13 locations to the eight firms which were owned or managed by Awang Hassan, Jafri and Rambli. Kham Enterprise was assigned works in locations 1, 2, 3 and 7. Long S.U.N. Enterprise was assigned works in location 9. Syarikat AM Enterprise was

assigned works in locations 6, 10 and 11. Syarikat Pembangunan Bumiputra was assigned works in location 8. Syarikat Azamurni Enterprise, Syarikat Naza, Syarikat Dorban, dan Syarikat Tuan Utama which was managed by Jafri was assigned works in locations 4, 5, 12 and 13. ASP Wilson Kakap also issued a “tender” or “sebut harga” form in respect of the said works. He

20 requested all the plaintiffs via letter dated 3rd February 2004 to complete the
works expeditiously. The plaintiffs were told by ASP Wilson Kakap that payment would be made from the budget for the following year. Awang Hassan said as follows:

Lepas pereksa tapak kerja, kami ikut dia balik ke pejabat nya. Dan di

pejabat nya dia beritahu kami PULAPOL tidak ada wang untuk membayar sebaik sudah siap kerja. Dia janji kami dia akan membayarnya. Mungkin,

jika tidak awal, selewat-nya pada selepas bajet tahun depan. Dengar begitu

kami rela buat kerja-kerja nya itu.

Awang Hassan said that all the plaintiffs submitted their tender price based on the valuation of one Mazlan bin Wahap who is a self professed

construction consultant. ASP Wilson Kakap accepted the quotation by signing on the tender form. ASP Wilson Kakap allegedly told Awang Hassan that the quotations were acceptable because each project did not exceed RM200,000. Awang Hassan, Jafri Bin Mohamad Su’ut and Rambli Bin Amat then proceeded to execute the works requested by ASP Wilson

Kakap in February 2004. They incurred great expense to source the supplies.

They resorted to issuing post dated cheques to suppliers of construction materials. Their consultant Mazlan bin Wahap supervised the works. ASP Wilson Kakap frequently made site visits but never registered dissatisfaction or complaint about the quality of the works. In fact, when the projects in the

13 locations were completed, he expressed satisfaction. He signed the invoices issued by the plaintiffs. However, the plaintiffs did not hear of payment until October, 2004 which is about five months after the works were completed. Awang Hassan said he was offered RM600,000 in cash by ASP Wilson Kakap in full and final settlement of the 13 projects. The offer was

rejected by Awang Hassan as the total invoiced amount for the 13 projects was RM1.9 million. Awang Hassan then flew to see senior officers at the Police Headquarters in Bukit Aman, Kuala Lumpur. He met one DCP Dato Fatimah Bt Ghazali who allegedly told him that she was in possession of a payment warrant of RM3 million which was to be sent to PULAPOL,

Kuching, but the names of the plaintiffs were not listed. She promised to investigate the complaint of the plaintiffs. When she came to PULAPOL in

Kuching, the contractors and Mazlan brought her to view the 13 completed projects. DCP Dato Fatimah Bt Ghazali left for Kuala Lumpur after promising to do something about the payment for the said projects. However, nothing happened and Awang Hassan appealed to the Ministry of

Finance as well. When DCP Dato Fatimah Bt Ghazali came to Kuching again, she requested for a discount in the invoices. The contractors agreed to a RM200,000 discount. She told them that payment would be made through a financial procedure known as AP59. However, the contractor did not received any payment. Instead, the Sarawak Public Works Department

(JKR) was requested to value the works in question. JKR valued the completed works at RM799,851.75. The contractors were told by ASP Wilson Kakap that payment would be made according to the said valuation. Awang Hassan said that he was not satisfied as the works were worth over RM1.9 million and the officer who valued the works was only a technician.

The plaintiffs engaged Kong and Advocates to protest the valuation.

However, Awang Hassan proceeded to the office of DCP Dato Fatimah and agreed to accept the sum of RM799,851.75. He signed below a notation on a letter dated 30th November 2005 which issued by DCP Dato Fatimah Bt Ghazali which stated that the amount was a “final settlement” (muktamad).

Awang Hassan said that he signed the letter because he was under pressure from suppliers who had demanded payment. Awang Hassan said that the payment was distributed to the six firms in the first Suit as follows:

Payee Payment Invoiced amount

. Sykt AM Enterprise RM206,965.75 RM531,979.50

2. Sykt Pembangunan RM 65,625.00 RM197,160.50

Bumiputra

. Sykt Azamurni RM 65,605.25 RM195,218.00

. Sykt Dorban

RM 31,699.25

RM106,400.00

. Sykt Tuah Utama

RM 29,746.00

RM 60,712.00

. Sykt Naza Enterprise

RM142,680.00

RM178,800.00

I pause to note that the invoiced amounts stated in the witness statement mirrors what is pleaded in the Statement of Claim. However, invoice of Syarikat Tuah Utama exhibited in page 10 of the Bundle of Agreed Documents shows that the invoiced amount is RM106,400 and not RM60,712.00. On the other hand, the invoice of Syarikat Dorban on page 11

of Bundle of Agreed Documents shows the amount due as only RM60,712.00 and not RM106,400 as pleaded in the Statement of Claim. During the final oral clarification, this mistake was adverted to by Counsel for plaintiff.

Reverting to the narrative, the balance of the partial payment of

RM799,851.75 was paid to the two companies managed by Rambli Bin Amat, i.e Kham Enterprise and Long Sun Enterprise. However, Awang Hassan received a second payment of RM206,965.75 by mistake two days later. Because of this double payment he was charged in the Magistrates Court for breach of trust. He was acquitted after a full trial. He is now

claiming for the balance of the full invoiced amounts for the works completed by all the eight companies that carried out works in the 13 locations as per the letter of ASP Wilson Kakap. He is also claiming for RM50,000 which is the legal fee he incurred in defending himself and aggravated and exemplary damages against the government.

25 The 2nd witness was Jafri Bin Mohamad Suut. He owned or managed the 3rd to 6th plaintiffs. His evidence was very similar to that of Awang Hassan. They have performed the works requested by ASP Wilson Kakap and had
invoiced the defendants as per the tender quotations. They performed the works immediately because ASP Wilson Kakap told them it was emergency works due to the visit of the IGP at the passing out parade to be held in PULAPOL, Kuching, in June of 2004. During his testimony, he stated that

the four firms managed by him received partial payment as follows:

(1)

Location No. 4 Sykt Azarmurni

….

RM

,625.25

(2)

Location No. 5 Sykt Tuah Utama

….

RM

,699.25

(3)

Location No. 12 Sykt Dorban

….

RM

,746.00

(4) Location 13 Sykt Naza Entreprise …. RM142,680. 00

However, during oral clarification, Counsel for plaintiffs pointed out, that based on evidence of payments, Sykt Azamurni only received partial payment of RM62,605.25. Jafri is now claiming the balance of the invoiced amounts.

The third witness was Victive anak Mesin. At the material time he worked as a construction sub-contractor. His brief testimony was that he was engaged as a sub-contractor by the plaintiffs to do road leveling, cutting, producing pre-mix and other road works with heavy machinery.

The fourth witness was Rambli bin Amat (P.W. 4). He owns Kham

Enterprise and Long S.U.N Enterprise who carried out works in Locations, 1,

2, 3, 7 and 9. His evidence in respect of the participation of the firms in the emergency works requested by ASP Wilson Kakap is similar to that of Awang Hassan. Like Awang Hassan and Jafri Bin Mohamad Suut, he also contested the valuation of JKR on the completed works. He invoiced the

total works completed at the five locations at RM645,268.50. He received partial payment of RM274,179.50. In the Statement of Claim, he claimed

judgment for the purported balance of RM456,929.50. However in the joint submission filed on behalf of all plaintiffs, counsel for plaintiffs corrected the
arithmetic error and is only claiming a balance of RM371,089.00.
The fifth witness was Mazlan bin Wahap. He is the consultant who

estimated the costs of the 13 projects on behalf of the plaintiffs. He also assisted to supervise the works for the plaintiffs. He said that the works were performed on an emergency basis and work continued even late at night. Throughout the duration of the works, ASP Wilson Kakap often visited the site but did not raise any complaints.

10 The 6th witness for the plaintiffs was Mohammad Fadzlan Mohamad Shahibi.
He is a quantity surveyor. He was requested to value the works done by the plaintiffs after the defendants offered to pay only RM799,851. 75. He valued the completed works at the 13 locations at RM2.1 million. He was therefore was of the opinion that the claim of RM1.9 million based on the invoices

issued by the plaintiffs as reasonable. Mohammad Fadzlan told the court that at the outset of the valuation, he told the plaintiffs that they are bound to accept whatever valuation he arrived at. He also said that his valuation was done two years after completion of works based on the prevailing rate for materials. However, he did not take into consideration the urgency of the

work when conducting his valuation. He also noted that the JKR rate for material was lower than the market value.

Case for the Defence

Three witnesses testified on behalf of the defendants. The first witness was
ASP Wilson Kakap (D.W. 1). He referred to the bundle of documents and

admitted inviting the plaintiffs to perform the emergency works in question.

He also acknowledged that the works were completed. However, he denied offering RM600,000 in cash to Awang Hassan in total settlement of the amounts due under the 13 projects. He said that he told the plaintiffs that there was no budget for the works in question. Nonetheless, they agreed to

undertake the works. He said that he was not involved in the partial payment process although he heard about it. During cross-examination, he agreed that he categorized all the 13 projects as “emergency works”. He recalled that the IGP was due to visit PULAPOL, Kuching, in the middle of that year and that he was under stress to ensure all the works were completed. He also agreed

signing on all the invoices after the works were completed.

The second witness for the defendants was Sharipah Sapiyah (D.W. 2). She is an officer attached to the Police Headquarters in Bukit Aman, Kuala Lumpur. She referred to the bundle of documents and gave evidence in respect of the partial payments made to the plaintiffs. She also said that Am

Enterprise was paid RM206,965.75 twice because of an error. She was instructed by DCP Dato Fatimah Bt Ghazali to prepare the partial payments.

The third witness for the defendants was DCP Dato Fatimah Bt Ghazali (D.W. 3). She identified the payment vouchers through which partial payments were issued to the plaintiffs. She said that payments in accordance

with the payment vouchers were made to the plaintiffs. She said that payments were made under AP59 financial procedure which is meant for works that were not budgeted for and did not follow normal procedure. She said that AM Enterprise was informed via letter that the defendants offered to pay only RM799,851.75 in full and final settlement. She said that although

only Syarikat Am Enterprise belonged to Awang Hassan, he represented all the other plaintiffs. She said that Awang Hassan agreed to the offer and

signed the letter on behalf of all the other plaintiffs. During cross- examination, she disagreed having told Awang Hassan about the existence of a warrant for RM3 million in respect of the emergency works. She also disagreed that she threatened to have Awang Hassan arrested if the works at

PULAPOL, Kuching, had not been completed.

Issues

The plaintiffs grounded their claim on contractual breach. Based on the pleadings, the basis of their claim in a nutshell is as follows. They were invited by ASP Wilson Kakap to perform emergency works at PULAPOL,

Kuching. They received written invitations to this effect from ASP Wilson Kakap who is the Financial Officer of PULAPOL, Kuching. They submitted tender forms or “sebut harga” forms in respect of the 13 projects. After having completed the works satisfactorily, they invoiced PULAPOL, Kuching, for payment in accordance with their “sebut harga”. They were not

paid fully, only paid partially based on JKR’s valuation which was done one and half years after completion of the project. They protested by letter before the payment was made. In respect of the acceptance of the payment, the plaintiffs’ case is that Awang Hassan was under duress at the material time. In any event he could only bind the company that he owned, i.e. Syarikat Am

Enterprise and not the other seven plaintiffs. The other seven plaintiffs had not given any letter of authority to him to enter into an agreement with the defendants to accept partial payment. Apart from the pleading based on contract, the plaintiffs also pleaded fraud against the defendants. This is because ASP Wilson Kakap knew that there was no fund in 2005 to pay for

the emergency works. However, he told the plaintiffs that the works had been categorized as emergency works and gave the impression that they

would be paid in full once the works were completed. As ASP Wilson
Kakap is a senior police officer holding the position of Financial Officer in
PULAPOL, Kuching, the 2nd and 3rd defendants are vicariously liable.
Briefly stated the defence is as follows. The defendants’ witnesses did not

deny that the emergency works in the 13 locations were performed by the plaintiffs. ASP Wilson Kakap did not deny inviting the plaintiffs to perform these works either. He also admitted signing on the invoices signifying completion of work. The principal defence is accord and satisfaction. The defendants averred that Awang Hassan had agreed to accept partial payment

in accordance with JKR’s valuation on behalf of not only Syarikat Am Enterprise, but also the other seven firms which tendered for the works in question. They are therefore estopped from claiming full payment according to the invoices they issued. Furthermore, the plaintiffs through Kong Advocates had not objected to the valuation of some of the works by JKR.

Counsel for defendants also argued that in the event liability is established in respect of the claim by Syarikat Am Enterprise, there should be a set off against the second of payment of RM206,965.75. As for the claim for aggravated and special damages, Counsel for defendants submitted that a claim grounded in contract does not permit it.

Having considered the respective positions of the parties, I find that the issues that arise in these 2 Suits are:

1. Whether a binding contract had been created between the plaintiffs and defendants through the conduct of ASP Wilson Kakap?
2. Whether the emergency works in question were completed

satisfactorily?

3. Whether the valuation of JKR absolves the defendants from paying the full invoiced amount?
4. Whether partial payment absolves the defendants from paying the full
invoiced amount?

5. Whether fraud proved?

6. Whether the all the plaintiffs are entitled to the full invoiced amount?

Whether binding contract created and whether works completed?

DCP Dato Fatimah Bt Ghazali said that normal financial procedures were not

followed in this case and that was the reason partial payment was made through a Treasury Instruction procedure known as AP59. This is because the projects in question were not budgeted for in the year they were carried out. Furthermore, the normal tender documents were not submitted. Regardless of her testimony, it is apparent that ASP Wilson Kakap as the

15 Financial Officer of defendants had bound the 2nd and 3rd defendants in
contractual relationship with the plaintiffs. ASP Wilson Kakap admitted issuing letters to the plaintiffs to invite them to perform the emergency works in question. He also agreed that he categorized the works in question as emergency works. He accepted the tenders or “sebut harga” from the

plaintiffs. He inspected the works during the construction period. He never complained about the quality of the work. Finally, it is obvious that he accepted the works as completed as he had signed on the invoices issued by the plaintiffs. Very significantly, the defendants did not tender any evidence to plead that the works were not completed to the standard requested by ASP

Wilson Kakap. In my opinion, the procedure adopted by ASP Wilson Kakap to invite plaintiffs to participate in the works is a non-issue. Although DCP

Dato Fatimah Bt Ghazali said that the contractors did not follow the proper procedure, in my opinion, the officer in charge i.e. ASP Wilson Kakap should have insisted on proper procedure before works commenced. The Treasury Instructions are administrative rules meant to govern financial

procedures. Third parties dealing with government officials cannot be expected to adhere to these rules unless required by the officer in charge. In the instant case the officer who was responsible to ensure compliance with Treasury Instructions before awarding the project was ASP Wilson Kakap. In any event, it is not true that the plaintiffs never submitted any quotation.

The evidence of the plaintiffs is that they submitted a quotation to ASP Wilson Kakap and invoiced the defendants accordingly. ASP Wilson Kakap told the court that he had told the contractors, i.e. Awang Hassan, Jafri and Rambli that there was no budget for the project but they still agreed to carry out the works. His evidence, to say the least, is incredulous. Awang Hassan,

Jafri Bin Mohamad Su’ut and Rambli Bin Amat are all Class F contractors.

It is completely unbelievable that they would have agreed to perform works to the tune of RM1.9 million without being paid a single cent. ASP Wilson Kakap said that he had categorized the works as emergency works. He also conceded that he was under pressure because the IGP was visiting

PULAPOL, Kuching, for the passing out parade. He was under orders to ensure that repair works to buildings and road works due to landslide were completed before June of 2004. In the premises, the evidence of the plaintiffs that he had promised them payment once the works were completed is more credible. I, therefore, find that a binding contract was created

between the defendants and the plaintiffs in respect of the works in question at the said 13 locations.

Whether JKR’s Valuation relevant?

After the contractors complained to DCP Dato Fatimah Bt Ghazali that they were not paid for the works, JKR was requested to value the works in order to make payment under AP59, i.e. payment for works that were not budgeted

for. The question that arises is whether the plaintiffs were legally obliged to accept payment in accordance with the JKR’s valuation. I am of the opinion that the JKR’s valuation does not bind the plaintiffs unless they have agreed to accept a lesser sum in accordance with the said valuation. My reasons are as follows. When ASP Wilson Kakap invited the plaintiffs to undertake the

works in questions, the plaintiffs were never told that the payment would be made in accordance with the JKR’s valuation after the works were completed. In fact, ASP Wilson Kakap had sighted the quotations submitted by the plaintiffs before commencement of works and had signed the invoices in question when the works were completed. Therefore, acceptance of

payment in accordance with JKR’s valuation is not a term of the contract.

The second point that must be considered is that the valuation of the JKR was done about one and a half years after completion of the project. The plaintiffs alleged that the JKR’s valuer was unqualified and did not even visit the site. The JKR’s valuer was not called to testify in court. Therefore, the

qualification of the JKR’s valuer and the accuracy of his report cannot be challenged in court.

Nonetheless, for reasons given earlier, I find that the JKR report is not relevant save for the projects where the parties had agreed to accept the payment in accordance with it.
25 Counsel for defendants pointed out that William Kong Advocates had written a letter dated 26th October 2005 on behalf of all the plaintiffs. In that letter,
William Kong Advocates had agreed to accept the valuation of JKR in locations 10, 12, 13. The projects in these locations were carried out by the
1st, 5th and 6th plaintiffs. The defendants effected payment to the 1st, 5th and
6th plaintiffs in accordance with the valuation of JKR. In the premises, I find
5 that there is merit in the submission of Counsel for defendants that the 1st, 5th and 6th plaintiffs are estopped from claiming full payment (see Boustead Trading v 1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3
MLJ 331).

Whether acceptance of partial payment absolves the defendants?

It is common ground that all the plaintiffs accepted partial payment which totalled RM799,851.75. The defence is that Awang Hassan had agreed to accept the lesser sum on behalf of all the plaintiffs. The argument of counsel for defendants that the defence of accord and satisfaction has merit. When Awang Hassan went to the Police Headquarters in Bukit Aman, Kuala

Lumpur, he signed on a letter prepared by DCP Dato Fatimah Bt Ghazali that he agreed to accept the lesser sum in full and final settlement (“muktamad”). The letter was addressed to Syarikat Am Enterprise. He signed below the following notation, presumably made by DCP Dato Fatimah Bt Ghazali”

“Aku Setuju Terima Jumlah Sebanyak RM799,851.75 (Muktamad)”

Awang Hassan was the owner of Syarikat Am Enterprise. For this reason, the argument of Counsel for plaintiffs is that he could not have bound the other plaintiffs by signing on the said letter. Counsel for plaintiffs also argued that Awang Hassan was subjected to duress at that point in time and therefore his agreement to accept the lesser sum is not valid. I shall first

consider the latter argument. The letter written by DCP Dato Fatimah Bt

Ghazali contains the following reminder:

Sayugia diingatkan pembayaran ini adalah muktamad (final and full

settlement) dan dinyatakan sebarang tuntutan selepas ini tidak akan dilayan.

Awang Hassan signed on this letter (P13) to indicate acceptance of a lesser amount in full and final settlement. Counsel for plaintiffs argued that the

above works manifested “threat” and “intimidation”. He said that it showed that DCP Dato Fatimah Bt Ghazali had been oppressive and arbitrary in her dealings with Awang Hassan. With due respect to Counsel for plaintiffs, I fail to note evidence of vitiating factors in the conduct of DCP Dato Fatimah Bt Ghazali or in the words of the letter marked as P13. From the testimony

of Awang Hassan himself, it is evident that DCP Dato Fatimah Bt Ghazali had made an effort to make part payment because the project was not budgeted for in accordance with the JKR’s valuation. This fact was known to Awang Hassan as he had been informed of the JKR’s valuation. In the premises, it was entirely up to him whether to agree or disagree with the offer

of partial payment in lieu of full payment in accordance with the invoices issued by his firm. There is also no evidence that DCP Dato Fatimah Bt Ghazali or her officers had physically forced him to accept partial payment. He is an experienced contractor and he went to the police headquarters on his own accord several times to appeal for payment. In the premises, it was

entirely up to him to refuse to sign P13 if he felt that he was being shortchanged. I therefore find that Awang Hassan had voluntarily signed on P13 to endorse acceptance of partial payment on behalf of AM Enterprise of which he is the sole owner. It is, therefore, my finding that AM Enterprise cannot claim for the balance of the invoiced amounts for the projects in

locations 6, 10 and 11. However, it is also my finding that Awang Hassan, on behalf of AM Enterprise, could not have bound the other plaintiffs by endorsing P13. DCP Dato Fatimah Bt Ghazali never obtained any letter from

the other plaintiffs to the effect that they had authorized Awang Hassan to negotiate or act on their behalf in the matter of procurement of payment for the emergency works. P13 was only addressed to Syarikat Am Enterprise which is only one of eight firms that carried out the emergency works. In the

premises, the defendants now cannot argue that the endorsement of Awang Hassan on P13 had bound all the other plaintiffs. In conclusion, it is my finding that P13 only binds Syarikat Am Enterprise.

Whether fraud proved?

The plaintiffs invoked section 17 of the Contracts Act 1950 against ASP

Wilson Kakap. The allegation against ASP Wilson Kakap is that he misrepresented to the plaintiffs that they would be paid for the work done. Section 17 reads as follows:

. "Fraud".

"Fraud" includes any of the following acts committed by a party to a

contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract

-

(a) the suggestion, as to a fact, of that which is not true by one who does not believe it to be true;

(b) the active concealment of a fact by one having knowledge of belief of the fact;

(c) a promise made without any intention of performing it;

(d) any other act fitted to deceive; and

(e) any such act or omission as the law specially declares to be fraudulent.

Explanation - Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the case are such that, regard being had to them, it is duty of the person keeping silence to speak, or unless his silence is, in itself, equivalent to speech.

Counsel for plaintiffs argued that ASP Wilson Kakap represented to the

plaintiffs that the emergency works would be paid upon completion when he

knew that there were no funds. This is the essence of the fraud alleged against him. Since ASP Wilson Kakap is a senior police officer, counsel for plaintiffs argued that the 2nd and 3rd defendant are vicariously liable. In respect of the burden of proof, Counsel for plaintiff submitted that it is on a

balance of probabilities. He cited the following passage from the Federal

Court decision of Ang Hiok Seng v Yim Yut Kiu [1997] 1 CLJ 497 in support:

The definition of fraud read in conjunction with the authorities lead us to the conclusion that where the fraud alleged in civil proceedings is based on a criminal offence, the criminal burden of proof beyond reasonable doubt

must be applied but where the fraud alleged is purely civil in nature, there is no reason why the civil burden should not apply.

However, if the plaintiffs are correct in their assertion that ASP Wilson Kakap never intended to pay for the emergency works from the outset, the elements of the criminal offence of cheating underpins his action (see
15 sections 24, 25 and 415 of the Penal Code). Therefore, the applicable burden is beyond reasonable doubt proof. It must also be noted that in the later case of Yong Tim v Hoo Kok Chong & Anor [2005] 3 CLJ 229, the Federal Court emphatically said that the standard of proof to establish fraud in civil cases is beyond reasonable doubt. The Federal Court did not make a distinction

between fraud which is civil in nature and fraud which is based on a criminal offence. In the instant case, I am of the opinion that the plaintiffs have not proved fraud against ASP Wilson Kakap. To succeed in establishing fraud, they would have to prove that ASP Wilson Kakap never intended at the outset to pay for the works that he requested. The plaintiffs’ witnesses told

the court that ASP Wilson Kakap categorized the works as emergency works.

ASP Wilson Kakap himself said in his witness statement that he categorized the works as emergency works. This means that payment would be made
later under AP55 which is meant for emergency works. It is not known why ASP Wilson Kakap was unable to process payment when the works were completed. However, there is simply insufficient evidence to infer that he intended to cheat the plaintiffs from the outset, i.e. request them to perform

works for which he knew that they would never receive payment. It is difficult to draw an inference that he intended to cheat the plaintiffs. He was a senior officer of PULAPOL. He would have known that no contractor would spend hundreds of thousands of ringgit without expecting payment in return. If payment was not made, he could have surmised that the aggrieved

contractors would write letters of appeal to various authorities which would include his superior officers. This is what happened in this case. Therefore, it is improbable that he intended to cheat the contractors by fraudulently representing to them that payment would be made when he knew for a fact that they would never be paid. It is more likely that due to pressure from his

superiors to complete the project in view of the impending visit of the IGP, he was negligent or took liberties with financial procedures. I, therefore, find that the plaintiffs have failed to prove fraud against the defendants.

Whether all the Plaintiffs are entitled to full payment?

The full invoiced amount of Syarikat Am Enterprise is RM531,979.50. They

received partial payment of RM206,965.75. The balance claimed is RM325,013.75. In my opinion, for reasons given earlier, Syarikat Am Enterprise is not entitled to the balance of the invoiced amount. This is because its owner, Awang Hassan had unconditionally accepted partial payment in full and final settlement. Even if it were otherwise, a sum of

RM206,965.75 ought to be deducted from the balance because counsel for plaintiffs had conceded it was paid twice because of an error on the part of

the defendants. Awang Hassan should also be barred from claiming for the full invoiced amount for the works in location 10 as Kong & Advocates did
not object to the JKR’s valuation in their letter dated 26th October 2005.
Syarikat Tuah Utama (5th plaintiff) invoiced claim is RM106,400.00. They

received partial payment of RM29,746.00. The balance is RM76,654.

Syarikat Naza Enterprise’s (6th Plaintiff) invoiced claim is RM178,800. They received partial payment of RM142,680. They are now claiming a balance of RM36,120. In my opinion, the 5th and 6th plaintiffs are not entitled to claim for the balance of the invoiced amount because in the letter dated 26th

October, 2005 issued by their solicitors, they did not object to the JKR’s valuation. In the premises, the doctrine of estoppel should bar them from making a further claim after having received partial payment.

I have already ruled that ASP Wilson Kakap had bound the 2nd and 3rd
defendants in contractual relationship with the plaintiffs. The 2nd, 3rd and 4th
15 plaintiffs had not agreed to the partial payment. They had also objected to the JKR’s valuation in the letter dated 26th October, 2005 which was issued by their solicitors. In the premises, they are entitled to the balance of the invoiced amount. The 2nd plaintiff’s claim under their invoice was

balance claimed is RM132,612.75. The 4th plaintiff claimed RM60,712.00. They received partial payment of RM31,699.25. The balance is RM29,012.75 In conclusion, I shall award judgment in favour of the 2nd, 3rd
25 and 4th plaintiffs in the sums of RM131,535.50, RM132,612.75 and
RM29,012.75 respectively.
In Suit 22-171-2009-III, the firms that were involved in carrying out the emergency works were Kham Enterprise and Long S.U.N. Enterprise. The balance of the invoiced amount due to these two firms is RM371,089. The owner of these firms is Rambli Bin Amat. As explained earlier, the action of
5 Awang Hassan in agreeing to accept partial payment in full settlement did not bind Kham Enterprise and Long S.U.N. Enterprise. These two firms also did not agree to the JKR’s valuation in the letter dated 26th October, 2005 which was issued by the common solicitors of all the plaintiffs, i.e. Kong Advocates. I shall therefore enter judgment for the plaintiff in Suit 22-171-

2009-III for the sum of RM371,089.00.

Claim for General and Special Damages

Apart from claiming the balance of the invoiced amounts, Counsel for plaintiffs urged the court to award RM6,000,000 in exemplary and aggravated damages in respect of Suit 21-7-2009-I and RM200,000 in

damages in respect of Suit 22-171-2009-III. In my opinion, the claim for aggravated damages is misconceived. It is usually awarded for injured feelings or humiliation suffered by a tort victim in cases such as physical assault or wrongful confinement. In Cassell & Co Ltd v Broome and Another [<<1972] AC 1027>>, (cited in the local case of Roshairee bin Abdul Wahab v

Mejar Mustafa bin Omar & Ors [1996] 3 MLJ 337) Lord Diplock described it as:

... compensation for the injured feelings of the plaintiff where his sense of injury resulting from the wrongful physical act is justifiably heightened by the manner in which or motive for which the defendant did it.

In the case of Kralj V Mcgrath, [1986] 1 All ER 54 cited by counsel for plaintiffs, Woolf J said that it would be wholly inappropriate to introduce the

concept of aggravated damages into claims for breach of contract and negligence.
As for exemplary damages, it is applicable where there is:

(1) oppressive, arbitrary or unconstitutional conduct by government

servants;

(2) conduct calculated to result in profit; and

(3) express authorization by statute.” (see Rookes v. Bernard [1964] AC

).

The plaintiffs failed to demonstrate in what manner the conduct of the
10 defendants was calculated to result in profit. The 2nd and 3rd defendants are obviously not carrying on a business venture. The plaintiffs also failed to prove that the conduct of the defendants was oppressive, arbitrary or unconstitutional. It is a simple case of refusing to pay the full amount that was due because some internal financial procedures were not complied with

by the officer who supervised the projects. It was also not demonstrated how ASP Wilson Kakap profited from the contract. As for special damages, the plaintiffs did not adduce any evidence or condescend into details in respect of the loss of RM600,000 apart from making a general averment that the plaintiffs suffered inconveniences as a result of the refusal of the defendants

to make full payment.

Lastly, the claim for the legal costs incurred by Awang Hassan in the criminal trial is misconceived. The Criminal Procedure Code does not provide for reimbursement of legal costs resulting from a failed prosecution. In any event, Awang Hassan was charged under section 403 of the Penal

code for having received the double payment of RM206,965.75. That fact

has obviously nothing to do with the pleaded case of the plaintiffs herein, i.e. refusal of the defendants to make full payment according to the invoices issued after projects were completed. As for the claim of RM30,000 which represents costs incurred by is colleague, one Adzreen, it is patently clear that

the claim should never have been pleaded as the said Adzreen is not even a plaintiff in this case. For all the above reasons, I shall dismiss the claim for general and special damages.

Conclusion

In conclusion, I make the following orders:
10 (i) Judgment for 2nd plaintiff in the sum of RM131,535.50. (ii) Judgment for 3rd plaintiff in the sum of RM132,612.75. (iii) Judgment for 4th plaintiff in the sum of RM29,012.75. (iv) Claim by 1st, 5th and 6th plaintiff dismissed.
(v) As the plaintiffs presented a joint claim in Suit 21-7-2009-I and

were only partially successful, I shall order the plaintiffs and defendants to bear their own costs.

(vi) In respect of Suit 22-171-2009-1, I shall grant judgment in favour of the plaintiff in the sum of RM371,089.00 with costs of RM30,000.00.

(vii) All the above to carry interest of 4% per annum from judgment date in accordance with O 42 r. 12 Rules of the High Court, 1980.

Order accordingly.
(RAVINTHRAN PARAMAGURU) Judicial Commissioner
Date of Delivery of Judgment: 5.9.2011
Date of Hearing: 10 – 12.5.2011

26 – 27.5.2011

12.7.2011
19.8.2011
For Plaintiff: Mr. Patrick Uren (for case 21-07-2009-I)

Messrs Anek Uren & Partners Advocates

Kuching
Mr. Ateng Jeros (for case 22-171-2009-III) Messrs Ateng Jeros & Co. Advocates Kuching

For Defendant: Mr. Mohd. Taufik Bin Mohd. Yusof
Senior Federal Counsel
Jabatan Peguam Negara Malaysia
Kuching

Notice: This copy of the Court's Reasons for Judgment is subject to editorial revision.

[Context] [Hide Context]

CommonLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.commonlii.org/my/cases/MYSSHC/2011/343.html