LIEW AH HOCK v 1. ) TENAGA NASIONAL BERHAD 2. ) SIAH KWEE KHIM

Case Significance

Holds that a claimant asserting a third-party indemnity for meter tampering must prove the counterparty's fault under sections 101 and 102 of the Evidence Act 1950, and that liability cannot be transferred by inference where direct evidence is absent.

This High Court decision at Johor Bahru concerns a civil appeal arising from a claim by Tenaga Nasional Berhad (the national electricity utility) for loss of revenue from alleged electricity-meter tampering. In the Magistrates' Court, Tenaga Nasional Berhad had sued the first respondent as the defendant and recovered RM60,778.45 with interest at 5% per annum from the date of judgment and costs on the scale, and the magistrate had further allowed the defendant's third-party claim against the appellant, holding the appellant, in a landlord–tenant relationship, fully liable to indemnify that sum. The appeal challenged those findings on three issues. On the utility's substantive claim the court upheld the magistrate: the sum of RM60,778.45 was supported by technical evidence and was not arbitrary, and the finding was maintained. The decisive issue was the third-party indemnity. The court held that the magistrate had erred in ordering the appellant to bear full liability, because the first respondent had failed to discharge the burden under sections 101 and 102 of the Evidence Act 1950 of showing that the meter manipulation arose from the appellant's act or negligence. The inference drawn was not supported by direct evidence or sufficiently cogent circumstances. Distinguishing Thomas Thomas v Tenaga Nasional Bhd, the court reasoned that the context of contractual liability for the supply of electricity cannot be equated with a third-party indemnity claim between a landlord and a tenant, and emphasised that an appellant's failure to prove its own innocence cannot substitute for the claimant's obligation to prove its case; the burden of proof remains on the party asserting it, and without adequate evidence liability cannot be transferred. The court therefore allowed the appeal in part on the third issue, upholding the utility's claim against the first respondent while setting aside the finding that the appellant was fully liable. The judgment is a useful statement on the limits of drawing an adverse inference to transfer liability in meter-tampering claims.