1. ) KETUA SETIAUSAHA KEMENTERIAN KEMAJUAN LUAR BANDAR DAN WILAYAH 2. ) Kerajaan Malaysia v 1. ) ASPES MECHANICAL SDN BHD 2. ) BAKTIJAYA RESOURCES SDN BHD

Case Significance

Illustrates the requirements of privity of contract and pleading discipline in a subcontractor's payment claim, the High Court reversing the Sessions Court because a deed of assignment gave the subcontractor no direct contractual nexus with the employer, and unjust enrichment could not be relied on where it was not pleaded.

This High Court decision is an appeal from the Sessions Court concerning a subcontractor's claim for unpaid works, and it turns on privity of contract and the discipline of pleadings. A ministry had appointed a main contractor for a rural water-supply project in Kedah, and the main contractor had in turn appointed the plaintiff as the electrical-works subcontractor, with the subcontract sum later reduced by agreement; the plaintiff and the main contractor then entered into a deed of assignment providing that payments for the subcontract works would be channelled through the main contractor. The plaintiff sued the main contractor and the ministry parties, and the Sessions Court allowed the plaintiff's claim against the ministry parties, who appealed. Applying the principle that an appellate court will not interfere with findings of fact unless the trial court has plainly gone wrong, the High Court nonetheless found plain error warranting intervention. It held that, on a proper reading of the documentary evidence and the deed of assignment, the plaintiff had no direct contractual nexus with the ministry parties: the assignment merely simplified the payment mechanism by providing for direct payment, while any outstanding sums had to be pursued against the main contractor, subject to verification of site quantities. The issue was therefore one of privity of contract, and the plaintiff had not discharged its burden of proving that any sum was due from the ministry parties. The court further held that unjust enrichment, on which the Sessions Court had partly relied, had not been pleaded, and that parties are bound by their pleadings, so it could not support the claim. The court allowed the appeal, set aside the Sessions Court's decision, dismissed the plaintiff's claim, and ordered costs of RM10,000. The judgment illustrates the requirements of privity and pleading in a subcontractor's payment claim.