GULAM WAWASAN SDN BHD v 1. ) Kerajaan Malaysia 2. ) KEMENTERIAN PERUMAHAN DAN KERAJAAN TEMPATAN 3. ) JABATAN PENGURUSAN SISA PEPEJAL NEGARA 4. ) Dato' Sri Haji Mohammad Bin Mentek, Ketua Setiausaha Kementerian Perumahan Dan Kerajaan Tempatan 5. ) ISMAIL BIN MOKHTAR, KETUA EKSEKUTIF SOLID WASTE AND PUBLIC CLEANSING MANAGEMENT CORPORATION 6. ) SOLID WASTE AND PUBLIC CLEANSING MANAGEMENT CORPOR

Case Significance

Addresses the effect of novation on privity of contract, holds that restitution under section 71 of the Contracts Act 1950 is unavailable against a non-contracting party where a valid contract with a third party exists, and restates the elements of misfeasance in public office.

This Court of Appeal decision concerns the limits of contractual and public-law claims against the Government where a contract has been novated to a concessionaire. The appellant company's original contract with a city authority had been novated to a new solid-waste concessionaire, and the appellant sued the Government and related public bodies and officers for breach of contract, for restitution, and for the tort of misfeasance in public office, complaining among other things of a failure to table its proposed price increase for approval and of unequal treatment compared with other contractors. On the contract claim, the Court applied the doctrine of privity: because the appellant's contract had been novated to the concessionaire and there was no direct contractual relationship between the appellant and the Government, and the concession agreement contained a "no privity" clause, the appellant was a stranger to that agreement and its claim against the Government was unsustainable. On the restitutionary claim, it held that where a valid and subsisting contract exists between the appellant and a third party under which full payment has been made, a claim in unjust enrichment or quantum meruit under section 71 of the Contracts Act 1950 is not available against a non-contracting party such as the Government. It further held that Article 8(2) of the Federal Constitution applies to public administration, not to disputes arising from private commercial contracts voluntarily entered into, and that the tort of misfeasance in public office was not made out, there being no proof of bad faith, targeted malice or reckless indifference, the public officer having acted in accordance with official procedure. The Court dismissed the appeal with costs. The judgment is significant for its treatment of privity after novation, the boundaries of restitution against a non-contracting party, and the elements of misfeasance in public office.