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2022 MarsdenLR 523
HIGH COURT MALAYA KUALA LUMPUR
MOHD NASRUL MUKHTAR – Appellant
Versus
YAYASAN PELAJARAN MARA (ENCL 26) – Respondent
[Civil Suit No: WA-22NCvC-759-10/2019]
The doctrine of legitimate expectation is not applicable in the context of a fixed-term employment contract, where the terms are clearly defined and concluded.
Headnote:(A) Rules of Court 2012 – Orders 33 and 14A – Employment Contract – Nature of contract – Plaintiff argued that a legitimate expectation was created for an extension of contract due to the application for renewal – Court held that contract was fixed-term for five years, subject to renewal at Mara's discretion – Conclusion drawn from precedent in Shamsuri Bin Salleh v. Yayasan Pelajaran Mara, where similar facts were resolved – Court determined it was inappropriate to invoke legitimate expectation in a concluded contract. (Paras 4, 11, 12, 13)
(B) Legitimate expectation – Doctrine applicability in contracts – Held not applicable in such cases as expectations derived from established contracts cannot alter their terms post-agreement. (Paras 10, 11)
Facts of the case: Plaintiff employed through several contracts and alleged the expectation of a ten-year term based on an application for contract extension, denied by Mara at its discretion – Plaintiff's claim considered a backdoor appeal to relitigate previous determinations. (Paras 2, 3, 8, 9)
Findings of Court: Plaintiff’s application for extension does not create any legitimate expectation for automatic renewal; his arguments had no merit against established contract terms and precedent. (Paras 11, 12, 13)
Issues: Whether the court is bound by earlier decisions and whether the plaintiff has a legitimate expectation for renewal. (Paras 3, 4)
Ratio Decidendi: Court concluded that legitimate expectations cannot arise legally in the context of a concluded employment contract, following prior appellate decisions regarding fixed-term renewal rights. (Paras 10, 11)
Result: Application allowed, and plaintiff's suit dismissed with costs.
(Enclosure 26)
Introduction
[1] The defendant (Mara) applied in encl 26 under O 33 r 2 and/or O 14A and/or O 92 r 4, O 26 r 1 and/or O 73 r 10 of the Rules of 2012 (RC 2012), posing several questions of facts/law to be determined by this Court (Annexure A).
Salient Facts
[2] (a) The defendant employed the plaintiff via several fixed-term contracts from 203 until 2016. The dispute relates to:
(i) The letter of offer 'Tawaran Perkhidmatan Secara Kontrak Sebagai Eksekutif Pentadbiran di Unit Dana Pinjaman Pendidikan Tinggi, Yayasan Pelajaran Mara' dated 26 March 2012 (Letter of Offer); and
(ii) The service agreement 'Perjanjian Perkhidmatan Secara Kontrak' dated 2 January 2013 (Service Agreement).
Based on these two documents, the plaintiff was a contract employee on a five-year temporary basis commencing from 1 January 2012 until 31 December 2016 (Contract).
(b) As the Contract was due to expire, the plaintiff formally applied for an extension of an additional five years, which Mara denied.
(c) On 31 December 2016, the said employment Contract expired.
(d) The plaintiff was given one month's salary in lieu of notice plus all other monetary entitlements in the form of gratuity, etc.
(e) An appeal to Mara was made but was also denied.
(f) The plaintiff argued he had a legitimate expectation that the Contract was for a fixed term contract of ten years from 1 January 2012, which would end on 31 December 2021.
(g) The position taken by Mara was that the plaintiff had all the while been a contract employee, specifically under a fixed-term Contract of five years (1 January 2012 - 31 December 2016).
(h) This Contract stipulates that it was subject to renewal for a further five years (31 December 2021) on terms that are at the sole discretion of Mara.
(i) Aggrieved, the plaintiff took this action, arguing that his employment under the Contract had been unlawfully terminated and claimed monetary benefits.
The Issue
[3] Mara, in encl 26, posed several fundamental questions, which, if the Court decides in the affirmative, would be sufficient to dismiss the plaintiff's lawsuit on the determination of the question of law and/or facts.
[4] In making this application in encl 26, Mara highlighted to the Court that this present suit had been adjourned pending the determination of the Court of Appeal in a case involving fundamentally similar facts in W-02(NCvC)(W)-2481-12/2018, and the Federal Court appeal in 02(f)-71-12/2021(W) between Shamsuri Bin Salleh v. Yayasan Pelajaran Mara . The CA and the FC dismissed the appeal of Shamsuri in holding that:
(a) The employment contract was for a fixed term of five years, subject to renewal at the absolute discretion of Mara. The claim that the Contract was for ten years is untenable.
(b) The Contract of employment did not provide for automatic renewal, and therefore the issue of a legitimate expectation to be renewed does not arise.
(c) Mara did not breach the Contract in electing not to extend the Contract of employment of Shamsuri; and
(d) Mara had the right to end the said Contract at the expiry of its term.
[5] Considering these determinations by the appellate and apex Court, it is asked:
(a) Does it bind this Court in determining the present suit by the plaintiff?
(b) Does cl 3 of the Contract entitles the plaintiff to an automatic contractual renewal of the Contract period for another five years on the premise that he had applied to Mara for an extension?
(c) Does cl 3 compels Mara to grant an automatic renewal of a further five years based on the plaintiff's application for an extension?
(d) Does cl 3 grant Mara the absolute discretion to extend or terminate the Contract?
(e) Reading cl 3 and the plaintiff's letter seeking an extension:
(i) Is it merely a request for Mara to exercise its discretion to accept or deny the extension, or
(ii) Does that letter by the plaintiff create a legitimate expectation that the renewal will be automatic?
(f) Does the claim and prayers by the plaintiff in this
