The court affirmed that a party's contractual obligations are fulfilled by issuing demand letters, and claims for unjust enrichment are unsustainable if no benefit was received by the defendant.

Alwi Abdul Wahab JCA:

Preliminaries

[1] The appeals in R7 and R8 are related and were heard together on 25 February 2025 as they were arising from the same decision of the learned High Court Judge given on 7 December 2023.

[2] In respect of R7 (Appeal 10), it was an appeal by Sunway City Sdn Bhd ("Sunway") on the dismissal of its claim against Otis Elevator Company (M) Sdn Bhd ("Otis") for the return of the disbursed sum paid by Sunway to Otis pursuant to Agreement for Payment and the Letter of Undertaking executed between them.

[3] In respect of R8 (Appeal 31), it was an appeal by Otis on the dismissal of its claim (third party proceeding) against Syarikat Pembenaan Yeoh Tiong Lai ("SPYTL") for contribution and indemnity of the disburse sum payable to Sunway in the event that Sunway succeeded in its claim against Otis.

[4] It must be highlighted that the outcome of Sunway's Appeal will have a determining effect on Otis's Appeal as the determination of SPYTL's liability, if any, would only arise if this Court allows Sunway's appeal and makes a finding that Otis is liable towards Sunway's claim.

The Background Facts

[5] It would appear that the background facts are mostly not in dispute and the chronology of events can be gleaned from the documentary evidence exhibited by the respective parties. Those facts are essentially as follows.

[6] Pursuant to a Building Contract dated 2 March 2009 Sunway as employer appointed SPYTL as its main contractor to carry out and complete the construction of the project known as "Cadangan Pembangunan 2 Blok Pangsapuri 20 Tingkat (160 Unit), Tempat Letak Kereta 4 Tingkat, Kemudahan Penduduk dan Tembok Penahan Di Atas Lot 48629 (F2), Jalan Sri Hartamas 3, Mukim Kuala Lumpur, Wilayah Persekutuan" ("the Project").

[7] SPYTL in turn appointed Otis as its nominated sub-contractor for the supply, installation, testing and commissioning of lift services under the Project for the sum of RM6,845,730.00.

[8] SPYTL and Otis then executed a Sub-Contract dated 2 March 2009 based on the PAM Sub-Contract Form (Private Edition with Quantities) (1998 Edition) with amendments ("Sub-Contract").

[9] As there were disputes between Sunway and SPYTL, the Building Contract between Sunway and SPYTL was terminated on 27 September 2010 before the Project was completed leading to the parties referring their disputes for arbitration.

[10] Due to the termination of the Building Contract between Sunway and SPYTL, the Sub-Contract between SPYTL and Otis was terminated automatically pursuant to cl 21.1 of the Sub-Contract.

[11] As of the termination date, SPYTL allegedly owed Otis a total of RM2,676,903.95 for work completed on the project. This sum consisted of payments under the Interim Payment Certificates ("IPC") No 30, IPC No 32R, IPC No 33 and Revised Final Valuation of Works.

[12] Subsequent to the termination of the Sub-Contract between SPYTL and Otis, and unknown to SPYTL, Sunway agreed to pay Otis this amount of RM2,676,903.95 under a Letter of Undertaking (issued by Otis dated 26 January 2011) and Agreement for Payment, which was executed on 28 January 2011 between Sunway and Otis. Sunway has fully disbursed the said sum of RM2,676,903.95 to Otis on 27 January 2011.

[13] However, the arbitration proceedings between Sunway and