Back
2022 MarsdenLR 2227
COURT OF APPEAL MALAYSIA PUTRAJAYA
KARUN KLASIK SDN BHD – Appellant
Versus
TENAGA NASIONAL BERHAD – Respondent
[Civil Appeal No: W-02(IM)(NCC)-609-05-2020]
A party suffering loss due to wrongful disconnection of services must provide adequate evidence substantiating claims for damages, as courts assess based on actual market value rather than merely replacement cost.
Headnote:(A) Federal Court Order dated 4 September 2019 – High Court's assessment of damages limited to nominal RM1,000 despite significant claimed losses – Liable for wrongful disconnection of electricity supply for 12 days – The absence of primary evidence undermined the Appellant's claims of loss. (Paras 1, 15, 19, 58)
(B) Damages – The principle of damages defined by Livingstone v. Rawyards Coal Co 1880 HL applies, entitling the injured party to be restored to pre-injury position. (Paras 44, 45)
(C) Burden of Proof – The party alleging damages has the burden to prove such damages on the balance of probabilities and failure to provide sufficient evidence leads to dismissal of claims. (Paras 36, 40, 42)
Facts of the case: The Appellant, engaged in processing and freezing prawns, suffered a wrongful disconnection of electricity supply ordered by TNB for a period which led to significant losses, including spoiled products valued at RM4,884,445.20 and additional claims related to breach of sales contracts. The High Court awarded only nominal damages. (Paras 2, 12, 13)
Findings of Court: The High Court had erred in assessing the damages as it misapplied the principles governing the entitlement to damages due to insufficient evidence and misunderstandings of the nature of losses. (Paras 58, 60)
Issues: The primary disputes revolved around the correct application of damages in light of wrongful disconnection, assessment of losses claimed and evidential support for such claims. (Paras 15, 16, 58)
Ratio Decidendi: The court found that the Appellant’s claims for damages should not be diminished due to technicalities regarding evidence, emphasizing they needed to reflect actual market value rather than cost of raw materials. (Paras 44, 50)
Result: Appeal allowed; the prior decision was set aside with appropriate damages awarded. (Paras 58, 60)
JUDGMENT
Introduction
[1] On 6 April 2020, the Learned High Court Judge ['LJ'] in assessing damages payable by the Respondent ['TNB'] decided to award only a nominal sum of RM1,000.00 as general damages ['GD'] pursuant to a Federal Court ['FC'] order dated 4 September 2019. Vide that order, the FC ordered the High Court to assess damages payable by TNB to the Appellant for wrongful disconnection of electricity supply to the latter's factory for a 12 day period. The Defendant had claimed damages in excess of RM5 million caused by TNB through wrongful disconnection as held by the FC. Hence, this appeal.
Brief Facts
[2] The Appellant carried on business at a factory located on its premises which processes and freezes prawns mainly for export. The processed frozen prawns were stored in the Appellant's cold rooms (located at the Appellant's Premises) pending export and sale.
[3] On 20 April 2011, based on the Respondent's inspection on 16 March 2011, the Respondent issued a notice to disconnect the Appellant's electricity supply by giving a very short 24 hours' notice on 21 April 2011 at 2.30pm.
[4] The Appellant denied tampering with the meter and pleaded with the Respondent not to disconnect its electricity and urged TNB to investigate further.
[5] At about 2.30pm on 21 April 2011, the Respondent disconnected the electricity supply to the Appellant's Premises. The electricity supply to the Appellant's premises was only reconnected on 3 May 2011. Thus, there was no electricity supply for a period of 12 days.
[6] Before and after the Respondent's disconnection on 21 April 2021, express notice was given to the Respondent that the Respondent's disconnection of electricity will cause the Appellant's factory operations to stop and cause the products stored in the Appellant's cold room to spoil or rot.
[7] The Respondent filed a suit against the Appellant for the sum of RM1,579,981.35 being back billing charges due to meter tampering at the Appellant's premises.
[8] The Appellant in turn counterclaimed for the amount of RM5,371,660.00 and US$85,000.00 for loss of business profits allegedly suffered as a result of the disconnection of electricity supply at the Appellant's premises for 12 days.
[9] On 16 March 2015, both the Respondent's claim and the Appellant's counterclaim were dismissed by the High Court.
[10] The Appellant appealed to the Court of Appeal against the dismissal of the Appellant's counterclaim. The Respondent did not appeal against the dismissal of their claim but only cross-appealed against the Appellant's appeal.
[11] The Court of Appeal dismissed both the Appellant's appeal and the Respondent's cross-appeal. However, the Appellant was granted leave to appeal to the Federal Court ['FC'] on 6 April 2017 and on 4 September 2019, the Federal Court allowed the Appellant's appeal on its counterclaim and ordered damages to be assessed by a different High Court Judge. The Federal Court found the Respondent liable for wrongfully disconnecting the Appellant's electricity and ordered the High Court to assess damages payable by the Respondent.
[12] As ordered by the Federal Court, the High Court conducted the assessment of damages ['Assessment Proceedings']. The Appellant's claim for losses as follows:
(a) Loss of products stored in the cold rooms (RM4,884,445.20).
(b) Settlement sum paid to third party (US$85,000.00 or its equivalent RM268,268.50).
(c) The expenses rendered futile - wages paid during shutdown due to disconnection of electricity (RM487,694.36).
(d) General Damages ['GD'] for injury to reputation and loss of business.
[13] At the end of the Assessment Proceedings, on 6 April 2020, the LJ made the following orders:
(a) No award for special damages;
(b) Awarded a nominal sum of RM1,000.00 as general damages; and
(c) Awarded costs of RM8,000.00 in favour of the Respondent against the Appellant.
[14] Aggrieved with the said decision the Appellant appealed to the Court of Appeal.
Our Decision
[15] We would first and fore
