An agreement that does not meet the criteria for an absolute assignment under Section 4(3) of the Civil Law Act 1956 cannot confer standing to sue on a non-party.

JUDGMENT

Mariana Yahya JCA:

Introduction

[1] This is an appeal by the Appellant against the decision of the High Court dated 3 October 2022 in allowing the Respondent's claim per Melaka High Court Civil Suit No: 22NCVC-5-10-2016 ("Suit 55") as follows

i. The Appellant to pay the Respondent a sum of RM3,200,534.63;

ii. The Appellant to pay the Respondent interest of 5% per annum on the judgment sum of RM3,200,534.63 from 31 October 2010 until full and final realisation; and

iii. Costs of RM30,000.00 subject to allocatur.

For ease of reference, the parties in this appeal shall be referred to as they were in the High Court, the Respondent as "the Plaintiff" and the Appellant as "the Defendant".

Background Facts

[2] The facts of the case as narrated in the learned High Court Judge's grounds of judgment are as follows. The Defendant is the developer of a project known as "Pembangunan Bercampur di atas Lot PT805-PT806, Muara Sungai Duyung, Mukim Alai, Daerah Melaka Tengah 1 Melaka" ("Melaka Project").

[3] The Defendant appointed Pembinaan Suci Kesturi Sd Bhd ("PSK") as the main contractor for the development of the first phase of the Melaka Project ("Phase I") via a "Letter of Acceptance" dated 29 December 2006 which was duly accepted by PSK on 10 January 2007.

[4] In the course of executing its obligations under Phase l, PSK encountered financial and technical difficulties due to some disputes with its joint venture partner, Intraline Resources Sdn Bhd. In order to overcome these difficulties, PSK decided to obtain assistance from the Plaintiff, YM Raja Halinuddin Raja Halid ("YM").

[5] In consideration of YM's assistance, PSK:

a) Assigned the income and payments/proceeds that PSK was entitled to receive under the Contract to YM, which is evidenced by, inter alia, YM's solicitors, Messrs Wan M Amin & Associates' letter dated 16 April 2009 ("the said Assignment"); and

b) Empowered YM and his nominees with authority, custody and management control of PSK.

[6] At all material times, the Defendant was aware of the said Assignment resulting in the "take over" of PSK by the Plaintiff and his nominees through the dealings between the parties as well as correspondence signed by the Plaintiff for and on behalf of PSK in the course of constructing Phase I of the Melaka Project.

[7] Phase I was successfully completed and a Certificate of Practical Completion dated 30 October 2010 ("CPC") certifying the due completion of Phase I to the value of RM28,963,235.00 was issued by Arkitek Pembangunan ,the appointed architect for the Melaka Project.

[8] Around the time of the CPC, the previous directors and shareholders of PSK wrested control of PSK from the Plaintiff which led to the filing of Kuala Lumpur High Court Originating Summons No: 24NCvC-856-04/2012 ("KLHC OS") against PSK, its directors and shareholders and the Defendant.

[9] In the KLHC OS, both the Plaintiff and the Defendant had exchanged affidavits, after which a Consent Order dated 16 August 2012 was recorded and the KLHC OS against the Defendant was withdrawn.

[10] The Defendant's financier for the Melaka Project is Malaysia Building Society Berhad ("MBSB"). After the issuance of CPC, direct payment was made to MBSB to the tune of RM20,000,000.00 and thus leaving a balance of RM8,963,235.00 ("Balance Contract Sum") which was due and owing by the Defendant to PSK under the contract. Meanwhile, the Certificate of Fitness for Occupation dated 19 September 2011 ("CFO") was issued by the authorities.

[11] No payment was made by the Defendant to PSK. The Plaintiff who claimed to be entitled to the Balance Contract Sum was also not paid. PSK was wound up on 14 May 2013.

[12] The Plaintiff's claims in Suit 55 were for the following reliefs:

a) The Balance Contract Sum of RM8,963,235.00;

b) Alternatively, such sum as the Court deems fit;

c) General damages to be assessed;

d) Interest;

e) Costs; and

f) Any other reliefs that the Court deems suitable.

[13] However during trial, the Plaintiff through his witness statement