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2011 MarsdenLR 3252
HIGH COURT MALAYA, JOHOR BAHRU
SKOPJATI (M) SDN BHD – Appellant
Versus
SRS ENGINEERING SDN BHD – Respondent
[23Ncvc-81-2011]
The court determined that the plaintiff's consistent and credible evidence supported their claim for refund, while the defendant's vague assertions lacked substantiation.
Headnote:(A) Cooperation Agreement - Plaintiff’s claim for refund of RM598,774.06 from the defendant arising from their cooperation agreement related to construction projects. - Plaintiff appointed main contractor by government, with salient terms including performance bond payments and profit sharing. - Defendant failed to refund RM498,774.06 despite repeated demands. (Paras 1-4)
(B) Evidence - Credibility of witnesses evaluated; plaintiff’s witnesses’ testimonies deemed more consistent and credible than defendant’s. - Defendant's denial of credible evidence regarding subcontract works found to be vague and unsupported. (Paras 16-21)
Facts of the case:
Plaintiff contracted for Customs and KPKT projects, entered COA with defendant on 7.5.2009, and alleged non-refund of due amounts after moneys were paid under an Assignment.
Findings of Court:
Plaintiff’s case against defendant allowed based on credible evidence; plaintiff entitled to RM433,033.92 plus interest at 4% from 31.5.2011.
Issues: Whether the plaintiff is entitled to the refund and the credibility of evidence provided by both parties.
Ratio Decidendi: Plaintiff’s credible testimonies supported their claims significantly, while the defendant’s contradictory stance and lack of evidence weakened their case.
Result: Plaintiff's claim allowed with interest and costs awarded.
The plaintiff was appointed by the government as the main contractor for the construction of the customs office and storage facilities ('Customs project') and remedial and upgrading works of public housing ('KPKT project').
On 7.5.2009 the plaintiff and the defendant entered into a cooperation agreement ('COA') relating to the said projects. The salient terms of the COA are as follows:
(i) the defendant agreed to pay a performance bond of RM500,000.00 to the plaintiff. RM100,000.00 was to be paid in cash simultaneous with the execution of the COA. The balance of RM400,000.00 was to be credited into the plaintiff's bank account within 7 days.
(ii) the defendant agreed to become a partner and/or sub-contractor for the projects and the profits was to be decided and agreed later.
(iii) the defendant agreed to carry out the project on the terms and conditions imposed by the Government under the projects.
(iv) any variation to the terms of the COA was subject to the consent of both parties.
On 13.7.2009, the plaintiff and the defendant entered into a Deed of Assignment (Security for direct payment to third party) ['the Assignment'] whereby in consideration of the defendant having executed and or agreeing to execute the sub-contract works relating to the Customs project, the plaintiff agreed to assign the moneys due and payable to the plaintiff under the contract for the sub-contract works up to a maximum of RM 1,530,000.00 to the defendant. Pursuant to the Assignment the moneys for the Customs project were paid to the defendant.
Plaintiff's case
The plaintiff's pleaded case is that the defendant was required to refund the moneys received under the Assignment to the plaintiff. The defendant has failed to refund the sum of RM498,774.06 to the plaintiff. It is also pleaded that the defendant agreed to pay financial charges of RM 100,000.00 to the plaintiff for the failure in refunding the moneys to the plaintiff. Despite repeated demands, the defendant has failed to pay the total sum of RM598,774.06 to the plaintiff.
Defendant's defence
Even if any payments were due to the plaintiff, they were subject to the following conditions:
(i) the projects works have been completed and payments received by the defendant;
(ii) all payments to workers, agents and sub-contractors involved in the projects have been settled;
(iii) payment of the investment capital and profits to the defendant as agreed;
(iv) after the defendant has made necessary deductions.
It is also pleaded that since all the moneys have already been paid to the plaintiff there are no moneys due and owing to the plaintiff.
Findings of the Court
In support of its case the plaintiff called the plaintiff's director En. Shaharudin Bin Sekor (PW1) and En. Abdul Shukor Bin A Rahman (PW2) a director of Mahir Builders (M) Sdn Bhd ('Mahir'). In rebuttal, the defendant called the defendant's director En. Sarip Bin Sarpan (DW1) and En. Mohamad Sarai bin Zainon (DW2) a sub-contractor.
According to PW1, the defendant only paid a total sum of RM250,000.00 to the plaintiff under the COA. After the COA was signed, on 10.6.2009 the plaintiff appointed the defendant as its sub-contractor for the Customs project for the contract sum of RM 1,530,000.00. The Assignment was then signed whereby the plaintiff agreed to assign to the defendant the payment for the Customs project of RM1,530,000.00. The Government was notified of the Assignment and asked to make payment to the defendant. Pursuant thereto, the Government credited into the defendant's account RM591,000.00, RM592,502.56, RM236,190.00 and RM202.581.50 between 12.10.2009 and 31.1.2010. The defendant failed to remit to the plaintiff RM433,003.92 after allowances for profit or return on investment to the defendant and interest. PW1 produced the plaintiff's statement of account dated 31.10.2010; a copy of which was sent to the defendant but no objections were raised by the defendant. Further, PW1 referred to a letter dated 21.4.2010 address
