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2025 MarsdenLR 5319
HIGH COURT MALAYA JOHOR BAHRU
PEARSON HARDMAN INDUSTRIES (M) SDN BHD – Appellant
Versus
MES TECHNOSERVICE MALAYSIA SDN BHD – Respondent
[Civil Suit No: JA-22NCVC-40-02/2020]
A claim for quantum meruit mandates assessment based solely on actual costs incurred for work done, excluding consideration of contractual profits.
Headnote:(A) Contract Law - Quantum Meruit - Assessment of damages - The court found that the plaintiff could not retain the payment of RM2.8 million for work done under a contract that was unlawfully terminated, emphasizing that damages assessed on a quantum meruit basis should reflect actual costs incurred and not account for profits or contract terms (Paras 19, 20, 21).
(B) Legal Principles - A claim for quantum meruit is for restitution based on the value of work done, independent of contractual rates (Paras 19, 20).
(C) Costs - Plaintiff ordered to pay RM8,000.00 in costs for the assessment proceeding (Para 23).
Facts of the case:
The plaintiff, appointed as a sub-contractor, was unlawfully terminated from a contract to retrofit cranes but received RM2.8 million before termination; plaintiff sought damages for expenses, loss of profit, and unlawfully taken parts (Paras 7, 10, 12).
Findings of Court:
The court found the pre-paid amount encompassed costs for work done, thus granting no additional damages (Para 21).
Issues: The key issue was whether the plaintiff could claim additional damages despite having received sufficient payment for work completed and whether those damages could be calculated on a quantum meruit basis (Paras 18, 19).
Ratio Decidendi: The court held that damages for quantum meruit must reflect the costs of work done, not contractual profits, reinforcing that no claim can exceed actual incurred costs in the absence of new evidence (Paras 19, 20).
Result: Plaintiff's claim for damages dismissed, with assessment costs of RM8,000.00 ordered to be paid.
| Table of Content |
|---|
| 1. details of the business contract and claims filed. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13) |
| 2. assessment of damages based on quantum meruit. (Para 18 , 19 , 20 , 21 , 22) |
| 3. decision on costs and separation from prior awards. (Para 23) |
Introduction
[1] On 6 October 2021 the High Court after full trial allowed the plaintiff's claim for unlawful termination of contract and granted an order for damages to be assessed based on quantum meruit. The Plaintiff's appeal to the Court of Appeal against the said decision was dismissed. The full grounds of the said judgment of the High Court as prepared by the presiding Judicial Commissioner Evrol Marriette Peters (now J) can be found in Pearson Hardman Industries (M) Sdn Bhd v. MES Technoservice Malaysia Sdn Bhd ; [2022] 2 AMR 162 .
[2] Since the plaintiff did not take up further the decision of the Court of Appeal to the Federal Court, this Court went ahead with the order for assessment of damages but this time it was heard before me as the presiding judicial commissioner.
[3] For the purpose of the assessment, parties have agreed that the damages to be assessed will purely be based on the cause papers and evidence already tendered during trial.
[4] At the conclusion of the assessment, the Court did not award any damages to the plaintiff and dismissed the plaintiff's assessment of damages with cost of RM8,000.00.
[5] The plaintiff had since filed its appeal to the Court of Appeal.
[6] The followings are the Court's grounds for the said decision.
Salient Facts
[7] Plaintiff was appointed as a sub-contractor by the Defendant to do retrofitting work on four (4) rubber-tyred gantry cranes (RTGs) for an agreed price of RM7 million ("the Business Contract"). The work commissioned was pursuant to the Defendant's contract with Johor Port Berhad ("JPB").
[8] After the Defendant paid a sum of MYR2.8 million being 40% of the agreed contract sum, the Plaintiff started to commence work on the first RTG ("TC13") in August 2019. However, due to some disagreements, the Defendant terminated the Business Contract in October 2019 and instructed the Plaintiff to complete the works on TC13 only and not to proceed with the other three (3) RTGs.
[9] The Plaintiff continued to work on TC13 and according to the Plaintiff, completed TC13 in November 2019. The Plaintiff left the site in December 2019 as instructed but alleged that there were parts which they had purchased to be used for the works in the Business Contract.
[10] The Plaintiff filed its claim on 13 February 2020, for the following:
(a) Damages for expenses purportedly incurred by the Plaintiff for the purchase of parts, materials and various services for the Business Contract for the four (4) RTGs;
(b) Damages for parts wrongfully taken by the Defendant;
(c) Payment for the work completed on TC13;
(d) General damages for loss of profit; and
(e) Aggravated damages.
[11] The Defendant, on the other hand, counterclaimed for the price difference allegedly incurred in completing the work on TC13, on the premise that the Plaintiff had failed to complete such work.
[12] As mentioned earlier, the Plaintiff's claim for unlawful termination of the Business Contract was allowed with damages was ordered to be assessed on a quantum meruit basis. The Defendant's counterclaim on the other hand was dismissed.
[13] The undisputed facts would show that the total contract sum as found by the High Court was for RM7,000,000.00
[14] It is also the evidence of the Plaintiff that he had spent a total of RM2,791,764.24 for the all the works done.
[15] It is also not disputed that only one (1) out of four (4) RTGs were completed by the plaintiff.
[16] Although the termination was found to be unlawful, it is not disputed that Plaintiff had received RM2,800.000.00 from the defendant being 40% of the contract sum.
[17] The plaintiff through the evidence of its 1st witness (PWS1) estimated the cost of work for each RTG was RM1,500,000.00. The said figure however was
