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2026 MarsdenLR 1124
HIGH COURT MALAYA JOHOR BAHRU
NORADURA HAMZAH, JC
PARAMESWARAN PERUMAL – Appellant
Versus
DELTA ZEEFORCE SECURITY SERVICES SDN BHD – Respondent
[Civil Appeal No: JA-12BNCvC-14-07/2024]
Courts may take notice of illegality without pleading only if it is ex facie apparent. Where illegality is not ex facie, the facts giving rise to it must be specifically pleaded to avoid procedural unfairness and to ensure the adverse party can properly defend the claim.
Headnote:(A) Civil Procedure - Rules of Court 2012 - Order 18 rule 8 - Necessity to plead illegality - Whether illegality non-ex facie must be pleaded to be considered by the court - In the absence of pleading, a party is denied the opportunity to meet the case against him - Principles of procedural fairness - Court will not enforce an illegal contract if illegality is ex facie, but if it is not, the facts giving rise to illegality must be specifically pleaded. (Paras 41, 42, 57 and 67)
(B) Contract Law - Breach of contract - Wrongful termination - Employment/Agency relationship - Requirement for reasonable notice in the absence of express termination clauses - Principles of natural justice and fair hearing in employment/agency contexts - Doctrine of approbation and reprobation - Party cannot adopt inconsistent positions to benefit from a contract and subsequently claim it is illegal to avoid liability. (Paras 87, 91, 105 and 108)
Facts of the case:
The appellant sought damages for wrongful termination of a contract regarding the management of operations and supply of personnel. The trial court dismissed the claim based on the issue of illegality, specifically regarding the unauthorized use of a license, despite such illegality not being pleaded in the statement of defence. The appellant challenged this decision, arguing that the illegality was not ex facie and that parties are bound by their pleadings.
Findings of Court:
The court held that the trial judge misdirected herself by relying on an unpleaded issue of illegality that was not apparent on the face of the contract. The evidence revealed that the contract was performed for years without conflict, and the defendant's conduct was inconsistent with its subsequent stance on illegality. Furthermore, the termination was effected without reasonable notice, proper investigation, or adherence to natural justice.
Issues: The main issues were whether the trial court erred in deciding a claim based on unpleaded illegality, and whether the respondent was liable for wrongful termination of the contract.
Ratio Decidendi: If illegality is not apparent on the face of the document (ex facie), the facts giving rise to it must be pleaded under the governing procedural rules to ensure procedural fairness. Without such pleadings, the trial court cannot rely on illegality as a basis for dismissal. Consequently, the respondent's summary termination without notice was a breach of contract. Result : Appeal allowed; decision of the lower court set aside; respondent ordered to pay damages for wrongful termination.
| Table of Content |
|---|
| 1. requirement to plead facts of illegality for non-ex facie illegality. (Para 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27) |
| 2. harmonious interpretation of precedent regarding pleading illegality. (Para 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42) |
| 3. distinction between ex facie and non-ex facie illegality. (Para 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 , 56) |
| 4. fundamental principle that parties are bound by pleadings. (Para 57 , 58 , 59 , 60 , 61 , 62 , 63 , 64) |
| 5. power of appellate court to rehear and determine merits. (Para 72 , 73 , 74 , 75 , 76 , 77 , 78 , 79 , 80 , 81 , 82 , 83 , 84 , 85) |
| 6. wrongful termination, procedural fairness, and natural justice. (Para 86 , 87 , 88 , 89 , 90 , 91 , 92 , 93 , 94 , 95 , 96 , 97 , 98 , 99 , 100 , 101 , 102 , 103 , 104 , 105) |
| 7. calculation of damages for wrongful termination of contract. (Para 106 , 107 , 108 , 109 , 110 , 111 , 112 , 113 , 114) |
JUDGMENT
Introduction
[1] This is an appeal by the appellant ("Plaintiff") against the entire decision of the learned Sessions Court Judge ("SCJ") dated 30 June 2024 which dismissed the plaintiff's claim against the respondent ("defendant") with costs to be borne by each party.
[2] For ease of reference and consistency, parties in this appeal will be referred to as they were at the trial Court.
[3] Both parties have filed their written submissions and bundle of authorities and orally submitted before this Court. This Court now delivers its decision.
Background Of The Case
[4] The plaintiff was appointed by the defendant via a letter of appointment dated 25 February 2015 as manager/agent at the Southern Zone Branch to manage tenders in the Southern Zone. This appointment was effective from March 2016.
[5] The consideration for the contract agreed between the plaintiff and the defendant was based on profit-sharing on the total bills/invoices issued by the plaintiff to the defendant, whereby the profit-sharing ratio was 88% to the plaintiff and 12% to the defendant.
[6] The plaintiff successfully secured a contract with Badan Pengurusan Pangsapuri Duta Impiana dated 3 March 2018 to supply security guards for Projek Skyview, as well as a contract with Persatuan Penduduk Rini Heights dated 15 October 2018 to supply security guards for Taman Mutiara Rini.
[7] The defendant terminated the plaintiff's appointment via a letter dated 31 October 2018 with immediate effect. The plaintiff claims that the termination was wrongful and invalid, and seeks damages from the defendant.
[8] The plaintiff claims, inter alia:
(a) a declaration that the defendant's termination letter dated 31 October 2018 is wrongful and invalid;
(b) the sum of RM391,923.39;
(c) general damages;
(d) interest at the rate of 5% per annum; and
(e) costs.
[9] The learned SCJ identified three issues for trial:
(a) whether the plaintiff was appointed as agent cum manager of the defendant;
(b) whether the contract between the plaintiff and the defendant is illegal and void; and
(c) whether the plaintiff is entitled to claim damages from the defendant.
[10] On the first issue, the learned SCJ found that the plaintiff was not only a manager but also an agent of the defendant, based on the plaintiff's own evidence during examination-in-chief and cross-examination.
[11] On the second issue, the learned SCJ found that the contract between the plaintiff and the defendant, particularly the arrangement regarding the use of the defendant's licence by the plaintiff, constituted proxy, lease or rental of the licence which clearly contravened the conditions issued by the authorities under the Private Agencies Act 1971 [Act 27] and Surat Pekeliling Agensi Persendirian Bilangan 4 Tahun 2010 ("Surat Pekeliling KDN Bil 4/2010").
[12] The learned SCJ referred to the Federal Court decision in Merong Mahawangsa Sdn Bhd & Anor v. Dato' Shazryl Eskay Abdullah [2015] 1 TCLR 631; [2015] 5 MLRA 377; [2015] 5 MLJ 619; [2015] 8 CLJ 212 and he
