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2025 MarsdenLR 1094
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]
Quantum meruit claims assess damages based on costs incurred, excluding profit; the amount already received suffices to cover expenses.
Headnote:(A) Contract Law - Quantum Meruit - Unlawful termination of contract - Plaintiff's claim for damages dismissed as the amount received was sufficient to cover costs incurred - Assessment based on quantum meruit principles established in Spatial Ventures Sdn Bhd v. Twintech Holdings Sdn Bhd; [2014] 8 MLJ 38 - Profit not considered in quantum meruit claims. (Paras 18-21)
(B) Assessment of Damages - Court's role in assessing damages based on evidence presented during trial - No new evidence led to justify additional claims beyond what was already assessed. (Paras 20-23)
Facts of the case:
The plaintiff was a sub-contractor for retrofitting work on four RTGs under a contract worth RM7 million. The defendant terminated the contract after paying RM2.8 million. The plaintiff claimed damages for expenses and loss of profit after the termination. (Paras 7-10)
Findings of Court:
The court found that the RM2.8 million received was sufficient to cover the plaintiff's costs, and no additional damages were warranted. (Paras 21-23)
Issues: The main issues were whether the plaintiff could retain the RM2.8 million as damages and the proper assessment of damages based on quantum meruit. (Paras 18-20)
Ratio Decidendi: The court ruled that quantum meruit is a measure of costs incurred, not profit, and the plaintiff could not claim more than what was already received. (Paras 19-21)
Result: Plaintiff's claim for damages dismissed; costs of RM8,000 awarded to the defendant.
JUDGMENT
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 calculated based on the contract sum of RM8,000,000.00 which is higher than the contract sum found by the trial Judge.
Decision
[18] After perusing through the documents and grounds of judgment of trial Judge in totality, I am
