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2023 MarsdenLR 497
HIGH COURT MALAYA SHAH ALAM
SKYWORLD HOLDINGS SDN BHD – Appellant
Versus
NEUROGINE SDN BHD & ANOTHER CASE – Respondent
[Suit Nos: BA-22NCC-163-11/2019 & BA-22NCC-174-12/2019]
The burden of proof lies on the party asserting facts, and documentary evidence prevails over oral claims in contract disputes.
Headnote:(A) Contracts - Breach of contract - Burden of proof - Evidence Act 1950 - Section 101 - Skyworld engaged Neurogine to develop a mobile application, but claimed it was non-functional and sought a refund. Neurogine counter-claimed for unpaid invoices. The court found Neurogine fulfilled its obligations under the contract and Skyworld's claims were unsubstantiated. (Paras 20, 24, 44, 62)
(B) The court held that the burden of proof lies on the party asserting the existence of facts, which Skyworld failed to do. (Paras 22, 43)
(C) The court ruled that payments made by Skyworld indicated acknowledgment of the second quotation, thus supporting Neurogine's claim for additional costs incurred. (Paras 56, 58)
Facts of the case:
Skyworld claimed a refund of RM 1,666,050.00 for a non-functional app developed by Neurogine, while Neurogine sought RM 1,606,887.00 for unpaid invoices.
Issues: Whether Neurogine breached its contract by failing to deliver a functional app and if it was entitled to payment for work done.
Findings of Court:
Neurogine had performed its contractual obligations, and Skyworld's claims lacked credible evidence.
Ratio Decidendi: The court emphasized the importance of documentary evidence over oral assertions and established that Neurogine met its contractual duties.
Result: Skyworld's claim dismissed; Neurogine's claim allowed.
| Table of Content |
|---|
| 1. initiation of claims and contractual background. (Para 1 , 2 , 3 , 4) |
| 2. details of the project and payments made. (Para 5 , 6 , 7 , 8 , 9 , 10) |
| 3. neurogine's defense and claims for payment. (Para 11 , 12 , 13 , 14 , 15 , 16) |
| 4. skyworld's defense against further claims. (Para 17 , 18 , 19) |
| 5. court's acknowledgment of factual issues. (Para 20 , 21 , 22) |
| 6. evidence presented regarding app functionality. (Para 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35) |
| 7. court's findings on the performance of the contract. (Para 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43) |
| 8. consideration of neurogine's claim in suit 174. (Para 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58 , 59) |
| 9. conclusion on the validity of neurogine's claim. (Para 60 , 61) |
| 10. final orders and conclusions of the court. (Para 62) |
Introduction
[1] The claims of the parties were filed in two suits, which have been consolidated in these proceedings. Skyworld Holdings Sdn Bhd.("Skyworld") filed Civil Suit: BA-22NCC-163-11/2019 ("Suit 163"), whereas Neurogine Sdn Bhd ("Neurogine") filed BA- 22NCC-174-12/2019 ("Suit 174").
[2] Skyworld engaged Neurogine to develop a social lifestyle mobile application system ("the app") for Skyworld's use. The app was intended for the use of Skyworld's customers by allowing them to interact with one another through an electronic messaging platform and also to make payment online. The app was to be developed in 2 phases. Skyworld was billed during the progress of the app development, to which it made part payments.
[3] The dispute between parties was triggered when Neurogine requested for further payments for work done. Several invoices were issued demanding payment. Skyworld refused to make payment towards the invoices. Instead it alleged that the app Neurogine developed failed to fulfill the specification parties agreed upon. It further claimed that the app could not be used and requested for refund of the monies paid thus far to Neurogine.
[4] Skyworld then filed the instant suit to claim for a refund. Neurogine on the other hand, sued for the balance sum owing for developing the app, which had yet to be paid by Skyworld.
Skyworld's Claim In Suit 163
[5] Sometime in early 2018, Skyworld requested the services of Neurogine to develop an app titled Design & Development Of Sky Chat, Wallet & Payment Gateway with Cloud Base Project. ("the Project"). Pursuant thereto, on 5 February 2018, Neurogine issued a quotation to the Skyworld detailing the specifications of the Project and the costing involved. The total cost of the Project stipulated in the quotation was RM 2,316,100.00.
[6] The Project comprised of two phases, the development of the SkyChat module and the e-wallet and Red Packet function module. The Project was to be completed and delivered to the Plaintiff within 6 months.
[7] Between March 2018 and October 2018, Skyworld made various payments to Neurogine totaling RM 1,666,050.00, towards the total cost of the Project.
[8] As Skyworld did not have the necessary expertise on the development of applications, it appointed iNetSOHO as its technical adviser and consultant. The representatives of iNetSOHO were responsible in engaging with Neurogine in the development of the app.
[9] On 2 July 2018, when the design and development of the app was handed over by Neurogine to be tested by iNetSOHO, it was found to be not functional, and failed to meet the specifications of the Project. Thereafter, in spite of several requests by iNetSOHO to improve on the app, Neurogine still failed to deliver a fully functional app.
[10] In this action, Skyworld claims that Neurogine's failure was a breach of its obligations under the contract. It thereupon seeks a refund of the amount of RM 1,666,050.00, which had been paid to Neurogine. The delivery of a non-functioning app resulted in a total failure of consideration and Neurogine is obliged to refund the amount paid thus far. To allow Neurogine
