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2013 MarsdenLR 978

COURT OF APPEAL PUTRAJAYA
PEMBINAAN SPK SDN BHD – Appellant
Versus
JALINAN WAJA SDN BHD – Respondent
[Civil Appeal No: W-02-1798-2011]



A quantum meruit claim must be expressly pleaded and adequately supported by evidence; unpleaded claims violate fundamental principles of pleadings and deny opposing parties due process.

Headnote:(A) Contracts Act 1950 - Section 71 - Appeal from High Court's decision on quantum meruit - Claim for special and general damages dismissed, yet damages ordered on quantum meruit basis to 'do justice' to plaintiff - Court found unpleaded issues misapplied fundamental rules of pleadings. (Paras 2, 4, 6, 27, 28)

(B) Quantum meruit - Claim must be based on pleaded material facts; unpleaded claims denied the opposing party's right to contest. Court criticized High Court for ordering damages based on unpleaded claim without sufficient evidence. (Paras 7, 21, 27)

(C) Implied terms - Court cannot impose terms contrary to clear contractual provisions; freedom of contract requires parties to adhere to agreed terms. (Paras 28, 30)

Facts of the case:
Appeal by defendant against High Court's order for quantum meruit damages despite dismissal of claims for special and general damages. The original agreement's and parties' intentions were scrutinized. The High Court allowed for unpleaded quantum meruit after trial concluded.

Findings of Court:
The learned Judicial Commissioner misapplied rules of pleadings in ordering quantum meruit damages; opposing parties should be allowed to present their case on pleaded issues.

Issues: Whether the High Court correctly ordered damages on quantum meruit basis despite it being unpleaded; whether any implied terms could apply under the circumstances.

Ratio Decidendi: A claim for quantum meruit must be expressly pleaded; decisions must arise from established issues and evidence presented at trial. To determine an unpleaded issue damages denies procedural fairness.

Result: Appeal allowed; High Court decision set aside.

Judgement Key Points

Key Points: - A claim for quantum meruit must be expressly pleaded and supported by evidence; unpleaded claims violate rules of pleadings and deny due process (!) (!) (!) . - Courts cannot order quantum meruit damages based on unpleaded issues or an "omnibus" prayer without proper evidence or amendment (!) (!) (!) . - Section 71 of the Contracts Act 1950 applies only where a person lawfully does something for another and the other enjoys the benefit, and cannot provide relief contrary to clear contractual provisions (!) (!) (!) . - Implied terms cannot override clear contractual terms; parties must adhere to the agreed terms and ensure their obligations are expressly provided for (!) (!) . - The court will not make a case for a party or decide unpleaded issues; disputes must be resolved based on the pleaded and evidence-based claims (!) (!) (!) .

How to properly plead a claim for quantum meruit in civil litigation?

What are the requirements for claiming compensation under section 71 of the Contracts Act 1950?

What is the scope for implying terms in a contract when the contract terms are clear?


Table of Content
1. court's discretion in claims not explicitly pleaded. (Para 1 , 1 , 2)
2. unpleaded issues raised in the appeal. (Para 3 , 4)
3. court's ruling based on misapplication of pleadings. (Para 5 , 6 , 7)
4. dependence on evidence and claims not stated in pleadings. (Para 8 , 10)
5. misapplication of fundamental rules of pleadings (Para 9)
6. background facts about the cooperation agreement. (Para 11 , 12 , 13 , 14 , 15)
7. appellant's arguments on lack of damages. (Para 16 , 17 , 19)
8. respondent's defense of quantum meruit. (Para 18 , 20)
9. court's duty and strict adherence to the rules of pleadings. (Para 21 , 22 , 23 , 24)
10. implications of unpleaded claims and contractual obligations. (Para 25 , 26 , 27 , 28)
11. conclusion allowing the appeal and costs (Para 29)

[1] This was an appeal by the defendant from the decision of the High Court after a full trial whereby the learned Judicial Commissioner dismissed the plaintiff's claim for special and general damages, but nonetheless ordered that damages be assessed by the registrar on a quantum meruit basis in what appeared to be an exercise of the Court's discretion "to do justice to the party that deserves it though the pleadings may be less than elegantly worded." See pp 38 and 39 of the grounds of judgment.

B. The Decision Of The High Court

[2] The claim for quantum meruit was not expressly pleaded and yet was ordered by the learned High Court, purportedly, as indicated above, to do justice between the parties. The learned Judicial Commissioner held:

"The plaintiff's contribution in such a situation as anticipated...where work had been done and costs incurred can be recognised and be claimed under quantum meruit ... Learned counsel ... was quick to object that such a relief cannot be granted because it was not pleaded. I need only say that one must go back to basics and it is this: the sole purpose of pleadings is so that no party would be taken by surprise. Here the defendant is not taken by surprise because all the relevant facts justifying a claim for general and special damages have been pleaded. The bigger includes the smaller. Whilst the Court may not grant any general and special damages, the Court may still proceed to grant the "smaller" which is a claim on a quantum meruit basis. The words "quantum meruit" need not have been used if the facts justifying it are writ large in teneral, the learned Judicial Commissioner also accepted that the Court could imply a term in the agreement that the parties must have intended the respondent was to be rhe whole claim ...

We must not be so fixated to pleadings that we fail to see the wood for the trees ..." (pp 36-37 of the grounds of judgment)

[3] Appellant's counsel started his submission by informing the Court that there was only one issue in this appeal, and that was whether the learned Judicial Commissioner was correct to have ordered damages on the quantum meruit basis. Counsel submitted the learned Judicial Commissioner erred in deciding on unpleaded issues. Aside from the quantum meruit issue in geimbursed for all its costs and expenses in the submission of the tender for the benefit of the appellant, and further that s 71 of the Contracts Act 1950 ("the Act") would apply. Both issues were also not expressly pleaded.

[4] The learned Judicial Commissioner in fact held:

"Even if a claim under quantum meruit and implied term is not available, this Court can also make compensation under s 71 of the Contracts Act 1950 ..."

Here the plaintiff had done something lawful for the defendant and it did not intend it to be done gratuitously and needless to say the defendant had enjoyed the benefits of a RM163 million contract ..." (See p 40 of the grounds of judgment)

C. Our Decision

[5] We agreed with the submission of the appellant and allowed the appeal with costs of RM10,000.00 to be paid by the respondent to the appellant. We further ordered the deposit to be refunded back to appellant.

[6] We found the learned Judicial Commissioner

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