TORT LAW

CTOS DATA SYSTEM SDN BHD V SURIATI MOHD YUSOF [2024] 9 CLJ 839 [Court of Appeal]

Brief facts

This case involved an internet service provider, Webe Digitial Sdn Bhd (‘Webe’) with its customer, the Plaintiff - Suriati Mohd Yusof (‘Suraiti’).

On 16th April 2009, Suriati signed up a standard internet service package offered by Webe. Subsequently, Suriati requested to upgrade her internet plan with an increased monthly charge. However, Suriati had defaulted in the payment of charges despite being notified of the outstanding sum by Webe and various attempts by Webe to reach out Suriati and all attempts had failed. Therefore, Webe proceeded to terminate their service on 31st August 2011 with a total sum of RM2,186.60 remained unpaid as at the date of termination and thereafter, reported to Suraiti’s default to CTOS Data Systems Sdn Bhd (‘CTOS’, ‘the defendant’), a private credit reporting agency, on 20th June 2012.

Sometime in May 2019, Suriati attempted to apply for a loan to the purchase vehicle, but all the applications were rejected as her CTOS report showed that she had a low credit score. Suratiti thereafter instituted a claim for negligence and defamation against CTOS Data Systems Sdn Bhd, founded on inaccurate credit information concerning the debt due to Webe.

High Court’s Decision:

(i)Accuracy of Credit Report

High Court ruled that CTOS owed a duty of care towards Suriati in providing an accurate credit information as Section 29 of the 2010 Act imposes a duty upon the credit rating agency to verify and to ensure the accuracy of the credit report in the meantime, to provide accurate credit information to facilitate financial agencies in approving and disbursing any financial aid to an applicant. Therefore, accuracy of the information provided by CTOS Data System Sdn. Bhd. is vital in the decision-making of the financial institutions. Therefore, CTOS had a duty of care to provide accurate credit information not only to the financial institutions but also to persons concerned against whom the information was related to.

(ii) Breach of Duty

High Court held that CTOS had led evidence that Suriati was alerted on the information against her was inaccurate. The evidence shows that CTOS chose to ignore the communication from Suriati and continued to maintain the said information that Suriati was indebted to Webe with a total outstanding sum of RM2,186.60. High Court’s view that at least, CTOS could just either suspend the information awaiting verification or to notify Suriati that the information was being verified. Therefore, by choosing to be indifferent even after being alerted by the Suriati, High Court ruled that CTOS has clearly breached the duty of care owed towards Suriati.

(iii)Credit Score

CTOS, apart from giving out the credit information, had also formulated a credit score based on certain criteria which include payment history, amount owed, credit history length, credit mix and new credit. These criteria come with their respective percentages which when added up, classifies the status of a person.

In this case, upon an analysis of the above criteria, Suriati has been classified as a serious delinquent. High Court view that there neither in the provision in the 2010 Act empowering CTOS to formulate a credit score nor empowering CTOS to create its own criteria or percentage to formulate a credit score. Hence, CTOS was just supposed to be a repository of the credit information to which the subscribers have access to. By formulating a credit score, CTOS has gone beyond its statutory functions and Suriati has suffered a loss as a result of being labelled as a delinquent by CTOS where in fact, High court held that CTOS had no right to do so.

(iv)Damages

High Court finds that CTOS has breached the duty of care owed to Suriati and also CTOS had overstepped the functions they were registered for. In High Court’s view, although Suriati had suffered losses, High Court finds Suriati could only prove personal losses but not business losses. Hence, Suriati is entitled to be compensated only for her personal losses. Suriati’s reputation as well as her relationship with her husband had broken down as a result of CTOS’s negligence and breach of fiduciary duties. For this loss suffered, the court allowed Suriati’s claim and awarded a sum of RM200,000 as general damages. The court also awarded costs of RM50,000 to Suriati.

Dissatisfied by the decision of the High Court, CTOS Data System Sdn Bhd file an appeal to Court of Appeal.

Issues considered by Court of Appeal: 

(i)whether the learned High Court Judge had erred in fact and/or law in allowing Suriati’s claim with costs and awarding a sum of RM200,000 as general damages.

(ii)whether the learned High Court Judge failed to give due consideration to the pleaded case of Suriati and to hold her to her case as pleaded, ie, premised on negligence and defamation.

(iii)Whether the learned High Court Judge had erred in fact and/or law in concluding that CTOS Data System Sdn Bhd was not empowered to “formulate a credit score” or to “create its own criteria or percentage to formulate a credit score” and that by having formulate a credit score, CTOS had caused Suriaiti to suffer a loss.

(iv)Whether the learned High Court Judge had erred in fact and/or law in concluding that CTOS had breached its duty of care to Suriati in all circumstances.

(v)Whether the learned High Court Judge had erred in law and in fact when His Lordship did not consider the Suriati’s other claims for an injunction, declaration, damages for mental distress and/or aggravated damages and punitive and/or exemplary damages as well as interest (which ought to be claimed from the date of the filing of the writ, ie, 29th January 2020 till date of full settlement) based on applicable principles.

Court of Appeal’s Decision:

 I. The Defamation Claim

Firstly, Court of Appeal will deal with the issue of defamation. It does not appear in the grounds of judgment that the High Court had granted damages based on defamation but rather on negligence and breach of statutory duty. It is pertinent to emphasize that Suriati had admitted that she had commenced an action against Webe in which she raised the contention that she was not indebted to Webe. Contrary to the pleaded case, Suriaiti repeatedly admitted during cross-examination that she was in fact indebted to Webe. It is trite that truth or justification is an absolute defence to an action in libel.

In the case of Hasnul Abdul Hadi v. Bulat Mohamed & Anor [1977] CLJU 33; [1977] 1 LNS 33; [1978] 1 MLJ 75, wherein the High Court held that, it is a complete defence to an action of libel or slander that the defamatory imputation is true. Such a defence is called a plea of justification. To establish it the defendant must prove that the defamatory imputation is true.

Similarly, Richard Malanjum J (as he then was), in Tun Datuk Patinggi Hj Abdul Rahman Ya’kub v. Bre Sdn Bhd & Ors [1995] CLJU 304; [1995] 1 LNS 304; [1996] 1 MLJ 393 held that, in a defamation action, the defence of justification is a complete defence and the question of malice or bad faith does not arise. But in order to succeed in the defence of justification a defendant must establish the truth of all the material statement in the words complained of which may include defamatory comments made therein. And in order to justify such comments, it is necessary to show that the comments are the correct imputations or conclusions to be drawn from the proved facts.

The Sessions Court Judge’s judgment in the defamation suit was not appealed against hence, the issue of indebtedness of Suriati to Webe is thus res judicata and cannot be re-litigated. The law does not allow the plaintiff to have a second bite of the cherry. Therefore, Court of Appeal finds no basis in law for the learned High Court Judge to allow the defamation claim given that trade reference was true in substance, hence, suriati’s action for defamation cannot stand at all.

 II.The Negligence Claim

Next, moving to the claim for negligence. In the present case, Suriaiti had also pleaded negligence as a cause of action, allegedly resulting in damage to her reputation and credit worthiness. As the information of Suriati indebtedness to Webe was correct, we cannot see how negligence had been proven. In the first place, based on the circumstances of this case, to our mind, the credit reporting agency does not owe a duty of care to Suriati as a customer as defined in the Credit Reporting Agencies Act 2010.

Webe is a subscriber to the services of CTOS Data System Sdn Bhd and CTOS provides a service where a subscriber may upload information of debts owed to the subscribers by third parties. This is broadly known as broadly as trade reference which is reflected in Section E of CTOS’s credit report. Webe is an internet service provider and Suriaiti was its customer. Webe uploaded information of Suriaiti’s indebtedness in the sum of RM2,186.60.

Even assuming for a moment that there was a duty of care, there was still no breach of this duty as the information cannot be said to be inaccurate, incomplete, misleading or irrelevant. It was Webe themselves who negotiated a settlement. Thus, there was nothing inaccurate about the fact that Suriati indeed had defaulted on its payment obligations to Webe.

III.The Claim of Breach Of Statutory Duty

As for the issued of the alleged breach of statutory duty, we find that it had not been specifically pleaded by Suriati. Hence, the learned High Court Judge was not entitled to make any finding on such a claim. To fortify this finding, the Court of Appeal, speaking through Mary Lim JCA (as Her Ladyship then was) in the case of Joseph Paulus Lantip v. Tnio Chee Chang & Another Appeal [2020] 4 CLJ 79, held that the role played by pleadings cannot be overstated. It is a fundamental principle of fair play which extends to the court that all parties are bound by their pleadings. It would be most damaging to our administration and system of justice if parties are allowed to plead a certain complaint, lead evidence on another and the court decides on something entirely different. The Federal Court recently reminded and expressed the following view on the importance of proper pleadings in Iftikar Ahmed Khan v. Perwira Affin Bank Bhd [2018] 1 CLJ 415 held that, it is settled law that parties are bound by their pleadings and are not allowed to adduce facts and issues which they have not pleaded.

Suriaiti claimed that her creditworthiness amongst financial institutions had been affected by the fact that CTOS had given her a low credit score in her database and Suriati’s credit reports, consequence of which she was unsuccessful in obtaining a loan due to low CTOS reports.

Notwithstanding, even assuming that there was an implied reference to it, Court of Appeal find that there was no breach of any statutory duty at all. There was also no connection proven between the rejection of her car loan application and the contents of the credit report. Furthermore, Suriati had also admitted in cross-examination that there was no evidence of any rejection by banks of facilities having been applied. This can be seen from the oral evidence given by her in court. Based on the testimony above, it is patently clear that CTOS Data System Sdn Bhd had not breached its duty of care to Suriati in all circumstances.

“Credit reporting”, as defined under the Credit Reporting Agencies Act 2010, would include credit information that has any bearing on the eligibility of a customer to any credit. That would entail a reporting which some credit reporting agencies would do by way of a credit score. Here, the credit score is calculated by a software using algorithms and bereft of human intervention and there is no evidence to show that the rejection of the car loan was premised on a low credit score.

Conclusion:

Court of Appeal allowed CTOS’s appeal, setting aside High Court’s order which was in favours of Suriati and further held that:

1) Truth or justification is an absolute defence to an action in libel. Suriati had commenced defamation suit against Webe at the Sessions Court wherein Suriaiti pleaded case was that she was not indebted in the amount of RM2,186.60 to Webe. However, contrary the pleaded case, Suriaiti repeatedly admitted during cross-examination that she was indebted to Webe. Moreover, the Sessions Court’s judgment in the defamation suit was not appealed against and, therefore, the issue of the Suriati’s indebtedness to Webe was res judicata and could not be re-litigated. The law does not allow the plaintiff to have a second bite of the cherry. Hence, there was no basis in law or fact for the defamation claim to be allowed by the High Court. The High Court Judge did not state any reasons in the grounds to suggest that the defamation claim was allowed, and neither was it stated that the claim for defamation was established. There was thus no merit in the defamation claim raised by Suriati.

2) Since the information of Suriati’s indebtedness to Webe was correct, therefore, negligence had not been proven. The credit reporting agency (CTOS) did not owe a duty of care to Suriaiti as a customer.

As defined in the Credit Reporting Agencies Act 2010, Webe was a subscriber to the services of the CTOS, where a subscriber may upload information of debts owed to the subscribers by third parties. Webe was an internet service provider and Suriati was Webe’s customer. Hence, Webe uploaded information of Suriati’s indebtedness. Even assuming that there was a duty of care, there was still no breach of this duty as the information could not be said to be inaccurate, incomplete, misleading or irrelevant.

3) As breach of statutory duty had not been specifically pleaded by Suriaiti, the High Court Judge was not entitled to make any finding on such a claim. Notwithstanding, even assuming that there was an implied reference to it, there was no breach of any statutory duty at all. There was no connection proven between the rejection of her car loan application and the contents of the credit report. Furthermore, Suriaiti had admitted in cross-examination that there was no evidence of any rejection by banks of the facilities having been applied. It was patently clear that CTOS had not breached its duty of care to Suriaiti in all circumstances.

SRI SANJEEVAN RAMAKRISHNAN v. ASP POONNAM E KELING & ORS [2025] 5 CLJ 509 (Federal Court)

Case Digest :

[1] The tort of false imprisonment is not one of strict liability that necessarily flows from an order of habeas corpus. There are two different processes under the law, ie, habeas corpus falls under criminal law while the tort of false imprisonment falls under civil law. While both deal with the lawfulness of detention, between both, there are different constituent elements that must first be established and different remedies that may be granted. The success of one does not invariably lead to the success of the other.

[2] The detenu who claims to have been unlawfully detained and is successful in a claim for habeas corpus will have to mount a separate action, in tort, for damages or monetary compensation. The success of a habeas corpus application would not necessarily form the basis of the civil action for damages. Whilst the order of habeas corpus is strong evidence in favour of the plaintiff, it is not conclusive to establish the case for false imprisonment. The fact that a habeas corpus order was issued did not automatically translate to liability for false imprisonment.

MALAYAN BANKING BHD v. JS VALUERS PROPERTY CONSULTANT (JOHORE) SDN BHD & ORS [2024] 6 CLJ 268 [High Court]

Brief facts

The plaintiff, Malayan Banking Bhd (‘the Bank’) had granted and released two banking facilities to one KW Kelly Wood Trading Sdn Bhd (‘the Borrower’) in the sum of RM4.8 million (‘the first banking facility’) to purchase two units of factories (‘factories’) and in the sum of RM12 million (‘the second banking facility’) to purchase four units of industrial buildings (‘industrial buildings’). The Borrower was eventually wound up under recovery proceedings commenced by the Bank. The foreclosure prices obtained from the sale of the properties by the liquidator of the Borrower company were only RM1.42 million for the factories and RM2.1 million for the industrial buildings.

The Bank had appointed the first defendant, its panel valuer, JS Valuers Property Consultant (Johore) Sdn Bhd (‘Valuation Company’) and the second defendant, a chartered surveyor and registered valuer under the Valuation Company (‘the Valuer’) to prepare valuation reports for the properties in respect of the two banking facilities. The Valuer was also a director and shareholder of the Valuation Company. The third defendant (‘the Panel Solicitor’) on the other hand, was appointed by the Bank to prepare loan documentation in relation to the banking facilities.

The Panel Solicitor had informed the Bank by contacting its head of business centre and through a letter, which was shortly after acknowledged receipt by the Bank that the Borrower requested and insisted that the Panel Solicitor prepare two sets of identical sales and purchase agreements with different purchase prices for the factories, one with a total consideration of RM8 million, the other for a lower consideration of RM8 million, the other for a lower consideration of RM2.6 million for purposes of adjudicating the memorandum of transfer to reduce the stamp duty payable by the borrower. The Panel Solicitor had advised against this both in the conversation in the letter but the Bank responded with no objection.

The Bank then commenced an action in the High Court against the Panel Valuer, the Valuer and the Panel Solicitor. The claim against the Panel Valuer and the Valuer was that (i) they had wrongfully, negligently and/or fraudulently prepared valuation reports that substantially overvalued the properties, (ii) the evidence of the overvaluation was conclusive and decisive evidence of fraud, (iii) in the alternative, they had grossly, deliberately and unreasonably inflated the valuations with no reasonable basis and therefore (iv) they had breached the duty of care that they owed to the Bank as its panel valuer.

Concurrently, the claim against the Panel Solicitor was that it had, inter alia, wrongfully and/or negligently advised the Bank to release the banking facilities knowing the Bank would rely on its advice, failed to ensure the documents prepared complied with the Bank’s requirements, failed to protect the Bank’s interest before advising the release of the banking facilities and consequently, had breached its contractual duties and duty of care owed to the Bank under the service-level agreement.

High Court’s Decision:

High Court judge Justice Suria Kumar DJ Paul allowed the Bank’s claim against the Valuation Company and the Valuer, awarding the Bank cost in the sum of RM40,000 but held that the Bank was equally liable for the losses it suffered, therefore reducing the liability of the Valuation Company and the Valuer by 50%. The Bank’s claim against the Panel Solicitor was dismissed with costs in the sum of RM50,000.

The Valuation Company and the Valuer

[1] Although the Bank failed to prove fraud on the balance of probabilities (the Bank elected not to proceed with their claim based on conspiracy to defraud) against the Valuation Company and the Valuer, it succeeded on the balance of probabilities that the Valuation Company and the Valuer had grossly inflated the valuation of the factories by 208% and the industrial buildings by 78%. It was held that the Valuation Company and the Valuer had failed to (a) adhere to the relevant standards in the Malaysian Valuation Standards, (b) to adopt the correct and similar sales evidence and (c) to apportion the market value wrongfully led to gross over-valuation of the properties.

[2] A valuer is required to take reasonable care to give a reliable and informed opinion on a valuation which he was employed to make and he must be taken to have held himself out as possessing the experience and skill required to value the particular property. Based on the purpose for which the valuation was sought by the Bank, surely the Valuation Company and the Valuer would have known that the Bank would rely on and act upon their valuation reports as the Bank’s Panel Valuer since they owed a duty to advise the Bank professionally.

[3] The Valuation Company and the Valuer were not careful nor honest in the preparation of the valuation reports. They had failed to exercise reasonable care in determining the true open market value of the properties which led to the values of the properties being inflated. The Bank’s letters of offer for the banking facilities to the borrower stipulated the minimum open market value expected by the Bank. They had relied on and adopted the transacted price of the properties in the sale and purchase agreements as the open market value without carrying out a proper valuation to satisfy whether the Bank’s condition precedent on the minimum open market value as security for the banking facilities was met.

[4] The Bank’s experts had testified that the usual practice for banks is to get two opinions and that when this market value is matched with the loan requirement, only then the loan will be processed and instructions given to the lawyers to prepare the loan agreement and to the valuer to come up with the valuation report. In finding the Bank contributorily negligent, Justice Suria Kumar reasoned that it would have been prudent for the Bank to seek first opinion to have a feel of the market value of the property before processing to grant the loan. In the alternative, it would have also been prudent for the Bank to obtain a second opinion instead of just accepting the Valuation Company and the Valuer’s valuation reports since the banking facilities granted were for a huge sum and the purchase of industrial buildings and not for residential properties.

The Panel Solicitor

[5] The Panel Solicitor had nothing to do with the valuation, hence the losses suffered by the Bank was a result of the inflated valuation of the properties by the Valuation Company and the Valuer and not as a result of the Panel Solicitor. Furthermore, the Bank failed to prove their claim against the Panel Solicitor by not adducing any evidence to establish the standard of care required by a prudent solicitor when advising financial institutions to release banking facilities. The Bank should have called practicing solicitors instead of bankers to give evidence on conveyancing practice.

[6] A solicitor is not guilty of negligence if he has merely acted upon his client’s instructions in the reasonable belief that they were correct, or if he has fully explained the position to his client and is nevertheless instructed to proceed. The Bank’s acknowledgment of the Panel Solicitor’s letter advising against having two different considerations for the factories showed that the Bank had knowledge of the two sets of sales and purchase agreements. The Bank could not now fault the Panel Solicitor for carrying out their instructions after being advised that it was wrong.

[7] A solicitor is entitled to act for both parties in a transaction even where their interests might conflict provided he obtained the informed consent of both parties to his action. There was no merit in the issue of conflict of interest raised by the Bank against the Panel Solicitor acting for the Bank concerning the loan documentation and also acting for the Borrower in the preparation of the sale and purchase agreement. The Bank had introduced the Borrower to appoint the Panel Solicitor and had given the Panel Solicitor instructions to prepare the loan documents. Further, it is common practice and norm in the banking industry in Malaysia that financial institutions only allow borrowers to appoint solicitors who are on their panel to prepare loan documentation.

[8] There was no merit in the Bank’s argument on the issue of failure to advise the Bank on a related party transaction. Based on evidence, the Bank knew that the Borrower’s and vendor’s directors and shareholders were all related and had been the Bank’s customers for several years. Hence, the Bank could have themselves verified with the Borrower concerning its relationship with the vendor and by doing the necessary searches and checking with the Companies Commission of Malaysia. Additionally, it was not the Panel Solicitor’s duty to advise the Bank on this matter after the Bank had already decided to grant the banking facility to the Borrower.

[9] Justice Suria Kumar DJ Paul held that the Bank was barred by judicial estoppel from bringing this claim premised on the loan documentation prepared by the Panel Solicitor after having successfully relied on the same documents against the Borrower in earlier recovery proceedings in which the Borrower was successfully wound up. The doctrine of judicial estoppel is to prevent a party who assumes a particular position in litigation from taking an inconsistent position in later proceedings.

AHMAD FAIZAL AHMAD ZAMZAMI v. TELEKOM MALAYSIA BHD & ANOTHER (Court of Appeal)

Case Digest :

[1] The proper legal test for imposing vicarious liability in tort is that an employer will be liable for the wrongful or even criminal actions of the employee - if the thing done by the employee is so “closely connected with the job assigned” to that employee and not whether the employee was on a “frolic of his own.” Hence, there must be a close connection between the wrongful act and the nature of the employment of the employee. The wrongful act has to be carried out in the course of the employment in order for the employer to be found vicariously liable for the action of the employee.

[2] Agency is a contractual relationship between a principal and an agent whereby the principal, expressly or implicitly, authorises the agent to work on his behalf and with the power to bind the principal. A principal is liable for the fraud of his agent acting within the scope of his authority, whether the fraud is committed for the benefit of the principal or for the benefit of the agent.

TENAGA NASIONAL BERHAD V BIG MAN MANAGEMENT SDN BHD [2024] 2 CLJ 775 [Court of Appeal]

Brief facts

The respondent, Big Man Management Sdn Bhd (‘Big Man’) had two contracts with Tenaga Nasional Berhad (‘TNB’) and was its consumer for the supply of electricity to a premises. As a consumer, Big Man handled all matters relating to the supply of electricity to the premises and was only involved in providing management services, not in any of the operations at the premises. Ice Man Sdn Bhd (‘Ice Man’) was an ice-making factory that operated on the premises. On various occasions in 2013 and 2014, TNB carried out inspection of the TNB meters situated in a (locked) meter room located within the compound premises. Upon inspection, TNB discovered that the TNB meters had been tampered with. TNB then issued disconnection notices to Big Man and thereafter, disconnected the electricity supply to the premises twice between 2014 and 2015 for periods of more than a month each time before resuming the electricity supply. Big Man alleged that it had no access to the meter room, that only TNB had access. Big Man disavowed any knowledge or responsibility for any alleged tampering of the TNB meters. Big Man then filed a suit in the High Court for (i) wrongful disconnection of electricity supply to the premises on those two occasions; (ii) unlawful interference with its business; (iii) breach of statutory duty by TNB; (iv) defamation; and (v) trespass, and claimed damages against TNB for the losses it suffered.

The issue here was whether TNB were entitled to invoke their powers under s.38(1) of the Electricity Supply Act 1990 (‘the Act’) to disconnect the electricity after the TNB meters had been rectified?

High Court’s Decision

Illegal disconnection of electricity: The High Court judge concluded that if the alleged tampering was halted and no longer extant, the disconnection of electricity supply was illegal TNB had breached the electricity supply contract twice, thus, Big Man was entitled to claim damages for the wrongful disconnections.

Damages for wrongful disconnection: In respect of Big Man’s special damages claim for the cost of renting and later purchasing generators and the purchase of fuel to power the generators during the periods of disconnection and to compensate Ice Man for the losses it suffered, the learned judge opined that the damages suffered by Big Man were the direct result of the non-supply of electricity and one “which the parties knew, when they made the contract, to be likely to result from the breach of it”. Big Man was entitled to recover special damages totalling RM2,907,931.40 and RM652,012.20.

Exemplary damages: The High Court judge awarded Big Man exemplary damages amounting to 25% of the special and general damages awarded, concluding that TNB had conducted itself in ways which called for exemplary damages as follows: (i) intentionally punishing the consumer through the disconnection of electricity supply – the lifeblood of the business; (ii) intentionally prolonging the first disconnection for a maximum of three months without any acceptable basis even though, by their own admission, the maximum period was not applied to first-time disconnections; (iii) refusing to meet the Big Man ’s representative for possible reconciliation and showing insolence; (iv) mounting a baseless claim of tampering, particularly with respect to the period of the first disconnection as the purported basis for the second disconnection and yet took no legal proceedings to pursue the claims; and (v) effecting the second disconnection with impunity and without any regard for the pending case against the first disconnection and without waiting for judicial pronouncement on the rights of the consumer under the Act.

Defamation: TNB’s representative had made statements to a 3rd party that were defamatory in nature and/or were malicious. In their natural and ordinary meaning, the words meant and were understood to mean that Big Man had (i) tampered and/or altered the meter; (ii) stolen the electricity supply for the premises; (iii) done something illegal; (iv) been charged and TNB had taken court action against Big Man; (v) repeatedly committed the same wrongdoings; and (vi) acted unreasonably as a consumer. The impugned representation was then reduced to writing and sent to 3rd party via a letter. Based on the extent of the publication of the defamatory statement to the 3rd party, the seriousness of the defamation, Big Man’s reputation and standing and the effect of the statement on its dignity, Big Man was awarded RM25,000 as general damages and RM25,000 as aggravated damages.

Breach of Statutory Duty: The High Court judge held that TNB was liable for infringing Big Man’s right as a registered electricity user by divulging its account details to a 3rd party without consent. Thus, Big Man was awarded the sum of RM20,000 for general damages.

Tort of Interfering with Big Man’s business: It was held that Big Man had failed to prove that TNB had unlawfully interfered with the consumer’s business as required under the law in which the elements which constitute the tort of unlawful interference with trade or business are:

(a) Interference with the party’s trade or business;

(b) Unlawful means;

(c) Intention to injure the party; and

(d) The party is injured thereby.

Trespass: The High Court judge initially allowed a sum of RM50,000 as general damages for trespass but in light of the Federal Court’s decision in Tenaga Nasional Bhd v. Evergrowth Aquaculture Sdn Bhd & Other Appeals [2021] 9 CLJ 179, TNB can enter and inspect consumer premises outside of business/operational hours of the consumer and no issue of trespass arises.

Dissatisfied with the High Court’s decision, TNB filed an appeal in the Court of Appeal. 

Issues before the Court of Appeal:

(i) Whether there was meter tampering;

(ii) Whether TNB fell foul of the “Mayaria” principle;

(iii) Whether exemplary damages could be allowed for a claim which was based on breach of contract; and

(iv) Whether defamation was proved.

Court of Appeal’s Decision

Although TNB had failed on the ‘Mayaria’ issue, it had succeeded on all other issues both on liability and quantum. The Court of Appeal allowed TNB’s appeal with costs of RM80,000.

1. Pertaining to the first issue, the Court highlighted that there was no dispute that there was meter tampering, except that the perpetrator was unknown. Since TNB never claimed that Big Man was responsible for meter tampering, and significantly, Big Man also did not tender any evidence to debunk TNB’s subjective finding of meter tampering, the issue of whether there was meter tampering or not ought not to have been raised. 

2. Pertaining to the second issue however, the Court of Appeal adopted the “Mayaria” principle which states that once TNB discovers meter tampering and the impugned (tampered) meter is then rectified and/or replaced, then the offence under s.37 Electricity Supply Act 1990 is deemed as no longer subsisting, TNB cannot invoke s. 38(1) Electricity Supply Act 1990 to disconnect the supply of electricity to the consumer’s premises. The disconnection would be unlawful. The Federal Court in the case of Chew Thai Kay reiterated that the amendment to the Act had not altered the position of the law as decided in Mayaria. If there is no evidence of meter tampering, no offence is committed and there is no lawful power to disconnect. There had to be a continuing offence to invoke the power of disconnection. As such, the disconnections were wrongful and TNB was liable for damages.

3. On the third issue, the Court held, there was no evidence of the purported damages that Big Man had incurred from paying Ice Man, no evidence of the losses suffered by Ice Man which Big Man was liable to compensate, no evidence that the Big Man had ever used generators (and fuel) because Big Man only provided management services, and did not run the ice factory. Since there was also no evidence whatsoever of Big Man’s business sales during the period of disconnection to justify the purported rental and/or purchase of the generators, Big Man was therefore not permissible for exemplary damages. Also, there was no jurisprudential support for exemplary damages to be granted as a percentage of special damages. In any event, as a matter of law, exemplary damages were not claimable in a breach of contract claim.

As for the claim of special damages (the out of pocket expenses or claims which were quantifiable and specifically pleaded), since Big Man had not proven their special damages claim, hence special damages were not assessed and Big Man was not permissible to claim for special damages as well.

4. To peruse the issue of defamation, the elements of defamation are:

(a) The statements are defamatory;

(b) The statements must refer to the plaintiff; and

(c) The statements must be published to a third party other than the plaintiff.

5. The 3rd party’s representative testified that the defamatory words used were her words, not TNB’s representative’s. Hence, the claim for defamation ought to have been dismissed as Big Man could not prove that the impugned words were uttered by TNB’s representative. Thus, the claim for defamation could not stand and was dismissed.

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