Perbadanan Bekalan Air Pulau Pinang Sdn Bhd V Lingkaran Luar Butterworth (Penang) Sdn Bhd


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RAYUAN SIVIL NO. P-01-56-02/2014














[Dalam Perkara Mengenai Guaman Sivil No.22-631-2010 Di dalam Mahkamah Tinggi Malaya Di Pulau Pinang]




Perbadanan Bekalan Air


Pulau Pinang Sdn Bhd . Plaintiff




Lingkaran Luar Butterworth


(Penang) Sdn Bhd . Defendan










[1 ] The appeal and cross appeal before us arises from a decision of the learned Judicial Commissioner (‘JC’) who on 03.01.2014 had allowed in part the claim of the Plaintiff to the extent of RM448,657.58, interest and cost of RM20,000.


[2] The Plaintiff had claimed the sum of RM1,507.921 for the costs incurred by the Plaintiff in relocating the Plaintiff’s underground water pipes (‘pipes’) as a consequence of the Defendant’s work carried out in relation to the Butterworth Outer Ring Road Project (‘the Project’).


[3] The appeal by the Plaintiff /Appellant before us is premised on the quantum of damages awarded to the Plaintiff by the learned JC. The damages awarded are RM825,600 less than the amount sought for in the Plaintiff’s statement of claim. Further the reduced amount has resulted in a consequent reduction in respect of 7.5% of supervision charges allowed.


[4] The Plaintiff/Appellant is not appealing against the other items reduced or rejected by the learned JC.


[5] The Defendant/Respondent has also filed a cross appeal against the learned JC’s decision in finding liability against the Defendant and allowing the Plaintiff’s claim in part to the extent of RM448,657.58, interest and cost of RM20,000.




[6] For clarity, we will address the issue of liability raised by the Respondent’s cross appeal before considering the issue of quantum of damages awarded raised by the Appellant in the main appeal.


Brief Background


[7] The Plaintiff is a limited company which is licensed to supply treated water and related services in Penang. The Defendant is a highway concessionaire responsible for the construction of highway and toll plazas in respect of a project known as the Butterworth Outer Ring Road Project (‘the project’).


[8] Sometime in May 2005, the Plaintiff discovered that in the course of the Defendant undertaking the project, the pipes of the Plaintiff would be buried under the embankment. Further, structures of the Plaintiff would be built over the pipes with the possibility of causing damage to the pipes.


[9] The Defendant’s project would adversely affect the Plaintiff’s supply of treated water and any remedial works would be lengthy and costly.


[10] A joint site visit was held on 10.05.2005 where the Plaintiff had raised these concerns with the Defendant and suggested a plan to relocate the affected pipes. A further joint site visit was held on 27.09.2005 and meetings were held to discuss the costs of relocation of the pipes.




[11] The Plaintiff appointed Syarikat Sri Bina to undertake works in relation to the relocation of the pipes. The works were completed on 1.3.2006.The Plaintiff presented the Defendant with a bill dated 9.11.2006 for a sum of RM1,915,947.71.


[12] After discussion, the Plaintiff agreed to undertake partial payment of the cost of relocation of pipes in the sum of RM408,026.16.


[13] The balance of the amount claimed by the Plaintiff for the relocation of the pipes was in the sum of RM1,507,921.55. However, the Defendant has refused to pay the Plaintiff the abovementioned amount.




[14] The issues before the High court may be summarised as follows:


1. Whether there was a need to relocate the pipes from their original location?


2. Whether the Defendant is obliged to bear the costs of relocating the pipes?


3. Whether the costs of relocation claimed by the Plaintiff are fair and reasonable?




Plaintiff’s Submissions


Necessity to relocate pipes


[15] The Plaintiffs contention is that there was a necessity to relocate the pipes from their original location under the Projek Plaza Toll 3C, as the works of the Defendant on the site of the pipes would cause the pipes to be buried deeper into the ground. This might damage the pipes. Any remedial works would be lengthy and costly and may pose safety issues.


[16] The structural works of the Defendant would also pose a problem in the maintenance of the pipes. Exhibit P18 shows a total of nine toll booths in the middle of the highway at the site of the pipes.


Defendant’s obligation to bear costs of relocation


[17] The Plaintiff had raised the issue of payment for relocation of pipes


by the Plaintiff in numerous correspondences. Joint site visits as well as meetings had been held with the attendance of representatives of both parties. At a meeting on 27.9.2005, the Plaintiff and Defendant had discussed the plan to relocate the pipes as well as access to the workers of the Defendant to enter the site in order to undertake the relocation works. The Plaintiff had never objected to the entry of the Plaintiff’s workers in order to relocate the pipes. By their conduct the Defendant had acknowledged their obligation in the relocation of the pipes.


(Autoclenz Ltd v Belcher & Ors (2010) IRLR 70)




Costs of relocation of pipes


[18] The Plaintiffs had informed the Defendant by a letter dated 20.07.2005 (Ex. P3) that the cost of relocation of pipes is RM1,915,947.71 (Ex. D15). This amount was then reduced to RM1,507,921.55 (Ex. P24) after a deduction of RM408,026.16, which is the costs of laying the pipes in the area of the Chung Hwa school (Ex. D16).


[19] To summarise the breakdown of the Plaintiff’s claim for the relocation of pipes in the sum of RM1,507,921.55 are as follows.


(a) Costs of laying pipes RM 825,600.00


(b) Costs to relocate pipes RM 578,010.00


(c) Survey costs RM 7, 372.05


(d) Pre-preparation costs RM 14, 839.50


(e) Overheads RM 356,455.39


(f) Supervision costs 7.5% RM133, 670.77


Defendant’s Reply


[20] The Plaintiff had not adduced any technical or engineering studies to support the Plaintiff’s contention that there was a necessity to relocate the pipes. The Plaintiff’s concerns of the risks of damage to the pipes were mere conjecture, assumptions and speculation without any supporting technical data as evidence.




[21] The Defendant’s embankment works which is a source of concern to the Plaintiff was only a temporary embankment for a period of 6 months and ultimately would only raise the level by a further 0.5m above the existing level.


[22] The pipes are located at a site of the toll plaza where there are no structures, and can be accessed directly for repair or maintenance works on pipes. There is no evidence of damage to the existing pipes under the highway and toll plaza.


[23] There are no legal provisions prohibiting the pipes from being laid under the highway or toll plaza area.


[24] The pipes have been relocated to a residential area, which is densely populated and may cause greater damage compared to the original location of the pipes in the highway which is less dense and unimpeded.


[25] The Plaintiff had unilaterally decided to relocate the pipes based on their own requirements and is attempting to shift the responsibility for the relocation costs on the Defendant.


[26] At no time did the Defendant agree to the relocation of the pipes or to bear the costs of relocation. The Defendant had notified the Plaintiff as early as 13.06.2005 of its disagreement to the relocation (Ex. D34). Subsequent meetings, site inspection and correspondences were intended to co-ordinate relocation works but cannot be taken to demonstrate the Plaintiff’s agreement to the relocation.




[27] The Plaintiff’s claim is baseless as it is not premised on any statutory provision, tort or contract.


[28] The costs of relocation of the pipes claimed by the Plaintiff is excessive and not proven. The Plaintiff had initially sought to claim RM1,915,947.71 which included the Chung Hwa school portion but was later reduced to RM1,507,921.55 after the Defendant’s objection.


[29] In the alternative, the quantum of damages awarded, if at all should be revised to RM381,029.33 which comprises the following:


(i) Costs to relocate pipes RM 347, 073.84


(ii) Survey costs RM 7, 372.05


(iii) Supervision costs RM 26, 583.24


Total costs RM 381,029.33


Decision of Judicial Commissioner (JC)


[30] The learned JC had allowed in part the claim of the Plaintiff to the extent of RM448,657.58, interest and cost of RM20,000.The reasons for her decision may be summarised as follows.


[31] Exhibit P18 shows nine structures on the toll booths where the underground pipes are located.


[32] SP1 had testified that the works carried out by the Defendant to raise the level of the embankment to a height of two metres using 25 ton heavy machinery, can cause damage to the underground pipes. Any




necessary repair of the pipes would be time consuming and costly .It would also adversely affect the highway users. Thus the concerns raised by the Plaintiff are well founded.


[33] The Defendant, as concessionaire under the Concession Agreement between the Defendant and the Government of Malaysia, did not take steps to inspect the site and discuss with the Plaintiff regarding the existing pipelines within the concession area. It was the Plaintiff who had taken the initiative to raise the concerns on the damage to the pipes due to the works on the highway.


[34] The Defendant had admitted in their defence that based on the Concession Agreement, the Defendant has the responsibility to relocate the pipes and to bear the costs incurred. Since the relocation works had been undertaken by the Plaintiff instead, the Plaintiff is entitled to be paid the costs of the relocation.


[35] The Plaintiff is entitled to the following costs.


(i) costs of relocation RM 409,983.43


(ii) Survey costs RM 7,372.05


(iii) Supervision costs 7.5% Total costs awarded RM 31,301.69 RM 448,657.58


[36] The following costs were rejected by the learned JC as unproven


(i) Cost of pipes RM 825,600.00


(ii) Pre preparation costs RM 14,839.00


(iii) On costs RM 356,455.39




[37] The JC rejected the cost of pipes on the grounds that Ex. P19 which referred to pipes of 1350mm was obtained from the Plaintiff’s store on 2.9.2005. However, according to Ex. P30, the quotation of the purchase price of the pipes was dated 20.10.2006, after the relocation works were completed. There is uncertainty as to whether the cost of the pipes is the same in the two different periods mentioned.


[38] The Plaintiff had also failed to explain what is meant by Prepreparation costs. Exhibit P32 (project costing) failed to itemise the prepreparation costs.


[39] The Plaintiff is only entitled to charge on costs if the Plaintiff had undertaken the relocation works themselves. Since the same was undertaken by Syarikat Sri Bina, who was appointed by the Plaintiff, the Plaintiff cannot claim this category of costs.


Grounds of Decision


[40] After careful consideration of the oral and written submissions of the Plaintiff/Appellant and the Defendant Respondent as well the Records of Appeal, we dismissed the Respondent’s cross appeal on liability.


[41] We are in agreement with the learned JC that there is sufficient evidence to find that the relocation of pipes from the original site under the highway and toll plazas was a necessary precaution, taking into account




the particular circumstances and the potential adverse consequences to the public caused by damage to the underground pipes.


[42] In the light of the essential public service provided by the Appellant, it is our opinion that the relocation was a necessary precaution. The costs incurred are necessary and the Respondent as concessionaire has the obligation to pay the costs incurred by the Appellant. Thus we affirm the learned JC’s finding of liability against the Respondent.


[43] However, we allowed the Appellant’s appeal on quantum and revised the amount awarded upwards to include one additional amount for the cost of pipes in the sum of RM585,600 for the following reasons. We find credible evidence that the abovementioned amount had been proven by the evidence of SP6 who testified that the pipes purchased by the Appellant cost RM1,600.00 per metre and that the actual length used by the Appellant was 516 metres (516 x RM 1,600 = RM825,600). From this amount a sum of RM240,000 is deducted (‘the Chung Hua school portion’).


[44] We are satisfied that there is no uncertainty in the price of the pipes arising from the differing references to the pipes. SP7 had testified that the size 1350 mm DN and 1422mm OD are the same pipes and that the letters OD represent ‘outer diameter’ and DN, ‘diameter nominal’. SP7 had also testified that the same pipes were used in the relocation works.




[45] As a result of the revision in the quantum awarded, we also allow supervision costs of 7.5% to be recalculated on the revised amount.






Court of Appeal Dated: 2nd July 2015


For the Appellant : Yuslinov binti Ahmad Sakthi Malar Selvi A/P Perumal K Messrs Yuslinov Ahmad & Petra Oon No 18 & 20, Lebuh Gereja 10200 PENANG


For the Respondent : Muralee Nair Alexius Lee Messrs Idris & Assoc. Tkt 1 Wisma Cheong No 28, Lebuh China 10200 PENANG



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