MOOT QUESTION – GRAND FINAL

MOOT QUESTION – MMU GRAND FINAL

Buat Duit Sdn Bhd, a cybercafe on Jalan Ayer Keroh Lama, decided to renovate an old building that they had just acquired which is adjacent to their existing building. They contracted with Mana Boleh Sdn Bhd for renovation work to be done at the price of RM200,000. As the result of work done on the newly-acquired building by Mana Boleh Sdn Bhd, part of the existing building was damaged: cracks appeared and paintwork was seriously spoilt; the cost of repair being adjudged at RM25,000.

Towards the completion of the renovation work, a van belonging to Mana Boleh Sdn Bhd carrying noxious paint was left unattended and unlocked in front of the building site. Ms Ichiwa Tamokasi, a passer-by, was curious about the source of the smell and went to investigate. As soon as she opened the container holding the paint, a strong fume overcame her which caused her to become unconscious. Ms Tamokasi subsequently went into a coma which lasted for three months, and until today she has not yet fully recovered from the incident. Mana Boleh Sdn Bhd had to pay RM30,000 for the cost of medical bills for Ms Tamokasi.

When Mana Boleh Sdn Bhd submitted their final bill, it showed a total of RM215,000. The additional amount of RM15,000 represented the cost of replacing leaking water and gas pipes throughout the building. When challenged, Mana Boleh Sdn Bhd referred to Clause 3 of their standard terms, which the managing director of Buat Duit Sdn Bhd had signed and returned midway through the contractual period, as he had many other matters to attend to and simply forgotten signing this said document.

Clause 3 reads:

Mana Boleh Sdn Bhd is entitled to levy additional charges for extra work which is required before renovation works can begin.

Furthermore, Mana Boleh Sdn Bhd denied liability for the damage to the current office building, pointing to Clause 15:

Mana Boleh Sdn Bhd will not be liable for any loss or damage arising out of the work carried out within the terms of this contract.

They also refused to pay for the injury to Ms Tamokasi, pointing out to Clause 31 which states:

Buat Duit Sdn Bhd shall indemnify Mana Boleh Sdn Bhd in respect of any loss or damage caused to any person present at the site when renovation work is in progress.

Buat Duit Sdn Bhd issued a cheque for RM175,000 to Mana Boleh Sdn Bhd and pointed out they needed to spend RM25,000 for repairing the damage brought about by the renovation works.

In the Sessions Court, Mana Boleh Sdn Bhd claimed against Buat Duit Sdn Bhd for (1) RM25,000 which they considered to be outstanding from the contracted amount; (2) RM15,000 for replacing the leaking gas and water pipes; and (3) enforcement of indemnity by Buat Duit Sdn Bhd for the medical expenses incurred by Ms Ichiwa Tamokasi. Buat Duit Sdn Bhd argued that all three clauses should be construed against Mana Boleh Sdn Bhd as, on this occasion, Buat Duit Sdn Bhd had been acting in the capacity of a consumer.

Sessions Court Judge Abe Lincoln held that:

(1) Buat Duit Sdn Bhd is liable to pay Mana Boleh Sdn Bhd for the RM25,000 as Mana Boleh Sdn Bhd were fully protected by Clause 15. This is because Clause 15 had been incorporated into the contract by virtue of the contract being signed by the managing director of Buat Duit Sdn Bhd. Clause 15 was not ambiguous as it was properly constructed and it satisfied the reasonableness test.

(2) Buat Duit Sdn Bhd is liable for the RM15,000 as Clause 3 was properly incorporated in the contract. It need not matter if the contract was signed at the completion of the pipe replacement work. Even though Clause 3 is of an extremely broad scope, the Court is of the opinion that it satisfies the reasonable test. As such, Clause 3 can be enforced against Buat Duit Sdn Bhd.

(3) The indemnity in Clause 31 for medical expenses was effective as it had been properly incorporated and constructed, and it was not unusually onerous.

On appeal to the High Court, the decision of the Sessions Court Judge on all three findings was affirmed.

Buat Duit Sdn Bhd now appeals to the Court of Appeal after having been granted leave to do so.