Merchant Synergy Sdn Bhd v Cempaka Johan Sdn Bhd

Appellant(s): Merchant Synergy Sdn Bhd

Respondent(s): Cempaka Johan Sdn Bhd

• YA Datuk Supang Lian
• YA Datuk Seri Mohd Firuz Bin Jaffril
• YA Tuan Dean Wayne Daly

• The main contractor for a mixed development project appointed the subcontractor via 59 similarly worded Letters of Award (LAs) to construct 1,324 bungalows, with a total contract sum of RM138,425,932.46.
• The subcontractor sued for RM9,210,013.04 in unpaid progress claims, relying on Progress Claim & Payment Statements signed and endorsed by the main contractor's director as constituting an account stated.
• The main contractor counterclaimed for rectification costs for defective works and Liquidated Ascertained Damages (LAD) for late delivery, disputing the director's authority to sign the statements relied upon by the subcontractor.

• Whether the subcontractor was required to plead and prove a distinct breach for each of the 59 separate LAs, rather than claiming on a consolidated basis.
• Whether the trial judge erred in finding an account stated/admission based on documents signed by the main contractor's director, absent any pleaded case of ostensible authority, and where the LAs vested certification authority solely in the Project Architect.
• Whether the trial judge's dismissal of the counterclaim for defective works and LAD was correct, and the extent to which appellate intervention was warranted given findings on witness credibility and evidentiary gaps.

• The Court held there was no pleading defect in the subcontractor's consolidated claim, noting the main contractor's own counterclaim was pleaded in the same consolidated manner, estopping it from raising the objection.
• The Court found the trial judge erred in relying on documents signed by the director to establish an account stated, as the LAs vested certification authority exclusively in the Project Architect, and there was no proper judicial appreciation of how or why the director came to sign those documents; consequently, the appeal against the subcontractor's claim was allowed and the High Court's decision on that claim was set aside.
• The Court affirmed the dismissal of the counterclaim, holding that the trial judge's findings on witness credibility, absence of Section 90A certification for computer-generated records, and lack of supporting evidence for rectification costs were independent of the director's signing authority and did not warrant appellate interference; costs of RM30,000 were awarded to the appellant.