ALOR SETAR DEVELOPMENT CORPORATION SDN. BHD. v EE ENGINEERING (MALAYSIA) SDN. BHD.

ka-12bc-1-06-2025 High Court (Mahkamah Tinggi) 30 March 2026 • KA-12BC-1-06/2025 • 28 min read

15 cases cited (0 SG, 15 foreign)

Catchwords

CONTRACT Illegality – 'Ali Baba' scheme – Sub-contracting of government project – Bumiputera main contractor lending CIDB license to non-Bumiputera sub-contractor in exchange for fixed 2% commission – Circumvention of government procurement policies – Whether arrangement constitutes a "total sub" and sham contract – Whether contract is illegal and opposed to public policy – Whether contract is void ab initio – Contracts Act 1950, s. 24 CONTRACT Remedies – Restitution – Unjust enrichment – Quantum meruit – Void and illegal contract – Attempt to rely on restitutionary principles in Patel v Mirza – Failure of plaintiff to plead alternative equitable remedies in Statement of Claim – Whether court can grant unpleaded remedies – Application of strict traditional rule of illegality – Maxims of ex turpi causa non oritur actio and ex dolo malo non oritur actio – Loss lies where it falls CIVIL PROCEDURE Pleadings – Bound by pleadings – Plaintiff’s claim anchored exclusively on enforcement of a valid contract – Failure to plead unjust enrichment or quantum meruit as alternative, fallback cause of action – Attempt to introduce unpleaded equitable remedy from the Bar during oral submissions – Whether permissible – Rules of Court 2012, O. 18 r. 7 EVIDENCE Burden of Proof – Proving illegality of contract – Evidential burden – Trial judge faulting defendant for failure to call advising solicitor to testify on illegality – Whether illegality under s. 24 Contracts Act 1950 is a question of law to be deduced from objective facts or oral testimony – Objective documentary evidence and systemic pattern of license-lending establishing illegality – Evidence Act 1950, s. 101 CIVIL PROCEDURE Appeal – Appellate intervention – Findings of fact by trial judge – Insufficient judicial appreciation of evidence – Failure of trial judge to properly evaluate objective documentary evidence and contemporaneous documents demonstrating 'Ali Baba' scheme – Failure to recognise substantially incontestable public harm – Plainly wrong test – Reversal of trial judge's decision

Judges (1)

John Lee Kien How @ Mohammad Johan Lee Delivered

Counsel (5)

Faiz Fadzil & Co. Firm Meg Nacha Zahir & Co. Firm Megalai V Raman Counsel Respondent Mohd Faizal Bin Abdullah Counsel Appellant Muhammad Faiz Bin Dato' Fadzil Counsel Appellant

Parties (2)

ALOR SETAR DEVELOPMENT CORPORATION Sdn Bhd Appellant EE ENGINEERING Sdn Bhd Respondent

Statutes Cited

Contracts Act 1950 (Cap 136)

Evidence Act 1950 (Cap 56)

Cases Cited (15)

UK (2)

[2016] UKSC 42 [2017] AC 467

MY (13)

[1973] 1 MLJ 210 [1983] 1 MLJ 36 [1992] 4 CLJ 1833 [1998] 4 CLJ 674 [1998] 4 MLJ 585 [2004] 4 CLJ 309 [2004] 6 AMR 781 [2005] 2 MLJ 1 [2006] 7 MLJ 510 [2011] 1 CLJ 210 [2011] 6 CLJ 493 [2015] 6 MLJ 1 [2021] 2 MLRH 466

Judgment

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Source: eJudgment (ka-12bc-1-06-2025)