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HAIRANI BINTI AB MALIK V ORCHARD CIRCLE SDN. BHD. AND SYARIKAT BEKALAN AIR SELANGOR SDN. BHD. Tribunal for Consumer Claims Wilayah Persekutuan, Kuala Lumpur

No: TTPM-WP-(P)-15-2010

President: Encik Mohd Nasrim bin Dato’ Hj Mohd Salleh

11 August 2010

Kwong v. Minister of Home Affairs, Malaysia (No.2)[1975] 2 MLJ 175; and Brettingham Moore v. Municipality of St. Leonards [1969] 121 CLR 509

GROUNDS OF JUDGEMENT Background The case before the Tribunal was the case concerning the Claimant (PYM) being the

consumer for the purpose of the Consumer Protection Act,1999 ("the Act") who had echoed

her grievances and adumbrated in the Statement of Claim (Form 1) against the water utility

company (commonly known as "Syabas"), the 1st Respondent, who was responsible for the

water supply service and distribution for Selangor, Wilayah Persekutuan and Putrajaya.

Although Syabas is a private limited company incorporated under the Companies Act,

1965, its operations are regulated by several Acts of Parliament, including, regulations and

by-laws made thereunder and, in particular the Akta Perbekalan Air, 1987. The others

include the Enakmen Perbekalan Air 1987, Kaedah-Kaedah Bekalan Air (Bayaran) Negeri

Selangor (Pindaan) 2006. Water charges were billed pro-rated for each tariff band based

on a 31-day billing period and was only applicble to domestic (Code 10) where there was a

three band tariff and commercial (Code 11) where there were two band tariff respectively.

The case for PYM was essentially that Syabas had been charging her on commercial rates

(Code 11) instead of domestic rates (Code 10) for the supply and consumption of water in

respect of the premises she had occupied. Her previous applications and complaints to

Syabas requesting for the change from Code 11 to Code 10 had failed which she had

considered all but a futile exercise. Hence, she had filed this claim in the Tribunal.

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The 1st Respondent (Syabas) however contended that they had no difficulty to accede to

PYM's request above-stated but require PYM to support her applications with letters and

documentations including from Majlis Perbandaran Kajang (authority) to justify the

applications and hence approval for the coding changes. Syabas contended that PYM had

failed to comply with Syabas Standard Operating Procedures ("SOP") and Buku Panduan

Syabas in her applications. Syabas maintained that had PYM complied with terms and

conditions in her applications or letters of complaints etc. as provided in Buku Panduan

Syabas (which Syabas alleged that she had failed to do), Syabas would have changed from

Code 11 to Code 10.

Natural Justice

In deciding this case, I am reminded of the end-result and importance of my

decision/rulings herein-below stated which shall affect considerable number of consumers

and Syabas and, whilst I am before the parties today, I have to place on record that since

the first hearing on the 5th February 2010 to hear the complaints of PYM and the Defence

of Syabas as the 1st Respondent (Form 2) and the 2nd Respondent developer (Form2)

respectively, culminating in the aggregate of 7 hearings altogether (inclusive of the day

when I delivered my decision herein) until I had perforced to refuse the request made by

Syabas for another adjournment since I had duly accorded full opportunities for the parties

to present and making submissions (including already 2 written by Syabas) during the

period of the last 6 hearings. I must say therefore, the principles of natural justice had been

fully if not wholly observed by this Tribunal and extended to the parties. However, it is my

considered view that the rights to natural justice (including the right to be heard) must

have its end too when it [natural justice] does not serve further justice, if were to be

allowed to continue without finality and which delay had resulted in injustice. Hence, to

avoid injustice and to accord justice, this is the day upon which I have chosen to make and

pronounce my decision/award based on the facts which I had extensively considered,

materials and evidence on record before me.

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I should add this. I had to consider and deal with several aspects of laws including the laws

of contracts (and the Contracts Act, 1950) as the services provided by Syabas vis-a-vis

consumer was essentially governed by the laws of contracts.

Tribunal's Jurisdiction

The most difficult part was on the jurisdictional issue wherein by their Defence, it can be

imputed that Syabas had raised issues relating to land or interest in the land, albeit, not

specifically raised the issues in the pleadings or there was a challenge before and

against the Tribunal for want of jurisdiction. In dealing with this part also, I had to decide

whether or not Syabas had raised any plausible defences by their pleadings touching on

title to land or interest of land thereof. If I were to accept the defence/imputation by

Syabas, then, obviously, I must strike-out this case in limine as I was caught by the

provisions of Section 2 (2) (d) and Section 99 (1)(b) of the Act.

However, upon due consideration of the facts and evidence before me, the allegations put

forth by Syabas concerning the title to any land or interest in land would depend on

another important factor, that is to say, whether or not PYM was bound by the SOP and the

alleged terms and conditions stipulated in Buku Panduan Syabas, requiring, among other

things, the consumer (in this respect PYM) to submit applications to Syabas with

supporting documents that would justify the change from Code 11 (commercial rates) to

Code 10 (residential rates). The supporting documents as alleged by Syabas must include

the Certificate of Fitness for Occupation, Sales and Purchase Agreement and the letter from

Majlis Perbandaran Kajang, Selangor as testimony that the land/premise occupied by

PYM was in the land category of residential and not commercial. Otherwise, it was also

contended by the defence that Buku Panduan Syabas is the "Standard Operating Procedure

(SOP) internal policy that binds the customer so that it was Syabas contention that Buku

Panduan Syabas shall be treated as the contract document which PYM as the

customer/consumer shall be contractually bound by the terms/conditions thereof.

For reasons, which I shall elaborate hereunder, I had unhesitatingly ruled that Buku

Panduan Syabas was not a contractual document, neither it has any statutory force in law

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or otherwise being itself the law that would bind PYM. In other words, Buku Panduan

Syabas is not the law or binding contract document. This is the crux of the matter whereat I

had on numerous times posed the question to Syabas whether or not it (Buku Panduan

Syabas) had any force in law upon which I had to take cognisance. Regrettably, Syabas had

failed to satisfy me in their submissions and/or at the proceedings or by evidence and

materials to convince me to arrive at a different conclusion or otherwise.

Therefore, my ruling was that this Tribunal has jurisdiction to dispose of this case as this

case was to determine whether or not there was a contract binding upon PYM to observe

and follow the "Standard Operating Procedure" vis-a-vis Buku Panduan Syabas.

Furthermore, the claims lodged by PYM was within the Tribunal's jurisdiction. Section 97

of the Act states, among other things, a consumer may lodge with the Tribunal claiming for

any loss suffered on any matter concerning his interests as a consumer under the Act.

Conversely, I found and ruled that Syabas was the supplier for the purpose of the Act.

However, the Tribunal has its own restrictions and jurisdictional limitations as embodied

in sections 98, 99 and 100 of the Act which I had taken notice but found no applications

here.

No case Against 2nd Respondent

I found no basis to make any order against Orchard Circle Sdn. Bhd. (2nd

Respondent) being the developer in this case. I do not wish to elaborate.

Findings

Upon reading the written submissions made by Syabas and considering the evidence and

materials before me, I found that as matter of fact, PYM "tidak menggunakan premis

tersebut sebagai rumah-kedai" [emphasis is mine] so as to attract item 3(ii) of the

Enakmen Pembekalan Air 1997 and hence, the charging under Code 11. On the contrary, I

found it as of fact that "PYM menggunakan premis tersebut" for domestic and/or for her

residential use. The facts are corroborated with photographs of the PYM's premise which

was not challenged neither opposed to by Syabas or at all. To this end, I could not indulge

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in but had to overrule Syabas submissions in their construction of statute as it would run

contrary to the already established principles, which stated:-

"The legislature has addressed itself to the very question and it is not for the court [or the

tribunal] to amend the statute by engrafting upon it some provision which the court [or the

tribunal] might think more consonant with a complete opportunity for an aggrieved person

to present his view and to support them by evidentiary materials..."

[see : Mak Sik Kwong v Minister of Home Affairs, Malaysia (No.2) applying the English

case of Brettingham Moore v Municipality of St. Leonards]

I must interpolate that I took own initiatives to look up the law and authorities before I

arrived at the decision and findings here as it is my duty to expound (not expand) the law

already entrenched in our legal system - the applicable and relevant principles of law and

statute and that I had not left any hiatus in the law and reasoning leading to the conclusion

I had come to.

Buku Panduan Syabas

In relation to services contracts, as in any other contract cases, an offer and acceptance

must be present. One party should have made an offer to the other and the other party

should have accepted the offer. In other words, there must be mutual consent. The terms of

the contract must be specifically agreed upon. If for some reason, the parties have not

agreed on any of the terms, then there is no contractual terms enforceable, valid or binding

in the law of contracts.

I concede that the doctrine of offer and acceptance in the laws of contracts encounters

difficulties when applied to everyday situations. Well-organized business has sometimes

used terms such as "..... [application for our services] are subject to the terms and

conditions" and standard prints in the so-called contract documents. Some have contained

bolder terms such "the usage of the services shall be deemed as acceptance of the terms

and condition". In this particular case, I found it compelling to state that there are no

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signatures signifying acceptance by the consumers to signify acceptance of the terms and

conditions under the provisions in the Buku Panduan Syabas. In this case, there was no

evidence and/or materials before me that PYM had accepted the alleged terms and

conditions in Buku Panduan Syabas. This was important in light of Section 2 (b) of the

Contracts Act, 1950 which states:-

"when the person to whom the proposal is made signifies his assent thereto, the proposal is

said to be accepted: a proposal, when accepted, becomes a promise."[emphasis is mine]

Could it be law to say that once your had put pen to paper in or on an application forms

that stated that you are bound by the terms and conditions therefore, you shall be deemed

to have agreed to the terms and conditions without (in the first place) knowing what the

terms and conditions were. Still, I am not to be indulged into recognising such

terms/conditions as valid and binding for want of offer and acceptance and, I shall never

adopt the taking of such simplistic way to circumvent the requirements of the law by

introducing such deeming provision to make out a contract (and therefore bound by such

terms and conditions) when there was no concluded contract in the first place. This

method of doing business was to deny all but the rights of the parties prior to entering into

a contract, in particular, the rights to accept or reject as the rights of election by the

consumers. I need to add that the requirements of offer and acceptance by the parties to

make a valid contract are testimony of preservation of rights of both the offeror and the

offeree. Such rights had been propounded and recognised by the courts. They are equally

sacrosanct and must be preserved and observed by this Tribunal.

Furthermore, the law is that the offer must still be communicated to the other party in

order that its acceptance may constitute a contract. It would follow that there could not be

an acceptance in ignorance of the offer - see Halsbury's Laws of England (Vol. 9 4th ed.)

at para. 237.

In this case, the Claimant could not have intended to accept the terms and conditions of

which she was ignorant. The undisputed facts that she had been seeking explanations from

the Respondent before filing this action in the Tribunal was consistent with her averment

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that she was ignorant of those terms which the Respondent sought to rely. I therefore

ruled that the Buku Panduan Syabas and the stipulations therein contained are not and

cannot be a valid and enforceable agreement or contract in law – Section 2(h) of the

Contracts Act, 1950.

This is not to suggest there is anything sinister in the usage of standards forms or

agreements since I recognised that it was almost impractical in modern business to have

contractual documents drafted for each individual occasion. But what is more vital was to

ensure that both contracting parties using the standard forms have assented to the terms

and conditions so that it (such agreement) would be consistent within the definition of

contract “as an agreement enforceable by law” under Section 2(h) of the Contracts Act,

1950.

Granted that I was not aided at all by the parties on legal aspects or authorities, my

research on the laws with regards to "unsigned documents" shows that a great deal of

thinking about contract law is based on the idea that contractual obligations arose because

those terms and conditions have been voluntarily assumed. But, even taking the objective

approach to the formation and interpretation of contracts, that will still leave greater scope

for parties to become subject to obligations that have not been voluntarily assumed.

In addition (at the risks of repetition), I rule that there could be no valid and enforceable

contract without a meeting of the minds which I referred to earlier as consensus ad idem

since it was stated that this [meeting of the mind] is still a general rule applicable to

contract law – see Halsbury’s Law of England, ibid) at para 226.

I thought by this award it might be useful to set out the reasons for decision as I am also

compelled to do under Section 114 of the Act and equally important is that this is the first

time the Tribunal was faced the issues brought about by the consumer against Syabas a

utility company in Malaysia and, in view of the dearth of local authorities on points raised

in this case.

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In the event, the Claimant's claims are allowed and accordingly, I had made the orders as

reflected in my Award dated the 11th August 2010.