Monday, February 27, 2006

Matrade RM167 Million Damages

"Even if it has been reduced to a one-sen company, we will go after them. We will go after the parent body and even its subsidiaries. They cannot just run away by reducing the paid-up Capital."

"We will show them what we can do."

- Samy Vellu

Samy Vellu said the government will go all out to pinned-down Perangsang International Sdn Bhd, a subsidiary company of Selangor government Incorporated, and the turnkey contractor for the Matrade Building.

Samy wants to make Perangsang pay RM167 million compensatory damages comprising $97.02 million for non-performance and $72.9 million for remedial works.

Boleh ka? How?

It's a $2 paid-up company! Didn't Samy understand what is $2?

They never reduced their paid-up capital, Samy! It was and had been a $2 company since the day the government decided to award Perangsang International the project.

How is it that the government could award a $167 million contract to a $2 company? Samy should answer!

The legal advisors in PWD should perform their duties by advising their boss about contract law and damage claims.

Wednesday, February 22, 2006

MRR2 - Cabinet Decides

New twist of events! The Board of Engineers (BEM) on instruction from the Prime Minister Pak Lah had arbitrated on the MRR2 issues and had made the final recommendations to the cabinet.

The events that lead to the Prime Minister's call to BEM to arbitrate arises because of internal disagreement between the boss - Works Minister, Samy Vellu, and his department, JKR on the structural repair reports. Samy wants to follow Halcrow's recommendation for rectification which was purportedly a face-saving (for himself) and will cost less for the contractor Bumi Hiway. Public Works Department (PWD) are convinced that the contract terms stipulate that the Turnkey Contractor is fully responsible and liable to make good the Work in full complaince of the terms of conditions of contract pertaining to design quality specified. PWD thus wants to Contractor to fulfil its obligations and ensure that the flyover meets the qualified quality specified. (read more here)

Based on the contractor's view, the repair works is basically patching and grouting the cracks. Based on Halcrow, it will be slightly more - it include some strengthening works. But based on Kohler & Seitz (the structural engineering consultant from Germany), the repair should be comprehensive to ensure the structural integrity will not be affected over a long term. However, it is estimated to cost RM40 million.

The contractor rejected Leonhardt Andra and Partners's recommendation. Samy was sympathetic towards the contractor and got in Halcrow to conduct another study. However, JKR was of the opinion that Halcrow seemed to suggest limited repair works, suficient to meet the minimum requirement and compliance. JKR was of the opinion that the contract stipulates that it is design and built to the specified and agreed quality and standards and will not accept second best, just because the cost of repair will be mammoth - that's the contractor's problem and if the contractor can convince the government to pay for them using taxpayers money, and if the government agreed, then JKR had to take instruction. Samy seemed to suggest that the government had to step-in to pay for it as it would be too much for the contractor to pay. The cabinet disagreed.

The final decision:

The Cabinet has decided to appoint a German consultant to spearhead repair work on the Middle Ring Road 2 in Kepong.

Works Minister Datuk Seri S. Samy Vellu said today the decision was reached at the last Cabinet meeting and the ministry’s secretary-general is discussing with the consultants on the conceptual layout of the work plan, which will be ready by the end of this month.

"They have assured us that the repair work on 31 pillars would be completed in four- and-a-half months," he said. The cost is expected to be more than RM40 million.

Samy Vellu said the cost was initially estimated to be around RM18 million but it has more than doubled after it was decided that all the 31 pillars need to be repaired simultaneously.

So now, who is going to pay for the repair? BumiHiway of Government?

Maybe, Khairy can mediate and settle in the Malaysia Boleh spirit! Good luck to Bumi Hiway if they can Kau Tim this toy guy.

Read more here:


Samy vs JKR

MRR2 Repair to Begin

Wednesday, February 15, 2006

10m High Wall of Danger

You buy a house costing a million in upmarket Mount Kiara - hell of expensive, but you believe it's worth it as it's a good investment.

Suddenly, at the back of your house, the neighbour developer built a 10 meter high wall which blocks your rights to have good airflow and lights. Worse off, the wall develops crack and wet soil seeps out of the cracks.

Now, you are at risk that soon, you will be asked to move out of your house due to the high risk of collapse. Nobody wants to buy your house and you have hundreds of thousands in mortgage loan to settle with your bankers.

Read this story:

House owners in Villa Aseana, a new housing project in Mount Kiara are angry that a 10m high wall has been built behind their new houses.

The developer of the land next door, Merge Power S/B erected the wall so that it could fill up the land’s sloping terrain with earth for its building project.

The wall however has showed signs of cracks and soils from the other side are leaking through the cracks. The residents had written to city hall and City Hall had issued an order to the developer to tear down the wall. The approved plan only allowed a 1m high wall. City Hall said they had given the developer one month’s notice to take down the wall or sent in the amended drawings for approval. City Hall said they will continue to monitor the developer and ensure that they abide by the plan.

What will you do if you are the dominant owner? What is your rights against the servient owner?

Let's look at a few English cases:

Bernstein v Skyviews & General Ltd [1978] QB: The case establishs that a landowner does not have unqualified rights over the airspace over his land. Facts: Skyviews employee flew over Bernstein's land, took photograph of his house and offered it for sale to Bernstein. Bernstein too exception and sued for trespass. Griffith J. dicta: "I can find no support in authority for the view that a landowner's rights in the air space above his property extend to an unlimited height. The problem is to balance the rights of an owner to enjoy the use of his land against the rights of the general public to take advantage of all that science now offers in the use of air space. This balance in my judgment is to restrict the rights to such height as is necessary for the ordinary use and enjoyment of his land and the structures upon it; and declaring that above that height he has no greater rights in the air space than any other member of the public."

Allen v Greenwood [1979]Court of Appeal: This case illustrate the important decision in respect of the easement of light. It makes clear that the amount of light which can be acquired as an easement is to be measured according to the nature of the building in question and the purpose for which it is normally used.

Colls v Home & Colonial Stores Ltd [1904] House of Lords: The amount of light which can be acquired as an easement is such amount as was required according to the ordinary notions of mankind for the beneficial use of premises.

Carr-Saunders v Dick McNeil Associates Ltd [1986] QB: In the case of business premises the right to light is sufficient light for the use of the premises for its ordinary uses. The case states that the question is not how much light has been taken but how much is left. The extent of the dominant owner's right is neither increased nor diminished by the actual use to which the dominant owner has chosen to put his premise or any rooms in them; for he is entitled to such access of light as will leave the premise adequately lit for all ordinary purposes for which they may reasonably be expected to be used. It will include all other potential uses to which the dominant owner may reasonably be expected to put the premises in the future.

Re Ellenborough Park, Powell v Maddison [1955] Court of Appeal: This is the leading authority on the essential characteristics which a right must possess in order to be capable of being an easement. First, easement cannot exist 'in gloss' (i.e. appurtenant to any land). Second, as to the need for an easement to accommodate the dominant tenement, this requirement would not be satisfied if the right is for the personal advantage of someone. Third, the requirement that the dominant and servient owners must be different persons arises from the fact that a person cannot have a right over his own land (i.e against himself). This requirement is satisfied if the two tenements are owned by the same person but are occupied by different person, Fourth, the right must be capable of forming the subject matter of a grant, i.e. the right must be sufficiently definite and that there must be both a capable grantor and grantee. The right must also be a kind already recognised as capable of being an easement.

Batchelor v Marlow (2001) Court of Appeal: the decision by the court demonstrates that a crucial factor in seeking to establish an easement is that the right claimed must leave the servient owner with reasonable use of the land.

Copeland v Green half [1952] Ch: This case laid down the principle that for a right to be an easement it must be a right against other land and not a right to possession of the other (i.e. servient) land.

Nickerson v Barraclough [1981] Court of Appeal: This case is about a landlocked except for an access to a highway over a bridge onto a lane belonging to the defendant who denied any right of way. The court of first instance held that an easement of necessity will exist if the land are made unusable and that there is a rule of public policy that no transaction should without good reason, be treated as effectual to deprive land of any means of access. However, the Appeal Court held that the doctrine by way of necessity was based on implication from circumstances and not public policy. Where an alternative route - albeit inconvenient - is available there can be no easement of necessity (Titchmarsh v Royston Water Co Ltd (1899).

Wheeldon v Burrows (1879) Court of Appeal: This is the leading authority on the acquisition of easements. The rule in Wheeldon is one of the ways in which an easement can be acquired by implied grant. The case laid down that on the grant of part of a tenement there would pass to the grantee as easements all quasi easements which were continuous and apparent; or necessary for the reasonable enjoyment of the land granted; and used by the grantor at the time of the grant for the benefit of the part granted.

In essence, the rights capable of being easements are:

#A right to receive light through defined aperture in a building;

#A right to the passage of air through a defined channel;

#A right to have a building supported by the wall of another building;

#A right to require the servient owner to fence his land;

#A right to park a vehicle in a defined area but must not leave the servient owner without any reasonable use of his land;

#A right to the passage of piped water across another person's land;

#A right to a view:

#A right to privacy;

#A right to general flow of air over land.

The fundamental rule of law is that user of the rights must not use force in order to enjoy the claimed right, nor must user take place under protest from the servient owner (Nec vi). User who enjoyed by permission cannot be as of right (Nec precario).

Tuesday, February 14, 2006

Design & Build Debacle

Problematic Projects Involve "Design-and-build" Concept - Shahrir

Public Accounts Committee Chairman Datuk Shahrir states that all projects implemented under the "design-and-build" concept had been problematic.

According to Shahrir that approach was conceivably chosen to overcome perceived inefficiencies of the check-and-balance, accountability and good governance approach in project implementation. He said that the wisdom then was that private initiative was far more efficient and giving the private contractor total control without any government oversight would see the projects completed much faster.

"Unfortunately, when things go wrong, there was no recourse to accountability," he said. Shahrir said his observation showed that what beset problem-hit projects like the privatisation of the Lumut naval dockyard and the construction of offshore patrol vessels for the Malaysian Navy, the MRR2 elevated highway, Matrade building and a hospital in Pandan, Johor, which appeared before PAC, was the belief that self-supervision would see speedier completion and delivery.

Was that the real objective when the government under Mahathir and Daim adopted the Turnkey concept, or was it a surreal reason?

The observed facts remain that Turnkey Design and Built concept was adopted to simplify and speed-up project awards which are mega in size.

First is the Vision 2020. Mahathir's dream is to make Malaysia, the new Japan in South East Asia. In order to push Malaysia to achieve a develop status by 2020, we needed a consistent minimum economic growth of 8% GDP for the next 25 years till 2020. From the government's collection of revenues from taxes and excise duties, it was be impossible to fund all those projects mega billion which will require the government to pump in hundreds of billions to generate domestic growth and development. To overcome that, the government had to get the private sector to raise the fundings for the projects and this way, it will reduce government borrowings.

Secondly, there was a fresh breed of corporate executives called the "New Entrepreneurs" groomed by Daim within Paremba and who had matured commercially to undertake bigger task to spearhead the UMNO-Daim-Mahathir Agenda. These new breed of professionals had enjoyed the political patronages and had the power and influence to get decisions made. They had the "godfather" on their side. In the name of NEP and Bumiputraship, it was a sure win situation and they sure had a fast-track generator of wealth and individual prosperity.

Thirdly, the worldwide entrepreneurs (particularly burgeoning in USA and Europe) are beginning ride the trend of the new "Billionaire Fashion parade". The rise of Bill Gates, Warren Buffet, Michael Milken and Jack Welch, Goldman Sach, Travellers & Citycorp,and the internet boom lead the pack of individuals and organization to a new era of economic explosion. The economy in USA beginning 1991 was riding an economic boom that lasted for more than a decade. This economic boom lead to the growth of massive billion dollar private sector borrowing and created readily availability of financial resources for private fundings, particularly from Junk Bonds. The merchant bankers had been successful in ballooning the US economy by way of mergers, acquisitions and "global acquisitions". These monies ultimately arrived at South East Asia with the rise of the Asian Tiger economies such as Korea, Taiwan, HongKong and Singapore. The second group of fast rising economies are Thailand, Malaysia, Phillipines and Indonesia. There were vast potential growth areas and with weak and kleptocratic governments who are prepared to "Kau Tim", the giant financiers with vast financial resources sees the opportunities to penetrate the system and "prostitute" them. Greed was the fundamental; craving was the decisive factors.

Mahathir was assisted by a coterie of jaggernauts who were more than persuasive. Thus gave rise to the "Billionaire Syndrome" in Malaysia and this in turn generated/created those mega billion projects. It was easy to get off-shore loans and bond fundings. Almost every public listed companies, big and small, jump into the bandwagon and ride the storm of economic activities. Mahathir was care-free as what he wanted was monies for development and to turn Malaysia into a new Japan in Asia. Mahathir had a Japanese economic advisor too.

What was envisage by Mahathir was pragmatic and possible. Malaysia, thus tango along the tide of globalization and liberalization. The problem was, during the fast growing phase, there was no monitoring and control system to tell the government the predictive negative outcome of decisions and actions. There wasn't enough "wisemen" who are honest to speak the bare truth and to highlight danger points. There were advisors who are "players within the same game", enjoying the milking and womenising.

Then, a new tidal wave came - the currency traders and hedge funds who saw another form of opportunites! The overheated economies of the Asian Tigers and Cubs are destined to be swallowed and trashed. It was known!

The end result - 1998 East Asian Economic Crisis and the collapse of the currencies against the USD. Malaysia was unprepared to face the hedge fund gamblers and risk-takers. The Pride and Ego of the system was too much for the body to digest. The governments were prepared to sign cheques that their body couldn't pay. It was like a cat that look himself in the mirror and saw himself a picture of a lion king. The cat believes he is a lion and fought the Manhattan leopards. The outcome: the cats were badly bruised, broken bones and broken teeth. Reality then prevailed and integrative and defensive actions within the economic zones save the situation from a total collapse.

It is now 8 years since the crisis. We are still licking our economic wounds and recuperating slowly. What next? Nothing, at this stage of hybernation and consolidation. It will take another 4 years of system adjustment and the rise of another maverick PM to see Malaysia driving another economic growth path. Pak Lah isn't good enough to play this game. He is a conservative and he lacks the muscles.

Who then can resuscitate the economic game-play? It's a million dollar guess. Another Mahathir and Daim will come along soon....

Thursday, February 09, 2006

MRR2 - Samy vs JKR

What? JKR not allowed to make an engineering design-decision regarding the methods of rectifications for MRR2 which was attributed to design shortcomings? The Prime Minister decides to mediate and calls on the Board of Engineers to be the court of final resort on the MRR2 Debacle? Isn't JKR under the Ministry?

The dispute - Works Minister wants to follow Halcrow's recommendation for rectification which was purportedly a face-saving (for himself) and will cost less for the contractor. Public Works Department (PWD) are convinced that the contract terms stipulate that the Turnkey Contractor is fully responsible and liable to make good the Work in full complaince of the terms of conditions of contract pertaining to design quality specified. PWD thus wants to Contractor to fulfil its obligations and ensure that the flyover meets the qualified quality specified.

However, Works Minister Samy Vellu admitted that some weakness in the design and climatic factors had contributed to the cracks in the Middle Ring Road 2 (MRR2) viaduct in Kepong.

"There's some problem with the design but it's the weather in this country that contributed mainly to the structural problem," Samy said.

He gave an assurance that the MRR2 would be safe for use after it was repaired in four months at a cost of RM18 million and that the viaduct could be used for 95 more years because viaducts were normally built to last 100 years.

He explained that the cracks were not on the road but on the pillars and truss of the viaduct.

What kind of bullshit explanation is this?

As a civil and structural engineering design consultant employed by the contractor, it is their professional and fiduciary duty to ensure that the structural design do take into consideration of all aspects, be they environmental, social, and operational into the design.

Samy Vellu said that although the local climate had been taken into account at the initial stage, the hot and wet weather conditions contributed to the cracks, compounded by the pipe leakage at the viaduct.

What crabs are they? This is oxymoronic reason. How can he say that although the local climate had been taken into account, the hot and wet weather conditions contributed to the cracks? The weather conditions in Malaysia has remain the same -Tropical Climate with temperature ranging between 20-36 degree and rainfalls throughout the last 35 years have been consistent; often wet and dry with intermittent rainfall. Is there a reason why the design engineers had not considered the hot and wet climate consistent conditions in existence over the last 35 years? In Law, this can amount to reckless negligence and the design engineers may be liable in an action for tort, should JKR seeks legal redress.

Samy admitted that the design factors had contributed to the cracks. Doesn't this constitute a breach of contract by the contractor? Again, this breach would also amount to reckless negligence and actionable in Contract and Tort.

The disagreement between the Works Minister and PWD seem to stem from the question of which report to follow - Halcrow or Kohler & Seitz? Both are reputable civil engineering design engineers internationally. Applying the legal principles, unless both report is factually contrary, the rights of PWD is reserved and that PWD can elect to apply the recommendations from either. It is the burden of the contractor to rebut the presumptions in the Kohler & Seitz's report if they are disagreeable with the presumptions and findings of Kohler.

However, it is observed that the Works Ministry is sympathetic towards the contractors possible hugh financial liability should the German consultant's recommendation is followed.

Isn't it absurd? Works Ministry is siding the contractor and fighting against their own department?

JKR has hundreds of PhD design engineers who are fully competent and highly skillfull in engineering design and the department is headed by the nation's best structural design engineer who happens to hold a doctorate in structural design.

By convention and the rule of law, the Works Ministry is not suppose to interfere with the engineering design aspects and decision-making. The Minister is suppose to administer the system and process and listen to their experts. If the department lacks the competency and ability, and are unable to provide a justifiable engineering solution, then only can the Minister step in to provide guidance and assistance by seeking external expertise.

However, it can be seen that non-engineers are making engineering design decisions and expert engineers are mouth-strapped and put under duress.

More puzzling is that the Prime Minister had to step in to mediate the differences and being a "Good-Guy", decided to call in the Board of Engineers to be the Court of last resort. What is happening to Malaysia? Are we having leadership crisis or a clash of civilisation?

Saturday, February 04, 2006

MRR2 Repair to Begin (2006)

In the Beginning ... 18th August Year 2004,

Samy said the repair will take 3 months ....

On 4th February 2006, one and a half year later,

Samy said it will take 3 to 4 months to repair.

In 2008, ... let's wait for the next announcement ...

Samy won't be there to answer ...

He retired!

New Works minister announced that ...

The repair will start soon...

But flyover bridge had been demolished then...

to make way for a new tunnel ...

awarded to BumiHiway joint-venture with MMC ...

Friday, February 03, 2006

Middle Ring Road 2

Kuala Lumpur Middle Ring Road 2 (MRR2)route 28 was built by Malaysian Public Works Department (JKR) to connect neighborhoods near the boundary of Kuala Lumpur.

The entire highway system consists of Federal Route 28, Damansara-Puchong Expressway E11 (from Sri Damansara to Sunway Interchange) and Shah Alam Expressway E5 (from Sunway Interchange to Sri Petaling Interchange). M

RR2 is generally referred to Route 28 since Route 28 occupies about two-thirds of the system.

Construction on this ring road would divided on 3 phase, This sections include Kepong-Gombak, Gombak-Ampang and Ampang-Sri Petaling.

The project was awarded to a consortium consisting of Sukmin Sdn Bhd, Bumihiway (M) Sdn Bhd and Konsortium Kontraktor Melayu (Wilayah) and the contract is to design and built the entire package 11 of MRR2 which covers a 4km stretch and cost RM238.8 million (the exacy contract sum is RM238,828,257.16).

The contract period is 36 months and was completed in 34 months (May 1999 to March 2002)

Controversial issues

The Kepong Flyover was reported to be faulty because 31 of 33 pillars supporting the flyover were reported to have obvious cracks.

Public concern about the safety issues at Kepong Flyover was due to the risks faced by at least 4,300 motorists using the flyover at a time.

Investigations were held by the government and as a result, Kepong Flyover was closed to traffic and then reopened with only 4 out of 6 lanes.

Works Minister Datuk S. Samy Vellu then imposed a gag order on his officers saying that he alone will handle any queries on the Middle Ring Road 2 (MRR2) Kepong flyover repairs. But even he was reluctant to answer questions on the flyover which had been closed for repairs to cracks on 30 pillars which had attracted the Anti-Corruption Agency's attention.

"In this country today, only the Minister of Works knows what has to be done there (MRR2) and what is happening in this ministry. When I say it takes three months ... that’s the decision. We wait for the investigations by the ACA to be completed and after that, we will finish the job.”

“No more press statement from anyone except by me ... please tell all the engineers not to make anymore statements,” he said to an officer from the ministry.

Initial findings by PWD suggested that the temporary hoisting crane mounted on the permanent RC structural piers to launch the precast beams to the bridge decks could have exerted pressure on the concrete crossbeams and caused the cracks.

In its report to the parliamentary Public Accounts Committee, the department said its preliminary checks found that the structure at the 11th package of the MRR II was found to be unstable because of the strain and caused the beams to split at three sections.

Samy Vellu said the PWD’s findings showed that the crane hoisted on top of the crossbeam could have added pressure and as result there was an overload on the beam.

The PWD, which carried out its own probe, revealed that the MRR II’s Kepong bridge, was “not stable due to internal redistribution of forces and alternative load paths due to yielding of reinforcement.”

Samy Vellu said due to excessive hot temperature there was no homogenous drying, externally and internally, because of differential (uneven) drying of concrete. According to him, this could be the other reason for the cracks.

Mounsell, Sharma and Zakaria was the turnkey design consultant engaged by BumiHiway and Minconsult was the checking design consultant representing JKR. Flint & Neill Partnership was first commissioned by the contractor to undertake an independent third-party investigations. At the same time, JKR had engaged a German consultant, Kohler & Seitz, to study the same problem. As both the investigation consultants had came out with different conclusions, the government engaged Halcrow to give the last word.

Earlier, before Halcrow was employed to investigate, Samy Velly had dismissed PWD's consultant, Kohler & Seitz findings that faulty design had caused the columns of the elevated highway stretch of the Middle Ring Road Two (MRR2) between Kepong and Selayang to crack.

Samy Vellu: "This is no design failure. The engineer can sue them (those making such allegations). Noboby can simply open his mouth and say design failure. The question of design failure doesn't arise."

Samy Velly said there had been "little cracks on the structure" which had been studied by experts from Australia engaged by the original consultant of the project and experts from Germany engaged by the Public Works Department (PWD), and both had come up with different views.

"I have asked Zaini (Public Works Department Director-General Tan Sri Ir Zaini Omar) to engage a neutral consultant to study both recommendations to see what actually needs to be done.

"Both of them (the two expert groups) gave two different views. So I have to satisfy myself with a neutral view, which (one) is right, before I give the next directive on what should be done," he said.

The government of Malaysia then appointed British Halcrow Consultancy Ltd on 12 August, 2004 to study the cracks that have appeared on 31 of the 32 crossbeams since 2000.

On the fate of the project consultant, he said: "We didn't find anything wrong with the design. We can't punish them. We cannot make accusations. (We) have to investigate what happened to the columns."

Halcrow has found a rare phenomenon--the expansion of a chemical compound, ettringite, had caused serious cracks. The compound contains calcium, aluminium, oxygen, sulphate, water, etc. On 25 February, 2005, Halcrow recommended to JKR to waterproof the bridge immediately, so that the delayed ettringite formation (DEF) would not result in further cracks.

According to Halcrow that has sought the service of Glascow University, ettringite is found in cement. Usually, it does no harm. But, under rare conditions such as during concrete hardening, temperature reaching over 70 degree Centigrade in the presence of sulphate and plenty of water, ettringite is formed, expanding dangerously.

If all the cracks are not waterproofed, more water seeps into them, aggravating the situation. JKR must stop the water.

Since 1999, when the MRR2 project started, over eight consultants from overseas have been appointed for the design of the project and investigation of the cracks.

In September 2004, The Sun Daily reported that the MRR2 cracks due to design flaw and improper anchorage of crossbeams

That was supposed to be the verdict of Halcrow. Works Minister Datuk Seri S. Samy Vellu, who disclosed the findings in a press conference in Parliament lobby said:

"The anchoring was not done properly which was the cause of all these problems. The design also did not indicate the proper anchorage of the beams and the columns."

Halcrow's report was prepared by its bridge engineering director Roger J.Buckby and submitted to the Works Ministry.

"They are still checking to see what went wrong with the design," Samy Vellu said.

Samy Vellu read out a portion of the Halcrow report:

"The main cause of excessive cracking in the crosshead to the T-shaped pier is a deficiency in the design and the anchorage of the columns reinforced into the crosshead. There is also a deficiency in the design of the transverse reinforcement in the top of the crossheads to resist splitting forces between bearings. The horizontal cracking in the crosshead directly above the columns is a direct result of the inadequate anchorage of the column bars into the crosshead."

Samy Vellu had earlier said it would cost RM20mil to repair the flyover located between Taman Bukit Maluri and the Forest Research Institute of Malaysia.

Samy Vellu would not comment on the apportionment of responsibility for the faults, and who should pay for it, adding that the government would pay for it first. He said the RM20 million repair bill he mentioned earlier was only an estimate but added that it would not exceed this amount.

"We can ask the contractor to pay, but if the contractor says he is not interested in doing the job for the lack of funds, then how? Do we have to wait until it obtains the funds? It can't be, as the work has to resume," Samy said.

The whole controversy expanded when eight officers from the ACA's Enigineering Forensic Unit, including a case investigation officer, started investigation into the problem tho' nobody made a report. The team of investigators spent six hours examnining the cracks on pillars and beams of flyover along the MRR2.

The Anti-Corruption Agency (ACA), apart from investigating possible fraud will also check whether it was built according to specifications. The ACA, which obtained documents relating to the design focused on the technical aspects of the flyover to check for any discrepancies in its construction. The eight-man team took samples from the damaged pillars and beams and sent them for composition and durability analysis. An ACA source said the analysis would show whether the concrete chunks were mixed and laid out according to the road construction industry's specifications.

“The investigations will focus on whether those involved cut corners to reap higher profits at the expense of safety and durability. The technical team will verify whether the builder had adhered to the specifications outlined in its building plan,” ACA spokesman Rosli Ali said. The investigation team led by Rosli Ali measured the length, width and depth of the flyover's pillars and beams.

Politicians wanted the Government to review the process of approving design and building contracts following the recent safety threat at the Middle Ring Road 2 (MRR2). Parliamentary Public Accounts Committee deputy chairman Dr Tan Seng Giaw said a briefing by Public Works Department (PWD) officials showed that the Government had only a minimum role in supervising the project.

“As a result, in the Package 11 stretch of the highway, hairline cracks were found in 31 of the 33 flyover pillars. It is wrong to make the contractor responsible from beginning to end without any PWD supervision,” the Kepong MP said, adding that the committee was briefed that only one PWD engineer supervised the project from time to time.

Bentong MP Liow Tiong Lai said there was an urgent need to study the awarding of design and building contracts.

The Anti-Corruption Agency (ACA) later gave the green light for the Public Works Department to continue with the remedial work.

Samy Vellu said the department was asked to complete the repairs within the three-month stipulated period. “The priority now is to ensure that the MRR2 is safe for use.” Repair work on MRR2 was halted for the ACA to carry out investigations.

Till today, it is more than one year, and the repair works has yet to begin.

Samy, what is three months to you???

Highland Tower Collapse

This landmark case arose out of the 1993 tragedy of the collapse of a tower block in the Highland Towers development in Ampang, just outside the Malaysian capital of Kuala Lumpur leading to loss of life and the loss of use of the Blocks that remained standing.

The event gained widespread publicity at the time, in particular as it was captured by a dramatic sequence of photographs taken by an American visitor to the Towers, and the frantic rescue operations over the next ten days.

The case has several important implications for Building Professionals in Malaysia, which will be the focus of this discussion, and also led to interesting developments and clarifications in the law of tort in Malaysia.

Brief facts

Highland Towers consisted of three blocks 12 storey high apartments named simply as Block 1, 2 and 3 respectively. It was constructed sometime between 1975 and 1978. Directly behind the 3 blocks was a steep hill with a stream flowing west (“the East Stream”), which would have passed harmlessly to the south of the Highland Towers site if it was allowed to follow its natural course.

Some time in the course of the Highland Towers development (as found by the Court) the East Stream was diverted by means of a pipe culvert to flow northwards across the hillslope directly behind Highland Towers. The approved drainage system on the hillslope behind Highland Towers was never completed.

On Saturday, the 11th December 1993, at about 1.30p.m., after 10 days of continuous rainfall, Block 1 collapsed.

The 2nd Defendant, an architectural draughtsman, was the purported architect of Highland Towers.

The Cause Of Collapse Of Block 1

In order to determine the liabilities of defendants on the allegations as charged by the plaintiffs, it is necessary at the onset to establish the cause of the collapse of Block 1 which lead to the forced evacuation Block 2 & 3. To decide on this, it is essential to disclose some brief facts.

Highland Towers & Its Surrounding Features

The retaining walls

The 3 apartment blocks of Highland Towers were built on elevated land with a relatively flat base. Directly behind it was a steep hill. Though some witnesses have describe the gradient of this hill to be 10 to 20 degrees but, by my estimate from various photographs tendered as exhibits, I perceive it to be far steeper. This hill was terraced, supported by retaining rubble walls made of boulders and cobbles of rock of varying seize placed together by mortar at a random fashion. Some of these walls had collapsed and were buried in the soil at the time of the Highland Towers tragedy. Those left are still standing, either in part or as a whole, but in a dire state of repair. From a physical survey was commissioned by MPAJ soon after the collapse of Block 1 on the affected area, covering the Highland Towers Site and the Arab Malaysian Land, it is apparent that these retaining walls were constructed in a haphazardous manner. Some were located on the Highland Towers Site with the rest in the Arab Malaysian Land.

Ownership of the slope behind Highland Towers

Both the Highland Towers Site and the Arab Malaysian Land once belonged to a common owner - the 1st defendant, who intended to develop the entire area into a housing scheme with 3 apartment blocks on Highland Towers Site and bungalows on the Arab Malaysian Land. When the lands were subdivided and issued with individual documents of title, the 1st defendant mortgaged the bungalow lots, consisting of 50 in number, to the 5th defendant in consideration of some financial arrangements. When the loans were not repaid, the 50 bungalow lots were transferred to the 5th defendant in November 1991 to offset the amount due.

The East Stream & pipe culvert

At the furthest eastern corner of the Arab Malaysian Land water from a stream, popularly known as the "East Stream" (which name is totally inappropriate since it actually flows westward), enters the 5th defendant land. The source of this stream originates from the Metrolux Land. It flows down hill in a westerly direction until it reaches a plateau where it forms a mud pond. From here the water is channeled into a set of concrete culverts which directs it to a pipe culvert (pipe culvert). This pipe culvert runs horizontally right across the hill slope of the Arab Malaysian Land. After passing through 10 bungalow lots, the water from this pipe is discharged into Lot 445 which is situated in the north. Lot 445 is a government land. This entire section of the land, as described, seems unaffected by the effects of the landslide that brought down Block 1.

The initial section of this pipe culvert was built as an integrated part of a retaining wall. It has manholes located at various intervals. Just by the side of this pipe culvert, running for some distance, is an open concrete drain. This was intended to drain surface runoff water while the pipe culvert catered for the water emanating from the East Stream.

All drainage and geo-technical experts who testified in this case agree that the flow regime of the East Stream into the pipe culvert running across the hill is highly undesirable and dangerous. Instead of water flowing along its natural course - downhill (following its natural terrain), it is now diverted into a man made structure that requires constant maintenance and supervision. Failure to attend to this will affect slope stability, causing a danger to humans living down slope. It must have been this concern that, subsequent to the collapse of Block 1, the rescue operators, upon discovering this unwarranted drainage system of the East Stream, redirected the flow pattern of this stream to its natural course, downhill in a westerly direction. They did it by placing sandbags in an area to prevent the flow of water into the pipe culvert. This is not completely successful since, by my observation during this Court's visit to the area, water is still detected in the pipe culvert.

Further down slope on the Arab Malaysian Land is network of drains. Those at the upper sector are earth drains while at the lower portion are made of concrete. These drains, I believed cater for surface water runoff while the pipe culvert was take care of the discharge emanating from the East Stream. Though in certain areas these drains are disconnected abruptly, presumably caused by the landslide that brought down Block 1, those at the upper level are still intact. But they are in an odd fashion. Starting from the top, a drain runs parallel for some distance along the pipe culvert. It then suddenly makes a U-turn to flow back in the same direction from where it came from. Then after proceeding for some distance, it is connected to a culvert across a road reserve. At this culvert and joining it is a drain coming from the opposite direction. By deduction, this drain from the opposite caters for water runoff on the southern side of the slope. From the junction the drain proceeds down hill and terminates abruptly at far right at a level parallel to the rear of Highland Towers. From an overall view of the post-collapse survey plan, this drain must have continued along the rear of Highland Towers until the end of Block 3 when it turned left down hill and drained into the lower section of the government land - Lot 445.

This drainage pattern too, in the view of all experts in the field of hydrology, is far from satisfactory. Firstly, large section of drains is earth drains that can be easily eroded. Secondly, water can infiltrate into the soil of these earth drains at a greater rate than those made of concrete. Thirdly, the flow pattern of these drains is undesirable. It does not flow naturally down hill. Instead it makes a number of U-turns, one of which even flows backwards to the direction where it came from. Fourthly, the drains are insufficient to accommodate the amount of runoff from the slope. Fifthly, the drains are in a vegetated area and maintenance is regularly and constantly required.

Before the Arab Malaysian Land was sold to the 5th defendant, Mr. Lim (DW1) was in charged of the drains on the slope. He ensured water in the drains flowed without interruptions, particularly from vegetation around it, and when the drains were damaged he would repaired it. Failure or neglect to ensure these has serious consequences as can witnessed by the flooding of the car parks at the Highland Towers accompanied by rocks and mud and a landslide on the slope some months before the collapse of Block 1. This was when Tropic moved into the Arab Malaysian Land to excavate and cleared the vegetation as well as leaving branches of trees and debris in the drains.

Bruce Mitchell's photographs

The 3 blocks of Highland Towers were built in such a manner that Block 1 and 3 were almost parallel to each other, with Block 2 in between set slightly back. From the window of the of the 4th floor of Block 3, a resident, Mr. Bruce Mitchell, had the presence of mind to snap a series of photographs just before the collapsed of Block 1. These highly commendable pictures, 6 in number, recorded the tragedy and rendered us a grime reminder of the last moments before the disaster that took so many lives and caused enormous loss of property. These pictures also provided invaluable information to specialist in the field of geo-technology to determine the cause of the collapse. They are marked as exhibit P7A - 7H but are commonly, throughout this trial, referred to as the "Mitchell Pictures".

As principal expert witnesses have relied extensively on these pictures to form their opinion, it is essential that I do give a brief description of each of these.

Photograph P7A, shows a view of the rear section of Highland Towers framed on both sides by the balconies from apartments in Block 1 & 2. At the furthest end of the picture is the hill slope. Erosion scars are seen in two areas where they are engulfed by vegetation, mainly trees which lean downhill as if being pushed by some force from above. Beneath is a rubble retaining wall. In front of this wall is a heap of earth with fragments of tar spawn over. Lower down from this spot is a continuous row of corrugated asbestos roofs in a state of collapse, with motor vehicles trapped under. Right next to this and slightly further front, is a cement slap which looks like an open-air badminton court. Supporting it is a rubble retaining wall topped by flower plants.

The left side of picture P7B shows a partial profile of Block 1 with some balconies of apartments facing Kuala Lumpur City protruding out. Beneath these is a tar-paved road with 3 motor cars parked in a row. At the far end of this road is a rubble retaining wall supporting a growth of lush green vegetation. The lower portion of this retaining wall has explored with soil spawn over a lower tier road. A lamppost standing close to the area where the soil is seen emitting has leaned.

Photograph P7C is the second frame of the same spot as P7B. The soil seen emitting in the earlier picture it is more profound. Substantial part of the retaining wall has collapsed. Greater volume of earth is seen gushing out of the disintegrated retaining wall. The lamppost has leaned more extreme.

P7D captures almost the entire Block 1 tilted at an angle with clouds of dust emitting from the base.

P7E records Block 1 almost tumbling to the ground. The rear apartments' balconies, now facing the sky are clearly visible.

P7F is a second frame of the same spot as P7E. In this subsequent shot, taken a few seconds later, there is a sea of dust with intermittent sight of a fallen building.

P7G reveals a wider view of the rear of Block 1 without the building (Block 1) obstructing. The dust from the fallen Block 1 is still present as evidenced by the white cloudily shades on the right side of the picture. In the center, starting from the top is the hill slope marked by scars extending to the right in a continuous line. Below, divided by a row of vegetation, is a rubble retaining wall which is still standing but split in the middle and slanting. In front of this is a large mess of expose earth, and floating on top are some cars with parts of the corrugated roof, which once provided a shade for the car park. At the extreme left of this photograph stands Block 2, with its landscaped terraced garden fully intact.

P7H is a pathetic view of the collapsed Block 1 lying on the ground in one piece with stunned spectators staring at the aftermath in total disbelief.

The Highland Towers Judgment -
Civil Suit No. S5-21-174-1996

The 3rd Defendant, was the engineer for Highland Towers.

The 4th Defendant was the local authority at the material time who had jurisdiction over the Highland Towers Site, the hillslope directly at the rear of Highland Towers (‘Arab Malaysian Land’) and the surrounding areas.

The 5th Defendant was, at the material time, the registered owner of the Arab Malaysian Land.

The 7th Defendant was the registered owner of a large piece of land (Metrolux Land) which is situated on top of a ridge, commonly known as Bukit Antarabangsa. This land is located just above the Arab Malaysian Land and at the material time was under development.

The 8th Defendant was the provider of management services to the 7th Defendant to develop the Metrolux Land into a housing estate.


The landslide that brought down Block 1 of Highland Towers was found by the Court to have been a rotational retrogressive slide emanating from a high retaining wall behind the 2nd of a 3-tier car park serving the 3 blocks of the Highland Towers.

Water was found to be one of the factors that caused this high wall to fail. This water emanated from poor and nonmaintained drainage, as well as a leaking pipe culvert carrying the waters of the diverted East Stream.


The following were the findings on liability by the Court:

The First Defendant was liable in negligence for not engaging a qualified architect, constructing insufficient and inadequate terraces, retaining walls and drains on the hillslope which could reasonably have been foreseen to have caused the collapse diverting the East Stream from its natural course and failing to ensure the pipe culvert diversion was adequate, and in nuisance for not maintaining drains and retaining walls.

The Second Defendant (Architect) was liable in negligence for not having ensured adequate drainage and retaining walls were built on the hillslope adjacent to the Highland Towers site, which he foresaw or ought to have foreseen would pose a danger to the buildings he was in charge of, in not complying with the requirements of the authorities in respect of drainage, in colluding with the First Defendant and Third Defendant (the Engineer) to obtain a Certificate of Fitness without fulfilling the conditions imposed by the Fourth Defendant (the Local Authority), in so doing not complying with his duties as Architect, and in not investigating the terracing of the hillslopes and construction of retaining walls even though he was aware they would affect the buildings he was in charge of, and also in nuisance as he was an unreasonable user of land.

The Third Defendant (Engineer) was liable in negligence for not having taken into account the hill or slope behind the Towers, not having designed and constructed a foundation to accommodate the lateral loads of a landslide or alternatively to have ensured that the adjacent hillslope was stable, for not having implemented that approved drainage scheme, for colluding with the First and Second Defendants to obtain a Certificate of Fitness without fulfilling the conditions imposed by the Fourth Defendant and also in nuisance as he was an unreasonable user of land.

The Fourth Defendant (Local Authority) although negligent in respect of its duties associated with building. i.e. in respect of approval of building plans, to ensure implementation of the approved drainage system during construction, and in the issue of the Certificate of Fitness, was nonetheless conferred immunity by reason of s95(2) of the Street, Drainage and Building Act.

The Fourth Defendant was however not immune in respect of its negligence in carrying out its post building functions of maintaining the East Stream. This also attracted liability in nuisance.

The Fifth Defendant (Arab-Malaysian Finance Bhd) was liable in negligence in failing to maintain the drains on its land, and in taking measures to restore stability on its land after the collapse.

The Seventh Defendant (Metrolux Properties) and its Project Manager, the Eighth Defendant, who were liable in negligence and nuisance for preventing water from flowing downhill (into their site) and instead directing water into the East Stream, when they knew or ought to have known that this would increase the volume of water and inject silt, especially where there was extensive clearing on their land, into the East Stream where it would be deposited, which would in turn (as proved) cause or contribute to the failure of the drainage system and collapse of Block 1.

The Ninth and Tenth Defendants (essentially the State Government) were not found liable due to a technical issue in respect of the particular party sued.

The Sixth Defendant (an abortive purchaser of the Arab-Malaysian Land who carried out site clearing works) was not found liable on the evidence.

Impact On Duties Of Building Professionals

A. The Architect

(i) No Defence That Engagement Was A Limited One, At The Very Least Must Ensure The Other Aspects Of The Works By Others Was Done Competently

The Architect’s defence that he was only retained to design and supervise the 3 apartment blocks, and denied that his scope extended to the drainage, earthworks and retaining walls.

This was rejected by the Court.

The Court held that the Architect must take into account the condition of the vicinity of the land upon which the building is built, as well as the land itself, must be evaluated when assessing the safety of the building.

[Also, as a matter of fact the Court found that the Architect was concerned with the vicinity as well as the building itself when he submitted the layout plan to the authorities as it included terracing and drainage of the hillslope behind Highland Towers. He must therefore ensure that this work, although carried out by others, is carried out in a competent and workmanlike manner]

(ii) No Difference In Standard Of Care For Unqualified Practitioner

Even though the Architect was in reality only an Architectural draughtsman, the Court measured his conduct against the standard of a reasonably competent Architect, holding that if a man is unqualified but holds himself out to be possessing a skill, he would be judged by the standard of a reasonably competent qualified person.

(iii) No Excuse To Say That Employer Forced Non- Compliance With Laws

Finally, the Court appears to have emphatically rejected the excuse of the Architect that he could not stop his boss from doing anything (in the context of colluding with the employer and engineer in obtaining Certificates of Fitness for the three apartment blocks without fulfilling the conditions imposed by the Local Authority and not ensuring the terracing and retaining wall were properly designed, provided for and sufficient to withstand slope failure even though he was aware it would affect the buildings he was in charge of) – the Court has clearly stated that when the law is broken, the Architect must report to the authorities – the architect must ensure that the law is followed even at the risk of being discharged.

B. The Engineer

The Engineer’s defence that he was only retained to design and supervise the structural aspects of the 3 apartment blocks, two retaining walls within the Highland Towers compound and submit plans for the drainage and two and denied that his scope extended to the drainage, earthworks.

This was rejected by the Court

The Court held that the Engineer must take into account the condition of the vicinity of the land upon which the building is built, as well as the land itself, must be evaluated when assessing the safety of the building. He should have ensured the stability of the hillslope behind Highland Towers.

His duty was not discharged by a mere belief that the terracing of the hillslopes and the retaining walls built on them were carried out by an engineer or other consultant. He ought to have inquired as to

whether this professional was qualified, and
whether what he was doing affected the safety of the Tower Blocks.
[Other Aspects of the Engineer’s negligence – gross violation of his duty of care to the purchasers in the issue of a notification to the Authorities that the approved drainage was built when only 10% was built]


Building Professionals require to consider the vicinity of the site as well as the site itself in assessing safety-particularly in regard to adjacent hillslopes.

Building Professionals cannot hide behind limited scopes of engagement-these are a matter between themselves and their employer, but the scope of their duty owed to persons likely to be affected by their services is not so limited.

Building Professionals require to ensure that others engaged to do work likely to affect the structures they have been engaged to design/supervise are competent and will carry out their work in a workmanlike manner.

If Building Professionals hold themselves out to have expertise in a particular area when they are unqualified, their conduct will be measured against the ordinarily competent qualified practitioner of such expertise.

Building Professionals must ensure the law is followed, reporting to the authorities if necessary if their clients break the law, even at the risk of being discharged by their client.
Impact On Tort Law


The Highland Towers decision becomes another Malaysian High Court decision which diverges from the approach of the English Courts and adopts the approach taken by other Commonwealth jurisdictions in allowing the recovery of “pure economic loss”, especially where sufficient proximity can be demonstrated between the negligent act and the loss. Pure economic loss is the loss related to the product itself which is defective by reason of negligence, as opposed to the loss or damage caused to the property of the Plaintiff by this defective product.


In this cause of action, a Defendant is liable if the Plaintiff can show the Defendant is responsible for a condition or activity which interferes with use or enjoyment of his land, and that condition or activity is not a reasonable user by the Defendant. The Highland Towers decision extends the law on nuisance in Malaysia by requiring an additional requirement to be established by the Plaintiff, i.e. whether the damage was of type that the Defendant could reasonably foresee, adopting a principle from an English case, Cambridge Water Co. Ltd v Eastern Countries Leather plc [1994] 1All ER 53 @ 70.

Rule In Rylands v Fletcher

In this cause of action, if a person brings unto his land and collects and keeps anything to do with mischief and it escapes, he is answerable prima facie for all the damage which is the natural consequence of the damage, regardless of whether the Defendant was negligent or not. The Highland Towers decision, following the Australian High Court in Burnie Port Authority v General Jones Pty Ltd 120 ALR 42 abandoned this as an independent cause of action and merged it into the general law of negligence.


In conclusion, the Highland Towers decision clarifies the extent and nature of the professional duties and responsibilities of Building Professionals demanded by the law, and contains important developments in tort law in Malaysia.

It remains to be seen if the Appellate Courts in Malaysia will endorse these principles.

The Judgments

Dr Benjamin George & Ors v Majlis Perbandaran Ampang Jaya and other applications
[1995] 3 MLJ 665

3 OCTOBER 1995


The applicants in this case were the developer and several residents and purchasers of blocks two and three of the Highland Towers Condominium (‘the Highland Towers’). The respondent was Majlis Perbandaran Ampang Jaya (‘the MPAJ’). The MPAJ had issued notices pursuant to s 83 of the Street, Drainage and Building Act 1974 (‘the Act’) to the applicants, which had the effect of ordering them to either repair or demolish blocks two and three of the Highland Towers and the walls on the nearby hillslopes, within three months from the date of the notices. The directions in the notices were contrary to the recommendations proposed by the Highland Towers committee, which was set up by the respondent to study the safety of blocks two and three, immediately after the collapse of block one of the Highland Towers. The applicants had actively tried to sought a solution to the Highland Towers problem, but the respondents refused to discuss the legality of the s 83 notices. This clearly ruled out any possibility that the respondent would withdraw the s 83 notices. Therefore, the applicants applied to the High Court for certiorari via O 53 of the Rules of the High Court 1980, to quash the notices on the grounds, inter alia, that the notices were unreasonable, unconstitutional, and illegal. However, the respondent argued that it had acted within its jurisdiction, and that the s 83 notices were not amenable to certiorari, as alternative appeal procedure had been provided by ss 83(3), (6), 91 and 92 of the Act.

Held, allowing the application:

(1) Section 83(1) of the Act confers a broad discretion on a local authority by allowing it to issue a s 83 notice after conducting such inquiry as it thinks fit to satisfy itself that a building is in a dangerous condition. A notice may require the owner of the building to either repair the defects or demolish the building within such period of time as it may specify. However, this discretion must be exercised in good faith, for a proper purpose, and after consideration of all the relevant factors. Further, a s 83 notice can only be directed to an ‘owner’ of a building as defined in s 3 of the Act.

(2) Both s 83(3) and (6) of the Act are not appeal provisions, as neither provides recipients of the s 83 notices with an opportunity to appeal to a higher authority against the validity of the notices. Thus, there is nothing in s 83 which provides them with an alternative statutory appeal procedure in preference to certiorari. Similarly, ss 91 and 92 also do not provide a genuine appeal procedure, as a right of appeal under the provisions only arises against a mandatory order made by the magistrates’ court. This would mean that the recipients of the s 83 notices could only appeal if the respondent had seeked for the mandatory order.

(3) An administrative decision which has failed to give adequate weight to a relevant factor of great importance or has given excessive weight to a factor of no great importance could be set aside on the ground of unreasonableness In this case, it was impossible to comply with the s 83 notices, because it was irrational to expect the applicants to do repairs on the hillslopes which they did not own, and which would have amounted to committing a trespass. Besides, three months was a wholly inadequate time period to carry out the repair or demolition works.

(4) Moreover, the directions in the notices departed from the recommendations of the Highland Towers committee, without giving any reason or explanation. This amounted to a breach of legitimate expectation rendering the s 83 notices ultra vires.

(5) Pursuant to the Act, the s 83 notices can only be served on the owner of the relevant building. In this case, as the strata titles of the Highland Towers had not been issued, the registered proprietor of the land, ie the developer, would be the owner. However, the respondent had issued the s 83 notices to the residents of the Highland Towers who were not owners for the purposes of the Act. Even if they were the owners, the s 83 notices were still ultra vires as they were not issued to all ‘owners’ of these buildings, contrary to art 8 of the Federal Constitution which states that all persons are equal before the law.

(6) Highland Properties Sdn Bhd, who was the owner for the purposes of the Act, had a duty to implement the views of the purchasers of blocks two and three of the Highland Towers. In turn, by virtue of the express and implied obligations imposed in the sale and purchase agreements between the developer and the purchasers, the purchasers might have to make contributions in order to comply with the s 83 notices. The s 83 notices must also be served on the financial institutions who had granted loans to the purchasers, as the purchasers had already assigned their rights under the sale and purchase agreements to them.

(7) It was clear that there was a failure on the part of the respondent to comply with the express and implied limitations on their statutory discretion in this case. The s 83 notices, which were illegal, had the potential to deprive the residents of blocks two and three of the Highland Towers of their apartments should the blocks be demolished. This was also contrary to art 13 of the Federal Constitution which provides that no person shall be deprived of property save in accordance with law.

Steven Phoa Cheng Loon & Ors v Highland Properties Sdn Bhd & Ors

11 AUGUST 2000


Highland Towers, constructed sometime between 1975 and 1978, consisted of three blocks 12-storey high apartments named as Block 1, 2 and 3 respectively. Directly behind the three blocks was a rather steep hill with a stream (‘the east stream’). On 11 December 1993, Block 1 collapsed. Immediately after the collapse of Block 1, the residents of Block 2 and 3 were prevented from entering their apartments by the local authority for fear of the instability of these two buildings. The purchasers/owners of Block 2 and 3 issued a writ against ten defendants: the first defendant was the developer of the three apartment blocks; the second defendant was the purported architect of Highland Towers; the third defendant was the engineer of Highland Towers; the fourth defendant was the local authority who had the jurisdiction over the Highland Towers site and the surrounding areas; the fifth defendant was the registered owner of 50 lots of bungalow land (‘the Arab Malaysian land’) directly at the rear of Highland Towers; the sixth defendant (Tropic) was a company that carried out clearing works on the Arab Malaysian land; the seventh defendant was the registered owner of a piece of land (‘the Metrolux land’) situated on top of a ridge just above the Arab Malaysian land and at the material time was under development; the eight defendant was the provider of management services to the seventh defendant to develop the Metrolux land; the ninth defendant was the state government of Selangor; and the tenth defendant was the Director of Land and Mines of the State of Selangor.

The plaintiffs’ claim was for damages caused jointly and/or severally by the acts and/or omissions of the defendants, their servants and/or agents in causing and/or contributing to the collapse of Block 1 and thereby forcing the plaintiffs to evacuate and abandon Block 2 and 3. The cause of action relied on by the plaintiffs against the defendants were negligence, nuisance and the liability under Rylands v Fletcher.

There were two conflicting theories advanced on the cause of the failure of Block 1. Supporting the plaintiffs’ contention was Dr Weeks and on the side of the fifth defendant was Prof Simons. The significance of these two theories was the belief that it would affect the liabilities of the parties, particularly of the first and fifth defendant. If Dr Weeks’ version was accepted, then it was contended that the cause of failure emanated from the fifth defendant’s land. Professor Simons, on the other hand, insisted that it originated form the first defendant’s property.

The defendants raised the following preliminary issues: (i) plaintiffs 44 to 73 had no right to bring the action against the defendants by virtue of s 4(3) of the Civil Law Act 1956 since their rights had been assumed by the financial institutions in favour of which a loan agreement cum assignment had been executed; and (ii) the claim of the plaintiffs could not be maintained because it was a claim for pure economic loss, the two apartments being the defective products.
The ninth and tenth defendants raised the following preliminary points: (i) citation of the wrong party — the ninth defendant should be the State Director; and (ii) particular officer or officers not named — by the provision of ss 5, 6(1), 6(4) and 18 of the Government Proceedings Act, the particular officer or officers in the government who committed the tortuous wrong must be identified, otherwise the claim against the tenth defendant must fail.


(1) With recognition by such high authority of such loan agreement cum assignment to be an equitable charge, the court saw no reason why the word ‘charge’ in s 4(3) of the Civil Law Act should not include equitable charge of this nature. For after all, this equitable charge was specie of a charge. Thus when this instrument of assignment purported to be by way of a charge, the effect of s 4(3) of the Civil Law Act was no longer applicable. Further, after perusing the loan agreements cum assignments, the court could not interpret them to be absolute assignments by the plaintiffs to the financial institutions. Though the word ‘absolute’ appeared in the documentation of the loan agreements cum assignments, there were also other clauses to show that the rights and interests in the sale and purchase agreements so assigned have not been transferred to the assignors. Besides, by the principle of equity of redemption, the plaintiffs were also able to maintain their right to sue (see pp 220G–221A, F).

(2) After due consideration, the court was more inclined to adopt Prof Simons’ interpretation that the landslide that brought down Block 1 of Highland Towers was a rotational retrogressive slide emanating from the High Wall behind the second tier car park. The court found that water must have been a major factor in causing the collapse of the high wall and the landslide that followed (see pp 234G, 235D).

(3) When the second defendant had represented himself as a qualified architect to all and sundry, as displayed by his actions, then he must be judged according to the character he had assumed. At the time when this defendant exercised his duty as an architect for the Highland Towers project, he must have foreseen that the apartments he built would be sold, and purchasers, their servants and/or agents would be occupying them. Thus these purchasers would be closely and directly affected by his acts and/or omissions and for this, he must have or ought to have them in contemplation when he was directing his mind to his acts and/or omissions. By this, the court found a duty of care existed between the second defendant and the plaintiffs and from the facts of the case, it was obvious that the second defendant had breached his duty of care to the plaintiffs (see pp 241A, C–E, 243C).

(4) When you had a hill so close and acute then the third defendant should have reasonably foreseen, judging by professional standard as an engineer responsible for the structure of Block 1, the danger of a landslide producing a lateral load against the foundation of the building. For this, he should have exercised care to either design and construct a foundation to accommodate lateral load or ensure that the slope was reasonably stable. Failure to do so was a breach of his duty of care he owed to the plaintiffs since his duty was to ensure the safety of the buildings he designed and built (see p 246G–H).

(5) As a general rule, an employer of independent contractor is not liable for the default or negligence of such a contractor. But here the plaintiffs were focusing on the appointment of such personalities, not after they were appointed. This means that before their appointment, there was a duty placed upon the first defendant to vet through them to ensure that they were competent and possessed such skill for the task they were employed to undertake. This involved inquiries and investigations into their credentials and qualifications. Obviously, these were not done. Despite being notified by the second defendant that he was not a qualified architect, the first defendant proceeded to engage him and even allowed him to appoint the third defendant as the consultant engineer for the project. This was surely negligent on the part of the first defendant (see pp 248H–249B).

(6) When implementing works of terracing of the slope and construction of retaining walls and drains on both the Arab Malaysian land and the Highland Towers site, the first defendant must have reasonably foreseen that such works, if insufficient and ineffective, would cause the collapse of Block 1 and result in damages to the plaintiffs, who were its neighbours under the principle of negligence. The retaining walls and the drainage system had been proved to be insufficient and inadequate. The court must conclude that the first defendant had breached his duty of care to the plaintiffs (see p 249B–E).

(7) Like the second and third defendants, the first defendant was liable for nuisance as one of the creators of the nuisance by its acts and/or omissions. Further, as an owner of the Highland Towers site, it had not been a reasonable user of its land for it failed to maintain the drainage system and the retaining walls resulting in the damages suffered by the plaintiffs who were its neighbours (see p 251B–C).

(8) Judging from the facts as disclosed in the chronology of events, the fourth defendant was negligent of the wrongs as alleged by the plaintiffs. However, since the acts of the fourth defendant were within those specified activities under s 95(2) of the Street, Drainage and Building Act, immunity applied to the fourth defendant (see pp 252H, 255E–F).

(9) However, the immunity did not apply to the fourth defendant for acts/omissions committed post-collapse. Despite the pressing need and the obvious knowledge of the urgent requirement for a master drainage plan to secure the stability of the slope so as to ensure the safety of the two apartment blocks, the fourth defendant did nothing. This was certainly inexcusable and definitely a breach of duty of care owed by the fourth defendant to the plaintiffs (see pp 256H–I, 259A–B).

(10) By the acts and/or omissions of the fourth defendant, the court also found that the fourth defendant was an unreasonable user of its land in failing to maintain the stream post-collapse which was under its care. Its acts and/or omissions were foreseeable to cause a damage to the plaintiffs — its neighbours. For this, the court found the fourth defendant was also liable to the plaintiffs for nuisance (see p 259E–F).

(11) Since it was already decided that it was due to a landslide caused primarily by water which emanated from the damage pipe culvert and the inadequate and unattended drains on the fifth defendant’s land, then the plaintiffs had sufficiently proved that the causa causan of the collapse of Block 1 leading to the forced evacuation of the plaintiffs from Block 2 and 3 was due to the acts and/or omissions of this defendant in not maintaining these water-courses. From the factual circumstances as disclosed, the court found that the fifth defendant could reasonably foresee that by its acts and/or omissions in failing to take care of its land, it would cause a land slide that would destroy Block 1 and forced the abandonment of Block 2 and 3 (see pp 261H–I, 262C–D).

(12) Given the circumstances of this case and applying the common law principle to nuisance, the court was convinced that the fifth defendant caused an actionable nuisance to the plaintiffs (see p 267B–C).

(13) Judging by the facts, the court did not find that the sixth defendant was negligent or committed nuisance. There was no evidence advanced to link the acts of this defendant in excavating and clearing Arab Malaysian land to the cause of the landslide that tumbled Block 1 (see p 268C–D).

(14) The assertion of the seventh and eight defendants during submission that they should not be made responsible for the acts of their independent contractors was an after thought for it was never pleaded in the statement of defence. Further, even if this issue was allowed to be raised, the defendants were not exempted from the liabilities for the acts of their independent contractors. The factual situation in the present case showed that it fell within the exception to the general rule, ie non-delegable duty covering cases involving extra hazardous acts or omissions (see pp 276G, 277D–E).

(15) As property developer and/or manager of development projects on a hill, the seventh and eight defendants must have known or ought to have known that by diverting watercourses on their land to the east stream, they would increase the volume of discharge to this outlet. With an extensive area of their land denuded of trees, they must have foreseen that water flowing over this area would carry with it eroded soil and silt which would be deposited down stream. And as proved, these caused or contributed to the collapse of Block 1 and forced evacuation of Block 2 and 3 (see p 280F–G).

(16) In the factual matrix of this case, the water at the Metrolux site was naturally on the land but the defendants had artificially erected barriers on their land to redirect its natural flow path into the east stream which consequently caused the damage suffered by the plaintiffs. Such acts of the defendants were closely and directly connected to the damage and for this, the seventh and eight defendants must be liable to the plaintiffs (see p 281H).

(17) For the purpose of this case, in respect of claims arising out of rivers, streams or watercourses, very little difference was made since the State Director, who was the tenth defendant, was already a party to this action. However concerning matters arising out of the ownership and/or occupier of the surrendered lands, the situation was different. The plaintiffs had not in their pleadings alleged that the tenth defendant was the person being sued this particular aspect of the claim. The plaintiffs’ statement of claim repeatedly and distinctively asserted that the tenth defendant was brought in as a party to this suit ‘by virtue of the fact that the property in stream and watercourses on Arab Malaysian land and its surrounding was vested in the state authority of Selangor’; never as a State Director to the surrendered lands. Thus, the claim of the plaintiffs against the ninth defendant must failed in respect of drainage matters but maintainable against the tenth defendant. But for the surrendered lands, the plaintiffs’ claim must fail against both defendants (see pp 284G–285A).

(18) The statutory provision implies a need to identify and distinguish the officer or officers concerned before the plaintiffs can proceed with attributing liability to the government. In the situation at hand, only the drainage and irrigation department was named in respect of matters related to drainage. Such defects were too serious and fundamental for such proceedings against the government to succeed; it must fail for non-compliance of the legislative provisions laid down for such action against a state government. By this, the plaintiffs’ claim against the ninth and tenth defendants must fail (see p 287A–D).

(19) On the issue of ‘pure economic loss’, following Dr Abdul Hamid Abdul Rashid & Anor v Jurusan Malaysian Consultants [1997] 3 MLJ 546, the court held that claim for pure economic loss can be maintained against the defendants (see p 244H).

(20) From the evidence tendered, the court was without doubt that all defendants, except number sixth, ninth and tenth, were joint tortfeasors in causing the same damage to the plaintiffs. For this, contribution could be recovered from each other (see p 288A).


Malaysian Law Journal

UPDATED REPORT: 18th February 2006

From the principles laid down in the Court of Appeal judgment, the Highland Towers decision clarifies the extent and nature of the professional duties and responsibilities of Building Professionals demanded by the law, and contains important developments in tort law in Malaysia.

Howeve this decision of the Court of Appeal remains subjected to the Highest Court, i.e. the Federal Court, whether they would endorse these principles.

Final Judicial Decision

Today, 18th February 2006 frontpage headline the Federal Court's DecisionFederal Court: MPAJ has full immunity from claims

Local councils cannot be held liable for losses suffered by anyone should a building collapse, the Federal Court has ruled. The court said this when it held that the Ampang Jaya Municipal Council (MPAJ) was not liable for losses suffered by 73 residents of two blocks of the Highland Towers condominium who had to evacuate after the collapse of Block One 13 years ago, killing 48 people.

The three-member panel presided by Chief Judge of Sabah and Sarawak Justice Steve Shim Lip Kiong and Federal Court judges Datuk Abdul Hamid Mohamed and Datuk Arifin Zakaria ruled that the MPAJ was not liable in the pre-collapse period as well as post-collapse period of Block One. They said local authorities such as the MPAJ were given full immunity under Section 95 (2) of the Street, Drainage & Building Act 1974 (Act 133) from claims for the pre-collapse period.

The court was unanimous in allowing the MPAJ’s appeal to set aside the Court of Appeal’s decision holding the MPAJ 15% responsible for the pre-collapse period. As for the post-collapse liability, it dismissed with a 2-1 majority the cross-appeal by the 73 residents of Block Two and Three against the Court of Appeal’s ruling that the MPAJ was not liable for losses suffered during the post-collapse period.

Justice Shim gave a dissenting judgment.

Justice Abdul Hamid Mohamad said that if the local councils were made liable, it would open the floodgates to further claims for economic loss, and this would deplete the council’s resources meant for the provision of basic services and infrastructure. “Projects will stall. The local council may go bust. Even if it does not, is it fair, just and reasonable that taxpayers’ money be utilised to pay the ‘debts’ of such people? In my view, the answer is no,” he said.

In overturning the trial judge’s decision to allow the post-collapse claims, Justice Abdul Hamid said vandalism followed every disaster, natural or otherwise, in undeveloped, developing or developed countries. “Recent events showed that even the most-powerful military and the best-equipped police force in the richest and most-developed country in the world were unable to prevent it,” he said.

“In my view, the provision of basic necessities for the general public has priority over compensation for pure economic loss of some individuals, who are clearly better off than the majority of the residents in the local council area,” he said.

He said a local council has an endless list of duties to perform for its residents and relied mainly on assessment rates and fees for licences.

Justice Arifin concurred with Justice Abdul Hamid’s findings.

In his dissenting judgment on the post-collapse liability, Justice Shim said:

"The MPAJ could not seek shelter in Section 95(2) of the Street, Drainage and Building Act because this was a case of negligence in failing to formulate and implement the master drainage plan so as to ensure the stability and safety of the adjacent Blocks Two and Three."

He said there was an assumption of responsibility by the MPAJ to do what it had promised.

“I do not think it would be in the public interest that a local authority such as the MPAJ should be allowed to disclaim liability for negligence committed beyond the expansive shelter of Section 95(2) or other relevant provisions of the Act nor would it be fair, just and reasonable to deprive the respondents of their rightful claims under the law,” he said.

In 2000, High Court Judge James Foong ruled for the 73, and apportioned liability as follows: Arab-Malaysian 30%, Metrolux and MBf Property Services together 20%, Highland Properties 15%, MPAJ 15%, draughtsman Wong Ting San 10% and engineer Wong Yuen Kean 10%.


The case is put to rest. The local authorities received the legal mandate that they are fully immune to liabilities. Even in committing reckless negligence, they will be shielded by the law under Section 95(2). Presumably, they could be care-free in all their ways of doing things and approving anything they deem fit in their full discretion, without the need to consider any threats to life, or to others.

It is the sad day for the Rule of Law in Malaysia.

Only if, and only if, we still can take the case to the UK Privy Council, can be hope to seek natural justice and the fundamental Rule of Law.

I Cry for You, Malaysia!!!