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EXEMPLARY DAMAGES – STATUTORY BODY DUTY – DAMAGES – OBTAINING APPROVAL

1. Summary and Facts

In Big Man Management Sdn Bhd v Tenaga Nasional Bhd [2025] 5 MLJ 290, the Federal Court reinstated the High Court’s decision awarding special and exemplary damages against Tenaga Nasional Berhad (“TNB”) for wrongful disconnection of electricity supply to an ice-making factory.

The appellant, Big Man Management Sdn Bhd, operated the factory owned by Ice Man Sdn Bhd. TNB had disconnected the factory’s electricity twice, alleging meter tampering, despite the tampering being rectified. The disconnections caused business losses and prompted Big Man to procure generators and diesel to continue operations.

The High Court awarded both special and exemplary damages, but the Court of Appeal reversed the award, holding that special damages were not strictly proven and exemplary damages were unavailable in contract. Big Man appealed to the Federal Court.

2. Legal Issues

• Whether exemplary damages are claimable by a consumer of electricity in a claim for breach against TNB.
• What principles should guide the assessment of quantum for exemplary damages.
• What is the correct interpretation of “strictly proved” and the standard of proof for special damages?
• Whether exemplary damages can be awarded in a breach of contract claim.

3. Court’s Findings

• The Federal Court allowed Big Man’s appeal and restored the High Court’s finding of liability.
• Special Damages – “Strict proof” refers only to proof on a balance of probabilities; Big Man successfully established losses on this standard.
• Exemplary damages may be awarded against a statutory body, including TNB, when it exercises monopoly powers.
• The Court granted RM100,000 in exemplary damages, stressing proportionality and case-specific assessment rather than fixed percentage formulas.
• General damages were not allowed because the appellant did not appeal the dismissal of that portion of the claim.

4. Practical Implications

• “Strictly proved” does not impose a higher evidentiary burden; it simply requires clear, credible proof of special damages.
• Statutory bodies with monopoly powers (such as TNB) may face exemplary damages for oppressive or arbitrary conduct.
• Exemplary damages in contract remain limited but may be awarded where there is independent wrongful conduct, including breach of statutory duty.
• TNB cannot use electricity disconnection as a method of debt recovery, reaffirming electricity supply as a public necessity.

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