SYNERGY ARTICLES
7 April, 2022
A) Introduction
The function of the Board of Engineers
Malaysia (BEM) under Section 4 of the
Registration of Engineers Act 1967 (revised
2015) includes, amongst others, “to fix from
time to time with the approval of the
Minister the scale of fees to be charged by
registered Engineers and Engineering
consultancy practices for professional
engineering services rendered”.
P.U.(B) 548 and P.U.(B) 288 were then
published by BEM to fix the scale of fees to
be charged by registered Professional
Engineers for professional advice or services
rendered.
P.U.(B) 288 applies to housing development
works for buildings not more than four
storeys high and P.U.(B) 548 applies to
housing development works exceeding
four storeys high and all other buildings.
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Synergy Building Solutions Sdn Bhd
By Ir. Ang Kok Keng
& Lau Lee Way
B) Quantum Meruit
Quantum Meruit is contained within Section
71 of Contract Act 1950 reproduced as follows: -
71. Obligation of person enjoying benefit
of non-gratuitous act
When a person lawfully does anything for
another person, or delivers anything to
him, not intending to do so gratuitously,
and such other person enjoys the benefit
thereof, the latter is bound to make
compensation to the former in respect of,
or to restore the thing so done or delivered.
ILLUSTRATIONS
(a) A, a tradesman, leaves goods at B’s
house by mistake. B treats the goods as his
own. He is bound to pay A for them.
(b) A saves B’s property from fire. A is not
entitled to compensation from B, if the
circumstances show that he intended to
act gratuitously.
 SYNERGY ARTICLES
C) Circumstances
The next question would be under what
circumstances is a quantum meruit claim
applicable to an Engineering Consultancy
Fee claim.
In WEA Engineers & Associates Sdn Bhd vs
Grandstep Development Sdn Bhd [2020] 1
LNS 765, the Court states the following in
orbiter: -
[30] The services rendered by the Plaintiff
here have been partially performed only.
[31] Unless otherwise provided in the
contract, this will generally attract the
application of quantum meruit in
principle. Quantum meruit is codified in
action 71 of the Contracts Act 1950.
[32] The quantum meruit assessment of
remuneration of professional services
rendered may be done based on the
product of the time spent at a reasonable
hourly charge rate.
Case Law
Parties to the Case
A - Employer
B - Unregistered Engineering Consultancy Firm
C - Registered Professional Engineer with BEM
D - Registered Sole Proprietor Firm with BEM
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7 April, 2022
Synergy Building Solutions Sdn Bhd
Quantum Meruit and
Engineering Consultancy Fee
Case Illustration
A appointed B to provide engineering
consultancy services for a Project. A
subsequently authorises C, trading under the
firm name of D (a sole proprietor) through a
letter of authorisation to carry out all matters
and preparations relating to authorities’
submissions, and procuring relevant and
timely approvals for the project. B carried out
preliminary and preparatory works but the
submission for development order was not
made. The entire project was cancelled, and
B submitted invoices to A.
B is not a registered entity with the Board of
Engineers Malaysia (BEM) but D is a
registered entity with BEM. B contended
that B and D are one and the same entity by
virtue of C having been the directing mind of
B and the sole principal of D. B and D are
alter egos of each other as compared to the
case of The Government of Sarawak v Sami
Mousawi-Utama Sdn Bhd [1998] 4 CLJ 175 as
the alter egos are both unregistered
individuals.
In this case, C, who performed part of the
consultancy services is a registered
professional engineer. The court is satisfied
and finds that both C and the Directors of A
knew that C, probably for tax purposes,
desired to utilise B to carry out the
engineering services but C would act as the
submitting qualified person required by the
relevant by-laws. Otherwise, it is inexplicable
why D is not the contracting party with A at
the first instance.
 SYNERGY ARTICLES
Section 7A of the Registration of Engineers
Act (REA) provides that only a body
corporate which has a permit from the
relevant governing professional bodies can
recover “in any court any fee, charge or
remuneration for any professional advice or
services”. The Court finds that the applicable
law, to wit, Section 7A of the REA as
interpreted in the Sami Mousawi case is
strict and hence, B, being an unregistered
entity is not entitled to recover any
remunerations including fees,
disbursements, and service tax pursuant to
the Contract.
However, the Court finds and held that C
being a registered professional engineer is
entitled to claim for the engineering
consultancy services rendered by him
personally to A contractually as required
pursuant to the Contract as well as the Letter
of Authorisation read together or
alternatively, entitled to be remunerated
based on quantum meruit pursuant to
Section 71 of the Contract Act 1950. As the
project has been cancelled, the Court finds
and held that the appropriate mode of
remuneration for C in the circumstances is
based on his time costs pursuant to Clause 7
of the Contract which states that “The
consultant engineer shall claim cost on
abortive works, if any, based on time scale
involved at reasonable current market rate”
- Iris Corporation Berhad v. S&J Partners Sdn
Bhd [High Court of Malaya at Kuala Lumpur
Civil Suit No. WA-22C-42-06/2020] -
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7 April, 2022
Synergy Building Solutions Sdn Bhd
Quantum Meruit and
Engineering Consultancy Fee
This indicates the following circumstances
that give rise to a quantum meruit claim in
an Engineering Consultancy Fee claim: -
1) when the services have been partially
performed unless otherwise provided
under the contract; and
2) when a Professional Engineer has no
direct contractual relationship with the
Employer, and the Engineering
Consultancy Firm is not registered with
BEM as required under Section 7A of REA.
D) Calculations
The Court in paragraph [32] of WEA
Engineers & Associates Sdn Bhd vs
Grandstep Development Sdn Bhd [2020] 1
LNS 765 states that: -
“quantum meruit assessment of
remuneration of professional services
rendered may be done based on the
product of the time spent at a reasonable
hourly charge rate”.
“Time spent at a reasonable hourly charge
rate” is similar to Part B of P.U.(B) 548 which
provides for the remuneration for the
professional services rendered to be based
on “Payment on the Basis of Salary Cost
Times Multiplier”.
“Payment on the Basis of Salary Cost Times
Multiplier” would be the salary cost times the
multiplier in respect of the time spent by
partners, consultants and technical
supporting staff excluding secretarial and
administration staff in rendering the
professional services [see Article 1(2) Part B
P.U.(B) 548].
SYNERGY ARTICLES
Article 3 of (Scale of Fees) of P.U.(B) 548
(Notification of Scale of Fees) provides the
following definitions: -
“multiplier” means a factor derived from
the elements covering -
(a) the annual salary;
(b) the fringe benefits including benefits
from bonuses, the Employee’s Provident
Fund, Social Security Organisation, staff
savings fund, subscriptions to
professional institutions, leave, medical
aid and insurances, seminars,
conferences and workshops;
(c) the office administrative charges and
expenses, including rentals, telephone
and telex, facsimile and postal charges,
stationery, subscriptions to journals,
promotion, training and scholarships,
transport costs, legal and audit fees, bank
charges and idle time; and
(d) the profits;
and, in the case of site staff recruited
especially for the project, the multiplier
shall be derived from the elements
covering the annual salary, gratuity,
benefits from the Employee’s Provident
Fund and Social Security Organisation,
medical aid, insurance, overhead costs and
profit only;
E) Conclusion
Under the Law of Malaysia, it is a strict
requirement for a Professional Engineer
and/or Engineering Consultancy Firm to be
registered with the Board of Engineers
Malaysia under Section 7 and 7A of the
Registration of Engineers Act 1967 to
practise, carry on business or take up
employment which requires him to carry out
or perform professional engineering services.
Failing which, the unregistered personnel or
firm is not entitled to any remuneration for
the engineering consultancy services
rendered pursuant to the Contract.
7 April, 2022
Synergy Building Solutions Sdn Bhd
Quantum Meruit and
Engineering Consultancy Fee
“salary cost” means the annual salary of a
person employed by the consulting engineer
divided by 1800 (this being deemed to be the
average annual total of effective working
hours of an employee) and multiplied by the
number of working hours spent by the
person in performing any of the services in
respect of which payment is to be made to
the consulting engineer upon the basis of
salary cost; and for the purpose of this
definition, the annual salary of a person for a
period of less than a full year shall be
calculated prorate to the person’s salary for
such lesser period;
Quantum Meruit = ∑[Salary x Month x Multiplier]
Note:
∑ - Total sum for partners, consultants and
technical supporting staffs involved in the
project
Only in certain circumstances as illustrated
above would entitle that person or the firm
to a quantum meruit claim for the services
rendered.
Finally, for a quantum meruit claim to
succeed, it is pertinent to keep
contemporaneous records such as staffs’
salary and time sheets for the said project.
These contemporaneous records will provide
the data as well as the supporting
documents required for a successful
quantum meruit claim.
*end*
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SYNERGY ARTICLES
7 April, 2022
Synergy Building Solutions Sdn Bhd

Quantum Meruit and

Engineering Consultancy Fee
References
[1] WEA Engineers & Associates Sdn Bhd vs Grandstep Development Sdn Bhd [2020] 1 LNS
765
[2] Iris Corporation Berhad v. S&J Partners Sdn Bhd [High Court of Malaya at Kuala Lumpur
Civil Suit No. WA-22C-42-06/2020
[3] The Government of Sarawak v Sami Mousawi-Utama Sdn Bhd [1998] 4 CLJ 175
[4] P.U.(B) 548 (Notification of Scale of Fees)
[5] P.U.(B) 288 (Notification of Scale of Fees for Housing Development)
[6] Registration of Engineers Act 1967 (Revised 2015)
[7] Contracts Act 1950
[8] Udachin Development Sdn. Bhd. v Datin Peggy Taylor [1984] 1 CLJ (Rep) 403

Article By:

Ir. Ang Kok Keng Lau Lee Way

B.Eng (Civil) (Hons) Class 1, M.Eng (Eng. Mngt.) M.Eng (Civil) (Hons.) Class 1
Dip. Int. Arb., P.Eng, MIEM, FCIArb, FMIArb,
MMSAdj, MSCL, AMAE, Adjudicator (AIAC),
Mediator (MMC)
Expert Determiner (TAE)
Arbitrator (AIAC, IEM, THAC)

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