Contractor Ordered to Pay RM2.02 Million for Damaging Underground Cables: High Court Explains Negligence and Compensation
Case Analysis: TM Technology Services Sdn Bhd v Mangkubumi Sdn Bhd [2026] CLJU 3390
Shah Alam High Court | Judgment dated 10 September 2026
1. Introduction: A Construction Accident Resulting in a RM2 Million Claim
Can a construction contractor be held responsible for millions of ringgit in compensation after accidentally damaging underground telecommunications cables?
More importantly, can the affected company claim not only the cost of repairing those cables but also subsequent reinstatement works, labour expenses, materials and warehouse handling charges?
These were among the important questions considered by the Shah Alam High Court in TM Technology Services Sdn Bhd v Mangkubumi Sdn Bhd [2026] CLJU 3390.
The High Court ruled in favour of TM Technology Services Sdn Bhd (“TM”) and ordered Mangkubumi Sdn Bhd (“Mangkubumi”) to pay RM2,020,685.25 in damages, together with interest and legal costs.
The judgment provides important guidance on negligence claims in Malaysia, particularly disputes involving construction works, damaged infrastructure and substantial repair expenses.
We consider this decision particularly relevant to contractors, developers, utility providers and business owners who may be involved in disputes concerning property damage and financial compensation.
2. What Happened? Underground Cables Damaged During Construction Works
On 8 November 2016, underground telecommunications cables and associated infrastructure were damaged during excavation and/or grouting works near the junction of Jalan Semangat and Jalan Dato’ Abdul Aziz in Petaling Jaya, Selangor.
The works were carried out by Mangkubumi and/or its subcontractor.
The damaged infrastructure included fibre-optic cables, copper cables and underground ducts used to house and protect telecommunications cables.
The damage caused an interruption to telecommunications services, requiring TM to undertake emergency restoration works followed by more extensive permanent repairs.
TM subsequently claimed RM2,020,685.25 from Mangkubumi for the losses allegedly arising from the incident.
Mangkubumi disputed the claim on two principal grounds.
First, it argued that the occurrence of damage did not automatically establish negligence.
Second, it challenged the substantial repair costs claimed by TM, arguing that some subsequent works were unrelated to the original incident or amounted to upgrading rather than necessary repairs.
Mangkubumi maintained that the reasonable compensation should be approximately RM147,000, or alternatively no more than RM200,000.
The Court therefore had to determine whether Mangkubumi was negligent and whether TM had sufficiently proved its RM2 million claim.
3. Can a Contractor Be Liable for Accidentally Damaging Underground Cables?
Under Malaysian negligence law, a claimant generally needs to establish three essential elements:
- The defendant owed the claimant a duty of care.
- The defendant breached that duty by failing to exercise reasonable care.
- The breach caused damage or loss to the claimant.
Importantly, an accident does not automatically mean that someone was legally negligent.
The claimant must establish negligence based on the available evidence.
In this case, the High Court found that Mangkubumi owed TM a duty to exercise reasonable care when conducting excavation and grouting works.
The Court explained that contractors working in established urban areas should reasonably anticipate that underground infrastructure, including telecommunications cables and utility pipes, may exist beneath the ground.
Accordingly, contractors should take reasonable precautions to identify and protect such infrastructure before commencing excavation.
Why did the Court find negligence?
One important issue concerned the utility-mapping information relied upon by Mangkubumi.
The Court noted that the mapping information originated from approximately 2012, several years before the incident in November 2016.
The document produced at trial was also undated and unsigned.
Although historical utility drawings may be useful, the Court found that there was insufficient evidence of reasonable verification of the underground infrastructure at the actual excavation location immediately before the works.
The Court also considered the absence of satisfactory contemporaneous records showing that appropriate utility-detection measures or trial excavations had been carried out.
Furthermore, a defence witness identified Mangkubumi as the contractor responsible for the damage.
Taking the evidence as a whole, the Court concluded that Mangkubumi had failed to exercise reasonable care.
Our Firm’s Analysis
This judgment highlights that relying on old construction drawings or outdated utility maps may not be sufficient to demonstrate reasonable precautions.
For construction companies, proper site investigations, utility verification, documentary records and supervision may become crucial evidence when defending a negligence claim.
However, the requirement remains one of reasonable care according to the circumstances. The judgment does not mean every instance of accidental damage automatically establishes negligence.
4. Can a Main Contractor Escape Liability by Blaming Its Subcontractor?
Another important issue was the involvement of a subcontractor in the excavation works.
In construction projects, it is common for the main contractor to appoint subcontractors to perform specialised work.
However, the High Court explained that the main contractor may still owe an independent duty of care concerning how the works are organised, coordinated and supervised.
In particular, a main contractor may itself be negligent if it fails to ensure that appropriate safeguards, utility mapping, coordination or supervision are in place.
Therefore, the mere involvement of a subcontractor does not necessarily relieve the main contractor of its own legal responsibilities.
Our Firm’s Analysis
This principle is important to developers, main contractors and subcontractors.
A party cannot necessarily avoid liability simply by asserting that the physical act causing the damage was performed by another contractor.
The Court will examine the actual responsibilities of each party, including who controlled the works and whether the necessary precautions were taken.
Nevertheless, liability is not automatically imposed on every main contractor for every act of its subcontractor. The legal duties and factual circumstances must still be established.
5. Can a Company Claim Both Temporary Repairs and Permanent Restoration Costs?
One of the most significant aspects of this case concerned the distinction between emergency repairs and permanent restoration works.
Mangkubumi argued that certain fibre-optic cables had already been installed by 23 November 2016, shortly after the incident.
It therefore disputed whether substantial additional civil and ducting works carried out later were genuinely necessary.
However, TM explained that telecommunications services had to be restored urgently to minimise disruption.
The initial restoration was temporary.
The repaired cables were not equivalent to fully restored permanent infrastructure, and further works were required to reinstate the ducts and accommodate permanent replacement cables.
The High Court accepted this explanation.
The Court recognised that emergency restoration and permanent reinstatement may constitute separate stages of one continuous repair process.
The fact that telecommunications services had been restored temporarily did not mean all necessary repair works had been completed.
The importance of the “But For” Test
In considering whether the subsequent expenses were caused by the incident, the Court applied the established causation principle commonly known as the “but for” test.
In simple terms, the question was:
Would TM have incurred these repair and restoration expenses if Mangkubumi had not caused the damage?
On the evidence, the Court was satisfied that the emergency repairs, subsequent duct reinstatement, civil restoration, materials and associated expenses resulted from the original incident.
There was no evidence of a separate intervening incident necessitating the same restoration exercise.
Our Firm’s Analysis
This aspect of the judgment is relevant beyond telecommunications disputes.
For example, where a contractor damages a building, pipeline, electrical installation or other property, the injured party may need to undertake temporary measures to prevent further losses before permanent rectification can be completed.
Both categories of expenditure may be recoverable if they are reasonably necessary, sufficiently proved and causally connected to the defendant’s wrongdoing.
The key consideration is not simply when the repair works occurred, but why those works were necessary.
6. How Are Special Damages Proved in Malaysian Courts?
In negligence claims involving property damage, the claimant may seek compensation for actual financial losses.
Such losses are commonly referred to as special damages.
However, Malaysian law requires special damages to be specifically pleaded and proved.
A claimant cannot simply present an estimate or demand a substantial sum without adequate supporting evidence.
In this case, TM supported its claim through multiple categories of documents and witness testimony.
The documentary evidence included contractor invoices, purchase orders, Goods Issue Notes, work-completion records, payment advices, material records and photographs.
TM also called witnesses to explain the restoration works, materials used and expenses incurred.
The High Court found that the combination of documentary evidence and credible oral testimony was sufficient to establish the losses claimed.
Are receipts and timesheets always necessary?
Mangkubumi challenged certain labour charges because individual attendance records, timesheets and punch cards were not produced.
However, the Court accepted the explanations provided by TM’s witnesses concerning overtime and personnel involvement.
The Court considered that the absence of every underlying record did not necessarily defeat a claim where the expenses were otherwise sufficiently supported by business records and credible testimony.
Similarly, the Court considered the Goods Issue Notes together with other supporting documentation rather than examining each document in isolation.
Our Firm’s Analysis
This decision demonstrates that proof of special damages must be evaluated by considering the totality of the evidence.
While invoices, receipts and contemporaneous records are important, the absence of a particular document does not invariably mean that the entire claim must fail.
Nevertheless, claimants should preserve as much supporting documentation as possible. Courts will still assess whether the claimed losses are genuine, reasonable and attributable to the relevant wrongdoing.
7. Can Warehouse Charges and Internal Operational Costs Be Claimed as Damages?
One particularly interesting aspect of the judgment concerned TM’s claim for warehouse and handling charges amounting to RM454,749.53.
Mangkubumi challenged this component on the basis that the charges were substantial and that the costing methodology had not been sufficiently explained.
TM argued that maintaining telecommunications materials in warehouses involved genuine operational expenditure.
Its witnesses explained that the costs arose from maintaining warehouse facilities, handling materials and ensuring that emergency stock was available for immediate deployment.
The High Court accepted the explanation in the circumstances of the case.
The Court recognised that maintaining emergency inventory has an economic cost and that the fact that materials were already held in stock did not necessarily mean their storage, handling and deployment were cost-free.
Importantly, the Court considered the overall supporting evidence and the allocation of those expenses to the restoration works.
Does this mean all overhead expenses can be claimed?
Not necessarily.
The decision does not establish that every company can automatically recover its general business overheads after suffering property damage.
A claimant must still prove that the relevant expenses are properly attributable to the incident and sufficiently supported by evidence.
Our Firm’s Analysis
This finding may be especially important for infrastructure operators, manufacturers, logistics businesses and companies maintaining substantial inventories.
Where operational resources are deployed to respond to another party’s negligence, certain associated expenses may potentially be recoverable.
However, accounting records, costing methodology and credible explanations remain important in establishing such claims.
8. Can a Defendant Challenge Repair Costs as Excessive or Unnecessary?
Mangkubumi contended that some of TM’s later works were unnecessary upgrades or improvements.
This raised the legal principle of betterment.
Generally, damages are intended to compensate the injured party, not place that party in a better position than it would have occupied had the wrongdoing not occurred.
For example, a claimant should not ordinarily be able to charge a defendant for an unrelated improvement to its property and describe that expenditure as a repair.
However, in this case, the High Court found insufficient evidence that the disputed works constituted unrelated upgrading.
The Court accepted TM’s explanation that the works were necessary for rectification and reinstatement.
Mangkubumi also proposed alternative repair costs of approximately RM147,000 and RM200,000.
The Court declined to adopt those figures because they did not sufficiently reflect the actual restoration process and were not supported by an independent technical assessment of the reinstatement exercise.
The Court emphasised the distinction between questioning a claimant’s expenses and establishing a credible alternative assessment.
Our Firm’s Analysis
A defendant facing a substantial property damage claim should carefully scrutinise the costs claimed.
However, merely alleging that the repair costs are excessive may not be sufficient to defeat an otherwise well-supported claim.
Depending on the circumstances, independent engineering, quantity surveying or accounting evidence may assist in determining whether particular costs were necessary, reasonable or genuinely related to the damage.
Conversely, claimants should be prepared to explain why the repair works and associated expenditure were reasonably required.
9. The High Court’s Decision: RM2,020,685.25 Awarded
After evaluating the evidence, the High Court found that TM had successfully established negligence, causation and the amount of its losses.
The Court ordered Mangkubumi to pay:
| Award | Amount |
|---|---|
| Damages | RM2,020,685.25 |
| Judgment interest | 5% per annum from the date of judgment until full realisation |
| Legal costs | RM15,000.00 |
The judgment was delivered on 10 September 2026.
The Court’s conclusion was based on the combined effect of the evidence, including the failure to demonstrate sufficient precautions, the damage occurring during Mangkubumi’s works, witness admissions and TM’s documentary proof of its restoration expenses.
10. What Can Malaysian Businesses Take Note Of?
At JY Ko Advocates & Solicitors, we consider this decision an important reminder that a negligence claim may involve substantially more than the immediate physical damage.
The financial consequences of a single construction incident can extend to emergency restoration, permanent rectification, specialist contractors, labour, material handling and other properly established expenses.
From a claimant’s perspective, establishing the connection between the wrongful act and each category of claimed loss is essential.
From a defendant’s perspective, a proper defence requires more than disputing the total amount demanded. It involves examining the actual duty of care, precautions taken, cause of damage and reasonableness of each component of the claim.
Three particular highlights from this judgment.
First, prevention and documentation matter. Contractors should ensure that reasonable precautions are taken before commencing underground works and maintain records demonstrating compliance.
Second, temporary repairs do not necessarily conclude the matter. Subsequent permanent rectification costs may remain recoverable where they are part of a continuous restoration process caused by the same incident.
Third, evidence determines compensation. Substantial damages may be awarded when properly established through documentary records and credible witness testimony, even where the defendant disputes the expenses.
Ultimately, the outcome of a negligence claim depends on its particular facts and evidence.
11. Frequently Asked Questions About Negligence and Property Damage Claims in Malaysia
Can I sue a contractor for damaging my property in Malaysia?
Potentially, yes. A property owner or other affected party may bring a negligence claim where the contractor owed a duty of care, breached that duty and caused recoverable damage. The available causes of action may also depend on the contractual relationship and surrounding facts.
Can I claim the full cost of repairing damaged property?
You may be entitled to recover reasonable repair and reinstatement costs that were caused by the wrongful act and properly proved. The Court will consider whether the expenses were necessary, reasonable and supported by evidence.
Can I claim compensation if the repairs take several months or years?
The passage of time does not automatically prevent recovery. However, the claimant must establish that the subsequent expenses remained causally connected to the original incident and did not arise from unrelated works or improvements.
Can a main contractor be responsible for damage caused by a subcontractor?
Yes, depending on the circumstances. A main contractor may bear direct responsibility where it has breached its own duty in organising, coordinating or supervising the works. The mere appointment of a subcontractor does not necessarily eliminate that duty.
What evidence should I prepare for a negligence claim?
Relevant evidence may include photographs, contemporaneous correspondence, incident reports, repair quotations, invoices, payment records, work orders, technical reports and witness testimony. The particular evidence needed will depend on the nature of the loss and the issues in dispute.
12. Conclusion: Why This Judgment Matters
The decision in TM Technology Services Sdn Bhd v Mangkubumi Sdn Bhd shows how a construction-related incident can develop into a substantial negligence claim.
The High Court’s RM2.02 million award demonstrates the importance of proper precautions before construction works and comprehensive evidence when pursuing compensation for property damage.
It also reinforces that Malaysian courts may recognise both immediate restoration costs and subsequent permanent reinstatement expenses where they are reasonably incurred, causally connected and sufficiently proved.
For businesses involved in construction, infrastructure and commercial operations, understanding these principles may be essential in managing legal risks and protecting their financial interests.
13. Need Legal Advice on a Negligence or Property Damage Claim in Malaysia?
JY Ko Advocates & Solicitors is a Kuala Lumpur-based law firm handling civil and commercial litigation, including negligence claims, contractual disputes, property-related litigation and claims for monetary compensation.
Whether your company has suffered substantial property damage or is defending a claim for alleged negligence, it is important to evaluate the relevant legal duties, available evidence, financial exposure and possible legal remedies.
Our firm assists clients in assessing contested claims, reviewing documentary evidence, preparing legal proceedings and representing parties in civil disputes before the Malaysian courts.
Learn more about our civil litigation practice in Malaysia.
Written on: 24th October 2026, Saturday
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Disclaimer: The above proposition is subject to actual facts and circumstances and shall never be referred as the actual law without seeking legal advice. Consult us for more information!