It is very common to have software development disputes in Malaysia as many developers and clients do not enter into proper software development terms. Many rely on invoices and undetailed statements of work. Many projects end up beyond the quoted price or scope of work, or massively delayed.
In Skyworld Holdings Sdn Bhd v Neurogine Sdn Bhd, the Skyworld sued Neurogine for a refund of RM1.66 million, alleging that the mobile app developed by Neurogine was non-functional. Neurogine denied this and counterclaimed RM1.6 million in unpaid invoices. Skyworld argued that the app was not functional as the source code was not given by the defendant for the app to be downloaded from the Google Play Store or Apple App Store.
The High Court found that Neurogine had substantially performed its obligations. Skyworld’s own representative conceded that the quotation did not include the source code, that most functions met the agreed specifications during user testing, and that only minor bug fixes remained which could be resolved even after the app was launched. The Court held that the project was stalled not due to Neurogine’s breach, but because Skyworld’s representative denied developer access to the Google Play Store over payment disputes.
Accordingly, the High Court dismissed Skyworld’s claim while allowing Neurogine’s counterclaim. The Court of Appeal affirmed the High Court’s decision, as the outcome of the dispute depended upon an evaluation of a purely factual nature.
An earlier version of this case summary was published by Foong Cheng Leong on LinkedIn.
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