Professional Documents
Culture Documents
LNS 2018 1 206 Othhco
LNS 2018 1 206 Othhco
BETWEEN
AND
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Adams and others v. Cape Industries Plc and another [1991] 1 All ER
929 (refd)
Arah Cipta Sdn Bhd & Anor v. Kian Kee Sawmills (M) Sdn Bhd & Ors
(No 1) [1997] 2 CLJ 408i CA (refd)
Cheah Sin Choon v. Tan Lye Hock [2017] 1 LNS 1103 CA (refd)
Coastland Properties Pte Ltd v. Lin Geok Choo [2001] 1 SLR 72 (refd)
Fung Keong Rubber Manufacturing (M) Sdn Bhd v. Lee Eng Kiat & Ors
[1980] 1 LNS 156 FC (refd)
KEP Mohamed Ali v. KEP Mohamed Ismail [1980] 1 LNS 169 FC (refd)
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Kokomewah Sdn Bhd v. Desa Hatchery Sdn Bhd [1995] 3 CLJ 511 CA
(refd)
Malayan Flour Mills Sdn Bhd v. Raja Lope & Tan Co and Another
[1998] 2 CLJ SUPP 89 HC (refd)
Mannai Investment Co. Ltd. v. Eagle Star Life Assurance Co. Ltd [1997]
A.C. 749 (refd)
O-Stable Panel Sdn Bhd v. Kenmark Industrial Co (M) Bhd [2009] 1 LNS
1281 HC (refd)
Tenaga Nasional Bhd v. Irham Niaga Sdn Bhd & Anor [2017] 5 CLJ 488
CA (refd)
Sunseekeers Pte Ltd v. JSH Joshua [1990] 3 CLJ Rep 979 HC (refd)
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JUDGMENT OF
Y.A. LEE SWEE SENG
[1] The current dispute between the Plaintiff as the Main Contractor
and the Defendant as Employer with respect to a construction Project
of the Universiti Teknologi MARA campus in Mukim Semujuk,
Daerah Jasin, Melaka, is a sequel to the partial settlement that the
parties managed to achieve.
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Project
[3] The Plaintiff was appointed via 2 Letters of Award both dated
2.7.2010 and for each Letter of Award the contract value is
RM8,610,000.00 for Enabling Works Package 1 and
RM201,983,000.00 for Building & Associated Works Package 2.
Apart from the Letters of Award, both parties agreed to be bound by
the contractual terms as contained in the Agreement and Conditions of
PAM Contract 2006 (Without Quantities) and the Additional
Provisions to the Contract Agreement (collectively referred to as the
“Contract.”
Problems
[4] Disputes arose between the parties with the Plaintiff suspending
works for what they said is the Defendant’s breach of the Contract for
failure to pay its Interim Claims on time. The Defendant on the other
hand contended that the Plaintiff’s suspension of work was unlawful
and after issuing a Notice of Default on 3.7.2012, proceeded to
terminate the Contract by their Notice of Termination dated
13.7.2012.
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[7] Part A consisted of the parts that both sides could agree with
respect to the following:
Appendix A RM 337,297.43
[8] The above Settlement Sum was paid subject to the rights of the
parties to pursue their respective claims against each other which
heads of claims are set out as Part B and Part C of the Deed of
Settlement. All pending applications, suits and appeals were also
withdrawn.
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Prayers
[10] The Plaintiff’s prayers for the various heads of claims are found
at paragraph 58 items 1-13, paragraph 59a-e and paragraph 60 of its
Statement of Claim.
Principles
[13] Plaintiff contended that other than Progress Payment No. 3, the
Defendant had a habitual practice of delay in certifying the Plaintiff’s
progress claims and more so in effecting payments for such
certificates. A full record of the chronology has been prepared by the
Plaintiff in BOD E pages 8-9.
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[15] However according to the Plaintiff the payment ordeal was far
from over. In addition to the late payment for Certificate No 13, the
Defendant was still in breach by their failure to certify the Plaintiff’s
progress claim no. 14 which at that point of time had became overdue
and exceeded the deadline of 26.5.2012.
[19] The picture the Plaintiff painted was that of patience petering
out. Learned counsel for the Plaintiff summarized the following
notices of delay previously issued:
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PAGE IN
ITEM LETTERS DATE
BOD C
Plaintiff’s letter recording
1. delay in payment for Progress 25/8/2011 1. 2
work 5 & 6
Plaintiff’s letter stating delay
2. from progress payment from 1/10/2011 3
1- 6
Plaintiff’s letter recording
3. 11/10/2011 4-6
delay in payment
Plaintiff’s letter to Defendant
4. 24/10/2011 7-8
warning on delay of payment
Plaintiff’s warning to
5. Defendant delay in paying 19/12/2011 14
Certificate No. 8
Plaintiff’s warning to
6. Defendant Delay in Paying 10/1/2012 19-22
progress No. 8
Plaintiff’s warning to
7. Defendant on delay in paying 29/5/2012 28-29
Certificate 13
Plaintiff’s warning to
8. Defendant on delay in 5/6/2012 32-33
certifying No. 14
Plaintiff’s warning to
9. Defendant on failure to 11/6/2012 36-38
certify No. 14
Plaintiff’s warning on delay
10. to certify and pay No. 14 and 18/6/2012 40
Suspension Notice
Plaintiff’s elaboration on
11. 22/6/2012 44-45
Suspension Notice
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Plaintiff’s warning to
12. Defendant on delay in 6/7/2012 79-80
certifying Claim No. 15
13. Termination by Defendant 13/7/2012 82-84
[20] Under the PAM Contract 2006 the Contractor has the right to
suspend its work due to non-payment of its progress claims. Clause
30.7 (page 73 BOD B) under which the Notice of Suspension was
issued states as follows:
[21] Learned counsel for the Plaintiff submitted that there must be
non-payment of the amount due in the Payment Certificate from the
Defendant beyond the stipulated time frame after the receipt of notice
before the issuance of the Notice of Suspension and that the said
Notice of Suspension shall not be given unreasonably or vexatiously.
[22] Learned counsel for the Plaintiff further emphasized that the
Notice of Suspension had been premised on a recurring problem in the
Project i.e. Delay in certifying the Progress Claim and delay in
honouring the Certificates. The precise words of the Notice of
Suspension dated 2.7.2012 from the Plaintiff to the Defendant are
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important enough to be set out in full and they read as follows with
the caption:
• Suspension of Work.
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[27] Learned counsel for the Plaintiff maintained that the Plaintiff’s
Suspension of the Works was not unlawful or without reasonable
cause and listed the chronology of key events with respect to Progress
Claim No.14 to prove the point as follows:
[28] The Plaintiff’s stand is that the suspension of the Works was
lawful and reasonable for repeated failure of the Defendant to certify
and pay on time and in particular Certificate No. 14 and therefore the
termination by the Defendant on ground of unreasonable suspension
was misconceived and improper. Learned counsel for the Plaintiff
then sought to prevail upon this Court that the termination by the
Defendant subsequently by their Notice of Termination dated
13.7,2012 was unlawful and invalid.
[29] It is now clear where the difference and divergence lie. The
Plaintiff maintains that the authoritative contractual terms for
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DATE OF
DEFENDANTS PAGE IN BUNDLE
LETTERS
4/11/2011 Page 9 BOD C
27/6/2012 Page 48
[33] It may fairly be stated that the Contract Documents duly agreed
and executed by the Plaintiff and the Defendant consisted of the
following:
(c) The Letter of Award dated 2.7.2010 for Building and Associated
Works (Package 2) pages 7 - 21 Bundle B/CBD pages 19 - 35.
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[37] Without doubt the expression “in addition to” in Clause 3.3 is
to indicate that the parties have found the base contract document i.e.
the PAM Contract 2006 to be inadequate for the present purpose of
the Project such that the “attached Conditions of Contract” had
become necessary to both supplement and complement the PAM
Contract 2006.
[38] When one looks at what was attached the said document is
entitled “Additional Provisions to the Contract Agreement” at page 82
and 84 BOD B and at page 85 are found the words “ADDITIONAL
PROVISIONS TO THE CONDITIONS OF CONTRACT,” running
from pages 85-184 where at page 184 both the parties had signed.
[40] Conflicts in the Clauses are bound to appear and generally the
terms and conditions in the Additional Conditions of Contract would
prevail for naturally why would anyone expend extra effort to add to
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“Priority of Documents
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[45] It does not matter that under Clause 3.1 of the PAM Conditions
of Contract the Priority in descending order is as follows: 1) Letter of
Award 2) Articles of Agreement 3) Conditions of Contract 4) Contract
Drawings 5) Contract Bills 6) Other documents incorporated in the
Contract Documents.
[48] Learned counsel for the Plaintiff also suggested that priority
should generally be given to agreements in official format prepared by
professional bodies like the Persatuan Akitek Malaysia (PAM) rather
than the Additional Terms and Conditions prepared privately by the
parties but I fail to see any basis for that proposition. As I said before,
the Additional Terms and Conditions often arise because the general
format in the standard form contract of PAM for instance might not
cater to the particular need of the parties and so they sought a
variation to it. Rather than crossing out the terms and conditions in
the PAM 2006 Contract and underlining the Additional Terms and
Conditions as one would do in the case of Amendment of Pleadings,
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[54] On the given facts, as pointed out by learned counsel for the
Defendant, Interim Certificate No. 14 for both Package 1 & 2 was
certified on 29.6.2012 (Bundle J pages 1068 & 1075) / CBD pages
250 & 257 as there is a need for the ICE to independently verify the
Works and endorse the Certificate before it can be issued. The
Defendant had given its reasons for the delay in certification which
they said was due to the Plaintiff not complying with the Architect’s
Instructions (AI) but it is not necessary to delve into that at this stage.
[55] I agree with the analysis of learned counsel for the Defendant
that under the PAM Conditions of Contract, Interim Certificate No. 14
for Package 1 & 2 having been certified on 29.6.2012 (Bundle J Pages
1068 and 1075 refers)/CBD pages 250 - 257, it is due for payment on
28.7.2012.
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[57] I would therefore agree with the Defendant that the Defendant
is not in breach of the agreed terms be it under the PAM or the
Additional Provisions to the Conditions of Contract in respect of
honouring the payment for Interim Certificate No. 14 when the
Plaintiff suspended the works at Site effective 3.7.2012 for non-
payment of Interim Certificate No. 14.
[61] Landesign stated in the said Notice of Default that the Plaintiff
was in breach of Clause 25.1(b) of the Conditions of Contract of the
PAM 2006 Contract for without reasonable cause suspending the
Works.
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[63] That simply would not do. As the termination of a Contract has
serious consequences, the party terminating must follow the strict
procedure prescribed in the Contract. Having given 14 days to the
Plaintiff through its agent Landesign, the Defendant cannot now resile
from that and terminate before the expiry of the 14 days by which
time the default of wrongful suspension of works by the Plaintiff as
Contractor would not have continued for at least 14 days.
[65] Unpleasant as the consequences are, this Court must give effect
to it as the rights of the parties to terminate as well as the
corresponding right to rectify the breach are governed by the terms of
the Contract and must be strictly followed. There is no intervening
event here. Moreover 2 wrongs do not make a right! The fact that the
Plaintiff was wrong in suspending the Works does not justify the
Defendant terminating the Contract before the continuing default of
14 days are up.
[66] The strictness of the time frame can be seen in the fact that
under Clause 25.2 of the PAM Contract 2006 the Employer “may,
within ten (10) Days from the expiry of the said fourteen (14) Days,
by a further written notice delivered by hand or by registered post,
forthwith determine the employment of the Contractor under the
Contract.” It is a case where premature termination before the
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[67] Learned counsel for the Defendant submitted that under the
“Additional Provisions to the Contract Agreement” and in the
“Additional Provisions to Conditions of Contract” there is no
provision for suspension of works by the Contractor for non-payment
unlike the PAM Conditions of Contract.
[69] Thus I would respectfully disagree with learned counsel for the
Defendant when she submitted that under the Additional Conditions of
Contract at Clause 72.1 the Contractor’s only remedy for non-payment
is to determine the Contract and the right to be paid for all works
executed prior to the termination pursuant to Clause 72.2. (Bundle B2
pages 163 refers) / CBD pages 41 - 95.
[70] There is no good reason why Clause 30.7 of the PAM 2006
Contract on the Contractor’s right to suspend Works for non-payment
could not be read harmoniously with Clause 72.1 on the Termination
of the Contract for Default by the Employer under the Additional
Conditions of Contract.
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“Contractor’s Default
...
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[73] Learned counsel for the Defendant had conveniently left out
Clause 69.1(b) which reads that if the Contractor (b) without
reasonable excuse ...has suspended the progress of the Works for
sixty (60) Days other than as expressly permitted by the Contract.”
(emphasis added)
[74] The Defendant submitted that under Clause 69.1 (d) the
following requirements must be met to enable the Defendant to expel
the Plaintiff forthwith:
(iii) There is no requirement for any notice for the deeming provision
to take effect.
(iv) The Employer may give notice specifying such breach and if
within 45 days of such notice, the Contractor shall have
failed to remedy the breach to the satisfaction of the
Employer, the Employer may enter upon the Site and the
Works and expel the Contractor. At this juncture, it is
important to take note that the aforesaid notice is not
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[77] I do not agree with the Defendant that when it is stated that:
“....the Employer may give notice to the Contractor specifying such
breach. If within forty five (45) Days in respect of Clauses 69.1 (a),
(c), (d), (e) and (f) and fourteen (14) Days in respect of Clause 6 9.1
(b) only, of such notice, the Contractor shall have failed to remedy
the breach to the satisfaction of the Employer, the Employer may
enter upon the Site and the Works thereon and expel the
Contractor...”; it means that anytime within the said 45 days or 14
days as the case may be, from the date the Defendant gives Notice to
specify the breach, the Defendant may terminate the Contract with
immediate effect without further Notice and enter into possession of
the Site and expel the Contractor.
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[80] The above approach was applied by the Federal Court in SPM
Membrane Switch Sdn Bhd v. Kerajaan Negeri Selangor [2016] 1 MLJ
464 at 478-479 and by the Court of Appeal in Cheah Sin Choon v. Tan
Lye Hock [2017] MLJU 1071.
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[92] The plaintiffs’ action was for the balance of money alleged to
be due and damages for wrongful termination of the contract; the
defendants counter claimed that they were entitled to terminate the
contract and claimed damages for defective work.
[94] It was further held that the notice of 20 September 1985 was a
valid notice of default under condition 8 but since it was not sensibly
connected with the defendants’ notice of 21 August 1986 purporting
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[95] It was in that context and against that backdrop that the Court
went on to hold that there was no reason for the implication of any
term to the effect that condition 8 of the contract was to be the only
machinery for terminating the contract, to the exclusion of common
law rights of termination. Accordingly the defendants’ common law
rights continued to exist side by side with clause 8. As such the
termination of 21 August 1986 was valid termination under common
law.
[98] Let it be said that this is not the case in the present dispute.
There was no evidence that the Plaintiff had evinced an intention not
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[99] Learned counsel for the Defendant also referred to the House of
Lords majority decision in Mannai Investment Co. Ltd. v. Eagle Star
Life Assurance Co. Ltd [1997] A.C. 749. The appeal was concerned
with the question whether a notice given by a tenant pursuant to a
break clause in a lease was an effective notice. In fact, there were two
leases with identical break clause, and two identical notices were
given. The premises were in Jermyn Street in London. The lease was
dated 11 March 1992, and was for a term of 10 years from 13 January
1992. The respondent company was the landlord, and the appellant
company was the tenant. The relevant clause was clause 7(13), which
provided as follows:
“The tenant may by serving not less than six months’ notice in
writing on the landlord or its solicitors such notice to expire on
the third anniversary of the term commencement date determine
this lease and upon expiry of such notice this lease shall cease
and determine and have no further effect...”
[100] So the clause gave the tenant a single opportunity to bring the
lease to an end. It so happened that the market for rents in this area
had fallen, and the tenant decided to take advantage of this
opportunity. It served the following notice on the landlord:
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[105] Our own case of Fajar Menyinsing Sdn Bhd v. Angsana Sdn Bhd
[1998] 6 MLJ 80 underscores the strictness with which a Court would
scrutinize a Termination Notice.
[108] The monetary claim by the Plaintiff has been pleaded in the
Statement of Claim at paragraphs 58 are as follows:
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[109] PW4 Encik Mior Azman Bin Mior Kamarudin, the Group Chief
Contract Officer for the Plaintiff, admitted that there are no
documents to support the BRC Claim of RM208,500.00 if one is
looking for documents to support the claim of ownership. He gave
evidence that the Plaintiff was only relying on the Joint Valuation
Sheet at Bundle D page 707 to support this claim/CBD page 832. PW4
confirmed that he was not present during the Joint Valuation.
[110] PW4 confirmed that he has knowledge that the Architect for the
Project Ar. Mariyah Pit had instructed the Plaintiff to remove the
materials at Site vide their letters of 6.9.2012, 19.9.2012 and
24.9.2012. He however had no knowledge of the actions taken by the
Plaintiff. When PW4 was referred to documents on removal of
materials by subcontractors, he confirmed that these were the
subcontractors of the Plaintiff. PW4 later agreed that based on the
documents shown to him at pages 772-787 Bundle I, their
subcontractors had removed the BRC.
[111] There is also the evidence of PW4 that the Plaintiff is bound by
Plaintiff’s Penultimate Claim (Progress Claim No. 16) at Bundle S
page 597 in respect of the agreed deduction for BRC for
RM208,500.00. Plaintiff’s Penultimate Claim agreeing to the
deduction of BRC for RM208,500.00 at Bundle S at page 597 remains
unchallenged/CBD page 517.
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[114] DW2 Encik Mohd Azmi Bin Yahaya was the M&E Engineer at
Jurutera CMP Sdn Bhd (“JCMP”). They are responsible to design the
M&E services for UiTM, Jasin Project. He gave evidence that he was
involved in the Joint Valuation carried out from 18 - 20.7.2012 and
endorsed in the Joint Valuation Report at pages 753-751 Bundle I.
DW2’s evidence on the valuation carried out in respect of item 1 (ii)
remains unchallenged/CBD pages 468 - 483.
[116] JCMP had rejected the Plaintiff’s claim for Item 1(ii) for the
sum of RM383,471.49 on grounds that it is not a valid claim. The only
witness for the Plaintiff who gave evidence on item 1 (ii) i.e. PW3
could not challenge DW2’s evaluation.
[117] I can accept DW2’s explanation that where the items required
installation, they were allowed 70% while items not requiring
installation were allowed 100%.
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[118] I agree with learned counsel for the Defendant that the Plaintiff
has failed to proof item 1 (ii) on a balance of probabilities.
Item 2 Panel IBS work done but not valued on 20.7.2012 for
RM2,370,774.00
[119] PW5 Mr Lim Chee Chen gave evidence on the IBS Panel. He
was the Senior Supervisor for IBS Integrated Sen Bhd, the Plaintiff’s
Subcontractor during the material time. PW5 said that the Plaintiff
and IBS Integrated Sdn Bhd are all under the Zikay Group of
Companies.
[120] PW5 explained that for the IBS Panels to be produced the shop
drawings have to be prepared first and approved by the Architect.
Based on the shop drawing the mould for casting would be prepared.
The Plaintiff would then issue a Request Work Inspection (RWI) and
all the Consultants and their representatives would have to inspect
before the casting start.
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to show the panels installed and those at the site. See also pages 807-
810 Bundle D.
[123] The Defendant said that they do not need those precast IBS
Panels. It is for them to ensure that the Plaintiff remove it lest it be
said that the Defendant’s new contractor had used it.
[124] If it is true that the Consultants had not approved it then there
should have been letters to that effect. Likewise at the Joint
Inspection conducted the Consultants must state in writing why they
are rejecting the IBS Panels already cast or that they are not usable
because of specifications that have not been met. Not to approve it at
that stage after termination and at the Joint Inspection with no reasons
given would put the Plaintiff in a quandary as these panels cannot be
used for other projects. The Panels were specially and specifically
fabricated for this Project.
[128] DW4 is Ir Abd Rani Bin Abd Aziz. He was Design Principal
from Aresea Consulting Engineers Sdn Bhd. DW4’s evidence that IBS
Mould is classified as temporary works and falls under Preliminaries
hence not claimable remained unchallenged. See Bundle B 1 page 12
and 14.
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[129] DW8, Encik Che Ayzayem Bin Che Amran, was the Project
Accounts Manager of the Defendant at the material time and currently
its General Manager. His evidence was that the Preliminaries in
respect of IBS works has been paid by the Plaintiff to the Defendant
in Interim Certificate No. 15 dated 19.11.2012 item 1.0 Bundle J page
1129 and this was not challenged. Plaintiff is therefore not entitled to
claim for IBS Mould. See CBD page 247-249.
[130] I would hold that the Plaintiff has not proved Item 3 on a
balance of probabilities.
[133] I would hold that the Plaintiff is therefore not entitled to claim
for IBS Prop.
[134] PW4’s evidence was that the machineries were idling for 1
month from June 2012 - July 2012 amounting to RM610,000.00 and
his calculation is as set out at page 821 Bundle D. He had referred to
page 640 Bundle D for a List of machineries at the site but however
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admitted that the List was for the period between 16.5.2012-
31.5.2012.
[135] PW4 said that the machineries were idling since the Plaintiff’s
letter dated 18.6.2012 which was the Notice of Intention to suspend
works till termination on 13.7.2012 by the Defendant. Surely the
Plaintiff cannot be suspending the Works earlier then 3.7.2012 for
that was what was stated in the Plaintiff’s Notice of Suspension dated
2.7.2012. PW4 agreed that neither the Defendant nor its consultants or
the Defendant’s Project Management Team prevented the Plaintiff
from operating its machineries.
[137] There is evidence that this VO had been approved. The Plaintiff
had written to SMPM Sdn Bhd, the Project Management Company of
the Defendant, by their Letter dated 3.3.2011 (p g 824 Bundle B)
setting out the fact that following their instructions not to proceed
with the construction of the FMS building, the Plaintiff had incurred
loss and expense which could not be reimbursed by a payment made
under any other provisions in the Contract. The Plaintiff therefore
gave notice of their intention pursuant to Clause 24.1(a) of the
Conditions of Contract to Claim for the following:
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[138] There was a further letter from the Plaintiff dated 2.4.2011
(page 825 Bundle B) giving a breakdown of the sum claimed.
[139] Then by the Plaintiff’s Letter dated 7.5.2011 (page 824 Bundle
B) the Plaintiff gave a discount of RM7,000.00 thus reducing the
amount claimed to RM39,700.00. The said letter also referred to a
meeting held with SMPM Sdn Bhd on 3.5.2011.
[140] All these letters were copied to the Defendant and it’s
consultants.
[141] The Defendant’s stand is that they had not agreed on the
quantum of the fees. Surely if that be their stand, then they should
have written to the Plaintiff and not remained silent.
[143] Item 7 relates to the time when employer requested for a much
bigger office. I am satisfied that this is a VO consisting of omission
and addition with a net addition of RM173,702.66. There must be
instruction to proceed to construct a bigger site office and there was a
reference to the Defendant’s Project Manager Consultant, SMPM Sdn
Bhd’s instruction Ref.No. SMPM/UITMJ/TCS/MEM/01/511(636) at
page 831 Bundle D. The various works done were also listed down
with the price stated. A site office is big enough a structure to be
noticed if it is there and there is evidence to show that after the initial
instruction and quotation as to the amount involved, the Defendant did
not object to it.
[144] Several reminders were sent to the Defendant but there were no
replies. This is a case where if the Defendant had not instructed its
construction, they should have objected strenuously and stridently.
The reminder letters can be found at Page 143 BOD E, page 155 BOD
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[145] The attachment is at page 831 with the details for each item set
out in Bundle D. There was no reply to the said letter. If indeed the
Defendant is objecting to the quantum, then they must descend to
details and not hide behind a wall of silence.
[147] Item 8 claim is for piling work done but not paid and the claim
is RM1,198,704.78. The witness testifying on this item was PW1 Abd
Razak Bin Mohamed Ali, the CEO of the Plaintiff who was also the
Project Director.
[148] I can accept his evidence that the additional piling work is
because of additional loading arising from variation works instructed
by the Consultant Engineer to be carried out during the progress of
the work which are different from the original tender drawings. The
supporting documents are found in pages 833-890 of Bundle D.
[149] With respect to the instruction for the variation work, that can
be found at page 923 Bundle D where by letter dated 2.11.2012 the
Plaintiff had written to the Defendant as follows:
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[150] The Plaintiff had written to SMPM on why they disagreed with
the Defendant’s stand that the Plaintiff would not be paid for the
additional piling. SMPM had not replied.
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[155] The Defendant had tried to explain that this had already been
valued at the Joint Valuation after termination but as explained by
PW3 the Valuation was based on the original contract sum and did not
take into consideration the Variation Works pursuant to the EIs.
[157] PW1 testified that Item 10 is the additional work done for
building and infrastructure work due to design change for Building
and Infrastructure. He referred to pages 1008-1009 Bundle D
(sewerage pipe) and Pages 1011-1013 Bundle D (for back filing
material on water reticulation).
[160] PW3 agreed that Plaintiff is claiming for this head of claim due
to subcontractors demands. PW3 also agreed that Plaintiff will not
claim if the subcontractors do not claim from the Plaintiff. The
relevant documents are at pages 1016-1028 Bundle D. He admitted
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that the Plaintiff had not made any payments to these claims by their
subcontractors.
[161] PW3 further agreed there has not been any fresh or new
demands from the subcontractors since their demands from July to
November 2011. Learned counsel for the Defendant referred to
Bundle I pages 908 - 911 and CBD pages 835 - 838.
[165] I am satisfied that the Plaintiff had not suffered any loss arising
out of these items claimed or that otherwise these items had been
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[167] Item 12 is for the variation works which were valued during the
Joint Valuation but which the Plaintiff said were omitted by the
Defendant without reason. PW4 referred to page 712 Bundle D. PW4
agreed there is no documents to support Plaintiff’s claim for item 12
and the relevant parts of the Notes of Evidence is at page 183. PW4
agreed Plaintiff is bound by Plaintiff’s Penultimate Claim in Bundle S
page 597 agreeing to the deduction of RM1,282,895.00 / CBD page
517 at item 5.2.
[169] PW2, Encik Anuar Bin Mohamed, the Plaintiff’s Director for
the Project, agreed there is no supporting documents for Plaintiff’s
claim at item 12. See pages 142,143 and 145 of Notes of Proceedings.
[170] I agree with the Defendant that the Plaintiff had failed to proof
item 12 on a balance of probabilities.
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[171] PW3 who was the Head of Plaintiff’s M&E Department gave
evidence that he was not giving evidence on item 13 and that he did
not know who would be giving evidence on this item.
[176] In the light of the above I would hold that the Plaintiff had not
proved Item 13 on the balance of probabilities.
Whether the Plaintiff has proved its Claim under paragraphs 59a
to 5 9e of its Statement of Claim
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[179] It has not been shown by the Plaintiff that the rate of interest
charged had been following the time frame for due date of payment of
the Payment Certificates and the time frame prescribed for expiry
before interest at the agreed rate is chargeable.
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[183] Plaintiff under this head of claim also claimed for interest on
late release of retention monies by the Defendant amounting to
RM448,742.00. The Defendant submitted that Retention monies under
the PAM Conditions of Contract are only released under Clause
30.6(c) and (d) as follows:
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[187] The Plaintiff were still computing the interest for late payment
in respect of Interim Certificate No. 15 from date of certification on
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[188] Similarly, the Plaintiff also claimed for interest on late payment
in respect of Interim Certificate No. 14 for Package 1 & 2 at item 27
and 28 Bundle E page 9. The Plaintiff at page 9 claimed for interest
from date of certification of Interim Progress Claim No. 14 on
29.6.2012 to 30.11.2012 for the sum of RM220,637.24. (The Interim
Certificate No. 14 for Package 1 & 2 is at pages 1067 - 1121 Bundle
J) / CBD page 250 - 304. I agree with the Defendant’s submission that
Interim Certificate No. 14 for Package 1 & 2 was withheld due to the
Plaintiff’s default in not complying with the AI’s and the Plaintiff
ought not to be allowed to reap a benefit from their own default.
[189] At any rate the Plaintiff’s claim for interest on late payment in
respect of Interim Certificate No. 14 & 15 ought not to be allowed on
the ground that when the Plaintiff agreed to the sum of
RM24,053,364.55 in Part A of the Deed of Settlement in Bundle F,
there was no agreement to pay interest on late payment in the release
of the said sum at Part A. Therefore the Plaintiff’s claim under para
59a for Interest on amounts outstanding for the sum of
RM1,253,599.21 cannot be supported and substantiated contractually
and so is dismissed.
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all claims of this nature the Plaintiff would have to be put to strict
proof of this head of damages.
[191] The Plaintiff referred to the case of O Stable Panel Sdn Bhd v.
Kenmark Industrial Co. Sdn Bhd [2010] 8 MLJ 686. It was held in that
case that in the event the plaintiff suffered damages due to illegal
termination, the factors to be considered would be taking into
consideration all costs and expenses with the total value of the
contract. It is based on the principle that had it not been due to the
Defendant’s unlawful termination, the Plaintiff would have been
allowed to complete the balance of the works and to ultimately
receive the balance of the contract value. The Plaintiff argued that it
is entitled to 15% of the balance total Contract Sum amounting to
RM20,507,546.34 being its loss of profit.
[192] The Defendant on the other hand relied on the ratio in Popular
Industries Limited v. Eastern Garment Manufacturing Sdn Bhd [1989]
3 MLJ 360 at page 367 as follows:
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[194] PW1, the Plaintiff’s Project Director, agreed that the Plaintiff’s
claim is based on gross profit. He further agreed that the Plaintiff’s
claim for loss of gross profit is an estimation. PW2 maintained that
the loss of gross profit is computed at 15% of the balance work to be
completed. Therefore, based on the Contract Sum of
RM210,593,000.00 less completed works as contended by the Plaintiff
of RM73,876,024.00, the balance Works is RM136,716,976.00 and
15% of that is RM20,507,546.40. PW2 agreed there is no document to
support the costs to be incurred by the Plaintiff to complete the
balance work. PW2 agreed no Project Accounts have been shown or
produced at the trial to substantiate this claim of loss of profit.
[196] I agree with the Defendant’s submission that PW2 could not
rebut the documentary evidence of 2% gross profit reflected in the
SSM search nor prove the alleged 15% gross profit as claimed.
Learned counsel for the Defendant also highlighted that the Plaintiff
had pleaded the claim for loss of profit for unlawful termination under
Para 59b and under Para 60b in the Statement of Claim for “Gantirugi
spesifik berjumlah RM52,157,206.64 seperti yang dinyatakan di
atas” which is a Claim falling under the category of special damages
requiring specific proof of the damages claimed.
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“Thus the plaintiff has not introduced any evidence to prove the
amount of damages and the figures stated by the plaintiff in
Schs I and II have not been substantiated. Applying the
principles enunciated in Guan Soon Ting Mining Co v. Wong
Fook Kum [1969] 1 MLJ 99, the plaintiff, if it succeeds in the
present action would, to my mind, only be entitled to an award
of nominal damages.”
[198] I agreed with the Defendant that the Plaintiff’s claim for gross
profit based on an estimation of 15% without any documentary proof
via Project Accounts ought to fail in limine.
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[201] All said the Plaintiff’s Claim for damages for loss of profit
leaves much to be desired and is totally unsatisfactory and this Court
would in the circumstance grant only a nominal damages of
RM5,000.00 having regard to the Contract Sum and the balance value
of work to be done and the remaining time needed for completion and
the past profit record of the Plaintiff.
[202] The Plaintiff justified this claim on the ground that the said sum
had been disbursed to the Defendant as loans and advances. The only
witness testifying on this claim is En Ismanazir Bin Ismail PW6, the
Plaintiff’s Group Accountant. PW6 referred to pages 20-43 of BOD E
to reveal all payments made to the Defendant.
[203] PW6 informed the court that all the money were paid to the
Defendant even though the recipient was in most cases Datin Hartini
i.e. one of the Defendant’s directors.
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[205] Parties must be deemed to have been aware that there were
other heads of claims that could possibly be raised but that for the
purposes of settlement they had expressly agreed to forgo and forbear.
The Plaintiff cannot now resurrect it.
[207] PW6 further agreed that he was a puppet at times and merely
follow instructions and cannot verify the claims. PW6 agreed the
payment of RM100,000.00 is for purchase of shares but did not know
what shares it was though the Payment Voucher states Just Wisdom
Sdn Bhd being purchaser of the shares. (Page 38 Bundle E refers).
[208] PW6 could not render any answer why the heading in the
Summary at page 19 Bundle E refers to “Detail of Advances for
Purchase of Shares’. PW6 could not sustain and support his evidence
that all the advances at page 19 in the Summary were for
“Pendahuluan for UiTM Jasin Projek” or as “Advances for UiTM
Jasin Project.’
[209] 1 agree with the Defendant’s submission that the Plaintiff had
failed to prove on a balance of probabilities via PW6 - the Plaintiff’s
Group Accountant that all the loans and advances pleaded at para 59c
for RM5,270,000.00 are advances for “Pendahuluan for UiTM Jasin
Projek”. The key witness PW 6 for this claim is unconvincing having
reluctantly recoiled from the reality of being relegated to a puppet at
times and he cannot verify the alleged claims nor its purpose.
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[211] As far back as the Federal Court case of Fung Keong Rubber
Manufacturing (M) Sdn Bhd v. Lee Eng Kiat & Ors [1981] 1 MLJ 238
at page 239 it has been held that an aggrieved party cannot sue for
loss of reputation in a breach of contract as follows:
[212] This is after all not a claim for defamation. See also the case
Platinum Nanochem Sdn Bhd v. Mecpro Heavy Engineering Ltd
[2016] 11 MLJ 141 where the same comment had been made.
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[213] The Court is satisfied in any event that there has been no loss of
reputation suffered as there were already demand notices issued by
subcontractors against the Plaintiff and in one case a subcontractor
Jeks Engineering obtained Judgment and commenced winding-up
proceedings against the Plaintiff. The Plaintiff had not denied this.
[214] Suffice to say that on the facts no loss of reputation had been
proved.
[215] PW2 gave evidence that the Plaintiff’s claim at Para 59e for
legal costs amounting to RM150,000.00 is supported by the
documents in Bundle D pages 676 - 699.
[216] PW2 agreed all the invoices referred to support the Plaintiff’s
claim for legal costs are not directed to the Defendant nor in respect
of Court actions against the Defendant.
[219] PW2 refused to agree that Plaintiff is not entitled to legal costs
since the Court awarded costs to the Defendant for successfully
setting aside Plaintiff’s ex-parte injunction. (Bundle F Deed of
Settlement Recital 1.2 refers).
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[221] There is thus no basis for this claim and hence this head of
claim by the Plaintiff is dismissed.
[222] The Defendant submitted that the Plaintiff in this trial had not
led any evidence to support a claim for general damages under
paragraph 60a of the Statement of Claim. It is to be noted that
Plaintiff at Para 60b of the Statement of Claim had pleaded the
Plaintiff’s entire claim at Para 58 and Para 59 as “spesifik” damages
amounting to RM52,157,206.64 when what was intended to be
conveyed was “Special Damages”.
[224] The Plaintiff’s prayer for another head of Claim under General
Damages at Para 60a is dismissed.
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[228] It must be stated at the outset that Just Wisdom Sdn Bhd is not
a party to this suit and this Court would be loathed to make an order
involving a non-party. The prayer at paragraph 39(d) of the
Defendant’s Counterclaim is akin to a specific performance order.
“... This claim was for specific performance of the contract for
the transfer of the land to the purchaser. The bank had to be
brought in because it was a chargee who had to be paid off and
its consent was required for the sale. The other defendants were
all involved in the steps taken by Datin Chong to resile from the
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[231] Furthermore only parties to a contract may sue each other under
the basic principle of privity of Contract. The Sale and Purchase of
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[232] It does not matter that Just Wisdom Sdn Bhd paid the sum of
RM4,350,000.00 via the Zikay Group of Companies including the
Plaintiff and the balance sum of RM270,000.00 is still due and owing
with interest accruing at 8% per annum pursuant to Clause 4.3 in the
Sale and Purchase Agreement dated 30.4.2010. It was further said that
as at 14.4.2017 there is an interest of RM142,347.38 and balance
principle sum of RM270,000.00 due and owing in respect of the said
shares.
[233] Any claim for the balance purchase price of the Shares not paid
to be set-off against a price to be negotiated between the parties for
the transfer back has to be in a suit where Just Wisdom Sdn Bhd and
Yayasan Basmi Kemiskinan are parties.
[235] At the appropriate time the relevant parties might want to wind
up the company Serendah Heights Sdn Bhd whether it be on the just
and equitable ground or on the ground of oppression of minority
interest if there is evidence to support that and if indeed they could
not agree on the price. At that stage the Court would have the
discretion to order one party to purchase the other party’s shares at a
price the Court may determine after hearing the parties.
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[238] Again who made the payment on behalf of Just Wisdom Sdn
Bhd is not important because even a wholly-owned entity is a separate
legal entity from its parent company.
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“Mr Morison described the theme of all these cases as being that
where legal technicalities would produce injustice in cases
involving members of a group of companies, such technicalities
should not be allowed to prevail. We do not think that the cases
relied on go nearly so far as this. As Sir Godfray Le Quesne
submitted, save in cases which turn on the wording of particular
statutes or contracts, the court is not free to disregard the
principle of Salomon v. A Salomon & Co Ltd [1897] AC 22,
[1895-9] All ER Rep 33 merely because it considers that justice
so requires. Our law, for better or worse, recognises the
creation of subsidiary companies, which though in one sense
the creatures of their parent companies, will nevertheless
under the general law fall to be treated as separate legal
entities with all the rights and liabilities which would
normally attach to separate legal entities.” (emphasis added)
[242] In the present case there is not a trace of any of the exceptional
circumstances referred to above, much less a plea for the corporate
veil to be lifted.
[243] Learned counsel for the Defendant then argued that being a
10% Shareholder in Serendah Heights Sdn Bhd, Just Wisdom Sdn Bhd
has given the following undertaking in the Shareholders Agreement
dated 5.7.2010 / CBD pages 722 - 751 and referred to the following
Clauses:
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Clause 12.1
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...
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“Clause 15.2
...
[245] Learned counsel then argued that clearly the termination of the
Plaintiff and the delay in the works is explicit of JWSB’s default and
inevitably the breach of its undertakings and covenants under the
Shareholders Agreement.
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JWSB for the losses incurred arising from the Event of Default and in
connection with the enforcement, preservation or protection of any
rights against the Defaulting Shareholder under the Agreement. This
indirectly would involve the Defendant’s claims against the Plaintiff
in this trial. It was further submitted that the Defendant being the
Concession Company and the wholly owned subsidiary of Serendah
Heights Sdn Bhd has locus standi to claim for the return of the said
shares.
[248] My simple answer to that is that if Just Wisdom Sdn Bhd had
breached its Undertaking, then it is for the relevant contracting party
to sue Just Wisdom Sdn Bhd and not for parent companies to fight the
battles of its subsidiaries in complete disregard and defiance of the
rule of separate legal entities since the watershed case of the House of
Lords’ decision in Saloman v. Saloman & Co Ltd [1897] AC 2 and
bypassing the principle of privity of contract.
Whether the Defendant has proved its LAD under Para 39 (e) and
(f) of the Counter Claim
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[251] Learned counsel for the Defendant admitted that both the
Clauses on LAD in the PAM Contract at Clause 22 and Clause 51 in
the Additional Provisions to the Conditions of Contract provide for
LAD due to non-completion of the works by the Completion Date.
This provision for LAD requires the Certificate of Non-Completion
(CNC) to be issued by the Architect to trigger the claim for LAD from
the period of due completion to the actual period of CPC.
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of the Contract was unlawful, the Defendant cannot now Claim for
LAD.
[253] However the Defendant sought to justify its claim for LAD for
delay that could be ascertained even before the CPC and CNC. It was
submitted that there are 2 most important stakeholders who are the
Government through the Ministry of Higher Education where UiTM is
the end user and the Financier i.e. BPMB. It was said that these 2
stakeholders have their own set of requirements and conditions (apart
from the PAM Contract) that the Defendant and the Plaintiff have to
abide in order for them to be involved in the Project. The set of
requirements by these 2 stakeholders are expressed in the Additional
Provisions to the Conditions of Contract and also in the Addendum to
both the Letters of Award for Package 1 & 2.
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[259] As was held by the Federal Court in Selva Kumar a/l Murugiah
v. Thiagarajah a/l Retnasamy [1995] 1 MLJ 817, under section 75
Contracts Act 1950 damages must be proved.
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[263] The Defendant’s Counter Claim for LAD for the sum
RM6,867,378.00 is derived during the suspension period and the
injunction period as follows:
[264] The Defendant submitted that the delay in the works during the
Suspension period from 3.7.2012 - 13.7.2012 and during the
injunction period from 24.7.2012 to 13.8.2012 are not challenged by
the Plaintiff. The Order of the Court and the documentary evidence to
support the aforesaid duration were not rebutted.
[266] In any event this loss has not been proved under section 75
Contracts Act 1950.
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[268] Under such a circumstance the Defendant cannot have the cake
and eat it in having the audacity to claim for LAD even after it had
effected termination of the Contract and of the Plaintiff.
[271] Learned counsel for the Defendant submitted that DW5, the QS,
gave evidence that DW5 had verified Defendant’s claim and allowed
the sum of RM184,331.72 as being a valid claim supported by
documents. DW5’s verification is at Bundle G pages 224 - 225 / CBD
pages 846 - 847.
[272] DW8, the General Manager who is responsible for the Project
Accounts of the Defendant, gave evidence that the Project Accounts
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being finalized and the figures revisited, the Defendant’s claim under
Para 39 (g) is now verified by the QS (DW5) and reduced to
RM184,331.72 and the supporting documents are at pages 226 - 418
Bundle G.
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[279] This claim had not been proved on the balance of probabilities
and therefore is dismissed.
[280] The Defendant’s claim arises out of the early release of the
Plaintiff’s retention monies in the Deed of Settlement dated 9.11.2012
at Part A Para 1 page 4 Bundle F/CBD pages 667 - 676.
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[285] Before the Court can allow this claim, it must be shown that the
parties had agreed that interest will be charged for the relevant period
for early release of the Retention Sum. Since there was no agreement
that interest would be paid, this Court cannot impose or import a term
which is not there and which the parties could not agree. Without an
agreement on interest, the Defendant is not obliged to release the
Retention Sum and then later imposed interest unilaterally.
[286] At any rate as this Court had held that the termination was
unlawful, the Retention Sum could not be validly held as the Plaintiff
would not be allowed back into the Site to carry out rectification
Works. Thus the so-called early release of Retention Sum after the
termination of Contract can nevertheless be justified in the
circumstances of the case.
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[288] This claim cannot be allowed in law as this Court had already
found the Defendant’s termination of the Contract to be unlawful. Any
extra costs of completion arising out of the Defendant’s unlawful
termination cannot be charged to the Plaintiff for that would be to
allow the Defendant to profit from its own unlawful conduct of
termination.
[289] The Defendant’s claim for legal costs for the sum of
RM222,242.75 is for damages suffered by the Defendant by way of
legal expenses and costs incurred due to Plaintiff’s default in
obtaining injunctive measures. This claim arises from the undertaking
as to damages given by the Plaintiff in the ex-parte Order dated
24.7.2012 at pages 983 to 989 Bundle IYCBD pages 840 - 845. The
ex-parte Order was later set aside as can be noted from the Grounds of
Judgment of the Learned Judge at page 991 at Bundle I. Hence the
Defendant submitted the Defendant’s claim for legal expenses
incurred as supported by the documents in Bundle G pages 454 - 456,
450 - 453, 457 - 460, 461, 473, 474, 480, 484, 481, 482 and 483 ought
to be allowed/CBD pages 633 - 666.
[290] The Defendant submitted that the legal fees incurred by the
Defendant to set aside the injunctive measures vide the legal charges
appended below are directly in respect of the UiTM, Jasin Project and
against the Plaintiff. This is evident from the legal Bill of Charges as
appended below:
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RM222,242.95
[291] It is no doubt true that the Plaintiff had undertaken to bear all
damages during the injunction application. However, I agree with
learned counsel for the Plaintiff that the damages do not cover any
legal fees as claimed by the Defendant.
[292] In Sunseekeers Pte Ltd v. JSH Joshua [1990] 3 CLJ (Rep) 979
the court stated that legal fees is not part of claimable damages. They
should be taxed as part of the party and party costs payable to the
Defendant.
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[296] Further, the Plaintiff had issued a Section 218 Notice dated
5.10.2012 against the Defendant in respect of the UiTM, Jasin Project.
(Para 7 Part A Deed of Settlement in Bundle F refers).
[297] What I had said with respect to the Plaintiff’s claim for loss of
reputation would equally apply to the Defendant’s Counterclaim for
loss of its reputation.
[300] DW5, the QS, gave evidence that the new contractors i.e. Arah
Semangat Sdn Bhd appointed by the Defendant after the Plaintiff’s
termination had carried out the rectification works in respect of the
Plaintiff’s unacceptable works. DW5 further gave evidence that DW5
prepared on behalf of ARH Interim Payment Certificate No. 3
(Rectification & Variation Works) at pages 490 - 547 in Bundle H /
CBD pages 605 - 632.
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Total RM5,285,241.31
[302] I can accept the evidence of DW5 who confirmed that the
Defendant is entitled to be reimbursed for the sum of RM4,312,229.71
paid out to Arah Semangat Sdn Bhd for Rectification Works. DW5
was candid in giving his evidence that the Defendant is not entitled to
the Variation Works amounting to RM973,011.60.
[303] I agree with learned counsel for the Defendant that the above
evidence on rectification works was further corroborated by DW4’s
evidence i.e. the Structure & Civil Consultant as follows:
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[306] However learned counsel for the Plaintiff had in his further
submission after the first clarification raised the issue that the claim
for rectification Works was not specifically pleaded.
[307] Learned counsel for the Defendant urged this Court to take
cognizance that after the Defendant had closed its case, I had given
written directions for both parties to submit and the Defendant had
informed the Court that the claim for rectification works would fall
within the general damages claimed at paragraph 39 (q). I am satisfied
as to what transpired as can be gathered from the Notes of Evidence at
Appendix - 1 (item 17 refers). Further, the Notes of Evidence on
14.4.2017 annexed as Appendix - 2 at pages 51 & 52 expressly stated
the Defendant’s claim for Rectification Works will be included in
Para 39 (q) under the head of General Damages. I agree that nowhere
in the Notes of Proceedings, is it stated the Plaintiff’s objection to
this head of claim as unpleaded. I would agree with the Defendant’s
submission that at no material time did the Plaintiff through its
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[308] The Defendant further submitted that the Plaintiff had not been
taken by surprise by the Defendant’s claim for rectification works. On
the contrary, the Plaintiff had participated without objection and cross
examined the Defendant’s Witness DW4 on this claim. Notes of
Evidence on 14.2.2017 in particular at pages 51, 52, 55 and 57 marked
as Appendix - 3 refers. I agree that the Plaintiff’s assertion that the
rectification costs is not reflected in the Final Account has no merits
for the retention monies have been released to the Plaintiff in the
Deed of Settlement. The Defendant further submitted that the
Defendant’s claim for rectification works is not too radical a
departure from the pleadings but in fact are damages common in the
building industry.
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[311] Learned counsel for the Defendant also referred to the case of
KEP Mohamed Ali v. KEP Mohamed Ismail [1981] 2 MLJ 10 at p 12,
where it was said:
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Pronouncement
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COUNSEL:
For the plaintiff - Ismail Arifin; M/s Ram Reza & Muhammad
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