LNS 2018 1 206 Othhco

[2018] 1 LNS 206 Legal Network Series
IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR

IN THE STATE OF WILAYAH PERSEKUTUAN, MALAYSIA
(CIVIL DIVISION)
[SUIT NO: 22C-35-0 9/2015]
BETWEEN
KEMBANG SERANTAU SDN BHD ... PLAINTIFF

(COMPANY NO: 224505-W)
AND
YBK USAHASAMA SDN BHD … DEFENDANT

(COMPANY NO: 8 90886-M)
CONTRACT: Building contract - Suspension of work - Validity -

Suspension of work by main contractor following employer’s non-
payment of interim certificate - Whether contractor has right to suspend
its work - Whether suspension of work was reasonable
CONTRACT: Building contract - Termination - Validity - Termination of

contract by employer following suspension of work by main contractor -
Whether party terminating contract must follow strict procedure
prescribed in contract - Whether termination was lawful and valid -
Whether there was breach of notice period
CONTRACT: Building contract - Damages - Wrongful termination - Loss

of profit - Termination of contract by employer - Claim for loss of profit
by contractor - Whether contractor was entitled to claim for loss of profit
arising out of a wrongful termination by employer
CONTRACT: Building contract - Damages - Rectification work - Claim

for costs of rectification work by employer against contractor -
1
Rectification works in respect of unacceptable works - Whether

employer’s claim for rectification works had merits
[Plaintiff’s claim allowed. Defendant’s claim allowed. Costs to be

borne by parties.]
Case(s) referred to:
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)
Architectural Installation Services Ltd v. James Gibbons Windows Ltd

[2004] 46 BLR 91 (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)
Fajar Menyinsing Sdn Bhd v. Angsana Sdn Bhd [1998] 1 LNS 88 HC

(refd)
Fung Keong Rubber Manufacturing (M) Sdn Bhd v. Lee Eng Kiat & Ors
[1980] 1 LNS 156 FC (refd)
Investors Compensation Scheme Ltd v. West Bromwich Building Society

[1998] 1 WLR 896 (refd)
Johor Coastal Development Sdn Bhd v. Constrajaya Sdn Bhd [2009] 4

CLJ 569 FC (refd)
KEP Mohamed Ali v. KEP Mohamed Ismail [1980] 1 LNS 169 FC (refd)
2
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)
Platinum Nanochem Sdn Bhd v. Mecpro Heavy Engineering Ltd [2015] 1

LNS 1326 HC (refd)
Popular Industries Ltd v. The Eastern Garment Manufacturing Sdn Bhd

[1990] 2 CLJ Rep 635 HC (refd)
Saloman v. Saloman & Co Ltd [1897] AC 2 (refd)
Selva Kumar Murugiah v. Thiagarajah Retnasamy [1995] 2 CLJ 374 FC

(refd)
SK Styroform v. Pembinaan LCL [2004] 5 MLJ 385 (refd)
SPM Membrane Switch Sdn Bhd v. Kerajaan Negeri Selangor [2016] 1

CLJ 177 FC (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)
Superintendent of Lands and Surveys, 4th Division & Anor v. Hamit B

Matusin & Ors [1994] 3 CLJ 567 SC (refd)
3
Legislation referred to:
Contracts Act 1950, s. 75
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.
[2] Whilst there was a partial settlement that resulted in the

withdrawal of an earlier action and an appeal therefrom, there was
unfortunately not enough momentum and motivation to carry them
through with a full and final settlement.
4
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.
[5] The Plaintiff applied for an urgent injunction to restrain the

Defendant from calling on the Bank Guarantee and to restrain the
Defendant from taking possession of the Site. There were also other
applications for contempt and committal against the Defendant and its
Directors. The High Court hearing the matter subsequently at the
inter-partes stage dismissed all the applications for injunctions and
also the committal proceedings.
[6] Parties managed to achieve a temporary truce with the signing

of a Deed of Settlement dated 9.11.2012. The Settlement was divided
into Part A, Part B and Part C.
5
[7] Part A consisted of the parts that both sides could agree with
respect to the following:
1. Amount Payable to KSSB:
(i) Total Work Done as at 20.7.2012 pursuant to
an agreed joint valuation carried out. RM 74,889,919.98
(ii) Less the net omission pursuant to the
Interim Final Certificate by the QS as per
Appendix A RM 337,297.43
(iii) Less Payment made to KSSB via Interim
Certificate 1-13 RM 50,499,258.00
Amount Payable to KSSB
(Including Retention Sum RM7,455,262,25) RM 24,053,364.55
[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.
[9] As the parties could not arrive at a settlement on the various

heads of claims in Part B and Part C, it is back to the drawing board
again with the Plaintiff filing this Claim and the Defendant filing a
Counterclaim.
6
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.
[11] The Defendant’s Counterclaim is at paragraph 39(a) - (t) of its

Defence and Counterclaim and prayers (h),(i),(k),(m) had been
withdrawn and so struck out.
Principles
Whether the Plaintiff’s suspension of work under the Contract

was unlawful
[12] It is true that in the PAM 2006 Conditions of Contract i.e.

Clause 30.1 (p g. 72 of BOD B) the Defendant as Employer must
certify any progress claim/work within 21 days from the day the
Plaintiff submitted its progress claim. Further the contractual period
of time stipulates the Defendant to pay within 30 days from such
Certification (Refer to clause 30.1 and to the PAM appendix in page
80 of BOD-B).
[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.
[14] The delay in certification and payment worsened at the Progress

Claim No. 13 stage. Subsequently, the Plaintiff had issued a Notice of
Default dated 29.5.2012 (page 28 of BOD -C) and only henceforth the
7
Defendant then issued a payment for Certificate No. 13 via letter

dated 1.6.2012 (Refer to page 30 BOD C)
[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.
[16] Plaintiff had further issued several warning letters to the

Defendant via letter dated 5.6.2012 (p g 32 BOD C) and letter dated
11.6.2012 (pg 36 BOD C) but to no avail.
[17] Due to such adamant position of the Defendant, learned counsel

for the Plaintiff said that the Plaintiff was constrained therefore to
issue a Suspension Notice dated 18.6.2012 (pg 40 BOD C). The
issuance appeared to be the last resort for the Plaintiff since even on
18.6.2012, the Defendant still had yet to certify progress claim no. 14.
[18] Despite what might appear to be a drastic step by the Plaintiff

in issuing the Suspension Notice, the Plaintiff said that this was the
last straw in a series of contumelious conduct on the part of the
Defendant in persistently delaying in approving the Progress Claims
and issuing the Payment Certificates.
[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:
8
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
6. Defendant Delay in Paying 10/1/2012 19-22
progress No. 8
7. Defendant on delay in paying 29/5/2012 28-29
Certificate 13
8. Defendant on delay in 5/6/2012 32-33
certifying No. 14
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
9
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:
“Suspension for Non Payment”.
“...if the employer fails or neglects to pay the contractor the

amount due as shown in the payment certificate and continue
such default for 14 days from the receipt of such notice, the
contractor may by a further written notice delivered by hand
or by registered post, forthwith suspend the execution of the
works until such time payment is made. Provided always that
such notice shall not be given unreasonably or vexatiously.”
(emphasis added)
[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
10
important enough to be set out in full and they read as follows with
the caption:
• Payment of Interim Certificate No. 14
• Suspension of Work.
“Referring to our notice previously issued to you dated 1 th June

2012, we regret to inform you that it is clear that you had failed
to fulfill your obligation to pay us according to the terms
enumerated in the Agreement and Conditions of PAM Contract
2006 and therefore we have all the rights to suspend the works
at site.
PLEASE TAKE NOTICE that with effect from tomorrow,

Tuesday, 3 rd July 2012, we shall suspend the execution of our
works until such time the payment is made to us as provided
under Clause 30.7 of the Agreement and Conditions of PAM
Contract 2006 (Without Quantities) dated the 30 th December
2010).”
[23] The Plaintiff by its earlier Notice of Default dated 18.6.2012

had notified the Defendant that it had failed to certify on time and/or
honour the Certificate No. 14. Learned counsel for the Plaintiff
graphically described such failure by the Defendant to abide with the
contractual timeline as “the paralyzing bane to the Plaintiff.” Under
Clause 30.1 of the Conditions of Contract in PAM 2006 the Architect
is to issue the Interim Certificate within 21 days of receipt of the
Plaintiff’s payment application. Learned counsel for the Plaintiff was
not unaware of the longer period provided in the Additional
Provisions to the Conditions of Contract for the issuance of the
Payment Certificate as contrasted below:
11
Period Of Period For Enforcement

Item Clauses
Certification Payment By
1. CLAUSE 30.1 Within 21 days Within 30 PLAINTIFF
PAM from receipt of days from the
CONDITIONS progress claim issuance of
OF CONTRACT certificate
2. CLAUSE 68.3 Within 30 days Within 20 DEFENDANT

of Additional after receipt of days from the
Provisions of progress claim issuance of
Contract employers
certificate of
payment
[24] The Notice of Suspension met with an immediate reaction from

the Defendant. The Defendant’s Architect of the Project i.e.
Landesign Architect, issued a Notice of Default to the Plaintiff
invoking Clause 25.1(b) of the Conditions of Contract PAM 2006
declaring the Plaintiff to be in default in that the suspension was
without reasonable cause. Landesign Architect denied that its client
the Defendant had been in default of Payment as it had under the
Contract three (3) months and fourteen (14) days to pay from the date
of issuance of the Certificate of Payment,
[25] Landesign Architect in that Notice of Default also gave 14 days

Notice in that if the Default were to continue for 14 days from the
date the Notice of Default is received, then the Employer would
initiate action allowable in the Contract. That appears to be the
language of Clause 25.2 of Conditions of Contract PAM 2006 on
“Procedure for Determination”.
12
[26] The said Notice of Default issued by Landesign Architect to the

Plaintiff dated 3.7.2012 is set out below for a full appreciation of its
content:
“Ref: Cadangan Pembangunan Universiti Teknologi Mara

(UiTM) Kampus Jasin di atas PT 1016 (Lot Lama 1005)
Mukim Semujuk, Daerah Jasin, Melaka:
Kontrak No: 2010/YBKU/KSSB/P2
- Notice of Default by the Contractor
The above matters, your letter dated 2 July 2012 to Messrs.

YBK Usahasama Sdn. Bhd. (YBKU) in suspending the works
effective 3 July 2012 kindly refers.
Please be reminded that Yg Berbhg Dato’ had agreed that The

Employer have a three (3) months and Fourteen (14) days to
make payment due to the contractor. As such your referred
letter informing suspension of work is in breach of clause
25.1(b) of PAM condition of contract.
Your office had to date also fail to comply to various Al issued

(duly attached) apart from the many non-compliance report
(duly attached) still unattended with some requires various
rectification work with the method of rectification requires prior
approval from the consultant. The number of workforce also had
been reduced significantly since June 2012.
As such it is necessary for us to serve notice that Kembang

Serantau Sdn. Bhd. is in default of clause 25.1 of the
contract. Should Kembang Serantau Sdn. Bhd. continue to be
in default for 14 days from receiving this notice, the
Employer will initiate action allowable in the contract.”
(emphasis added)
13
[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:
ITEM LETTERS DATE PAGES IN

BOD C
8. Plaintiff’s warning to 5/6/2012 32-33
Defendant on delay in
certifying No. 14
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.
Suspension Notice 22/6/2012 44-45
12.
Defendant on delay in 6/7/2012 79-80
certifying Claim No. 15
[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
14
certification process and payment are under the PAM Conditions of

Contract (Refer BOD B from page 28 to page 81) whereas the
Defendant’s position is that the “Additional Provisions to the Contract
Agreement’ containing the “Additional Provisions to the Conditions
of Contract” at pages 82-184 BOD B, prevails.
[30] The conflict cannot be more contrasting. Under Clause 30.1 of

The Conditions of Contract of the PAM Contract 2006 the
Certification by the Architect is within 21 days of receipt of the
Contractor’s Progress Claim and Payment is to be made within the
period of honoring the Certificate which is 30 days as stated in the
Appendix to Clause 30.1. Under Clause 68.3 of the “Additional
Provisions to the Conditions of Contract” the Employer is to certify
the amount to be paid to the Contractor within 30 days of submission
of the Contractor’s monthly statement. That Certificate of Payment is
to be endorsed by the Independent Checking Engineer (“ICE”)
appointed and only after the said endorsement is payment due within
20 days. It is to be noted that there is no time frame within which the
ICE shall give its endorsement. Under Clause 72.1(a) of the
“Additional Provisions to the Conditions of Contract” it is only after
the Employer has failed to pay the Contractor within 3 months of the
due date that the Contractor may give another 14 days written Notice
to the Employer to remedy the breach before the Contractor has the
right to terminate the Contract for non-payment of a Payment
Certificate duly endorsed by the ICE.
[31] Clearly the 2 terms of when a Payment Certificate is due and

when the Employer is in Default for non-payment are in conflict. The
Defendant had repeatedly informed the Plaintiff of the enforcement of
the Additional Provisions to the Conditions of Contract as follows:
15
DATE OF
DEFENDANTS PAGE IN BUNDLE
LETTERS
4/11/2011 Page 9 BOD C
21/6/2012 Page 41 BOD C
27/6/2012 Page 48
[32] How then is this conflict to be resolved? The parties have

already provided for that in the expressed terms in the Letters of
Award as well as in the “Additional Provisions to the Conditions of
Contract” and also in the PAM 2006 Contract itself.
[33] It may fairly be stated that the Contract Documents duly agreed
and executed by the Plaintiff and the Defendant consisted of the
following:
(a) The Letter of Award dated 2.7.2010 for Enabling Works

(Package 1) pages 1 - 3 Bundle B2/CBD pages 1 - 13.
(b) The Addendum dated 9.12.2010 to the Letter of Award dated

2.7.2010 (Package 1) pages 14 - 18 Bundle B2/CBD pages 14 -
18.
(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.
(d) The Addendum dated 9.12.2010 to the Letter of Award dated

2.7.2010 (Package 2) pages 23 - 26 Bundle B/CBD pages 36 -
40.
(e) The Additional Provisions to the Contract Agreement

(“Additional Conditions of Contract”) pages 82 - 184 Bundle
B/CBD pages 96 - 199.
16
(f) The PAM Conditions of Contract (Without Quantities) “PAM

Contract” pages 28 - 86 Bundle B/CBD pages 41 - 95.
[34] To begin with, the 2 Letters of Award dated 2.7.2010 have

Clauses 3.3 - 3.5 in the Letter of Award for Enabling Works (Package
1 of the Project) and Clauses 3.3 - 3.4 in the Letter of Award for
Building & Associates Works (Package 2 of the Project); the latter is
identical to Clause 3.3 - 3.5 of the Letter of Award for Enabling
Works, wherein reference was made to the “attached Conditions of
Contract”. Clauses 3.3 - 3.5 of the Letter of Award for Enabling
Works (Package 1 of the Project) are set out below:
“3.3 Save as otherwise provided herein, in addition to all

terms and conditions of the Agreement and Conditions of
Building Contract Private Edition Without Quantities issued
under the sanction and approval of Pertubuhan Akitek Malaysia
Edition 2006 (“the PAM Conditions of Contract of
Contract”), the attached Conditions of Contract shall apply
to this Letter of Award.
3.4 The provisions in the attached Conditions of Contract

are in amplification and form an integral part of this Letter of
Award.
3.5 You acknowledge that the PAM Conditions of a Contract

have been extended and/or modified pursuant to the contract
documents by the inclusion of the provisions herein
provided.” (emphasis added)
[35] Learned counsel for the Plaintiff submitted that by “attached

Conditions of Contract” is meant the Conditions of Contract in the
PAM 2006 Contract from Clauses 1.0 - 38.1 of the Conditions of
Contract from BOD B in pages 27-86.
17
[36] That, I am afraid, would go against the grain of the descriptive

words and references made to the “attached Conditions of Contract”
in contradistinction to the PAM Conditions of Contract as in Clause
3.3 above. The above Clauses referred to would be so incoherent if by
the “attached Conditions of Contract” is meant the PAM Conditions of
Contract. The expressions “in addition to” in Clause 3.3, the
“amplification” in Clause 3.4 and the “have been extended/modified”
in Clause 3.5 would have been so clumsily placed with no coherence
to the sentence structure and syntax.
[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.
[39] It is not uncommon for parties to a construction contract to use

a base document which is normally a standard form contract
prescribed by the industry body be it PAM, IEM, PWD, CIDB and
more recently KLRCA Standard Form Agreement on top of the Letter
of Award and then to supplement it with additional terms and
conditions specially crafted and rafted into the base contract to form
the total Contract Documents.
[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
18
an existing standard form agreement terms and conditions that do not

prevail over an already existing terms and conditions in the standard
form?
[41] The use of the device of “Priority of Documents” Clause is to

address this more than likely conflict such that what had been thought
through and tailored to meet the particular and peculiar needs of
Project stakeholders would prevail over the general terms in a
standard form contract in whose terms the parties have their
confidence as forming the base of the Additional Conditions of
Contract where these Additional Conditions are silent.
[42] Clause 5.3 of the “Additional Provisions to the Conditions of

Contract” addressed the “Priority of Documents” as follows:
“Priority of Documents
This Contract comprises of the following documents and in the

event of any conflict between or among the documents the order
of priority shall be in the order that they appear, which is as
follows:
(i) the Letter of Award and these conditions as attached to it;
(ii) such further documents as the parties may agree and

which are signed on behalf of both parties to identify them
as documents forming part of the Contract;
(iii) followed by the sequence of priority as provided in the

PAM Conditions of Contract.”
[43] It is as clear as broad daylight that the “Additional Provisions

to the Conditions of Contract” commonly referred to as the
“Additional Conditions of Contract” or just “Conditions of Contract”
would prevail over the PAM Conditions of Contract.
19
[44] The question of which terms prevail may be easily answered by

looking at the Clause 3.0 from the Conditions of Contract PAM 2006
at page 44 of the BOD B.
[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.
[46] Once the latter documents in the “Additional Conditions of

Contract” had stated and sorted out the order of “Priority of
Documents” that latter Documents would prevail over the earlier
documents unless otherwise stated.
[47] Learned counsel for the Plaintiff seemed to see some

significance or rather the less of it when these “Additional Provisions
to the Contract Agreement” are placed from pages 82 - 184 BOD B
rather than in front like the PAM 2006 Contract from 28-81 BOD B
but surely that kind of sequencing documents for purposes of
numbering and binding cannot take precedence over the “Priority of
Documents” expressly stated.
[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,
20
those in the Construction Industry have a more efficient and effective

method by way of setting out by the device of “Priority of
Documents” such that in the event of conflict, the parties already
know which contractual documents would prevail. That is both
purposeful and practical.
[49] Whilst it may be true as in the present case where the

Additional Provisions to the Contract Agreement are prepared by the
Defendant as Employer, ultimately it is for the Plaintiff as Contractor
to assent if not accede to those Additional Terms and Conditions. One
is not talking of inequality of bargaining powers here for the
Contractor is free to walk away without any explanation if the
Additional Terms and Conditions are too onerous for its liking.
Having signed it the Contractor cannot then say that they still prefer
and want the PAM 2006 Conditions of Contract to prevail in the event
of conflict. In any event the Plaintiff had not pleaded inequality of
bargaining power on the part of the Plaintiff.
[50] So as here when there is a conflict between Clause 30.1 of the

Conditions of Contract PAM 2006 Contract with respect to payment
period once certification is issued with Clause 68.3 of the Additional
Conditions of Contract, the latter would prevail.
[51] As outlined by learned counsel for the Defendant, the Plaintiff

submitted the Progress Claim No. 14 (Package 1) to SMPM, the
Project Management Company under the Contract, on 2.5.2012 and
duly received by the Architect on 3.5.2012. (Bundle Q page 466) /
CBD page 201.
[52] The Plaintiff submitted the Progress Claim No. 14 (Package 2)

to SMPM, on 28.4.2012 and there is no acknowledgment of receipt by
the Architect noted. (Bundle Q page 466) / CBD page 202.
21
[53] Assuming Interim Certificate No. 14 for Package 2 was also

received by the Architect on 3.5.2012 hence under the PAM
Conditions of Contract, the Interim Certificate No. 14 ought to be
issued on or before 24.5.2012 (i.e. within 21 days). On the other hand,
under the Additional Provisions to the Conditions of Contract, the
Interim Certificate No. 14 ought to be issued on or before 2.6.2012
(within 30 days).
[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.
[56] Under the Additional Provisions to the Conditions of Contract,

the Defendant vide their letter dated 28.6.2012 (at page 821 Bundle
I)/CBD pages 240 - 241 had informed the Plaintiff to collect the
Interim Certificate No. 14 from the Defendant’s office on 29.6.2012.
Under the Additional Provisions to the Conditions of Contract,
Interim Certificate No. 14 will be due for payment on 19.7.2012.
Further, the Defendant will be in default of payment on Interim
Certificate No. 14 upon expiry of 3 months and 14 days i.e. on or
about 2.10.2012.
22
[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.
[58] It must be noted that the complaint of Default of the Plaintiff is

not on the delay in certification but delay in payment of Interim
Certificate No. 14 as stated in the caption to the Notice of Default
dated 2.7.2012.
[59] As such, as unpleasant as the results may be, contractually the

Plaintiff as Contractor has no right to suspend works on 3.7.2012.
Whether the Defendant as Employer has the right to terminate the

Contract when the wrongful suspension has not continued for 14
days under Clause 25.2 of the Conditions of Contract of the PAM
2006 Contract
[60] As stated, Landesign, the Defendant’s Architect had issued on

3.7.2012 a Notice of Default by the Contractor in its immediate
response to the Contractor’s Notice of Suspension of Works of
2.7.2012.
[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.
[62] However after giving the Plaintiff the 14 Days period

presumably to rectify the breach for the breach must continue for 14
days at least before the Defendant could terminate the Contract, the
Defendant as Employer terminated the Contract by their letter to the
23
Plaintiff dated 13.7.2012 with immediate effect, the said Letter of

Termination having been received the same day by the Plaintiff. To be
sure the said Letter of Termination referred to the Notice of
Suspension dated 2.7.2012.
[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.
[64] The termination was 4 days earlier than allowed for

contractually under the provisions cited by the Defendant’s Architect
under Clause 25.2 of the PAM 2006 Contract. Such a termination is
wrong in law for non-compliance with the procedure for termination
which procedure must be strictly complied with.
[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
24
continuing default of 14 days is as bad and as ineffective and

unlawful as a termination post the 10 days after the continuing default
of 14 days.
[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.
[68] With respect I would disagree as the right to suspend Works is

not only found in Clause 25.1 of the PAM 2006 Contract which is
undeniably part of the Contract Documents but also implied under
Clause 69.1(b) under Contractor’s Default of the Additional
Conditions of Contract, when it referred to “...or has suspended the
progress of the Works for sixty (60) Days other than as expressly
permitted by the 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.
[71] The termination of the Contract by the Defendant before the

continuing default of 14 days given to the Plaintiff was therefore
invalid, wrongful and unlawful.
25
Whether the Letter of Termination of 13.7.2017 with immediate

effect is nevertheless valid under Clause 69.1 of the Additional
Provisions to the Conditions of Contract
[72] Learned counsel for the Defendant contended that the

termination vide the Letter of Termination dated 13.7.2012 is
nevertheless valid on account of repudiatory breach on the part of the
Plaintiff as Contractor pursuant to Clause 69.1 of the Additional
Provisions to Conditions of Contract. Learned counsel for the
Defendant had reproduced below what is relevant with respect to
Clause 69.1 as follows:
“Contractor’s Default
If the Contractor shall assign the Contract other than as

permitted by the Contract, or if the Employer shall be entitled to
terminate pursuant to Clause 28 or if the Contractor;
...
(d) despite a previous warning by the Employer in writing

given not more than sixty (60) Days prior to notice of
breach, is continuing to fail to proceed with the works with
due diligence or is otherwise persistently or
fundamentally in breach of any of his material
obligations under the contract; or ...
Then, the Contractor shall be deemed to be in breach of the

Contract and without prejudice to any other rights and remedies
of the Employer, 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
26
the satisfaction of the Employer, the Employer may enter upon

the Site and the Works thereon and expel the Contractor
therefrom without thereby avoiding the Contract or releasing the
Contractor from any his obligations or liabilities under the
Contract or affecting the rights and powers conferred on the
Employer by the Contract and may himself complete the works
or may employ any other contractor or contractors to complete
the Works.”
[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:
(i) The Contractor is persistently or fundamentally in breach of any

of his material obligation under the Contract.
(ii) The deeming provision is triggered once there is a breach of

Clause 69.1 (d).
(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
27
mandatory since the said Clause reads “... without prejudice

to any other rights and remedy of the Employer, the Employer
may give notice to the Contractor specifying such breach ...”.
Further, the notice can be given by the Employer and/or the
Employer’s Representative since the definition of Employer
in the Additional Conditions of Contract includes the
Employer’s duly appointed representatives. (emphasis added)
(v) There is no requirement for any notice for the Employer to

expel the Contractor and the provision to expel is thus
forthwith. (emphasis added)
[75] I do not agree with the purported termination of the Contract by

the Defendant under Clause 69.1 (d) above as the said Clause must be
specifically invoked and the actual breach complained of spelt out in
the Notice of Breach. Is it a case of the Plaintiff failing to proceed
with the Works with due diligence? Is it a case of the Plaintiff
persistently or fundamentally in breach of any of his material
obligations under the Contract?
[76] It is not enough and certainly too vague a Termination Letter

without due notice and with immediate effect to refer to the following
as the ground for immediate Termination without Notice. The Letter
of Termination of 13.7.2012 is important enough to be set out in full
below:
“We refer to the Notice of Default by the Contractor issued by

Landesign Architect dated 3.7.2012 in respect of the above
matter.
We further refer to your letter dated 11.6.2012 on the Notice

Refer To Arbitration and your letter dated 18.6.2012 on Notice
of Suspension of Works followed by your letter dated 2.7.2012
wherein your good selves suspended execution of all works and
28
directed all your sub-contractors to equally suspend works. Your

conduct in suspending all works affirms your intention not to
carry out your primary obligation to proceed regularly and/or
diligently with the works. Your refusal not to be bound by the
Contract Documents, your blatant non compliance with the
architect’s Instructions and suspending all works without a valid
legal cause is itself a repudiatory breach which entitles us to
invoke our rights of termination without any further notice.
Despite our letters dated 19.6.2012 and 27.6.2012 reiterating the

agreed terms between the parties in the Contract Documents,
your good selves vide your letters dated 25.6.2012 ... and
6.7.2012 have clearly evinced your intention not to be bound by
the agreed terms in the Contract Documents. As such your
continued act to suspend works at the site is clearly in breach
of the Concession Agreement dated 4.5.2010 which you have
agreed to observe, perform and comply vide Clause 1.7 in the
Additional Provisions to the Conditions of Contract. The
Concession Agreement expressly stipulates that the Concession
Company i.e. YBKU would be in default during the construction
period if there is a continuous period of 30 calendar days of
suspension of Works or any part thereof.
Under the circumstances, and in view of your apparent and

expressed intention and conduct not to adhere and be bound
by the Contract Documents, we have no alternative but to
terminate your good selves as the Main Contractor for
Package 2 - Building and Associated Works and Package 1 -
Enabling Works for the abovementioned Project.
PLEASE TAKE NOTICE that effective from service of this

Letter of Termination you are hereby terminated as the Main
Contractor for Package 2 - Building and Associated Works
29
and Package 1 - Enabling Works for the abovementioned

Project.
You are hereby instructed to vacate the Site and return

possession of the Site to YBKU with immediate effect.
PLEASE TAKE FURTHER NOTICE that upon service of

this Letter of Termination on your goodselves, it is the
responsibility of YBKU as the Concession Company to
protect and maintain the Project Site and Land until
completion of the Project. We will not tolerate any
interference of our rights and your goodselves will be
notified in writing by the Architect for a joint inspection of
the Site to determine the extent of your works executed and
the materials and goods delivered to the Site.” (emphasis
added)
[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.
[78] The 45 days or 14 days as the case may be must be interpreted

to mean that the Defendant has within that period to remedy its breach
for otherwise the time frame would be devoid of meaning. It would
mean that today the Defendant may give Notice of Default and the
30
next day terminates the Contract. I would attribute it more to poor

drafting than anything else.
[79] In Investors Compensation Scheme Ltd v. West Bromwich

Building Society [1998] 1 WLR 896 at 912-913, it was held as
follows:
“The ‘rule’ that words should be given their ‘natural and

ordinary meaning’ reflects the common sense proposition that
we do not easily accept that people have made linguistic
mistakes, particularly in formal documents. On the other hand, if
one would nevertheless conclude from the background that
something must have gone wrong with the language, the law
does not require judges to attribute to the parties an
intention which they plainly could not have had. Lord Diplock
made this point more vigorously when he said in Antaios
Compania Naveira SA v. Salen Rederrierna AB [1985] AC 191,
201:
If detailed semantic and syntactical analysis of words in

commercial contract is going to lead to conclusion that
flouts common sense, it must be made to yield to business
common sense.” (emphasis added)
[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.
[81] Further I do not agree that this is a case of a breach under

Clause 69.1(d) but primarily and predominantly a breach under Clause
69.1(b) for suspending the progress of the Works and for that the
suspension must have continued for 60 days.
31
[82] Here the suspension started only on 3.7.2012 and the

termination was effected on 13.7.2012 and I could not see how the 60
days of suspension has continued before there could be termination.
At best this is a valiant attempt to salvage the Termination of the
Contract by the Defendant but falls short of the strict procedure that
parties have agreed with respect to termination with regard to Notice
period.
[83] The Defendant’s purported Letter of Termination is invalid,

wrongful and unlawful even under the Additional Conditions of
Contract under Clause 69.1(b) thereof.
Whether the Defendant can rely on its common law rights to

terminate the Plaintiff without Notice on ground of the Plaintiff
having repudiated the Contract
[84] As it transpired, learned counsel for the Defendant had a motive

in pursuing the argument that the Plaintiff had no right to suspend
works for non-payment of the Interim Certificates of Payments. It is
to set the stage for her subsequent submission, when not without some
seriousness, she contended that the suspension of Works by the
Plaintiff as Contractor would amount to repudiation of the Contract
which entitled the Defendant as Employer to terminate without further
notice as stated in paragraph 2 of the Letter of Termination.
[85] I can accept the submission of learned counsel for the

Defendant that the Defendant’s right to terminate the Contract is
preserved with the inclusion of the clause below in Clause 69.1 of the
Additional Conditions of Contract as follows:
“... the Contractor shall be deemed to be in breach of the

Contract and without prejudice to any other rights and
remedies of the Employer,...” (emphasis added)
32
[86] However in exercising that common law right the Employer

cannot itself breach the Notice period contractually agreed whether it
be the Notice period to rectify breach or the period of continuance of
the breach by the Contractor before the termination. The other rights
and remedies in common law cannot be exercised to deny the
Contractor of its contractually agreed rights. Otherwise the
contractual terms would be denuded and be devoid of meaning or
worse still, there could be a breach of it by the Employer and yet the
Contractor cannot defend against the termination. An Employer
cannot under the guise of its common law rights breach its contractual
obligations to comply with the Notice Period prescribed or to forgo it
altogether.
[87] Thus after having given the Plaintiff 14 days to consider

resuming work on ground of wrongful suspension, the Defendant
would be estopped from now asserting that the 14 days period can be
ignored by it and the termination can be effected even before the 14
days is over.
[88] Where as in this case the parties have agreed to the

contractually agreed period of 14 days under Clause 25.2 of the PAM
2006 Contract or 60 days under the Additional Conditions of Contract,
then it is not for the Defendant as Employer to say that there has been
repudiatory breach before the time was up.
[89] Our local jurisprudence on this can be found in the case of

Malayan Flour Mills Sdn Bhd v. Raja Lope & Tan Co and
Another[1998]6 MLJ 377, though overruled on appeal, it was more on
the point of the learned High Court Judge having exercised appellate
jurisdiction in a setting aside of the Arbitral Award. There is also the
High Court case of SK Styroform v. Pembinaan LCL [2004] 5 MLJ
385.
33
[90] Learned counsel for the Defendant referred to the case of

Architectural Installation Services Ltd v. James Gibbons Windows Ltd
[2004] 46 BLR 91. The plaintiffs there were labour-only sub-
contractors to the defendants under a contract made on 22 July 1985.
Condition 8 stated that the sub-contract could be terminated if the
main contract was determined, or if the sub-contractor went into
liquidation or “if the sub-contractor wholly suspends the works or
fails to proceed with the works expeditiously or to the satisfaction of
the main contractor or to remedy defective work and remains in
default for seven days after being given notice in writing thereof by
the main contractor. ,,
[91] Condition 20 of the sub-contract provided for the hours of

work. On 20 September 1985, the defendants notified the plaintiffs
that they required compliance with condition 20. On 21 August 1986
the defendants purported to terminate the contract “by reason of your
withdrawal of labour from the above contract without sufficient notice
to ourselves”.
[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.
[93] It was held that a Notice in writing of a default under condition

8 was required before there could be a termination on the grounds set
out in sub-clause (c) of that clause. Here Notice was already given in
September 1985. However the Court held that it was necessary for
there to be a sensible connection both in content and in time between
the notice of default and any termination notice.
[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
34
to terminate the contract, the defendants had not validly determined

the contract on accordance with the provisions of condition 8.
[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.
[96] The approach taken by the Court at page 100 is to be welcomed:
“I would be sorry if the draftsmen of contracts felt it necessary

to include such legal verbiage in order to avoid unintended
results of their drafting. Construction contracts are already
sufficiently complicated when the draftsmen seek to state what
they do mean. They should not be burdened with the additional
task of stating what they do not mean. When someone has
obviously gone to a great deal of trouble to draft a contract, and
two commercial parties have agreed to a contract in those terms,
the court should be very reluctant to step in and suggest that
those two parties also agreed something which was not written
down in the agreement between them.”
[97] The Judge had in mind a clear repudiatory breach in the

example he gave where a contractor had said “we are leaving the site
and we shall not return and we shall not change our minds about this”
in such a case an Employer would clearly not have to go through the
two notice procedure to terminate the contract.
[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
35
to resume work altogether especially when the Certificate of Payment

No. 14 had been issued and collected before the Letter of
Termination.
[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:
“Pursuant to clause 7(13) of the lease we as tenant hereby give

notice to you to determine the lease on 12 January 1995 ...”
[101] Unfortunately, however, the tenant made a mistake. The third

anniversary of the term commencement date was not 12 January 1995
but 13 January 1995. The landlord has claimed that in the result the
notice was ineffective. The Court of Appeal, reversing the decision of
36
Judge Rich Q.C. (sitting as an additional judge of the Chancery

Division), upheld the landlord’s contention. It is from that decision
that the tenant appealed to the House of Lords which allowed the
appeal (Lord Goff of Chieveley and Lord Jauncey of Tullichettle
dissenting).
[102] The House or Lords by a majority held that the construction of

the notices had to be approached objectively, and the question was
how a reasonable recipient would have understood them, bearing in
mind their context; that the purpose of the notices was to inform the
landlord of the tenant’s decision to determine the leases in accordance
with the break clauses; that a reasonable recipient with knowledge of
the terms of the leases and of the third anniversary date would have
been left in no doubt that the tenant wished to determine the leases on
13 January 1995 but had wrongly described it as 12 January; and that,
accordingly, the notices were effective to determine the leases.
[103] As can be appreciated it was a case of a typo error where the

landlord was not in doubt of the clear intention of the tenant to renew
the lease. It is more a case of failing to cross a ‘t’ or to dot an ‘i’ and
surely it such cases the purposive rule serves its purpose.
[104] That is no justification from departing from the long held

principle that in construction contracts, “exact Compliance with time
limits for notices will usually be required and will be treated as a
condition precedent to a valid determination of a construction
contract” as commented at para 12.038 Hudson’s Building and
Engineering Contracts, Eleventh Edition 1995 Sweet & Maxwell,
London. It was further held in the same paragraph as follows:
“... This is particularly so where continuation of a default or a

state of affairs is required for a stipulated number of days before
a “second” or definitive notice of determination may be served.
The cases referred to in paragraphs 12-039 and 12-040 seek to
37
underscore the strictness and seriousness of non-compliance

even if the day is one day short!”
[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.
[106] It would also be incongruent for the Defendant purporting to

terminate the Contract forthwith under common law and yet at the
same time seeking to avail itself of rights available upon termination
only under Contract such as the right to require the Plaintiff as
Contractor to vacate the site and to return possession of the site to the
Defendant and the further right of a joint inspection to determine the
extent of Works executed and the materials and goods delivered to the
site.
[107] Having regard to the circumstances of the case it cannot be said

here that the termination without Notice can nevertheless be justified
under the common law right to terminate on ground that the Plaintiff
as Contractor had repudiated the Contract when the time frame for the
continuing breach in wrongful suspension of work had not yet
expired.
Whether the Plaintiff has proved its Claims under paragraphs 58

of its Statement of Claim.
[108] The monetary claim by the Plaintiff has been pleaded in the
Statement of Claim at paragraphs 58 are as follows:
38
Item Description Amount

(RM)
1 Material on site on 20.7.2012 591,971.49
Panel (IBS) work done but not valued on
2 2,370,774.00
20.7.2012
3 IBS Mould 1,013,298.32
4 Probe 283,500.00
Machineries Idling for one month from June 2012
5 610,000.00
- July 2012
6 VO approved but not paid 39,700.00
Employer requested for a much bigger
7 employer’s representative office ( not paid for 173,702.66
additional cost)
8 Piling work done but not paid 1,198,704.78
Variation for M&E works as per instruction
SP01,SP02,SP03,CW01,CW03,E02,E04,E05,
9 113,029.00
E08,E09,E10, E11,E12,E13, ,E15,E16,E17,&
E18.
Additional work done for building and
infrastructure work due to Change of Design for
10 3,957,906.36
Building Foundation and infrastructure work (
not paid)
Cancellation of M&E materials due to
11 7,581,171.45
termination
12 Variation Works (Omission) 1,282,895.00
13 Revision to value of work done for M&E works. 81,000.00
TOTAL 19,297,653.06
39
Item 1 Material on Site
Item 1 (i) Material (BRC) on site for RM208,500.00
[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.
[112] The Plaintiff’s Penultimate Claim agreeing to the deduction is

equally reflected in the Interim Certificate No. 15 for Package 2 at
pages 1126 - 1129 item 10.0, 11.0 and 12.0. The Defendant also
submitted that Interim Certificate No. 15 remains unchallenged/CBD
page 249.
40
[113] On the balance of probabilities, the Plaintiff had failed to prove

item 1 (i) of RM208,400.00.
Item 1 (ii) Balance M&E Materials at site for RM383,471.49
[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.
[115] I can accept the evidence of DW2 who testified that on

25.7.2015 JCMP went to the site and valued the balance of the M&E
materials on site based on unit rates in the Contract Document. He
explained that JCMP could not value the balance M&E materials in
Site during the Joint Valuation on 20.7.2012 because the Plaintiff was
not ready with their claims. JCMP computed the balance M&E
materials on site based on unit rates amounting to RM1,144,766.60
and allowed the sum of RM894,766.82. See JCMP’s Valuation Report
at page 1050 Bundle J. This sum has been duly paid by the Defendant
to the Plaintiff and this was admitted by the Plaintiff at page 714 of
Bundle D.
[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%.
41
[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.
[121] Once completed the wall panel would be transported by lorries

to the work site and the crane would be used to lift and install the
wall panel. PW5 informed the Court that the casting yard is at the site
and all the facilities are at the site.
[122] The supporting documents for this claim of RM2,370,774.00 are

at pages 727-813 Bundle D. I can accept this evidence of the
supporting documents though it was prepared by IBS Integrated Sdn
Bhd and not the Plaintiff as it is not disputed that IBS Integrated is
the Plaintiff’s Subcontractor for the specialist IBS Works. The various
pages detailed the breakdown of the panels installed with wet joints
and those at the site but not installed yet. There were 567 Panels for
the former and 445 Panels for the latter. The calculations for the
various hostel blocks and floors and the quantities of Panels for each
Block of hostel and the floors are all set out in details with the photos
42
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.
[125] It is also difficult to believe, as counsel for the Defendant

would want this Court to, that these panels have been destroyed.
[126] I would allow this claim on a balance of probabilities.
Item 3 IBS Mould for RM1,013,298.32
[127] PW5 gave evidence that IBS Mould is an accessory. At CBD

page 513 under “Preliminaries” it is clearly stated that the contractor
shall provide all (things) necessary for the erection of the IBS
structure i.e. tools, materials, accessories, transportation, etc. and a
sum of RM4,187,000.00 had been set aside for that.
[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.
43
[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.
Item 4 for Prop for RM283,500.00
[131] I agree with DW4 that Prop is a temporary system to support

IBS component during installation and is included in the preliminaries
allowed to the Plaintiff. (Bundle B1 pages 12 & 14 refers). IBS Mould
and Prop are accessories necessary for erection of the IBS Structure.
Item 4 being included in the Preliminaries is not claimable by the
Plaintiff.
[132] DW8’s evidence that 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 is not challenged.
See also CBD page 249.
[133] I would hold that the Plaintiff is therefore not entitled to claim
for IBS Prop.
Item 5 Machineries idling for one month for RM610,000.00
[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
44
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.
[136] This Court had earlier held such a suspension to be unlawful

and hence the Plaintiff cannot claim for the idling costs of the
machineries.
Item 6 VO approved and not paid of RM39,700.00
[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:
1. Fabricated IBS steel mould RM16,700.00
2. Design fee for the IBS Shop Drawing RM10,000.00; and
3. Management fees RM20,000.00 making a total of

RM46,700.00.
45
[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.
[142] I would allow this Claim on the balance of probabilities. Item 7

VO for constructing a bigger representative office for RM173,702.00
[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
46
E, pages 155 to 195 BOD E. In a further reminder at page 830 of

Bundle D from the Plaintiff to SMPM Sdn. Bhd dated 6.3.2012 the
Plaintiff wrote as follows:
“As requested during the meeting, we are pleased to submit

herewith our revised submission amounting to net addition
RM173,702.66 which is included the details breakdown as per
attachment, for your perusal and further action.”
[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.
[146] I would allow the Plaintiff’s claim on the balance of

probabilities.
Item 8 for piling work done for RM1,198,704.78
[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:
47
“We would like to inform you that the design of building

foundations including piling had changed from the original
tender drawing. In our opinion the consultants should design the
foundation in accordance with the IBS requirements at early
stage and we are not responsible for any deviation of the design
during the construction stage.
At the meantime, we hereby give you notice to claim the

variation order and we’ll submit the relevant cost in due
course.”
[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.
[151] I would allow this claim on the balance of probabilities.
Item 9 Variation for M&E Works for RM113,029.00
[152] Item 9 is for the Variation of M&E works as per instructions.

The witness testifying on this is PW3 En Hazlan Bin Hashim who was
the General Manager of the Plaintiff for Mechanical & Electrical
Works.
[153] I am satisfied that the Defendant’s Consultant Engineer Jurutera

CMP Sdn Bhd had given written instructions for the Variation Works
to be done in as evidenced in pages 896-900 of Bundle D for General
pipe services and in pages 906-918 for electrical services. The
Engineer’s Instructions (EI) had all been complied with as can be seen
at pages 901- 905 Bundle D.
[154] The evidence on the amount claim is found at pages 894-895 of

Bundle D.
48
[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.
[156] I would allow this claim on the balance of probabilities.
Item 10 Additional work done for buildin g and infrastructure work

for RM3,957,906.36
[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).
[158] However there were no evidence of any instructions in writing

from the Consultant Engineers EI that these changes were required or
that it was the result of variations effected by the Defendant
Engineers. I can accept the evidence of DW4 that changes to the
layout based on the type of selection or IBS system for each building
done by the Contractor’s IBS Consultant and the infrastructure works
around the building arising out of such changes are matters that the
Plaintiff can anticipate and as such any extra costs have to be
absorbed by the Plaintiff.
[159] This item is disallowed on the balance of probabilities.
Item 11 Cancellation of M&E Materials for RM7,581,171.45
[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
49
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.
[162] DW2’s evidence that these subcontractors have been absorbed

by the newly appointed Main Contractor i.e. Arah Semangat Sdn Bhd
remains unchallenged. See also Bundle W page 1 and CBD page 839.
[163] A further examination of page 1016 Bundle D prepared by the

Plaintiff on the Summary or Cancellation Charges for material off-site
for M&E Services would show that for items B, C, E and F, the
subcontractors continued with the Main Contractor Arah Semangat
Sdn Bhd (“ARH”) and that these items were used. Had these
subcontractors not been paid, they would have sued for it.
[164] In respect of items A, D and G these items were not delivered

to site and hence not considered during the Joint Valuation. I can
accept the evidence of DW2 who was the M&E Engineer from JCMP
that JCMP is still the Consultant for the Mechanical and Electrical
services for this Project and that he personally knew that these
subcontractors in respect of items B, C, E and F have been absorbed
by the new Main Contractor ARH. The names of the subcontractors
are Galitek Engineering Sdn Bhd, Progress Centre Engineering Sdn
Bhd, Apex Air Compressor (M) Sdn Bhd and Eita Elevator (Malaysia)
Sdn Bhd. DW2 further testified that Mectel Engineering Sdn Bhd is
Progress Centre Engineering Sdn Bhd’s own subcontractor.
[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
50
absorbed by the new subcontractors ARH and the subcontractors paid

accordingly.
[166] This claim for cancellation of M&E Material is dismissed on

the balance of probabilities.
Item 12 VO (omission) for RM1,282,895.00
[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.
[168] The Plaintiff’s Penultimate Claim (Progress Claim No. 16)

agreeing to the deduction is equally reflected in the Interim
Certificate No. 15 for Package 2 at pages 1126 - 1129 Bundle D items
10.0, 11.0 and 12.0. The Defendant also submitted that Interim
Certificate No. 15 remained unchallenged. See CBD page 249.
[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.
Item 13 Revision to value of work done for M&E works for

RM81,000.00
51
[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.
[172] No documents have been forwarded by the Plaintiff to support

item 13 and therefore no valuation was carried out by the Consultants
in the Tabulation prepared by QS at Bundle I page 746 - 749.
[173] 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 Revision to value of work done for M&E works for
RM81,000.00 at item 5.3 and also at CBD page 517.
[174] I agree with the Defendant that the Plaintiff’s Penultimate

Claim agreeing to the deduction for Revision to value of work done
for M&E works for RM81,000.00 at Bundle S at page 597 remained
unchallenged.
[175] The Plaintiff’s Penultimate Claim agreeing to the deduction is

equally reflected in the Interim Certificate No. 15 for Package 2 at
pages 1126 - 1129 item 10.0, 11.0 and 12.0. Interim Certificate No. 15
remained unchallenged by the Plaintiff too. See also CBD page 249.
[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
Para 59a - Interest on late payment for RM1,253,599.21
[177] Plaintiff relied on its computation at page 9 Bundle E to support

this head of claim for interest on late payment of interim certificate
amounting to RM1,253,599.21. PW2 agreed during cross-examination
52
that the computation at page 9 Bundle E/CBD page 553 is based on

PAM Conditions of Contract in failing to certify and honour the
interim certificates within 51 days pursuant to Clause 30.1.
[178] However, as I had already held that where there is a conflict in

the period of certification and the period of payment after the issuance
of the Certificate of Payment, the terms in the Additional Provisions
to the Conditions of Contract would prevail. As stated under Clause
68.3 of the “Additional Provisions to the Conditions of Contract” the
Employer is to certify the amount to be paid to the Contractor within
30 days of submission of the Contractor’s monthly statement. That
Certificate of Payment is to be endorsed by the Independent Checking
Engineer (“ICE”) appointed and only after the said endorsement is
payment due within 20 days. There is no time frame within which the
ICE shall give its endorsement. Parties did not appear to be concerned
enough to have addressed that in the said Clause presumably they
expect each other to act reasonably throughout the Contract. Under
Clause 72.1(a) of the “Additional Provisions to the Conditions of
Contract” it is only after the Employer has failed to pay the
Contractor within 3 months of the due date that the Contractor may
give another 14 days written Notice to the Employer to remedy the
breach before the Contractor has the right to terminate the Contract
for non-payment of a Payment Certificate duly endorsed by the ICE.
Under Clause 68.13 it is only after the Employer has failed to make
payments within 45 days from the due date of payment (which is 20
days from the date the Payment Certificate is endorsed by the ICE)
that the Contractor may charge interest at the rate equivalent to 1.5%
above the Base Lending Rate of May bank.
[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.
53
[180] In any event the Plaintiff’s claim under para 59 a is inconsistent

with the Deed of Settlement dated 9.11.2012 in Bundle F pages 1 - 10
/ CBD pages 667 - 676. Part C in the Deed of Settlement at page 7
expressly provides as follows:
“In the event parties fail to arrive at a settlement in respect of

Part C, then YBKU and KSSB are given liberty to pursue their
respective claims confined only to Part C and it is further
expressly agreed that YBKU and KSSB shall not invoke, add
and/or substitute any other claim or claims whatsoever nor
attempt to enforce or execute the said claims in Part C against
either party without a proper deliberation by the Court and/or
Arbitrator”. (emphasis added)
[181] The Plaintiff in the Deed of Settlement in Part C KSSB’s Claim

item 1 has claimed for interest on late payment for the sum of
RM584,517.03. PW2 refused to agree that Plaintiff’s claim at Para 58
(a) is an addition not allowed under the Deed of Settlement in Bundle
F at Part C.
[182] During cross-examination PW2 was questioned whether the

Plaintiff’s claim at Part C in the Deed of Settlement for interest on
late payment amounting to RM584,517.03 is included in Plaintiff’s
claim today for RM1,253,599.21 and PW2 agreed that it is included.
When PW2 was asked to verify and compute at the Tabulation at page
9 Bundle E on how to arrive at the figure of RM584,517.03, PW2
could not show proof to the Court on the computation.
[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:
54
(i) the 1 st moiety of 2.5% is released upon issuance of CPC;
(ii) the 2 nd moiety of 2.5% is released upon issuance of

Certificate of Making Good Defect (CMGD).
[184] I agree with the Defendant that notwithstanding the above

provision, both the Plaintiff and the Defendant entered into a Deed of
Settlement dated 9.11.2012 and the Retention monies were agreed to
be released together with the monies owing to the Plaintiff in Part A.
The Deed of Settlement does not provide for any interest on late or
delay in the release of the Retention Monies under Part A. Therefore,
the Plaintiff now cannot revert to the PAM Contract to claim for
interest on late release of Retention monies. The Plaintiff under this
head of claim also claimed for interest on late payment in respect of
Interim Certificate No. 15 for Package 1 & 2 certified on 21.11.2012
after the Deed of Settlement dated 9.11.2012 was entered by parties.
(Interim Certificate No. 15 is at pages 1112 - 1129 Bundle J) /CBD
pages 242 - 249.
[185] I agree with the Defendant’s submission that the Plaintiff

having agreed at Part A in the Deed of Settlement to the sum of
RM24,053,364.55 ought not to be allowed to claim for late payment
interest in respect of Interim Certificate No. 15 which was certified on
21.11.2012 after parties had agreed to the final sum payable to the
Plaintiff for actual work valued at 35.08% which includes all interim
certificates from Interim Certificate 1 to 15 including the retention
monies.
[186] DW9 gave evidence that the agreed sum of RM24,053,364.55

was paid to the Plaintiff via 3 cheques on 15.10.2012, 15.1.2013 and
23.5.2013 respectively. (DW9-WS Q&A 13 refers).
[187] The Plaintiff were still computing the interest for late payment
in respect of Interim Certificate No. 15 from date of certification on
55
21.11.2012 to 15.1.2013 less 51 days allowed under the PAM Contract

for the sum of RM376,710.32 at item 29 and 30 at page 9 Bundle E. If
they had calculated according to the “Additional Provisions to the
Conditions of Contract’ there would be no interest until the expiry of
20 days and followed by 45 days after the date of the Payment
Certificate and so no interest would be payable as the time frame had
not expired.
[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.
Para 59b Loss of Profit due to unlawful termination of

RM20,507,546.34
[190] Generally a Contractor is entitled to claim for loss of profit

arising out of a wrongful termination by the Employer. However like
56
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:
“It is axiomatic that a Plaintiff seeking substantial damages has

the burden of proving both the fact and the amount of damages
before he can recover....”
[193] Further at page 369:
“In this context, I am reminded of Lord Goddard’s dictum in

Bonham-Carter v. Hyde Park Hotel quoted with approval by
Thomson CJ in Lee Sau Kong v. Leow Cheng Chiang, namely,
that:
Plaintiffs must understand that if they bring actions for

damages it is for them to prove their damage; it is not
enough to write down the particulars, and so to speak,
throw them at the head of the Court, saying, ‘This is what I
57
have lost, I ask you to give me these damages’. They have

to prove it.”
[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.
[195] During cross-examination, PW2 was referred to the SSM search

result on the Plaintiff at Bundle F page 89 - 99 / CBD pages 699 -
709. PW2 agreed the gross profit before tax at page 99 in respect of a
revenue of RM28,050,152.00 is only RM561,901.00 which is about
2%. PW2 also agreed that the revenue of RM28,050,152.00 includes
the revenue from the UiTM Jasin Project but could not tell what
percentage of it.
[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.
58
[197] In Kokomewah Sdn Bhd v. Desa Hatchery Sdn Bhd [1995] 1

MLJ 214 at page 236 it was observed as follows:
“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.
[199] One must also look realistically at the Plaintiff’s stage of

Completion as at the date of termination of the Contract. I can accept
the evidence of DW7 Encik Wazir Bin Mansor who was the Project
Manager of the Project and the Project Director from the Project
Management Consultant engaged by the Defendant to manage the
Project, that at the date of Joint Valuation on 20.7.2012 where parties
concerned had endorsed the summary on Progress of Work at page 17
Bundle F that the actual physical work completed was only 41.03%.
However at that time about 69% of the contract period of 30 months
had expired. Site possession was given on 19.1.2011 and the Plaintiff
was terminated on 13.7.2012. The Defendant had paid a total sum of
RM74,889,919.98 representing 35.08% of the work done. With merely
12 months left for completion and the remaining works comprising
64.92% had yet to be completed, the inevitable conclusion is that is
that the Plaintiff’s work was in critical delay.
[200] By no means is anyone saying that the Plaintiff cannot

accelerate the work but acceleration comes with additional costs of
manpower and labour and without the Project Management Account
59
being produced under the circumstance of critical delay by the

Plaintiff one would have to cost in the factor of a possible LAD Claim
by the Defendant which would in all probability eat into if not
completely decimate whatever claim to profit that the Plaintiff is now
claiming.
[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.
Para 59c being Pre and Post Contract Expenses of RM5,270,000.00
[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.
[204] I agree with the Defendant’s submission that the Plaintiff’s

claim at Para 59c is inconsistent with and not permitted under the
agreed terms at Part C of the Deed of Settlement in Bundle F pages 1 -
10 in particular at page 7 wherein it is expressly agreed that both
Plaintiff and Defendant are confined to their claims at Part C and
parties cannot invoke, add and/or substitute any other claims. As such,
the Plaintiff’s claim at para 59c is an additional claim not expressly
provided at Part C of the Deed of Settlement and hence cannot be
allowed.
60
[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.
[206] PW6 under cross-examination agreed that it was a mistake to

include the payment for RM600,000.00 paid to the Plaintiff’s Director
in the Claim against the Defendant. (Page 34 Bundle E refers). PW6
agreed item 16 and 17 in the Summary at page 19 amounting to
RM250,000.00 is a donation for charity dinner but agreed he included
it in the claim against the Defendant because he was instructed by
Dato’ Khay Ibrahim, one of the Plaintiff’s Directors. (Page 34 Bundle
E refers).
[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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Para 59d - Damages to business reputation for RM5,000,000.00
[210] This claim is as frivolous as it is fanciful. Where parties have

regulated their losses by contract and in this case a Construction
Contract following the PAM 2006 Contract augmented by the Parties’
Additional Provisions to the Conditions of Contract, there is no room
nor basis for this claim.
[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:
“In the case of a claim for wrongful dismissal, a workman may

bring an action for damages at common law. This is the usual
remedy for breach of contract e. g., a summary dismissal where
the workman has not committed misconduct. The rewards,
however, are rather meagre because in practice the damages are
limited to the pay which would have been earned by the
workman had the proper period of notice been given. He may
even get less than the wages for the period of notice if it can be
proved that he could obtain similar job immediately or during
the notice period with some other employer. He cannot sue for
wounded feelings or loss of reputation caused by a summary
dismissal, where for instance he was dismissed on a
groundless charge of dishonesty. At common law it is not
possible for a wrongfully dismissed workman to obtain an order
for reinstatement because the common law knew only one
remedy, viz., an award of damages.” (emphasis added)
[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.
62
[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.
Para 59e - Legal costs in resisting unlawful and illegal termination by

way of injunction and police report for RM150,000.00
[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.
[217] PW2 agreed the total invoices do not sum up to RM150,000.00

from pages 676 - 699 Bundle D.
[218] PW2 agreed there is no documents to support legal costs of

RM150,000.00 incurred by the Plaintiff against the Defendant
specifically.
[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).
[220] Under Part A Clause 4 of the Settlement Agreement it is

provide that “Upon signing this Deed of Settlement , KSSB to instruct
their solicitors to withdraw the Writ Action under Suit No: 22NCvC-
63
964-08/2012 and the Injunction Order dated 17.8.2012 and both

parties to bear their own costs...”
[221] There is thus no basis for this claim and hence this head of
claim by the Plaintiff is dismissed.
Whether the Plaintiff is entitled to a claim for general damages
[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”.
[223] In any event the award of nominal damages of RM5,000.00 is a

category of General Damages.
[224] The Plaintiff’s prayer for another head of Claim under General
Damages at Para 60a is dismissed.
Summary of Claims allowed for the Plaintiff
[225] Based on the claims allowed for the Plaintiff, I granted

judgment for the sum of RM3,900,910.44 made up of the following:
Para 58 item 2 for RM2,370,774.00
Para 58 item 6 for RM39,700.00
Para 58 item 8 for RM1,198.704.78
64
Para 59 item b for RM5,000.00
[226] I also granted Interest on the sum RM3,900,910.44 at 5% per

annum from date of writ to realization.
Whether the Defendant is entitled under Shareholders Agreement

and Sale and Purchase of Shares Agreement to an order that Just
Wisdom Sdn Bhd transfer its 10% Shares in Serendah Heights Sdn
Bhd for an agreed consideration back to the Defendant.
[227] The Shareholders Agreement is found at pages 37-68 BOD F

and the Sale and Purchase of Shares Agreement at pages 69-84 BOD
F/CBD pages 752 - 766.
[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.
[229] As was highlighted by his Lordship Mahadev Shankar JCA in

the Court of Appeal case of Arah Cipta Sdn Bhd & Anor v. Kian Kee
Sawmills (M) Sdn Bhd & Ors [1997] 2 MLJ 513 at page 520-521, for a
plaintiff to succeed in specific performance, all parties claiming an
interest in the land must be made a party before the Court so that they
may be made bound by the order to ensure that the purchaser could
get a clear title:
“... 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
65
sale agreement and to create an adverse claim to the land which

they had sought to protect by filing caveats against it. If the
plaintiffs were to succeed to obtain specific performance, these
people had to be made bound by the order so that the purchaser
could get a clear title. Besides, as against all of them, there was
also a claim for damages for unlawful interference.”
[230] Likewise an order for specific performance may not be granted

if in so ordering, the rights of third parties not before the Court would
be prejudiced. The Singapore case of Coastland Properties Pte Ltd v.
Lin Geok Choo [2001] 1 SLR 72 is illustrative of this principle, as
follows:
“2 ...I should add that since specific performance is a

discretionary order, it is implicit that the court must feel
comfortable in making the order. This simply means that that
must be no residual doubt in the judge’s mind that the order, if
made, would not create any problems to any party, and not just
to the litigants themselves. I pause to emphasize that the burden
of proof is on the party claiming the order for specific
performance. If he is unable to so satisfy the court he will not
get the order.
3 In this case, I declined to grant an order for specific

performance partly because I was not satisfied that to do so
would be right and fair to all parties, including the mortgagee.
The clinical approach of the common law may readily ignore the
consequences to a person who is not a party to the proceedings,
but the defendant is here crying for the hand of equity to
intervene; and equity looks beyond the common law...”
(emphasis added)
[231] Furthermore only parties to a contract may sue each other under
the basic principle of privity of Contract. The Sale and Purchase of
66
Shares Agreement dated 30.4.2010 is between Yayasan Basmi

Kemiskinan and Just Wisdom Sdn Bhd wherein the former sold 10%
i.e. 500,000 of Serendah Heights Sdn Bhd shares to the latter for a
purchase price of RM4,620,000.00.
[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.
[234] As the price is to be negotiated, then a key term of the contract

if there is one, has not been agreed and this Court cannot decide a
price for the parties short of the parties agreeing on the price.
[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.
[236] It was argued by the Defendant’s solicitors that the Plaintiff

had made direct payments for the purchase of the said Shares to
Yayasan Basmi Kemiskinan (YBK), Permodalan YBK Sdn Bhd
67
(PYBK) and PYBK Usahasama Sdn Bhd (PYBKU) totaling a sum of

RM4,350,000.00.
[237] The relevant documents are at page 1 of Bundle V and cross

reference in respect of the Payment Vouchers can be seen in the
Summary at Bundle E page 19) / CBD page 559.
[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.
[239] In the Court of Appeal case of Tenaga Nasional Bhd v. Irham

Niaga Sdn Bhd & Anor [2015] MLJU 2165, the Court of Appeal
followed the principles laid down in Adams and others v. Cape
Industries Plc and another [1991] 1 All ER 929.The Court of Appeal,
after examining the authorities, held that:
1. the corporate veil could be lifted in exceptional

circumstances and
2. those exceptional circumstances must involve: (a) actual or

equitable fraud and (b) the use of the company whose
corporate veil was to be lifted as the means to conceal the
true facts behind the facade of the company.”
[240] Even in a case of tortious liability in Adams and others v. Cape

Industries Plc and another [1991] 1 All ER 929, the English Court of
Appeal had ruled against the concept of linking a single economic unit
to liability of the parent company for the debt of its subsidiaries. Lord
Slade LJ said at page 1016 as follows:
“The ‘single economic unit’ argument
There is no general principle that all companies in a group of

companies are to be regarded as one. On the contrary, the
68
fundamental principle is that ‘each company in a group of

companies (a relatively modern concept) is a separate legal
entity possessed of separate legal rights and liabilities’....”
[241] Further at pages 1019-1020 it was clarified as follows:
“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:
“Clause 5.2 - JWSB hereby agrees and covenants as follows:
69
5.2.4 to ensure that its nominated contractor ie KSSB who

will undertake the construction, completion and timely
delivery of the Project will comply and adhere to all terms
and conditions as imposed by the Government of Malaysia
in the concession agreement.
Clause 12.1
(c) JWSB hereby agrees and covenants to cause

KEMBANG SERANTAU SDN BHD (Company No.
224505-W) to undertake to indemnify and keep
indemnified and hold harmless YBK, PEHSB and the
Concession Company from and against all losses,
liabilities, obligations, damages, judgments, deficiencies,
claims, demands, suits, proceedings, arbitration,
assessments, costs and expenses (including without
limitation, expenses of investigation and enforcement of
this indemnity and reasonable solicitors’ fees and
expenses) suffered, incurred or sustained by YBK,
PEHSB and the Concession Company, directly or
indirectly, as a result of or arising out of a breach or
breaches of any warranties, undertakings and obligations
of KEMBANG SERANTAU SDN BHD (Company No.
224505-W) under the agreement for the appointment of
KEMBANG SERANTAU SDN BHD (Company No.
224505-W) as the main contractor.
Clause 14.1 - Representations and Warranties by JWSB
JWSB hereby warrants, covenants and represents to YBK

that:
(a) it has the relevant expertise in the fields of constructing

and developing institutes of higher education and related
70
businesses and it has the technical know-how, expertise

and knowledgeable and experienced personnel to manage
the performance of its nominated Main Contractor and
operate the Project;
...
(e) it is financially solvent, able to pay its debts as the mature,

and possessed of sufficient working capital to complete
its obligations under this Agreement;
Clause 14.2 - JWSB acknowledges that YBK and PEHSB has

entered into this Agreement in reliance on its
representations and warranties as aforesaid.
Clause 14.5 - Without restricting the rights of YBK and

PEHSB or the ability of YBK and PEHSB to
claim damages on any basis available to it, if
JWSB is in breach of any of the warranties set
out in Clause 14.1, JWSB shall pay to YBK and
PEHSB on demand the amount necessary to put
YBK and PEHSB into the position which would
have existed if the said warranties had not been
breached together with all costs and expenses
incurred by YBK and PEHSB as a result of
such breach.”(emphasis added)
[244] Having addressed the obligations and liabilities of JWSB,

learned counsel for the Defendant drew the Court’s attention to
Clause 15.2 in the Shareholders Agreement which further identifies
what constitutes an Event of Default by a Shareholder. Clause 15.2
expressly states the following defaults by a Shareholder as an “Event
of Default”:
71
“Clause 15.2
...
(b) fails to carry out the Project diligently and or stalls or

abandons the Company; or
(c) commits a material breach of any of its obligations under

this Agreements; or
(d) fails to undertake or perform any part of its obligations in

accordance with the terms and conditions of this
Agreement;” (emphasis added)
[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.
[246] The Defendant further submitted that Just Wisdom is in breach

of Clause 5.2 in the Shareholders Agreement dated 5.7.2010 in failing
to ensure its nominated contractor i.e. the Plaintiff undertakes the
construction, completion and timely delivery of the UiTM, Jasin
Project. It was argued that this breach is an Event of Default pursuant
to Clause 15.2 in the said Shareholders Agreement and the Defendant
being a wholly owned subsidiary of Serendah Heights Sdn Bhd is
entitled to the remedy provided pursuant to Clause 15.3 (a) (i) to
require the transfer of the 500,000 Serendah Heights Shares from the
defaulting shareholder i.e. Just Wisdom Sdn Bhd via its
agent/nominee i.e. the Plaintiff at a fair market value determined and
certified by the Auditors which shall be final and binding on the
shareholders.
[247] There was the further argument that the Non-Defaulting

Shareholders YBK and PEHSB have a right to be indemnified by
72
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.
[249] This Counterclaim of the Defendant at paragraph 39(d) of its

Counterclaim would have to be dismissed.
Whether the Defendant has proved its LAD under Para 39 (e) and
(f) of the Counter Claim
Para 39(e) of the Counterclaim for LAD before termination
[250] The Defendant’s claim for LAD at Para 39(e) in the

Counterclaim is as follows:
“Para 39 (e) - LAD for the 8% delay amounting to

RM9,705,894.24. This is pursuant to the
Project Account being finalized and the
figures revisited.
73
The Defendant’s Counter Claim for LAD

is now for a reduced sum of
RM9,705,894.24 is supported by the
Architect’s Instruction (AI) No. 17 dated
2.7.2012 at pages 932 - 934 in Bundle I.
Al No. 17 confirms the delay of 8% in
the Plaintiffs work. The summary for the
computation of the LAD is at page 114 in
Bundle G / CBD
page 848. The supporting documents are

attached at Appendix 1 from pages 124 -
214 in Bundle G.
Further, the LAD per day is fixed at

RM163,509.00 in the PAM Conditions of
Contract 2006 (Without Quantities) in
Bundle B at page 80 / CBD page 95. A
summary of the computation is at page
115 in Bundle G/CBD page 84 9 and the
supporting documents are at Appendix 2
from pages 215 - 223 in Bundle G and
from pages 948 - 1030 in Bundle I.”
[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.
[252] As no CNC had been issued the Defendant is not entitled to a

Claim for LAD. Moreover as this Court had held that the termination
74
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.
[254] In both the Letters of Award for Package 1 & 2 at Clause 13 it

is provided as follows:
“Clause 13 Approval of Appointment by Financier
13.1 You acknowledge that we are required to meet all

requirements and conditions imposed by the financier failing
which we shall not be given any financing for the Project hence
rendering us to be unable to fulfill the conditions precedent in
the Concession Agreement. Thus, notwithstanding Item I or any
other provision in this letter, you also agree that this
appointment is further subject to the approval of our financier
for the Project as regards the same”.
[255] Pursuant to Clause 13 above, the Defendant therefore submitted

that the Financier for the Project had requested that LAD be imposed
following any event of delay on the Plaintiff’s part and this
additional provision at Clause 4.1 was incorporated in the Addendum
75
to the Letter of Award dated 9.12.2010 for Package 1 & 2 at Bundle B

pages 23 - 26 and Bundle B2 pages 14 - 18.
[256] Clause 4.1 reads:
“Notwithstanding Item 10.6 of the LOA, the Financier for the

Project had requested that we further impose liquidated and
ascertained damages (“LAD”) following any event of delay
on your part. Thus, in accordance with Item 11.2 of the LOA,
where it was stipulated inter alia that should our financier
impose any condition or requirement upon you, you shall
undertake to comply with the same within such timeline as may
be imposed, the provisions regarding LAD are hereby made
conditions of your appointment and execution of the Project, in
the manner hereinafter appearing” (emphasis added)
[257] Premised on Clause 4.1 in both the Addendum to the Letters of

Award, the Defendant submitted that the Defendant’s claim at Para 39
(e) and (f) for LAD is based on the event of delay caused by the
Plaintiff as follows:
“LAD for the 8% delay
• As confirmed by the Architect in A1 No, 17 on the 8%

delay in the Plaintiff’s works. (Bundle I pages 932 - 934) /
CBD pages 324 - 326.
• Based on the evidence of DW6 at para 7.1 in the analysis

of DW6’s evidence as appended below:
Even though LAD is normally paid upon issuance of

CNC, Certificate Non-Completion, LAD may be
payable in this case due to Clause 4.1 (Addendum to
Letter of Award). The 8% delay is a conservative
figure. The joint valuation yield a 35.08% of physical
76
work done against an almost 60% contract period

which have lapsed; 60 - 35 - 25% deficit. Should we
remove say 10% due to the S curve, it is still 15% of
delay. However, we need the work programmer in
Microsoft project format from the Plaintiff to
ascertain the actual percentage of delay. Be that as it
may, it is not unreasonable to say that 8% delay is
the LAD that could be imposed.”
[258] There is no evidence that the Defendant’s financier had exacted

this Claim from the Defendant and charged them accordingly. There is
also no proof as to how this sum of 8% calculation is a genuine
calculation of the loss suffered by the Defendant. There is also no
evidence before the Court that the Ministry of Higher Education had
charged the Defendant for this sum.
[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.
[260] The Federal Court in Johor Coastal Development Sdn Bhd v.

Constrajaya Sdn Bhd [2009] 4 MLJ 445, held that Selva Kumar
(supra) is still good law and the appellant/vendor could not recover or
retain without proof by evidence of the loss or damage suffered as a
result of the breach of the Sale and Purchase Agreement there.
[261] In the circumstances this I would dismiss this Counterclaim of

the Defendant for LAD under paragraph 39(e).
Para 39(f) of the Counterclaim for LAD during suspension and

injunction period
[262] The submission of the Defendant for this Claim is as follows:
77
“Para 39 (f) - LAD for delay in the works during suspension

period from 3.7.2012 to 13.7.2012 and during
injunction period from 24.7.2012 to 13.8.2012
amounting to RM6,867,378.00. This is pursuant to
the Project Account being finalized and the figures
revisited.
[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:
- Suspension period from 3.7.2012 to 13.7.2012
- Injunction period from 24.7.2012 to 13.8.2012
(Grounds of Judgment at page 991 in Bundle I refers).”
[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.
[265] The Defendant had themselves given the Plaintiff 14 days to

return to work in their Notice dated 3.7.2012 through its Architect
Landesign. As this Court had held that the termination on 13.7.2012
was unlawful the Defendant is not entitled to damages for delay
occasioned during this period which in any event is the period allowed
for by the PAM Contract 2006 that the Architect had chosen to follow
for the purpose of Notice to rectify the breach of unlawful suspension.
[266] In any event this loss has not been proved under section 75
Contracts Act 1950.
78
[267] With respect to the injunctive period, this period of 24.7.2012

to 13.8.2012 is after the termination of the Contract on 13.7.2012 and
hence the Plaintiff would have no choice but to cease work and vacate
the Site forthwith whether or not the termination is held subsequently
to be lawful or unlawful.
[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.
Para 39 (g) of the Counterclaim for expenses incurred during

suspension and injunctive orders for RM184,331.69
[269] The Defendant had computed the suspension and injunctive

period as follows:
(i) Suspension period from 3.7.2012 - 13.7.2012. (Based on

Plaintiff’s Notice of Suspension dated 2.7.2012 and
Defendant’s Letter of Termination dated 13.7.2012).
(ii) Injunction period from 24.7.2012 to 13.8.2012. (Supported

by Recital 1.2 at page 3 in the Deed of Settlement dated
9.11.2012 in Bundle F page 1 - 10).
[270] Defendant’s supporting documents are at Bundle G pages 226 -

418.
[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
79
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.
[273] The Defendant submitted that the Plaintiff failed to challenge

DW5’s evidence on the verification and also failed to challenge the
supporting documents from pages 226 - 418 in Bundle G. The
Defendant therefore submitted that the Defendant had proved this
head of claim on a balance of probabilities.
[274] I do not agree. With respect to the suspension period, the

Defendant had themselves given a grace period of 14 days to rectify
the breach of unlawful suspension and had further terminated the
Contract on 13.7.2012 before the period is up. This Court had held
that such a termination is unlawful and as such it would be
incongruent for the Defendant to be able to claim for damages
sustained during the period of 3.7.2012 to 13.7.2012 when its own
action had been found to be unlawful.
[275] As for damages sustained during the period of the injunction,

again it would be inconsistent with the agreement forged in the
Settlement Agreement to on the one hand having agreed to the
Plaintiff withdrawing the Writ action in Suit No. 22NCvC-964-
08/2922 and the Injunctive Order of 17.8.2102 and even withdrawing
the appeal to the Court of Appeal on the Injunctive Order, to now
claim the sum of RM184,331.72.
[276] If it is damages arising out of the injunction, then it should be

properly pursued in the same action under assessment of damages
pursuant to the Undertaking given by the Plaintiff to pay such
damages as may be sustained by the Defendant as a result of the
injunction before it was set aside.
80
[277] It is further incongruent to claim damages under this head when

the Defendant had effectively terminated the contract on 13.7.2012.
[278] Moreover the parties had no difficulties conducting a Joint

Valuation from 18.7.2012-20.7.2012 and it is difficult to imagine
what damage the Defendant had suffered from 24.7.2012 to 13.8.2012.
[279] This claim had not been proved on the balance of probabilities
and therefore is dismissed.
Para 39 0) of the Counterclaim for interest on early release of

retention sum for RM7,339,307.90
[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.
[281] Under the PAM Conditions of Contract retention monies are

released upon issuance of CPC and the CMGD namely towards end of
the Project. On our given facts, due to the early release insisted by the
Plaintiff, the Defendant is now burdened with the interest for the
tenure of the loan until the UiTM Jasin Project is completed.
[282] DW8 who is responsible for the Project Accounts of the

Defendant gave evidence that the computation for the interest can be
found at Bundle J page 1183/CBD page 850. The Penultimate -
Interim Certificate No. 15 for Package 1 & 2 at page 1123 &
1075/CBD pages 243 & 258 provides the retention monies amount to
RM7,305,578.16 consisting of RM430,500.00 for Package 1 and
RM5,641,812.40 for Package 2. The interest of 6.3% per annum is
computed from date of release of the retention monies to the Plaintiff
on 21.5.2013 till expiry of Defect Liability Period on 18.7.2015
amounting to RM534,648.23.
81
[283] The Defendant further submitted that the Defendant had

reserved its rights to claim for interest on the early release of the
retention sum to the Plaintiff and this can be noted at Part A Para 1 at
page 4 in the Deed of Settlement wherein it is expressly stated -
“It is hereby agreed that the sum of RM24,053,364.55 is the

agreed sum payable to KSSB. It is further agreed that the
payment of RM24,053,364.55 to KSSB is without prejudice to
YBKU’s claim in Part B and Part C therein”.
[284] Further, Defendant’s claim at Para 39 Q) is at item 2 in Part C

in the Deed of Settlement at page 7 Bundle F. Therefore, the
Defendant submitted that the Plaintiff claim at Para 39 Q) is
supported and ought to be allowed.
[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.
Para 39 (l) of the Counterclaim for escalation of costs for

RM5,600,000.00
82
[287] DW7 i.e. the Project Director at SMPM gave evidence on

Defendant’s Counter claim at Para 39 (l) for escalation of costs
amounting to RM5,600,000.00.
[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.
Para 39 (n) of the Counterclaim for legal costs for RM222,242.75
[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:
Bill No. 2598/12 - RM 5,000.00 (page 451)
83
Bill No. 2558/12 - RM 5,000.00 (page 455)
Bill No. 2693/13 - RM 1,500.00 (page 458)
Bill No. 2669/13 - RM135,137.55 (page 462)
Bill No. 2670/13 - RM 41,717.70 (page 462)
Bill No. 2822/13 - RM 33,887.70 (page 475)
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.
[293] This Counterclaim of the Defendant for legal Fees is thus

dismissed.
Para 39 (p) of the Counterclaim for damage to reputation for

RM10,000,000.00
[294] The Plaintiff after termination obtained an ex-parte interim

injunction against the Defendant amongst other to restrain the
Defendant and/or their agents from entering the Project Site. The ex-
parte Order is at Bundle I page 991. In the said ex-parte Order the
Plaintiff inserted a Penal Clause against the Directors of the
Defendant.
84
[295] The Plaintiff obtained leave and commenced committal

proceedings against the Directors of the Defendant and the Directors
were served with the cause papers by the Plaintiff. (Recital 1.2 Deed
of Settlement Bundle F page 3 refers)/CBD pages 667 - 676.
[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.
[298] Furthermore if the Defendant had wanted to sue for damages

arising out of the injunction being set aside, it must then pursue it in
the Writ action which unfortunately had been withdrawn together with
the injunctive order and the appeal from the injunctive order.
[299] This Counterclaim of the Defendant for loss of reputation

cannot be sustained and is not supported by evidence and so is
dismissed.
Para 39 (c) Damages to be assessed and in particular for the Costs of

Rectification Works for RM4,312,229.71
[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.
[301] Pursuant to Interim Payment Certificate No. 3 (Rectification &

Variation Works), ARH valued the same as follows:
85
(i) Rectification Works : RM4,312,229.71
(ii) Variation Works : RM 973,011.60
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:
1 The Defendant can claim from the Plaintiff the costs

incurred by the Defendant to rectify the Plaintiff’s work
amounting to RM4,312,229.71. DW4 confirmed the newly
appointed Main Contractor i.e. Arah Semangat Sdn Bhd
carried out the Rectification Works. This rectification
works is supported by Interim Payment Certificate No. 3
(Rectification Works) at Bundle J page 1130 - 1157 in
particular page 1133/CBD pages 605 - 632.
2 DW4 referred to Interim Payment Certificate No. 3

(Rectification Works) which is endorsed by all the
Consultants including ARSEA to support this claim
because the said rectification works were duly completed
to the Consultant’s satisfaction.
86
DW4 further gave evidence that as the Principal C&S

Engineer responsible for the UiTM Jasin Project he has
full knowledge of this Certificate. DW4 confirmed that Ir.
Mohd Halimi bin Dato’ Abdul Hamid ie the CEO of
ARSEA endorsed Interim Certificate No. 3. (Bundle J page
1132 refers).
[304] The above evidence by DW4 and DW5 on rectification works

carried out by the newly appointed Main Contractor due to Plaintiff’s
unacceptable works amounting to RM4,312,229.71 was not seriously
challenged nor rebutted by the Plaintiff.
[305] Plaintiff’s First Written Submission has not addressed the

Defendant’s claim for rectification works nor any objection raised on
the same. In fact, the Plaintiff’s Written Submission in toto has not
challenged the Defendant’s Counter Claim.
[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
87
learned counsel, raise any objection to the Defendant’s claim for

rectification works.
[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.
[309] If authority is needed one can refer to the Supreme Court’s

decision in Superintendent of Lands and Surveys (4 th Div) & Anor v.
Hamit bin Matusin & Ors [1994] 3 MLJ 185 where the headnotes had
summarized the facts as follows:
“The plaintiffs applied for an injunction, inter alia, to restrain

the defendants from building on certain state lands (‘the lands’),
over which the plaintiffs claimed to have acquired native
customary rights. At the trial, one of the reasons for the
defendants’ denial of the existence of such native customary
rights was that the lands were situated within a river bank
reserve on which no one could claim any title thereon by virtue
of the Sarawak Land Code (Cap 81). Another reason was that the
lands once belonged to Sarawak Shell Oil Ltd. In the final
submission after the conclusion of all the evidence, an objection
was raised by the Plaintiffs for the first time that such defences
88
were not pleaded and ought to be disregarded under O. 18 r. 7(1)

of the Rules of the High Court 1980.”
[310] It was held at page 190 as follows:
“...Therefore when such evidence represents a departure

from pleadings, it should be objected to as and when and
where it is adduced, and it will be too late when it only
objected to later on, as in the final submission at the close of
evidence in the instant appeal. In these circumstances, the party
facing such evidence at variance from the pleadings, by
failing to object, cannot be said to be taken by surprise,
prejudiced, misled or embarrassed. Otherwise, the other side
of the coin would be, in the event of such an objection raised at
the stage of final submission being accepted by the court, that
the party adducing such evidence may face the great risk of
being denied leave to amend his pleadings in question at that
stage.
Such evidence, when given without any objection by the

opposing party, will further have the effect of curing the
absence of such plea in the relevant pleading, in other words,
the effect of overcoming such defect in such pleading...”
(emphasis added)
[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:
“... As one of the objects of modern pleadings is to prevent

surprise, we cannot for one moment think that the defendant was
taken by surprise. To condemn a party on a ground of which no
material facts have been pleaded may be as great a denial of
89
justice as to condemn him on a ground on which his evidence

has been improperly excluded.”
[312] In view of the above evidence, I agree with the Defendant’s

submission that the Defendant’s claim at Para 39 (q) for rectification
works for RM4,312,229.71 has merits and is proved on a balance of
probabilities.
[313] I also allowed interest on the above amount from date of

judgment, as prayed under paragraph 39(r) of the Defendant’s
Counterclaim, to date of realization at 5% per annum.
Pronouncement
[314] In a nutshell the Plaintiff succeeded in its Claim in the sum

RM3,900,910.44 together with interest at 5% per annum from date of
writ to realization. The Defendant succeeded in its Counterclaim in
the sum of RM4,312,229.71 together with interest at 5% per annum
from the date of judgment to realization.
[315] Based on the circumstances of this case, this Court had

exercised its discretion and made an order that each party bears its
own costs.
Dated: 19 JANUARY 2018
(YA LEE SWEE SENG)

Judge
Construction Court
High Court Kuala Lumpur
Date of decision: 24 JULY 2017
90
COUNSEL:
For the plaintiff - Ismail Arifin; M/s Ram Reza & Muhammad
For the defendant - Yougesswary Singam; Chambers of Yougesswary

Singam
91

LNS 2018 1 206 Othhco

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[2018] 1 LNS 206 Legal Network Series

IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR

KEMBANG SERANTAU SDN BHD ... PLAINTIFF

YBK USAHASAMA SDN BHD … DEFENDANT

CONTRACT: Building contract - Suspension of work - Validity -

CONTRACT: Building contract - Termination - Validity - Termination of

CONTRACT: Building contract - Damages - Wrongful termination - Loss

CONTRACT: Building contract - Damages - Rectification work - Claim

Rectification works in respect of unacceptable works - Whether

[Plaintiff’s claim allowed. Defendant’s claim allowed. Costs to be

Case(s) referred to:

Architectural Installation Services Ltd v. James Gibbons Windows Ltd

Fajar Menyinsing Sdn Bhd v. Angsana Sdn Bhd [1998] 1 LNS 88 HC

Investors Compensation Scheme Ltd v. West Bromwich Building Society

Johor Coastal Development Sdn Bhd v. Constrajaya Sdn Bhd [2009] 4

Platinum Nanochem Sdn Bhd v. Mecpro Heavy Engineering Ltd [2015] 1

Popular Industries Ltd v. The Eastern Garment Manufacturing Sdn Bhd

Saloman v. Saloman & Co Ltd [1897] AC 2 (refd)

Selva Kumar Murugiah v. Thiagarajah Retnasamy [1995] 2 CLJ 374 FC

SK Styroform v. Pembinaan LCL [2004] 5 MLJ 385 (refd)

SPM Membrane Switch Sdn Bhd v. Kerajaan Negeri Selangor [2016] 1

Superintendent of Lands and Surveys, 4th Division & Anor v. Hamit B

Legislation referred to:

Contracts Act 1950, s. 75

[2] Whilst there was a partial settlement that resulted in the

[5] The Plaintiff applied for an urgent injunction to restrain the

[6] Parties managed to achieve a temporary truce with the signing

1. Amount Payable to KSSB:

(i) Total Work Done as at 20.7.2012 pursuant to

an agreed joint valuation carried out. RM 74,889,919.98

(ii) Less the net omission pursuant to the

Interim Final Certificate by the QS as per

(iii) Less Payment made to KSSB via Interim

Certificate 1-13 RM 50,499,258.00

Amount Payable to KSSB

(Including Retention Sum RM7,455,262,25) RM 24,053,364.55

[9] As the parties could not arrive at a settlement on the various

[11] The Defendant’s Counterclaim is at paragraph 39(a) - (t) of its

Whether the Plaintiff’s suspension of work under the Contract

[12] It is true that in the PAM 2006 Conditions of Contract i.e.

[14] The delay in certification and payment worsened at the Progress

Defendant then issued a payment for Certificate No. 13 via letter

[16] Plaintiff had further issued several warning letters to the

[17] Due to such adamant position of the Defendant, learned counsel

[18] Despite what might appear to be a drastic step by the Plaintiff

“Suspension for Non Payment”.

“...if the employer fails or neglects to pay the contractor the

• Payment of Interim Certificate No. 14

“Referring to our notice previously issued to you dated 1 th June

PLEASE TAKE NOTICE that with effect from tomorrow,

[23] The Plaintiff by its earlier Notice of Default dated 18.6.2012

Period Of Period For Enforcement

2. CLAUSE 68.3 Within 30 days Within 20 DEFENDANT

[24] The Notice of Suspension met with an immediate reaction from

[25] Landesign Architect in that Notice of Default also gave 14 days

[26] The said Notice of Default issued by Landesign Architect to the

“Ref: Cadangan Pembangunan Universiti Teknologi Mara

Kontrak No: 2010/YBKU/KSSB/P2

- Notice of Default by the Contractor

The above matters, your letter dated 2 July 2012 to Messrs.

Please be reminded that Yg Berbhg Dato’ had agreed that The

Your office had to date also fail to comply to various Al issued