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Pec2217n2 Individual Assignment 2018227552
Pec2217n2 Individual Assignment 2018227552
STUDENT’S INFORMATION
No. STUDENT ID / GROUP NAME TOTAL
CO1: Explain and assess the scenario according to the laws, bylaws and regulations relating to the design and
construction of civil engineering works in Malaysia. (C6)
PO3: Ability to design systems, components or processes for solving complex engineering problems that meet
specified needs with appropriate consideration for public health and safety, cultural, societal, and environmental
considerations.
30 marks
INDIVIDUAL ASSIGNMENT
CEM583
STUDENT ID : 2018227552
CLASS : PEC2217
ABSTRACT
4.0 DISCUSSION
5.0 REMEDIES
6.0 CONCLUSION
7.0 REFERENCES & APPENDICES
ACKNOWLEDGEMENT
Bismillahirrahmanirrahim,
In the name of Allah, the most gracious and most merciful. He grants on me
knowledge, a healthy body and piece mind to complete this individual assignment of Law
for Construction (CEM583). A special thank you to both of my parents, En Zainuddin and
Pn Zaizuriah for providing all necessary tools to ease the completion of this report.
I would like to thanks to my lecturer, En Khairul Ammar for giving his best to
help us in completing this report. I am very honoured to be a student of Universiti Teknologi
Mara (UiTM) Cawangan Pulau Pinang for giving a chance to explore more on law involve
in construction industry which related with my course of study.
I am very grateful for the cooperation given by Jabatan Kerja Raya (JKR) in
helping me to find related document to be used in this report. Thank you to En. Jaafar,
assistant engineer in JKR for giving his guidance to me in finding important information to
be adopted in this written report.
ABSTRACT
This report was prepared to complete the individual assignment of subject Law
for Construction (CEM583). The report contains infrastructure project detail and
background where it stated all the information about the project in chapter 1. In chapter 2,
9 basic elements in document contract related to the project were described clearly. All the
description of each item was based on the content of document contract which obtained
during my visit to Jabatan Kerja Raya (JKR) Sabak Bernam. Next, in chapter 3, it described
a court case that I chose which related with the project. The detail information about the
court case including judges, defendant, case fact and court involve were described in this
chapter. In chapter 4, it describes the potential of the court case to happen to the project
chose earlier. The discussion was referred to the 9 basics element in chapter 2. The propose
solution or remedies to prevent the case from happen again in the future was describe in
chapter 5. While, in chapter 6, it elaborates the conclusion for this report and chapter 7 were
the list of references and appendices that were used in this report.
1.0 PROJECT DESCRIPTION
1.2 Stakeholders
The project stakeholders were known as main person or company who
responsible in manage, construct and complete the project referring to the given
period. Usually consist of main contractor, consultant, quantity surveyor and
developer. All of the stakeholders were mention in the contract document with
sign of agreement. Table below shows the details of the stakeholders involve in
this project.
Client Institut Perakaunan Negara (IPN)
Consultant JKR Malaysia
JKR Sabak Bernam
Quantity surveyor Cawangan Senggara Fasiliti Bangunan, JKR Malaysia
Contractor A.Rahis Sdn Bhd
2.4 Consideration
In contract, consideration was known as a must-have element to produce legally
binding contract. Consideration does not have to be money but it can be
something valuable such as service. It usually comprised of the two parties
promising to do something that benefit each party involved in the contract.
Consideration also known as “bargained-for-detriment”. In other word both
parties entering the contract must exchange something valuable to each other.
In this contract document, government has agreed to accept A. Rahis Sdn Bhd
to complete the STP project with total cost of RM5,294,741.85. A. Rahis Sdn
Bhd has made a promise with government (JKR) to construct the STP in return
government will pay some money to the contractor.
2.5 Certainty
Certainty can be defining as free from any doubt. In contract document all
related information were listed to avoid any uncertainties. In the document of
contract, the government has written the important information such as
acceptance letter, contractor information, bill of quantity and scope of works.
That information will reduce the uncertainty of the slide presentation.
2.6 Capacity
In contract, capacity refer to the individual status to enter the contract or
otherwise voidable. According to the Family Reform Act 1969, a minor under
18 years old can enter into a contract law however, not all contract available for
individual under 18 years old. Minors can only enter legally binding contract
for education, medicine and basic necessities. When minor reach 18, all contract
becomes legally binding for both parties. In this document contract, all the
parties which is JKR and the contractor were suit and able to enter the legally
binding contract.
2.7 Consent
Consent was another important element in the contract. It was known as the
understanding of the parties with the proposed contract. The consent of an
agreement must be genuine and voluntary. If there are some mistakes, or if one
party attempts to deceive or pressure the other, consent will not be considered
genuine and voluntary. In this project, JKR as government has agreed to receive
and gave a tendered to the A. Rahis Sdn. Bhd while A. Rahis Sdn Bhd has
agreed with the contract document. This shows that both parties voluntary and
able to give their consent in completing and supervising the project.
2.8 Legality
Legality is known as a legal agreement and contract made between both parties.
It is important to ensure the contract was legal because if anything happen in
future, court will not enforce any illegal contract. Contract document that was
signed by all parties involve was one of the legal agreements. If anything,
happen in the future, the case can be brought to the court to get justification. For
this project, A. Rahis Sdn Bhd has enter a legal contract by signing the contract
document with JKR which consist of letter of acceptance, agreement, scope of
works and many more.
2.9 Possibility
Possibility known as the contract binding must be possible to complete because
a legal contract cannot be undertaken to perform an impossible act. Before a
project was announced, there were several steps to get the background of
project, design, remedial measure and cost of project before the contract was
open for tendering. This STP project was one of the infrastructure projects and
before they decided to construct, all related information will be available in the
document contract. A. Rahis Sdn Bhd has decided to construct the project and
already sign the required agreement.
3.0 RELATED COURT CASE
Plaintiff stated that the defendant was responsible for the whole construction
process and claimed that the defendant refused to carry out rectification works
according to the recommended design plaintiff has to cover the rectification
works at total cost of RM 602,580.00, therefore they claim for the damages
arising. At the same time, defendant denied that they liable to rectify the STP
1100 and stated that they already constructed the STP according to the
instruction and design received from Consultant Engineer. A counterclaim for
the sum of RM122,550.32 being the sub-contract fees allegedly still due and
owing by the plaintiff to the defendant was claimed.
3.3 Sentence Imposed
The judge has proved that the plaintiff able to prove their claim and defendant
has failed to defend themselves form plaintiff claim. The judge allow the
plaintiff to claim and enter judgement in the sum of RM 602,580.00 with interest
at the rate of 5% per annum from the date of judgement to date of realization
and come to agreed costs of RM40,000.00. To be fair with defendant
counterclaim, the judge has agreed to allow the sum of RM92,290.32 which
includes the RM36,000.00 of retention sum.
1. The Khen On & Anor v. Yeoh & Wu Development Sdn Bhd & Ors [1196]
2 CLJ 1105, 1112 FC.
2. Section 74(1) of the Contract Act 1950 (Act 136) was applied to claim for
compensation for the loss or damage caused by the defendant.
3. Contract Act 1950, s. 74(1)
4. Evidence Act 1950, s. 114(g)
5. Sarkar on Evidence 15th Ed Vol 2 pg 1678
4.0 DISCUSSION
Based on the previous court case, the defendant failed to follow the instruction from
the plaintiff and affect the plaintiff to lost some money in order to do the rectification
process. It was believed that the defendant which is contractor failed to carry out their
duty when giving the responsibility to carry out the project.
In this part, a thorough discussion on 9 basic elements will be discuss between the
previous court case (Construction of Two Sewerage Treatment Plant at Sekolah
Menengah Teknik Beaufort Dan 150 Unit Kuarters Institusi Pendidikan) with the
current selection project (Pembaikan Bangunan Dan Kemudahan Infrastruktur
‘Sewerage Treatment Plant’ (STP) Serta Kemudahan Mekanikal Dan Elektrikal di
Institut Perakaunan Negara (IPN) Sabak Bernam.
Based on the 9 basic elements shows in the table above, it can be concluded that there
has a low possibility for the on-going project involved with the same case of court case.
This is because, JKR has validate that the contractor, A. Rahis Sdn Bhd was capable
and will complete the project within the range of time with the cost provided. Such case
can happen to the on-going project when lack of supervision from the JKR.
5.0 REMEDIES
Based on the court case mention before, it shows that the subcontractor which was
Weida Environmental Technology Sdn Bhd (defendant) failed to carry out their
responsibility to complete the project as stated in the contract. During the liability
period, when Imej Warisan Sdn Bhd (plaintiff) discovered the crack on one of the
STP tank namely STP 1100 and informed the defendant, further investigation
carried out that the STP tank tilted to a differential settlement about 400mm, the
defendant failed to carry out the rectification works and make the plaintiff suffer a
loss to cover the maintenance works at the total costs of RM602,580.00.
It is important to identify the competent contractor to carry out the project. The
contractor must fulfil the 9 elements in order to make the project to be successful
without hurting any parties. Section 74(1) of the Contract Act 1950 (Act 136) was
applied to claim for compensation for the loss or damage caused by the defendant.
The contractor must competent in serving good quality of works, able to complete
the works within time and have a full consent on their responsibility before the
project pass to the owner.
This problem may occur due to lack of supervision from the main contractor, in this
court case it was referred to Imej Warisan Sdn Bhd. Even though the project was
completely pass to the subcontractor, Weida Environmental Technology Sdn Bhd,
the main contractor should supervise the process of the construction to avoid any
inconvenience things happen. The defendant claim that they already do the works
accordingly by referring to the drawing. Lack of supervision cannot ensure that the
works done by the defendant was carry out according to the plan or not and lead the
defendant also suffer the loss from the plaintiff claims
Good supervision is required to ensure the works done by any party followed the
standard given by the main contractor or owner of the project. Inadequate
supervision can leas to various failure such as collapse or serious cracking. In this
court case, the STP tank 1100 was first discovered the crack but then further
investigation carried out even worse things happen to the STP tank.
6.0 CONCLUSION
As the conclusion, document contract was important when involving with project as
this document content all agreement made by both parties and a legal binding contract
that can bring to the court for hearing if any things happen in the future. The contract
document also explained the works need to be done by the contractor to complete the
project within the range of time with the amount provided. Contract can be classified
into four types of court which were PAM contract, CIDB contract, IEM contract and
PWD (JKR) contract. In this report, I adopted PWD (JKR) contract that was obtained
during my visit to Jabatan Kerja Raya (JKR) Sabak Bernam.
I stated the court case that related to the on-going project with the description of the
court involve, the judge, plaintiff and defendant, case fact and the sentence imposed by
the judges. I also have done differentiate between both court case and selected project
on 9 basic elements that a contract must have to be successful project without hurting
any parties involved. I have stated the remedial action that should be taken in order to
avoid the same cases happen in the future.
7.0 REFERENCES
MALAYSIA
BETWEEN
AND
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[Plaintiff’s claim allowed and judgment entered for the Plaintiff for
RM602,580.00 with interest at 5% per annum from the date of
judgment to date of realization and agreed costs of RM40,000.00;
Counterclaim allowed for RM92,290.32 and this sum to be set off
from the judgment sum of RM602,580.00 with no orders as to costs.]
The Khem On & Anor v. Yeoh & Wu Development Sdn Bhd & Ors [1996]
2 CLJ 1105, 1112 FC
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DECISION
Introduction
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plants by the Defendant on 11.11.2008 and during the defects liability period
ie, sometime in May 2009, Plaintiff discovered cracks on the walls of the
1100 PE STP and it was further found that the STP 1100 PE tank had been
costs to rectify and make good the 1100 PE STP and/or to reimburse the
recommendations and design of the Consultant Engineer for the main works,
RM602,580.00.
arising from the breach of the contract by the Defendant and costs, inter alia.
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Defendant denied that they are liable to rectify the defects of the 1100
STP and averred that they had constructed the STP according to the
instructions and design of the Consultant Engineer, the PSRR and that they
had duly performed the piling work using the Plaintiff’s piling rig to the
satisfaction of the Plaintiff. Defendant further pleaded that the Architect was
incompetent to issue the rectification orders for rectification works under the
the sub-contract fees allegedly still due and owing by the Plaintiff to the
The Issues
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show that the fact that the status of the Plaintiff being the main contractor of
the said Project while the Defendant was engaged on 17.6.2006 by the
Plaintiff as sub-contractor for the design and build of the aforesaid 2 STP
namely the 1100 PE and the 900 PE for the Sekolah Menengah Teknik
Beaufort Sabah and the 150 units of Kuarters Insititusi Pendidikan and
11.11.2008 are not in dispute. It is further agreed that the contract between
the Plaintiff and the Defendant was on a design and build concept meaning
that the Defendant was wholly responsible for the design, building,
said 2 STP. Parties have also agreed that in May 2009, cracks were
discovered on the wall of STP 1100 PE and that it had tilted. There is also
no dispute that the Plaintiff had engaged Hygroclear Engineering Sdn Bhd
Substantially parties have agreed on the facts of this case that Plaintiff
and Defendant had entered into a sub-contract work to design and build the
2 STP upon which Defendant had completed the work but it was discovered
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that one of the 2 STP ie, the 1100 PE had cracks on its wall and it had
substantially tilted.
Plaintiff had informed the Defendant of the cracks on the walls of STP 1100
PE and that the STP had tilted towards the sludge holding section with a
differential settlement of about 150 mm. Defendant was told to identify the
cause of the settlement and the tilting and to propose technical remedial
solutions.
was discovered that the tilting had escalated to about 400 mm. Plaintiff had
meeting held on 9.7.2009 that they would investigate the cause and submit
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propose to detach the structure of the sludge drying bed from the sludge-
holding/setting tank but Plaintiff contended that the proposal was cosmetic
in nature which would not resolve the tilting problem of the STP. Plaintiff
alleged that the Defendant’s said proposal was to get through the defects
liability period without having to incur costs to rectify the tilting of the sludge-
holding/setting tank.
the Plaintiff would appoint a 3rd party contractor to carry out the rectification
STP and it was found that the tilting had continued. According to Ms. Nelly
Majain who is a licensed civil engineer (PW2), the detachment of the sludge
drying bed from the sludge holding/setting tank was not a permanent solution
to the tilting problem unless there was no tilting but from the survey report in
February and May 2010, it showed that the settlement had increased
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tremendously up to 700 mm. Thus, the permanent solution, she opined, was
informing the latter that the said STP 1100 continued to tilt and the technical
carry out rectification works acceptable by PSRR and the Plaintiff; Defendant
their own licensed civil and structural engineer for a permanent solution to
the problem. It appears that the Defendant did not respond to the architect’s
direction nor take any action to rectify the defects. This led the Plaintiff to
appoint Hydroclear Engineering Sdn Bhd to carry out the work at the costs
pleaded that they are not liable to the Plaintiff’s claim contending that
Plaintiff’s claim is based on its pleaded case vide paragraphs 4 (c) and 4 (d)
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Completion; and
which bear reference to Clause 15.0 of the contract between Plaintiff and
Defendant which fundamentally enlisted, inter alia, that it is the opinion of the
Architect as to the practical completion of the works for which the Architect
shall specify within the Defects Liability Period a schedule of defects and
delivered to the Defendant not later than 14 days after the expiration of the
Defects Liability Period and the Defendant shall make good such defects,
shrinkages and other faults therein specified in the Architect’s schedule, that
the Architect may issue instructions requiring any defects etc. which appear
within the Defects Liability Period to be made good and if the defects etc.
had been made good, the Architect shall so issue a certificate of making
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have taken place on the day named in the certificate. Defendant contended
that since the Architect was not called to testify, it must be presumed that the
Defendant had performed and completed all the necessary works specified.
Since the Architect did not testify, Defendant contended that the Plaintiff had
failed to prove requirement under Clause 15.3 of the contract which relates
to para 4 (c) of the Statement Of Claim that the Architect must “whenever he
other faults which appear within the Defects Liability Period and which are
made good.”
On this point, Plaintiff submitted that the Defendant had failed to plead
in their Defence that the Plaintiff is not entitled to the claim because there
was no instruction from the Architect to carry out rectification works under
Clause 15.3 of the said contract nor that the rectification work was done by
reconstruction of the 1100 STP. What had been pleaded by the Defence is
that the Architect was and is at all material times incompetent to issue
Defence).
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From the facts, there is apparently no dispute that the said Architect
had issued instructions vide his letter dated 7.7.2010 to the Defendant
specifying that the severity of the tilting has rendered the earlier proposal by
Messrs. Perunding dan Rakan-Rakan Sdn Bhd no longer suitable and that
PSRR and Plaintiff. Defendant had also failed to heed the Architect’s
contemporaneous documents before the Court, I find that the Architect had
in fact issued instructions to the Defendant to make good the defects of tilting
Defendant had not done so. When the defect in the instant case is known to
the Defendant during the Defects Liability Period and with the instruction in
writing from the Architect requiring the Defendant to resolve the said defect
problem with a permanent solution, I find that the Architect had duly
conformed with Clause 15.3 of the contract when he had issued the said
instructions. I do not agree with the contention put forward by the Defendant
that the mere fact that the Architect did not say in his letter of instruction
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dated 7.7.2010 (pp. 278-281) that the instruction was issued pursuant to
Clause 15.3 but Clause 2.1 would disentitle the Plaintiff to claim for reasons
that the effect is the same and that when this instruction was issued, it was
within the Defects Liability Period. Thus, even if the Architect was not called
calling of a witness or his evidence; see Sarkar on Evidence 15th Ed. Vol. 2
pg. 1678.
Defendant had further contended that Clause 15.3 and Clause 2.1 and
2.2 of the contract between the parties do not provide that the Plaintiff could
employ and pay other persons to execute any work which may be necessary
irrespective whether the Architect had given instructions to rectify the defects
or otherwise, the Plaintiff should not be deprived of its right to claim for
breach of contract under common law citing Teh Khem On & Anor v. Yeoh
& Wu Development Sdn Bhd & Ors. [1996] 2 CLJ 1105, 1112 F.C., inter alia.
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In Teh Khew On & Anor (supra), His Lordship Peh Swee Chin FCJ said @
p. 1112:
1317, to the effect that such clause similar to cl. 23 in our instant
six months, would not take away the right to sue in respect of
same defects will not ipso facto take away the rights of any
Plaintiff had indeed pleaded in the Statement Of Claim vide para 4(d)
that ‘the Defendant will forthwith comply with all instructions issued by the
employ and pay other persons to execute any work which may be necessary
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to give effect to the instructions.” It is a fact that the Architect had issued
STP and when the Defendant had failed or neglected to do so, Plaintiff could
rely on common law principles to engage other contractor to carry out the
work that was not properly performed for reason that the failure to comply
with the terms and conditions of the contract by failure or refusal to make
section 74(1) of the Contracts Act 1950 (Act 136) to claim for compensation
for the loss or damage caused by the Defendant, which naturally arose in
the usual course of things from the breach the parties knew when they made
the contract to be likely to result from the breach of it. Since the Plaintiff had
so pleaded that they shall be entitled to employ and pay other person to
execute any work and pay for it to give effect to the Architect’s instructions
to make good the defects, I find that this arises as a consequence of the
breach by the Defendant in not complying with the covenant in the contract
which justified the Plaintiff’s claim. I do not find the Defendant’s contention
tenable that the Plaintiff’s claim must only be confined to a particular clause
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attract compensation for the loss or damage arising out of the breach. I find
On the Defendant’s defence that they are not liable because they had
constructed the STP according to the instructions of PSRR and the Plaintiff’s
consultant who gave instructions to use the Plaintiff’s piling rig and the
Plaintiff was to make available 150 mm diameter piles for the purpose of
carrying out and the Defendant did carry out the re-pile to the satisfaction of
the Plaintiff’s consultant and that the tilting could be due to the change in
design and specification, inter alia, I find that there is no clear evidence from
the defence to rebut the allegation of defects in the tilting. Defence had not
come up with any technical report on the tilting to draw a conclusion that it
was due to the Plaintiff’s piles or the change in design and specification that
caused the said tilting. It must be borne in mind that Defendant is the
contracting party to this design and build contract. They must be conversant
and must be satisfied with all technical nature of the work to be carried out
nature. Even if the pile was to be made available by the Plaintiff, the
Defendant still held the responsibility and obligation to ensure that it was the
correct and proper one to be used and could not follow blindly if it was
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contract to design and build and must therefore perform in conformity with
their expertise. It will be unacceptable to shift the blame to others when they
had not shown that they had satisfied their fundamental obligation to build in
the manner that the STP is well structured and safe. I do not find this line of
For the foregoing reasons, I hold that the Plaintiff has proved its claim
on a balance of probability and that the Defence has failed to rebut the
claim and enter judgment for the Plaintiff in the sum of RM602,580.00 with
interest at the rate of 5% per annum from the date of judgment to date of
of retention sum being the sum that the Plaintiff had not disputed to be still
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due to the Defendant and I order that this sum shall be set off from the
judgment sum of RM602,580.00 with no orders as to costs.
Counsel:
For the plaintiff - Marina Tiu; M/s Yap Chin & Tiu
Advocates and Solicitors
KOTA KINABALU
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