Agrow Builders Sdn Bhd v Sp Anggerik Sdn Bhd (WA-22C-5-02/2025)

It is often gainsaid that one should never act or react in haste, especially when angry or indignant.

The principle issue that the Court is to decide in this action is what brought an end to the subcontract between the parties. Was it terminated by the Defendant, as alleged by the Plaintiff? Or was it repudiated by the Plaintiff, as says the Defendant. Or was it neither. Salient facts

In 2024, the Defendant was appointed by Dewan Bandaraya Kuala Lumpur ("DBKL") as the main contractor for the project known as "Cadangan Menyiapkan Kerja Bagi Pembangunan Semula Pasar Jalan Raja Bot Kuala Lumpur" situated in downtown Kuala Lumpur ("Project").

By a Letter of Award dated 2.6.2024 ("LOA"), the Defendant had appointed the Plaintiff as subcontractor to carry out "Micro Piling Works (Phase 3)" for the Project ("micro-piling works"). The Plaintiff had in fact carried out the micro piling works for the first two phases of the Project. However, the Plaintiff having carried out the micro piling works for the first two phases of the Project is really of no consequence here as Phase 3 was under a new and separate subcontract altogether.

By a letter dated 6.8.2024 ("Disputed Letter"), the Defendant notified the Plaintiff that the micro-piling works had been removed from its scope of works by DBKL and then said: "In the premises, we have no alternative but to withdraw the said Letter of Award and to treat the same as cancelled with immediate effect. We will however notify you if the said Micro Piling Works (Phase 3) is reinstated in our scope of works, or if there are other works that you may wish to participate in, in the future."

The Plaintiff took umbrage with the Disputed Letter, and what followed was a flurry of letters between them. First, by a letter dated 21.8.2024, the Plaintiff took the position that the Disputed Letter was "a fundamental breach of and a unlawful termination of the Letter of Award dated 2.6.2024 with no lawful basis whatsoever" and reserved its rights to claim compensation and damages from the Defendant.

The Defendant responded by a letter dated 5.9.2024, notifying the Plaintiff as follows: "Please be advised that our letter dated 6 August 2024 to withdraw the Letter of Award dated 2 June 2024 and to treat the same as cancelled, was issued to you in abundance of caution as the Micro Piling Works (Phase 3) had been removed from our scope of works, as mentioned in our said letter. However, we have since been provided with the updated drawings in relation to the Phase 3 works, which indicate that there are Micro Poling Works to be carried out as part of the Phase 3 works. As such, we are pleased to inform you that we retract our letter dated 6 August 2024, and we invite you to meet with us at any time during the week of 5 to 11 September to discuss carrying out of the works under the Letter of Award dated 2 June 2024."

The Plaintiff's next letter dated 9.9.2024 indicated that the Plaintiff's anger had not yet abated. It maintained its stand that the Defendant had unlawfully terminated the LOA, but on a strictly without prejudice basis agreed to meet with the Defendant on a date and time to be determined for a discussion on "any future new contract works".

By its letter dated 12.9.2024, the Defendant reiterated its stand that it had retracted the withdrawal and cancellation of the LOA, and proposed a meeting on 18.9.2024 "to discuss the continuation of the micro piling works in respect of the above project based on our Letter of Award dated 2.6.2024."

By its letter dated 13.9.2024, the Plaintiff vehemently maintained its stand that the Defendant had already unlawfully terminated the LOA and further said: "We are not agreeable to attend the meeting on 18.9.2024 which you proposed as you have already terminated the Letter of Award dated 2.6.2024 and there can be no meeting for any alleged continuation of the works as the Letter of Award dated 2.6.2024 has already been unlawfully terminated by you. We will proceed to take legal action against you to claim for all losses and damages which have arisen to us as a result of your wrongful and unlawful termination of the Letter of Award dated 2.6.2024."

By its letter dated 23.9.2024, the Defendant reiterated that it had retracted the withdrawal and cancellation of the LOA and noted the Plaintiff's refusal to meet with it to discuss the carrying out of the micro-piling works. It then said: "In the premises, we treat your refusal to meet with us to discuss the carrying out of the awarded micro-piling works as a repudiation of your obligations under the Letter of Award dated 2 June 2024. We accept your said repudiation and as a result the Letter of Award is hereby terminated."

On 14.2.2025, the Plaintiff filed this action, maintaining its stand that the Defendant had terminated the LOA, and sought the following relief: "Wherefore, the Plaintiff humbly prays for: -

A declaration that the Defendant had unlawfully terminated the Subcontract;

The Defendant to pay the Plaintiff special damages for Loss of Profit in the sum of RM1,065,620.00;

In the alternative, Loss of Profit to be assessed by this Honourable Court and to be awarded to the Plaintiff;

Interest at a rate of 5% per annum on the sum of RM1,065,620.00 from 7.8.2024 until full and final settlement thereof;

General damages;

Costs; and

Any other just and further reliefs as deemed fit by this Honourable Court."

In its Defence filed on 24.3.2026, the Defendant reiterated its stand that it had retracted the withdrawal and cancellation of the LOA, and that the Plaintiff had repudiated the LOA, following which the LOA had been terminated. However, the Defendant did not counterclaim for any damages for that repudiation, but merely sought that the Plaintiff's claims against it be dismissed with costs.

In paragraph 9 of the Defence, the Defendant pleaded the following as its reasons for having issued that Disputed Letter: "a. To confirm that the Letter of Award was conditional upon the existence of Micro Piling works under the scope of the Main Contract between the Defendant and DBKL in relation to the relevant phase, that is Phase 3, b. At the time the letter was issued, the Defendant was under the impression that Micro Piling works under the scope of the Main Contract between the Defendant and DBKL in relation to Phase 3 would be omitted from the said phase; c. As such, in abundance of caution and to save the Plaintiff from incurring what could be unnecessary expense, the Defendant withdrew the Letter of Award and treated the same as cancelled, and notified the Plaintiff that the Defendant would inform the Plaintiff if the Micro Piling works were reinstated in the scope of works under the Main Contract for Phase 3."

The reason for so pleading was revealed in due course. Unbeknown to the Plaintiff, the Defendant had actually been proposing a change to the method of piling for the Project to DBKL.

By a letter dated 5.8.2024 (i.e. the day before it issued the Disputed Letter to the Plaintiff), the Defendant had submitted a proposal to DBKL to change the piling system for the Project from micro pile to piling injection ("Piling System Proposal"), contending that that alternative piling injection system would save costs and time. In its letter dated 26.9.2024 to the Project Engineer / S.O. appointed by DBKL, the Defendant pointed out, inter alia, that its proposed piling system involved a combination of jack-in-pile and micro-piling. However, despite submitting a detailed proposal on that change, DBKL rejected that Piling System Proposal in October 2024. Thus, at the time this action was filed, the piling system under the LOA remained.

At the trial, En. Kamaludin bin Mohd Noor, the Defendant's Managing Director (DW1) testified to the following in paragraphs 17- 25 of his Witness Statement marked as "WS-DW1": "17. Q You have stated earlier that as at the date of the Letter of Award, the scope of Micro Piling works in Phase 3 of the Project had not been finalized by DBKL. Did the Defendant request DBKL to consider the omission of the Micro Piling works? A : Yes.

Q : Why did the Defendant request DBKL to consider the omission of the Micro Piling works? A: On the basis that continuing with the design which involved Micro piling would increase the cost of Phase 3 by approximately RM2,000,000.00 and also as micro piling at the site of the Phase 3 works was not feasible, due to the high water table at the area in question which would lead to continuous flooding of the work site, which in turn would escalate the costs and lead to delays in the Phase 3 works.

Q: When did the Defendant make that request to DBKL? A: Some time towards the end of July 2024, which was formalized on 5 August 2024. The Defendant proposed a different method of piling, that is injection piling, which would lower the overall cost.

Q : Was DBKL receptive to the request made by the Defendant? A : We were initially under the impression that DBKL was receptive to the request to change the piling system and would change it to the injection system.

Q : Did the Defendant take steps to bring this to the attention of the Plaintiff? A : Yes, while the Defendant was under this impression, the Defendant wrote to the Plaintiff out of caution to withdraw the Letter of Award and to treat the same as having been cancelled, on the basis that Micro Piling had been removed from the Phase 3 scope of works. Q : Refer to page 74 of B2. What is this document? A: This is the Defendant's letter to the Plaintiff dated 6 August 2024 withdrawing and cancelling the Letter of Award on the basis that Micro Piling had been removed from the Phase 3 scope of works. The Defendant also notified the Plaintiff by this letter that if the Micro Piling works were reinstated in the Phase 3 works, the Defendant would notify the Plaintiff.

Q: As a 6 August 2024, being the date of the letter withdrawing and cancelling the Letter of Award, had DBKL confirmed in writing that the Micro Piling had been removed from the Phase 3 scope of works? A ： No.

Q : Why did the Defendant write to the Plaintiff to withdraw and cancel the Letter of Award on 6 August 2024 if as at that date, DBKL had not confirmed in writing that the Micro Piling had been removed from the Phase 3 scope of works? A : The letter was written purely as a precautionary measure to ensure that the Plaintiff did not incur costs in carrying out preliminary tasks in relation to the subcontracted works, since at that time, the Defendant was under the impression that DBKL was receptive to the request to change the piling system and would change it to the injection system. Q: As at 6 August 2024, had the Plaintiff carried out any preliminary tasks in relation to the subcontracted works? A : Not as far as the Defendant was aware, as the Plaintiff had not delivered shop drawings, method statements or its work programme to the Defendant despite accepting the Defendant's offer on 6 Jun 2024, some 2 months earlier. The intention was therefore to ensure that the Plaintiff did not proceed to incur such costs on the basis that the piling design for the Phase 3 would be changed."

In challenging this evidence, in cross-examination Learned Counsel for the Plaintiff referred DW1 to that Defendant's letter dated 26.9.2024, and asked him only one question, namely that his evidence in Q&A 17-20, particularly Q&A 18, was unsubstantiated. He disagreed.

The Defendant also testified unchallenged that DBKL did not proceed with that Phase 3 of the Project.

The issues to be decided are:

Whether the Defendant's letter dated 6.8.2024 constituted a termination of the LOA;

If so, whether that termination of the LOA was invalid;

If the termination of the LOA was invalid, whether the Plaintiff is entitled to claim loss of profits and/or general damages, and if so how much; and

If the Defendant's letter dated 6.8.2024 did not terminate the LOA, whether the Plaintiff repudiated it.

If the Defendant's letter dated 6.8.2024 did not constitute a termination of the LOA, then there would be no need to decide issues (2) and (3). Issue (1): Whether the Defendant's letter dated 6.8.2024 constituted a termination of the LOA

A termination of any agreement is supposed to bring an unequivocal end to it. This issue therefore involves a determination whether the contents of that letter viewed in the facts and circumstances of this case terminated the LOA.

Based on the documents and the evidence, it is my view that the Defendant's letter dated 6.8.2024 did not constitute a termination of the LOA. For several reasons.

First and foremost, I find that the Defendant's letter dated 6.8.2024 was not unequivocal in bringing the LOA to an end. The word "termination" was not used, and that Letter was couched in language that to me conveyed the Defendant's understanding that the works subcontracted to the Plaintiff had been removed from the Defendant's scope, thus necessitating bringing the subcontract under the LOA to an end. It did, nevertheless, leave the door ajar for the Plaintiff's re-appointment should those works subcontracted to the Plaintiff be re-instated into the Defendant's scope. That, to me, conveyed the message that the removal of the works subcontracted to the Plaintiff from the Defendant's scope was not necessarily final, or that the LOA was necessarily at its end. It could still be revived or continued with.

Secondly, this Court cannot ignore the Defendant's retraction of that letter dated 6.8.2024, and its clear intention in its letters dated 5.9.2024 and 12.9.2024 to re-engage with the Plaintiff to continue with the LOA. Moreover, there was no evidence of any physical works having been carried out by the Plaintiff until then.

Thirdly, whilst the Plaintiff may argue that the reasons for the Defendant having issued that letter dated 6.8.2024 were not true or substantiated at the time (i.e. that the micro piling works had been removed from its scope), I find that to be of no consequence.

The Plaintiff's pleaded case on the termination was:

the LOA did not expressly state that the LOA was contingent on DBKL maintaining the micro-piling works as part of the Defendant's scope of works;

(ii) there was no evidence of the micro-piling works having been removed from the Defendant's scope of works; and

(iii) the Defendant's allegations in that letter was a fundamental breach of the LOA.

The backdrop to that was that the Defendant was in actual negotiations with DBKL to change the piling system, which would have actually removed either wholly or partially the Plaintiff's works under the LOA.

I also accept the evidence of DW1 that the Defendant was under the impression that its Piling System Proposal to DBKL was going to be met with a favourable response, and that its letter dated 6.8.2024 to the Plaintiff was to prevent the Plaintiff from incurring any unnecessary expense. Having observed him closely, I could discern no deceit or untruthfulness on his part. Though admittedly that letter could have been worded better, it is not the role of this Court to adjudge only on perfectly worded correspondence.

Furthermore, as I had pointed out, the only cross-examination on that evidence by DW1 was that it was unsubstantiated, i.e. not supported by documents. It was never put to him in cross-examination that his evidence was untrue. Nor did the Plaintiff ever plead that the Defendant had terminated the LOA for ulterior reasons or that the termination was male fide.

It must be borne out that DW1's evidence was that the Defendant was under the impression that its proposal to change the piling system would be met with a favourable response. Impressions, by their very nature, are gained from interactions between persons, between contracting parties, and need not necessarily be documented. As between the Defendant and DBKL and its other consultants, it is reasonable to assume that the Defendant would have mooted to DBKL or its consultants the idea of changing the piling system, and had been under the impression from those interactions that DBKL was favourable, more so when the Defendant was of the view that that change would save DBKL time and cost.

It then begets the question, why the Defendant did not say so in its letter dated 6.8.2024 to the Plaintiff? The answer to that is simple: it was not legally obliged to.

The Plaintiff and the Defendant were in a commercial relationship and not any fiduciary relationship that required full and reasonable disclosure between them. At face value, the Piling System Proposal was premised on saving costs and time, and involved removing either wholly or partially the Plaintiff's works under the LOA. In direct issue was the Defendant's contract with DBKL, that was confidential between them and to which the Plaintiff was not a privy to. In these circumstances, the Defendant cannot be expected to have kept the Plaintiff informed of its Piling System Proposal to DBKL, more so when it could ultimately result in the Plaintiff's services not being needed for Phase 3 at all. The Plaintiff could have raised a big hue and cry about that when the contract in issue would have been between DBKL and the Defendant.

Fourthly, as submitted by Learned Counsel for the Defendant, if the Plaintiff was of the view that that letter dated 6.8.2024 reflected an unequivocal intention by the Defendant to no longer be bound by the LOA, then it ought to have taken the Defendant's withdrawal and cancellation of the LOA by the Disputed Letter as a repudiation of the LOA, and as a consequence either insist on performance of the LOA or accept that repudiation and terminate the LOA.

Instead, in its first reaction to that letter dated 6.8.2024, the Plaintiff decided to take the position that letter was a fundamental breach and a termination of the LOA.

In Mayson v. Clouet And Another [1924] AC 980, Lord Dunedin said: "...The law is quite plain. If one party to a contract commits a breach then if that breach is something that goes to the root of the contract, the other party has his option. He may still treat the contract as existing and sue for specific performance; or he may elect to hold the contract as at an end - i.e., no longer binding on him-while retaining the right to sue for damages in respect of the breach committed."

Here, the Plaintiff had instead taken the Defendant's withdrawal and cancellation of the LOA as a termination of the LOA - which I find was not - and had then maintained and continued to maintain that stand, despite the Defendant's clear retraction, that that letter dated 6.8.2024 was a termination of the LOA.

Altogether, I find that the Defendant's letter dated 6.8.2024 did not constitute a termination of the LOA.

As I have found that the Defendant's letter dated 6.8.2024 did not constitute a termination of the LOA, then there would be no need to decide whether the termination was invalid or otherwise, or decide any damages claimed by the Plaintiff, i.e. issues (2) and (3). Issue 4: Whether the Plaintiff had repudiated the LOA

I gather that the Defendant has raised this issue for the pure and simple reason that, if the matter stops at the LOA having not been terminated, then it continues to subsist to this day.

Nevertheless, I do find that the Plaintiff did repudiate the LOA.

I find that, from the Plaintiff's letters dated 21.8.2024, 9.9.2024, 13.9.2024 and 9.10.2024, the Plaintiff was insistent that the Defendant's letter dated 6.8.2024 had permanently and unequivocally terminated the LOA, and that it wanted to have nothing more to do with the LOA or the Defendant. It decided to be unmoving in that first stand taken rather hastily in its letter dated 21.8.2024.

As I had found earlier, the Defendant's letter dated 6.8.2024 did not constitute a termination of the LOA, and that one of the reasons is that the Defendant had retracted that letter. This means that the LOA still subsisted during the time of those Plaintiff's letters.

As the Plaintiff by those letters had clearly evinced and confirmed to envince an intention that it wanted to have nothing more to do with the LOA or the Defendant, on the works subcentrated to it under the LOA, then that was a repudiation of the LOA.

I find that, by its letter dated 23.9.2024, the Defendant had accepted that repudiation, and had terminated the LOA.

Coming full circle, I find that the LOA between the parties was not terminated by the Defendant, as alleged by the Plaintiff, but was instead repudiated by the Plaintiff and then terminated by the Defendant upon accepting that repudiation.

In these circumstances, the Plaintiff is not entitled to loss or damage, and to any of the relief it seeks.

In these circumstances, I make an order that the Plaintiff's claim against the Defendant be dismissed, with costs of RM60,000.00 subject to an allocator. Dated the 15th day of June 2026 Azlan Sulaiman High Court of Judge Counsel: Ms. Annette Edwin (Ms. Nathelyn Pereira & Ms. Angelle Faith Chung Yen Lee with her) (Messrs. Dorairaj, Low & Teh) For Agrow Builders Sdn Bhd En. Mahathir Abdullah (Messrs. Mahathir) For SP Anggerik Sdn Bhd Cases: Mayson v. Clouet And Another [1924] AC 980