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1 IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY OF KUALA LUMPUR, MALAYSIA CIVIL SUIT NO. WA-22C-83-08/2017 BETWEEN ANJUNG HIJAU SDN BHD (Company No. 53120-P)
WA-22C-83-08/2017
High Court of Malaysia18 Oct 2023
The written judgment as the court issued it, with the coram, case number, and source links. Every paragraph has its own anchor.
What the court ordered
Citations and treatment detected automatically from later judgments and the authorities this decision relies on.
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Earlier cases and laws this decision relies on
“Application for EOT 1 during cross-examination. Accordingly, the plaintiff is deemed to have accepted their evidence that D1 did submit a written notice for EOT 1 to D2. [53] Under section 45 of the Evidence Act 1950, where the Court has to form an opinion upon “a point of foreign law or of science or art, or as to ide”
“(2) fix a completion date later than that previously fixed. [88] In London Underground Ltd v Citylink Telecommunications Ltd [2007] All ER (D) 318; [2007] EWHC 1749 (TCC), the English Technology and Construction Court (TCC) had the occasion to consider **Note : Serial number will be used to verify the originality of th”
“any surplus amount to the Contractor within the Period of Honouring Certificates. [Emphasis added] [62] The Court of Appeal in Junaidi Berimang v Public Prosecutor and another appeal [2022] MLJU 453; [2022] CLJU 522 held that the word “may” conveys “consideration” or “discretion”. The Federal Court in The Government of”
“, he shall repay any surplus amount to the Contractor within the Period of Honouring Certificates. [Emphasis added] [62] The Court of Appeal in Junaidi Berimang v Public Prosecutor and another appeal [2022] MLJU 453; [2022] CLJU 522 held that the word “may” conveys “consideration” or “discretion”. The Federal Court in”
“Public Prosecutor [2011] 1 MLJ 471; [2010] 2 AMR 293, [2009] 6 CLJ 93. FC; Tan Kim Ho & Anor v PP [2009] 3 CLJ 236; [2009] 3 MLJ 151, FC; Ermiadi v Public Prosecutor [2023] 4 AMR 697; [2023] MLJU 51, [2023] CJLU 56, CA. [42] Furthermore, the plaintiff’s own expert witness, PW-2, in clause 2.5.5 of his expert report dat”
“n Abdul Samad v Public Prosecutor [2011] 1 MLJ 471; [2010] 2 AMR 293, [2009] 6 CLJ 93. FC; Tan Kim Ho & Anor v PP [2009] 3 CLJ 236; [2009] 3 MLJ 151, FC; Ermiadi v Public Prosecutor [2023] 4 AMR 697; [2023] MLJU 51, [2023] CJLU 56, CA. [42] Furthermore, the plaintiff’s own expert witness, PW-2, in clause 2.5.5 of his e”
“estimony of a witness during cross-examination, that party is deemed to accept that part of the witness’s evidence. The rule is explained by the Federal Court in Wong Swee Chin v PP [1981] 1 MLJ 212; [1980] CLJU 138 as follows: On this point we need only say there is a general rule that failure to cross-examine a witne”
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1 IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE FEDERAL TERRITORY OF KUALA LUMPUR, MALAYSIA CIVIL SUIT NO. WA-22C-83-08/2017 BETWEEN ANJUNG HIJAU SDN BHD (Company No. 53120-P)
1
AND ASSOCIATED BUILDERS & CONTRACTORS SDN BHD (Company No. 7746-W)
2
ZON DESIGN REKABINA SDN BHD (Company No. 574411-X)
3
AHMAD JAAFAR BIN AZIZUL RAHMAN (IC No. 590423-08-5433) DEFENDANTS GROUNDS OF JUDGMENT Introduction [1] This suit between the plaintiff and the defendants relate to the construction of a project in Ipoh, Perak, known as: “Cadangan Pembangunan Kediaman Fasa 1 yang mengandungi 16 unit rumah berkembar 2 ½ tingkat, 7 unit sesebuah Zero Lot 2 ½ tingkat dan 24 unit rumah berkelompok 2 ½ tingkat di atas sebahagian Lot 15517S (PN283716) Bandaraya Ipoh, Daerah Kinta, Perak Darul Ridzuan untuk Tetuan Anjung Hijau Sdn Bhd dan Cadangan Pembangunan Kediaman Fasa 2 yang mengandungi 17 unit rumah sesebuah Zero Lot 2 ½ tingkat di atas sebahagian Lot 15517s (PN283716), Bandaraya Ipoh, Daerah Kinta, Perak Darul Ridzuan untuk Tetuan Anjung Hijau Sdn Bhd (“the Project”). 23/04/2024 14:58:02 Kand. 196 Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 2 [2] The plaintiff is the developer of the Project. The first defendant (“D1”) was the main contractor appointed by the plaintiff for the construction of the Project. The second defendant (“D2”) was the architect and contract administrator of the Project. The third defendant (“D3”) is a professional architect: he is a director and a shareholder of D2. Perunding ZNA (Asia) Sdn Bhd. (“ZNA”) was the civil and structural engineer for the Project. [3] The plaintiff’s claim against the defendants is in connection with three extensions of time (referred to individually as “EOT 1”, “EOT 2” and “EOT 3”, and collectively as “EOTs”) granted by D2 to D1 in respect of Phase 1 and Phase 2 of the Project. [4] D1’s counterclaim against the plaintiff is for the balance of the payment owing by the plaintiff to D1 for work done for the Project. [5] EOT 1 and EOT 3 were extensions of time for Phase 1 of the Project granted by D2 to D1, where (i) EOT 1 was granted by D2 pursuant to the Initial Application for EOT 1 and the Revised Application for EOT 1 (both defined below) made by D1 to D2, and (ii) EOT 3 was granted by D2
Preamble
pursuant to an appeal made by D1 against EOT 1. EOT 2 was an extension of time for Phase 2 of the Project granted by D2 to D1. [6] The plaintiff contends that all three EOTs were null and void and should be set aside. It further contends that because the EOTs were null and void, the plaintiff does not owe D1 the balance of payment for the work done by D1 for the Project. [7] The plaintiff seeks the following reliefs against the defendants: (i) a declaration that the EOTs given by D2 to D1 are null and void and be set aside; (ii) a declaration that D1’s claims against the plaintiff are null and Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 3 void; and (iii) damages in the sum of RM3,198,102.00 being liquidated and ascertained damages, together with interest at rate of 5% per annum from 13.11.2014 until full settlement. [8] The defendants deny the plaintiff’s claim. They plead that D1’s applications for the EOT 1, EOT 2 and EOT 3 were in accordance with PAM 2006 and that D2 had properly and validly approved D1’s application for the EOTs in accordance with PAM 2006. [9] D1 counterclaims from the plaintiff the sum of RM3,141,706.82 being the balance of payment due and owing from the plaintiff to D1 for work done for the Project together with interest of 7.85% per annum on the sum from 01.11.2018 until full settlement. [10] Trial proceedings of this suit took place over 11 non-consecutive days. The parties called 10 witnesses: there were 8 witnesses of fact and two expert witnesses. The witnesses are: NAME NO. Azrin Mirzhan bin Kamaludin “PW-1” Ar. Ng Yen Shiuun (Plaintiff’s Expert Witness) “PW-2” Dr. Tong Ling Siew “DW-1” Azhar bin Abu Bakar “DW-2” Ong Ee Boon “DW-3” Suriati Ab Razak “DW-4” Long Ah Yew @ Long Shee Yeow (AY Long) “DW-5” Zulkiphle Bin Aby Bakar “DW-6” Ahmad Jaafar bin Azizul Rahman (D3) “DW-7” Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 4 NAME NO. Ar. Steven Thang Boon An (D2 and D3’s expert witness) “DW-8” [11] Upon considering the terms of PAM 2006, the law and the evidence adduced during the trial, this Court found that the plaintiff had failed to prove its case on a balance of probabilities against any of the defendants. The plaintiff’s claim against the defendants was accordingly dismissed. [12] As regards D1’s counterclaim, this Court found that D1 had proved that the plaintiff owes D1 the balance sum of RM3,141,706.62 for work done by D1 in respect of the Project. Judgment was accordingly given to D1 for its counterclaim against the plaintiff. [13] The full reasons for this Court’s decision are set out in this judgment. Material Facts [14] The plaintiff appointed D1 as the Project contractor by a letter of award dated 06.12.2013 (“Letter of Award”). Their contract was governed by the terms and conditions in the PAM Contract 2006 (Without Quantities) standard form contract (“PAM 2006”). [15] The Project was developed in two phases: Phase 1 and Phase 2. D1 had completed the construction of the Project. [16] Phase 1 of the Project was certified as complete on 08.04.2015: the Certificate of Practical Completion (“CPC”) for Phase 1 was issued by D2 on 27.04.2015. Phase 2 of the Project was certified as complete on 01.10.2015: the CPC for Phase 2 was issued by D2 on 11.10.2015. Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 5 [17] On 26.04.2018, ZNA issued its first engineering instruction to D1 — Engineering Instructions No. 1 (“EI No.1”), instructing D1 to divert the Project’s drainage system next to the Royal Perak Golf Club. [18] On 29.04.2018, ZNA issued a second engineering instruction to D1 — Engineering Instruction No. 2 (“EI No. 2”). In EI No. 2, ZNA instructed D1 to lower and reconstruct the main drainage system along the Project’s boundary with Politeknik Ungku Omar (“PUO”). [19] Both EI No. 1 and EI No. 2 were signed by Zulhkiplee bin Abu Bakar (“DW-6”), the principal of ZNA. DW-6 testified during the trial that the main outlet drain adjacent to PUO had to be reconstructed by lowering down further and enlarging the existing drain. The existing drain had caused a backflow of water onto PUO’s land during heavy rain. ZNA issued EI No. 2 after PUO had complained to Majlis Bandaraya Ipoh about the flooding on its land resulting from the backflow of water. EOT 1 [20] The original completion date for Phase 1 of the Project was 12.09.2014. [21] On 10.09.2014, D1 applied to D2 for an EOT of 230 days to complete the construction work of Phase 1 (“Initial Application for EOT 1”). D1 listed EI No. 1 and EI No. 2 from ZNA as the reasons for applying for the EOT. With the application, D1 attached the reasons for the application, EI No. 1 and EI No. 2, the Request for Instructions (“RFI”) and other documents. [22] Subsequently, in a letter to D2 dated 06.11.2014, D1 requested a meeting between D1 and the plaintiff together with consultants, namely, Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 6 D2, ZNA, Primedge Consult, and the quantity surveyor, Messrs. Basar & Harun Sdn Bhd (“the QS”). The purpose of the meeting was to finalise D1’s application for EOT 1. [23] The meeting was held on 11.11.2014. It was attended by D1, the plaintiff, D2, ZNA, Primedge Consult, and the QS. Following the meeting, D1 submitted its revised application for EOT 1 (“Revised Application for EOT 1”) on 13.11.2014. [24] The Revised Application for EOT 1 was for similar reasons as that for the Initial Application for EOT 1 but with an additional 203 days applied for the construction of a sewerage treatment plant (“STP”). This was because the works for the construction of the STP could not commence until the reconstruction of the drain along the boundary with PUO was completed — the drain had to be lowered before the site could be handed over to the nominated sub-contractor (M/S Belkron Trading Sdn Bhd) (“Belkron”) for the construction of the STP. Belkon started constructing the STP on 13.10.2014 and took 203 days to complete the STP on 05.05.2015. [25] D2 issued EOT 1 on 13.04.2015. Despite D1 having applied for an extension of time for a period of 433 days in its Revised Application for EOT 1, D2 granted D1 an extension of time of 100 days only from 12.09.2014 to 20.12.2014 for the completion of Phase 1 of the Project in EOT 1. Dissatisfied with the extension of time granted under EOT 1, D1 in its letter dated 26.05.2015 to D2, appealed for the extension of time for the completion of Phase 1 of the Project to be extended to 05.05.2015 i.e. the completion date of the work on the STP by Belkron. The appeal letter was copied to ZNA and the plaintiff. Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 7 [26] Phase 1 of the Project was certified as practically completed by the CPC on 08.04.2015. D1 appealed to D2 against the 100 days granted under EOT 1 through its letter to D2 dated 26.05.2015. D2 granted EOT 3 for 205 days on 03.08.2015. [27] With respect to Phase 2 of the Project, ZNA through Engineer’s Instruction No. 1 dated 24.01.2014 (“EI No.1 for Phase 2”) instructed D1 to conduct additional work of 128 numbers of Mackintosh Probe Test at designated locations at Phase 2 of the Project per the sketch attached to the said engineer’s instruction. [28] On 10.02.2015, D1 applied from D2 for a 95-day extension of time (“Application for EOT 2”). [29] D2 granted EOT 2 for a period of 36 days to extend the Completion Date of Phase 2 to 20.03.2015. Issues to be tried [30] The parties had filed a long list of issues to be tried prior to the trial. These issues fall into the following four broad categories: 1) Were EOT1, EOT2 and EOT 3 properly applied for by D1 and approved by D2 in accordance with PAM 2006? 2) Did D2 and/or D3 conspire with D1 to approve D1’s applications for the EOTs? 3) Is the plaintiff entitled to RM3,198,102.00 being damages for LAD? and Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 8 4) Does the plaintiff owe D1 the sum of RM3,141,706.82 being balance of payment for work done by D1 for the project? Issue (1): Were EOT 1, EOT 2 and EOT 3 properly applied for by D1 and approved by D2 in accordance with PAM 2006?
a
Did D1, in making the application for EOT 1, comply with the condition precedent in clause 23.1(a) of PAM 2006? [31] The plaintiff’s case is that D1, in applying for the EOT 1, did not comply with the condition precedent in clause 23.1(a) of PAM 2006. [32] What is the condition precedent in clause 23.1(a) of PAM 2006? It is the written notice that a contractor must give to the architect of his intention to apply for an EOT within 28 days from the date of an architect’s instructions (“AI”), confirmed architect instructions (“CAI”) or the commencement of any Relevant Event (defined in clause 23.8 of PAM 2006). Clause 23.1(a) expressly states that giving such written notice within the requisite 28 days is a condition precedent of applying for an EOT. Clauses 23.1(a) and (b) of PAM 2006 reads:
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23.0 Extension of Time 23.1 If the Contractor is of the opinion that the completion of the Works is or will be delayed beyond the Completion Date by any of the Relevant Events stated in Cl. 23.8, he may apply for an EOT provided always that:
23
23.1(a) the Contractor shall give written notice to the Architect his intention to claim for such EOT together with an initial estimate of the EOT he may require supported with all particulars of the cause of delay. Such notice must be given within 28 Days from the date of AI, CAI or the commencement of the Relevant Event, whichever is earlier. The giving of such written notice shall be a condition precedent to an entitlement of EOT; and Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 9 23.1(b) within 28 Days of the end of the cause of delay, the Contractors shall send the Architect his final claim of EOT duly supported with all particulars to enable the Architect to assess any EOT to be granted. If the Contractors fails to submit such particulars within the stated time (or within such longer period as may be agreed in writing by the Architect), it shall be deemed that the Contractor has assessed that such Relevant event will not delay the completion of the Works beyond the Completion Date. [Emphasis added] [33] The plaintiff’s case is that D1 did not give written notice to D2 of its intention to apply for an extension of time within 28 days of the commencement of a Relevant Event; hence, it argues that D2 and D3 cannot exercise its discretion to grant EOT 1 to D1. [34] The plaintiff’s claim is premised on the opinion of its expert witness, Ar. Ng Yean Shiunn (“PW-2”), who, in preparing his expert report, did not read the Initial Application for EOT 1 submitted by D1 to D2. [35] Mr. Ashvin Kulasingam, counsel for the plaintiff, submitted that based on the opinion of the plaintiff’s expert witness, EOT 1 should be dismissed in limine because of this purported lack of written notice by D1. [36] Mr. Ashvin also submitted that the engineering instructions (EI No. 1 and EI No. 2) are not recognised under PAM 2006 as a reason for the grant of the EOTs unless it was endorsed by an AI. [37] With respect to learned counsel for the plaintiff, clause 23.1(a) of PAM 2006 states that the contractor must give the architect written notice of its intention to apply for the extension of time within 28 days of “from the date of AI, CAI or the commencement of the Relevant Event, whichever is earlier”. “AI” and “CAI” are defined in clause 2.2 of PAM 2006 Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 10 as “Architect’s Instructions” and “Confirmation of Architect’s Instructions”, respectively. [38] As expressly provided in clause 23.1(a) of PAM 2006, the written notice for an application for an EOT, can be given not just within 28 days of an AI or CAI but also within 28 days from the commencement of a “Relevant Event”. [39] In this instant case, there is no dispute that the instructions for the works under EI No. 1 and EI No. 2 are “Relevant Events” under clause 23.8 of PAM 2006. [40] DW-7 testified that both engineering instructions were “Relevant Events” under clauses 23.8(f), (m) and (s) of PAM 2006. Plaintiff’s counsel did not challenge his testimony under cross-examination. [41] It is a trite principle of law that failure to cross-examine a witness on a particular area of his evidence is deemed to be acceptance of that part of his evidence: see Brown v Dunn [1893] 6 The Reports 67; Aik Ming (M) Sdn Bhd & 8 Ors v Chang Ching Chuen & 3 Ors & Another Case [1995] 3 CLJ 639; [1995] 3 AMR 2375; [1995] 2 MLJ 770, CA; Shamim Reza bin Abdul Samad v Public Prosecutor [2011] 1 MLJ 471; [2010] 2 AMR 293, [2009] 6 CLJ 93. FC; Tan Kim Ho & Anor v PP [2009] 3 CLJ 236; [2009] 3 MLJ 151, FC; Ermiadi v Public Prosecutor [2023] 4 AMR 697; [2023] MLJU 51, [2023] CJLU 56, CA. [42] Furthermore, the plaintiff’s own expert witness, PW-2, in clause 2.5.5 of his expert report dated 05.11.2018 stated that the drainage works at the Royal Perak Golf Club (under EI No. 1) and the drainage works along the boundary with PUO and the construction works for the STP Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 11 (under EI No.2) were prima facie “Relevant Events” under clauses 23.8
e
(e), (h) and (s) of PAM 2006. [43] Accordingly, this Court finds no merits to the submission by plaintiff’s counsel that an EI is an unauthorised instruction that cannot form part of the “Relevant Event” under clause 23.8 of PAM 2006. [44] It is an undisputed fact that D1 had submitted to D2 on 10.09.2014, a written notice of its application for EOT 1 of 230 days (defined above as the “Initial Application for EOT 1”) after having received EI No. 1 and EI No. 2 on 26.08.2014 and 29.08.2014 respectively, from ZNA. [45] The Initial Application for EOT 1 was submitted within 28 days of the commencement of the Relevant Events i.e., EI No. 1 and EI No. 2. It is also undisputed that all of D1’s written notices to D2 for EOT 1, EOT 2, and EOT 3 form part of the bundle of documents in the Ikatan Dokumen Bersama filed in this Court for the purposes of the trial of this suit. [46] However, the plaintiff’s expert, PW-2, in preparing his report, did not read D1’s Initial Application for EOT 1, even though the plaintiff gave him the Ikatan Pliding and the Ikatan Dokumen Bersama for purposes of his assessment and preparation of his expert report. [47] PW-2, in his report, stated that he had no knowledge of the Initial Application for EOT 1 that D1 had submitted to D2. PW2 said the document was not made available to him for his assessment. PW-2 referred to the Initial Application for EOT 1 as “EOT 0”. In para. 2.4.8 of his report, PW2 stated, “EOT 0 is nowhere to be found on official records that was made available for my assessment and therefore one could not verify the authenticity of its existence.” Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 12 [48] With respect to PW2, the authenticity of Initial Application for EOT 1 (or EOT 0 as PW2 calls it in his expert report) was never challenged by the plaintiff and was adduced as a Part B document during the trial. [49] Under cross-examination by D2 and D3’s counsel, Mr. Andrew Heng, PW-2, admitted that he did not read all the documents in the Ikatan Dokumen Bersama when making his assessment and preparing his expert report. Plaintiff’s counsel did not re-examine him on this point. [50] Moreover, the plaintiff’s own witness, PW-1, admitted that the Initial Application for EOT 1 was made by D1 on 10.09.2014. He also admitted that D1 had copied its application to the plaintiff. [51] In addition, DW-1, in his witness statement, stated that D1 had applied for the EOT through its the Initial Application for EOT 1 dated 10.09.2014 to D2. And DW6 of ZNA testified that ZNA was copied the Initial Application for EOT 1. [52] Plaintiff’s counsel did not challenge either DW-1’s or DW-6’s testimonies in relation to D1’s submission of the Initial Application for EOT 1 during cross-examination. Accordingly, the plaintiff is deemed to have accepted their evidence that D1 did submit a written notice for EOT 1 to D2. [53] Under section 45 of the Evidence Act 1950, where the Court has to form an opinion upon “a point of foreign law or of science or art, or as to identity or genuineness of handwriting or finger impressions”, the opinion of experts i.e. the person who is “specially skilled in that foreign law, science or art, or in questions as to identity or genuineness of handwriting or finger impressions, are relevant facts. Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 13 [54] It is settled law that notwithstanding the opinion given by an expert witness, the Court is free to draw its own conclusions based on the evidence adduced during a trial. The Court of Appeal in Kulasingam Samuel v Rasammah J.V. Tambipillai [1997] 1 MLJ 288; [1997] 1 CLJ 406; [1997] 1 AMR 797 said: Expert witnesses only give opinion evidence but the Court is free to draw its own conclusions. [55] In this instant case, this Court must form an opinion as to whether the Initial Application for EOT 1 sent by D1 to D2 was a “written notice” under clause 23.1(a) of PAM 2006. The plaintiff’s expert witness, PW-2, as a consultant architect, is specially skilled in architecture and the requirements of PAM 2006. [56] But as he had failed to read the Initial Application for EOT 1, which is the very document this Court must form an opinion on whether it is a “written notice” under clause 23.1(a) of PAM 2006, PW-2’s opinion that D1 had failed to submit the written notice to D2 in compliance with clause 23.1(a) of PAM 2006, is a not relevant fact that can be considered by this Court in making its findings. As is evident from PW-2’s expert report, his opinion that the Initial Application for EOT 1 is not a “written notice” under clause 23.1(a) of PAM 2006 is premised on his failure to read the document. [57] Accordingly, based on these facts, this Court finds that D1 submitted a written notice to D2 of its intention to apply for EOT 1 within 28 days of the commencement of a Relevant Event and had accordingly complied with the condition precedent in clause 23.1(a) of PAM 2006. Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 14
b
Was EOT 3 granted by D2 in compliance with clause 23.10 of PAM 2006? [58] The plaintiff contends that EOT 3 was not granted by D2 in compliance with Clause 23.10 of PAM 2006 for the following reasons:
i
EOT 3 was not granted by D2 within 12 weeks from the CPC;
II
(ii) D1 did not come with clean hands in applying for the EOT 3 because it did not serve the required written notice for EOT 1 under clause 23.1(a);
III
(iii) EOT 3, which is the result of D1’s appeal against EOT 1, was based on the same grounds as EOT 1; and
IV
(iv) D2 and D3 did not attend the meeting on 01.06.2005 between D1 and ZNA.
i
Is an architect obliged under clause 23.10 of PAM 2006 to review and fix a Completion Date within 12 weeks after the date of CPC? [59] Phase 1 of the Project was certified by D2 as practically completed by the issuance of the CPC on 08.04.2015. D1 made its appeal to D2 against the 100 days granted under EOT 1 through its letter to D2 dated 26.05.2015 (“Application for EOT 3”). D2 granted EOT 3 for 205 days on 03.08.2015. [60] Under clause 23.10 of PAM 2006, D2, as the architect of the Project, may, but is not obliged to, within 12 weeks from the date of the CPC to review and fix a completion date, which is later than that previously fixed if in D2’s opinion the fixing of the completion date is fair and reasonable having regard to any of the Relevant Events. Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 15 [61] Clause 23.10 expressly states that an architect “may (but not obliged to)” within 12 weeks of the practical completion review and fix a later completion date. Clause 23.10 of PAM 2006 reads:
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23.10 The Architect may (but not obliged to) within twelve (12) weeks after the date of Practical Completion review and fix a Completion Date later than that previously fixed, if in his opinion the fixing of such later Completion Date is fair and reasonable having regard to any of the Relevant Events, whether upon reviewing a previous decision or otherwise and whether or not a Relevant Event has been specifically notified by the Contractor under Clause 23.1. No such final review of extension of time shall result in a decrease in any extension of time already granted by the Architect. In the event the fixing of such later Completion Date affects the amount of Liquidated Damages the Employer is entitled to retain, he shall repay any surplus amount to the Contractor within the Period of Honouring Certificates. [Emphasis added] [62] The Court of Appeal in Junaidi Berimang v Public Prosecutor and another appeal [2022] MLJU 453; [2022] CLJU 522 held that the word “may” conveys “consideration” or “discretion”. The Federal Court in The Government of Malaysia & Anor v Aminah Ahmad [2023] 5 MLJ 32 [2023] 8 CLJ 1; [2023] 6 AMR 102; [2023] 5 MLJ 32 held that the word “may” is merely permissive and does not impose any obligation to act. [63] Therefore, under clause 23.10 of PAM 2006, D2 may review and fix a later completion date than it had previously fixed within 12 weeks of the CPC. Hence, in this instant case, the fact that D2 had granted EOT 3 and fixed a later completion date than it had earlier fixed under EOT 1, more than 12 weeks after the CPC, does not mean that EOT 3 granted by D2 was in non-compliance of clause 23.10 of PAM 2006. [64] D2 and D3’s expert witness, AR. Steven Thang Boon Ann (“DW-8”) is a consultant architect with experience in exercising clause 23.10 of PAM Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 16
2006
DW-8 stated in his expert report that the period of 12 weeks for the architect to “review and fix a Completion Date later than previously fixed” in clause 23.10 is a provision allowed in a standard form contract. DW8 stated that depending on the size and complexity of the works, the period could be shortened or lengthened. He referred this Court to the Handbook for PAM Contract 2006, clause 23.10, pg. 186, published by Pertubuhan Akitek Malaysia (PAM) in 2010, which reads: Clause 23.10: The Architect may (but not obliged) within twelve (12) Weeks after the date of Practical Completion review and fix a Completion Date later than that previously fixed …….. This Clause allows the Architect to review extension of time, previously granted, within 12 weeks after the issuance of the Certificate of Practical Completion. As the earlier grant of an extension of time under clause 23.4 is an interim extension of time, the Architect should take this opportunity to review his earlier decision in light of actual events. It is not mandatory that the Architect must review the extension of time previously granted, but it is recommended that if the Architect is not reviewing the extension of time, he shall confirm this to the Contractor, so that the Contractor knows what the Architect has decided. The period of 12 weeks is the provision allowed in a standard form of contract. Depending on the size and complexity of the Works, the period could be shortened or lengthened. In Temloc v Errill Properties 39 BLR 30, the court, in deciding a JCT Contract Clause 25.3.3: “After completion Date, ……… the Architect may, and not later than the expiry of 12 weeks after the date of Practical Completion ……. Fix a Completion later than that previously fixed ……. ” decided that: In my view, …. Clause 25.3.3 …. Is directory only as to time and is not something which would invalidate the calculation and payment of liquidated damages” ……………. [Emphasis added] [65] The case of Temloc Ltd v Errill Properties Ltd 39 B.L.R. 30, [1988] 1 WLUK 627, referred to by PAM in the Handbook for PAM Contract 2006, Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 17 is an English Court of Appeal case. The standard form contract governing the contract between the developer and contractor in that case was the 1980 JCT standard form of building contract private with quantities edition (“JCT Contract”). Clause 25.3.3 of the JTC Contract, unlike clause 23.10 of the PAM 2006, states: Not later than the expiry of 12 week from the date of practical completion the architect shall in writing to the contractor either ….. fix a completion date later than that previously fixed. [Emphasis added] [66] Even though clause 25.3.3. of the JTC Contract states that the architect shall fix the date of practical completion not later than 12 weeks from the date of practical completion, the English Court of Appeal held that the 12 weeks period stated in clause 25.3.3 of the JTC Contract is “directory only as to time and is not something which would invalidate the calculation and payment of liquidated damages.” [67] In contrast to the clause 25.3.3 of the JTC Contract, clause 23.10 of PAM 2006 expressly states that the architect “may (but not obliged to)” within twelve (12) weeks after the date of Practical Completion review and fix a Completion Date later than that previously fixed. [68] In his expert report, DW-8 concluded that EOT 3 was validly granted for the following reasons:
a
The grounds stated in D1’s application for EOT 3 fell within the Relevant Events under clause 23.8 of PAM 2006, particularly clauses 23.8 (b), (m) and (p). DW8 stated: Of significant is the complaint by Politeknik Ungku Omar to Majlis Bandaraya Ipoh dated 3rd September 2013 on the back flow of rain water from the newly constructed drainage system. This drainage Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 18 system was redesigned by ZNA and was constructed by Defendant 1, thus pushing back the site possession to the NSC for Sewer Treatment Plant to commence their work. ……….
b
ZNA, as the consultant civil and structural engineer of the Project, is responsible for the structural and civil work on site. Therefore, it was appropriate for ZNA to evaluate the EOT for the civil and structural work submitted by D1 and make the recommendations to D2, who is, as the consultant architect, is the contract administrator of the Project;
c
D1 submitted EOT 1 on 10.09.2014, and D2 issued a letter dated 28.09.2014, seeking more information from D1 to substantiate its EOT claims. DW8 said: As the work on site especially the Sewer Treatment Plant remains outstanding, detailed account would not be reasonable until almost completion.
d
The 12 weeks in clause 23.10 can be shortened or lengthened depending on the size and complexity of the work. [69] The plaintiff’s counsel never challenged DW-8’s findings in his expert report during cross-examination. It follows, therefore, based on the rule in Brown v Dunn, that the plaintiff is deemed to have accepted DW- 8’s findings that EOT 3 was validly granted. [70] Accordingly, based on the interpretation of the word “may” by the Court of Appeal in Junaidi Berimang and the Federal Court in Aminah binti Ahmad (which, pursuant to the doctrine of stare decisis, this Court is bound) and the views expressed by the English Court of Appeal in Temloc Ltd v Errill Properties Ltd, by PAM in the Handbook for PAM Contract 2006, and by the DW-8 in his expert report, I find that it is not Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 19 mandatory under clause 23.10 PAM 2006 for D2 to grant EOT 3 and fix a later Completion Date, within 12 weeks of the CPC.
II
(ii) Did D1 not come with clean hands in applying for EOT 3? [71] The other argument raised by the plaintiff’s counsel to support its contention that EOT 3 was not granted in accordance with clause 23.10 of PAM 2006 was that D1 did not come with clean hands in submitting the Application for EOT No. 3. This argument is premised on the plaintiff’s allegation that D1 did not serve D2 the requisite written notice for EOT 1 under clause 23.1(a) of PAM 2006. [72] For reasons discussed above, this Court found that D1 did serve the written notice of its application for EOT 1 within 28 days of the commencement of the Relevant Events under clause 23.1(a) of PAM
2006
[73] Accordingly, as D1 did serve the written notice on D2 and had met the condition precedent under clause 23.1(a) of PAM 2006 in relation to its application for EOT 1, this Court finds that D1 did come with clean hands in submitting its application for EOT 3. [74] Moreover, an architect’s review of his previous decision as to the completion date under clause 23.10 of PAM 2006, is not dependent on whether or not the contractor gave notice under clause 23.1 of PAM 2006. Sundra Rajoo, WSW Davidson and Harbans Singh, in their book The PAM 2006 Standard Form of Building Contracts, LexisNexis, 2010, at pg. state: Clause 23.10 requires the architect to review the completion date in any event; and he must do this in the light of any Relevant Event whether or not specifically notified to him by the contractor under Clause 23.1, so long as Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 20 he is of the opinion that the review and the fixing of such later Completion Date is fair and reasonable having regard to any of the Relevant Events that have impacted on the progress of Works. Prima facie, he must take into account all the possible Relevant Events for which the contractor is contractually entitled to an extension of time even for which the contractor has failed to give written notice, a condition precedent to any extension of time entitlement, or failed to submit sufficient particulars. [Emphasis added] [75] Therefore, D2’s grant of EOT 3 upon his review of the previous extension of time granted under EOT 1 under clause 23.10 of PAM 2006 is not invalidated even if D1 did not give a written notice under clause 23.1.
III
(iii) Must D1’s appeal in EOT 3 be on different grounds from that in its application for EOT 1? [76] As for the plaintiff’s argument that the grant of EOT 3 was invalid because the grounds of D1’s appeal in EOT 3 are the same as its application for EOT 1, this Court is unable to find any merit in the argument for the following reasons:
i
First, clause 23.10 of PAM 2006 does not state that the architect’s review of the previously fixed completion date must be based on new grounds or facts. Similarly, there is nothing in PAM’s Handbook for PAM Contract 2006 that states that an architect, in reviewing and fixing a completion date that he had previously fixed, must base such review on new facts.
II
(ii) Secondly, D1 did provide further documents to ZNA on 16.06.2015 to support its application for EOT 3. Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 21 D1 had a meeting with ZNA on or about 01.06.2015, and on 16.06.2015, D1 forwarded the documents to D2 to support its Application for EOT 3. The supporting documents included a written explanation, photographs and site plans to support its appeal against EOT 1 (see bundle B1/ pp. 117-127). In these further documents, D1 showed ZNA and D2 that the drainage work at PUO cannot be carried out concurrently with the STP and that the NSC (Belkron) can only start building the STP after the drain along the border with PUO had been lowered and reconstructed. [77] Learned counsel for the plaintiff cited the case of YL Pavillion Sdn Bhd v Capitol Avenue Development Sdn Bhd (2018) MLRHU 905, a decision of the High Court of Kota Kinabalu, to support its argument. Counsel for the plaintiff, in his submissions, referred to and quoted a portion of the judgment, where the learned judge had listed out the argument put forward by the plaintiff’s counsel. It was not the decision of the findings of the Court. I am puzzled why counsel for the plaintiff chose to represent to this Court the submissions of counsel in YL Pavillion as the findings of the Court in that case. [78] Moreover, the facts in YL Pavillion differ from and can be distinguished from the facts of this case. In YL Pavillion, the architect had issued an architect’s certificate granting an extension of time for the contractor to complete the works. The developer (the defendant) then used the architect’s certificate to unilaterally revise the contractual date for delivery of vacant possession to the purchaser (the plaintiff). In contrast to this present case, the plaintiff in YL Pavillion did not challenge the Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 22 validity of the extension of time granted by the architect in the architect’s certificate to the contractor. In that case, the plaintiff challenged the developer’s action in wrongfully revising the date of delivery of vacant possession and reducing the amount of liquidated damages paid. The High Court of Kota Kinabalu held that it was unlawful for the developer to unilaterally revise the date of delivery of vacant possession.
IV
(iv) Is EOT 3 null and void because D2 and D3 did not attend the meeting on 01.06.2015 between D1 and ZNA in respect of D1’s application for EOT 3? [79] D1’s application for EOT 3 is premised on the event relating to civil and structural works, namely the reconstruction and lowering of the PUO drain and the construction of the STP. Therefore, it is imperative for D2, as the Project architect, to consider ZNA’s recommendations before deciding on whether or not to grant EOT 3. [80] D1 in the written explanation to D2 stated that the lowering of the main outlet drain adjacent to PUO was critical to the construction of the STP because the work for the construction of the STP cannot start until the drain had been lowered. [81] DW-6 of ZNA said that after reading the supporting documents submitted by D1 as regards its appeal against the number of days granted in EOT 1, ZNA was of the view that D1 had presented a valid case to support its claim for the appeal on the 100 days granted for EOT 1. [82] During the trial, DW-6 testified that based on the ground, the site condition, the key plan that was presented to ZNA, where the drain was located, and where the STP was located, ZNA concluded that the drain by Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 23 PUO and the STP could not be constructed at the same time. D1 had to lower the drain first before the STP could be constructed. [83] ZNA, in a letter dated 31.07.2015 (signed by DW-6) to D2, recommended that D2 grant a further EOT of the completion date from 13.10.2014 to 05.05.2015, i.e. 205 days. ZNA informed D2 that it believed D1’s claim for the EOT (i.e. the lowering down of the drain and the hand-over of the STP site) was reasonable and that D1 should be granted an EOT from 13.10.2014 to 05.05.2015. The body of ZNA’s letter reads: We had a lengthy discussion with ABC [D1] and received substantial documents on the above issue on which the ABC has presented a valid case in supporting their claim for an appeal on the EOT phase 1 application. One of the main factors, was the need to lower down the drain because of ponding on the adjacent lot and was further crippled by the requirement to divert the existing earth drain, which was flowing directly on the STP designated location. Based on site representative report, on 1st September 2014 the STP site was backfilled and work has finished 90% and almost ready for handing over. Therefore we believe the ABC’s claim for EOT phase 1 on the lowering down drain and STP site handing over on 13th October 2014 were reasonable and we believe the ABC should be granted the EOT period which have claimed, However, PZNA should be bound to any delay or complication regarding this matter as Instruction was issued within reasonable time. As such we recommend the EOT for the STP from 13th October 2014 to 5th May 2015 or 205 days which they have applied. [Emphasis added] [84] Accordingly, for all these reasons, this Court is unable to agree with counsel for the plaintiff that EOT 3 is null and void because D2 and D3 did not attend the meeting between D1 and ZNA on 01.06.2015. Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 24
v
Was D2’s grant of EOT 3 “fair and reasonable” in the circumstances? [85] Under clause 23.10 of PAM 2006, D2 (as the Project’s architect) must act “fairly and reasonably” when considering D1’s appeal in its Application for EOT 3. [86] In their book The PAM 2006 Standard Form of Building Contracts, LexisNexis, 2010, Sundra Rajoo, WSW Davidson and Harbans Singh state at pg. 482-483: Clause 23.10 is an example of such a provision which affords the architect an opportunity to undertake such a review purportedly to correct any “unreasonableness” ……… it gives the architect another opportunity to revisit, address his previous decisions and to rectify areas that particularly need another look ………. In short, it gives a second chance to make a final decision on extensions of time. [87] And on pg. 484, they state an architect is required to review the completion date in light of any Relevant Event under clause 23.10 “so long as he is of the opinion that the review and the fixing of such later Completion Date is fair and reasonable having regard to any of the Relevant Events that have impacted on the progress of Works”. They go on to state at pg.485: Hence, at the end of the said review process [under clause 23.10], the architect can make one of the following two decisions:
1
confirm a completion date previously fixed; and
2
fix a completion date later than that previously fixed. [88] In London Underground Ltd v Citylink Telecommunications Ltd [2007] All ER (D) 318; [2007] EWHC 1749 (TCC), the English Technology and Construction Court (TCC) had the occasion to consider Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 25 the architect’s obligation (or the arbitrator empowered to review a contractor’s application for an extension of time) to “grant an interim extension of time as is fair and reasonable in the circumstances”. [89] The TCC held that the assessment of what is “fair and reasonable” extension of time in circumstances is one which (i) necessarily has a subjective element, (ii) is based on the assessment of the circumstances,
III
(iii) analysis of critical delay should not be seen as determining the answer to the question, and (iv) analysis of critical delay is at most an area of expert evidence which may assist the arbitrator or the court in arriving at the answer of what is a fair and reasonable extension of time in the circumstances. Ramsey J said:
164
……………… The question of what is fair and reasonable in the circumstances indicates that the remedy is not tied to a particular analysis nor is the arbitrator bound to follow the contentions of the parties. The assessment is one which necessarily has a subjective element and is based on an assessment of the circumstances.
165
…………, whilst analysis of critical delay by one of a number of well-known methods is often relied on and can assist in arriving at a conclusion of what is fair and reasonable, that analysis should not be seen as determining the answer to the question. It is at most an area of expert evidence which may assist the arbitrator or the court in arriving at the answer of what is a fair and reasonable extension of time in the circumstances. ……………. [90] What is delay and critical delay? Robert J Gemell, in Quantification of Delay and Disruption in Construction and Engineering Projects, 2017, Thomson Reuters, pg. 338, explained the difference between delay and critical delay as follows: A delay analysis is an investigation into the cause and extent of project delay. There are critical delays and non-critical delays. Critical delay causes delay to the project completion date. Non-critical delay does not cause delay to the project completion date. Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 26 [91] “Fair and reasonable” assessment of extension of time by an architect is explained in Keating on Building Contracts, 11th edn., 2021, by Stephen Furst and Vivian Ramsey, Thomson Reuters at pg. 261, para.8- 025 as follows: In John Barker Construction Ltd. V London Portman Hotel Ltd. (1996) 83 B.L.R.31 it was held that an architect, when considering what a “fair and reasonable” extension of time would consist of Cl. 25 of the JCT 1980 Standard Form of Building Contract with Quantities must: (i) apply any relevant provisions of building contract, (ii) make a logical and methodical analysis of the effect any relevant events had or were likely to have on the programme, and (iii) conduct a calculation of the relevant critical delay, rather than simply make an impressionistic general assessment of the same. Although the need for a logical and methodical analysis to underpin any award of an extension of time has been doubted [see Royal Brompton Hospital NHS Trust v Hammond (No. 7) 76 Con. L.R. 148 at 176] it is submitted that arbitrators and courts are likely to require contract administrators to discharge this function in a way that contains some form of logical and methodical assessment although this may not necessitate a critical path analysis by way of a computer programme. [Emphasis added] [92] Therefore, D2, in reviewing the extension of time that it previously given in EOT 1 for purposes of D1’s appeal, must (i) apply the relevant provisions in clause 23.10 of PAM 2006; (ii) make a logical and methodical analysis of the effect of any relevant event or likely to have on the programme, and (iii) conduct a calculation of the relevant critical delay. [93] Ahmad Jaafar bin Azizul Rahman (“DW-7”), who is D3 and the director and shareholder of D2, stated in his witness statement (QA6): After assessing ZNA’s recommendation and satisfied that the delaying event comes within the meaning of Relevant Event under Clauses 23.8(f), 23.8(m),
23
23.8(s) and the application was made within 28 days from the commencement of the Relevant Event, i.e. 10.09.2018, we proceeded to grant a Certificate of Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 27 EOT No. 01 for the extension of completion date until 20.12.2014, i.e. 100 days, vide a letter dated 13.04.2015, which can be found at CBOD-C Page 233. [94] Under cross-examination by plaintiff’s counsel as to DW-7’s answer to QA6 in his witness statement, DW-7 said that D2, after consulting with ZNA and making its own assessment, recommended to the plaintiff to grant the EOT of 100 days to D1. [95] Upon receipt of D1’s appeal against EOT 1, DW-7 said that D2 had reviewed the number of days it had granted in EOT 1 and the documents submitted by D1 to support the appeal. DW-7 said that D2 had also assessed ZNA’s recommendation in its 31.07.2015 letter and found that ZNA’s reasoning as to why the completion date should be extended and additional extension of time should be given, to take into account the lowering of the PUO drain and the construction of the STP, was justified. [96] DW-7 said that upon considering ZNA’s recommendation and D2’s review and assessment of the documents submitted by D1 to support the appeal, D2 issued EOT 3 and extended the Completion Date for Phase 1 of the Project for 205 days from the original completion date of 13.10.2014 to 05.05.2015. [97] Learned counsel for the plaintiff did not challenge DW-6 of ZNA and DW-7’s evidence during his cross-examination of them. Plaintiff’s counsel only asked them brief questions on the supporting documents provided by D1 for the application of EOT 3. The rule in Brown v Dunn, therefore, applies — the plaintiff is taken to have accepted DW-6 and DW-7’s evidence as regards ZNA’s recommendation and D2’s review of its earlier decision and the granting of EOT 3. Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 28 [98] For these reasons, this Court finds that D2 and D3 had proved their case that D2 had conducted a fair and reasonable assessment of D1’s Application for EOT 3 and in granting EOT 3 in the circumstances. [99] Accordingly, this Court finds that EOT 3 was granted in accordance with clause 23.10 of PAM 2006.
c
Was EOT 2 granted in accordance with PAM 2006? [100] EOT 2 was granted by D2 for Phase 2 of the Project. The original Completion Date for Phase 2 of the Project was on 12.02.2015. [101] ZNA through Engineer’s Instruction No. 1 dated 24.01.2014 (“EI No.1 (Phase 2)”) instructed D1 to conduct additional work of 128 numbers of Mackintosh Probe Test at designated locations at Phase 2 of the Project per the sketch attached to the said engineer’s instruction. D1 claimed that, however, it only received the 1st revised construction drawing from the plaintiff on 17.04.2014 and could only commence work after receiving the drawing. [102] In its letter dated 10.02.2015 to D2, D1 had applied for an extension of time of 95 days for the Completion Date of Phase 2 of the Project (“Application for EOT 2”) (marked as “D3”). It included the EI No. 1 (Phase 2), the RFI and related documents in the application. [103] Under cross-examination, DW-1 testified that the ZNA wanted the Mackintosh Probe test to assess the ground condition to redesign the foundation for Phase 2 of the Project. He said, “if you don’t have a foundation, you don’t have a house at all”. When I asked DW-6 during the trial why ZNA wanted the Mackintosh Probe test done, DW-6 replied that Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 29 ZNA needed the test done because it wanted to know the soil condition — “to know the strength of the soil in the area.” [104] Based on the recommendation of ZNA and upon considering the supporting documents submitted by D1 in the Application for EOT 2, D2 granted EOT 2 for a period of 36 days to extend the Completion Date of Phase 2 to 20.03.2015 (see bundle B1/pg. 46). The reasons stated on the EOT 2 for the extension of time were the two delaying events i.e. (a) additional work for Mackintosh Probe; and (b) awaiting new design from ZNA. DW-7 testified that D2 found that the two delaying events were Relevant Events under Clause 23.8(m) of PAM 2006 and, for this reason, granted EOT 2 to extend the Completion Date from 12.02.2015 to 20.03.2015. [105] However, D2 only granted EOT 2 for 36 days and not 95 days, as requested by D1 in its application. In his witness statement, DW-7 stated that D2 agreed with ZNA’s recommendation that the new Completion Date should be 31.03.2015 i.e. 36 days from 23.02.2015, to be a fair and reasonable EOT. DW7 said that D2 agreed with ZNA that the new start date should be 17.04.2014 and not 21.04.2014 as claimed by D1 since D1 had received the drawings on 17.04.2014; and that D1 took too long to submit the second batch of the Mackintosh Probe test result — D1 had submitted the first batch of the test result on 14.02.2014 but only submitted the second batch on 31.03.2014. [106] Learned counsel for the plaintiff did not challenge DW-7’s answers in his witness statement regarding the reason why D2 had granted 36 days for EOT 2. Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 30 [107] Accordingly, the plaintiff is deemed to have accepted the grounds that D2 had granted EOT 2. Findings of Court on Issue (1) [108] For the reasons above, this Court finds that D2 had fairly and reasonably assessed D1’s application for EOTs and that it had granted EOT 1, EOT 2 and EOT 3 on fair and reasonable grounds in the circumstances. [109] The plaintiff’s counsel failure to challenge the defendants’ witnesses on the part of their testimony as regards the granting of the EOTs during cross-examination is damning on the plaintiff’s case. The rule in Brown v Dunn, which has been applied by our Courts (for e.g., the Federal Court in Shamim Reza bin Abdul Samad v PP and the Court of Appeal in Aik Ming), stipulates that where a party fails to challenge the testimony of a witness during cross-examination, that party is deemed to accept that part of the witness’s evidence. The rule is explained by the Federal Court in Wong Swee Chin v PP [1981] 1 MLJ 212; [1980] CLJU 138 as follows: On this point we need only say there is a general rule that failure to cross-examine a witness on a crucial part of the case will amount to an acceptance of the witness’s testimony. [110]
Preamble
Pursuant to section 101 of the Evidence Act 1950, the plaintiff, as the person who desires for this Court to give it judgment against the defendants in this suit, must prove the facts it asserts exist. Section 102 of the Evidence Act stipulates that the burden of proof in a suit lies on the person who would fail if no evidence at all were given on either side. And under section 103 of the Evidence Act, the burden of proof as to any Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 31 particular fact lies on the person who wishes this Court to believe of its existence. The Federal Court in International Times & Ors v Leong Ho Yuen [1980] 2 MLJ 86; [1980] 1 LNS 31 held: “According to section 102 and 103 of the Evidence Act, if the party with whom this onus lies whether initially or subsequently as a result of its shifting does not give any or further evidence or gives evidence which is not sufficient, such party must fail.” [111] In this instant case, the plaintiff did not adduce any evidence to discharge its burden of proof that D1 had failed to comply with the condition precedent in making its application for EOT 1. It also failed to adduce any evidence to prove that D2 had granted EOT 1, EOT 2 and EOT 3 without justification and/or in breach of PAM 2006. [112] For all the above reasons, this Court finds that D1 had applied for EOT 1, EOT 2 and EOT 3 in accordance with PAM 2006 and that D2 had granted EOT 1, EOT 2, and EOT 3 in accordance with PAM 2006. Issue (2): Did D2 and/or D3 conspire with D1 and ZNA to approve D1’s applications for the EOTs without justification and/or in breach of PAM 2006? [113] The plaintiff pleaded that D2 and/or D3 had conspired with D1 and ZNA to approve D1’s applications for the EOTs without justification and/or in breach of PAM 2006. [114]
Preamble
Pursuant to the principles of the tort of conspiracy, in order to prove that D2 and/or D3 had conspired with D1 and ZNA, the plaintiff must prove the following: (i) a conspiratorial agreement between the defendants and ZNA for D2 to approve D1’s applications for the EOTs in breach of PAM 2006; (ii) the purpose of the agreement was to injure the plaintiff; and Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 32
III
(iii) the agreement was executed by the defendants and ZNA, which resulted in damages to the plaintiff. [115] The Court of Appeal in SCK Group Bhd & Anor v Sunny Liew Siew Pang & Anor [2011] 4 MLJ 393; [2010] 9 CLJ 389 held that: [14] The tort of conspiracy is not constituted by the conspiratorial agreement alone. For conspiracy to take place, there must also be an unlawful object, or, if not in itself unlawful, it must be brought about by unlawful means: see Davies v Thomas [1920] 2 Ch 189 per Warrington LJ, and Seah Siang Mong v Ong Ban Chai & Another Case [1998] 1 CLJ Supp 295 (HC) per Ghazali J (now FCJ). There must be a co-existence of an agreement with an overt act causing damage to the plaintiffs. Hence, this tort is complete only if the agreement is carried into effect, thereby causing damage to the plaintiffs. In order to succeed in a claim based on the tort of conspiracy, the plaintiffs must establish:
a
an agreement between two or more persons;
b
for the purpose of injuring the plaintiff; and
c
acts done in the execution of that agreement resulted in damage to the plaintiff: Marrinan v Vibart [1962] 1 All ER 869 at p 871 per Salmon J; and Halsbury's Laws of England (4th Ed) Vol 45 at p 271, as applied by Ghazali J (now FCJ) in Seah Siang Mong. [Emphasis added] [116] Despite making the very serious allegation of conspiracy against the defendants and ZNA, the plaintiff did not adduce any evidence at all to prove the requisite elements of the tort of conspiracy. No evidence was produced during the trial to show that there was an agreement between the defendants and ZNA for D2 to grant the EOTs without justification and/or in breach of PAM 2006. Without such an agreement, there cannot be a conspiracy between the parties to commit an overt act to cause damage to the plaintiff. In the words of the Court of Appeal in SCK Group, Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 33 the plaintiff in this instant case failed to prove “the co-existence of an agreement with an overt act causing damage to the plaintiff”. [117] Accordingly, the plaintiff failed to prove its allegation of the tort of conspiracy between D2 and D3 with D1 and ZNA for D2 to grant the EOTs to D1 without justification and/or in breach of PAM 2006. [118] In Hong Yik Trading v Liziz Plantation Sdn Bhd [2017] 5 MLJ 398; [2017] 8 CLJ 491, FC, Arifin Zakaria CJ said: [12] It is settled law that the burden of proof rests throughout the trial on the party who asserts that the facts exist (s 101 of the Evidence Act 1950). Where a party on whom the burden of proof lies has discharged that burden, then the evidential burden shifts to the other party. However, if the party on whom the burden of proof lies fails to discharge it, the other party need not call any evidence. [119] It follows, therefore, as the plaintiff failed to discharge its burden of proof of the alleged conspiracy between D2 and/or D3 with D1 and ZNA in the grant of the EOTs without justification and/or in breach of PAM 2006, the defendants do not have to call any evidence to disprove the allegation. Findings of Court on Issue (2) [120] By reason of the plaintiff’s failure to discharge its burden of proving the tort of conspiracy against the defendants, this Court finds that D2 and/or D3 did not conspire with D1 and ZNA to approve D1’s applications for the EOTs without justification and/or in breach of PAM
2006
Issue (3): Is the plaintiff entitled to RM3,198,102.00 being damages for LAD? [121] In paragraph 25(v) of its Amended Statement of Claim, the plaintiff pleaded that it had suffered loss and damage for LAD in the sum of Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 34 RM1,050,920.00 as a result of the grant of EOT 1 and the sum of RM2,154,386.00 as a result of the grant of EOT 3. However, the plaintiff did not plead any particulars in its Amended Statement of Claim as to how the amount of RM3,198,102.00 of LAD was calculated. [122]
Preamble
Pursuant to sections 101 and 102 of the Evidence Act 1950, the plaintiff has the burden of proving (i) that the grant of EOT 1 and EOT 3 were wrong, (ii) it had suffered damages as a result of the alleged wrong, and (iii) the amount of damages it had suffered as a result. [123] The plaintiff has failed to prove that the grant of the EOT 1 and EOT 3 were wrong. For the reasons above, this Court has found that D1’s applications for EOT 1 and EOT 3 were fairly and reasonably assessed by D2 and were validly and properly granted by D2 to D1 in accordance with PAM 2006. Accordingly, the plaintiff is not entitled to any loss and/or damages for LAD resulting from the issuance of EOT 1 and EOT 3. [124] The plaintiff also did not provide any particulars as to how the sum of RM3,198,102.00 of LAD was calculated. In addition, it did not produce any evidence to prove the amount of LAD that it claimed to have paid as a result of the issuance of EOT 1 and EOT 3. [125] PW-1, the plaintiff’s main witness, did not give any particulars of the damages claimed by the plaintiff. He did not state how much, if any, LAD that it had paid to the purchasers of the houses in Phase 1 of the Project. He admitted under cross-examination that the plaintiff did not produce any documents in Court to support its claim that it had paid LAD in the sum of RM3,198,102.00 to the purchasers. Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 35 [126] It is settled law that the plaintiff must prove the loss it claims. As
177
Lord Goddard remarked in Bonham Carter v Hyde Park Hotel 64 TLR 178 “It is not enough for the plaintiff to just write the figures and throw them at the Court” — quoted by the Federal Court in Tan Sri Khoo Teck Puat & Anor v Plenitude Holdings Sdn Bhd [1994] 3 MLJ 777; [1995] 1 AMR 41; [1995] 1 CLJ 15. Findings of Court on Issue (3) [127] For these reasons, this Court finds that the plaintiff has failed to discharge its burden of proof as regard its claim of the sum of RM3,198,102.00. [128] Accordingly, the plaintiff is not entitled to the sum of RM3,198,102.00 claimed. Issue (4): D1’s Counterclaim — does the plaintiff owe D1 the sum of RM3,141,706.82? [129] D1’s counterclaim against the plaintiff is in the sum of RM3,141,706.82 being the balance payment due to D1 from the plaintiff for work done by D1 for the Project. [130] D1’s counterclaim is based on the COIPP issued by D2 to the plaintiff and copied to D1. D2 had issued 22 COIPPs and the last COIPP was COIPP No. 22 dated 23.04.2018, which was received by D1 on 01.11.2018. The amount certified in COIP No. 22 was as follows: Nett valuation: RM45,989, 147.69 Less: Previous Payment (RM44,955,400.00) Amount due for Payment: RM1,033,747.69 Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 36 [131] D1 claims that the previous payment stated in COIPP No. 22 was incorrect. The actual amount paid to D1 was the RM43,421,334.03, not RM44,955,400.00. DW-1 testified that D1’s records show that the plaintiff paid RM43,421,334.03 to D1, and not RM44,955,400.0. [132] DW-3, who is D1’s quantity surveyor, gave an in-depth and thorough explanation of the counterclaim in his witness statement. He referred to the COIPPs issued by D2, and the documentary evidence of payment made by the plaintiff to D1. DW-3 also showed the computation for D1’s counterclaim. [133] D1 pleads that for this reason the amount to be paid by the plaintiff to D1 is RM3,141,706.82. The calculation for the amount owing is below: Nett valuation (as on COIPP No. 22): RM45,989, 147.69 Less: Previous Payment Made: (RM43,421,334.00) Amount not paid: RM2,567,813.66 Interest on late payment: RM573,893.16 Amount due for payment: RM3,141,706.82 [134] The plaintiff did not challenge the validity of the COIPP No. 22 issued by D2. Its refusal to pay the payment due is premised on its claim that the EOTs granted were null and void. In para. 50D of its defence, the plaintiff pleaded that D1 had refused, failed and/or was negligent in its duty and responsibility as the contractor for the Project. PW-1, in his supplemental witness statement, stated that the plaintiff is of the view that the counterclaim is not payable because of the invalid EOTs granted by D2 to D1. Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 37 [135] It is a fundamental principle of construction law that the employer must pay the contractor for the construction works under a contract between them. Hence, the plaintiff is obliged to pay D1 for the works done by D1 for the construction of the Project. In their book Construction Law in Malaysia 2013, Thomson Reuters, Sundra Rajoo and Harbaans Singh stated on pg. 276 and 277: ………, the employer is under a positive obligation to pay the contractor the agreed consideration (i.e. the contract sum) in accordance with the terms of the particular contract involved; failure to do so constituting a breach of contract on his part with its consequential ramifications. ………… …….. most, if not all, standard forms of conditions of contract used in this country incorporate elaborately detailed stipulations vis-à-vis the employer’s obligation to pay and the contractor’s right to payment. Notable examples of these include clause 30.0 of the PAM Contract 2006 (With Quantities) …………… [Emphasis added] [136] The contract in the Letter of Award between the plaintiff and D1 was governed by PAM 2006. Clause 30.1 of PAM 2006 states that the employer is obliged to pay the amount certified in the COIPP within the “Period of Honouring Certificates”. Para. 10.2 of the Letter of Award states that “The Period of Honouring Certificate shall be thirty (30) working days from the date of certificate from the Architect.” Therefore, the plaintiff must pay D1 the amount on each COIPP within 30 working days from each of the said COIPPs. [137] The evidence shows that the plaintiff has not paid D1 the amount certified in the COIPP No. 22 and that it has not paid all the sum certified under some of the earlier COIPPs. The unpaid amounts were detailed by DW-1 and DW-3 in their testimonies. Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 38 [138] Learned counsel for the plaintiff did not challenge either DW-1 or DW-3 during his cross-examination of both these witnesses on their evidence regarding the amount the plaintiff owes to D1 under the COIPPs. Therefore, the plaintiff is deemed to have accepted D1’s evidence that the plaintiff owes D1 payment in the sum of RM3,141,706.82: see Browne v Dunn; Aik Ming (supra); Wong Swee Chin v. PP (supra). Learned counsel for the plaintiff also did not make any submissions regarding D1’s counterclaim in the plaintiff’s written submissions filed in this Court after the trial of this suit. [139] Furthermore, PW-1, under cross-examination by D1’s counsel, admitted that the plaintiff had not made all the payments under the COIPPs to D1. Findings of Court on Issue (4) [140] For these reasons, this Court finds that D1 successfully discharged its burden of proof that the plaintiff owes it the sum of RM3,141,706.82 being the balance of payment for the construction work done by D1 for the Project.
para
[141] For the reasons above, with respect to the plaintiff’s claim, this Court finds that the plaintiff failed to discharge its burden of proof against the defendants. Accordingly, the plaintiff’s actions against D1, D2 and D3 are dismissed. [142] With respect to D1’s counterclaim against the plaintiff, this Court finds that D1 had discharged its burden of proof against the plaintiff. Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 39 Therefore, judgment is given to D1 in the sum of RM3,141,706.82 against the Plaintiff. [143] The Plaintiff is hereby ordered to pay to D1
a
the sum of RM3,141,706.62;
b
interest at the rate of 7.85% per annum on the sum of RM3,141,706.62 from 02.11.2018 until the date of full settlement. [144] The plaintiff is ordered to pay D1 costs in the sum of RM100,000.00; and to pay D2 and D3 together costs in the sum of RM100,000.00, subject to the allocatur fee. Dated: April 22, 2024 FAIZAH JAMALUDIN Judge High Court of Malaya at Kuala Lumpur Anjung Hijau Sdn Bhd v Associated Builders & Contractors Sdn Bhd & Ors 40 COUNSELS: For the Plaintiff: Ashvin Kulasingam Messrs Chan Lee & Co Suite No. 508, Block C, Pusat Dagangan Phileo Damansara 1, 9 Jalan 16/11, Off Jalan Damansara, 46350 Petaling Jaya, Selangor For the First Defendant: Norazali bin Nordin (Mohamad Nizam bin Mohamed Salleh with him) Messrs Maxwell Kenion Cowdy & Jones No. 31, Jalan Tun Sambanthan, 30000 Ipoh, Perak For the Second & Third Defendants: Andrew Heng Yeng Hoe (Roger Leong Chun Lim with him) Messrs Zain Megat & Murad D2-5-1 to D2-5-3A, Block D Solaris Dutamas (Publika) No. 1, Jalan Dutamas 1, 50480 Kuala Lumpur
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