Ar LIM Yoke Tiang (No Pendaftaran Lembaga Akitek Malaysia: A/L 221) v Matrix Concepts (Central) Sdn Bhd (W-02(C)(W)-1455-07/2018)

(a) advisory services;

(b) survey and investigation services;

(c) planning and development services;

(d) financial advisory services;

(e) exceptional negotiations and protracted involvement services;

(f) project management consultancy services; and

(g) miscellaneous services. [19] When the plaintiff changed directions in its conduct of its commercial business as planned, additional works and variation of works were required. There was a change in the density of the construction entailing a fresh design of three as opposed to the earlier two blocks at 120 units per acre density without the villas, requiring too, a different foot 11 plinth. In short, these works were beyond the scope of works under LOA 2 in which case the defendant was entitled to payment for both additional and variation works. The defendant relied on minutes of meeting dated 12.6.2015 in support, wherein it was recorded that the construction works were described as:

(a) incomplete works by previous contractor

(b) remaining works to be tendered and completed and

(c) continuing works from left over works after C2-b completion. [20] There are three underlying agreements that must be considered. Chronologically, they are as follows: i.

5.1.2012 Letter of appointment between IRDK and defendant [LOA 1]; ii.

21.4.2015 Sale & Purchase agreement between IRDK and plaintiff [SPA]; iii.

25.5.2015 Letter of appointment between plaintiff and defendant [LOA 2]. [21] Under LOA 1, the defendant had agreed with IRDK that the scope of his professional services for the project “shall be as stipulated in the Lembaga Arkitek Malaysia – Conditions of Engagement unless described otherwise herein”. That scope involved 4 stages, namely Schematic Design Stage, Design Development Stage, Contract Documentation Stage and Contract Implementation and Management 12 Stage. In clause 3, it was agreed that the defendant’s fees was “at 2.60% (excluding government service tax of 6%) of the final construction sum for the construction works”; with the fees subjected to the schedule of payment provided at clause 4. [22] According to the table found in clause 4, the payment is by stages, paid at the end or upon completion of each stage and it is a based on a percentage of the cumulative fee: STAGE OF PAYMENT Stages of Payment for each phase of Project (including infrastructure Works) % of Fee Cum % of Fee 4.1 Upon approval of Schematic Design & Concept - -

4.2 Upon completion of Design Development to Enable other Consultants to commence with their design 15.00 15.00 4.3 Upon submission of Building Plans 15.00 30.00 4.4 Upon approval of Building Plans 15.00 45.00 4.5 Upon completion of tender documents ready for tender 20.00 65.00 4.6 Upon issuance of Letter of Award to the selected contractor 5.00 70.00 4.7 From commencement of works to issuance of Certificate of Practical Completion (fees to be paid progressively monthly in accordance to the duration of contract)

20.00 95.00 4.8 Issuance of Certificate of Fitness (CFO / CCC)

3.00 98.00 4.9 Expiry of Defects Liability Period & CMFG

2.00 100.00 Total 100.00 [23] Under the SPA, the subject matter of the sale is the land together with building structures “currently being erected thereon”, that is, the 13 project on a “as is where is” basis (together with all the approvals and licences for the development). [24] Under LOA 2, the terms of the defendant’s appointment as the “Architecture Consultant” for the project are on terms similar to those found in LOA

However, unlike the terms in LOA 1, the defendant’s professional fees “shall be a fixed lump sum amount of Three Million and Six Hundred Thousand only (RM3,600,00000), excluding 6% GST. This is subjected to the schedule of payment outlined in clause 5 herein below” together with “an agreed one-off lump sum reimbursement amount of Three Hundred Thousand only (RM300,000.00)” which was paid upon signing LOA 2. Those payments are paid in stages, the details of which are in clause 5 as follows: STAGE OF PAYMENT Stages of Payment for each phase of Project (including infrastructure Works) % of Fee Amount (RM) Cumulative Work done up to 20th May 2015 5.1 Upon approval of Schematic Design & Concept - - -

5.2 Upon completion of Design Development to Enable other

Consultants to commence with their design 15% 540,000.00 15% 3 Upon approval of Building Plans 30% 1,080,000.00 45%

5.4 Upon completion of tender documents ready for tender 10% 360,000.00 55%

5.5 Upon issuance of Letter of Award to the selected contractor 5% 180,000.00 - 14

5.6 From commencement of works to issuance of Certificate of Practical Completion (fees to be paid progressively monthly in accordance to the duration of contract) 30% 1,080,000.00 -

5.7 Issuance of Certificate of Fitness

5.8 Expiry of Defects Liability Period & CMGD and Final Accounts 5% 180,000.00 - Professional Fee 3,600,000.00 Note on Cumulative Work done up to 20th May 2015): Professional Fee = RM3,600,000.00 Agreed Cumulative Work done up to 20th May 2015 @55% = RM1,980,000.00 Less Previous Payments made by IRDK Ventures Sdn Bhd = Add Agreed One-Off Lump Sum Reimbursement = RM300,000.00 RM1,180,000.00 Add 6% GST Balance Payment to be made by = RM 70,800.00 Matrix Concepts (Central) Sdn Bhd = RM1,250,800.00 [25] It is clear from the above provisions and the two tables scheduling the stage payments of the defendant’s professional fees that there is a material distinction between the two contracts of appointments, quite aside from the obvious fact that these are two entirely separate agreements. The defendant had quite clearly agreed to be paid on a lump sum basis for his professional services. Those terms cannot change merely by reason of a termination of the services. 15 [26] Further, it was agreed at clause 4.5 of LOA 2 that the defendant’s professional fee “shall be inclusive of design amendment and submission for approval to increase the Project density of not more than 110 units per acre”. Clause 5 contains the schedule of payment of the professional fees and the payment “shall be upon the completion of each Stage of Work described in the table to the satisfaction of the Client except for the Contract Implementation and Management Stage whereby the fees due under this Stage shall be paid progressively in equal monthly installment (or any other prior agreement) over the duration of the building contract period”. [27] It is clear to us from the above terms of LOA 2 that the defendant had agreed to his professional fees being on a lump sum fee, and not according to the Scale Fees. Although the learned Judge had remarked that this was not “unexpected in a case where in a competitive market one has to try to anchor in the work and secure the project”; we are of the view the reasons behind the defendant’s decision on how his professional fees are to be costed are immaterial given the clear terms of LOA 2. We do not, however, have the same reservation on the learned Judge’s conclusion, which we find quite reasonable, from the conduct of the claim including the defendant’s amendments to the counterclaim, and the evidence given at trial, that his Lordship was “not impressed and certainly not persuaded by the Defendant’s recalculation of his professional fees based on what he castigated as a fresh revelation from the Plaintiff on the cost of construction upon which he would base his fees when they claimed for damages including financing loss and the 16 loss of profits”; that this was what prompted the defendant to amend his Counterclaim to claim for revised fees based on the Scale Fees. [28] We are thus in agreement with the learned Judge that the Scale Fees has no application in the agreement between the parties before us. A close examination of the provisions of the Scale Fees further reveal that these Rules are in fact binding on the defendant qua architect and not on the contracting parties. This is further supported by General Circular No. 4/2010 dated 10.5.2010 issued by the Board of Architects. [29] We must add that this claim of RM8,571,060.00 computed according to Rule 10 of the Scale Fees, was in any event not supported by any evidence. This sum comprised the following: i. RM8,004,500.00 being “fresh architectural consultancy fees … where there is now an enlarged and different foot-plinth to develop 3 Blocks or 3 Towers with the Respondent’s instructions for 120 units density per acre” [variation costs]; ii. RM406,560.00 being the “fee entitled for Protracted and Additional Services” [protraction costs]; iii. RM160,000.00 being “fee entitlement for Additional Work done above the Basic Services with new instructions from the Respondent to design for 120 units density” [additional costs]. [30] In order to be entitled to the above costs, there must be evidence of the stage of completion and the nature of the work done. More 17 specifically, the defendant would have to lead evidence to prove that his works had reached the Contract Documentation Phase in order to be entitled to these costs. We agree with the findings of the learned Judge that the defendant’s works had only reached the Schematic Design Stage, and even at that stage, there was no evidence that this stage of works had been completed. This claim was thus properly dismissed. [31] Having made the above decision with which we concur, the learned Judge nevertheless proceeded to allow the defendant’s claim for the sum of RM342,347.48 on the basis that there was work done in relation to the change of density, a decision which we do not entirely agree with. According to the learned Judge, it cannot be disputed that work was done upon the clear instructions of the plaintiff and that presentation had been made on those revisions. Although there were no submissions made to the authorities on the revised density, the learned Judge held that the plaintiff was obliged to pay for such revision of works. [32] In this regard, we disagree. This claim for the sum of RM342,347.48 was supposedly awarded on a tax invoice dated 2.12.2016 issued by the defendant to the plaintiff. It seems neither party referred to this document, whether in the course of trial or in their submissions. In that tax invoice, a sum of RM362,257.88 was invoiced for “copyright & related documents” while a sum of RM160,000.00 was invoiced for “additional works done for 2 new design proposals at 120 units density of 3 tower blocks in May 2016.” 18 [33] While we agree with the learned Judge that there must be payment for services done and payment for any variation works, in the context of the present appeal, that sum is still subject to proof. As this tax invoice is the defendant’s own document submitted in support of his Statement of Final Account dated 2.12.2016, any claim for such variation of works must at most, be on the sum appearing in those documents. The plaintiff has accepted that at best, the sum of RM160,000.00 is due and owing for such variation of works, and we agree. [34] That Statement of Final Account prepared by the defendant himself wherein the sums make no reference whatsoever to the Scale Fees, further supports our earlier deliberations that the Scale Fees do not apply; and the defendant had understood and had always accepted this to be the correct position. In fact, as submitted by the plaintiff, the defendant only raised the matter of a claim under the Scale Fees vide an amendment to his Counterclaim on 19.4.2017, long after his Defence and Counterclaim was first filed, questioning thus the genuineness of his basis of claim. [35] We turn finally to the matter of the plaintiff’s claim and appeal. The plaintiff’s claim was in respect of the delay in the issuance of the Letter of Release and its losses purportedly suffered as a consequence of the delay. The claim was allowed in part as the learned Judge found the losses unproved. 19 [36] Although the plaintiff had made some written submissions in respect of the dismissal of its claim for such losses, at the hearing of the appeals, learned counsel for the plaintiff impressed upon us that the plaintiff’s concern was really over the matter of the defendant’s counterclaim, and the fact that the sum of RM362,257.88 was allowed when, if at all, only a far lesser sum ought to have been allowed. We have already dealt with the matter of the variation of works’ claim and do not propose to repeat ourselves. [37] As for the dismissal of the plaintiff’s claims premised on delay in the issuance of the Letter of Release, we agree with the findings and conclusions of the learned Judge in respect of these issues. Under clause 11 of LOA 2, the defendant was obliged to issue the Letter of Release, the object of which was to enable the plaintiff to proceed with the project without any delay. In turn, this would allow new architects to be appointed and to accept such appointment, and for the other artisans, suppliers and contractors to proceed with the project and be paid for their services rendered. Clause 11 reads thus:

Termination of Appointment As an additional clause of termination this appointment may be unilaterally terminated by the Client giving one (1) month written notice. Upon such termination, the Architect shall issue the Letter of Release within seven (7) calendar days to the Client and all other relevant bodies to enable the Client to proceed with the Project without any undue delay. 20 The remuneration of the Architect upon termination shall be computed without any delay the remuneration of the Architect upon termination shall be computed based on the schedule of work in progress at the site. [38] Under clause 13 of LOA 2, the defendant was also obliged to deliver up at least one copy of all documents, specifications etc. that he had prepared for the project within 14 days from the termination. The plaintiff then has absolute right to make use of those documents. [39] The defendant had refused to comply with clauses 11 and 13, contending that he had a common law right of lien over the documents because he had not been paid in full, and that his lien was exercisable under the Architects Rules 1996 to recover any outstanding sum due and owing to him. The decision in Hughes v Lenny (1839) 5 M&W 183 was cited in support. [40] The plaintiff contended otherwise, maintaining that the Architects Rules 1996 had no application and that in any case, by virtue of clause 10.2 of LOA 2, the terms and conditions of LOA 2 “shall take precedence” in the event of any discrepancy, including any discrepancy under the Board of Architect Malaysia - Conditions of Engagement. In other words, the defendant was obliged to issue the Letter of Release even if the plaintiff had not settled the defendant’s fees. [41] The learned Judge decided in favour of the defendant, finding that the rights of the parties as set out in LOA 2 were not inconsistent with 21 Rules 19, 20 and 22 of Conditions of Engagement as found in Part One of the Third Schedule to the Architects Rules 1996. However, based on the evidence adduced, the Court found that the plaintiff had already paid fees for the original drawings and plans prepared by the defendant up to the Contract Documentation Phase, just that insofar as the defendant was concerned, it had not been paid in full. But, that balance sum is a sum due from IRDK and not from the plaintiff. Be that as it may, due to the dispute on the other sums due from the plaintiff, the Court found that the defendant had a lien over the documents. The learned Judge thus found that the defendant was not in breach for refusing to issue the Letter of Release and for delivering up the documents according to the timelines provided under LOA 2. [42] As for the loss purportedly suffered by reason of the delay in the issue of the Letter of Release which was considered by the learned Judge for the sake of completeness, this claim was dismissed due to a lack of proof, whether of the amounts claimed or of the efforts which ought to have been taken by the plaintiff to catch up on lost time due to the delay in the issuance. The learned Judge found a lack of urgency on the plaintiff’s part in proceeding with the project or, availing itself of the special procedure of waiver by the Board of Architects found under General Circular No. 2/2007. The Board has a right to waive the requirement of a letter of release when there is impasse between the architect concerned and the client over the issuance of such a letter. There was also no evidence of the plaintiff’s action in proceeding with the project after the issuance of the Letter of Release. 22 [43] We have no reason to disagree with these findings and conclusions of the learned Judge. The plaintiff’s claim was therefore properly dismissed by the learned Judge. Conclusion [44] For all the reasons discussed above, we unanimously dismissed the defendant’s appeal in Appeal No.: W-02(C)(W)-1455-07/2018 as we were not persuaded that there were merits in this appeal. The High Court decision in this regard is therefore affirmed. [45] As for the plaintiff’s appeal in Appeal No.: W-02(C)(W)-1456- 07/2018 in respect of the counterclaim for additional works and variation works, we allow the appeal in part and vary the sum allowed in the defendant’s counterclaim to the sum of RM160,000.00 appearing at order (c) of the order of the High Court at page 28 of the Record of Appeal Jil. 1, and further order that the difference in the two sums to be refunded. Dated: 3rd January 2020 signed (MARY LIM THIAM SUAN) Judge Court of Appeal Malaysia 23 Counsel/Solicitors For the appellant: S. Chandran (Christopher Kushi & Annamalai with him) Tetuan Steven Thiryu & Sudhar Partnership A1-12-01, Arcoris Mont Kiara Jalan Kiara, Mont Kiara 50480 KUALA LUMPUR For the respondent: Nitin Nadkarni (Darshendev Singh & Leong Chee Weng with him) Tetuan Lee Hishammuddin Allen & Gledhill Aras 6, Menara 1 Dutamas, Solaris Dutamas No. 1, Jalan Dutamas 1 50480 Kuala Lumpur