Atm Development Sdn Bhd (dalam Penyelesaian) v Pembinaan Melima (M) Sdn Bhd (WA-22C-84-11/2022)

The Plaintiff, one ATM Development Sdn Bhd (In Liquidation) (“Plaintiff”) has made a claim against Pembinaan Delima (M) Sdn. Bhd (“Defendant”), with regards the development of a housing estate project known as Taman Desa Wirajaya, Mukim Apam, Daerah Gual Periok, Pasir Mas, Kelantan Darul Naim (“Project”) to which amongst others, the Plaintiff has sought the following orders from this Court in respect of the Project: S/N outmeaU4QEykbX4OvfuHDQ a. that the Architect’s Certificate of Practical Completion (CPC) was wrongly issued by the Architect, be declared invalid and / or defective; b. that the Defendant is not entitled to the purported advance sum of RM1,330,000.00 (“Advance Sum”); c. that the Defendant is liable for RM1,368,598.57 being the purported liquidated ascertained damages paid and / or payable by the Plaintiff to the purchasers of the 266 units in Phase 2(A) Project (which will be elaborated in further detail in the Background Facts), from 1.1.2020 until 22.8.2020 (“LAD”); d. that the Defendant is liable for RM1,608,098.05 being the purported loss and expenses incurred by the Plaintiff as a result of the Defendant’s delay in completing the Phase 2(A) Project, from 1.1.2020 until 22.8.2020 (“Loss and Expenses”) and e. that after deducting the Advance Sum, LAD and Loss and Expenses, the Plaintiff claims that there was an overpayment to the Defendant in the sum of RM631,106.98.

It is however the Defendant’s case that despite the completion of the Works under the Contract and the expiry of the Defect Liability Period (DLP), the Plaintiff has failed to pay the agreed Contract Price in full to the Defendant.

Accordingly, the Defendant counterclaims the following: S/N outmeaU4QEykbX4OvfuHDQ a. a declaration the Phase 2(A) Project was practically completed by the Defendant on 30.12.2019 and the Architect’s CPC was valid and rightfully issued by the Architect; b. a declaration that the Defendant is entitled to RM24,228,000.00; c. the Plaintiff is to pay to the Defendant the sum of RM3,675,589.64 being the outstanding sum under the Contract and Supplementary Agreement; d. Interest at 5% per annum on the amount due under Progress Claims no. 11, 12, 12, 13 and 14 from the date of each of the Progress Claims no. 11, 12, 13 and 14 or such date as this Court deems fit until judgement and thereafter interest at 5% per annum on the judgment sum from the date of judgement until full settlement; and e. Costs.

I will now relate the background facts of the matter at hand.

5.

The Project is divided into different phases consisting of :- S/N outmeaU4QEykbX4OvfuHDQ a. Phase 1: 412 units of single storey terrace house at PT10287 – PT10698 b. Phase 2 (A): 266 units of single storey terrace house at PT c. Phase 2(B): 72 units of single storey bungalow house at PT10965 - PT11036; and d. Phase 3: 92 units of single storey bungalow house at PT11037 - PT11128, among others.

On 8-1-2016, the Plaintiff entered into a Joint Venture Partnership Agreement with Dig-Cast Construction Sdn Bhd ("Dig-Cast") to jointly develop the Project (Joint Venture Partnership Agreement).

8.

Subsequently, by a further agreement entered on or about 23-11- 2018, the Plaintiff and Dig-Cast agreed to reduce the latter's scope of work to only Phase 1 of the Project, with the remaining phases to be completed by new turnkey contractors.

Dig-Cast had already at that material period completed a portion of the works under Phase 2(A) of the Project, and agreed to hand over the remaining works, including any unfinished infrastructure works S/N outmeaU4QEykbX4OvfuHDQ related to Phase 2(A), to be completed by the new turnkey contractor appointed by the Plaintiff.

As at 21-12-2018, the Plaintiff had entered into numerous sale and purchase agreements for the 235 of the units in Phase 2(A) of the Project, 8 of which allegedly dated as far back as 16-12-2016.

Subsequently, by a Turnkey Contract Agreement dated 21-12-2018 ("Turnkey Contract") which was prepared by the Defendant, the Plaintiff appointed the Defendant as the turnkey contractor to take over from Dig-Cast the design, payment of all contribution, construction and completion of the remainder works for Phase 2(A), over a contract period of 12 months from 1-1-2019 to 31-12-2019 (“Contract Period”) and to complete the Project with Certificate of Compliance and Completion (“CCC”).

By a Supplementary Agreement, also dated 21-12-2018 ("Supplementary Agreement"), it was agreed between the Plaintiff and the Defendant, that the Turnkey Contract would be amended as follows :-

that the contract price of Phase 2(A) of the Project upon ‘completion’ with Certificate of Practical Completion (“CPC”) is revised to RM22,898,000-00;

(ii) in view of the Defendant’s agreement to complete Phase 2(A) of the Project with CPC by 31-12-2019, the Plaintiff agreed to pay the Defendant a further sum of RM1,330,000-00, in addition to the revised sum of RM22,898,000-00 ("Incentive Payment"), bringing the total to RM24,228,000.00; S/N outmeaU4QEykbX4OvfuHDQ

(iii) in the event the Defendant does not proceed with the next phase of the Project, namely Phase 2(B) of the Project ("Next Phase"), the Incentive shall be treated as an incentive for the Defendant to complete Phase 2(A) with CPC and CCC on or before 31-12-2019;

(iv) in the event the Defendant proceeds with the Next Phase, the Incentive Payment shall be treated as part payment of the contract sum of the Next Phase; and all other terms and conditions of the Turnkey Contract shall remain unchanged.

Pursuant to a request by the Defendant, the Turnkey Contract was further amended on or about 21-12-2018, to revise the payment schedule, without altering any other terms of the Turnkey Contract ("Amended Payment Schedule").

The Defendant thereafter commenced works under the Turnkey Contract.

On 31-12-2019, the Defendant’s Architect issued a ‘Perakuan Siap Kerja’ (“CPC”) for Phase 2A stating that the works for the same have been completed subject to “penyiapan apa-apa kerja yang belum di siapkan dan pembaikan apa-apa kececatan , ketidak sempurnaan, kekusutan atau apa-apa kerosakan lain..”.

It was argued by the Plaintiff that the CPC was issued despite the works not being completed, in particular : a. the road Works; and b. the Telecommunication & Street Lighting Works. S/N outmeaU4QEykbX4OvfuHDQ

After going through the parties’ respective case, this Court finds that the following issues have arisen to be decided by this Court:- i) Whether under the terms of the Turnkey Contract, the Defendant is required to complete the project with CPC and CCC by 31-12-2019; ii) Whether the CPC issued by the Architect on 31-12-2019 was wrongfully issued, invalid or defective; iii) Whether the Defendant is entitled to the extension of time in completing the project; iv) Whether the Defendant is entitled to the incentive payment of RM1,300,000; v) Whether the Defendant is liable to pay the LAD; and vi) Whether the Defendant is liable to pay cost and expenses.

It is to be noted that under the terms of the standard Sale and Purchase Agreements (SPA’s) for Phase 2(A) (pursuant to Schedule G of the Housing Development (License and Control) Regulations, 1989), vacant possession must be delivered with CCC, water and electricity supply, within 24 months of the agreement date.

The standard SPA terms further provide that if the Plaintiff fails to deliver vacant possession on time, it must pay liquidated damages at 10% per annum of the purchase price, calculated daily from the due date to the purchasers. S/N outmeaU4QEykbX4OvfuHDQ

It was submitted by the Plaintiff that the Defendant should or ought to be familiar with the aforesaid terms as they were entrusted with the full scope of works from construction, to CPC, CCC, and subsequently the handing over of vacant possession to the purchasers.

It is observed by this Court that

22.1 the Defendant’s Project Manager, DW-2 Koay Wei Shun (“DW2”), had testified at trial that the Defendant had never completed a housing development project or any other turnkey contracts before undertaking the project, does not excuse the

22.2 the Defendant’s principal and Director, DW-3 Toong Ah Tea (“DW-3 Toong”) was well aware of the purpose of the Turnkey Contract and the need to speedily deliver vacant possession of the units.

At this stage, it suffices to say that in construing the Turnkey Contract, this Court is minded of its commercial and business purpose in construing the terms of the Turnkey Contract. Whether Under The Terms Of The Turnkey Contract, The Defendant Is Required To Complete The Project With Certificate Of Practical Completion (“CPC”) Together Certificate Of Compliance And Completion (“CCC”) By 31-12-2019 And Whether The CPC Issued By The Architect On 31-12-2019 Was Wrongfully Issued, Invalid Or Defective; S/N outmeaU4QEykbX4OvfuHDQ

I now turn to the first issue of whether the Defendant is required to complete the project with Certificate of Practical Completion (“CPC”) and Certificate of Compliance and Completion (“CCC”) by 31-12- 2019 under the terms of the Turnkey Contract.

The contention by the Plaintiff, as mentioned earlier, is that despite the works not being completed, the CCC was issued by the Defendant’s Architect.

To this the Defendant had contended that the completion for Phase 2(A) Project was achieved on 30.12.2019 with the issuance of the Architect’s CPC, and thus the Architect was justified in certifying completion notwithstanding the said outstanding works.

The Defendant’s above contention was based on the fact that

27.1 the Contract does not outline any specific CPC requirement.;

27.2 PW3, Dr Lai Woon Fatt, the Plaintiff’s Expert Witness and DW4, Wong Jian Bei, the Defendant’s Expert Witness, had both concurred that the requirement and terminology of completion was not defined under the Contract;

27.3 DW1, Ir Haji Salahuddin Hj Abdullah, the Defendant’s architect, had testified that there was no standard form of contract adopted in the Contract. S/N outmeaU4QEykbX4OvfuHDQ

From the trial it is observed that as of 31-12-2019, the Defendant’s own Progress Report No.11-A, had indicated that the infrastructure works for road had only reached 90% completion, while telecommunication and street lighting works stood at 60% completion as seen as follows:-

This was further affirmed by the Defendant’s own witnesses,

29.1 DW3, Toong Ah Tea, under cross-examination where DW3 acknowledged that there was work which remained unfinished as of December 2019, and

29.2 the Architect, DW1, who had also acknowledged that as of 31- 12-2019, the cable connection and wearing course have not been done.

It has also been pointed out to this Court, and this Court has observed from the evidence before it that a. the laying of the wearing course had been halted due to the absence of installed cables for telecommunications and electricity (due to the cable trench digging and laying work which S/N outmeaU4QEykbX4OvfuHDQ had yet to be commenced or completed) as at 9-1-2020 which can be observed from the pictures at Enclosure. 24, Bundle D, Pages 12 – 15; b. the power supply cable to the houses had still not been connected at 18-3-2020 as shown from the picture at Enclosure. 24, Bundle D, Page 36;

I have further also found that by the Defendant’s letter dated 14-5- 2020 in reply to the Plaintiff’s letter dated 30-4-2020, which can be found at enclosure 58, Bundle B pages 134-137, had highlighted the ongoing delay, to which the Defendant did not dispute that:-

TNB cable laying and installation work had not been done; and

(ii) Bomba testing had not been carried out.

The respective experts, PW3 Dr. Lai Woon Fatt, concluded that the project faced a delay of approximately 8 months from its original target completion date, whilst the Defendant’s expert witness, DW-4 Wong Jian Bei, also agreed with PW 3’s findings of the actual site progress.

In essence, I find after examining the evidence of the work progress after the expiry of the Contract Period on 31-12-2019 until their eventual completion is as follows:- Date Subject Matter Status Reference 31-12-2019 Road works 90% S/N outmeaU4QEykbX4OvfuHDQ Telecommunication and streetlighting 60% Progress Report No.11-A (Encl. 23 / C / Page 415 at 418) 9-1-2020 Road works (Wearing course) Not Laid On-site photographs (Encl. 24 / D / Pages 12 – 15) 26-2-2020 Road works Completed On-site photographs (Encl. 24 / D / Page 43) 17-3-2020 Power supply to the house Not connected On-site photographs (Encl. 24 / D / Page 36) 14-5-2020 TNB cable laying and installation work outstanding Melima’s letter dated 30-4-2020 (Encl. 58 / B / Page 132) Bomba testing outstanding 25-7-2020 Telecommunication and streetlighting Completed On-site photographs (Encl. 24 / D /

I therefore hold from all of the above that the Project was not practically completed as at the date of the expiry of the Contract Period i.e 31.12.2019 S/N outmeaU4QEykbX4OvfuHDQ

I also hold from the evidence before the Court that

35.1 the road infrastructure works were only eventually completed on 26-2-2020 based on the picture at Enclosure 24, Bundle D page 43;

35.2 the telecommunication and streetlighting infrastructure works were yet to be completed by 26.2.2020 from the picture at Enclosure 24, Bundle D page 44; and

35.3 the supply of electricity works were only completed by 28.7.2020 based on the letter dated 28.7.2020 from TNB to Ventech Consult at enclosure 58 Bundle B page 176.

The evidence before the Court had thus shown that the final layer of road works, the ‘wearing course’ had not been applied, and electricity connection to the units had not been completed and accordingly I find that the said works remained outstanding.

Following from the above, my analysis of the Works under the Turnkey Contract can only be considered as being practically completed and ready for securing the CCC on 28.7.2020, as all site works were from the totality of the evidence before this Court completed on that date, which in my assessment would include TNB’s last works completed on that said day.

With respect I therefore cannot agree with the Defendant with their submission that the outstanding works such as TNB and final road‐ S/N outmeaU4QEykbX4OvfuHDQ wearing course were de minimis in nature, and did not preclude the Architect from issuing the CPC on 31.12.2019.

The facts in my opinion clearly show that the houses built on the project were not functional at that material time and the Plaintiff could not have adequate use of the Works for their intended purpose for which they were commissioned.

For the record, the CCC was only issued by the Architect on 30-8- 2020 as shown in enclosure 58 Bundle B at page 293

I rely on and quote the Court of Appeal in Kerajaan Malaysia v. Global Upline Sdn Bhd and Another Appeal [2017] 1 MLJ 170 where the said Appellate Court had held that : Definition of ‘completion’ [65] In any construction works ‘completion’ would mean that all the construction works agreed to have been undertaken are completed except for very minor de minis work not carried out …. Even though there are divergent views taken by the courts but essentially completion means the ‘completion’ of all the works that need to be done as agreed under the terms of the contract. [66] ‘Completion’ would in essence mean that the project would be in a state of readiness for beneficial use or occupation by the employer even though that there might be some minor defects ...

In coming to my decision, I had also considered the Defendant’s submission that to construe the meaning of completion for the S/N outmeaU4QEykbX4OvfuHDQ purpose of the CPC under the Contract, particularly in the absence of an express term or definition of completion for the CPC therein, it is sensible to consider the consistent conduct of the relevant parties, as well as various undisputed contemporaneous documents during the Contract Period.

In support of the above, the Defendant points to the client consultant meeting no. 10 held on 9.10.2019, where the requirements for the issuance of CPC were discussed, during which the M&E Engineer, Ventech Consult, stated that the TNB compact substation and street lighting would not affect the issuance of the CPC.

After examining the above said document in Bundle C pages 117 to 119, I had found that there is in fact always been a common understanding between the parties that the Defendant was to procure the CCC by 31.12. 2019. This in my decision is borne by the following contemporaneous documents and conduct, which I will elaborate with in more detail in the subsequent paragraphs of my written grounds hereinafter:-

the Turnkey Contract;

(ii) the Supplementary Agreement;

(iii) the Whatsapp Conversation;

(iv) the Progress Claims with CCC as penultimate payment;

the Defendant’s Letters of Award to its Consultants; and

(vi) the Defendant’s Conduct in obtaining CCC, including several client-consultant meeting minutes. S/N outmeaU4QEykbX4OvfuHDQ

I have been referred to and adopt the case of Vistanet (M) Sdn Bhd v Pilecon Civil Works Sdn Bhd [2005] 6 MLJ 664, where Abdul Malik Ishak J (as His Lordship then was) held that, despite the PAM contract pending execution in that case, the defendant was nevertheless bound by its terms due to contemporaneous documents and its conduct in fulfilling obligations under those terms. His Lordship had thus held: “[9] In the present case too, by looking at the defendant’s conduct and the contemporaneous documents it showed clear proof of an implied acceptance of the terms of the PAM contract by the defendant. Indeed the defendant had carried out its obligations in reference to the terms of the PAM contract. … [11] Thus, in my considered view, on the facts the defendant was bound by the PAM contract although it was not executed because the defendant has impliedly and by conduct performed their obligations in the context of the terms of the PAM contract.”

I have referred to the Turnkey Contract as evidence of the understanding between the parties that the Defendant was to procure the CCC by 31.12.2019. I had made the said conclusion after reading the said Turnkey Contract wherein I have found that the Defendant’s obligation to secure both the CPC and CCC by 31-12-2019 is clearly set out in the Turnkey Contract where S/N outmeaU4QEykbX4OvfuHDQ a. Clause 2, states that the Contract Period is twelve months, commencing on 1-1-2019 and ending on 31-12-2019’ b. Clause 5.1 specifies that the Defendant shall at its own cost and expense, be responsible for ad complete the Project in accordance with the approved plans and drawings, under the supervision of the consultants and relevant statutory authorities; c. Clause 5.3 which expressly states that the Defendant is to “Complete the Project with CCC”; d. Clause 5.4 which states that the Defendant must complete the Project in a good workmanlike manner and in compliance with generally recognized building standards and practices within twelve months from 1.1. 2019 (i.e. by 31.12 .2019)； e. Clause 5.5 which specifies that the Defendant is to assist the Plaintiff in gathering all necessary information and documents required by the Plaintiff to obtain CCC; and f. Clause 5.6 where it is expressly provided that upon the issuance of CCC, the Defendant is to assist the Plaintiff in handing over the keys and vacant possession (“VP”) to the Purchasers.

As I am of the considered view that the Contract between the parties is a ‘turnkey contract’, the Defendant is to be fully responsible for the design, construction, and completion of the Project, including obtaining the CCC on time and in accordance with the said Contract. S/N outmeaU4QEykbX4OvfuHDQ

As authority for the above proposition, I rely on and refer to the text Building Contract Litigation (2nd Ed) which defines a turnkey contract as follows: “Turnkey contract. An expression sometimes used to describe a design and build contract where the contractor not only designs and builds the building but also designs and installs any plant necessary. The idea is that all the employer has to do is to turn the key to the front door and start using the building….”

For the record, the above passage was also adopted by Kamalanathan Ratnam J in his decision in Ganad Corp Bhd v Flobright Trading Sdn Bhd & Anor [2000] 6 MLJ 830.

Following from this, the Plaintiff would then be able to deliver vacant possession to the purchasers, once the CCC is issued. Accordingly, I agree with the Plaintiff’s counsel that the CCC is an essential and integral part of the Defendant’s contractual obligations.

As I have mentioned above, I have also found that the Defendant’s conduct show a consensual understanding that it was the Defendant’s duty to secure the issuance of CCC within the Contract Period as amongst others in the Supplementary Agreement dated 21- 12-2018 whereby the Turnkey Contract was amended from the original contract price from RM24,228,000-00 to RM22,898,000-00 S/N outmeaU4QEykbX4OvfuHDQ and for which difference of RM1,330,000-00 was treated as an incentive which the Defendant was only entitled to if it did, complete the Project by 31-12-2019.

From my own assessment of the facts and chronology of the case before me, I tend to agree with counsel for the Plaintiff that this incentive of RM1,330,000.00 was meant to ensure that the Plaintiff is not made liable for liquidated ascertained damages to the home purchasers.

As to the WhatsApp conversation I had found that the Defendant had, as shown in enclosure 58 Bundle B pages 80 to 81, understood and confirmed that physical works had to be completed by October to secure the CCC by 31-12-2019. This can partly be found in DW-3 Toong’s WhatsApp to PW-1 Soon on 23 July 2019, in which Toong, in response to Soon’s concern about “complications with regards to LAD.”, whereby Soon mentioned that the Defendant would be able to achieve completion of construction works by “Oct” 2019 which I might add was not disputed by DW 3 when he was cross examined on the same.

I had also found that in the trial and under cross examination, DW3 had also conceded that he was aware that CCC had to be obtained in order for vacant possession to be delivered to the purchasers.

I also hold that the evidence mentioned above, through a further WhatsApp conversations also indicated an urgency to complete the S/N outmeaU4QEykbX4OvfuHDQ physical works by October 2019 as shown by another message from DW3 to Soon on 4-8-2019, where DW-3’s message was “..We need to Increase pace of work by 26% for the next 2 months to catch up with the scheduled progress. Lots of hard work for the next 2 months I will be attending the monthly site meeting on 8 Aug, coming Thursday to assess the progress and see how we can expedite progress of work.”

The said need to expedite works in the “next 2 months” (ie. by October 2019) is in this Court’s view evidence that the Defendant was required to obtain the CCC and not only the CPC, by 31-12-2019.

Thus, I hold that the Defendant’s conduct in particular through DW3, vide the promise to complete the physical works by October 2019, and his efforts to expedite progress is further evidence of a common understanding between the parties that the Defendant was to procure the CCC by 31.12. 2019.

To conclude, the above when seen in the light of DW3’s admissions during cross-examination regarding the consequences of delayed physical works and CCC, clearly evidences a contractual obligation that the Defendant was to complete physical works and obtain the CCC within the Contract Period to enable the delivery of vacant possession.

This would then in this Court’s view also avoid further LAD liability being incurred by the Plaintiff. S/N outmeaU4QEykbX4OvfuHDQ

The same understanding which I referred to above can also be gleamed from Progress Claim 9 (dated 30.9.2019) onwards, where the parties replaced the term “CPC” (from Progress Claims No. 1 – 8) with “CCC” as the penultimate payment milestone. I refer to the Progress Claims at enclosure 23 Bundle C in support thereof in particular pages 53 and thereafter at pages 59, 64, 72, 77, 83, 87.

At this juncture, I must state that from the records before me being Bundle F / enclosure 26 at pages 51 - 93, which appears not to have been disputed by the Defendant, shows that the Plaintiff had paid to the Defendant to-date the total sum of RM20,552,410.36 for progress claims no 1 to 13 including for 2 advance payments dated 13.2.2020 for the sum of RM400,000.00 and 10.7.2020 for the sum of RM500,000.00 respectively.

I have also observed that the Defendant in its own letter of award to Rekajati Akitek dated 1-1-2019 (“Architect Appointment Letter”) as seen in enclosure 26 Bundle F page 21, had stated the architect’s scope of works includes obtaining CCC and that no additional fees or remuneration would be paid if the Architect continued to carry out his obligations beyond the Architect’s contract period which was set at 12 months from 1-1-2019 (i.e. the Contract Period).

It is also in evidence, as per enclosure 26 Bundle F page 27, that in another letter of appointment, the Defendant in its appointment of the S/N outmeaU4QEykbX4OvfuHDQ Civil and Structural Consultant, Perunding RNR Sepakat, had also specified the obligation to secure the CCC, was within the contractual period of 12 months.

In light of the same, the above letters of appointments to the Defendant’s consultants is once again, in this Court’s view, further proof of an understanding between the parties that the Defendant was to procure the CCC by 31.12. 2019.

To add to the above I have also observed that in a letter dated 14.5.2020 to the Plaintiff, as found in enclosure 58 Bundle B page 134, the Defendant had acknowledged that it would be handling all liaison work with the relevant authorities to secure the CCC. It is pertinent to note that this letter was issued after the said date of 31- 12-2019

In coming to this Court’s decision I have further found that the Defendant through DW-3, had admitted to the fact that the Defendant had only for the first time in its letter dated 14.5.2020 claimed in writing that its role was merely to ‘assist’ the Plaintiff in obtaining the CCC, but not actually obtain the CCC. Clearly this testimony would debunk the Defendant’s said contention and amount to an afterthought.

Based on all of my aforesaid findings, the subsequent issue of whether the Defendant is entitled to the extension of time in completing the project is therefore to be answered in the negative. S/N outmeaU4QEykbX4OvfuHDQ Whether The Defendant Is Entitled To The Incentive Payment Of RM1,300,000;

As to whether the Defendant is entitled to the incentive payment of RM1,300,000, I hold that the Defendant is not entitled to the same as the Defendant had not continued with the next phase of the Project in light of this Court’s findings and decision in my grounds herein. Is The Defendant Liable For LAD Payment, Cost And Expenses

Based on this court’s findings as mentioned above, I hold that the Defendant is in breach of the Turnkey Contract, having failed by 31 December 2019, to :- i) obtain CCC; ii) procure the issuance of a valid CPC; and / or iii) achieve Practical Completion of the project.

I now refer to and quote Section 74(1) of the Contracts Act 1950 which provides that when a contract is breached, the non-defaulting party is entitled to claim compensation from the party in breach for :- i) any loss or damage arising from the breach, or ii) losses that were foreseeable by both parties at the time the contract was formed as likely to result from the breach.

Accordingly, I hold based on the facts before this Court, that Loss and Expense and Liquidated Ascertained Damages would be a S/N outmeaU4QEykbX4OvfuHDQ reasonable loss which the Plaintiff would suffer as a result of the Defendant’s breach of the contract

In this respect, I have noted that the calculations for the said LAD claims as submitted by the Plaintiff’s counsel

are taken only from 24 months from the SPA date; and

(ii) if such duration falls before 1-1-2020, the duration is only calculated from 1-1-2020 (reaching a maximum of 236 days), as the Plaintiff is not claiming for such prior LAD sums from the Defendant.

In the cross examination of DW3 Toong, I have observed that he was unable to dispute the correctness of these calculations.

However, during cross examination, of PW1, Soon Jun Chew, the Plaintiff’s principal and director when challenged during cross-examination admitted that there were discrepancies and mistakes in the LAD Tabulation at Bundle R page 49 to 50 when it was pointed out to him that

72.1 the SPA’s dates listed in the 1st LAD Tabulation differ from the actual SPA’s dates;

72.2 For items no. 20, 34, 36 & 87 - the purchasers’ names in the 1st LAD Tabulation differ from those stated in the actual SPAs;

72.3 For items no. 72, 73, 80 and 158 - the purchase prices stated in the 1st LAD Tabulation are higher than those stated in the corresponding SPA’s; S/N outmeaU4QEykbX4OvfuHDQ

72.4 For items no. 144 & 146 - the actual SPAs did not state any purchase price at all;

72.5 For a large number of entries, namely items no. 2, 3, 4, 5, 6, 7, 10, 11, 12, 15, 16, 22, 23, 29, 31, 32, 35, 38, 40, 42, 43, 44, 45, 46, 47, 48, 50, 51, 52, 53, 55, 56, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 73, 74, 75, 76, 77, 78, 79, 80, 81, 83, 84, 85, 86, 87, 88, 89, 90, 91, 93, 94, 95, 96, 97, 98, 99, 101, 102, 103 until 136, 138 until 151, 154, 157, and 158, the LAD calculations are erroneous.

It was pointed out to this Court by counsel for the Plaintiff and this Court has verified from the Notes of proceedings that during cross examination of PW1, PW1 had attributed the discrepancies and mistakes in the LAD Tabulation to “the system” and conceded that the LAD Tabulation needed to be verified and re-tabulated.

I note that the Plaintiff not called the maker of the LAD tabulation as required under Section 73A of the Evidence Act 1950 which provides that

Notwithstanding anything contained in this Chapter, in any civil proceedings where direct oral evidence of a fact would be admissible, any statement made by a person in a document and tending to establish that fact shall, on production of the original document, be admissible as evidence of that fact if the following conditions are satisfied:

if the maker of the statement either:-

had personal knowledge of the matters dealt with by the statement; or

(ii) where the document in question is or forms part of a record purporting to be a continuous record, made the statement (so far as the matters dealt with thereby are not within his personal knowledge) in the performance of a duty S/N outmeaU4QEykbX4OvfuHDQ to record information supplied to him by a person who had, or might reasonably be supposed to have had, personal knowledge of those matters; and

if the maker of the statement is called as a witness in the proceedings: Provided that the condition that the maker of the statement shall be called as a witness need not be satisfied if he is dead, or unfit by reason of his bodily or mental condition to attend as a witness, or if he is beyond the seas and it is not reasonably practicable to secure his attendance, or if all reasonable efforts to find him have been made without success.

In any civil proceedings, the court may at any stage of the proceedings, if having regard to all the circumstances of the case it is satisfied that undue delay or expense would otherwise be caused, order that such a statement as is mentioned in subsection (1) shall be admissible as evidence or may, without any such order having been made, admit such a statement in evidence :-

notwithstanding that the maker of the statement is available but is not called as a witness; and

notwithstanding that the original document is not produced, if, in lieu thereof, there is produced a copy of the original document or of the material part thereof certified to be a true copy in such manner as may be specified in the order or as the court may approve, as the case may be.

Be that as it may, I do hold that the above does not bar the Plaintiff from proving their claim for LAD on a balance of probabilities. I will come to this in the next few paragraphs herein

As to the Defendant’s contention that the Plaintiff’s claim for LAD from 1-1-2020 to 22-8-2020 is baseless in light of the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020 (“COVID-19 Act”), I have observed that this was not part of the Defendant’s original defence and does not form S/N outmeaU4QEykbX4OvfuHDQ part of its pleadings. This appears to be an afterthought and in my view cannot be raised at the stage of submissions as an alternative defence which will be unfair to the Plaintiff’s as they were not given an opportunity to address this in their response to the said contention.

For the record, after the Defendant had obtained an order from this Court for an Amended Defence and Counterclaim, the Plaintiff produced additional documents and a fresh LAD tabulation via its bundles of documents.

Based on these additional documents and the new LAD tabulation, the Plaintiff had allegedly paid a total sum of RM548,451.34 to the purchasers as LAD between January and August 2020 by a related third party company known as ATM Rebate Services Sdn Bhd (“ATM Rebate Services”).

I am mindful that PW1, did not disclose the exact quantum of such payments made by ATM Rebate Services at the trial and I hold that ATM Rebate Services, which company search on ATM Rebate Services at Bundle AC page 19 showed that PW1 was the only shareholder, and the Plaintiff are in fact two separate and distinct legal entities and are not related.

Following from all of the above, the Defendant submits that the Plaintiff has failed to provide contemporaneous, accurate, and reliable documentation to support its claim for RM1,368,598.57. With respect, I agree with the same. S/N outmeaU4QEykbX4OvfuHDQ

Be that as it may, there is authority for the proposition that damages will not be refused by the mere fact that it is impossible to assess them with precision. I rely on Macvilla Sdn Bhd v Mervyn Peter Guan Yin Hui & Anor [2019] MLJU 693 where the Court of Appeal held “[40] Section 74 is related to compensation for actual damage and not for speculative loss of profit or economic loss with a caveat that the claimant must demonstrate that he had taken steps to mitigate the loss and the type of loss envisaged, though not exhaustive in the illustrations, must be one any reasonable tribunal appraised of the facts and supporting evidence will be in a position to attest that the compensation sought is for actual loss and/or damage for breach of contract. For example, claiming loss of profit for breach of contract, as of right may be misconceived proposition as all business or ventures do not end up in profits. …This point is emphasised in section 74(1) of the 1st limb itself by asserting “compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things”. The 2nd limb says ‘which the parties knew when they made the contract’. The 2ndlimb is restricted in contrast to the 1st limb. The 1st limb is objective in nature and the 2nd limb is subjective in nature and knowledge, is an important ingredient. [41] Both the limbs are related to special as well as general damages. As far as the special damages are concerned, it is well established it must be specifically pleaded and proved. Thus, the ‘actual damage’ concept envisaged in section 74 is easier for courts to assess when it relates to special damage and proved according to law. However, on the issue of general damages, there must be evidence of actual damage or loss. Courts have also said that damages will not be refused by the mere fact that it is impossible to assess them with precision. Thus, strict proof is not a requirement in the pleading sense under section 74. The illustrations to section 74 will also support that strict proof is related to actual loss and damage and not to the quantum. The issue of quantum must be determined S/N outmeaU4QEykbX4OvfuHDQ by the court after hearing both parties. [See Javis v. Swan Tours Ltd [1973] QB 233].”

Following from the above, and after careful consideration and examination of the documents before me, I hold that the Plaintiff has discharged its burden on a balance of probabilities of proving only the amounts claimed as LAD for certain items only in the contents page at Bundle Z which are primarily for Lot Nos. 10699, 10703, 10704, 10706, 10708, 10709, 10710, 10711, 10713, 10714, 10715, 10716, 10717, 10720, 10725, 10726, 10729, 10730, 10731, 10732, 10733, 10734, 10735, 10736, 10738, 10742, 10744, 10745, 10746, 10748, 10749, 10750, 10753, 10756, 10757, 10758, 10761, 10762, 10763, and 10764 (total 40 units) and that the Defendant is thus to be held liable for the LAD Payment to the Plaintiff from the documents produced therein at pages 14 to 305 for those items totalling the amount of RM.177,496.66. Is the Defendant liable for the Cost and Expenses suffered and/or incurred by the Plaintiff

The Plaintiff has also claimed for loss and expense from January to August 2020 consisting of salaries, administrative cost, maintenance charges, travelling and accommodation costs which the Plaintiff claims are reasonably incurred when the Project completion was delayed.

Any claim for prolongations costs and expenses must be strictly proved to have been incurred or expended akin to proving damages; see s. 74 of the Contracts Act 1950, and see the judgment of Lim S/N outmeaU4QEykbX4OvfuHDQ Chong Fong J (now JCA) in RC Asia Engineering Sdn Bhd v Lion Pacific Sdn Bhd [2021] MLJU 1796 where the Learned Judge said “…the claim for prolongations costs and expenses must be strictly proved to have been incurred or expended akin to proving damages; see s. 74 of the Contracts Act 1950. They often comprise of indirect costs not already included in the direct costs that are priced and progressively claimed in the work items of the construction contract either based on unit rates or lump sums during the course of execution of the work.”

PW1, in his Witness Statement PW1-WS Q&A 51 testified that the amount of RM1,608,098.05, represents the total costs incurred between January and August 2020. At trial and under cross examination PW 1 confirmed that no summary or breakdown was provided in the Plaintiff’s pleadings or witness statements to substantiate how this sum was computed.

From the said sum of RM1,608,098.05, a total sum of RM1,456,743.55 relates to the claim for the alleged total salaries (including directors’ fees), EPF, SOCSO, EIS contributions and staff meal allowance for 23 staff of the Plaintiff, as well as the ATM Management Team Sdn Bhd (“ATM Management”), ATM Group and ATM Rebate Services for the period January to August 2020.

I have observed that the purported staff salaries were paid by the Plaintiff’s related company, ATM Management, but I have found no evidence before this Court to confirm or show any arrangement and relationship between ATM Management and the Plaintiff. S/N outmeaU4QEykbX4OvfuHDQ

I am also unable to accept that all staff salaries and contributions are "losses" without proper evidence of how these relate to the Phase 2(A) Project’s delay. With respect, the 8 pages of summary of staff salary at Bundle F, pgs. 94 – 101 provided to this Court to substantiate the Plaintiff’s claim fails to reach the threshold of the requirement of balance of probabilities. I further find such a document as a self serving document which has not been corroborated by any documentary evidence.

As to the Plaintiff’s claim for a meal allowance for the period of January, February and March 2020 of RM25,750.00, I find no evidence demonstrating that the said sum was in fact spent on meals for the Plaintiff’s staff due to the delay of Phase 2(A) Project.

With regards the total sum of RM100,260.00 being the general administration costs incurred by ATM Management, I hold that

92.1 these are payments made to a third party which the Plaintiff is not entitled to recover as there is no proven contractual link to the Defendant; and 92.2 there is no evidence demonstrating that the Administration Cost was a loss incurred by the Plaintiff

I now turn to the maintenance charges and sinking fund between January – September 2020 for Unit 1207, 1208, 1209, 1210, Plaza Permata, 6, Jalan Kampar, 50400 Kuala Lumpur claimed by the Plaintiff. S/N outmeaU4QEykbX4OvfuHDQ

I am unable to consider the entire head of claim for RM40,840.80 as the Plaintiff, ATM Group, ATM Management and ATM Rebate Services are all operating from the same office address.

I will however apportion the claimed maintenance charges and sinking fund among these related companies and award only one third of the sum of RM40,840.80 which amounts to RM13,613.60 to the Plaintiff.

There is also a claim by the Plaintiff for Insurance, Site Supervision, Travelling and, Accommodation

From the trial I have found that from 2019 to 2021, Phase 2(A) of the Project was the only project undertaken by ATM, as testified and admitted by the Defendant’s principal and director, DW3 Toong Ah Tea during cross-examination.

Premised on the evidence before this Court in particular the documents in Bundle F at enclosure 26 and based on the authority of Macvilla Sdn Bhd (supra) and section 74 of the Contract Act 1950, this court is satisfied on a balance of probabilities that the following claims totaling RM14,919.90 have been proven by the Plaintiff. They are as follows:

98.1 insurance charges for ATM’s Project Manager, Phoon Ah Loi between January 2020 and August 2020 totalling RM 934.40;

98.2 the site supervision costs of RM 2,000.00 less the CNY ang pow of RM1,000 given which shall thus be the sum of RM1,000.00 only; and S/N outmeaU4QEykbX4OvfuHDQ 33 98.3 the travelling and accommodation claim of RM12,985.50 for the period being the months of February 2020, March 2020 and July 2020 as shown in Bundle F (CBD 5) pages 155 to

I have however not allowed the January 2020 claim as I find that the figures do not match the documentary evidence provided to the Court and the “Expenses Claim /Reimbursement Form” allegedly for the month of January 2020 was undated, not signed as approved or received.

I therefore find merit in the Plaintiff’s claims against the Defendant as the losses which this Court has given are damages which are reasonably and foreseeably resulting from the delay caused by the Defendant resulting in the Plaintiff failing to deliver vacant possession to its end purchasers in the Project.

Thus from all of the above, the damages to be paid by the Defendant to the Plaintiff is calculated as follows ITEM AMOUNTS (RM) Revised Contract Price 22,898,000.00 Less Total Payment Made To Date 20,552,410.36 Less Liquidated Ascertained Damages (LAD) which were proved to be paid / payable 177,496.66 Less Costs and Expenses incurred by the Plaintiff due to 14,919.90 S/N outmeaU4QEykbX4OvfuHDQ the delay in completing Phase 2 (A) TOTAL 2,153,173.08

Conversely, I hold that the Defendant’s claims against the Plaintiff have not been established.

In the circumstances and following from my decision and findings herein above, I hereby allow and order a. a declaration that the Certificate of Practical Completion (CPC) was wrongly issued by the Architect and is invalid and defective b. judgment in the sum of RM 2,153,173.08 c. interest at the date of 5% per annum from the date of the Writ till the date of full realization d. costs of RM 70,000.00

Accordingly, I am dismissing the Defendant’s counter claim with costs. Dated: 27th day of January 2026 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE CONSTRUCTION COURT 1 KUALA LUMPUR S/N outmeaU4QEykbX4OvfuHDQ COUNSEL FOR THE PLAINTIFF: Navpreet Singh and Sakina binti Siraj (Messrs Nav & Co. (Kuala Lumpur) COUNSEL FOR THE DEFENDANT: Lim Shan Yi, Goh Chin How and Muhammad Irsyad Ijla bin Abd Khalid (Messrs Wong Neoh & Partners) S/N outmeaU4QEykbX4OvfuHDQ