Bolt Industries Sdn Bhd v Itramas Re Services Sdn Bhd (BA-12BC-3-02/2024)

For ease of reference, the Appellant and Respondent will be referred to as Plaintiff and Defendant respectively as per the case at the Sessions Court.

This case was filed at the Sessions Court, Shah Alam, Selangor via Suit no. BA-A52C-13-02/2020 by the Plaintiff. After a full trial, the Sessions Court Judge had dismissed the Plaintiff’s claims in entirety against the Defendant which had led to the Plaintiff to file this appeal against the Learned Sessions Court Judge’s decision.

Since the Grounds of Judgement by the Sessions Court Judge had fully adopted the Defendant’s submission, this appeal was decided by way of re-hearing pursuant to Order 55 Rule 2 of ROC 2012 and Section 29 of the Courts of Judicature Act 1964. Upon examining all the records of the appeal including the notes of proceedings at the Sessions Court and the both parties’ submissions at this appeal, this court allowed the appeal and delivered its decision accordingly.

The Defendant being dissatisfied with this court’s decision had filed a Notice of Appeal to the Court of Appeal, for which this Grounds of Judgment is being given.

The dispute between parties centred on a sub contract entered into between the Plaintiff and the Defendant, which was evinced by a Letter of Award (“LOA”) dated 27.6.2018 for the contract price of RM637,000.00. It is not disputed that the Defendant vide “Statement of Variation Order No. 1” has reduced the contract price to RM362,340.78. The Plaintiff responded with its acceptance to the same (remeasured contract price) vide the letter dated 27.12.2018.

According to the LOA, the Plaintiff was required to commence its works on 1.8.2019 and complete the same on 1.9.2018. However, as there was delay in the Plaintiff’s works, the Defendant issued the Statement for Variation Order No. 1 to the Plaintiff omitting the installation of Sub-Structure, Mounting Structure and Solar Photovoltaic (PV) Modules (3MWd.c) from the Plaintiff’s scope of work under the LOA. Based on the omission, the value of works under the LOA was reduced to the sum of RM362,340.78.

Subsequently, The Plaintiff completed its installation works on 27.10.2018, which was 56 days after the contracted completion date of 1.9.2018. The Defendant vide its letter to the Plaintiff imposed liquidated ascertained damages (LAD) on the Plaintiff for the delay of 56 days in completing the installation works.

Further, the Defendant inspected the Plaintiff’s installation works and discovered defects in the Plaintiff’s installation works. As such, the Plaintiff issued a punchlist in January 2019 to show the defects that needed to be rectified by the Plaintiff. At the same time, the Defendant also discovered that the Plaintiff had damaged 53 units of solar panel PV modules notwithstanding that the Plaintiff had received intensive training on how to operate and install solar panel PV.

As such, the Defendant issued letters dated 13.11.2018 and 26.12.2018 to the Plaintiff and stated that the Defendant will backcharge the compensation of RM42,930.00 for the 53 units of damaged solar panel PV modules caused by the Plaintiff. In reply to the Defendant’s letters, the Plaintiff sent an email dated 23.1.2019 confirming that the Plaintiff had damaged the 53 units of solar panel PV modules.

Apart from that, after the Plaintiff demobilized from the Project site unilaterally without the Defendant’s permission, the Defendant discovered that the Plaintiff had failed to complete its scope of work under the Letter of Award. Prior to the Plaintiff’s demobilization, the Defendant had issued several reminders and/or warnings and an email dated 7.10.2018 to the Plaintiff for it to complete the installation works, however, the Plaintiff failed to complete its works and thereafter demobilized from the Project site without the Defendant’s permission and/or agreement.

Due to the Plaintiff leaving the Project site without completing its scope of work, the Defendant vide its letter dated 31.1.2019 to the Plaintiff informed that the Defendant has appointed a third party contractor, Pensolar Sdn Bhd, to complete the Plaintiff’s installation works and the cost for this appointment suffered by the Defendant will be charged to the Plaintiff.

Subsequently, the Defendant issued its Final Statement of Account to the Plaintiff for the sum of RM40,243.93 for the Plaintiff’s installation works after deducting the sum of RM116,081.12 as backcharges from the Letter of Award sum which is calculated as follows:- Subcontract Sum = RM362,340.78 Deduct (-) Amount paid = RM187,898.69 RM174,442.09 Deduct (-) 5% Retention Sum = RM 18,117.04 RM156,325.05 Deduct Additional Costs (-) Appointment of Third Party Contractor = RM 18,800.00 (-) Compensation for Damage to 53 Units of Solar Panel Modules = RM 42,930.00 (-) Liquidated Damages (56 days) = RM 54,351.12 (RM116,081.12) Balance to be paid by the Defendant = RM 40,243.93

The Defendant then made the payment of RM40,243.93 to the Plaintiff. In the meantime, the Plaintiff also served a Payment Claim under Section 5 of the Construction Industry Payment and Adjudication Act 2012 (CIPAA) to the Defendant. However, the Plaintiff’s claim was dismissed. Notwithstanding that, the Plaintiff proceeded to file a Writ of Summons and Statement of Claim on 19.3.2020 against the Defendant to claim for the sum of RM150,531.12 as shown below: “a. Ganti rugi sebanyak RM150,531.12; b. Faedah pada kadar 5% dari tarikh 20.7.2019 sehingga penyelesaian penuh; c. Kos tindakan ini; dan d. Apa relif atau perintah yang Mahkamah mulia ini fikir suai dan saksama.” C. APPELLATE INTERVENTION

The Defendant submits that the Appellate Courts will not as a general rule, interfere with questions of fact decided by a trial court based on the credibility of witnesses seen and heard by that court. In support of its argument, the Defendant had referred to the Federal Court case of Conlay Construction Sdn Bhd v Perembun (M) Sdn Bhd [2013] 9 CLJ 828 where on the issue of appellate interference the following was held: “The case before the High Court was one that involved findings of facts. In such a case, it is our view that unless it was found that the learned trial judge was plainly wrong, it was not open for the Court of Appeal to have intervened even to the limited extent of ordering a re-trial.”

However, in this case, the Sessions Court Judge’s Grounds of Judgment carries no judicial explanation or appreciation other than the Defendant’s submission being adopted in total. As such, due to the factual difference with the case of Conlay Construction Sdn Bhd v Perembun (M) Sdn Bhd (supra), this court takes the stand that this case warrants appellate intervention in hearing this appeal. As submitted by the Plaintiff, this court will rely on the Court of Appeal’s case of IJM Construction Sdn Bhd v. Lingkaran Luar Butterworth (Penang) Sdn Bhd & Anor [2024] MLRAU 813 where reference to the Court of Appeal case of Nor Azlina Abdul Aziz v. Expert Project Management Sdn Bhd [2017] 6 was made, where the circumstances which would warrant appellate intervention were listed therein as follows:- “[33] The Court of Appeal in Nor Azlina Abdul Aziz v. Expert Project Management Sdn Bhd [2017] 6 MLRA 561; [2017] 3 MLJ 763; [2017] 5 CLJ 58 in the judgment of the Court delivered by Harmindar Singh JCA (now FCJ) held thus: "[20] Nevertheless there are occasions when appellate interference is warranted and these occasions have been well set out in numerous cases. Some of these occasions are:

where the trial judge took into account irrelevant considerations and failed to give due weight to relevant considerations (see Director of Forestry, Sabah & Anor v. Mau Kam Tong & Ors And Another Appeal [2009] 3 MLRA 617;[2010] 3 MLJ 509; [2010] 3 CLJ 377);

where there was no proper evaluation of the evidence by the trial judge (see Lee Nyan Hon & Brothers Sdn Bhd v. Metro Charm Sdn Bhd [2009] 2 MLRA 593; [2009] 6 MLJ 1; [2009] 6 CLJ 626; [2009] 6 MLJ 1);

where the decision arrived at by the trial court was without judicial appreciation of the evidence (see Gan Yook Chin & Anor v. Lee Ing Chin & Ors [2004] 2 MLRA 1; [2005] 2 MLJ 1; [2004] 4 CLJ 309; [2004] 6 AMR 781);

where a trial court has so fundamentally misdirected itself, that no reasonable court which had properly directed itself and asked the correct questions, would have arrived at the same conclusion (see Raja Lob Sharuddin Raja Ahmad Terzali & Ors v. Sri Seltra Sdn Bhd [2007] 3 MLRA 224; [2008] 2 MLJ 87; [2008] 2 CLJ 284);

where the trial judge was plainly wrong in arriving at his decision (see Lee Ing Chin & Ors v. Gan Yook Chin & Anor [2003] 1 MLRA 95; [2003] 2 MLJ 97; [2003] 2 CLJ 19; [2003] 2 AMR 357);

where a trial judge had so manifestly failed to derive proper benefit from the undoubted advantage of seeing and hearing witnesses at the trial, and in reaching his conclusion, has not properly analysed the entirety of the evidence which was given before him (see First Count Sdn Bhd v. Wang Yew Logging & Plantation Sdn Bhd [2013] 4 MLRA 457; [2013] 4 MLJ 693; [2013] 5 AMR 305 which followed the Privy Council case of Choo Kok Beng v. Choo Kok Hoe & Ors [1984] 1 MLRA 706; [1984] 2 MLJ 165b); and

where the judgment is based upon a wrong premise of fact or of law (see Perembun (M) Sdn Bhd v. Conlay Construction Sdn Bhd [2012] 2 MLRA 71; [2012] 4 MLJ 149)". D. ISSUES [16] The issues and/or disputes between Parties revolve around the followings: i. Whether Defendant is entitled to deduct from the Final Account dated 20.6.2019 a sum totalling RM116,081.12 for:

RM42,930.00 as damages for damage to 53 units of solar panel modules;

RM54,351.12 as LAD; and

RM18,800.00 as backcharges for the costs incurred by the Defendant to complete the Plaintiff’s works by a 3rd party contractor. ii. Whether the Plaintiff is entitled to claim an amount of RM34,450.00 which is alleged to be additional work carried out outside the scope of the LOA. E. FINDINGS OF THE COURT [17] In relation to whether the Defendant had discharged its burden to proof the followings: i. Whether Defendant is entitled to deduct from the Final Account dated 20.6.2019 a sum totalling RM116,081.12 for: a. Deduction of RM42,930.00 as damages for 53 units of solar panel modules [18] During cross examination of Murali Haripalan (SP1), it was admitted that the number of damaged solar panel modules were 53 units. It was also established that the cost for the damage of these panels amounts to RM42,930.00. It is also the Plaintiff’s evidence via SP1 and Kuhan Ganeswaran (SP2) that the damage on these 53 panels cannot be the responsibility of the Plaintiff as at the time the request for inspection (RFI) was done (the basis to certify the Plaintiff’s work) no such damages were apparent. [19] According to SP2, the damages on the solar panel were physical damages, such as, broken solar panels and/or cracks on the solar panels. SP2 also testified that due to external exposure and lack of security, these damages had occurred. It is the Plaintiff’s evidence that it had no control over the movements and or the security around these solar panels during its tenure there and worse still after the Plaintiff had demobilised from the site on 27.10.2019. [20] However, it was not disputed that the notices of these damaged solar panels had been given to the Plaintiff on 3.11.2018 and 26.12.2018 which the Plaintiff had responded to the same via its email on 23.1.2019. [21] In the Plaintiff’s email on this issue, SP1 had admitted that the cost for the 53 damaged solar panels are to be borne by the Plaintiff. In fact, in the correspondences between parties pertaining to this issue, the Plaintiff had not objected to be made responsible for this damage and had also not objected to the backcharge intended by the Defendant. In fact, in its email to the Defendant dated 14.3.2019, again the Plaintiff had indicated that there are only, “53 broken modules in record” . [22] It is also observed by the court that when this issue was notified to the Plaintiff, there was no request for the damaged solar panels to be physically inspected or that based on its record, RFIs had been raised and had confirmed the condition of these solar panels at the time. Given the Plaintiff’s contention that the site was open to many other contractors and that movements at the site was not within its control and that there are other external factors which may cause damage to their work, there were no indications of any sort where the Plaintiff’s had requested for tighter security to ensure further damages from taking place. [23] Based on the time frame taken by the Plaintiff to revert to the Defendant on this issue i.e. close to one (1) month (from the notice dated 26.12.2018), there can be possibilities that the damage could have gotten worse. However, there was no denial by the Plaintiff and the only issue that were raised by the Plaintiff via its email dated 23.1.2019 is that the Plaintiff’s record shows that there are only 53 broken modules and not 54 as stated in the Defendant’s letters. [24] Based on the correspondences between the Plaintiff and the Defendant on this issue, it is clear that as long as the Plaintiff had the notion it can make the insurance claim for these damaged solar panel modules, the Plaintiff never once in its correspondences raised any objections against this intended backcharge. However, when the insurance claim was rejected, the Plaintiff then decided that it was not responsible for these damages, clearly exposing its afterthought. [25] Therefore, it is the considered view of this court on this issue of backcharge of RM42,930.00, the Defendant had discharged its burden to prove on a balance of probabilities that the deduction of the sum RM42,930.00 was not only justified but had been admitted by the Plaintiff. b. Deduction of RM54,351.12 as LAD [26] Based on the tenure of the contract as stated in the LOA, it is not denied that the completion date was to be on 1.9.2018. It is also not denied that the demobilisation of the Plaintiff from the site had been on 27.10.2018. Therefore, there is a delay of 56 days. [27] It is not denied that the Defendant had given notice of delay to the Plaintiff via its letter dated 3.8.2018. However, via its letter dated 8.2.2019, when the Plaintiff had replied to the Defendant’s letter date 23.1.2019 on the imposition of LAD, the Plaintiff had highlighted to the Defendant the many working constraints it had faced at the site.