Concrete Engineering Products Berhad v 1. ) Greengroup Engineering Sdn Bhd (WA-22C-34-03/2017)

GREENGROUP ENGINEERING SDN BHD

MONTANE CONSTRUCTION SDN BHD (COMPANY NO.: 962941-V) ... DEFENDANTS THE JUDGMENT OF Y.A. LEE SWEE SENG [1] The dispute that has arisen between the plaintiff and second defendant (“D2”) Montane Construction Sdn Bhd (“Montane”) revolves around the interpretation of a one-page two-paragraph Letter of Undertaking (“LU”) given by D2 to the plaintiff where D2 had agreed to pay 2 the plaintiff the sum owing by the first defendant (“D1”) GreenGroup Engineering Sdn Bhd (“GreenGroup”) to the plaintiff provided that there is a sum owing by D2 to D1. Project [2] The parties were all in a chain of construction contracts for a project in Malacca wherein D2 had been appointed as the main contractor by one Gold Mart Sdn Bhd (“Gold Mart”) with respect to a mixed commercial development project of 32 storeys (“the Project”). D2 had in turn appointed D1 as their subcontractor for the piling works and the pile caps works (“the Works”). D1 in turn appointed the plaintiff as their supplier of the prestressed spun concrete piles (“spun piles”). [3] It became clear to the plaintiff some 2 months into their contract with D1 that D1 was having difficulty paying the plaintiff for the spun piles delivered and by that time, some RM5 million was already outstanding. [4] A meeting was held between the plaintiff, D1 and D2 as represented by their directors and D2 agreed to provide the said LU which in the words of DW 1 Miss Ruth Tan, the senior director of D2, was some kind of security for the plaintiff. Problem [5] As it transpired, there was problem with the payments for the spun piles from D1 and D2. The plaintiff was paid via D2 but not in full for the amount outstanding for the spun piles and finally when D2 terminated D1, the amount outstanding had stood at RM4,886,220.83. D2 had only paid the plaintiff RM7.5 million. 3 [6] The plaintiff brought this suit against D1 and D2 and succeeded in summary judgment against D1. This trial only involves the plaintiff and D2, wherein the plaintiff had sued for the loss arising out of the breach of the LU of the same amount. There was no appeal by D1 and subsequently D1 went into liquidation. Pleadings [7] D2 denied owing any sums to the plaintiff and contended that the plaintiff had not proved the amount owing by D1 to the plaintiff for which amount the plaintiff now seeks to enforce in the LU. [8] D2 went on to plead that they were only obliged to pay the plaintiff only so much as D1 may instruct them provided there is an amount outstanding from D2 to D1 and that the discretion was with D2 to decide to pay in “part or in full” the amount outstanding from D1 to the plaintiff. [9] That aside the dispute can be analyzed in 4 parts. First is the amount that D2 said D1 asked them to so pay D1 themselves for realistically D1 needed some cash to pay its staff and its other operating expenses. The second is the amount which D2 said they paid, as instructed by D1, to the other suppliers of D1. The third is the amount which D2 deducted from the amount owing to D1 materials bought by D2 on behalf of D1 and the spun piles that D2 ordered direct from the plaintiff and so reduced the amount owing to D1 by the amount that D2 has paid the plaintiff for the spun piles bought direct from the plaintiff for the Works. The fourth is the amount that the D2 said they are entitled to set-off from the amount owing to D1 for the Liquidated and Ascertained Damages (“LAD”) for the delay caused by D1. [10] The amounts paid or set-off under each of the 4 scenarios are not in dispute. The only question is whether the said amounts could be deducted 4 or set-off by D2 from the direct payment to the plaintiff even though there were outstanding amounts left unpaid throughout the duration of the Works until D2 terminated D1 on 20.10.2016. Principles Whether there is the sum of RM4,886,220.83 owing by D1 to the plaintiff [11] It goes without saying that if the plaintiff has not proved the sum owing by D1 for the supply of the spun piles for the Works then the LU cannot kick in as D2 is not obliged to pay if D1 does not owe the plaintiff for the spun piles sold and delivered to them. One does not even at this stage debate over the meaning of the LU as asserted by D2. [12] To begin with the plaintiff had obtained a summary judgment against D1 on 9.8.2017 for the full claim sum of RM4,886,220.83. D1 did not appeal against the summary judgment entered against them. The plaintiff has filed their proof of debt with the Insolvency Department after D1 was wound-up (see CBOD-3 page 11 and 12). [13] Learned counsel for the D2 said that the plaintiff was merely relying on their statement of account with D1 to prove the amount outstanding from D1. He cited the case of KPM Khidmat Sdn Bhd v Tey Kim Suie [1994] 2 MLJ 627 at page 631, where the Supreme Court in dealing with Summary of Accounts had observed as follows: “To recapitulate, on the evidence of the respondent, the learned judicial commissioner found the respondent had discharged the burden of proving the debt due from the appellant on the basis of the summary of accounts (at pp 117-121 of the appeal record) prepared by Ah Lian which she collated from the record book kept by the 5 respondent, detailing the works done and completed by him, although the said book was never produced in court. He further held that in the absence of the appellant's evidence challenging the truth of the summary of accounts, the latter could be, and indeed, was admitted as a true statement of account for works done to found a claim for the respondent. We agree with counsel's submission that the learned judicial commissioner was wrong in law in relying on the summary of accounts (at pp 117-121 of the appeal record) prepared by Ah Lian, who was not called as a witness nor made available to the defendant. Moreover, the record book of the respondent, which was the source document upon which the summary of accounts was prepared, was never produced.” (emphasis added) [14] The facts in the present case are clearly distinguishable in that here the plaintiff took no chances and had subpoenaed PW 1 Kang Yong Hoon (also known as Philip Kang) and he was the Managing Director of D1. He came to give evidence in court and confirmed the sum owing from D1 to the plaintiff which has now become a judgment sum via the summary judgment. [15] D2 had not challenged PW 1 on the debt owing by D1 to the plaintiff for the spun piles supplied for the Works. It is thus more than a mere statement of accounts that have been exhibited together with other supporting documents but rather a further support by the one who was in charged of the Works. There is no reason for the said witness PW 1 to lie for indeed if D1 has paid for the spun pile, there should be no difficulty in showing proof for payment. 6 [16] The following evidence of PW 1 Mr Kang the Managing Director of D1 on the supply of the spun piles by the plaintiff which was at all material time within the knowledge of D2, is found in his witness statement PW2-WS, Q & A No. 8. Similarly, PW-1 and DW-1 also confirmed the same during the trial. The evidence is reproduced below: PW-1 (line 26, page 11, NOE) Ok. Now when Cepco supplies spun piles, alright, who would acknowledge receipt of the spun piles at the project site? Both parties, we checking. Both parties will? Montane and Greengroup. Will check and receive the spun piles? Yes. How do they check? Based on the Delivery Order our Supervisor and the Montane Construction, the person-in-charge, will sign. Ok. And then Montane will sign? Yes. DW-1 (line 18, page 76, NOE) You agree that you have gone through the BQ of Green Group in awarding the contract? Yourself or – I don’t need to go through in detail as such. We have QS But it was gone through? 7 Yes, not in detail. You agree in the BQ it states all the quantity of piles? You agree? BQ quantities of pile? Yes. That is measured by QS consultant and is estimated quantity. And the amount also states there. Yes. Price by the contractor. (line 22, page 98, NOE) ……... Now Ms Ruth, it is the evidence of Mr Philip Kang that all materials that were supplied and brought to the site has always been acknowledged received by both parties -- Montane and also Green Group. Our clerk-of-work. (line 32, page 107, NOE) …….. You look at page 100, the last supply was 30th June under Green Group. Yes. They have supplied everything. From the statement, yes. Did you deny that they have not, did you write to Cepco or did you take an objection that there was a supply which is insufficient? We only deal with Green Group. 8 Yes, but is there any complaint or that’s all? I think the project haven’t finished, they still need to have pile. That pile you have purchased it directly from Cepco? Yes N.B. MS Michael Susaya - Counsel for plaintiff Kang PW 1 Tan DW 1 [17] Not only does D1 not dispute the sum owing, but D2 has not throughout the execution of the Works disputed the sum owing to the plaintiff or complained that the spun piles were not as delivered. Neither has D2 denied the sum owing to the plaintiff. [18] Moreover looking at the amount that D2 had paid D1 and other suppliers as well as themselves to the tune of RM4 million plus and the RM7m plus that has been paid to the plaintiff, the denial raised by D2 appears quite hollow considering that the plaintiff is the only supplier of the spun piles for the piling and piling caps Works subcontracted by D2 to D1. [19] Surely D2 cannot pretend to be paying D1 for the value of the Works done and progress billing made without asking where the spun piles are ordered from. [20] On the balance of probabilities the plaintiff has proved the amount outstanding of RM4,886,220.83 and indeed the whole of D2’s focus on the trial was more on justifying why payments were made by D2 to D1, other suppliers and set-offs by D2 for spun piles ordered by them from the plaintiff and the LAD claimed. 9 Whether under the Letter of Undertaking D2 may decide in their discretion how much to pay the plaintiff based on D1’s instruction to them for “settlement in full or in part” of the amount outstanding [21] The circumstances under which the LU was given by D2 to the plaintiff were not disputed. D1 had difficulty paying the plaintiff for the spun piles and this is due no less to D2 retaining the whole of the First Certified Claim of about RM1.525m in lieu of the Performance Bond that D1 was supposed to procure in favour of D2. Some 2 months into the Works D1 already manifested problem in making payments to the plaintiff. [22] A meeting was held between PW 2 Mr Nelson Leong the Managing Director of the Plaintiff, PW 1 Mr Philip Kang the Managing Director of D1 and Miss Ruth Tan the Senior Director of D2 to discuss this problem. The solution lies in D2 giving a letter of Undertaking to the plaintiff. [23] The LU dated 5.11.2015 (page 108, CBOD-1) was furnished by D2 to the plaintiff wherein D2 undertook to deduct from any outstanding sum owing to D1 and make direct payment to the plaintiff on behalf of D1. The exact words in the LU must now be reproduced for an analysis and appreciation of its meaning: “As requested by Green Group Eng Sdn Bhd, we would like to inform that in event if Green Group Eng Sdn Bhd fails to settle the payment due for the spun pile purchase for the above mentioned project, we hereby undertake to deduct from any outstanding sum owing to Green Group Eng Sdn Bhd and shall pay on their behalf directly to you for the settlement in part or in full of the amount. However, if there is no outstanding payment between Green Group Eng Sdn Bhd and us, we shall not be responsible to you for any 10 outstanding payment by Green Group Eng Sdn Bhd.” (emphasis added) [24] It bears reminder and repetition here that the plaintiff’s cause of action against D2 is for breach of undertaking by failing to fulfill their obligation to pay the plaintiff from the outstanding sums payable by D2 to D1 the Interim Certificate Funds. The plaintiff submitted that D2 had instead depleted the Interim Certificate Funds by making payments to several parties and to themselves by paying out or setting off from the said funds as follows:

to Greengroup Eng Sdn Bhd (D1);

(ii) to D1’s suppliers and/or sub-contractors; and

(iii) to D2 themselves for purchase of materials on behalf of D1 (which included the direct purchase order by D2 to the plaintiff), and

(iv) for its liquidated damages claim (“LAD claim”), [25] These, the plaintiff submitted, were in breach of undertaking and for which D2 is liable to pay to the Plaintiff the outstanding sum of RM4,886,220.83, being the balance sum owing for the supply of spun piles. [26] It is not disputed that the LU has not been withdrawn by D2 and neither has the plaintiff released D2 of their undertaking to pay. It was an undertaking given to assure the plaintiff that they have nothing to worry because the ultimate beneficiary of the Project in D2 would be making payment to D1 and more than that, D2 would be making payment direct to the plaintiff where the amount outstanding for the spun piles is concerned. [27] Indeed there would be nothing for the plaintiff to worry if D2 had followed through with what they said they would do. It is a case where even if the spirit was willing the flesh was weak. 11 [28] It is also not in dispute that there were various Interim Certificates issued by the Consultant which when taken together were more than enough to pay for the sums owing by D1 to the plaintiff. [29] D2’s banal but rather bizarre argument is that the LU permits them to pay only such amount as D1 may direct in part settlement of the amount outstanding between D1 and the plaintiff. Such an interpretation would of course denude and deplete the LU of its meaning altogether and would go contrary to its very intended purpose. [30] It cannot be gainsaid that a letter of Undertaking is a contract and the general principles of interpretation would apply, except with greater strictness because of the very inherent nature of an undertaking. In Chase Perdana Sdn Bhd (Formerly Known As Chew Piau Bhd) v CIMB Bank Bhd [2010] 1 MLJ 685 it was held that an undertaking creates a contractual relationship (at para 52, page 703) as follows: “The breach of an undertaking attracts damages in the same manner as a breach of contract (see Tan Sri Khoo Teck Puat & Anor v Plenitude Holdings Sdn Bhd [1994] 3 MLJ 777 at p 786). It is therefore correct to state that an undertaking is similar to that of contractual relationship.” [31] The fact that the LU issued by D2 in favour of the plaintiff at the request and with the consent of D1 is nothing less than a contract between the plaintiff and D2. Miss Ruth Tan DW 2 admitted to this as well. [32] The context of the LU provides colour to an otherwise drab cloth of the competing interests of the parties which find its convergence in the LU. The evidence of Mr Nelson Leong PW 1 provides such a context: 12 Question 3 Could you state to the court briefly Cepco’s claim against Montane? Cepco sold and delivered concrete piles to Green Group. Payment to Cepco was undertaken by Montane via a Letter of Undertaking (p. 108). Montane as the main contractor, appointed Green Group as the sub-contractor to carry out piling and pilecaps works. All payments to Green Group by Montane were based on the Interim Certificates. The undertaking to pay Cepco was an agreement reached between three parties i.e. Cepco, Montane and Green Group. Without the undertaking by Montane to pay, Cepco would not have supplied concrete piles to the project. (emphasis added) Question 9 Why Cepco wanted the undertaking from Montane? Because of these reasons: a) The contract amount between Montane and Green Group according to Letter of Award (pg 101) is RM30,500,000.00, which is more than sufficient to pay Cepco’s supply of concrete piles; b) Purchase of spun piles are the first material in the construction, all other material are after that, therefore Cepco is secured; c) Performance bond ensures Green Group’s commitment to Montane; and 13 d) There was no known encumbrance or priority claim over the sum (interim certificates) payable by Montane to Green Group. [33] Miss Ruth Tan (DW-1) evidence corroborated that of PW 1 where the common denominator of a lack of confidence in D1 to pay for the spun piles is concerned that led to the issuance of the LU: Question 13 Can you explain to this Court the circumstances under which the said Undertaking was given to the Plaintiff? Prior to the issuance of the said undertaking, I was introduced to the Plaintiff’s representative, Mr. Nelson Leong by the 1st Defendant in a meeting. Mr. Nelson Leong informed me during that meeting that the Plaintiff had no confidence in the 1st Defendant’s financial ability to pay for the piles supplied to the 2nd Defendant’s project. After the meeting, I proceeded to prepare the said undertaking and a copy was also given to the 1st Defendant. (emphasis added) [34] DW 1 further confirmed this in cross-examination (line 10, page 116, NOE), that the plaintiff has no confidence on D1 for payment. [35] It was an arrangement that suited all the parties: plaintiff supplying the spun piles to D1 to do the piling works for D2 and D2 would ensure that from any payments due from them to D1, the plaintiff is paid first for the amount outstanding between D1 and the plaintiff so that D1 would get an uninterrupted supply of the spun piles required for the Project and D2 would get the assurance that the foundation work is properly done without delay. 14 [36] In short the LU was to secure the payment of the spun piles as requested by the plaintiff and agreed to by D2 with the consent of D1, since the monies paid out by D2 to the plaintiff would come from the amount certified as owing by D2 to D1 for the piling works done by D1. [37] If all the three parties keep to the bargain there would have been no problem. It was an arrangement where no one should be out of pocket for too long for that would be financially debilitating, if not disastrous depending on the extent of one’s exposure and financial standing. [38] It does not lie in the mouth of Miss Ruth Tan (DW-1) to deny having seen the letter from the plaintiff dated 11.2.2016 reminding D2 of the amount outstanding from D1 to the plaintiff. At any rate, the said letter was placed in “Part B” document, where its existence is not in dispute. [39] I noted that Mr. Nelson Leong (PW-2) was not cross-examined on this letter, with respect to suggesting to the witness that this letter was not sent to D2 or that D2 has no knowledge on this letter. [40] D2’s very own evidence was that they were notified of the sum owing as early as January 2016, which was proved by several letters, the earliest being, the letter dated 19.1.2016 (page 110, CBOD-1). Also DW-1 in cross-examination admitted that D2 had been notified in early January 2016. [41] Learned counsel for the plaintiff highlighted the following are the evidence: PW2-WS, Q & A No. 5. Question 5 Please inform the court, whether Montane was aware of the sum owing by Green Group to Cepco? Yes, they were aware: 15 a) As early as the issuance of the 1st interim certificate. Green Group brought to the knowledge of Montane by letter dated 19.1.2016 (p. 110). Where Green Group informed Montane of owing by Green Group exceeding RM5 million for spun pile supplied by Cepco. b) On 2.2.2016, Cepco informs Montane directly of the outstanding balance of RM5.2milion (p. 116) c) On 9.6.2016, Cepco informs Montane directly of the outstanding balance of RM5.8million (p. 124) d) On 4.7.2016, Cepco informs Montane directly of the outstanding balance of RM6.85 million (p. 129) Likewise DW 1 could not wriggle herself out of having known the amount outstanding from D1 to the plaintiff at the material time at line 10, page 99, NOE as follows: ……… Page 114, as early as 19th January, Green Group has informed you that 5 million, more than 5 million is owing to Cepco, are you also denying that you didn’t see this letter? I know. You know. So as early as -- if you had known in January there is 5 million owing, you have knowledge that 5 million was going to Cepco, I will put it to you that in February,

02.02.2016, you will also have an anticipation or you could gather that the amount owing 5.2 is not very far. 16 Because there was no payment made under the first certificate to Cepco, correct? Yes. (line 5, page 100, NOE) 2016, yes, correct, 2016, not 15, there’s an error. Page 110, can you confirm that the date is 2016? Yes. Not 2015. Because 2015 January is parties have not known each other. So as I was putting it to you, Ms Ruth, in January 19th, you agree that the 5 million was notified to you, like you just said earlier. This is from Green Group. They asking for payment. (line 32, page 100 until line 7, page 101, NOE) There’s no payment cert for Green Group. During January, probably one cert only, which is 500 over thousand. O, I’m not talking about Green Group certificate, alright. I’m talking about Cepco, supply and come up to 5.2 million. Possible. Question is you have to notice of payment, that is the most important, yes? Yes. N.B. MS - Moses Susaya, counsel for the plaintiff TAN - DW 1 Miss Ruth Tan 17 [42] Even if for a moment it is assumed that D2 did not know of the amount outstanding at all material time, my reading of the LU is such that it is incumbent for D2 to inquire before making payments out so as not to be in breach of the LU, which like all letters of undertaking, would be strictly interpreted and enforced. [43] Having known as far back as 19.1.2016 of the amount then outstanding from D1 to the plaintiff, D2 is contractually duty bound to deduct the outstanding sum (Interim Certificate Funds) owing to D1 and pay it directly to the plaintiff to settle the sum due for the supply of spun piles to the Project. It is as plain and simple as ABC. [44] If such sum in the Interim Certificate sum is less than the sum owing to the plaintiff at that time, certainly there could only be a partial settlement of the sum due to the plaintiff for supply of spun piles. Therefore if the sum owing to the plaintiff is greater than the Interim Certificate sum, then it will be settlement in part. Likewise if the sum due to D1 in the Interim Certificate is more than the sum owing to the plaintiff, then D2 would be required to settle the debt owing to the plaintiff in full. [45] There is nothing stated that D2 may in their discretion decide how much to pay direct to the plaintiff and that this may well be in part settlement of the sum owing by D1 to the plaintiff. The LU does not permit D2 to pay in part settlement when there is enough or more than enough monies in the “any outstanding amount” form D2 to D1 in the Certificate of Payment Funds. [46] One must be careful not to read into the LU words not there as D2 would want this Court to. Neither must one tweak it and much less twist it to yield an interpretation that one prefers and doing violence to the words used in the process. That would be to rewrite the letter of undertaking for 18 the parties. It would be totally unprecedented! No contracts much less a letter of undertaking would be certain of its meaning. It would mark the beginning of the end of the certainty of contracts as we know it. We must resist every temptation to go down that slippery road. [47] Learned counsel for D2 argued with some audacity that the obligation of D2 pursuant to the undertaking is subject to the instruction from D1 with respect to how much to pay and when to pay. Nowhere in the LU is it stated that it is a prerequisite to obtain D1’s instruction before any payment can be made by D2 to the plaintiff. Of course for proper accounting purpose D2 should and there is no indication that they did not inform D1 about it. [48] The evidence of Mr. Kang (PW-1) the Managing Director of D1 and Miss Ruth Tan (DW-1) confirmed that there is no other similar undertaking given by D2 to any other supplier of D1. Therefore, I agree with the Plaintiff that D2 only has an obligation to make direct payment to the plaintiff based on the LU, but not to the other suppliers of D1. [49] The sums due and payable under the various Interim Certificates between D1 and D2 must be paid first to the plaintiff, either in full if the sum is sufficient or in part, if the sum is not sufficient, before payment to D1 or any other parties. [50] Learned counsel for D2 then argued that if that be the interpretation then D2 might as well award the contract for piling and piling cap Works to the plaintiff. That misses the point; it is generally expected that the Works done with the piles supplied would be more than the price of the piles otherwise D1 would be doing either a loss business or that they have gotten their costing totally wrong. It is thus not unreasonable that the spun piles purchased must be paid the moment a Certified Claim has been issued for the piles were supplied on credit and D1 having converted the 19 piles into foundation Works would be paid by D2 and so D1 would be able to pay for the piles in full. [51] It stands to reason that if there is no outstanding sums owing by D2 to D1 then there is no need for any payments to be made by D2 to the plaintiff even if there is a sum outstanding between D1 and the plaintiff. That could arise in a situation where though the spun piles have been delivered the piling works done with the piles supplied have not been certified yet. [52] What is crystal clear is that the operative words of the LU in “....undertake to deduct from any outstanding sum owing to Green Group Eng Sdn Bhd and shall pay on their behalf directly to you for the settlement in part or in full of the amount...” cannot be made to read as referring to “....such amount as D1 may direct D2 to pay...” in substitution of “any outstanding sum owing to D1”. [53] We cannot afford to add on or subtract words from a document as crucial as a letter of undertaking. In Michael C Solle v. United Malayan Banking Corporation [1986] 1 MLJ 45 at 46 the Federal Court held (at page 46, para I onwards) as follows: “The principles of construction to be applied to the undertaking are similar to those applied to an ordinary contract. The intentions of the parties are to be gathered from the language used. They are presumed to have intended what they said. The common and universal principle is that an agreement ought to receive that construction which its language will admit, which will best effectuate the intention of the parties, to be collected from the whole of the agreement.” 20 [54] Learned counsel for D2 cited the decision in Royal Selangor Golf Club v Anglo-Oriental (M) Sdn. Bhd. [1990] 1 CLJ 995 wherein Justice Lim Beng Choon quoting from Central Bank of India v. Hartford Fire Insurance Co. Ltd. [1965] AIR SC 1288 expressed the following: “In Central Bank of India v. Hartford Fire Insurance Co. Ltd. [1965] AIR SC 1288, the Supreme Court of India lays stress on the second principle advocated in the Wm. Neill & Son (St Helens) Ltd. case when it says at p. 1290: Now it is commonplace that it is the Court's duty to give effect to the bargain of the parties according to their intention and when that bargain is in writing the intention is to be looked for in the words used unless they are such that one may suspect that they do not convey the intention correctly. If those words are clear, there is very little that the Court has to do. The Court must give effect to the plain meaning of the words however much it may dislike the result.” (emphasis added) [55] Whilst I agree with the proposition of giving effect to the plain words used, I must hasten to add that the context and syntax of the words employed must be considered lest we arrive at a commercially incoherent proposition. [56] I agree with the Plaintiff that the Letter of Undertaking is simple and straight forward. It is an undertaking given by D2 to the Plaintiff to deduct from the “interim certificate monies” due to D1 any sums outstanding and due from D1 to the plaintiff, and to make payment directly to the plaintiff. It is not disputed that there were sufficient funds in the Interim Certificates to pay the plaintiff in full but for the different interpretation placed on the LU by D2. D2 had made deductions from the amount outstanding to pay (i) D1, (ii) 21 D’s other and/or sub-contractors, (iv) D2 and (iv) to set off LAD claim by D2 against D1. [57] The words used in the LU do not provide D2 with the option to choose between payments to anyone of the 3 categories of parties i.e. D1, D1’s other suppliers/subcontractors or D2 themselves or a combination of them and on the amount and proportion as D2 would prefer or D1 would dictate. It imposes a contractual obligation on D2 to make payments to the plaintiff for so long as there is an outstanding sum owing from D2 to D1 for the piling works done and for so long as D1 still owes the plaintiff for the spun piles. [58] It was argued that D1 would need to pay other suppliers and subcontractors and their own workers and operating expenditure. No one is denying that but it is for D1 to manage its cash flow such that even after paying the plaintiff there would be leftovers to pay their other suppliers, subcontractors, own workers and other operations expenditure. If D1 cannot do that then there must be something drastically wrong with D1’s costings and they might as well not execute the Works where the payments received from D2 is not even enough to pay its main supplier of the spun piles i.e. the plaintiff and what more the other suppliers, subcontractors and workers. [59] Even if that indeed is the problem of D1 arising out of slow progress in the Works or wrongly underestimating costs or that progress payments were under certified or that certifications were delayed or for whatever reason, that is not the concern of the plaintiff. The realities on the ground, harsh as it may be, does not absolve D2 from its obligation to pay the plaintiff and neither does it permit D1 to instruct D2 to make payments to D1, bypassing payment to the plaintiff. The LU was issued by D2 to the 22 plaintiff at the request of D1 for the plaintiff was not confident of the financial capacity to pay for the spun piles seeing that there was already the sum of about RM5 million outstanding after 3 months into the supply. D1 prevented the payment by D2 to the plaintiff by causing D2 to pay D1 direct. [60] DW 2 herself said that with respect to the payment of RM2,000,000 from Interim Certificate No.2 (page 118, CBOD-1) and the payment of RM1,000,000 from Interim Certificate No.3 (page 120, CBOD-1), both payments direct from D2 to the plaintiff, these were the result of meetings (on 12.2.2016 and 24.3.2016) between PW 2 and PW 1. Following from the meetings, written instructions were given by D1 to D2 to make payments to the plaintiff. [61] These payments in part settlement were made with the agreement of the plaintiff and not unilateral deductions for payments to D1. The forbearance on the part of the plaintiff is not to be taken to mean that for future payments the plaintiff had waived their rights under the LU. [62] These 2 instances are more a case of the plaintiff agreeing to a written variation of the LU where a partial payment is temporarily accepted to ease the cash flow of D1. [63] Apart from these two payments to the plaintiff, all other instructions for payment from D1 to D2 are unilateral instructions, which the plaintiff has no knowledge and D1 also did not inform or seek consent from the plaintiff. [64] All in there was a sum of RM7,500,000.00 paid by D2 to the plaintiff via eight (8) separate payments. The fact that the rest of the payments on top of the 2 payments referred to above had been a case where D1 directed D2 to make payments to the plaintiff, does not convert the LU to one where the undertaking to pay only arises after D1 has given the 23 instruction to pay with respect to the amount to be paid. The plaintiff was not a party to these instructions and cannot be bound by the internal arrangement between D1 and D2 for their personal benefits. [65] The fact that the plaintiff had written once by their letter dated 27.10.2016 to D1 expressing their objection to a lesser payment is more a case of their trying to accommodate D1’s plea for some leeway and concession rather than a consistent conduct raising estoppel where the legal obligation by D2 to pay the whole amount outstanding is very much in force. [66] A bargain is a bargain for otherwise the plaintiff has every right not to want to continue to supply the spun piles unless it is cash upon delivery. Here the plaintiff was encouraged to supply on the assurance of payment precisely because the D2 the main contractor, which is related to the employer of the Project, had given their LU. [67] If the LU can be interpreted to mean that D2 is only obliged to pay such amount as D1 may direct and D2 may see it fit to pay, then to stretch that argument to its extremity, the plaintiff would have no valid complaint if they were paid RM1.00 or none at all for each interim certificate issued. Taking the argument of D2 to its logical conclusion would lead only to the enormity of the absurdity! [68] I agree with the plaintiff that an interpretation should be given to the LU that produces a reasonable result and not something that defeats its objective. The Court of Appeal in Lee Chin Huat & Anor v. Choo Keng Hee & Anor [2013] 3 MLJ 94 took this approach and observed as follows (at para 10 page 101) : “In interpreting the undertaking, there was a requirement to interpret the undertaking in such a manner that would lead to a reasonable 24 rather than an absurd result (see ICI Paints (Canada) Inc v JM Breton Plastering (1984) Co [1992] 116 NSR (2d) 385). 'A Court is entitled to consider the logical consequences of each. When one interpretation would lead to an absurdity and the other would not, the courts are entitled to conclude that the contract was not intended to produce an absurd result' (see Brinkerhoff International Inc v Numac Energy Inc [1996] AJ No 883).” (emphasis added) [69] Even when the words in their natural meaning are unclear the Court would still tend towards a commercially sensible interpretation as was observed by the Federal Court recently observed in SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor (2016) 1 MLJ 464 as follows [para 78, page 491 to 492]: “Thus the nub of this appeal is, when one has to choose between two competing interpretations, the one which makes more commercial sense should be preferred if the natural meaning of the words is unclear. It is noteworthy that the same approach was taken by Lord Hodge (in the majority decision of Arnold v. Britton And Others), where His Lordship accepted the unitary process of construction in Rainy Sky SA v. Kookmin Bank [2011] 1 WLR 2900 para 21 that: … if there are two possible constructions, the Court is entitled to prefer the construction which is consistent with business common sense and to reject the other.” [70] DW 1 had testified that all payments by D2 to D1 are based on Interim Certificates issued by the Consultant. Thus whenever an Interim Certificate issued, such sum stated in that particular Interim Certificate would become due and outstanding to D1 and it should be paid to the 25 plaintiff pursuant to the undertaking. When D1 failed and/or refused to pay for the supply of spun piles, D2 has a legal obligation under the LU and deduct the Interim Certificates funds and pay to the plaintiff. When D2 made payments to D1 despite knowing that there is a sum due and owing by D1 to the Plaintiff, D2 has breached the undertaking. [71] More than that, any payments to D1 from 19.1.2016 onwards, is in breach of the undertaking, as these payments ought to have been made to the plaintiff as required in the LU. [72] I can only come to one conclusion based on the LU in that clearly D2 breached their undertaking to the plaintiff when D2 made payments to D1 without paying the sum over to the plaintiff. Whether D2 was in breach of their Letter of Undertaking when they made payments to the suppliers and subcontractors of D1 at D1’s instruction instead of to the plaintiff [73] There is no dispute that the contract sum between D1 and D2 for the Works of RM30,500,000.00 was more than enough to pay for the plaintiff supply of spun pile to D1 which balance amount was only about RM4,886,220.83. [74] Even taking the last 4 Certificates of Payment in Certificate No. 7 dated 5.7.2016, Certificate No. 8 dated 18.8.2016, Certificate No. 9 dated 14.9.2016 and Certificate No. 10 dated 14.9.2016 (typographical error in the Certificate itself) there is more than enough to cover the claim of the plaintiff as can be seen from the breakdown below: 26 Certificate No. Amount paid by D2 other than to Plaintiff (RM) 7 1,028,158.29 8 1,685,242.47 9 1,240,879.44 10 1,718,973.57 Total 5,673,253.77 [75] The suppliers referred to are the suppliers and/or sub-contractors of D1, with whom D2 do not have any contractual relationship, namely KLS Resources Sdn Bhd, Hexatech Energy International Sdn Bhd and Fairdinkum Resources. This was confirmed by D2’s witnesses themselves. The amount paid out to these third parties supplies and subcontractors of D1 at the instruction of D1 to D2 from Certificate No. 7-10 amounted to RM171,396.60. The total paid out by D2 to third parties suppliers and subcontractors of D1 from all the 10 Certificate amounted to RM1,288,910.00. [76] For the same reasons given above with respect to why D1 cannot instruct D2 to make payments to D1 direct, similarly D1 cannot instruct D2 to make payments on their behalf. By the time payment was due under Certificate No. 7 D2 had already been informed of the sum of RM5.8m by the plaintiff’s letter dated 9.6.2016. [77] As stated earlier even without such a letter, it is incumbent upon D2 after having given the LU to inquire with the plaintiff if there is any sum owing from D1 to the plaintiff before making payment out to D1 or D1’s suppliers and subcontractors. In fact as early as Certificate No. 1 D1 had 27 already informed D2 by their letter of 19.1.2016 of the amount them outstanding of about RM5 million. [78] The plaintiff was unaware of the payments made by D2 on behalf of D1 to the suppliers and subcontractors of D1 until late June 2016 as testified by PW 2 in his witness statement. D2 did not challenge this evidence and in spite of the plaintiff’s objection, D2 continued to make such deductions on behalf of D1 and upon D1’s instructions. [79] Payments to third parties suppliers and subcontractors of D1 at D1’s instructions are clearly payments to D1 and this was admitted by DW 2 Miss Oh Shiek Fen herself, the QS of D2. [80] No amount of legal gymnastics can change the real character of the payment and D2 cannot breach the LU and then raise the lame excuse that there was no more payment outstanding to D1 after having paid D1’s suppliers and subcontractors. [81] I would thus find D2 having breached the LU in making payments on behalf of D1 to the suppliers and subcontractors of D1 upon the instructions of D1. Whether D2 breached the Letter of Undertaking when they deducted for themselves the materials purchased on behalf of D1 including spun piles purchased by D2 from the plaintiff [82] D2 made payments to themselves via deductions from the sum approved and certified by the Consultant in the various Interim Certificates. These deductions were for purchase of materials by D2 on behalf of D1 consisting of the purchase of materials from 3rd party suppliers and the direct purchase orders for spun piles from the plaintiff. The plaintiff was 28 blissfully unaware that D2 would be so deducting from the amount outstanding from D2 to D1. [83] I agree with the plaintiff that there is no reservation of right in the LU to allow D2 to set-off any payment due to them from D1. When it is stated in the operative clause of the LU that “...we hereby undertake to deduct from any outstanding sum owing to Green Group Eng Sdn Bhd and shall pay on their behalf directly to you for the settlement in part or in full of the amount” it must be understood that in the context of the LU to be the sum certified in the various Interim Certificates for otherwise there would be no certainty of any amount outstanding as the plaintiff is not privy to whatever that D2 might be purchasing on behalf of D1. [84] That would be the ordinary and natural meaning of the expression “any outstanding sum owing to D1” for how else can the plaintiff be assured of payments if other deductions are allowed, bearing in mind always that the whole purpose of the LU was to secure payments for the plaintiff from any outstanding sum to D1. [85] I agree with the plaintiff that other than the performance bond and retention sum which was already stipulated and deducted in the Interim Certificates, whatever remaining sum which is calculated after taking into account the deductions for performance bond and retention sum made therein in the Interim Certificates are due and payable to D1 at the time of issuance of such Interim Certificates. If it is a payment scheme where D2 would pay for the materials needed for the Works and then deduct the same from the outstanding account then surely this must be a material term that ought to have been disclosed by D2 to the plaintiff for then the contract sum would no longer be RM30,500,000.00 as stated in the Letter of Award 29 issued by D2 to D1 upon which the plaintiff had relied on and accepted the LU from D2. [86] It is in this context of taking the Interim Certificate as a whole without any further deductions for the amount owing arising out of the purchase of materials by D2 on behalf of D1 that one must read the qualifying clause in the LU to the effect that “...if there is no outstanding payment between Green Group Eng Sdn Bhd and us, we shall not be responsible to you for any outstanding payment by Green Group Eng Sdn Bhd.” [87] Thus there would be no outstanding payment in a case where Work has been done but the progress payment claim not made or made but not processed by the consultants yet. [88] To interpret otherwise would place the plaintiff at the mercy of D1 and D2 for the plaintiff had no control over such purchase and the amount and would not be in the know. [89] This is more than poignantly illustrated by D2’s purchase of spun piles from the plaintiff after they had stopped supplying to D1 for non-payment. D2 placed orders for spun piles from the plaintiff to overcome the problem of non-supply from the plaintiff to D1. The plaintiff gladly supplied the spun piles for which they were paid by D2 only to have suffered a delayed sting later when it came in the deduction from D1’s account by D2 of the sum for which D2 paid the plaintiff! [90] Was it a case of cunning or clever craftiness? The plaintiff would have nothing of that for they had clearly been taken for a ride. It was nothing less than D2 immunizing itself from the problem arising from D1 not paying the plaintiff resulting in the non-supply by the plaintiff but not to worry, for D2 had thought of a way of not paying the plaintiff under the LU 30 and yet get their supply of the much needed spun pile to complete the foundation works. [91] D2 was not candid with the plaintiff when they concealed from them their intention to make the deduction under the head of materials ordered by them on behalf of D1. I would go further and say D2’s conduct smacks of bad faith on their part in not honouring the LU with respect to making payments to the plaintiff from any outstanding amount to D1. It was a case of adding insult to injury and this Court would not allow such a novel argument to be carried and discarding in the process the basic commercial norm of honest dealings and candid conduct. D2 might see it as bending without breaking D1’s contractual commitment to pay under the LU but this Court sees it as nothing less than a breach of the LU. [92] Even if for a moment it may be argued that the operative clause and the qualifying clause of the LU is unclear as to the right to set off with respect to payments made on behalf of D1 by D2 and thus the outstanding sum is to be hived off and excised for such a payment on behalf of D1 for materials purchased, one must then fall back on the contra proferentem rule in that a document is interpreted against the party that had produced it in the event of ambiguity or uncertainty. [93] It is to be expected that D2 would take care of their own interests and would have so stipulated it if it was intended that the LU is to be subject to a set-off in respect of purchase of materials on behalf of D1 whether from the plaintiff or any other suppliers. [94] The same applies with equal force to D1 who had agreed to the LU to be worded in its present form, that they too would have insisted on the inclusion of a term in the LU if it was intended that the LU be subject to payments also to their other suppliers and/or sub-contractors. 31 [95] It is only reasonable that the failure of D2 (or for that matter, D1 who agreed to it) to reserve any right of deductions to make 3rd party payments or self-payments from the interim certificate monies, should be held against them. [96] It is reasonable and natural to assume that a commercial party like D2 that put forward a document where they assume a liability would look after their own interests. It was observed by Lord Mustill in Tam Wing Chuen v. Bank of Credit & Commerce Hong Kong Ltd. (1996) 2 BCLC 69 at page 77, para b as follows: “… the basis of the contra proferentem principle is that a person who puts forward the wording of a proposed agreement may be assumed to have looked after his own interests, so that if the words leave room for doubt about whether he is intended to have a particular benefit there is reason to suppose that he is not.” (emphasis added) [97] At the very least D2 should have obtained the consent of the plaintiff and be completely transparent about it for otherwise the rationale of having a LU from D2 would have been nullified. D2 was acting in their self-interest when making the deductions unilaterally for spun piles ordered by them from the plaintiff. [98] Perhaps the picture would be more vivid if D1 found themselves in a situation where they have the manpower and skills but not the materials with which to do the Works and D2 had come in to do the financing of the materials. If deductions are made for each Certificate of Payment then D2 must disclose this to the plaintiff for the ground rules or paradigm has changed and the plaintiff would have to readjust their exposure to D1 which 32 may well involve no further supplies of spun piles until the outstanding is paid. [99] I would say on the balance of probabilities that D2 had nevertheless breached the LU when they made such a unilateral deduction for materials ordered on behalf of D1. [100] I noted that D2 had argued that there was no priority of payment that the plaintiff may expect from D2. I cannot agree to that for to pay oneself first in the light of the undertaking would be to undermine the undertaking altogether in the name of selfish altruism! [101] It is no different from D1 instructing D2 to pay other suppliers on their behalf for here the only difference is that the other suppliers happened to be suppliers that D2 had already paid on behalf of D1 in the purchase of raw materials and the spun piles from the plaintiff. [102] For D2 to make such deductions would be to act in a manner that would deplete the outstanding sums and in this case, resulting in the failure of D2 to pay the plaintiff under the LU. It is obvious that D2 must not act in a manner that would cause it to be in a position where there is no amount outstanding to the plaintiff. That would be to take advantage of its own breach. [103] When DW 1 was being cross-examined she admitted that there were instructions for payments from D1 that D2 did not follow with respect to the Interim Certificate No. 7 (CBOD-1). These documents were referred to the DW-1 in cross examination and she confirmed the instruction were not followed:

Page 130 – RM1,000,000 to D1 (not followed)

(ii) Page 131 – RM1,000,000 to the Plaintiff (not followed)

(iii) Page 132 – RM300,000 to the Plaintiff (not followed) 33

(iv) Page 141 – RM750,000 to the Plaintiff (followed and paid) (line 7, page 91, NOE) …………….. this instruction, you did not carry out, this instruction, agree? Yes. [104] In fact when it comes to payment to third parties suppliers and subcontractors as can be seen as page 458, CBOD-2 D2 only chose to follow part of the instruction i.e. RM30,000.00 to be paid to Fairdinkum and refused to make direct payment to others suppliers and/or contractors. [105] So it was not as if D2 must follow D1’s instruction to pay to third parties but that D2 arrogate to itself the discretion to decide strategically who to pay. I find that D2 had stopped payment to the plaintiff after the plaintiff had completed the supply of spun piles in July/August 2016 but D2 continued to make payment to other suppliers. There is merit in the plaintiff’s submission that clearly D2 had acted in their personal interest and that of their related employer (Gold Mart). [106] DW 1 Miss Ruth Tan saw nothing wrong in making the unilateral deductions for payments on behalf of D1 for materials purchased and the spun piles purchased on behalf of D1 as she saw this as part of contract administration. She further rationalized that had D2 not terminated the contract with D1 then there would have been enough to pay the plaintiff. [107] That is precisely the point - effectively D2 wanted to save its own skin first and so make the deductions up front instead of paying the plaintiff when there was ordinarily an outstanding amount from D2 to D1 and leave the plaintiff to the crumbs that may fall from the table if crumbs there still are. Here there were no more crumbs! 34 [108] DW 1 Miss Ruth Tan said that if D2 still have to pay the plaintiff, then with respect to D1 they would have made double payment, first to D1 and suppliers of D1 and further for goods purchased on D1’s behalf and now to make these payments to the plaintiff. That I must say was the risk D2 took when they brazenly paid out from the amount outstanding to D1 to parties other than the plaintiff. If D2 had wanted to vary the LU they could at least have gotten the consent of the plaintiff. Having taken the forbidden fruit with their eyes opened, they cannot now complain of the double exposure that they find themselves to be in! [109] When the Plaintiff came to know of these deductions it was too late for them to take any action save to plead for a proper consideration from D2. The fact that the plaintiff had sought to persuade D2 by their letter of 4.7.2016 by use of the language of giving priority of payment to them is not so much an admission of the fact that there was no priority of payment in favour of the plaintiff but more a case of business politeness, imploring rather than insisting. [110] Just as a swallow does not make a summer, so too here where knowledge of direct payments to D1 and deductions having been made does not in the circumstances of this case, raise an estoppel against the plaintiff. Here was a case where the plaintiff found themselves being owed close to RM5 million and with little negotiating power for the spun piles have been supplied. Where D2 tried to make deductions unilaterally for so-called payments made on behalf of D1 for materials purchased on their behalf, the plaintiff can only cling on to the hope that subsequent certifications would be enough for payments. 35 [111] The plaintiff did not foresee that D2 would be terminating D1 with the result that there was no hope of payments being made from future certifications. [112] At any rate even if for a moment the amount of RM3,022,324.32 being materials paid for by D2 on behalf of D1 and another RM655,755.96 for spun piles ordered by D2 direct from the plaintiff from amounts certified in Certificates No. 7-10 are validly deducted, there was still more than enough from Certificates No.1-10 that could have been paid to the plaintiff had D2 complied with the LU. Overall D2 had made the following payments to D1 and the suppliers and/subcontractors of D1 as follows:

Payment to D1 for a total sum of RM3,774,040.77;

(ii) Payment to D1’s suppliers and/or sub-contractors for a total sum of RM1,288,910.06 [113] Both amounts added up to RM5,062,950.83 which is more than enough to pay the plaintiff’s claim under the LU from D2 for the unpaid spun piles supplied of RM4,886,220.83. [114] The LU is an independent obligation of D2 to the plaintiff and this is not a case where other running accounts between D1 and D2 can be taken into consideration for the plaintiff has no control over such order of materials by D2. [115] Overall, looking at the big picture against both the backdrop and bedrock of the LU, I cannot bring myself to accept that such deductions by D2 is right and leaving the plaintiff unpaid to the tune of RM4.8 m. The moment a discretion is imported into the LU by D2 to decide when and how much to pay from the amount outstanding to D1, D2 would have compromised their obligations under the LU and for which loss the plaintiff is entitled to claim against D2. 36 Whether D2 is entitled to deduct the LAD from the amount outstanding between D1 and D2 which they said they have suffered as a result of delay caused by D1 [116] D2 said that the consultant QS LangdonSeah noted via its letter dated 10.10.2016 that D2 is entitled to recover LAD from D1. Interim Certificate No. 10 dated 14.10.2016 was issued for the sum of RM 1,718,973.57. However D2 via their letter dated 17.10.2016 informed the plaintiff amongst others that they would recover Liquidated Damages amounting to RM 2,250,000.00 from D1. [117] D2 via their letter dated 25.10.2016 informed D1 that D2’s Liquidated Damages claimed will be recovered from Payment Certificate No. 10. Thereafter D2 informed the plaintiff via their letter dated 31.10.2016 that there is no more outstanding payment due to D1 under the Interim Certificate No. 10. [118] Learned counsel for D2 submitted that the effect of this in relation to the undertaking is that D2’s obligation to the plaintiff under the undertaking is extinguished in respect of any obligations arising after the issuance of the Interim Certificate and/or after notification has been given to D1 that D2 will be recovering their Liquidated Damages claim from Interim Certificate No. 10. [119] D2 had not proved how the loss and claim for LAD of RM2.25 million had arisen. The consultant who certified the sum as the LAD to be deducted at source from Certificate No. 10 had not come to testify and justify the sum when challenged. The Federal Court had held in Selva Kumar a/l Murugiah v Thiagarajah a/l Retnasamy [1995] 1 MLJ 817 that even for a sum named in the contract as agreed liquidated damages, under section 75 of the Contracts Act 1950 it still must be proved. This was 37 reaffirmed by the Federal Court in Johor Coastal Development Sdn Bhd v Constrajaya Sdn Bhd [2009] 4 MLJ 445. [120] There is no evidence of D2 having been charged this claim by LAD by the Employer Gold Mart. There is no threatened suit by the Employer for late delivery that could be attributed to D1 who did only the piling Works. There is no evidence that a Certificate of Non Completion (“CNC”) had been issued to D1. There is no evidence that D2 had paid this sum claimed as LAD to the Employer. [121] DW 2 gave evidence that the final account was not signed by D1 (line 28, page 146, NOE) and that D1 disputed the sum claimed for LAD. [122] Furthermore, it is also PW 1’s evidence that D1 had previously filed a suit in Melaka to dispute on the final account but due to financial problem, D1 could not proceed further. [123] D2 has also not filed a proof of debt for this LAD after D1 had gone into liquidation. [124] D2’s claim for LAD is suspect as according to DW 2 Miss Oh the Revised Completion Date for D1 was 8.8.2016 and termination of D1 was effected on 20.10.2016. Assuming for a moment that CNC had been served on D1 one is puzzled and perplexed as to how the sum of RM2.25 million has been incurred in a space of slightly over 2 months. [125] D2 further argued that the LAD is a dispute between them and D1 and not for the plaintiff to raise here. I am afraid I cannot agree simply because the amount sought to be deducted impinges on the plaintiff’s claim with respect to the sum that D2 now seeks to deduct unilaterally from the amount outstanding from D2 to D1. Both D1 and the plaintiff can dispute this LAD claim in so far as it affects them and both have disputed this LAD claim from D2. 38 [126] Assuming for a moment that there is a ring of truth around the Statement of Final Account between D1 and D2, the final account sum is RM17,005,713.99 at page 306, CBOD-1. On the other hand, the previous payments under Interim Certificates No. 1-10 are RM17,447,291.36 at page 291, CBOD-1. It still does not explain how an LAD of RM2.25 million has been incurred. [127] If at all there is a claim for LAD it is still future when the final accounts between the Employer Gold Mart and D2 is issued. For the moment the loss has not crystallized and certainly not sustained as in having to pay out or to suffer a deduction from the Employer. [128] Moreover there is a sum of RM1.525m in the Performance Bond which D2 had deducted from D1 for Certificate No. 1 and D2 should be able to claim from this Performance Bond for their so-called LAD losses. Pronouncement [129] I found that D2 had made payments from the Interim Certificate Funds in breach of the undertaking given to the plaintiff when they made payments to D1, the suppliers and subcontractors of D1 and to D2 themselves with respect to the materials ordered on behalf of D1 including the spun piles ordered from the plaintiff. I also held that the claim for LAD against D1 had not been proved and so the LAD claimed cannot be validly deducted from the amount owing by D2 to D1. [130] The loss suffered by the plaintiff as a result of the breach by D2 of the undertaking is the amount that the plaintiff ought to have receive if not for the breach of the undertaking. 39 [131] The sum of RM4,886,220.83 had been proved on the balance of probabilities. Interest shall run from 5% per annum from date of filing of writ of 2.3.2017 to realization. [132] After hearing the parties on costs the Court allowed the plaintiff costs of RM20,000.00. Dated: 29 November 2018. - signed - LEE SWEE SENG Judge Construction Court High Court , Kuala Lumpur For the Plaintiff : Moses Susayan and Cheng Siong Kiat (Messrs Raja Badrol, Ramli & Azizi) For the Second Defendant : Benjamin Tay Hanyi and Kelvin Chow Yok Yeen (Messrs Thakurta Low & Rajendra) Date of Decision: 31 July 2018.