Crcc Malaysia Berhad v 1. ) M101 Entity Sdn Bhd (WA-22C-70-07/2020)

M101 ENTITY SDN BHD [Company No.: 201401021083 (1097169-V)]

M101 HOLDINGS SDN BHD [Company No.: 201401006143(1082224-P)]

3.

DATIN CHAN HENG SI ... DEFENDANTS GROUNDS OF JUDGMENT INTRODUCTION [1] This suit involves the dispute between the Plaintiff as the main contractor and the 1st Defendant (‘D1’) as the developer of the ambitious M101 Skywheel, a mixed development project with a gross development value of RM1.8 billion and touted as the world’s highest SkyMall at a height of 316 m with an MRT station at its door step, retail outlets, SoFo units, designer suites, Asia’s first ever Planet Hollywood Hotel and a Ferris wheel on the 52nd floor. [2] Apart from D1, the 2nd Defendant (‘D2’) as its sole shareholder and the 3rd Defendant (‘D3’) and 4th Defendant (‘D4’) as D1’s and D2’s Directors were also named as the opponents in this suit. [3] Although the project was headed for completion by 2020, the parties became embroiled in bitter feuds in adjudication (see CRCC Malaysia Berhad v M101 Entity Sdn Bhd [2021] MLRHU 937, arbitration (which was brief) and court proceedings. In this civil suit, allegations of, not only the typical non-payment by D1 for work done by the Plaintiff and wrongful termination of the contract by D1, were raised, but also fraudulent and dishonest conduct by the Defendants and breach of statutory and director duties by D3 and D4. [4] After having considered the pleadings, oral and documentary evidence, written submissions and oral clarifications by the learned counsels who represented the parties in this suit, I had given my broad findings on the Agreed Issues To Be Tried (‘ITBT’) for the trial and adjudged that:

the Plaintiff’s claim against D1 is allowed;

D1 is to pay the Plaintiff the sum of RM38,277,862.45 consisting of –

RM37,694,650.97 for works done by the Plaintiff under the construction contract;

(ii) RM2,780,560.20 for variation works;

(iii) RM832,527.76 for customised material; and

(iv) RM2,484,883.72 for contractual interest for the late payment of Interim Certificate Nos. 3 to 15 (calculated as at 24.7.2020);

setting off in the sum of RM5,514,760.20, being the amount which has been paid by D1 to the Plaintiff for the above sums;

D1 is to pay the Plaintiff interest at the rate of 5% per annum on the total judgment sum of RM38,277,862.45 from 24.7.2020 until full settlement;

the Plaintiff’s claim against D2, D3 and D4 is dismissed;

D1 is to pay the Plaintiff costs of RM50,000.00, subject to allocatur;

the Plaintiff is to pay D2 and D3 collectively, costs of RM50,000.00, subject to allocatur; and

the Plaintiff is to pay D4, costs of RM30,000.00, subject to allocatur. [5] D1 is dissatisfied with my decision as stated in subparagraphs 4(a),

(b), (d) and (f) above. As the Plaintiff did not file a Notice of Appeal against my decision, this judgment shall focus on the reasons as to why I allowed the Plaintiff’s claim against D1 for the total sum of RM38,277,862.45 with interest and costs. BACKGROUND FACTS [6] The Agreed Facts between the Plaintiff and D1, which are relevant for purposes of analysing the ITBT as between these two parties, are as follows. [7] The Plaintiff is a company incorporated under the laws of Malaysia with a registered address at Suite 20-02, 20th floor, Menara Tan & Tan, 207, Jalan Tun Razak, 50400 Kuala Lumpur. [8] D1 is a private limited company incorporated in Malaysia with a registered address at Lot 20-ACD, Level 5, Menara Pandan B, Persiaran MPAJ, Jalan Pandan Utama, Pandan Indah, 55100 Kuala Lumpur and business address at Suite 20.01 – 20.04, Plaza 138, Jalan Ampang, 50450 Kuala Lumpur. [9] D2 is similarly a private limited company with a registered address at Lot 20-ACD, Level 5, Menara Pandan B, Persiaran MPAJ, Jalan Pandan Utama, Pandan Indah, 55100 Kuala Lumpur and business address at Suite 20.01 – 20.04, Plaza 138, Jalan Ampang, 50450 Kuala Lumpur. [10] D1 and D2 are in the business of real property and housing development and investment holdings. D2 is the sole shareholder of D1 and accordingly holds 100% of the issued and paid-up capital of D1. [11] D3 is a Malaysian citizen of full age with an address at 5, Jalan Serai Wangi, Taman Cheras, 56100 Kuala Lumpur. D3 is a Director in D1 and D2. [12] D4 is a Malaysian citizen with an address at No. 57, Jalan SS 24/1, Taman Megah, 47301 Petaling Jaya, Selangor. At the material time, D4 was married to D3 and a Director in D1 and D2. [13] By the Letter of Award dated 28.11.2017 (‘LoA’), D1 appointed the Plaintiff as the contractor for the sub-structure and super-structure works (‘Works’) for the construction of the following:

construction of two commercial high-rise blocks of 80 and 81 floors respectively; consisting of a Ferris Wheel, commercial and residential lots; and

a 12-storey car park (hereinafter referred to as the ‘Project’). [14] The Project is located at Lot 1713 (Lot Lama 412), Seksyen 41, Jalan Raja Muda Abdul Aziz, Kampong Bharu, Kuala Lumpur. [15] The parties agreed to a contract sum of RM879,638,084.00. The letter of acceptance was signed by D3 and was accepted by the Plaintiff on 7.12.2017. [16] Pursuant to the terms of the LoA and the subsequent Agreement and Conditions of PAM Contract 2006 (With Quantities) (‘PAM Contract’) entered into between the parties, the Plaintiff had commenced work on 16.12.2017. [17] On 2.2.2018, the Plaintiff issued a letter to the architect submitting the performance bond (‘PB’) for the amount of RM43,688,966.25. [18] The Plaintiff proceeded to progress the work and issued the Progress Claims, where 15 of the them were assessed by the architect appointed by D1. The particulars of the Progress Claims and the Interim Certificates issued are as follows: DATE

22.1.2018 Progress Claim No. 1 5,388,720.42 6.2.2018 Interim Certificate No. 1 223,200.00 9.2.2018 Payment from the 1st Defendant 25,548.40 24.2.2018 Progress Claim No. 2 3,758,779.42 23.3.2018 Interim Certificate No. 2 1,469,970.00 27.3.2018 Progress Claim No. 3 2,890,484.18 23.4.2018 Interim Certificate No. 3 967,382.78 26.4.2018 Progress Claim No. 4(R) 1,315,433.69 17.5.2018 Payment from the 1st Defendant 1,769,211.80 18.5.2018 Interim Certificate No. 4 356,809.59

1.6.2018 Progress Claim No. 5 2,497,740.00 21.6.2018 Interim Certificate No. 5 1,704,217.64 25.6.2018 Progress Claim No. 6 3,902,961.98 19.7.2018 Interim Certificate No. 6 2,210,177.30 25.7.2018 Progress Claim No. 7 4,025,509.11 16.8.2018 Interim Certificate No. 7 2,323,520.14 29.8.2018 Payment from the 1st Defendant 500,000.00 1.9.2018 Progress Claim No. 8 2,103,887.89 25.9.2018 Interim Certificate No. 8 450,294.84 28.9.2018 Progress Claim No. 9 3,699,011.32 19.10.2018 Interim Certificate No. 9 946,942.55 25.10.2018 Progress Claim No. 10 3,992,667.14 1.11.2018 Payment from the 1st Defendant 220,000.00 5.11.2018 Payment from the 1st Defendant 350,000.00 7.11.2018 Payment from the 1st Defendant 250,000.00 9.11.2018 Payment from the 1st Defendant 100,000.00 21.11.2018 Interim Certificate No. 10 2,485,191.64 24.11.2018 Progress Claim No. 11 7,193,344.15 26.11.2018 Payment from the 1st Defendant 100,000.00 14.12.2018 Payment from the 1st Defendant 200,000.00 21.12.2018 Interim Certificate No. 11 2,709,789.66 28.12.2018 Payment from the 1st Defendant 200,000.00 2.1.2019 Progress Claim No. 12 5,909,878.68 8.1.2019 Payment from the 1st Defendant 200,000.00 11.1.2019 Payment from the 1st Defendant 200,000.00 14.1.2019 Payment from the 1st Defendant 500,000.00 18.1.2019 Payment from the 1st Defendant 500,000.00

18.1.2019 Interim Certificate No. 12 4,394,618.37 25.1.2019 Progress Claim No. 13 4,802,750.30 25.1.2019 Payment from the 1st Defendant 200,000.00 13.2.2019 Interim Certificate No. 13 3,735,013.97 26.2.2019 Payment from the 1st Defendant 100,000.00 26.2.2019 Payment from the 1st Defendant 100,000.00 7.3.2019 Progress Claim No. 14 3,467,575.75 22.3.2019 Interim Certificate No. 14 2,494,337.00 25.3.2019 Progress Claim No. 15 6,231,192.87 18.4.2019 Interim Certificate No. 15 4,790,043.03 30.4.2019 Progress Claim No. 16(R) 14,134,229.80 5.8.2019 Statement of Final Account 60,132,298.04 [19] The architect issued a letter dated 2.4.2019 stating that, as the Plaintiff had failed to maintain the PB, D1 was allowed to withhold or deduct the value of the PB from the amounts that are due and payable to the Plaintiff. This was followed by a letter from D1 dated 15.4.2019 which reiterated the contents of the architect’s letter dated 2.4.2019. [20] The Plaintiff had, on 5.8.2019, submitted to D1, the Statement of Final Account (‘SoFA’) consisting of 16 Progress Claims for total work done of RM37,694,650.97 for the Project. D1 had assessed and certified 15 of these Progress Claims in the sum of RM31,261,508.51. [21] D1 has to date paid the Plaintiff the sum of RM5,514,760.20 for Interim Certificate Nos. 1 to 5 and part of Interim Certificate No. 6. [22] On 4.6.2019, D1’s Sale and Purchase Agreement solicitors, F. L. Foo & Co. confirmed that “561 parcel(s)/unit(s) of the property(ies) within the Project has/have its SPA executed by the respective Purchaser(s), and the amount of the Purchase Price as provided in the SPA for all the said parcel(s)/units(s) sum up to RM453,047,430.78 only.”. THE PLAINTIFF’S CASE [23] The Plaintiff was invited by the Defendants to tender for the Works for the Project. During the tender process, the Plaintiff requested for details as to manner in which the Defendants were going to finance the Project. [24] During the various meetings during the tender process, it was reassured by the Defendants, and it was further represented to the Plaintiff that the Defendants had the necessary funding in order to finance the Project as it secured funding from various financial institutions, including the Sabah Development Bank Bhd (‘Sabah Bank’). [25] Premised on the representations by the Defendants that the necessary financing was in place to fund the Project, the Plaintiff was willing to participate in the Project and was induced to enter into a contract with D1. [26] However, the Defendants had fraudulently or negligently misrepresented to the Plaintiff regarding D1’s ability to make payment for work done by the Plaintiff, in particular that there were adequate funds to make payment for work done and for the purpose of the Project. [27] The Plaintiff commenced work on or about 16.12.2017 and submitted 16 Progress Claims, out of which 15 were assessed and certified. On 5.8.2019 the Plaintiff submitted a draft SoFA claiming for the sum of RM60,132,298.04 for work done, variation order works, customised fabricated materials, interest and loss and expense. [28] On 22.10.2018 and 27.11.2018, the Plaintiff issued letters to the architect seeking for overdue payment of the certified sums. As there was no payment by D1, the Plaintiff issued a Notice of Default for non-payment of Interim Certificates Nos. 5 and 6 on 29.11.2018. [29] On 11.12.2018, a meeting was held between the Plaintiff and the Defendants. Pursuant to the said meeting, the Defendants agreed to settle the overdue amount of RM3,900,291.92 by or before 12.2.2019. [30] The terms of the settlement are recorded in a letter dated 13.12.2018 whereby D1 agreed –

to pay the Plaintiff the sum of RM3,900,291.92 within 2 months and RM1,900,291.92 by 12.2.2019; and

to grant an extension of time (‘EoT’) and further an EoT for Delay Event (‘DE’) No. 2 of 185 days. [31] Despite the settlement agreement, D1 failed to pay the overdue amount. On 8.1.2019, the Plaintiff issued its claim to the architect followed by a Notice of Default for non-payment on 9.1.2019. [32] On 11.1.2019, D4 issued a letter admitting that D1 was facing tight cash flow and represented to the Plaintiff that –

D1 was able to repay all the outstanding amount given that total sales as at 11.1.2019 had been achieved up to RM421 million and RM70 million of bridging loan facility was available for future drawdown from Sabah Bank; and

the M101 Group has a proven track record in property development as it had completed the Dang Wangi Project in December 2017 and the M101 Bukit Bintang Project was targeted to be completed by the 1st quarter of 2019. D4 proposed to collateralize the retail lots in both of these projects as surety that the outstanding sum will be paid. [33] The Plaintiff responded by issuing a letter to D1 on 15.1.2019 stating that the terms and conditions of the settlement reached between the parties in December 2018 had been breached. [34] Further letters were issued by the Plaintiff to D1 to remind and claim for the overdue payments where in the letter dated 23.1.2019, the Plaintiff gave Notice of Suspension of Work for non-payment of Interim Certificates Nos. 5, 6 and 7. [35] On 12.2.2019, D1 wrote that it agreed to the sum of RM3,735,013.97 as the valuation for Interim Valuation No. 13. This was followed with another letter on 20.2.2019 where D1 proposed a list of area in the M101 Bukit Bintang Project amounting to a collateral value of RM155,155,660.00 to the Plaintiff. However, the Plaintiff did not accept this proposal. [36] In April 2019, the Defendants instructed the architect to withhold or deduct the value of the PB from amounts that were due and payable to the Plaintiff for allegedly failing to maintain a valid PB. This was designed to avoid making payment to the Plaintiff for work done. [37] D1 had, vide the letter dated 26.4.2019, wrongfully terminated the contract. On 10.5.2019, D1 issued a letter to withdraw its notice dated 26.4.2019 and thereafter, on 21.5.2019, issued a Notice of Default. [38] The Plaintiff by its letter dated 10.6.2019 disputed D1’s entitlement to issue the Notice of Default. On the same date, D1 issued a second Notice of Determination, wrongfully terminating the contract and with the fraudulent intent and ulterior motive of avoiding payment to the Plaintiff. [39] In the Statement of Claim (‘SoC’), the Plaintiff pleaded that D1 has breached the terms and conditions of the contract by failing to make payment to the Plaintiff and therefore it claimed for, among others, the following:

the sum of RM61,924,589.61 or such other sums as determined by the Court as against D1 to D4. The particulars for the sum of RM61,924,589.61 are as follows: Total work done: RM37,694,650.97 Variation work done: RM10,426,534.54 Customised material: RM2,318,520.38 Interests: RM2,484,883.72 Loss and Expense: RM9,000,000.00

a declaration that –

the Defendants have defrauded the Plaintiff;

(ii) D3 and D4 have breached their duties to the Plaintiff to ensure the Plaintiff’s interests are not compromised; and

(iii) D2, D3 and D4 are jointly and severally liable to the Plaintiff for the debt due and owing by D1 to the Plaintiff or alternatively, a declaration that D3 and D4 are jointly and severally liable to the Plaintiff for the debt due and owing by D1 to the Plaintiff; and

damages to be assessed. D1’s CASE [40] The allegations levelled and claims made by the Plaintiff against D1 were vehemently denied. [41] Specifically, sometime in May 2017, the Plaintiff had invited D1 to its office to negotiate on the tenders for the Project. During the said meeting, the Plaintiff had induced D1 to be appointed as the main contractor for the Project by making various representations, including the promise to provide D1 with a line of credit of up to RM50,000,000.00 (‘Line of Credit’) to finance the Project. [42] In reliance on the representations made by the Plaintiff, particularly the representation regarding the Line of Credit, and upon the Plaintiff issuing a Letter of Interest dated 31.5.2017 (‘LoI’) to D1 encompassing the Plaintiff's representations, D1 then agreed to appoint the Plaintiff as the main contractor for the Project. [43] D1 had secured funding from Sabah Bank to finance the Project, however, due to the Plaintiff's action in not being able to adhere to the timeline of the Project, D1’s withdrawal of the loan was affected. As such, D1 had no choice but to fund the Project by itself. D1 had emphasised to the Plaintiff on the importance of the Line of Credit, as the absence of the same would impact on the progress of the Project. [44] From the initial stage, the Works were stifled by severe delays, poor performance and the Plaintiff’s inability to adhere to the timeline of the Project due to various reasons, thereby breaching its contractual agreement with D1. [45] Furthermore, in accordance with the LoA, the Plaintiff is to provide D1 with a PB which the Plaintiff had done on 2.2.2018. The PB had expired on 9.1.2019 and the Plaintiff had failed, refused or neglected to renew or extend the validity of the same. Hence, from there on and pursuant to the Conditions of Contract (‘CoC’) in the PAM Contract, D1 was entitled to deduct or set-off any amounts due and owing to the Plaintiff against the value of the PB. Considering the amount claimed in the sum of RM4,923,812.06 was much lesser than the value of the PB in the sum of RM43,688,966.25, the Plaintiff should have treated the claim as being deducted or set-off against the PB sum. [46] The Plaintiff’s allegations on the purported non-payment for work done against D1 were made in bad faith and undermined the representations made and assurances given by the Plaintiff to D1, apart from being in breach of the contract. At all material times, D1 was not facing any financial difficulties. Therefore, the Plaintiff’s Notice of Suspension of Work dated 23.1.2019 was invalid while D1’s termination of the Plaintiff's employment was proper and lawfully executed. [47] D1 was wound up on 15.12.2021 vide Kuala Lumpur High Court Companies (Winding Up) Petition No.: WA-28NCC-438-07/2021. The Liquidator of D1 was appointed by the court on 15.12.2021 and was made aware of this suit in early 2022. The Plaintiff applied for leave

Mr. Huang Zheng, the Plaintiff’s Director (PW1);

Mr. Ren Mingyu, the Plaintiff’s Construction Manager/ Engineer (PW2);

Mr. Liu Chongzhang, the Plaintiff’s Project Manager/ Engineer (PW3);

Mr. Ng Keong Woo, D1’s Group Project Manager (DW1);

Dato’ Yap Ting Hau, D1’s Director (DW2); and

Datin Chan Heng Si, former Director of D1 and D2 (DW3). [49] The ITBT are as follows: “1. Whether the 2nd, 3rd and/or 4th Defendants have carried out the business of the 1st Defendant with intent to defraud, inter alia, the Plaintiff and/or for a fraudulent purpose in violation of Section 540 of the Companies Act 2016?

Whether the 2nd, 3rd and/or 4th Defendants negligently and/or recklessly and/or fraudulently misrepresented the 1st Defendant’s financial position to the Plaintiff?

Whether the corporate veil separating the 1st Defendant with the 2nd, 3rd and 4th Defendants should be pierced for the purpose of the Plaintiff’s claims herein?

Whether the 3rd and 4th Defendants have breached their statutory duties as directors of the 1st and 2nd Defendants?

Whether the Plaintiff is entitled to its claim for work done in the sum of RM37,694,650.97?

Whether the Plaintiff is entitled to its claim for variation in the sum of RM10,426,534.54?

Whether the Plaintiff is entitled to its claim for customised material in the sum of RM2,318,520.38?

Is the Plaintiff entitled to its claim for contractual interest in the sum of RM2,484,883.72 (calculated as at 24.7.2020)?

Whether the Plaintiff is entitled to its claim for Loss and Expense in the sum of RM9,000,000.00?”. [50] For purposes of D1’s instant appeal against my decision, only Issues 5 to 8 are relevant. [51] Issues 1 to 4 were answered in the negative on the following grounds:

the Plaintiff did not prove the elements required under s 540 of the CA 2016 that the business of D1 was carried on with intent to defraud the Plaintiff or for a fraudulent purpose. A failure to fulfil the contractual obligation to make payments cannot support a claim in fraud;

as the Plaintiff failed to discharge the legal burden to prove fraudulent trading, there is no justification to lift D1’s corporate veil; and

I was not convinced that negligent or fraudulent misrepresentations were made by D2, D3 or D4 to the Plaintiff as to D1’s financial position. ANALYSIS AND FINDINGS OF THE COURT ON LIABILITY D1’s liability for the Plaintiff’s claim for breach of contract [52] It is trite law that the burden of proof lies on the Plaintiff to prove its entitlement to the amount as pleaded in the SoC which is RM61,924,589.61 (see s 102 of the Evidence Act 1950 [Act 56] (‘EA 1950’). In paragraph 169 of the Plaintiff’s post-trial Written Submission (encl. 145), it was submitted that the Plaintiff’s claim is RM60,132,610.82 where the sum for Loss and Expense is RM7,208,021.21 instead of RM9 million as pleaded. [53] In paragraphs 21 - 28 of the SoC, the Plaintiff has pleaded the particulars of the Progress Claims and the Interim Certificates which were issued and these are part of the Agreed Facts. [54] At the trial, the Plaintiff produced the letters which it had written to Veritas Architects Sdn Bhd (‘Architect’) regarding the reminders for non-payment, late issuance of Interim Certificates, overdue payment of Interim Certificates, Notices of Default for Non-Payment of Interim Certificates Nos. 5, 6, 7, 8, 9 and 10 for the period between 22.10.2018 to 2.4.2019 (see B13). [55] In the letter dated 13.12.2018, the Plaintiff recorded the “… top management meeting on 11.12.2018” between D1 and the Plaintiff whereby D1 “has pledged to settle all the overdue monies form the Architect’s Interim certificates and grant an … (EOT) to CRCC on the conditions that CRCC continue to proceed with the works on site without suspension.”. [56] During this period, D1 did not at any time write to the Plaintiff to dispute the contents of the Plaintiff’s letters. The letters which were issued are –

by D1 dated 8.1.2019 to forward the information as requested by the Plaintiff regarding the Credit Facilities from Sabah Bank and the list of units sold with the prices;

by D4 dated 11.1.2019 referring to the meeting held on 8.1.2019 and to clarify as follows: “1. M101 Entity Sdn Bhd is currently facing tight cash flow and we are able to repay all the outstanding amount of the construction costs given that:

total sales to-date 2019 has been achieved upto RM 421 million where the total construction cost is at RM 913 million at completion in year 2022; (Appendix III)

(ii) upon the completion of Basement and Sub-Structure Works, we can issue the progress claim to buyers upto 55% of total sales; and

(iii) RM70 million of bridging loan facility is available for future drawdown granted from Sabah Development Bank Bhd. (Appendix IV)

Further to the abovementioned, M101 Group has a proven track record in property development as below:

M101 Group has completed the Dang Wangi Project in December 2017. The property is being occupied as a hotel, namely Red by Sirocco (Appendix 1); and

(ii) The M101 Bukit Bintang Project is targeted to be completed by 1st Quarter in year 2019 and to be operated as a hotel under the name of Monopoly Mansion, KL (Appendix II).

We are open for further discussion to collateralize our retail lots in the abovementioned hotels as a surety that the outstanding sum to-date will be repaid”; and

by D3 dated 21.3.2019 referring to the letter dated 11.1.2019 and the numerous meetings between the Plaintiff and D1 “at various times and places” and that: “Firstly, on a strictly without prejudice and without admission to any liability basis, we hereby write to confirm that our existing contract with the payment terms of … (120) days from the date of the Architect Certificate for the completion according to stages in respect of the project shall be sustained accordingly. In the event that the payment from the contract is due and remain unpaid by us within the stipulated and agreed period of time, we shall give collateral of our Bukit Bintang Project and Dang Wangi Project. The collateral shall consist of the property for the respective units as stated in the List of Properties (which we had furnished to your good office earlier on 20.02.2019). Moreover, the collateral value shall be … (60%) from the work done in respect of the Project. In furtherance to such collateral arrangements, the Sale and Purchase Agreement in relation to particular units affected shall be signed between parties and such agreement may not be dated and stamped to enable us the Developer to market and sell off such affected units to the end buyer. On top of that, we shall pay the interest for late payment of the outstanding sum which the interest percentage shall be determined and agreed between parties. Secondly, subject to your agreement to provide funds for the sum of … (RM60,000,000.00) only into the abovementioned Project, we are pleased to inform you that we shall consider your good office's proposal to have new revision of the completion period for the Skywheel Project as follows:- 1st Sectional Completion • All facilities ie M&E, common area, architectural finishes, ID Works and anything relevant thereof for Level 46 and below shall be completed in accordance with the Certificate Project Completion's requirement within the period of … (53) months as stipulated in our contract. 2nd Sectional Completion • Upon fulfilment of the conditional completion of 1st Sectional above, the total Skywheel Project completion shall be revised up to …

months (including any extension of time granted by the relevant architect) from the date of the 1st Sectional Completion. In the event that the relevant contract administrator and/or architect grants any extension of time for the completion of Project, such extension shall run simultaneously and concurrently with the revised completion as stated in this paragraph”. [57] Despite clear evidence that there are outstanding payments due to the Plaintiff based on the Interim Certificates issued and after taking into account the payments made by D1 to date, and that D1 even made offers to resolve this problem, in the Defence, D1 vehemently denied and disputed the Plaintiff’s claim and put the Plaintiff to strict proof. [58] Further, D1 pleaded that it has no obligation to pay the Plaintiff because the Plaintiff –

failed to renew the PB;

failed to provide the Line of Credit; and

repudiated the LoA by wrongfully suspending the works and D1 had lawfully terminated the contract. [59] Each of these defences will be discussed in turn in the succeeding part of this judgment. It has not escaped the attention of this Court that, in paragraph 9 of the Defence, D1 stated that the Defence was prepared based only on the accounts, books and/ or records of D1 that have been passed to the Liquidator and to which the Liquidator has access to and any averment against D1 in the SoC that is not within the Liquidator’s knowledge is denied and the Plaintiff is put to strict proof. Whether the Plaintiff failed to renew the PB [60] Clause 12 of the LoA reads as follows: “The Contractor is required to submit Performance Bond equivalent to … (5%) percent of the Contract Sum amounting to … (RM 43,688,966.25). The Performance Bond must be in the form of banker’s guarantee from a bank approved by the Employer and in the format attached as Appendix A to this Letter of Award. The Performance Bond shall be furnished to the Employer within … (30) days upon acceptance by the Contractor of this Letter of Award. However, the Employer agrees to release the Performance Bond upon work done accumulated exceeds or equal to 5% of the Contract Sum within 14 days after work done certified by Architect. In return, Contractor shall submit a Corporate Guarantee to replace the Performance Bond. For clarity, the Corporate Guarantee shall be issued by the Contractor’s parent company in the form approved by the Employer and the Performance Bond shall only be returned to the Contractor upon the Contractor furnishing the Corporate Guarantee to the Employer.”. [61] Clause 37 of the CoC provides that: “37.0

37.1 The Contractor shall before the Date of Commencement of the Works, submit to the Employer a Performance Bond for a sum equivalent to the percentage stated in the Appendix as a security for the due performance and observance by the Contractor of his obligations under the Contract up to Practical Completion of the Works.

37.2 The Performance Bond shall be in form issued in the terms and conditions specified in the Contract or otherwise approved by the Employer.

37.3 The Performance Bond submitted by the Contractor shall remain valid until … (3) Months after the Completion Date. Where the Works would not be completed by the Completion Date, the Contractor shall before the expiry of the Performance Bond, extend the duration of the Performance Bond to expire … (3) Months after the projected Practical Completion of the Works.

37.4 If the Contractor fails to provide or maintain the validity of the Performance Bond in accordance with this clause, then without prejudice to any other rights and remedies which the Employer may possess, the Employer shall be entitled to withhold or deduct an amount equal to the Performance Bond from any payment due or to become due to the Contractor.

37.5 In the event the Employer determines the employment of the Contractor in accordance with Clause 25.0, or if there is any breach of the Contract, the Employer may call on the Performance Bond and utilize and make payments out of or deduction from the Performance Bond for the completion of and/or rectification of the Works and reimbursement of loss, and/or expense suffered by the Employer. On completion of the works, any balance of monies remaining from the Performance Bond shall be refunded to the Contractor without interest.

37.6 In the event the Contractor determines his own employment in accordance with Clause 26.0, the Employer shall within … (28) Days return the Performance Bond to the Contractor for cancellation.”. [62] D1 submitted that it is entitled to withhold or deduct RM43,688,966.25 from any payment for work done by the Plaintiff as the Plaintiff failed to maintain the PB as required under Clause 12 of the LoA read together with Clause 37 of the CoC. [63] According to Clause 37.3 of the CoC, the PB shall remain valid until three months after the Completion Date. In the Appendix to the CoC, the Completion Date is 15.5.2022. In this case, it is clear from the face of the Bank Guarantee from HSBC Bank Malaysia Berhad dated 9.1.2018 that the PB expired on 7.1.2019. [64] On 2.4.2019, the Architect wrote to the Plaintiff and, among others, noted that the Plaintiff has failed to maintain the validity of the PB as obligated under Clause 37.3 of the CoC. The Architect advised that, as provided under Clause 37.4 of the CoC, if the Plaintiff fails to maintain the validity of the PB, then without prejudice to any other rights and remedies which D1 may possess, D1 shall be entitled to withhold or deduct an amount equal to the PB from any payment due or to become due to the Plaintiff. [65] This was followed by D1’s letter dated 15.4.2019 to the Plaintiff stating, among others, that despite reminders, D1 has not received any valid PB from the Plaintiff and therefore, D1 is exercising its rights as provided under Clause 37.4 of the CoC. [66] The learned counsel for D1 cited the Court of Appeal decision in Kejuruteraan Bintai Kindenko Sdn Bhd v. Nam Fatt Construction Sdn Bhd & Anor [2011] 7 CLJ 442 to emphasise the importance of the PB in a construction contract which is to provide a security which is to be readily, promptly and assuredly realizable when the prescribed event as stipulated in the contract occurs. [67] The learned counsel further lend support from the case of Scomi Transit Projects SDN BHD v Prasarana Malaysia Berhad [2016] MLJU 622 for the proposition that the obligation to maintain the PB is a separate and standalone obligation and not dependent on any other conditions i.e. progress payment being maintained. [68] I have given careful consideration to D1’s submission. However, and without undermining the significance of having and maintaining a valid PB at all times as required under the contract, I am persuaded by the Plaintiff’s submission that, in the circumstances of this case, there is no basis for D1 to withhold payments which are due and owing to the Plaintiff on the ground that the PB was not extended. [69] In a long letter to D1 dated 2.5.2019 and titled “Unreasonable Work Suspension by CRCC and Notice of Determination of Contractor’s Employment by Employer”, the Plaintiff placed its position on the issue of the PB in these words: “…

We find it repugnant that you now allege that we had breached Clause 37.3 of the PAM 2006 and that we had failed to provide or maintain a valid performance bond. Our obligation was to maintain a performance bond for a period of time until we achieve 5% of the contract sum. We have almost reached this value of work but due to your inability to make payment have resulted in us having to suspend works and this resulted in delays to the progress of the work and most importantly we could not achieve the 5% within the time frame planned. Given that the cause of this problem is entirely caused by you, to suggest that we breached the terms of the contract is clearly misconceived and not supported by the facts and evidence.

Our views are fortified by the fact that although the performance bond had expired on 7.1.2009 you did not request us to renew the same, presumably predicated on the fact that you are fully aware that the fault lies with you and that you had breached the terms and conditions of the contract between us. Your failure to make payment for work done and to take steps to remedy your default is a breach of your obligations under the terms of the contract.

In reply to your allegation that you are entitled to withhold the sum of the performance bond, we disagree with your allegation. There is no basis for you to withhold any monies which are due and owing to us. As explained above, you are in breach of the terms of the contract and you cannot rely on your on breach in order to justify the termination. Again, we would have proceeded in accordance with the contract programme and the contractual requirements but for your conduct which resulted in significant delays to the progress of the works. We state that you have no basis under the terms of the contract to refuse to make payment for the work done and further you do not have a valid basis to set off the value of the performance bond against the amounts due and owing to us. …”. [70] D1 contended that, based on the above letter and Interim Valuation No. 15 dated 9.4.2019, where the Plaintiff’s work done is valued at its highest, the gross valuation of the Plaintiff’s completed work was valued at RM34,775,009.46, which is below 5% of the Contract Sum. [71] However, as can be seen from DW1’s answers in cross-examination, the total value of work done based on Progress Claim No. 16 for the period ending 25.4.2019, which was submitted to D1 vide the Plaintiff’s letter dated 30.4.2019, is RM48,121,185.51. This amount includes the sum claimed for variation works i.e. RM10,426,534.54. [72] It is observed that there is also a sum for materials on site, namely, RM2,318,520.38 which brings the gross amount due in the sum of RM50,439,705.89. [73] DW1 additionally agreed that no valuation of the variation works was carried out by D1 or an independent Quantity Surveyor (‘QS’) appointed by D1 to determine the value of work carried out by the Plaintiff. Mr. Sanjay Mohan submitted for the Plaintiff that D1 was apparently carrying out the measurement of the works in-house, contrary to the requirements under the PAM Contract, and it was on this basis that it was alleged the works did not meet the threshold of 5% of the Contract Sum. [74] In my considered view, the Plaintiff has established, on a balance of probabilities that it has met the contractual threshold of 5% of the Contract Sum. [75] Moreover, D1 did not write to the Plaintiff about the impending expiry of the PB or immediately upon its expiry on 7.1.2019. Instead, D1 raised this issue only three months later, evidently to use it as an excuse to “withhold” payment of the sums which were due and owing to the Plaintiff. DW1 agreed to the suggestion by the learned counsel for the Plaintiff that D1’s letter dated 15.4.2019 was a deliberate ploy to avoid making payment to the Plaintiff. [76] Having breached the contract by failing to make payment of the certified sums, D1 cannot be allowed to take advantage of its own wrong and attempt to evade its obligation to make payment to the Plaintiff by alleging that the Plaintiff has failed to extend the PB (see Dato' Abd Rahim Mohamad v. Abdul Farish Rashid [2008] 2 MLRA 607 and Light Style Sdn Bhd v KFH Ijarah House (M) Sdn Bhd [2009] 4 MLJ 575). [77] This is clearly a case of D1, having admitted, by its conduct at the material time, that there are outstanding payments to be made to the Plaintiff, is now seeking to resile from the earlier position on the pretext of a breach of the contractual provisions. Whether the Plaintiff failed to provide the Line of Credit [78] This issue revolves around the LoI and for ease of reference, the salient part of the LoI is reproduced below: “We refer to the discussions between your PMC representative Dato Seri Dr Yeoh and our representative held on 24th May 2017 at our KL office, and we, CRCC Malaysia Bhd is willing and capable to be considered to be the Main Contractor for the above project based on the following terms and conditions:-

1.1 The Employer M101 ENTITY SDN BHD is desirous to appoint CRCC MALAYSIA BHD as the Main Contractor for the above project which consist of … (2) towers blocks comprising of shop lots, Small Office Flexible Office (‘SOFO”), high-end suites, hotels with individual strata title, sky retails, the Skywheel and car parks provisionally known as “M101 Skywheel” (“the project”).

2.1 The estimated target contract sum is … (RM700,000.00) (“Contract Sum”) subject to the submission and finalization of the Bill of Quantities.

2.2 The Contract Sum shall include the Prime Cost and Provisional Sum (“PC Sum”). …

5.1 The Employer is willing to deposit … (RM5,000.00) into the Escrow Account after awarding the Project to the Main Contractor and may be utilize by the Main Contractor after the commencement of mobilization and execution of the Initial Preliminaries Work for setting up of site office, temporary facilities, etc as defined in the Preliminaries in the Bill of Quantities (“Commitment”).

5.2 The Commitment shall form part of the Progressive Billings (as defined herein).

PAYMENT TERMS The Main Contractor shall provide to the Employer a credit for the construction cost of up to … (RM50,000.00) subject to certification by the Employer’s architect or consultant (as the case may be) (“Facilities”) with the following conditions:

upon each progressive billings invoice certified by the Employer’s architect or consultant (as the case may be) (“Progressive Billings”), the payment shall be made in the following form until the value of the Facilities has been reached:

The Main Contractor shall provide a credit of up to … (80%) of the

(ii) The Employer shall pay … (20%) of the Progressive Billings within … (60) days;

the Employer’s portion of … (20%) shall be first deducted from the Commitment amount advanced to the Main Contractor. Once the Commitment amount is fully set-off from the Progress Billing, the Employer shall then pay the outstanding … (20%) of the Progressive Payment Billings.

upon the Employer utilizing the said Credit Facilities of RM50 million, all subsequent Progressive Payment Billings for the Works for the Project shall be paid within … (30) days from the date of Payment Certificate issued by the Architect; …”. [79] D1 fervently submitted that the Plaintiff had misrepresented to D1 because the Plaintiff initially agreed to finance the Project by the Line of Credit but the Plaintiff subsequently failed to fulfil this promise. [80] In paragraph 7 of the Plaintiff’s Reply to D1’s Defence, the Plaintiff denied that it made any representation or promise to the Defendants in respect of any line of credit. [81] In its Written Submissions, D1 chronicled the events which occurred prior to the execution of the LoA, namely D1’s negotiations with potential main contractors such as Eversendai Corporation Berhad and China Huashi Enterprises Co. Ltd. (‘Huashi’) in attempting to establish the existence of a condition precedent that the main contractor which was going to be appointed needed to provide a credit line of RM50 million. DW3 testified that “… Everybody die for this job. Like I said, every single C company, their CEO, their CFO, their COO, I’ve been eating dinner every night. But I tell them one thing, without RM50 million, I don’t talk. …”. [82] D1 relied on an article which was posted on StarProperty on 25.1.2017 titled “Chinese Developer Huashi To Build RM1.8bil M101 Skywheel” where it was reported that D1 announced Huashi will finance RM50 million worth of construction cost. However, Huashi subsequently pulled out from the collaboration as it could not obtain approval from its parent company to provide financing of the said amount. [83] With regards to the terms of the Line of Credit, or the “Collateral Credit Agreement” as referred to in DW1’s Supplementary Witness Statement (WS(S1) – DW1), and the reason as to why the Line of Credit was not mentioned in the LoA, DW1 answered that: “The salient terms are as contained in Clauses 5, 6 and 6.1 of the Letter of Intent (“LOI”). Clause 5 of the LOI provides that the 1st Defendant is willing to deposit a sum of RM5,000,000.00 into an escrow account after awarding the Project to the Plaintiff. Clause 6, in essence, provides that the Plaintiff would provide a credit facility of RM50,000,000.00 to the 1st Defendant, which would be utilised in the manner as provided for in Clause 6 of the LOI. … It was omitted at the request of the Plaintiff. At a meeting before the appointment of the Plaintiff, Huang Zheng (“Huang”) informed Dato’ Joseph Yap (deceased) and I that the Plaintiff wanted to keep the Collateral Credit Agreement out of the LOA, as it is a separate commercial arrangement between parties. Huang also informed us that there were bureaucratic hurdles/red tape to be overcome with its parent company in China, if the Collateral Credit Agreement was included in the LOA. At all material times, the Plaintiff assured the 1st Defendant that despite its exclusion from the LOA, the Collateral Credit Agreement would be honoured by the Plaintiff. As such, the 1st Defendant agreed to exclude it from the LOA.”. [84] DW1 also explained that D1 did not pay the sum of RM5 million into an Escrow Account as provided under Clause 5 of the LoI because “Parties eventually agreed that the 1st Defendant would pay the sum through payments made towards the Project’s interim certificates, until RM5,000,000.00 is achieved. Once that obligation is fulfilled, the Plaintiff would provide the RM50,000,000.00 line of credit.”. [85] D1 took the position that it has paid its share of RM5 million in the manner as above stated, but the Plaintiff did not provide the Line of Credit because, according to DW1, the Plaintiff informed that it did not have sufficient funds to do so and it could obtain a credit line of RM60 million instead from its parent company. However, the Plaintiff required supporting documents from D1 for onward submission to the parent company. [86] The “supporting documents” requested was for D1 to issue letters “i) stating that the 1st Defendant was not in a position to pay the Plaintiff; ii) committing to pay the Plaintiff any sum due, together with the intended payment methods; iii) offering to collateralise units in 2 others projects known as M101 Bukit Bintang and M101 Dang Wangi, as security.”. Subsequently, D1 prepared the draft letters and DW1 forwarded these to PW1 for his approval before D1 officially issued them to the Plaintiff. The final letters which were issued are those dated 8.1.2019, 11.1.2019, 20.2.2019 and 21.3.2019 (‘Four Letters’). [87] D1 urged the Court to make a finding that the Line of Credit is a mutual agreement between the Plaintiff and D1, and that the Plaintiff is estopped from denying the same, taking into account the following circumstantial evidence which shows that the parties had relied and acted on the Plaintiff’s promise in the course of dealings:

the Plaintiff’s knowledge of the Line of Credit as D1’s pre-condition for a successful tender by any main contractor;

D1 had made direct payments to the Plaintiff’s sub-contractor, Zhong Xiang Construction on 14.12.2018, 9.1.2019 and 11.1.2019 in the sum of RM200,000.00, respectively, with the Plaintiff’s knowledge and consent as evidenced by the Plaintiff’s letter dated 15.12.2018;

the Plaintiff did not suspend the works even though it had issued the Notices of Default dated 29.11.2018 and 9.1.2019 and the Notice of Suspension of Works dated 23.1.2019. The Plaintiff did not issue any Notice of Suspension of Works pursuant to the Notice of Default dated 15.3.2019. This is because the Plaintiff knew it had the obligation to provide the Line of Credit;

the Plaintiff requested D1 to prepare the drafts for the Four

Clause 12 of the LoA on the PB was modified such that the Plaintiff had obtained the Bank Guarantee for the duration of one year only instead of 53 months, which is the completion period for the Project under Clause 7 of the LoA. Without the Line of Credit, D1 would not have agreed to modify the terms on the PB as D1 had willingly sacrificed its security for the completion of the works by the Plaintiff. [88] Upon deliberation of the pleadings, oral and documentary evidence and submissions of the Plaintiff and D1, I was persuaded by the Plaintiff’s submission that the parties did not reach an agreement on all the terms and conditions for the provision of the Line of Credit on the following grounds:

Based on Clauses 5.1, 5.2, 6 and 6.1 of the LoI, the Line of Credit is subject to D1 depositing RM5 million into the Escrow Account. The credit facility of RM50 million is arrived at by D1 having to pay 20% of each certified amount, which sums will be first deducted from the RM5 million commitment fee. DW1 admitted that the Escrow Account was never opened and the RM5 million was never placed in the Escrow Account. DW2’s evidence was that D1 had paid the Plaintiff the sum of RM5.5 million by February 2019 and has therefore met its 20% obligation. Thereafter, the Plaintiff has to provide the financing of RM50 million. Nevertheless, D1 did not produce any documentary evidence where D1 has conveyed to the Plaintiff regarding the 80:20 ratio and the achievement of D1’s 20% portion by February

D1’s letter to the Plaintiff dated 21.3.2019 did not state that D1 is not obliged to pay due to the agreement on the Line of Credit and that the time has come for the Plaintiff to provide the RM50 million financing as promised. Instead, D1 offered collateral in the form of the property for the units in its Bukit Bintang Project and Dang Wangi Project.

Apart from the LoI, there is no reference to the Line of Credit in the LoA and nor was any amendment or modification made to the PAM Contract to reflect the same. There is no mention of the Line of Credit in the correspondence or other documents in the year 2018, the Interim Certificates and the documents related to the proceedings under the Construction Industry Payment and Adjudication Act 2012 [Act 746] (‘CIPAA’). If DW1’s explanation on the absence of the RM5 million deposit into the Escrow Account is true i.e. that D1 would pay the sum through payments made towards the Interim Certificates until RM5 million is achieved, surely there would be documents, correspondence or written notations to this effect. Instead, DW1 himself testified that when the Interim Certificates were issued and payments were made by D1 to the Plaintiff, no reference was made to the fact that, pursuant to the LoI, only 20% would be paid and 80% would be withheld. This goes to show that the Plaintiff and D1 did not conduct their affairs in accordance with the LoI.

There is an “Entire Agreement” clause in the LoA which reads as follows: “16. This Letter of Award constitutes the entire agreement and understanding between the parties with respect to the matters dealt with in this Letter of Award. This Letter of Award supersedes any other agreements, letters, correspondence (oral or written either expressed or implied) entered into prior to this Letter of Award in respect of the matters dealt with in this Letter of Award and was not entered into by the Parties in reliance of any agreement, understanding, warranty or representation of any Party not expressly contained or referred to in this Letter of Award.”.

All the arguments pertaining to the LoI and the Line of Credit were raised by D1 only when this suit was filed. This supports the Plaintiff’s contention that the contentions were merely an afterthought to defeat the Plaintiff’s claim. [89] Turning to the “circumstantial evidence” as submitted by D1 and set out in paragraph 87 above –

the direct payment that was made by D1 to the subcontractor in December 2018 was with the Plaintiff’s knowledge and consent and an attempt to progress the works which were on going at site during this time. The Plaintiff decided to suspend work only in April 2019 as a result of further non-payment by D1;

the notices of default were not executed because D1 continuously promised to resolve the issue of non-payment as evidenced by D1’s letters to the Plaintiff. Various proposals were put forth by D1 to resolve the impasse between the parties in 2018 and 2019 but not once did D1 raise the issue of the Line of

at the time when the drafts for the Four Letters were being prepared, D1 was in desperate need for funds. There was no agreement by the Plaintiff on all the terms in relation to the Line of Credit. The parties were still in discussions on the same; and

D1 has not established that there was some “sacrifice” on D1’s part which accounts for the wordings of Clause 12 of the LoA as being deliberately designed in consideration of the Line of Credit. There is no correlation between the contractual provision on PB and the purported Line of Credit. Whether the Plaintiff wrongfully suspended works [90] In paragraph 22 of the Defence, D1 pleaded the facts surrounding the expiry of the PB and the entitlement to set off any amounts due and owing to the Plaintiff as against the value of the PB in coming to the conclusion that the Notice of Suspension of Work dated 23.1.2019 is invalid. It was additionally pleaded that, considering the amount claimed in the sum of RM4,923,812.06 was much lesser than the value of the PB, the Plaintiff should have treated the claim as being set-off against the PB sum. [91] As discussed earlier, my findings on the issue concerning the expiry of the PB is not in favor of D1. [92] My findings on the issues relating to the suspension of works by the Plaintiff and termination of the contract by D1 are similarly not in favor of D1 for the reasons as explained below. [93] In its Defence, D1 alleged that the Notice of Suspension of Work dated 23.1.2019 is invalid. This is the first Notice of Suspension of Work issued by the Plaintiff vide its letter to D1 dated 23.1.2019 where, based on Interim Certificate Nos. 5 to 7, the total payment overdue is RM4,923,812.06. the Plaintiff stated that it shall suspend the execution of work effective from 24.1.2019. [94] On the Plaintiff’s part, it relied on the second Notice of Suspension of Work dated 17.4.2019, which was enclosed to its letter of even date. In that letter, the Plaintiff referred to its previous correspondences, notices and Interim Certificate Nos. 6 to 10 and stated that the total payment overdue is RM7,906,241.09 and it shall suspend the execution of work effective from 17.4.2019. [95] In paragraph 109 of D1’s Written Submissions, D1 inserted a flow chart to illustrate the time given for the Plaintiff to remedy the purported unlawful suspension of works and the “Plaintiff’s Unlawful Demobilization on 12.04.2019” is the first event in the flow chart. This shows that even D1 took the position that the demobilization took place in April 2019, and not in January 2019. [96] Further, D1 submitted in paragraphs 79.9 and 79.10 of the Written Submissions that notwithstanding the Plaintiff’s Notice of Default dated 29.11.2018, Notice of Default dated 9.1.2019 and the Notice of Suspension of Work dated 23.1.2019, the Plaintiff did not actually suspend works pursuant to the same. This is reflected in the fact that although D1 did not settle the purported outstanding payment, it had subsequently issued another Notice of Default dated 15.3.2019 which indicates that the Plaintiff was still on site. [97] The fact that the suspension of works did not take place until April 2019 is also supported by the Progress Claim Nos. 14 to 16 for the period ending 28.2.2019, 25.3.2019 and 25.4.2019, respectively, which shows an increase in the percentage of work done for General Condition & Preliminaries, Piling and Structure Works and Building Works and an increase in the amounts claimed for these items. [98] On 22.4.2019, D1 wrote to the Plaintiff stating, among others, as follows: “2) Secondly, kindly be informed that CRCC's sub-contractor has started to demobilize their plant and machinery and site material on 12th April 2019. On top of that, CRCC has gradually discontinue their works commencing from 30th March 2019 and totally cease works on 6th April 2019. All of the abovementioned events occurred prior to the Notice of Suspension is served to us which can be considered as unreasonable and premature act of suspension resulting to invalid suspension. Therefore, we believe that CRCC is unable to meet their obligations and commitments towards their sub-contractor and henceforth jeopardizing the Project and unreasonably withholding the continuance of Works on Site. 3) Clause 14.1 of the Contract stated that materials and goods delivered to the Site shall not be removed until completion of the Works unless prior written consent in writing for the Architect has been obtained. In applying the law to our current situation, we believe that CRCC has yet to obtain any written consent from Veritas for the removal equipment and Veritas has yet to issue any written consent for the same and therefore, such act by the contractor can be shall as a breach of conditions of contract. 4)

suspended the Works without reasonable cause since 17.4.2019;

failed, refused and/ or neglected to –

recommence Works despite instructions to recommence

(ii) carry out the Works regularly and/ or diligently on-site and at a reasonable rate of progress to meet projected timelines; and

(iii) return the plants, machinery and/ or site materials, which were wrongfully removed, as instructed in the Architect’s letter dated 23.4.2019;

wrongfully –

removed and/ or demobilized the plant, machinery, and site material; and/ or

(ii) extracted the sheet piles which were driven into the ground and removed from the site without any authorisation and/or instructions from the Architect; and/ or

abandoned the Works based on the abovementioned defaults. [106] The Plaintiff challenged the Notice of Default and the Notice of Determination dated 10.6.2019 vide its letters dated 10 and 11 June 2019. [107] Once more, following from my previous findings that D1 has breached the contract by failing to make payments of the Interim Certificates and hence the Plaintiff’s issuance of the Notice of Suspension of Work dated 17.4.2019 is valid, the alleged defaults as set out in the Notice of Default dated 21.5.2019 and the Notice of Determination dated 10.6.2019 are, in my view, baseless. [108] I agree with the Plaintiff’s submission that D1’s act of termination was contrived to avoid making payment to the Plaintiff for the Works. Reasons were then manufactured to terminate the contract. Where the grounds relied on to terminate the contract are not proven, this effectively means that the termination in unlawful (see, Kamula Hartamas Sdn Bhd (formerly known as Aras Suasana Sdn Bhd) v Bank Kerjasama Rakyat Malaysia Bhd [2017] 3 MLJ 668 and Richallenge Corp Sdn Bhd v Poteck Enterprise Sdn Bhd [2020] 3 MLJ 704). [109] Based on the aforesaid reasons, I find and hold that D1’s termination of the contract was wrongful. [110] There is a final issue on liability which has to be addressed. In its Written Submissions, D1 contended that the Plaintiff had failed to diligently progress with the Works according to the LoA as there was severe delay which resulted in D1 being unable to drawdown the loan from Sabah Bank. D1 submitted that –

the Plaintiff failed to conclude the rationalisation of the rates for the Works within the timelines as provided under Clause 4 of the

there was delay in the piling/ pile testing works. [111] However, a perusal of the Defence shows that the abovesaid issues as submitted by D1 were not pleaded in the Defence. In paragraph 14 of the Defence, a fleeting reference is made to “… the Plaintiff’s actions of being unable to adhere to the timeline of the Project, …”. No other facts regarding the delay and its particulars were pleaded. This is in contrast to D2’s and D3’s Defence (see Part B4 of their Defence). [112] D1 had adopted the evidence and submissions of D2 and D3 in so far as they are consistent with D1’s pleaded case. As D1 did not plead on delay, it is my finding that D1 cannot rely or ride on whatever evidence that was led by D2 and D3 and their submissions on this issue. [113] Mr. Sanjay Mohan, in submitting for the Plaintiff, had highlighted other persuasive reasons to reject D1’s submissions on the allegation of delay or failure to execute the works regularly and diligently by the Plaintiff, namely –

D1 did not produce any critical path analysis to substantiate this allegation;

there is no evidence to support D1’s arguments that it could not draw down up to 55% from its end purchasers and that it was not able to draw down around RM70 million from Sabah Bank due to the Plaintiff’s delay. In any event, D1 would not have been able to draw down the loan sum as it did not make payment into the account with Sabah Bank in accordance with the terms of the loan or debentures. Moreover, there is no evidence that D1 had submitted the Interim Certificates to Sabah Bank or any evidence to establish the nexus between the alleged delay in the progress of works by the Plaintiff with D1’s ability to drawdown on the funding;

there is no letter from D1 or the Architect complaining that the Plaintiff was slow in progressing its work; and

any delay would have been caused by D1’s failure to pay the certified sums to the Plaintiff. [114] On the same ground as to the absence of any pleadings by D1 on delay, I did not consider D1’s submission on the issue in respect of the Line of Credit, namely that D1 had repeatedly granted indulgence to the Plaintiff notwithstanding the Plaintiff’s failure to adhere to the terms of the LoA, including the delay in submitting the master work programme, repeated request for rationalisation of rates and delay in overall work progress, in good faith in consideration of the Line of Credit. [115] In the final analysis, I find and hold that the Plaintiff has proven, on a balance of probabilities, that D1 has breached the contract and is liable to the Plaintiff for the Plaintiff’s claims. ANALYSIS AND FINDINGS OF THE COURT ON QUANTUM [116] In the course of my deliberations after the trial, an issue arose on whether D1 is entitled in law to adopt the evidence and submissions of D2 and D3 in defending the Plaintiff’s claim against D1 insofar as quantum of damages is concerned. [117] As this point was not addressed in the Plaintiff’s and D1’s main and reply submissions, I invited the learned counsels to file further written submission on this issue. [118] Based on paragraph 32 of D1’s Defence, D1 had denied and disputed paragraph 79 of the SoC, which includes the Plaintiff’s prayer for the sum of RM61,924,589.61 or such other sums as determined by the Court as against all four Defendants collectively or individually. D1 had put the Plaintiff to strict proof of the reliefs sought. [119] Turning to the Notes of Evidence (‘NoE’) at p 306, encl. 140, the Plaintiff’s counsel had agreed that, in the interest of time, questions will be put to the Plaintiff’s witnesses once by any of the Defendants’ counsels and no objections will be taken or any issue raised by the Plaintiff. PD1 had requested for PD2 and D3 to be allowed to cross-examine the Plaintiff’s witnesses first and this was allowed by the Court (see NoE, p 14, encl. 140). Therefore, whatever oral evidence elicited during such cross-examination on the issue of quantum of damages can be relied upon by D1 and D4 if they so intend without the need for PD1 and PD4 to ask the same questions. [120] In the post-trial written submissions and Scott Schedule – Quantum (pp 10 - 27, encl. 166), D1 took the position that it will adopt the evidence and submissions of D2 and D3 insofar as they are consistent with D1’s pleaded case (see paragraph 101, encl. 147; paragraph 93, encl. 160 and paragraphs 3, 11, 18, 21, 22 and 24, encl. 166). In my view, this means that D1 adopts whatever evidence and submissions of D2 and D3 in establishing that the Plaintiff has not proven its entitlement to the reliefs sought on a balance of probabilities. [121] In the circumstances, I was inclined to agree with D1’s submission that it is entitled to rely on the evidence before the Court, including the evidence which was elicited through the cross-examination of the Plaintiff’s witnesses by the solicitors for D2 and D3 [see Seow Hoon Hin [2019] MLJU 519 (CA)], in the determination on whether the Plaintiff has proven the quantum of its claim or otherwise. [122] After having considered the submissions by D2 and D3 in relation to the Plaintiff’s items of claims as established, among others, through the cross-examination of PW2 and PW3, the following are my findings in respect of the ITBT on quantum. 5th Issue (ITBT): Whether the Plaintiff is entitled to its claim for work done in the sum of RM37,694,650.97 [123] The value of the unpaid amounts of the outstanding certified work done is in the sum of RM25,746,748.31 as particularised below: Interim Certificate No. 15: Total Gross Value of Work Done RM30,801,178.01 Add: Variation Order RM 2,738,820.20 Add: Material On Site RM 1,195,010.25 Less: 10% Retention (Limit at 5%) (RM 3,473,500.95) Less: Amount previously paid (RM 5,514,760.20) Total outstanding certified work done RM25,746,748.31 [124] The Plaintiff has submitted the Final Claim dated 5.8.2019. This includes the total work done of RM37,694,650.97, the particulars of which are as follows: ITEM FINAL CLAIM CERTIFIED UNCERTIFIED Bill No. 1 – Preliminaries 11,011,848.67 9,314,642.71 1,697,205.96 Bill No. 2 – Piling and Structure Works • 2A – Bored Piles • 2B – Diaphragm Wall • 2C – Instrument 21,805,514.70 3,529,361.50 139,898.20 16,842,171.60 3,396,114.20 128,718.20 4,963,343.10 133,247.30 11,180.00 ation and Monitoring Bill No. 3 – Building Works • 3A – Structural Steel Works 1,208,027.90 1,119,532.30 88,495.60 37,694,650.97 30,801,179.01 6,893,471.96 [125] The supporting documents for the Plaintiff’s work done are at pp 12 to 128, B16. The Plaintiff submitted that the sum of RM6,893,471.96 is for the amount of works carried out but remained uncertified or refused to be certified by D1. [126] D2’s and D3’s submission which were adopted by D1 are as follows:

the onus is always on the Plaintiff as the party claiming to show a prima facie case that it is entitled to its claim (see Letchumanan Chettiar Alagappan @ L Allagappan (as executor to SL Alameloo Achi alias Sona Lena Alamelo Acho, deceased) & Anor v Secure

the Plaintiff’s claim can be challenged by the Defendants through cross-examination of the Plaintiff’s witnesses, in particular PW2 and PW3;

at the start of the Project, the Plaintiff’s Progress Claims were assessed by the QS which was appointed by D1, namely, WLT Associates (see Clause 5.3 of the LoA). However, in January 2019, the QS resigned from the Project. The Plaintiff and D1 mutually agreed that all Progress Claims shall then be assessed by D1’s internal QS and certified by DW1. In the event the Plaintiff is dissatisfied with the Interim Valuation, the Plaintiff and D1 will agree on the amount prior to sending it to the Architect; and

in the Final Account dated 5.8.2019 prepared by the Plaintiff, the total value of work done, variation and customised materials are identical as the value in Progress Claim No. 16. This shows that the Final Account had ignored the existence of Interim Valuation No. 16 prepared by D1 where each item was assessed individually with the correct valuation by D1 alongside the Plaintiff’s claim and its supporting documents. Hence, in preparing the Final Account, the Plaintiff should have based it on Interim Valuation No.16, which was assessed by D1’s internal QS and certified by DW1. [127] The Plaintiff explained that, for Preliminaries, which is based on the percentage of the work-done value by the builder’s work value, the builder’s work value is obtained through the following formula: (Contract Amount – Excluded Preliminary, NSC Work and Contingency Sum) 879,638,084.00 - 90,999.496.00 - 376,750,000.00 - 50,000,000.00 361,888,588.00 = The builder’s work value [128] In Progress Certificate No. 15 by the QS, it is shown that: Recurring Calculation Claim Up Todate: 1 Initial 2 Recurring 3 Final Total Amount (RM) 22,550,144.80 361,808,588.00 = 6.231% 5,166,687.64 4,147,955.07 - 9,314,642.71 while in the Plaintiff’s final claim: Recurring Calculation 26,682,802.30 361,888,588.00 =

7.373% Claim Up Todate: 1 Initial 5,166,687.64 2 Recurring 5,845,161.03 3 Final - Total Amount (RM) 11,011,848.67 [129] The documents in respect of Bored Piles show the bored pile work which were carried out by the Plaintiff but have yet to be certified by the QS. [130] As regards the Diaphragm Wall, the documents show that the Plaintiff had completed all works such as rebar, concrete and soil excavation, as seen in RAT/7/F to RAT/7/L which were certificated by the QS. However, there was under certification for RAT/7/B, RAT/7/C and RAT/7/E i.e. “Keep records for certification”, “provision of all necessary equipment” and “design and construct temporary reinforced concrete guide wall”, respectively, and all of which were necessary for the construction of the Diaphragm Wall. [131] PW2 was not cross-examined regarding the Plaintiff’s computation for the items for Preliminaries, Bored Piles, Diaphragm Wall, Instrumentation and Monitoring and Structural Steel Works. [132] During cross-examination of DW1, he admitted that he cannot quantify the value of works and that D1’s in-house QS was able to do so. DW1 was not re-examined on this and the in-house QS was not called as a witness. [133] Unlike the claim for variation work done, there is no evidence at the trial to justify D1’s assessment of RM33,007,479.78 as the total gross value of work done as per Interim Valuation No. 16. On the other hand, the Plaintiff has produced sufficient evidence that the value of work done is RM37,694,650.97. Therefore, the onus shifts to the Defendants to show that the said value is not that amount, however the Defendants have failed to do so. [134] The 5th Issue (ITBT) was thus answered in the affirmative. 6th Issue (ITBT): Whether the Plaintiff is entitled to its claim for variation in the sum of RM10,426,534.54 [135] The Plaintiff’s claim for variation orders is in the sum of RM10,426,534.54 as shown below: VO Description Instruction Amount Previously Certified Amount 1 Preliminary Test Pile (Bi-Directional Test Method) Letter dated 2.4.2018 935,960.75 543,368.20 2 Additional Instrumentation Monitoring Works Ground Settlement Marker 184,090.00 142,350.00 3 Backfilling of Bored Hole P34-2 Architect’s Instruction 003 dated 18.12.2017 & Engineer’s Instruction 001 dated 15.12.2017 22,200.00 22,200.00 5 Sg. Bunus Downstream Diversion Works Document transmittal of Drawings dated 28.2.2019 & Request for work Inspection 7,536,745.70 2,029,332.00 6 Return of 3nos Temporary Stop End to Geopancar Architect’s Instruction 009 dated 10.10.2018 1,570.00 1,570.00 7 PG7-13 Cavity Treatment Works Engineer’s Instruction 008 dated 28.11.2018 88,320.00 - 8 Backfilling to PG16-3 & Reboring Engineer’s Instruction 010 43,712.06 - dated 26.12.2018 9 Backfilling of PG1-27 & Rock Probing Exceeds 5m Request for Work Inspection 352,426.01 - 10 Piling Design Fee Compensation (2% of Piling Works) Letter dated 12.9.2018 1,261,510.02 - 10,426,534.54 2,738,820.20 [136] The Plaintiff asserted that the work as set out above were not part of the Plaintiff’s scope of work and thus, were additional works which was instructed by D1 and/ or its consultants. [137] Essentially, D1 challenged VO1, VO5 and VO7 to VO10. The issues raised by D1 in respect of each of these VO are discussed in the succeeding part of this judgment. VO1 [138] D1 took the position that it did not certify the entire sum claimed by the Plaintiff i.e. RM935,960.75 as the 2nd PTP test carried out by the Plaintiff’s piling sub-contractor failed structurally (see Interim Valuation No. 16 dated 24.5.2019 at p 125, B6). [139] Upon failure of the 2nd PTP test, D1’s consultant had notified the Plaintiff that a replacement test pile had to be carried out by the Plaintiff at its own cost and time. This is in line with the Specifications as agreed by the parties (see the Specification which was prepared by the Civil and Structural Engineer at p 170, B2; the letter from Meinhardt to the Plaintiff dated 15.8.2018 at p 58, B12; and the Engineer’s Instruction No. 006 dated 9.10.2018 at p 128, B12). [140] In addition, the documents exhibited by the Plaintiff to show alleged piling work done, were not approved or certified by D1 or its consultants (see pp 147, 151, 154, 163, 178, 180, 182 - 184, 187, 238, 254 and 271, B16 and p 6, B17). [141] Mr. Sanjay Mohan argued for the Plaintiff that there is no basis for the sum of RM392,592.55 not to be certified by D1 as the issue is one of quantum rather than the Plaintiff did not carry out the work. [142] However, upon scrutinising the documents referred to by D1, I am of the view that D1’s justification is sound and I accepted its submission that, at best, the quantum for VO1 should be for the sum of RM543,368.20 as per Interim Valuation No. 16. VO5 [143] VO5 was initially certified at RM2,029,332.00. However, in Interim Valuation No. 16, VO5 was assessed and certified as nil by D1 because –

all sheet piles were not on site;

there was no Engineer’s Instruction for outlet sump for drain diversion from Meinhardt; and

there was no inspection of work whereby the as-built drawing was submitted but there was no confirmation yet. [144] Furthermore, according to D1, the work done based on the design of the drain diversion for outskirt of site perimeter was not approved by the Architect. D1 did not provide the as-built drawing and this led to D1 being unable to certify the work which was performed by the Plaintiff (see Interim Valuation No. 16 at p 131, B6). [145] The Plaintiff’s claim encompassed materials as well. D1 contended that the Plaintiff was not entitled to the same due to the removal of the materials from the project site (see D1’s letter to the Architect dated 22.4.2019). The Plaintiff undid its works and dismantled the structures, reinstating the land back to its original state. [146] PW2 testified during cross-examination that materials such as sheet piles were removed by the subcontractor as the subcontractor was not paid. PW2 also said that the Plaintiff had dismantled the materials at the project site due to non-payment. PW2 could not confirm to whom the materials which were removed belonged to and whether they have been certified. There is evidence that the materials were removed from the project site to the GS06 LRT 3 project site, a project which the Plaintiff concurrently ran. [147] There was no serious challenge by the Plaintiff as regards D1’s evidence and submission. Hence, the Plaintiff’s claim for VO5 was rejected. VO7 to VO10 [148] D1 relied on the fact that there was no Architect’s Instruction (‘AI’) for the purported variation works claimed by the Plaintiff under VO7 to VO10. Pursuant to Clause 11.2 of the CoC, a valid variation instruction must be through an AI. [149] Clause 11.7 of the CoC additionally provides that the Plaintiff is entitled to claim for additional expenses incurred when a variation has caused or is likely to cause delay to its works, provided that –

written notice pertaining to an intention to claim such additional expenses together with an initial estimation of the claim has to be given to the Architect within 28 days from the date of the AI or Confirmation of AI giving rise to the claim; and

complete particulars of the claim for additional expenses together with all necessary calculations shall be forwarded by the Plaintiff to the Architect within 28 days from the date of completing the variation. Failure to do this means that the Plaintiff has waived its rights to additional expenses. [150] In this regard, the Plaintiff did not give any written notice of its intention to claim additional expenses. D1 cited the case of Usahasama SPNB- LTAT Sdn Bhd v. Abi Construction Sdn Bhd [2016] 7 CLJ 275 to support its stance that failure to issue a written notice, which is a condition precedent under Clause 11.7(a) of the CoC, correctly led to the rejection of the claims under VO7 to VO 10. [151] The Plaintiff acknowledged that no AI was issued but contended that there is evidence of the works being carried out. In oral submission, my attention was drawn to the Plaintiff’s Request For Work Inspection dated 30.11.2018 for inspection on lean concreting for PG7-13. Nevertheless, it was observed that there is a remark in the said Request that the claim is subject to approval by the Architect and QS. [152] Overall, I was persuaded by D1’s submission and hence, the Plaintiff’s claim for VO 7 to VO10 was accordingly not allowed. [153] In summation, the Plaintiff’s witnesses were not cross-examined regarding the claims for VO2, VO 3 and VO6. Therefore, I accepted the challenge by D1 against VO1, VO5 and VO7 to VO10 except that the sum of RM2,029,332.00 which was certified by the QS for VO5 was maintained. The amounts that were allowed for the VO claims are as follows: VO1 - RM 543,368.20 VO2 - RM 184,090.00 VO3 - RM 22,200.00 VO5 - RM2,029,332.00 VO6 - RM 1,570.00 Total = RM2,780,560.20 7th Issue (ITBT): Whether the Plaintiff is entitled to its claim for customised material in the sum of RM2,318,520.38 [154] The Plaintiff relied on the fact that D1 had certified the materials on site @ 75% for the sum of RM832,527.76 based on Interim Valuation No. 15 for the period ending 25.3.2019. To the Plaintiff, this signifies that D1 acknowledged that the materials on site @ 100% as at 25.3.2019 is in the sum of RM1,485,992.62. [155] The Plaintiff emphasised that it had provided customised material for the purpose of the Project in the sum of RM2,318,520.38 up to the date of termination and hence, the Plaintiff is entitled to the said sum. [156] I have perused the documentary evidence which was submitted by the Plaintiff to support its claim. This evidence consists of eight pages of the list of materials and some pictures. [157] In my considered view, the Plaintiff has not discharged the burden to prove this claim on a balance of probabilities as there was no evidence to establish that the materials were customised specifically for the Project; the Plaintiff has made full payment for the materials; D1 or its consultant has inspected the materials; and the materials remain at the project site. [158] In Interim Valuation No.16, the materials on site were valued at nil. In D1’s letter to the Plaintiff dated 19.6.2019, reference was made to the site meeting between the parties on 17.6.2019 where the Plaintiff’s representatives informed the intention to remove the remaining material on the site. D1 responded by stating that it will not certify any material on site claim by the Plaintiff in the latest Progress Claim. [159] In the circumstances, I was inclined to allow the Plaintiff’s claim for customised material in the sum of only RM832,527.76 i.e. the amount which was certified by the QS was maintained. 8th Issue (ITBT): Whether the Plaintiff is entitled to its claim for contractual interest in the sum of RM2,484,883.72 (calculated as at 24.7.2020) [160] The Plaintiff’s claim for contractual interest was for the delay in payment of Interim Certificate Nos. 3 to 15 (calculated as at 24.7.2020)

Interim Certificate No. 3

RM1,025,425.75 22.8.2018 –

11.2018 10,224.01 2.

RM378,218.17 16.9.2018 –

11.2018 4,280.59 3.

RM1,806,470.70 20.10.2018 –

1.2019 26,223.35

Interim Certificate No. 6

RM1,700,291.92 18.11.2018 –

7.2020 229,314.92 5.

RM2,323,520.14 15.12.2018 –

7.2020 286,346.80 6.

RM450,294.84 24.1.2019 –

7.2020 51.718.52 7.

RM946,942.55 17.2.2019 –

7.2020 103,997.64 8.

RM2,485,191.64 22.3.2019 –

7.2020 255,746.65 9.

RM2,709,789.66 21.4.2019 –

7.2020 261,821.36

Interim Certificate No. 12

RM4,394,618.37 19.5.2019 –

7.2020 398,820.65

Interim Certificate

RM3,735,013.97 14.6.2019 –

7.2020 318,606.92

Interim Certificate No. 14

RM2,494,337.00 21.7.2019 –

7.2020 193,430.71

Interim Certificate No. 15

RM4,790,043.03 17.8.2019 –

7.2020 344,351.60 2,484,883.72 [162] D1 submitted that the Plaintiff has no right to claim for contractual interest as there is no outstanding amount due and owing to the Plaintiff for the reasons as alluded to previously in this judgment, namely, the Plaintiff’s failure to maintain the PB and the agreement as to the Line of Credit. These reasons have been rejected by the Court. [163] D1 submitted in the alternative that, if the Court is of the view that the Plaintiff is entitled to contractual interest, the interest should be calculated up till 7.1.2019 only because there are no outstanding payments after this date as D1 would have been entitled to withhold a sum equivalent to the value of the PB. D1’s calculation is shown below: NO.

Interim Certificate

RM467,382.78 22.8.2018 –

11.2018 7,346.87

Interim Certificate

RM356,218.17 16.9.2018 –

11.2018 3,882.29

Interim Certificate

RM1,704,217.64 20.10.2018 –

1.2019 28,217.64

Interim Certificate

RM2,210,177.30 18.11.2018 –

1.2019 23,161.45

Interim Certificate

RM2,323,520.14 15.12.2018 –

1.2019 11,200.64 73,808.89 [164] In view of my earlier reasoning in rejecting D1’s contention on its right to withhold payment on the ground that is related to the PB issue, it naturally follows that there is no basis for the Plaintiff’s claim for contractual interest to be limited up until 7.1.2019 only. The entire claim of RM2,484,883.72 was therefore allowed. 9th Issue (ITBT): Whether the Plaintiff is entitled to its claim for Loss and Expense in the sum of RM9,000,000.00 [165] At the stage of written submission, the sum claimed by the Plaintiff for this item was RM7,208,021.21 for the alleged critical delay period between 18.12.2017 to 10.10.2018 (297 days) and 27.12.2018 to 11.3.2019 (75 days). [166] The Plaintiff’s claim was purportedly due to the following delay events: DELAY EVENT DELAY PERIOD EOT GRANTED DE No. 2: Delay due to Main Contractor not having received the confirmation of Design Specification and Test Method for Preliminary Test Pile (PTP) Works for ULT-1a and ULT-3 185 days (18.12.2017 to 10.10.2018) 36 days DE No. 15: Delay due to Main Contractor not having received in due time the necessary Piling Construction Drawings 149 days (2.5.2018 to 28.9.2018; concurrent with DE No. 2) - Notice of Delay for DE No.13: Delay due to default of payment 75 days (27.12.2018 to 12.3.2019) 75 days [167] The particulars for the Plaintiff’s claim for loss and expense in the sum of RM7,208,021.21 are as follows: DESCRIPTION Preliminary Cost: • Electricity (TNB) • Water (SYABAS) • Indah Water Consortium (IWK) • Site Security • Removal of construction debris / rubbish Subtotal 102,577.18 39,911.13 1,130.00 183,330.48 35,570.00 362,518.79 Overheat Cost: • Site staff’s salary, bonus and expenses • Rental of accommodation and vehicle Subtotal 4,815,263.92 660,552.51 5,475,816.43 Idling Cost for Plant and Equipment: • Rental of plant and machinery Subtotal 1,369,686.00 1,369,686.00 7,208,021.21 [168] Mr. Sanjay Mohan candidly admitted during the clarification session that this is not the Plaintiff’s strongest claim because some items are not corroborated and the conditions of the PAM Contract were not fulfilled. [169] I did not allow this claim for the primary reason of non-fulfilment of Clause 24.1 on “Loss and/or expense caused by matters affecting the regular progress of the Works” and Clause 24.3 on “Matters materially affecting the regular progress of the Works” of the CoC. The Plaintiff did not fulfill the condition precedent for a loss and expense claim under Clause 24.1 of CoC and that the loss and expense were caused by matters affecting the regular progress of the Works as stipulated in Clause 24.3 of the CoC. [170] Additionally, the Plaintiff failed to prove that the loss and expense claims were incurred solely for the Project and not for other matters unrelated to the Project. [171] In the upshot, the total amount of the Plaintiff’s claim that was allowed is as follows: RM37,694,650.97 RM 2,780,560.20 RM 832,527.76 RM 2,484,883.72 + RM43,792,622.65 and D1’s payment of RM5,514,760.20 has to be factored in. The Plaintiff’s claim against D1 was therefore allowed in the sum of RM38,277,862.45 with interest thereon at the rate of 5% per annum from 24.7.2020 until full settlement. CONCLUSION [172] Based on all the foregoing reasons, this Court made the order on liability and quantum as first set out in paragraph 4 above. Dated: 13 June 2025 (ALIZA SULAIMAN) Judge High Court in Malaya Kuala Lumpur Counsels/ Solicitors: For the Plaintiff: Sanjay Mohanasundram (Adam Lee Leong Soon with him) Messrs. Sanjay Mohan Advocates & Solicitors Unit 5.01, Level 5 WORK@Clearwater Jalan Changkat Semantan 50490 Kuala Lumpur For the 1st Defendant: Ravenesan a/l Sivanesan (Naveennesan a/l Sivanesan and Chau Yen Loong with him) Messrs. S Ravenesan Advocates & Solicitors No. 54-1 Jalan Telawi Bangsar Baru 59100 Kuala Lumpur For the 2nd & 3rd Defendants: Bryan Ho Jiann Yau (Siew Kai Hwei and Kimberly Ng Wenn Mei with him) Messrs. Ho Partnership Advocates & Solicitors Suite A-11-3A, Level 11, Plaza Taragon Kelana No. 3, Jalan SS 6/6 Kelana Jaya 47301 Petaling Jaya Selangor For the 4th Defendant: Nicholas Navaron Anak Chula Messrs. Izral Partnership Advocates & Solicitors 2nd Floor, Wisma Hamzah KH No. 1, Leboh Ampang 50100 Kuala Lumpur