Daya CMT Sdn Bhd v Yuk Tung Construction Sdn Bhd (22C-61-12/2015)

Lim Kim Chai and Low Thiam Herr are the common directors and common shareholders in all three companies. Pang Chee Meng is a director in YTL and the Defendant while Tan You Hock (“Gary Tan”) DW 6, the Group Managing Director of Yuk Tung Group and Wong Kai Cheong (“KC Wong”) DW 7, the Defendant’s Financial Controller, are the two other directors and shareholders in DKSB. In the words of learned counsel for the Defendant, Mr William Leong, the 3 companies operate in the form of a loose group of companies. They may be conveniently referred as companies in the Yuk Tung Group. [11] Following a tender exercise called by the Defendant wherein four tenderers participated including the Plaintiff, the Principal Subcontract was awarded to the Plaintiff for the construction and completion of the entire Works in the Project. Principal Subcontract [12] The documents constituting the Principal Subcontract are as follows: a. The Letter of Award dated 2.5.2012 (“the Letter of Award”); b. The Special Provisions to the Letter of Award (“the Special Provisions”); 6 c. The Government of Malaysia Standard Form of Contract to be used for Contract based on Drawings and Specifications - PWD Form 203 (Revised 10/83) with the Government of Malaysia’s standard amendments together with further amendments in Attachment A (“the Conditions”); d. The Appendix to the Conditions attached as Attachment B (“the Appendix”); and e. The form of Performance Bond attached as Attachment C (“the Performance Bond”). [13] The Principal Subcontract Price was RM270 million. The completion period was 30 months from site possession on 15.5.2012 until completion on 14.11.2014 (“the Original Completion Date”). The Liquidated and Ascertained Damages was stated as RM70,000.00 per day (“the Principal Subcontract LAD”). [14] It was a condition precedent of the Principal Subcontract that the Plaintiff was to provide the Defendant with a Performance Bond of RM13.5 million (“the Performance Bond”) and a corporate guarantee (“the Corporate Guarantee”) from Daya Materials Berhad (“DMB”), the Plaintiff’s parent company, to secure the Plaintiff’s due performance. The Plaintiff provided the Performance Bond and procured the Corporate Guarantee. 7

The Defendant was disappointed that in spite of their requests, DMB did not extend the Corporate Guarantee after the expiry of the Original Completion Date on 14.11.2014. [16] The Defendant had also retained RM13.5 million as security for payment of rectification works for the defect liability period (“the Retention Sum”). Problems [17] The Plaintiff submitted various Work Programmes in the execution of the Works. The Defendant perceived that the Plaintiff was falling back in the progress of their Works. The Plaintiff blamed it on the SO’s refusal to grant Extension of Time (“EOT”) for the requisite number of days applied for. There were 3 EOT Applications that are material for this Court’s consideration. [18] The Project was not completed by the Original Completion Date of 14.11.2015. The Consultants rejected EOT 1 for the reasons given, granted 23 days for delay to the mock-up units for the change in the pelmet ceiling design for EOT 2 and 20 days for the delay for piling due to existing obstructions for EOT 3 and rejected the other grounds in EOT 2 and 3. By 8 the Extended Completion Date of 27.12.2014 the Project was still not completed. [19] Any progress of Works past the Completion Date or Extended Completion Date is always very stressful, often with both sides blaming the other for the cause of the delay. As a way forward the parties were able to forget the past for a while and to forge ahead with the parties entering into a Supplemental Agreement dated 28.10.2014 to provide for sectional completion. [20] Chiefly a sectional completion would help the Plaintiff to focus on completion of Block A and podium works and that the Principal Subcontract LAD could be buffered such that for Section 1 for Block A and podium works, the Principal Subcontract LAD was fixed at RM30,000.00 per day. [21] As for Section 2 for Blocks B and C, the Principal Subcontract LAD was fixed at RM40,000.00 per day. The Defendant too would be able to fend off some claims for late delivery damages from purchasers who would claim against the Owner/Developer YTL who would in turn have to look to the Defendant for payment where contractual rights of the parties are concerned. [22] The Plaintiff handed over Section 1, Block A and the Podium to the Defendant on 22.10.2015. The Defendant narrated that delays in the 9 progress works for Blocks B and C continued to accumulate with strikes and work stoppages by the workmen and subcontractors becoming increasingly frequent. Other issues highlighted by the Defendant included delay in the installation of the third tower crane (“TC7”) and with no passenger hoist installed for Blocks B and C. The Defendant came to the grim conclusion that realistically the Plaintiff would not be able to complete the Project by 31.3.2016 as targeted by the Plaintiff. [23] Reality had to be confronted and the Defendant decided to bite the bullet and terminated the Principal Subcontract on 22.12.2015 on the ground that the Plaintiff had failed to regularly and diligently proceed with the Works. [24] They also called on the Performance Bond. The Plaintiff obtained an ex-parte injunction to restrain the payment out of the proceeds of the Bond. To cut the long story short, the injunction was dismissed after the inter-partes hearing and on an appeal by the Plaintiff to the Court of Appeal, the appeal was dismissed on 21.7.2016. See the case of Daya CMT Sdn Bhd v Yuk Tung Construction Sdn Bhd [2016] MLJU 352;[2016]1 LNS 649 and [2016] AMEJ 1487 where the arguments of the parties and the decision of this Court are fully set out. The sum of RM13.5 million was paid out to the Defendant which sum learned counsel for the Defendant candidly 10 accepted that it must be taken into the equation with respect to the claims of the parties herein. Prayers [25] The Plaintiff filed various heads of claim against the Defendant arising from what they asserted was a wrongful termination of the Principal Subcontract and raised a passel of issues. [26] They included damages and payments for Works and Variation Works done but not certified or under-certified and also for Goods and Services Tax that they had to incur because of the delay which they said were attributed to the Defendant not just in their failure to grant the requisite EOT but also in issuing various Architect’s Instructions and Variation Orders (“VOs”) after the Certificate of Non Completion (“CNC”) was issued. The Plaintiff contended that time had become at large and that the CNC issued was no longer valid and so the Plaintiff must be given a reasonable time to complete the Works. [27] The Defendant as expected, argued that the termination was lawful and so they claimed for damages being the additional costs incurred in engaging another Principal Subcontractor to complete the Works and also for LAD and some other ancillary claims including GST which they said 11 they would not have needed to pay if not for the delay caused by the Plaintiff. Principles Whether the Defendant’s rejection of the Plaintiff’s 3 EOT Applications other than an extension of 43 Days was reasonable and valid in the circumstances of the case [28] In dealing with an application for an EOT, one cannot ignore the operative parts of Clause 43 of the Conditions of the Principal Subcontract. Learned counsel for the Defendant, Mr William Leong, had helpfully teased out the 4 relevant requirements that the Plaintiff DCMT must meet as follows: a. That DCMT “upon it becoming reasonably apparent that the progress of the Works is delayed,” has forthwith given written notice of the causes of delay to the SO (“the Notice Requirement”); b. That an event named in paragraphs (a) to (k) of Clause 43 (“the Relevant Event”) has occurred (“the Relevant Event Requirement”); 12 c. That the Relevant Event is likely to cause the completion of the Works to be delayed or has been delayed beyond the Original Completion Date or beyond the Extended Completion Date (“the Causal Requirement”); and d. That DCMT has used its best endeavours to prevent delay and to do all that may reasonably be required to the satisfaction of the SO to proceed with the Works (“the Mitigation Requirement”). [29] Generally the Defendant and the Consultants would assume that the Plaintiff is proceeding regularly and diligently unless there is patent evidence to suggest otherwise. The principle of non-interference in the schedule of Works would apply. Therefore unless a formal Notice is given as soon as a cause of delay becomes apparent, the Defendant and the Consultants would be unable to effectively manage risks in the execution of the Works and the SO would be unable to manage and execute his duties regarding the certification of an appropriate extension of time. [30] I agree with the Defendant that a timeous Notice of Delay would help the Defendant and the Consultants to make an informed decision as to how the instruction is to be given or to be mitigated to reduce the effect of the Relevant Event or even to withdraw the instruction altogether. 13

Here the Plaintiff took Site possession on 15.5.2012 with work on the Caisson Wall commencing only on 6.9.2012 and completed on 8.7.2013; a period of 305 days. The EOT 1 was only applied for on 17.4.2013 (PBOD 45:1-58). [32] Learned counsel for the Defendant pointed out that the operative parts of Clause 43 are substantially similar to the PAM/ English JCT forms of contract. In London Borough of Merton v Stanley Hugh Leach Ltd [1986] 32 BLR 51 at pages 54-55 and 62, it was held that the giving of notice under the English JCT form of contract is not a condition precedent to the performance by the architect of his duties under the clause. [33] The failure of the contractor to notify the architect when it becomes reasonably apparent to him that the progress of the Works is delayed is a breach of contract. It is not fatal to the contractor’s entitlement to an extension of time but the architect can take this into account in assessing the extension of time. [34] In this respect, the contractor cannot benefit from his breach by receiving a greater extension than he will otherwise have had if the architect had received notice at the proper time and had been able to avoid or reduce the delay by some instruction. 14

The Defendant submitted that under the circumstances of the present case, the Plaintiff’s failure to comply with the Notice Requirement amounts to a waiver and gives rise to an estoppel against the Plaintiff claiming EOT in respect of the EOT applications and the alleged acts of prevention listed in Annexure B to the Statement of Claim (“SoC”) (“the Annexure B Events”). [36] While I heard what the Defendant was trying to say, I would not put too much weight on the delay in meeting the Notice Requirement and would rather proceed to the more substantive arguments below. With respect to the Relevant Event Requirement the Plaintiff had not satisfied the requirement of Clause 43(e) in: a. That the instruction was a variation under Clauses 5(a) (i) and 24; b. That the instruction was made in writing under Clause 5(c); and c. That the instruction was in respect of a modification to the design, quality or quantity of the Works as shown in the Contract Drawings or Specifications as defined in Clause 24

(b). 15 [37] The Plaintiff must further prove that the Relevant Event is the effective cause for the completion of the whole of the Works to be delayed beyond the Original Completion Date or Extended Completion Date. [38] The mere happening of the event is not good enough and the Contractor must be able to show the causal link (“The Causal Requirement”) between the event and the delay in the Works as was highlighted by Judge Seymour QC in The Royal Brompton Hospital National Health Service Trust v Hammond & Ors [2000] EWHC 39 Technology and Construction Court at paras [23], [31] and [32] and in particular at para [31] as follows: “[31] An issue which needs to be considered before addressing the claims made against WGI and PMI in detail is the question of the circumstances in which it is proper to grant an extension of time under clause 25 of the Standard Form. The answer, in my judgment, depends upon the proper construction of that clause. Leaving aside for a moment the authorities to which my attention has been drawn, particularly by Mr Taverner, as a matter of impression it would seem that there are two conditions which need to be satisfied before an extension of time can be granted, namely:- i. That a Relevant Event has occurred; and 16 ii. That that Relevant Event is likely to cause completion of the works as a whole to be delayed beyond the Completion Date then fixed under the contract, whether as a result of the original agreement between the contracting parties or as a result of the grant of a previous extension of time. This analysis does not strike me as particularly exciting or novel, but I felt that it was necessary at least to consider the question because it seemed to me that, in his submissions, Mr Taverner was rather glossing over the second element.” [39] The learned author Keith Pickavance in “Delay and Disruption in Construction Contracts” 4th Edition at page 783 propounded a helpful methodology in a three-part chain of causation to prove that the Relevant Event is the effective cause for the delay of the entire Works beyond the Completion Date. These are not separate causes but rather successive links in a single “chain”, all three of which are necessary to prove entitlement to an extension of time. [40] The first part is the Primary Causation which is the Occurrence of a Causal Event in that the Relevant Event has occurred. It is the identification of the nature of the causal event, the date upon which the event itself (“Initiation Date”) occurred and the initiation of the chain of 17 causation arising from it. This is necessary in order to undertake a meaningful cause and effect analysis. The Initiation Date will: a. dictate whether events happen sequentially, in parallel, or concurrently and assist in distinguishing the effect of one event from that of another; b. determine the calendar date after which an event can possibly have an effect; c. determine the commencement of time within which notice may be required to be given as a condition precedent to entitlement; and d. determine the time at which statutory limitation provisions commence. [41] See the case of Henry Boot Construction Ltd v Alstom Combined Cycles Ltd [2005] EWCA Civ 814 at [23], [24], [76]-[78]. The second part of the causation event is called the Secondary Causation and it is to show that the Relevant Event must have caused a Delay to the Progress of the Works. It is to identify the intention to start, or finish, whatever work that is in issue by a fixed point in time, prior to the completion date and to examine the state and progress of the Work at the Initiation Date. 18 [42] If the Relevant Event does not cause a delay to progress then the occurrence of the Relevant Event alone is generally of no consequence because it must follow logically that, if it does not cause delay to the progress of the Works, it cannot cause delay to the completion of the Works. [43] This is illustrated in the case of Leighton Contractors (Asia) v Stelux Holdings Ltd [2004] HKCFI 804 where the Hong Kong Court rejected an appeal from an arbitrator’s award. In that case the contractor alleged the developer had caused delay to progress by releasing tender information for mechanical, ventilation and air conditioning and electrical woks late in relation to the date it was required according to the contractor’s original planned schedule of work. [44] The arbitrator found that the information was indeed provided later than it should have been according to the original planned schedule, but such lateness could not have delayed the progress of works, and hence could not, at its lowest, have been “likely to delay completion of the works.” [45] The arbitrator found that, because of other delays for which it was not alleged the developer was responsible, on the date on which the information was originally planned to have been needed, the contractor was still involved in substructure works. 19 [46] Even by the time the information had been provided and the mechanical, ventilation and air conditioning and electrical subcontracts had been awarded, the contractor was only just ready to start (and had not commenced) construction of the basement slab, completion of which was a predecessor to the commencement of the works in question. [47] Reyes J in Leighton Contractors (Asia) v Stelux Holdings Ltd [2004] HKCFI 804 at [14]-[17] analysed astutely as follows: “14. Whether information is provided in “due time” or is “necessary” when requested can only be determined by reference to the state of the works at the time when information is requested or provided. Stelux’s late submission of information and potential delay to the 20 completion of the works. It is not enough for Leighton to show that information was provided late. Leighton must also show that, on the date (say) when the information ought originally to have been provided, delay to completion was “likely”. In the actual circumstances of the case, looking prospectively from the time of Stelux’s initial failure to provide information, Stelux’s failing could not be causative of delay. The late information could not cause actual delay, having regard to the state of the works at the time when the information ought to have been furnished originally.” [48] Then there is the Tertiary Causation which is to show the delay in the Progress of the Works must cause, or, at its lowest, be likely to cause a Delay to the Completion of the Works. [49] The Contractor must demonstrate not only that a measurable delay to progress has occurred as a result of the Relevant Event, but that the delay to progress is, at its lowest, likely to cause a delay to completion of the Works after the Completion Date. It is this, the quantifiable delay to the 21 completion of the Works after the Completion date, which forms the third link in the chain of causation. [50] The importance of proving actual causation for the delay in completing the entire works and the need to show that the Relevant Event falls on the critical path was explained with characteristic clarity in Hudson’s Building and Engineering Contracts, 13th Edition at page 780 paragraph [6-050] as follows: “An event causing delay will cause delay generally to one activity, occasionally more than one activity. This activity will be one task among many that the Contractor has to perform in order to complete the works. The assessment of extension of time involves the assessment of a delay to the completion of the whole of the works (or where sectional completion is provided for, to a section). The question therefore is whether the activity which has been delayed will cause delay to subsequent activities which will then lead to a delay to the completion of the whole. This assessment involves an identification of the so-called critical path, that is, whether the activity in delay and the subsequently affected activities lead through to a delay in the completion date. Activities which are on the critical path are usually referred to as critical activities. Activities 22 which are not are usually said to involve a period of float and are usually referred to as sub-critical activities, that is, an activity which will not come into the critical path until the period of float has been used up.” [51] See also the case of The Royal Brompton Hospital National Health Service (supra) at [23], [31] and [32] (TCC). The learned author of Hudson’s 13th Edition further explained at page 781 paragraph [6-051] as follows: “There may be any number of delays suffered on a project but many will not cause any critical delay, that is to say, delay which results in a delay to overall completion. Usually, it is only those events which cause critical delay to any activity on the critical path and hence cause critical delay to the project as a whole which are relevant to any assessment of the Contractor’s entitlement to an extension of time.” (emphasis added) The EOT 1 for 211 Days and later 238 Days: Whether the Caisson Wall is Not a Relevant Event or Causal Event [52] To begin with the Caisson Wall was a method of temporary works proposed by the Plaintiff after some delay from the date of site possession 23 for the Plaintiff was vacillating between a few proposals available to them. One would search in vain to find a written instruction on the Caisson Wall as it is not a variation to the Works but rather part of the Scope of Works of the Plaintiff. Neither is it Additional Work but necessary Work as forming part of the obligation of the Plaintiff to carry out as a means to construct and complete the permanent Works in the Project. [53] Here is where the context would clarify what may appear to be cloudy for the uninitiated. The site condition as shown in the photographs (DBOD 29:1-44) showed that the temporary works for shoring are required for the Northern Slope (supporting the Kuala Lumpur-Seremban Highway), the Western Slope next to the La Farge factory and the Eastern Slope, before the existing walls supporting the slopes can be demolished and the permanent works, a perimeter reinforced concrete wall (“the RC Wall”), can be constructed. [54] There was no modification to the tender drawings and specifications for the RC Wall that necessitated the construction of the Caisson Wall and therefore it cannot be part of Additional Work. [55] Whilst it is true that subsequently the Defendant agreed, at the suggestion of the Plaintiff, that the Caisson Wall would become a permanent work by replacing the RC Wall and that there was then no 24 necessity for the Plaintiff to construct a replacement RC Wall, that does not change the initial character of the Caisson Wall at the stage of commencement and completion. [56] Learned counsel for the Plaintiff, Mr Alan Wong, said that payment claims were made for the Caisson Wall and payments made under Variation Works. To be fair to the Plaintiff, once the suggestion was acceded to by the Defendant that the Caisson Wall will replace the RC Wall, it then had transformed itself from a temporary work to a Variation Work and the Plaintiff ought to be paid for this change in the character of the Caisson Wall. [57] The Plaintiff was fully conscious of the need to propose a suitable temporary shoring Work when it submitted the tender on 12.10.2011 to construct and complete the entire Works based on the tender documents, drawings and specifications in 30 months from the date of site possession on 15.5.2012. It was “a price inclusive” tender. [58] The Plaintiff had first proposed soil nailing and then by its letter dated 22.6.2012 had proposed the contiguous bore pile method (“CBP”). This CBP method was found not to be feasible because the boundary of the Site was on the Northern Slope. It was not possible to place the equipment and machinery required to carry out the CBP method unless the slope was cut 25 and back-filled to create a platform. This would have taken up a substantial portion of the Site. [59] The Plaintiff subsequently at the 15.8.2012 site meeting proposed the Caisson Wall as temporary works for the shoring of the Northern Slope. It is recorded in the minutes that the Plaintiff was to immediately mobilize the Caisson team to proceed with the Caisson works. [60] Thus works on the Caisson Wall commenced only on 6.9.2012; some 4 months after site possession and was completed only on 8.7.2013! This was over a period of 305 day. [61] For the Plaintiff to have submitted the EOT 1 on 17.4.2013 [PBOD 45: 1-58] for 211 days extension of time on the ground that the Caisson Wall and Ground Anchor Works are outside its scope of works is to completely miss the point. Perhaps with the audacity of hope the Plaintiff increased the claim to 238 days by its letter of 14.6.2013 [PBOD 45: 59- 775]. [62] The fact that the Caisson Wall Works proposed by the Plaintiff was temporary work as required to be proposed in the Tender Document submitted by the Plaintiff and clarified by the Defendant in its interview with the Plaintiff in the Tender Interview Meeting does not derogate from the fact that it is part of the Plaintiff’s scope of Works. 26 [63] In fact the agreement of the Defendant to the Plaintiff’s suggestion to convert the Caisson Wall to permanent works in substitution of the RC Wall would provide some breathing space to the Plaintiff as well as allowing the Plaintiff to catch up with lost time. DYGT, the Defendant’s Civil & Structural Engineering Consultant, by its 13.5.2013 letter, stated that the schedule for construction of the RC Wall was 138 days while the proposed Caisson Wall was scheduled to be completed in 82 days. [64] Therefore there was a real saving of 56 days (138 - 82 = 56). The Consultants also found the Caisson Wall itself did not cause delay to the overall progress of the Works. Rather the delay was caused by the Plaintiff’s poor coordination, insufficient manpower and machinery in constructing and completing the Caisson Wall. Therefore EOT 1 was rejected. [65] The Plaintiff appealed but the appeal was rejected as there were no fresh grounds furnished by the Plaintiff. [66] As pointed out by the Consultants the Plaintiff in the 27 July 2012 Programme had scheduled completing the temporary work in 64 days. The Consultants maintained that the actual completion by mid-2013 was due to the Plaintiff sheer incompetence and poor coordination, which this Court is inclined to believe. 27 [67] The Plaintiff argued that by their letter dated 15.2.2012 they had made it clear as follows: “Our revised tender price excludes any temporary works related to the construction of the retaining walls (such as Shoring, Temporary scaffolding, anchorage to wall and etc.)” [68] As pointed out by the Defendant the fact that the Plaintiff chose not to price the temporary works does not make the temporary works not a part of the Plaintiff’s scope of Works. [69] The Plaintiff is expected to act consistent with its tender bid submission on 12.10.2011 [DBOD 17:89], where the Plaintiff had expressly stated as follows: “We have priced our tender strictly in accordance to the instructions to Tenderers in full compliance to the specifications.” [70] I agree that the scope of Works under Clause 4 of the Conditions, pursuant to “the inclusive price principle” for the construction and completion of the RC Wall based on the tender drawings and specifications includes the temporary work for shoring the Northern Wall. [71] Clause 4 of the Conditions in the PWD Form 293 (Revised 10/83) incorporated into the Principal Subcontract provides as follows: “Scope of Contract 28 The Contractor shall upon and subject to these Conditions construct and complete the Works shown upon the Contract Drawings and described by or referred to in the Specification and in the Articles of Agreement and these Conditions in compliance therewith, using materials, goods and workmanship of the quality and standards therein specified.” (emphasis added) [72] I agree that the Contractor’s obligation to do the specified work nonetheless includes the obligation to do all ancillary work indispensably or contingently necessary to achieve completion, as opined by the learned author Lim Chong Fong (now Justice Lim Chong Fong) at page 21 of his book, “The Malaysian PWD Form of Construction Contract” 2nd Edition. [73] It cannot be gainsaid that the temporary work for the shoring of the slope is an ancillary work which is indispensably or contingently necessary to achieve completion of the permanent RC Wall for the Basement of Block B and ultimately the entire Project. [74] I agree with learned counsel for the Defendant that the principle that the Contractor’s obligation to do the specified work includes the obligation to do all ancillary work indispensably or contingently necessary to achieve completion which comprises temporary work required to construct and 29 complete the permanent work is a well-accepted principle since the House of Lords cases of Thorn v The Mayor and Commonalty of London Company v McElroy & Sons and Ors [1878] 3 App Case 1040 at pp 1054 and 1052. [75] Perhaps this passage from Hudson’s 11th Edition at pages 497-498 [Paragraph 4.039] would put the matter to rest: “Thus notwithstanding an omission to describe or refer to some part of the work in the technical documents, more generalised descriptions or obligations of the builder contained in the contract documentation as a whole may be interpreted as requiring additional work to be done for the contract price or prices as well as the specifically described work. Furthermore, no description, however meticulous, can be expected to descend to every last detail of building processes. It is a cardinal principle of construction, therefore, that in the absence of an expressed contrary intention, an obligation to do the described work for a price imports an obligation to do any essential and inevitable ancillary work or processes, whether 30 described or not, which are needed to produce the described work.” (emphasis added) [76] The learned doyen of Construction Law further observed with respect to temporary work that is contingently necessary to achieve completion as follows in Hudson’s 11th Edition at page 501 [Paragraph 4.043-4.044]: “It frequently occurs in practice, particularly in engineering contracts, that unexpected difficulties are encountered during construction which may not only necessitate a change from the expected method of working but in extreme cases may mean completion of the work, at least in strict accordance with the original design, is impossible. Effectively, therefore, a contractor who (as is almost invariably the case) expressly and impliedly undertake to complete the work or project according to the contract drawings and design, thereby impliedly warrants his ability to do so, and if he cannot will be liable for damages. In consequence, any additional work necessary to achieve completion must be carried out by him at his own expense if he is to discharge his liability under the contract, and will not qualify for additional payment as a variation even if he has been formally instructed to do the work in question.” (emphasis added) 31 [77] I agree with learned counsel for the Defendant these principles have been accepted and applied by the Malaysian Courts in PB Malaysia v Samudra (M) Sdn Bhd [2009] 7 MLJ 681; Pembinaan Teris Sepakat Sdn Bhd v Kumpulan Ikram Sdn Bhd & Anor (Mohd Rozi bin Salleh & Anor, third party) [2015] 10 MLJ 764 and KC Leong Holdings Sdn Bhd v Datin Moh Bee Ling [2015] 7 MLJ 10 at 18 paragraph [23]. [78] It is clear then that the default position is that temporary work is part of a contractor’s scope of work. I would go so far as saying that the contrary intention to the terms of the Original Tender Submission must be clear and unequivocal with respect to either excluding the temporary works from the Contract Sum and scope of Works or that the temporary works shall be treated as a Variation Order or Additional Work. [79] Absent that the Defendant here is entitled to interpret the said letter harmoniously with the Plaintiff’s Tender Submission and with what is general and approved practice and principle in construction contract where temporary works are concerned as in an interpretation consistent with commercial realities and common sense. [80] It is also quite telling that the Plaintiff proceeded to carry out the Caisson Wall works without obtaining the Defendant’s agreement on the costs. The Plaintiff stated in its letter of 16.10.2012 as follows: 32 “For your information, we have already proceeded with the said works so that the demolishing of existing structures can be completed without hindering the progress of the overall structural works.” [81] There is merit in the Defendant’s submission that if the Caisson Wall was not part of the Plaintiff’s Scope of Works and was Additional Work as alleged the Plaintiff would have proceeded under Clauses 5 and 43 to obtain written instruction and secure agreement on the loss and expense incurred by issuing the formal notice on the cost and time implications before proceeding. Very significantly this was not done. Instead the Plaintiff proceeded with the construction of the Caisson Wall without any agreement from the Defendant on the time and costs implications. The fact that the Plaintiff proceeded as they did is consistent with their knowledge that the temporary work is part of their obligation. [82] The Federal Court in SPM Membrane Switch Sdn Bhd v Kerajaan Negeri Selangor [2016] 1 MLJ 464 at 478-479 and in particular at page 485 paragraph [51] went on to add that in interpreting the contract, the court must approach it holistically and cited the case of Chamber Colliery Ltd v Twyecould [1915] ILC 268 as follows: “...the application of the well-known rule that a deed ought to be read as a whole, in order to ascertain the true meaning of its several 33 clauses; and that the words of each clause should be so interpreted as to bring them into harmony with the other provisions of the deed, if that interpretation does no violence to the meaning of which they are naturally susceptible.” [83] The Federal Court in SPM Membrane Switch (supra) at page 491 paragraph [78] held that in applying the principles of interpretation 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. [84] If further context are needed to give a clearer picture, one can go back to the interviews with the 4 tenderers that both KK Lay DW5 and Tan You Hock (“Gary Tan”) DW6 testified. They testified that upon receiving the 1st Tender Report from the QS, it was realised that the 4 tenderers had different methods for the shoring of the slopes and that it was difficult to compare the merits of each tender owing to the differing methods affecting the final tender price. [85] They then held tender interviews with each tenderer and requested them to submit a second revised tender excluding the price for the temporary shoring work for the Northern Slope but informing them that such temporary work remains within their scope of works. They both 34 testified that they had informed the Plaintiff’s CEO, Jimmy Liew, who agreed to the same. The evidence given by both KK Lay and Gary Tan are supported and corroborated by the 1st Tender Report and 2nd Tender Report. [86] Very unfortunately the principal of the QS firm, Mr Toh Seng Hon who prepared the 1st Tender Report and 2nd Tender Report passed away suddenly on 13.5.2017 before he could give evidence at the trial. Be that as it may, I agree with the Defendant that the 1st Tender Report and 2nd Tender Report were produced by him in the ordinary course of his practice and are contemporaneous documentary evidence that the tenderers submitted revised tenders to exclude price of the temporary shoring of the Northern Slope but which temporary work remains as part of the tenderers’ scope of work and responsibility. [87] I can accept the evidence of KK Lay DW5 when he said that the Tenderers were informed at the tender interviews that only the price for the temporary work for the shoring of the Northern Slope is to be excluded from the tender price and if the tenderers wish to exclude this temporary work from their scope they will have to expressly qualify this in the revised tender. 35 [88] The Plaintiff did not make any express qualification in the course of the tender process in the 15.2.2012 letter or in the later correspondences dated 9.3.2012 and 17.4.2012. Q&A 59 [DW5-WS]. Further Gary Tan DW6 testified that Tenderer No. 3 who excluded the temporary work from its scope of works was disqualified. [89] The Plaintiff did not call its former chief executive officer (“CEO”), Jimmy Liew to testify. PW1 Tham Jooi Loon (“Nathan Tham”) confirmed in cross-examination that the negotiations were conducted by the Plaintiff’s CEO, Jimmy Liew. [90] PW1 also admitted he has no personal knowledge of the discussions relating to the tender and the series of letters written by the CEO. PW1’s said that its human resource would be able to contact the previous CEO Jimmy Liew eventhough he had left the Plaintiff’s employ. [91] In the event that the Plaintiff want the Court to believe the temporary work in the Caisson Wall is excluded from the scope of Works, then they should call the said Jimmy Liew, failing which an adverse inference would be drawn against the Plaintiff under section 114(g) Evidence Act 1950. [92] On the balance of probabilities I would hold that the Plaintiff had not shown that the Caisson Wall being temporary work is Variation Work at the 36 time of construction or that it is Additional Works that justify the EOT 1 applied for. [93] The Plaintiff also sought to justify the application of EOT 1 on the ground of delay caused by 2 other Subcontractors which works the Plaintiff took over by way of a Novation Agreement. [94] The Defendant had stated in their Letters of Award to APG and SS Perkasa and in the Principal Subcontract that the subcontracts for the piling works with APG and demolition work with SS Perkasa were to be transferred to the Principal Subcontractor by way of a novation arrangement upon the appointment of the Principal Subcontractor. The Principal Subcontractor was in the Plaintiff and the Plaintiff accepted this in the Letter of Award dated 2.5.2012. [95] This novation was also recorded in the minutes of Site meeting No.1 held on 16.5.2012. The Novation Agreements for the APG Subcontract and the SS Perkasa Subcontract were both signed by the respective parties and both are dated 15.8.2012. [96] Whilst the Novation Agreements were formalized only on 15.8.2012 the piling works and demolition works were already made clear to the Plaintiff that they could take over and immediately carry on with APG and SS Perkasa where they had last left as site possession was already given 37 to the Plaintiff on 15.5.2012. For all intents and purposes an equitable Novation had already taken place even before the Novation Agreement was executed and formalized. [97] Thus there is no basis for saying that there was a delay from 15.5.2012 when site possession was given to the Plaintiff until 15.8.2012 of 3 months when the Novation Agreement was finally executed. In any event if there was such a delay, the 56 days savings when it was decided that the Caisson Wall be converted into the RC Wall was quite sufficient to address this delay if any. [98] The Plaintiff had engaged KL Geo to construct and complete the Caisson Wall in 5 months, that is, by 13.2.2013 when in their own 27 July Programme they had provided for completion of the temporary shoring work in 64 days. One would have expected them to have complied with Clause 43 on Mitigation Requirements by way of acceleration of the Caisson Wall works to catch up on the 4 months lost. [99] The Plaintiff had instead proposed a 992 Day Programme as an alternative to the 27 September Programme which was duly rejected by the Defendant as it exceeded the 900 days for completion. [100] KL Geo proved inadequate for the task and had only 24 people to do the work when they should use 55 people, which was the commitment 38 given by the Plaintiff, to finish in 64 days. At the rate that KL Geo was progressing with 24 people they would need 138 days. DW 4 in his Witness Statement stated that the actual number of caisson workers did not at any time reach 55. [Q&A 14.3 and 14.4 DW4-WS]. [101] As the method of constructing Caisson Wall involved hand-digging by manual workers in the silos provided, it is not rocket science to calculate the number of workers needed to complete the 28 Caisson Piles. [102] The caisson work daily records showed that in many days there were only 5 to 8 caisson workers. For example, on 24.11.2012 work was carried out on only one caisson pile and on 25.11.2012, two caisson piles. The number of caisson workers engaged by KL Geo from 13.9.2012 to 26.1.2013 is set out in Appendix B1 of the Architect’s witness statement [DW4-WS]. There are several days where there were zero workers, other days the number of caisson workers range from 5 to 17. [103] I agree with the Defendant’s expert, Garth Rodney Mccomb, that based upon the rate of construction indicated by the Plaintiff at 0.9 m/day with each pile approximately 20 m long, one pile would require around 22 days to construct. Assuming the Plaintiff planned to work on alternate piles (for safety and logistic reasons) and the Plaintiff planned to deploy 24 39 teams to work concurrently at any one time, the planned allowance of 44 days as indicated in the 27 July Programme seems entirely feasible. [104] Mr Mccomb said that based on the actual start date of 6 September 2012 and allowing for 46 days for completion of the caisson works as indicated in the 27 July Programme, the Plaintiff should have finished the caisson works by 21 October 2012. See Mccomb’s Expert Report paragraph 4.23 to 4.25. DW9-ER. [105] As opined by the Defendant’s expert Mr Mccomb, had this been achieved there should not have been any impact on the overall progress of the Block B works. I agree with Mr Mccomb’s conclusion that, even if these works are deemed to be Additional Works/ Variation Works, they should not have caused any delay to the overall programme and the SO was correct not to award any extension of time due to this issue. See Mr Mccomb’s Expert Report paragraphs 4.30 and 4.31. [106] There was clearly the problem of a lack of workers for the Caisson Wall works and a clear lack of coordination with respect to the execution of the works. This can be seen in the speedier progress achieved when a second Caisson Wall contractor CW Yap was engaged on 21.12.2012 by the Plaintiff to beef up the work and to catch up with speed; albeit rather 40 late in the day though better late than never. The commitment of 50 workers at site to do this work was not fulfilled. [107] Comparing the speed of KL Geo with that of CW Yap, and as highlighted by the Defendant, KL Geo took 170 calendar days from 13.9.2012 to 2.3.2013 to complete the excavation of 16 caisson piles. Work was carried out between 38 to 46 working days for each pile with no work done on many days. By comparison, CW Yap completed the excavation of 32 caisson piles also between 38 and 44 working days except that the work was completed in 45 calendar days. [108] As for the Plaintiff’s expert Mr Martin, he had proceeded on the basis that the temporary shoring work in the Caisson Wall was not part of the Plaintiff’s Scope of Work. He did not consider why based on the Plaintiff’s Method Statement the Caisson Wall could not have been completed in 64 days as stated in the 27 July Programme. [109] The lack of coordination and the failure to comply with the Programme submitted can be seen in the repeated directions and reminders recorded in the site meeting minutes and site memos issued to the Plaintiff to increase the manpower, machinery and co-ordination. The delay and lack of diligence can be seen from the daily records for the caisson works. 41 [110] There was also no basis for suggesting as the Plaintiff did, that there was a shortage of Caisson workers at that time when CW Yap, engaged by the Plaintiff did not have the problem with caisson workers and indeed managed to speed up the completion of the Caisson Wall. [111] When the delay in the construction of the Caisson Wall could have been avoided with accelerated work with more workers and better coordination, then surely the delay in the Caisson Wall Construction cannot be a Causal Event under Clause 43 that would support an EOT. [112] The Plaintiff also claimed for extension of time in EOT 1 based on the allegation it encountered rock in the course of excavating the caisson pile. The Plaintiff however failed to carry out the requisite test at the site in accordance with the agreed method statement. [113] The Plaintiff agreed that completely weathered rock shall be treated as soil with SPTN>100 and to be verified on site. As explained by DW3, rock or hard material must have a value greater than SPTN>100. SPTN refers to the Standard Penetration Test to the Value of N or the Standard Penetration Number or “the SPT Blowcount Value (N)”. I agree with the Defendant that the Plaintiff failed to prove it encountered rock. [114] The hitting of rocks was something that could have been avoided or at least worked around the problem if there had been proper site 42 investigation and inspection and if soil testing had been done. I agree that to construct a Caisson Wall without doing proper soil testing would be to take unreasonable risk of hitting for example a rock structure. [115] I can accept the evidence of DW 3 that the Defendant’s Consultant DYGT had informed the Plaintiff to obtain from their own professional engineer a new socket design if the caisson workers have encountered rock. [116] The Plaintiff did not obtain the fresh socket design from its professional engineer to cater for the presence of the rock as claimed. If the Plaintiff had encountered rock at a shallow depth as they claimed, it will no longer be necessary to dig into the hard rock to the original designed depth. [117] I agree with the Defendant that it would be a wasteful exercise to continue excavation to the original designed depth, if rock had indeed been encountered. The only reasonable inference that can be drawn arising from the Plaintiff’s professional engineer not issuing a fresh socket design for the caisson pile is that the soil was not rock. See Q&A 16.1, 16.2 and 16.3 DW3-WS. [118] Learned counsel for the Defendant referred to the case of Obrascon Huarte Lain SA v Her Majesty’s Attorney General for Gibraltar [2014] 43 EWHC 1028, where Akenhead J held the Government of Gibraltar was entitled to terminate the contractor for not proceeding diligently in the construction of a tunnel. [119] The Judge held that as experienced contractors, the contractor ought to have known of the site conditions and type of soil they would encounter on excavation from the SPTN blow counts in the course of carrying out the soil investigation for building the tunnel. The Judge held the contractor could not rely on the soil condition as an excuse for not proceeding diligently. [120] I am satisfied that encountering rock is not one of the matters listed in Clause 43 that would entitle the Plaintiff to an extension of time. I agree that it is the responsibility of the Plaintiff to carry out a site inspection in accordance with Clause 15 which also includes the soil investigation. That would enable the Plaintiff to design the caisson pile, based on the type of soil to be excavated as ascertained from the SPTN reading. It is for the Plaintiff to ensure necessary arrangements were made for the machinery, equipment and number of caisson workers appropriate for the soil conditions on the Northern Slope. 44 [121] For the Plaintiff to say that they were not able to use of the smaller pneumatic breaker is therefore not a ground for extension of time. They ought to have changed the equipment to a larger pneumatic breaker. [122] The Defendant had alerted the Court to a few shortcomings in Mr Martin’s Expert Report for the Plaintiff. Mr Martin had stated that the collapsed reinforced concrete wall was beyond the Plaintiff’s control and was not foreseeable when starting the caisson works. However factually that is not a correct. [123] The collapsed reinforced concrete wall referred to is the existing structure to be demolished. It had already collapsed before the tender. I can accept the fact that this was clearly visible to any one carrying out a site inspection as can be seen from the photographs of the collapse of the existing wall dated 6.11.2009. DBOD29: 7, 12, 13, 14, 16 and 29. [124] Mr Martin had also not considered that the encountering of rock, shortage of caisson workers and the condition of the existing structures holding the Northern Slope are matters entirely at the contractor’s risks. They do not entitle the Plaintiff to an extension of time. [125] He had also missed out on the daily caisson works records and makes no mention of the substantial number of days when no work was carried out by one or both of the subcontractors. 45 [126] PW1 Mr Nathan Tham agreed in cross-examination that by sending the 27 September Programme at 6.38pm and the alternative 992 Day Programme at 6.42pm, the Plaintiff was attempting to regain the lost time by submitting a master works programme exceeding the contractual period. I agree with the Defendant that there was no merit in the EOT Application on account of the Caisson Wall. EOT 2 for 411 Days : Whether the change in drawings for egress and ingress, alleged delay caused by APG and change in Ceiling Layout to include a Pelmet for Block A residential units were Relevant Events or Causal Events [127] EOT 2 was submitted on 17.4.2013 for an extension of 411 days on the following grounds:

210 days for alleged delay due to a change in construction drawings and upgrading works at the egress and ingress and additional works for a detention tank;

51 days for alleged delay due to the novation of the subcontract with the piling subcontractor, APG from the Defendant to the Plaintiff; 46

150 days for alleged delay due to changes to the ceiling layout design for Block A by incorporating a curtain pelmet recess. [128] After evaluating the reasons the Consultants granted 23 days extension for EOT 2 on account of the delay due to the change in the pelmet ceiling design. EOT 2 Ground 1 Realignment of Ingress and Egress [129] I find as a matter of fact that the late issuance of the drawings for the change in the egress and ingress is due to the Plaintiff’s delay in completing the utilities mapping. I agree with the Defendant that the issuance of the change in the drawings on 14.11. 2014 did not have a negative impact on the progress because the Plaintiff was not scheduled to carry out this portion of the Works until June 2015. [130] As explained, the Plaintiff was required to carry out the utilities mapping in order to submit to the Lembaga Lebuhraya Malaysia (“LLM”) for approval of the plans for the roadworks and drainage. The Plaintiff delayed by 325 days in carrying out and completing the utilities mapping from 24.12. 2013 to 14.11.2014. 47 [131] As narrated by the Defendant, DYGT repeatedly reminded the Plaintiff at the infrastructure meetings to carry out the utilities mapping but the Plaintiff failed to do so and only carried it out on 14.11.2014. [132] It was LLM’s prerogative, upon receipt of the utilities mapping, to decide not to move the existing utilities. LLM instead, exercised its discretion and required the roadworks and drainage to be shifted. DYGT then issued the new drawings for the realignment of the roads and drains in accordance with LLM requirements on 14.11.2014 and obtained LLM approval to the new plans on 26.11.2014. The change in the road and drain alignment did not cause delay to the Project Works. [133] Very significantly, the Plaintiff had not started work on these works in November 2014. The 27 September Programme had by this time been superseded by subsequent revised master work programmes and mitigation programmes. The Plaintiff had not even fixed the schedule for these Works to commence in November 2014 and they only commenced the relevant portion of the Works in June 2015. [134] KP Lee DW 3, DYGT’s Engineer, gave evidence that these are external infrastructure works and that they did not fall under the critical path because they are not related to the progress of the super structure. DYGT 48 requested the Plaintiff to provide information to substantiate its claim that the works fell under critical path but the Plaintiff had not been able to do so. [135] I can accept the evidence of the Defendant’s expert, Mr Mccomb, who in his time impact analysis of EOT 2 Part A, (Realignment of Drains and Egress and Ingress) said that the Plaintiff did not submit any information relating to the ongoing main building works (Blocks A, B and C) which he believed would have been more critical than the external works at this stage. [136] He noted that by December 2015 the structural works to Blocks B and C had still not been completed therefore these alleged delays to the external works would not have been critical and would not have had an impact on the actual overall completion date. See Paragraph 5.11 of the Defendant’s Expert Report (“DER”). [137] The Plaintiff’s expert, Mr Martin, did not consider the actual situation and state of the activities with regard to the works on Blocks A, B and C at the time the revised drawings were issued. As highlighted by the Defendant, Mr. Martin’s reference that the design changes were required by the Local Authorities and therefore out of the Plaintiff’s control, failed to take into account why in the first place, there was the unexplained delay in the Plaintiff completing the utilities mapping upon which the Local 49 Authorities acted. See Paragraph 3.3.5.1 page 51 of the Plaintiff’s expert report (“PER”). EOT 2: Ground 2 Delay Caused by APG [138] The Plaintiff had applied for 51 Days EOT on the ground that APG had delayed the piling works by 51 days when the said piling Subcontract was novated to the Plaintiff. However that delay was based on APG’s Programme that was used prior to the appointment of the Plaintiff. The Architect had directed the Plaintiff to submit another report based on the Plaintiff’s revised Master Work Programme. [139] At the next Site Meeting No. 10 held on 18.7.2012 it can be seen that the overall progress (financial) schedule was 1.61%, actual 1.93% and the variance is positive 0.33%. There was thus no delay pursuant to the Plaintiff’s revised master programme. See DBOD 9:3201 at page 3202.This positive variance improved with Site Meeting No.11 held on 25.7.2012. The overall works progress (financial) under schedule 1.94%, actual 2.24%, variance +0.31% and ahead by +3 days. See Site Meeting No.11 Minutes held on 25.7.2012 at DBOD 9:3204 at page 3205. [140] It cannot be disputed that according to the Plaintiff’s approved 27 September Programme that begins from the date of site possession, 50

15.5.2012, the piling works were scheduled to start from 16.5. 2012. In a very real sense the Plaintiff took the benefit of 51% of the piling work having been completed as at 16.5.2012 by APG with 100% completion for Zones 1, 2, 3 and 4 and Zone 5 to start on 10 October 2012 (which is a deliberate decision by the Plaintiff to continue the Zone 5 as a temporary access to the Site). [141] I can follow the Defendant’s argument that the APG programme and delay under that programme is not carried forward into the 27 September Programme of the Plaintiff and therefore is completely irrelevant to the Plaintiff’s progress of the Works under the 27 September Programme. [142] The Plaintiff’s programme commences from the date of site possession on 15.5.2012 with completion by the Original Completion Date of 14.11.2014; the full 900 day Contractual Period. I agree that any delay under the APG programme is irrelevant to the Plaintiff’s programme and did not affect its progress Works, as the Plaintiff had begun afresh on a clean slate. [143] There is yet another reason why there is no basis for an EOT on this ground. It is because both APG and the Defendant with the consent of the Plaintiff, had agreed in the Novation Agreement that APG and the Defendant shall have no claims against the other in respect of the 51 subcontract prior to the date of the Novation Agreement. Both APG and the Defendant had released each other from any claim for delay under Clause 3.1 APG Novation Agreement PBOD1:95 at page 96. [144] I agree with the Defendant’s submission that under section 63 of the Contracts Act 1950, the effect of a novation is that the original contract need not be performed. [145] The Plaintiff entered into the novation agreement knowing full well the effect of the Clause 3.1 is that the Defendant and APG had mutually released each other of any liabilities under the original subcontract and therefore any claims for delay have been released. Salleh Abas LP in Lyl Hooker Sdn Bhd v Tevanaigam Savisthri & Anor [1987] 2 MLJ 52, at p 53 explained 'novation' as follows: “Novation is a new contract. It extinguishes rights and obligations under the old contract for which the new contract is made. Being a new contract, there must be consent by all parties and there must be consideration, and rights and obligations under it are not those transferred from the old contract which is already extinguished (see Chitty on Contract, Vol 1, (1983 Ed), at paras 1315–1316).” 52 [146] Likewise in Polygram Records Sdn Bhd v The Search & Anor [1994] 3 MLJ 127 Justice Visu Sinnadurai J. (as he then was) set out the test to ascertain whether the old contracts is extinguished: “Section 63 is not limited in its scope to novation as it is understood under English Law alone, but also covers situations where the parties have rescinded the earlier contract, by substituting a new one. If there is an intention on the part of both the parties to substitute a new contract, the old need not be performed, even if the new merely alters certain terms of the old. The test basically is this: if a new contract is entered into by the parties, whatever its terms, the old contract is extinguished. It does not, however, cover a situation where the terms of the old contract are merely altered or varied, without a new contract in substitution of it being entered into. In such a case, the old contract, as altered or varied, remains in force.” (emphasis added) [147] I agree with the Defendant that this claim for an EOT lacks merits. EOT 2: Ground 3 Changes in Ceiling Layout in the Pelmet Recess [148] The Plaintiff had claimed for 150 days extension of time based on the above ground whereas the Consultants had granted 23 days for the mock- 53 up units which were in Level 8. The car parks are at the levels below and the delay in constructing the mock-ups was due to the Progress delay in completing the Works below Level 8. [149] It is not disputed that the instructions to change the ceiling to include the pelmet was given orally in March 2014. The evidence from the minutes of the relevant Site Meetings was that the plaster ceiling with the pelmet were constructed between March and December 2014, immediately after the completion of the mock-up units. [150] I agree with the Defendant that the written instruction given by the Architect on 7.11.2014 was to formalize the oral instruction given in March 2014 which had already been acted upon by the Plaintiff. [151] The Architect had selected the mock-up units on 11.12.2013 and issued instructions to commence construction of the mock-up units on 19.12.2013. The plaster ceiling manufacturer issued a quotation to the Plaintiff with the exact pelmet measurements on 19.12.2013. The plaster ceiling manufacturer’s quotation for pelmet recess dated 19.12.2013 is at PBOD75:211 and the relevant Minutes are at Item 6.4 Minutes of Site Meeting No. 63 11.12.2013 [DBOD 8:3016] and Item 6.4 Minutes of Site Meeting No. 64 19.12.2013 [DBOD 8:3020]. 54 [152] Generally documents and photographs would help to refresh one’s memory in case there are lapses of it. The Architect had referred to the photographs in the Progress Reports to show the plaster ceiling with the pelmet had already been installed in the mock-up units in March 2014. More importantly, the typical units from March onwards before the 7.11.2014 formal instruction was issued had already been installed with the pelmet. [153] As this had been vigorously denied by the Plaintiff, the Defendant had referred the Court’s attention to the following to dispel any doubts: a. Photographs of the plaster ceiling with pelmet installed in the mock-up units taken on 2.3.2014 in the March 2014 Progress Report. PBOD15:246; b. Photographs of the plaster ceiling with pelmets installed in the typical in the June 2014 Progress Report. PBOD21:40; c. Photographs of the plaster ceiling with pelmet installed in Zone 3 Level 12 on 6.9.2014. PBOD21:90; d. Photographs of the ceiling works with the pelmet in the typical units in the October 2014 Progress Report. PBOD21:150. [154] Conspicuous by its absence is that there is no record of any installation of plaster ceilings to the residential units in Block A after 55 December 2014. There is also no record of any hacking of the ceilings or re-installation of the ceiling with pelmet recess after the written instruction of 7.11.2014 or any re-installation at all. [155] Very tellingly, the Plaintiff had failed to produce evidence of work to remove the plaster ceilings to the residential units and the installation of new plaster ceilings with the pelmet recess for the period of 150 days after the written instruction dated 7.11.2014 was issued. The inescapable conclusion is that no such work was carried out for 150 days as claimed. It reinforces the fact that the installation of the plaster ceiling with the pelmet had been carried out from March 2014 to December 2014. [156] The claim for 150 days extension from 7.11.2014 is devoid of merits other than the 23 days granted for the mock-up units. EOT 3: Piling Works and Existing Structure Obstructions [157] The Plaintiff had claimed for an extension of 118 days in EOT 3 for obstruction to the piling works by existing structures. The Consultants granted 20 days. The Plaintiff had failed to provide any evidence on the delay caused by the existing structures to the piling works. [158] DYGT on their own accord went through the daily piling records and calculated that the total delay caused by the existing structures is 20 days. I 56 agree with the Defendant that the indisputable contemporaneous records show that the delay was only 20 days consisting of the following: a. 14 days due to the obstruction of piles as set forth in the summary of the daily records. The total number of hours is 112 hours; b. 6 days due to the re-design of the pile caps and additional piles (19 numbers of extra piles) with the working rate of 3 piles a day with 2 machines. See Q&A 50, 51.1, 51.2 and 52 [DW3- WS] [159] DW3 had produced a summary based on the daily piling records setting forth the pile number, the date and time and duration of the delay caused by each of the obstruction. See Q&A51.2 [DW3-WS] [160] The summary of piling delay due to existing structure obstruction is found in DBOD 25:5949-5958. The daily piling reports are in DBOD 25:5959-6220 and the piling records DBOD 25:6221-6722. There is no evidence to show how the existing structures delayed the piling works for 118 days as claimed by the Plaintiff. [161] Taken as a whole, the Plaintiff had failed to prove the facts and produced evidence to show that the Relevant Event had occurred for the 3 57 EOTs applied for other than the extension of 23 days for EOT 2 and 20 days for EOT 3 which the Defendant had granted. [162] The Plaintiff had also failed to prove that the event is a Causal Event in that it had delayed the progress of the Works and caused the Works to be delayed beyond the Completion Date other than the extension of 43 days that the Defendant had granted. [163] I am satisfied on the balance of probabilities that the Defendant had produced facts and evidence to show that the alleged events are not Relevant Events, that upon an examination of the activities at the material time, the events did not cause delay to the progress of the Works and did not cause delay to the entire Project Works beyond the Original Completion Date or Extended Completion Date. Whether there were other events of delay referred to in Annexure B to the SoC that would justify an extension of time under the Prevention Principle [164] Aside from EOT No. 1, 2 and 3, the Plaintiff argued that there were other events of delay also contributing to the overall delay in the progress of the Project which are referred to in Annexure B to the SoC. [165] The Plaintiff claimed that the 32 events described in Annexure B entitled them to an extension of 338 days for Section 1 and 637 days for 58 Section 2 (“the Annexure B Events”), relying on the application of the Prevention Principle. [166] However the Prevention Principle is generally inapplicable in the presence of Clause 43 of the Conditions of Contract that allows for a justifiable EOT in the event the Plaintiff could show a Relevant Event and Causal Event. [167] I agree with the Defendant that the Plaintiff cannot invoke the Prevention Principle because the Annexure B Events are expressly covered under paragraphs (a) to (k) of Clause 43. As pointed out by the Defendant, the Plaintiff had applied for extension of time in respect of 11 of the Annexure B Events in EOT 1, 2, 3 and 4 for which those claims were dismissed on the grounds given above other than the 43 days allowed for. [168] The Plaintiff did not apply for extension of time in respect of the remaining 21 Annexure B Events under Clause 43 and they did not give the required notice in accordance with Clause 43 when the instructions were given nor at any time during the currency of the Project. [169] It would be fair to say that the Defendant only learned of these claims when served with the Statement of Claim filed on 6 June 2016. [170] Essentially under the “Prevention Principle” a party cannot insist on the performance of a contractual obligation by the other if it is itself the 59 cause of the non-performance. Where the Prevention Principle is brought into operation, the employer cannot require the contractor to complete by the date nominated in the contract and if the contract does not allow the employer to fix an extended completion date by granting extension of time, then time is ‘at large’ and the only obligation on the contractor is then to complete the works within a reasonable time. [171] See Hudson’s Building and Engineering Contracts 13th Edition paragraph 6-025 page 738: “It is well settled that in building contracts when there is a stipulation for work to be done in a limited time, if one party by his conduct-which may be quite legitimate conduct, such as ordering extra work-renders it impossible or impracticable for the other party to do his work within the stipulated time, then the one whose conduct caused the trouble can no longer insist on strict adherence to the time stated. In those circumstances, he cannot claim any penalties or liquidated damages for non-completion in that time.”- The House of Lords expressly approving the passage in the judgment of Lord Denning MR in the Court of Appeal in Trollope & Colls v NW Metropolitan Regional Hospital Board [1973] 2 All ER 260. 60 [172] I agree that the Prevention Principle will not apply if the extension of time clause allows for extension of time to cover the employer’s acts or defaults, as observed by Salmond LJ in Peak Construction (Liverpool) v McKinney Foundations Ltd (1970) 1 BLR 111 at 121 “... if there is a clause which provides for extension of the contractor’s time in circumstances which happen, and if the appropriate extension is certified by the architect, the delay due to the fault of the Contractor is disentangled from that due to the fault of the employer and the date is fixed from which the liquidated damages can be calculated.” [173] Learned counsel for the Defendant also referred to the dicta of Judge Jackson in Multiplex Construction (UK) Limited v Honeywell Control Systems Ltd (No.2) [2007] EWHC 447 (TCC) as follows: “[47] ...The essence of the prevention principle is that the promisee cannot insist upon the performance of an obligation which he has prevented the promisor from performing. [48] In the field of construction law, one consequence of the prevention principle is that the employer cannot hold the contractor to a specified completion date, if the employer has by act or omission prevented the contractor from completing by that date. Instead, time becomes at large and the obligation to complete by the specified date 61 is replaced by an implied obligation to complete within a reasonable time. The same principle applies as between main contractor and sub-contractor. [49] It is in order to avoid the operation of the prevention principle that many construction contracts and sub-contracts include provisions for extension of time. Thus, it can be seen that extension of time clauses exist for the protection of both parties to a construction contract or sub-contract.” (emphasis added) [174] Apparently the Plaintiff’s contention that the Prevention Principle may be invoked even when they have not exercised their contractual right to claim under the extension of time clause is an argument that was raised in the Northern Territory of Australia’s case of Gaymark Investments Pty Limited v Walter Construction Group Limited [1999] NTSC 143 which is that by not giving notice under the extension of time clause the prevention principle is resurrected or re-engaged. [175] I agree with the Defendant that the Courts in Australia, Scotland and England have declined to follow the Gaymark decision because it will allow the contractor to negate his contractual commitments and with impunity set time at large. 62 [176] The research of learned counsel for the Defendant led him to say with some air of confidence that that the Gaymark decision is a departure from an earlier Australian decision in Turner Corporation Limited (receiver and manager appointed) v Austotel Pty Limited 1997 13 BCL 378 12 where the Court held that the contractor cannot invoke the Prevention Principle where the contractor did not apply for extension under the extension of time clause. Cole J observed as follows: “If the Builder, having a right to claim an extension of time fails to do so, it cannot claim that the act of prevention which would have entitled it to an extension of time for Practical Completion resulted in its inability to complete by that time. A party to a contract cannot rely upon preventing conduct of the other party where it failed to exercise a contractual right which would have negated the effect of that preventing conduct.” (emphasis added) [177] Learned counsel for the Defendant highlighted that the Gaymark decision was not followed in the later New South Wales Court of Appeal decision in Peninsula Balmain Pty Limited v Abigroup Contractors Pty Limited [2002] NSWCA 211: “[78] I accept that, in the absence of the Superintendent’s power to extend time even if a claim had not been made within time, Abigroup 63 (the contractor) would be precluded from the benefit of an extension of time and liable for liquidated damages, even if delay had been caused by variations required by Peninsula and thus within the so-called “prevention principle”. I think this does follow from the two Turner cases and the article by Mr Wallace referred to by Mr Rudge.” [178] Learned counsel for the Defendant further pointed out that in Scotland in the Second Division of the Inner House of Court Session in City Inn Limited v Shepard Construction Limited 2003 SLT 885, the employer contended that the contractor was not entitled to any extension of time because the contractor had not complied with clause 13.8 of the contract in relation to notices. The court held that the contractor could not obtain extension of time if it did not comply with the notice provision. [179] Likewise the Courts in England declined to follow the Gaymark decision. In Multiplex Construction (UK) Limited v Honeywell Control Systems Ltd (No.2) [2007] EWHC 447 (TCC) [100], Judge Jackson concurred with the late Ian Duncan Wallace QC that the Gaymark decision extends the Prevention Principle theory too far. Jackson J in Multiplex summed up the position in his judgment as follows: “[103] I am bound to say that I see considerable force in Professor Wallace’ criticisms of Gaymark. I also see considerable force in the 64 reasoning of the Australian courts in Turner and in Peninsula and in the reasoning of the Inner House in City Inn. Whatever may be the law of the Northern Territory of Australia, I have considerable doubt that Gaymark represents the law of England. Contractual terms requiring a contractor to give prompt notice of delay serve a valuable purpose; such notice enables matters to be investigated while they are still current. Furthermore, such notice sometimes gives the employer the opportunity to withdraw instructions when financial consequences become apparent. If Gaymark is good law, then a contractor could disregard with impunity any provision making proper notice a condition precedent. At his option the contractor could set time at large.” (emphasis added) [180] Even if on the surface there appears to be “concurrent events” of delay advanced by the Contractor, one must not cop out from determining which is the overriding event of delay as can be seen in the dicta of Coulson J in Jerram Falkus Construction Ltd v Fenice Investments Inc [2011] EWHC 1935 at [50] (TCC) as follows: “If there were two concurrent causes of delay, one which was the contractor’s responsibility, and one which was said to trigger the prevention principle, the principle would not in fact be triggered 65 because the contractor could not show that the employer’s conduct made it impossible for him to complete within the stipulated time. The existence of a delay for which the contractor is responsible, covering the same period of delay which was caused by an act of prevention, would mean that the employer had not prevented actual completion. Throughout his analysis, Hamblen J stressed that the importance of the contractor proving the delay to the actual progress of the work as a result of the alleged act of prevention.” [181] I would prefer the above approach as it is consistent with the understanding of the Relevant Event and Causal Event. Learned counsel for the Plaintiff, Mr P Gananathan, had sought to persuade this Court to adopt the approach taken by Dyson J in Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd (1999) 70 ConLR 32 as follows: “13. Second, it is agreed that if there are two (2) concurrent causes of delay, one of which is a relevant event, and the other is not, then the contractor is entitled to an extension of time for the period of delay caused by the relevant event notwithstanding the concurrence of the other event. Thus, to take a simple example, if no work is possible on a site for a week not only because of exceptionally inclement weather (a relevant event), but also because the contractor has a shortage of 66 labour (not a relevant event), and if the failure to work during that week is likely to delay the works beyond the completion date by one week, then if he considers it fair and reasonable to do so, the architect is required to grant an extension of time of one week. He cannot refuse to do so on the grounds that the delay would have occurred in any event by reason of the shortage of labour.” [182] The above case can be distinguished as in the example given, it is clear that even if one has no labour shortage, one still could not proceed with the works because of exceptionally inclement weather. The weather was not the fault of the Contractor as it was clearly an independent event over which the Contractor had no control. [183] In the light of the preponderance of cases espousing that the Prevention Principle does not apply when there is an express clause governing extension of time, I would likewise dismiss the Plaintiff’s argument that the Annexure B Events had engaged the Prevention Principle to set time at large. Whether the CNCs were validly issued for the purpose of imposing the LADs for delay in Sectional Completion for Section 1 and Section 2 67 [184] Having held that the 3 EOTs applied were reasonably considered by the Defendant with the rejection of EOT 1 and the granting of a total of 43 day’s for EOT 2 and EOT 3, the question is whether the CNC was validly issued. [185] After the Consultants’ rejection of EOT 1, the Architect issued a CNC on 15.11.2014 (“the 1st CNC”) that the Project was not completed by 14.11.2014 (“the Original Completion Date”). Following the grant of 43 days for EOT 2 and 3, the Architect issued a second CNC dated 28.12.2014 (“the 2nd CNC”) that the Project was not completed by 27.12.2014 (“Extended Completion Date”). [186] The Plaintiff argued that the 1st CNC and 2nd CNC were not validly issued as they were issued by the Architect instead of by the SO named under the Principal Subcontract. I do not find any merits in this argument as the Plaintiff had been dealing with the Architect for their applications for EOTs and their various appeals. The SO is deemed to have delegated that duty to the Architect who being a professional, is in a better position to independently apply his mind to the issue of delay and the need to issue a CNC for otherwise time would have become at large. 68 [187] The Architect DW3 himself testified that he had been delegated the authority of the SO by the Defendant and as this is an internal matter which the Defendant is not disputing. [188] I see no basis for the Plaintiff to question the authority of the Architect here to issue the CNC. The Plaintiff is also estopped from contending that the named SO cannot delegate that authority to the Architect for the Project as the Plaintiff had been dealing with the Architect where issues of EOTs were concerned and also with respect to instructions, directions and various variations and additional works on the ground. [189] The Plaintiff had very plainly accepted the Architect and the Consultants namely the QS, DYGT and GACE as the SO’s representatives as they were so described in the Principal Subcontract. The Plaintiff had even accepted the Consultants’ instructions, Payment Certificates and valuations as having been given under the power and authority of the SO. [190] The fact that there is no written delegation of authority, a copy of which is to be given to the Plaintiff, as required under Clause 2 of the Conditions of Contract, cannot detract from the acceptance by the Plaintiff of the Architect’s delegated authority and the Plaintiff cannot now resile from that position. 69 [191] Having no problem accepting the numerous written and oral instructions from the Architect and liaising with the Architect with respect to the various aspects of the execution of the Project especially with respect to 3 EOTs Applications, it appears rather incongruent and inconsistent for the Plaintiff to insist now that the CNC can only be issued by the SO and not by the Architect of the Project. [192] The Plaintiff had also not objected to the Architect issuing the 1st CNC and the 2nd CNC on ground that they did not recognize the authority of the Architect to do so. The Plaintiff is deemed to have recognized the authority of the Architect to so issue the CNCs in question as they had for the most part been dealing with him where matters of EOTs applications and appeals are concerned. [193] Indeed the Plaintiff is estopped from raising this objection to the Architect’s authority to issue the CNCs. See the case of Boustead Trading FC. [194] At any rate, in the abundance of caution, the SO had on 21.10.2015 issued a CNC confirming the Architect’s certification that the Project was not completed by the Extended Completion Date of 27.12.2014 (“the SO CNC”). This was necessitated too by the repeated requests from the 70 Plaintiff to the Consultants to review the rejection of the EOTs and the Defendant and the Consultants had informed the Plaintiff that unless the Plaintiff could furnish fresh grounds, their decisions stand. [195] I would hold that the CNCs issued were validly issued and that the Plaintiff had not been prejudiced by it for the Extended Completion Date had become due and the Works had not been completed. [196] Arising out of the delay that was already apparent, the parties entered into a Supplemental Agreement dated 28.10.2014 to provide for sectional completion. To assist the Plaintiff it was provided that Section 1 shall cover Block A and podium works for which the Principal Subcontract LAD is RM30,000.00 per day. Section 2 shall be for Blocks B and C for which the Principal Subcontract LAD is RM40,000.00 per day. See the Supplemental Agreement [DBOD26:6738]. [197] That was to buffer the Plaintiff from the full impact of the LAD as originally provided for without a Sectional Completion of RM70,000.00 per day. It is an agreed fact that the Plaintiff completed and handed over Section 1, Block A and the Podium to the Defendant on 22.10.2015. [198] Meanwhile delays in the progress works for Blocks B and C deteriorated further. As narrated by the Defendant, strikes and work stoppages by the workmen and subcontractors became increasingly 71 frequent. Issues relating to machinery, such as delay in the installation of the third tower crane (“TC7”) and that passenger hoist had not been installed for Blocks B and C remained unresolved. [199] The Plaintiff’s representatives were recorded to have expressed at the Construction Progress Update Meeting No.26 held on 7.10.2015 that the Plaintiff would not be able to complete the Project by 31.3.2016. See the Construction Progress Update Meeting No.26 DBOD9:3324 [200] The Defendant terminated the Principal Subcontract on 22.12.2015 on the ground that the Plaintiff had failed to regularly and diligently proceed with the Works. [201] The question is whether the said termination was valid and lawful in the circumstances of the case. Whether the Termination of the Plaintiff by the Defendant on 22.12.2015 was valid on ground that the Plaintiff had failed to regularly and diligently proceed with the Works [202] It cannot be disputed that the Plaintiff did not complete the Project by the Completion Date of 14.11.2014 or the Extended Completion Date of 27.12.2014. This Court had earlier analyzed the evidence with respect to the 3 EOTs applied for and had found that the extension not given for EOT 72 1 and that given for EOT 2 and 3 were reasonable in the circumstances of the case. [203] The relevant CNCs having been issued, the 1st CNC on 15.11.2014 and the 2nd CNC on 28.12.2014, time does not become at large. The question is whether for the delay in completion past the Extended Completion Date the Defendant is entitled to terminate the Principal Subcontract on ground of the Plaintiff having failed to proceed regularly and diligently with the Works under Clause 51(a)(ii) of the Principal Subcontract. [204] The raw facts showed that as at the date of termination on 22.12.2015 (“Termination Date”) the total number of accumulative days delay as at the Termination Date was 359 days after allowing for the extension of time of 43 days. [205] It is pertinent to point out that as a result of the repeated delays, the Plaintiff issued revised works and mitigation programmes: a. By a letter dated 19.11.2013, the Plaintiff issued Construction