Excel M&E Sdn Bhd v Mujur Sepakat Sdn Bhd (CA-22C-1-08/2018)

The Plaintiffs in this suit has filed Enclosure

This Court allowed the Plaintiff’s claim against the Defendant for a total sum of RM9,214,991.48 with interest at the rate of 5% per annum and together with cost amounting to RM150,000.00. The Defendant’s counterclaim was dismissed.

Plaintiff was appointed by the Defendant who is the subcontractor to Zenith Aim Sdn Bhd (“Zenith Aim”) to carry out mechanical and electrical works in a mixed development known as Hotel Tower, Convention Hall and Office Tower on Lot 423, Sek 20 PN 5596, Kuantan Pahang Darul Makmur (“the development”).

The appointment of Plaintiff was via 4 letters of Award dated 29.5.2009 and 9.9.2009 (the LOA’s) which comprise of fire protection LOA, Electrical LOA, air conditioning and mechanical ventilation (ACMV) LOA and lightning protection LOA.

The LOA’s are build-only lump sum contracts. The contract prices stipulated in the LOAs arrived on the basis of the works determined by the Defendants in 2009.

The Hotel Tower and the Convention Hall were granted the Certificate of Completion and Compliance (“CCC”) on 22.12.2010 and the Office Tower was granted its CCC in or around 13.12.2011.

Thus, this claim was filed by the Plaintiff mainly because the Plaintiff believes that having completed the works under the 4 LOA’s the Plaintiff is entitled to the whole of contract prices to be paid on lump sum basis.

Besides the lump sum payment based on the 4 LOA’s, the Plaintiff is also claiming for variations order for the LOA’s and also prolongations cost due to the delay.

The Defendant on the other end has filed a counterclaim against the Plaintiff, where the Defendant believes that the Plaintiff is not entitled to the entire claim made simply because; 1) The Defendant had made full payment for the amount certified and due under all payment certificate issued for works done under the 4 LOA’s; 2) The Plaintiff is not entitled for payments for defective works that does not comply with the contract quality standards; 3) The Defendant has never instructed the Plaintiff to carry out any variation works under the LOA’s; 4) The Defendant has suffered losses, damages and cost due to Plaintiff’s Defaults and breaches of contract. MAIN ISSUES TO BE TRIED IS THE PLAINTIFF ENTITLED TO THE BALANCE LUMP SUM

A lump sum contract is a contract where the employer is liable to pay the contractor a fixed sum that has been agreed upon once all the work has been completed by the contractor. It is undisputed that the 4 LOA’s in this suit is a lump sum contract.

Thus, it is the duty of this court to decide whether the works under the 4 LOAs has been completed for the Plaintiff to be entitled of the balance lump sum payment under the 4 LOAs.

Mr. Yap who is the key witness for the Plaintiff has testified in court that the Plaintiff has completed the works under all 4 LOAs for the Hotel Tower and the Convention Hall by November 2010, a Bomba inspection was held on 10.12.2010 for the Hotel and Convention Hall and the CFO for the Hotel and Convention Hall was issued on 22.12.2010.

Furthermore, this evidence was also further corroborated by the Defendant’s own witness Mr. Palanisamy during the cross examination on 2.6.2023 where he agreed that the works were completed as at the date of the CFO.

The same has happened for the Office Tower where Mr. Yap has testified that the Plaintiff has completed the works under the LOAs by 23.5.2011 and subsequently two Bomba inspection were held on 23.5.2011 and 26.9.2011, with the fire certificate issued on 25.11.2011. The CFO for the Office Tower was also obtained on 13.12.2011.

The CFO certifies that the building is complete and safe for occupation with the complete infrastructure and complies with regulation of Local Authority. Thus, if the Plaintiff did not complete their work under the 4 LOAs it would be impossible for the CFO to be issued for the said buildings.

This court agrees with the Plaintiff that the satisfaction of the Bomba inspections and subsequently, the obtaining of the CFO satisfied and discharged the Plaintiff’s obligations under the Agreement as set out in the clauses under the 4 LOAs.

This evidence has also been corroborated by the Defendant’s witness Mr. Palanisamy during the cross examinations on 15.6.2023. Where Mr. Palanisamy clearly agreed that there is no evidence or site memo issued saying that the Plaintiff failed to finish any work at the time the CFO was issued. Based on the available site memos, it was clear that the Plaintiff has completed their works by the time the CFO was issued.

This Court is more convinced by the testimonies given by Mr. Yap being the Plaintiff’s witness where his statements were more reliable and was supported by documentary evidences to proof the Plaintiff’s case.

Besides that, the Development has already commenced operations and have been in operation for more than a decade. Throughout those years, the Defendant have never put forward any assertion or claim that the Plaintiff has failed to complete the works.

Thus, it is crystal clear that the Plaintiff have completed the works under the 4 LOAs and is definitely entitled for the remaining sum of the unpaid amount under the lump sum contract. This is because even the CFO also has been issued for the respective places proving that the works are already complete and up to par.

The Defendant’s claim that the Plaintiff has failed to complete the works under the 4 LOAs under the said completion date is purely baseless. Their claim for specific damages and delay for completion is irrelevant as this court is of the view that the Plaintiff has completed their work in a prompt manner. IS THERE VARIATION WORKS DONE BY THE PLAINTIFF UNDER THE 4 LOAS AND IS THE PLAINTIFF ENTITLED FOR THE PAYMENTS OF THE VARIATION WORKS?

The Defendants in this suit stated that they did not instruct the Plaintiff to do any variation works under the 4 LOAs. However, the Defendant has failed to adduce to this court any relevant documents to support their defense. The Defendant has never adduced any alternative evidence on the completion and non-completion of the works to rebut the Plaintiff’s evidence.

The Plaintiff on the other hand submitted supportive documentary evidence to proof that variation works has definitely took place.

The variation works were confirmed to have been completed by Mr. Yap and have been corroborated by the Defendant’s own witness, Mr. Palanisamy who have confirmed that the works were indeed completed.

This Court is convinced via the evidence adduced in this court that the Defendant had clearly instructed these variation works to be carried out and that these variation works were completed by the time it was handed over.

Thus, the Plaintiff at all material time is entitled over the payments for the variation works that they have done. IS THE PLAINTIFF ENTITLED TO THE PROLONGATION COST?

The prolongation cost that is claimed by the Plaintiff is valid and this Court is convinced that due to the hindrance caused by the Defendant, the Plaintiff was unable to start and complete their work as per the LOAs in the given time frame.

Thus, it has caused the Plaintiff to suffer extra prolongation cost to complete the works beyond the contractual completion dates.

The Defendant in this suit has enjoyed the benefit from the construction and completion of the works done by the Plaintiff as per the 4 LOAs. It is unfair to the Plaintiff if the Defendant refuses to pay for all the lump sum money that has been agreed upon and for the extra cost that has been bared by the Plaintiff.

Throughout the trial proceeding, the Plaintiff has time and time again adduced evidence to support their claim and the Plaintiff witness Mr. Yap’s testimony was more convincing compared to Mr. Palanisamy. Mr. Palanisamy has on several occasion admitted that the works have been completed.

This Court strictly believes that the Defendants’ version of claim did not challenge the Plaintiff’s claim in any manner. The Plaintiff has successfully proven their claim on the balance of probabilities that they are entitled for the sum paid under the lump sum contract.

It is absurd for the Defendant to state that Plaintiff is not entitled to the payments for defective works and/or works that does not comply with the contract quality standards, requirements and specifications. This is because, the Defendant has never once throughout the years being in operation has complained about any defects or has taken any legal actions against the Plaintiff for such defects if present.

This is because, the Defendant has never once throughout the years being in operation has complained about any defects or has taken any legal actions against the Plaintiff for such defects if present.

Furthermore, the relevant CFOs have been issued which clearly shows that the Plaintiff’s work is up to par with the standard requirements that is needed for operations of the buildings.

Thus, this Court has allowed the Plaintiff’s claim against the Defendant for a total sum of RM RM9,214,991.48 with interest at the rate of 5% per annum and together with cost amounting to RM150,000.00. The Defendant’s counterclaim was dismissed. -signed-ZAINAL AZMAN BIN AB AZIZ JUDGE HIGH COURT MALAYA OF KUANTAN PAHANG DARUL MAKMUR DATED : 15 DECEMBER 2023 Plaintiff Solicitors : Mr. Chong Boon Leong together with Mr. Abd Azim Bin Abd Razak. Tetuan Rahmat Lim & Partners Suite 33.01, The Gardens Noth Tower Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur Ref. : 8018002022/BLCHONG Email : enquiries@rahmatlim.com Defendant Solicitor : Ms. Khor Xiou Shan together with Ms. Kee Shu Min. Tetuan AmerBON D3-5-1 Solaris Dutamas No.1 Jalan Dutamas 1, 50480 Kuala Lumpur Ref. : 2023000832 VKXS/KSM/SSA/nj Email : court@amerbon.com