Kerajaan Malaysia v KCSB Konsortium Sdn Bhd (WA-21C-3-04/2017)

It discloses no reasonable cause of action;

It is scandalous, frivolous or vexatious;

It may prejudice, embarrass or delay the fair trial of the action; or

It is an abuse of the process of court. 7 [16] The test for striking out has been laid down by the Supreme Court in Bandar Builder Sdn Bhd v United Malayan Banking Corporation Bhd [1993] 3 MLJ 36 where it was held inter alia that: “The principles upon which the court acts in exercising its power under any of the four limbs of O 18 r 19(1) of the Rules of the High Court 1980 are well settled. It is only in plain and obvious cases that recourse should be had to the summary process under this rule and the summary procedure can only be adopted when it can clearly be seen that a claim or answer is on the face of it 'obviously unsustainable'. It cannot be exercised by a minute examination of the documents and facts of the case in order to see whether the party has a cause of action or a defence” (emphasis added) [17] Section 6(1) of the Limitation Act 1953 expressly provides as follows: “Save as hereinafter provided the following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued, that is to say-

actions founded on a contract or on tort...” 8 [18] In the context of cases involving issue of statutory limitation for breach or default under a contract, it is trite law that limitation period begins to run when the cause of action accrues, and more specifically, from the date of the breach. [19] In the Federal Court case of Nasri v Mesah [1971] 1 MLJ 32, it was held inter alia that: “…time begins to run for the purposes of limitation from the date of any infringement or threat of infringement of the appellant's right under the agreement. A cause of action on a contract accrues on the date of breach and in the case of actions founded on contract, therefore, the time runs from the breach.” [20] In the Court of Appeal case of Bounty Dynamics Sdn Bhd (formerly known as Media Development Sdn Bhd) v Chow Tat Ming & 175 Ors [2016] 1 MLJ 507, it was held inter alia that: “The respondents’ claims were time barred under s 6(1)(a) of the Limitation Act 1953. Being founded in contract, the principle of law was that a claim for breach of contract had to be commenced at the earliest possible time when the innocent party became aware of the breach.” 9 See also: Kong Ming Bank Berhad v Sim Siok Eng [1982] 2 MLJ 205 (High Court) and Peng Bee Sdn Bhd v Teoh Liang Teh & Ors [2001] 1 MLJ 1 (Court of Appeal). [21] More significantly it was argued for the Defendant that the Defendant’s breach had occurred back in 17.1.2003, even though the Privatization Agreement was terminated only on 11.4.2011. The fact that the Privatization Agreement was only terminated on 11.4.2011, more than 8 years after the purported breach had occurred back in 2003 - does not negate the well established law that limitation starts to run from the date of the breach. [22] Learned counsel for the Defendant, Mr Norazmi Norazman, submitted that a similar point was dealt with in the Federal Court case of The Great Eastern Life Assurance Co Ltd v Indra Janardhana Menon (representing the estate of the deceased, NVJ Menon) [2006] 2 MLJ 209, where the Court held inter alia that: “(3) A cause of action founded on contract accrues on the date of its breach and time begins to run from that breach. In the instant case, the claimant's cause of action only arose when the appellant allegedly breached its obligation to pay the claimant his commission 10 in 1986. When the claimant filed his action in court in 1993, the claim had already become time-barred…

In the instant case, there was no contractual modification or alteration in any of the contracts binding the claimant to the appellant that could be relied upon to shift the time of breach to some time in the future. In the absence of such modification, the general principle of law that time begins to run from the date of breach, applied...

The Court of Appeal had also erred in concluding that so long as the parties remained in contractual relationship, no period of limitation existed. There was no basis for such a conclusion given that the Act itself prescribes when time begins to run for the purpose of computing limitation periods...” [23] I have no quarrel or quibble with the above proposition that generally a cause of action in Contract would arise from the date of the breach of the Contract. [24] However, in most construction contracts, there is a provision for Liquidated and Ascertained Damages or LAD such that parties had anticipated and agreed that there might be delay in completion by the contractor and in such a case, a CNC would normally be issued by the 11 Superintending Officer (SO) to the Contractor to give Notice that LAD would be charged from the date of the CNC to date of Actual Completion. See the case of Lion Engineering Sdn Bhd v Panchuan Development Sdn Bhd [1996] MLJU 275. [25] This is a contractual modification to an accrual of a cause of action for damages for breach of contract in the failure of the Contractor to complete by the Completion Date in the absence of any extension of time given. [26] In the Federal Court case of Insun Development Sdn Bhd v Azali Bin Bakar [1996] 2 MLJ 188 at page 196, it was held inter alia that: “It is clear law that in the absence of express contractual provision, the purchaser’s right to sue for damages would accrue on the date of the breach of contract. (See Nasri v Mesah [1971] 1 MLJ 32 at p 34; Reeves v Butcher [1891] 2 QB 509 at p 511; Gibbs v Guild (1881–1882) 8 QBD 296 at p 302). But, the parties to a contract are free to regulate or modify their rights in the event of breach thereof in such a manner as to postpone the date of accrual of their right to sue for damages which, of course, was what had happened in Loh Wai Lian.” (emphasis added) 12 [27] In Loh Wai Lian v SEA Housing Corporation Sdn Bhd [1987] 2 MLJ 1 at pages 3-4, the Privy Council explained that parties are free to modify the date of accrual of action, and in this case the accrual of a right to sue for LAD after the Completion Date as follows: “...First, the "indemnity" provided for by the rule was translated as "agreed liquidated damages." Secondly, the formula for calculation of the indemnity was modified by specifying not only the terminus a quo as provided in the rule but also the terminus ad quem, that is to say, the date of actual completion and delivery of possession. It is, in their Lordships' view, tolerably clear that the only rational purpose of defining a payment to be made by the vendor, by reference to what has become a conventional term, as "agreed liquidated damages" was to make it clear that the purchaser was not to have any right to any other payment by way of damages in respect of the delay over and above what the vendor was undertaking to pay, for there could not sensibly be any prospect of a sum calculated according to mandatory statutory provisions being held to be irrecoverable as a penalty. But the description of the amount as "liquidated damages" cannot in any event be determinative of the date on which the sum is to be payable. The clause has to be reasonably and sensibly 13 construed. The obligation is introduced by the words "the vendor shall pay" and there follows the calculation of the sum which he is to pay carefully defined by its opening and closing date. A construction which would import into the clause a fresh obligation on the vendor to pay the calculated amount at the end of each day would be capricious, involving as it does a series of breaches of contract as each day passes without payment being made. The whole tenor of the clause is, in their Lordships' view, that the vendor is assuming as a matter of contract and subject to the occurrence of the condition precedent that the building remains uncompleted on the stipulated date, an express contractual obligation to pay a single sum which cannot become due, because it cannot be ascertained, until the building has been completed and possession can be delivered. If the question is asked "in the absence of such an express provision when would the purchaser's right of action for damages for breach of contract accrue?”, the answer is plainly the date on which the breach occurred. But parties to a contract are, of course, entitled to regulate or modify their rights in the event of breach in any way that they think fit and the accrual of any cause of action then becomes a matter of the correct 14 construction of what they have provided. This appeal raises no point of principle but simply a question of what is the true construction of the contract in which the parties entered. In their Lordships' judgment, the only sensible construction of clause 17 is, as Mr. Kidwell has contended, that it imposes an obligation to pay, in substitution for any other right to damages which the purchaser might otherwise have, a single sum to be calculated and ascertained at a particular date and that until that sum has been ascertained it does not become due and cannot be sued for.”(emphasis added) [28] As if to ensure that the seeming conflict in the Privy Council’s Decision in Loh Wai Lian’s case (supra) and the Federal Court’s case of Insun Development (supra) does not cause further confusion, relevant amendments were made to Schedule G standard prescribed form of Sale and Purchase Agreement under the Housing Development (Control and Licensing) Regulations 1989 made under the Housing Development (Control and Licensing) Act 1966 and as noted by the observations of the learned authors Chan Wai Meng and Usharani Balasingam in the article entitled “Delay in the Completion of a New Residential Property : Rights of the Purchaser” [2007] 1 MLJ xix at pages xxvi - xxviii as follows: 15 “...The current cl 23(2) of Schedule G prescribes the date the purchaser takes vacant possession of the property as the closing date for the computation of the liquidated damages. Clause 23(2) reads: If the vendor fails to deliver vacant possession of the said building in the manner stipulates in cl 24 herein within the time stipulated in sub-cl (1), the vendor shall be liable to pay to the purchaser liquidated damages calculated from day to day at the rate of ten per centum (10%) per annum of the purchase price from the expiry date of the delivery of vacant possession in sub-cl (1) until the date the purchaser takes vacant possession of the said building. Such liquidated damages shall be paid by the vendor to the purchaser immediately upon the date the purchaser takes vacant possession of the said building. Further, cl 23(2) clearly provides that the developer is liable to pay the liquidated damages to the purchaser only upon delivery of the vacant possession to the purchaser. Prior thereto, the developer is not liable. Thus, if there is a delay in the delivery of vacant possession, the purchaser's cause of action against the developer for liquidated damages arises only on the date the purchaser takes or is 16 deemed to have taken vacant possession of the said residential property. If the purchaser wishes to file an action against the developer in court, he has to do so within six years from that date. This is further reinforced by cl 23(3) of the Schedule G, which reads: For the avoidance of doubt, any cause of action to claim liquidated damages by the purchaser under this clause shall accrue on the date the purchaser takes vacant possession of the said building.” (emphasis added) Whether the Plaintiff’s Claim in the present suit is time barred under the Limitation Act 1953 [29] The Defendant contended confidently that the Plaintiff’s Claim is time-barred since 17.1.2009. The date was arrived at in this wise. Originally the Project was supposed to commence from 10.6.1998 and to be completed by 10.6.2001 (a duration of 36 months). However, the timeline for resuming the works and the completion date for the Project was revised and/or extended by the Plaintiff to 16.1.2003. [30] It is not disputed that by 17.1.2003 the Project was not completed. In fact, when the Plaintiff issued the CNC on 25.6.2007, the Plaintiff reiterated in the said CNC the breach and/or failure of the Defendant to complete the 17 works would entitle them to claim LAD at the rate of RM49,119.97 for the “period during which the said Works shall so remain and have remained incomplete and I shall certify for deduction such damages from any money due or which may become due to you under this Agreement.” [31] It was signed off by the authorized representative of the Plaintiff and in this case the Chief Secretary of the Ministry of Defence of the Plaintiff. [32] Based on the proposition above that generally in action in contract, the causes of action would arise from the breach of the contract, in this case the failure to complete the Works by the extended Completion Date of 16.1.2003, limitation would have set in rendering the suit statute-barred by 17.1.2009 as cause of action accrued on 17.1.2003. Therefore Plaintiff’s claim for LAD had lapsed. [33] I am not persuaded by that argument. Here is a case where the parties have modified the date of accrual of the cause of action for LAD. In a construction contract between the Employer and Contractor there is generally an LAD clause to buffer the harsh effect of termination of the construction contract merely because the Contractor has delayed in completing the project by the Completion Date. 18 [34] By not terminating the Agreement the Employer is affirming the contract and allowing the Contractor to complete beyond the Completion Date or Extended Completion Date as in this case subject to a deduction of LAD amount from whatever might be the sums due for the work done during the period after the Completion Date. [35] Termination would bring in its wake a host of claims for damages, chief of which would be the extra costs and expenses in engaging a new contractor to complete the project. There is also delay occasioned in completing the project arising from terminating the Contractor and re-tendering and accepting and appointing the new contractor. As the consequences are severe with the huge financial implication to the Contractor, the LAD clause would generally enjoin the Employer to accept the delay of the Contractor on payment of LAD. [36] Of course there would be case where after the CNC is issued there is still the continuing breach on the part of the Contractor to proceed with the Works regularly and diligently such that there is no reasonable likelihood of the Contractor completing the project in the near foreseeable future without the Employer incurring too much losses to their clients or to the people as in a government project in this case. 19 [37] The Employer would in such a situation have to make the difficult decision to terminate and sue for damages. [38] The LAD clause in the present case is not materially different from that in the Loh Wai Lian’s case (supra). Whilst the Plaintiff here has an indisputable right to terminate for the Defendant’s default in completing by the Completion Date, that right need not be exercised and the Plaintiff may contractually elect to affirm the contract and claim LAD and only when it is abundantly clear that the Defendant is in no position to realistically complete the Works that it may then elect to terminate the Contract and sue for all damages arising out of the breach. [39] In fact if the Employer were to immediately terminate upon the Completion Date being up and the Works remained uncompleted, such a termination might well be unlawful and unconscionable as has been held in some of the cases that shall be referred to below. [40] In Nirwana Construction Sdn Bhd v Pengarah Jabatan Kerja Raya Negeri Sembilan Darul Khusus & Anor [2008] 4 MLJ 157 the Court of Appeal observed astutely as follows: “[70] If delay by the appellant is to be the main factor for termination (quite apart from unsatisfactory work, defective workmanship etc) that 20 particular reason cannot be said to be a condition or warranty going to the root of the contract. Although a period of time for completion is necessarily in place here, one has to construe the entire contractual terms and conduct of parties for its effect and consequence … [118] In my view, when the respondent allowed the appellant continued performance of the contract on more than one occasion, and even entering into a supplementary contract, the respondent had thereby elected to affirm the contract to run its course. The appellant is entitled to regard it as such especially when the respondent accepted the contract from the appellant on 5 June 1996, which the appellant is entitled to treat as the respondent having waived its right to terminate. Nothing would be more clear and equivocal than this conduct of the respondent (see Berry v Hodson [1988] 1 Qd R 361; Craine v Colonial Mutual Fire Insurance Co Ltd (1920) 28 CLR 305). … 21 [123] It is instructive to remind ourselves that a party having a legal right shall not be permitted to exercise it in such a way that the exercise amounts to unconscionable conduct.” (emphasis added) [41] In DC Contractor Sdn Bhd v Universiti Pertahanan Nasional Malaysia [2014] 11 MLJ 633 the same approach is taken when there is delay in completion vis-a-vis an LAD clause as follows: “[62] Similarly, that is the case with cl 39 which talks about completion either by or on the completion date or such other date as may be extended; while cl 40 provides for the payment of LAD in the event of delayed completion. Clause 41 on the other hand, provides for completion of parts of the works. In fact, the presence of cl 40 'providing for the payment of a sum … as liquidated damages calculated on a daily basis for the period that the work undertaken remains unfinished on the expiry of the time provided in the contract would, in the absence of a contrary intention to be gathered from the contract point to time not being of the essence'. This view was expressed by the Federal Court in Berjaya Times Square Sdn Bhd (formerly known as Berjaya Ditan Sdn Bhd) v M-Concept Sdn Bhd [2010] 1 MLJ 597 at p 22 620 [2010]; 1 CLJ 269 at p 295 where after examining the relevant authorities, the Federal Court expressed the following: ... In my judgment, while individual contracts will fall to be interpreted in accordance with their own terms, it is a useful guide to construction that a stipulation as to time must be read along with other provisions of the contract to determine if time is truly of the essence of the contract. Further a clause providing for the payment of a sum whether as a fine, a penalty or as liquidated damages calculated on a daily basis for the period that the work undertaken remains unfinished on the expiry of the time provided in the contract would, in the absence of a contrary intention to be gathered from the contract point to time not being of the essence. ... [65] In the present case, that starting point is rebutted. Not only is there cl 40 on the payment of LAD, there is also cl 51 on termination. The court cannot accept that by the mere giving of an extension of time, the issue of the letters of warning and the notice of 23 breach, the parties had intended that time was of the essence. Time is not of the essence of this contract. At best, these are evidence of the defendant not accepting the performance or alleged lack of performance by the plaintiff. The breach of these matters do not confer on the defendant a right to terminate the contract merely because of non-completion by the completion date. The defendant would only be entitled to damages for such a breach, if the grounds are proved true.” (emphasis added) [42] To be sure Section 16.2 (b) of the Privatization Agreement reads as follows: “Without prejudice to the Government’s right to terminate in the event of the Company’s default, unless an extension is granted, the Company shall pay to the Government liquidated and ascertained damages to be calculated from day to day at a rate to be determined per day in accordance with the following formula until the actual Completion Date: BLR + 1.5%. X $B 365 Where - $B - value of the Contract Sum.” (emphasis added) 24 [43] Both the opening and closing date is clear and even if the opening date is not clear, the closing date is clearly stated where the event is concerned though no one would know when that closing date would be. [44] It is further provided in Section 16.2(d) that “The Parties hereby unconditionally and irrevocably acknowledge that the sum stipulated herein constitute a reasonable compensation.” [45] The way it works in construction contract is that if really there is no hope of the Contractor completing soon for which delay the LAD may be a sufficient and adequate compensation, then the Employer is entitled to exercise its right to terminate the contract. It may be in cases where a stadium has to be completed by a certain date for a major world sporting event, an LAD compensation may be little comfort for the very credibility of the Government in vying and hosting such an event would be severely and irreversibly dented. Likewise too where construction of infrastructure projects are concerned or as in this case involving the army and security. [46] Ultimately it boils down to the particular and peculiar facts of each project as in whether it is a government project where the credibility of the government and the security of the state is concerned or the wellbeing of its citizens or its servants as in here the army and the army camps. 25 [47] In a pure commercial project where the losses can be passed on or quantified as in purchasers’ claim for agreed liquidated damages for late delivery in a commercial project against the Employer/Developer the Court may be more inclined to allow for a longer LAD claim in lieu of termination upon a failure to complete by the completion date as exemplified in the Singapore case of Chua Chay Lee & Ors v Premier Properties Pte Ltd [2000] 4 SLR 177 where the contractor delayed completing the works for more than 12 months after the contractual completion date. The Singapore Court of Appeal held that the termination on ground of the 12 month delay was unlawful: “[6] If one were to ask whether or not the respondents' delay of around 12 months for the handing over of the appellants' new apartments was an anticipatory breach which went to the root of the contract or was a frustrating delay or would lead to performance by the respondents of their contractual obligations in a manner which was substantially inconsistent with the bargain between them and the appellants, there would be no reason whatsoever to disturb the finding of the judicial commissioner. … 26 [8] The inclusion of a liquidated damages clause in the agreement showed that the parties had contemplated a possible delay in the completion of the appellants' apartments. … [9] A party to a contract may not purchase indefinite delay by paying damages. A time will come when the delay is so great that the defaulting party is guilty of repudiatory conduct. However, that point of time had not arrived when the appellants terminated the contract on 11 May 1999... … [12] Whether one applied English cases or Laurinda's case to the facts in this case, the only reasonable conclusion was that the appellants were not entitled to terminate the contract when they purported to do so on 11 May 1999. They could not show how a delay of 12 months, in the context of a 33-month period of construction, coupled with the payment of $280,500 in liquidated damages to each of them, could be a frustrating delay going to the root of the agreement.” (emphasis added) [48] I had said even if the opening date of calculating the LAD is not certain because generally an LAD would only begin to run upon issuance of 27 CNC (25.6.2007 in the present case) but here the Plaintiff had sought to claim in paragraph 22 and 23f of the Statement of Claim from 17.1.2003 (the Extended Completion Date) to 10.5.2011 the date of Termination of the Privatization Agreement of RM149,128,228.92, that is to be determined at trial and it goes towards reducing the Plaintiff’s Claim under LAD. [49] The date of termination is the cutting off date which date the Plaintiff would not be able to ascertain on 17.1.2003 simply because it cannot foresee whether the Defendant would be able to complete the Project if at all and when that would be. [50] Whether or not the Plaintiff would be able to succeed is for them to prove at the trial but I cannot say in all certainty that the cause of action for the LAD had accrued on 17.1.2003. I am more inclined to the view that it is generally claimable from the date of issuance of CNC and in this case on 25.6.2007 to date of termination on 10.5.2011 in which case the cause of action only accrued on 11.4.2011 such that this suit filed on 7.4.2017 was well within the 6 years limitation period. [51] The Defendant also argued that alternatively the CNC in itself is evident that any allegation of breach and with that the commencement of the Plaintiff’s cause of action against the Defendant would have arisen at 28 the very latest on the date the said CNC was issued i.e. 25.6.2006. Therefore, according to learned counsel for the Defendant, even if we a were to calculate the 6 years limitation period since 25.6.2007 the Plaintiff’s claim would have been time-barred since 25.6.2013. [52] However that is not the purpose served by a CNC. Generally a CNC is issued to prevent time from being at large after the Completion Date has set in and to justify a claim for LAD. [53] It had not been argued that time for completion became at large after the expiry of the Extended Completion Date of 17.1.2003 before the CNC was issued on 25.6.2007. For the sake of argument, even if it had been raised, it is still a matter to be determined at trial whether more than a reasonable time had passed having reference to whether the parties were still negotiating and exploring the roadmap forward and whether the Defendant here was still prevailing upon the Plaintiff for further extension of time. Even if the reasonable time for completion is before the CNC was issued, it is still the call of the Plaintiff whether and when to issue the CNC or for that matter the Notice of Termination is to be issued with the Defendant as contractor having the right always to terminate the contract or to repudiate it to cut its own losses. 29 [54] As submitted by the Senior Federal Counsel for the Plaintiff and as admitted by learned counsel for the Defendant, there were negotiations between the parties for a further extension of time to complete the Project (after the extension to 17.1.2003 had lapsed). The Plaintiff had issued a letter to the Defendant dated 21.2.2006 giving conditional extension of time to complete the Project. [55] Such extension would have enabled the Defendant to complete the Project latest by 21.2.2009 if one were to take into account the maximum period of 36 months from 21.2.2006. [56] Nevertheless, such extension of time never materialised as the condition could not be satisfied at that time. Learned counsel for the Defendant then submitted that, be that as it may, even if there was such an extension of time given, it would have lapsed by 21.2.2009 and by then, it is not disputed that the Project was not yet completed. [57] Learned counsel for the Defendant then postulated that, even if we were to calculate the 6 years limitation period from 21.2.2009, the Plaintiff’s claim against the Defendant would be barred by limitation since 21.2.2015. [58] The answer to that is that it is not for the Defendant to dictate when the Plaintiff should give the necessary Default Notice and Notice to 30 Terminate under the Privatization Agreement. The ball is at the feet of the Plaintiff as the Employer and if it is the Plaintiff who had been in breach, then surely the Defendant is at liberty to terminate the Agreement earlier. [59] Assuming for a moment that the LAD claim is statute-barred, that cannot mean that the Plaintiff cannot sue for other heads of claim for damages upon termination which has to be carried out in accordance with the strict procedure provided under the Privatization Agreement. [60] Where the relevant clause confers a right on the Employer to terminate based on a strict procedure, that right remains inchoate and would only accrue and crystallize upon it being exercised. In fact if the right is not properly exercised as in the procedure is not properly followed, then the whole termination might be held to be unlawful and the Employer would not be able to sue for damages and may as a consequence be held liable to the Contractor for unlawful termination of the contract. [61] Section 18.1 is entitled “EFFECTS OF DETERMINATION” and (A) on “Events of Default by the said Company” provided under Section 18.1(A)(a)

where relevant as follows: “(a) Save as otherwise provided in this Agreement, if the said Company: 31

without reasonable cause: ...

(cc) fails to complete the said Project within the stipulated period or extended stipulated period; ... the Government shall be entitled to give notice in writing (hereinafter referred to as the “Default Notice”) to the said Company specifying the relevant default and require it to remedy the default within thirty (30) days (or such longer period as the Government May agree) from the date of the Default Notice.

Termination If the Government has issued a Default Notice pursuant to the Section hereinabove, and the Company fails to remedy the default specified in such notice within the time stipulated therein, the Government may, for so long as the relevant default or event is continuing, forthwith terminate this Agreement at any time by giving written notice to that effect 32 (hereinafter referred to as the “Termination Notice”) to the Company.” [62] Here the Default Notice was dated 4.11.2011 addressed to the Defendant by the Plaintiff and exhibited as Exhibit DZJ 9 in Enclosure 7 being the affidavit of the Plaintiff to oppose the striking out application of the Defendant. [63] There were 4 breaches that required remedy:

Failed to complete the Project within the time frame set out in Section 8.3(a);

Failed to ensure that the Performance Bond remains valid till the date of the Certificate of Completion as provided under Section 11.2(b);

Failed to ensure they the Land Bond is effective for 12 months after the date of the Certificate of Completion as provided under Section 7.2(c);

Failed to ensure that the said Project was covered by insurance as provided under Section 17.3(A). [64] The Notice of Termination dated 11.4.2011 sent by the Defendant to the Plaintiff is exhibited as Exhibit DZJ 1. It stated that the breaches had 33 not been remedied after 30 days and that the Notice is issued pursuant to Section 18.1(A)(b). Under Section 18.1(A)(c) it spelled out the “Consequences of Termination”. What is relevant for the Plaintiff’s claim here is under Section 18.1(A)(c)(i)(cc) and (did) where it is provided as follows: “(cc) without prejudice to any other rights which the Government might have against the said Company, the Company shall reimburse the Government for any costs and expenses (including any incidental costs and expenses) paid or incurred or reimbursed by the Government after the date of the termination in completing the Project. For the avoidance of doubt, such costs and expenses shall include but not be limited to any additional costs and expenses incurred by the Government in having to complete the said Project in excess of the costs and expenses which would have been incurred by the Company in completing the said Project;

(dd) the difference in value, to be determined by the Joint Auditors, between the prevailing market value of the Exchanged Land in its undeveloped state on the date of termination and the Land Bond value, of any...” 34 [65] Basically the Plaintiff’s heads of claims in paragraph 23 of the Statement of Claim are what it said it is entitled to claim under Section 18.1(A)(c)(i) of the Privatization Agreement upon its termination. Whether or not the Plaintiff can succeed is for determination at the trial. [66] This is certainly not a plain and obvious case to be struck out on the ground of limitation having set in for the head of claim of LAD and the other heads of claim set out in paragraph 23 as follows: a. The sum of the Land Bond of RM256,000,000.00 which is the value of the Agreement; b. The sum of the Performance Bond of RM12,800.000.00; c. The difference in the value of the land and the Land Bond as at 30.5.2015 of RM37,400.000.00; d. The costs of maintenance of Building, housing accommodation for the members of the Armed Forces and their family of RM9.493,807.00; e. Costs of construction of new camps and temporary units of RM1.016 billion; f. LAD claim of RM143,128,228.92 from 17.1.2013 till 10.5.2011; 35 Whether under the Consent Judgment recorded in the previous 2015 suit, both parties had agreed not to raise limitation for the period from the date of termination of the Agreement from 11.4.2011 and/or 28.4.2011 until, 17.6.2017. [67] By way of summary and for the sake of argument I had considered above the 3 possible scenarios of limitations having set in as follows: a) 6 years from 16.1.2003; b) 6 years from 21.2.2009; or c) 6 years from 25.6.2007; and for the reasons given above rejected the proportions put forth by the Defendant in justifying striking out on ground that limitation has set in for the Plaintiff’s claims. [68] The above were considered as if there was no Consent Judgment with the above terms with respect to an agreement not to raise the said limitation period in the event that there is no settlement and a fresh suit has to be filed. [69] The above were also considered with deference to learned counsel for the Defendant and assuming that the Consent Judgment does not estop 36 the Defendant from raising limitation for the period before the date of Termination of 11.4.2011. [70] However effect must be given to the terms of the Consent Judgment which in effect is an Agreement. In Wilding v Sanderson [1897] 2 Ch 534 Byrne J. held at page 543 as follows: “A consent judgment or order is meant to be the formal result and expression of an agreement already arrived at between the parties to proceedings embodied in an order of the court. The fact of its being so expressed puts the parties in a different position from the position of those who have simply entered into an ordinary agreement. It is, of course, enforceable while it stands, and a party affected by it cannot, if he conceives he is entitled to relief from its operation, simply wait until it is sought to be enforced against him, and then raise by way of defence the matters in respect of which he desires to be relieved. He must, when once it has been completed, obey it unless and until he can get it set aside in proceedings duly constituted for the purpose (see case of Wiltopps (Asia) Ltd v Drew & Napier & Anor 2000 3 SLR 244; di ms 252).” 37 [71] Here there is no attempt to set aside the Consent Judgment and so its terms are valid and binding on the parties. When the said period of limitation is agreed to be excluded from being raised as an issue in a fresh suit arising out of the breach of paragraph 1a) and b) of the Consent Judgment, effect must be given to that agreed term like all contractual terms unless there are vitiating factors like fraud, coercion, undue influence, misrepresents or mistake. Here there are none of those vitiating factors as parties were represented by their solicitors and can be seen below in the Consent Judgment reproduced. [72] The effect is that clearly from date of termination which is 11.4.2011, time shall not begin to run until 17.6.2017. Either way whether with or without the benefit of parties agreeing to time not running from 11.4.2011 until 17.6.2017, the Writ was filed on 7.4.2017 which was before 11.4.2017, the date limitation would have set in without the moratorium until 17.6.2017. [73] The terms of the Consent Judgment in the previous 2015 Suit are as follows in their original language: “PENGHAKIMAN PERSETUJUAN TINDAKAN INI setelah dipanggil untuk mediasi pada hari ini di hadapan Yang Arif Hakim Tuan Lee Swee Seng Hakim Mahkamah 38 Tinggi dan dengan kehadiran Puan Juraidah Binti Abbas (Puan Siti Nor Shakirah Binti Muhamad bersamanya) Peguam Kanan Persekutuan bagi pihak Plaintif dan Encik M. Vinoben (Encik Norazmi Bin Norazman bersamanya) peguamcara Defendan MAKA ADALAH PADA HARI INI DIHAKIMI SECARA PERSETUJUAN TANPA SEBARANG PENGAKUAN KE ATAS LIABILITI bahawa:

Pihak-pihak bersetuju untuk menyelesaikan secara baik tuntutan Plaintif di dalam tindakan ini, tertakluk kepada syarat-syarat yang berikut: a) Bahawa Defendan membuat permohonan tidak lewat dari 17.11.2016 bagi memperolehi kelulusan dan/atau kebenaran bersyarat bertulis dan notis premium untuk mengubah kategori kegunaan tanah-tanah berikut dari “nil” kepada “bangunan”: i) PN 11044, Lot 1876, Mukim Plentong, Daerah Johor Bahru, Negeri Johor ii) PN 10081, Lot 139, Mukim Tebrau, Daerah Johor Bahru, Negeri Johor (secara kolektifnya dirujuk sebagai “Tanah Balasan”); 39 b) Bahawa Defendan membuat permohonan tidak lewat dari 17.11.2016 bagi memperolehi kelulusan dan/atau kebenaran bersyarat bertulis dan notis premium untuk melanjutkan tempoh pajakan Tanah Balasan tersebut kepada 99 tahun (berdasarkan baki tempoh pajakan semasa) ; c) Bahawa Plaintif melakukan apa yang munasabah dan di bawah kuasa mereka untuk membantu Defendan dalam permohonan untuk memperolehi kelulusan dan/atau kebenaran bersyarat bertulis dan notis premium di perenggan 1(a) dan (b) di atas; dan d) Kos-kos berkenaan dengan permohonan untuk mendapatkan kelulusan dan/atau kebenaran bersyarat bertulis dan notis premium di perenggan 1(a) dan (b) di atas adalah ditanggung oleh Defendan. (secara kolektifnya dirujuk sebagai “Syarat –Syarat” tersebut).

Syarat-Syarat tersebut di perenggan 1(a) dan 1(b) perlu dipenuhi tidak lewat daripada 17.2.2017. Apabila Syarat-Syarat tersebut dipenuhi Defendan hendaklah membuat pembayaran (dengan jumlah keseluruhan sebanyak RM301,400,000.00 bagi Tanah Balasan) seperti berikut: 40 a) Jumlah sebanyak RM56,316,709.72 hendaklah dibayar kepada Plaintif dalam tempoh tidak lewat daripada 17.5.2017 secara ‘lump sum’. Sekiranya pembayaran RM56,316,709.72 tersebut tidak dibuat pada 17.5.2017 maka Defendan akan dikenakan faedah pada kadar 5% setahun ke atas jumlah RM56,316,709.72 tersebut dari 18.5.2017 sehingga penyelesaian penuh jumlah tersebut yang tidak akan melebihi 36 bulan dari tarikh 17.2.2017; b) Baki jumlah sebanyak RM245,083,290.28 hendaklah dibayar (sama ada secara progresif ataupun sebaliknya) tidak lewat dari tempoh 36 bulan dari tarikh 17.2.2017 (“Tempoh Akhir Pembayaran”).

Plaintif hendaklah membuat permohonan menarik balik, mengetepikan dan/atau membatalkan Kaveat Pendaftar di atas tanah PN 10081, Lot 139, Mukim Tebrau, Daerah Johor Bahru, Negeri Johor apabila pembayaran penuh sebanyak RM56,316,709.72 bersama faedah jika terpakai dibuat kepada Plaintif.

Plaintif hendaklah membuat permohonan menarik balik, mengetepikan dan/atau membatalkan Kaveat Pendaftar di atas tanah PN 11044, Lot 1876, Mukim Plentong, Daerah Johor Bahru, Negeri 41 Johor (atau mana-mana bahagian yang berkenaan) berdasarkan jumlah pembayaran bagi baki RM245,083,290.28 sama ada secara progresif ataupun sebaliknya.

Sekiranya Syarat –Syarat di perenggan 1(a) dan 1(b) tidak dapat dipenuhi pada 17.2.2017, maka pihak-pihak berhak untuk mengambil tindakan baru berdasarkan terma-terma Perjanjian Penswastaan “Tripartite Privitization Agreement For The Design and Construction of the Skudai Army Camp”. Sekiranya ini berlaku maka pihak-pihak tidak akan membangkitkan isu had masa dari tarikh penamatan Perjanjian Penswastaan tersebut pada 11.4.2011 dan/atau 28.4.2011 sehingga 17.6.2017.

Pihak-pihak bersetuju untuk berbincang bagi mencapai persetujuan bersama berkenaan sebahagian atau mana-mana baki tanah yang diperlukan oleh pihak Plaintif dan tempoh pendudukan Plaintif di Tanah Balasan tanpa pembayaran atau sewa selepas pembayaran penuh RM301,400,000.00 dibuat.

Sekiranya Defendan tidak membuat pembayaran untuk menyelesaikan jumlah RM301,400,000.00 tersebut (atau sebarang baki pembayaran yang ada) (berserta dengan faedah jika terpakai) 42 pada tarikh akhir Tempoh Akhir Pembayaran, maka Penghakiman akan dimasukkan terhadap Defendan untuk jumlah RM301,400,000.00 tersebut (berserta dengan menolak sebarang pembayaran yang telah dibuat sebelum itu, sekiranya ada).

Tiada perintah mengenai kos.” [74] The learned Senior Federal Counsel, Puan Juraidah Abbas, explained that the need to file a fresh action which right the parties have preserved in the Consent Judgment was necessitated by the fact that the State has compulsorily acquired the Exchanged Lands. [75] Parties could not have intended the agreement on the limitation period not having effect from 11.4.2011 to 17.6.2017 to create a new right for the Defendant to strike out the Plaintiff’s claim. [76] As can be seen, the Defendant has filed their Defence and Counterclaim before the filing of this Application raising inter alia breaches of the Privatization Agreement by the Plaintiff in wrongful termination and in causing a Registrar’s Caveat to be entered against the Exchanged Lands, wrongful rejection of the Defendant’s application for extension of time, failure to obtain the change of category of land use to “Building” for the Exchanged Lands. 43 [77] The Defendant would then be able to canvas the argument that the CNC is wrongly issued as the proper extension of time ought to have been given. The observation of the Court of Appeal in Pembinaan LCL Sdn Bhd v SK Styrofoam (M) Sdn Bhd [2007] 4 MLJ 113 might resonate with the Defendant as follows: “[7] Next, he found that the certificate of non-completion (CNC) was invalid because the architect had not properly assessed the appellant's request for extension of time. The architect could not therefore know the precise completion time. How then could he, asked the arbitrator, 'express an opinion that the works ought reasonably to have been completed on a certain date?' This point really flows from the first. Since time was not of the essence of the contract, the architect was in no position to determine when the actual completion date was unless he had given reasonable notice of the respondent's intention to reinstate the time clause. Accordingly, the arbitrator committed no error of law in this part of his award.” (emphasis added) [78] Surely it cannot be a case where the Defendant had wanted it to be such that neither party would have any claim against the other but that the 44 Defendant would still get the benefit of keeping the Exchanged Lands already registered in their name. [79] This Court is more than fortified that the Plaintiff’s Claim should proceed to trial and with that, the Defendant’s Counterclaim as well. Pronouncement [80] It cannot be denied that the intention of the parties to work towards a settlement within the framework recorded in the Consent Judgment in the previous 2015 Suit could not be realized because of the acquisition by the State Government of the Exchanged Lands. [81] As provided for under paragraph 5 of the Consent Judgment parties are back to the drawing board. [82] The Defendant would be receiving the compensation sum from the State under the land acquisition as they are the registered owner of the Exchanged Lands. [83] Both sides should take a fresh look at the original equation to see how the fact of the compulsory acquisition may be tweaked to achieve the parties’ original intent. 45 [84] At any rate this is not a fit case for striking out at this stage. The matter ought to go for trial. [85] The Defendant’s application to strike out under Enclosure 17 is dismissed with costs of RM8,000.00. Dated: 28 December 2017. - signed - Y.A. LEE SWEE SENG Judge High Court Kuala Lumpur For the Plaintiff : Juraidah Abbas together with Siti Nor Shakirah Mohamad (Senior Federal Counsel – AG’s Chambers) For the Defendant : Norazmi Norazman (Messrs Azmi Fadzly Maha & Sim)