Koridor Padu Sdn Bhd v 1. ) Lembaga Getah Malaysia (WA-22C-100-10/2020)

Schedule

Schedule E of the PDP Agreement; 28.1 LGM was the only party who had the mandate to carry out crucial and absolute decisions pertaining to the Project; 28.2 LGM was the only party who had the interest in the Project and had the final say in all construction and developmental matters in relation to the Project which benefits LGM; 28.3 the PDP shall enter into a Works Package Contract with each selected Works Package Contractors/Consultants; 13 28.4 LGM shall have no Liability or responsibility whatsoever to the Work Package Contractor/Consultant under the Works Package Contract in respect of the portion of the Works under the Works Package Contract and the PDP shall keep LGM indemnified and held harmless from any and all claim by the Works Package Contractors/ Consultants or any other third party in respect of the same save in so far as such Claims by the Work Package Contractors/ Consultants are due to any act, neglect and/or omission of LGM; 28.5 LGM is the only party who had control over the funds pertaining to the Project to make the necessary payments to the contractors under the Project; and 28.6 It is stated therein that the PDP shall be an independent contractor and that the said agreement does not constitute the parties as partners. [27] It is the Plaintiff’s case in the matter before me that LGM is the principal of the PDP i.e. LGM had contracted with the Plaintiff through the PDP. I have however noted that the pleaded case of the PDP is that they had at all times acted within the scope of the PDP Agreement in dealing with third parties and had at all times acted on the instructions of LGM. [28] The Plaintiff further submits that the LGM cannot disclaim liability to the Plaintiff based on an agreement that it has with its own agent or project development partner /PDP to the exclusion of the Plaintiff and the other WP Contractors involved in the LGM development. [29] It is also in submission by the Plaintiff that LGM did not oppose the action by having a primary defence of privity of contract. To this I have examined LGM’s Re Amended Statement of Defence and found this to be an erroneous statement as LGM did specifically plead the defence of privity of contract at amongst others in paragraph 9 thereto. [30] Accordingly, after having carefully considered the Plaintiff’s various contentions on this issue, I cannot agree with the Plaintiff that LGM is the principal of the PDP, as I find from the documents before me in particular the express terms and conditions of the PDP Agreement, that the PDP Agreement was an agreement entered into between LGM and the 2nd and 3rd Defendants only and that the Plaintiff and the other works package contractors who were subsequently appointed under the terms of the PDP Agreement were never a party or privy to the PDP Agreement. [31] To support the above decision, I also wish to refer to clause 5.3.1 of the PDP Agreement where it is expressly stated that LGM makes payment to work package contractors/consultants on behalf of the PDP as further evidence that LGM is not the principal of the PDP, but is at most only the paymaster for the PDP to the works package contractors appointed by the PDP. [32] The fact that the PDP Agreement provides as contended by the Plaintiff that inter alia the PDP being a consultant has been selected by LGM as the project delivery partner to provide services to LGM or is responsible for the calling of bids and the procurement of Works Package Contracts (“WPC”) or that the PDP is to award the WPC in accordance with the procurement policy in the PDP Agreement or the PDP is to ensure that the Works are carried out by the WPC/Consultants inter-alia, in accordance with the respective Works Package Contract and the PDP Agreement or the PDP is to procure from Works Package Contractors such as the Plaintiff a security for performance (WPC Performance Bond) or payment will be made by LGM, does not respectfully in my decision necessarily make LGM the principal of the PDP. Whether LGM can be personally liable on the contract is a question of construction having regard to the surrounding circumstances. [33] From an assessment and analysis of the facts and circumstances before me, it is my decision that the PDP were to carry out inter alia the planning, design (inclusive of such part of the Design Works to be carried by the PDP pursuant to Clause 4A.1), engineering, project management, cost and schedule management, construction management and supervision services, contract administration, testing, commissioning (Services) and as such the PDP were clearly contracted by LGM to provide such Services under the PDP Agreement for a fee as stated under the PDP Agreement. [34] I hold that the PDP did not merely act as an intermediary for LGM so as to bring it within a principal agent relationship but the PDP was contracted and required to perform such Services with ‘reasonable skill, care and diligence’. [35] I also hold from the facts before me that the Project belongs to LGM alone, and that the 2nd and 3rd Defendants had no proprietary interest in either the Land or the Project. [36] The Federal Court had in Ching Yuen Tung V BEP Aketik [1978] 1 MLJ 211 this to say on the law of agency: “Whether the relationship of agency exists in the present case depends not on the use of terminology but on the exact circumstances of the relationship between the alleged principal and agent. The word “agent” may be used in at least two other senses. First, the word is frequently used to describe the position of a person who is employed by another to perform duties often of a technical or professional nature which he discharges as the other's alter ego and not merely as an intermediary between the principal and the third party, e.g. a solicitor who may be his client's agent for the purpose of instituting or continuing legal proceedings on his behalf. Secondly, the word has often been used in business in a complementary and not a legal sense, as in the case of the appointment of a “sole selling agent”, “exclusive agent”, or “authorised agent”. The relation so established between the appointor and appointee is usually that of vendor and purchaser and no contractual relationship is established between the appointor of the agent and third parties by the sale of goods by the so-called “agent to those third parties. See Halsbury's Laws of England, 4th Edition, Volume 1 page 419, paragraph 702.” [37] Accordingly, in my view, an agency is not created here as the PDP i.e. the 2nd and 3rd Defendants, had contracted with the Plaintiff in its own legal capacities which the PDP had done so and not with the PDP as the alter ego of LGM. [38] For the sake of completeness, the Plaintiff had relied on Ching Yuen Tung v BEP Arkitek [1978] 1 MLJ 211 to support its case that payments were made by LGM to the Plaintiff which the Plaintiff submits points to the fact that LGM was the principal of PDP. [39] With respect, after reading the aforesaid case, I hold that in the BEP Arkitek (supra) the Federal Court in a judgment read by Lee Hun Hoe CJ (Borneo) had held: “That was not the first occasion respondents had business dealings with appellant. In the Po Hing project respondents performed similar services for appellant and were paid by appellant. It is immaterial that the cheque was issued by a third person.” [40] Thus, applying BEP Arkitek (supra) to the case before me, I hold that the fact that payments were made by LGM to the Plaintiff does not by itself make LGM the principal of the PDP as the payments were provided for under clause 5.3.1 of the PDP Agreement. Is LGM responsible for the action of the 2nd and 3rd Defendants as provided for in the PDP Agreement [41] In the circumstances and based on my grounds herein above, I hold that LGM is not responsible for the action of the 2nd and 3rd Defendants as provided for under clause 10.1.2 of the PDP Agreement. Contract 1 And the Parties to It [42] It is however an agreed fact between LGM and the 2nd and 3rd Defendants that the 2nd and 3rd Defendants or the PDP had entered into Contract 1 with the Plaintiff. [43] I find that the terms of Contract 1 had inter alia, contained the following terms: - 43.1 The contract sum amounts to RM216,000,000.00. 43.2 The contract was to be a lump sum contract without quantities and where Quantities were provided in the Schedule of Prices it was to serve as a guide and do not form part of the contract. 43.3 The term “Employer” therein referred to KLIAA-KLIACS Consortium i.e. the PDP. 43.4 The Plaintiff shall submit the progress claim of work done and material delivered on site by the 25th of each calendar month. 43.5 The date of possession of the site was deemed delivered and received on 1.3.2017. 43.6 The work must be completed by the Plaintiff within 30 months from the date of possession of the site, wherein the date of completion was on 30.8.2019. 43.7 The contract is as defined in the Employer’s tender included the Contract Documents listed including amongst others the Standard Form of Contract-PWD Form 203 (Rev 1/2010) and its addendum and appendix to the Condition of Contract. 43.8 The Plaintiff should obtain and submit an unconditional and irrevocable Performance Bond (PB) in the form of Bank Guarantee from a local commercial / Islamic Bank in Malaysia equivalent to 5% of the Contract Sum, i.e., RM10,800,000.00. This term constitutes a condition precedent under Contract 1. 43.9 In addition to the PB, the PDP was entitled to retain the percentage of the value of the work, material and goods whereby 10% will be deducted from the first interim payment and subsequent interim payments until the total amount deducted aggregate to a sum equivalent to 5% of the contract sum. 43.10 The Plaintiff is obliged to submit the progress claim of work done and material delivered on the Site to the 2nd and 3rd Defendants / PDP with the necessary breakdown, measurement, records, delivery orders, invoices and etc. 20 43.11 All payments were to be made by the 2nd and 3rd Defendants. [44] The Plaintiff alleges that by a letter dated 11 July 2017 (11.7.2017 Letter), which constituted / referred to as Addendum No.1 to Contract 1, the PDP had made an amendment to the contract sum, from RM216,000,000.00 to RM 397,102,760.97 and awarded the Plaintiff additional works to oversee the implementation of the works in relation to mechanical, electrical and other ancillary works by the nominated sub-contractors (“NSC package”). I have however examined the said 11.7.2017 Letter and find that the said 11.7.2017 Letter was not signed by the PDP nor acknowledged as accepted by the Plaintiff. [45] In accordance thereto, I am not able to accept that the 11.7.2017 Letter with regards Addendum No.1 to Contract 1, on the contract sum for Contract 1, from RM216,000,000.00 to RM 397,102,760.97 was a valid or legally binding agreement between the Plaintiff and the 2nd and 3rd Defendants / the PDP, and thus this Court will have to disregard the said 11.7.2017 Letter. [46] There was also the testimony of PW1 who when shown the PDP Agreement under cross examination, agreed that it was the 2nd and 3rd Defendants who were the one who entered into contract with the Plaintiff and not LGM despite PW1 making a contrary assertion earlier on in his testimony. Pw1’s testimony at Page 30 of NOPV1 being as follows: - [47] It is also pertinent to observe that the Plaintiff had signed and acknowledge receipt of the letter of acceptance dated 1.3.2017 and thereby accepted the express terms as contained in the said Letter of Acceptance / Contract 1. [48] Consequently, I therefore hold from the documents including the Tender Documents, the Form of Contract/ Conditions of Contract and the letter of Acceptance (Contract 1) and the other evidence produced before this Court to which I have averred to in my grounds herein above, that the contracting party in relation to Contract 1 is only the 2nd and 3rd Defendants / the PDP and the Plaintiff, and that the Plaintiff is the sub-contractor for the package as referred to in the Tender Documents. [49] I therefore hold that this Court finds there is no contract executed or entered into between the Plaintiff and LGM or that LGM was in any way a party to Contract 1 and that the PDP are independent contractors of LGM as the PDP. It is from my assessment of the PDP Agreement that the PDP assumes the responsibility to carry out and complete the entire Project for a fee as prescribed in the PDP Agreement. [50] For the sake of completeness, I had looked at the issue estoppel argument raised by LGM in reliance of the case of KLIAA-KLIAC Consortium & 2 Others v Latipah Abu t/a La Architect [2020] 1 LNS 129 where LGM submits support its contention that the 2nd and 3rd Defendants are not its agent but instead are only an independent contractor. On this point I agree with counsel for the Plaintiff that LGM had not pleaded estoppel in its pleadings and that the Plaintiff was not a party to the aforesaid case referred to and as such I have not considered the effects of any alleged estoppel herein. [51] In coming to this Court’s decision, the Court had further considered the submission by the Plaintiff that that there was ample evidence that LGM had orchestrated the entire Contract 1 and had examined amongst others the following evidence put forth by the Plaintiff being: a. the Plaintiff was requested to and actually issued the interim payment invoices directly to LGM for payments. b. the cheque of LGM dated 20-06-2017 and the Tax Invoice of the Plaintiff dated 21-06-2017 in respect of the 1st interim payment which was made by LGM to the Plaintiff. c. the Interim Payment Certificates came under the heading of LGM, such as for instance “Perakuan Bayaran Interim No.1”. d. post termination of the Contract, LGM also continued to deduct 15% from the post termination payments that was paid by it to the Plaintiff. e. meetings held by the Plaintiff with LGM where the Chairman of LGM had assured payments under IPC’s to the Plaintiff and told the Plaintiff not to leave the Project site. [52] Be that as it may, I reiterate that a reading of the PDP Agreement expressly provides under clause 5.3.1 therein that payment can only be made by LGM if the same was done in accordance with the PDP Agreement whereby the 2nd and 3rd Defendants have to prepare the WPC Payment Certificates. [53] With respect, I therefore cannot agree on a balance of probabilities with the Plaintiff’s contention that the aforesaid evidence is proof that LGM had orchestrated the entire Contract 1. At its highest the aforesaid evidence only fortifies the fact that LGM is the paymaster under the PDP Agreement and such payments were made on behalf of the 2nd and 3rd Defendants. Government of Malaysia [54] I further hold that that contention by the Plaintiff that the 2nd and 3rd Defendants are the agents to the Government of Malaysia as being untenable as this Court finds that it has been expressly provided (to which the Plaintiff has bound itself by virtue of Contract 1), that the Contract Documents listed including the Standard Form of Contract - PWD Form 203 (Rev 1/2010) and its addendum and appendix to the Condition of Contract, that the term “Government” or “Government of Malaysia” shall read as KLIAA-KLIACS Consortium i.e. the 2nd and 3rd Defendants’ Consortium as shown at Page 101 of Bundle C. [55] I have also noted that the Plaintiff has not pleaded LGM as the Government of Malaysia and I agree with learned counsel for LGM that the Government of Malaysia is also not named as a party to the suit herein. [56] I also hold that LGM is a statutory body formed under the Malaysian Rubber Board (Incorporation) Act 1996 and reference is made to Section 3(1) of the Malaysian Rubber Board (Incorporation) Act 1996 which provides that: - “(1) There is established a body corporate by the name of "Malaysian Rubber Board" with perpetual succession and a common seal, which may sue and be sued in its corporate name and, subject to and for the purposes of this Act, may enter into contracts and may acquire, purchase, take, hold and enjoy movable and immovable property of every description and may convey, assign, surrender, yield up, charge, mortgage, demise, reassign, transfer or otherwise dispose of, or deal with, any movable or immovable property or any interest therein vested in the Board upon such terms as it thinks fit.” [57] It is thus clear that under the law, LGM can thus sue or be sued under its own capacity independent that of the Government of Malaysia and at the sake of repetition I hold that LGM is for all intents and purposes including under the Contract 1 herein, not the Government of Malaysia. [58] This Court is also unable to accept the Plaintiff’s contention wherein PW1 asserted that the Plaintiff does not need a contract to claim against LGM but can claim for the same based on the alleged unlawful termination of the contract between the Plaintiff and the Government of Malaysia. In the absence of any evidence of a contract, whether express or implied between the Plaintiff and LGM, no claim can succeed by the Plaintiff against LGM. [59] As to PW1’s contradicting testimonies and insistence that the Plaintiff’s contract is with the Government of Malaysia, I put the same to his ignorance of the legalities when it comes to establishing when and how a contract is legally formed. Contract 2 [60] I now come to Contract 2, which can be seen at Bundle D, which this Court however finds that Contract 2 i.e. for the TNB Package, constitutes a different and separate contract between the PDP / the 2nd and 3rd Defendants and the Plaintiff. [61] I have observed that pursuant to the TNB Package under Contract 2, amongst the terms agreed between D2-D3 and the Plaintiff are, inter alia, as follows: 61.1 The Contract Period shall be 15 months from the date possession. 61.2 The date of possession of the Site shall be as follows: (i) The Site for TNB SSU & CSR shall be seven (7) days from the date of Contract 2; and (ii) Site for all sub-stations shall be within five (5) months from the date of Contract 2. 61.3 Plaintiff shall submit to the Superintending Officer for approval a work program for the carrying out of the Works based on the above stated date of possession. 61.4 No claim shall be entertained due to the Site being given in sections or in parts. 61.5 the Plaintiff should obtain and submit an unconditional and irrevocable Performance Bond in the form of Bank Guarantee from a local commercial / Islamic Bank in Malaysia amounting to 5% of the Contract Sum, i.e., RM258,000.00 which sets as a condition precedent to Contract 2. [62] I note that the evidence before this Court shows that the Plaintiff has only conducted preliminary works at the Site in relation to the TNB Package under Contract 2, whereby a sum of RM53,025.96 was duly paid and received by Plaintiff for Contract 2. [63] In any event, the 2nd and 3rd Defendants vehemently deny the existence of the NSC Package and state that there were discussions on the same between the Plaintiff and the 2nd and 3rd Defendants, but no agreement and/or contract in respect of the same was ever finalized. With respect, I cannot agree with their contention as a sum of RM53,025.96 was duly paid and received by Plaintiff for Contract 2 which is evidence that the Plaintiff had conducted preliminary works at the Site in relation to the TNB Package under Contract 2. Requirement of Performance Bond (PB) And the Effects Thereto [64] I now turn to whether the PB as referred to in Contract 1 and Contract 2 were obtained and the effects thereto. [65] It is the Plaintiff’s case that on or about 11 September 2017, the Plaintiff’s application for financing facility for the said Contract was approved by its financiers, Malaysia Building Society Bhd (“MBSB”), which includes the issuance of the performance bond for the Contract up to RM11 million. [66] The Plaintiff contends that the PB however could not be issued inter-alia by reason of the PDP not being a legal entity, which lead to a serious dispute and consequently Contract 1 was terminated by the PDP on 14-7-2017. The Plaintiff also contends additionally, that the NSC and the TNB packages were also terminated by the PDP with the blessings of LGM. [67] The 2nd and 3rd Defendants however submits that the Plaintiff were at all material times aware of the requirement to secure the PB prior to the execution of Contract 1 and that the Plaintiff had requested for an extension of time to submit the same, wherein the 2nd and 3rd Defendants had agreed to extend the submission period until the 29.10.2017. [68] From my assessment of the facts at trial, the 2nd and 3rd Defendants had thereafter vide a letter dated 6.9.2017 to the Plaintiff requested for the PB but the Plaintiff failed to furnish a valid reply to the same. [69] I have noted that thereafter the SO had issued a letter dated 28.09.2017 to the Plaintiff, as found in Bundle G page 49, and reminded it of its obligation to obtain the PB so as “…to ensure the project can be administered smoothly and not affecting your current and future cash flow and subsequently affecting the project as a whole”. [70] I have also found subsequently that on 5.10.2017, the 2nd and 3rd Defendants as the PDP, provided a letter to the Plaintiff which was copied to MBSB's solicitors, Messrs Zulpadli & Edham (5.10.2017 Letter), wherein inter alia: (a) it confirmed that both the 2nd and 3rd Defendants were 2 separate companies acting as joint venture consortium known as “KLIAA-KLIACS Consortium”; (b) it confirmed that they were the PDP for the Project; (c) it confirmed that the 2nd and 3rd Defendants as the PDP have declared that there are no outstanding claims for the Performance Guarantee; (d) that they were unable to cause LGM to issue a Letter of Confirmation as requested; (e) that they were the Employer and not LGM; and (f) the PDP was the contract awarder and not LGM. This said 5.10.2017 Letter can be found at Bundle G, pages 47-48. [71] However, from the evidence before me on 24.10.2017, as can be found in Bundle E pages 128 to 129, the evidence shows that the Plaintiff issued a letter (24.10.2017 Letter) addressed to the KLIAA - KLIACS Consortium, wherein the Plaintiff had made the following allegations as follows: 71.1 the PDP had failed to represent itself as a Registered Company under the Companies Act 1965; 71.2 the PDP was stated to not have the necessary capacity to enter any contracts; 71.3 the PDP was not duly incorporated under the Companies Act and therefore does not have any legal entity in law; 71.4 the PDP has caused and fail to perform of fulfilling its obligations which adversely affected the works; 71.5 due to the questionable entity, it had led to a direct result of the Plaintiff having failed to fulfil the requirements from its financier, MBSB which led to the first act of prevention by the KLIAA-KLIACS Consortium to enable the Plaintiff to obtain the Bank Guarantee. [72] The facts thereafter show, at Bundle E, pages 135-137, that the 2nd and 3rd Defendants, through the SO, one Ir Mohd Ariffin Karim, issued a Notice of Default on 15.11.2017, pursuant to Clause 51 of the Conditions of Contract to the Plaintiff wherein the Plaintiff was put on notice in relation to its alleged continued failure to execute the works, where inter alia, the Plaintiff had: 72.1 suspended or abandoned the Works or any part thereof for a continuous period of 7 days. 72.2 not conducted any activity at the Project site from 28.09.2017 to 23.10.2017. 72.3 failed to proceed regularly and diligently with the performance of its obligation which includes and not limited to slow progress in constructing Block A1 and Block A5, lack of manpower and labour at the Site on 24.10.2017, 28.10.2017 to 07.11.2017. 72.4 failed to submit or close out the Non-Conformance Reports (NCR). 72.5 failed to comply with Clause 47 of the Conditions of Contract whereby the Plaintiff had subcontracted out the whole of the Works or a substantial part of it without the prior written consent of the SO and issued a letter of award to Seacera Group Berhad in relation to the entire Contract for the agreed Contract Sum. 72.6 failed to provide the PB despite the duration on furnishing the same being extended until 29.10.2017. [73] It was contended by the Plaintiff that in cross examination, D2 & D3W1 was directed to the letter of the PDP to LGM, dated 21-12- 20171 where the Plaintiff alleged that the PDP is explaining to LGM that work was still going on at site in the months of September, October and November of 2017. [74] After carefully reading the said letter from the PDP, I find that the letter in fact states that “Dari rekod yang dicatit, kerja-kerja ditapak bina pada bulan-bulan September, Oktober dan November berjalan tetapi dengan aktiviti yang amat terhad dan mencapai peratus kemajuan kerja yang tidak memuaskan”. [75] This in my view corroborates the PDP’s said Notice of Default on 15.11.2017 where amongst others was the issue of the Plaintiff having inter alia, suspended or abandoned the Works or any part thereof for a continuous period of 7 days and not conducted any activity at the Project site from 28.09.2017 to 23.10.2017 as well as having failed to proceed regularly and diligently with the performance of its obligation which includes and not limited to slow progress in constructing Block A1 and Block A5. [76] I do also find that the 2nd and 3rd Defendants had then issued a Termination Letter dated 14.12.2017 (“Termination Letter”) and required the Plaintiff to cease all works at the Project Site and leave the Project Site with immediate effect. [77] I have noted and considered the Plaintiff’s further contention that the cumulative delay appears to be only 33 days as at 25-11-2017 and the Plaintiff was set back by 36 days by the building approval. Be that as it may, I do however find based on my cumulative reasons in the grounds herein that the Termination was valid. [78] From the chronology of events which occurred and the documents as well as the testimonies at trial, the fact of the 2nd and 3rd Defendants registration as a joint venture entity may have to some extent affected the Plaintiff's obligation to secure the PB, but this fact even if true, does not in my view absolve the Plaintiff from obtaining the PB as the Plaintiff could and should have conducted a company search, which they did not, on not only the 2nd and 3rd Defendants but also on the PDP to ensure that the PDP is a valid and / or registered legal entity and thereafter determined the prospects of obtaining the PB based on such information. [79] The Plaintiff should or could in my view also have inquired on the status of the PDP’s legal position or personality either before or shortly after entering into Contract 1 with the 2nd and 3rd Defendants so as to ensure that they would be able to secure the PB from its financiers. No fault can be attributed to either LGM or the 2nd and 3rd Defendants on this issue. [80] I find that the evidence at trial also shows that the Plaintiff was not the only contractor involved in the Project, and that another contractor within the Project, namely Mudajaya Corporation Berhad (“Mudajaya”) had no difficulties in obtaining a bank guarantee from Bangkok Bank in favour of the PDP consortium albeit in the names of the 2nd and 3rd Defendants, rather than the name of the Consortium to facilitate the issuance of the bank guarantee. With respect, I find that the Plaintiff appears to be the only party who had difficulty in procuring the necessary bank guarantees for the Defendants. [81] I further find that the Plaintiff had without any misrepresentation or coercion from any of the Defendants, entered into Contract 1 after being fully aware that it was with the PDP, albeit being the 2nd and 3rd Defendants. I also find that from the terms therein the Plaintiff was aware at all material times of the requirement to secure the PB prior to the execution of Contract 1. [82] The 24.10.2017 Letter is in this Court’s opinion only at best proves that the Plaintiff had difficulty to obtain or procure the PB but I hold that the allegations therein do not distract from the fact that the Plaintiff had the legal obligation to obtain the PB under Contract 1. I further hold, from the facts before this Court, that the failure by the Plaintiff to obtain the PB is not due to either the 2nd or 3rd Defendants fault in any way. [83] In fact, I find that the 2nd or 3rd Defendants had assisted the Plaintiff where possible by inter alia its 5.10.2017 Letter to the Plaintiff’s financiers’ solicitors to clarify the facts so as to support the Plaintiff in its obligation to obtain the said PB. [84] I do from the facts and evidence mentioned above, find that various reminders were sent to the Plaintiff by the 2nd and 3rd Defendants representatives and that the Plaintiff had still failed to procure the necessary Performance Bond(s) to give proper effect to the commencement of works under the Project. [85] To reiterated, I therefore hold that there is an obligation on the Plaintiff to furnish the necessary Performance Bond(s) pursuant to clauses 9.1 and 4.1 of Contract 1 and Contract 2 respectively and that the Plaintiff is duty bound to fulfil its contractual obligations under the Contracts. [86] The failure by the Plaintiff to procure the Performance Bond therefore constitutes a material and repudiatory breach under Contract 1 and Contract 2, which entitles the 2nd and 3rd Defendants to terminate the same. [87] The Federal Court had in the case of Berjaya Times Squares Sdn Bhd (formerly known as Berjaya Ditan Sdn Bhd) v M Concept Sdn Bhd [2010] 1 MLJ 597 put it in the following fashion: - “The doctrine of repudiation is based on the proposition that where a promisor wrongfully repudiates a contract in its entirety, the promisee has a choice. He or she may elect to accept the repudiation, treat the contract as at an end and sue for damages. The rationale is that the primary obligation to perform the promise made is substituted with a secondary obligation to compensate the promisee for the breach. See Moschi v Lep Air Services Ltd & Anor [1973] AC 331. Alternatively, he or she may elect to reject the repudiation and treat the contract as subsisting. Whether the one or the other course was adopted by the promisee — the innocent party — is a fact that is to be inferred by the court from the objective facts, including the words and conduct of the parties. An election once made is irreversible. See Sargent v ASL Developments Ltd (1974) 131 CLR 634 at p 655. But it is the essence of the doctrine of repudiation that the breach must go to the root of the contract. See Mayson v Clouet [1924] AC 980; Bowes v Chaleyer (1923) 32 CLR 159; Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26. In the absence of an express refusal to perform, the test is whether the conduct of the contract-breaker is such that a reasonable person would say of it that he has breached his promise in its entirety. See Freeth & Anor v Burr (1874) LR 9 CP 208; Rasiah Munusamy v Lim Tan & Sons Sdn Bhd [1985] 2 MLJ 291.” Interim Claims [88] The Plaintiff has also alleged that pursuant to Contract 1, the Plaintiff then made the following interim payment claims (“IPC”) (minus the relevant Retention Sums of 15%, that is 10% representing the retention sum and 5% representing the performance bond/guarantee sum), through the PDP, to LGM: - (i). IPC No.1 dated 30-5-2017 for RM3,852,477.93 (inclusive of GST); (ii). IPC No.2 dated 31-7-2017 for RM3,785,322-80 (inclusive of GST); (iii). IPC No.3 dated 21-8-2017 for RM1,910,481-32 (inclusive of GST); (iv). IPC No.4 dated 26-9-2017 for RM1,888,173-95 (inclusive of GST); (v). IPC No.5 dated 26-10-2017 for RM1,044,879-90 (inclusive of GST); and (vi). The Plaintiff states that it was paid on the IPC No.1 by LGM on or about 25 June 2017. [89] At trial, PW 1 had testified inter alia that the quantity surveyor (QS) can approve the interim payment certificate as the stamp of one Pakatan Ukur Bahan Sdn Bhd appears on the the Standard Form of Contract-PWD Form 203 (Rev 1/2010) by reference to Page 125 of Bundle C. [90] I however find that a reading of clause 28.3 therein provides that it was only the Superintending Officer (“SO”) (i.e. the representative of the 2nd and 3rd Defendants’ Consortium) who can approve the interim certificates. For the record clause 28.3, is however in my view no longer applicable as it was substituted in the addendum with the new clause as seen in Page 163 of Bundle C. [91] Later on, in the trial, PW1 contradicted himself and testified that the QS cannot approve the Interim Payment Certificate despite saying otherwise earlier on. Thus, this fortifies my decision that only the SO can approve the Interim Payment Certificate. This can be seen at amongst others the Notes of Proceedings at Page 130 of NOPV1: - Page 130 of NOPV1: - [92] The 2nd and 3rd Defendants have however submitted: 91.1 that the Plaintiff has only conducted preliminary works at the Site in relation to the TNB Package under Contract 2, whereby a sum of RM53,025.96 was duly paid and received by Plaintiff. 91.2 the interim claims submitted by the Plaintiff could not be released within the agreed payment period as this was solely due to the Plaintiff's failure and/or refusal to secure the performance bond as agreed between parties, in addition to the fact that LGM was unsatisfied with the performance of the Plaintiff and had so indicated to the 2nd and 3rd Defendants. 91.3 the Plaintiff failed to progress and advance the works in accordance with the Conditions of Contract (“CC”) and subsequently had stopped work in September 2017. 91.4 the works carried out by the Plaintiff had not complied with the work program and had failed to achieve the required percentage of work which thus clearly established that the Plaintiff had failed to undertake the work with diligence and in due time. 91.5 these constituted solely attributable delays occasioned by the Plaintiff. [93] From the above, in particular the letter dated 6.9.2017 from the PDP to the Plaintiff and a letter dated 28.9.2017 from the QS to the Plaintiff of which I have sighted in Bundle G, I have found no evidence of the fact that LGM was unsatisfied with the performance of the Plaintiff and had so indicated the same to the 2nd and 3rd Defendants and I find that the main issue in the the interim claims submitted by the Plaintiff not being released appears to be the Plaintiff's failure to secure the performance bond as agreed between parties. [94] I do however further find that PW 1 was evasive and kept changing his answers to fit the case which he was trying to put forward during cross-examination, despite his testimony earlier on that he is familiar and well-verse with the contracts. In any event with respect, his version and interpretation of the contracts involved does not detract from the fact that it is this Court which ultimately decides what the contracts and its terms and conditions are. [95] The 2nd and 3rd Defendants also submit that the QS had only valued the completed work at the sum of RM10,336,888.57 in relation to the works carried out by the Plaintiff and the Defendants had paid RM10,957,101.89 in total to the Plaintiff. [96] Thus the 2nd and 3rd Defendants contend: 95.1 that there is no outstanding amount due and payable by the Defendants under the Contract to the Plaintiff; and 95.2 that a sum of RM620,213.32 was paid in excess to the Plaintiff for the completed works prior to the Termination Letter. [97] Based on what I had alluded to above, I hold that the Quantity Surveyor (QS) cannot approve any Interim Payment Certificate and only the Superintending Officer (SO) (i.e. the representative of the 2nd and 3rd Defendants’ Consortium) is empowered under the contract to approve the interim certificates. [98] I further hold that in so far as the payments made in relation to the 1st Interim Payment Certificate and the Perakuan Pembayaran Penamatan no.1, as found in Bundle E, such payments were made after the issuance of the WPC Payment Certificate in compliance with clause 5.3.1. of the PDP Agreement. [99] I note from the facts before me and on the basis of the admission in the pleadings by LGM and the 2nd and 3rd Defendants, that the Plaintiff took possession of the project site to carry out the works under the Contract 1 on 1-3-2017. [100] Under Contract 1, the Plaintiff ought to begin with the works only after submission of the PB to the tune of RM10.5 million, but the facts evidence that the Plaintiff was asked to proceed with the works whilst the PB was being readied as LGM’s development was behind schedule. [101] The evidence before this Court further shows that the Plaintiff could not start with the piling works (which was part of its job scope), until 7-4-2017 as the project architect, LA Architect, only obtained the approval for the building plans on 6-4-2017 as can be seen from the letter in April 2017 from the Majlis Bandaraya Shah Alam addressed to the project architect and acknowledged receipt by the project architect on 6.4.2017. [102] The evidence before me then shows that the Plaintiff had: 102.1 Submitted its claim No.1 sometime in the middle of May 2017, which was followed by a site inspection which was held on 25- 5-2017 for joint valuation of the works done as seen in the Witness Statement of PW1, Embi bin Bahari, the director of the Plaintiff; 102.2 As the PB had yet to be received the PDP, the PDP then informed the Plaintiff that they will deduct an additional 5% from the approved claim in lieu of the said performance bond; 102.3 After the valuation, the Plaintiff’s interim claim No.1 was approved by the consultants and the PDP; 102.4 the Plaintiff was thereafter asked to prepare the Tax Invoice dated 29.5.2017 addressed to LGM which totaled RM4,532,326-98, including GST, as evidenced in page 89 of Bundle D, and amounted to RM3,852,477-93, after the deduction of 10% for performance guarantee, and an additional 5% for performance bond; 102.5 LGM had paid the Plaintiff the sum of RM3,852,477-93 for its claim under IPC No.1 by way of a cheque dated 20-05-2017; 102.6 the Plaintiff had thereafter submitted its IPC No 2 dated 14.7.2017, IPC No 3 dated 21.7.2017, IPC No.4 dated 42 26.8.2017 & IPC No. 5 dated 26.9.2017 respectively all together with the supporting documents to the PDP; 102.7 all these 4 IPCs were not honored by LGM; 102.8 the termination of the Contract thereafter occurred on 14-12- 2017. [103] From the letter of the PDP dated 26-10-2017 which can be seen at page 130 of Bundle E, I find that the PDP had stated therein that they had forwarded the payment claims to LGM and had also met and discussed with the new Chairman of LGM on 18-9-2017 and that the Chairman of LGM had promised to process the payment claims of the Plaintiff. [104] At the trial, LGM’s witness, Nor Adnan Anas (DW1-W1), testified in his Witness Statement that LGM did not make the payments as it did not receive the recommendation from the PDP as regards Interim payments Nos 2-5. [105] I have also observed that by a letter of the Plaintiff, dated 15-11-2017 to LGM, the Plaintiff had outlined the 5 interim claims and a discussion which was held by them with the Chairman of LGM at the LGM office concerning the Plaintiff’s interim claims. [106] In the evidence before this Court, I have also observed that the PDP was only recommending payment for Claim No. 2 as shown by a letter from the PDP to LGM dated 9.8.2017 as found in page 3 of Bundle V and that the PDP had appealed for the payment to be released vide its letter dated 25.9.2017 to LGM, which can be found at page 3 of Bundle T, after LGM rejected the request by its letter dated 15-8-2017. [107] As to the Interim Payment Certificate no.2 which is at Bundle D, I note that the Interim Payment Certificate no.2 was not signed by the SO i.e. the 2nd and 3rd Defendants. Contractually this would mean that there would thus be no obligation to make payment to the Plaintiff. This decision is also corroborated by the fact that there are no WPC Payment Certificates issued by the SO in accordance with Clause 5.3.1 of the PDP Agreement. [108] However, as the evidence shows that the PDP was recommending payment for Claim No. 2 as shown by the letter from the PDP to LGM dated 9.8.2017 referred to above, I hold that Claim No. 2 for the sum of RM4,453,320.95 was payable by the PDP to the Plaintiff. [109] With regards the interim payment certificate no.3, no.4 and no.5, DW4, the 2nd and 3rd Defendants’ witness, admitted that these certificates were not sent to the Plaintiff. I am cognizance of the fact that the consultants involved had approved the 5 interim certificates of the Plaintiff and that the total amount of works that had been allegedly certified as at 26-9-2017 amounts to RM14,683,924-60. [110] I however observed that the said Interim Payment Certificate no.3, 4 and 5 were not signed or approved by the SO and there is no evidence before this Court to show the PDP was recommending payment for Interim Payment Certificate No. 3, 4 and 5. [111] In the circumstances, I am unable on a balance of probabilities to allow the sums under Interim Payment Certificate no.3, 4 and 5. Retention Sum [112] As to the retention sum held by LGM, LGM had in its Re Amended Defence pleaded that it is entitled to forfeit the sums retained by it under IPC No.1, and the two (2) post termination payments pursuant to clauses 25.3.2, 25.3.4 and 25.3.5 of the PDP Agreement. [113] Clause 25.3.2. of the PDP Agreement provides that: - “The PDP shall procure from the … Works Package Contractor to provide a security for performance whereby deductions of ten (10%) shall be made from every interim payments payable to the… Works package Contractors in accordance with the Work Package Contracts until the total amount deducted is equivalent to five percent (5%) of the awarded contract sum for the Works Package Contracts … (“WPC Performance Guarantee Sum”). The amount equivalent to the WPC Performance Guarantee Sum shall be released by the Owner upon the issuance of the CPC by the Owner and the remaining fifty per cent (50%) of the WPC Performance Guarantee Sum shall be released after the issuance of the Project Final Completion Certificate by the Owner.” [114] Clause 25.3.4. of the PDP Agreement provides that: - “In the event the Work Package Contract is terminated due to the fault, default or act of the PDP and/or Work Package Contractors/ Consultant, the WPC Performance Guarantee Sum retained by the Owner or any balance thereof shall be forfeited in favour of the Owner.” [115] I agree with LGM and find that in relation to Contract 1 and Contract 2: - (i) the retention sums as provided for in the WPC Payment Certificate no.1, as per Page 62 of Bundle, B at the sum of RM 453,232,70 (10% WPC Performance Guarantee Sum) and the sum of RM 226,616.35 (5% due to non-provision of the Performance Bond) were forfeited as the Contract 1 was terminated by the 2nd and 3rd Defendants as provided for under Clause 25.3.4 of the PDP Agreement. (ii) the retention sums as provided for in the WPC Payment Advice at Page 112 of Bundle E, Confirmation for Payment Certificate at Page 113 of Bundle E and the WPC Payment Certificate at Page 114 of Bundle E at the sum of RM 442,427.54 (10% WPC Performance Guarantee Sum) and the sum of RM 221,213.77 (5% due to non-provision of the Performance Bond) was forfeited as Contract 1 was terminated by the 2nd and 3rd Defendant. (iii) based on the calculation at Page 164 of the Bundle J, the retention sums are as provided for in the payment made on 12.12.2019 which is inclusive of RM 393,410.58 (10% WPC Performance Guarantee Sum) and RM 196,705.28 (5% due to non-provision of the Performance Bond). (iv) in relation to Contract 2, the 10% WPC Performance Guarantee Sum at RM 53,025.97 was forfeited as Contract 2 was terminated by the 2nd and 3rd Defendant. [116] I further find after reading the said clauses 25.3.2 and 25.3.4 of the PDP Agreement that the same does entitle LGM to forfeit the sums retained by it under IPC No.1, and the two (2) post termination payments. [117] Accordingly, this Court holds that the same was retained and forfeited legally pursuant to the PDP Agreement and does not, as contended by the Plaintiff, give rise to any contractual relationship between the Plaintiff and LGM. Are There Any Payments Due And Owing By the 2nd and 3rd Defendants To The Plaintiff In Relation To The Project [118] The Plaintiff had prayed in their Amended Statement of Claim for inter alia: a. RM1,440,199.33 being the balance sum under the interim claims of the Plaintiff; and b. RM2,387,834.70 being the retention sum being held by D1. [119] The Defendants had relied on the final account statement as shown in Bundle G which was prepared by one Pakatan Ukur Bahan Sdn Bhd (“PUBSB”), where it is noted that the total works carried out by the Plaintiff were valued at RM12,890,708.12 (inclusive of GST). [120] The Plaintiff submits that it was paid the sum of RM10,855,890-57 by LGM, that is both during and post termination of the Contract, of which the payments were made in the following manner: - (i) the sum of RM3,852,477-93 (plus GST of 6%) IPC No.1; (ii) the sum of RM3,760,634-07 (plus GST), on about first week of February 2018, being the first post termination payment; and (ii) the sum of RM3,242,778-57 (plus GST) on about 12-12-2019, being the 2nd post termination payment. [121] The 2nd and 3rd Defendants submit that as such, a total amount of RM10,957,101.89 has been paid by LGM to the Plaintiff. In respect of the remaining amount of RM1,933,606.23, D2-D3 contends that LGM has then taken the position that there is no further payment to be paid. In any event if such payment is due, the same ought to be made by LGM to the Plaintiff pursuant to the terms and conditions of the PDP Agreement. [122] I note that there is a reduction of the percentage of works and the value of works from 2.59% on 26-9-2017, to 1.27%, post termination on 19-12-2017 to which the Plaintiff submits that there is no basis for the reduction of the percentage of the works done by the Plaintiff in respect of “Building Works (Research and Laboratory Facilities) and the QS was not even called to give evidence about the reduction. [123] Be that as it may, as stated in my grounds herein, Interim Certificates no. 3, 4 and 5 were never certified by the SO as per the terms of Contract 1. Thus, I am of the view that the Plaintiff is not entitled to the sums under Interim Certificates no. 3, 4 and 5. [124] As stated, the Plaintiff is only entitled to the Claim No. 2 for the sum of RM4,453,320.95. Claim for Loss & Profit [125] The Plaintiff contends that it has suffered purported loss of profits as follows: a. RM30,971,411.31 being the loss of profits incurred by the Plaintiff under Contract 1 and Contract 2. b. RM3,587,002.00 being the loss of profits incurred by the Plaintiff under Addendum No.1 to LOA which pertains to the implementation of works in relation to the mechanical, electrical and other ancillary works by the Nominated Subcontractors (“NSC Package”). [126] As a result of my grounds supporting my decision herein, I hold that the Plaintiff is not entitled to claim any loss of profit against any of the Defendants and as such, the claim for loss of profit is dismissed by this Court. The Indemnity And / Or Contribution Against the 2nd And 3rd Defendants To LGM [127] I hold that that the 2nd and 3rd Defendants are to indemnify and contribute whatever Plaintiff’s claim which this Court, if any, has awarded as: - a. under clause 10.1.2 of the PDP Agreement at Page 35 of Bundle U, the 2nd and 3rd Defendants has agreed to indemnify LGM on all claims initiated by the work package contractor, in this case, the Plaintiff. b. the 2nd and 3rd Defendants have provided an undertaking to indemnify LGM on all claims arising from its breach of its agreement with the Work Package Contractor, as per Page 161 of Bundle J. Decision [128] Following from all of the above, I hold that the Plaintiff has: 128.1 failed to prove its claim on a balance of probabilities to this Court and the Plaintiff’s case before this Court is therefore dismissed; 128.2 as there is no counter claim from the 2nd and 3rd Defendants herein for any refund paid in excess to the Plaintiff for the completed works prior to the Letter of Termination, there is accordingly no outstanding amount due and payable by the Defendants under the Contracts to the Plaintiff; 128.3 the Court is consequently awarding costs to and hereby orders the Plaintiff to pay the 1st Defendant / LGM costs of RM5,000.00, and costs of RM5,000.00 to the 2nd and 3rd Defendants jointly; 128.4 this Court is in the circumstances therefore dismissing in toto the 2nd and 3rd Defendants Statement of Claim against LGM as per enclosure 66 with costs of RM5,000.00 to be paid to the 1st Defendant by the 2nd and 3rd Defendants. Dated: 19th day of May 2025 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE CONSTRUCTION COURT 1 COUNSEL FOR THE PLAINTIFF: M. Rajinthera Kumar & Hiu Yeat Fong (Messrs Wong & Co.] COUNSEL FOR THE 1st DEFENDANT: Dato’ Firuz Hussein and Choo Shi Jin (Messrs Firoz Julian) COUNSEL FOR THE 2nd AND 3rd DEFENDANT: Dato’ Abd. Shukor Ahmad, Daniel Bock Jr Wie and Aaron Aiman Thangarajoo (Messrs Shukor Baljit & Partners)