MAJLIS BANDARAYA PULAU PINANG v Sagamuda Civil Sdn Bhd (P-01(C)(W)-247-04/2024)

This appeal was also filed against the curious decision of the Learned JC for allowing the Respondent’s counterclaim for a declaration that the contract was unlawfully terminated by the Appellant and as consequence, the Appellant was not entitled to any payment of LAD. Instead, the Learned JC found that Respondent must be paid for its unpaid works in the sum of RM1,654,195.58 as stated in the Final Account.

The Appellant-Plaintiff was the employer for a development project while the Respondent-Defendant was the main contractor who had undertaken to carry out the development project. B. BACKGROUND FACTS

For better understanding of the issues involved in this appeal, it is apt that the background facts and the chronology of events which had led to the appeal be first laid out. For purposes of this grounds of judgment, the parties will be referred to in their capacities as they were at the High Court.

By a Letter of Acceptance dated 14.8.2014 (“LOA”), Majlis Bandaraya Pulau Pinang (“the Plaintiff / MB Penang”) had appointed Sagamuda Civil Sdn Bhd (“the Defendant / Sagamuda”) as the main contractor of a project known as the Proposals to Rehabilitate the Infirmary in Jalan Sungai, Penang (“Project”) for a contract sum of RM8,240,000.00. Subsequent to the LOA, the parties thereafter executed a formal contract dated 15.9.2014 (“PAM Contract”).

It is undisputed that the PAM contract entered between the Plaintiff and the Defendant adopted the Agreement and Conditions of PAM Contract 2006 (With Quantities) (“COC”).

It is also not in dispute that by Clause 7 of the LOA and Appendix of the COC, the parties had agreed that the Date of Commencement of Works of the said Project shall be 15.9.2014, while the Date of Completion of the Project falls on 14.9.2015.

For purposes of carrying the construction works under the PAM contract, Clause 3.5 of the COC prescribes that the Defendant (as the main contractor) is required to submit their Works Program (“WP”) to the Plaintiff (the employer). The WP would entail or set out the proposed schedule of works and the order or the sequence of works to be carried out by the Defendant namely; in respect of (i) Piling Work; (ii) Building Work; (iii) Mechanically and Electrical Work and (iv) External Work.

As required under Clause 3.5 of the COC, on 9.9.2014 the Defendant submitted its WP to the Plaintiff. The unchallenged fact remains that the Defendant was lagging behind the time schedule and from the outset did not comply with the timeline set out in the WP. The Defendant in actual fact struggled to timeously perform its obligations under the PAM contract. Res ipsa loquitor, the Defendant was in critical and serious delay in its construction works and was in dire straits to complete the project.

The Defendant’s delays in carrying out the construction works under the project can be clearly demonstrated in Table A below (with extracts from the WP). (WP can be found at page 632 of Enclosure 5, Bundle 2B-Bahagian C.) TABLE A LOA dated 14.8.2014 Formal Contract (PAM Contract) dated 15.9.2014 Commencement of works date:

15.9.2014 Completion date:14.9.2015. (One year) Work Program (WP) submitted: 9.9.2024 Condition Precedent to commence work Not satisfied until 21.10.2014 well past the original commencement date Underground utilities mapping Not completed until 23.4.2015 Piling Works Must commence on 6.10.2014 and should be completed by 4.11.2014. Even by 2.7.2015 works were not completed. Substructure works Should be completed by 13.1.2015. Works not completed even on 14.7.2015. Roof truss shop drawing Was only submitted on 27.8.2015. Should be completed by 17.4.2015 Building Works Must commence on 3.11.2014 and should be completed on 20.8.2015. Works not completed External Works Must commence on 8.4.2015 and should be completed on 5.9.2015. Works not completed Mechanical and Electrical Works Must commence on 12.1.2015 and should be completed on 10.8.2015. Works not completed. Architect issued Certificate of Non Completion (“CNC”) on 14.9.2015

the Plaintiff’s 1st notice of termination was unlawful and/or invalid;

(ii) the Conditional Reinstatement Agreement was an EOT, thus time was set at large; and

(iii) the Defendant was not bound to the Final Account because the final account was not signed by the Defendant. On ground (i): Invalidity of the termination. [28] The LJC found that the PAM contract was unlawfully / wrongfully terminated by the Plaintiff for the following reasons:

the 2nd termination letter dated 28.6.2016 was invalid because it was issued based on the CNC and Notice of Default of the 1st termination letter;

(ii) the 2nd termination was invalid as the Plaintiff failed to issue a fresh CNC pursuant to Clause 22.1 of the COC; and

(iii) the 2nd termination was invalid as the 2nd Termination letter was issued before the expiration of the 45 days under the CRA. On ground (ii): The Conditional Reinstatement Agreement was an EOT, thus time was set at large. [29] The LJC ruled that the Plaintiff’s letter dated 19.5.2016 reinstating the contract (the CRA) constituted an EOT. According to the LJC, when the Plaintiff agreed to allow the Defendant to continue works on the project via the reinstatement letter, effectively the Plaintiff had granted the Defendant an EOT. The granting of the EOT would therefore gave rise to the following consequential effects:

the initial NOD under Clause 25.2 dated 29.1.2016 was cancelled and thus the CNC under Clause 22.1 dated 14.9.2015 was also cancelled;

(ii) Clause 22.3 COC deemed that the prior CNC under Clause 22.1 to be revoked. Hence, time becomes at large as there was no other CNC issued by the Plaintiff;

(iii) As the CNC dated 14.9.2015 was cancelled, thus the 1st Termination was rendered invalid and therefore the Plaintiff was not entitled to the 1st tranche LAD (accruing at 1st Termination); and

(iv) As there was no other CNC issued for the 2nd Termination, the Plaintiff was not entitled to the 2nd tranche LAD (accruing at 2nd Termination). On Ground (iii): The Plaintiff was not bound by the Final Account. [30] Despite the fact that Clause 22.3 already prescribed that any dispute to the final account must be made within three (3) months from receipt of the said account (and that the Defendant was certainly out of time to dispute the Final Account) the LJC ruled the Defendant’s refusal to sign the Final Account was a sign of ‘dispute’ and thus, the Final Account was not binding against the Defendant. E. THE APPEAL BEFORE US [31] We have perused the Memorandums of Appeal, the High Court’s Grounds of Judgment, the Records of Appeal and the parties’ respective written submissions and we are of the view that the Appeal before us can be can be appropriately decided by determining the following issues: Issue 1: Whether the LJC was correct to find that the termination of the PAM contract by the Plaintiff was invalid; Issue 2: Whether the LJC was correct in his finding that the Conditional Reinstatement Agreement was an EOT, and thus, time was therefore set at large. Hence, the EOT would have effectively nullified/ invalidated the Plaintiff’s claim for LAD; Issue 3: Whether estoppel applies against the Defendant considering the Defendant’s own departure from a strict and rigid conformity of the PAM contract and the COC; and Issue 4: Whether the LJC was correct to find that the Final Account was not binding on the Defendant. F. ISSUE 1: WHETHER THE LJC WAS CORRECT TO FIND THAT THE TERMINATION OF THE CONTRACT WAS INVALID. [32] From our perusal of the LJC’s GOJ, we are beckoned to highlight that the LJC was actually in gross confusion with regard to the issue of the validity of termination of the contract by the Plaintiff. Our reasons are as follows. First, the LJC had stated in paragraph 12 of his GOJ that one of the main issues that he has to decide was with regard to the validity 2nd termination. Paragraph 12 of the GOJ reads: “There are various issues raised. Among the main ones are as follows: …

(iii) The issue in relation to whether the Plaintiff had validly terminated the contract on 28.6.2016 (Issue of termination)?” [33] However, in paragraph 53 of the GOJ, the LJC did not make any ruling on the 2nd termination letter dated 28.6.2016 but instead ruled that the 1st on termination was invalid. Paragraph 53 of the LJC’s GOJ reads as follow: “[53] In our case, it is clear that only the Notice of Default dated 1.02.2016 existed at the time of termination. It is clear that the Notice of Default based on failure to comply with the Notice dated 29.1.2016 no longer exists. Failure to do so causes the 1st termination Notice dated 15.4.2016 to be invalid from the beginning.” [34] Second, the LJC did not make any pronouncement / ruling on the validity of the 2nd termination despite having concluded that 1st termination was invalid. Third, it was never disputed that the Plaintiff’s 1st termination letter dated 15.4.2016 has clearly and explicitly terminated the Defendant’s employment as the main contractor of the Project. It was never the Defendant’s case that it was disputing the validity of the 1st termination. Nowhere in the Defendant’s letter dated 17.4.2016 did the Defendant dispute the 1st termination. In admission of its breaches and the Plaintiff’s entitlement to terminate the PAM contract, the only matter that was raised by the Defendant in its letter was the Defendant’s appeal to the Plaintiff begging the Plaintiff to retract the 1st termination and for a 2nd chance to bring the project to completion (which the Defendant ultimately also failed to do). Fourth, the LJC somehow inexplicably did not give his reasons or explain the underlying ‘reason’ that the validity of the 1st termination remains to be of concern or an issue before him. [35] Hence, the above considered, we have no hesitation to agree with the counsel for the Plaintiff that the validity of the 1st termination in actuality was never an issue to begin with. There is no reason whatsoever for the LJC to harp on the validity of the 1st termination considering the fact that the 1st termination had already been admitted by the Defendant (and had in fact been retracted due to the execution of the CRA). Even if for any reason at all that there were any defects or technicalities in the exercise of the 1st termination by the Plaintiff, the Defendant had not suffered any damages or prejudice considering both the Plaintiff and the Defendant had mutually moved on beyond the 1st termination and later landed on the 2nd termination (which also reflected poorly of the Defendant’s trend and tendency to breach promises or contracts it entered into). [36] Instead the LJC went on at length on how the 1st Termination was invalid as the 1st termination letter was issued based off of a ‘non-existent’ NOD dated 29.1.2016 (of which the Architect had subsequently replaced or superseded with another NOD dated 1.2.2016). [37] The LJC further ruled that as there was no issuance of afresh NOD pursuant Clause 25.2 of the COC, the Plaintiff therefore cannot rely on the NOD dated 1.2.2016 to terminate the Defendant’s contract via the 2nd termination letter dated 28.6.2016. The LJC was under the erroneous assumption that the 2nd termination was exercised pursuant to the terms of the COC (where in actuality, the 2nd termination was exercised pursuant to the mutually agreed CRA which allows the Plaintiff to terminate the contract “bila-bila masa” in the instance the Defendant was in breach of the revised micro schedule) [38] We are regretfully of the view that the LJC was essentially confused in appropriately analyzing and appreciating the distinct and separate complexities of the issues surrounding the 1st termination and 2nd termination. This confusion had led him to misconstrue the true context and content of the 2nd Termination Notice dated 28.6.2016. [39] We must emphasize that it was apparent that the Plaintiff was exercising the new additional right to terminate “at any time” under the CRA due to Defendant’s failure to adhere to the revised micro schedule. This was clearly reflected looking at the contents of the Conditional Reinstatement Agreement (CRA) dated 19.5.2016. The relevant part of the letter states as follows: a. Untuk makluman tuan, Mesyuarat Lembaga Perolehan Bil.5/2016 bertarikh 16 Mei 2016 telah memutuskan Kontrak K/45/2015 bagi Cadangan Membaikpulih Bangunan Infirmary di Jalan Sungai, Pulau Pinang dibenarkan untuk kontraktor menyambung semula dan menyiapkan kerja-kerja pembinaan dengan syarat-syarat berikut: b. Kontraktor hendaklah menyiapkan projek tersebut dalam tempoh 45 hari sehingga 6 Julai 2016; Majlis boleh menamatkan kontrak BILA-BILA MASA sekiranya kontraktor gagal mengikut jadual terperinci harian (daily micro rescheduling) yang ditetapkan; c. Pembayaran penuh hanya akan dibuat apabila projek tersebut selesai. [40] The contents of the CRA are crystal clear. In the CRA, the Plaintiff had explicitly stated that in its Procurement Board Meeting held on 16.5.2016, it was agreed that the Defendant be given another chance to complete the works within the 45 days. It is also clearly stipulated in the CRA that the agreement to allow the Defendant to complete the project with a deadline of 45 days is strictly subject to the stipulated condition that the Defendant must strictly comply with the Revised Micro Schedule, failing which the Plaintiff has every right under para 2 (ii) of the letter to terminate the contract at any time. This departure from the initially prescribed mechanism of termination in the COC was mutually agreed upon by both parties. The Defendant cannot now feign ignorance or confusion that the Plaintiff must still abide by the COC which the Defendant itself had agreed to dispense with. [41] We find that the LJC was plainly wrong in finding the termination of the contract was invalid merely because there was no fresh NOD / CNC being issued under Clauses 25 and 22 of the COC before the 2nd termination letter was issued. We must reiterate that a fresh CNC or NOD is only necessary if the Plaintiff was exercising the right to terminate under the COC. However, in this case the Plaintiff was in fact exercising its additional right to immediate termination under the CRA and not under any provisions of the COC. [42] We are of the view that insisting on a fresh issuance of CNC or NOD would mean the Court is reading additional conditions beyond what was mutually agreed upon under the CRA. In fact, the Conditional Reinstatement was not an EOT that would trigger the cancellation of the CNC under Clause 22.3 of the COC. It would be thoroughly unjust to insist on the Plaintiff to comply with termination procedures under the COC as it would directly run afoul against the express mutual agreement under the CRA that the Plaintiff can terminate the contract “at any time”. Thus, insisting on the termination procedures under the COC (for the 2nd Termination under the CRA) was also akin to unlawfully and unnecessarily improving the Defendant’s bargain in the CRA. Suffice that we refer to the recent decision in the case of Davanam Constructions Sdn Bhd v THP Enstek Development Sdn Bhd (formerly known as TH-NSTC Sdn Bhd) [2024] MLJU 1280: “[115] It was also significantly audacious for the Plaintiff to insist upon this Court to re-write the JVDA so as to improve the bargain the Plaintiff itself had struck upon its own feasibility studies the Plaintiff had conducted well before the JVDA. If this Court were to begin to excuse contracting parties based on the market’s fluctuations, then this Court would have disintegrated the very fabric of good commerce. If that shall be the precedent, then every and all parties to a contract would be allowed to exonerate itself from all blame of contractual breach by assigning blame against the economy or market fluctuations. The immovable rule remains that no parties cannot stand (after a contract) to seek the Court’s assistance to improve the bargain it had agreed to prior. This principle was very recently restated by the Court of Appeal in the case of Orion Choice Sdn Bhd v Bellajade Sdn Bhd [2023] 5 MLJ 437: “Nor can the courts exert unnecessary discretion to deter party autonomy and improve on any party’s bargain in a contract. We can do no better than to refer to the wisdom of the Federal Court in the landmark case of CIMB Bank Bhd v Anthony Lawrence Bourke & Anor [2019] 2 MLJ 1: [26] We agree with the defendant that parties are bound by the terms of the contract which they entered into and that it is the court’s duty to give effect to the clear and plain meaning of the words in the said clause. That is quite trite. [28] It is also trite that an agreement must be construed by the words used in the agreement and the court is not empowered to improve upon the instrument which it is called upon to construct. This we have stated in Berjaya Times Squares Sdn Bhd (formerly known as Berjaya Ditan Sdn Bhd) v M Concept Sdn Bhd [2010] 1 MLJ 597... (Emphasis added.)” [43] It was also patently clear to us that it was erroneous for the LJC to find that the 2nd termination was invalid merely because it was issued before the lapse of 45 days. A plain reading of paragraph 2 (ii) of the CRA sufficiently reveals that the Plaintiff was not bound to wait for the lapsing of the additional 45 days (ending 6.7.2016) to issue the 2nd Termination letter. The additional right to termination was subject to strict adherence of the revised micro schedule and NOT any number of days. As the Defendant began to breach the revised micro schedule even before the lapsing of the 45 days, the Plaintiff was entitled to the 2nd Termination there and then. [44] In view of all the deliberations under this heading, we here answer issue 1 in the negative. The LJC had certainly erred in finding that the Plaintiff’s termination of the PAM contract was invalid. G. ISSUE 2: WHETHER THE LJC WAS CORRECT IN HIS FINDING THAT THE CONDITIONAL REINSTATEMENT AGREEMENT WAS AN EOT, AND THUS, TIME WAS THEREFORE SET AT LARGE. HENCE, THE EOT WOULD HAVE EFFECTIVELY NULLIFIED/ INVALIDATED THE PLAINTIFF’S CLAIM FOR LAD. [45] The LJC had erroneously accepted the Defendant’s submission that the Plaintiff by its CRA had effectively granted the Defendant an ‘EOT’ to finish up the project until 6.7.2016. The LJC had premised his conclusion on the basis that prior to the issuance of the 2nd termination letter on 28.6.2016, the Plaintiff did not issue a fresh CNC and a fresh NOD in accordance to clauses 22 and 25 of the COC respectively. According to the LJC, since the Plaintiff had cancelled the 1st termination via its CRA, all the reasons that had led to the 1st termination are completely null and void. And therefore, the Plaintiff cannot rely on the “sebab-sebab” which were stated on the previously issued CNC / NOD (dated 14.9.2015 and 1.2.2016 respectively). The LJC did not accept the argument by the Plaintiff that the 2nd termination letter was issued based on the conditions stated in the CRA. The LJC was of the view that to terminate the contract, the Plaintiff must comply with the provisions under the COC (see paragraphs 73 and 74 of the GOJ). [46] With due respect to the LJC, he had again misconstrued the COC. The very fact of the matter is; the cancellation of the 1st Termination Notice does not mean the Plaintiff also terminates the CNC. We must emphasize here that the CRA does not erase the factum of delay up to the 1st Termination Notice. The CRA never mentioned of the Plaintiff’s intention to ‘exonerate’ the Defendant from its admitted delays already accrued within the 1st tranche of the LAD period (prior to the 2nd Termination). The granting of additional 45 days way past the original completion date under the CRA by no means was a locus classicus EOT under the PAM contract and the COC. [47] In a typical construction contract (especially a PAM contract), the manner and method for the contractor to request for and obtain an EOT was clearly prescribed under the PAM contract or COC. Should the contractor identify that it might not be able to comply with the originally set deadline, it was incumbent upon the contractor (the Defendant in this case) TO FIRST APPLY FOR EOT. Then, by the Plaintiff’s discretion (and of course fair consideration), THE PLAINTIFF MAY OR MAY NOT GRANT THE DEFENDANT EOT. Should the Plaintiff allow the Defendant’s application for EOT, only then the Plaintiff is disentitled from claiming LAD SPECIFICALLY for the number of days that the Plaintiff allowed for extension. This is the crucial misapprehension that plagued the LJC’s erroneous decision. He had found that time had been set ‘at large’ merely because the Plaintiff had allowed additional 45 days under the CRA for the Defendant to complete the project (of which the Defendant still failed to do so). This was entirely wrong and a misconceived understanding on the mechanism of EOTs. At best, even if the 45 days under the CRA was somehow an EOT (of which it was definitely not an EOT), the Defendant hypothetically might be entitled to absolve delays up to 45 days ONLY and NOT FOR THE ENTIRE DURATION OF DELAY. Thus, if for instance if there was already a delay of 145 days (inclusive of the additional 45 days), the Plaintiff would still be entitled to 100 days’ worth of LAD. What more in this case where the CRA was not even an EOT, the Plaintiff remains entitled to LAD upon the entire breadth and length of the Defendant’s total delays. [48] And we must again reiterate that the CRA only states that the Defendant was conditionally given 45 days to finish up all incomplete works so as to avoid total termination of the contract. It did not set a ‘new completion date’. The Plaintiff was still intent on claiming LAD for the delays post or prior to the initial 1st Termination. [49] The Plaintiff’s entitlement to LAD is specifically provided Clause 22 of the COC. Therefore, this Court must emphasize that Clause 22.1 of the COC is a contractual provision related to liquidated damages which entitles the Plaintiff to recover compensation in the forms of monetary payment triggered by occurrence of specified default or breach by the Defendant (as main contractor) in performing its obligation under the contract. Therefore, Clause 22 of the COC has nothing directly to do with termination of the contract. [50] Now, if there was delay (breach) on the part of the Defendant in carrying out its obligation under the contract, for purpose of claiming LAD, Clause 22 of the COC requires the Plaintiff to issue a CNC. A CNC is invalidated / cancelled only when there was a proper application and granting of EOT under the procedures prescribed under Clause 22.3 of the COC. It was wrong and baseless for the LJC to assume that the CNC was automatically invalidated when the 1st Termination Notice was cancelled. It was also wrong and erroneous for the LJC to find that the CRA was an EOT that triggers the cancellation of the CNC under Clause 22.3 of the COC. [51] Regrettably, we find that the LJC did not appreciate the proper operation of the provisions under the COC, particularly the provision for LAD and the issuance of a CNC (Clause 22 of the COC) and the granting of EOT (Clause 23 of the COC). We must stress that there is a distinct difference between granting EOT (which acquiesces delay and disentitles LAD) under the COC and granting ‘conditional days’ under a totally separate CRA. Now, when EOT is applied for and granted under the COC, then the employer cannot claim for LAD for specifically for the number of days allowed for extension (which does not cover the entire length of delay if the delay ran longer than the extension granted). [52] In the Appeal before us, it must be noted the Defendant had admitted that they indeed did submit a total of 6 applications for EOT and all the applications were rejected by the Architect via his letter dated 11.9.2015. It must also be noted that the rejection was never challenged by the Defendant. It must also be observed that during the subsistence of the CRA, the Defendant by its letter dated 15.6.2016 had re-applied for 6 EOTs to the Architect but was also rejected on the ground that the Defendant’s EOTs applications neither have legal basis nor factual basis. At the trial, the evidence of the Architect (PW 1) in respect of the rejection of the EOTs’ applications again were never challenged by the Defendant. Therefore, the undisputed fact remains that there was no EOT granted by the Plaintiff to the Defendant to negate or disentitle the Plaintiff of its claim for LAD. Most pertinently, the factum that the Defendant proceeded to re-apply for the 6 EOTs clearly proven that the CRA was not an EOT (and thus does not trigger the cancellation of the CNC under clause 22.3 of the COC). If the Defendant genuinely believed that the CRA was an EOT to set time at large, then the Defendant would not have re-applied for the 6 EOTs. [53] Regarding the additional 45 days given to the Defendant by the Plaintiff vide its CRA, it is crystal clear that the additional 45 days were conditionally given under a totally separate contract. Thus, the original completion date and prior period of delay as against the PAM contract remains intact (if the conditions were eventually not met). [54] In fact, since the Defendant had failed to ensure diligent adherence to the revised micro schedule (albeit before the lapsing of the 45 days), the Defendant is not even entitled to the entirety of the conditional benefit of the 45 days that was conditionally granted via the CRA. The 45 days’ benefit is only attainable if and only if the Defendant strictly and diligently adhered to the revised micro schedule (which the Defendant clearly had failed to do so). [55] Succinctly, contrary to the finding of the LJC that the CRA constituted an EOT, even the Defendant itself admitted that the conditional reinstatement was not an EOT considering the fact that the Defendant still re-applied for 6 EOTs after the issuance of the CRA. Thus, the Defendant’s own conduct justifies estoppel to apply to estop the Defendant from contending that the CRA was an EOT (which the CRA certainly was not). [56] Considering the aforementioned deliberations, it is plain and obvious that the CRA was not an EOT. Since the CRA was not an EOT, Clause 22.3 COC was not triggered to invalidate the CNC. Thus, the Appellant remain entitled to both the 1st tranche (accruing at 1st Termination) and 2nd tranche (accruing at 2nd Termination) of LAD. [57] Considering all of the deliberations under this heading, we hereby answer issue 2 in the negative. The LJC had certainly erred in finding that the Conditional Reinstatement Agreement was an EOT. Thus, time was never set at large. Hence, the Plaintiff remains entitled to claim for LAD. H. ISSUE 3: WHETHER ESTOPPEL APPLIES AGAINST THE DEFENDANT CONSIDERING THE DEFENDANT’S OWN DEPARTURE FROM A STRICT AND RIGID CONFORMITY OF THE PAM CONTRACT AND THE COC. [58] In the Appeal before us, we cannot ignore the fact that the Defendant in resisting / negating the Plaintiff’s claim for LAD had tenuously complained that the Plaintiff had failed to comply with the provisions of the COC with regards to the termination of the contract, in particular Clauses 22, 23 and 25 (relating to issuance of CNC and NOD before the Plaintiff can terminate the contract). [59] We are of the view that it no longer lies before the Defendant to complain and insist on strict or rigid conformity or adherence to the COC on the following grounds:

the additional 45 conditional days granted under the CRA was not an EOT that was applied for in strict adherence to the specific procedures prescribed under the COC. It was not applied for by the Defendant. It was conditionally granted upon appeal or desperate plea by the Defendant after the 1st termination (not upon any EOT application);

(ii) the additional 45 conditional days were conditionally granted after the 1st termination by the Plaintiff. It does not make legal or logical sense that the additional 45 days were an EOT under the COC because at the time when the CRA was penned down, the PAM Contract had already been terminated. Thus, the 45 additional days can only be granted outside the ambit of the PAM Contract and even the COC;

(iii) therefore, since the Defendant initially were conditionally granted additional 45 days vide a ‘collateral dealing’ outside the parameter of the PAM Contract and the COC, it would be unjust for Sagamuda to now insist on strict compliance of the PAM contract or the COC against the Plaintiff. [60] Based on the abovementioned reasons, it is our judgment that estoppel shall operate to bar the Defendant from denying the Plaintiff’s right to enforce its right to terminate the contract “at any time” independent of the procedures of the PAM contract and the COC considering the Defendant itself was granted the conditional 45 days also independent of the procedures prescribed under the COC or the PAM contract. (see: Boustead Trading (1985) Sdn Bhd v Arab Malaysian Merchant Bank Bhd [1995] 3 MLJ 331 ; Cheah Theam Kheang v City Centre Sdn Bhd & Other Appeals (2012) 2 CLJ 16; Vila Mekar Sdn Bhd v Wong Yie Dee [2025] MLJU 2104; Ho Yau Hong & Ors v How Yaw Ming and another appeal [2023] MLJU 933). [61] We hereby answer issue 3 in the positive. Estoppel certainly applies against the Defendant considering the Defendant’s own departure from a strict and rigid conformity of the PAM contract and the COC. I. ISSUE 4: WHETHER THE LJC WAS CORRECT TO FIND THAT THE FINAL ACCOUNT WAS NOT BINDING ON THE DEFENDANT. [62] It must be minded that Clause 25.6 COC clearly prescribed a specific method and time to dispute a Final Account (must be by way of written dispute to be issued within 3 months from receipt of Final Account). Of which the Defendant irrefutably had failed or refused to do so. [63] We find that the LJC had contradicted himself with regards to the issue of the Final Account. On one end in para 111 of GOJ, the LJC found that the Defendant cannot dispute the Final Account under the COC. However, the LJC found that the Defendant’s act of ‘not signing’ the Final Account was a sign of dispute. And thus, the Final Account is somehow no longer binding or conclusive. [64] We must state that there are good reasons why the COC includes specific method and timing to dispute the Final Account. If we follow the LJC, then any Final Account can be disregarded just by the contractor intentionally refusing to sign the Final Account. This would unnecessarily take the teeth out of the bite of the mutually and bilaterally agreed terms in the issuance, disputation mechanism, and finality of the Final Account. If we were to allow a contractor not to be bound by the Final Account simply by refusing to sign the same, this would lead to an absurd and undesirable precedent that a contractor can simply ignore a Final Account for periods longer than the contractual 3 months’ time limit and later belatedly mount a challenge against the Final Account as and when the Employer commenced an action based on the Final Account. This would obviously cause undue hardship and disadvantage to the employer of a project as the closure of a project’s account will be protracted and delayed due to the belated disputes raised out of time by the Contractor. The conclusion and finalization of the Final Account should not be left at the mercy (or arbitrary whims and fancy) of an errant or delinquent contractor. [65] In the appeal before us, since the Defendant has never issued any written protest or never raised any objection against the Final Account within the prescribed three (3) months, then it can no longer lie in the mouth of the Defendant to now belatedly dispute the correctness of the Final Account (see: Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331 ; KGN JAYA SDN BHD v PAN RELIANCE SDN BHD [1996] 1 MLJ 233). [66] In view of the deliberations under this heading, we hereby answer issue 4 in the negative. The LJC had certainly erred in finding that the Final Account was not binding on the Defendant. J. OUR DECISION [67] All of the above deliberations considered, we find that the LJC was plainly wrong in arriving to his findings and decision in dismissing the Plaintiff-Appellant’s claim and allowing the Defendant-Respondent’s counterclaim. [68] We find that there are glaring merits in the present appeal. We therefore allow the Plaintiff-Appellant’s appeal with costs. We hereby order that the findings and decisions of the LJC be reversed and set aside entirely. Consequent to this appeal being allowed, the Plaintiff-Appellant’s claim in its Statement of Claim in prayers 87 (a) to (k) are hereby allowed. On the same note, the entirety of the Defendant-Respondent’s counterclaim is hereby dismissed. [69] We accordingly order that the Defendant-Respondent do pay the Plaintiff-Appellant costs of RM80,000.00 (here and below), subject to allocatur. Dated 7th July 2025 SGD -------------------- (AZIMAH BINTI OMAR) JUDGE COURT OF APPEAL For the Appellant - Messrs. Presgrave & Mathews (GEORGETOWN)

Lim Hock Siang

Daniel Khoo Kevin

May Jo in

For the Respondent - Messrs. Shukor & Co (BUKIT MERTAJAM)

Amir bin Abu Bakar Amirul Azim bin Zainordin