Mudajaya Corporation Berhad v Jalinan Senada Sdn Bhd (WA-12BNCVC-95-08/2017)

The Respondent on the other hand, had also filed a notice of cross appeal appealing against the decision of the Sessions Court for dismissing its claim for variation works amounting to RM57,583.39. B. BACKGROUND FACTS [3] Essentially, the dispute that arose between the Appellant and the Respondent pertains to the execution of a construction contract dated 13.8.2014.

For ease of reference, this Court will refer to the parties in both the appeal and the cross appeal according to their position before the learned Sessions Court Judge (the trial court).

Both the Defendant (the Appellant - Mudajaya Corporation Sdn Bhd) and the Plaintiff (the Respondent - Jalinan Senada Sdn Bhd) are companies incorporated in Malaysia.

The Defendant was appointed as the main contractor for the MRT project known as “Project Mass Rapid Transit Lembah Kelang: Jajaran Sungai Buloh-Kajang Package V3; Construction and Completion of viaduct Guideway and Other Associated works from Dataran Sunway Station to Section 17” (“said project”). The employer of the Project was Gamuda Berhad.

The Defendant, upon being appointed as the Main Contractor of the said project, vide a Letter of Award dated 13.8.2014 (the said Letter of Award), had then engaged the Plaintiff (the Respondent) as its sub-contractor to undertake drainage works known as “Drainage Page 4 of 51 Works (DS07-DS37)[Package 2]” for a total contract sum of RM1,994,622.70.

On the same day of the Letter of Award, the Defendant and the Plaintiff had also entered into a Sub Contract (“Agreement Form).

Preamble 2 of the Agreement Form clearly stipulates that all documents listed in the preamble shall be deemed to form and be read and construed as part of the Sub Contract or Agreement Form. The documents are as follows: Letter of Award Ref. No: MCB/PO/E56-MRTV3/CD/08/14/071 a. Instruction to Tenderer; b. Form of Tender; c. Form of Agreement; d. Special Conditions of Subcontract; e. General Conditions of Subcontract; f. Materials and Workmanship Specification g. Particular Specification; h. Bill of Quantities & Responsibility Matrix;

Therefore, in respect of the sub contract works to be carried out by the Plaintiff, it is not in dispute that the terms, conditions and obligations of parties are contained in all documents spelt out in Preamble 2 of the Agreement Form.

The salient terms of the Sub-Contract which are relevant to the present action are as follows: i. 4 Date of Commencement 8.1(a) As per Letter of Award 5 Date of Completion 9.1(b) 15 months from date of possession ii. CLAUSE DETERMINATION a) If in the Contractor’s sole opinion that Subcontractor have delayed the Subcontract Works by ten (10.0%) percent in comparison with the approved Works Programme for the Subcontract Works or the Subcontractor have failed and Page 6 of 51 evidently persisted with neglect to remedy after a seven (7) calendar days written notice being served on Subcontractor, without prejudice to the Contractor’s rights, the Contractor shall be entitled the right to take back the remaining Subcontract Works without any further notice to Subcontractor. b) Any payment due or to become due including but not limited to retention monies shall be withhold by the Contractor until all costs to be deducted and/or set-off from Subcontractor can be ascertained. iii.

CLAUSE 12.0: CONTRACTOR’S OPTION TO SUPPLY MATERIALS 1 It is hereby agreed between the parties that the Contractor reserves the right to supply materials as specified in the Special Conditions of Subcontract or any other materials to any part the Subcontract Works by notice in writing and the Subcontract Sum shall be adjusted in accordance to the Subcontract rates herein or if none is provided, shall be mutually agreed between the Parties or failing which a reasonable rate to be determined by the Contractor. Page 7 of 51 iv.

CLAUSE 14.0: ACCEPTANCE OF SITE 1 The Subcontractor fully acknowledges that the Subcontractor have inspected the site and adjacent land and accepted the grounds as found, examined drawings and/or other documents, made thoroughly acquainted with all details, the nature and extent of works. The Subcontractor has satisfied himself as to the conditions, forms and nature of the site including existing ground levels, subsoil and the existing various underground services. The subcontractor shall exercise extreme care during the execution of the Subcontract Works to ensure that properties are not damaged due to the execution of the Subcontract Works. The Subcontractor hereby agrees that he will not be entitled to any reimbursement for lack of knowledge and/or ignorance of the site conditions. v.

CLAUSE 16.0: PAYMENT TERMS 1 The Subcontractor shall submit its Statement of Works Done together with proper documentation substantiations on a monthly basis (in a format approved by the Contractor) based upon the results of valuation conducted jointly by the Subcontractor and the Contractor to facilitate the issuance of Page 8 of 51 a Interim Certificate of Payment which shall be issued upon expiry of the number of days specified in the Special Conditions of Subcontract thereafter.

16.2 The Contractor may in any Interim Certificate of Payment make any correction or modification whether arithmetical or otherwise that should properly be made to any previous Interim Certificate of Payment. A Interim Certificate of Payment shall not be deemed to indicate the Contractor’s acceptance, approval, consent or satisfaction.

16.3 Where the amount paid by the Contractor to the Subcontractor pursuant to any error in a previous Interim Certificate exceed the amount due and payable to the Subcontractor under any subsequent Interim Certificate or the Final Account Certificate, such excess shall be recoverable by the Contractor from the Subcontractor.

16.4 It shall be a condition precedent for the issue of any Interim Certificate of Payment that the Subcontractor has returned the Letter of Award duly signed and witnessed and has deposited the Bank Guarantee for Performance Bond. Page 9 of 51 vi. CLAUSE 26: SUSPENSION AND/OR TERMINATION

CONTRACTOR 1 If the Subcontractor fails to comply with one or more grounds in Clause 7 herein;

26.2 If in the Contractor’s sole opinion that the Subcontractor:-

fails to proceed with Subcontract Works with due diligence; or

fails to comply with the written instruction or notice of the Contractor and have evidently persisted with neglect after seven (7) calendar days from the date of a notice being served; or

abandons the Subcontract Works or otherwise plainly demonstrates the intention not to continue performance of his obligations hereunder; or

sub contracts or assigns the whole of the Subcontract without the required agreement; or

fail to meet the milestone date;

becomes bankrupt, insolvent, goes into liquidation, has a receiving or administration order made against him, compounds with his creditors, or carries on business Page 10 of 51 under a receiver, trustee or manager for the benefit of his creditors. [12] This Court also takes note that the Plaintiff is required to complete the sub contract works within 15 months from the date that possession is given. THE PLAINTIFF’S CASE [13] The Plaintiff’s pleaded case as narrated in its Statement of Claim is simply this:

The Plaintiff requested for site possession in October 2014 and was granted the same on 6.4.2015. The Plaintiff thereafter commenced and proceeded with their Works.

Around December 2015, the Plaintiff discovered that a third party was undertaking the Works and using their material. This interference was allowed and authorized by the Defendant and was conducted without any prior notice to or consent of the Plaintiff.

The Defendant also unilaterally notified the Plaintiff of the omission of Section DS7-DS11 from the Plaintiff’s Works to which the Plaintiff had not agreed to.

The Plaintiff avers that by the Defendant’s conduct and acts as stated above the Defendant was in breach of the Contract, evinced the clear intention not to be bound by the said Contract, unilaterally repudiated the same and made it impossible for the Plaintiff to perform the Works. The Plaintiff accepted the Defendant’s unilateral termination.

The Plaintiff did not intend to do the Works gratuitously.

Due to the Defendant’s breach the Plaintiff suffered loss and damage as follows: i. Payment Outstanding for work done RM27,851.06 ii. Payment due on Variation Order RM64,513.29 iii. Payment due on back charges RM43,303.68 iv. Loss of Profits on balance Works RM309,959.10 ____________ Page 12 of 51 TOTAL RM697,627.13 ____________ [14] Based on the above pleaded case, the Plaintiff claims against the Defendant for the following: i. judgment in the sum of RM697,627.13; ii. interest from the date of the breach at the rate of 5.00% per annum until date of realization; iii. costs; and iv. such further and other relief as the Court may deem fit and proper to grant. THE DEFENDANT’S CASE [15] The Defendant had vigorously disputed the Plaintiff’s claim and contended that the Plaintiff is not entitled to the sums claimed. In its Amended Statement of Defence, the Defendant inter alia raised the following: Page 13 of 51 3….

The Defendant says that the Plaintiff was required to take site possession as early as 8.3.2015, but had failed and/or refused to do so;

(b)

(c)

In further reply to paragraph 5, the Defendant denies that the Plaintiff was only granted site-possession on 6.4.2015 and puts the Plaintiff to strict proof thereof. 5 ….

….

Clause 14.1 of the General Conditions of the Sub-Contract reads, “The Subcontractor fully acknowledges that the Subcontractor have inspected the site and adjacent land and accepted the grounds as found, examined drawings and/or other documents, made thoroughly acquainted with all details, nature and extent of works. The Subcontractor has satisfied himself as to the conditions, forms and nature of the site including existing ground levels, subsoil and the existing various underground services. The Subcontractor shall exercise extreme care during the execution of the Subcontract Works to ensure that properties are not damaged due to the execution of the Subcontract Works. The Subcontract hereby agrees that he will not be entitled to any reimbursement for lack of knowledge and/or ignorance of the site conditions”,

The Defendant issued to the Plaintiff a “Notice of Delay” dated 24.8.2015 due to the progress of the drainage works being badly delayed as a result of insufficient manpower and gave due notice to the Plaintiff that the Plaintiff’s scope of works would be, inter-alia, withdrawn without further notice and that Page 15 of 51 all costs incurred by the reason of the Plaintiff’s delay would be back charged to the Plaintiff in the event there wasn’t a significant improvement by the Plaintiff. The Defendant says that the aforesaid delay is a breach of the terms and conditions of the sub-contract between the Plaintiff and Defendant. …..

By letter dated 15.12.2015, due to the Plaintiff’s continued failure to proceed diligently, the Defendant pursuant to sub-clause 17(a) and Clause 26 of the Conditions of the Subcontract gave the Plaintiff 7 days notice that in the event of the Plaintiff failing to proceed diligently with the sub-contract works, the same would be automatically terminated.

The Plaintiff failed to proceed diligently in carrying out the sub-contract works within the aforesaid period of 7 days and the sub-contract was automatically terminated.

The Plaintiff by its various defaults and contractual breaches caused the Defendant to engage the services of 3 others contractors who the Defendant had to pay an increased sum of money to rectify the aforesaid defaults and breaches and also to carry out the Plaintiff’s contractual obligations. This increased cost totaled RM251,394.15. The Plaintiff is further indebted to the Defendant in the sum of Page 16 of 51 RM164,976.21 being back charges imposed by the Defendant as a result of the Plaintiff’s aforesaid contractual breaches and default. The Defendant therefore claims the aforesaid total sum of RM416,370.36 both as a set off to the Plaintiff’s claim and as a counterclaim against the Plaintiff. [16] The Defendant had also counterclaimed for back charges and the costs of hiring new contractors to complete the work which was left by the Plaintiff. The details of losses and expenses for the Defendant are as below:- a) Cost for the appointment of three new contractors RM 251,394.15 b) Back charges RM 156,628.56 Total RM 416,370.36 [17] In response to the Defendant’s Amended Statement of Defence and Counter Claim, the Plaintiff had filed its Amended Reply to Defence and pleaded the following:

The Plaintiff confirms Paragraph 2 of the Defence.

In reply to Paragraph 3 and 4 of the Defence, the Plaintiff maintains Paragraph 5 of their Statement of Claim. While the Plaintiff is aware of the Defendant’s first Notice dated 13/3/2015 and the request to take possession, the Plaintiff avers that there were minimal works done, only 2 bays available out of the agreed 30 bays, and taking such possession by 8/3/2015 would have been futile and would have incurred idling costs, mobilization and demobilization costs to the Plaintiff.

The Plaintiff responded to the Defendant’s letter dated 13/32015 vide their letter dated 20/3/2015 on the above, which the Defendant accepted.

Around late March 2015, the Defendant’s Senior Construction Manager informed the Plaintiff that there were 7 bays available for the Plaintiff to commence works and hence the Plaintiff did so by starting their mobilization process on 6/4/2015 to take possession.

In reply to Paragraph 6 of the Defence: i. the Plaintiff denies that they are in breach and puts the Defendant to strict proof thereof. The information and documents as required by Contract were supplied. ii. the Performance Bond and insurance policies were information/documents that were not required by the Page 18 of 51 conditions of the Contract and this was communicated to the Defendant who was well aware of this and accepted this. Hence the Defendant’s Notice dated 16/9/2015 was unnecessary and need not have been complied with. Hence paragraph 6 (a), (b), (c), (d) and (e) of the Defence are denied and the Defendant put to strict proof thereof. iii. the Defendant’s ‘Notice of Delay’ dated 24/8/2015 was responded to by the Plaintiff vide their letter dated 27/8/2015 which response the Defendant accepted. iv. the Defendant’s letter dated 23/10/2015 was unilaterally written by the Defendant omitting works from section DS07 to DS12 from the Plaintiff’s scope of Works under the Contract and the Plaintiff never agreed to this omission. In any event the Plaintiff has not made any claim for the Works on these sections. Hence save that the letter was sent Paragraph 6(f) is denied and the Defendant put to strict proof thereof. v. the Plaintiff denies the allegations in Paragraph 6 (g), (h) and

of the Defence and puts the Defendant to strict proof thereof. The Defendant wrote yet another letter dated 15/12/2015 [but received by the Plaintiff on 21/12/2015] and the Plaintiff responded to both the Defendant’s letter vide their letter dated 21/12/2015. The Defendant is put to strict proof Page 19 of 51 that they were precluded/prevented from proceeding with road widening works. vi. With respect to the Plaintiff’s claim as Paragraph 6 to 9 that a third party was undertaking works on their site, [which the Defendant has denied vide Paragraph 5 of their Defence], the Plaintiff avers that while the Defendant states that they had given a seven day notice dated 15/12/2015 to the Plaintiff to increase the progress of works on sight, the Defendant had already on or before 15/12/2015 allowed third parties to take over the Plaintiff’s Works and use their equipment. AMENDED DEFENCE TO COUNTERCLAIM

The Plaintiff repeats the above paragraphs.

Paragraphs 12 to 14 of the Counterclaim are denied and the Defendant is put to strict proof thereof 4. The Plaintiff denies each and every allegation in the Counterclaim as if the same was traversed and denied seriatim.

Wherefore the Plaintiff prays that the Defendant’s Counterclaim be dismissed with costs. Page 20 of 51 C. THE SESSIONS COURT’S DECISION [18] Upon his consideration of the oral testimonies of the witnesses called by the parties and documentary evidence produced before him, the Sessions Court Judge had allowed the Plaintiff’s claim as follows: No Item Amount 1) Progress claim No.5 to No.7 together with interest on the said sum at 5% per annum from 20.11.2015 until the date of full realization. RM 269,949.67 2) Variations together with interest on the said sum at 5% per annum from 20.11.2015 until the date of full realization RM 86,994.20 3) Back Charges together with interest on the said sum at 5% per annum from 20.11.2015 until the date of full realization RM 17,665.75 Page 21 of 51 4) Loss of profits together with interest on the said sum at 5% per annum from 16.12.2015 until the date of full realization RM 251,906.13 5) Costs RM 31,900.00 [19] The Learned Session Court Judge had dismissed the Defendant’s counter claim in entirety with costs of RM12,825.00. [20] Before this Court proceeds to determine the merits of the appeal and the cross appeal, it is only apt for this Court to briefly set out the jurisdiction of this Court sitting as an appellate court. It is trite principle of law that in warranting the exercise of appellate intervention or interference namely; to reverse the decision of a Sessions Court, the appellate court needs to determine whether or not the Sessions Court has arrived at its decision with sufficient judicial evaluation and appreciation of the evidence adduced before it. Page 22 of 51 [21] In the case of Lee Ing Ching & Ors v Gan Yook Chin & Anor [2003] 2 CLJ 19, Gopal Sri Ram, JCA (as he then was) in delivering the decision of the Court of Appeal had stated as follows: “Very recently, this Court in Arab Malaysian Finance Bhd v Steven Phoa Cheng Loon & Ors [2003] 1 CLJ 585 CA, reviewed some of the leading authorities on appellate intervention and identified the general rule of appellate non-interference. We also considered some of the categories in which appellate interference is warranted. We find it unnecessary to repeat what we there said. Suffice to say that we re-affirm the proposition that an appellate court will not, generally speaking, intervene unless the trial court is shown to be plainly wrong in arriving at its decision. But appellate interference will take place in cases where there has been no or insufficient judicial appreciation of the evidence. It is, we think appropriate that we say what judicial appreciation or evidence involves. A judge who is required to adjudicate upon a dispute must arrive at his decision on an issue of fact by assessing, weighing and, for good reasons, either accepting or rejecting the whole or any part of the evidence placed before him. He must, when deciding whether to accept or to reject the evidence of a witness test it against relevant criteria. Thus, he must take into account the presence or absence of any motive that a witness may have in giving his evidence. If there are contemporary documents, then he must also test evidence of a witness against these. He must also test the evidence of a particular witness against the Page 23 of 51 probabilities of the case. A trier of fact who makes findings based purely upon the demenour of a witness without undertaking a critical analysis of that witness’ evidence runs the risk of having his findings corrected on appeal. It does not matter whether the issue for decision is one that arises in a civil or criminal case: the approach to judicial appreciation of evidence is the same. There are a number of important and leading cases in which the point has been considered.” [22] This Court had perused the learned Sessions Court’s grounds of judgment and his appreciation of the issues involved understood by him from the pleaded case of the Plaintiff and the Defendant and on the evidence produced before him. [23] The learned Sessions Court at the conclusion of the case has made finding of facts of the issues before him. For a clear understanding of his findings in allowing the Plaintiff’s claim, this Court opines that it is necessary to reproduce the learned Sessions Court’s grounds of judgment below: [24] Terdapat tiga isu utama yang perlu saya putuskan di dalam kes ini iaitu:

Sama ada Plaintif berhak kepada bayaran berjumlah RM684,099.12 yang merangkumi tuntutan untuk bayaran bagi kerja-kerja yang telah dilakukan, tuntutan variasi, ‘back charges’ dan kehilangan keuntugan.

(ii) Sama ada notis penamatan yang dikeluarkan oleh Defendan sah.

(iii) Sama ada Defendan berhak untuk bayaran berjumlah RM416,370.36 iaitu bayaran untuk 3 kontraktor yang dilantik untuk menyudahkan kerja-kerja Plaintif dan ‘back charges’ untuk bahan-bahan yang dibeli dan perkhidmatan yang diberikan oleh Defendan bagi pihak Plaintif. [25] Setelah meneliti keterangan-keterangan yang dikemukakan beserta eksibit-eksibit dan hujahan bertulis yang dikemukakan oleh kedua belah pihak, di tahap imbangan kebarangkalian, saya memutuskan bahawa Plaintif telah berjaya membuktikan tuntutannya terhadap Defendan. [26] Berdasarkan keterangan kedua belah pihak, saya mendapati walaupun terdapat kelewatan di dalam kerja-kerja yang dilakukan oleh Plaintif, saya mendapati kelewatan ini adalah disebabkan oleh tindakan Defendan yang tidak memberikan keseluruhan kawasan Page 25 of 51 kerja kepada Plaintif. Adalah satu fakta yang tidak boleh dinafikan oleh Defendan bahawa Plaintif hanya diberikan kawasan kerja ‘North Bound’ sahaja dan bukan semua kawasan ‘North Bound’ ini diberi serentak kepada Plaintif. Walaupun telah diberikan kawasan untuk Plaintif memulakan kerja, Defendan telah gagal untuk memberikan akses yang sepatutnya untuk membolehkan Plaintif menjalankan kerja-kerjanya seperti yang dinyatakan dalam sub-kontrak tersebut. Ini dapat dilihat dari keterangan saksi Defendan sendiri, DW1 yang menyatakan terdapat gangguan trafik yang menyebabkan Defendan tidak dapat memberi keseluruhan akses kepada Plaintif. [27] Oleh yang demikian, saya berpendapat penamatan kontrak Plaintif adalah tidak sah memandangkan Plaintif hanya diberikan 50% kawasan kerja sahaja dan Plaintif telah pun melaksanakan hampir separuh dari kerja-kerja ini. Plaintif mempunyai tempoh masa 15 bulan untuk menyiapkan kerja-kerjanya. Selain dari itu, notis penamatan telah menyatakan kontrak Plaintif ditamatkan berdasarkan klausa 17(a) dan 26 kontrak. Namun demikian, saksi Defendan, DW1 telah menyatakan bahawa tiada pelanggaran klausa 17(a) oleh Plaintif dan tidak pasti apakah alasan di bawah klausa 26 yang dikatakan telah dilanggari oleh Plaintif. Adalah jelas penamatan ini dibuat secara ‘unilateral’ oleh Defendan tanpa asas yang kukuh. Page 26 of 51 [28] Berdasarkan keterangan yang ada, saya berpendapat penamatan kontrak oleh Defendan adalah tidak sah kerana kelewatan yang berlaku bukanlah disebabkan hanya oleh kelewatan kerja oleh Plaintif tetapi lebih kepada tindakan Defendan yang gagal memberikan keseluruhan kawasan kerja dan gagal memberikan akses yang sepatutnya di kawasan kerja yang telah diberikan oleh Defendan. Tidak ada keterangan untuk menunjukkan kerja-kerja yang telah dilakukan oleh Plaintif adalah tidak baik ataupun tidak menurut peruntukan kontrak antara Plaintif dan Defendan. Malah Defendan telah permohonan membuat bayaran untuk Tuntutan Progress No. 1-4 kepada Plaintif. [29] Mengenai tuntutan Plaintif untuk bayaran bagi kerja-kerja yang telah dilakukan di dalam Tuntutan Progresif No. 7 (yang merangkumi tuntutan 5 dan 6) berjumlah RM269,949.67, saya membenarkan tuntutan Plaintif ini. Walaupun Defendan menegaskan Plaintif tidak layak untuk menerima bayaran ini kerana ‘joint inspection and measurement’ belum dilakukan, saya berpendapat Plaintif tidak wajar dihukum di atas sebab ini kerana pemeriksaan dan pengukuran bersama tidak dapat dijalankan kerana keengganan Defendan untuk berbuat demikian. Adalah tidak adil untuk menolak tuntutan Plaintif ini hanya kerana pemeriksaan dan pengukuran bersama tidak dilakukan. Saya juga berpendapat adalah tidak Page 27 of 51 munasabah untuk memerintahkan pemeriksaan dan pengukuran bersama dijalankan kerana kerja-kerja perparitan tersebut telah pun disambung oleh pihak lain. [30] Untuk tuntutan bayaran untuk kerja-kerja variasi berjumlah RM86,994.20, saya membenarkan tuntutan ini memandangkan ianya diakui oleh Defendan. Bagi tuntutan berjumlah RM57,583.39, ianya adalah tidak dibenarkan kerana saya berpendapat ianya gagal dibuktikan oleh Plaintif. [31] Plaintif juga menuntut RM17,665.75 sebagai bayaran ‘back charges’ yang telah dibuat secara salah oleh Defendan. Ini ialah kerana Defendan telah membeli bahan-bahan yang salah dan menuntut bayaran untuk perkhidmatan sewa lori yang tidak diminta oleh Plaintif. Setelah saya meneliti keterangan yang ada, saya berpendapat Plaintif telah berjaya membuktikan tuntutan ini. Tiada keterangan dikemukakan yang Plaintif telah membuat pesanan yang silap semasa memesan barangan dari Defendan. Oleh itu, tuntutan Plaintif untuk jumlah RM17,665.75 adalah dibenarkan. [32] Memandangkan saya telah memutuskan penamatan kontrak oleh Defendan adalah tidak sah, Plaintif adalah berhak kepada gantirugi Page 28 of 51 akibat dari pemecahan kontrak oleh Defendan ini. Plaintif telah menuntut kehilangan keuntungan sebanyak RM251,906.13 yang merupakan 15% dari nilai baki kerja. Saya berpendapat margin keuntungan sebanyak 15% ini adalah satu jumlah yang munasabah kerana jumlah ini adalah norma industri pembinaan bagi mengira keuntungan. [33] Oleh kerana saya telah memutuskan penamatan kontrak Plaintif oleh Defendan adalah tidak sah, Defendan adalah tidak berhak untuk menuntut dari Plaintif kos melantik 3 kontraktor lain untuk menyudahkan kerja-kerja Plaintif. Kos ini sepatutnya ditanggung oleh Defendan. Oleh yang demikian, tuntutan balas Defendan untuk jumlah ini adalah tidak dibenarkan. Saya juga menolak tuntutan ‘back charges’ Defendan bagi pembelian bahan-bahan dan penyediaan perkhidmatan oleh Defendan kepada Plaintif. Ini adalah kerana dokumen-dokumen yang dikemukakan untuk menyokong tuntutan ini telah dibuktikan kesahihannya dan kekal sebagai ID sahaja sehingga tamat perbicaraan. Defendan juga gagal untuk menunjukkan adanya ‘Purchase Orders’ atau permohonan untuk membeli dari Plaintif. Page 29 of 51 [34] Berdasarkan alasan-alasan di atas, tuntutan Plaintif adalah dibenarkan seperti di atas dengan kos dan tuntutan balas Defendan ditolak dengan kos. [24] From his grounds of judgment, the learned Sessions Court Judge had basically found that the dispute between the Plaintiff and the Defendant had given rise to three primary issues. They are namely; i. Whether the Notice of Termination dated 15.12.2015 was validly issued by the Appellant? ii. Whether the Plaintiff is entitled to the sum of RM684,099.14 comprising of its claim for work done, variation claims, back charges and loss of profit? iii. Whether the Defendant is entitled to the sum of RM 416,370.36 in respect of costs incurred for the appointment of three new contractors by Defendant? [25] Regarding the first issue, the Sessions Court had held in the following manner: [26] Berdasarkan keterangan kedua belah pihak, saya mendapati walaupun terdapat kelewatan di dalam kerja-kerja yang dilakukan Page 30 of 51 oleh Plaintif, saya mendapati kelewatan ini adalah disebabkan oleh tindakan Defendan yang tidak memberikan keseluruhan kawasan kerja kepada Plaintif. Adalah satu fakta yang tidak boleh dinafikan oleh Defendan bahawa Plaintif hanya diberikan kawasan kerja ‘North Bound’ sahaja dan bukan semua kawasan ‘North Bound’ ini diberi serentak kepada Plaintif. Walaupun telah diberikan kawasan untuk Plaintif memulakan kerja, Defendan telah gagal untuk memberikan akses yang sepatutnya untuk membolehkan Plaintif menjalankan kerja-kerjanya seperti yang dinyatakan dalam sub-kontrak tersebut. Ini dapat dilihat dari keterangan saksi Defendan sendiri, DW1 yang menyatakan terdapat gangguan trafik yang menyebabkan Defendan tidak dapat memberi keseluruhan akses kepada Plaintif. [27] Oleh yang demikian, saya berpendapat penamatan kontrak Plaintif adalah tidak sah memandangkan Plaintif hanya diberikan 50% kawasan kerja sahaja dan Plaintif telahpun melaksanakan hampir separuh dari kerja-kerja ini. Plaintif mempunyai tempoh masa 15 bulan untuk menyiapkan kerja-kerjanya. Selain dari itu, notis penamatan telah menyatakan kontrak Plaintif ditamatkan berdasarkan klausa 17(a) dan 26 kontrak. Namun demikian, saksi Defendan, DW1 telah menyatakan bahawa tiada pelanggaran klausa 17(a) oleh Plaintif dan tidak pasti apakah alasan di bawah klausa 26 yang dikatakan telah dilanggari oleh Plaintif. Adalah jelas Page 31 of 51 penamatan ini dibuat secara ‘unilateral’ oleh Defendan tanpa asas yang kukuh. [28] Berdasarkan keterangan yang ada, saya berpendapat penamatan kontrak oleh Defendan adakah tidak sah kerana kelewatan yang berlaku bukanlah disebabkan hanya oleh kelewatan kerja oleh Plaintif tetapi lebih kepada tindakan Defendan yang gagal memberikan keseluruhan kawasan kerja dan gagal memberikan akses yang sepatutnya di kawasan kerja yang telah diberikan oleh Defendan. Tidak ada keterangan untuk menunjukkan kerja-kerja yang telah dilakukan oleh Plaintif adalah tidak baik ataupun tidak menurut peruntukan kontrak antara Plaintif dan Defendan. Malah Defendan telah membuat permohonan bayaran untuk Tuntutan Progress No. 1-4 kepada Plaintif [26] On the claim for work done, variation claims, back charges and loss of profits, the Sessions Court Judge had held as follows: [29] Mengenai tuntutan Plaintif untuk bayaran bagi kerja-kerja yang telah dilakukan di dalam Tuntutan Progresif No. 7 (yang merangkumi tuntutan 5 dan 6) berjumlah RM269,949.67, saya membenarkan tuntutan Plaintif ini. Walaupun Defendan menegaskan Plaintif tidak layak untuk menerima bayaran ini kerana ‘joint inspection and measurement’ belum dilakukan, saya berpendapat Page 32 of 51 Plaintif tidak wajar dihukum di atas sebab ini kerana pemeriksaan dan pengukuran bersama tidak dapat dijalankan kerana keengganan Defendan untuk berbuat demikian. Adalah tidak adil untuk menolak tuntutan Plaintif ini hanya kerana pemeriksaan dan pengukuran bersama tidak dilakukan. Saya juga berpendapat adalah tidak munasabah untuk memerintahkan pemeriksaan dan pengukuran bersama dijalankan kerana kerja-kerja perparitan tersebut telah pun disambung oleh pihak lain. [30] Untuk tuntutan bayaran untuk kerja-kerja variasi berjumlah RM86,994.20, saya membenarkan tuntutan ini memandangkan ianya diakui oleh Defendan. Bagi tuntutan berjumlah RM57,583.39, ianya adalah tidak dibenarkan kerana saya berpendapat ianya gagal dibuktikan oleh Plaintif. [31] Plaintif juga menuntut RM17,665.75 sebagai bayaran ‘back charges’ yang telah dibuat secara salah oleh Defendan. Ini ialah kerana Defendan telah membeli bahan-bahan yang salah dan menuntut bayaran untuk perkhidmatan sewa lori yang tidak diminta oleh Plaintif. Setelah saya meneliti keterangan yang ada, saya berpendapat Plaintif telah berjaya membuktikan tuntutan ini. Tiada keterangan dikemukakan yang Plaintif telah membuat pesanan yang silap semasa memesan barangan dari Defendan. Oleh itu, tuntutan Plaintif untuk jumlah RM17,665.75 adalah dibenarkan. Page 33 of 51 [27] In dismissing the Defendant’s counterclaim, the Sessions Court had held: [33] Oleh kerana saya telah memutuskan penamatan kontrak Plaintif oleh Defendan adalah tidak sah, Defendan adalah tidak berhak untuk menuntut dari Plaintif kos melantik 3 kontraktor lain untuk menyudahkan kerja-kerja Plaintif. Kos ini sepatutnya ditanggung oleh Defendan. Oleh yang demikian, tuntutan balas Defendan untuk jumlah ini adalah tidak dibenarkan. Saya juga menolak tuntutan ‘back charges’ Defendan bagi pembelian bahan-bahan dan penyediaan perkhidmatan oleh Defendan kepada Plaintif. Ini adalah kerana dokumen-dokumen yang dikemukakan untuk menyokong tuntutan ini telah dibuktikan kesahihannya dan kekal sebagai ID sahaja sehingga tamat perbicaraan. Defendan juga gagal untuk menunjukkan adanya ‘Purchase Orders’ atau permohonan untuk membeli dari Plaintif. D. THE APPELLANT’S COMPLAINTS AGAINST THE SESSIONS COURT’S DECISION [28] The Appellant contended that the following findings of the learned Sessions Court are erroneous in fact and / or in law: Page 34 of 51

That the termination of the Sub-Contract by the Appellant was wrongful;

That the Appellant had failed to provide the Respondent with proper access to enable the Respondent to carry out the Works under the Sub-Contract;

That the Respondent is entitled to the sum of RM269,949.67 in respect of Progress Claim Nos 5 to 7;

That the Respondent is entitled to the sum of RM17,665.75 in respect of back charges for the alleged wrongful purchase of materials by the Appellant;

That the Respondent is entitled to a loss of profits in the sum of RM251,906.13 following the termination of the Sub-Contract by the Appellant; and

That the Appellant was not entitled to its claims for loss and expense in respect of the appointment of three (3) new contractors to complete the balance of the Works and also back charges for materials purchased and services rendered on behalf of the Respondent. Page 35 of 51 [29] Now, in essence the Appellant in its defence raised the defence that the Plaintiff is not entitled to the sums claimed because the Plaintiff was instead the party who had breached the Sub Contract Agreement when it had failed to carry out its work under the Sub Contract diligently. Vide a Notice of Termination dated 15.12.2015, the Defendant had terminated the Plaintiff’s employment under the Sub Contract as the Plaintiff had breached the express obligation under clause 26.2 of the Sub Contract Agreement; namely to carry out the Sub Contract works with due diligence. [30] It was the Defendant’s pleaded case that at all material times, the Plaintiff had not carried out its works diligently wherein the Plaintiff had not only delayed in commencing the works at the site but there were also serious delays on the part of the Plaintiff in progressing the works under the Sub Contract due to the lack of manpower placed by the Plaintiff at the site to carry out the works. [31] It is evidenced that prior to the issuance of the Notice of Termination dated 15.12.2015, the Defendant had also issued a Notice of Delay Page 36 of 51 dated 24.8.2015 to the Plaintiff, in which the Defendant had raised its dissatisfaction on the delay on the part of the Plaintiff in progressing with the works. In the said letter, the Defendant had also notified the Plaintiff that if there was no significant improvement to the works by the Plaintiff, the Defendant would withdraw the scope of works and give it to other contractors with costs incurred being back charged to the Plaintiff. The contents of the letter dated 24.8.2015 is reproduced below: “PROJEK MASS RAPID TRANSTI LEMBAH KELANG: JAJARAN SUNGAI BULOH-KAJANG PACKAGE V3: CONSTRUCTION AND COMPLETION OF VIADUCT GUIDEWAY AND OTHER ASSOCIATED WORKS FROM DATARAN SUNWAY STATION TO SECTION 17 Drainage Works from DS 07 to DS 37 - Notice of Delay and Insufficient Manpower & Poor Progress of Work The progress of Drainage works are badly delayed due to insufficient manpower and not to our satisfactory at all. Many location the drainage of works has seriously delayed due to lack of manpower and your current manpower 7 workers only and you required to complete all the drainage works by end of October 2015. The badly affected delated areas are:

DS 17 to DS 18 – Laying of Crossing culvert. (North Bound)

(ii) DS 19 to DS 20 – Construction of cast in situ U Drain. (North Bound)

(iii) DS 21 to DS 22 – Construction of R.C. Pipe Culvert diameter 750 mm. (North Bound)

(iv) DS 25 to DS 23 – Laying of U Drain 900 U 1200 mm. (North Bound)

DS 33 to DS 27 – Laying of U Drain 900 U 1200 mm. (South Bound) We hereby issuing Notice of Delay and will closely will monitor your progress of Drainage works and if there is no any significant improvement and we will withdraw your scope of works to others without any further notification and all the cost incurred will be back charge to your accordingly. Attached are the relevant pictures indicating very slow progress of work for the past 2 months.” [32] Despite having being issued with the Notice of Delay, there was no significant improvement on the progress of works done by the Plaintiff. The delay in progress of work by the Plaintiff is evidenced by the progress claims submitted by the Plaintiff which shows that from April 2015 until November 2015, the Plaintiff had only completed 21% of the works prescribed under the sub-contract. It was not even disputed by the Plaintiff that since the end of November 2015, there was no manpower placed at site by the Plaintiff. Page 38 of 51 [33] The delay in the Plaintiff’s work was supported by the Plaintiff own witness i.e SP1 (Oon Hoon Teck – the Plaintiff’s Project Director) when he was being cross-examined by the counsel for the Defendant. Q: I put it to you Mr Oon, pursuant to progress claim no.7 as 20 November 2015, progress of works or completed works at site was only 21%. Do you agree? A: Correct. E. HIGH COURT’S DECISION UPON APPEAL [34] This Court does not hesitate to find the glaring error of the learned Sessions Court Judge in determining the parties’ dispute. For succinct understanding of this Court’s decision, the learned Sessions Court Judge’s error and misguidance can be digested in two tranches: i. Incorrect tangent and issue framed by the Sessions Court Judge; and Page 39 of 51 ii. The learned Session Court Judge’s incomplete analysis and failure to appreciate full facts, pleadings and evidence before the Sessions Court, and failure in fully examining balance of probabilities Incorrect tangent and issue framed by the Sessions Court Judge [35] At this juncture, this Court must take note that it was the Plaintiff’s pleaded case that even though the Notice of Termination was unilaterally issued by the Defendant, the Plaintiff had accepted the termination as the Plaintiff takes the stance that by December 2015, the Plaintiff had discovered that a third party was undertaking the works and using its material and thereby it was impossible for the Plaintiff to perform and continue with the Sub Contract works. [36] It is pertinent to note that the entire scheme of pleadings by both parties have no reference to the validity of the Notice of Termination or validity of the Defendant’s unilateral termination. The entire framework of the parties’ contentions largely contends of each party’s alleged breaches in either delayed works or delayed delivery of Page 40 of 51 possession, and right to appoint third party contractors. The factum of termination and validity of termination was never put to dispute and was never an issue put before the Sessions Court Judge. [37] From the Plaintiff’s own pleadings, this Court is of the considered view that the Plaintiff, apart from stating that the repudiation of the sub contract by the Defendant was done unilaterally, the Plaintiff did not challenge the unilateral repudiation. In its action against the Defendant before the learned Sessions Court, the Plaintiff had not sought any declaratory relief or remedy challenging the notice of termination issued by the Defendant. Clearly, the Plaintiff had accepted the repudiation of Sub Contract and in fact in paragraph 8 its Statement of Claim, the Plaintiff has pleaded as follows: 8……The Plaintiff accepted the Defendant’s unilateral termination. [38] Nonetheless, despite the clear stance taken by the Plaintiff regarding the termination of the Sub Contract, the learned Sessions Court had gone beyond the pleaded case of parties by framing the first issue as: Page 41 of 51 i. Whether the Notice of Termination dated 15.12.2015 was validly issued by the Appellant? [39] The first issue was framed by the learned Sessions Court Judge despite he had in his grounds of judgment stated that the Plaintiff had accepted the termination. The learned Sessions Court Judge had emphasised that the Plaintiff had accepted the termination three times in his grounds of judgment namely; in para 2, 9 and 18 which stated : “Plaintif menerima penamatan ini tetapi telah menuntut bayaran berjumlah RM 684,099.14 untuk kerja-kerja yang telah dilakukan…” [40] Contrary to the pleaded case before him and his own assertion of the Plaintiff having accepted the termination, the learned Session Court Judge had determined the entirety of the case on the misguided issue of the validity of the termination (which again, was not an issue put before the learned Sessions Court Judge). Page 42 of 51 [41] This Court cannot ignore the trite law that parties are bound by their own pleadings. (See: i. ANJALAI AMMAL & ANOR v ABDUL KAREEM [1969] 1 MLJ 22 ii. GIGA ENGINEERING & CONSTRUCTION SDN BHD v YIP CHEE SENG & SONS SDN BHD & ANOR [2015] 6 MLJ 449.) [42] This Court agrees with the counsel for the Appellant that the learned Sessions Court was wrong when he made a finding that the termination of the Plaintiff’s employment under the Sub Contract was wrongful when the validity of termination is not even an issue put before him. The Plaintiff had conceded and accepted the termination. [43] Now, the error by the Learned Sessions Court Judge is this: He had canvassed the Defendant’s alleged failure to deliver site possession against an unpleaded issue (being the validity of termination). [44] In the case of Iftikar Ahmed Khan (as the executor of the estate for Sardar Mohd Roshan Khan, deceased) v Perwira Affin Bank Page 43 of 51 Bhd (previously known as Perwira Habib Bank Malaysia Bhd) [2018] 2 MLJ 292), the Federal Court has held that: “ A decision based on an issue which was not raised by the parties in their pleadings is liable to be set aside: Yew Wan Leong v Lai Kok Chye [1990] 2 MLJ 152. In The Chartered Bank v Yong Chan[1974] 1 MLJ 157 the Federal Court set aside the judgment of the trial judge as it was decided on an issue not raised on the pleadings. In that case the trial judge erred in concluding that the pleadings included a claim for breach of contract as well as a claim for libel.” [45] Thus, it is already clear at this juncture that the Learned Sessions Court Judge has determined the case based on an unpleaded issue before the Court. Page 44 of 51 The learned Session Court Judge’s incomplete analysis and failure to appreciate full facts, pleadings and evidence before the Sessions Court, and failure in fully examining balance of probabilities [46] Now, the entire breadth (though brief) of the learned Session’s Court Judge’s decision is wholly and singularly premised on the Defendant’s alleged breach in failure to deliver site possession in time. Now, it is pertinent to note that by balance of probabilities, it is incumbent for the learned Sessions Court Judge to do the balancing act between two probable contentions and assertions. One being the alleged breach by the Plaintiff in failing to perform the contract diligently and two, being the alleged breach by the Defendant in failing to fully deliver site possession in time. [47] Thus, this is a circumstance in which it is crucial for the judge to make a full appreciation of all of the parties’ contention, in determining, of the two breaches, which one is more probable than not to be the most real and reasonable catalyst in causing breakdown of the Page 45 of 51 contract. Thus, it is a grave err for the learned Sessions Court Judge to simply draw a hypothesis that ‘there is delay in delivering site possession and therefore there shall be reasonable delay in contract works’. The analysis must be in proper depth and cannot be dealt with in such a superficial manner. [48] If the learned Sessions Court Judge is willing to indulge in the reasonableness of the Plaintiff’s delay of works (which is a breach), then, in fairness and on the basis of balance of probability, the learned Sessions Court Judge should also indulge in the reasonableness of the Defendant’s inability of delivering full site possession to the Plaintiff (which is equally a breach). And this is the exact balancing act and factual appreciation that the learned Sessions Court Judge had unfortunately failed to do. [49] There is not an iota of mention of the Defendant’s side of the dispute on whether or not it is reasonable for the Defendant to be expected to grant full access of the site owing to the fact that the contract revolves Page 46 of 51 around works which is situated in a premise which is heavily laden with traffic and traffic congestions. [50] There is not an iota of discussion on whether or not the delay of the Plaintiff’s work was solely caused by the Defendant’s delay in delivering site possession. The factum of the Plaintiff’s sufficiency or insufficiency of workforce and staff was never put to the balancing act. [51] There was never any discussion and analysis on the Plaintiff’s work rate or performance notwithstanding the delay in site delivery. It might have equally been the case that the Plaintiff’s work in and of itself was slow and was not necessarily caused by the Defendant’s delay in delivering site possession. And this probability is even more crucial to be examined considering the Plaintiff’s delay in works is not only pertaining to the North Bound site, but also the South Bound site. [52] There must have been an in-depth examination (which was totally absent in the learned Sessions’ Court Judge’s decision) on the Page 47 of 51 Plaintiff’s own performance, work rate and sufficiency of workforce especially considering the delay in works also occurred in the South Bound site which the Plaintiff has never complained of insufficient access or delay in site possession. [53] It must have piqued the curiosity of the learned Sessions Court Judge (which it unfortunately has not) on why was there a delay in the Plaintiff’s works in the South Bound Site although there were never any complaints of insufficient access or delay in site possession by the Plaintiff. Verily here, the Plaintiff’s own diligence and work rate begs to be questioned (which the Learned Sessions Court Judge has failed to examine and analyse). [54] It is plain to see that it is incumbent for the Plaintiff, to prove that it has been diligent in its works and its works were only delayed by the delay in site possession, and vice versa, it is equally incumbent for the Defendant to prove that it is reasonable for the Defendant to give partial access and the Plaintiff instead was not diligently pursuing its work. Page 48 of 51 [55] Furthermore, there were also pleaded facts and documents tendered regarding the parties’ knowledge on the sites’ access or “site conditions” even on the contract documents themselves. There should have been (which there is not any) full deliberation and appreciation of facts and evidence on the parties’ knowledge on the actual or reasonable access and site conditions which could be expected under the contract document themselves. It was not deliberated at all by the learned Sessions Court Judge on the parties’ consensus, awareness and understanding on the extent of site access that the Plaintiff can and contractually can expect to be delivered. Without any basis and reference to any specific term of document or document in and of itself, the learned Sessions Court Judge simply declared that it was agreed in full consensus that the Defendant should have given 100% access to the site (notwithstanding traffic conditions and congestions) to the Plaintiff. Until and unless the Sessions Court Judge has properly referred to proper documents and evidence, this finding remain as a bare unsubstantiated finding by the Court. Succinctly, there is a gross absence of meaningful deliberation on what actually is “akses yang sepatutnya” or agreed “site conditions”. Page 49 of 51 [56] And these are the exact balancing acts that the learned Sessions Court Judge had failed to observe in disposing the case on the balance of probabilities. The learned Sessions Court Judge have not at all discussed the probabilities and reasonableness of each parties’ contention and had merely latched onto an incomplete and isolated hypothesis. And this is the exact hypothesis that the learned Sessions Court Judge had failed to test against the full facts, pleadings, and evidence before the Court. [57] Thus, there is already a glaring error in the learned Sessions Court Judge’s decision on liability. Thereto, logically gleaning from the learned Sessions Court Judge wrongful finding of liability, then the learned Sessions Court Judge’s finding on damages must also be in error. It is impossible for this Court to even consider the learned Sessions Court Judge’s finding on damages when it is already clear that the learned Sessions Court Judge is not even fully abreast with or fully appreciative of the facts, pleadings, and evidence before the Court. Page 50 of 51 [58] Likewise, in dismissing the Defendant’s counter claim, the Sessions Court had dismissed the counter claim solely on the ground that the termination of the Sub Contract was wrongful. There was no judicial appreciation by the Sessions Court on evidence which has been produced either oral or documentary in respect of Defendant’s entitlement for recover its costs for engaging new contractors to finish the incomplete job of the Plaintiff. [59] In this circumstances, it is therefore appropriate for this Court to exercise its powers of appellate intervention and disturb the findings of the learned Sessions Court. [60] In the present appeal, having considered the grounds (or lack thereof) on which the learned Sessions Court has made his findings, this Court finds that the decision of the Sessions Court must be set aside entirely. Hence, the appeal by the Appellant and the Cross Appeal by Respondent is allowed. Page 51 of 51 [61] Hence, this case shall be remitted back to the Sessions Court and to be heard before another Sessions Court Judge. [62] Finally, this Court orders that there will be no order as to costs in respect of both the appeal and the cross appeal. ………………………………………………………………………. (AZIMAH BINTI OMAR) Judge High Court of Kuala Lumpur 8 July 2019 For the Plaintiff - Messrs. Harold & Lam Partnership Rohan Arasoo Jeyabalah Teoh Yen Yee For the Defendant -