Nz Bina Sdn Bhd v 1. ) Reaplite Industry Sdn Bhd (JA-22NCvC-275-12/2017)

REAPLITE INDUSTRY SDN BHD …DEFENDANTS (No. Syarikat : 456814-W)

OCBC BANK (MALAYSIA) BERHAD (No. Syarikat : 295400-W)

This is a suit in which the reliefs agreed by the Plaintiff before commencement of the trial, claiming only for liquidated ascertained damages (LAD) to be paid by the 1st Defendant arising from the termination of contract for delay in completion of construction work by the 1st Defendant in the main-contract of a highway project. The main contract was between JKR and the Plaintiff. The sub-contract between the Plaintiff and the 1st Defendant to execute the JKR project was entered into pursuant to a Letter of Award (“LOA”) from the Plaintiff to the 1st Defendant, dated 31.12.2013. 29/07/2025 12:02:32

The LAD sum, in turn was attributed to the sum imposed by JKR against the Plaintiff for the delay in the work, agreed by both parties (JKR-Plaintiff) in the main contract. The 1st Defendant, by way of the said LOA and Extension of Times (“EOT”) Nos. 1 and 2 granted by JKR1 (the EOT was on the application made by the Plaintiff, as sought by the 1st Defendant), was required to complete its work by 31.03.2017 but failed. A Notice of Termination to the 1st Defendant was issued on 30.10.2017 by the Plaintiff for the 1st Defendant’s failure, refusal and/or neglect to complete the JKR project.2

The 1st Defendant in its counter-claim sought for declaratory relief of the termination as being unlawful as 98% of the works already completed, payment of unpaid progressive claims being progress payment No. 35, 36 and 37 and the performance bond for the sum of RM11,498,944.49 called by JKR. The performance bond together with a credit facility of RM66,499,000.00 was obtained from the 2nd Defendant by the 1st Defendant at the request of the Plaintiff, it being a condition for the purpose towards financing the execution of the JKR project.

Under the OCBC Facility, the Plaintiff was to assign all payments from JKR (“JKR Proceeds”) to a “Designated Current Account” (“DCA”) in OCBC.3 When JKR makes payment to the DCA account, the JKR Proceeds will be distributed in the following manner: 1 EOT on the application by JKR on 9.7.2015 from the supposed completion date 14.3.2016 was granted by JKR to 9.1.2017 (EOT1) whilst a second extension (EOT2) granted on 3.8.2016 extending completion date to 31.3.2017 (see: EOT 1 and 2 addressed to the Plaintiff in enclosure 240 Common Bundles of Documents at page 126 and 137 pdf.) 2 See: enclosure 244 at page 327 pdf. 3 See: enclosure 240 at page 69 and 71 pdf. i. 3% will be transferred to the Plaintiff; ii. From the 97% then, OCBC will deduct whatever sums owing to it; and iii. The balance will then be released to the 1st Defendant’s account which was a joint signatory account with the Plaintiff.

This is in line with the Letter of Award para (E) that states: “E. Progress Payment and Retention Progress Payment shall be made to you on ‘back to back’ basis upon we received the same from our Employer. The Employer shall deposit the progress payments directly into a designated Escrow Account maintained with any Banks (which will be determined later) whereby the said Banks shall the apportion the funds accordingly based on the agreed proportion.”

With the termination of the sub-contract with the 1st Defendant, the Plaintiff argued that the assignment of the JKR Proceeds should equally be terminated, which moved an O14A application filed by the Plaintiff and was allowed by the High Court. OCBC’s appeal to the Court of Appeal and OCBC’s appeal was allowed. However, with the settlement eventually entered between the Plaintiff and the 2nd Defendant OCBC Bank, the 2nd Defendant no longer made a party to this current suit. The Plaintiff emphasized in its submission before this Court, that the assignment of the proceeds was never reinstated after the appeal.

As to the progressive claims no 35, 36 and 37 the Plaintiff contended that the 1st Defendant had failed to furnish proof of material evidence in the form of supporting documents of the progress claims when the 1st Defendant had testified that they were available in its office. It was contended that despite testifying so, yet the 1st Defendant failed to produce them. However, this Court observes that claims no.35 to 37 were in fact available and presented to the Plaintiff (See: Notes of Evidence “NOE” of SD2 and further deliberation in the GOJ below). Issues arising for the Court’s determination

The issues arising before this Court are as follows: i. Whether NZ Bina (Plaintiff) is entitled to claim from Reaplite (Defendant) the LAD imposed by JKR; ii. Whether NZ Bina’s termination of Reaplite lawful; iii. Whether Reaplite is entitled to claim for the unpaid progressive claims against NZ Bina; and iv. Whether NZ Bina is liable to pay Reaplite the sum of RM11,498,944.49 on the calling of the performance bond by JKR. Scope of the work of the 1st Defendant

It must be noted that the 1st Defendant’s obligations under the sub-contract is amongst one of the many other sub-contracts existing between the Plaintiff and other contractors but these sub- contractors were confined to carrying out utility works. The utility works was governed by a Supplementary Agreement between the Plaintiff and JKR dated 28.11.2016 identified as “Pembinaan Utiliti Utama Dari Sebana K Tg. Pengelih Bagi Projek Membina Jalan Baru 4 Lorong 2 Hala Dari Ft 092 ke Pularek, Kota Tinggi, Johor”.4

In the course of the 1st Defendant carrying out its obligations for work under the Main Contract which was sub-contracted to the 1st Defendant, the 1st Defendant’s stand (and agreed by this Court) that possession of the site between the Plaintiff and the 1st Defendant was crucial. The significance being as it will determine if the 1st Defendant has its right of way to carry out the obligations under the sub-contract without interfering with utility works of other contractors via the Plaintiff’s existing sub-contracts with them albeit it was argued by Plaintiff as irrelevant.5 The sub-contract can be seen existing in the multiple correspondences and assignments between Plaintiff and these companies, and between the 1st Defendant and these companies.6

It is also not disputed that in 2016, JKR had during the validity of the main contract, imposed several Variation Orders (“Arahan Perubahan Kerja”@ “APK”) for the said project including “Pelarasan Harga Kontrak (“PHK”) when amongst them, via “APK1” dated 21.6.2016, the 1st Defendant was tasked with “Pembinaan Pusingan U dari Sungai Rengit ke Sungai Rengit di Persimpangan No. 1 Jalan 4 See: enclosure 241 at page 612 pdf. 5 See: enclosure 261 at page 17 (pdf.), page 34 to 40 (pdf.)). 6 (see: enclosure 240, 243 and particularly enclosure 244 at page 213 pdf.). See: enclosure 242 at page 376 pdf. and enclosure 244 at page 288 pdf. respectively. FT092”, the construction of an underpass via “APK2” dated 24.1.2017.

The APKs stipulated that the design and built elements to be left to the contractor@ Plaintiff’s consultant’s view. This gave rise to issue pertaining to delay in confirmation of design from U-turn to under-path and issue on land acquisition causing delay in possession of site,7 that inevitably moved the request for Extension of Time (“EOT”) submitted to the Plaintiff by the 1st Defendant for JKR’s consideration8. The “PHK” no. 5 issued by JKR9 during the ongoing period of the APK moved the Plaintiff for EOT No.3 via a letter dated 30.3.2017. JKR agreed with EOT No. 3.10

JKR via its “surat amaran terakhir untuk LAD”,11 followed with a certificate of non-completion,12 invoked clause 42.1 of the main contract claiming for the LAD for the delay in the completion of the said work. The Plaintiff now sought for this reimbursement from the 1st Defendant.

During the trial, both the Plaintiff and the 1st Defendant had respectively called SP1 Mr. Jawahar Nehru being the former Project “Pengurus besar Pembinaan” of JKR and SD1 Ir. Rozita being JKR current Project Director, as their respective witness. In relation to 7 See: clause 27 of the “Contract Document Jilid 1” (enclosure 258 at page 127 pdf.) on “Possession of Site” that indicates acquisition of some private land and properties along the stretches of the project which was expected to continue 8 EOT No. 1 (see: enclosure 240 at page 126 pdf.) where “land acquisition” being reason for delay that moved the completion date 14.3.2016 extended to 9.1.2017 and EOT No. 2 (see: enclosure 240 at page 137 pdf.) where the completion date extended to 31.3.2017. 9 See: enclosure 244 at page and 281 pdf. 10 See enclosure 244 at page 342 pdf. 11 See: enclosure 244 at page 310 pdf. 12 See: enclosure 244 at page 316 pdf. SP1, minutes of meeting chaired by JKR Engineer on 22.12.2016 and 22.2.2017 (SP1 was present in the said meeting) where arising from “APK2”, concerns were raised on (-ve)10.51% and (- ve)16.63% delay of the physical work progress.13

It transpired that eventually, a Certificate of Completion of Work dated 6.12.2017 was issued by JKR14 and the calling of the performance bond in mid-July 2019 by JKR due to the failure by the Plaintiff in its obligations in respect of the JKR project. It must be emphasized that the sub-contract with the 1st Defendant was already terminated by the Plaintiff since 30.10.2017.

This termination would mean the 1st Defendant can no longer shoulder the rectification work found in any defect during the defect liability period as neither clause (M) of the Letter of Award made any exemption or waive this duty on the 1st Defendant, in the event of termination nor does clause (P) on “Termination of Sub-contract” with cross-reference to clause 51 of the Main Contract.15 13 See: enclosure 244 “Minutes of Meetings chaired by JKR” at page 120 and 138 pdf. 14 See: enclosure 244 at page 337 pdf. 15 See: enclosure 240 (at 32 pdf.) that states as follows: “P) Termination of Sub-Contract The provisions of Clause 51 of the Conditions of the Main Contract shall apply mutatis mutandis to this Sub-Contract in relation to the Termination of the Sub-Contract by NBSB (Naza Bina Sdn Bhd). See also: main contract (enclosure 258 at page 31. pdf “Conditions of Contract”). Clause 51 would probably be a typo error as clause 51 is on “Intellectual Property Rights, Royalties” instead it should be clause 60 “Events and consequences of Default by Contractor”. Findings by this Court

With these background facts, it is important to scrutinize the agreement signed between the Plaintiff and the 1st Defendant. Clause 16.1 of the sub-contract provides as follows:

16.1 Cl. A(1): The 1st Defendant’s scope of work is for the construction and completion of new road all in accordance with the Bills of Quantities, technical specifications, drawings and all preliminaries items as described in the Main Contract between JKR and the

16.2 Cl. A(3): The 1st Defendant shall observe all instructions given to it by the Plaintiff’s representative, JKR’s representatives, the Consultants and their duly authorized representatives.

16.3 Cl. C(3): All drawings, specifications, conditions/term or any other matter which are included with or under the Main Contract and pertaining any manner to the Sub-Contract works and have not been expressly excluded or varied shall also be deemed binding on the 1st Defendant on a ‘back to back basis’ in accordance with the Main Contract.

16.4 Cl. D: the Sub-Contract period is 104 weeks, commencing from 18.3.2014 and scheduled to be completed on 14.3.2016.

16.5 Cl. N(14): At any time, the Plaintiff may terminate the Sub-Contract in whole, or in part by notice in writing whenever the Plaintiff shall determine that such termination is in the best interest of the Plaintiff.

The 1st Defendant’s stand is that the ‘back to back’ basis renders the work and payment in the sub-contract be at tandem with the main contract. Any work done in the sub-contract would have been in the sight and view of JKR and acknowledged by both SP1 and/or SD1. It is also for this reason that the work carried out in the sub-contract in the form progressive claims number 35 to 37, despite the contention by the Plaintiff that proofs were not presented during trial, evidence to the contrary shows that they were in fact sent to the

There was delay in payments by JKR to the Plaintiff and this can be seen from the Plaintiff’s letter dated 1.3.2017.17 This delay in payment by the JKR resulted in the delay on work by the 1st Defendant pertaining to construction of “underpass at CH7900 to CH8500 (Kg. Lepau Area) as contained in the Plaintiff’s letter.

The 1st Defendant, in response to the Plaintiff’s letter dated 29.11.2017,18 agreed to continue with completion of the work. This came with the assurance that the termination issued be treated as premature, rescinded, null and void. With this reply from the 1st 16 See: enclosure 261 at pages 215 (pdf.) to 235 (pdf.) for claims number 35 to 37 from the 1st Defendant to the Plaintiff and enclosure 326 at pages 11 (pdf.) to 22 (pdf.) 17 See: enclosure 244 at page 221. 18 See: enclosure 244 at page 333 pdf. Defendant via its letter dated 30.11.2017, an updated formal claim number 35 was handed for Plaintiff’s certification and action.

In the 1st Defendant’s re-examination, in reply to the suggestion in cross-examination that the 1st Defendant was unable to show the delay in the utility work with other sub-contractors, he was referred to the minutes of the meetings with JKR (referred to earlier in para 14 of this GOJ). The minutes in para 4.1 comprising of “kerja-kerja lampu jalan, lampu isyarat, telekom dan kerja-kerja elektrikal” as explained by the 1st Defendant SD2 refer to “utility work” undertaken by sub-contractors appointed by the Plaintiff.

The 1st Defendant’s stand was that these tasks must be completed first before the main work in para 4.2 of “guardrails, signages, street lighting at the roundabout location 1 and 2 and bridge 1 and 2, traffic lights at the junction of CH0.00” can be carried out by the 1st Defendant.

The non-completion of the work by the 1st Defendant was repeated by the Plaintiff in its reply dated 1.8.2017 to the 1st Defendant’s letter dated 5.7.2017 when the 1st Defendant sought for the issuance of the “CPC” on the basis of a 98% work completed. This request was put forward by the 1st Defendant despite the utility work remained uncompleted. The Plaintiff disagreed with the request acting on the belief that JKR would equally refused the said proposal.

In addition, the 1st Defendant justified the delay via a reply in its letter dated 27.9.2017.19 This resulted with the issuance of the termination letter dated 30.10.2017 by the Plaintiff to the 1st Defendant.20 This Court is of the view, explanation was in fact offered by the 1st Defendant on the delay and as to whose responsibility to address that delay.

This Court agreed that as per the minutes, the fault was not on the 1st Defendant as although the 1st Defendant was cross-examined on this, the stand maintained by the 1st Defendant was that unless the utility work in para 4.1 of the minutes completed, the main work in para 4.2 would be affected, thus resulting in a delay. There was no evidence in rebuttal offered by the Plaintiff on this.

Furthermore, the Plaintiff in fact agreed that the possession of the site was handed to the sub-contractors to undertake the utility work. This can be seen in the minutes of meetings and correspondences between the 1st Defendant and the Plaintiff as extracted earlier in this GOJ.

This Court also noted that SD1 had in her testimony, received claims number 35 to 37 and this as recorded in the document known “Perakuan Akaun dan Bayaran Muktamad” signed by SD1 as “Pengarah Pembinaan, Pasukan Pengurusan Projek Khas” on 27.6.2023 under the heading as follows:21 19 See: enclosure 244 at pages 320 pdf. onwards. 20 See: enclosure 244 at page 327 pdf. 21 See: enclosure 296 at page 26 pdf. “A. Butiran Jumlah Potongan. a. Bayaran Interim terdahulu No.1 hingga No.40 RM263,456,916.16” b. ….. c. ….. d. …..”

SD1 in fact elaborated further that for the purpose of processing the payment, SD1 need not rely on the elaborate details of the work done but only the summary. This strengthened the 1st Defendant’s claim that these works were completed and summary presented but remained unpaid by the Plaintiff.22

The evidence of SD1 negate the suggestion by the Plaintiff that there were no supporting documents that accompanied the claims handed by the 1st Defendant as the 1st Defendant said the documents were available at his office but the claims furnished were supported by summaries prepared by the 1st Defendant company.

To this Court’s view, with the fact that this is a billion-dollar project, contrary to what was suggested by the Plaintiff that there were no supporting documents to these claims number 35 to 37, coupled with the relevant evidence of SD1 extracted above and this Court’s attention was not directed to any document from the Plaintiff to suggest otherwise, this Court must come to a finding that the absence of a written reply from the Plaintiff to indicate that the claims 22 See: enclosure 244 at page page 335 pdf., enclosure 261 at pages 214 to page 235 pdf., see: NOE enclosure 328 at page 460 pdf.) could not be processed for want of supporting documents, is frivolous.

Rather, it is illogical and absurd that the 1st Defendant had purposely opted not to forward claims without any proof of work done, when the earlier claims up to number 34 and subsequent claims up to claim number 40 submitted by the 1st Defendant all were dealt promptly by SD1 and payment made.

The covering letter from the Plaintiff dated 1.11.2018, 28.11.2018 and 2.5.2019 forwarding those respective claims,23 enhanced further that there are proof that the 1st Defendant did submit those claims. This moved this Court to make the necessary deduction and inferences that the said interim claims were in fact made by the 1st Defendant and received by the Plaintiff for SD1’s further action.

In the case of Muhamad Qamarul Bin Munsyiaqbal @ Yusri v Md Nor Bin Md Zain & Anor [2020] MLJU 106 (Tab 16 of the PBOA Volume 2), it was held that: “[19] A defendant after he has ‘put’ his case to the plaintiff or the plaintiff’s witnesses must produce evidence proving the facts that he has ‘put’ to said witnesses. Mahadev Shankar J in an article titled, “Putting and Suggesting in Cross-Examination” (January 1984 MLJ xi) stated that, “it is well established that when matters are ‘put’. Thus, if the defendant 23 See: enclosure 326 at page 11 to 13 pdf. fails to produce such evidence he would be taken to have accepted the witness's account that he was challenging when cross-examining that witness.”

Based on all these findings, this Court is of the view that the termination of the contract by the Plaintiff is unlawful as there are evidences to the contrary to show that the 1st Defendant was unable to carry out the tasks obligated to the 1st Defendant as the sites under the 1st Defendant’s purview were still not within his care.

In addition, there is no denial that based on the Plaintiff’s letter, there was delay in payment by JKR for work done by the sub-contractors as payments did not occur speedily on ‘back to back’ basis. This had affected the performance by the 1st Defendant. The existence of other factors as reflected in the letter by the 1st Defendant pertaining to site such as land acquisition that contributed further to the delay, the ongoing utility work by others that forbid the 1st Defendant necessary access to site, all of which were not within the 1st Defendant’s management and control.

Hence to this Court’s finding, it is unjustifiable for the Plaintiff to put the blame on the 1st Defendant by terminating its contract and to impose the LAD on the 1st Defendant. The EOTs granted by JKR support the genuineness of the 1st Defendant’s course as the terms of contract itself stipulates for the necessary condition for one to be in possession of the site for the purpose of performing the obligations that has been agreed under the contract.

With that determination, it is this Court’s further finding that the 1st Defendant had successfully proven its counter-claim for the return of the performance bond paid to the Plaintiff. The 1st Defendant is entitled to the said security as the delay that was concluded by the Plaintiff as caused by the 1st Defendant is not supported by cogent evidence.

This Court further concluded that the 1st Defendant had proven that the Plaintiff was aware of the unpaid claims number 35 to 37 submitted by the 1st Defendant as proof by way of oral and documentary evidence were available and presented during trial. On this finding, the claim by the Plaintiff is dismissed for lack of convincing evidence to support the Plaintiff’s version of the story. Dated: 29 July 2025 (Nurulhuda Nur’aini Binti Mohamad Nor) Hakim Mahkamah Tinggi Malaya Johor Bahru Johor Darul Ta’zim Solicitors For The Plaintiff : Razlan Hadri Zulkifli, Danny : H M Soong & Edmund Choi : Sing Eu Messrs Gan, Ho & Razlan Hadri Suite K-3-10 Level 3 Blok K No. 2 Jalan Solaris Solaris Mont’ Kiara 50480 Kuala Lumpur Solicitors For The Respondent : Eugene Jayaraj & Alani Farhah Messrs Haris Ibrahim Kandiah Partnership Twenty-Two Chambers 22 Jalan Changgai 6/22 46000 Petaling Jaya