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IN THE HIGH COURT OF MALAYA

AT KUALA LUMPUR

[CIVIL SUIT NO. WA-22C-33-04/2019]

BETWEEN

NTN ASIA BUILDER SDN BHD … PLAINTIFF

AND

1. SINOHYDRO CORPORATION (M) SDN BHD

2. TEMASEK LAND SDN BHD … DEFENDANTS

GROUNDS OF JUDGMENT

Introduction

[1] This is a dispute on the value of completed work done pursuant

to a terminated sub-contract for structural and architectural works in
respect of an apartment project in Genting Highlands.

[2] The Plaintiff is a private limited company involved in the

wholesale business.

[3] The First Defendant is similarly a private limited company

involved in civil and engineering construction business.

[4] The Second Defendant is also a private limited company

involved in the construction and machinery rental business.

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Preliminary

[5] In this suit, the Plaintiff sued both Defendants for construction
work done under the construction contract or alternatively on quantum
meruit pursuant to s. 71 of the Contracts Act 1950. The Plaintiff
claimed for the following in its pleading:

(a) The Defendants jointly and severally pay the Plaintiff the
sum of RM6,734,866.92;

(b) In the alternative, the Defendants jointly and severally pay

damages to be assessed;

(c) general damages;

(d) interest at the rate of 5% per annum;

(e) costs; and

(f) such further and other relief as deem fit and proper by this
Honourable Court.

[6] The First Defendant responded that the Plaintiff breached its
construction contract and counterclaimed for the following in its
pleading:

(a) damages in the sum of RM11,391,403.34;

(b) interest on the sum of RM11,391,403.34 at the rate of 5%

per annum from the date of this counterclaim to the date of
actual and full payment thereof;

(c) general damages to be assessed and paid by the Plaintiff to

the First Defendant;

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(d) interest on any general damages awarded at the rate of 5%

per annum from the date of judgment to the date of full
and actual payment thereof;

(e) costs;

(f) any other or further relief deemed just by the Honourable

Court.

[7] The Second Defendant entered its appearance but did not
thereafter participate further in the suit. Nonetheless, I proceeded
with the trial against the Second Defendant too in absentia based on
Order 35 rule 1(2) of the Rules of Court 2012; see also Guindarajoo
Vegadason v. Satgunasingam a/l Balasingam [2010] 4 MLJ 842.

[8] As the result, the trial eventually took place between the
Plaintiff and First Defendant only for 5 days on 22 to 25 February and
19 March 2021.

[9] The trial documents were marked as bundles A to W which

included the documentary evidence in bundles B to T which carried
status A or B as stipulated therein. In addition, exhibits D1 was
admitted in evidence in the course of the trial.

[10] The Plaintiff called the following witnesses to give testamentary

evidence:

(i) Ng Thok Nee (“PW1”), a director of the Plaintiff; and

(ii) Sr. Cheng Wei Ying (“PW2”), a consultant quantity

surveyor of Unitech QS Consultancy Sdn Bhd.

[11] The First Defendant called the following witnesses to give

testamentary evidence:

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(i) Sr. Saw Soon Kooi (“DW1”), a consultant quantity

surveyor of Kuantibina Sdn Bhd; and

(ii) Lan Dian (“DW2”), business manager of the First

Defendant.

[12] After the close of the trial, the parties furnished their respective
written closing submissions in chief and submissions in reply
simultaneously. Oral submissions and clarification with counsel was
held on 1 October 2021.

[13] I thereafter deferred my decision to deliberate on the arguments

put forth by them.

[14] Now having done so, I give hereinbelow my decision together

with the supporting grounds.

Background Facts

[15] The First and the Second Defendants had by an agreement dated
26 May 2016 formed a consortium known as Sinohydro-Temasek
Consortium (“Consortium”).

[16] By a letter of award dated 24 June 2016, the Consortium was

appointed as the main contractor by NCT Building and Civil
Engineering Sdn Bhd (“Employer”) for a project known as:

“The Execution and Completion of Phase 3 Comprising Block 2,

24 Storey Apartment (219 Units) and Block 3, 26 Storey
Apartment (139 Units) for “Cadangan Pembangunan Bercampur
Yang Mengandungi: -

(A) 4 Blok Pangsapuri 24-26 Tingkat (709 Unit);

(B) 1 Blok Pangsapuri 9 Tingkat (72 Unit);

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(C) 1 Blok Pangsapuri 8 Tingkat (34 Unit);

(D) 1 Blok Pangsapuri 30 Tingkat (333 Unit);

(E) Podium Tempat Letak Kereta 9 Tingkat;

(F) 1 Unit Pondok Pengawal;

(G) Loji Rawatan Kumbahan;

(H) Kolam Takungan;

di Atas Lot PT 11385 HS (D) 10562, Cadangan Loji Rawatan

Air Di Atas Lot 11377 HS (D) 10554 Dan Cadangan Tambahan
Tempat Letak Kereta Di Atas Lot 26460 Genting Highlands,
Mukim dan Daerah Bentong, Pahang Darul Makmur ”
(“Project”).

[17] The parties thereafter on 27 March 2017 executed the PAM

Articles of Agreement and Conditions of Contract pursuant to the
PAM Contract 2006 (with Quantities)(“Main Contract”).

[18] Subsequently the Consortium appointed Buildkon Worldwide

Sdn Bhd (“Buildkon”) as the subcontractor to undertake the Main
Contract works.

[19] According to the First Defendant, Buildkon abandoned the

works sometime in December 2017.

[20] As the result and by a letter of award dated 11 January 2018

(“Sub-Contract”), the Consortium appointed the Plaintiff to complete
a specified portion of the building works for the two (2) apartment
blocks of the Project (Block 2 and Block 3) for a total contract sum of
RM14,507,544.20.

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[21] The Sub-Contract is reproduced below including relevants part

duly translated from Chinese to English:

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[22] Consequently, the Plaintiff commenced work on 15 January

2018.

[23] During the Plaintiff’s employment by the Consortium, the

Plaintiff submitted the following Interim Progress Claims pursuant to
the Sub-Contract:

(i) Interim Progress Claim No. 1 dated 2 February 2018 for

RM1,872,826.26;

(ii) Interim Progress Claim No. 2 dated 2 March 2018 for

RM2,454,632.02; and

(iii) Interim Progress Claim No. 3 dated 19 June 2018 for

RM2,407,408.64.

[24] However, the Consortium failed to certify any of the Plaintiff’s

Interim Progress Claims and did not make any payment to the
Plaintiff whatsoever.

[25] Unbeknownst to the Plaintiff, the Employer on 27 March 2018

served a notice of default to the Consortium giving the Consortium 14
days to remedy the default, failing which the Employer would
terminate the Main Contract. The defaults expressed were pursuant to
clause 25.1(c) and clause 25.1(d) of the PAM Conditions of Contract
for failure to proceed regularly and diligently with works and failure
to comply with A.I.s respectively.

[26] The Employer thereafter took the position that the Consortium
had failed to remedy the defaults and proceeded to terminate the Main
Contract via notice of determination dated 17 April 2018.

[27] According to the Plaintiff, the Consortium orally informed the

Plaintiff of the termination of the Main Contract and was asked to
vacate the site immediately. There is however no letter or notice of

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termination issued by the Consortium to the Plaintiff pursuant to the

Sub-Contract.

[28] Between 21 April 2018 and 4 May 2018, there was a joint
inspection exercise conducted pursuant to the Main Contract between
the Employer, the Project consultants and the Consortium. The stage
of work done as at the date of termination of the Main Contract was
recorded vide construction drawings which were signed off by the
representatives of the Consortium, the Employer and the Project
consultants (“Construction Drawings”).

[29] The Plaintiff was however neither informed nor invited to attend
the abovementioned joint inspection.

[30] The Project architect subsequently issued a report dated 15 May

2018 outlining the percentage of Architectural and Structural works
completed as at 17 April 2018 (“Architect’s Report”).

[31] Additionally, the Project engineer issued a report dated 7 May

2018 confirming the percentage of structural work completed as at 17
April 2018 (“Engineer’s Report”).

[32] By reason that the Consortium did not make any payment to the
Plaintiff for the work done, the Plaintiff via a letter dated 20 June
2018 wrote to the First Defendant requesting payment for the Interim
Progress Claim no. 1 and Progress Claim no. 2.

[33] The First Defendant replied by letter dated 21 June 2018 stating
that any claims should instead be addressed to the Consortium.

[34] The Plaintiff thereafter wrote a letter dated 11 July 2018 to the
Consortium requesting for payment but the Plaintiff did not receive
any reply.

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[35] As between the First Defendant and the Employer, the First
Defendant commenced adjudication proceedings under the
Construction Industry Payment and Adjudication Act 2012. The
adjudication proceedings were concluded with a decision made
against the First Defendant.

[36] The Plaintiff then on 24 April 2019 commenced this suit against
the First Defendant and the Second Defendant claiming liability
against them jointly and severally for payment for the work completed
by the Plaintiff under the Sub-Contract.

Issues for Determination

[37] From my review of the pleadings, issues to be tried and closing

submissions of the parties, the primary issues that need to be
addressed and determined by me are as follows:

(i) Parties to the Sub-Contract;

(ii) Plaintiff’s claim for work done pursuant to the Sub-Contract;

and

(iii) First Defendant’s counterclaim for breach of the Sub-Contract.

[38] I will deal with each of them seriatim.

Findings of the Court

Parties to the Sub-Contract

[39] In respect of the first issue on parties to the Sub-Contract, the

First Defendant contended that the Sub-Contract was made between
the Plaintiff and the Consortium; hence the First Defendant is not a

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party thereto. In other words, there is no privity of contract between

the Plaintiff and the First Defendant.

[40] The Plaintiff in rebuttal contended that the Sub-Contract was

made between the Plaintiff and both the First Defendant and the
Second Defendant.

[41] The First Defendant replied that in the event any of them is
liable to the Plaintiff, the liability to the Plaintiff is joint but not
several.

[42] From my review of the Sub-Contract, I find that its opening

paragraph provides that the Plaintiff has been appointed by a
consortium named as Sinohydro-Temasek Consortium abbreviated as
SHTC. The payment obligations in clause 7 of the Sub-Contract
provided that the payments to the Plaintiff are to be made by SHTC.
Furthermore, it is provided that the Sub-Contract is binding on each
of the parties in clause 24 as well as the penultimate paragraph of the
Sub-Contract. Finally, I also noted the Sub-Contract has been
executed by each of the Defendants individually.

[43] It is provided in s. 44 of the Contracts Act 1950 as follows:

[44] Any one of joint promisors may be compelled to perform

(1) When two or more persons make a joint promise, the promisee
may, in the absence of express agreement to the contrary, compel any
one or more of the joint promisors to perform the whole of the
promise.

Each promisor may compel contribution

(2) Each of two or more joint promisors may compel every other joint
promisor to contribute equally with himself to the performance of the
promise, unless a contrary intention appears from the contract.

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Sharing of loss by default in contribution

(3) If any one of two or more joint promisors makes default in the
contribution, the remaining joint promisors must bear the loss arising
from the default in equal shares.

Explanation - Nothing in this section shall prevent a surety from

recovering from his principal payments made by the surety on behalf
of the principal, or entitle the principal to recover anything fr om the
surety on account of payments made by the principal.

ILLUSTRATIONS

(a) A, B and C jointly promise to pay D RM3,000. D may compel

either A or B or C to pay him RM3,000.

(b) A, B and C jointly promise to pay D the sum of RM3,000. C is

compelled to pay the whole. A is insolvent, but his assets are
sufficient to pay one-half of his debts. C is entitled to receive RM500
from A’s estate, and RM1,250 from B.

(c) A, B and C are under a joint promise to pay D RM3,000. C is

unable to pay anything and A is compelled to pay the whole. A is
entitled to receive RM1,500 from B.

(d) A, B and C are under a joint promise to pay D RM3,000 A and B

being only sureties for C. C fails to pay. A and B are compelled to pay
the whole sum. They are entitled to recover it from C .

See Nik Mohamed Salleh v. Tengku Besar Zabidah [1971] 1 MLJ 73

FC.

[44] In General Corporation Bhd v. Yoke Keng Holdings Sdn Bhd &
Ors [2009] 1 LNS 618, Hamid Sultan Abu Backer JC (later JCA) held
as follows with emphasis added by me:

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“6. I have read the notes of proceedings, witness statement, agreed

facts, documents, submission and the evidence etc. The plaintiff and
defendants have adequately submitted on the facts and relevant issues
which is not necessary for me to repeat. I take the view the plainti ff’s
claim must be dismissed. My reasons inter alia are as follows:

(a) I do not find much merit in the defendants ’ argument (without

citing authorities) that all the vendors have not been named as parties
and there need to be apportionment of liability an d the failure is
fatal. It is not disputed that the plaintiff had only chosen to sue about
47.88% of the vendors. All the vendors in this case by clause 7(u) of
the said agreement had warranted that the tax return of the company
have at all times been and will be, up to the completion date, correct
and on a proper basis and are not the subject of any back duty claims
or other disputes with the revenue authorities in Malaysia. I find no
provision in the sale and purchase agreement to show that the
contractual terms limit the liabilities of each vendor to the
proportionate shareholdings sold to the plaintiff. On the facts of the
case the liability will be joint and several as stated in sections 43
and 44 of Contract Act 1950 (CA 1950).

Section 44 of CA 1950 does not differentiate between a joint and

several promises and a joint promise. The onus of severing the
liability lies with the promisor in the contract. If no clause has been
drafted to limit or discriminate this exposure then each and every
promisor is liable for the obligation. Support for the proposition can
be found in a number of cases. Learned authors of Pollock and Mulla
on Indian Contracts Act in relation to Section 43 of Indian Contracts
Act which is equipollent to our section 44 makes the follo wing
observations:

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“The series of sections now before us material varies the rules of the
Common Law as to the devolution of the benefit of and liability on
joint contracts. As far as the liability under a contract is concerned,
it appears to make all joint contracts joint and several. The plaintiff
a bank, filed a suit on a promissory note against the defendants where
liability was joint and several. The High Court depending on some
equitable ground directed that the decree must first be realized from
one defendant and for the balance if any the execution was to be taken
against the other defendant. The Supreme Court held such a decree
was bad in law there being no such equitable principle or statutory
provision and converted the decree to be a joint and se veral decree
against the defendants. It allows a promisee to sue such one or more
of several joint promisors as he chooses, and excludes the right of a
joint promisor to be sued along with his co -promisors. Hence the
minority of one joint promisor does not affect the liability of the
other. There is still considerable difference of opinion in the Indian
High Court as to its consequential operation where a judgment has
been obtained against some or one of joint promisors, and the
decisions must be examined. We think it the better opinion that the
enactment should be carried out to its natural consequences, and that,
notwithstanding the English authorities founded on a different
substantive rule, such a judgment, remaining unsatisfied, ought not,
in India, to be held a bar to a subsequent action against the other
promisor or promisors.” (emphasis added)

Subsequently in Takashimaya Construction & Development Sdn Bhd

& Anor v. My Influx Sdn Bhd & Other Appeals [2020] 2 CLJ 92 CA,
Zabariah Mohd Yusof JCA (now FCJ) held as follows also with
emphasis added by me:

“[49] Counsel for the plaintiffs further submit that the plaintiffs are
not trying to lift the corporate veil but asserts that these two
companies have the same directors and shareholders and that they

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acted jointly. That is why the learned High Court Judge did not deal
with the question on the issue of the lifting of the corporate veil as it
was never put to her. In any event, there is nothing in the terms of
the SPAs 2007 which shows that the defendants exercised separate
obligations. The question still remains whether they are joint
promisors. In joint promisors, it does not matter to whom the monies
are paid. In this regard, counsel for the plaintiffs referred this court
to s. 44 (1) of the Contract Acts 1950.

[50] There cannot be a sale and purchase of the land without the
concurrence of the landowner. There is nothing in the SPAs 2007 that
severs D1 and D2 as separate obligors. There was this joint
arrangement between the two of them. By reason of s. 44 (1) of the
Contracts Act 1950, the learned High Court Judge was entitled to
order against both of them.”

[45] In the premises, I find and hold that the liability of the First
Defendant and Second Defendant under the Sub-Contract are joint and
several particularly since there is no provision in the Sub-Contract
that the liability of the Defendants is only several; see also NCT
Building & Civil Engineering Sdn Bhd v. Sinohydro Corporation (M)
Sdn Bhd and Another Summons [2020] MLJU 776.

Plaintiff’s claim for work done

[46] Next as to the Plaintiff’s claim for work done, the Plaintiff
contended that it is entitled to payment of the sum of RM4,193,360.10
as valued by its expert witness PW2. This is reduced from the sum of
RM6,734,866.92 claimed in its pleading.

[47] However the First Defendant contended that the Plaintiff is only
entitled to payment of the sum of either RM1,961,536.66 or
RM2,417,795.62 as valued by its expert witness DW1.

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[48] There is therefore clash of views between the expert witnesses.

[49] In Technip France SA’s Patent [2004] R.P.C. 46, Jacob LJ held
as follows in respect of the reception of expert evidence:

“But just because the opinion is admissible, it by no means follows

that the court must follow it. On its own (unless uncontested), it would
be ‘a mere bit of empty rhetoric’ Wigmore, Evidence (Chadbourn rev)
para. 1920. What really matters in most cases is the reasons given for
the opinion. As a practical matter as well as constructed expert ’s
report containing opinion evidence sets out the opinion and reasons
for it. If the reasons stand up, the opinion does, if not, not. ”

[50] It is obvious that the valuation of the work done must be

consonance and correlate with the terms of the Sub-Contract.

[51] In this regard, the Sub-Contract, inter alia, provides:

(i) The Plaintiff was appointed to provide Services for the Project
for a lump sum fixed price of RM14,507,544.20 (excluding 6%
SST); and

(ii) Pursuant to clause 2.1 of the Sub-Contract, the scope of works

for the Services to be carried out by the Plaintiff is expressed to
be as set out in Appendix 4.

[52] It is, amongst others, provided in Appendix 4 of the Sub-

Contract that the Plaintiff shall provide the mobilization and
demobilization of equipment, labour force to site and all necessary
preliminaries including the provision of all necessary insurances
connected herewith. In summary, the Tables therein outline the details
of the Building Works for Block 2 and Block 3 to be completed by the
Plaintiff. These details specify a breakdown of the actual contract
amount, the unfinished work ratio and the value of the unfinished
work awarded to the Plaintiff, viz:

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(i) The total amount of unfinished work to be completed by the

Plaintiff for Block 3 is 31.5% valued at RM6,967,005.38; and

(ii) The total amount of unfinished works to be completed by the

Plaintiff for Block 2 is 28.01% valued at RM6,146,493.20.

[53] There is also a composite summary of the breakdown of the total

contract sum, works and excluded works stated in the Sub-Contract.

[54] From the above breakdown of the percentage of works to be

completed by the Plaintiff and the apportioned fixed values attached
to it as stated in Appendix 4, I find and that the Sub-Contract is a
lump sum contract because the price for the work to be done by the
Plaintiff has been agreed to and fixed.

[55] In Government of Malaysia v. Syarikat Ismail Ibrahim Sdn Bhd

and Ors [2020] 1 LNS 40, Hamid Sultan Abu Backer JCA defined a
lump sum contract as follows:

“103. The nature of a lump sum contract and its current

jurisprudence is succinctly explained by the authors of Designing
Building Wiki and it reads as follows: “A lump sum contract (or
stipulated sum contract) is the traditional means of procuring
construction, and still the most common form of construction
contract. Under a lump sum contract, a single ‘lump sum’ price for
all the works is agreed before the works begin. It is defined in the
CIOB Code of Estimating Practice as, ‘a fixed price contract where
contractors undertake to be responsible for executing the complete
contract work for a stated total sum of money.’ This is generally
appropriate where the project is well defined, when tenders are
sought, and significant changes to requirements are [2020] 1 LNS 40
Legal Network Series 66 unlikely. This means that the contractor is
able to accurately price the works they are being asked to carry out ”.

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See also Lembaga Pembangunan Industri Pembinaan Malaysia v.

Konsortium JGC Corp & Ors [2015] 6 MLJ 612 FC.

[56] The lump sum contract price is therefore binding on the parties
and not subject to change irrespective of the actual quantities of work
done unless there are variations ordered to the work to be carried out.

[57] Consequently, the valuation of work done has to be subjected to

this lump sum contract price agreed to by the parties in the Sub-
Contract.

[58] For purposes of valuation of the Plaintiff’s work done, PW2 who
is a registered consultant quantity surveyor prepared his expert report
to assess and quantify the amount of work done by the Plaintiff from
the time the Plaintiff commenced work on 15 January 2018 right up to
the date the Plaintiff was ordered to leave the site upon the
termination of the Main Contract on 17 April 2018.

[59] In his expert report, PW2 assessed the percentage and value of
work done by the Plaintiff by 2 methods, viz:

(i) Firstly based on percentage of completed work outlined in the

Architect’s Report & Engineer’s Report (“First Method”); and

(ii) Secondly based on the percentage of completed work as

recorded in the as-built Construction Drawings (“Second
Method”).

[60] By his First Method, PW2 assessed the work done by the
Plaintiff based on the following methodology:

(i) The Sub-Contract as evidenced by the letter of award dated 11

January 2018 formed the basis to determine the balance of work
to be completed by the Plaintiff whereby the percentage of work

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to be done and the value has been determined and agreed upon
by the parties;

(ii) The percentage and value of work to be done by the Plaintiff

stated therein is a summary of works to be completed by the
Plaintiff for Block 2 and Block 3 in the Sub-Contract. This
summary states the balance percentage of works that are left to
be done by the Plaintiff and the corresponding values attached
for these work;

(iii) In total, the total percentage of building work left to be done by

the Plaintiff for Block 2 is 28.01% valued at RM6,146,493.20
and for Block 3 is 31.5% valued at RM6,967,008.38;

(iv) The progress and amount of architectural work completed as at

the date of termination of the Main Contract is that as outlined
in the Architect’s Report;

(v) The progress and amount of structural work completed as at the

date of termination of the Main Contract is that as outlined in
the Architect’s Report with details provided in the Engineer’s
Report;

(vi) Having noted the percentages of balance of the work to be

completed by the Plaintiff as per the Sub-Contract, PW2
thereafter noted the percentage of works completed as outlined
in the Architect’s Report and Engineer’s Report to determine the
percentage of work done by the Plaintiff;

(vii) The value of the work done by the Plaintiff is thereafter

assessed by using the apportioned values as per the Tables in
Appendix 4 of the Sub-Contract; and

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(viii) PW2’s detailed computations and workings in arriving at the

percentage and value of work done for Block 2 and Block 3 is
shown as per Appendix B of his expert report.

[61] Premised upon the above, PW2 assessed the total value of the
work completed by the Plaintiff at RM4,193,360.10 (with
preliminaries being apportioned accordingly).

[62] By the Second Method, PW2 assessed the value of work done by
the Plaintiff but based on the following alternative methodology:

(i) Having determined the amount and value of work to be done by

the Plaintiff as per the Sub-Contract and noting the record of
work done as per the as-built Construction Drawings, PW2
determined the percentage of work done by the Plaintiff;

(ii) The value of work done is thereafter assessed based on

apportioned values as per the Tables in Appendix 4 of the Sub-
Contract; and

(iii) The breakdown of the percentage of work done and value as

attributed for Block 2 and Block 3 are tabulated as Appendix C
of his expert report. PW2’s workings and calculations done
based on the as-built Construction Drawings are annexed in
Appendix A to his rebuttal witness statement.

[63] Based on the above, the total value of the work completed by the
Plaintiff is assessed by PW2 at RM4,585,557.94 (with preliminaries
being apportioned accordingly too).

[64] PW2 concluded that the value of work done by the Plaintiff up
to 17 April 2018 is RM4,193,360.10 based on his First Method which
is the lesser value arrived from the two methods applied.

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[65] On the other side, DW1 who is also a registered consultant

quantity surveyor similarly prepared his expert report to assess and
quantify the amount of work done by the Plaintiff from the time the
Plaintiff commenced work on 15 January 2018 right up to the date the
Plaintiff was ordered to leave the site upon the termination of the
Main Contract on 17 April 2018.

[66] In this respect, DW1 in his expert report similarly assessed the
percentage and value of work done by the Plaintiff by 2 methods, viz:

(i) Firstly based on total re-measurement of completed work from

the Construction Drawings (“First Method”); and

(ii) Secondly based on the percentage of completed work based on

the Architect’s Report and Engineer’s Report (“Second
Method”).

[67] By his First Method, DW1 assessed the work done by the
Plaintiff based on the following methodology:

(i) From the Construction Drawings as well as further construction

drawings furnished by the Consortium, DW1 derived by re-
measurement the quantities of work completed by the Plaintiff;
and

(ii) The total value of work done by the Plaintiff is assessed using
the derived re-measured quantities multiplied by the marked
down unit rates contained in the Main Contract bills of
quantities.

[68] DW1 accordingly assessed the total value of the Plaintiff’s work
done amounted to RM1,647,987.35 + RM313,549.31 for preliminaries
totaling to RM1,961,536.66 as detailed in Tables 1 to 3 of his expert
report.

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[69] By the Second Method, DW1 assessed the value of work done by
the Plaintiff but based on the following alternative methodology:

(i) The percentage of work done as recorded in the Architect’s

Report and Engineer’s Report are used to establish the basis of
the extent of work done; and

(ii) The extent of work as derived and the work as set out in the
Sub-Contract are used to determine the value of work done by
the Plaintiff.

[70] Thus DW1 assessed the total value of the Plaintiff’s work done
amounted to RM2,084,914.73 + RM396,679.97 for preliminaries
totaling to RM2,481,594.70 as detailed in Tables 1 to 3 of his expert
report.

[71] Ultimately, DW1 concluded that the value of work done by the
Plaintiff up to 17 April 2018 is RM2,481,594.70 derived based on his
Second Method for several reasons particularly because the re-
measurement methodology showed negative progress compared to the
actual work done by the Plaintiff.

[72] It is plain notwithstanding that both expert witnesses adopted

two methodologies each to determine the value of the Plaintiff’s work
done, they ultimately preferred and adopted the methodology based on
the Architect’s Report and Engineer’s Report, to wit: PW2’s First
Method and DW1’s Second Method respectively.

[73] Consequently, I discard reviewing the methodology and the

corresponding valuation done by both the expert witnesses based on
Construction Drawings. Be that as it may, I also find that assessment
based on Construction Drawings necessitates measurement of
quantities and application of rates which would not commensurate
with the method of pricing in derivation of the Sub-Contract lump

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sum price and its corresponding breakdown in Appendix 4 of the Sub-

Contract without adjustment. In other words, there are assumptions
involved which may differ from how the Sub-Contract pricing was
undertaken. This can be arbitrary and unsatisfactory.

[74] That notwithstanding, I find that despite the same basis of

valuation has been eventually adopted based on the work done as
recorded in the Architect’s Report and Engineer’s Report by both the
expert witnesses, to wit: PW2’S Second Method and DW1’S First
Method respectively, there is still a wide gap of RM1,711,765.40
being the difference between PW2’s valuation of RM4,193,360.10 and
DW1’s valuation of RM2,481,594.70 for the work done.

[75] The principal differences lie in the following elements of work

done by the Plaintiff:

Item Description % of Work Done % of Work Done

attributed by PW2 attributed by DW1

Block 2 Block 3 Block 2 Block 3

B Frame 99.16% 100% 94% 93%

C Upper floor 99.16% 100% 94% 93%

D Roof 25% - 0% -

G External 21.60% 4.20% 2.83% 1.64%

Doors

J Internal Doors 21.60% 4.20% 34.02% 2.91%

[76] For items B (Frame) and C (Upper Floor) structural works, PW2
explained that he attributed a percentage of 99.16% to them for the
following reasons:

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(i) In the Architect’s report, the Project architect noted that the
total structural works completed are 94 % for Block 2 and 93%
for Block 3 and these are the percentages utilized by DW1 for
Item B and Item C respectively;

(ii) These figures would not accurately represent the percentages for
the Item B (Frame) & Item C (Upper Floor) Elements as the
uppermost two floors for both Block 2 and Block 3 are the Roof
and the Lift Motor Room and would fall under Item D (Roof);

(iii) Nonetheless the Project Engineer in the Engineer’s Report has

broken down the percentage of completed structural works by
floors;

(iv) Thus for Block 2, PW2 assessed the total for Item B (Frame) &
Item C (Upper Floor) at 99.16% based on the Project engineer’s
certificate that structural works for Ground Floor to Level 23
were 100% and for Level 24 was 80%. For Item D (Roof), PW2
derived a percentage of 25% noting that the Project engineer
certified that structural works for level 25 was at 50% and for
Level 26 was at 0%. These are noted in the Table at Appendix B
of his expert report;

(v) As for Block 3, PW2 similarly assessed 100% completion for

Item B (Frame) & Item C (Upper Floor) based on the Project
engineer’s certification that there was 100% completion of
structural works for Ground Floor to Level 26 of Block 3. For
Item D (Roof), PW2 assessed the same at 0% as the Project
engineer certified 0% for Levels 27 and 28. These are again
noted in the Table at Appendix B of his expert report.

[77] In comparison, DW1 however assessed 0% for Item D of Block

2 in Table 2 of his expert report for Level 25 of Block 2. Furthermore

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DW1 assessed 93% for Item B and Item C for Ground Floor to Level
26 of Block 3.

[78] As for architectural works for Item J (Internal Doors) and Item
G (External Doors), PW2 explained that he had attributed a
percentage of 21.6% for Block 2 and 4.2% for Block 3 for the
following reasons:

(i) In the Architect’s Report, the Project architect noted completion

of 72% and 14% of door frame for Block 2 and Block 3
respectively. PW2 understood that these figures are not for the
entire Elements for Item J (Internal Doors) and Item G (External
Doors) but represented only the percentage of completion of
door frames only. This is because door frames are a sub-element
of both Item J (Internal Doors) and Item G (External Doors) and
by industry practice would amount to 30% of the cost of both
Items; and

(ii) Hence PW2’s assessment as seen in his remark 3 of the Table

for Block 2 and remark 1 of the Table for Block 3 of the
percentage of completion of both Item J (Internal Doors) and
Item G (External Doors) are derived at by multiplying the
Project architect’s certified completion for door frames with
30% to derive the total percentage of completion of both Items J
and G. Consequently he assessed 21.60% and 4.20% for both
Items J and G for Block 2 and Block 3 respectively;

[79] Likewise in comparison, DW1 derived his percentages for Item J

and Item G by multiplying the percentages of completion for door
frames noted in the Architect’s Report with specific values and rates.
However, these values and rates are not based on the Sub-Contract
between the parties here and which are also not reflected anywhere in
the Architect’s Report. Thus, DW1 assessed that only 2.83% of works
for Items J and G for Block 2 were completed notwithstanding that the

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Project architect certified that 72% of door frames in Block 2 were

completed.

[80] According to PW2, DW1’s assessment of 72% completion of

door frames amounted to only 2.83% completion of Items J and G.
Thus, the remaining 28% for door frames would be about 1.1%
resulting in the total percentage attributed to door frames for Items J
and G being 3.93% which falls very much below what would be the
accepted industry standard rates for this architectural component.

[81] The other relevant items are Item E (Staircase), Item H (Internal
Walls), Item K (Wall Finishes), Item L (Floor Finishes) and Item M
(Ceiling Finishes) are based on the exact amounts certified by the
Project architect in the Architect’s Report. The assessment and
valuation by PW2 and DW1 do not therefore significantly differ as
reflected in their respective expert reports.

[82] As held in Technip France SA’s Patent (supra), the acceptable

valuation boils down to my evaluation of the cogency of the
respective expert witnesses’ opinion based on their reasons given in
defence of their opinion.

[83] I have scrutinized the expert report of both PW2 and DW1 and
their oral testimony in court and I prefer that proffered by PW2.

[84] Firstly, I find that PW2’s opinion is more thorough than DW1’s
opinion in that PW2 has taken into account both the Architect’s
Report and the Engineer’s Report with emphasis properly and
correctly given to the Engineer’s Report in respect of structural
works. I noticed that PW2’s assessment is not consistent with the
Engineer’s Report in respect of Item B (Frame), Item C (Upper Floor)
and Item D (Roof). I am nonetheless mindful that in the making of the
assessment of Item D (Roof), PW2 relied on the Elemental Standard
Form of Cost Analysis (4 th edition) produced by the Building Cost

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Information Service (BCIS) published by the Royal Institution of

Chartered Surveyors (RICS) whereas DW1 relied on the Manual for
Preparation of Elemental Cost Analysis (ECA) produced by the
Building Cost and Information Centre published by the Institution of
Surveyors Malaysia (ISM). I prefer the definition published in the
RICS because it seems to me to be consistent with the Project
engineer’s views and accordingly his derivation of the percentages of
roof completion seen in the Engineer’s Report.

[85] As for the architectural work, I am satisfied as opined by PW2

that the work completion of Item J (Internal Doors) and Item G
(External Doors) recorded by the Project architect are for door frames
only which formed part but not the whole of the door elements. I am
also satisfied and find the assumption made by PW2 that the door
frame constituted 30% weightage fair and reasonable consistent with
conventional practice. Consequently DW1’s assessment is inaccurate,
if not also flawed. Moreover, DW1 thereafter went on to value the
Item J (Internal Doors) and Item G (External Doors) work completed
based on re-measurement and rates derived from the Main Contract
which are inapplicable to the Sub-Contract.

[86] In the premises, I find and hold that the value of work done by
the Plaintiff is RM4,193,360.10 as per PW2’s assessment and
valuation.

First Defendant’s counterclaim for damages

[87] By reason that the Main Contract between the Consortium and
the Employer was terminated on 17 April 2018, the First Defendant
challenged the validity of the termination against the Employer in
adjudication proceedings under the Construction Industry Payment
and Adjudication Act 2012 (“CIPAA”).

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[88] At the conclusion of the adjudication proceedings, the First

Defendant has been found liable to pay the Employer damages in the
sum of RM13,329,166.50 comprising of the following:

(i) Value of Rejected Works (NCR) RM2,101,605.41

(ii) Actual Rectification Costs RM7,133,192.26

(iii) Additional cost paid to NSC and RM2,156,601.67

Variation Order due to defective works

(iv) Agreed Backcharges RM720,636.64

(v) Payments on Behalf RM1,217,126.52

RM13,329,166.50
Total

[89] Consequently, the First Defendant counterclaimed special

damages in the sum of RM13,329,166.50 as well as general damages
from the Plaintiff.

[90] The First Defendant via paragraph 15 of its Amended Defence

and Counterclaim pleaded as well as DW2 in the course of the trial
admitted that the basis of its counterclaim is as per the adjudication
decision. DW2 testified as follows under cross examination:

Q: Yes, this was the basis on which you then found certain
amounts payable under defective works, rejected works,
backcharges, payment on behalf and rectification costs.
That was, the part, all of those things in Bundle N, yes?

A: That’s right.

That notwithstanding, the First Defendant also relied on the views of

DW1 as set out in its expert report to support its counterclaim.

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[91] An adjudication decision made under the CIPAA is binding but

not final pursuant to s. 13 of the CIPAA which provides:

13. Effect of adjudication decision

The adjudication decision is binding unless-

(a) it is set aside by the High court on any of the grounds referred to
in section 15;

(b) the subject matter of the decision is settled by a written agreement

between the parties; or

(c) the dispute is finally decided by arbitration or the court.

In other words, there is room for the same dispute to be re-determined

by arbitration or in the court of law. If the dispute is finally
determined in court, it is re-determined afresh unshackled or
unfettered whatsoever by the findings of the adjudicator.
Additionally, the dispute is re-determined subject to the provisions of
the Evidence Act 1950 (“EA”) that is inapplicable in the earlier
adjudication proceedings as stipulated in s. 12 (9) of the CIPAA.

[92] Furthermore, I noted that the First Defendant here in support of

its counterclaim is not relying on an adjudication decision of the
dispute between the Plaintiff and the First Defendant but the
adjudication decision between the First Defendant and the Employer.
Generally, the decision of the adjudicator is not a judgment. Only a
court judgment may be relevant and relied upon in a subsequent court
proceeding as provided in ss. 41 and 42 of the EA. Simply put, the
adjudication decision tantamount to an opinion which is inadmissible
in evidence. That notwithstanding and in the circumstances herein, the
adjudication decision relied upon by the First Defendant did not
emanate from a dispute between the parties here. It is therefore by its
nature inadmissible, if not also irrelevant.

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[93] As the result, the First Defendant’s counterclaim against the

Plaintiff for damages must be proved in the usual way subject to s. 74
of the Contracts Act 1950 as elaborated in Toeh Kee Keong v. Tambun
Mining Company Ltd [1967] 1 LNS 197 FC and Tan Sri Khoo Teck
Puat & Anor v. Plenitude Holdings Sdn Bhd [1995] 1 CLJ 15 FC.

[94] In Damansara Realty (Pahang) Sdn Bhd v. Om Cahaya Mineral

Asia Bhd [2021] 5 CLJ 283 CA, S. Nantha Balan JCA held as follows
with emphasis added by me:

“[67] It was also submitted that the judge failed to properly apply s.
74 of the Contracts Act 1950 in awarding RM10.8 million to the
plaintiff. Pursuant to s. 74 of the Contracts Act 1950, the type of loss
envisaged must be with supporting evidence to prove that the
compensation sought is for actual loss and/or damage for breach of
agreement.

[68] In other words, the plaintiff can only claim special damages
that had been specifically pleaded, and strictly proved . Counsel
referred to the Court of Appeal decision in Macvilla Sdn Bhd v.
Mervyn Peter Guan Yin Hui & Anor [2019] 1 LNS 949; [2019] MLJU
693; [2019] AMEJ 0759 CA which explained the application of s. 74
as follows:

[41] Both the limbs are related to special as well as general

damages. As far as the special damages are concerned, it is well
established it must be specifically pleaded and proved. Thus, the
‘actual damage’ concept envisaged in section 74 is easier for courts
to assess when it relates to special damage a nd proved according to
law.

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[155] It is important to emphasise that para. 29 of the SOC is a claim

for special damages which must be specifically pleaded (which has
been done) and strictly proven (which has not been done).

[156] The principle in relation to special damages is trite, ie, it must

be specifically pleaded (and particularised) and strictly proven. In
Ong Ah Long (supra), Justice Syed Agil Barakbah FCJ (pp. 305
(CLJ); pp. 327-328 (MLJ)) speaking for the Federal Court expla ined
the principle in the following words:

It is a well-established principle that special damages in contrast to

general damages, have to be specifically pleaded and strictly proved.
They are recoverable only where they can be included in the proper
measure of damages and are not too remote (see Halsbury’s Laws of
England 4th edition, volume 11 page 218 para 386). That in our view
is the cardinal principle adopted by all courts both in England and
this country. The same principle was adopted by Ong Hock Th ye, F.J.
(as he then was) in Yee Hup Transport & Co and Anor v. Wong Kong
[1967] 1 LNS 215; [1967] 2 MLJ 93 which was an appeal on quantum
of damages. Quoting an excerpt from the judgment of Wilmer L.J. in
llkiw v. Samuels[1963] 1 WLR 991; [1963] 2 All ER 879 he held that
the general damages should not be awarded as though they were
special damages properly pleaded and proved. Similarly Chang Min
Tat, F.J. (as he then was) in Murtadza bin Mohamed Hassan v. Chong
Swee Pian [1979] 1 LNS 57; [1980] 1 MLJ 216 a pplied the principle
in llkiw v. Samuels (supra) that special damages if pleaded as in that
case could be recovered. The principle was also adopted by Mohamed
Azmi, J. (as he then was) in Sam Wun Hoang v. Kader Ibramshah
[1981] 1 LNS 103; [1981] 1 MLJ 295 in the Federal Court.

[157] In llkiw v. Samuels [1963] 2 All ER 879; [1963] 1 WLR 991, 107
Sol Jo 680 CA 1950 Diplock LJ (p. 890 All ER):

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As regards the question of damages, I would put it in this way.

Special damage in the sense of a monetary loss which the plaintiff has
sustained up to the date of trial must be pleaded and particularised.

... In my view, it is plain law - so plain that there appears to be no

direct authority, because everyone has accepted it as being the law
for the last hundred years - that one can recover in an action only
special damage which has been pleaded, and, of course, proved .”

[95] I will deal with the First Defendant’s head of claim of value of
rejected works of RM2,101,605.41, actual rectification costs of
RM7,133,192.26 and additional cost paid to NSC and variation order
due to defective works of RM2,156,101.67 collectively as they are
related because of work allegedly done not in conformance with the
Sub-Contract.

[96] It is firstly incumbent upon the First Defendant to prove that

there was indeed work done by the Plaintiff that did not conform to
the Sub-Contract. I accept that the acceptability of the work done
under the Sub-Contract is subject to the same acceptability under the
Main Contract because the Plaintiff carried out the work vicariously
for the Consortium.

[97] As such, the acceptability of the work or otherwise must be

based on the standard required under the Main Contract which is to
the reasonable satisfaction of the Project architect or its
representatives such as the Project engineer in respect of the
structural works based on the PAM 2006 Conditions of Building
Contract which formed part of the Main Contract.

[98] In KC Leong Holdings Sdn Bhd Datin Moh Bee Ling [2015] 7
MLJ 10, I have held as follows on proof of defective work claim:

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“In any case, whether for breach of contract or in negligence, it is

trite law that the Defendant must prove that the alleged defects were
caused by the Plaintiff as a matter of fact. The classic maxim that she
who asserts must prove her assertion applies here as codified in s .
101 of Evidence Act 1950.

The causation of a defect can however be due to design, q uality of

material used, workmanship, lack of maintenance, wear and tear or a
combination of them. The Defendant must therefore produce cogent
evidence that the cause of the defect as alleged is plainly attributable
to the Plaintiff.

In this regard, the Defendant obviously cannot blame the Plaintiff if

the defect is due to lack of proper and regular maintenance. Likewise
the Plaintiff would be exonerated if the defect is due to design fault
since this is not a design and build contract as earlier found.

In building contract litigation, I have expected the complainant to

carefully sieve through and tabulate each and every relevant defect
and the costs of remedying them systematically preferably also in a
Scott schedule. The tabulation must cross refer to th e defect as
substantiated preferably by photographic records or other cogent
mode of proof together with the corresponding item of expenses or
costs incurred to remedy the defect as substantiated by the work
invoices. The complainant must in honesty disreg ard those works that
constituted improvement or addition/modification rather than
rectification. In short, the complainant cannot throw the whole
kitchen sink of alleged unprocessed defects and expenses to the court
to have them sorted out as presented by the Defendant here.

Moreover, it is incumbent on the Defendant to satisfy the court that

she has mitigated her damages, see Kebatasan Timber Extraction Co

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v. Chong Fah Shing [1969] 2 MLJ 6. The Defendant is thus obliged to

show that she had acted reasonably in the appointment of the
rectification contractors by calling tenders or alternative quotations,
otherwise to satisfactorily explain why such steps were not carried
out. The Defendant has not led any evidence on this aspect. ”

[99] As to the proof of the alleged non-conforming work done by the

Plaintiff, the First Defendant did not call the Project architect and
Project engineer to testify on the work done. They are material
witnesses and the First Defendant’s failure to call them for reasons
best known only to the First Defendant is fatal to its counterclaim. It
is likely withholding or suppression of evidence that attracts adverse
inference as provided in s. 114(g) of the EA. In addition, I find that
the First Defendant has also not sufficiently proved that the alleged
non-conforming or rejected works as evidenced by the non-
conforming reports (NCR) produced by the First Defendant were
undertaken by the Plaintiff and not Buildkon. This has been partly
conceded to by DW2 under cross examination as follows:

Q: So I put it to you that you cannot determine which are the works
that were done by the previous contractor and which are the
works that were done by the Plaintiff, which you claim to be
defective?

A: Agree.

[100] That notwithstanding, the First Defendant has also plainly not
presented its counterclaim systematically and cogently in a detail
tabular manner as prescribed in KC Leong Holdings Sdn Bhd Datin
Moh Bee Ling (supra) connecting the identity, causation and hence
liability of non-conforming work with the resultant value of
abatement and/or rectification costs in substantiation of the First
Defendant’s allegations.

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[101] As to the proof tendered by the First Defendant, I find and hold
that the First Defendant’s principal reliance on the adjudication
decision made in the dispute between the First Defendant and the
Employer unacceptable because it is irrelevant and inadmissible for
reasons stated in paragraphs [91] and [92] above. Additionally, I am
mindful that the First Defendant also relied on the corroborative
evidence of DW1 to illustrate the reasonableness of the counterclaim
as set out in his expert report. Whilst DW 1 may be qualified and able
to comment on rectification costs, I however find and hold that he
being a quantity surveyor, is not competent to testify as an expert on
non-conforming work done which is in the purview of an architect
and/or engineer. He has attempted to interpret the Project architect’s
notations in the architect’s letter dated 15 May 2018 as well as several
non-conforming reports on alleged rejected floor and ceiling finishes
work. However upon my review, I find DW1’s interpretation
subjective and arbitrary in the absence of an analysis as explained in
paragraph [100] above. It follows that his resultant re-measurement
and valuation are consequently unhelpful.

[102] Consequently in the absence of the systematic analysis as

mentioned in paragraph [100] above, I find that the First Defendant
has not sufficiently discharged its burden of proof to justify its
entitlement to the various heads of counterclaim for the amounts as so
alleged.

[103] Finally, I find and hold that the First Defendant has also not
mitigated its counterclaim by giving the Plaintiff the opportunity to
rectify the alleged non-conforming work (if any) pursuant to clause
12.3 of the Sub-Contract and which would have been ordinarily
required as a matter of law as well as held in Bumimetro Construction
Sdn Bhd v. Sun-Jaya M & E Sdn Bhd [2020] MLJU 136.

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[104] In the premises, I reject all the First Defendant’s heads of

counterclaim on alleged non-conforming work done by the Plaintiff.

[105] Secondly as to the First Defendant’s heads of counterclaim of

backcharges of 720,636.64 and payments on behalf of
RM1,217,126.52, I will also deal with them collectively together.

[106] The backcharges of the First Defendant are based again on the
findings of the adjudicator made in the adjudication proceedings
between the First Defendant and Employer allegedly for materials,
charges, goods, services, equipment and/or machinery related to or
utilized by the Plaintiff to carry out its work. They were purportedly
authorized by the Consortium.

[107] During the course of the trial, DW2 conceded under cross
examination the supporting documents of the backcharges imposed by
the Employer upon the First Defendant were acknowledged by the
Consortium as follows:

Q: And these are documents that are signed by the Defendant’s

consortium vis a vis the employer pursuant to your own
arrangements?

A: Agree.

Nonetheless, DW2 further conceded under cross examination that

there are no debit notes issued by the Consortium to the Plaintiff for
any of those backcharges as follows:

Q: You agree with me that there is no debit notes given to Plaintiff

by the First Defendant which are in the bundles?

A: Yes, agree.

[108] Furthermore, it is plain that the Second Defendant had given

authorizations to the Employer to make payments on behalf to third

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parties on behalf of the Consortium. However, there were no such

authorization given by the Plaintiff to the Consortium or First
Defendant as also conceded by DW2 as follows under cross
examination:

Q: Temasek had given authorization to the employer to make

payments for the employer to make payments on behalf of
consortium. OK? So, my question is, there is no such
authorization letter by the Plaintiff given to the consortium or
the First or Second Defendant to make any payments on behalf ?

A: Agree.

Q: And there is no such admissions or letters of authorization given

by the Plaintiff to the consortium or the First Defendant?

A: Agree.

[109] In Setegap Bhd (in creditor’s voluntary winding up) v. Ranhill

Engineers and Constructors Sdn Bhd [2011] 6 MLJ 684, Nallini
Pathmanathan J (now FCJ) held as follows with emphasis added by
me:

“The Defendant’s claim for the cost of materials bought on behalf

of the Plaintiff.

DW-2 gave evidence on behalf of the Defendant in respect of this

head of claim. In essence the Defendant claims a sum of
RM719,570.45 being the costs of materials purchased by the
Defendant on behalf of the Plaintiff at the Plaintiff ’s behest. In
support of this claim DW-2 pointed first to the consolidated
statement of account where one column entitled ‘Debit note
Amount’ details the quantum expended by the Defendant on behalf

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of the Plaintiff in respect of materials purchased. DW -2 stated that

the purchase of these materials was in actual fact, the responsibility
of the Plaintiff. However the Plaintiff had requested that the
Defendant purchase these construction materials. In support of this
statement DW-2 made reference to a series of letters dating from
28th February 2005 until 28 th October 2005 from the Plaintiff to the
Defendant requesting that the Defendant purchase the construction
materials listed therein. In the first letter dated 28 th February 2005
it is evident from the contents that the suppliers wanted to deal
directly with the Defendant to ensure timely payment. The letter
ends with the plaintiff stipulating that “... Purchase procedure shall
be through your office to put up a purchase order to supplier upon
our purchase order to you...”

The Plaintiff therefore clearly envisaged issuing a purchase order to

the Defendant. In other words the Plaintiff fully intended to pay the
Defendant for the construction materials supplied. This is further
corroborated when the Plaintiff stipulates in the letter that: - “...
Payment shall be deducted directly from our progress claim. ”

DW-2 then testified that from the records, the Defendant agreed to the
Plaintiff’s request and duly purchased the material requested for by
the Plaintiff. In respect of these materials there was also an
agreement as evidenced in the letter dated 13 May 200 5 that a
service charge of 2% would be levied on the cost of such materials.
The Defendant’s claim for materials supplied is further supported by
a series of Debit Notes issued by it to the Plaintiff which were not
disputed until trial. There are a total of seven debit notes which have
all been produced in evidence. They provide further evidence to
corroborate the fact that goods were supplied by the Defendant to the
Plaintiff.

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In the course of cross-examination DW-2 was asked for the purchase

orders underlying the debit notes, which he said were in the
possession of the Defendant but which he had not brought with him. It
was suggested that the mode of ordering was via purchase orders
from the Plaintiff to the Defendant, but DW-2 stated that the Plaintiff
had in fact sent letters and the Defendant had issued purchase orders
to third parties to meet the Plaintiff’s requests for construction
materials. DW-2 also confirmed that there was a ‘mark up’ of 2% on
the costs of payment sought from the Plaintiff for tho se materials
purchased on its behalf. DW-2 was also asked for the invoices from
third parties to evidence the fact that these materials had in fact been
purchased, but again he had not produced them in the documents
before the Court. He denied that these claims for the supply of
construction materials was fictitious. He was unable to produce
evidence of payments made by the Defendant to the third parties.

Again I have considered the totality of the evidence available under

this head. The strongest indication of the bona fides of the
Defendant’s claim are in fact the Plaintiff’s own letters asking that
the Defendant purchase these goods on its behalf. There can be no
clearer evidence that the Plaintiff did in fact require the Defendant
to purchase construction materials on its behalf. The debit notes
which were issued to the Plaintiff but remained unchallenged until
trial provide further evidence of the fact that these materials were
indeed purchased and supplied to the Plaintiff . The fact that the
Defendant did not produce purchase orders to third parties or
evidence of payment to third parties cannot detract from the
preponderance of evidence that shows that the claim is genuine. In the
instant case as the Plaintiff itself appears to have accepted in one of
its letters that a service charge of 2% may be levied, entitles the
Defendant to make claim for this additional amount as well. I am

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satisfied that the Defendant is entitled to make claim in the sum of

RM719,570.45 in respect of this head of claim. ”

[110] By comparison, there is in contrast absolutely nothing in the

Sub-Contract or the other eventual documentation produced here to
signify that the Plaintiff agreed, accepted or acknowledged liability
for the materials, charges, goods, services, equipment and/or
machinery allegedly supplied by the Employer. It is irrelevant that the
Consortium had agreed to them. I have in CFB Aluminium Extrusion
Sdn Bhd v. Lim Soon Seng [2014] 1 LNS 1311 held as follows on the
need to produce the key documents to justify a goods, sold and
delivered claim:

“Generally, it is plain that the seller in a claim for payment for goods
sold and delivered must prove that the order was made and the goods
were received by the buyer. The proof is commonly by way of
producing in court the purchase order, delivery order and the invoice
for the goods (“the key documents”)…”

Thus and for a back charge or payment made on behalf claim, I hold
that the supplier must produce in court the supply requisition,
delivery note and the duly acknowledged debit notes with other
accompanying supporting documents thereto (“Key Documents”). For
purposes of proof here, the First Defendant must produce these Key
Documents. But they were not produced by the First Defendant.

[111] I however find that DW1 in attempted justification of the First

Defendant’s counterclaim in his expert report merely assumed that
these materials, charges, goods, services, equipment and/or machinery
were used by the Plaintiff based solely on the dates of the documents.
Without the Key Documents, these assumptions are however not
reliable because DW1 obviously has no personal knowledge as he was
not actually at the site to witness the Plaintiff’s usage of them.
Furthermore, I find DW2’s evidence unhelpful because he wavered by

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agreeing that the materials, charges, goods, services, equipment

and/or machinery were used by the Plaintiff and other contractors and
later disagreeing to it altogether.

[112] In the premises, I also reject both the First Defendant’s heads of
counterclaim on agreed backcharges and payment made on behalf.

Conclusion

[113] For the foregoing reasons, I therefore enter judgment of

RM4,193,360.10 against the First Defendant and the Second
Defendant jointly and severally together with interest at 5 % per
annum from 24 April 2019 till full realization with costs of
RM80,000.00 subject to the usual allocator.

[114] The First Defendant’s counterclaim is dismissed.

Dated: 29 NOVEMBER 2021

(LIM CHONG FONG)

Judge
Construction Court 1
High Court Kuala Lumpur

COUNSEL:

For the plaintiff - Harvinderjit Singh, Raj Shankar & R Prem Anand; R Prem
Anand

For the first defendant - Chan Sock Mun & Teo Lee Hoon; Tan Chuan Yong &
Sm Chan

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Case(s) referred to:

Guindarajoo Vegadason v. Satgunasingam a/l Balasingam [2010] 4 MLJ 842

Nik Mohamed Salleh v. Tengku Besar Zabidah [1971] 1 MLJ 73 FC

General Corporation Bhd v. Yoke Keng Holdings Sdn Bhd & Ors [2009] 1 LNS
618

Takashimaya Construction & Development Sdn Bhd & Anor v. My Influx Sdn
Bhd & Other Appeals [2020] 2 CLJ 92 CA

NCT Building & Civil Engineering Sdn Bhd v. Sinohydro Corporation (M) Sdn
Bhd and Another Summons [2020] MLJU 776

Technip France SA's Patent [2004] R.P.C. 46

Government of Malaysia v. Syarikat Ismail Ibrahim Sdn Bhd and Ors [2020] 1
LNS 40

Lembaga Pembangunan Industri Pembinaan Malaysia v. Konsortium JGC

Corp & Ors [2015] 6 MLJ 612 FC

Toeh Kee Keong v. Tambun Mining Company Ltd [1967] 1 LNS 197 FC

Damansara Realty (Pahang) Sdn Bhd v. Om Cahaya Mineral Asia Bhd [2021]
5 CLJ 283 CA

KC Leong Holdings Sdn Bhd Datin Moh Bee Ling [2015] 7 MLJ 10

Bumimetro Construction Sdn Bhd v. Sun-Jaya M & E Sdn Bhd [2020] MLJU
136

Setegap Bhd (in creditor's voluntary winding up) v. Ranhill Engineers and
Constructors Sdn Bhd [2011] 6 MLJ 684

CFB Aluminium Extrusion Sdn Bhd v. Lim Soon Seng [2014] 1 LNS 1311

Legislation referred to:

Contracts Act 1950, ss. 44, 71, 74

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Construction Industry Payment and Adjudication Act 2012, ss. 12 (9), 13

Evidence Act 1950, ss. 41, 42, 114(g)

Rules of Court 2012, O. 35 r. 1(2)

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