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DALAM MAHKAMAH TINGGI MALAYA DI MUAR

DALAM NEGERI JOHOR DARUL TAKZIM
[GUAMAN SIVIL NO: 23-47-2008]
BETWEEN
CAMELLIA VIEW SDN BHD

... PLAINTIF
AND

ENVIPRO SDN BHD

... DEFENDEN

[GUAMAN SIVIL NO: 22-98-2008]

ANTARA
ENVIPRO SDN BHD

... PLAINTIF
DAN

CAMELLIA VIEW SDN BHD

... DEFENDAN

(dipindahkan dari Mahkamah Sesyen Batu Pahat dan digabungkan

melalui Perintah bertarikh 31 haribulan Mac 2009)

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CONTRACT: Breach - Contract for work done and material supplied

- Whether defendant breached its obligation by changing piling
material without consent of plaintiff - Whether plaintiff entitled to
difference in costs for unilateral change of piling material - Whether
it was defendant's fault in building the sewage treatment plant (STP)
out of position - Whether defendant depended on the accuracy of
plaintiff's demarcation of the site of the STP - Whether plaintiff
estopped from denying that it had knowledge of the error and signed
the Amended Plan in order to have it submitted to relevant authority
for approval
CONTRACT: Breach - Delay - Damages - Whether defendant
delayed in completing and handing over the STP on or before
31.12.2005 - Whether plaintiff entitled to liquidated ascertained
damages (LAD) - Whether fact that plaintiff made progress payments
to defendant meant that plaintiff waived its rights to claim LAD
against defendant
CONTRACT: Building contract - Progress payments - Pegasus
informally engaged by plaintiff as superintending engineer - Whether
Pegasus's role purely that of an employee of plaintiff or its
"agent" for purposes of Contract - Whether basic principles
pertaining to role of a superintending engineer or architect
applicable to Pegasus - Whether role included issuance of
Certificate of Practical Completion (CPC) - Whether it was
premature of Pegasus to have issued CPC - Whether progress
payments made by plaintiff to defendant vis Progress Payment
Certificates Nos. 5 to 7 prevented plaintiff from challenging decision
of Pegasus - Whether plaintiff was estopped from disputing CPC Whether CPC should have been issued much later - Whether CPC
was wrongly issued by Pegasus and therefore invalid

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[For the 2008 case, special damages comprising of deductions in cost

of piling material at RM4,952.00 and LAD of RM240,000.00 allowed;
general damages as a result of the encroachment into the buffer zone
disallowed; a declaration that the CPC issued by Pegasus on 2.1.2006
was null and void allowed with interest and costs; For the 2009 case,
RM129,998.00 is payable by Plaintiff to Defendant which shall be
set-off from sums due from Defendant to Plaintiff in the 2008 Case
with interest and costs.]

Case(s) referred to:

Hiap Hong & Co Pte Ltd v. Ong Huat Development Co (Pte) Ltd
[2001] 2 SLR 458 (refd)
Ooi Yoke In (F) and Anor v. Public Finance Bhd [1993] 2 CLJ 464 (refd)
Sakinas Sdn Bhd v. Slew Yik Hau & Anor [2002] 5 MLJ 497 (refd)
Serangoon Garden Estate Ltd v. Marian Chye [1959] 25 MLJ 113 (refd)
Syarikat Ong Yoke Lin Sdn. Bhd. v. Giant Cash and Carry Sdn Bhd &
Ors [2000] 4 CLJ 733 (HC) @ 759 (refd)
Legislation referred to:
Contracts Act 1950, s. 75
Evidence Act 1950, s. 114(g)
Other source(s) referred to:
Hudson's Building And Engineering Contract , 12 t h Edition, Sweet and
Maxwell, 2010, under the sub-heading of Design and Build
Contracts, at pages 522, 523, 524 paragraph 3-130
Nigel M Robinson, et al, Construction Law in Singapore and
Malaysia, Second Edition, Butterworths Asia, 1996, pg. 301-302, 344346

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GROUNDS OF JUDGMENT

A.

PRELIMINARIES:

[1]

For the purposes of these actions, the Court will refer the parties

as in Civil Suit No. 23-47-2008 (the 2008 Case) as the Plaintiff and the
Defendant respectively.

[2]

The Defendant had commenced an action against the Plaintiff at

the Batu Pahat Sessions Court for the sum of RM129,998.00 being the
balance of payment due under several Progress Payment Certificates;
whilst the Plaintiff had commenced an action (being the 2008 Case)
against the Defendant at the Muar High Court as remedies sought by
the Plaintiff involved higher amounts than being within the jurisdiction of
the Sessions Court. The Sessions Court case was then transferred to
the Muar High Court and re-registered as Civil Suit No. 22-98-2009 (the
2009 Case). Both the 2008 Case and the 2009 Case were
consolidated on 6.3.2012.

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B.

THE 2008 CASE:

[3]

In the 2008 Case, the Plaintiff claimed against the Defendant for:-

3.1. special damages comprising of:3.1.1. deductions

in

cost

of

piling

material

for

the

sum

of

RM12,963.20;
3.1.2. liquidated and ascertained damages (LAD) of RM289,500.00;
3.2. general damages, including loss and damage suffered as a result
of the encroachment by the Defendant into the buffer zone;
3.3. a declaration that the Certificate of Practical Completion (CPC)
issued by Pegasus Engineers Sdn. Bhd. (Pegasus) on 2.1.2006
is null and void;
3.4. interest and costs.

C.

THE 2009 CASE:

[4]

In the 2009 Case, the Defendant claimed against the Plaintiff for

the sum of RM129,998.00 together with interest and costs in respect of

7 Progress Payment Certificates issued by Pegasus.

D.

THE FACTS:

[5]

The Plaintiff is a company carrying on the business as a housing

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developer. The Defendant is an environmental engineering company

which specialises in the building of sewage treatment plants.
[6]

By letters dated 7.4.2005 and 28.6.2005 between the Plaintiff and

the Defendant forming the contract between them (the said Contract),
the Plaintiff had engaged the Defendant to execute and complete a
sewage treatment plant (the STP) on Lot 9254 situated within the
Plaintiff's housing development area called Taman Flora Utama in
Mukim Simpang Kanan, Batu Pahat Johor in accordance with the Site
Plan for an Extended Aeration Process System for 6500 PE dated July
2005 (page 37, B), (the Site Plan).
[7]

The essential terms of the said Contract were:-

7.1. the contract sum was RM1,350,000.00;

7.2. the said Contract was a design and build contract where the
Defendant was responsible for, amongst other things, all
authorities submissions, approval, inspection and handing over to
the authorities upon completion;
7.3. the date of site possession was 1.7.2005;
7.4. the date of completion of the whole works was 31.12.2005; and
7.5. the LAD was fixed at RM1,500.00 per day.

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The Plaintiff's Case

[8]

The Plaintiff alleged that in breach of the said Contract, the

Defendant had used bakau piles instead of reinforced concrete piles for
the piling works of the main tank. Hence it was the contention of the
Plaintiff that it was entitled to retain the actual savings that had resulted
from the change in the piling material amounting to RM12,963.20 .
[9]

The Plaintiff alleged that in breach of the said Contract, the

Defendant had constructed the STP in such a manner that its outer
boundary wall had encroached into the buffer zone of the STP of
approximately 7.8 metres between the outer boundary wall of the STP
and the row of shop houses (namely Lot PTD 39455), and
approximately 8.8 metres between the outer boundary wall of the STP
and the row of double-storey terrace houses (namely Lots PTD 39412,
PTD 39413, PTD 39414 and PTD 39415) wherein the buffer zone must
at least be 12 metres wide. As a result of the said encroachment the
Plaintiff was initially unable to sell Lot PTD 39455 and had only
succeeded in selling the said Lot for a lower sum of RM390,000.00.
Similarly, the Plaintiff only succeeded in selling the double-storey terrace
houses at a lower price of RM266,800.00. The Plaintiff had therefore
suffered losses and damages as a result of the Defendant's breach.
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[10] The Plaintiff alleged that the Defendant had only completed and
handed over the STP to the Sewerage Service Department on
13.7.2006, thus incurring a delay of 193 days. The Plaintiff therefore
claimed LAD of RM289,500.00 against the Defendant.
[11] As the Plaintiff alleged that the Defendant had only completed the
whole works on 13.7.2006, the Plaintiff's superintending engineer,
Pegasus, had erroneously issued the CPC certifying that the Defendant
had practically completed the works on 31.12.2005. The Plaintiff
therefore sought for a declaration that the CPC was null and void.

The Defendant's Case.

[12] The Defendant in essence denied the Plaintiff's claim against it.
With regard to the Plaintiff's claim to the savings in respect of the use of
bakau piles, it was the Defendant's contention that the bakau piles were
used at the Plaintiff's request resulting in the said Contract price was
reduced from RM1,350,000.00 to RM1,345,048.00.
[13] As for the Plaintiff's allegation that the Defendant had constructed
the STP in a manner where the boundary wall of the STP had
encroached into the buffer zone, the Defendant denied the allegation

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and instead alleged that even if there had been encroachment, it was
due to the Plaintiff's submission of the Amended Plan to the authorities
in December 2005 by Pegasus and which was approved on 23.1.2006.
That the construction of the STP was in accordance with the Amended
Plan. Further, the Plaintiff had sold the double-storey houses Lot PTD
39412 and Lot PTD 39413 without incurring any loses whilst the buffer
zone vis Lot 39415 had not changed from 12 metres wide,

[14] The Defendant alleged that there was no delay in completing the
works since it was by the Plaintiff's own action vis its superintending
engineer Pegasus which had caused the Plan to be amended and
consent to the amendment of the Plan was only obtained on 23.1.2006 .
The Defendant alleged that the Plaintiff had waived the date of
completion since the Plaintiff had made payments to the Defendant to
the sum of RM1,215,050.00 under the said Contract.

[15] It was the Defendant's contention that the CPC was issued by the
Plaintiff itself vis Pegasus and therefore the Plaintiff was estopped from
disputing the CPC.
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[16] Instead the Defendant claimed that the Plaintiff owed it the sum of
RM129,998.00 as per the Defendant's claim in the 2009 Case.
E.

THE ISSUES:

[17] The parties had agreed to 11 issues to be tried. However I have

adopted the 4 main issues as proposed by the Plaintiff's counsel, with
some modifications, in his submission as well as 1 issue in respect of
the Defendant's claim against the Plaintiff. They are:17.1. whether the Defendant had breached its obligation by changing
the piling material without the consent of the Plaintiff;
17.2. whether the Defendant was at fault in the STP being built not in
accordance with the Site Plan;
17.3. whether the Defendant had delayed in completing and handing
over the STP on or before 31.12.2005;
17.4. whether the superintending engineer Pegasus had erroneously
issued the CPC dated 2.1.2006; and
17.5. whether

the

Plaintiff

owed

the

Defendant

the

sum

of

RM129,998.00, being the balance of the said Contract sum

remaining unpaid.
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[2012] 1 LNS 720

F.

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Whether the Defendant had breached its obligation by

changing the piling material without the consent of the
Plaintiff.

[18] It was submitted for the Plaintiff that the Defendant had without its
knowledge and consent unilaterally changed the piling materials of the
main tank from reinforced concrete piling to bakau piling which was a
cheaper alternative in contravention of Clause 6.7.1 of the Defendant's
Quotations (page 3, B). The Plaintiff had never at any material time
consented to such changes.
[19] That the Defendant's second witness, SD2, had stated in his
Witness Statement D2, Q & A 25, 26, 27, 28 that the Plaintiff had agreed
to the quotation stated in the Projected Cost of Piling Work at pge 3, C,
(Projected Cost) which was RM95,048.00. It thus reduced the contract
sum from RM1,350,000.00 to RM1,345,048.00. When SD2 was crossexamined that the Plaintiff could not have agreed for the use of the
bakau piles at the cost of RM95,048.00 in June or July as the quotation
was dated 17.9.2005, SD2 had denied the matter (page 47, Notes of
Evidence). SD2 had admitted that the quotation in the Projected Cost
was for the actual costs of bakau piling after completion of piling works
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(page 47, Notes of Evidence). Therefore, it was submitted that SD2's

testimony that the quotation was agreed to in June 2005 cannot be
accepted as in June he would not have actual costs of construction
using bakau piles to obtain the Plaintiff's agreement. There was
therefore no such estimation being presented to the Plaintiff for the
Plaintiff's approval. Moreover, SD2 had also admitted under crossexamination that, with reference to page 58, B, the Defendant had as at
15.8.2005 already gone ahead to order bakau piles without obtaining the
Plaintiff's consent and that there was no written letter from the Plaintiff to
agree to the use of bakau piles (pages 46-48, Notes of Evidence).
[20] In view of these facts, it was submitted by the Plaintiff that it should
be compensated with a minimum sum of RM12,963.20 being the
difference in costs for the unilateral change of the piling material.
[21] It was submitted by the Defendant that the Plaintiff had raised this
issue as an after thought seeing that vide Envipro's letter to Pegasus
dated 12.1.2006, carbon copied to the Plaintiff, on pages 56-57, B,
clearly showed the Plaintiff's knowledge and consent to the use of the
bakau piles for all piling works after a discussion and soil test was done.
Moreover, the Plaintiff had not at any time disputed nor objected to the
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use of the bakau piles for all piling works especially in respect of all
payments made after 12.1 200& It was the Defendant's contention that
the document on page 3, C, proved that the Plaintiff had agreed and
consented to the Defendant using the bakau piles.
[22] After a close perusal of SD2's testimony, I find that the learned
counsel for the Plaintiff had been mistaken in stating that SD2 had
testified that the Plaintiff had agreed to the quotation stated in the
Projected Cost in June 2005 when the Projected Cost was dated
17.9.2005. What SD2 stated in his Answers 25, 26 and 27, D2, was that
in the month of June, July 2005 after soil tests were carried out, there
was a discussion held in early August 2005 wherein the Plaintiff had
directed the Defendant to use bakau wood for all piling in the
construction of the STP and whereby the new contract price for the STP
was RM1,345,048.00 with the cost of the bakau wood being agreed at
RM95,048.00 as per the Projected Cost on page 3, C. I quote at length
below the Q & A 25 - 27 of SD2 for a better understanding:S25: Minta jelaskan samada harga kontrak RM1,350,000.00 itu dikekalkan
atau terdapat perubahan kepada harga kontrak itu.
J25:

Pada bulan Jun, Julai 2005 selepas menjalankan ujian tanah (soil test)
satu perbincangan telah diadakan pada awal bulan Ogos 2005 di
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mana Camellia mengarahkan Envipro menggunakan kayu bakau untuk

semua piling untuk pembinaan loji tersebut di mana jumlah harga
kontrak pembinaan loji baru adalah RM1,345,048.00.
S26:

Adakah Envipro mengeluarkan sebut harga untuk bakau piling yang

diarahkan oleh Camellia?

J26:

Ada, kos untuk bakau piling adalah sebanyak berjumlah RM95,048.00.

Minta lihat muka surat 3 Ikatan Dokumen Tambahan Defendan.

S27: Minta jelaskan pembezaan di antara harga asal RM1,350,000,00

dengan harga baru RM1,345,048.00 yang berjumlah RM4,952.00.
J27:

Pada

awalnya

Camellia bersetuju RC Piling

dengan harga

RM70,000.00 dan bakau piling dengan harga RM30,000.00 berjumlah

RM100,000.00 seperti di revised quotation Envipro di muka surat 3
Ikatan Dokumen Bersama. Selepas kajian tanah pada Jun, Julai 2005
Camellia mengarahkan Envipro menggunakan kayu bakau untuk
semua piling dengan harga yang dipersetujui RM95,048.00. Ini
terdapat perbezaan RM4,952.00 apabila ditolak daripada harga
asal

RM100,000.00.

Justeru,

harga

baru

kontrak

menjadi

RM1,345,048.00,

[23] Even though I find learned counsel for the Plaintiff was mistaken, I,
however, find that he was correct in saying that SD2 had stated the
agreed price for the bakau piles was RM95,048.00 as quoted by the
Defendant in the Projected Cost on page 3, C, which was dated
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17.9.2005, which could not be the case seeing that the purported
agreement by Mr Wong / SP1 of the Plaintiff of the new price had
purportedly taken place some time in early August 2005.
[24] This issue was further complicated when SD2 attempted to explain
during cross-examination the discrepancy between the date of the
quotation in the Projected Cost on page 3, C, that is, 17.9.2005 and the
ability of the Plaintiff agreeing with that quotation in Jun, July 2009. In
giving his explanation, SD2 had contradicted his earlier testimony during
examination-in-chief by referring to a letter written by him for the
Defendant dated 5.8.2005 on pages 39-42, B, to the Plaintiff purportedly
giving the Plaintiff / SP1 the estimated cost of bakau piles for all
estimated to be at RM109,898.00 including the cost of the soil
investigation. SD2 then stated that once SP1 had agreed with
Appendix E (on page 42, B), the Defendant had proceeded with the
bakau piling (page 47 Notes of Evidence). In so stating, I find once
again SD2 had contradicted himself when he later admitted during
cross-exmination that, with reference to page 58, B, the Defendant had
as at 15.8.2005 already gone ahead to order bakau piles without
obtaining the Plaintiff's consent (page 48, Notes of Evidence) and that
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there was no written letter from the Plaintiff to agree to the use of bakau
piles
[25] As for the Defendant's letter dated 12.1.2006, purportedly carbon
copied to the Plaintiff, I am at a loss to understand how this letter could
be said to clearly show the Plaintiff's knowledge and consent to the use
of bakau piles for all piling works. In the first place, this letter was dated
12.1.2006 when the bakau piling works had already been completed. In
the second place, the intent of this letter was to ask Pegasus's consent
for the extension of time to complete the STP works; failure on the
Defendant's part to obtain Pegasus's consent would mean that the
Defendant had delayed completing the works on time as per the
contracted date of 31.12.2005. In the third place, the contract between
the parties was a design and build contract which meant that once the
Plaintiff had agreed to the terms of the said Contract the Defendant was
left to ensure the performance of the said Contract to this completion.
[26] In view of these material contradictions in SD2's evidence and no
documentary evidence to prove that the Plaintiff / SP1 did agree to the
use of bakau piles for all the construction of the STP, I find that the
Defendant had breached its contractual obligations by changing the
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piling material, namely the R.C. piles for the main tank to bakau piles,
without the consent of the Plaintiff. A perusal of the Defendant's letter
dated 5.8.2005 (page 39, B,) to the Plaintiff showed very clearly there
was no attempt made by the Defendant to obtain the consent of the
Plaintiff on the use of the bakau pile in spite knowing that the said
Contract was a design and build one. Instead, the said letter was written
to the Plaintiff by stating as a fact that:

With reference to the above-mentioned matter, please be informed that

the projected cost of bakau piling work as per latest consultant design is
RM109,898.00. Kindly refer to Appendix E and drawing No.
ESB1152/2005/RC-005 for details .

[27] The Plaintiff had proposed to the Court to grant it the sum of
RM12,963.00, being the difference in costs for unilateral change of piling
material. I find the said amount as not justifiable because the original
Contract sum was RM1,350,000.00 whereas the revised quotation
taking into account the use of bakau piles wholly was RM1,345,048.00.
This meant that the difference in price, or cost savings was RM4,952.00.
In the circumstances I do so grant the said sum of RM4,952.00 to the
Plaintiff as being appropriate damages suffered by the Plaintiff.
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G.

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Whether the Defendant was at fault in the STP being built not
in accordance with the Site Plan.

[28] It was not in dispute that the Site Plan was designed by the
Defendant and accepted by the Plaintiff and approved by the relevant
authorities. It was also not in dispute that the STP was built out of
position from that found in the Site Plan. The questions therefore arose
whether it was the Defendant's fault in building the STP out of position
and whether the defence of estoppel applied against the Plaintiff.
[29] The Defendant chose to deal with this issue, as well as other
issues raised by the Plaintiff, by taking the position that the Plaintiff was
estopped from raising it. According to the Defendant, the Plaintiff itself
had prepared the Amended Plan as contained in page 53, B, and which
was approved on 23.1.2006 by the relevant authorities. That the Plaintiff
had never raised any objection to the change in the position of the STP
until the Defendant filed the 2009 Case in the Sessions Court. Neither
did the Plaintiff raise any objection when it made progress payments to
the Defendant. Learned counsel for the Defendant urged the Court to
invoke the adverse inference against the Plaintiff under section 114(g)
Evidence Act 1950 (Evidence Act) for the Plaintiff's failure to call as its
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witness the expert surveyor who had surveyed the Site. Further,
pursuant to Clauses 9.6 and 9.7 of the said Contract (pages 1-7, B) it
was submitted that the burden of proof was on the Plaintiff to prove the
terms and conditions stipulated therein and that it was not the
responsibility of the Defendant to survery the site of the STP.

[30] The Defendant submitted that it was mere speculation on the part
of the Plaintiff when the Plaintif submitted that even if the Plaintiff was
told about the shift of the STP the Plaintiff had no choice but to accept
the construction as it was and to sign the Amended Plan and submit to
the authorities for approval. Otherwise it would mean that the Defendant
would have to re-construct the STP according to the Plan, which in turn
would not be viable for the Plaintiff as the Plaintiff needed to handover
32 units of double storey shop houses to the purchasers by early March
2006.

[31] As for the losses suffered by the Plaintiff under this issue, the
Defendant submitted that the burden of proof was on the Plaintiff to
prove specifically its claims for losses and compensation and the
Plaintiff was precluded from submitting that the Defendant's counsel had
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not specifically cross-examined the Plaintiff's sole witness on this

aspect.
[32] It was the submission of the Plaintiff that the Defendant's position
that the demarcation of the STP site was to be provided by boundary
stones and that the Defendant's reliance on Clause 9.6 of the so-called
Revised Quotation (pages 1-9, B) was wrong, as according to SD1
Clause 9.6 implied that the demarcation was provided by boundary
stones. Whereas, and as submitted by the Plaintiff, this Clause had no
relation to the boundary stones on the Site but relate to the demarcation
of the STP reserve on the layout plan for the entire housing project. The
Plaintiff's contention was supported by the testimony of SD1, who had
designed the original plan of the STP. SD1 had testified that Clause 9.6
meant that the specific place where the STP would be built would have
been disclosed to the Defendant in the layout plan itself and that the
demarcation on the layout plan had allowed SD1 of the Defendant to
design the STP (page 22, Notes of Evidence).
[33] It was further submitted that the Defendant knew from day one the
requirement for a buffer zone and had prepared the Site Plan. The
Defendant therefore should have done a survey according to the Plan
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prepared by it to ascertain the proper boundary for the STP and cannot
now blame the Plaintiff by saying that the Plaintiff had provided a wrong
demarcation of the STP reserve to it when no such demarcation by way
of boundary stones was ever given.
[34] It was the Plaintiff's position that the wrong positioning of the STP
was done by the Defendant from day one. SD2 had admitted that he did
not discover the error until December 2005, which was toward the end of
the contract term. The Defendant did not inform the Plaintiff specifically
about the mistake; neither was there a letter indicating to the Plaintiff
that the STP had been built out of its original location.
[35] As for the signing of the Amended Plan by SP1, being the
Defendant's strong point in invoking the principle of estoppel against the
Plaintiff, it was submitted by the Plaintiff that SD2 had on or about
15.12.2005 come to see the Plaintiff's Managing Director / SP1 and
represented to him that there were documents which needed to be
signed in order to facilitate submissions and approval from the relevant
authorities. SD2 then left with the signed Amended Plan. However,
SD2 denied he had anything to do with the signing of the Amended Plan
and taking it back. But as SD1 had testified that the Amended Plan was
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received by her directly from SD2, and as SD2 had admitted that there
was no covering letter from the Plaintiff enclosing the Amended Plan
back to the Defendant, it was submitted by the Plaintiff that this went to
support and corroborate the Plaintiff's contention that the Defendant did
misrepresent to the Plaintiff's Managing Director / SP1 in getting the
latter to sign the Amended Plan.
[36] As SP1 testified that the Plaintiff had never received a copy of the
letter at page 45, B, (which explained about the reduction of buffer
zones of the STP) and as SD1 had testified that she had prepared the
same by using the letter head of Pegasus, it was submitted by the
Plaintiff that this showed the Plaintiff had no knowledge of the changes
to the buffer zone at this point in time and had never agreed to the
changes. Therefore, the Plaintiff argued that the principle of estoppel
was not applicable to the Plaintiff.
[37] Under Clauses 9.6 and 9.7 (page 4, B) of the Revised Quotation,
which fall under the heading in Clause 9.0 General Assumptions, the
parties had agreed to these two assumptions as follows:9.6. Demarcation of Sewage Treatment Plant reserve will be available.

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9.7.

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STP reserve, setback and buffer zone comply with requirement by

authorities.

As there are no other provisions in the said Contract which could throw
any light on the responsibilities of both parties in respect of the Site
issue, I will have to decide the issue based on these 2 Clauses. I rule
that based on these 2 Clauses, it was the responsibility of the Plaintiff to
demarcate the site of the STP on the ground taking into account the
measurement of the STP reserve, set back and buffer zone as approved
by the authorities. It was not good enough for the Plaintiff to merely
provide the Defendant with the demarcation for the Site Plan purposes;
the Plaintiff was also required to provide the boundary stone on the
ground for the STP reserve and the buffer zone. My finding of fact is
corroborated by the testimony of SP1 himself when he stated as follows
(page 10, Notes of Evidence):Pages 1-7, B referred.
Q:

Refer page 4, B, item 9.0 especially 9.6 explain what is this Clause
9.6 is about? Is it the duty of the Plaintiff under this clause to provide the
demarcation of the STP to be made available?

A:

By 9.6, it means for the Plaintiff to see what is the shape of the land where
the STP is supposed to be built upon because if don't show him where the
STP is, they would not know where the STP is to be.

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Surely, SP1 could not have meant literally just to see the site and the
Defendant would know what to do. I had scrutinised the Revised
Quotation agreed to by the Plaintiff and I do not find any item of work
and costs pertaining to the need of the Defendant to cause the survey of
the Site for the location of the STP and its buffer zone before starting
construction works. Such an absence, and in view of Clauses 9.6 and
9.7, can only mean that it was the responsibility of the Plaintiff to
demarcate the site for the STP and its buffer zone, it being the
assumption of both parties that this was the case. Further, during crossexamination, and with reference to page 45, B, SD1 had agreed to the
Plaintiff's counsel's suggestion that penandaan batu sempadan rezab
meant it was the stone marker setting out the corner of the land on
which the STP plant was to be built (page 43, Notes of Evidence). On
further questioning, SD2 had this to say about the demarcation stones
(page 44, Notes of Evidence):Q:

When before you start the piling would you not engage a surveyor to
peg the location of the buildings?

A:

Normally we'll not hire a surveyor because the Plaintiff had already
given us the boundary stone or rather Plaintiff has already done the
demarcation of the STP reserve. We only do the necessary internal set
back.
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...
Q:

Where boundary stones are concerned you stated they are at the
corner of the property?

A:

Yes.

Q:

If boundary stones are placed at the corners of the property one would
have to engage a surveyor to ensure the line are straight?

A:

I disagree. It is unnecessary because the Plaintiff already hired

surveyor to mark out the STP area.

[38] I'm fortified in my finding by referring to the authoritative textbook

on building contracts entitled Hudson's Building And Engineering
Contract, 12 th Edition, Sweet and Maxwell, 2010, under the subheading of Design and Build Contracts, at pages 522, 523, 524
paragraph 3-130, entitled (iv) Responsibility for accuracy of information
as to the site and its effect on design where it is stated as follows:One of the key sources of Employer - supplied information affecting the
efficacy of the design and build Contractor's design is the accuracy and
completeness of information as to the site. Unforeseen site conditions are
a fertile source of dispute in all building and engineering contracts. If price
certainty and single point responsibility are the prime factors in a design
and build project, the scope for additional cost, delay and ultimately failure
of the project arising from conditions encountered at site which adversely

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affect construction because they fail to comply with the parameters or

bases of the design cannot be underestimated.
...
The provision of information about the site and underground
conditions

is

generally

the

responsibility

of

the

Employer.

Nonetheless, the importance of site conditions to the success of a design

gives rise to particular issues in the context of design and build contracts.
Particular issues that arise with respect to design and build contracts are:
(a) the extent to which the Contractor is required to obtain or verify site
information for itself or may rely only on that provided by the
Employer, (b) the responsibility of the Contractor for inaccuracies or
incompletness of site information, and (c) the placing of the risk of
unforeseen conditions.
...
Most standard form contracts do not place the burden of site conditions
quite so clearly upon the Contractor. Generally the Employer remains
re s p o n s i b l e f o r t h e a c c u r a cy of t h e i n f o rm at i o n i t p ro v i d e s a n d
the Contractor is responsible for the appropriate interpretation of that
information.

[Tekanan ditambahkan.]

[39] In this regard, the Plaintiff's reference to SD1's testimony that

Clause 9.6 referred to the demarcation in the layout plan of the Plaintiff

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the specific place where the STP would be built would contradict what
SP1 himself had said, that is, if the Plaintiff did not show the Defendant
where the STP was on the ground, the Defendant would not know where
the STP was to be. In any case, that was the view expressed by SDI. I
agree with SD1's testimony in the sense of the Plaintiff was responsible
for the demarcation in the layout plan of the Plaintiff the specific place
where the STP would be built, but disagree with her testimony that that
was all that was provided for under Clause 9.6.
[40] In view of my finding that it was the responsibility of the Plaintiff to
demarcate the STP and its buffer zone, and since the Defendant had
depended on the boundary stones of the STP as demarcated by the
Plaintiff's surveyor before the Defendant started work on the STP, I
therefore find that it was the Plaintiff's fault that the STP was built out of
position. This was because the Defendant had depended on the
accuracy of the Plaintiff's demarcation of the site of the STP, which, as it
turned out, was not the case.
[41] As for the Plaintiff's/SP1's allegation that SD2 had misrepresented
to him with regard to the signing of the Amended Plan, I find that the
Plaintiff had failed to prove on a balance of probabilities that the
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Defendant / SD2 had misrepresented to SP1. It is trite law that a person

is bound by any document he has signed knowingly or unknowingly of
its contents unless he can prove that he had signed it due to fraud or
misrepresentation (see Serangoon Garden Estate Ltd v. Marian Chye
[1959] 25 MLJ 113; Ooi Yoke In (F) and Anor v. Public Finance Bhd
[1993] 2 CLJ 464). SP1 was the managing director of the Plaintiff, which
is a housing developer. It is hard for me to accept the testimony of SP1
that he did not know / understand the contents of the Amended Plan
when he signed it. As the managing director of the Plaintiff, he would be
used to reading Site Plans and signing such Plans should there be a
need to amend it. It is not plausible to me to accept the Plaintiff's
contention that when SP1 signed the Amended Plan for the alleged
purpose of obtaining the approval of the relevant authority that he did
not closely scrutinize the Amended Plan to see what was needed to be
amended and why it needed to be amended. It is my finding that SP1
knew what he was signing and therefore had known about the shift in
the positioning of the STP and had agreed to the amendment. It must
be remembered that Pegasus had all these time approved the interim
certificates for progress payments to the Defendant and Pegasus would
have also known about this error when it signed the relevant stage
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payment. Since Pegasus was in the employ of the Plaintiff, at the very
least Pegasus', knowledge of this fact must be imputed to the Plaintiff. If
Pegasus saw it fit not to inform the Plaintiff about the error it was not for
the Plaintiff to lay the burden wholly on the Defendant to inform it of the
error, seeing especially that the Plaintiff was under the duty to provide
the site information / demarcation in the first place.

[42] In this context I am disturbed by the fact that the Plaintiff did not
see it fit to call Pegasus or its representative as the Plaintiff's witness
seeing that Pegasus was the Plaintiff's consulting engineer for the STP
project. Likewise, the Plaintiff had failed to call its surveyor who had
surveyed the Site. I therefore invoke the provisions of section 114(g) of
the Evidence Act against the Plaintiff for failing to call these persons as
its witnesses.

[43] In the circumstances, I agree with the learned counsel for the
Defendant's submission that the Plaintiff is now estopped from denying
that it had knowledge of the error and had signed the Amended Plan in
order to have it submitted to the relevant authority for that authority's
approval. The Amended Plan moreover was sent to the relevant
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authority for its approval via Pegasus's letter dated 20.12.2005 at page
45, B and was carbon copied to the Plaintiff.
[44] Since I have found that the Defendant was not at fault in building
the STP out of position and that the defence of estoppel applied against
the Plaintiff, I therefore dismiss the Plaintiff's claim for general damages
in respect of the so-called encroachment by the Defendant into the
buffer zone.

H.

Whether the Defendant had delayed in completing and

handing over the STP on or before 31.12.2005.

[45] The Contract completion date was agreed to be on 31.12.2005.

But the STP was only completed and handed over to the Sewerage
Service Department on 13.7.2006 (page 32, B; page 48 Notes of
Evidence), after a delay of 193 days
[46] The Defendant's defence was that:46.1. there was no delay;
46.2. the Plaintiff, vide Pegasus, had on 21.12.2005 forwarded the
Amended Plan signed by the Plaintiff and which was approved
on 23.1.2006;
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46.3. even if there was any delay the parties had waived the time limit
as evidenced by the fact that the Plaintiff had made payments for
the sum of RM1,215,050.00 or 90% of the said Contract sum
without any objection nor dispute, between the period 2005 until
2007 and had not set off its alleged claim for LAD;
46.4. the Plaintiff had failed to obtain the electricity supply as was
required under Appendix A, page 3, B, Clause 8.1 of the said
Contract, seeing that Tenaga Nasional would install the electricity
meter only on 26.5.2006 (page 129, B);
46.5. the Plaintiff had made all the payments under the said Contract
from 2005 to 2007 without raising any objection nor dispute on the
delay in completion and handover of the STP;
46.6. in view of the above, the Plaintiff was estopped from raising this
issue.
[47] The Plaintiff submitted that:47.1. the Defendant's witness, SD2 had admitted that as at 15.1.2006,
the

works

were

not

completed

yet

as

no

testing

and

commissioning had been done (page 48, Notes of Evidence);

47.2. with reference to the Defendant's letter to Pegasus on page 56, B,
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dated 12.1.2006, requesting for extension of time, SD2 had

confirmed that the Defendant did not receive any response from
Pegasus. Neither did the Defendant adduce any evidence to
show that the Plaintiff had specifically waived the time limit (page
49, Notes of Evidence);
47.3. as for the Plaintiffs failure to obtain the electricity supply, SD2 had
admitted that the Defendant did have temporary electricity supply
and had given unsatisfactory explanation as to why the Defendant
could not do the testing and commissioning by saying that the
electricity was for light usage only (page 48, Notes of Evidence).
SD2 had also failed to explain why the Defendant did not apply for
an extension of time by reason of there was no supply of electricity
other than to state that supply of electricity was not within the
scope of the Defendant's work (page 49, Notes of Evidence);
47.4. if the non-supply of electricity was the main reason for the delay,
the least the Defendant should have done was to put it on record
to the Plaintiff and to Pegasus, which would shield the Defendant
from any claim of LAD. As the Defendant failed to do so, it
showed that the delay was never caused by the Plaintiff's failure to
obtain electricity supply.
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[48] The Plaintiff therefore submitted based on section 75 of the

Contracts Act 1950 and Sakinas Sdn. Bhd v. Slew Yik Hau & Anor
[2002] 5 MLJ 497 it was entitled to recover LAD at the rate of
RM1,500.00 per day x 193 days = RM289,500.00

[49] Once again I wish to reiterate that the said Contract was a design
and build contract whereby upon the Defendant presenting its bills for
payments, the Plaintiff, through Pegasus issuing the Progress Payment
Certificates, would have to honour the said payments. The fact that the
Plaintiff had made the progress payments to the Defendant did not
mean that the Plaintiff had waived its rights to claim LAD against the
Defendant. After all, it was very important for the Plaintiff that the
Defendant completed the construction of the STP so as not to cause the
Plaintiff itself in delaying the completion of its housing and commercial
shop lots project. Whatever dispute it may have with the Defendant
could be taken up at a later time, and which the Plaintiff did in this
action. As for the setting - off issue, that was exactly what the Plaintiff
did by refusing to pay the balance of the said Contract price of
RM129,998.00 to the Defendant.
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[50] As for the non-supply of electricity, I agree with the submission of

learned counsel for the Plaintiff that it was not the cause of the
Defendant's delay in completing the STP. In the first place, and as
admitted by SD2, there was a temporary supply of electricity to the Site
which could easily

be used for the purposes of testing and

commissioning the STP. Secondly, if it was true that a proper supply

of electricity was required by the Defendant for the express purpose of
testing and commissioning the STP, it is hard to understand why the
Defendant failed to apply for an extension of time seeing that the
electricity supply was required for the testing and commissioning of the
STP, being within the scope of works of the Defendant. The Defendant
saw it fit to apply for an extension of time for soil testing and piling
design, shortage of bakau piles and rain factor in its letter dated
12.1.2006 to Pegasus (pages 56-61, B), and yet did not see it fit to apply
for an extension of time in regard to the electricity supply essential to its
completion of the STP works. This served to show to me that the nonsupply of the electricity to the Site by the Plaintiff was not essential as
there was a temporary supply of electricity and it did not cause the delay
in the completion of the STP. Further, as Pegasus failed to respond to
the Defendant's request for an extension of time and nothing was done
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by the Defendant to pursue the matter, there was no extension of time

granted to the Defendant by the Plaintiff.
[51] Be that as it may, since the Plaintiff, vide Pegasus, had forwarded
the Amended Plan to the relevant authority on 21.12,2005, which was
approved on 23.1.2006, it is only fair to me to allow the Defendant an
extension of time of 33 days (from 21.12.2005 to 23.1.2006) to enable
the Defendant to accommodate the time required to wait for the outcome
of the relevant authority's approval. This would mean the Defendant is
to be faulted for 160 days delay in completing the STP, which in turn
means the Plaintiff is entitled to a LAD of 160 days x RM1,500.00 =
RM240,000.00. I do so hold as the parties had not disputed on the rate
of the LAD and I regard the rate as being reasonable in the
circumstances.
I.

Whether

the

Superintending

Engineer/

Pegasus

had

erroneously issued the Certificate of Practical Completion

dated 2.1.2006.
[52] The CPC dated 2.1.2006 (CPC) was issued by Pegasus (pages
5455, B).
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[53] It was the Plaintiff's submission that:53.1. the CPC was invalid as it had been issued by mistake or without
legal basis;
53.2. the Plaintiff's contention was supported by the fact that the
Defendant had on or about 12.1.2006, about 12 days after the
purported issuance of the CPC, requested for an extension of time
to complete the works and to extend the physical completion to
15.1.2006 (pages 56-61, B);
53.3. SD2 had admitted that as at 15.1.2006 the works were not yet
completed as no testing nor commissioning had been done (page
48, Notes of Evidence);
53.4. and yet Pegasus continued to issue 3 Progress Payment
Certificates No. 5 dated 24.1.2006 (pages 26-27, B), No. 6 dated
24.8.2006 (pages 67-68, B) and No. 7 dated 24.9.2007 (pages 7576, B) after the issuance of the CPC. It was absurd of Pegasus to
have issued the CPC when substantial works were still in
progress;
53.5. it is well established principle of law that the date of Practical
Completion usually indicates the end of the construction period
and the commencement of the period of making good defects and
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the defect liability period; end of the period of the contractor's

general possession of the site, site responsibility and full control
reverts to the employer / owner; end of certification of regular
interim payments etc. (see pages 301 - 302, Nigel M. Robinson,
et al, Construction Law in Singapore and Malaysia , Second
Edition, Butterworths Asis, 1996). However, the factual matrix of
this case showed the opposite state of affairs after the issuance of
the CPC. The physical possession of the STP was given to the
Sewerage Service Department on 13.7.2006 (page 32, B) and 3
Progress Payment Certificates amounting to RM529,998.00 were
issued after the date of Practical Completion.

[54] It was submitted by the Defendant that:54.1. this issue raised by the Plaintiff was a non-issue;
54.2. the Plaintiff had never disputed nor questioned the actions taken
by Pegasus in particular Pegasus's action in issuing all the
Progrerss Payment Certificates and the CPC before the filing of
this action;
54.3. the Plaintiff had made payments to the Defendant from 2005 to
2007 based on the Progress Payment Certificates issued by
Pegasus without registering any protest or dispute;

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54.4. the Plaintiff did not raise any objection nor dispute against the
issuance of the CPC dated 2.1,2006 until the Defendant filed the
2009 Case in the Sessions Court on 4.8.2008;
54.5. the Plaintiff did not institute any action against Pegasus in respect
of the CPC nor added Pegasus as a party in this suit;
54.6. the Plaintiff had admitted to receiving the STP in 2006 without
raising any objection, dispute against the Defendant nor with
Pegasus;
54.7. moreover, Pegasus was the Plaintiff's representative and or agent
in respect of the STP project.

[55] Even though Pegasus was engaged by the Plaintiff as the

superintending engineer, Pegasus's role cannot be purely said to be that
of an employee of the Plaintiff nor its agent for the purposes of the
said Contract. Even though the said Contract between the Plaintiff and
Defendant was an informal one (there was no form of contract executed
between them) I am of the view that the basic principles pertaining to the
role of a superintending engineer or architect, as the case may be, are
applicable to Pegasus. This role of Pegasus can be understood by my
quoting extracts from case law as follows:38

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S y a r i k a t O n g Yo k e L i n S d n . B h d . v. G i a n t C a s h a n d C a r r y S d n .
Bhd & Ors [2000] 4 CLJ 733 (H.C.) @ 759: As alluded to earlier, the third defendant was a mere architect of the
Giant hypermarket. The third defendant was employed by the first
defendant. The duties of the third defendant as an architect and the
oblig ations that flow ed under it can readi l y be seen in exhibi t TUH
1 of encl. 11. According to the case of Sutcliffe v. Thackrah And
Others [1974] 2 WLR 295, the architect has got certain roles to play
Lord Reid described the position of the architect in that case in these
fine words (see page 299 of the report):N o w I c a n c o m e t o t h e p o s i t i o n o f a n a r c h i t e c t . H e i s e m p l o ye d
b y the building ow ner but has no contract w ith the contr acto r. We
do

not

in

this

case

have

occasion

to

consider

whether

never theles s he ma y have so me dut y to the contra ctor: I do not

think that a cons idera tion of that ma tter w ould help in the pres ent
cas e. The R.I.B.A . form of contra ct sets out the arch ite ct' s
functions in great detail. It has often been said, I think rightly, that
the archi tect has tw o different t yp es of function to perfor m. In
man y ma tt ers he is bound to act on his c lient' s ins truc tions ,
w hether he agrees w ith the m or not; but in man y other mat ters
requir ing profes s ional ski ll he mus t form and act on his ow n
opinion.
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Many matters may arise in the course of the execution of a

building contract where a decision has to be made which will
a ff e c t t h e a m o u n t o f m o n e y w h i c h t h e c o n t r a c t o r g e t s . U n d e r
R.I.B.A. contract many such decisions have to be made by the
architect and the parties agree to accept his decisions. For
example,

he

decides

whether

the

contractor

should

be

r e i m b u r s e d f o r l o s s u n d e r c l a u s e 11 ( v a r i a t i o n ) , c l a u s e 2 4
(disturbance) or clause 34 (antiquities); whether he should be
allowed extra time (clause 23); or where work ought reasonably
have been completed (clause 22). And, perhaps most important,
he has to decide whether work is defective. These decisions will
be reflected in the amounts contained in certificates issued by the
architect.

The building ow ner and the contrac tor make their contrac t on the
understanding that in all such matters the architect will act in a fair
and unbias ed manner and it mus t therefor e be i mpli cit in the
ow ner's con tract w ith the archit ect that he s hall not onl y exerc is e
due care and s kill but als o reach s uch dec is ions fa irl y, holding the
bal ance betw een his cl ient and the contrac tor.

It would be correct to say that the duty of the architect is to issue

certificate and certify whether the contractor has met its contractual
obligation so as to entitle the contractor to receive interim payments
during the progress of the works. In discharging its duty, the architect
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must be seen to be impartial and must act faily and professionally

when exercising its independent judgment. If the architect fails to
fulfil these requirements, the aggrieved party may challenge the
decision of the architect.

H i a p H o n g & C o . P t e L t d v. O n g H u a t D e v e l o p m e n t C o ( P t e )
Ltd [2001] 2 SLR 458 (C.A. Singapore) at pages 464, 465: 15.

It is settled law that an architect under a building contract is not

an arbitr ator. But he has a dual funct ion. In the w ords of Lord Re id
i n S u t c l i f f e v. T h a c k r a h [ 1 9 7 4 ] A C 7 2 7 a t 7 3 7 ; [ 1 9 7 4 ] 1 A l l E R 8 5 9
at 863: ' In ma n y mat ters he is bound to act on his cli ent' s
ins truc tions , w hether he agrees w ith the m or not; but in man y other
mat ters requiring profes s ional s kil l, he mus t for m and act on his ow n
opinion' .
16.

It is equall y s ettled law tha t an ow ner and a contrac tor w ould

have ma de their contract on the unders t anding tha t in all ma tt ers

w here the archi tec t has to appl y his profes s ional s kil l and j udgment,
the archi tect w ill act in a fair and unbias ed mann er in app l yi ng the
ter ms of the con tract.

S uch

mat ters

w il l

inc lude

the

is s ue

of

certificates for payments and the grant of extension of time. While an

arch itec t under such a contrac t is the e mp lo ye r' s agent, in the
exer cis e of his funct ions requiring ski ll and judg ment, he mus t act
fai l y and profes s ional l y and neither part y s hould s eek to unfair l y or
undul y influenc e hi m in the dis charge of thos e func tions .
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At page 470:35.

It is vitally important to bear in mind the nature of the duties of the

architect when he I exercising the function of a certifier, As stated
before, it is settled law that he is to act faily and independently. He is not
subject to the directions or instructions of either party although he must
listen to both parties before he arrives at his own decision. Thus, in
exercising the function of certification the architect cannot be the agent
of the owners. The nature of that function is wholly inconsistent with the
architect being an agent of the owner. In Emden's Construction Law
Issue 56/Jun 1999 at p. II 275 the authors stated 'When issuing
certificates the architect or other certifier is not acting as the employer's
agent but must form and act on his own opinion.' In 4(2) Halsbury's
Laws of England (4 th Ed Reissue) the learned authors stated that the
architect's duties as certifier are different from his duties as agent or
arbitrator although sometimes it is not easy to distinguish them.'

36.

It is true that the architect is employed by the owner and to that extent
the latter has control over him. But such control must necessarily be
confined to matters in which the architect acts as the owner's agent and
not in relation to matters where the architect is accorded a special role
under the contract and where he is expected to exercise independent
judgment. In para 6.228 of Hudson's the authors, after referring to
matters on which the owner exercises control over the architect, go on to
state that 'the owner of necessity ceases to be entitled to control (the

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architect's) activities in relation to the matter he is called upon to decide,

whether as certifier or arbitrator.

The role of the superintending engineer as elucidated above must

necessarily include his role as the issuer of the Certificate of Practical
Completion, not only for the purpose of issuing Progress Payment
Certificate. Based on the said role played by Pegasus vis the Plaintiff
and the Defendant, the CPC issued by Pegasus can be challenged by
the Plaintiff for illegality.
[56] Even though it was most regrettable that the Plaintiff did not see it
fit to sue Pegasus in this action nor call the representative of Pegasus
as its witness, but based on the factual matrix of this case and in respect
of this issue on the legality of the CPC, I hold that the CPC was wrongly
issued by Pegasus and therefore was invalid.
[57] I agree with the submissions of learned counsel for the Plaintiff on
this issue. I hold that Pegasus in issuing the 3 Progress Payment
Certificates Nos. 5 to 7 amounting to RM529,998.00 or 39% of the
Contract Sum after the CPC was issued showed very clearly that a
substantial portion of the works in completing the STP had yet to be
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done by the Defendant. That being the case, it was premature of

Pegasus to have issued the CPC. On

top

of

that,

the

testing,

commissioning and handing over of the STP was only completed on

13.7.2006, that is, over 6 months after the CPC was issued.
[58] The progress payments made by the Plaintiff to the Defendant vis
Progress Payment Certificates Nos. 5 to 7 cannot prevent the Plaintiff
from challenging the decision of Pegasus since the Plaintiff was only
doing that which it was obliged to do by virtue of the said Progress
Payment Certificates being issued by Pegasus. It is an established
principle that an interim certificate is a condition precedent to payment.
any party aggrieved by the amount stated as due in a certificate can only
challenge it at arbitration or to commence an action for damages for
breach after issuance of the Certificate of Practical Completion. [See
Nigel M. Robinson, Construction Law in Singapore and Malaysia
(supra) at pages 344-346].
[59] As for the Defendant's contention that the Plaintiff had filed this
action only after the Defendant had filed the 2009 Case on 4.8.2008 at
Batu Pahat Sessions Court, I note the Plaintiff's submission that the

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Plaintiff, through its previous solicitors, did send a Letter of Demand

dated 3.7.2007 on pages 69 - 70, B, to the Defendant demanding
damages and compensation in respect of the breaches of contract
pertaining to the construction of the STP, that is, before the date the
Defendant filed the 2009 Case in the Batu Pahat Sessions Court. The
Defendant's contention therefore had no merits.
[60] I consequently hold that the CPC should have been issued much
later on and certainly not on 2.1.2006.

J.

Whether the Plaintiff owed the Defendant the sum of

RM129,998.00, being the balance of the contract sum
remaining unpaid.

[61] According to the Defendant's pleadings, and which was not

disputed by the Plaintiff in so far as the Progress Payment Certificates
and payments had been made to the Defendant vis the said Certificates,
Pegasus had issued 7 Progress Payment Certificates as follows:Certificate No.

Date of Certificate

Amount (RM)

6.9.2005

36,450.00

3.10.2005

182,880.00

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7.11.2005

141,885.00

19.12.2005

453,835.00

24.1.2006

414,950.00

24.9.2007

80,702.88

To t a l p a y m e n t t o
be made

1,345,048.00

[62] The Plaintiff had made 7 progress payments as follows:Date

Amount (RM)

29.9.2005

36,450.00

17.10.2005

182,880.00

24.1.2006

522,113.50

4.5.2006

73,606.50

30.8.2006

150,000.00

3.11.2006

150,000.00

7.2.2007

100,000.00

Total Payment made

1,215,050.00

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This meant that there was a balance of RM129,998.00 due from and
owing by the Plaintiff to the Defendant. The Defendant now claims from
the Plaintiff the said amount seeing that the Defects Liability Period had
ended in 2007.
[63] The Plaintif on the other hand alleged that it had never agreed to
the reduction in the Contract Sum by the use of cheaper bakau piles by
the Defendant, that the said sum was not owed by the Plaintiff to the
Defendant or alternatively was set-off with the amount accrued and
owed by the Defendant to the Plaintiff in the 2008 Case.
[64] In view of the fact that the Plaintiff did not see it fit to bring
Pegasus as a party to the 2008 Case, nor call a representative of
Pegasus as a witness, I take the view that the Plaintiff did not wish to
dispute the said Progress Payment Certificates issued by Pegasus. It
would also appear to me that the Plaintiff was contented to accept the
Defendant's Projected Cost of RM95,048.00 as a result of the use of
bakau pile wholly on the Site which then reduced the Contract Sum from
RM1,350,000/- to RM1,345,048. That being the case, I find that as the
Plaintiff had only paid the Defendant the total sum of RM1,215,050.00,
the sum of RM129,998.00 is still due and payable from the Plaintiff to
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the Defendant. However, this sum is ordered to be set - off against the
sums I have ruled to be payable by the Defendant to the Plaintiff as
damages in the 2008 Case.
K.

CONCLUSION:

[65] For the reasons stated above I make the following orders:The 2008 Case.
65.1. special damages comprising of:(i)

deductions in cost of piling material at RM4,952.00 allowed;

(ii)

LAD of RM240,000.00 - allowed;

65.2. general damages as a result of the encroachment into the buffer

zone - disallowed;
65.3. a declaration that the CPC issued by Pegasus on 2.1.2006 is null
and void - allowed;
65.4. costs at RM15,000.00 - allowed;
65.5. interest at 5% per annum from the date of judgment until judgment
is satisfied - allowed;
The 2009 Case.
65.6. the sum of RM129,998.00 shall be payable by the Plaintiff to
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the Defendant and which shall be set-off from the sums due
from the Defendant to the Plaintiff in the 2008 Case;
65.7. costs at RM15,000.00 - allowed;
65.8. interest on the sum of RM129,998.00 at 4% per annum from the
date of filing of the Summons (4.8.2008) to the date of judgment
and at 5% per annum from the date of judgment until judgment is
satisfied - allowed.

(UMI KALTHUM ABDUL MAJID)

Judge
High Court Muar

Dated: 14 DECEMBER 2012

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Counsels:
For the plaintiff - Gideon Tan; M/s Gideon Tan Razali Zaini
Peguambela & Peguamcara
812, 8 th Floor, Block A, Kelana Square
17, Jalan SS 7/26
47301 Petaling Jaya, Selangor Darul Ehsan
For the defendant - M/s Mogan Karupiah
Peguambela & Peguamcara
380-C, Sin Hoe Garden
Bukit Baru
75150 Melaka.

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