[Suit No. 22-119-2011]

1

MALAYSIA 1

IN THE HIGH COURT OF SABAH AND SARAWAK 2

AT KUCHING 3

SUIT NO. KCH-22-119-2011 4

BETWEEN 5

6

GOLDEN ANTS DYNASTY SDN BHD PLAINTIFF 7

(Company No. 740215-T) 8

No. 205, 1st Floor 9

Green Ville Park Shophouse 10

Jalan Batu Kitang 11

93250 Kuching 12 13

AND 14

15

NAIM CENDERA SDN BHD DEFENDANT 16

(Company No. 261213-T) 17

9th Floor, Wisma Naim 18

2 Jalan Rock 19

93200 Kuching Sarawak 20

GROUNDS OF DECISION 21

1. In this action the Plaintiff claims against the Defendant for the 22

following: 23

a. The sum of RM959,282.28 being the additional cost 24

incurred by the Plaintiff for the additional work; 25

b. Alternatively, the sum of RM959,282.28 for additional 26

work carried out on a quantum meruit basis. 27

c. Further and/or alternatively, damages for breach of 28

contract to be assessed by the Honourable Court; 29

[Suit No. 22-119-2011]

2

d. Interest on all sums payable under prayers (a), (b) and (c) 1

hereof at 8% per annum from the date of practical 2

completion of the works, namely 29th May 2008, till the 3

date of final payment; 4

e. Such further and other relief as the Honourable Court may 5

deem just; and 6

f. Costs. 7

The Plaintiffs Case 8

2. By a Letter of Award dated 16th November, 2007 ["LOA"] 9

issued by Naim Cendera Holding Bhd, the Plaintiff was 10

appointed as the contractor for the Defendant to carry out site 11

clearance and earthworks for the proposed affordable housing 12

development project on Lot 4710, Block 14, Salak Land 13

District, Kuching, Sarawak [Package A] ["the Work"] for the 14

sum of RM3,383,580.00 ["the Contract Sum"]. 15

3. Naim Cendera Holding Bhd. is the Holding company which 16

had appointed its subsidiary/associate company, the Defendant, 17

to enter into the contract with the Plaintiff, which the Plaintiff 18

agreed. 19

4. Due to the urgency of the Work, the Defendant gave the 20

Plaintiff only one day to prepare and submit their quotation for 21

the Work. Neither the Plaintiff nor the Defendant had carried 22

out actual survey work on the site. The Plaintiff relied on the 23

topographical survey of the site, which the Defendant supplied 24

to them, to prepare the quotation. 25

[Suit No. 22-119-2011]

3

5. During the price negotiation stage of the tender, the Plaintiff 1

requested for 35% - 40% settlement and compaction of the 2

earth fill, as the site was situated on a swampy land. The 3

Defendant, relying on the settlement data of 8% - 9% of the 4

adjoining Package C of the project, allowed the Plaintiff only 5

15% settlement and compaction. The Plaintiff finally accepted 6

15% settlement and compaction on the clear understanding that 7

they would be paid by the Defendant for any additional volume 8

of earth in excess of 380,000 cubic meters. 9

6. Due to the urgency of the Work, the Defendant handed the site 10

over to the Plaintiff and requested the Plaintiff to commence 11

the execution of the Work immediately and the Plaintiff 12

immediately commenced execution of the Work on 26th 13

October 2007, even before the issuance of the LOA. In the 14

LOA issued on 16th November 2007, it stated the official site 15

handing over was 26th November 2007. 16

7. In the course of execution of the Work, the Plaintiff discovered 17

that the volume of earth required for the earthfill work 18

exceeded the agreed volume of 380,000 cubic meter under the 19

Contract and additional work had to be carried out to transport 20

the excess volume of earth ["additional work"]. The Plaintiff 21

informed the Defendants then Project Manager, Encik Abdul 22

Razak Ahmad Marzuki, on several occasions that the Plaintiff 23

would be applying for variation of the additional work. The 24

Project Manager instructed the Plaintiff to continue with the 25

earthfill work and informed the Plaintiff that their application 26

for variation works would be considered upon practical 27

completion of Work. 28

[Suit No. 22-119-2011]

4

8. The Work was duly completed on 28th May, 2008 and handed 1

over to the Defendant on 29th May, 2008. The Defects 2

Liability period of the Work ended on 29th November, 2008. 3

9. On 29th May, 2008 and 26th November, 2008, the Plaintiff 4

submitted to the Defendant their claim for variation on the 5

additional work. There was no decision by the Defendant 6

although several meetings were held between the Plaintiff and 7

the Defendant. 8

10. On 31st October, 2009, the Defendant informed the Plaintiff 9

that their application for additional Work has not been 10

approved by the Defendants management. 11

11. The Plaintiff claimed by way of alternative, that the additional 12

work was carried out with the full knowledge of the Defendant 13

and was duly accepted by the Defendant without any protest or 14

reservation whatsoever. As a result the Plaintiff claimed the 15

sum of RM959,282.28 being the reasonable remuneration for 16

the additional work carried out on a quantum meruit basis. 17

12. Hence, the claim by the Plaintiff. 18

The Defendants Defence 19

13. The Defendant denied there was urgency of Work and 20

additional work. 21

14. The Defendant averred that under the Preliminary and 22

Generally attached to the Plaintiffs letter dated 23rd October 23

2007 that the contract is based on a fixed price lump sum 24

tender. 25

[Suit No. 22-119-2011]

5

15. It is provided under the Special Instruction to the Tenderer 1

dated 24th October 2007 that the Plaintiff is to take note that all 2

levels as shown on the drawings are for information only and 3

shall not be taken to represent the true ground levels of the site. 4

It is the responsibility of the Plaintiff to ascertain the existing 5

ground levels at their own expenses for the purpose of 6

computing their earthworks quantity and no claim shall be 7

entertained if the actual ground levels are higher or lower than 8

the levels indicated on the drawings. 9

16. It is agreed between the Plaintiff and the Defendant that 10

immediately after taking possession of the site and before 11

commencing any work, the Plaintiff shall check the actual 12

levels and dimension against those shown on the drawing and 13

immediately inform the Engineer in the event of any alleged 14

discrepancy. If no communication has reached the Engineer, 15

the Contractor shall be held to accept all levels and dimension 16

and no claim for extra payment in this connection will be 17

entertained. 18

17. It is understood between the Plaintiff and the Defendant that 19

the Plaintiff is only entitled to claim for the sum contracted and 20

shall not be entitled to any further sum for any additional work. 21

The Defendant, its agent and/or employee and/or representative 22

never led the Plaintiff into believing that the Plaintiff will be 23

paid for any additional work done. 24

Bundles of Documents 25

18. At the trial, the following Bundle of Documents have been 26

filed by the Parties: 27

[Suit No. 22-119-2011]

6

a. Bundle of Agreed Documents marked exhibit BAD 1

[agreed only as to authenticity only]; 2

b. Disputed Bundle of Documents marked as DBD; 3

c. Plaintiffs Supplementary Bundle of Documents Volume 1 4

to 5 marked as PSBOD Vol. 1 to Vol. 5. 5

d. Statement of Agreed Fact marked as SAF. 6

Agreed Facts 7

19. Below are the agreed facts as per the Statement of Agreed Fact 8

marked SAF: 9

STATEMENT OF AGREED FACTS 10

THE CONTRACT 11

1. Under and by virtue of award NCSB/SPNB/GADSB/2007-12

0863 dated 16th November, 2007 (for brevity, the LOA), 13

the Plaintiff was the contractor of the Defendant in respect of 14

the execution and completion of the proposed site clearance 15

and earthworks for the proposed affordable housing 16

development on Lot 4710, Block 14, Salak Land District, 17

Kuching, Sarawak (Package A) (for brevity, the Contract 18

Sum). 19

2. The LOA was issued by Naim Cendera Holdings Bhd., who 20

appointed its subsidiary or associate company, the Defendant, 21

to enter into the contract with the Plaintiff, which the 22

Plaintiff agreed. 23

3. Paragraph 2 of the LOA provides that the mode of payment 24

(of the Contract Sum) shall be RM3,146,729.40 in cash 25

through monthly progress payment and the balance of 26

RM236,850.60 to be set off against your (the Plaintiffs) 27

purchase of properties undertaken by Desa Ilmu Sdn. Bhd. at 28

Kota Samarahan. 29

[Suit No. 22-119-2011]

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4. Paragraph 3 of the LOA provides as follows:- 1

You will be required to execute in due course a Formal 2

Contract Agreement. However, until the Formal Contract 3

Agreement is executed, your quotation together with this 4

Letter of Acceptance and the following letter and discussion 5

shall constitute a binding contract between Golden Ants 6

Dynasty Sdn. Bhd. and Naim Cendera Sdn. Bhd. The 7

contract number for this Contract is NC/SPNB/ST/C05/2007. 8

(a) Your quotation ref. no. QUO/NAIM/1007-01 dated 23rd 9

October, 2007. 10

(b) Your scope of works shall consist of extracting of earth 11

filling material at Naim Ready Mix Sdn. Bhd. borrow 12

pit and to transport imported earth filling including 13

filling up to the required level and well compacted all 14

to specification. 15

(c) You are to carry out the works all in accordance to 16

drawings and specification (attached). 17

(d) To maintain the finished proposed platform level as 18

stated above for an additional three (3) months after 19

completion of works with Licensed Surveyors 20

endorsement. 21

5. Paragraph 8 of the LOA provides as follows:- 22

8. The time for completion of the project shall be 2 23

Months after the date of official commencement date 24

which shall be on 26th November, 2007 and shall be 25

completed on 25th January, 2008. Failure to complete 26

the whole works by or before the Date for Completion 27

or within any extended time fixed under Clause 23.0 or 28

sub-clause 32.1(iii), we reserve the right to impose 29

Liquidated and Ascertained Damages (LAD) at the rate 30

of 0.0262% of the Contract Sum or Malaysian Ringgit: 31

[Suit No. 22-119-2011]

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Eight Hundred Eight Six and Cents Fifty Only 1

(RM886.50) per calendar day. 2

6. No formal Contract Agreement had been executed between 3

the parties. 4

EXECUTION OF THE WORKS 5

7. On 26th October, 2007, the Defendant handed over the site to 6

the Plaintiff and the Plaintiff immediately commenced the 7

execution of the Works, before the issuance of the LOA on 8

16th November, 2007, and the official commencement date of 9

26th November, 2007, stated in the LOA. 10

8. The Plaintiff duly completed the Works in accordance with 11

the terms of the Contract on 29th May, 2008, as certified in 12

the Defendants Certificate of Practical Completion dated 13

28th July, 2008. 14

9. The Plaintiff duly handed over the completed Works to the 15

Defendant immediately after 29th May, 2008, and the 16

Defendant accepted the handover subject to the Plaintiff 17

making good minor defects to the Works. 18

10. The Defects Liability Period of the Works ended on 28th 19

November, 2008, as certified in the Defendants Certificate of 20

Making Good Defects dated 13th February, 2009. 21

EXTENSION OF TIME 22

11. On 7th January, 2008, the Plaintiff, vide their letter 23

REQ/NAIM/0108-01 of idem date, applied to the Defendant 24

for extension of time (for brevity, EOT) of two months to 25

complete the Works on the ground of inclement weather. 26

12. On 1st February, 2008, the Defendant, vide their letter 27

NCSB/SPNB/GADSB/2008-1108 of idem date, granted the 28

Plaintiff EOT of two months till 25th March, 2008, to 29

complete the Works. 30

[Suit No. 22-119-2011]

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13. The Plaintiff subsequently encountered further delay of 63 1

days to complete the Works owing to inclement weather and 2

other circumstances beyond their control. The Defendant 3

proceeded to impose on the Plaintiff liquidated and 4

ascertained damages (for brevity, LAD) at the rate of 5

RM886.50 per day for 63 days amounting to the sum of 6

RM55,849.50. 7

14. On 15th April, 2009, the Plaintiff, vide their letter, 8

REQ/NAIM/WLAD/0409-01 of idem date, applied to the 9

Defendant for waiver of the LAD of RM55,849.50. 10

15. On 31st October, 2009, the Defendant, vide their letter 11

NCSB/SPNB/GoldenAnts-ST/2009-2430 of idem date, 12

approved the waiver of the LAD of RM55,849.50. 13

16. On 14th November, 2009, the Defendant issued Payment 14

Certificate No. 10 (Final LAD Waiver) certifying the refund 15

of the amount of RM55,849.50 representing the waiver of the 16

LAD. 17

ADDITIONAL WORKS 18

17. The contract sum for the Works agreed between the parties 19

was the sum of RM3,383,580.00, comprising the following 20

items as shown in the Summary of Tender. 21

Item Description Unit Qty Rate Amount

(RM)

1. Preliminary & Generally LS 522,280.00

2. Site clearance Acre 25 1,000.00 25,000.00

3.

(a)

(b)

Earthworks

Transport only imported

earth filling

Earth bund

M3

LS

380,000

6.97

2,650,000.00

135,000.00

4. Spot turfing LS 13,500.00

5. Earth drain LS 24,300.00

6. Temporary access road

and culvert

LS 11,300.00

22

[Suit No. 22-119-2011]

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1

7. Permanent settlement

reference station

LS 1,000.00

8. Rod settlement gauge LS 1,200.00

Total 3,383,580.00

2

18. On 25th April, 2008, there was a meeting between the parties 3

in respect of the additional works. 4

19. On 29th May, 2008, the Plaintiff, vide their letter 5

GAD/TO/NC/0504-2008 of idem date, submitted to the 6

Defendant their claim on the additional work in the sum of 7

RM963,411.19, which comprised the cost of transport from 8

Naim Ready Mix Sdn. Bhd. to the site of an additional volume 9

of 137,630.17m of earthfilling material at RM7.00 per m. 10

20. Immediately upon receipt of the Plaintiffs letter, a meeting 11

took place between the parties on the additional works. 12

21. On 15th April, 2009, the Plaintiff, vide their letter 13

GAD/TD/NC/0401/2009 of idem date, re-submitted to the 14

Defendant the relevant documents on the additional works. 15

22. On 31st October, 2009, the Defendant vide their letter 16

NCSB/SPNB/GoldenAnts-ST/2009-2429 of idem date, 17

informed the Plaintiff that the application for extra 18

volume . . . has not been approved by our management. 19

PAYMENT CERTIFICATES 20

23. The Defendant had issued the following interim and final 21

payment certificates on the Works, namely:- 22

(1) Payment Certificate No. 1 (Advance Payment) dated 4th 23

December, 2007; 24

(2) Payment Certificate No. 2 dated 7th January, 2008; 25

(3) Payment Certificate No. 3 dated 31st January, 2008; 26

(4) Payment Certificate No. 4 dated 23rd February, 2008; 27

[Suit No. 22-119-2011]

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(5) Payment Certificate No. 5 dated 27th March, 2008; 1

(6) Payment Certificate No. 6 dated 29th April, 2008; 2

(7) Payment Certificate No. 7 dated 15th July, 2008; 3

(8) Payment Certificate No. 8 (Penultimate) dated 26th 4

September, 2008; 5

(9) Payment Certificate No. 9 (Final) dated 23rd February, 6

2009; and 7

(10) Payment Certificate No. 10 (Final LAD Waiver) dated 8

14th November, 2009. 9

Issues To Be Tried 10

20. The parties have not agreed on the issues to be tried, Gleaning 11

from the pleadings, I am of the opinion that the main issue to 12

be tried is as follows: 13

Whether the Plaintiff is entitled to claim RM959,282.28 being 14

the alleged costs for the additional work, i.e. the additional 15

work done to transport the volume of earth in excess of 16

380,000 cubic metres? 17

21. In order to answer the main issue, it is necessary first to 18

consider the following subsidiary issues, namely: 19

(a) Whether it was the Plaintiffs responsibility to ascertain 20

the existing ground levels in order to fill the site to the 21

required level? 22

(b) Whether the Plaintiff has been dispensed from 23

ascertaining the existing ground level due to the urgency 24

of the Work? 25

[Suit No. 22-119-2011]

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(c) Whether there was a promise by the Defendants 1

representative to the Plaintiff that the Defendant would 2

pay the Plaintiff for the additional work 3

Subsidiary Issue (a) 4

22. It is opportune at this juncture to look at the following terms 5

and conditions in the contract documents: 6

(i) Under Item (d) of the Scope of Work provided by the 7

Preliminary and Generally [page 150 Exhibit BAD], the 8

Work involved Earthworks including compaction to the 9

level as shown in the drawings and as directed by the 10

Engineer, including forming earth bunds, all as indicated 11

in the drawings. 12

(ii) Item A of the Preliminary and Generally [page 11 13

Exhibit BAD] states: 14

VISIT TO SITE 15

The Contractor shall visit the site of the Works and shall be 16

independent inquiry and observation ascertain the 17

following in connection with the works:- 18

a. The nature, character and extent of the works 19

b. Local conditions 20

c g .. 21

h. The character of the soil or strata and the nature of 22

subsoil upon which the works are to be executed. 23

Tenderers are to be bore trial holes at their own 24

expense if they deem it necessary. 25

i. . 26

[Suit No. 22-119-2011]

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No claims made on the ground of failure to visit the site 1

and/or of want of any of the aforesaid matters or other like 2

information which might financially affect the Contract, 3

will be considered. 4

(iii) Item C of Preliminary and Generally [page 12 Exhibit 5

BAD] states: 6

"SITE INSPECTION 7

Immediately after taking possession of the site and before 8

commencing any work, the Contractor shall check actual 9

levels and dimension against those shown on the 10

drawings and immediately inform the Engineer in the 11

event of any alleged discrepancy. If no communications 12

has reached the Engineer, the Contractor shall be held to 13

accept all levels and dimensions and no claims for extra 14

payments in this connection will be entertained. 15

23. Paragraph 1 of the Special Instruction to Tenderer (page 3 16

Exhibit BAD] states: 17

"Existing ground levels 18

Tenderer are to take note that all levels as shown on the 19

drawings are for information only and shall not be taken to 20

represent the true ground levels of the site. It is the 21

responsibility of the tenderer to ascertain the existing 22

ground levels. 23

24. In the light of the foregoing provisions in the Contract 24

documents, it is vividly clear that it is the Plaintiffs 25

responsibility to ascertain the ground level in order to 26

determine the quantity of earth needed to fill the site to the 27

required level. 28

[Suit No. 22-119-2011]

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Subsidiary Issue (b) 1

25. It is undisputed fact that the Plaintiff did not carry out any 2

topographical survey. 3

26. Counsel for the Defendant submitted that no evidence was ever 4

adduced by the Plaintiff that at the material time when they 5

tendered for the work, they tendered it unwillingly or were 6

forced to take over the project. There was also no allegation 7

that the signature of the Plaintiff on the Special Instruction to 8

Tender [pages 3 - 4 Exhibit BAD], Form of Tender [pages 5-6 9

Exhibit BAD], Summary of Tender [page 7 Exhibit BAD] and 10

Preliminary and Generally [pages 8 - 42 Exhibit BAD] by fraud 11

or misrepresentation. The Plaintiff having signed the above 12

documents voluntarily have given their assent to the whole 13

contract. It was submitted that under the contract, it was the 14

duty of the Plaintiff to carry out independent inquiry to 15

ascertain the level of the ground for the purpose of computing 16

the earthwork quantity, any loss or damage suffered by the 17

plaintiff due to their failure to ascertain the ground level cannot 18

be claimed against the Defendant. 19

27. Counsel for the Defendant submitted that even PW3, the 20

licensed land surveyor, testified that it is not recommendable 21

for a contractor to tender for a contract without carrying out a 22

topographical survey of the ground condition and the level of 23

the ground. It was submitted that the Plaintiff had only 24

themselves to blame for failing to ascertain the actual ground 25

level and that the Defendant cannot be penalised for the 26

Plaintiffs own failure. 27

[Suit No. 22-119-2011]

15

28. Counsel for the Defendant submitted that the evidence showed 1

that the Plaintiff was given possession of the site after they 2

tendered for the Work i.e. on 26th November 2007, which was 3

one month before the actual official site handing over. The size 4

of the project site is 25 acres and, according to PW3, it would 5

take one month to conduct the survey of the 25 acres of land. 6

The Plaintiff, therefore, had ample opportunity to carry out the 7

survey work but they have failed to do so. Thus, the Plaintiffs 8

contention that they were not given ample time to carry out site 9

survey to determine the ground level ought to be disregarded. 10

29. PW1 explained that no topographical survey was carried out 11

prior to the tender because this is not the usual contract due to 12

the urgent nature of the contract. PW1 said that on 19th October 13

2007, Datuk Hasmi from the Defendant Company invited him 14

to tender for the contract because his previous contractor could 15

not complete the Work and they needed a contractor to do the 16

Work urgently. On 22nd October 2007 he collected the tender 17

form and met Gordon Kab on 23rd October 2007 to discuss 18

about the contract (more will be said of what were discussed 19

between PW1 and Gordon Kab later). On 24th October, 2007 20

the Plaintiff submitted its tender [pages 1 - 42 Exhibit BAD]. 21

The Defendant accepted the Plaintiffs tender vide their letter 22

dated 25th October, 2007 [page 43 Exhibit BAD], which states, 23

amongst others, You are required to mobilize your 24

machineries to the project site and to proceed with the works 25

immediately. 26

30. PW1 said that the Plaintiff on 26th October 2007 mobilized 27

their machineries to the project and proceeded with the Work 28

[Suit No. 22-119-2011]

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immediately as instructed in the Defendants letter dated 25th 1

October 2007. In other words, the Plaintiff took possession of 2

the site and commenced work even before the Letter of Award 3

(which was only issued on 16th November 2007) was issued to 4

him and well before the official commencement of work 5

(which was on 26th November 2007). Based on the Letter of 6

Award, the time for completion of the Project shall be two 7

months after the official commencement date i.e. 26th 8

November 2007 until 25th January 2008. PW1 said that the 9

Defendant had waived the requirement of site inspection by 10

virtue of the Defendants letter dated 25th October 2007 [page 11

43 Exhibit BAD]. 12

31. DW1, the project manager of the Work, testified that the 13

Plaintiff was supposed to check the ground level of the site 14

immediately after taking possession of the site, before 15

commencement of any work and should have immediately 16

informed the Engineer in the event of any alleged discrepancy 17

on the level and dimension given. DW1 disagreed when it was 18

put to him that the Defendant had waived the requirement for 19

site inspection by virtue of the letter dated 25th October 2007. 20

[page 43 Exhibit BAD]. 21

32. However, in cross-examination, DW1 had testified: 22

Q215 PUT: The Plaintiff was unable to do the site survey 23

because the Defendant instructed the Plaintiff to 24

mobilize your machineries to the site and to proceed 25

with the works immediately as per the letter dated 26

25.10.2007 at page 43 of BAD. 27

A: Yes, thats correct. 28

[Suit No. 22-119-2011]

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. 1

Q226 PUT: By instructing the Plaintiff to mobilize its 2

machinery onto the project site and to proceed with 3

works immediately, the Plaintiff was not given any 4

opportunity to survey the site at all. 5

A: I do not agree. 6

Q227 PUT: Upon immediate mobilization of machinery 7

and immediate commencement of works on the 8

Defendants instruction, the Plaintiff was unable to 9

ascertain the original ground level at the site. 10

A Yes, I agree. 11

Q228 Now refer to page 3 of Exhibit BAD. Here, the special 12

instructions to tendered stipulated 7 months from site 13

possession as the time for completion of Package A, 14

didnt it? 15

A Yes, thats correct. 16

Q229 Now refer to paragraph 8 at page 49 of BAD. 17

Although 7 months for completion of works for 18

Package A was stipulated in the special instruction to 19

tenderers, the Plaintiff was only given 2 months from 20

site possession to complete the works werent they? 21

A Yes, I agree. 22

Q230 The reduction in time to complete the work from 7 23

months to 2 months shows the urgency of the works, 24

correct? 25

A Yes, that is correct. 26

Q231 PUT: The works were needed to be completed 27

urgently as stated by Datuk Hasmi Hasnan in his 28

memo at page 119 of BAD as well. 29

A Yes, thats correct. 30

[Suit No. 22-119-2011]

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Q233 PUT: The 2 months given to the Plaintiff to complete 1

the proje4ct, which is less than 1/3 of the stipulated 2

time frame of 7 months shows that the works were 3

needed to completed urgently. 4

A Yes, that is correct. 5

33. In my opinion, the Plaintiff has amply shown that the Project 6

was of urgent nature given that the former incompetent 7

contractor had already wasted four out of seven months of the 8

contract period. This is vividly evident in the note written by 9

Datuk Hasmi to Gordon Kab on 19th October, 2007 [page 119 10

Exhibit BAD], that reads, Interview and get this contractor to 11

do part of with/without Naim Realty mix .... give more to 12

whoever faster. Urgent, Get them to bid for future earth 13

work. 14

34. The urgency of the Work is further evident from the fact that 15

upon accepting the Plaintiffs tender, the Defendant in their 16

letter dated 25th October, 2007 [page 43 Exhibit BAD], states, 17

amongst others, You are required to mobilize your 18

machineries to the project site and to proceed with the works 19

immediately. In response to that request, it is undisputed fact 20

that the Plaintiff promptly moved his machinery onto the site 21

and started work the very next day i.e. 26th October 2007 22

without surveying the actual ground level of the site. DW1 23

agreed that once machinery had been moved onto the site and 24

work commenced, it would not be possible to survey the 25

original ground condition. 26

35. I do not agree with the Defendants contention that the 27

Defendant allowed the Plaintiff to take possession of the site a 28

[Suit No. 22-119-2011]

19

month before the official commencement of the Work so that 1

the Plaintiff could carry out the survey of the ground level. My 2

reason for saying so is that survey of ground level would be 3

conducted by surveyor and does not require utilising the 4

machinery of the Plaintiff. In my view, in asking the Plaintiff 5

to mobilize the machinery to the site and start work 6

immediately, the Defendant has obliquely waived the need to 7

survey the ground level of the site. 8

36. In my opinion, due to the urgency of the Work (that had been 9

already been delayed for about four months out of seven 10

months) and pursuant to the request of the Defendant per the 11

letter dated 25th October 2007 [page 43 Exhibit BAD] in which 12

the Defendant requested the Plaintiff to mobilize the machinery 13

to start work immediately, the Plaintiff was literally left with 14

no opportunity to carry out site survey. The Defendant had not 15

given the Plaintiff an opportunity/time to carry out the site 16

survey and had waived the necessity to do so. As such, it does 17

not lie in the mouth of the Defendant to say that the Plaintiff 18

have only themselves to blame for not carrying out the site 19

survey. 20

Subsidiary Issue (c) 21

Whether 380,000 cubic meter of earth was the estimated or 22

maximum volume of earth 23

37. It is an agreed fact that the agreed contract sum of 24

RM3,383,580 comprised of RM2,650,000.00 for Transport 25

only Imported Earth Filling at the quantity of 380,000 cubic 26

meter at RM6.97 per cubic meter. 27

[Suit No. 22-119-2011]

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38. It is the Plaintiffs contention that 380,000 cubic meters based 1

on 15% compaction is the maximum volume of earth quoted by 2

the Plaintiff and the Defendant had assured the Plaintiff of 3

payment for any additional volume of earth in excess of 4

380,000 cubic meter. 5

39. The Defendant, on the other hand, contended that 380,000 6

cubic meter is the estimate volume of earth quoted by the 7

Plaintiff to earthfill the site to the required level. 8

40. On 23rd October, 2007 the Plaintiff submitted their contract 9

price based on the settlement and compaction of approximately 10

35% to 40% as the site was situated in swampy area. However, 11

during the price negotiation between the Plaintiff and one 12

Gordon Kab and one Abdul Razak Ahmad Marzuki for the 13

Defendant, they relied on the settlement data of 8% - 9% of the 14

adjourning "Package C" of the project and allowed the Plaintiff 15

only 15% settlement and compaction. They assured the 16

Plaintiff that the Defendant would pay for any additional costs 17

in transporting any additional volume of earth. PW1 said that it 18

was with this assurance and understanding that the Plaintiff 19

then agreed to amend their tender price and submitted their 20

amended tender on 24th October, 2007. PW1 stressed that the 21

Plaintiff finally accepted 15% settlement and compaction on 22

the clear understanding that the Defendant would pay the 23

Plaintiff for any additional volume of earth in excess of 24

380,000 cubic meters. 25

41. On 24rd October, 2007 the Plaintiff submitted its amended 26

tender for the Work at the price of RM3,383,580.00, of which 27

[Suit No. 22-119-2011]

21

Transport only imported earth filling including filling to 1

required level in approved layers well compacted as directed. 2

The quotation was accepted by the Defendant as evidenced by 3

the LOA dated 25th October, 2007 [page 43 Exhibit BAD]. See, 4

Q & A 110 p. 45 notes of proceedings. 5

42. The letter at page 43 Exhibit BAD stated, amongst others: 6

Please be informed that your appointment as our 7

earthwork contractor shall be subject to the terms and 8

conditions of the scope of works and agreed Contract Sum 9

of which will be discussed and confirmed upon at a later 10

date by both parties. 11

43. It should be noted also that in the FORM OF TENDER [page 5 12

Exhibit BAD], it states, Unless and until a formal Agreement 13

is prepared and executed this tender, together with your written 14

acceptance thereof, shall constitute a binding Contract between 15

us. 16

44. It is an agreed fact that no formal agreement was drawn up 17

between the parties. 18

45. Counsel for the Defendant submitted that as no formal 19

agreement had been signed, the Plaintiffs quotation, List of 20

Preliminary and Generally and Appendix shall constitute a 21

binding Contract between the Plaintiff and the Defendant. 22

46. Counsel for the Defendant contended that at page 150 of 23

Exhibit BAD, under Item D Type of Contract, the Contract is 24

based on a fixed price lump sum tender. 25

[Suit No. 22-119-2011]

22

47. Counsel for the Defendant contended that there was never any 1

additional work carried out by the Plaintiff for the following 2

reasons: 3

a. It is the Plaintiffs responsibility under the agreement to 4

complete the project including filling up the site to the 5

required level for a fixed price of RM3,383,580.00; 6

b. Under the Scope of Work provided by the Preliminary and 7

Generally [page 150 Exhibit BAD], it stated: 8

"SCOPE OF WORK 9

The Contract comprises generally the supply of all 10

labours, materials, tools, equipments and 11

everything else necessary for the construction and 12

completion of the works in which comprise briefly 13

the following:- 14

(a) to (c).. 15

(d) Earthworks including compaction to the level as 16

shown in the drawings and as directed by the 17

Engineer, including forming earth bund, all as 18

indicated in the drawings. 19

(e) to (h). 20

c. Under the Method Statement [page 53 Exhibit BAD] 21

prepared by the Plaintiff, it is stated under paragraph 1: 22

"The earthwork shall include the excavation of 23

earth from borrow pit situated at Pasir Pandak 24

from the earth licensee (Naim Ready Mix Sdn. Bhd.), 25

transportation by 10 wheeler dump truck to the 26

earthfilling site and levelling work to the required 27

level (as per the drawing) which is up to the 28

maximum of 3.45 meter above sea level in the 29

frontage of the site and 3.3 meter above sea level 30

[Suit No. 22-119-2011]

23

towards the ending of the site. The estimated 1

volume of earth to be earthfilled is about 370,000 2

meter cubic based on the settlement of 15 percent. 3

48. Counsel for the Defendant submitted that it is the responsibility 4

of the Plaintiff to earthfill the site to the required level as per 5

the drawing. Hence, when the Defendant asked the Plaintiff to 6

earthfill the site to the required level as per the drawing, the 7

work so required was within the scope of work under the 8

agreement. It does not vary from the scope of work. Counsel 9

for the Defendant submitted that there is no additional work 10

carried out by the Plaintiff and any claim by the Plaintiff for the 11

so-called additional work must be disallowed. 12

49. In support of the contention that no claim be allowed for work 13

done within the scope of work under the contract, reliance was 14

placed on Teknik Segala Sdn. Bhd. v Salcon Engineering Bhd 15

[2012] 9 MLJ 543 where Justice Zaleha Yusof J held: 16

"Further, as submitted by the learned counsel for the 17

Defendant, and upon scrutinising the evidence of PW1, I 18

totally agree with the Learned counsel, that those work 19

shown in the so called variation orders fall within the work 20

scope of the Plaintiff under the contract. 21

50. It should be noted that Justice Zaleha Yusof went on to say: 22

Since the contract was a lump sum contract the plaintiff 23

must prove that there was an agreement between the 24

parties for variations and additional works in order for it 25

to recover further payments. There was no agreement 26

between the parties for any variation (see para 37). 27

[Suit No. 22-119-2011]

24

51. As submitted by Counsel for the Plaintiff, it should be noted 1

that under the heading FORM OF CONTRACT in the 2

Preliminary and Generally on page 154 Exhibit BAD, Item A 3

Conditions of Contract provides: 4

The Article of agreement and Schedule Conditions of 5

Contract into which the Contractor will be required to 6

enter in connection with this project shall be those 7

contained in the AGREEMENT AND SCHEDULE OF 8

CONDITIONS OF BUILDING CONTRACT PRIVATE 9

EDITION (WITHOUT QUANTITIES) (as issued under the 10

sanction of Pertubuhan Akitek Malaysia Edition 1998 11

(Revised October 1998)). 12

52. Item B of the Schedule of Conditions of Contract states: 13

"The Contractor is referred to the full text of the under 14

mentioned clauses of the Conditions of Contract to which 15

the following are short references and against which the 16

contractor is to provide any sum he considers necessary in 17

complying with the terms of these clauses. 18

Clause No.; 19

53. The Pertubuhan Akitek Malaysia Edition 1998 (Without 20

Quantities) Standard form (Annexure A) of the Plaintiffs 21

Submission shows additional payment for variation work is 22

permissible in Article 2, which states: 23

The Employer will pay the Contractor the sum of . 24

(RM) ..) (hereinafter referred as the Contract Sum) 25

or such other sum as shall become payable hereunder at 26

the times and in the manner specified in the Conditions. 27

54. Clause 11.0 of Conditions of Building Contract provides, inter 28

alia, as follows:- 29

[Suit No. 22-119-2011]

25

11.1 The term "Variation" as used in these Conditions means: 1

11.1 (i) alteration or modification of the design, quality or 2

quantity of the Works as shown in the Contract 3

Drawings and described by or referred to in the 4

Specification. 5

11.1 (ii) the addition, omission or substitution of any work. 6

11.1 (iii) the alteration of the kind or standard of any 7

materials or goods to be used in the Works. 8

(emphasis provided) 9 10 11.2 The Architect may issue instructions requiring a Variation 11

and he may sanction in writing any Variation made by 12

the Contractor otherwise than pursuant to an instruction 13

of the Architect. No Variation required by the Architect or 14

subsequently sanctioned by him shall vitiate this Contract. 15

(emphasis provided) 16

. . . 17

11.5 . . . 18

11.5 (v) Effect shall be given to the measurement and 19

evaluation of all Variations in Interim 20

Certificates and by adjustment of the Contract 21

Sum. 22

(emphasis provided) 23

55. In Chow Kok Fongs Law and Practice of Construction 24

Contracts, 4th Edition, Volume 1, on page 124, it was written in 25

respect of Contract Models and Standard Forms: 26

2.41 The "contract sum" is based on the work delivered in 27

accordance with the stipulations of the project brief or 28

client's requirements. In most situations, it will operate as 29

a fixed price or "lump sum" contract. The contractor is 30

only entitled to claim for additional payments where it is 31

demonstrated that the works, as defined in the project 32

brief or client's requirements, have been varied or where 33

there has been a breach of obligations by the owner and, 34

[Suit No. 22-119-2011]

26

as a result of which, the contractor had to incur additional 1

expense. 2

(emphasis provided) 3

56. In the light of the foregoing, it can thus be seen that the 4

contract sum in a lump sum agreement, like any contract, can 5

still be adjusted on the ground of any additional works 6

executed by the Plaintiff under the provisions of Clause 11.0 of 7

Conditions of Building Contract. 8

57. The Court is mindful that it was provided under the 9

Preliminary and Generally that no claim whatsoever shall be 10

allowed for any variation in the costs of wages, materials, 11

construction plant, fuel, duty, taxes, temporary works or 12

transport or anything else whatsoever which may occur during 13

the period of this contract. Suffice it to say that the Plaintiffs 14

claim has nothing to do with fluctuation in the prices of labour 15

and materials in the course of the Work. Hence, it is of no 16

relevance to the Plaintiffs claim. 17

58. It is significant to note that in the LOA, it informed the Plaintiff 18

of the acceptance of the Plaintiffs quotation for the sum of 19

RM3,383,580.00 subject to terms and conditions as stipulated 20

herein and in the tender documents". It further stated: 21

"You will be required to execute in due course of Formal 22

Contract Agreement. However, until the Formal Contract 23

Agreement is executed, your quotation together with this 24

Letter of Appointment and the following letters and 25

discussion shall constitute a binding Contract between 26

Golden Ants Dynasty Sdn. Bhd. and Naim Cendera Sdn. 27

Bhd. [underline added] 28

[Suit No. 22-119-2011]

27

59. It would appear that the agreement between the parties is both 1

written and oral. This is consistent with the Plaintiffs assertion 2

that due to the urgency of the Work, they were not given time 3

to carry out the survey to determine the volume of earth 4

required. However, the Defendants representatives in allowing 5

the Plaintiff to quote only 15% compaction had assured the 6

Plaintiff in the meeting that the Defendant would pay for 7

transporting the additional volume of earth if the volume of 8

earth exceeded the quoted sum. It was on this understanding 9

that the Plaintiff had agreed to carry out the Work without 10

conducting a proper site survey. 11

60. Counsel for the Plaintiff submitted and, I concur - that 12

defence of lump sum contract pleaded in paragraphs 3, 13, 13

14(b), 17 and 22 of the statement of defence is an afterthought. 14

I say so because from the time the Plaintiff wrote the letter 15

dated 25th April, 2008 [page 8 Exhibit BAD] informing the 16

Defendant of their intended claim for transporting the 17

additional volume of earth until the filing of the defence on 7th 18

February 2012, a period spanning over approximately three 19

years and nine months, the Defendant never once gave their 20

reasons for rejecting the Plaintiffs claim for the additional 21

costs. The defence was raised for the first time in the statement 22

of defence. 23

61. The Court is also of the view that if it is a lump sum agreement 24

whereby the Plaintiff was contractually bound to fill the site to 25

the required level for the quoted price regardless of volume of 26

earth that would be required, then it would not be necessary to 27

make any estimate of volume of earth required to achieve the 28

[Suit No. 22-119-2011]

28

earth filling. The fact that the Plaintiff had to put in the quantity 1

of the volume of earth at 380,000 cubic meters is consistent 2

with the testimony of PW1 and PW2 that during the price 3

negotiation, Gordon Kab and Abdul Razak Ahmad Marzuki 4

only allowed him to put in 15% compacting and filling. 5

62. It should be further noted that in the Bill No. 1 Preliminary 6

and Generally in respect of Payment Certificates No. 2 7

(Advance Payment) [page 227 Exhibit BAD], it states under 8

Item B: 9

ITEM DESCRIPTION UNIT QTY

B Earth works as

specified to the required

area and platform level

including forming earth

bund, all as indicated on

the drawings

M3 380,000

10

63. The description shown in Bill No. 1 Preliminary and 11

Generally in respect of Payment Certificate No. 2 (Advance 12

Payment) above [page 227 Exhibit BAD] also appear in the 13

following bills: 14

a. Bill No. 1 Preliminary and Generally in respect of 15

Payment Certificate No. 3 [page 235 Exhibit BAD] under 16

the cover of letter dated 13th December 2007 [page 229 17

Exhibit BAD]; 18

b. Bill No. 1 Preliminary and Generally in respect of 19

Payment Certificate No. 4 [page 243 Exhibit BAD] under 20

the cover of letter dated 11th January 2007 [page 237 21

Exhibit BAD]; 22

[Suit No. 22-119-2011]

29

c. Bill No. 1 Preliminary and Generally in respect of 1

Payment Certificate No. 5 [page 257 Exhibit BAD] sent 2

under cover of letter dated 11th February 2007 [page 250 3

Exhibit BAD]; 4

d. Bill No., 1 Preliminary and Generally in respect of 5

Payment Certificate No. 6 [page 263 Exhibit BAD]; 6

e. Bill No. 1 Preliminary and Generally in respect of 7

Payment Certificate No. 7 [page 275 Exhibit BAD] under 8

cover of letter dated 11th April 2008 [page 267 Exhibit 9

BAD]; 10

f. Bill No. 1 Preliminary and Generally in respect of 11

Payment Certificate No. 8 [page 283 Exhibit BAD] under 12

cover of letter dated 29th May 2008 [page 276 Exhibit 13

BAD]. 14

64. It should be noted that in all the above bills for the Payment 15

Certificates, the Plaintiff stated the quantity of the earth and the 16

Defendant paid the Plaintiff without raising any question about 17

the insertion of the quantity of earth to be transported to the 18

project site. This, in my view, is consistent with PW1s 19

evidence regarding the amended tender that they subsequently 20

tendered after discussion with Gordon Kab. In other words, 21

380,000 cubic meters is not an estimated volume of earth but 22

the maximum volume of earth quoted by the Plaintiff upon the 23

promise by Gordon Kab and Abdul Razak Ahmad Marzuki that 24

the Defendant would pay the Plaintiff for the additional work in 25

respect of any volume of earth in excess of 380,000 cu meters. 26

[Suit No. 22-119-2011]

30

65. For all the reasons above, my answer to Issue No. 1 is in the 1

affirmative. 2

Unsigned Memorandum [Exhibits 1 - 4 DBD] 3

66. PW1 testified that when there was no reply was forthcoming 4

from the Defendant regarding his claim for transporting the 5

additional volume of earth, on 26th November, 2008, he 6

approached one Datuk Hasmi bin Hasnan to assist. Datuk 7

Hasmi referred it to one Vincent Kueh to solve the problem. 8

On 27th November 2008, the Plaintiff submitted the letter at 9

page 101 BAD to Vincent Kueh who then called for a meeting 10

on 4th December 2008 after which Vincent Kueh asked the 11

Project Manager, Sivakumar (DW1) to make proposal for 12

payment to the top management as discussed in the meeting. 13

67. According to PW1, few days later one Nazri bin Madom, 14

Quantity Surveyor from Naim Cendera Sdn. Bhd., called the 15

Plaintiff to collect the draft memorandum [Exhibits 1 - 4 DBD] 16

and to confirm the contents before submission to the top 17

management. The Plaintiff brought back the unsigned 18

memorandum and confirmed its contents. PW 1 explained that 19

Exhibits 1 - 4 DBD was unsigned because they only wanted the 20

Plaintiff to confirm the contents before Nazri bin Madom 21

submitted it to the top management. PW1 did not know why 22

the Defendant did not give the Plaintiff the signed original 23

memorandum. PW1 believed the signed copy of the Exhibits 1 24

- 4 DBD would be in the possession of the Defendant. 25

68. It is to be recalled that the admissibility of the memorandum to 26

propose settlement was objected to by the Defendant on the 27

[Suit No. 22-119-2011]

31

ground that PW1 was not the maker. Counsel for the Plaintiff 1

informed the court that the Plaintiff had, on 8th June 2012, filed 2

and served notice to produce, under section 66 of the Evidence 3

Act 1950, on the ground that it was a document prepared by the 4

Defendant and at all material times in possession of the 5

Defendant to which the Plaintiff has no access. For the 6

Defendant, it was contended that Nazri bin Madom referred to 7

by PW1 must come to give evidence. 8

69. The Court allowed the admission of the unsigned memorandum 9

on the ground that upon receipt of the section 66 notice, the 10

Defendant did not produce the document for inspection. There 11

is nothing to show or suggest that the Defendant had informed 12

the Plaintiff that they are not in possession of the said 13

memorandum. Absence of such response gives rise to 14

irresistible inference that the Defendant must have the 15

memorandum in their possession. 16

70. In his witness statement, it should be noted that DW1 made no 17

allusion to the unsigned memorandum [Exhibits 1 - 4 DBD] 18

alleged to be written by him. When it was shown to him in the 19

cross-examination, to the question which was put to him that 20

Exhibits 1 - 4 DBD reflected his recommendation to the 21

management pertaining to the Plaintiffs claim for the 22

additional earthwork, DW1 replied, I disagreed because I did 23

not sign it. In further re-examination, DW1 explained that he 24

did not sign because he did not prepare it. This testimony of 25

DW1 was not challenged in further cross-examination of DW1. 26

[Suit No. 22-119-2011]

32

71. In my opinion it is safe to rely on the unsigned memorandum 1

[Exhibits 1 - 4 DBD] for the following reasons. It should noted 2

that the Plaintiffs letter dated 26th November 2008 addressed 3

to the Defendant for the attention of Datuk Hasmi Bin Hasnan 4

[page 101 BAD] bore two receipts of acknowledgement, one of 5

which was by Vincent on 27th November 2008. This is 6

consistent with PW1s testimony that after the letter dated 26th 7

November 2008, he called Datuk Hasmi to explain the problem. 8

As Datuk Hasmi did not have any clue of the matter, he then 9

asked Mr Vincent Kueh to help solve the problem. On 27th 10

November 2008, PW1 brought the said letter to see Vincent 11

Kueh and the letter was acknowledged by his staff on the same 12

day. [Q & A 4 page 5 NOP]. 13

72. I, therefore, believe and accept PW1s evidence that there was 14

a discussion with Mr Vincent Kueh on 4th December 2008. As 15

a result of that meeting Mr Vincent Kueh asked DW1 to 16

prepare a memorandum proposing payment to the Plaintiff as 17

discussed in the meeting. In the premise, it is my finding of 18

fact that in all probability DW1 had prepared the draft 19

memorandum for the management. It is significant to note that 20

the memorandum made two recommendations, namely, (1) 21

payment of RM953,218.39 being the additional earth 22

transported by the Plaintiff; and (2) waiver of LAD amounting 23

RM55,849.00. It is undisputed fact that the second proposal 24

was adopted by the management whereas the first proposal was 25

rejected vide the Defendants letter dated 30th October 2009. 26

73. The Plaintiff had tried to rely on the grounds of 27

recommendation written in the unsigned memorandum as 28

[Suit No. 22-119-2011]

33

admission of the Plaintiffs claim. Counsel for the Plaintiff 1

submitted that DW1 as Project Manager of the Package A 2

project had full and complete knowledge of what was going on 3

at the site. Further, DW1 was at the material time in the 4

employment of the Defendant and his admission in the 5

unsigned memorandum could be imputed to the Defendant and 6

such admission is deemed to be that of the Defendant. 7

74. It is pertinent, however, to take note that in the cross-8

examination of DW1, DW1 agreed to the Plaintiffs counsels 9

question that he only took over from Abdul Razak Ahmad 10

Marzuki in respect of the Project in this case around April 2008; 11

that his knowledge of all the events that occurred during the 12

tender negotiation stage and initial stage of the works are from 13

the documents that he had read and from what was told to him 14

by other people; and he had no personal knowledge of the 15

tender negotiation and initial period of work for the Project. 16

75. A comparison of the unsigned memorandum and the Plaintiffs 17

letter dated 26th November 2008 [Exhibit 101 BAD] shows that 18

ground (a), (b) and (c) of the recommendation also appeared in 19

Exhibit 101 BAD i.e. (a) no actual survey works was carried 20

out on site as the contractor was only given one day to prepare 21

the quotation; (b) the Plaintiff had to rely on the topographical 22

survey supplied to them; and (c) the Defendant only allowed 23

15% for the settlement and compaction during the price 24

negotiation based on the available information obtained from 25

the Package C settlement data. 26

[Suit No. 22-119-2011]

34

76. It would appear to me that the grounds (a), (b) and (c) is not 1

based on DW1s personal knowledge but on what other people 2

told to him and based on what he has read. As such, I do not 3

agree with Plaintiff that they amounted to admission of facts. In 4

my view, Exhibits 1 - 4 DBD is a mere recommendation based 5

on what the Plaintiff had told DW1 in their letter dated 26th 6

November 2008 [page 101 BAD]. They do not prove the fact as 7

alleged by the Plaintiff. 8

Calling of Mr Gordon Kab and Mr Abdul Razak Ahmad 9

Marzuki 10

77. Counsel for the Defendant submitted that the burden is upon 11

the Plaintiff to call Gordon Kab to testify on their behalf that 12

the Defendant agreed to pay the Plaintiff for the alleged 13

additional work to transport the additional volume of earth, 14

citing Juahir Sadilon v Perbadanan Kemajuan Ekonomi Negeri 15

Johor [1996] 4 MLJ 1. 16

78. In Juahir Bin Sadikon, the Court of Appeal held: 17

The allegation of the oral representation has been 18

pleaded by the appellant at para 8 of his statement of 19

claim, and denied by the respondent at para 5(a) of its 20

amended statement of defence. 21

He who alleges must prove such allegation and the onus is 22

on the appellant to do so. See s 103 of the Evidence Act, 23

1950. Thus, it is incumbent upon the appellant to produce 24

Tan Sri Basir as his witness to prove the allegation. The 25

fact that the appellant was unable to secure the attendance 26

of Tan Sri Basir as a witness does not shift the burden to 27

the respondent to produce the witness and testify as to 28

what he had uttered as firstly the respondent never raised 29

[Suit No. 22-119-2011]

35

such an allegation and secondly has denied even making 1

one. 2

79. Counsel for the Defendant contended that in Genisys Integrated 3

Engineers Pte Ltd v UEM Genisys Sdn. Bhd. & Ors [2008] 6 4

MLJ 237 (CA), the Court of Appeal referred to an Indian case 5

of Krishna Kamini v Nilmadhab (1923) AIR Cal 63 where 6

Buckland J said: 7

"So far the learned subordinate judge relies upon the fact 8

that Arjun is not in the defendants service, that is no 9

excuse at all. The only evidence as to the omission is that 10

enquiries were made at the Bombay office. If a party 11

wishes not have a presumption raised against him by the 12

fact that an important witness has not been called, he 13

should exhaust to the utmost of his power every means to 14

bring that witness before the court. 15

The Court further added: 16

An example of satisfactory explanation is where evidence 17

is led to show that a potential witness is absconding or has 18

left the country and could not be traced despite all 19

reasonable attempts. 20

80. Counsel for the Defendant submitted that the Plaintiff had led 21

no evidence to show that Gordon Kab had either absconded or 22

left the country and could not be traced despite all reasonable 23

attempts. It was submitted that it is for the Court to draw 24

adverse inference under section 114(g) Evidence Act and to 25

make presumption that Gordon Kabs evidence, if produced, 26

would be unfavourable to the Plaintiff. 27

[Suit No. 22-119-2011]

36

81. Counsel for the Plaintiff contended that the Plaintiff does not 1

have the burden to call Gordan Kab and Abdul Razak Ahmad 2

Marzuki as these two persons were in the employment of the 3

Defendant at the material time. It was contended that the 4

Defendant should have called them and in failing to do so, the 5

Court ought to draw adverse inference under section 114(g) 6

Evidence Act against the Defendant. 7

82. In my view, pursuant to section 101 of the Evidence Act, the 8

Plaintiff who wants the Court to believe that Gordon Kab and 9

Abdul Razak Ahmad Marzuki in allowing the Plaintiff only 10

15% of compaction and settlement had assured the Plaintiff 11

that they would be paid for any extra volume of earth in excess 12

of the 380,000 cubic meters, bears the burden to call these two 13

persons. 14

83. In Johara Bi Binte Abdul Kadir Marican v Lawrence Lam 15

Kwok Fou & Anor [1981] 1 MLJ 139, Chang Min Tat FJ states: 16

. that until and unless the plaintiff had discharged the 17

onus on her to prove her case on a balance of probabilities the 18

burden did not shift to the defendant and no matter if the 19

defendant's case was completely unbelievable, the claim 20

against him must in this circumstance be dismissed. 21

84. In Juahir Sadilon v Perbadanan Kemajuan Ekonomi Negeri 22

Johor, supra, Mokhtar Sidin JCA opines as follows: 23

The other issue before us, was there such an offer. It is 24

clear that it was the plaintiff who asserts that Tan Sri 25

Dato' Haji Bashir who made the offer, the onus is on the 26

plaintiff to satisfy the Court that such an offer was ever 27

[Suit No. 22-119-2011]

37

made. This is clearly provided for by ss. 101 and 103 of 1

the Evidence Act 1950. The sections read as follows: 2

101. Burden of Proof 3

(1) whoever desires any Court to give judgment as 4

to any legal right or liability, dependant on the 5

existence of facts which he asserts, must prove 6

that these facts exist; 7

(2) when a person is bound to prove the existence 8

of any fact, it is said that the burden of proof 9

lies on that person. 10

103. Burden of Proof as to Particular fact 11

The burden of proof as to any particular fact lies 12

on that person who wishes the Court to believe in 13

its existence unless it is provided by any law that 14

the proof of that fact shall lie on any particular 15

person. 16

It is clear from the above provisions on whom the onus lies. 17

In the present case it is the plaintiff who had asserted that 18

there exists a particular fact viz. that there was an offer to 19

sell the said land at the price between RM7,000 to 20

RM8,000. The onus is on the plaintiff to satisfy the Court 21

there was such an offer. 22

85. It is clear from the authorities above that the burden of proof in 23

civil cases shifts depending on whether the party that bears the 24

burden has discharged the burden of proof. In the present case, 25

I have earlier given my reasons that I am satisfied that the 26

Plaintiff has proven on the balance of probability that there was 27

price negotiation with Gordon Kab and Abdul Razak Ahmad 28

Marzuki in which they only allowed the Plaintiff to quote 15% 29

settlement and compaction with the assurance that the 30

[Suit No. 22-119-2011]

38

Defendant would pay the Plaintiff for any additional costs to 1

transport earth in excess of 380,000 cubic meters. In the 2

circumstance, the burden of proof has shifted to the Defendant 3

to call Gordon Kab and Abdul Razak Ahmad Marzuki to rebut 4

the Plaintiffs assertion, which they have failed to do. 5

Accordingly, I draw the adverse inference under section 114(g) 6

Evidence Act against the Defendant. 7

Whether there is Additional Work 8

86. PW1 told the court that sometime in March, 2008, the Plaintiff 9

discovered that the total volume of earth for the Work would 10

exceed the agreed volume of 380,000 cubic meters. He then 11

informed the project manager Abdul Razak Ahmad Marzuki in 12

a meeting on 29th March, 2008, that the Plaintiff intended to 13

claim for the additional work. 14

87. On 25th April, 2008, there was a meeting with the new project 15

manager, DW1, and he briefed DW1 on the Plaintiffs intended 16

claim for the additional volume of earth for the Work. DW1 17

instructed the Plaintiff to carry on with the Work and he 18

assured PW1 that, after practical completion of the Work, the 19

Defendant would consider favourably the Plaintiffs intended 20

claim. 21

88. In my view, PW1s evidence of having informed the Defendant 22

through their project manager, Abdul Razak Ahmad Marzuki 23

and DW1, that the volume of earth for the Work had exceeded 24

the agreed volume and that the Plaintiff intended to claim for 25

the additional work in transporting the additional volume of 26

[Suit No. 22-119-2011]

39

earth is credible. My belief is based on the Plaintiffs letter to 1

the Defendant for the attention of DW1, which mentioned: 2

"As discussed in our last meeting on 25th April 2008, we 3

would like to bring to your attention that we have 4

exceeded our initial quotation price for the above project 5

as the work carried out has exceeded the volume of 6

380,000 meter cubic of earth. . 7

89. PW1 told the court that the actual total volume of earth 8

transported by the Plaintiff to the project site was 517,630.17 9

cubic meters. 10

90. PW2 (Lu Din Kiong, Managing Director of Plaintiff Company) 11

told the court that the additional earth transported by the 12

Defendant was 137,630.17 cubic meters, which is the 13

difference between the 517,630.17 cubic meters total volume of 14

earth filled by the Plaintiff and 380,000 cubic meters volume of 15

earth agreed to be filled at the project site. 16

91. PW2 said that the Plaintiff and the Defendant used lorry token 17

ticket system as a record to calculate the actual delivery of 18

earth to the site. A lorry token ticket was issued for every trip 19

made by the lorry carrying the earth. The token ticket was 20

given to five parties, i.e. 21

a. Lorry driver; 22

b. Bulldozer driver; 23

c. Excavator driver; 24

d. The earth supplier, Naim Ready Mix Sdn. Bhd. (the 25

Defendants associate company); and 26

[Suit No. 22-119-2011]

40

e. The Plaintiff. 1

92. PW2 said that at the end of each day, the Plaintiff provided all 2

the lorry token tickets issued for the day to the Defendant for 3

verification, which the Defendant did by putting an initial on 4

the reverse page of the token ticket and photocopied every lorry 5

token ticket for its retention. 6

93. According to PW2, the purpose of the lorry token ticket is to 7

quantify the actual volume of earth transported to the site. 8

These tickets are controlled documents and serially numbered. 9

Based on these tickets, the Plaintiff worked out the volume of 10

earth transported to the site each month. The volume of earth 11

carried by each lorry per day is calculated based on its number 12

of daily trips multiplied by the volume dimension of the lorry 13

bucket. 14

94. PW2 said that the Plaintiff had been using the lorry token ticket 15

system as part of its internal operating procedure for control 16

and tracking of actual earthworks done at all its project sites 17

since 2006. The Defendant had never commented that there 18

were deficiencies in the Plaintiffs lorry token ticket system. 19

95. The original lorry token ticket are found at pages 25 - 430 of 20

the Plaintiffs Supplementary Bundle of Documents Volume 1, 21

at pages 431 719 of the Plaintiffs Supplementary Bundle of 22

Document Volume 2, at pages 720 - 1121 of the Plaintiffs 23

Supplementary Bundle of Document Volume 3 and at pages 24

1122 1673 of the Plaintiffs Supplementary Bundle of 25

Document Volume 4. The Summary of total lorry trips and 26

[Suit No. 22-119-2011]

41

volume by month is found at page 1 of the Plaintiffs 1

Supplementary Bundle of Document. 2

96. Counsel for the Defendant submitted that although there was a 3

column provided in these lorry token ticket to fill in the actual 4

volume of earth loaded on to each lorry, it was nevertheless not 5

completed by the Plaintiff. It was submitted that the Plaintiff 6

never explained why the column provided for was never 7

completed with the actual volume of earth transported by each 8

of the lorry. The logical explanation for such omission, 9

contended counsel for the Defendant, would be that the volume 10

of earth was never a concern of both the Plaintiff and the 11

Defendant as it was the Plaintiffs obligation to earthfill the site 12

to the required level regardless of the volume of earth 13

transported. 14

97. Counsel for the Defendant further submitted that PW3 (Land 15

Surveyor) stated that the only way for a surveyor to calculate 16

the total volume of earth filled on the site is by looking at the 17

original ground survey and as build survey. The Plaintiff has 18

not adduced any evidence that they have submitted the original 19

ground survey. Without the original ground survey and the "as 20

build survey, even PW3 could not calculate the actual volume 21

of earth transported to the project site. 22

98. This contention of the counsel for the Defendant is not correct. 23

I say so because PW2 had explained in his examination in chief 24

as well as in cross examination that the column for volume of 25

earth was not filled in because each lorry has its measurement 26

dimension in cubic meters and from the lorry plate number, the 27

[Suit No. 22-119-2011]

42

volume of earth it carried can be calculated/ascertained because 1

its bucket does not change. 2

99. Although it was put to PW2 during cross-examination that the 3

Defendant never agreed to the use of the lorry token ticket 4

system to calculate the volume of earth transported by the 5

Plaintiff to the site, the Defendant, however, did not call any 6

witness to rebut PW2s testimony. 7

100. In the premise, based on the unchallenged evidence of PW2, 8

the Plaintiff has proved that the Plaintiff had transported the 9

total volume of 517,630 cubic meters of earth to the site. Thus 10

the additional volume of earth the Plaintiff had transported to 11

the project site was 137,630.17 cubic meters [517,630.17 - 12

380,000], the total cost of which, at the agreed rate of RM6.97 13

per cubic meter, is RM959,282.28. 14

Failure to inform the project engineer of the alleged 15

discrepancies of the actual ground levels and dimension 16

against those shown on the drawings 17

101. Counsel for the Defendant contended that in the event the 18

Court finds that the Plaintiff did incur expenses to carry out 19

additional work to transport the additional volume of earth, the 20

Defendant is not liable to pay the Plaintiff for such expenses on 21

the ground that the Plaintiff has failed to comply with the 22

following provisions in the Preliminary and Generally. 23

102. Item C of the Preliminary and Generally on page 12 Exhibit 24

BAD states: 25

26

[Suit No. 22-119-2011]

43

"SITE INSPECTION 1

Immediately after taking possession of the site and before 2

commencing any work, the Contractor shall check actual 3

levels and dimensions against those shown on the 4

drawings and immediately inform the Engineer in the 5

event of any alleged discrepancy. If no communications 6

has reached the Engineer, the Contractor shall be held to 7

accept all levels and dimensions and no claims for extra 8

payments in this connection will be entertained. 9

103. Item B on page 10 of Exhibit BAD, paragraphs 2 thereof states: 10

DEFINITIONS OF TERMS 11

Engineer shall mean Jurutera CSD Sdn. Bhd. 12

104. Item A on page 29 Exhibit BAD states: 13

AUTHORISATION OF VARIATIONS AND EXTRAS 14

No variations and extras shall be valid unless authorised 15

in writing by the Engineer. It is the responsibility of the 16

Contractor to inform the Engineer in writing of any 17

variations and extras not authorised in writing. 18

105. Counsel for the Defendant submitted that the provisions of the 19

terms referred to above vividly showed that it is the 20

responsibility of the Plaintiff to ascertain the ground levels and 21

dimension and to inform the Engineer if there is variance from 22

the drawing provided. If there is no communication by the 23

Plaintiff to the Engineer, then the Plaintiff shall be held to 24

accept all levels and dimension as shown on the drawing and 25

will not be entitled to any extra claim. 26

106. Counsel for the Defendant submitted that PW1 had admitted in 27

re-examination that the Plaintiff did not communicate with the 28

[Suit No. 22-119-2011]

44

Engineer because they were assured by Gordon Kab and Abdul 1

Razak Ahmad Marzuki that the Defendant would pay the 2

Plaintiff for the costs in transporting the additional volume of 3

earth. PW1 also admitted in cross-examination that Gordon 4

Kab and Abdul Razak Ahmad Marzuki is not the Engineer 5

provided under the Agreement. It was submitted that the 6

Plaintiff has not adduced any evidence to show that the alleged 7

additional work to transport the extra volume of earth was 8

authorised by the Engineer. By reason of the Plaintiffs failure 9

to comply with the provision of the Agreement by informing 10

the Engineer of the alleged variance in the ground level and 11

dimension, the Plaintiff is not entitled to claim for the 12

additional costs for the additional work in transporting the 13

alleged additional volume of earth. 14

107. To support the argument, counsel for the Defendant relied on ss 15

53 and 55 of the Contracts Act 1950. S 53 of the Contracts Act 16

states: 17

53. Order of performance of reciprocal promises 18

Where the order in which reciprocal promises are to be 19

performed is expressly fixed by the contract, they shall be 20

performed in that order; and, where the order is not 21

expressly fixed by the contract, they shall be performed in 22

that order which the nature of the transaction requires. 23

ILLUSTRATIONS 24

(a) 25

A and B contract that A shall build a house for B at a 26

fixed price. A's promise to build the house must be 27

performed before B's promise to pay for it. 28

[Suit No. 22-119-2011]

45

(b) 1

A and B contract that A shall make over his stock-in-2

trade to B at a fixed price, and B promises to give 3

security for the payment of the money. A's promise need 4

not be performed until the security is given, for the 5

nature of the transaction requires that A should have 6

security before he delivers up his stock. 7

Section 55 of the Contracts Act states: 8

55. Effect of default as to that promise which should be first 9

performed, in contract consisting of reciprocal promises 10

When a contract consists of reciprocal promises, such that 11

one of them cannot be performed, or that its performance 12

cannot be claimed till the other has been performed, and 13

the promisor of the promise last mentioned fails to perform 14

it, the promisor cannot claim the performance of the 15

reciprocal promise, and must make compensation to the 16

other party to the contract for any loss which the other 17

party may sustain by the non-performance of the contract. 18

ILLUSTRATIONS 19

(a) 20

A hires B's ship to take in and convey, from Kelang to 21

Singapore, a cargo to be provided by A, B receiving a 22

certain freight for its conveyance. A does not provide 23

any cargo for the ship. A cannot claim the performance 24

of B's promise, and must make compensation to B for 25

the loss which B sustains by the non-performance of the 26

contract. 27

(b) 28

A contracts with B to execute certain builders' work for 29

a fixed price, B supplying the scaffolding and timber 30

[Suit No. 22-119-2011]

46

necessary for the work. B refuses to furnish any 1

scaffolding or timber, and the work cannot be executed. 2

A need not execute the work, and B is bound to make 3

compensation to A for any loss caused to him by the 4

non-performance of the contract. 5

(c) 6

A contracts with B to deliver to him, at a specified 7

price, certain merchandise on board a ship which 8

cannot arrive for a month, and B engages to pay for the 9

merchandise within a week from the date of the 10

contract. B does not pay within the week. A's promise to 11

deliver need not be performed, and B must make 12

compensation. 13

(d) 14

A promises B to sell him one hundred bales of 15

merchandise, to be delivered next day, and B promises 16

A to pay for them within a month. A does not deliver 17

according to his promise. B's promise to pay need not 18

be performed, and A must make compensation. 19

108. Further reliance was also placed on Mars Equity Sdn. Bhd. v 20

Tis "Ata"ashar Sdn. Bhd. [2006] 4 MLJ 320, where Gopal Sri 21

Ram JCA [as he then as] held: 22

Now, the order of performance of obligations in a 23

contract is governed by s 53 of the Contracts Act 1950 24

which provides: 25

53. Where the order in which reciprocal promises 26

are to be performed is expressly fixed by the 27

contract, they shall be performed in that order; and, 28

where the order is not expressly fixed by the 29

contract, they shall be performed in that order 30

which the nature of the transaction requires. 31

[Suit No. 22-119-2011]

47

The section is ipsissima verba s 52 of the Indian Contract 1

Act 1872. In the leading textbook on the subject, viz, 2

Singhal & Subrahmanyan's Indian Contract Act (4th Ed) p 3

984, the commentary to s 52 reads: 4

Standing alone, however, the mere order of 5

performances in time is not always decisive of the 6

case. The promise to render the earlier performance 7

is not conditional on tender of an agreed equivalent 8

by the other party; but may be conditional on other 9

factors even though it is not expressly so provided. 10

For example, the promisor's duty to render the 11

earlier performance is constructively conditional on 12

the absence of a material increase in his risk of not 13

getting the agreed exchange. He is privileged to 14

withhold his performance, if the other party 15

repudiates in advance, or if, for any reason, he 16

becomes prospectively unable to render the agreed 17

exchange, whether because of objective 18

impossibility, or of insolvency, or other personal 19

inability. So, if a seller promises to ship goods on a 20

certain day, in return for the buyer's promise to pay 21

for them after delivery, the seller's duty to ship is 22

constructively conditional on the buyer's 23

prospective ability to pay. If the seller can show that 24

the buyer will not in fact be able to pay, he is 25

privileged not to ship; this is true, in spite of the fact 26

that shipment is to be first in time. 27

28

It follows that the respondent was clearly in breach 29

of its primary obligation to transfer the land to the 30

appellant. Therefore, it was not in a position to call 31

for the performance of the appellant's obligation 32

under the timber agreement to apply for the licence. 33

[Suit No. 22-119-2011]

48

The present case, in my judgment, falls plumb 1

within s 55 of the Contracts Act 1950. That section 2

says: 3

When a contract consists of reciprocal 4

promises, such that one of them cannot be 5

performed, or that its performance cannot 6

be claimed till the other has been performed, 7

and the promisor of the promise last 8

mentioned fails to perform it, the promisor 9

cannot claim the performance of the 10

reciprocal promise, and must make 11

compensation to the other party to the 12

contract for any loss which the other party 13

may sustain by the non performance of the 14

contract. 15

Section 55 is, of course of general application when 16

it speaks of the promisor having to pay 17

compensation to the promisee. But, whether 18

compensation is sufficient in a given case depends 19

on the subject matter of the contract. 20

109. Counsel for the Plaintiff contended that no evidence had been 21

led to show that the Engineer played any role on the site during 22

the execution of the Work by the Plaintiff. On the contrary, the 23

testimony of DW1 amply showed that it was DW1, and not the 24

Engineer, who told the Plaintiff that the Defendant would pay 25

the Plaintiffs claim for additional volume of earth upon proof 26

that they had done the additional work. (Q & A 243 and 254 if 27

the notes of proceedings). 28

110. Counsel for the Plaintiff submitted that the Defendant had by 29

their conduct allowed the role of the Engineer to be usurped by 30

[Suit No. 22-119-2011]

49

their own Project Manager. Under the circumstance, the 1

Defendant cannot expect the Plaintiff, at the same time, to seek 2

the instruction of the Engineer on the additional volume of 3

earth. 4

111. I have no reason to disagree with counsel for the Plaintiff. 5

112. It should also be recalled that earlier on I have made a finding 6

of fact that during price negotiation the Plaintiff was asked to 7

quote only 15% of compaction and settlement i.e. with the 8

promise of being paid for any volume of earth in excess of 9

380,000 cubic meter; and that the Defendant through the 10

Letters of Appointment dated 25th October 2007 [page 43 11

Exhibit BAD] directed the Plaintiff to mobilize the machinery 12

to the site and to proceed with the work immediately had 13

effectively not given the Plaintiff a chance to check the actual 14

ground level through survey. In the circumstances, it does not 15

lie in the mouth of the Defendant to say that the Plaintiff had 16

failed to comply with the terms of the agreement. 17

113. In Chow Kok Fongs Law and Practice of Construction 18

Contract, 4th Edition, Volume 1, p. 285, the learned author 19

observes: 20

Recovery Without Written Orders 21

Implied Promised to Pay 22

5.29 In certain circumstances, the courts may be prepared to 23

impute an implied promise on the part of the employer to 24

pay for work which has not been ordered in accordance 25

with the formalities stipulated in the contract conditions. 26

A situation which warrants such an imputation is where 27

the employer has done some act suggesting that he is 28

waiving the condition precedent, and which has the 29

[Suit No. 22-119-2011]

50

effect of leading the contractor reasonably to believe 1

that the strict legal rights will not be insisted on. In 2

Molloy v Liebe (1910), the employer ordered the 3

contractor to execute a certain item of work. The 4

contractor argued that this was extra work. The employer 5

maintained that the work was not an extra and insisted 6

that the contractor carry out the work. The matter was 7

referred to arbitration. In an award which was 8

subsequently upheld in court, the arbitrator ruled that that 9

work was indeed, as the contractor claimed, extra works 10

and that the employer had, by his insistence that the work 11

should be done, impliedly promised the contractor that the 12

work would be paid for. It was considered immaterial, in 13

the circumstances, that the subject work was not ordered 14

in writing in accordance with the procedures stipulated 15

under the terms of the contract. 16

(emphasis provided) 17

114. I also agree with the Plaintiff that this head of defence is an 18

afterthought. As rightly submitted by counsel for the Plaintiff, 19

for the period of some three years since the Plaintiff made their 20

claim for the additional work, the Defendant had never 21

informed the Plaintiff that they were not entitled to claim for 22

the additional work until the defence was filed. 23

CONCLUSION 24

115. For all the reasons aforesaid, I am satisfied that the Plaintiff, on 25

the balance of probability, has proven their claim. As such I 26

allow the claim as prayed for with costs of RM50,000.00. 27

Interest at 8% per annum from 29th May 2008 to 1st October 28

2012, thereafter at 5% per annum until full settlement. 29

[Suit No. 22-119-2011]

51

Alternative Claim: 1

116. In the light of my above decision it is not necessary to consider 2

the alternative claim. 3

4

5

(DATUK YEW JEN KIE) 6

Judge 7

8

Date of Grounds of Decision: 10.3.2014 9

10

Date of Delivery of Judgment: 21.1.2014 11

12

Date of Hearing: 4.3.2013 13

6.3.2013 14

18.4.2013 15

22 24.7.2013 16 17

For Plaintiff: Mr. Satinder Singh 18

Messrs Sandhu & Co. Advocates 19

Kuching 20

21

For Defendant: Mr. Bong Siak Peng 22

Messrs Bong Siak Peng Advocates 23

Kuching 24

25

26

27

28

29

30

31

32

Notice: This copy of the Court's Reasons for Judgment is subject to editorial 33 revision. 34