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2024 MarsdenLR 200
HIGH COURT MALAYA KUALA LUMPUR
PESAT BUMI SDN BHD – Appellant
Versus
CESCON ENGINEERS SDN BHD – Respondent
[Civil Suit No: WA-22C-38-04/2021]
The Defendant's failure to fulfill contractual obligations justified the Plaintiff's termination of the contract, leading to the award of nominal damages to both parties.
Headnote:(A) Contract Law - Breach of Contract - The Plaintiff claimed that the Defendant breached their contract for civil and structural engineering services by failing to provide necessary input and attend scheduled meetings, leading to the termination of the contract. The Defendant counterclaimed for unpaid fees. (Paras 2-4, 45-46)
(B) Contractual Obligations - The court found that the Defendant was required to provide both Civil and Structural Engineering and Mechanical & Electrical Engineering services as per the contract dated 7 July 2014, but only provided C&S services. (Paras 8-9)
(C) Termination of Contract - The court held that the Defendant's failure to perform its obligations justified the Plaintiff's termination of the contract. (Paras 55-66)
(D) Counterclaim - The Defendant's counterclaim for fees was partially allowed, with nominal damages awarded due to lack of evidence for the claimed amounts. (Paras 94-104)
Facts of the case:
The Plaintiff engaged the Defendant for a project involving the development of service apartments. Disputes arose over the Defendant's failure to provide required services, leading to the Plaintiff's termination of the contract. (Paras 1-1.6)
Findings of Court:
The Defendant breached the contract, justifying the Plaintiff's termination. The Plaintiff's claim for damages was partially upheld, and nominal damages were awarded to both parties. (Paras 106-108)
Issues: The main issues included whether a contract existed, if the Defendant breached the contract, and the validity of the Plaintiff's claims for damages. (Paras 5-6)
Ratio Decidendi: The court ruled that the Defendant's failure to comply with contractual obligations constituted a breach, allowing the Plaintiff to terminate the contract. (Paras 66)
Result: Plaintiff awarded RM80,000.00 in nominal damages; Defendant awarded RM10,000.00 for services rendered.
JUDGMENT
Agreed Facts
[1]The following were the agreed facts at the trial:-
1.1 By a letter dated 7 July 2014, Cescon had submitted a proposal to Pesat Bumi for the appointment of the Cescon as the consultant for civil and structural engineering services and mechanical engineering services for a project known as "Proposed Development Consisting of Bungalows, Low Rise Town House/ Apartment on Lot 17737, Mukim Genting, Daerah Bentong, Pahang Darul Makmur' ("the Project") upon the terms and conditions stated in the letter that had been agreed by Pesat Bumi on 27 March 2015 ("the Contract).
1.2 The Contract contains, inter alia, the express terms as follows:
a) Clause 2.1 of the Contract
"a. To prepare and submit Earthworks, Road and Drain, Sewerage and Water Supply plans as required for local authorities' approval;
b.To prepare and submit Earthworks, Road and Drain, Sewerage and Water Supply plans as required for local authorities' approval;
c.To prepare design calculations and drawings for structural and foundation works;
d.To conduct periodical site inspections during construction; and
e.To apply for Certificate of Completion and Compliance (CCC) clearances from relevant local authorities".
b) Clause 2.2 of the Contract
"a. To submit electrical, telephone, fire protection system and street lighting plans as required for local authorities' approval;
b.To prepare Tender Documents and advise on award of tender for Mechanical and Electrical Engineering subcontract works, if applicable;
c.To prepare Contract Documents for Mechanical & Electrical Engineering subcontract works, if applicable;
d.To conduct periodical site inspections during construction; and
e.To apply for Certificate of Completion and Compliance ("CCC") clearances from relevant local authorities".
1.3 The Master Title of the Project was Lot PT17737. Lot PT17737 was then subdivided into two plots of land, ie Lot PT23025 and PT23026.
1.4 On or around 19 October 2018, Planning Approval for all three phases of the Project on Lot PT23026 was approved and obtained.
1.5 On or around 28 March 2019, Planning Approval for all three phases of the Project on Lot PT23026 was subsequently amended and approved to reflect the amendment on the title of the Project.
1.6 On or around 11 July 2019, Phase 3 of the Project was proposed to be revised to two blocks of service apartments, which involves Phase 3A comprising of 462 units of service apartment and Phase 3B comprising of 526 units of service apartment. ("Revised Phase 3 Project")
Plaintiff's Claim
[2]The Plaintiff had in its Statement of Claim pleaded as follows:
a. the Defendant had committed various breaches of contract throughout the period of July 2019 to September 2019.
b. the Defendant had failed to provide their basic input and comment on the preliminary layout plans for the said Proposed Revised Phase 3 Project and/or the updated architectural layout plans for the said Proposed Revised Phase 3 Project and to proceed diligently with all the necessary actions including but not limited to working out the proposed civil and structural design, planning for submissions and to obtain clearance letters from the relevant technical departments and/or authorities on an urgent basis so as to facilitate the submission process for the amendment to the Planning Permission approval within the stipulated timeline given despite numerous reminders.
c. The Defendant had also failed and/or refused and/or neglected to attend the CCM held at the Project Site Office at Genting Permai on 9 August 2019, 26 August 2019 and 6 September 2019 as well as the scheduled meeting between the Plaintiff's appointed architect, DCA and the Defendant on 3 September 2019 of which the aforementioned meetings are crucial and compulsory in order for all parties to resolve the issues on technical and authority submissions, in view of the urgent need for submission of the amendment to the Planning Permission approval.
d. As a result of the aforesaid breaches by the Defenda
