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2021 MarsdenLR 931
HIGH COURT MALAYA SHAH ALAM
GPR CONSTRUCTION SDN BHD – Appellant
Versus
SRI TERNAK PROPERTIES SDN BHD – Respondent
[Civil No: BA-22C-24-07/2018]
Burden of proof lies with counterclaimant to establish claims; mutual agreement and prior certifications in contracts dictate enforceability of terms.
Headnote:(A) Construction contracts - Contracts - Plaintiff-contractor's claims for unpaid values and retention sums under the First and Second Contracts - Defendant-employer's counterclaims for damages and rectifications - Court found Defendant failed to prove its claims, ruling the contractor's works were practically completed and issues of varying rates and responsibilities established therein. (Paras 18, 30, 37, 52).
(B) Liquidated damages - Rate of RM500/day valid and enforceable for the Second Contract - Court validated this claim due to completion delays unrectified by the Defendant, limited to the LAD amount despite other alleged costs. (Paras 59, 61, 72).
Facts of the case: Dispute involved claims by the Plaintiff-contractor for unpaid work and retention sums against counterclaims made by the Defendant-employer for liquidated damages and defects. The Court examined certifications, agreements and varied interpretations of contract boundaries.
Findings of Court: Court ruled in favor of the Plaintiff-contractor for unpaid work claims while dismissing the Defendant's counterclaims; identified lack of evidence to support Defendant's assertions and that the Plaintiff had completed substantial works by agreed standards.
Issues: Entitlement to payments and evaluative discrepancies in contractual fulfillment statuses were primary issues addressed by the court.
Ratio Decidendi: The court established that mutual agreement affects contractual obligations and non-disputed certifications serve as standard acceptance of completion in contract law.
Result: Plaintiff awarded RM444,458.25 for unpaid work, RM73,500 for preliminaries, and retention sums without interest; Defendant limited to RM75,000 for liquidated damages.
JUDGMENT
Introduction
[1] The disputes between the employer and his contractor in the present case relate to two construction contracts for the design, construction and completion of shops and warehouse. In the present suit, the Plaintiff-contractor claims for the unpaid values of executed work, release of retention monies, loss and/or expense and interests in respect of both contracts, while the Defendant- employer counterclaims for liquidated damages, costs of defects rectification works, and interests in respect of both contracts.
[2] After a full trial including oral evidence of factual witnesses on liability and quantum and the reports and oral evidence of the experts on quantum issues, this Court on 26 July 2021 allowed parts of the Plaintiff-contractor's claims and also allowed parts of the Defendant-employer's counterclaims.
[3] Dissatisfied with the said decision, the Defendant-employer has appealed against the entirety of the said decision.
Background Facts
[4] At first, Plaintiff was appointed by the Defendant vide a letter of award dated 1 December 2014 to Design and Build a 3 Storey Shop / Warehouse with a Contract amounting to RM2,904,867.60 for a project known as Cadangan Merekabentuk Dan Membina Sebuah Kedai/Gudang 3 Tingkat di Lot 1032, Batu 7 1/2, Jalan Rawang, Selayang, 68100 Batu Caves, Selangor [refer p 1 to 24 AB-1]. This initial award was superseded by another later award of a larger contract when subsequently, the Defendant directed the Plaintiff to provide a quotation for Designing and Building a Shop / Warehouse for 5 Floors and the Plaintiff through a letter of award dated 28 January 2015 has stated the total contract for the proposal for the construction of the 5 storey shop / warehouse worth RM10,243,714.00 excluding Service Tax for a project known as Cadangan Merekabentuk Dan Membina Sebuah Kedai/Gudang 5 Tingkat di Lot 1032, Batu 7 1/2, Jalan Rawang, Selayang, 68100 Batu Caves, Selangor (hereinafter referred to as "the First Contract") (refer to p 25 to 34 AB-1).
[5] By another Letter of Award dated 1 September 2016, the Defendant awarded a second contract for execution and completion of "Cadangan Merekabentuk Dan Membina Sebuah Kedai/Gudang 5 Tingkat di Lot 1032, Batu 7 1/2, Jalan Rawang, Selayang, 68100 Batu Caves, Selangor. Submission of Phase 1 - Extension Works at Gridline 14 - 15/A1 - E" for a contract sum of RM1,060,629.81 (hereinafter referred to as "the Second Contract") (refer to AB9/2075 - 2081).
[6] The Plaintiff issued in total 16 progressive claims to the Defendant where the first dated 2 February 2016 and the 16th Progressive Claim dated 31 July 2016. Then the Plaintiff issued 5 Final Claims dated 31 August 2016, 26 September 2016, 31 October 2016, 30 November 2016 and 13 January 2017.
[7] The Defendant verified and certified all 16 progressive claims and three Final Claims up to the Third Final Claim dated 31 October 2016.
[8] Based on the 2nd Contract, the date of completion is 27 January 2016 but has been extended to 30 May 2017 and confirmed vide the Defendant's letter dated 15 March 2017 (refer page 2727 AB-11).
[9] The Plaintiff left and surrendered the project site on end of March 2017 after completed the works under the project with omissions where the facts are within the full knowledge of the Defendant.
[10] The Plaintiff filed this legal action against the Defendant on the 23 September 2017 in Shah Alam Sessions Court which was then transferred to the High Court of Shah Alam vide an order dated 1 March 2018. In this suit, the Plaintiff claims against the Defendant for unpaid values of works done, loss and/or expenses, and miscellaneous items under the First Contract, while the Defendant has counterclaimed against the Plaintiff for losses and damages under the First Contract and also under the Second Contract.
[11] The Defendant issued two purported certificates of non-completion both dated 7 October 2017, one for each of the First Contract and the Second Contract.
Iss
