The 1st Defendant was liable for liquidated damages, and the court found no duty of care owed by the 2nd and 3rd Defendants to the Plaintiff.

(Appeal To High Court Against Sessions Court's Decision After Trial)

Wong Kian Kheong J:

Background

[1] In this judgment, I shall refer to parties as they were in the Sessions Court (SC).

[2] The first defendant company (1st Defendant) was the employer of a construction project in Malacca City (Project). Regarding the Project-

(1) on behalf of the 1st Defendant, the second defendant company (2nd Defendant) issued a "Letter of Award" dated 20 December 2017 (LA) to the plaintiff company (Plaintiff) wherein the 1st Defendant had appointed the Plaintiff to do the "Design, Fabrication, Construction and Installation of Entrance Statement" in the Project (Works). The following provisions in the LA are relevant-

(a) clause 2 LA (cl 2) stated that the "Date of Commencement" of the Works (Commencement Date) would be notified by the "Superintending Officer" (SO) and the Works "shall be completed" within 4 months from the Commencement Date (Completion Date);

(b) clause 3 LA (cl 3) provided that the contract between the Plaintiff and 1st Defendant "shall" be based on, among others, "Contract Agreement and Conditions of Quotation" as attached herein;

(c) according to cl 5 LA (Clause 5), if the Plaintiff failed to complete the Works within the stipulated time or any extended time period for completion of the Works (EOT) and the 1st Defendant's "Representative" had issued a "Certificate of Non-Completion" (CNC), the 1st Defendant "shall" be entitled to recover "Liquidated Damages" (LD) from the Plaintiff at the rate of RM2,085.00 per day; and

(d) clause 6 LA (cl 6) provided that "payment shall be paid progressively" according to "progress claim" (PC) submitted on a monthly basis and within 45 days of the "interim certificate of payment" (ICP) presented to the 1st Defendant;

(2) the 2nd Defendant was appointed by the 1st Defendant as the architect (Project Architect) and SO for the Project;

(3) the 1st Defendant had appointed the third defendant company (3rd Defendant) as the Quantity Surveyor (QS) in the Project (Project QS); and

(4) TDC Engineering Consultants Sdn Bhd (TDC) was appointed by the 1st Defendant as the Project's Engineer.

[3] The 2nd Defendant as the SO had notified the Plaintiff that the Commencement Date was 6 April 2018. As such, the Completion Date was 5 August 2018.

[4] For the first PC issued by the Plaintiff for a sum of RM177,282.00 (1st PC), the 3rd Defendant valued the Works stated in the 1st PC as RM143,514.00 [Valuation (1st PC)]. The 2nd Defendant then issued an ICP for an amount of RM143,514.00 (1st ICP). The 1st Defendant had paid the Plaintiff with regard to the 1st ICP. There was no dispute regarding the Valuation (1st PC) and 1st ICP.

[5] The Plaintiff issued a second PC for a sum of RM660,300.00 (2nd PC) for which the 3rd Defendant valued the Works claimed in the 2nd PC at RM345,257.70 [Valuation (2nd PC)]. On 20 June 2018, the 2nd Defendant issued a second ICP on 20 June 2018 for an amount of RM345,257.70 (2nd ICP). The 1st Defendant only paid RM97,563.04 to the Plaintiff in respect of the 2nd ICP.

[6] The Plaintiff had issued a "Variation Order" (VO) no 1 on 29 May 2018 for a sum of RM130,000.00 in respect of additional works requested by the 1st Defendant (1st VO). There was no dispute regarding the 1st VO.

[7] The local authority, "Majlis Bandaraya Melaka Bersejarah" (Local Authority), only gave a permit for the Works on 3 July 2018 (Local Authority's Permit).

[8] The 2nd Defendant issued a CNC on 6 August 2018 [after the Completion Date (5.8.2018)].

[9] A third PC in a sum of RM312,228.30 was issued on 14 August 2018 by the Plaintiff (3rd PC). The 3rd Defendant had initially valued the Works stated in the 3rd PC as RM120,711.87 [1st Valuation (3rd PC)]. The 3rd Defendant however subsequently revised the 1st Valuation (3rd PC) and re-valued the Works claimed in the 3rd PC at RM80,001.24 [Revised Valuation (3rd PC)]. A third ICP for an amount of RM80,001.24 was issued on 14 September 2018 by the 2nd Defendant (3rd ICP