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2014 MarsdenLR 2466
HIGH COURT MALAYA SHAH ALAM
KC LEONG HOLDINGS SDN BHD – Appellant
Versus
DATIN MOH BEE LING – Respondent
[Civil Suit No: 22-1575-2007]
Key principles established include the binding nature of oral contracts in construction, the methodology for calculating costs, and the inability to claim damages for defects without cogent evidence linking them to the contractor's negligence.
Headnote:(A) Civil Law Act 1956 - Section 11 and Contracts Act 1950 - Section 74 - Building contract - Claim for final payment and cross claim for defects - Plaintiff completed two bungalows for Defendant but claimed outstanding payments; Defendant counter-claimed for defective work and costs - It was established that the Plaintiff's method of cost calculation was consistent with earlier projects, and the terms of the verbal contract were binding. The court found the Defendant had not sufficiently proven their claims for defects or damages, holding the Plaintiff liable only for the agreed cost of the project. (Paras 61-70)
(B) Building contract interpretation - The nature of the oral building contract was identified as traditional, affirming that the contractor's obligations extend to work completed in a good and workmanlike manner. The court held that existing contractual duties override claims of tortious negligence regarding defective performance under this specific contract. (Paras 32, 44)
Facts of the case:
The Plaintiff was contracted to construct two luxury bungalows for the Defendant but faced a claim for final payment of RM 1,010,767.20 and a counterclaim of RM 1,065,370.92 for alleged defects and losses due to non-execution of work. The dispute involved an interpretation of costs, scope of work, and claims of defects arising post-completion.
Findings of Court:
The Plaintiff was found entitled to a final payment amounting to RM 327,982.53 after adjustments for prior payments and minor rectifications approved by the Defendant. The Defendant's counterclaims for additional damages were rejected due to lack of evidence.
Issues: Determination of proper costs payable for completed work, breach of contract by the Plaintiff, and the validity of the Defendant's cross claims for damages and rectification costs.
Ratio Decidendi: The court ruled that the Plaintiff's calculations were consistent with prior agreements, and the defects claimed by the Defendant were not satisfactorily proven as the direct result of the Plaintiff's actions or omissions, thereby limiting liability to the contracted scope of work.
Result: Judgment for the Plaintiff in the sum of RM 327,982.53; Defendant's cross claims dismissed.
| Table of Content |
|---|
| 1. overview of the construction dispute (Para 1 , 2 , 3 , 4 , 5) |
| 2. background facts of the construction project (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15) |
| 3. plaintiff's claims for payment (Para 16 , 17 , 18 , 19) |
| 4. defendant's counterclaims and defenses (Para 20 , 21) |
| 5. court's analysis on rights and obligations (Para 22 , 23 , 24 , 25 , 26 , 27 , 28) |
| 6. court's observations on oral contract terms (Para 29 , 30 , 31) |
| 7. determination of contract nature (Para 32 , 33 , 34 , 35) |
| 8. court’s ruling on final claims and assessments (Para 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43) |
| 9. defective work analysis (Para 44 , 45 , 46 , 47 , 48 , 49 , 50) |
| 10. cross claims evaluation and court's conclusions (Para 63 , 64 , 65 , 66) |
[1] This is a typical building contract case on a claim for final payment of completed work to be met with a cross claim for incomplete and defective work done.
[2] The Plaintiff is the main contractor for the construction of 2 luxury bungalows for the Defendant.
[3] The Defendant is the owner of 2 plots of land known as Lot LB69A and bearing postal address 42A and 42B Jalan U1/6, Glenmarie Court, 40150 Shah Alam ("the Land"). The 2 bungalows (collectively "Project" and individually "Unit 42A and Unit 42B") were built on the Land.
The Trial Process
[4] The trial consumed 6 days. The first tranche was heard on 5 to 8 November 2012 before Hinshawati Yunus J and I heard the second tranche on 7 to 8 April 2014. The trial documents were marked as Bundles A to D9 which included the documentary evidence in Bundles B1, B2 , B3 , B4 , B5 and exhibits P1, P2, D3 (A) to (C), D4, D5, D6, D7, D8 and D9. The following witnesses testified at the trial for the respective parties:
i) William Yap Ying Long (PW1), manager of the Plaintiff;
ii) Datin Moh Bee Ling (DW1), the Defendant herself;
iii) Ir Ng Khaim Choo (DW2), a civil engineer who is the Defendant's expert witness on civil and structural engineering;
iv) Sr Tony Thang Boon Eng (DW3), a registered and chartered quantity surveyor from TAQ-Surveyors who is the Defendant's expert witness on construction costs;
v) Lim Yu Meng (DW4), the sole proprietor of Walk and Turn Builders and the Defendant's rectification contractor for general works;
vi) Chew Hun Wei (DW5), the sole proprietor of Citipool Services and the Defendant's rectification contractor for the swimming pool; and
vii) Lim Teck Peng (DW6), the director of Max Stone Grind Sdn Bhd and the Defendant's rectification contractor for granite flooring.
[5] After the close of the trial, the parties submitted their respective written closing arguments in chief and in reply. There were oral clarifications held with counsel on 3 and 18 June 2014.
Background Facts
[6] The Defendant had earlier in 2004 before embarking on this Project engaged the Plaintiff to construct a luxury bungalow situated in the same vicinity as the Project bearing postal address 4 Jalan U1/10A Glenmarie Court , 40150 Shah Alam ("Unit 4").
[7] In mid 2005, the parties by an oral agreement entered into the building contract for the construction of this Project.
[8] The professional consultants that undertook the design and made the necessary building plan submission for the Project were Arkitek Barubena and Jurutera Perunding HAL for the architectural works and the engineering works respectively.
[9] The permission to commence the construction work of the Project was obtained from the Majlis Bandaraya Shah Alam on 31 May 2006.
[10] The Plaintiff completed the construction work of the Project by July 2007 and the Certificates of Completion and Compliance were issued by Ar Goh Kay Cheong of Arkitek Barubena on 15 February 2008.
[11] There was the inspection and handover meeting of the Project held on 7 July 2007 and 6 August 2007 that were attended by both parties and Ir H'ng Ah Lep of Jurutera Perunding HAL.
[12] The Defendant took possession of both Unit 42A and Unit 42B on 7 July 2007 and the Plaintiff did not thereafter undertake any rectification of defective wor
