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2022 MarsdenLR 2827
HIGH COURT MALAYA SHAH ALAM
UNIVERSITI TEKNOLOGI MARA – Appellant
Versus
MAGNA METIER SDN BHD – Respondent
[Civil Suit No: BA-21C-3-10/2019]
The court emphasized strict compliance with contractual notice requirements, determination of breaches, and the consequent impact on claims for damages, resulting in the dismissal of the Original Action and allowance of the Counterclaim.
Headnote:(A) Contracts Act 1950 – Sections 56 and 75 – Liquidated and Ascertained Damages (LAD) – Claim for LAD dismissed due to invalid issuance of Certificate of Non-Completion (CNC) and failure to comply with notice requirements as per contractual clauses. The Plaintiff did not establish the validity of the Default Notice, and special damages were inadequately pleaded. (Paras 38-41)
(B) Evidence Act 1950 – Section 114(g) – Adverse inference – The Court drew an adverse inference due to the Plaintiff’s failure to produce evidence that supported their claims regarding notices sent by registered post. (Paras 24-26)
(C) Estoppel – The Plaintiff's conduct was found to estop them from enforcing alleged breaches, having affirmed the contract by allowing the Defendant’s continued performance and making payments post-breach. (Paras 49)
(D) Counterclaim – The Counterclaim was allowed as the Defendant proved the Plaintiff's breaches of contract, warranting relief in the form of payment and declaration of wrongful termination. (Paras 53, 64)
Facts of the case: The case arises from a construction contract where the Defendant failed to complete a hockey stadium as per terms, leading to disputes over breaches, notices, and termination. The Plaintiff alleged fraud regarding materials but failed to substantiate this claim. (Paras 1-10)
Findings of Court: The Court held that the Plaintiff’s failure to comply with contractual notice requirements invalidated claims for LAD and led to a determination in favor of the Defendant’s Counterclaim for wrongful termination and payment. (Paras 64)
Issues: The primary issues include the validity of notices, performance failures, and the Plaintiff's burden to prove special damages and fraud. (Paragraps 16, 41)
Ratio Decidendi: The findings underscore the importance of compliance with contractual procedures for claims of damages and recognize that the failure to produce supporting evidence results in negative inferences and admissibility issues related to documentation. (Paras 24-25, 38-39)
Result: Original Action dismissed; Counterclaim allowed with orders for payment and declaration of wrongful termination. (Para 64)
JUDGMENT
A. Background
[1] By way of a "Surat Setujuterima Tender" dated 14 October 2011, the plaintiff in this case (Plaintiff) had appointed the defendant company (Defendant) to, among others, design and build a hockey stadium (Works) in the Plaintiff's "Sports Centre" in Shah Alam, Selangor Darul Ehsan (Site).
[2] The agreement between the Plaintiff and Defendant with regard to the Works (Contract), consists of, among others, the "Condition of Contract for Design and Build Contract, PWD Form DB (Rev. 2007)" (COC).
[3] The Defendant had appointed Aiman Platinum Sdn. Bhd. (APSB) as a sub-contractor to perform the Works.
[4] The Plaintiff had sent a warning letter to the Defendant dated 21 May 2012 [Plaintiff's Warning (Safety Signage)] which stated as follows, among others:
(1) the Defendant had failed to install a safety signage at the Site (Safety Signage); and
(2) the Defendant was given 7 days from the date of the Plaintiff's Warning (Safety Signage) to install the Safety Signage.
[5] There was a delay by the Defendant in the Works [Delay (Works)] as follows:
(1) the Plaintiff's letter dated 21 January 2013 to the Defendant [Plaintiff's Warning (21 January 2013)] had stated as follows, among others -
(a) the Defendant did not proceed with the Works diligently; and
(b) the Defendant was required to provide to the Plaintiff a reasonable explanation for the Delay (Works) within 14 days from the date of the Plaintiff's Warning (21 January 2013);
(2) according to the Plaintiff's letter dated 21 June 2013 to the Defendant [Plaintiff's Warning (21 June 2013)], among others -
(a) notwithstanding two earlier warnings given by the Plaintiff to the Defendant regarding the Delay (Works), the Defendant had not proceeded diligently with the Works; and
(b) the Defendant was required to provide to the Plaintiff a reasonable explanation for the Delay (Works) within 14 days from the date of the Plaintiff's Warning (21 June 2013);
(3) the Plaintiff had issued a Certificate of Delay and Extension of Time No. 1 dated 18 July 2013 to the Defendant (CDEOT). The CDEOT stated as follows, among others -
(a) the Delay (Works) was due to the delay in obtaining the development order for the Works from the local planning authority, "Majlis Bandaraya Shah Alam"; and
(b) an extension of time of 182 days up to 27 March 2013 (Extended Completion Date) was given by the Plaintiff for the Defendant to complete the Works; and
(4) a Certificate of Non-Completion dated 10 October 2013 was issued by the Plaintiff to the Defendant (CNC). According to the CNC, among others -
(a) the Defendant had failed to complete the Works on the Extended Completion Date (27 March 2013); and
(b) in accordance with clause 45 COC (Clause 45), the Defendant was required to pay Liquidated and Ascertained Damages (LAD) at the rate of RM1,310.00 per day to the Government (not the Plaintiff).
[6] The Plaintiff alleged that a letter dated 30 January 2014 had been sent to the Defendant (Default Notice). According to the contents of the Default Notice, among others -
(1) as the Defendant had not proceeded with the Works diligently, the Works would not be expected to be completed on the Extended Completion Date (27 March 2013);
(2) the Defendant was required to perform diligently the Works within 14 days from the date of the Defendant's receipt of the Default Notice or within reasonable time and if the Defendant failed to do so, the Plaintiff would terminate the Defendant's employment under the Contract;
(3) the Default Notice stated that the Default Notice was sent by the Plaintiff to the Defendant by registered post; and
(4) the Default Notice was signed by Sr. Hajah Zuraida Yahya (Sr. Hajah Zuraida), the director of the Plaintiff's Facilities Management Office.
The Defendant had denied receipt of the Default Notice. Hence, the Default Notice was marked as a "Part C" document under O 34 r 2(2)(e)(ii) of the Rules of 2012 (RC). I will discuss the admissibility of the Default Notice in paragraph
