Parties in a construction contract cannot claim penalties for delays if their actions contributed to the continuance of those delays, establishing the 'prevention principle'.

JUDGMENT

Lim Chong Fong J:

Introduction

[1] This is a suit on claims for balance payment of completed construction work and prolongation costs as well as cross claims of backcharges and liquidated damages for late work completion of railway track work in Selangor.

[2] The Plaintiff is a private limited company specialising in all manner of railway track engineering works business.

[3] The Defendant is also a private limited company specialising in railway track construction, rail bridges and other railway engineering business.

Preliminary

[4] The Plaintiff instituted this suit on 12 June 2019 against the Defendant for breach of contract and claimed the following:

(i) the balance sum of the Plaintiff's certified works amounting to RM640,379.19;

(ii) interest at a rate of 5% per annum from 30 September 2017 until full settlement;

(iii) prolongation costs of RM2,871,669.00;

(iv) interest at a rate of 5% per annum from 1 June 2018 until full settlement by the Defendant;

(v) general damages as a result of the Defendant's breach of contract;

(vi) costs of this action; and

(vi) any other relief as this Honourable Court thinks fit and reasonable.

[5] In opposition, the Defendant counterclaimed against the Plaintiff for breach of contract for the following:

(i) damages fixed at a sum of RM228,000.00 as a result of the Plaintiff's delay in completing the contract works;

(ii) liquidated and ascertained damages for the sum of RM897,289.95;

(iii) interest at a rate of 5% per annum on the sums of RM897,289.95 and RM228,000.00 from the date of judgment until full settlement;

(iv) general damages;

(v) costs; and

(vi) any other reliefs as this Honourable Court thinks fit and reasonable.

[6] The trial of this suit took 3 days on 16 to 17 February 2021 and 29 March 2021 on a chess-clock limited examination time of 7 hours allocated to each party subject to such further extension of time with the leave of the Court. The parties completed the trial well within the prescribed time.

[7] The trial documents are marked as bundles A to T which included the documentary evidence in bundles B to F and bundles J to T. By consent of the parties, the documentary evidence in bundle B carried status A whilst the rest in bundles C to F and bundles J to T carried status B within the meaning ascribed in Melawangi Sdn Bhd v. Tiow Weng Theong , 2020 MarsdenLR 538 .

[8] The Plaintiff called the following witnesses who gave sworn testamentary evidence:

(i) James Anthony Dass (PW1) who adduced both his main witness statement (PW1-WS) and rebuttal witness statement (PW1-WS(A)) under examination in chief; and

(ii) Kesavan a/l Krishnan (PW2) who adduced his witness statement (PW2-WS) under examination in chief.

[9] The Defendant called the following witnesses who also gave sworn testamentary evidence:

(i) S Gumasundari a/p Subramaniam (DW1) who adduced her main witness statement (DW1-WS) and rebuttal witness statements (DW1-WS(A) and DW1-WS(B)) under examination in chief; and

(ii) Tiruchirapalli Sundaresan Natrajan (DW2) who adduced his man witness statement (DW2-WS) and rebuttal witness statement (DW2- WS(A)) under examination in chief.

[10] In addition and by consent of the parties, I appointed Sr. Lim Kok Sang (CW1) to guide the Court on the assessment of prolongation costs and expenses claimed by the Plaintiff who adduced his expert opinion report dated 30 June 2020.

[11] After the close of trial, the parties submitted their written submissions in chief and written submissions in reply as directed followed by oral submissions by counsel on 28 June 2021. The parties thereafter submitted further written submission with leave of the Court.

[12] Now having considered all the evidence adduced and submissions presented by the parties, I hereby give my decision below together with the supporting grounds.

Background Facts

[13] The Defendant in consortium with Skypark Link Sdn Bhd is the main contractor for the construction and completion of the project described as "Project Landasan Keretapi Dari Subang Jay