In construction contract disputes, claims for damages post-mutual termination may be barred if not preserved in termination terms, and the burden of proof lies on the party asserting damages.

JUDGMENT

Aliza Sulaiman J:

Introduction

[1] This suit involves a protracted and bitter dispute over the Plaintiff's claim for outstanding sums for substructure works which were completed for the construction of serviced apartments in Setapak, Kuala Lumpur.

[2] The Defendant strongly resisted the Plaintiff's claim and brought a counterclaim of its own for among others, liquidated and ascertained damages ('LAD') for alleged delay in the completion of the substructure works and costs of rectification.

[3] After having considered the pleadings, oral and documentary evidence, written submissions and clarification by the learned counsels representing the parties, I had, on 30 August 2024 allowed the Plaintiff's claim in the sum of RM7,230,492.14 and dismissed the Defendant's counterclaim.

[4] The Defendant has appealed against part of my decision in:

(a) allowing the Plaintiff's claim in the sum of RM7,230,492.14 consisting of the following:

(i) RM4,850,814.42 as the balance payment for works done based on the Final Account dated 9 January 2019 with interest at the rate of 5% per annum from 10 June 2019 until full settlement;

(ii) RM193,792.80 as the balance payment for materials supplied;

(iii) RM189,999.92 as interest on the sum as stated in subparagraph (ii) above; and

(iv) RM1,995,885.00 as the balance payment for Variation Orders ('VO');

(b) dismissing the Defendant's counterclaim; and

(c) ordering that costs of RM80,000.00 be paid by the Defendant's contributory, Pelantar Segar (M) Sdn Bhd ('Pelantar Segar') to the Plaintiff.

[5] As the Plaintiff did not file a Notice of Appeal, these grounds of judgment shall deal with the issues which were decided in the Plaintiff's favor while the reasons for accepting the Defendant's submissions on the other issues will only be discussed briefly.

Agreed Facts

[6] The Statement of Agreed Facts for the trial are set out below.

[7] The Plaintiff is a company incorporated in Malaysia and having its business address at No 3, Jalan Medan Taiping 5, Medan Taiping, 34000 Taiping, Perak.

[8] The Defendant is similarly a company incorporated in Malaysia and having its registered address at No 8, Ground Floor, Jalan Bayu Tinggi 2A/KS6, Batu Unjur, 41200 Klang, Selangor and business address at No 15-1, 1st Floor, Jalan Remia 2/KS 6, 41200 Bandar Botanic Klang, Selangor.

[9] The Plaintiff and the Defendant are involved in the construction business.

[10] The Defendant was wound up pursuant to an order of the Shah Alam High Court ('SAHC') dated 14 May 2019 under the Winding Up Petition No BA-28NCC-97/2019 ('Petition 97') filed by Dakota Engineering Sdn Bhd ('Dakota').

[11] The Plaintiff obtained leave from the SAHC vide the Notice of Motion Post-Winding Up No BA-28PW-144-05/2023 on 10 July 2023 to proceed with this action against the Defendant.

[12] By the Letter of Award dated 3 August 2012 ('LoA'), the Defendant appointed the Plaintiff to carry out substructure works ('Works') for a project known as "Cadangan Pembangunan 2 Blok Pangsapuri Servis 16 Tingkat (412 Unit) di atas 7 Tingkat Podium dan Tingkat Bawah yang mengandungi 3 tingkat ruang perniagaan, 4 tingkat tempat letak kereta, 1 tingkat untuk kemudahan-kemudahan penduduk berserta unit kediaman di atas Lot 29094 (PT 7573 & 9462), Jalan Madrasah (Jalan 1/22A) Taman Melati, Mukim Setapak, Kuala Lumpur' ('Project') for the contract sum of RM26,000,000.00.

[13] On 5 December 2013, the Plaintiff and the Defendant mutually agreed to terminate the contract as stated in the Plaintiff's letter dated 5 December 2013 ('Termination Letter').

[14] The Defendant confirmed the mutual termination through its letter dated 9 December 2013 ('Defendant's 9 December 2013 Letter').

[15] On 18 December 2013, SJA Architect ('Architect') issued a Notice of Termination of Substructure Contract to the Plaintiff and the Defendant ('Notice of Termination') following a joint inspection conducted on 17 December 2013.

The Plaintiff's Case

[16] The Plaintiff contended that it has carried out the Works bas