A clause permitting omission of works cannot justify complete termination of a contract without reasons; contracts must be interpreted in context to avoid absurd results.

[1] Pursuant to O 33 r 2 of the Rules of the High 1980 which provides that "The Court may order any question or issue arising in a cause or matter, whether of fact or law or partly of fact and partly of law, and whether raised by the pleadings or otherwise, to be tried before, at or after the trial of the cause or matter, and may give directions as to the manner in which the question or issue shall be stated", the defendant (appellant in this appeal) applied to the Court below for the following preliminary question to be tried.

"Adakah kl 19. 0 Appendix A - Supplementary Terms and Conditions memberi kuasa ataupun hak kepada defendan untuk mengeluarkan segala skop kerja plaintif di bawah kontrak kecil. "

[2] The pertinent background facts, as found by the Court below and against which there is no dispute, could be summarised as follows. By letter of award dated 12 March 2004 (see p 52 of the Appeal Record), the appellant appointed the respondent as its subcontractor to execute certain building, mechanical and electrical works for a project known as" Cadangan Pembangunan Perumahan Angkatan Tentera di atas Tanah Milik Kerajaan di atas Lot PT 2082 Mukim Ampang, Kuala Lumpur" (hereinafter referred to as the subcontract works). However, the respondent could not execute the subcontract works, by reason that required piling works remained unfinished. Thereafter, the appellant invoked cl 19 of Appendix A to the letter of award, which read as follows:

"We reserve the right to omit wholly or in part of the works from the subcontract. The omissions of works prescribed may be deducted from the subcontract sum. No claim whatsoever will be entertained for such omissions. "

[3] In its letter dated 2 December 2004 (see 146AR), the appellant notified the respondent as follows:

"... we hereby invoke cl 19. 0 of Appendix A - Supplementary terms and Conditions and hereby give you notice that you are omitting wholly the works awarded to your goodselves under the above subcontract.

In view thereof, kindly suspend all works on site until any further instructions or notice from us. In meantime, kindly submit your claims for works carried out to date on or before 7 December 2004. "

[4] In response, on 9 December 2004, the respondent submitted (see 148AR) a claim for work already done and for alleged losses (alleged loss of profits not included). In September 2005, the respondent filed suit against the appellant. In relation to the preliminary question, which was answered against the appellant, the Court below held that cl 19 only permitted variation of the subcontract works but not termination of the subcontract without reason or justification (see p 13 of the Rekod Rayuan Tambahan).

[5] Before us, it was argued by learned counsel for the appellant that the preliminary question was so framed that it had to do with the omission of works but not termination of the subcontract, that cl 19 concerned the omission of works, that cl 19 clearly provided that the appellant could "omit wholly or in part of the works", that the omission of works, be it wholly or in part, did not result in termination of the subcontract, and that the Court below erred when it approached cl 19, as it did, as a termination clause.

[6] Learned counsel for the appellant further contended that whilst "termination brings a contractual relationship to an end", the instant omission of works was pursuant to a contractual provision, that cl 19 did not stipulate that the appellant must give reasons for the omission of works, that since the respondent was not obliged to execute omitted works there could be