A contractor must satisfactorily complete work for entitlement to claim retention sums, and counterclaims for incomplete works require substantial evidence.

[1] The Plaintiff instituted two suits against the Defendant to recover the total retention sum of 5.0% (2.5% under each suit) under Contract Agreement dated 3 May 2016 (Exhibit P-1, pages 1 to 10 Bundle F). The two (2) suits instituted by the Plaintiff are set out as below:

(a) Ipoh Sessions Court Civil Suit AA-A52NCVC-24-02/2019 ("Suit 24");

(b) Ipoh Sessions Court Civil Suit AA-A52NCVC-153-09/2019 ("Suit 153").

Suit 24 is in respect of Plaintiff's claim for the first 2.5% retention sum of RM270,701.19 which was due on 14 July 2018.

Suit 153 is in respect of Plaintiff's claim for the other 2.5% retention sum of RM270,701.19 which was due on 14 July 2019.

The Defendant has also instituted a counter claim in Suit 24 against the Plaintiff for failure to complete the rectification of the sewerage reticulation works under agreement dated 28 March 2016 (Exhibit D6, pp 219 to 222 Bundle F).

[2] The cases were heard before Judge Tn Harith Sham with the evidence of PW1, Plaintiff's sole witness and DW1 to DW6. Thereafter, as I was instructed to continue hearing the case, DW6's evidence which was not completed was heard before me after which the Defendant's case was closed.

[3] My decision after the full trial is that the Plaintiff's claim in both Suit 24 and Suit 153 is dismissed. The Defendant's counter claim in Suit 24 is also dismissed. Both parties to bear their own costs for both suits.

[4] Both the Plaintiff and Defendant being dissatisfied with the decision of this Court, are now appealing to the High Court. Three (3) notices of appeal were filed. The Plaintiff filed two (2) separate notices of appeal for Suit 24 and Suit 153 and the Defendant had filed an appeal for the dismissal of the counter claim in Suit 24. As both the cases are derived from the same course of action, I have prepared this Grounds of Judgment to deal with all the appeals.

[5] The facts of the case which are not disputed are as follows:

(i) The said Project was completed with Certificate of Completion and Compliance ('CCC') issued on 14 July 2017 (Exhibit P2 - pages 11-12 Bundle F).

(ii) The defect liability period is 24 months from the date of issuance of CCC (cl 10.1 of the Agreement dated 3 May 2016 ("Building Contract") - (Exhibit P1 - page 1-10 Bundle F);

(iii) Defendant was entitled to retain 5% of the contract price (cl 10.2 of the Building Contract). Defendant has retained the sum of RM541,402.38 as retention sum.

(iv) RM270,701.19 was supposed to be released to Plaintiff on 14 July 2018 (12 months from the date of CCC) and the balance sum of RM270,701.19 on 14 July 2019 (24 months from the date of CCC).

(vi) Defendant had also appointed Plaintiff to do sewerage work vide Agreement dated 28 March 2016 ("Sewerage Contract" - exhibit P6 - page 219 to 222 Bundle F).

[6] Issues to be determined by the Court:

Plaintiff's claim against the Defendant

a) Whether cl 10.2 read together with cl 7.4 of Contract Agreement dated 3 May 2016 (Exhibit P-1, pages 1 to 10 Bundle F) allows the Defendant to withhold payment of the retention sum claimed by the Plaintiff?

Defendant's counter claim

a) Whether the Plaintiff has completed the rectification for the Sewage Reticulation Work to IWK's satisfaction under the agreement dated 28 March 2016 (Exhibit D6, pp 219 to 222 Exhibit F).

b) Whether the Defendant is entitled to claim the total sum of RM172,500.00 for the appointment of third-party contractor to complete the rectification of the Sewage Reticulation work?

[7] The Court's decision

A) Retention sum

The Defendant's defence to the Plaintiff's claim in Suit 24 and Suit 153 is that the Plaintiff is not entitled to claim for the retention sum for two (2) reasons:

(i) The Plaintiff has NOT completed the rectification work for them to be contractually entitled to the rete