Gopal Sri Ram JCA:

[1] The appellants before us were the defendants in the Court below. The respondent was the plaintiff. We will, for convenience, refer to them throughout this judgment as plaintiff and defendants.

[2] On 8 October 1994, the High Court at Johor Bahru entered judgment in the plaintiff's favour for the sum RM804,800 together with interest and costs. The defendants had, in the action brought by the plaintiff, delivered a defence and counterclaim. The learned Judge who tried the action entered judgment on the counterclaim for a sum of RM63,375. This appeal is directed only against so much of the learned Judge's judgment as found for the plaintiff. There is no cross-appeal by the plaintiff against the award made on the counterclaim.

[3] Before dealing with the facts as are relevant to the appeal, there is one matter we may dispose of quite shortly.

[6] Second, Counsel for the defendants before us frankly conceded that the evidence in question was available at the trial. Yet it was not put in. It follows therefore that one of the vital conditions upon which is dependent the exercise of discretion by an appellate Court to permit fresh evidence was absent. (See, Lau Foo Sun v. Government of Malaysia [1970] 2 MLJ 70). The evidence, even if relevant (which is not the case), was not, on the basis of the exercise of discretionary power, admissible.

[7] With that we now turn to consider the background of the factual matrix against which this appeal arose. This has been dealt with at length and with great care by the learned Judge. We therefore find it quite sufficient for this purpose to extract the relevant passages from his judgment.

The plaintiffs' claim against the defendants is for a sum of RM2,461,750 being liquidated damages for the delay in completing 90 units of dwelling houses.

The plaintiffs alleged that by a written agreement dated 11 August 1981, the defendants contracted with the plaintiffs to provide labour for masonary, carpentry and steel bending for the construction of 90 units of dwelling houses to be erected on Taman Sri Setia in Johore Bahru. The 90 units of houses were to be completed within 10 months from date of the agreement, which was 11 June 1982. According to the plaintiffs, the defendants failed to do so, and under cl 27 of the agreement, is entitled to liquidated damages of RM50 per day per house. To support this claim for, RM2,461,750, the plaintiffs based their calculation on the completion of the said house according to a chart, tendered in evidence as P6.

The defendants' defence asserted that they have completed 46 units on the 31 January 1983 and 44 units on the 31 March 1983. Further they alleged that the plaintiffs had breached the agreement by inter alia:

(a) failing t