Denys Roberts CJ:

Preliminary

Brunei Shell Petroleum Company Sdn. Bhd. ("BSP") entered a contract with Haji Malai Mashor General Contractor ("HMMGC") the main contractor, for the execution of civil works, under contract No. 002816/87/EPS.

On 8 November 1988, HMMGC entered a sub - contract, for the performance of part of the works, namely concrete and steel works, with Sharikat Alimah Abdullah Enterprise ("SAAE"). The second defendant, Liew Hwa Ming ("Liew") was the main supervisor of the sub-contract for SAAE.

About 1 November 1988, SAAE, in its turn, appointed the plaintiffs ("Yap" and "Lee") as its sub-contractors under contract 002816/87/EPS. The contract was to last from 1 November 1988 until its completion, which appears to have been at some time in 1990. The plaintiffs submitted their "final account" on 13 November 1990. This was only a verbal contract. Although its terms were not recorded in writing, an undated letter from SAAE, signed by Mohammed Kassim bin Amran ("Kassim") a partner in SAAE, and Liew confirmed the appointment by SAAE of the plaintiffs as sub-contractor for the steelwork. (PBp.55).

The Plaintiffs' Agreement

It was orally agreed by SAAE and the plaintiffs that the cost of all materials other than the cost of steel pipes, which were to be supplied by BSP, should be borne by the plaintiffs. According to paragraph 5 of the defence, the costs were to include labour, transport charges, equipment rentals and any other outgoings. Yap did not dispute in evidence, that the plaintiffs were to bear all the expenses involved in carrying out the contract.

The unit cost prices, showing both what HMMGC would claim from BSP (100%) and what could be claimed by the plaintiffs from SAAE (70%) are set out on p. 60 of the plaintiffs' bundle ("PB"). These were agreed by the plaintiffs with Liew during the discussions which took place between them, prior to the appointment of the plaintiffs as the sub-contractor, to SAAE, for the steel works only.

The arrangement was that the plaintiffs should charge their agreed unit cost price, which was be 70% of the total charged to BSP. 80% of this total was charged by SAAE to HMMGC. 100% was charged by BSP by HMMGC. If the item was approved, 100% would be paid by BSP to HMMGC, which would pay 80% to SAAE.

SAAE kept 10% of the unit cost price which was to be divided equally between Kassim, a partner of SAAE and Liew. 70% of the sum was paid by BSP was to be passed on to the plaintiffs. The latter, however, were to meet all the expenses of the project from the 70% passed to them by SAAE.

This was the original agreement between the parties, varied, so Liew asserts, by a subsequent verbal contract between the parties. This alleged variation will be considered below.

Amount of Claim

There were changes, though none of them were significant, to the various figures contained in the statement of claim.

Based upon the various bills they had submitted to SAAE, the plaintiffs say that the work done by them under the contract amounted to RM310,767.60. This sum was reached on the basis of the agreed unit prices. It was supported by EWO's signed by Liew.

From this sum, the plaintiffs admit, there should be deducted RM119,896.70, which was paid by SAAE either to them, or to other persons by way of disbursements for expenses. The plaintiffs asserts that this left a balance of RM190,890.90 due to the plaintiffs and unpaid.

Defence

SAAE has sought to reduce any sum which is said to have represented the value of the plaintiffs' work under the contract by:

(a) reducing the cost of the work done by the plaintiffs from RM310,767.60 to RM277,713.85; and

(b) deducting various payments made by SAAE, on behalf of the plaintiffs to a value of RM63,783.70.

The deductions at (1) and (2) would leave RM213,930.15.

(c) relying on a later verbal agreement, varying the original agreement, between the plaintiffs and Liew that SAAE would pay to the plaintiffs only 50% of the "net profit". This "net profit" would b