The court ruled that the Plaintiff failed to prove the existence of the retention sum owed, and the Defendant's counterclaim for negligence was dismissed due to lack of evidence and failure to establish a duty of care.

JUDGMENT

(Full Trial)

Yong Leou Shin SCJ:

A. Introduction

[1] This is a claim for outstanding debts arising from a business relationship involving subcontracted construction works under a public construction project.

[2] The Plaintiff sought judgment against the Defendant for the sum of RM62,287.73, alleging it remained unpaid as the retention sum, along with costs. The Defendant denied liability and counterclaimed RM146,993.96, citing losses from a rejected GST claim.

[3] After a full trial, this court dismissed both parties' claims and ordered each party to bear their own costs.

B. Salient Facts

[4] The Plaintiff and the Defendant were engaged in work under the main contractor, Hakikat Engineering Sdn Bhd ("Hakikat Engineering"), for a construction project undertaken by the Jabatan Kerja Raya (JKR). The project, titled "Cadangan Pembinaan Ibu Pejabat Pertahanan Awam (IPPA), Sungai Merab, Mukim Dengkii, Sepang, Selangoris referred to as the IPPA Project.

[5] The Defendant was awarded subcontract work under the IPPA Project by the main contractor, Hakikat Engineering. When a portion of the IPPA Project required work involving 'Precast Components IBS', the Defendant subcontracted this specific work to the Plaintiff.

[6] On 28 September 2015, the Plaintiff and Defendant signed an "Agreement of Strategic Alliance - Proposed Construction of the Civil Defence Headquarters (IPPA), Sungai Merab, Mukim Dengkii, Sepang, Selangor" based on a Letter of Award.

[7] The Agreement stipulated a total contract value of RM2,814,802.50. Despite the Agreement, the Plaintiff reported to the main contractor, Hakikat Engineering, regarding any "Stop Work Orders" issued during the project.

[8] After 1 year and 6 months of working under the Letter of Award, the Plaintiff, with the consent of Hakikat Engineering and JKR, signed a Deed of Assignment on 14 April 2017.

[9] The Deed of Assignment transferred the obligation for payments owed by JKR for work completed by the Plaintiff under the Letter of Award directly to the Plaintiff. The contractual value under the Deed of Assignment at the time of signing was RM1,526,382.00.

[10] Following the Deed of Assignment, JKR commenced direct payments to the Plaintiff for the 'Precast Components IBS' work performed.

[11] The Plaintiff completed its contractual obligations and received progress payments but alleged that an outstanding amount of RM62,287.73 i.e the retention sum remained unpaid by the Defendant.

[12] In 2018, the Plaintiff filed a claim against the Defendant in the Magistrate's court in Shah Alam for the outstanding amount of RM62,287.73 through Civil Suit No: BA-A72NCVC-2169-10/2018 ("Civil Suit No: 2169").

[13] The Civil Suit No:2169 was later withdrawn by mutual agreement that the claimed amount of RM62,287.73 would be paid after the Defendant received the retention sum from the Jabatan Kerja Raya (JKR).

[14] However, the Plaintiff claimed that no payment was made even after the Project's completion in March 2019. Accordingly, the Plaintiff, through its solicitors, issued a demand letter dated 11 November 2020 requesting the Defendant to pay RM62,287.73 to the Plaintiff.

[15] The Defendant filed a defence denying any indebtedness to the Plaintiff and submitted a counterclaim amounting to RM146,993.96, alleging losses incurred after the Royal Malaysian Customs Department rejected the Defendant's GST claim.

C. Agreed Issues To Be Tried

[16] Agreed issues to be tried (filed vide encl 29) are as follows:

i. Whether the Defendant still owes the Plaintiff the sum of RM62,287.73 under the Contract.

ii. Whether the sum of RM62,287.73 constitutes the retention sum withheld by the Jabatan Kerja Raya under the Contract.

Whether the Jabatan Kerja Raya has released the retention sum, and if so, which party received the retention sum.

iv. Whether the Plaintiff is liable to pay the Defendant's counterclaim for losses and expenses amounting to RM146,993.96.

v. Whether the sum of RM146,993.96 represents the refund of GST input tax to the