JUDGMENT

1. This is my JUDGMENT in respect of the plaintiff's claim against the defendants for breach of earth filling agreement and the counterclaim of the 1st defendant in respect of the same agreement.

2. In brief, the 1st defendant employed the plaintiff as main contract pursuant to an earth filling agreement, for the sum of RM3.4 million. The plaintiff subcontracted it to the 2nd defendant for the sum of RM3.2 million. The plaintiff was to benefit a sum of RM200,000.00. This did not happen, notwithstanding the plaintiff has paid RM700,000.00 and hence this claim. The plaintiff's version is as follows:

(a) it is the plaintiff's contention that prior to the execution of an earth filling agreement between the plaintiff and the 1st defendant and issuance of a letter of award by the plaintiff to the 2nd defendant, there exists an oral agreement between plaintiff, 1st and 2nd defendants. The oral agreement was that the 1st defendant (as employer) would engage plaintiff as their contractor to clear, earth-fill and level (hereinafter referred to as "the said work") Lots 565, 592 and 593 all of Block 4 Muara Tebas Land District (hereinafter referred to as "the said lands") belonging to the 1st defendant, on condition that the plaintiff would engage the 1st defendant's nominated subcontractor ie, the 2nd defendant as the plaintiff's subcontractor to actually carry out the said work for the plaintiff. Payment to the plaintiff by the 1st defendant will be made back to back immediately upon the 2nd defendant receiving its payment from the plaintiff.

(b) the said oral agreement was reached by Ms. Anne Kung, the executive director of the plaintiff, and the 3rd defendant, the common director of the 1st and 2nd defendants.

(c) subsequently, on 18-11-1997 the 2nd defendant submitted their first interim payment of RM900,000.00 to the plaintiff for part of the said work done and the plaintiff paid the 2nd defendant RM700,000.00.

(d) on 20-11-1997, the plaintiff submitted their progress claim No. 1 to the 1st defendant for a value of work done as at 15-11-1997 of RM1 million. However, the 1st defendant refused to pay the plaintiff the sum of RM1 million or any part thereof, which the plaintiff is entitled to.

(e) it is the plaintiff's contention that because of the 1st defendant's refusal to pay the plaintiff the sum of RM1 million, the 1st defendant is in breach of the earth filling agreement and by its non-payment has repudiated the earth filling agreement.

(f) the plaintiff contends that the 2nd defendant through the 3rd defendant has induced the plaintiff to pay the 2nd defendant a sum of RM700,000.00 while at all material times the 2nd defendant knew that the 1st defendant would not pay the plaintiff at all. Therefore, the plaintiff is entitled to the return of RM700,000.00 from the 2nd defendant for fraudulent misrepresentation.

(g) also, it is the plaintiff's contention that they are entitled to claim a pre-liquidated damages of RM50,000.00 from the 2nd defendant for non completion of the said work on the ground that the 2nd defendant should have undertaken and completed the said work on 18-01-1998. However, the 2nd defendant had abandoned the said work after receiving the payment of RM700,000.00 from the plaintiff.

3. The defendants deny the said oral agreement, the liability and quantum as alleged by the plaintiff.

The 1st defendant's version, inter alia , is as follows:

(a) the 1st defendant entered into the earthfilling agreement with the plaintiff to pay the plaintiff RM3.4 million to complete the earthfilling works within 3 months from date of handing over of possession of the site.

(b) possession of the site was handed to the plaintiff upon execution of the earthfilling agreement.

(c) the plaintiff wanted the 2nd defendant to sub contract the earthfilling works and awarded the earthfilling works to the 2nd defendant pursuant to the letter of award.

(d) there was no oral back to back agreement with the plaintiff in terms of payment of the contr