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2010 MarsdenLR 1688

HIGH COURT MALAYA KUALA LUMPUR
FITENT SDN BHD – Appellant
Versus
BALLAST NEDAM GROEP NV (M) SDN BHD – Respondent
[Guaman No: S-22-628-2003]



Claims for loss of profit require evidence of wrongful termination; mutual termination denies such claims, limiting recovery to actual incurred costs.

Headnote:(A) Contract Law - Principles regarding mutual termination - Agreement made between parties regarding contract work, including expectations for costs and management - Evidence presented indicates Plaintiff assisted Defendant prior to contract award - Court determines the scope of payment eligibility based on contract termination and actions undertaken. (Paras 1, 4, 21, 29, 32)

(B) Claim for Loss of Profit - Courts emphasize that claims for loss of profit necessitate wrongful termination - Established that mutual termination occurred, denying claims for loss of profits not underwritten by award. (Paras 28, 32)

Facts of the case:
The Plaintiff assisted the Defendant in tendering for a project awarded via a letter of intent. Post-commencement of work, the Plaintiff was mutually terminated from the contract based on a meeting with the Defendant. The Plaintiff claimed RM10,512,709.37, seeking costs and profits.

Findings of Court:
The Plaintiff is entitled only to the actual costs incurred during the execution of the contract work, specifically for Pile Caps, Piers, and Portals. Claims for loss of profits are denied due to the mutual nature of the contract termination.

Issues: Determining entitlements to costs and profits based on mutual contract termination and agreed circumstances during the contract's life.

Ratio Decidendi: The Court ruled that a rightful claim for losses relies on wrongful termination, which was absent; hence, mutual termination limits recovery strictly to executing costs incurred.

Result: The Plaintiff's claim is allowed for actual costs incurred; costs awarded with interest.

Table of Content
1. facts of the contract and parties' actions (Para 1 , 2 , 3 , 4 , 5 , 6)
Balia Yusof Wahi J:

The hearing before me is by way of submissions as agreed by the parties in accordance with O 33 r 2 of the Rules of the High based on the agreed facts and issues as listed in Lampiran 21. The agreed facts are as follows:

1. On 19 October 1999 the Defendant was awarded a contract known as The Construction, Completion and Maintenance of Package 1B - Pembinaan Jambatan Sungai Prai, Jalan Tuju dan Lain-lain Kerja yang Berkaitan.

2. Prior to this award, the Plaintiff had assisted the Defendant in tendering for the Project as detailed in Question and Answer 4 in the Witness Statement of Tai Chong Keng.

3. On 9 March 2000, a Letter of Intent was issued by the Defendant and accepted by the Plaintiff for the construction of Pile Caps, Piers and Portals for RM16,713,752.00. This figure was subsequently increased to RM18,530,010.40. This award did not include any piling work.

4. Sometime in the 2nd half of 2000, the Plaintiff commenced work on the Pile Caps, Piers and Portals.

5. By a letter dated 17 August 2001, the Superintending Officer's Representative instructed the Defendant to remove the Plaintiff from all concrete related works.

6. On 20 August 2001 a meeting was held between representatives of the Plaintiff and the Defendant at which it was agreed that the contract between them would be mutually terminated.

Parties also agree paras 3.1.2 to 3.1.2.8 of John Fredericks Rolfe's witness statement in Question and Answer No. 4.

Parties have further agreed the issues to be determined by this Court as follows:

1. Whether the Plaintiff would be entitled to be paid for all related expenses including management cost from the first day of the Plaintiff's involvement in the project until 21 August 2001.

2. Alternatively, whether, as the Defendant contends, the parties agreed that the Plaintiff would only be paid for the work actually completed to date.

3. If the answer to question 1 is in the positive, whether the Plaintiff is entitled to claim:

a. Loss of the profit from Piling Contract;

b. Management Cost related to the Project (Pre-tender until termination);

c. Actual costs incurred by the Plaintiff in executing the Piles Caps, Piers and Portal Works;

d. Loss of profit from the Substructure Works.

4. The quantum of any item in issue 3 that the Plaintiff is held to be entitled to claim will be assessed by the Deputy Registrar or Senior Assistant Registrar.

Parties has further agreed that the documents in Lampiran 16, 17 and 18 are the pertinent documents that the Court should consider and move this Court to resolve the dispute between them by construing the said documents only. The relevant documents agreed to by the parties are listed as follows:

The documents in Lampiran 16

1) Pages 5 - 19

2) Pages 23 - 24

3) Page 30

4) Page 101

5) Pages 184 - 186

The documents in Lampiran 17

1) Pages 510-519

2) Pages 581 - 582

3) Pages 599 - 600

4) Pages 604 - 605

5) Pages 614 - 618

6) Page 627

The documents in Lampiran 18

1) Pages 262 - 263.

These documents are collectively referred to in a common bundle of documents marked as Lampiran 25.

The Plaintiff is claiming for a total sum of RM10,512,709.37 for loss of profit from the piling contract and the substructure works as well as management costs incurred from the pre tender period till the termination of the contract.

The involvement of the Plaintiff is not denied, and the documents contained in Lampiran 16 in particular pp 5 to 8, pp 11, 12, 13, 14, 15 and 16 are clear evidence of the Plaintiff's involvement and rendering assistance to the Defendant. For example by the said letter dated 5th May 1999 at pp 5 - 7 of Lampiran 16, the Plaintiff supplied drawings and designs and on the location of boreholes for the bridge. There is another letter where the Plaintiff says that they will be giving a set of quotations for complete pricing. The Plaintiff also supplied information on hotel accommodation and the confirmation of hotel boo

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