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2015 MarsdenLR 200

HIGH COURT MALAYA KUALA LUMPUR
HASRAT IDAMAN SDN BHD – Appellant
Versus
MERSING CONSTRUCTION SDN BHD – Respondent
[Civil Suit No: S2-22-157-2007]



The party claiming payment for additional works must prove those works were instructed and supported by contractual arrangements.

Headnote:This judgment addresses a contract dispute involving claims for additional works in a sub-contract relationship. The Court analyzes the legal framework under which the plaintiff claims payment for additional works purportedly instructed by the defendant. It ultimately finds that the defendant did not instruct additional works, and the claim is dismissed. The Court concluded: 'The plaintiff has failed to discharge the burden of proving its case on a balance of probabilities'.

Table of Content
1. details of contract arrangements and claims. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9)
2. defendant's position on claim validity. (Para 30 , 31 , 32 , 33 , 34 , 35 , 36)
3. evaluation of claims against contractual obligations. (Para 43 , 44 , 45 , 46 , 47 , 50 , 51 , 55 , 56)
4. final decision and rationale for dismissal. (Para 75)
JUDGMENT

Mary Lim Thiam Suan J:

Facts

[1] By letter dated 7 September 2001, DRB-HICOM, as contractor, appointed a company known as Azamme Sdn Bhd (Azamme) to carry out works in relation "Electrified Double Track Project between Rawang and Ipoh (Infrastructure Works) (the project). The works comprised two elements, the relocation of utilities and the Horizontal Directional Drilling Works (HDD) works. Azamme, as the "specialist sub-contractor", sub-contracted the project to the defendant as principal sub-contractor vide letter dated 29 September 2001.

[2] According to the plaintiff's re-amended statement of claim, by letter dated 15 October 2001, the plaintiff was appointed by the defendant as a sub-contractor only for the works in relation to "Utilities Relocation for Electrical Works (TNB)" (the works) for a contract price of RM5,379,806.25 (sub-contract). This means that the HDD works were not sub-contracted to the plaintiff. Such works remained and were executed by the defendant themselves.

[3] The letter of award of this sub-contract required the Interim Conditions of the specialist sub-contract, technical specifications, working drawings, interim bill of quantities, interim payment schedule, interim programme, letter of award of the specialist sub-contract dated 7 September 2001, and 29 September 2001, and any other documents that are identified, signed and agreed by both DRB-HICOM and Azamme as forming part of the specialist sub-contract works, or bound as an attachment to the above letters of award of specialist sub-contract, "to be deemed to form and be read and construed as part of this sub-contract". The contracts between DRB-HICOM and Azamme dated 7 September 2001 and 29 September 2001 between Azamme and the defendant are the specialist sub-contracts that were envisaged.

[4] The plaintiff claimed that it had completed the works and a joint measurement had been conducted by the consultants. That joint measurement is said to have verified the extent of the plaintiff's works. The plaintiff had made progress claims via 115 claims certificates amounting to RM9,779,933.52. In its re-amended statement of claim, the plaintiff pleaded that the defendant had paid a total amount of RM7,331,103.76. With another sum of RM138,665.00 conceded by the plaintiff as being appropriate to be deducted as contra, the balance due and outstanding was a sum of RM2,310,164.76. The present claim is for that sum.

[5] The claim is disputed. In defence, the defendant claimed that the contractual arrangements with the plaintiff have to be read together with the contracts between DRB-HICOM and Azamme and between the defendant and Azamme. From these arrangements, the plaintiff was to be paid according to actual quantities and upon re-measurement which have been certified by the consultants of DRB-HICOM. The defendant claimed that the plaintiff had been duly paid; in fact the plaintiff had been overpaid but the defendant decided against reclaiming the overpayment.

[6] The defence made some mention as to how around 2 June 2005, the principal contract was returned to the Government of Malaysia, the owner/employer of the project. UEM Construction Sdn Bhd was subsequently appointed to complete the project. The defendant then alluded to settlement arrangements between the parties involved after the Government had taken back the project. The details of those arrangements are not important or relevant for the purpose of this case.

[7] Insofar as the actual defence to the claim is concerned, the defendant denied having instructed or issued any variation orders for any additional work. It is the defendant's claim that because s

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