NH Chan JCA:

I have had the advantage of reading the judgment in draft of my lord Abdul Malek Ahmad, JCA and I agree with all that he has said. However (and this is done in support of, and also as an addition (for the sake of clarity only) to, my lord's judgment), I wish to elaborate on the law applicable to the plaintiff's appeal (Civil Appeal P-02-56-96) against the award for liquidated damages by the judge below on the defendant's counterclaim.

The judge below found that the intention of the parties was that time was of the essence of the contract. This is what he said:

The next question I have to consider is whether the completion dates as stipulated in AB32 and AB34 are the essence of the contract. This is a question of law where several authorities were cited by both counsel in their written submissions. The Defendants contend that it is 'yes', whereas the Plaintiff says 'no'. In the Defence to the Counterclaims, he alleges a defence of waiver and acquiescence on the part of the Defendants. From the authorities, it is quite clear to me that whether or not time is of the essence of the agreement depends on the facts and circumstances of each case. Intention of the parties gathered from the instrument itself together with the surrounding circumstance must be looked at (Associated Pan Malaysia Cement Sdn Bhd v. Syarikat Teknikal & Kejuruteraan Sdn Bhd [1990] 3 MLJ 287 SC). The evidence of the Defendants' architect, DW4, and Yap, DW5, clearly show that they had explained to PW1 the contents of the agreement AB31 - 32 and the letter AB33 and 34, especially the completion dates. DW1 has also testified that in his meeting with the Plaintiff before AB32 - 32 was signed, he stipulated the dates of completion which the Plaintiff agreed. He explained to the Plaintiff the essence of completing the works within the time stipulated and the bonus incentive. He also stressed that in the event of any delay by the Plaintiff, the latter would have to pay liquidated damages as per tender document which was in his possession. In the face of the above explanations, it is not reasonable for PW1 to say that the dates referred to in those documents are merely tentative dates of completion. Clearly, from what had transpired between the Plaintiff and DW1 and later confirm by DW4's letter in AB33 - 34, I have to dismiss the suggestion that the dates stipulated in the agreement are tentative. Of course,

this is counsel's suggestion because nowhere in the evidence led by the Plaintiff (except a denial by PW1 that time is of the essence) that these dates are "mere markings of a few tentative dates" for completion of the various stages of the works.

Therefore, from the evidence and the surrounding circumstances of the case, I am satisfied that the time of completion specified in AB32 and 34 is of the essence of the contract.

As the judge has found that the intention of the parties was that time was of the essence of the contract, the law which now applies in this case is s. 56(1) of the Contracts Act 1950.Section 56(1) reads:

56(1) When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract.

Section 56(1) only applies to cases where the parties to the contract have intended that time is of the essence of the contract. In the present case, since the plaintiff (contractor) had failed to complete on time, and time having found to be of the essence of the contract by the judge below, the contract became voidable at the option of the defendant (employer). See Pollock & Mulla: Indian Contract and Specific Relief Acts (11th Edn, 1994) Vol. 1, at p. 694, where it reads:

The use of the word 'voidable' is immaterial.