The developer breached the contract by not making payments for construction, leading the court to award the contractor over RM38 million with applicable interest, emphasizing the validity of the contractor's claims despite performance bond issues.

Introduction

[1] This suit involves the dispute between the Plaintiff as the main contractor and the 1st Defendant ('D1') as the developer of the ambitious M101 Skywheel, a mixed development project with a gross development value of RM1.8 billion and touted as the world's highest SkyMall at a height of 316 m with an MRT station at its door step, retail outlets, SoFo units, designer suites, Asia's first ever Planet Hollywood Hotel and a Ferris wheel on the 52nd floor.

[2] Apart from D1, the 2nd Defendant ('D2') as its sole shareholder and the 3rd Defendant ('D3') and 4th Defendant ('D4') as D1's and D2's Directors were also named as the opponents in this suit.

[3] Although the project was headed for completion by 2020, the parties became embroiled in bitter feuds in adjudication (see CRCC Malaysia Berhad v. M101 Entity Sdn Bhd 2021 MarsdenLR 2359 , arbitration (which was brief) and court proceedings. In this civil suit, allegations of, not only the typical non-payment by D1 for work done by the Plaintiff and wrongful termination of the contract by D1, were raised, but also fraudulent and dishonest conduct by the Defendants and breach of statutory and director duties by D3 and D4.

[4] After having considered the pleadings, oral and documentary evidence, written submissions and oral clarifications by the learned counsels who represented the parties in this suit, I had given my broad findings on the Agreed Issues To Be Tried ('ITBT') for the trial and adjudged that:

(a) the Plaintiff's claim against D1 is allowed;

(b) D1 is to pay the Plaintiff the sum of RM38,277,862.45 consisting of:

(i) RM37,694,650.97 for works done by the Plaintiff under the construction contract;

(ii) RM2,780,560.20 for variation works;

(iii) RM832,527.76 for customised material; and

(iv) RM2,484,883.72 for contractual interest for the late payment of Interim Certificate Nos 3 to 15 (calculated as at 24 July 2020);

(c) setting off in the sum of RM5,514,760.20, being the amount which has been paid by D1 to the Plaintiff for the above sums;

(d) D1 is to pay the Plaintiff interest at the rate of 5% per annum on the total judgment sum of RM38,277,862.45 from 24 July 2020 until full settlement;

(e) the Plaintiff's claim against D2, D3 and D4 is dismissed;

(f) D1 is to pay the Plaintiff costs of RM50,000.00, subject to allocatur;

(g) the Plaintiff is to pay D2 and D3 collectively, costs of RM50,000.00, subject to allocatur; and

(h) the Plaintiff is to pay D4, costs of RM30,000.00, subject to allocatur.

[5] D1 is dissatisfied with my decision as stated in subparagraphs 4(a), (b), (d) and (f) above. As the Plaintiff did not file a Notice of Appeal against my decision, this judgment shall focus on the reasons as to why I allowed the Plaintiff's claim against D1 for the total sum of RM38,277,862.45 with interest and costs.

Background Facts

[6] The Agreed Facts between the Plaintiff and D1, which are relevant for purposes of analysing the ITBT as between these two parties, are as follows.

[7] The Plaintiff is a company incorporated under the laws of Malaysia with a registered address at Suite 20-02, 20th floor, Menara Tan & Tan, 207, Jalan Tun Razak, 50400 Kuala Lumpur.

[8] D1 is a private limited company incorporated in Malaysia with a registered address at Lot 20-ACD, Level 5, Menara Pandan B, Persiaran MPAJ, Jalan Pandan Utama, Pandan Indah, 55100 Kuala Lumpur and business address at Suite 20.01 — 20.04, Plaza 138, Jalan Ampang, 50450 Kuala Lumpur.

[9] D2 is similarly a private l