JUDGMENT

Azimah Omar JCA:

A. Introduction

[1] This is an appeal against the decision of the learned Judicial Commissioner ("Learned JC / LJC") after a full trial. The Learned JC had dismissed the Appellant's claim against the Respondent for breach of a construction contract primarily for liquidated ascertained damages ("LAD") for delay and damages for failure to perform the contract.

[2] This appeal was also filed against the curious decision of the Learned JC for allowing the Respondent's counterclaim for a declaration that the contract was unlawfully terminated by the Appellant and as a consequence, the Appellant was not entitled to any payment of LAD. Instead, the Learned JC found that Respondent must be paid for its unpaid works in the sum of RM1,654,195.58 as stated in the Final Account.

[3] The Appellant-Plaintiff was the employer for a development project while the Respondent-Defendant was the main contractor who had undertaken to carry out the development project.

B. Background Facts

[4] For better understanding of the issues involved in this appeal, it is apt that the background facts and the chronology of events which had led to the appeal be first laid out. For purposes of this grounds of judgment, the parties will be referred to in their capacities as they were at the High Court .

[5] By a Letter of Acceptance dated 14 August 2014 ("LOA"), Majlis Bandaraya Pulau Pinang ("the Plaintiff / MB Penang") had appointed Sagamuda Civil Sdn Bhd ("the Defendant / Sagamuda") as the main contractor of a project known as the Proposals to Rehabilitate the Infirmary in Jalan Sungai, Penang ("Project") for a contract sum of RM8,240,000.00. Subsequent to the LOA, the parties thereafter executed a formal contract dated 15 September 2014 ("PAM Contract").

[6] It is undisputed that the PAM contract entered between the Plaintiff and the Defendant adopted the Agreement and Conditions of PAM Contract 2006 (With Quantities) ("COC").

[7] It is also not in dispute that by cl 7 of the LOA and Appendix of the COC, the parties had agreed that the Date of Commencement of Works of the said Project shall be 15 September 2014, while the Date of Completion of the Project falls on 14 September 2015.

[8] For purposes of carrying the construction works under the PAM contract, cl 3.5 of the COC prescribes that the Defendant (as the main contractor) is required to submit their Works Program ("WP") to the Plaintiff (the employer). The WP would entail or set out the proposed schedule of works and the order or the sequence of works to be carried out by the Defendant namely; in respect of (i) Piling Work; (ii) Building Work; (iii) Mechanical and Electrical Work and (iv) External Work.

[9] As required under cl 3.5 of the COC, on 9 September 2014 the defendant submitted its WP to the plaintiff. The unchallenged fact remains that the Defendant was lagging behind the time schedule and from the outset did not comply with the timeline set out in the WP. The Defendant in actual fact struggled to timeously perform its obligations under the PAM contract. Res ipsa loquitur, the Defendant was in critical and serious delay in its construction works and was in dire straits to complete the project.

[10] The Defendant's delays in carrying out the construction works under the project can be clearly demonstrated in Table A below (with extracts from the WP).

(WP can be found at p 632 of encl 5, Bundle 2B-Bahagian C.)

[11] A cursory glance of Table A above would be sufficiently revealing that the Defendant had indeed failed to carry out its works regularly and diligently according to the WP.

[12] Due to the critical and significant delay in the construction works on the part of the Defendant, it is therefore not surprising that the Plaintiff posited that the Defendant had failed to perform its obligations under the PAM contract namely; to complete the project by the completion date of 15 September 2015.

[13] For purposes of accruing LAD, on 14 September 2015 the Architect issued the Certifica