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2022 MarsdenLR 2113
HIGH COURT (KUALA LUMPUR)
LIM CHONG FONG, J
Budaya Restu Sdn Bhd – Plaintiff
Versus
Kerajaan Malaysia – Defendant
CIVIL SUIT NO WA-21C-4-05 OF 2020
Nabilah bt Din (Natasha & Co) for the plaintiff.
Iznie Elyanna Zainal (Jabatan Peguam Negara) for the defendant.
In construction contracts, the contractor bears the burden of proving rock excavation via in-situ soil data and must strictly comply with written notice requirements and provide systematic delay analysis to claim extensions of time or prolongation costs.
Headnote:(A) PWD 203A Conditions of Contract; Contracts Act 1950 - Sections 71 and 75 - Courts of Judicature Act 1964 - Section 15A - Construction contract for sewerage pipe jacking - Rock excavation claim - Burden of proof on contractor to provide in-situ soil investigation data to justify "Extra Over" rates for rock (Paras 43-44) - Interpretation of contract based on objective meaning and the "matrix of fact" available to reasonable persons (Para 33) - Extension of Time (EOT) - Requirement of written notice and systematic delay analysis to establish criticality and efficacy of delay events (Paras 70-73) - Loss and expense claims - Strict compliance with mandatory written notification and proof of direct loss required (Paras 81-84) - Payment certificates - Written application for interim payment is a condition precedent to certification (Para 92).
(B) Liquidated Ascertained Damages (LAD) - Correctly imposed where contractor fails to prove entitlement to EOT or that time was set at large (Paras 74-76).
(C) Arbitration costs - Contractor cannot unilaterally abort arbitration proceedings and claim wasted costs in a subsequent suit (Para 107).
Facts of the case:
A contractor was appointed for a sewerage pipe jacking project. Disputes arose regarding payments for rock excavation, manhole remeasurement, extension of time (EOT), prolongation costs, and the deduction of liquidated damages. The contractor claimed that utilities relocation and rock encounters caused delays and additional costs. The employer denied these, citing the contractor's failure to provide adequate soil reports and notice of delay.
Findings of Court:
The court found the contractor failed to prove the extent of rock encountered through in-situ data, except for a small stretch using a specific method. The manhole claim was rejected as prices had been rationalized. EOT and prolongation claims were rejected due to lack of written notice and failure to provide a critical delay analysis. The employer was found in technical breach for not issuing some payment certificates, but nominal damages were awarded as the contractor had not submitted written applications.
Issues: Whether the contractor was entitled to additional payments for rock excavation; whether the manhole remeasurement claim was valid; whether the contractor was entitled to EOT and prolongation costs; whether the deduction of LAD was justified; and whether the employer was liable for non-issuance of payment certificates.
Ratio Decidendi: The contractor bears the burden of proof to establish soil conditions via in-situ tests to claim rock excavation rates. Entitlement to EOT requires strict adherence to notice provisions and a systematic delay analysis to prove the event was on the critical path. Loss and expense claims under the contract require mandatory written notice and proof of direct loss.
Result: Judgment for the Plaintiff in the sum of RM180,000.00 with interest at 5% per annum from the date of the writ till full settlement and costs of RM25,000.00.
Lim Chong Fong J:
GROUNDS OF JUDGMENT
Introduction
[1]This is a suit that principally concerns the claim for rock excavation alike to that seen in Perwira Bintang Holdings Sdn Bhd v Kerajaan Malaysia [2013] 1 LNS 1336; CA and extension of time, prolongation and idling costs as well as refund of liquidated damages imposed for the completion in respect of a sewerage pipe jacking project in Alor Gajah, Malacca.
[2]The Plaintiff is a private limited company involved in the construction contracting business.
[3]The Defendant is the Federal Government of Malaysia.
Preliminary
[4]In this suit, the Plaintiff claimed for the following:
(i)satu deklarasi bahawa Plaintif tidak sepatutnya dikenakan LAD dan memohon agar Defendan memulangkan semula LAD yang dikenakan sebanyak RM494,716.68 ke atas Plaintif;
(ii)satu deklarasi bahawa EOT no. 3 & No. 4 dibenarkan oleh Defendan:
(iii)tuntutan bagi kerja-kerja tambahan dalam pengukuran semula kuantiti untuk “Extra Over Item carry out Jacking for through Rock” berjumlah RM1,391,000.00;
(iv)tuntutan bagi kerja-kerja tanah tambahan dalam pengukuran semula kuantiti untuk “Extra Over Item Trench Excavation for Excavation in Rock” berjumlah RM150,540.00;
(v)tuntutan untuk kos ujian-ujian yang telah Plaintif jalankan berjumlah RM49,500.00;
(vi)tuntutan untuk “Variation Order for Manshield Method” berjumlah RM408,231.44;
(vii)tuntutan untuk kos pemanjangan Kontrak (prolongation) termasuk “Preliminaries” kos yang disebabkan lanjutan masa dan “Idling Costs” berjumlah RM479,784.43 atau jumlah yang ditaksirkan oleh Mahkamah;
(viii)tuntutan untuk kaedah pengiraan “Manholes” yang salah berjumlah RM241,350.00;
(ix)gantirugi yang akan ditaksirkan oleh Mahkamah atas kegagalan Defendan untuk menyediakan laporan penilaian bayaran “Payment Certificate” dan bayaran setiap bulan bermula Disember 2015 sehingga Julai 2016;
(x)gantirugi yang ditanggung oleh Plaintif kerana kerja-kerja di tapak telah diberhentikan oleh pihak Polis dengan serta-merta;
(xi)gantirugi atas kos tambahan bagi kerja pemecahan dan pembaikan semula jubin rumah penduduk serta pembaikan pada longkang luar rumah penduduk berjumlah RM171,075.05;
(xii)gantirugi am;
(xiii)kos timbang tara yang berlangsung pada 27.03.2017 sehingga 30.01.2020 berserta kos peguamcara yang keseluruhannya berjumlah RM142,805.34;
(xiv)faedah pada kadar 8% setahun atas jumlah penghakiman dari tarikh penghakiman sehingga penyelesaian penuh;
(xv)kos tindakan ini di atas dasar peguamcara dan anak guam; dan
(xvi)lain-lain relif yang dianggap suai dan manfaat oleh Mahkamah yang Mulia ini.
[5]The trial of this suit took six days on 4 to 8 October 2021 and 3 November 2021 before me via Zoom remote communication technology pursuant to s. 15ACourts of Judicature Act 1964
[6]The trial documents were marked as bundles A to X including the documentary evidence in bundles B to U which are by consent categorised in status A or B as designated therein.
[7]The Plaintiff called the following witnesses who gave sworn testamentary evidence:
(i)Shamsul Ariffin bin Abdul Aziz (“PW1”), a registered quantity surveyor and the managing director of JUB Ikatan Sepakat Sdn Bhd;
(ii)Dr. Mohd Rozi bin Umor (“PW2”), a senior lecturer of the Program Geologi, Fakulti Sains dan Teknoloji, Universiti Kebangsaan Malaysia;
(iii)Mohammad Faazil bin Dato’ Ir Hj Fakharazi (“PW3”); the Plaintiff’s Project site agent; and
(iv)Dato’ Ir Hj Fakharazi bin Wahijan (“PW4”), the managing director of the Plaintiff.
[8]The Defendant called the following witnesses who also gave sworn testamentary evidence:
(i)Alias bin Idris (“DW1”), formerly deputy chief director in Jabatan Perkhidmatan Pembentungan of the Kementerian Alam Sekitar dan Air (KASA);
(ii)Azhar bin Ahmad Nazri (“DW2”), a geo-science officer in Jabatan Kerja Raya Malaysia;
(iii)Hj Abd Hamid bin Ubaidullah (“DW3”), formerly a civil engineer with Ilham Jurutera Sdn Bhd; and
(iv)Hj Mohd Fadzil bin Hj Abdul (“DW4”), formerly also a civil engineer with Ilham Jurutera Sdn Bhd and a resident engineer of
