JUDGMENT

Facts

By a letter of offer dated 7.12.93 the respondent awarded a contract known as "Cadangan Mendirikan Sebuah Komplex Membeli-Belah Berserta Dengan Tempat Letak Kereta Bawah Tanah Di Tanah Kerajaan Di Persimpangan Jalan Seremban Kuala Pilah" (the project) to one Orient Marvel [2] Sdn Bhd (the original contractor). On or about 23.5.94 the respondent and the original contractor signed a building contract (the contract) with a schedule of conditions sanctioned by the Pertubuhan Akitek Malaysia (PAM). On or about 2.9.94, the respondent, the petitioner and the original contractor entered into a Deed of Novation whereby the respondent agreed to release and discharge the original contractor from further performance of the terms and conditions of the contract. In consideration thereof the respondent agreed to be bound by the terms and conditions of the contract as if the respondent had entered into the contract with the petitioner.

On 6.10.95 Arkitek Azamrakan, the architect to the project (the architect) certified Interim Certificate No. 15 for a sum of RM1,106,099.57. On 9.10.95 the architect issued a Certificate of Practical Completion (the CPC). A copy of the CPC was annexed