JUDGMENT

Abdul Aziz Mohamad J:

Under three subcontracts, the judgment debtors ("Way Soon") contracted to do certain construction works for the main contractors, TSR Bina Sdn Bhd ("TSR"), the garnishees. On 12 February 1998 the learned Senior Assistant Registrar, on the application of the judgment creditors ("Binamin"), made an order under O. 49 r. 1attaching all debts due or accruing due from TSR to Way Soon to satisfy the judgment obtained by Binamin against Way Soon in this action, pending TSR's showing cause against the attachment. On 5 August 1998 the learned Senior Assistant Registrar found that TSR failed to show cause and made an order to that effect. TSR now appeal.

It appears from the written submissions in this appeal to be common ground that what Binamin have been claiming as debts due or accruing due from TSR to Way Soon is a retention sum of RM595,682.16 retained by TSR under and in accordance with the three subcontracts. According to O. 49 r. 1(1), TSR may be ordered to pay that sum to Binamin, or so much thereof as is sufficient to satisfy the judgment and the costs of the garnishee proceedings, if it is a "debt due or accruing due" from TSR to Way Soon. The judgment that Binamin obtained against Way Soon is for a sum of RM313,718.18 with interest at 8% per annum on that sum from the date of judgment, 31 October 1997, until full settlement, besides ascertained interest of RM26,882.87 and costs of RM225.

TSR's stand is that the retention sum is not a debt due or accruing due to Way Soon. One reason for their stand is that Way Soon had, under a factoring agreement, sold to Hong Leong Finance Berhad ("Hong Leong") debts owed by TSR to Way Soon. That reason cannot stand because, in para. 9 of their affidavit dated 14 May 1998, Hong Leong themselves said that the retention sum was not part of the debts sold by Way Soon to them and they had no right to it.

The other reason for TSR's stand depends on cl. 24 of each of the subcontracts, which clause gave TSR the right to terminate the subcontracts on the happening of one of several events, one of which is in cl. 24.1(c), namely, the event of no major activities being carried out by Way Soon on the site for a continuous period of three days and Way Soon's failing to resume work within three days after receiving from TSR notice instructing them to do so.

Clause 24.1(d) provides that in the event the subcontract is terminated, "All amount due or to become due to (Way Soon) shall be withheld until the issuance of the certificate of practical completion and finalisation of the account which shall take into account all direct loss/or damage to (TSR) as a result of such termination and the additional cost in employing others to complete the works". The clause gives TSR the right to withhold moneys otherwise due to Way Soon until the final reckoning between them and TSR. The terms of the clause are clear. The right to withhold moneys in the event of breach of contract is given for the obvious reason that at the final reckoning there might not be anything due to Way Soon or what is due may not be as much as the amount withheld. Since there would be a right in TSR to withhold the moneys, before the final reckoning there would be no right in Way Soon to demand payment of them and if they were to sue for them they would not succeed.

On 13 February 1998, before the order of 12 February 1998 was served on TSR, TSR gave Way Soon notice of termination of the subcontracts under cl. 24.1(c) of the subcontracts. The notice not being complied with, on 31 March 1998 TSR terminated the subcontracts, which were worth RM11,913,643.10, but which Way Soon had performed only to the value of RM6,756,198.28.

TSR's stand is that the works have still not been completed and the architect has not issued a certificate of practical completion and the account between them and Way Soon has not been finalised. Therefore under cl. 24.1(d) they are entitled to withhold payment of the retention sum. They say t