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2017 MarsdenLR 1440
HIGH COURT MALAYA KUALA LUMPUR
EASY REGION ENGINEERING SDN BHD – Appellant
Versus
BUREAU VERITAS (M) SDN BHD – Respondent
[Suit No: WA-22NCVC-640-10/2016]
Parties must honor agreed terms of payment regardless of disputes with third parties involved in the contract.
Headnote:In this case, the court analyzed the contractual relationship between the plaintiff and the defendant within the context of the terms and conditions set by the Request for Proposal (RFP). The plaintiff claimed RM1,138,169.97 for outstanding service charges and manpower charges for Resident Jobs. The defendant argued that it was not liable for service charges under the RFP terms. The court found that the plaintiff's work was completed and the defendant had not disputed the invoices at the time they were issued, thus holding the defendant liable for the claimed amount. The court also noted a counterclaim for erroneous payment, which was ultimately dismissed. Judgment was ruled in favor of the plaintiff for the sum of RM1,138,169.97 with interest and costs awarded to the plaintiff while the defendant's counterclaim was dismissed.
| Table of Content |
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| 1. the plaintiff seeks payment for services rendered under a sub-contract. (Para 1 , 3 , 4 , 5) |
| 2. parties' roles and responsibilities were established through agreed terms of the project and contribution towards service charges. (Para 2) |
| 3. the defendant argues the absence of a formal agreement precludes payment. (Para 8 , 10 , 12) |
| 4. the issues surrounding payment and contract terms between the parties need clarification. (Para 11) |
| 5. the court assesses evidence of obligation to pay outstanding invoices. (Para 20 , 22 , 23) |
| 6. the court highlighted the importance of documentary evidence and absence of timely disputes regarding invoices. (Para 21 , 60) |
| 7. the defendant is liable to pay the amount claimed by the plaintiff. (Para 56 , 66) |
[1] These are my grounds of judgment after a full trial. The plaintiff was the defendant's sub-contractor in respect of a project known as "Inspection and Certification-Schlumberger Malaysia" ("the project") which involved the inspection, servicing and certification of drilling and lifting equipment for oil and gas at the premises of Schlumberger WTA (M) Sdn Bhd ("Schlumberger"). The defendant was Schlumberger's main contractor for the project. As the defendant's sub-contractor under the project, the plaintiff carried out two types of jobs, namely "resident jobs" and "ad-hoc jobs".
[2] The scope of work under resident jobs and ad-hoc jobs explained by DW1 in his answer to Question 7 in his witness statement (DW1A) which reads as:-
"Q: Can you elaborate on the scope of work under the Project?
A: Yes. I will first refer to Exhibit 1 - Scope of Work in the RFP at pp 344 to 348 CBD. In general, and as stated earlier, the scope of work involved the inspection, servicing and certification of drilling and lifting equipment at Schlumberger's premises.
For the scope of work under items (A) and (B) of Exhibit 1 - Scope of Work from pp 344 to 346 CBD, Schlumberger would issue POs with instructions for the vendor/ contractor to deploy personnel to perform specific inspection, servicing or certification services as required by Schlumberger In turn, the defendant would relay Schlumberger's instructions to the plaintiff via a Notification of Inspection ("NOI"). As this scope of work involved the ad hoc deployment of personnel to Schlumberger's premises on a temporary basis to perform specific services as required by Schlumberger, in the industry, we commonly call them "Ad Hoc Jobs". Depending on the personnel and services required, Schlumberger would pay manpower charges ("Manpower Charges") and service charges for the Ad Hoc Jobs. We use the term "Service Charges" loosely and for convenience as the term also includes the charges for chemicals, tools, equipment and consumables used to perform the specific services on site. In Exhibit 2 - Schedule of Rates and Prices of the RFP at pp 349 to 352 CBD, the Manpower Charges and Service Charges for Ad Hoc Jobs would be under items (A) to (h). As stated earlier, there was a slight change in the scope of work for the Project during the tender process. Therefore, there was also a slight change in Exhibit 2 - Schedule of Rates and Prices when the Project was awarded to the Defendant under the Letter of Award. Exhibit 2 - Schedule of Rates and Prices under the Letter of Award can be seen at pp 396 to 401 CBD. The Manpower Charges and Service Charges for Ad Hoc Jobs would be under items (A) to (K) of Exhibit 2 - Schedule of Rates and Prices in the Letter of Award.
In addition to the Ad Hoc Jobs, there is another scope of work which is under item (3) of Exhibit 1 - Scope of Work (p 347 CBD). This scope of work involved the residential or full time placement of personnel at Schlumberger's premises to support all segments of operations on site. In the industry, it is common to refer to these jobs as "Resident Jobs".
The Resident Jobs for the Project can be easily identified by the defendant's reference no of IDD 14/0288.
In Exhibit 2 - Schedule of Rates and Prices of the
