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2021 MarsdenLR 2906

HIGH COURT MALAYA KUALA LUMPUR
G-PILE SISTEM SDN BHD – Appellant
Versus
CMMC SDN BHD & ANOR – Respondent
[Civil Suit No: WA-22C-86-10/2019]



Petitioner Advocates:Hor Shirley ,Respondent Advocate: David Lai Chung Yew

The primary contract was between the Plaintiff and First Defendant, with the Second Defendant only acting as its agent and not a party to the contract.

Headnote:(A) Contracts Act 1950 – Sections 179, 183, and 190 – Construction contract – Dispute regarding parties to the contract and payment – Court found the primary contract was between the Plaintiff and First Defendant, with Second Defendant acting as agent; no novation occurred, and no binding contract existed between the Plaintiff and Second Defendant. (Paras 35, 46, 51)

(B) Agency – Ostensible authority – Court emphasized the principle of ostensible authority established via the contract's execution, leading to liability for outstanding payments owed by First Defendant to the Plaintiff, despite the Second Defendant managing the project. (Paras 34, 49)

Facts of the case: This suit arises from a construction contract with claims for unpaid work, with the Plaintiff alleging the First Defendant's liability for outstanding payments based on evidences indicating agency. (Paras 1-4, 11-13)

Findings of Court: Plaintiff established that the contract was with the First Defendant. Second Defendant had no personal liability, and the Plaintiff's claim against it was dismissed. (Paras 49, 55)

Issues: Determine the liability of the First Defendant and the role of the Second Defendant as agent in the contractual agreement. (Paras 30, 31)

Ratio Decidendi: Court determined the contracting parties through factual evidence surrounding the contract's performance and recognized the validity of the contract dictated the parties liable for payment. (Paras 44-46)

Result: Judgment for Plaintiff against First Defendant; Second Defendant's claim dismissed.

JUDGMENT

Lim Chong Fong J:

Introduction

[1] This is a suit principally to determine the contracting parties of the construction contract and the resultant consequences thereto for unpaid work done.

[2] The Plaintiff is a private limited company involved in the hydraulic pile injection system business.

[3] The First Defendant is likewise a private limited company involved in the property development business.

[4] The Second Defendant is also a private limited company involved in the property management services business.

Preliminary

[5] In this suit, the Plaintiff claimed against the Defendants for the following:

(1) A declaration that the 1st Defendant and/or the 2nd Defendant is a party/are parties to the Contract with the Plaintiff;

(2) The following sums to be paid by the 1st Defendant and/or the 2nd Defendant to the Plaintiff:

(a) The Outstanding Sum of RM2,463,418.95;

(b) In the alternative, damages to be assessed;

(c) Interest at 7.9% per annum being the Maybank Base Lending Rate of 6.9% per annum plus 1 % as provided in cl 30.17 of the Conditions of Contract on the Outstanding Sum of RM2,463,418.95 to run from the following periods until full payment is made:

(i) for the sum of RM1,641138.44 (including 6%GST) due under Interim Payment Certificate No 6, interest to run from 23 June 2017 ie 30 days from 23 May 2017, until full payment is made;

(ii) for the sum of RM165,330.88 (including 6% GST) due under Interim Payment Certificate No 7, interest to run from 21 July 2017 ie 30 days from 21 June 2017, until full payment is made;

(iii) for the sum of RM363,755.47 (including 6% GST) due under Interim Payment Certificate No 8, interest to run from 28 August 2017 ie 30 days from 28 July 2017, until full payment is made;

(iv) for the sum of RM293,194.17 (including 6% GST) due under Interim Statement of Final Accounts, interest to run from 3 February 2019 ie 30 days from 3 January 2019, until full payment is made;

(d) In the alternative, interest on all sums claimed, damages or sums found due calculated at such rate and from such date as the Court thinks fit;

(e) Costs;

(3) An Order to set aside the Adjudication Decision and the 1st Defendant and/or the 2nd Defendant to indemnify the Plaintiff for all costs and expenses incurred in the Adjudication proceedings and the Adjudication Decision;

(4) Any further or other relief which the Honorable Court deems fit and proper to grant.

Furthermore, the First Defendant counterclaimed for the following:

As against the Plaintiff

(a) A declaration that the action herein is an abuse of process of this Honorable Court;

(b) General damages to be assessed by this Honourable Court.

As against the 2nd Defendant

(c) An order that the 2nd Defendant indemnify the 1st Defendant for any and all damage, losses, costs and expenses incurred by the 1st Defendant arising from and/or in relation to the proceedings herein, whether pursuant to an Order for damages made against the 1st Defendant herein or otherwise;

(d) Further and/or in the alternative, general damages to be assessed by this Honorable Court;

As against the Plaintiff and 2nd Defendant

(e) Costs;

(f) Such other reliefs that this Honourable Court deems fit and proper

[6] The trial of the suit took 2 days on 1 and 2 April 2021. Throughout the course of the trial, the Second Defendant was absent albeit it has filed its statement of defence to the Plaintiff's claim as well as the First Defendant's counterclaim.

[7] The trial documents are marked as bundles A to I including the documentary evidence contained in bundles B to G which, by consent, carried status B save for bundle G. However in the course of the trial, bundle G was also, by consent, converted to carry status B.

[8] The Plaintiff called Siow Kon Hee ("PW1"), a director of the Plaintiff as its sole witness and the First Defendant likewise called Tan Sim Hoe ("DW1"), a director of the First Defendant as its sole witness.

[9] After the close of the trial, the Plaintiff and the First Defendant exchanged their respective writt


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