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2021 MarsdenLR 2959

HIGH COURT MALAYA SHAH ALAM
KHAIRI CONSULT SDN BHD – Appellant
Versus
GJ RUNDING SDN BHD – Respondent


Petitioner Advocates: For the appellant:Ismail Mohamed Arifin ,Respondent Advocate: Hamizah Sobree

Judgement Key Points

Key Points: - The contract language was interpreted as not requiring a certificate of payment from the Employer before the Defendant’s payment obligation arises. (!) (!) - The court held that the conditional payment provision (back-to-back payment dependent on employer payment) is void under CIPAA 35(1) and (2)(a). (!) (!) - The court applied contra proferentem, interpreting clauses against the drafter (the Defendant) to find payment liability without third-party certification. (!) (!) - The Plaintiff is entitled to payment based on completion of services and contract terms, independent of external third-party approvals. (!) (!) - The contract did not specify a time for payment; the defendant was obligated to pay within a reasonable time under s 47 CA, and breached by delaying. (!) (!) (!) - Summary judgment was upheld, and the defendant’s appeal dismissed with costs. (!) (!) - The defendant’s estoppel and malice arguments were considered and rejected to negate payment obligations. (!) (!)

What is the validity of conditional payment provisions under CIPAA in a construction consultancy contract?

What is the effect of contra proferentem on interpreting contract clauses concerning payment obligations in this case?

What is the proper basis for payment to the plaintiff under the contract when payment is not tied to third-party certification or current employer payment?


JUDGMENT

(Appeal Against Sessions Court's Summary Judgment)

Wong Kian Kheong J:

Background

[1] This judgment will refer to the parties as they appear in the Sessions Court (SC).

[2] The plaintiff company (Plaintiff) provides engineering consultancy services.

[3] The defendant company (Defendant) is the main consultant for the construction of a road from Nilai-Labu to "Bandar Enstek/KLIA" (Project).

[4] The Project required, among others, two bridges (Bridges) to be built over railway tracks on land belonging to Railway Assets Corporation Bhd (RAC).

[5] The Plaintiff sent a letter dated 8 September 2016 to the Defendant [Plaintiff's Letter (8 September 2016) ] which stated, among others, as follows:

(1) the scope of work (Services) "shall" be, among others, the design of the Bridges for the purpose of application to Keretapi Tanah Melayu Bhd (KTMB) and RAC for "wayleave" approval from KTMB and RAC (Wayleave Approval); and

(2) the professional fee for the design of the Bridges "shall" be RM1,500,000.00 (Fee).

[6] The Defendant replied to the Plaintiff's Letter (8 September 2016) in a letter dated 26 January 2017 [Defendant's Letter (26 January 2017)]. According to the Defendant's Letter (26 Jan


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