Gopal Sri Ram JCA:

[1] There is only one issue in this case. It is whether the plaintiff (appellant before us) is entitled to recover damages for breach of a building contract he had entered into with the defendant (respondent before us). The relevant facts are as follows.

[2] The plaintiff is a building contractor. On 2 March 1993, it entered into a contract for the construction of a school for the defendant. The contract was in the standard PWD (JKR) form with which we are all quite familiar. The contract price was RM1,956,126. The contract period was 78 weeks, that is to say, the plaintiff had to complete construction of the school and hand it to the defendant within that period. It is not on dispute that the 78 weeks expired on 29 August 1994. As it happened, the plaintiff did not complete construction by the agreed date. However, there is abundant evidence to show that the plaintiff was granted several extensions by the defendant. It is also beyond dispute - indeed it is conceded by the defendant that as at 12 September 1995 (which is the date of his letter) the plaintiff had completed 93% of the work. What was left undone was certain remedial work in respect of some of the partitions in the building and the planting of grass on the hill slopes and the football field. The former was completed. As to the latter, the defendant accepted the turfing that was done on the hill slopes but he rejected the turfing of the football field which he wanted turfed with cow grass which is not the kind of grass that the plaintiff had used. Despite the aforesaid state of affairs, the defendant took the position that the work contracted for had not been completed. So, by his letter of 12 September 1995, to which I have referred, the defendant warned the plaintiff to complete all works within 14 days. The defendant warned that if the plaintiff should make default then cl 51 of the contract would be invoked and the contract terminated. Later, by his letter of 7 October 1995, the defendant terminated the contract, purporting to act under cl 51(a) thereof. In essence what that clause says is this: without prejudice to any other remedies the Government (in the present instance the defendant) may have, in the event of the plaintiff commits any of the breaches specified by sub-cll (i)-(v) of cl 51, the superintending officer ('SO') administering the contract may issue a notice to the contractor (the instant plaintiff) calling upon him to remedy the breach and if the breach persists for 14 days then the SO may terminate the contract.

[3] There are three matters relating to the letter of 7 October 1995 that require mention. First, on 11 October 1995, some four days after the letter was written, a meeting was held between the parties. It was agreed that the defendant will be granted a further extension. Nothing was said about the letter itself. Second, the State Engineer, after a review of the facts, recommended that the plaintiff be excused for 17 weeks of delay. Despite this the defendant only permitted the plaintiff only 9 weeks. The defendant did not at any time reserve his rights under the letter of 7 October. How could he? The 9 weeks extension he gave the plaintiff far exceeded the 14 days the SO had prescribed under the letter. The irresistible inference to be drawn from all these actings is that the parties regarded the notice of 7 October 1995 as a dead letter intended to have no effect whatsoever. It therefore ceased, for all purposes, to have any effect whatsoever. Further, there is cogent evidence from the plaintiff to show that at the meeting of 11 October 1995 the defendant had waived his right to claim liquidated ascertained damages ('LAD') from the plaintiff for the delay in completing construction. Third, if you look at the 7 October 1995 letter, you will find that it does not accord with the terms of cl 51. I will deal with this part of the case at the appropriate place in this judgment.

[4] Let me now conclude the factual narr