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Issue of Late and Non-Payment in Construction Industry
Issue of Late and Non-Payment in Construction Industry
Issue of Late and Non-Payment in Construction Industry
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5.1 Introduction
This chapter is the final chapter that summaries the findings of the research according to the objective of
the research. It is also contains the problems encountered during the research as well as the
recommendations for future researches.
(PAM Form)
Main Contractor
v
Employer
2
Table 5.1 Circumstances of late and non-payment issue are entitled to ground for determination by
contractor Perwik Sdn Bhd v Lee Yee Kee (M) Sdn Bhd (1996) 1 MLJ 857
Withhold payment by employer
In refer to the case, Woon Hoe Kan & Sons Sdn Bhd v Bandar Raya Development Bhd (1971) 2 MLJ 213,
the court held that in respect of main contractor for progress payment, the employer has not right to
withhold the payment without any express provision in the contract.
The employer does not defence or have any supportive evidence to withhold main contractors claim. So,
the employer breaches his contract which is failure or honouring the certified amount to the contractor.
Construction Contract
(PAM Form)
Main Contractor
v
Employer
No
Cases
Circumstances
Judges Decision
Type of contract
Contractual Parties
3
Future Heritage Sdn Bhd v Intelek Timur Sdn Bhd (2003) 1 MLJ 49
Partial payment in two Interim Certificates
The Court of Appeal restored the arbitration award that the contractor is entitled to terminate or determine
the contractor to the employers failure to pay the certificate of payment No 9 and 10 under clause 26 (1) of
the contract.
Construction Contract
(PAM Form)
Main Contractor
v
Developer
4
L Grande Development Sdn Bhd v Bukit Cerakah Development Sdn Bhd (2007) 4 MLJ 518
Delayed or refusal of employer pay the six Interim Certificates certified by Architect
After examined the six Interim Certificate (No 5-10), it is cleared that the SO had certified the amount that
employer must pay to the contractor for interim.
Therefore, the employer is entitled to pay the amount certified in the interim payment to the contractor
unless the amount cancelled by both parties.
The court held that A certificate is in essence a statement of ascertained and verified fact which is to be
accepted as a statement of true at face value. The interim certificate constitutes a finality of the assessed
value of work done by the contractoremployer obliged to pay the sum certified to contractor.
Therefore, the contractor should be able to receive the payment in full of the amount certified without have
to wait for any contra payments in future.
A failure of the employer pay the full amount certified considered as breach of an essential term of contract
and the contractor can determine the contract to sue for the recovering payments for the work done.
Construction Contract
(PWD Form)
Main Contractor
v
Employer
Table 5.1 Circumstances of late and non-payment issue are entitled to ground for determination by
contractor (contd)
No
Cases
Circumstances
Judges Decision
Type of contract
Contractual Parties
5
Haji Abu Kassim v Tegap Construction Sdn Bhd (1981) 2 MLJ 149
5.6 Conclusion
In a conclusion, late payment and non-payment certainly considered as a breach of contract and whether
a ground for determination or termination by contractor is dependent on the contract provisions and the
intention of contractual parties. The contractor must understanding on his rights and remedies on part or
non-payment and conditions for determination of his employment where applicable in most of standard
forms of contract in construction industry.