[2018] 1 LNS 824 Legal Network Series

DALAM MAHKAMAH TINGGI Dl KUALA LUMPUR

DALAM WILAYAH PERSEKUTUAN MALAYSIA
(BAHAGIAN SIVIL)
[RAYUAN SIVIL NO: WA-12BC-20-09/2017]

ANTARA

CONSEAL SDN BHD

(NO. SYARIKAT : 273633-P) ... PERAYU

DAN

GAYA ANALISA SDN BHD

(NO. SYARIKAT: 85511 -W) ... RESPONDEN

GROUNDS OF JUDGMENT

[1] The claims in this case arose from a sub-contract in relation to a

project described as “Rancangan Tembatan Banjir Sungai Bunus,
Wilayah Persekutuan Kuala Lumpur - Membina Dan Menyiapkan
Lencongan Banjir Sungai Bunus Serta Kerja-Kerja Berkaitan Wilayah
Persekutuan Kuala Lumpur.” The project concerns flood control works
which required piling, in particular, micropiling.

[2] The Respondent, who was the Plaintiff in the action, was
appointed the contractor for the project. To undertake the micropiling
works, the Respondent appointed the Appellant, the Defendant, as its
sub-contractor.

[3] For the micropiling works, the Respondent issued the Appellant a
Letter of Award dated 31.9.2014. The opening paragraph of this Letter
of Award states as follows:

“We, the Contractor for the above-mentioned Main Contract, are

pleased to confirm our award of this Sub-Contract to you for a
sum of RM 3,093,644.00 (Ringgit Malaysia : Three Million

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Ninety Three Thousand Six Hundred Fourty Four Only) as per
the rates and prices and scope of works set out in APPENDIX 1
and as per Terms and Conditions of Contract, Special Clause to
Condition of Contract, Specification, Elemental, Bill of
Quantities Breakdown, Drawings (if any), your quotation and any
correspondence which shall together with this Letter of Award
constitute a contract binding the two parties herein.”

[4] Therefore, the contract between the parties and its terms and
condition are evidenced by, and contained in, the Letter of Award and
the quotation that was provided by the Appellant. For ease of reference,
this contract between the parties shall now on be referred to simply as
the “Contract”.

[5] The Appellant’s scope of works under the Contract is set out in
the Letter of Award in the following terms:

“1 Scope of Works:-

a) To supply all necessary materials, labour,

supervision, tools, plant, equipment and machineries
to carry out works works of micropile accordance with
the instruction work.

b) You shall be deemed to have allowed for everything

necessary for completing the works whether any item
described is taken individually or collectively
including submission of the followings for approval
prior commencement of work:-
i. Samples or catalogs
ii. Method statement of work
iii. Sample of warranty certificate
iv. Shop drawing
v. All other necessary document required by
S.O

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The quantities shall be provisional and subject to final
site measurement unless otherwise stated. You shall
deem to include all necessary costs to complete the
said works according to main contractor’s site
programme.”

[6] It is common ground between the parties that there were three
areas or sites on which work was to be carried out by the Appellant.
These areas are referred to as the “Gate Pumps”, the “Jack in Box
Tunnel” and the “Outlet Structure Area”. Both the Gate Pumps and the
Jack in Box tunnel are in what is called the Inlet Area.

[7] Having entered into the Contract, the Respondent paid a sum of
RM 100,000.00 to the Appellant as an advance. This payment was made
on 12.11.2014.

[8] On 15.11.2014 the Appellant mobilised and entered the site.

Apparently, being experts in micropiling, the Appellant soon found that
the specified design was not workable for the project. It then proposed
a variation. This resulted in a proposed Variation Order. There were
several versions of the proposed Variation Order but the various
versions are of no particular significance to this case. The difference in
the various versions related mainly to the issue of pricing. Suffice it to
note that this proposed variation affects a key aspect of the Contract in
that it involves the very micropiles that are to be used.

[9] The Contract between the parties was, however, subsequently

terminated by the Respondent. The Respondent claims that the
Appellant was in breach in failing to commence work despite having
been instructed to do so. This, the Respondent contends, is a breach of
the Contract and in particular, a breach of clause 12 of the Letter of
Award which states as follows:

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“12. You shall comply with all instructions given by our Site
Representative or his official representative and shall seek
clarification from all inconsistencies, discrepancies and queries
with regards to the works.”

[10] Having terminated the Contract, the Respondent brought this

action to recover the RM 100,000.00 paid to the Appellant.

[11] The Appellant on the other hand, maintains that the termination
was wrongful. The Appellant contends that due to several justifiable
reasons, it could not begin work as directed. The reasons given included
the contention that the sites were not ready for the Appellant to
commence work on. As the termination was wrongful, the Appellant
contends that it is entitled to, and accordingly mounted a counter-claim
for inter alia, damages and progress payments claimed but not paid.

[12] After a full trial, the learned Sessions Court Judge allowed the
Respondent's claim for the RM100,000.00 it had advanced to the
Appellant. The Appellant’s counterclaim was dismissed.

[13] The Appellant was dissatisfied with the outcome and hence this
appeal against the decision of the Sessions Court. The Appellant
maintains inter alia that the learned Sessions Court Judge had erred in
several respects and had failed to properly consider or appreciate many
aspects of the Appellant’s case, particularly, its contention that it could
not commence work for the reasons given.

[14] Five reasons were advanced by the Appellant why it could not
commence work on the project. They were as follows:

(a) delay in platform preparation;

(b) confirmation of variation order rates;

(c) pending working permits;

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(d) lack of survey peg points; and

(e) non removal of utilities.

[15] The Appellant maintained that it could not commence work

because all these five issues were not resolved.

[16] In its letter to the Respondent of 24.12.2014, which was over a

month after mobilisation, the Appellant explained that due to these five
issues, it was still unable to commence its micropiling works.

Delay in platform preparation

[17] The Appellant maintains that there were 2 types of platform that
were required for it to undertake its work. One is a working platform
and the other, a safety platform.

[18] The working platform was required for the Appellant to carry out
its work in the Inlet Area. The safety platform on the other hand, was
required for the Appellant to carry out its work at the Outlet Structure
Area.

[19] The distinction between these two areas is this. The Outlet
Structure Area is that part which is adjacent to the river. The fact that
the area to be worked on is adjacent to the river means that additional
safety measures have to be taken into account due to changes in water
level and the attendant effect and consequences.

[20] Clause 4 of the Letter of Award states as follows:

“4. Power, water, working platform, dewatering, survey and

setting out for the works shall be provided by us.”

[Emphasis added]

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[21] By clause 4, the Respondent had placed upon itself the

responsibility of providing inter alia the working platform.

[22] In addition, the Appellant’s quotation, which is to be read

together with the Letter of Award to constitute the Contract, states in
paragraph 3 read with paragraph 3.1 that:

“3. GOODS AND SERVICES TO BE PROVIDED BY THE MAIN

CONTRACTOR

Our price is based on the following goods and services to be

provided by the Main Contractor free-of-charge and in time
relative to the sub-contract period:-

3.1. Access to the sites and moving around the site for our plants
and equipment. Firm and dry working platform with proper
drainage to be handed over and accepted by us at the time of
handling [sic] over. Continuity of work shall be ensured by M.C”

[Emphasis added]

[23] The Appellant contends however, that neither of the two

platforms required for it to commence work was ever established by the
Respondent. There is in fact no evidence led that either platform was
provided by the Respondent.

[24] In regard to the safety platform, this is an especial requirement

that does not seem to fall within clause 4 of the Letter of Award. This
was in fact a point made by the Respondent.

[25] The Respondent further contended that North Soil Eng (M) Sdn
Bhd, the substitute contractor who was appointed in place of the
Appellant after the Contract was terminated, did not require any safety
platform and yet it could perform the works.

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[26] This contention of the Respondent however, does not take into
account the fact that the substitute contractor’s scope of works did not
include the Outlet Structure Area. Therefore, the substitute contractor
would not have required any safety platform.

[27] Furthermore, as pointed out by the Appellant, the Respondent’s

contract with the substitute contractor had a different provision in
relation to the working platform. Unlike clause 4 in the Letter of
Award, clause 4 of the Respondent’s contract with the substitute
contractor of 31.09.2014 states as follows:

“4. Power, water, and accommodation for the works shall be

provided by you”.

[28] There was thus no obligation on the part of the Respondent to

provide any working platform for the substitute contractor.

[29] What remains ultimately is that no working platform was in fact

provided by the Respondent as was its obligation to do so under clause
4 of the Letter of Award.

[30] On this issue the learned Sessions Court Judge held as follows:

“(g) Mahkamah mendapati yang tempat projek adalah selamat

dan tidak memerlukan keselamatan. Ini berdasarkan keterangan
saksi SP1 dan SP2. Mahkamah juga mengambil kira yang pihak
kontraktor lain yang menggantikan defendant iaitu pihak North
Soil Eng (M) Sdn Bhd telah berjaya melakukan kerja cerucuk
mikro di tapak kerja tanpa platform keselamatan.”

[31] The second reason advanced by the Appellant was that it could-
not-commence work because the proposed Variation Order and the rates
therefor had not been approved. The fact that there was no approval for

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the proposed Variation Order up to the point of termination of the

Contract is not in dispute.

Confirmation of Variation Order Rates

[32] The Variation Order proposed was for the use of micropiles with
permanent casing as opposed to temporary casing. Permanent casing
results in the micropile casing remaining in situ when installed.
Temporary casing on the other hand, involves the removal of the
micropile casing after installation, which is said to be the conventional
method.

[33] This proposed variation, in fact, had the support of the

Respondent. In its letter to the Jabatan Pengairan & Saliran Malaysia
of 12.12.2014, the Respondent explained and requested as follows:

“2. Sila maklum bahawa BQ Part 2 Bill 10-3/7 dan BQ Part 2

Bill 11-1/3 langsung tidak mempunyai item untuk ‘steel casing’
kekal ataupun sementara. Manakala lukisan kontrak
PAOR413/JPS/BPB/KG.BHARU/OS/02 dengan jelas terlakar
kewujudan ‘steel casing’ kekal/sementara dengan kedalam
cerucuk mikro sehingga 18m (termasuk soket sedalam 3m).
3. Lukisan PA OR413/JPS/BPB/KG. BHARU/DR/01,
PAOR413/JPS/BPB/KG.BHARU/GP/TW/01,
PAOR413/JPS/BPB/KG.BHARU/DR /02 dan Berdasarkan
struktur tanah sedia ada hampir semua posisi cerucuk gerekan
mikro memerlukan ‘steel casing’ sementara. Manakala bagi
kawasan yang terletak dibawah lebuhraya AKLEH samaada di
‘outlet structure’ mahupun di kawasan ‘Jack in box culvert’ (CH
0.0 ke CH 32) casing sementara tidak boleh ditarik keluar
disebabkan halangan lantai AKLEH. Seterusnya steel casing
tersebut perlu dikekalkan kerana sambungan casing yang
mencecah hingga 18m tidak dapat ditarik keluar. Masaalah yang
sama terjadi untuk kerja mikro piling bagi asas untuk struktur
“outlet” (sila lihat lukisan
PA0R413/JPS/BPB/KG.BHARU/OS/01).

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4. Seterusnya, lukisan
PAOR413/JPS/BPB/KG.BHARU/GP/TW/ 02 daripada CH 19
hingga CH 32, kawasan “clearance” dibawah lantai AKLEH yang
kurang daripada 4m, “steel casing” dan paip API perlu ditempah
khas kerana sambungan “steel casing” dan paip API hanya dapat
dibuat dengan sambungan pada setiap 2m di bawah lanjakan
AKLEH zon 4 (ch 19 ke CH 32). Manakala sambungan “steel
casing” dan paip API pada jarak 2.5m hingga 3m perlu dibuat di
kawasan terbuka dibawah lantai lebuhraya AKLEH di zon 4(CH
KE CH 32).
5. Lukisan Struktur
PAOR413/JPS/BPB/KG.BHARU/GP/FD/01,
PA0R413/JPS/BPB/KG.BHARU/ARC/03 terowong banjir terlakar
penggunaan cerucuk spun bersaiz 300mm di antara CH 32 hingga
CH 19. Kawasan ini berada di bawah lantai AKLEH. Maka
penggunaan cerucuk spun adalah mustahil. Hanya cerucuk mikro
yang boleh di gunapakai. Perubahan ini memerlukan arahan dari
P.P kerana ada implikasi tambahan masa dan kod yang agak
besar.
6. Oleh kerana kerja-kerja diatas melibatkan kos tambahan
yang besar, pihak kami dengan rendah hati memohon agar pihak
tuan dapat mengeluarkan arahan P.P untuk melaksanakan kerja-
kerja cerucuk mikro dan penukaran cerucuk jenis spun kepada
cerucuk mikro di CH 19 hingga 32 di zon 4 supaya kerja-kerja
tersebut dapat dilaksanakan segera setelah mendapat permit LLM
dan juga untuk mengelakkan sebarang pertikaian di masa
hadapan.”

[34] However, the Variation Order sought was never approved. In

addition, clause 16 of the Letter of Award states as follows:

“16. a) No variation shall vitiate this contract. However, all

variations must be sanctioned by us or our representative in
written letter or instruction. You are hereby agreed to
execute the variation works as soon as it practicable after
the written instruction.

b) Valuation of variation shall be in accordance to the

rates (if any), stated in the Summary of Tender so far as they

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are relevant or as practicable. However if any variation
cannot be valued using the aforementioned rates, it shall be
valued based upon daywork rates or such revised rates shall
be determined by mutual consent.”

[35] Although the Variation Order sought was not approved by the
consultants, the Respondent seemed willing to, nevertheless, proceed
with the works as per the proposed Variation Order. This appears to be
so in the Respondent’s letter to the Appellant of 10.04.2015 where the
Respondent states in the second paragraph:

“We hereby to confirm with you that the variation works for
Permanent/Temporary Casing and all associated works due to
changes of original design and construction method to suit with
site condition is additional cost to your sub-contract. Therefore,
we are instruct to you [sic] to proceed the said variation work as
soon as possible to avoid any further delay of progress at site and
require to complete all relevant documents with complying of
Consultant approval.”

[36] However, the Appellant contends that the problem was not
resolved by the Respondent because the rates for the works in respect
of the proposed Variation Order had not been agreed to by the
Respondent. In this same letter of 10.04.2015, in the third paragraph,
the Respondent expressly states as follows:

“However; the additional cost and rates as per your claim for this
variation work is not final and subject to further discussion and
final site measurement.”

[37] Bearing in mind the provisions in clause 16 of the Letter of Award

and the fact that the rates for the works in respect of the proposed
Variation Order had not been agreed upon, the Appellant contended that
it was not able to commence work, the payment for which has not been
agreed. Until agreed in accordance with the terms of the Contract, there

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was no contractual obligation on the Appellant’s part to carry out the

proposed Variation Order, particularly, as the proposed variation
contemplates different specifications from those of the Contract.

[38] As mentioned above, it should also be borne in mind that the

proposed Variation Order concerns the very micropiles that the
Appellant had to use. Thus, it concerns a core aspect of the Contract,
which is to be varied, and the payment for which has not been agreed
upon.

[39] Counsel for the Respondent contended that as the Variation Order
was not approved, the Appellant should have proceeded on the basis of
the original specifications. Granted, the earlier instructions given to the
Appellant were merely to start the micropiling work particularly in the
Outlet Area. This can be seen in the Respondent’s letters to the
Appellant of 10.03.2015 and 7.04.2015.

[40] However, this contention by counsel for the Respondent does not
accord with the instructions from the Respondent in its letter to the
Appellant issued as late as 10.04.2015 wherein the Respondent stated,
“Therefore, we are instruct to you [sic] to proceed the said variation
work as soon as possible to avoid any further delay of progress at site
...”.

[41] Indeed, this contention is also not consistent with the

Respondent’s pleaded case. In paragraph 8 of the Statement of Claim
the Respondent pleaded as follows:

“8. Isu berkenaan degan kerja-kerja tambahan tersebut masih

tidak dapat diselesaikan sejak dari tarikh penolakan tersebut
tetapi Plaintif telah melalui surat bertarikh 10 Mac, 2014, to
April, 2015 dan 5 Mei, 2015 membuat keputusan selaras dengan
Klausa 16, Surat Award tersebut mengarahkan Defendan untuk

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meneruskan kerja- kerja tambahan dan kerja-kerja micropile
tersebut tetapi Defendant telah gagal serta ingkar mematuhi
arahan Plaintif.”

[Emphasis added]

[42] Clearly, the Respondent’s requirement of the Appellant was the

commencement of works as per the Variation Order that had yet to be
approved and the rates of payment for which, were not, as yet, agreed
upon. It was always the intention that the Appellant should commence
work based on the proposed Variation Order rather than on the original
specifications under the Contract even though in the Respondent’s
letter of 18.05.2015, reference to its earlier letter of 10.04.2015 was
omitted.

[43] Therefore, it cannot be that proceeding with the original

specifications for the micropiles without the proposed variation was
still an option available to the Appellant.

[44] In relation to this issue of the Variation Order, the learned

Sessions Court Judge merely held as follows:

“(h) Alasan defendan yang tiada pengesahan atau confirmation

V.O. tidak dapat diterima sebab V.O yang dikemukakan pada
13/11/2014, 9/12/2014, 7/1/2015, 9/1/2015, 26/1/2015, 4/2/2015
dan 21/4/2015 tidak disokong atau diluluskan oleh jurutera
perunding yang merupakan pihak berkecuali di dalam projek ini.

(i) Plaintiff telah mengeluarkan arahan notis tarikh 10/4/2015

untuk dengan memulakan kerja tetapi ini tidak dihiraukan oleh
defendan.”

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Permits

[45] At some point during the initial part of the Contract, there
appeared to be some confusion whether some sort of permit was
required in order to carry out the works.

[46] The Appellant contends that it was only informed by the

Respondent that a permit was not required for the Gate Pump area some
6 months after it had mobilised on 15.11.2014. This was by the
Respondent’s letter to the Appellant of 18.05.2015.

[47] As for works at the Jacked in Box Tunnel, the Appellant was only
informed by the Respondent some 8 months after the Appellant had
mobilised, that no permit was required. This was by the Respondent’s
letter of 3.08.2015.

[48] In addition, it was only by the Respondent’s letter of 18.05.2015,

that the Appellant learnt that the permit from the Lembaga Lebuhraya
Malaysia had been obtained by the Respondent.

[49] Thus, the Appellant had thought permits were required in order to
start work but they were in fact not required. In addition, the permit
that was required had been obtained but the Appellant was not informed
until much later. The Appellant was only informed of all these on
18.05.2015. This was clearly after the Respondent’s letter to the
Appellant of 10.04.2015 insisting that the Appellant commence work.

[50] As for this issue, the Respondent asserts that the Appellant was
informed that no permit was required in respect of the Outlet Area on
7.02.2015, 10.03.2015, 7.04.2015 and 5.05.2015. This is not disputed.
On all these dates, the reference was only to the fact that the Outlet.
Area needed no permit. However, the Outlet Area was but only one of

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three work areas and it was the area the Appellant claims it required a
safety platform.

[51] To this issue, the learned Sessions Court Judge held as follows:

“(j) Issue tentang menunggu permit kerja yang dibangkitkan oleh

defendan langsung tidak relevan sebab hakikatnya permit
pekerjaan tidak diperlukan untuk defendan memulakan kerja-
kerja mereka. Plaintiff telah memaklumkan ini kepada defendan
melalui surat-surat bertarikh 7hb. Februari 2015, 10hb Mac
2015, 7hb. April 2015 dan 5hb. May 2015. (mukasurat 142, 174,
176 dan 219 Dokumen B)”

Survey peg points

[52] The Appellant contends that clause 4 of the Letter of Award also
imposes an obligation on the Respondent to provide the Appellant with
survey peg points. Without these points, it is contended, the Appellant
cannot commence work.

[53] The Respondent however, countered with the contention that the
Appellant did not ask for the survey peg points.

[54] For a start, the issue of survey peg points were raised by the
Appellant in its letter to the Respondent as early as on 24.12.2014. In
addition, the need for a survey is clearly set out in clause 4 of the Letter
of Award.

[55] Furthermore clause 3.2 of the Appellant’s quotation which is to

be read with the Letter of Award imposes the obligation on the
Respondent to provide:

“3.2. The gridline and survey point with proper pegs to be handed
over at the time of handling over.”

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[56] Thus, survey peg points were to be provided by the Respondent,

at the time of handing over, in order to enable the Appellant to effect
its work. It is also significant to note that it is not contended for the
Respondent that survey peg points were ever actually provided.

[57] This point was never addressed by the learned Sessions Court
Judge.

Removal of utilities

[58] Clause 3.4 of the Appellant’s quotation provides as follows:

“3.4. Removal of spoils from site and within the site e.g. pile
heads, drilled earth, debris, slurry and water. Provision of
temporary 3- phase electricity if necessary and lighting and
sewerage installations for the sub-contractor works. All Services
diversion e.g. traffic, sewerage pipes and water pipes, etc.”

[59] The Appellant claims it could not start work pending the removal
of utilities at the Gate Pump Area. In short, the site was not cleared.

[60] This contention, as the Respondent rightly pointed out, only

affects the Gate Pump Area i.e. only one of the three work areas.

[61] On this issue, the learned Sessions Court Judge found as follows:

“(k) Mahkamah juga menolak alasan “removal of utilities” oleh

pihak defendan sebab hakikatnya defendan masih boleh
memulakan kerja awalan yang lain sementara proses pengalihan
utilites.”

Could the Appellant have commenced work?

[62] Having regard to the foregoing, it seems clear that there were at
least a couple of legitimate bases why the Appellant could not have
commenced work on any of the three areas under the Contract.

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[63] While the Outlet Structure Area may not be affected by the need
for any permit to start work (a fact that the Appellant was aware of by
7.02.2015) and the obligation to provide a safety platform (as opposed
to a working platform) is not clearly required of the Respondent, yet
there were other impediments to the Appellant’s commencement of
work.

[64] There is the absence of survey peg points. These were to have
been provided by the Respondent at the point of handing over. That
would have been when the Appellant mobilised. It was the
Respondent’s breach of its obligation to provide survey peg points that
also precluded the Appellant from commencing work.

[65] One aspect of this case is thus the Appellant’s prevention from
performing its obligations under the Contract due to the Respondent’s
breach of the Respondent’s obligations thereunder. The legal
implication of such a situation was discussed in Tong Aik (Far East)
Ltd v Eastern Minerals & Trading (1959) Ltd [1936] 29 MLJ 322 by
Winslow J. as follows:

“Mr. Hilborne submitted that, if a party to a contract, through

his own act or omission, prevents the other party from carrying
out the contract, he cannot succeed against the party in default
and that the latter is excused from performance of his contract.
He relied for this proposition on the following passage from
Pollock on Contracts, 13th Edition at page 219-

“Where a promisor is prevented from performing his contract or

any part of it by the default or refusal of the promisee, the
performance is to that extent excused; and moreover default or
refusal is a cause of action on which the promisor may recover
any loss he has incurred thereby, or he may rescind the contract
and recover back any money he has already paid under it. Default
may consist either in active interruption or interference on the

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part of the promisee, or in the mere omission of something without
which the promisor cannot perform his part of the contract.”
He relied further on the rule of law referred in Roberts v. Bury
Improvement Commissioners which exonerates one of two
contracting parties from the performance of a contract when the
performance of it is prevented and rendered impossible by the
wrongful act of the other contracting party. Accepting these
propositions, which I do, it seems to me that the failure on the
part of the plaintiffs to attain the minimum target was due,
partially, at least, to the failure on the part of the defendants to
provide adequate machinery and competent supervision as
undertaken and in failing to conduct their mining operations
strictly in accordance with the advice of their mining
consultants.”

[66] There is also section 55 of the Contracts Act 1950, which provides
as follows:

“55. When a contract consists of reciprocal promises, such that

one of them cannot be performed, or that its performance cannot
be claimed till the other has been performed, and the promisor of
the promise last mentioned fails to perform it, the promisor
cannot claim the performance of the reciprocal promise, and must
make compensation to the other party to the contract for any loss
which the other party may sustain by the non-performance of the
contract.”

[67] In the decision of the Court of Appeal in Dial Kaur a/p Tara Singh
v. Mann Foong Realty Sdn Bhd [2000] 3 MLJ 153, N H Chan J invoked
section 55 of the Contracts Act 1950 in the following circumstances:

“This is a case where there were reciprocal promises to be

performed by the two parties such that the performance of the
promise by one party could not be claimed by the other till the
other party’s own promise had been performed. In this case the
reciprocal promises in the agreement consisted of para (c) and
(d) such that the performance of the promise in para (c) by the
defendant could not be claimed by the plaintiff till the plaintiff's

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own promise in para (d) had been performed. And if the plaintiff
failed to perform its promise in para (d) it could not claim the
performance of the reciprocal promise by the defendant in para
(c). Here we know that the plaintiff had to perform its promise in
para (d) first before it could call upon the defendant to perform
her promise in para (c) because in para (d) the plaintiff had to
pay Malayan Banking Bhd RM1,186,640 in order to obtain the
release of the said eight titles and the defendant’s 23 titles from
the bank.
…
... it is plain that the obligation of the defendant under para (c)
to execute the eight transfers of the land in question to the
plaintiff is merely a subsidiary term, the non-performance of
which does not relieve the plaintiff from his primary obligation
under para (d) of the contract. The obligation of the plaintiff
under para (d) to pay RM1,186,640 to Malayan Banking to settle
the debt due to the bank so as to obtain the release of all the 31
titles from the bank and to have the charge discharged is a
fundamental term. It is plain, therefore, that the promise of the
defendant to execute the eight transfers in para (c) could not be
claimed by the plaintiff till the plaintiff's own promise in para (d)
had been performed. In our judgment the non-performance of the
plaintiff's promise to pay the bank in full and to recover all the
31 titles from the bank is fatal to its case. If the plaintiff failed to
perform its promise in para (d), it could not claim the
performance of the reciprocal promise by the defendant in para
(c); sees 55 of the Contracts Act 1950. If the plaintiff was not
entitled to make such a claim against the defendant till its own
obligation in para (d) had been performed then his action against
the defendant must surely fail. Since the plaintiff had no cause of
action against the defendant in its statement of claim, there was
no legal basis for the interlocutory injunction to be granted or for
it to be continued. Without a cause of action, no serious question
for trial was disclosed to sustain the injunction that was obtained
against the defendant: see Keet Gerald Francis Noel John v.
Mohd Noor bin Abdullah [1995] 1 MLJ 193 (Cal).”

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[68] Equally significant is the fact that the instruction to commence

work was on the basis of the proposed Variation Order, the rates for
which were not agreed.

[69] It surely cannot be that the Respondent is able to impose the

performance of a variation of work, the consideration for which is
neither agreed nor brought within the ambit of the Contract. The
Respondent did not have any right to require the Appellant to
commence work based on the proposed Variation Order, the rates for
which had not been agreed, and to then seek to terminate the Contract
because of the Appellant’s failure to do so.

[70] As pleaded in paragraphs 8 and 9 of the Respondent’s statement

of claim, it was in essence the failure of the Appellant to comply with
the instructions of the Respondent to commence work as per the
proposed but unapproved variation order that resulted in the
Respondent’s termination of the Contract.

[71] Having regard to the foregoing and in the circumstances of this

case, I find that the Respondent had wrongfully terminated the
Contract.

[72] It is trite that a Court of law in an appellate role should be slow

to interfere with the findings of fact by a trial judge. It may only do so
after careful consideration and the application of established principles.
As was stated by Raus Sharif FCJ (as he then was) in the Federal
Court”s decision in Azman bin Mahmood & Anor v SJ Securities Sdn
Bhd [2012] 6 MLJ 1:

“[25] The law on appellate intervention on findings of fact by a trial

judge is trite. In this context it may be useful to refer to the case of
Multar Masngud v. Lim Kim Chet and Anor [1982] 1 MLJ 184:

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[1982] CLJ 107 (FC), wherein it was held that an Appellate Court
will interfere and disturb the finding of fact by the trial Judge if
crucial evidence had been misconstrued resulting in the uncertainty
on one party’s evidence’ - and the consistency of the other party’s
evidence being disregarded. In the Privy Council case of Choo Kok
Beng v. Choo Kok Hoe and Ors [1984] 2 MLJ 165 it was held that
when a trial Judge had so manifestly failed to derive proper benefit
from the undoubted advantage of seeing and hearing witnesses at
the trial, and in reaching his conclusion, has not properly analysed
the entirety of the evidence which was given before him, it is the
plain duty of the appellate court to intervene and correct the error
lest otherwise the error results in serious injustice. In Gan Yook
Chin and Anor v. Lee Ing Chin And Ors [2005] 2 MLJ 1: [2004] 4
CLJ 309 (FC), the Federal Court echoed the following:
In our view, the Court of Appeal in citing these cases had
clearly borne in mind the central feature of appellate
intervention i.e. to determine whether or not the trial court
had arrived at its decision or finding correctly on the basis of
the relevant law and/or the established evidence. In so doing
the Court of Appeal was perfectly entitled to examine the
process of evaluation of the evidence by the trial court.
Clearly, the phrase ‘insufficient judicial appreciation of
evidence’ merely relate to such a process. This is reflected in
the Court of Appeal’s restatement that a Judge who was
required to adjudicate upon a dispute must arrive at his
decision on an issue of fact by assessing, weighing and, for
good reasons, either accepting or rejecting the whole or any
of the evidence placed before him: The Court of Appeal
further reiterated the principle central to appellate
intervention i.e. that a decision arrived at by a trial court
without judicial appreciation of the evidence might be set
aside on appeal.”

[73] With respect, there was insufficient judicial appreciation of the

evidence in this case. The learned Sessions Court Judge .dealt
somewhat superficially with the contentions of the Appellant and the
evidence it led, which included unequivocal contemporaneous
documentary evidence.

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[74] Accordingly, the Appellant’s appeal against the decision of the

Sessions Court in allowing the Respondent’s claim against the
Appellant should be allowed.

The Counterclaim

[75] The Appellant has a counterclaim. In this counterclaim both

special and general damages are sought. There is also a claim for
payment under what is described as Progress Claim No. 2 for a sum of
RM132,200.00.

[76] SD-1, Seow Ching Huay, testified as to the Appellant’s claim for
damages. However, what SD-1 did was to merely provide figures
setting out calculations of the amounts that the Appellant seeks to
claim.

[77] In his witness statement, and on the issue of damages, the

following was SD-Ts testimony in respect of the sum of RM405,020-
00 claimed:
“22.2.3. Since the date we mobilised at the site, the Defendant had incurred
cost of RM292,910.00 to pay for the material, machines and equipment
placed at the site, part of the sum was included in Progress Claim (2)
dated 26-1-2015. At the same time, we had incurred cost of RM112,110-
00 to pay for the salary of the project engineer, site engineer, supervisor,
engineer, operator and workers who were assigned to the site. Therefore
in total, the Defendant had incurred cost of RM405,020.00.”

“23.1. Yes, we have prepared a summary calculation of our material, equipment

and machineries mobilised at the site, which amounting to RM292,910-
00.

23.2. We have also prepared the summary calculation for the salary for the
workers, including project engineer; site engineer, supervisor, operator
and general worker, which amounting to RM112,110.00.

23.3. In total, we have incurred cost of RM405,020-00 (RM292,910-00 +

RM112,110-00).

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23.4. The Summary Calculation is enclosed together with the Internal Delivery
Orders and the workers” attendance cards from the date the Defendant
mobilised until the date the Defendant demobilised.”

[78] As RM272.820.00, for the so called special damages claimed of

SD-1 testified as follows:
“24.1. The amount is derived by taking the total incurred cost of RM405,020-00
and deducts the sum of RM132,200- 00 being Progress Claim No. 2 dated
26-1-2015 issued by the Defendant to the Plaintiff, so the Defendant is
claiming for the balance sum of RM272,820-00 as special damages.

24.2. For easy illustration, the calculation is as follows:-

(a) The material, machines and RM292,910-00 equipment placed

at the site

(b) Salary of the project engineer, site engineer,

supervisor, engineer, operator and workers RM112,110-00

RM405,020-00

DEDUCT

(c) Progress Claim No. 2 dated 26-1- RM132,200-00

2015

Total Special Damages RM272,820-00

[79] Then there is an alternative claim for special damages in the sum
of RM305,020-00. As for this claim, SD-1 testified as follows in his
witness statement:
“25.1. The amount is derived by taking the total incurred cost of
RM405,020-00 and deducts the initial payment of RM100,00.00
received from the Plaintiff, so the Defendant is claiming for the
balance sum of RM305,020.00 as alternative prayer for special
damages.”

[80] As for the claim for general damages, SD-1 testified as follows:

“26.1. As I have said earlier, the Defendant has suffered great losses due to
the following:

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26.1.1. The Plaintiff had instructed the Defendant to enter the Project site
despite the site was not ready for the Defendant to commence work
and the variation order had yet to be approved. Further, the Plaintiff
guaranteed and represented to me that the variation order for
variation work would be approved soon;

26.1.2. Defendant had mobilised on the Project site on its own cost;

26.1.3. As there was a burn mark on the controller of the piling machine and
the controller door and there was also leakage on the hydraulic hose,
the Defendant had to repair the said machine on its own cost;

26.1.4. The Defendant lost 3 metal drills which had been taken by 3 strangers
who visited the Project site unlawfully;

26.1.5. The Defendant had suffered losses profit income due to the unilateral
termination of Letter of Award by the Plaintiff.

26.2. As such, the Defendant is claiming for general damages from the
Plaintiff.”

[81] There was thus also a claim against the Respondent for general
damages in respect of alleged damage to the Appellant’s equipment,
even though no cause of action was pleaded in respect of these claims.

[82] It is always useful to be reminded of fundamental principles

governing an area of law that the Court has to deal with. In regard to
damages, the judgment of the Federal Court in Datuk Mohd Ali bin Hj
Abdul Majid & Anor (both practising as Messrs Mohd Ali & Co) v.
Public Bank Bhd [2014] 4 MLJ 465 is apposite. In that case, Ariffin
Zakaria CJ explained thus:
“[31] The object of an award of damages is to give the claimant
compensation for the damage, loss or injury he has suffered. The general
principle governing the measure of damages has its origin in the words of
Lord Blackburn in Livingstone v. Rawyards Coal Co (1880) 5 App Cas 25
where he said:

that Sum of money which will put the party who has been injured,,
or who has suffered, in the same position as he would have been in

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if he had not sustained the wrong for which he is now getting his
compensation or reparation.

[32] It is trite law that a claimant claiming damages must prove that he
has suffered the damage. The claimant has the burden of proving both
liability and quantum of damages, before he can recover the sum claimed:
This follows from the general rule that the burden of proving a fact is upon
him who alleges it and not upon him who denies it, so that where a
particular allegation forms an essential part of a person’s case, the proof
of such allegation falls on him (see s 103 of the Evidence Act 1950). If he
fails to prove both the liability and the quantum of damages, he loses the
action.

[33] Therefore, in a claim for damages, it is not sufficient for the plaintiff
to merely state the amount of damages that he is claiming, he must prove
the damage that he had in fact suffered to the satisfaction of the court. This
principle is borne out in the case of Bonham-Carter v. Hyde Park Hotel
(1948) 64 TLR 177 where Lord Goddard CJ observed:

Plaintiffs must understand that if they bring actions for damages it

is for them to prove their damage; it is not enough to write down the
particulars, and, so to speak, throw them at the head of the court,
saving: “This is what I have lost I ask you to give me these
damages.” They have to prove it.

This statement was cited with approval by Edgar Joseph JR FCJ in Tan Sri
Khoo Teck Puat v. Plenitude Holdings Sdn Bhd [1994] 3 MLJ 777.”

[Emphasis added]

[83] See also the decision of the Court of Appeal in Voo Nyuk Pah &
Anor v. Lam Yat Kheong & Anor [2012] 5 CLJ 229.

[84] This is what the Appellant has sought to do, to have SD-1 “...write
down the particulars, and, so to speak, throw them at the head of the
court, saying: ‘This is what I have lost, I ask you to give me these
damages”. In addition, these claims are not in truth claims for work
done under the Contract. If at all, they are really claims in the form of
general damages.

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[85] As for general damages, there was but a mere re-iteration of a

claim that damage was suffered.

[86] However, it should not be overlooked that the Appellant was paid
a sum of RM 100,000.00, in advance. Provided in the Appellant’s
quotation for the “Provision of all necessary piling plant and
equipment, transportation to the Site, handling, assembling, and
removal of the Site after completion of operation” for each of the three
areas i.e. the Gate Pumps, Jacked in Box Tunnel and Outlet Structure,
was RM30,000.00 thus totalling RM90,000.00. Therefore the
RM100,000.00 would have provided for the mobilisation and
demobilisation costs of the Appellant such that no damage can be said
to have been suffered in that respect.

[87] In truth, the substance of the Appellant’s claims for damages is

for idling time in respect of its equipment, after it had mobilised on
15.11.2014. This too, is the substance of the Appellant’s claim under
Progress Claim No. 2. It was in fact learned counsel’s submissions for
the Appellant that the Progress Claims were for idling costs suffered
by the Defendant due to the Respondent’s delay and default in getting
the sites ready.

[88] Throughout this case, the Appellant’s consistent contention has

been, inter alia, that the site was not ready and it could not commence
work as directed. That being the case, it should have done more to
mitigate its losses rather than to leave its equipment idle for months.

[89] In addition, any damage that the Appellant may have suffered was
not properly proven save for the ipse dixit of SD-1.

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[90] Thus, on this issue the learned Sessions Court Judge found as
follows:

“(m) Mahkamah mendapati yang defendan gagal untuk membuktikan

sebarang kerugian di dalam tuntutan balas mereka dan tiada juga bukti
ganti rugi am seperti yang dituntut oleh defendan. Tiada sebarang kerja
spertimana skop kerja yang sepatutnya dilakukan oleh defendant yakin
kerja-kerja berkenaan tidak dibuat di tapakkerja. Di dalam “site diary
iaitu mukasurat 98 - 130, Mahkamah meneliti kesemua kandungan “site
diary” atau “DiariTapak” berkenaan iaitu daripada tarikh 25hb.
December 2014 sehingga catatan 26hb. Januari 2015 dan kesemua catatan
ini menyatakan yang “...Stanby - No activity on site. Hold work due to
pending design / work permit and V.O. approval ...” Dan ada juga catatan
menyatakan tentang cuti umum iaitu 25hb. December 2014 untuk cuti
Christmas. Secara keseluruhannya tiada kerja-kerja dilakukan oleh
defendan di tapak kerja.”

[91] In the circumstances of this case I agree with the finding of the
learned Sessions Court Judge that the damages allegedly suffered by
the Respondent were not proven.

[92] However, the claim for damages cannot rest merely with that
finding. The Respondent had wrongfully terminated the Contract. The
breach of a contract is actionable per se. That is to say, there is no need
to prove substantial damage before an action for breach of contract may
be brought; damage is presumed. If a breach of contract is established
but no substantial damage is proven, the law will presume that damage
was nevertheless suffered by the innocent party and nominal damages
will be awarded.

[93] This principle was clearly described by Gopal Sri Ram JCA (as
he then was) in Nirwana Construction Sdn Bhd v. Pengarah Jabatan
Kerja Raya Negeri Sembilan Darul Khusus & Anor [2008] 4 MLJ 157
in the following terms:

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“[12] There is a further point which is in the plaintiff’s favour. It is an
established principle that breach of contract is actionable per se. In other
words, damage, that is to say, injuria, need not be separately established
as an ingredient of the wrong. Neither is a plaintiff in an action for breach
of contract required in law to prove that the defendant acted intentionally
or negligently in committing the breach. Once a breach of contract is
established a plaintiff is entitled to recover damages. What follows is an
exercise in the assessment of those damages. If at that stage he or she is
unable to evidentially establish the measure of damage suffered, nominal
damages will be awarded. As my learned sister Zainun Ali JCA said when
delivering the judgment of this court in Sony Electronics (M) Sdn Bhd v.
Direct Interest Sdn Bhd [2007] 1 MLJ 229 fat d 242):

Nominal damages may be awarded where the fact of a loss is shown

but the necessary evidence as to its amount is not given.”

[94] Having regard to the foregoing, the evidence led and submissions
by counsel for the parties, I hold that:

(i) the Appellant’s appeal against the decision of the Sessions

Court in allowing the Respondent’s claim against the
Appellant is allowed and

(ii) the Appellant’s appeal against the dismissal of the

Appellant’s counterclaim by Sessions Court is allowed with
nominal damages of RM5,000.00 to the Appellant.

[95] Having heard submissions by learned counsel for the parties on

the issue of costs, I order costs of RM25,000.00 to the Appellant, here
and below.

Dated: 25 JUNE 2018

(DARRYL GOON SIEW CHYE)
Judge Commissioner
High Court Civil NCVC 2
Kuala Lumpur

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Counsel:

For the Plaintiff - Yap Siew Yee, Goh Ye Han; M/s Yap Siew Yee & Co
Suite 1222, 12th Floor, Block A,
Damansara Intan Business Centre
No.1, Jalan SS 20/27
47400 Petaling Jaya Tel: 03-7732 9601 - Fax: 03-7732 9603)
For the defendant - Jefril Jaafar, Rohaine Mohd Shim and Sharifudin
Mohd Manan; M/s Hadmin Zahar & Rahine Sharifudin
No. 17-2, Jalan Setiawangsa 8
54200 Kuala Lumpur
Tel: 03-4251 3088 Fax: 03-4251 6088)

Cases referred to:

Azman bin Mahmood & Anor v. SJ Securities Sdn Bhd [2012] MLJU
660

IJM Corp Bhd v. Zamri bin Hj ibrahim & Anor [2014] 2 MLJ 335

Majutera Sdn Bhd v. Kerajaan Malaysia, Jabatan Kerja Raya [2012] 1

LNS 2

Hasrat Idaman Sdn Bhd v. Mersing Construction Sdn Bhd [2015] 5

MLRH 218

Kerajaan Malaysia v. Ven-Coal Resources Sdn Bhd [2014] 11 MLJ 218

Berjaya Times Square Sdn Bhd v. M-Concept Sdn Bhd [2010] 1 CLJ
269

Jan De Nul (Malaysia) Sdn Bhd & Anor v. Vincent Tan Chee Yioun &
Anor and other cases [2016] 1 LNS 1234

Pembinaan SPK Sdn Bhd v. Jalinan Waja Sdn Bhd [2016] 10 CLJ 112

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[2018] 1 LNS 824 Legal Network Series

NZ New Image Sdn Bhd v. Loh Yok Liang [2016] 9 CLJ 695

Amfinance Bhd v. Ultimate Eight Sdn Bhd & Ors [2014] 3 CLJ 695

Johandra Realty Sdn Bhd & Anor v. Ketua Pengarah Jabatan

Pengairan dan Saliran Malaysia [2017] 1 LNS 350

Tekital Sdn Bhd v. Auto Parking Inc Sdn Bhd [2011] 9 CLJ 794

Mature Land Sdn Bhd v. Atlantic Plantation Sdn Bhd [2013] 3 MLRA
643

Paramaha Enterprise Sdn Bhd & Ors v. The Government of the State of
Sabah & Anor [2015] 2 CLJ 268

Kumpulan Darul Ehsan Berhad v. Mastika Lagenda Sdn Bhd [2017] 1

LNS 1025

Ong Ah Long v. Dr. S. Underwood [1983] 2 MLJ 324

Legislation referred to:

Section 55 of Contracts Act 1950

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