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FACULTY OF ARCHITECTURE, PLANNING AND SURVEYING

UNIVERSITI TEKNOLOGI MARA
SHAH ALAM, SELANGOR

ASSIGNMENT 1

COURSE : PROFFESIONAL PRACTICES II

COURSE CODE : BQS609

DATE OF SUBMISSION : WEEK 8

PREPARED FOR : SR DR SITI MAZZUANA SHAMSUDDIN

CLASS : AP2245D

PREPARED BY:

NAME MATRIC NO
NURAZIAH JASMIN BINTI ZULKEPLY 2019601628
RAJA NUR ANISAH BT RAJA ARIFIN 2019608088
EZYAN KAUSAR BT EZANI 2019818898
SITI NUR AIN BT SUKERI 2019660222
AIRA NABAHAH BT NAHARUDDIN 2019601902
HAFIY AMSYAR BIN RUSLI 2019884208
TABLE OF CONTENT

NO. CONTENT PAGE

1.0 Name of the case law

2.0 Identification of law

3.0 Facts of the case

4.0 Decision by the court

5.0 Conclusion and lesson learnt

6.0 References
1.0 NAME OF THE CASE LAW

Uniphone Telecommunications Bhd v Bridgecon Engineering Sdn Bhd & Anor

2.0 IDENTIFICATION OF CASE

MLJ 875 of 2011

3.0 FACTS OF THE CASE

Summary of the contract

This a turnkey contract awarded to the plaintiffs on the date of 15 June 1996 where

the employer, Gaya Kombinasi (M) Sdn Bhd has issued the letter of award. The

turkey contract was for the construction of an office building which consists of 7 floors

of office building and 3 floors of parking located at Lot 16717 in Mukim Petaling,

Daerah Petaling, Selangor Darul Ehsan. This project also known as Mines Waterfront

Business Park. The total project cost of construction was at the consideration of

RM70,500,000.00 and the actual agreed completion date between the employer and

the contractor was on 30 March 1998.

This case was rise once again to court of appeal by the appellant/defendant

(Uniphone Telecommunication Bhd) against the decision of the High Court to argue

upon the respondents/plaintiffs (Bridgecon Engineering Sdn Bhd and Fujita

Corporation (M) Sdn Bhd) regarding the issues of payment and the Certificate of

Practical Completion.
Explanation of the dispute

Primarily, there should be a clear vision that Gaya entered into a sale and purchase

agreement (SPA) with the defendant on 4 December 1996 six months while the

project was still ongoing. Therefore, there have been an agreement where Gaya will

sell the land and the defendant shall buy the land together with the construction of

the office building with the sum of RM161,088,000.00. Thus, this shows that the

plaintiff was not involve in the SPA agreement while the defendant was not involved

in the turnkey contract.

A deed of assignment (DOA) dated on 12 February 1999 about more than two years

later, where was entered between the three parties, which is Gaya,

respondents/plaintiffs, and the appellant/defendant was to facilitate the balance

payment, which the total of RM19,386,709.00 to the respondents that is under the

turnkey contract. Therefore, the sum of RM15 million is the sum payable by the

appellant to Gaya that is under the SPA and as part of owning by Gaya to the

respondents that this RM15 million sum also shall be paid by the appellant to the

respondents.

The amount of RM15 million shall be paid in the manner of RM7 million to be paid

upon the execution of DOA by the appellant and the balance of RM8 million is to be

paid 18 months after the issuance of CPC or earlier which will be paid by the

appellant also.

On 21 April 1999, the new CPC date have been issues by the architect to the

respondents and thus the claim for extension of time or liquidated damages cannot

be made. Moreover, there shall be no changes and threaten and cause of stoppage

of works be made by the appellant or the employer to avoid any extension of new

CPC date. The respondents were also obliged to work diligently to rectify any defects

that appear within the 18 months from the new CPC date under the turnkey contract.
Thus, on the issuance of the new CPC on 21 April 1999, the respondents shall entitle

to be paid the remaining balance of the sum by the appellant within that 18 months.

However, the appellant/defendant refused to pay the sum of that said RM8 million to

the respondents/plaintiffs as claimed by them on 3 April 2001 because there have

been so defects that is not satisfied for the appellant and the respondents seems had

failed to complete their works. This counterclaim filed by the appellant on 5 June

2001.

In their defence, the appellant also claimed that the CPC issued to the respondents

was defective and inappropriately issued. The CPC was then found unsigned by the

employer which it was a triable issue as to the validity of the CPC which means that

the CPC was invalid. It is known that CPC is required to have the employer’s

signature for its validity. However, there was no explanation from the respondents

regarding this unsigned CPC.

Though, the respondents argue that the balance sum of RM8 million under the DOA

is free of obligation towards the appellant that is under the SPA. It is said by the

respondents that any obligations to make good any defects during the defect liability

period are only toward the employer which is Gaya Kombinasi as this both parties

are under the turnkey contract and not with the appellant.

To summarise this, the issuance of the Certificate of Practical Completion has no

explanation and declaration done by the respondents that the CPC was issued in the

manner as prescribed by PAM and why was it unsigned by the employer where it will

clearly show that the CPC was invalid.

4.0 DECISION BY THE COURT

In case UNIPHONE TELECOMMUNICATIONS BHD v BRIDGECON ENGINEERING

SDN BHD & ANOR, the high court had dismissed the appeal with cost. The appellant

need to pay all cost because the appeal had been rejected. However, the appellant

had succeeded in raising triable issues. The appeal was made by defendant (UTB)

after the summary of judgement to the plaintiff had been decided by high court.

Before the appeal has been made, the majority are stated that DOA was clear and

unambiguous statement. The terms of the deed of assignments (DOA) referred to the

sales and purchase agreement (SPA) and turnkey contract. It was clearly stated that

defendant (UTB) needs to pay the plaintiff (Brigdecon Engineering) on behalf of Gaya

for the balance sum due from Gaya to plaintiff under the turnkey contract. Remaining

sum of money is RM8,000,000. This sum is the total amount of sum that defendant

need to paid to Gaya under SPA for the office building which Gaya will need to pay it

to the plaintiff. By being a party to the DOA, the defendant agreed to pay that sum of

money to the plaintiffs on behalf of Gaya. Therefore, defendant was obligated to pay

the remaining sum of RM8,000,000 to the plaintiff.

On the appellant, some triable issues had been raised. The issue is on defects and

certificate of practical completion. It is whether there were incomplete works and

substantial defects in the construction of the project and whether the respondent is

expected to complete the works and repair the defects before the respondent can

claim the sum of RM8 million from the appellant.

The dispute is either there were defects and incomplete works or not. The statement

given by the respondent and appellant are opposed each other. For respondent, they

agreed that the whole work have been completed with the minor defects which are

not serious in nature. In the other hand, the appellant opposes that there were

incomplete works and there are serious and substantial defects occurred in the

project which the respondents should not claim the payment from them.
The appellant has succeeded to raise the issue of incomplete and substantial

defective works in the statement of defence and counterclaim. In their affidavits, the

appellant declarations are on opposing the respondent’s summary judgment

application that the appellant refused to pay the claim and the fact that they obtained

the quotation for the completion works with the estimated sum of RM16,349,005.77.

The appellant has even filed a counterclaim for RM17m. In their counterclaim the

appellant claims that they have incurred RM856,481.70 to rectify some of the defects

which documents detailing on the defects have been produced as of their first

affidavit. Other than that, the appellant is also claiming a further sum of

RM16,349,005.77 which was claiming to be the sum that they need to incur in order

to complete the works and repair the defects. In their affidavits, the appellant also

has produced details of the incomplete works and defects, the contractors that would

be involved to complete the works and or to remedial the defects and also the

quotations.

The next issue which are more sided to the appellant is the issuance of Certificate of

Making Good Defects (CMGD). CMGD is only being issued by the project architect,

KPK architect to the respondent on 6 November 2001 which is more than two and a

half year after the issuance of CPC on 21 April 1999. If it is only the minor defects, it

will not be taking such a long time to be completed. Therefore, the duration of making

good defects which are quite long is being more sided to appellant’s claim which the

defects were extensive and substantial in nature. The defects are not the minor one

as claimed by the respondent.

Next ambiguous issue is on the validity of the certificate of practical completion

(CPC). The format of CPC required to the approval of Gaya Kombinasi who is the

employer but the CPC was unsigned by the employer. The respondent and project

architect did not have any explanation on the reason of the obvious omission. Other

than that, the CPC has the appendix which contains a long list of works that need to
be completed by the respondent. But the appendix was being omitted by the

respondent in their first affidavit in which the respondent only displaying the CPC

without any appendix. This shows that the CPC that had been display were not

complete. The appellant than displayed the appendix when they filed their affidavit as

responded to the respondent’s affidavit. When this failure on the part of the

respondents to show the appendix to the CPC was pointed out by the appellant in

their affidavit, in their reply, the respondents did not bother to provide any explanation

whatsoever. From the response, the interpretation then can be made that the

omission of the appendix to the CPC by the respondent was intentional.

The deed of assignment (DOA) instructs in clause 8.1 that the new Certificate of

Practical Completion (CPC) on date 21 April 1999 need to be certified by the

architect as stated by Pertubuhan Arkitek Malaysia (PAM). The validity of CPC is

being challenge because the CPC is not signed by the employer, contains the

appendix with the long list works to be completed and no declaration in the CPC that

it is issued as being prescribed by PAM.

In the dispute between the appellant and the respondents, the CPC is a vital

document for the appellant's liability to pay depends upon the issuance of a valid

CPC. Now, the validity of the CPC is being seriously challenged by the appellant.

Hence, the legal burden is on the respondents to verify that the CPC is validly issued.

It is compulsory upon the respondents to prove that that the CPC was issued as

being prescribed by Pertubuhan Akitek Malaysia (PAM). Based on the CPC and the

affidavits of the respondents, there is no statement stated that the CPC is issued in

accordance with the manner as prescribed by PAM. Further, there is no presumption

of law that where an architect issues a CPC, it must be presumed that the CPC was

issued in accordance with the manner as prescribed by PAM.

There were also serious disputes in relation to the list of defects as set out in the

appendix to the CPC. According to the appellant, the defects were extensive and
substantial and that some of the works are even incomplete. The appellant opposes

that the architect should not have issued the CPC. However, the appellant cannot be

able to prove that the defects are extensive and there were incomplete works.

Therefore, the issuance of CPC by the project architect cannot be argue

Hence, the defence and counterclaim of the appellant was not an accused. This case

was not the straightforward case as granted by the summary of judgement. In the

court of appeal, the appellant need to satisfy the court that there were real triable

issues and they actually have succeeded to prove it although the appellant lost the

case.
5.0 CONCLUSION & LESSON LEARNT

In conclusion, the dispute in the construction industry might occur between the

parties. The parties can decide to bring the dispute into Alternative Dispute

Resolution such as arbitration or also to the Court. In this cases Uniphone

Telecommunications Bhd v Bridgecon Engineering Sdn Bhd & Anor, the appellant

bring the dispute to Court of Appeal (Putrajaya) after the first proceeding is Bridgecon

winning. The High Court judge also give winning to the defendant because of the

terms in Deed of Assignment (DOA) is clear and they entitled to the claim.

This case shows the importance of the CPC validity because it can bring the cases to

another dispute and all the parties need to understand the contract carefully to avoid

any problem arise. There are several lessons learn in this study that is portray:

i. We must achieve CPC before exceeding the revised date

From this case, the plaintiff succeeds to get their claim, which is RM 8 million after

CPC. This is because the plaintiff had achieved the CPC before exceed the revised

date. After all, this project has an extension of time. This show that the plaintiff

manages to follow the revised contract period. The defendant needs to pay the

plaintiff the amount of money that had been agreed in DOA. The court had come to

the plaintiff side because the plaintiff has their right on this case.

According to the agreement in DOA, Uniphone Telecommunication as defendant is a

fault because by right, plaintiff deserves to claim the money because they achieve

the CPC. Even the plaintiff claims the works have defects, however, the issuance of

CPC already made by the Architect. The date of CPC is important because if it

exceeds, the defendant will not get the claim and will be charge for LAD. Low Hop
 Bing and Syed Ahmad Helmy JJCA also agree that the plaintiff needs to pay

defendant because the sum of RM 8,000,000 is not a retention sum.

ii. All information in the document must be fill

From this case, the defendant success to arise the dispute by bringing the validity of

the Certificate of Practical Completion. In turnkey contract, the term of Certificate of

Practical Completion is not found but it can be found at SPA agreement. The CPC

format however required Employer approval or signature.However, in this case, the

CPC was not signed by the Employer and for this case, refer to Gaya Kombinasi.

Bridgecon(Plaintiff/Respondent) and also the architect issued this CPC has no

explanation regarding this arising issue. In a contract or other important document, it

is important to fill all the requirement in the document. This is to ensure the validity of

the contract. The appellant even they are not winning the appeal, they success to

bring this issue because it is clear that all documents must be completed.

iii. All parties need to understand the contract and their rights

In this contract, the turnkey contract was made between Gaya Kombinasi and the

BridgeCon(Plaintiff). The contract between Gaya Kombinasi and the Uniphone

Telecommunication (Appellant) is sale and purchase agreement (SPA). The parties

involved only have to follow the obligation towards the party that they enter the

contract.

Even all the parties entered contract under Deed of assignment, the contract only

stated that the defendant needs to pay the plaintiff on behalf of Gaya Kombinasi. The

defendant argues that they are defective works and the CPC is not valid. However,
the work to rectify the defect is between the Plaintiff and Gaya Kombinasi under a

turnkey contract. Plaintiff and defendant do not enter the contract for the plaintiff to

rectify the works.

The defendant still needs to pay the plaintiff the remaining amount agreed after

issuance of CPC as stated in SPA and the judge stated that the appellant could ask

remedy for the defects and incomplete works by the defendant. Through this case, it

is important for all the parties involved to understand their contract and their

obligation towards the parties and the contract. If a dispute occur later in the contract,

the parties can argue regarding their obligation toward the contract. Uniphone

Telecommunication must not clear regarding the contract decided to bring this case

to Court of Appeal. However, they still have a right to appeal the case even if they

know their obligation because many disputes happen in this cases.

6.0 REFERENCES: RELATED CLAUSES IN PAM

PAM Clause 15.0