BUMI JELAPANG CORPORATION SDN. BHD. Kerajaan Negeri Kedah

KA-21C-1-11/2018 Kand. 179 02/09/2025 11:40:23 IN THE HIGH COURT OF MALAYA AT ALOR SETAR IN THE STATE OF KEDAH DARUL AMAN, MALAYSIA CIVIL SUIT NO.: KA-21C-1-11/2018 BETWEEN BUMI JELAPANG CORPORATION SDN BHD (Company No.: 722169-K) --- PLAINTIFF AND THE GOVERNMENT OF THE STATE OF KEDAH DARUL AMAN --- DEFENDANT GROUNDS OF JUDGMENT A. INTRODUCTION 1. This is a civil claim brought by the Plaintiff, Bumi Jelapang Corporation Sdn. Bhd. (“BJC”), against the Defendant, the Government of the State of Kedah Darul Aman, for alleged wrongful 1 S/N h38xS9TyO0qMCeQUpPxp1g **Note : Serial number will be used to verify the originality of this document via eFILING portal termination of a construction contract and non-payment of works completed. The Plaintiff seeks a sum of RM8,581,654.18, together with interest and costs, premised on contractual breach, quantum meruit and estoppel. B. BACKGROUND FACTS 2. The Plaintiff, BJC was appointed by the Defendant as the main contractor to carry out the construction works for the Chenang Waterfront Development Project, Langkawi pursuant to a contract dated 27 January 2015, with a contract sum of RM28,888,988.68. According to the Plaintiff, the construction works had progressed up to 78% completion before the contract was terminated by the Defendant by way of a letter dated 17 January 2018. 3. The Plaintiff contends that it carried out and completed approximately 78% of the physical works before the contract was terminated by the Defendant via letter dated 17 January 2018. At that stage, the Plaintiff had been paid only about 29.37% of the contract sum, amounting to RM8.48 million. 4. The Plaintiff contends that the termination was unlawful, and that the delays in the works were attributable to variations of instructions, cancellation of works, and site conditions disrupted by the Defendant’s own actions. The Plaintiff further claims the sum of 2 S/N h38xS9TyO0qMCeQUpPxp1g **Note : Serial number will be used to verify the originality of this document via eFILING portal RM8,581,654.18 representing the value of completed works which remained unpaid, together with interest and costs of the action. 5. The Plaintiff further asserts that the delay in completion was occasioned not by its default but by late delivery of possession of the site, delayed and unsynchronised variation orders, denial of Extension of Time (EOT) No. 4 despite justifiable grounds, and interference by the Defendant in opening the site to public access before completion. 6. The Defendant, on the other hand, denies the existence of a valid and binding contract, disputes the Plaintiff’s entitlement to further payments, and avers that the termination was lawful under the terms of PWD Form 203A. 7. The Defendant maintains that the Plaintiff had failed to complete the works within the stipulated time despite several extensions being granted, and that the termination was in accordance with the terms of the contract. 8. The Defendant also filed a counterclaim seeking damages and liquidated sums for delays, as well as the costs incurred in appointing a replacement contractor. 3 S/N h38xS9TyO0qMCeQUpPxp1g **Note : Serial number will be used to verify the originality of this document via eFILING portal 9. During the trial, the Plaintiff called five (5) witnesses, including the company’s Managing Director, the project engineer, and the contract management officer. The Defendant, in turn, called three (3) witnesses, including the State Finance Officer and the District Engineer. 10. The notes of evidence reveal significant contradictions between the parties’ versions of the facts, particularly concerning the principal causes of delay in the project and the existence of written instructions or official records of communication said to substantiate the Plaintiff’s alleged defaults. C. ISSUES FOR DETERMINATION 11. The principal issues to be determined by this Court are as follows: (a) Whether a valid and binding contract (express or implied) existed between the parties; (b) Whether the termination of the contract by the Defendant was lawful; (c) Whether the delays were attributable to the Plaintiff or to the Defendant; 4 S/N h38xS9TyO0qMCeQUpPxp1g **Note : Serial number will be used to verify the originality of this document via eFILING portal (d) Whether the Plaintiff is entitled to payment on the basis of quantum meruit for works executed; (e) Whether the principle of estoppel applies against the Defendant; (f) Whether the Defendant’s counterclaim has merit; (g) The quantum of damages and ancillary relief. D. SUBMISSIONS OF THE PARTIES Plaintiff’s Submissions 12. The Plaintiff argues that the termination was wrongful as delays were caused by the Defendant’s own acts and omissions. It relies on the doctrine of quantum meruit to claim payment for the 78% works completed, citing the principle in Syarikat Binaan Utara Jaya (A Firm) v Koperasi Serbaguna Sungai Glugor Bhd [2009] 2 MLJ 546 that compensation is payable for the value of work performed. 13. The Plaintiff contends that the termination of the contract by the Defendant was unlawful and carried out unilaterally without affording the Plaintiff a fair opportunity. The Plaintiff emphasises 5 S/N h38xS9TyO0qMCeQUpPxp1g **Note : Serial number will be used to verify the originality of this document via eFILING portal that the works were executed in accordance with the approved scope and schedule, and were duly verified in joint meetings. 14. Among the cases relied upon by the Plaintiff are Borneo Post Sdn Bhd v Sabah Times Sdn Bhd [1998] 3 MLJ 85 on wrongful termination of a contract entitles the aggrieved party to claim damages; Cannon Construction Sdn Bhd v Malaysian American Commission on Education Exchange [1985] 2 MLJ 449 on termination without lawful basis constitutes a breach of contract; Raja Zahabuddin Raja Sulong v Harun bin Mahmud [2006] 5 CLJ 43 on recognising a claim based on quantum meruit even in the absence of a written contract and Amalgamated Investment v Texas Commerce Bank [1982] QB 84 on principle of estoppel applies to representations relied upon by another party. 15. The Plaintiff also invokes estoppel, contending that the Defendant’s conduct in making progress payments and issuing certifications represented recognition of the Plaintiff’s entitlement. Authorities cited include Majlis Perbandaran Ampang Jaya v Steven Phoa Cheng Loon & Ors [2006] 2 MLJ 389 and Amalgamated Investment v Texas Commerce Bank [1982] QB 84. 6 S/N h38xS9TyO0qMCeQUpPxp1g **Note : Serial number will be used to verify the originality of this document via eFILING portal Defendant’s Submissions 16. The Defendant contends that the Plaintiff was in default and failed to complete within the stipulated time despite multiple EOTs granted. The Defendant relies on Selva Kumar a/l Murugiah v Thiagarajah Retnasamy [1995] 1 MLJ 817 for the proposition that damages must be strictly proven. 17. The Defendant submits that the Plaintiff had failed to complete the works within the stipulated time and in accordance with the required quality standards. The Plaintiff had been given adequate notice and reasonable opportunities to remedy its defaults, yet the defaults persisted notwithstanding several formal warnings. It is therefore argued that the termination was effected only after continuous non- compliance on the part of the Plaintiff. 18. The Defendant further maintains that there is no reliable record of valid payments or formal certifications of works which could substantiate the Plaintiff’s claims. The alleged delays, according to the Defendant, do not fall within the ambit of force majeure and hence cannot be excused. Accordingly, the Plaintiff has no legal or contractual basis to advance additional claims. 7 S/N h38xS9TyO0qMCeQUpPxp1g **Note : Serial number will be used to verify the originality of this document via eFILING portal 19. In support of its position, the Defendant refers to the authority of Selva Kumar a/l Murugiah v Thiagarajah Retnasamy [1995] 1 MLJ 817, which underscores the requirement of strict proof of actual loss for contractual damages, and Gaymark Investments Pty Ltd v Walter Construction Group Ltd [1999] NTSC 143, which deals with issues relating to extensions of time and responsibility for delays. The Defendant also cites Government of Malaysia (JKR) v Golden Globe Sdn Bhd [2018] 6 MLRA 134 to argue that a contractor in default cannot claim further payment. E. FINDINGS OF THE COURT 20. The Court examined the testimony of the witnesses for the Plaintiff and the witnesses for the Defendant. 21. Plaintiff’s key witness, PW1, the Project Director of BJC, demonstrated that there was confirmation of work progress amounting to 87.31% through the Progress Report as well as verification documents issued by the Defendant’s own representatives. 22. PW2, the consulting project engineer, confirmed that the delays were caused by the Defendant’s failure to provide timely approvals of plans and possession of the site. This was further supported by 8 S/N h38xS9TyO0qMCeQUpPxp1g **Note : Serial number will be used to verify the originality of this document via eFILING portal PW3, who showed that several Interim Certificates were not paid according to schedule despite the works having been carried out. 23. The Defendant’s witnesses, however, failed to effectively rebut this evidence. DW1 admitted that no clear written notice was issued to the Plaintiff before termination, and DW2 confirmed that the Plaintiff’s work continued beyond the original period with the knowledge of the Defendant. 24. The Court finds that the termination by the Defendant was effected hastily, without proper basis, and in contravention of the provisions of the contract. 25. To support the findings, the Court refers to the following authorities: (a) Boustead Trading (1985) Sdn Bhd v Arab-Malaysian Merchant Bank Bhd [1995] 3 MLJ 331, where the Court emphasised the principle that the termination of a contract must be effected strictly in accordance with its lawful terms and with bona fide intention. (b) Sierra Alpha Sdn Bhd v Malayan Banking Bhd [1999] 2 MLJ 618, in which the Court held that a party who wrongfully terminates a contract may be held fully liable for the losses suffered by the other party. 9 S/N h38xS9TyO0qMCeQUpPxp1g **Note : Serial number will be used to verify the originality of this document via eFILING portal (c) Examination of the principle of estoppel in Tay Joo Sing v Ku An Lee [1985] 2 MLJ 109 supports the position that the Defendant cannot deny the progress of works after having previously acknowledged the percentage of works completed. 26. Accordingly, the Court is of the view that the Plaintiff is entitled to damages as the contract was terminated without lawful justification, and that the Defendant cannot be allowed to benefit from shortcomings of its own making. Issue 1: Existence of Contract 27. Although the Defendant challenges the validity of the contract, the Court is satisfied that an implied contract existed. Documentary evidence, including letters of appointment, site instructions, progress reports and interim payments, establish mutual recognition of contractual relations. This accords with the principle in Gurumurthy a/l Muthusamy v Ketua Pengarah Kastam [1998] 6 MLJ 763. Issue 2: Termination and Delays 28. The evidence shows that delays were substantially caused by the Defendant’s late site possession, delayed variation orders, and refusal to grant EOT No. 4 despite justifiable grounds. Further, the 10 S/N h38xS9TyO0qMCeQUpPxp1g **Note : Serial number will be used to verify the originality of this document via eFILING portal Defendant prematurely opened the project site to the public. These circumstances undermined the Plaintiff’s ability to perform and disentitled the Defendant from terminating. Accordingly, the termination was wrongful. Issue 3: Quantum Meruit 29. The Court accepts the Plaintiff’s evidence that 78% of works were completed, but only 29.37% of the contract sum was paid. Applying the doctrine of quantum meruit, the Plaintiff is entitled to payment for the value of works conferred upon the Defendant. The principle is reinforced by Syarikat Binaan Utara Jaya (A Firm) v Koperasi Serbaguna Sungai Glugor Bhd [2009] 2 MLJ 546 and Damansara Realty (Pahang) Sdn Bhd v Angsana Sdn Bhd [2006] 1 CLJ 1015. Issue 4: Estoppel 30. Having made progress payments and acknowledged the Plaintiff’s works in various certifications and meetings, the Defendant is estopped from denying the Plaintiff’s entitlement. This is consistent with Majlis Perbandaran Ampang Jaya v Steven Phoa Cheng Loon & Ors [2006] 2 MLJ 389. 11 S/N h38xS9TyO0qMCeQUpPxp1g **Note : Serial number will be used to verify the originality of this document via eFILING portal Issue 5: Counterclaim 31. The Defendant’s counterclaim for RM14,946,000.00 is unsubstantiated. No cogent evidence was produced to show actual costs incurred or comparative valuations with the replacement contractor. The Court is not persuaded to allow the counterclaim. F. DECISION 32. For the reasons above, this Court holds that the Plaintiff has established the existence of a binding contractual relationship; the termination by the Defendant was unlawful; the Plaintiff is entitled to recover the unpaid value of works under quantum meruit; estoppel operates against the Defendant; and the Defendant’s counterclaim fails. 33. Accordingly, the Court orders that the Defendant shall pay to the Plaintiff the sum of RM8,581,654.18; interest at 5% per annum from the date of filing of the writ until full realisation; and costs of RM15,000.00 to the Plaintiff. 12 S/N h38xS9TyO0qMCeQUpPxp1g **Note : Serial number will be used to verify the originality of this document via eFILING portal Dated : 30th July 2025 ……………………………………………… (YA PUAN MAHAZAN BINTI MAT TAIB) JUDGE HIGH COURT OF MALAYA ALOR SETAR, KEDAH For The Plaintiff : Dato’ Kevin Sathiaseelan, Leng Wie Mun, Wincy Chia & Nurul Fasihah Shahrol Azam Messrs. Kevin & Co. Advocates & Solicitors For The Defendant : Najib bin Zakaria, Abdul Rahim, Raihan binti Roselan & Alia Amanda Messrs. Najib Zakaria, Hisham & Co. Advocates & Solicitors 13 S/N h38xS9TyO0qMCeQUpPxp1g **Note : Serial number will be used to verify the originality of this document via eFILING portal