PESAT BUMI SDN BHD CESCON ENGINEERS SDN BHD

PESAT BUMI SDN BHD CESCON ENGINEERS SDN BHD

Appeal dismissed: respondent was entitled to challenge the genuineness and classification underlying variation orders despite not being party to PAM contract because it was not enforcing PAM terms; the consultant contract between the parties did not incorporate the PAM conclusiveness clause so statements of final account were not binding on respondent; the High Court’s factual findings that (a) certain VOs were not sufficiently proven and (b) appellant exercised its contractual discretion unreasonably were not plainly wrong and therefore should stand.

Citation
W-02(C)(W)-1216-07/2022 (Mahkamah Rayuan)
Parties
Appellant / Plaintiff: Pesat Bumi Sdn Bhd; Respondent / Defendant: Cescon Engineers Sdn Bhd
Court
C
Jurisdiction
Malaysia
Judgment Date
18 January 2024
Case Number
W-02(C)(W)-1216-07/2022 (Mahkamah Rayuan)
Procedural Posture
Civil Appeal (construction/contract) / Court of Appeal Judgment on Appeal From High Court
Outcome
Appeal dismissed; High Court findings and judgment upheld
Legal Topics
Conclusiveness of Final Account, Privity, Variation Orders, Exercise of Contractual Discretion, Fees as Percentage of Construction Cost, Wednesbury Reasonableness
Source Language
Malay/English
Construction Law Contract Law Civil Procedure Administrative Law Conclusiveness of Final Account Privity Variation Orders Exercise of Contractual Discretion +2 more

Case Brief

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Parties

Pesat Bumi Sdn Bhd

Appellant / Plaintiff

Cescon Engineers Sdn Bhd

Respondent / Defendant

Procedural Posture

Civil Appeal (construction/contract) / Court of Appeal Judgment on Appeal From High Court

Legal Issues

  1. 1 Whether respondent (consultant) could challenge variation orders made under PAM contract to which it was not a party (privity)
  2. 2 Whether statements of final account under PAM contract were final and conclusive as between appellant and respondent
  3. 3 Whether appellant’s exercise of contractual discretion to exclude certain items from construction costs was reasonable and lawful

Ratio Decidendi

Appeal dismissed: respondent was entitled to challenge the genuineness and classification underlying variation orders despite not being party to PAM contract because it was not enforcing PAM terms; the consultant contract between the parties did not incorporate the PAM conclusiveness clause so statements of final account were not binding on respondent; the High Court’s factual findings that (a) certain VOs were not sufficiently proven and (b) appellant exercised its contractual discretion unreasonably were not plainly wrong and therefore should stand.

Court Disposition

Appeal dismissed; High Court findings and judgment upheld

Orders

  • Appeal dismissed
  • High Court judgment affirmed in favor of respondent for principal RM1,665,897.51