KAM SIEW 1. ) TAN TONG KEONG 2. ) LIM YOKE KEE 3. ) TAN JIA YAO

BA-22C-45-10/2019 Kand. 147 IN THE HIGH COURT OF MALAYA AT SHAH ALAM, SELANGOR DARUL EHSAN 28/07/2023 08:57:47 CIVIL SUIT NO: BA-22C-45-10/2019 BETWEEN KAM SIEW (NRIC. No.: 540309-10-5917) … PLAINTIFF AND 1. TAN TONG KEONG (NRIC. No.: 630602-05-5719) 2. LIM YOKE KEE (NRIC. No.: 630112-05-5230) 3. UT CONSTRUCTION & RENOVATION (Business Registration No.: 002394876-W) … DEFENDANTS JUDGMENT (after trial) A. Introduction 1. This case raises two interesting questions as follows: (1) whether the court can consider the oral testimony of a solicitor (X) regarding the meaning of a contract entered into by X’s client (Y) when X had previously acted for Y in the negotiations and drafting of the contract; and (2) when Y called X as a witness in a trial to give evidence regarding the interpretation of the contract executed by Y, has Y impliedly waived legal privilege attached to communication between X and Y regarding the contract under the second limb of s 128 of the Evidence Act 1950 (EA)? S/N sYvwmXDJbUSkQm7vYARVg 1 **Note : Serial number will be used to verify the originality of this document via eFILING portal B. Background 2. The plaintiff (Plaintiff) owns a double-storey bungalow situated at Lot 37409, Jalan Shahbandar 20/6, Bandar Mahkota Cheras, Mukim Cheras, Daerah Hulu Langat, Selangor Darul Ehsan (Property). 3. Mr. Tan Jia Yao (Jia Yao) is the sole proprietor of a business known as “UT Construction & Renovation” (UTCR). UTCR was initially the third defendant (3rd Defendant) in this case. After the conclusion of the trial in this case (Trial), the Plaintiff applied in court enclosure no. 80 (Enc. 80) to amend his Amended Statement of Claim (ASOC) to substitute Jia Yao as the 3rd Defendant (in place of UTCR). The court has allowed Enc. 80 - please refer to Part D below. 4. The first defendant (1st Defendant) and second defendant (2nd Defendant) are Jia Yao’s father and mother respectively. 5. The Plaintiff alleged that he had orally appointed the 1st Defendant and UTCR to renovate the Property (Works). In this judgment, I shall refer to this appointment as the “1st Contract”. 6. UTCR appointed Messrs “Ahmad Zakuan Architect” (Messrs AZA), a firm of architects, to prepare building plans for the 1st Contract (Building Plans) to be submitted to the local authority, “Majlis Perbandaran Kajang” (MPKj). 7. There were disputes regarding the Works which led to a suit filed by the Plaintiff against the 1st Defendant, 2nd Defendant and UTCR in Shah Alam Sessions Court Civil Suit no. BA-B52C-43-06/2017 (1st Suit). This S/N sYvwmXDJbUSkQm7vYARVg 2 **Note : Serial number will be used to verify the originality of this document via eFILING portal judgment shall refer to the 1st Defendant, 2nd Defendant and UTCR collectively as the “Defendants (1st Suit)”. 8. In the 1st Suit - (1) the Plaintiff pleaded as follows, among others - (a) the Plaintiff had paid to the Defendants (1st Suit) a total sum of RM536,984.50 for the Works but the Works had not been completed by the Defendants (1st Suit); and (b) the Plaintiff had claimed for, among others, the return of RM536,984.50 from the Defendants (1st Suit); (2) Mr. Thisinayagam A/L Somasundram (SD2), an Advocate and Solicitor (A/S) represented the Defendants (1st Suit); (3) the Defendants (1st Suit) had resisted the 1st Suit on various grounds; and (4) on 13.3.2018, all parties recorded a consent judgment in the Sessions Court (Consent Judgment). According to the Consent Judgment - (a) the Plaintiff and Defendants (1st Suit) had reached a full settlement regarding the 1st Suit based on the terms of a “Settlement Agreement” (SA); and (b) the SA was appended to the Consent Judgment as Appendix A. 9. I reproduce below the salient terms of the SA: S/N sYvwmXDJbUSkQm7vYARVg 3 **Note : Serial number will be used to verify the originality of this document via eFILING portal (1) clause 1(i) - the Defendants (1st Suit) are required to complete the Works - (i) as provided in the Bills of Quantities attached to the SA as Annexures 1 and 2 (BQs); and (ii) in accordance with the Building Plans as attached to the SA as Annexure 3 [Clause 1(i)]; (2) clause 1(ii) - the Defendants (1st Suit) are not required to obtain the “Certificate of Completion and Compliance” (CCC) but “shall assist or allow the Plaintiff and/or third party(ies) engaged by the Plaintiff to liaise with the relevant … authorities to procure the issuance of the CCC, including but not limited … to provide the relevant necessary documents to such third party(ies) for such purposes” [Clause 1(ii)]; (3) clause 3(i) - the total cost for the Works will be RM300,000.00 [Total Cost (Works)] which will only be payable to Defendants (1st Suit) after the amount of the Total Cost (Works) has been ascertained and duly verified by the Plaintiff and 1st Defendant [Clause 3(i)]; (4) clause 3(ii) - the Plaintiff shall pay the Total Cost (Works) to the Plaintiff’s then solicitors, Messrs Siew Lee & Co. (Messrs SL), as stakeholders and Messrs SL shall release the Total Cost (Works) to the then solicitors for the Defendants (1st Suit), Messrs S/N sYvwmXDJbUSkQm7vYARVg 4 **Note : Serial number will be used to verify the originality of this document via eFILING portal Nayagam & Partners (SD2’s firm) (Messrs NP), within seven working days after the receipt of each progress claim (PC) from the Defendants (1st Suit) and after the PC has been duly verified by both the Plaintiff’s representative and 1st Defendant; (5) clause 4(ii) [Clause 4(ii)] - the Works shall be completed by the Defendants (1st Suit) on 25.8.2018 (Completion Date); (6) clause 4(iv) - for avoidance of doubt, Works shall mean the completion of all the Works as stated in clause 1.1(i) SA [Clause 4(iv)]; (7) clause 5(i) - if the Defendants (1st Suit) fail to compete the Works on the Completion Date, the Defendants (1st Suit) shall pay to the Plaintiff a sum of RM300.00 per day from the Completion Date until the completion of the Works as duly verified by the Plaintiff’s representative [Clause 5(i)]; (8) clause 5(ii) - if the Defendants (1st Suit) fail to complete the Works one month after the Completion Date - (a) a sum of RM250,000.00 shall be payable in full by the Defendants (1st Suit) to the Plaintiff; and (b) with regard to the sum of RM250,000.00 - (i) the payment of the sum of RM250,000.00 shall be without any prejudice to the Plaintiff’s “other rights and/or remedies” to which the Plaintiff is entitled; S/N sYvwmXDJbUSkQm7vYARVg 5 **Note : Serial number will be used to verify the originality of this document via eFILING portal (ii) the Defendants (1st Suit) shall deposit the sum of RM250,000.00 with Messrs NP as stakeholders on the “day immediately after the expiry” of the Completion Date; and (iii) Messrs NP shall release the sum of RM250,000.00 to Messrs SL within three days upon the request of Messrs SL [Clause 5(ii)]; (9) clause 6(ii) - time wherever mentioned in the SA is of the essence in the SA; (10) clause 6(iii) - the Plaintiff is entitled to terminate the SA if the Works are not completed as provided in Clause 1(i) and within one month after the Completion Date as provided in Clause 4(ii). This right to terminate the SA is subject to any extension of time (EOT) provided in clause 7; and (11) clause 7 - if the Plaintiff fails to confirm the PC of the Defendants (1st Suit) within three working days after notification of the PC, the Plaintiff shall allow an EOT for a period which corresponds with the period of the Plaintiff’s delay in the confirmation of the PC. 10. Pursuant to the SA, UTCR took possession of the Property and recommenced Works. The Property shall be referred to in this judgment as the “Site”. S/N sYvwmXDJbUSkQm7vYARVg 6 **Note : Serial number will be used to verify the originality of this document via eFILING portal 11. On 19.3.2018, UTCR issued PC no. 1 for a sum of RM114,925.40 (PC No. 1) to be paid by the Plaintiff to UTCR for Works which had been completed at the time of the issuance of PC No. 1. The Plaintiff’s architect, Mr. Peter Chan Ping Wai (SP2), however only recommended the Plaintiff to pay to UTCR an amount of RM87,443.70 for PC No. 1 and this amount was paid by the Plaintiff to UTCR. 12. Messrs SL sent a letter dated 27.4.2018 to Messrs NP [Messrs SL’s Letter (27.4.2018)] which stated as follows, among others: (1) the Plaintiff agreed to extend the Completion Date to 22.9.2018 (Extended Completion Date); and (2) Messrs SL requested the Defendants (1st Suit) to assist regarding, among others, the Building Plans. According to paragraph 4 of Messrs SL’s Letter (27.4.2018) - “4. Information relevant for the issuance of CCC a) As stated in the last clause of the [SA] read together with Clause 1(ii), while the [Defendants (1st Suit)] are not required to obtain the CCC, the [Defendants (1st Suit)] are the ones who engaged the architect and draughtsmen to prepare the plans for submission to the relevant authorities in compliance with the relevant laws and regulations. b) As such, pursuant to Clause 1(ii), your clients [Defendants (1st Suit)] ought to liaise with the architect engaged by your clients to inquire on the latest status of the application of the submission plans. This is part of your clients’ obligations pursuant to Clause 1(ii), which is to assist our client to procure the issuance of the CCC. S/N sYvwmXDJbUSkQm7vYARVg 7 **Note : Serial number will be used to verify the originality of this document via eFILING portal c) In addition, our client would like to put on record that your clients have previously claimed a sum of RM17,000.00 from our client which has been paid by our client for the application for plans submission. We attached the relevant quotation and proof of payments for your attention. d) Pursuant to the above, your clients ought to assist our client in this matter.” (emphasis added). Attached to Messrs SL’s Letter (27.4.2018) were the following documents - (a) a quotation dated 1.12.2015 by UTCR to the Plaintiff for payment of, among others, the architect who would prepare the Building Plans; and (b) three payment vouchers evidencing the Plaintiff’s payment of RM17,000.00 with regard to the preparation of the Building Plans [Plaintiff’s Payments (Building Plans)]. 13. SP2 sent a letter dated 30.4.2018 to UTCR [SP2’s Letter (30.4.2018)]. In SP2’s Letter (30.4.2018), among others - (1) UTCR and its representatives were “absent at the site most of the time”. There were only two workers at the Site at the time of SP2’s Letter (30.4.2018) who often asked the Plaintiff “what to do next”; and S/N sYvwmXDJbUSkQm7vYARVg 8 **Note : Serial number will be used to verify the originality of this document via eFILING portal (2) SP2 had asked regarding the status of the Building Plans, including when the Building Plans were submitted to MPKj [SP2’s Query (Building Plans)]. 14. UTCR replied to SP2’s Letter (30.4.2018) in a letter dated 2.5.2018 [UTCR’s Letter (2.5.2018)]. In UTCR’s Letter (2.5.2018), among others - (1) there was no denial by UTCR that there were only two workers of UTCR at the Site during the material time who did not know what to do; (2) UTCR did not reply to SP2’s Query (Building Plans); and (3) UTCR stated that UTCR would only follow its obligations under SA and not any request from SP2 which was not included in the SA. 15. On 7.6.2018, UTCR issued PC no. 2 for an amount of RM42,326.70 (PC No. 2) with regard to Works which had been done at the time of the issuance of PC No. 2. For PC No. 2, SP2 only recommended the Plaintiff to pay a sum of RM400.00 to UTCR. Hence, the Plaintiff paid RM400.00 to UTCR in respect of PC No. 2. 16. UTCR sent PC no. 3 for a sum of RM41,926.70 (PC No. 3) to be paid by the Plaintiff to UTCR for Works which had been performed at the time of the issuance of PC No. 3. SP2 however opined that UTCR should repay a sum of RM6,900.00 to the Plaintiff because the previous Works performed by UTCR (before the conclusion of the SA) had been demolished pursuant to the Building Plans annexed to the SA. S/N sYvwmXDJbUSkQm7vYARVg 9 **Note : Serial number will be used to verify the originality of this document via eFILING portal 17. On 3.9.2018, MPKj issued the following notice to the Plaintiff [MPKj’s Notice (3.9.2018)] under s 70(11) of the Street, Drainage and Building Act 1974 (SDBA): “NOTIS AMARAN … Adalah dimaklumkan bahawa tuan/puan telah melakukan kesalahan di bawah undang-undang seperti berikut: Seksyen 70(11) Akta Jalan, Parit dan Bangunan 1974 … KESALAHAN Telah membuat perubahan pada mana-mana bangunan dengan apa- apa cara tanpa mendapati kebenaran bertulis terlebih dahulu daripada Pihak Berkuasa Tempatan, MPKj. Sila ambil perhatian, tuan/puan dikehendaki dalam tempoh 30 hari dari tarikh notis ini disampaikan menjalankan kerja-kerja yang perlu bagi maksud itu, iaitu: ARAHAN seksyen 72(a), (b), (c) Akta Jalan, Parit dan Bangunan 1974 … Sila runtuhkan struktur tambahan tersebut dalam tempoh masa yang telah ditetapkan dan mengambil langkah-langkah sebagaimana yang diperintahkan oleh Pihak Berkuasa Tempatan, MPKj. Sila hentikan kerja-kerja di tapak serta merta. Dengan ini kerjasama tuan/puan adalah diminta supaya kesalahan ini tidak diulang. Sekiranya notis ini tidak dipatuhi tindakan tegas selanjutnya akan diambil terhadap tuan/puan tanpa sebarang notis lagi. Kerjasama pihak tuan/puan dalam perkara ini amatlah diharapkan.” (emphasis added). S/N sYvwmXDJbUSkQm7vYARVg 10 **Note : Serial number will be used to verify the originality of this document via eFILING portal 18. As a consequence of MPKj’s Notice (3.9.2018), UTCR sent a letter dated 3.9.2018 to the Plaintiff and SP2 [UTCR’s Letter (3.9.2018)]. According to UTCR’s Letter (3.9.2018), among others - “… [MPKj] issued an order today (3.9.2018) to stop all work at the site immediately. As such we will have to vacate the site immediately. Please request your representative to be present for us to hand over site possession at 4.00 pm tomorrow (4.9.2018). We shall not be responsible for any loss of material and any other items after we have vacated the site.” (emphasis added). 19. UTCR sent a letter dated 4.9.2018 to the Plaintiff and SP2 [UTCR’s Letter (4.9.2018)] which stated as follows, among others: “Following to [sic] [UTCR’s Letter (3.9.2018)] in [sic] regards the above matter, you are absent from the site handing over. Therefore, we have no choice but to vacate the site without your present [sic]. We shall not be responsible for any loss of material and any other items after we have vacated the site. Attached herewith the photos of current site condition for record purpose.” (emphasis added). S/N sYvwmXDJbUSkQm7vYARVg 11 **Note : Serial number will be used to verify the originality of this document via eFILING portal 20. In response to UTCR’s Letter (3.9.2018), Messrs SL sent a letter dated 4.9.2018 to Messrs NP [Messrs SL’s Letter (4.9.2018)]. The contents of Messrs SL’s Letter (4.9.2018) are as follows, among others: (1) the Plaintiff refused to take possession of the Site; (2) as UTCR had stated in its letter dated 8.8.2018 to the Plaintiff that UTCR is a “Design and Build Contractor”, UTCR ought to be responsible and take all reasonable steps to remedy the consequences arising from MPKj’s Notice (3.9.2018) on or before 14.9.2018; (3) MPKj’s Notice (3.9.2018) only required the Works to be stopped and did not require UTCR to vacate the Site; and (4) when UTCR informed the Plaintiff that UTCR would vacate the Site immediately, UTCR had made a fundamental breach of SA and the Plaintiff reserved his right to take necessary action against UTCR. 21. Messrs NP replied to Messrs SL’s Letter (4.9.2018) in a letter dated 5.9.2018 [Messrs NP’s Letter (5.9.2018)]. Messrs NP’s Letter (5.9.2018) alleged, among others, as follows: (1) the Plaintiff had the duty under the SA to obtain the necessary approval; and (2) MPKj’s Notice (3.9.2018) had a twofold purpose, namely - (a) UTCR should stop Works and demolish additional structures; and S/N sYvwmXDJbUSkQm7vYARVg 12 **Note : Serial number will be used to verify the originality of this document via eFILING portal (b) the due performance of UTCR under the SA had been frustrated. 22. SP2 sent a letter dated 5.9.2018 to UTCR [SP2’s Letter (5.9.2018)]. According to SP2’s Letter (5.9.2018), among others - (1) when the Plaintiff and SP2 checked with MPKj, they were shocked to be informed by MPKj that there was no record of submission of the Building Plans for MPKj’s approval; and (2) SP2 urgently requested UTCR to provide, among others, an endorsed copy of the Building Plans to SP2. 23. UTCR replied to SP2’s Letter (5.9.2018) by way of a letter dated 11.9.2018 [UTCR’s Letter (11.9.2018)]. UTCR’s Letter (11.9.2018) alleged that - (1) a “set of Architectural and Structural Drawings” had been given to the Plaintiff during the early stage of the Works; and (2) a set of Architectural and Structural Drawings was handed to SP2 on 22.3.2018. 24. SP2 sent a letter dated 8.9.2018 to Messrs AZA [SP2’s Letter (Messrs AZA, 8.9.2018)] which sought the assistance from Messrs AZA regarding, among others, MPKj’s Notice (3.9.2018). 25. By way of a letter dated 14.9.2018 [Messrs AZA’s Letter (UTCR, 14.9.2018)], Messrs AZA inquired from UTCR on how to respond to SP2’s Letter (Messrs AZA, 8.9.2018). S/N sYvwmXDJbUSkQm7vYARVg 13 **Note : Serial number will be used to verify the originality of this document via eFILING portal 26. UTCR did not reply to Messrs AZA’s Letter (UTCR, 14.9.2018). 27. SP2 sent a letter dated 22.10.2018 to UTCR [SP2’s Letter (22.10.2018)] which stated as follows, among others: (1) UTCR did not respond to SP2’s request for information in SP2’s Letter (5.9.2018); and (2) Messrs AZA was waiting for UTCR’s instruction on how to respond to SP2’s request for assistance in SP2’s Letter (Messrs AZA, 8.9.2018). 28. UTCR did not reply to SP2’s Letter (22.10.2018). 29. On 14.12.2018, UTCR had sent PC no. 4 to the Plaintiff for an amount of RM41,926.70 (PC No. 4). 30. By way of a letter dated 9.6.2020, the solicitors for the Plaintiff in this case, Messrs Chih-Jen & Associates (Messrs CJA), have forwarded a letter dated 9.6.2020 from the Plaintiff to Messrs AZA which inquired from Messrs AZA on whether the Building Plans had been submitted by Messrs AZA for MPKj’s approval before commencement of the Works. Messrs AZA replied in a letter dated 29.6.2020 [Messrs AZA’s Letter (29.6.2020)] as follows: (1) Messrs AZA had been engaged by UTCR to prepare the Building Plans for submission to MPKj; (2) while Messrs AZA was “in process of submission” of the Building Plans to MPKj, UTCR notified Messrs AZA to stop the submission; and S/N sYvwmXDJbUSkQm7vYARVg 14 **Note : Serial number will be used to verify the originality of this document via eFILING portal (3) as requested by UTCR, “all related documents” had been handed by Messrs AZA to UTCR. 31. Messrs CJA sent a letter dated 10.7.2020 to Messrs AZA which enclosed a request dated 9.7.2020 from the Plaintiff to Messrs AZA. The Plaintiff requested to have sight of UTCR’s notice to Messrs AZA to stop the submission of the Building Plans to MPKj. In a letter dated 3.12.2020 [Messrs AZA’s Letter (3.12.2020)], Messrs AZA informed the Plaintiff that - (1) UTCR terminated Messrs AZA’s services when the Plaintiff terminated the 1st Contract in March 2017; and (2) Messrs AZA had forwarded all the information and documents to UTCR. C. This suit 32. In this action, in the ASOC, the Plaintiff has prayed for, among others, the following remedies against the 1st Defendant, 2nd Defendant and UTCR (Original Action): (1) a sum of RM250,000.00 shall be paid to the Plaintiff pursuant to Clause 5(ii); (2) a sum of RM300.00 per day shall be paid as liquidated and ascertained damages (LAD) from 23.9.2019 until the completion of the Works; and S/N sYvwmXDJbUSkQm7vYARVg 15 **Note : Serial number will be used to verify the originality of this document via eFILING portal (3) cost for the Plaintiff to complete the Works in accordance with the Building Plans. 33. There was a counterclaim against the Plaintiff by the 1st Defendant and UTCR (Counterclaim) for the following sums of money: (1) an amount of RM41,926.70 due under PC No. 4; and (2) a sum of RM170,229.60 which was the value of Works which had been performed by UTCR under the SA but had not been included in PC Nos. 1 to 4 [Value (Non-PC Works)]. 34. The Original Action and Counterclaim were tried together and the following witnesses had been called at the Trial: (1) three witnesses testified for the Plaintiff, namely - (a) the Plaintiff; (b) SP2; and (c) Ar. Steven Thang Boon Ann (SP3); and (2) the Defendant and SD2 gave evidence to resist the Original Action and to support the Counterclaim. 35. The Plaintiff gave the following evidence, among others: (1) the 2nd Defendant was sued in the 1st Suit because the Plaintiff had made various payments to the 2nd Defendant pursuant to the 1st Contract; S/N sYvwmXDJbUSkQm7vYARVg 16 **Note : Serial number will be used to verify the originality of this document via eFILING portal (2) for the purpose of the SA, SP2 was appointed by the Plaintiff to, among others - (a) advise the Plaintiff on whether Works performed by UTCR had complied with the Building Plans and BQs; and (b) recommend payments by the Plaintiff to UTCR regarding PCs issued by UTCR; (3) UTCR could not rely on MPKj’s Notice (3.9.2018) to stop the Works and vacate the Site immediately because the failure to obtain MPKj’s approval was a “direct result” of UTCR’s own action or inaction with regard to the Building Plans; and (4) due to UTCR’s failure to complete the Works in accordance with the SA - (a) the Plaintiff was entitled to claim from the 1st Defendant, 2nd Defendant and UTCR under the SA - (i) RM300.00 a day from the Completion Date until the completion of the Works as LAD under Clause 5(i); and (ii) RM250,000.00 pursuant to Clause 5(ii); and (b) the Counterclaim should be dismissed. 36. SP2’s testimony was as follows, among others: (1) SP2 gave reasons why SP2 only recommended part payments by Plaintiff to UTCR for PC Nos. 1 and 2; S/N sYvwmXDJbUSkQm7vYARVg 17 **Note : Serial number will be used to verify the originality of this document via eFILING portal (2) SP2 explained why SP2 recommended that the Plaintiff should not pay UTCR for PC No. 3 and instead, UTCR should repay a sum of RM6,900.00 to the Plaintiff; and (3) SP2 could not recommend payment by the Plaintiff to UTCR for PC No. 4 because the Defendants had breached the SA by stopping Works and vacating the Site immediately [purportedly due to MPKj’s Notice (3.9.2018)]. 37. SP3 is an architect who has been appointed by the Plaintiff to provide an expert opinion on the Works performed by the Defendants in this case (SP3’s Expert Opinion). According to SP3’s Expert Opinion, among others - (1) the Works did not comply with the Building Plans; and (2) UTCR did not carry out the Works diligently. 38. The 1st Defendant gave the following testimony, among others: (1) the Plaintiff had previously appointed a contractor to carry out the Works but the contractor subsequently abandoned the Site. UTCR took over the Works; (2) the 2nd Defendant was not involved in UTCR. Nor was the 2nd Defendant involved in the Works in this case; (3) the 1st Suit was filed because - (a) the Plaintiff did not pay PCs submitted by UTCR; and S/N sYvwmXDJbUSkQm7vYARVg 18 **Note : Serial number will be used to verify the originality of this document via eFILING portal (b) the Plaintiff locked the Site without giving notice to UTCR and refused to allow UTCR to enter the Site; (4) after the conclusion of the SA - (a) there would be adverse consequences to the Plaintiff if the Works were performed in accordance with the Building Plans; (b) due to the Building Plans, UTCR had to do additional works amounting to RM62,846.82; (c) UTCR had completed “building works” on 30.5.2018. The Plaintiff was supposed to arrange for “Mechanical and Electrical” contractors for the building works and to supply tiles for the swimming pool and fish pond; (d) the Plaintiff only paid RM400.00 to UTCR for PC No. 2 and did not pay at all in respect of PC No. 3; and (e) in view of MPKj’s Notice (3.9.2018) - (i) UTCR had to stop Works and vacate the Site immediately; and (ii) the SA was frustrated; and (5) UTCR was not responsible under the SA to submit the Building Plans to MPKj. 39. According to SD2, among others - S/N sYvwmXDJbUSkQm7vYARVg 19 **Note : Serial number will be used to verify the originality of this document via eFILING portal (1) SD2 acted for the 1st Defendant, 2nd Defendant and UTCR in the 1st Suit; (2) to resolve the 1st Suit - (a) there were mediation sessions in the Sessions Court; and (b) all the parties and their A&S met to negotiate and draft the SA; and (3) SD2 gave the following interpretation of, among others, clauses 5(i) and (ii) SA [SD2’s Interpretation (SA)] - (a) if the Works are not completed, LAD at the rate of RM300.00 per day shall be imposed by the Plaintiff for a period of one month after the Completion Date. According to SD2, the Plaintiff is entitled to claim first for LAD in a sum of RM9,000.00, namely, RM300.00 for 30 days after the Completion Date; (b) if the Works are still not completed after the lapse of one month from the Completion Date, the Plaintiff can only claim as LAD for a second amount of RM250,000.00; and (c) premised on SD2’s Interpretation (SA), the maximum liability of LAD for which the 1st Defendant, 2nd Defendant and UTCR are liable to the Plaintiff is only RM259,000.00 [Maximum Liability (LAD)]. S/N sYvwmXDJbUSkQm7vYARVg 20 **Note : Serial number will be used to verify the originality of this document via eFILING portal D. Enc. 80 40. After the conclusion of the Trial, in Enc. 80 the Plaintiff applied to, among others, amend ASOC so as to substitute Jia Yao in place of UTRC as the 3rd Defendant. 41. I reproduce below O 1A, O 2 r 1(2), O 20 rr 5(1) and 8(1) of the Rules of Court 2012 (RC): “Regard shall be to justice O 1A In administering these Rules, the Court or a Judge shall have regard to the overriding interest of justice and not only to the technical non-compliance with these Rules. O 2 r 1(2) These Rules are a procedural code and subject to the overriding objective of enabling the Court to deal with cases justly. The parties are required to assist the Court to achieve this overriding objective. Amendment of writ or pleading with leave O 20 r 5(1) Subject to Order 15, rules 6, 6A, 7 and 8 and the following provisions of this rule, the Court may at any stage of the proceedings allow the plaintiff to amend his writ, or any party to amend his pleading, on such terms as to costs or otherwise as may be just and in such a manner, if any, as it may direct. Amendment of certain other documents O 20 r 8(1) For the purpose of determining the real question in controversy between the parties to any proceedings, or of correcting any defect or error in any proceedings, the Court may at any stage of the proceedings and either of its own motion or on the application of any party to the proceedings order any document in the proceedings S/N sYvwmXDJbUSkQm7vYARVg 21 **Note : Serial number will be used to verify the originality of this document via eFILING portal to be amended on such terms as to costs or otherwise as may be just and in such manner, if any, as it may direct.” (emphasis added). 42. With regard to the court’s exercise of discretion in deciding an application to amend a pleading, it is decided in Limatic Holdings Sdn Bhd v Perbadanan Kemajuan Negeri Selangor, at [8], as follows: “[8] I am of the following view regarding the court’s power to allow parties to amend their pleadings: (1) by reason of O 1A and O 2 r 1(2) RC, all the RC, including O 20 rr 5(1) and 8(1) RC, “shall” be applied by the court with regard to the “overriding interest of justice” and not only to the technical non-compliance with RC. It is to be noted that O 2 r 1(2) RC is not found in the Rules of High Court 1980 (RHC). O 1A has been inserted into RHC with effect from 16.5.2002 [please see Rules of the High Court (Amendment) 2002, PU(A) 197/02]. Cases regarding amendment of pleadings which have been decided before the introduction of O 1A RHC and O 2 r 1(2) RC, in my opinion, should be read with caution; (2) whether the court allows a pleading to be amended pursuant to O 20 rr 5(1) and 8(1) RC is an exercise of the court’s discretion. Accordingly, cases on the exercise of the court’s discretion to allow amendment of pleadings under O 20 rr 5(1) and 8(1) RC, cannot constitute binding legal precedents from the view point of the stare decisis doctrine; S/N sYvwmXDJbUSkQm7vYARVg 22 **Note : Serial number will be used to verify the originality of this document via eFILING portal (3) the following matters, not exhaustive, may be considered in the exercise of the court’s discretion pursuant to O 20 rr 5(1) and 8(1) RC - (a) the “overriding” consideration is whether it is just for the court to allow an application to amend a pleading (Amendment Application); (b) whether an Amendment Application is made in good faith or otherwise - please see the Federal Court’s judgment delivered by Mohamed Azmi FJ in Yamaha Motor Co Ltd v Yamaha Malaysia Sdn Bhd & Ors [1983] 1 MLJ 213, at 214. The Amendment Application is not bona fide if - (i) the Amendment Application is a “tactical manoeuvre” - please see the judgment of Zulkefli Ahmad Makinudin CJ (Malaya) (as he then was) in the Federal Court case of Hong Leong Finance Bhd v Low Thiam Hoe & Another Appeal [2015] 8 CLJ 1, at [28]; (ii) the Amendment Application is filed to delay an expeditious disposal of the action in question. It is to be noted that the three-fold objective of RC is to ensure a just, expeditious and economical disposal of cases - please see O 34 r 1(1)(b) RC and CELCOM (M) Bhd & Anor v Tan Sri Dato’ Tajudin bin Ramli & Ors and another case [2017] 4 AMR 418, at [19] and [20]; or (iii) the Amendment Application is made for an ulterior, improper or collateral purpose; (c) whether there is a delay in the filing of the Amendment Application - Hong Leong Finance, at [25]. In this regard - S/N sYvwmXDJbUSkQm7vYARVg 23 **Note : Serial number will be used to verify the originality of this document via eFILING portal (i) at what stage of the proceedings is the Amendment Application made? If the Amendment Application is made when the case is at an advanced stage, the applicant bears a “heavy onus” to persuade the court to allow the Amendment Application - Hong Leong Finance, at [21]; and (ii) does the applicant have a reason affirmed by way of an affidavit to explain the delay in the filing of the Amendment Application? - Hong Leong Finance, at [25]; and (d) the following nature of the proposed amendment to the pleading has to be considered - (i) does the Amendment Application introduce a new cause of action or a new defence? In this sense, has the Amendment Application changed the action from one character into an action of another and inconsistent character? - Yamaha Motor, at p. 214-215; (ii) if the Amendment Application introduces or substitutes a new cause of action which is time-barred, the court should consider O 20 r 5(2) and (5) RC (not in this case); (iii) has the Amendment Application disclosed full particulars of the proposed amendment of the pleading for the court to decide that there is a real prospect of success for the applicant in proving the same? - Hong Leong Finance, at [33(e)]; and (iv) would the Amendment Application prejudice the opposing party and if so, can such a prejudice be compensated in the form of costs to be paid by the applicant? - Yamaha Motor, at p. 214; and S/N sYvwmXDJbUSkQm7vYARVg 24 **Note : Serial number will be used to verify the originality of this document via eFILING portal (4) the applicant in an Amendment Application has the burden to persuade the court to exercise its discretion to grant the Amendment Application.” (emphasis added). 43. The Defendant’s learned counsel, Mr. Chong Kah Heng, had objected strenuously to Enc. 80. Nonetheless, on Thursday, 14.7.2022, I exercised my discretion under O 20 rr 5(1) and 8(1) read with O 1A and O 2 r 1(2) RC to allow Enc. 80 with the following order [Order (Enc. 80)]: (1) the Plaintiff was granted leave of court to amend ASOC and UTRC is substituted by Jia Yao as the 3rd Defendant in this case. This judgment shall henceforth refer to the 1st Defendant, 2nd Defendant and Jia Yao as the “Defendants”; (2) in view of the delay in filing of Enc. 80, the Plaintiff was ordered to file and serve Re-Amended Statement of Claim (RSOC) on or before 5 pm, Friday, 15.7.22; (3) the Defendants were allowed to amend the Amended Defence and Counterclaim (ADC). The Re-Amended Defence and Counterclaim should be filed and served by the Defendants on or before 5 pm, Friday, 22.7.22; (4) the Plaintiff was allowed by court to amend his Amended Reply to Defence and Defence to Counterclaim. The Re-Amended Reply to Defence and Defence to Counterclaim had to be filed and served by the Plaintiff on or before 5 pm, Tuesday, 26.7.22; S/N sYvwmXDJbUSkQm7vYARVg 25 **Note : Serial number will be used to verify the originality of this document via eFILING portal (5) the Defendants were granted leave of court to - (a) reopen their defence; (b) re-call the 1st Defendant and/or SD2 to give evidence in this case; (c) call any new witness, including Jia Yao, to testify at the Trial; and (d) tender new documents with the condition that the above evidence and/or documents are relevant to the substitution of UTRC by Jia Yao as the 3rd Defendant in this case; and (6) the Plaintiff shall pay costs of RM3,000.00 to the Defendants in any event [Costs (Enc. 80)]. 44. The Plaintiff had succeeded to discharge the heavy burden to persuade the court to allow Enc. 80 due to the following reasons: (1) as explained in HT Maltec Consultants v Malaysian Resources Corporation Bhd [2015] 5 AMR 607, at [17], the Registration of Businesses Act 1956 (RBA) does not confer legal personality on any business which is registered under RBA as a sole proprietorship or partnership. Accordingly - (a) Jia Yao is personally responsible in law for UTCR’s acts, omission and debts; and S/N sYvwmXDJbUSkQm7vYARVg 26 **Note : Serial number will be used to verify the originality of this document via eFILING portal (b) Jia Yao cannot hide behind the business registration of UTCR pursuant to RBA. As UTCR is not a legal person under RBA, it is only just pursuant to O 20 rr 5(1) and 8(1) read with O 1A and O 2 r 1(2) RC for the Plaintiff to substitute Jia Yao in place of UTCR in RSOC. (2) paragraph 5 ASOC had pleaded that Jia Yao “owns” UTCR. This was admitted in paragraph 3 ADC. There was therefore a judicial admission by the Defendants that Jia Yao is the sole proprietor of UTCR - please refer to the Federal Court’s judgment delivered by Suriyadi Halim Omar FCJ in Yam Kong Seng & Anor v Yee Weng Kai [2014] 4 MLJ 478, at [15] to [18]. In paragraph 5 of “Agreed Facts” (AF), all the parties in this case have agreed that Jia Yao owns UTCR. AF was filed by parties pursuant to the court’s pre-trial case management direction under O 34 r 2(2)(j) RC. The filing of AF attracts the application of s 58(1) EA which provides as follows - “Facts admitted need not be proved s 58(1) No fact need be proved in any proceeding which the parties thereto or their agents agree to admit at the hearing or which before the hearing they agree to admit by any writing under their hands, or which by any rule of pleading in force at the time they are deemed to have admitted by their pleadings: Provided that the court may, in its discretion, require the facts admitted to be proved otherwise than by such admissions. ” (emphasis added). S/N sYvwmXDJbUSkQm7vYARVg 27 **Note : Serial number will be used to verify the originality of this document via eFILING portal The Defendants are estopped by paragraph 3 ADC and paragraph 5 AF from denying that Jia Yao is the sole proprietor of UTCR; (3) Enc. 80 was made in good faith and was not filed due to any ulterior, improper or collateral purpose. Nor was Enc. 80 a “tactical manoeuvre” as explained by Zulkefli Ahmad Makinudin CJ (Malaya) (as he then was) in the Federal Court in Hong Leong Finance Bhd v Low Thiam Hoe & Another Appeal [2015] 8 CLJ 1, at [28]; (4) as the Trial had been concluded, Enc. 80 was not filed to delay the proceedings in this case; (5) the delay in the filing of Enc. 80 was because of the inadvertence on the part of the Plaintiff’s solicitors. By reason of O 1A and O 2 r 1(2) RC, the court should not allow a party to be penalized or prejudiced due to the fault or negligence of the party’s solicitor; (6) other than the substitution of Jia Yao in place of UTCR in RSOC, Enc. 80 did not introduce a new cause of action against the Defendants. Enc. 80 did not also change the Original Action from one character into an action of another and inconsistent character. Nor did Enc. 80 add a new co-defendant in this case; (7) there was no prejudice to the Defendants because - (a) in paragraph 3 ADC and paragraph 5 AF, the Defendants have admitted that Jia Yao is the sole proprietor of UTCR; (b) the Defendants were allowed to amend ADC; and S/N sYvwmXDJbUSkQm7vYARVg 28 **Note : Serial number will be used to verify the originality of this document via eFILING portal (c) the court allowed the Defendants to reopen their defence with the following rights - (i) the 1st Defendant and/or SD2 could be recalled to testify at the Trial; (ii) the Defendants had a right to call any new witness, including Jia Yao, to give evidence in this case; and (iii) new documents could be adduced as evidence by the Defendants provided that the above evidence and documents were relevant to the substitution of UTRC by Jia Yao as the 3rd Defendant in this case; and (8) any prejudice which could be occasioned to the Defendants due to the Order (Enc. 80), could be compensated by Costs (Enc. 80). 45. Pursuant to the Order (Enc. 80), Jia Yao testified on behalf of the Defendants. According to Jia Yao - (1) although Jia Yao is the owner of UTCR, the 1st Defendant runs UTCR; and (2) Jia Yao was not involved in the Works in this case. E. Liability of 2nd Defendant and Jia Yao 46. It is not disputed that only the 1st Defendant (not the 2nd Defendant and Jia Yao) conducted the Works in this case through UTCR. However, the S/N sYvwmXDJbUSkQm7vYARVg 29 **Note : Serial number will be used to verify the originality of this document via eFILING portal 1st Defendant, 2nd Defendant and Jia Yao (through UTCR) had willingly entered into the SA and Consent Judgment. Consequently, the 1st Defendant, 2nd Defendant and Jia Yao are jointly and severally liable for any breach of the SA and Consent Judgment. F. Issues 47. In addition to the two questions stated in the above sub-paragraphs 1(1) and (2), the following issues shall be determined in this case: (1) whether the Defendants had breached Clause 1(ii) and Consent Judgment when - (a) the 1st Defendant did not inform the Plaintiff that - (i) the Building Plans had not been submitted by UTCR for MPKj’s approval; and (ii) Messrs AZA had handed the Building Plans to UTCR; and (b) UTCR did not respond to queries by SP2 and Messrs SL regarding the status of the submission of Building Plans to MPKj; (2) can the Defendants rely on MPKj’s Notice (3.9.2018) as a ground to frustrate the 1st Defendant’s further performance of the SA under s 57(2) of the Contracts Act 1950 (CA)?. This question discusses whether a party may rely on a “self-induced frustration” to excuse the performance of the party’s obligations under an agreement; S/N sYvwmXDJbUSkQm7vYARVg 30 **Note : Serial number will be used to verify the originality of this document via eFILING portal (3) whether the Defendants had breached Clause 4(ii), (iv) SA and Consent Judgment when - (a) the 1st Defendant had immediately vacated the Site upon receipt of MPKj’s Notice (3.9.2018)?; and (b) the 1st Defendant did not complete the Works on the Extended Completion Date (22.9.2018); (4) if the 1st Defendant had failed to complete the Works on the Extended Completion Date, do clauses 5(i) and (ii) SA impose a Maximum Liability (LAD)? This issue also concerns the interpretation of ss 74(1) and 75 CA; (5) if clauses 5(i) and (ii) SA do not provide a Maximum Liability (LAD), whether a computation of LAD [a sum of RM300.00 per day from the lapse of the Extended Completion Date (23.9.2018) until the actual completion of the Works] constitutes an “unreasonable compensation” under s 75 CA. If the answer to this question is in the affirmative, should the court order an assessment of “reasonable compensation” to be paid by the Defendants to the Plaintiff pursuant to s 75 CA [Assessment (Compensation)]? In the Assessment (Compensation), can the court consider the Defendants’ breach of Clause 1(ii) and the effect of s 74(1) CA?; and (6) with regard to the Counterclaim, is the Plaintiff liable to the 1st Defendant and 3rd Defendant for PC No. 4 and Value (Non-PC Works)? S/N sYvwmXDJbUSkQm7vYARVg 31 **Note : Serial number will be used to verify the originality of this document via eFILING portal G. Credibility of witnesses 48. I have no hesitation to find as a fact that the Plaintiff is an honest witness because - (1) at all material times, the Plaintiff had acted upon the advice of SP2. In paragraph 49 below, this court has given reasons why SP2’s expert views on the Works should be accepted; and (2) as the Property is owned by the Plaintiff, the Plaintiff had no motive to delay or sabotage the Defendants’ performance of the SA and Consent Judgment. In other words, there is no reason for the Plaintiff to impede in any manner the Works carried out by the Defendants. 49. This court makes a factual finding that the expert opinion and factual evidence of SP2 can be accepted due to the following reasons: (1) SP2’s expertise as an architect under s 45(1) EA has not been challenged by Mr. Chong during SP2’s cross-examination at the Trial; (2) SP2 had given various reasons for his recommendations to the Plaintiff regarding PC Nos. 1, 2 and 3 in SP2’s letters to UTCR dated 28.3.2018 (paragraph 4), 11.6.2018 and 10.8.2018. These reasons are credible and have not been rebutted by the 1st Defendant’s testimony. Furthermore, the Defendants did not adduce any expert evidence to rebut SP2’s expert testimony; S/N sYvwmXDJbUSkQm7vYARVg 32 **Note : Serial number will be used to verify the originality of this document via eFILING portal (3) SP2’s cross-examination at the Trial by Mr. Chong, has not revealed any reason for me to disbelieve SP2; and (4) SP2 is a practising architect and would not have risked his professional career by giving false testimony against the Defendants in this case. 50. With regard to SP3’s Expert Opinion - (1) based on SP3’s resume, I accept SP3’s expertise as an architect. In any event, at the Trial Mr. Chong had not disputed SP3’s competence to give expert testimony under s 45(1) EA; (2) SP3 had given cogent reasons to support SP3’s Expert Opinion; (3) SP3 was an independent expert who had declared in his expert report that, among others, he understood his duty to assist the court as an expert and this duty overrode his obligations to the Plaintiff (who had instructed him in this case); and (4) the cross-examination of SP3 did not provide any reason for this court to reject SP3’s Expert Opinion. 51. I have no hesitation to make a finding of fact that the 1st Defendant is not a reliable witness. This factual finding is premised on the following evidence and reasons: (1) according to Messrs AZA’s Letter (29.6.2020), among others, Messrs AZA had been appointed by UTCR to submit the Building Plans for MPKj’s approval. During the 1st Defendant’s cross- examination by the Plaintiff’s learned counsel, Mr. Ooi Chih Jen, the S/N sYvwmXDJbUSkQm7vYARVg 33 **Note : Serial number will be used to verify the originality of this document via eFILING portal 1st Defendant admitted that UTCR had accepted Plaintiff’s Payments (Building Plans). UTCR however subsequently instructed Messrs AZA not to submit the Building Plans for MPKj’s approval - please refer to Messrs AZA’s Letter (29.6.2020). Furthermore, Messrs AZA’s Letter (3.12.2020) stated that, among others, in March, 2017 UTCR had terminated AZA’s services and AZA had forwarded all documents, including the Building Plans, to UTCR. It is clear that the 1st Defendant had actual knowledge that - (a) the Building Plans had not been submitted by UTCR for MPKj’s pproval; and (b) UTCR had possession of the Building Plans at all material times (2 Material Facts). An honest contractor in the 1st Defendant’s position would have disclosed (through UTCR) the 2 Material Facts to the Plaintiff, SP2 and/or Messrs LY - (i) during the negotiations regarding the contents of the SA so as to enable the SA to provide for the 2 Material Facts; or (ii) within a reasonable time after the conclusion of the SA and the recording of the Consent Judgment; (2) the relevant part of s 70 SDBA is reproduced below - S/N sYvwmXDJbUSkQm7vYARVg 34 **Note : Serial number will be used to verify the originality of this document via eFILING portal “s 70. … Notice of commencement or resumption of building operations (9) No person shall commence the erection of a building or resume the erection of a building in any case where the work of erection has been suspended for a continuous period exceeding three months unless - (a) such work is commenced or resumed, as the case may be, within twelve months from the date on which the plans and specifications of such building were approved by the local authority; and (b) he has given the local authority four days' notice in writing of his intention to commence or resume such work, as the case may be. … (11) Any person who makes any alteration to any building otherwise than is provided for in this Act or by-laws made thereunder or without the prior written permission of the local authority shall be liable on conviction to a fine not exceeding twenty-five thousand ringgit and a Magistrate's Court shall, on the application of the local authority, issue a mandatory order to alter the building in anyway or to demolish it. … (14) In any case where proceedings have not been instituted against any person who, by reason of failure to obtain prior permission from the local authority, has contravened subsection (13) such person shall, on the submission of plans and specifications to the local authority by the principal submitting person or submitting person in accordance with this Act, pay to the local authority a sum which shall be not less than five times but not exceeding twenty times the prescribed fees as the State Authority may prescribe, and in the event of S/N sYvwmXDJbUSkQm7vYARVg 35 **Note : Serial number will be used to verify the originality of this document via eFILING portal plans and specifications being submitted without such payment, the local authority shall refuse to accept the same. …” (emphasis added). When UTCR took possession of the Site and recommenced Works (pursuant to the SA) without MPKj’s approval, the 1st Defendant (through UTCR) had committed an offence under s 70(11) SDBA. The 1st Defendant was more culpable than the Plaintiff because the 1st Defendant had actual knowledge that the Works were performed without MPKj’s approval of the Building Plans whereas the Plaintiff was totally oblivious to the fact that the Works were done by UTCR without MPKj’s approval; (3) even if it is assumed that the 1st Defendant had inadvertently omitted to inform the Plaintiff, SP2 and/or Messrs LY regarding the 2 Material Facts, when UTCR received queries regarding the status of the submission of Building Plans to MPKj in the following letters - (a) query by Messrs SL in paragraph 4 of Messrs SL’s Letter (27.4.2018); and (b) SP2’s Query (Submission Plans) in SP2’s Letter (30.4.2018), the 1st Defendant should have promptly answered the above queries and disclose the 2 Material Facts to Messrs LY and/or SP2. However, the 1st Defendant did not do so. In fact, UTCR’s Letter (2.5.2018) did not even respond to SP2’s Query (Submission Plans). There was therefore clear evidence of the 1st Defendant’s S/N sYvwmXDJbUSkQm7vYARVg 36 **Note : Serial number will be used to verify the originality of this document via eFILING portal dishonest concealment of the 2 Material Facts from Messrs LY and/or SP2 [1st Defendant’s Concealment (2 Material Facts)]; (4) after UTCR had received MPKj’s Notice (3.9.2018), the 1st Defendant’s Concealment (2 Material Facts) persisted in the following letters - (a) UTCR’s Letter (3.9.2018); (b) UTCR’s Letter (4.9.2018); (c) Messrs NP’s Letter (5.9.2018); and (d) UTCR’s Letter (11.9.2018); (5) Messrs AZA’s Letter (UTCR, 14.9.2018) had sought UTCR’s instruction on how to answer the query regarding MPKj’s Notice (3.9.2018) in SP2’s Letter (Messrs AZA, 8.9.2018). The fact that UTCR did not respond to Messrs AZA’s Letter (UTCR, 14.9.2018), not only evidenced the 1st Defendant’s Concealment (2 Material Facts) but also disclosed the 1st Defendant’s bad faith towards the Plaintiff in this case (1st Defendant’s Bad Faith); (6) the 1st Defendant’s Concealment (2 Material Facts) and 1st Defendant’s Bad Faith was fortified by UTCR’s failure to reply to SP2’s Letter (22.10.2018); and (7) there was nothing in MPKj’s Notice (3.9.2018) which ordered or directed UTCR to demobilize and leave the Site immediately. It is to be noted that even if the Works in this case had no MPKj’s approval, S/N sYvwmXDJbUSkQm7vYARVg 37 **Note : Serial number will be used to verify the originality of this document via eFILING portal by virtue of s 70(9)(a), (b) and (14) SDBA, the Plaintiff could resume the Works [Resumption (Works)] if the Plaintiff - (a) applies for and obtains MPKj’s approval for the Building Plans pursuant to s 70(9)(a) SDBA; (b) gives written notice to MPKj regarding the Resumption (Works) four days before the commencement of the Resumption (Works) - please refer to s 70(9)(b) SDBA; and (c) pays any amount imposed by MPKj under s 70(14) SDBA. 52. In Part H below, I have rejected SD2’s Interpretation (SA). Having said that, there is nothing in SD2’s testimony to suggest that SD2 is not truthful. H. Can court accept SD2’s Interpretation (SA)? 53. I am of the view that the SA should be construed as follows: (1) the interpretation of an agreement is a question of law to be decided by the court and not by witnesses through their oral evidence. I cite the following judgment of Gopal Sri Ram JCA (as he then was) in the Court of Appeal case of NVJ Menon v The Great Eastern Life Assurance Company Ltd [2004] 3 CLJ 96, at 103-104 - “… This is because the construction of a contract is a question of law for determination by the court and not by witnesses through their oral evidence. … S/N sYvwmXDJbUSkQm7vYARVg 38 **Note : Serial number will be used to verify the originality of this document via eFILING portal It matters not a jot to us what the plaintiff thought his entitlements under the contract with the defendant were. Neither does it matter to us what the defendant’s witnesses thought of the way in which that contract ought to be interpreted. Their views are entirely irrelevant; as irrelevant as the views of the witnesses who gave their interpretation of the Financial Orders in Reynolds. In the instant case, the learned judge referred to the oral testimony and relied upon it for the interpretation of the agreements and circulars. That, in our view is clearly an inadmissible method of construction.” (emphasis added); and (2) the SA concerns a commercial transaction and should be construed in a commercially sensible manner - please refer to the Federal Court’s judgment delivered by Gopal Sri Ram FCJ in Berjaya Times Squares Sdn Bhd (formerly known as Berjaya Ditan Sdn Bhd) v M Concept Sdn Bhd [2010] 1 MLJ 597, at [10]. 54. Premised on Menon, in the construction of SA, the court cannot take into account SD2’s Interpretation (SA). I. Had Defendants impliedly waived legal privilege regarding their communication with SD2 in respect of SA? 55. Section 128 EA provides as follows: “Privilege not waived by volunteering evidence S/N sYvwmXDJbUSkQm7vYARVg 39 **Note : Serial number will be used to verify the originality of this document via eFILING portal s 128 If any party to a suit gives evidence therein at his own instance or otherwise, he shall not be deemed to have consented thereby to such disclosure as is mentioned in section 126; and if any party to a suit or proceeding calls any such advocate as a witness, he shall be deemed to have consented to the disclosure, only if he questions the advocate on matters which but for such question he would not be at liberty to disclose.” (emphasis added). 56. The scope of the second limb of s 128 EA [2nd Limb (Section 128 EA)] has been explained by Richard Malanjum CJ (Sabah and Sarawak) in the Federal Court case of Tan Chong Kean v Yeoh Tai Chuan & Anor [2018] 2 MLJ 669, at [47], as follows: “[47] An implied consent has to be ‘inferred from one’s conduct rather than from one’s direct expression’. In this case learned counsel for the defendants argued that there was evidence. However, his reliance on s 128 appears to be misconceived. There are two limbs in s 128. Learned counsel is relying on the second limb, that is, ‘… if any party to a suit or proceeding calls any such advocate as a witness, he shall be deemed to have consented to the disclosure, only if he questions the advocate on matters which but for such question he would not be at liberty to disclose’. But even in the second limb there are also condition precedents stipulated. Firstly, the client must be the party calling the advocate as a witness in a suit or proceeding. Secondly, the client ‘questions the advocate on matters which but for such question he would not be at liberty to disclose’.” (emphasis added). S/N sYvwmXDJbUSkQm7vYARVg 40 **Note : Serial number will be used to verify the originality of this document via eFILING portal 57. In this case, I am of the view that the Defendants had impliedly waived legal privilege regarding their communication with SD2 in respect of the SA pursuant to the 2nd Limb (Section 128 EA) [Defendants’ Waiver (Legal Privilege)]. This decision is due to the following reasons: (1) the Defendants had called SD2 to give evidence at the Trial; and (2) SD2’s witness statement contained SD2’s Interpretation (SA), ie., the Defendants had questioned SD2 on matters which but for such questioning SD2 would not be at liberty to disclose. 58. Notwithstanding the Defendants’ Waiver (Legal Privilege), in the finest tradition of the Bar, Mr. Ooi did not question SD2 on SD2’s communication with the Defendants with regard to the SA. As explained in the above paragraph 54, the court cannot consider SD2’s Interpretation (SA) in the construction of the SA. J. Did Defendants breach Clause 1(ii)? 59. A commercially sensible interpretation of Clause 1(ii) reveals that all the Defendants have a mandatory obligation to “assist” the Plaintiff to procure the issuance of CCC. This mandatory obligation is clear from the employment of the imperative term “shall” in Clause 1(ii). For the Plaintiff to obtain CCC in this case, the Defendants “shall” “assist” the Plaintiff with regard to the submission of the Building Plans for MPKj’s approval. This is understandable because without MPKj’s approval of the Building Plans, CCC for the Property renovated in accordance with the Building Plans (Renovated Property) cannot be issued and this defeats the commercial purpose of the SA, namely, for the Plaintiff to occupy and enjoy the Renovated Property. It is inconceivable for a reasonable S/N sYvwmXDJbUSkQm7vYARVg 41 **Note : Serial number will be used to verify the originality of this document via eFILING portal person to employ a contractor to renovate his or her home when he or she is not able to occupy and enjoy subsequently the renovated home. 60. I have no hesitation to decide that even before the issuance of MPKj’s Notice (3.9.2018), the 1st Defendant had breached Clause 1(ii) {1st Defendant’s Breach [Clause 1(ii)]} - (1) when the 1st Defendant (through UTCR) did not disclose the 2 Material Facts to the Plaintiff - please refer to the above sub- paragraph 51(1); and (2) the 1st Defendant’s Concealment (2 Material Facts) had been committed - please see the above sub-paragraphs 51(3) to (6). 61. The 2nd Defendant and 3rd Defendant are jointly and severally liable to the Plaintiff for the 1st Defendant’s Breach [Clause 1(ii)]. K. Whether MPKj’s Notice (3.9.2018) had frustrated Defendants’ further performance of SA under s 57(2) CA 62. Section 57(2) CA states as follows: “A contract to do an act which, after the contract is made, becomes impossible, or by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.” (emphasis added). S/N sYvwmXDJbUSkQm7vYARVg 42 **Note : Serial number will be used to verify the originality of this document via eFILING portal 63. I am of the view that a party to a contract (Z) can only rely on s 57(2) CA to excuse Z’s further performance of the contract in the following two scenarios: (1) according to the first limb of s 57(2) CA {1st Limb [Section 57(2) CA]}, Z’s further performance of the contract had become “impossible” due to the occurrence of an event after the formation of the contract (Event). Cases have given a technical meaning to the term “impossible” in the 1st Limb [Section 57(2) CA]; or (2) the second limb of s 57(2) CA {2nd Limb [Section 57(2) CA]} applies when the following two conditions are fulfilled cumulatively - (a) the Event rendered unlawful Z’s further performance of the contract; and (b) the occurrence of the Event could not have been prevented by Z. It is clear that Z could not rely on an Event which has been caused or induced by Z. In this regard, I rely on the following judgment of the Court of Appeal delivered by Gopal Sri Ram JCA (as he then was) in Guan Aik Moh (KL) Sdn Bhd & Anor v Selangor Properties Bhd [2007] 4 MLJ 201, at [7] - “[7] It follows from the foregoing authorities that there are three elements woven into the fabric of the doctrine embodied in s 57. First, the event upon which the promisor relies as having frustrated the contract must have been one for which no provision has been made in the contract. If provision has been made then the parties must be taken to have allocated the risk between them. Second, the event relied upon by the promisor must be one for which he or S/N sYvwmXDJbUSkQm7vYARVg 43 **Note : Serial number will be used to verify the originality of this document via eFILING portal she is not responsible. Put shortly, self induced frustration is ineffective. Third, the event which is said to discharge the promise must be such that renders it radically different from that which was undertaken by the contract. The court must find it practically unjust to enforce the original promise. If any of these elements are not present on the facts of a given case, then s 57 does not bite.” (emphasis added). 64. In this case, the Defendants are not invoking the 1st Limb [Section 57(2) CA] to excuse their performance of the SA after their receipt of MPKj’s Notice (3.9.2018). 65. This court has no hesitation to decide that the Defendants cannot rely on the 2nd Limb [Section 57(2) CA] in the present case. My reasons are as follows: (1) MPKj’s Notice (3.9.2018) had been induced by the 1st Defendant and could have been avoided by the Defendants if - (a) the 1st Defendant (through UTCR) had disclosed the 2 Material Facts to the Plaintiff - please refer to the above sub-paragraph 51(1); and (b) the 1st Defendant’s Concealment (2 Material Facts) had not been committed - please see the above sub-paragraphs 51(3) to (6); and (2) even if it is assumed that the 1st Defendant did not cause or induce the issuance of MPKj’s Notice (3.9.2018), as explained in the above S/N sYvwmXDJbUSkQm7vYARVg 44 **Note : Serial number will be used to verify the originality of this document via eFILING portal sub-paragraph 51(7), Resumption (Works) could be resumed by the 1st Defendant once there was Plaintiff’s compliance with s 70(9)(a), (b) and (14) SDBA. If the court has allowed the Defendants to rely on MPKj’s Notice (3.9.2018) to excuse the Defendants’ further performance of the SA the under the 2nd Limb [Section 57(2) CA], this creates an unjust and undesirable situation, namely any main contractor and/or sub- contractor in a construction contract (Main Contractor/Sub- Contractor), may immediately evade the Main Contractor/Sub- Contractor’s contractual obligations solely upon the issuance of a notice by a local authority to an owner of a building to stop construction work. Such a situation also renders redundant Parliament’s intention in s 70(9)(a), (b) and (14) SDBA which allow an owner of a building to apply subsequently for the local authority’s approval for the building. L. Whether Defendants are liable for LAD to Plaintiff under Clauses 4(ii) and (iv) 66. This court decides that the 1st Defendant had breached Clauses 4(ii) and (iv) {1st Defendant’s Breach [Clauses 4(ii) and (iv)]} when - (1) the 1st Defendant immediately vacated the Site upon receipt of MPKj’s Notice (3.9.2018); and (2) the Defendants did not complete the Works on the Extended Completion Date (22.9.2018). S/N sYvwmXDJbUSkQm7vYARVg 45 **Note : Serial number will be used to verify the originality of this document via eFILING portal 67. It is to be noted that even before the 1st Defendant’s Breach [Clauses 4(ii) and (iv)] on 23.9.2018 (after the lapse of the Extended Completion Date), there was already substantial delay in the 1st Defendant’s performance of the Works. This is clear from the following evidence: (1) SP2’s Letter (30.4.2018) stated that, among others, there were only two workers of UTCR at the Site [at the time of SP2’s Letter (30.4.2018)] who often asked the Plaintiff “what to do next”. Such an averment was not denied in UTCR’s Letter (2.5.2018); (2) answer to question no. 44 of the 1st Defendant’s witness statement (WSSD1) had admitted that as at July, 2018, UTCR was slow in the performance of the Works; and (3) according to SP3’s Expert Opinion, UTCR had not carried out the Works diligently. 68. The 2nd Defendant and 3rd Defendant are jointly and severally liable to the Plaintiff for the 1st Defendant’s Breach [Clauses 4(ii) and (iv)]. M. Did Clauses 5(i) and (ii) impose a Maximum Liability (LAD)? 69. I am not able to accede to Mr. Chong’s submission that clauses 5(i) and (ii) SA have imposed a Maximum Liability (LAD). This decision is premised on the following reasons: (1) Clause 5(i) SA has expressly provided that if the Defendants fail to complete the Works on the Extended Completion Date (23.9.2018), the Defendants “shall pay to the Plaintiff a sum of RM300.00 per day” for the period from the Extended Completion Date until the day S/N sYvwmXDJbUSkQm7vYARVg 46 **Note : Serial number will be used to verify the originality of this document via eFILING portal the construction has been completed as duly verified by the Plaintiff’s representative. Clause 5(i) does not impose any maximum amount of LAD to be paid by the Defendants to the Plaintiff; (2) Clause 5(i) does not state that Clause 5(i) is subject to Clause 5(ii) (which has provided for a sum of RM250,000.00); (3) Clause 5(ii) does not provide that Clause 5(ii) shall prevail over Clause 5(i) because Clause 5(ii) does not contain the words “notwithstanding Clause 5(i)”; and (4) I acknowledge that Clause 5(ii) starts with the word “However”. Nonetheless, Clause 5(ii) has expressly stated that Clause 5(ii) is “without prejudice to the Plaintiff’s other rights and/or remedies which the Plaintiff may be entitled to”. Hence, Clause 5(ii) cannot limit or prejudice the effect of Clause 5(i). N. Is Plaintiff entitled to LAD under s 75 CA? 70. I reproduce below s 75 CA: “Compensation for breach of contract where penalty stipulated for s 75 When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for.” (emphasis added). S/N sYvwmXDJbUSkQm7vYARVg 47 **Note : Serial number will be used to verify the originality of this document via eFILING portal 71. In the Federal Court case of Cubic Electronics Sdn Bhd (in liquidation) v Mars Telecommunications Sdn Bhd [2019] 2 CLJ 723, at [74], Richard Malanjum CJ (Sabah & Sarawak) has explained s 75 CA as follows: “[74] In summary and for convenience, the principles that may be distilled from hereinabove are these: … (iv) In determining what amounts to "reasonable compensation" under s 75 [CA], the concepts of "legitimate interest" and "proportionality" as enunciated in Cavendish (supra) are relevant. (v) A sum payable on breach of contract will be held to be unreasonable compensation if it is extravagant and unconscionable in amount in comparison with the highest conceivable loss which could possibly flow from the breach. In the absence of proper justification, there should not be a significant difference between the level of damages spelt out in the contract and the level of loss or damage which is likely to be suffered by the innocent party. (vi) s 75 [CA] allows reasonable compensation to be awarded by the court irrespective of whether actual loss or damage is proven. Thus, proof of actual loss is not the sole conclusive determinant of reasonable compensation although evidence of that may be a useful starting point. (vii) The initial onus lies on the party seeking to enforce a damages clause under s 75 [CA] to adduce evidence that firstly, there S/N sYvwmXDJbUSkQm7vYARVg 48 **Note : Serial number will be used to verify the originality of this document via eFILING portal was a breach of contract and that secondly, the contract contains a clause specifying a sum to be paid upon breach. Once these two elements have been established, the innocent party is entitled to receive a sum not exceeding the amount stipulated in the contract irrespective of whether actual damage or loss is proven subject always to the defaulting party proving the unreasonableness of the damages clause including the sum stated therein, if any. (viii) If there is a dispute as to what constitutes reasonable compensation, the burden of proof falls on the defaulting party to show that the damages clause including the sum stated therein is unreasonable.” (emphasis added). 72. Firstly, premised on Cubic Electronics, I am of the view that the Plaintiff has discharged the burden to persuade the court that s 75 CA applies in this case because - (1) the Defendants have breached Clauses 4(ii) and (iv) {Defendants’ Breach [Clauses 4(ii) and (iv)]} - please refer to the above paragraphs 66 to 68; and (2) Clause 5(i) has specified LAD to be paid by the Defendants to the Plaintiff in the event of the Defendants’ Breach [Clauses 4(ii) and (iv)]. 73. Secondly, in accordance with Cubic Electronics, taking into account the concepts of "legitimate interest" and "proportionality", this court decides that the Defendants [parties who have breached Clauses 4(ii) and (iv)] S/N sYvwmXDJbUSkQm7vYARVg 49 **Note : Serial number will be used to verify the originality of this document via eFILING portal have succeeded to discharge the onus to show that the total LAD in a sum of RM300.00 per day payable by the Defendants to the Plaintiff (Total Payable LAD) pursuant to Clause 5(i) from 23.9.2018 (Extended Completion Date) until the date of actual completion of the Works as duly verified by the Plaintiff’s representative (Actual Completion Date) constitutes “unreasonable compensation”. This decision is based on the following reasons: (1) in this case there is no Actual Completion Date. Hence, there is no “terminus ad quem” to quantify and limit the Total Payable LAD; and (2) Clause 3(i) has expressly provided that the Total Cost (Works) is only RM300,000.00. In view of the Defendants’ legitimate interest with regard to the Total Cost (Works) as stipulated in Clause 3(i), the Total Payable LAD is “extravagant”, “unconscionable” and/or “disproportionate”. 74. In view of the reasons explained in the above paragraph 73, an Assessment (Compensation) shall be conducted by the learned Judicial Commissioner (who replaced me in Shah Alam Construction Court) to determine the amount of reasonable compensation to be paid by the Defendants to the Plaintiff due to the Defendants’ Breach [Clauses 4(ii) and (iv)]. O. Whether Defendants are liable to Plaintiff for breach of Clause 1(ii) 75. As explained in paragraphs 60 and 61, the Defendants have breached Clause 1(ii) {Defendants’ Breach [Clause 1(ii)]}. 76. Section 74(1) CA provides as follows: S/N sYvwmXDJbUSkQm7vYARVg 50 **Note : Serial number will be used to verify the originality of this document via eFILING portal “Compensation for loss or damage caused by breach of contract 74(1) When a contract has been broken, the party who suffers by the breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from the breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.” (emphasis added). 77. The scope of s 74(1) CA has been explained in Jambatan Merah Sdn Bhd (in liquidation) v Public Bank Bhd [2016] 1 CLJ 811, at [46], as follows: “[46] Even if the Plaintiff has suffered any loss or damage due to the Defendant’s Breach (Alleged Loss), the Plaintiff must prove that the Alleged Loss is claimable and is not too remote under either one or both the limbs of s 74(1) CA (1950) as follows: (a) the Alleged Loss “naturally arose in the usual course of things” from the Defendant’s Breach within the meaning of the first limb of s 74(1) CA (1950); and/or (b) both the Plaintiff and Defendant “knew, when they made the contract” that the Alleged Loss was “likely to result from the breach” of the Defendant’s Breach as understood in the second limb of s 74(1) CA (1950).” (emphasis added). 78. The Assessment (Compensation) shall include an inquiry regarding the amount of compensation to be paid by the Defendants to the Plaintiff as S/N sYvwmXDJbUSkQm7vYARVg 51 **Note : Serial number will be used to verify the originality of this document via eFILING portal a result of the Defendants’ Breach [Clause 1(ii)]. In this regard, the Plaintiff has the burden to prove the following matters in the Assessment (Compensation): (1) the Plaintiff’s loss “naturally arose in the usual course of things” from the Defendants’ Breach [Clause 1(ii)] within the meaning of the first limb of s 74(1) CA; and/or (2) the Plaintiff and Defendants knew when they entered into the SA that the Plaintiff’s loss was “likely to result” from the Defendants’ Breach [Clause 1(ii)] as understood in the second limb of s 74(1) CA. P. Outcome of Original Action 79. The Original Action is allowed due to the evidence and reasons as elaborated in the above Parts J to O. Q. Breaches of Consent Judgment 80. In view of the Defendants’ Breach [Clause 1(ii)] and Defendants’ Breach [Clause 1(ii)], this court is constrained to find that the Defendants have breached the Consent Judgment. R. Counterclaim 81. I have no hesitation to dismiss the Counterclaim on the following grounds: (1) according to SP3’s Expert Opinion, the Works did not comply with the Building Plans. In the above paragraph 50, this court has given S/N sYvwmXDJbUSkQm7vYARVg 52 **Note : Serial number will be used to verify the originality of this document via eFILING portal reasons for accepting SP3’s Expert Opinion. If the Works did not adhere to the Building Plans, the 1st Defendant and/or UTCR cannot therefore counterclaim from the Plaintiff for PC No. 4 and Value (Non-PC Works); (2) the 1st Defendant did not call any expert witness to give expert evidence to rebut SP3’s Expert Opinion; (3) the Plaintiff and SP2 are credible witnesses - please refer to the above paragraphs 48 and 49; and (4) as explained in the above paragraph 51, the 1st Defendant is not a reliable witness. 82. For the avoidance of doubt, the Defendants had not adduced any evidence to prove on a balance of probabilities that the SA was breached by the Plaintiff. Hence, the Plaintiff did not breach the Consent Judgment. S. Costs 83. As this court has - (1) allowed the Original Action; and (2) dismissed the Counterclaim I exercise my discretion pursuant to O 59 rr 2(2) and 3(2) RC to order the Defendants to pay costs of this case (Costs) to the Plaintiff. This decision accords with the rule that “costs to follow the event” as stipulated in O 59 r 3(2) RC. S/N sYvwmXDJbUSkQm7vYARVg 53 **Note : Serial number will be used to verify the originality of this document via eFILING portal 84. Mr. Chong has invited the court to order Costs to be borne by the Defendants based on the scale provided for subordinate courts in O 59 r 23(1) RC. According to Mr. Chong, O 59 r 16(6) RC supports this submission. I reproduce below O 59 r 16(6) RC: “Notwithstanding paragraphs (2) to (4), if any action is brought in the High Court, which would have been within the jurisdiction of a Subordinate Court, the plaintiff shall not be entitled to any more costs than he would have been entitled to if the proceedings had been brought in a Subordinate Court, unless in any such action a Judge certifies that there was sufficient reason for bringing the action in the High Court.” (emphasis added). 85. This court is unable to accept Mr. Chong’s aforesaid contention. Firstly, the quantum of compensation to be paid by the Defendants to the Plaintiff can only be ascertained after the conclusion of the Assessment (Compensation). There is always a possibility that the amount of compensation assessed by the court may exceed the monetary jurisdiction of the Sessions Court. Secondly, I certify under O 59 r 16(6) RC that there is a sufficient reason for the Plaintiff to institute the Original Action in the High Court, namely, the question of whether the Defendants had impliedly waived legal privilege regarding their communication with SD2 in respect of the SA pursuant to the 2nd Limb (Section 128 EA). 86. By reason of O 59 rr 16(2), (3), 19(1) and (2) RC, Costs should be determined on a standard (not indemnity) basis. 87. This court exercises its discretion to determine Costs as follows: S/N sYvwmXDJbUSkQm7vYARVg 54 **Note : Serial number will be used to verify the originality of this document via eFILING portal (1) “Out of Pocket” expenses in a sum of RM10,000.00 shall be paid by the Defendants to the Plaintiff; and (2) an amount of RM70,000.00 is awarded as “Getting Up” (GU Sum) to be borne by the Defendants. The GU Sum is determined based on the following reasons - (a) as provided in O 59 r 16(1)(b) RC, Mr. Ooi is a senior counsel; (b) this case involved many documents - please refer to O 59 r 16(1)(c) RC; and (c) this case concerns the Plaintiff’s own residential property and is important to him - please see to O 59 r 16(1)(e) RC. T. Conclusion 88. In view of the above evidence and reasons, the following is adjudged by this court: (1) the Original Action is allowed and the Counterclaim is dismissed; (2) the Assessment (Compensation) shall be conducted; and (3) Costs shall be paid by the Defendants to the Plaintiff as stated in the above paragraph 87. 89. This case serves as a reminder that when a notice is served by a local authority on a Main Contractor/Sub-Contractor to stop construction work immediately on a construction site, the Main Contractor/Sub-Contractor cannot immediately demobilize and hand over possession of the site to S/N sYvwmXDJbUSkQm7vYARVg 55 **Note : Serial number will be used to verify the originality of this document via eFILING portal the employer and/or main contractor, as the case may be (Employer/Main Contractor). This is because the Employer/Main Contractor has a right to apply to the local authority under the relevant provisions in the SDBA for the Main Contractor/Sub-Contractor to resume work. 90. This is a sad ending for the 1st Defendant who has dishonestly concealed the 2 Material Facts from the Plaintiff. Even sadder is the fact that the 1st Defendant’s iniquitous conduct has rendered his wife and son jointly and severally liable to the Plaintiff in this case. DATE: 24 JULY 2023 WONG KIAN KHEONG Judge Court of Appeal Counsel for Plaintiff: Mr. Ooi Chih Jen & Mr. Khaw Eng Khoon (Messrs Chih-Jen & Associates) Counsel for Defendants: Mr. Chong Kah Heng & Ms. Ooi Xi Fang (Messrs K. H. Chong & Associates) S/N sYvwmXDJbUSkQm7vYARVg 56 **Note : Serial number will be used to verify the originality of this document via eFILING portal