Clauses with law cases

Paragraph 4: Following a series of negotiations, the contract was finally awarded to Bina Maju. Abdul
was asked by Megah Holding to issue a letter of award to Bina Baik to record, among other things, the
parties’ agreement that the project would be completed in 3 sections, each with different and separate
Completion Dates and liquidated damages. The letter should also confirm several items supposedly
discussed and negotiated directly between Megah Holding and Bina Maju, some of which were variations
to the terms of the initial offer. For purposes of the contract, Ar. Abu, principal partner of Razak Arkitek
was named as the Architect. However, as Ar. Abu was away on an overseas assignment, Megah Holding
instructed Prima Kos to formalize the award. Prima Kos wrote to Bina Maju as follows: “We refer to your
revised tender submitted on 01 October 2023. It is the client’s intention to accept your offer of RM75
million based on an overall contract period of 36 months for the works which would be executed under
the agreed Contract”. Bina Maju’s letter was stated to be ‘subject to contract’ and it mentioned that Razak
Arkitek would subsequently follow up with the issue of a letter of award.

● Clause 11.0
● Clause 21.1 , 21.2 , 21.3

Paragraph 5:The letter from Prima Kos stated a Date of Commencement of 15 November 2023 and a
Completion Date of 15 November 2025 for the last section of the works. Bina Maju was requested to sign
and return the duplicate copy of the letter as acknowledgement and acceptance of the terms and
conditioned but instead, a senior manager from Bina Maju responded by writing “Noted - OK” on the
first page of the letter which was returned to Razak Arkitek. Anxious to see some physical construction
activity at the site, Megah Holding handed possession of the site to Bina Maju who was instructed to
commence work first - which they did- on the assurance that the letter of award would be formally
issued by Razak Arkitek (on behalf of Megah Holding and the contract documents prepared for
execution.

● Clause 3.1 Contract Documents

● Clause 3.3 Copies of documents
● Clause 21.1 Date of Commencement and Completion
● Clause 38.3 Proof of Notice
Paragraph 6: Razak Arkitek requested Bina Maju to submit the performance bond before the Date of
Commencement of the works. Despite reminders both in writing and at the regular site meetings, Bina
Maju failed to provide a performance bond. The works programme was hastily prepared without proper
checking and submitted 28 days after receipt of the letter from Prima Kos. Razak rejected it and asked for
another programme to be provided. Bina Maju ignored the request and said that the fresh programme had
to wait as they did not have the time and resources to do so now.

● Clauses 39.0 Performance Bond

● Clause: 3.5 work programmes
● Clause 3.6 Programme not part of Contract
● Clause 3.7 Archotect’s acceptance of programme
 Case Study:

1) Validity of Bina Maju’s argument that the ‘notice’ recorded in the site meeting
minutes qualifies as their notice of an intention to apply for an extension of time.

YI SHENG

● Clause 23.1 (a), (b)

Law Case:

1. In the Scottish case of John L. Haley Ltd v. Dumfries & Galloway Regional Council
(1988), the claimants (John L. Haley Ltd) sought an extension of time for building works
on a school under the JCT 63 standard form of contract. The contract period of 78 weeks
was exceeded by 31 weeks, with a six-week extension initially granted. Further extension
requests were denied, leading to arbitration. The claimants argued for an extension based
on specific clauses, while the arbiter (Dumfries & Galloway Regional Council) granted a
four-week extension relying on site meeting minutes. However, the Court of Session
ruled that the minutes did not constitute valid notice under clause 23 of the contract. The
claimants, having conceded that notice was a condition precedent, ultimately lost their
case.

(JCT is considered the older version of Standard Form of Contract which is then developed
into PAM 1998)

2. In the Steria Ltd v. Sigma Wireless Communications Ltd (2007) case, the court had to
decide whether site meeting minutes constituted proper notice under the contract. The
court clarified that the written notice must come from Steria, and a note in minutes from
the main contractor or employer did not automatically qualify. The court left unanswered
whether minutes or progress reports by Steria would suffice, emphasizing that, if
accepted, they must meet the required level of detail outlined in the contract conditions
for delay notice.

Reference:
https://drahmedelyamany.weebly.com/uploads/7/0/1/0/7010103/200_contractual_problems_and_
their_solutions.pdf
2) Possible valid grounds by Megah Holding for determination of Bina Maju’s employment,
their rights and duties in the event Megah Holding decides to proceed with such determination,
the arrangements for completing the works and how the costs incurred and loss and expense
suffered by Megah Holding could be recovered. BOON

● Clause 3.5,3.6, 25.1, 25.3, 25.4, 25.5, 25.6, 25.7

Law Cases:

Case 1:
3) Course of action to be taken by Razak Arkitek following Megah Holding’s decision to
take possession and occupation of the completed lecture theatres before practical completion of
the works. BOON

● Clause 16.1 a-f, 16.2, 16.3, 21.3, 22,23

Law Cases 1:

1)
Law Case 2:
 4) Options available to Razak Arkitek in respect of the work that was not constructed in
accordance with the contract requirements. AMMAR

Clause 6.1, 6.5, 6.7, 15.3b, 30.4

Law Case 4:

High Court (Kuala Lumpur) – Originating Summons No WA-24C-12-01 of

2022 Lim Chong Fong J
22 April 2022
Facts
This is an application for direct payment from the principal under s.30 of the Construction
Industry Payment and Adjudication Act 2012 (“CIPAA”). The parties are both private limited
companies and the former is involved in the construction and renovation business whereas the
latter company is involved in the property development, construction and project management
business. The Defendant entered into a development venture agreement (“Principal Contract”)
with Kini Murni Development Sdn Bhd (“KMD”) to develop the project. KMD appointed the
Plaintiff as the main contractor. Payment disputes which arose between the Plaintiff and KMD,
and the Plaintiff commenced adjudication proceedings against KMD pursuant to the CIPAA.
The Adjudicator on 2 November 2018 delivered his adjudication decision in favour of the
Plaintiff in allowing its claim of RM 8,363,046.35 with interest and costs. The Adjudication
Decision was subsequently enforced as a judgment of the High Court pursuant to s.28 CIPAA.
As the Defendant failed to pay the outstanding sum pursuant to the adjudication decision, the
Plaintiff instituted this originating summons (“Application”) on 13 January 2022.
The Plaintiff contended that the Defendant as the principal of KMD has failed to timeously
comply with s.30(2) of the CIPAA following the principles relating to s.30 of the CIPAA.
The Defendant however contended that it is not obliged to pay the Plaintiff because there is no
money due or payable to KMD based on s.30(5) of the CIPAA. The Defendant primarily
challenged KMD’s claim no.19 for RM 4,848,000.00 as well as several other claims are not due
or payable. As to the former, the claim by KMD is not in accordance with the work done in the
sequence in Appendix 2 (Table 1) of the Principal Contract consecutively from items 1 to 7
whereas in the latter, the claims of KMD have not been served on the Defendant.

Issues

● The sole issue here is whether there is money due or payable from the Defendant to KMD
at the material time the s.30(1) notice was served by the Plaintiff on the Defendant.

Decision

Held (amongst others)

1. The Learned High Court Judge allowed the application and found that KMD has properly
submitted all relevant claims via progressive notices of payment requesting for payment
from the Defendant duly supported with a certificate endorsed by KMD’s architect or
engineer in charge of the Project. Both conditions on the submission of notice of
payment as well as the supporting certificates have been met and that suffices making the
 Defendant liable to pay the Adjudicated Sum excluding late payment interest. Hence,
there were monies due or payable in the sum of RM94,62,253.45 to KMD.
2. As to the Defendant’s contention that KMD has failed to carry out the work in
accordance with the work sequence of Appendix 2 of the contract, this was found to be
irrelevant for the purposes of the Principal Contract and this application. In any event, the
Court found that KMD and its contractor are at liberty to carry out the sequence of work
as it deems fit so long as the work was certified to be done by the relevant consultants.
5) Procedures that Razak Arkitek and Bina Maju must comply with when dealing with the
claim for loss and expense arising from the old abandoned steel piles and services cables
encountered. YI SHENG

● Clause 11.2: No Variations required by architect shall vitiate Contract

● Clause 11.3: Issue of Variations after Practical Completion
● Clause 11.5: Valuation of Variatious and Provisional Sums
● Clause 11.6: Valuation rules (c)
● Clause 11.7: Additional expense caused by Variation
● Clause 23.8: Relevant Events (h)
● Clause 23.1: Extension of Time
● Clause 24.1 (a), (b)
● Clause 24.2 Access to Contractor’s Books and Documents
● Clause 24.3 Matters materially affecting the regular progress of the works
● Clause 24.4 Loss and/or expenses to be included in certificate
● Clause 25.4,25.6

Law Case:

1. In the case of Thorn v. Mayor and Commonalty of London (1876), the judge said, ‘If the
additional or varied work is so peculiar, so unexpected, and so different from what any
person reckoned or calculated on, it may not be within the contract at all.’ A mere
increase in the quantities of the work will not invalidate the original contract, even
though substantial. The work ordered must be totally different from that contracted for.
This being the case, the contractor will be entitled to payment on a quantum meruit basis
and not the contract rates
2. In the case of Blue Circle v. Holland Dredging Co (1987), the contractor was required to
remove large quantities of excavated material from the site as part of the contract. A
variation was issued by the engineer, to the effect that the excavated material should be
used to form a bird island, instead of removing it from the site. Again, the court held that
this variation amounted to a separate contract.

Reference:
https://drahmedelyamany.weebly.com/uploads/7/0/1/0/7010103/200_contractual_problems_and_
their_solutions.pdf
 6) Remedies available to Megah Holding arising from Bina Maju’s failure and refusal
to comply with the instructions of Architect. AIMI

● Clause 2.4, Clause 4.4, Clause 25.1 , Clause 25.2 , Clause 30.4,6.5,6.7

Law case :
7) When are the works deemed to be “Practically Completed”? What are the obligations of
all parties when the works have reached practical completion? HANI

Clause 15.1, 15.2, 30.6, 30.10

QIMONDA MALAYSIA SDN BHD vs SEDIABENA SDN BHD & APC CORPORATE
HOLDINGS SDN BHD

The case involves an appeal against a decision allowing the Respondents' application for a
declaration that the retention sum held by the Appellant is held on trust by the Appellant in favor
of the Respondents. The Appellant's counsel abandoned the argument on the issue of estoppel,
and the court found that the retention monies are trust monies held by the Appellant for the
Respondents for specific purposes. The court also found that the Respondents are entitled to their
claim. The High Court judge concluded that the retention monies belong to the Respondents and
are held by the Appellant on trust for the Respondents

The present appeal before this court is against the decision of the learned High Court judge dated
22 April 2011 in allowing the Respondents’ application for a declaration that the retention sum
held by the Appellant under the relevant contract is held on trust by the Appellant in favour of
the Respondents and granting injunctive reliefs as prayed with costs of RM25,000.00. The
Appellant was the Defendant and the Respondents were the Plaintiffs at the court below.

Reference:
chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://simplymalaysia.files.wordpress.co
m/2011/09/qimonda-malaysia-sediabena-apc-w-02ncc-1132-2011_306781.pdf