JOINT MANAGEMENT BODY SOUTH CITY PLAZA v SNFOR SDN BHD

Case Significance

Illustrates a contractor's payment claim failing and a counterclaim for remedial costs succeeding where waterproofing works do not resolve the leakage defect they were engaged to cure and are not completed satisfactorily.

This High Court decision at Shah Alam concerns an appeal from the Magistrates' Court in a dispute over payment for waterproofing works and a counterclaim for the cost of remedial works. The respondent contractor had carried out waterproofing works for the appellant, a joint management body of a commercial complex, and sued for the balance of its unpaid fees of RM77,000, while the appellant counterclaimed for the costs it incurred in appointing a new contractor to resolve a persistent leakage problem. The Magistrates' Court had, after a full trial, allowed the contractor's claim and dismissed the appellant's counterclaim, and the appellant appealed. The issues included whether the contractor had represented that it had the expertise and skill to resolve the leakage problem, whether a site visit had been made before its appointment, whether the leakage problem had in fact been resolved, whether the waterproofing works had been completed satisfactorily, and whether the appellant had given notice of the non-completion of the works. On the evidence, the court found that the waterproofing works had not resolved the leakage and had not been completed satisfactorily, and that the appellant had engaged a new contractor whose evidence and payment vouchers proved the remedial costs, so that the Magistrate ought to have dismissed the contractor's claim and allowed the counterclaim. The court allowed the appeal, set aside the Magistrate's judgment, dismissed the contractor's claim, and allowed the counterclaim to the extent of RM45,000 for the relevant lot with a further prayer for damages to be assessed for remedial works, with interest at 5% per annum from the date of the writ and costs of RM10,000. The judgment is a useful illustration of a contractor's payment claim failing, and a counterclaim for remedial costs succeeding, where waterproofing works do not resolve the very defect they were engaged to cure.