Boulevard Pillar Sdn Bhd v Goh Hardware & Construction Sdn Bhd

Case Significance

Illustrates how a developer-contractor construction dispute is resolved by determining whether progress payments were due at termination, and quantifies the developer's recovery of the additional cost of completing the abandoned works.

This High Court decision at Muar concerns a construction dispute between a developer and its main contractor, each accusing the other of breaching the building contract. The plaintiff developer had appointed the defendant as main contractor to construct houses on two parcels of land. The relationship broke down: the contractor terminated the contract, alleging non-payment of its progress claims, while the developer contended that payment was not yet due and that it was the contractor who had breached the contract by stopping work and abandoning the site. Both parties are companies and are named. The court tried the matter fully and had to resolve the competing allegations of breach.

The central questions were whether the contractor's progressive claims were in fact due and payable as at the date on which it terminated, and, flowing from that, whether the contractor's termination was lawful or was itself a repudiatory breach. If the progress claims were not yet due, the contractor's cessation of work and departure from the site could not be justified by the developer's supposed non-payment, and the developer would be entitled to the additional cost of engaging a replacement contractor to complete the project — both the additional cost on the works already completed by the original contractor and on the works left outstanding.

Having weighed the evidence, the court allowed the plaintiff developer's claim and the defendant contractor's counterclaim, each with interest. It awarded the developer damages of RM358,696.76 under one head and RM329,438.95 under another, a total of RM688,135.71, with the developer having elected not to proceed with a further prayer, so that its claim for other general and special damages was dismissed. Interest at 5% per annum was awarded on the total sum from the date of judgment, and the parties were left to bear their respective costs. The judgment is a useful illustration of how a court in a developer-contractor dispute determines the lawfulness of a contractor's termination by reference to whether progress payments were actually due, and quantifies the developer's recovery of the additional cost of completion.