KAYANGAN KEMAS SDN. BHD. v PEMBINAAN KERY SDN. BHD.

Case Significance

Illustrates when a concluded settlement agreement and part-performance by the paying party defeat an attempt to resist summary judgment under Order 14 of the Rules of Court 2012 by raising previously unmentioned defects, the defendant being estopped from resurrecting complaints not raised during settlement.

This High Court decision at Kuala Lumpur concerns an application for summary judgment under Order 14 of the Rules of Court 2012 in a construction-payment dispute. The plaintiff, Kayangan Kemas Sdn Bhd, had been engaged as main contractor by the defendant, Pembinaan Kery Sdn Bhd, under a letter of acceptance in 2018 for the construction of a fifteen-storey block with a podium and a vehicle depot, the parties' contract incorporating the Agreement and Conditions of the PAM Contract 2006. The plaintiff completed the works, as evidenced by a certificate of practical completion in September 2021, and the architect issued an interim (final payment) certificate under clause 30 of the PAM Contract in the sum of RM6,982,199.58. The parties then met and reached a settlement agreement on payment of the outstanding sum, under which the defendant paid four instalments. When a balance of RM5,982,199.58 remained unpaid, the plaintiff sought summary judgment. The defendant resisted, raising various complaints about the plaintiff's works and contending that negotiations were still ongoing so that summary judgment was inappropriate. The court rejected those arguments. It held that the defendant had not raised the alleged defects after the certificate of practical completion or during the settlement negotiations, and that its conduct in actively participating in the settlement terms and paying four instalments put beyond doubt that a binding settlement agreement had been concluded, a fact the defendant did not dispute. The defendant was accordingly estopped from raising the belated complaints of defects and was bound to make good its contractual obligations. Finding no triable issue, the court entered summary judgment for the outstanding RM5,982,199.58, allowed time for payment, ordered interest at 5 per cent from the new year and awarded costs of RM5,000. The judgment illustrates when a concluded settlement agreement and part-performance defeat an attempt to resist summary judgment by raising previously unmentioned defects.