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Case Update: No unilateral imposition of a blanket refusal to entertain claims arising from EOT in a Contract for Design and Build Contract PWD Form

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31 March 2022

CONSTRUCTION LAW
Construction contract – Loss and expense – Extension of time – Delay – Condition Precedent – Non-Compliance

PSI Incontrol Sdn Bhd v IRCON International Limited
Civil Appeal No: W-02(NCvC)(W)-2168-11/2019 | Court of Appeal
- see the grounds of judgment here

Facts PSI Incontrol Sdn Bhd (‘Appellant’) was the subcontractor in a construction contract in which IRCON International Limited (‘Respondent’) was the main contractor for the construction and completion of an Electrified Double Track project. The Appellant at the High Court made a claim for wrongful deduction and extension of time claims (EOT). However, the learned Judicial Commissioner (JC) allowed the Appellant’s claim for the wrongful deduction but dismissed the Appellant’s claim for the EOT. The learned JC found inter alia that the Appellant had failed to comply with the conditions precedent in the Conditions of Contract for Design and Build Contract PWD Form (COC) and that notwithstanding the Respondent having granted an extension of time, the Appellant was not entitled to claim for the Losses and Expenses because they had failed to comply with the relevant clause of the COC, provide notice of intention to claim the Losses and Expenses and submit particulars that may be necessary to enable the claims to be ascertained. Hence this appeal.

Issue Whether the learned Judicial Commissioner’s judgement in dismissing the Appellant’s claim for loss and expense pertaining to an extension of time granted by the Respondent in a construction contract was right in fact and law?
 
Held In unanimously allowing the appeal, the Court of Appeal held that the learned JC had erred in fact and in law in dismissing the Appellant’s claim for loss and expense pursuant to the extension of time that was granted by the Respondent.  The Court of Appeal were of the considered view that the material finding by the learned JC was inherently contradictory and erroneous in that notwithstanding having held that EOT No. 1 had been granted pursuant to the relevant clause under the COC, the learned JC could not then have held that there was non-compliance with the said clause. Thus, the Court of Appeal found that this was a serious misdirection and that there was no proper judicial appreciation of the evidence. Further, the Court of Appeal held that the relevant clause in the COC did not allow the Respondent, to unilaterally impose a blanket refusal to entertain any claims arising from the EOT. In conclusion, the Court of Appeal unanimously allowed the appeal and set aside the judgment and order of the learned JC in respect of dismissal of the Appellant’s claim for loss and expense arising from the EOT.

Zul Rafique & Partners
{31 March 2022}

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