Kah Seg Construction Case Study

According to clause 30.7 in PAM 2006, if the employer do not pay within 14 days after receiving a suspension notice by the contractor, the contractor must further issue a written notice delivered by hand or by registered post to effect his suspension of work and provided that such notice shall not be given “unreasonably or vexatiously”. Case law above has defined “unreasonably”, which means contractor’s notice have brought a disproportionately disadvantage to the employer, and may even contend that the notice to be “vexatiously” given, which means the contractor has the ulterior motive or purpose of oppressing, harassing or annoying. From the cases discussed and analyzed here, when the contractor suspends works, the employer can claim that
In Kah Seng Construction Sdn.Bhd. v Selsin Development Sdn.Bhd, it was stated that a Contractor’s response to actual or alleged breaches of contract by the owners by suspending or deliberately going slow are extremely dangerous. In this case, the plaintiff contended that it was entitled to suspend works because of non-payment of one certificate and partial non-payment of another. The defendant argued that even if the Defendant was not entitled to set off sums of monies for delay and defective works against sums due to the Plaintiff in the interim certificates, there was no provision in the rudimentary contract between the parties for non-payment of certified sums and that the Plaintiff’s admitted suspension was wrongful. The judge held
The statement also supported by the case of Graymark Investment v Walter Construction Group; the Contractor is entitled to an EOT since he failed to meet the notification requirements as stated in the Contract. Although the arbitrator found that the Contractor was entitled to an EOT since such delay is caused by the Employer but the court refused to uphold the “notice condition precedent” provision, but instead relied on the “prevention principle” that a party cannot take advantages of its own wrong in enforcing a contract. While in the case of City Inn v. Shepherd Construction, the Contractor has failed to send the notice which was a condition precedent to apply an EOT. The court held that the failure on the part of the Contractor to comply with the provision is properly regarded as breach of contract on his part since he said that:
“If the Contractor having formed the opinion, elects not to do what the clause requires of him, he not only deprives himself of any entitlement, he would otherwise have had to an EOT; he also deprives the Architect opportunity of reviewing the instruction in light of the Contractor’s opinion of its consequences, and choosing whether to insist in it, or withdraw it… it therefore seem to