vii
TABLE OF CONTENTS
CHAPTER
TITLE
1
PAGE
TITLE
i
DECLARATION
ii
DEDICATION
iii
ACKNOWLEDGEMENT
iv
ABSTRACT
v
ABSTRAK
vi
TABLE OF CONTENTS
vii
LIST OF ABBREVIATIONS
xii
LIST OF TABLES
xiii
LIST OF CASES
xiv
LIST OF APPENDICES
xvii
INTRODUCTION
1
1.1
Background of the Study
1
1.2
Problem Statement
6
1.3
Significance of the Study
8
1.4
Research Aim and Objectives
8
1.5
Scope and Limitation of the Study
9
1.6
Research Methodology
10
1.6.1 Development of Research Proposal
11
1.6.2 Data Collection
11
1.6.3 Data Analysis
11
viii
1.7
1.6.4 Writing Up
11
Thesis Organization
12
1.7.1 Chapter 1: Introduction
12
1.7.2 Chapter 2: Payment in Standard Forms of
Contract
12
1.7.3 Chapter 3: Comparison between PAM 2006
Standard Form and JCT 2009 Standard Form
on issues of Payment
12
1.7.4 Chapter 4: Analysis of Case Laws
13
1.7.5 Chapter 5: Conclusion and Recommendation
13
Conclusion
13
PAYMENT IN STANDARD FORMS
OF CONTRACT
15
2.1
Introduction
15
2.2
Employer’s Obligation to Pay
17
2.3
Contract Price
17
2.4
Time of Payment
18
2.5
Types of Certificate
19
2.5.1 Certificate of Payment
19
1.8
2
2.5.1.1 Interim Certificate
20
2.5.1.2 Final Certificate
20
2.5.2 Certificate of Events
21
2.5.2.1 Certificate of Non Completion
21
2.5.2.2 Certificate of Practical Completion
21
2.5.2.3 Certificate of Making Good of
Defects
2.5.2.4 Certificate of Extension of Time
2.6
2.7
22
22
Payment Application Issuance of Architect’s
Certificate
23
2.6.1 Amount Due in Architect’s Certificate
24
2.6.2 Errors in Payment Certificate
24
Set Off by Employer
25
ix
2.8
Retention
28
2.9
Definition of Variation
31
2.9.1 Rules for Valuation of Variation
32
Remedies Available for Unpaid Contractor
33
2.10.1 Suspension of Works for Non-Payment
34
2.10.2 Claim for Interest on the Late Payment
35
2.10.3 Determining the Contract by the Contractor
37
2.10.4 Summary Judgment
37
2.10.5 Winding Up
38
2.11
Compulsory Suspension of Work
39
2.12
Cessation Insurance resulting from Supervision of
2.10
2.13
the Works
39
Contractors’ Claim for Loss and Expense
40
2.13.1 Application to Ascertain Loss and/ or Expenses
40
2.13.2 The contractor is not entitled to loss
and / expense except in accordance with the
express provisions of the contract
41
2.13.3 Ascertainment of Loss and/or Expenses
43
2.13.4 Amount Ascertained added to Contract Sum
43
2.14
Final Account
44
2.15
Conclusion
45
3
COMPARISON BETWEEN PAM 2006 AND JCT
2009 ON ISSUES OF PAYMENT
46
3.1
Introduction
46
3.2
Comparison of Payments between Nigeria and
Malaysia
3.3
Comparison of the period of Interim Payment and
Time for Honouring the Certificate
3.4
49
Comparison for Employer to set-off in PAM 2006 and
JCT 2009 standard forms of contract
3.5
47
51
The differences between the PAM 2006 and JCT
2009 Standard of Forms of Building Contract
54
x
3.6
Conclusion
56
ANALYSIS OF CASE LAWS
57
4.1
Introduction
57
4.2
Issue on Non-Payment
58
4.3
Action on Non-Payment
58
4
4.3.1 Suspension as the result of Nonpayment or
Delay in Payment
59
4.3.1.1 Provision under the Common Law
64
4.3.1.2 Provision in the Standard Forms of
Contract
4.3.1.3 Analysis of Case Laws
64
65
4.3.2 Slowing the Progress of Work as result of
Nonpayment and Delay in Payment
67
4.3.3 Claim for interest due Delay in Payment
or Nonpayment
67
4.3.3.1 The Provision in the Standard Form
of Contract
4.3.3.2 The Provisions under Common Law
67
72
4.3.4 Application for Summary Judgment for
Nonpayment or Delay in Payment
73
4.3.4.1 The Provision in JCT 2009 and PAM
2006 Standard Forms of Contract
73
4.3.4.2 Analysis of Case Law
74
4.3.4.3 Provision under Common Law
75
4.3.5 Winding up Petition
76
4.3.5.1 Provision in the Standard Forms of
Contract
4.3.5.2 Analysis of Case Law
4.3.6 Termination Due Nonpayment
76
77
84
4.3.6.1 Provision in the Standard Forms of
Contract
4.3.6.2 Analysis of Case Law
86
86
xi
4.3.6.3 The Provision of Common Law
4.4
88
Conclusion
88
CONCLUSION AND RECOMMENDATIONS
89
5.1
Introduction
89
5.2
Summary of Research Findings
90
5
5.2.1 Objective 1 – Similarity and Differences in Malaysian
and Nigerian Standard Forms of Contract
90
5.2.2 Objective 2 – Recommendations to Improve Payment
in Nigeria
92
5.3
Further Research
94
5.4
Problems Encountered
94
5.5
Conclusion
95
REFERENCES
Appendix A - B
96
98 - 114
xii
LIST OF ABBREVIATIONS
PAM
Pertubuhan Akitek Malaysia
IEM
Institution of Engineers Malaysia
CIDB
Construction Industry Development Board
JKR
Jabantan Kerja Raya
ISM
Institution of Surveyors Malaysia
JCT
Joint Contract Tribunal
PC
Provisional Cost
CA
Contract Administrator
CPC
Certificate of Practical Completion
EOT
Extension of Time
LAD
Liquidated and Ascertained Damages
RF
Retention Fund
CJ
Chief Judge
HCR
High Court Rule
SCR
Supreme Court Rule
CL
Clause
FCJ
Federal Court Judge
VAT
Value Added Tax
DRA
Development Right Agreement
RM
Malaysian Ringgit
xiii
LIST OF TABLES
TABLE NO.
TITLE
3.1
Comparison of Payments between Nigeria and Malaysia.
3.2
The period of Interim Payment and Time for Honouring
the Certificate.
3.3
PAGE
47
49
Comparison on ground for Employer set-off in PAM 2006
and JCT 2009 standard forms of contract.
51
xiv
LIST OF CASES
TITLE
PAGE
Lubenham Fidelities v South Pembrokeshire (1986) 33 BLR 39.
4
Dawnays Ltd v inter (1971) 1 WLR 1205.
4
Henry Boot Building Ltd v The Croydon Hotel & Leisure Co Ltd (1986)
36 BLR 41.
29
Lee Kam Clin v Syarikat Kukuh Maju Sdn Bhd (Syariat Perumahan Pegawai
Kerajaan Sdn Bhd, Garnishee (1988) 1 MLJ 444.
30
Choo Yin Loo v Visuvalingam Pillay (1930) 7FMSLR.
34
Charthan & Dover Railway Co v South Eastern Railway Co (1893) AC 249.
35
President of India v La Pintada Cia Navegacion SA (1985) AC 104.
35
FG Minter Ltd v Welsh Health Technical Services Organization (1980)
13 BLR 1.
35
General Tire and Rubber Co v Firestone Tyre and Rubber Co Ltd (1975)
2 All ER 173.
36, 48
xv
TITLE
PAGE
Rees & Kirby Ltd v Swansea CC (1985) 30 BLR 1.
Small & Son Ltd v Middlesex Real Estates Ltd (1921) WN 245.
36
37, 85
Who Hup (PTE) Ltd & Another v Turner (East Asia) PTE (1987) 1 MLJ 433.
38
JB Kulim Development Sdn Bhd v Great Purpose Sdn Bhd (2002) 2 MLJ 298.
38
Pembenaan Leow Tuck Chui & Sons Sdn Bhd v Dr Leela’s Medical Centre
Sdn Bhd (1995) 2 MLJ 57.
52, 74
Gilbert-Ash (Northern) Ltd v Mordern Engineering (Bristol) Ltd (1973) 3
ALL ER 195.
54
Withers v Reynolds (1831) 1 LJ KB 30.
59
Mersey Steel & Iron co. v Naylor Benzom & Co. (1884) 9 App. Cas. 434.
60, 84
Yong Mok HIn v United Malay States Sugar Industries Ltd (1966) 2 MLJ 286.
61
Canterbury Pipe Lines V Christchurch Drainage(1986) 33 BLR 76.
62
Supermal v Federated Homes (1981) Con L.R 25.
65
Tan Kok Cheng & Sons Reality Co Sdn Bhd v Lim Ah Pat (T/A Juta Bena)
(1995) 3 MLJ 273.
65
Vistanent (MCs) Sdn Bhd v Pilecon Civil Works Sdn Bhd (2005) 6MLJ 664.
66
FG Minster Ltd v Welsh Health Technical Services Organization (1980)
13 BLR 1.
68
xvi
TITLE
PAGE
Lojan Properties Ltd v Tropicon Contractors PTE Ltd (1991) 2 MLJ 70.
68
BCM development Sdn Bhd v The Titular Roman Catholic Bishop of Malacca
Johore (2010) MLJU 507.
70
Hadley v Baxendale (1854) 9 Ex 341.
72
Re Sanpete Builder (S) PTE LTD (1989) 1 MLJ 393.
77
Kemayan Construction Sdn.Bhd v Prestara Sdn.Bhd (1997) 5 MLJ 608.
79
Pembinaan Purcon v Enterainment Village (M) Sdn Bhd (2004) 1 MLJ 545.
81
Dataran Rentas Sdn.Bhd v BMC Construction Sdn.Bhd (2008) 2MLJ 826.
82
Dataran Rentas Sdn Bhd v BMC Construction Sdn Bhd (2010) 5MLJ 222.
84
Dataran Rentas Sdn. Bhd v BMC Construction Sdn Bhd (2008) 2 MLJ 856.
86
xvii
LIST OF APPENDICES
APPENDIX
TITLE
A
Interim valuation
B
Article of Agreement on Payment
PAGE
98
110