Where Are You Heading, LAD? Application of Liquidated Damages Clauses in Termination or Abandonment Cases: How The UK Decision in Triple Point Technology, Inc v PTT Public Company Ltd May Impact Malaysian Law on Liquidated Damages

Written by Ms Choong Shaw Mei, an Advocate and Solicitor (Malaya) and part-time lecturer in the University of Malaya.
Edited by Celin Khoo Roong Teng.

Lately, the UK Court of Appeal made another significant decision on the recoverability of LAD in the case of Triple Point Technology, Inc v PTT Public Company Ltd (‘Triple Point v PTT’). An interesting issue relating to claims for LAD in the event of a failure to complete performance of the contract was raised.
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I. INTRODUCTION
The legal principles in contract law dealing with liquidated and ascertained damages (‘LAD’) have received a great deal of attention after the stunning restatement by the Federal Court in Cubic Electronics Sdn Bhd (In Liquidation) v Mars Telecommunication Sdn Bhd[1] (‘Cubic Electronics’) in 2018 when the apex court of Malaysia reinstated the importance and viability of LAD clauses.[2] The said decision was unexpectedly based on the UKSC decision of Cavendish Square Holdings BV v Talal El Maksessi[3] (‘Cavendish’) whereby the Federal Court realigned the law on LAD in Malaysia as set out in Section 75 of the Contracts Act 1950 with the new penalty test postulated by the UK Supreme Court. Recently, another significant decision on the recoverability of LAD was made by the UK Court of Appeal in the case of Triple Point Technology, Inc v PTT Public Company Ltd[4] (‘Triple Point v PTT’), which raised an interesting issue relating to claims for LAD in the event of a failure to complete performance of the contract.[5]  

There is no doubt that LAD clauses play an important role in relation to risks allocation in a contract and allow the parties to avoid lengthy and expensive litigation by specifying an amount to be payable in the event of breach. LAD clauses in contracts are usually negotiated and agreed to by both parties as a means to liquidate or quantify the sum payable upon breach of contract. Once the breach is established, the aggrieved party is entitled to the sum provided in the LAD clause without proof of actual loss.[6] While it is settled law that the courts have regulatory supervision over secondary obligations such as exclusion clauses and LAD clauses to ensure that they are fair and not oppressive,[7] such power of the courts is deemed a necessary interference with the freedom to contract and should be exercised judiciously. It is therefore significant that the courts in these recent decisions are trending towards recognising the intentions of the parties by scrupulously upholding the application of the contractual clauses under consideration.
 
While LAD clauses can be found in various types of contracts, they are most common in construction contracts to compensate for late completion of construction work,[8] as well as in sale and purchase agreements of property from housing developers[9] or vendors to compensate for late delivery of vacant possession. In this context, LAD is provided as compensation in the event of late completion of the performance of contractual obligations. The LAD clause usually provides for the calculation of compensation for delay on a daily basis from the agreed completion date to the date of actual completion. The question then arises as to whether LAD can be claimed in the event of non-delivery of the property or construction works instead of delay in completion as provided in the contract. In some cases, it may involve the completion of works by another contractor, while in other cases the construction project in question is totally abandoned.
 
II. TRIPLE POINT TECHNOLOGY, INC V PTT PUBLIC COMPANY LTD
Triple Point Technology Inc (‘Triple Point’) is a company which designs, develops and implements software for use in commodities trading. PTT Public Ltd (‘PTT’) is a company, which amongst many other activities, undertakes commodities trading principally in oil, refined products and petrochemicals. In January 2013, the two parties negotiated and agreed on the terms of their contract for the provision of a new Commodity Trading and Risks Management System to PTT (referred to as the ‘CTRM contract’). The contract as originally executed relates to Phase 1 of the project, which was the implementation of the CTRM software in accordance with the scope provided in the CTRM contract to replace the existing CTRM system. After the parties had signed off the contract, Triple Point duly commenced performance. Subsequently, PTT sent two further order forms to Triple Point — referred to as ‘order form C’ in respect of Phase 2 of the project which would involve the development of the system to accommodate new types of trade, and ‘order form B’ that adds further users to both Phase 1 and Phase 2.
 
Unfortunately, work proceeded slowly as Triple Point failed to properly resource the project. Triple Point achieved completion of stages 1 and 2 of Phase 1 on 19th March 2014, which was 149 days late, but the invoice in respect of this work was duly paid. PTT refused to make payment on further invoices issued by Triple Point (based on calendar dates for payment as stated in the order forms) in respect of other work which were not yet completed. PTT instead relied on Article 18 of the CTRM contract which states that payment would be made by milestones, which have not been achieved by Triple Point apart from the completion of stages 1 and 2 of Phase 1. Triple Point insisted that further payments were due on its invoices and refused to continue working without further payment and eventually left the site. PTT maintained that Triple Point had wrongfully suspended work whereupon it proceeded to terminate the CTRM contract on 15th February 2015.
 
Triple Point filed a claim against PTT for all the outstanding sums shown as due and payable on the unpaid invoices. PTT denied any further payments were due to Triple Point and counterclaimed for delay and damages due upon termination of the contract. Mrs Jefford J of the Technology and Construction Court dismissed the claim for payment by Triple Point and ordered them to pay substantial damages on the counterclaim. By a notice of appeal filed on 25th October 2017, Triple Point appealed against the judge’s decision on various grounds. The main issue of principle which arose was how to apply a clause imposing LAD for delay in circumstances where the contractor or supplier never achieved completion. Sir Rupert Jackson, in delivering the Court of Appeal decision, held that Article 5.3 of the CTRM contract has no application where the contractor never handed over completed work to the employer.     
 
III. APPLICATION OF LAD CLAUSES IN THE EVENT OF TERMINATION
Article 5.3 of the CTRM contract reads:
‘If CONTRACTOR fails to deliver work within the time specified and the delay has not been introduced by PTT, CONTRACTOR shall be liable to pay the penalty at the rate of 0.1% (zero point one percent) of undelivered work per day of delay from the due date for delivery up to the date PTT accepts such work, provided, however, that if undelivered work has to be used in combination with or as an essential component for the work already accepted by PTT, the penalty shall be calculated in full on the cost of the combination.’
 
The learned Court of Appeal judge agreed with the High Court judge that Article 5.3 of the CTRM contract was not a penalty clause but a lawful provision for LAD.[10] Sir Rupert further held that the sums generated by the contractual formula in Article 5.3 were modest compared with the financial consequences of the delay in installing the software.[11] It was then contended by Triple Point that Article 5.3 was not engaged and that the Article only applies when work was delayed but subsequently completed and then accepted; it does not apply in respect of work which the employer never accepted. This brief commentary will focus solely on the issue of PTT’s entitlement to LAD for the delay of the work which remained outstanding upon the termination of the CTRM contract. The learned Court of Appeal judge recognised this to be a formidable argument which raised questions of general principle concerning the operation of LAD clauses in termination or abandonment cases.[12]
 
His Lordship began his review of the authorities with the House of Lords’ decision in British Glanzstoff Manufacturing Co Ltd v General Accident Fire and Life Assurance Corporation Ltd (‘Glanzstoff’)[13] where Glanzstoff had employed a contractor, Brown, to construct a new factory. Clause 26 of the construction contract provided that if the contractor ceased working, the employer could engage another contractor to complete the works and the employer could then recover the additional costs incurred from the original contractor. Brown became bankrupt and eventually stopped work on the site. Pursuant to Clause 26 of the contract, Glanzstoff engaged another contractor, Henshaw, to complete the works but Henshaw overran by six weeks from the date specified in the contract. Glanzstoff claimed LAD for the six weeks’ delay at the rate specified in the LAD clause.
 
Clause 24 of the contract provided as follows:
‘If the contractor fails to complete the works by the date named in clause 23, or within any extended time allowed by the architect under these presents, and the architect shall certify in writing that the works could reasonably have been completed by the said date, or within the said/extended time, the contractor shall pay or allow to the employer the sum of £250 sterling per week for the first four weeks, and £500 per week for all subsequent weeks as liquidated and ascertained damages for every week beyond the said date or extended time, as the case may be, during which the works shall remain unfinished, except as provided by clause 23, and such damages may be deducted by the employer from any moneys due to the contractor.’
 
Lord Haldane LC delivered the House of Lords’ judgement (with which The Earl of Halsbury and Lord Atkinson concurred) dismissing the appeal. He held that Clause 24 does not apply in the instant case for two reasons:
‘…first of all, that is altogether inept to the provisions made by clause 26, which contain a complete code of themselves; and secondly, because upon its construction I read it as meaning that if the contractors have actually completed the works, but have been late in completing the works, then, and in that case only, the clause applies. Under the circumstances…the contractors have not completed the works; on the contrary, they have been ousted from the works by the employers under their powers given them by clause 26. I am therefore of the same opinion as the learned Judges in the Court of Session, who were unanimous in holding that clause 24 has no application to the present case…’[14] (emphasis mine)
 
Lord Shaw delivered a separate speech to a similar effect:
‘…Clause 24, in my judgement, gives no foundation for such a hypothetical claim. It only applies to the failure by Brown himself to complete this contract timeously, but it does not apply to a state of matters in which, under section 26 of the contract, a different remedy has been adopted under what is really a separate code.’[15] (emphasis mine) 
 
Sir Rupert Jackson then reviewed various decisions in both the UK and other common law jurisdictions whereby LAD was awarded in cases where construction work was not completed or abandoned and the general consensus was that the LAD provision prevailed up to the date of termination and general damages thereafter.[16] His Lordship was however of the view that the House of Lords’ decision in Glanzstoff was not cited or properly considered in many of those cases. In some cases, it was held that the LAD clause would even apply until the second contractor achieves completion,[17] which is difficult to justify as it is clear that the first contractor would have no control whatsoever over the completion of the work by the former. His Lordship summarised that:
‘…In cases where the contractor fails to complete and a second contractor steps in, three different approaches have emerged to clauses providing liquidated damages for delay: (i) The clause does not apply, (ii) The clause only applies up to termination of the first contract, or (iii) The clause continues to apply until the second contractor achieves completion.’[18]
 
His Lordship clarified the law succinctly as follows:
‘The textbooks generally treat category (ii) as the orthodox analysis, but that approach is not free from difficulty. If a construction contract is abandoned or terminated, the employer is in new territory for which the liquidated damages clause may not have made provision. Although accrued rights must be protected, it may sometimes be artificial and inconsistent with the parties’ agreement to categorise the employer’s losses as £x per week up to a specified date and then general damages thereafter. It may be more logical and more consonant with the parties’ bargain to assess the employer’s total losses flowing from the abandonment or termination, applying the ordinary rules for assessing damages for breach of contract. In my view, the question whether the liquidated damages clause (a) ceases to apply or (b) continues to apply up to termination/abandonment, or even conceivably beyond that date, must depend upon the wording of the clause itself. There is no invariable rule that liquidated damages must be used as a formula for compensating the employer for part of its loss.’[19] (emphasis mine)
 
His Lordship opined that there is much force in the House of Lords’ reasoning in Glanzstoff and that it was a decision of the apex court which has never been disapproved. In turning to Article 5.3 in the instant case, his Lordship held that:
‘This clause like clause 24 in Glanzstoff, seems to be focussed specifically on delay between the contractual completion date and the date when Triple Point actually achieve completion. The phrase in article 5.3 “up to the date PTT accepts such works” means “up to the date when PTT accepts completed work from Triple Point”. In my view Article 5.3 in this case, like clause 24 in Glanzstoff, has no application in a situation where the contractor never hands over completed work to the employer.’[20] (emphasis mine)
 
His Lordship then held that:
‘…The consequence of this analysis is that PTT is entitled to recover liquidated damages of $154,662 in respect of Triple Point’s delay of 149 days in completing stages 1 and 2 of Phase 1. PTT is not entitled to recover liquidated damages for any of the other delays. That is because Triple Point did not complete any other sections of the work. The fact that PTT cannot recover liquidated damages in respect of any other sections of the work does not mean that it is left without a remedy for non-completion. Such damages are at large, rather than fixed in advance. PTT is entitled to recover damages for breach of Articles 5 and 12 of the CTRM contract, assessed on ordinary principles.’[21]
 
The Court of Appeal’s decision made waves in legal circles in the UK and is pending an appeal to the UK Supreme Court.[22] The decision has not been universally accepted as it challenges the ‘orthodox analysis’ as found in most textbooks, which allows the claim under the standard LAD clause up to the day of termination in the event of non-completion.[23] Sir Rupert’s ruling on the orthodox analysis is a major departure from the construction industry’s practice and understanding. Triple Point v PTT’s impact on the FIDIC 1999 Silver Book[24] was considered in the recent case of PBS Energo AS v Bester Generacion UK Ltd and others.[25]
 
Cockerill J merely noted therein that Triple Point v PTT is under appeal and is authority for ‘the proposition that when considering damages for delay which are included in contracts it is necessary to consider the drafting of the contract carefully to assess whether the clause allows that any Liquidated damages will survive termination and particularly whether they will survive termination in circumstances where the contract is terminated with the works incomplete.’[26]
 
Another argument against the Triple Point v PTT decision is that insufficient consideration was given to the issue of accrued rights and obligations upon the termination of a contract.[27] It is an established legal principle that accrued rights, being those rights to which the parties had become entitled during the term of the contract, continue to be enforceable following termination. It would however be pertinent to point out that the argument that an LAD clause does not apply in the case of non-completion of the contract is not necessarily a failure to recognise accrued rights. It has more to do with understanding the scope of the LAD clause,
which in this context is meant to compensate for delay in completion of contract works. It is not so much a question of upholding accrued rights to LAD post-termination, but whether such rights are within the LAD clauses. Clauses governing the right to impose LAD should therefore make it expressly clear if their operation is to survive termination.
 
IV. ANALYSIS OF MALAYSIAN CASES
Glanzstoff was cited with approval in the Malaysian case of Lion Engineering Sdn Bhd v Pauchuan Development Sdn Bhd,[28] which involves a PAM contract. Clause 22[29] provides for LAD as follows:
‘If the Contractor fails to complete the works by the Date for Completion stated in the appendix to these Conditions or within any extended time fixed under clause 23 or clause 32(1)(c) of these Conditions and the Architect certifies in writing that in his opinion the same ought reasonable so to have been completed, then the Contractor shall pay or allow to the Employer a sum calculated at the rate stated in the said appendix as Liquidated and Ascertained Damages for the period during which the works shall so remain or have remained incomplete, and the Employer may deduct such sum from any monies due or to become due to the Contractor under this Contract.’
 
Malik Ishak J referred to the House of Lords’ dicta in Glanzstoff that ‘a clause on liquidated damages applied only where the contractors had completed the contract and did not apply where the contract has passed out of their hands’. The principle as set out in the case of Glanzstoff was however not specifically applied in arriving at the judgement therein. The case was decided on the fact that the employer failed to prove their claim for LAD by failing to establish that the certificate for non-completion, as required pursuant to Clause 22, was properly issued by the architect.[30]
 
The Glanzstoff decision was also cited and applied in the recent case of Excel Metro Capital Sdn Bhd v Mohd Salleh bin Sukiman.[31] In this case, both parties entered into a Construction Agreement (‘CA’) whereby the Plaintiff was to construct a bungalow for the Defendant. Clause 4 of Part I of the CA provides that if the Plaintiff failed to complete the construction ‘within the stipulated time’, LAD will be imposed at the rate of RM300 per day. On the issue of the Defendant’s claim for LAD upon the Plaintiff’s failure to complete the construction works on the agreed completion date, Zalita Zaidan JC cited Glanzstoff and opined as follows:   
‘Based on the CA clause 4 Part I, the imposition of the LAD occurs if the Plaintiff failed to complete the construction works before the completion date. This clearly means that the CA must be in operation for clause 4 Part I to be invoked. In one House of Lords case of British Glanzstoff Manufacturing C Ltd v General Accident Fire and Life Assurance Corp Ltd where the original contractors had become insolvent and the work had to be suspended, another contractor was engaged by the appellants to complete the works which was completed six weeks after the completion date. The appellants claimed for LAD for the delay due to insolvency caused by the original contractor. The House of Lords held that the LAD applied only where the original contractor had completed the contract.’[32]
 
In numerous Malaysian cases, it would appear that the courts generally adopted what Sir Rupert termed the ‘orthodox analysis’,[33] which states that the LAD clause would apply up to termination of the contract. In the very recent case of Kerajaan Malaysia v KCSB Konsortium,[34] the dispute involved a tripartite privatisation agreement for the construction of an Army Camp on government land in Skudai that remained uncompleted after more than thirteen years. In allowing the claim for LAD for the abandoned project, Lee Swee Seng J (as he then was) held that LAD shall be calculated from the date of service of the certificate of non-completion (‘CNC’) up to the date of termination.[35] The provision on LAD is set out in Section 16.2 of the tripartite agreement as follows: ‘(b) …liquidated and ascertained damages to be calculated from day to day at the rate to be determined per day in accordance with the following formula until the actual Completion Date: …’[36]
 
In view of the principle of law laid down by Glanzstoff (which was not cited), it could be argued that based on the wording of Section 16.2(b), the said clause would have no application in the situation whereby the construction of the Army Camp was never completed. Looking at the decision of Triple Point v PTT, it would appear that the wording in the aforesaid clause is very similar to Article 5.3 and is focused on compensation for the period of delay between the issuance of the CNC (which is required to be issued for imposition of LAD in most construction contracts) and the date where the contractor actually achieves completion. The Author submits that in the light of the Triple Point v PTT decision which has clearly reinstated the legal principle set out in Glanzstoff, there is every reason to question the award of LAD for the non-completion of the Skudai Army Camp as being inconsistent with the LAD clause itself.
 
In Balbeer Singh Karam Singh & Ors v Sentul Raya Sdn Bhd[37] (‘Balbeer Singh’), the Court of Appeal did not address the issue of whether LAD would still be payable in the event of the abandonment of the entire project. Abdul Wahab Patail JCA, who delivered the Court of Appeal judgement, primarily focused on the issue of whether the court should be deterred from awarding a sum as LAD merely because it appears colossal by reason of the statutory sale and purchases agreements[38] being kept alive; and whether the rate of the LAD was too high and would call for the application of Section 75 of the Contracts Act 1950. In making the award for LAD, his Lordship determined the cut-off date for the period to calculate the LAD by referring to the concept of mitigation and came to the conclusion that:
‘In the absence of evidence when they became aware (of the need to mitigate), the best available evidence is the date of the last offer to them to refund the payments they had made, i.e. 26 July 2002. This applies in respect of the period for which liquidated ascertained damages for delay is payable.’[39]
 
The Court of Appeal decision in Balbeer Singh was relied upon in the recent High Court case of Ganda Selat Sdn Bhd v Mohammadi bin Mt Abu @ Ramli & Ors[40] as the authority to hold that LAD can be awarded notwithstanding that the delivery of vacant possession was deemed impossible due to the housing project being an abandoned project.[41] The Plaintiff, Defendants and landowners had signed the relevant Sale and Purchase Agreements pursuant to schedule H of the Housing Development (Control and Licensing) Act 1966 (‘the SPAs’) for the sale of 120 units of condominiums built by the Plaintiff to the Defendants. The Plaintiff failed to complete the project, and to date, no vacant possession of the units was delivered to any of the Defendants. The Defendants, through their solicitors, issued a statutory notice dated 28th August 2018 against the Plaintiff pursuant to Subsection 465(1)(a) and 466(1)(e) of the Companies Act 2016 claiming for the LAD as the sum due and owing to them.
 
Noorin binti Badarudin J discussed the issue concerning the 2002 amendments to the statutory SPAs which introduced the new Clauses 26(2) and (3) as follows:
‘(2) If the Vendor fails to deliver vacant possession of the said Parcel in the manner stipulated in clause 27 herein within the time stipulated in sub-clause (1), the Vendor shall be liable to pay to the Purchaser liquidated damages calculated from day to day at the rate of ten per centum (10%) per annum of the purchase price from the expiry date of the delivery of vacant possession in sub-clause (1) until the date the Purchaser takes vacant possession of the said Parcel. Such liquidated damages shall be paid by the Vendor to the Purchaser immediately upon the date the Purchaser takes vacant possession of the said Parcel.
(3) For the avoidance of doubt, any cause of action to claim liquidated damages by the Purchaser under this clause shall accrue on the date the Purchaser takes vacant possession of the said Parcel.’
 
Her Ladyship herself pointed out that the new Clause 26(3) can be used to argue that the purchasers are not entitled to claim LAD in the event that there is no vacant possession although she protested that it would be unjust to do so.[42] In the light of the decision in Triple Point v PTT, whereby the court would look at the actual wording of the LAD clause to determine whether LAD could be claimed for non-completion of the work, the very wording of Clauses 26(2) and (3) (as highlighted in bold) could be interpreted to mean that LAD can only be claimed in the event that there is delivery of vacant possession. In other words, LAD cannot be claimed in the event of a project that had been abandoned. This is not to say that the purchasers in such cases are left without any remedies for non-completion, only that they are not entitled to LAD as set out in Clause 26(2) of the statutory SPAs. As explained by Sir Rupert J in Triple Point v PTT, ‘…Such damages are at large, rather than fixed in advance, …entitled to recover damages for breach …assessed on ordinary principles.’[43]
 
This understanding is central to the issue at hand as it would appear that many judges have conflated the issue of the application of the LAD clauses in the event of non-completion with the more basic issue of recovery of damages for breach of contract in such a situation. In general, an LAD clause in this context provides for an agreed sum of compensation specifically for delay in completion of the contractual obligations. The aggrieved party is nonetheless able to claim for damages for actual loss suffered in accordance with established legal principles of compensation for any breach of contract not covered by the LAD clause. It would therefore be outside the scope of the principles of legal interpretation to extend such LAD provision to cover a loss beyond the contemplation of the parties when they agreed to the same unless the clause specifically provides for it. LAD which is provided as a means to compensate the aggrieved party in the event of late performance or delivery should not be extended to compensate the aggrieved party for the failure to complete the project, no matter how abhorrent the conduct of the party in breach.[44] 
 
V. CONCLUSION
It would therefore seem that Malaysian courts have not given any in-depth consideration to the issue of whether LAD should be allowed in the event of non-completion in terms of the legal principles involved. The position taken by the majority of High Court judges is generally in line with the ‘orthodox analysis’. The Court of Appeal decision in Balbeer Singh[45] did not address the issue on the application of the LAD clause in the event of non-completion that was raised in Triple Point v PTT, nor did it refer to the actual provision to determine if the wording of the clause itself allowed for such an award. While the courts of first instance may continue to deliver decisions allowing LAD in cases involving abandoned projects to protect purchasers in line with the ethos of the Housing Development (Control and Licensing) Act 1966, such decisions could be challenged on appeal in view of the Triple Point v PTT verdict. The wording used in the latest standard LAD clauses[46] adopted by the construction industry in Malaysia may require redrafting if LAD is to be claimed in cases of termination or abandonment of construction works. This uncertainty will remain until an appellate court delivers a clear ruling as the significant decision in Triple Point v PTT, though not binding on Malaysian courts, is certainly of persuasive authority.[47]      
 
The Contracts Act 1950 is silent on the issue of LAD claims apart from Section 75, which was re-examined and restated recently to incorporate the more-progressive ‘new penalty test’ expounded in the UKSC decision of Cavendish. This is in line with the trend of development not just in the UK but globally, whereby courts would be giving more weight to the concept of freedom of contract by upholding the intention of contracting parties as reflected in terms of the contract and refraining from interfering with what the parties have freely negotiated and accepted when exercising their supervisory powers in regulating secondary obligations.[48] The emphasis is on ascertaining what the parties had intended and that would mean interpreting the clauses using the usual rules of interpretation to discern such intention. This calls for clear and careful drafting of such provisions to reflect the true intention of the parties. Lawyers need to seek proper instruction from their clients and avoid merely incorporating stock phrases and clauses in a contract.
 
It will be interesting to see if the UK apex court would be willing to depart from the ‘orthodox analysis’ and decline to adopt an approach that is at times artificial and inconsistent with what the parties have bargained for, and which is not reflected in the wording of the LAD clause. In the meantime, the most cogent takeaway from the Triple Point v PTT decision is the importance of drafting an LAD clause in clear and concise terms in order that the courts may accurately determine to what extent such claims for LAD may be entertained and that the intention of the parties on agreed damages are therefore upheld by the courts. There is a strong emphasis in recent decisions by the courts of England and Wales that contracts should be applied in accordance with their written terms.[49] We would have to wait for the appeal to be decided by the UK Supreme Court as well as further consideration by the Malaysian courts to ascertain which direction the law on the application of LAD clauses post-termination will be heading.

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Disclaimer: The opinions expressed in this article are those of the author and do not necessarily reflect the views of the University of Malaya Law Review, and the institution it is affiliated with.

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Footnotes:
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[1] Cubic Electronics Sdn Bhd (In Liquidation) v Mars Telecommunication Sdn Bhd [2019] 6 MLJ 15 (Federal Court).

[2] Choong, S.M. (2019, Feb 10). A Stunning Restatement of the Law on Liquidated Damages. Lex; in Breve University of Malaya Law Review. Retrieved from <https://www.umlawreview.com/lex-in-breve/a-stunning-restatement-of-the-law-on-liquidated-damages-clauses-by-the-federal-court>. Site accessed on 17 Sept 2020.

[3] Cavendish Square Holdings BV v Talal El Maksessi [2015] UKSC 67.

[4] Triple Point Technology, Inc v PTT Public Company Ltd [2019] EWCA Civ 230.

[5] This case is now pending appeal to the UK Supreme Court.

[6] McKendrick, E. (2014). Contract Law: Text, Cases, and Materials. (6th ed.). New York, NY: Oxford University Press, 905.

[7] See footnote 1 above at para 51.

[8] PAM Contracts 2018, cl 22.1.

[9] Sale and Purchase Agreement pursuant to schedule H of the Housing Development (Control and Licensing) Act 1966 (Act 118) (Malaysia), cl 26(2).

[10] See footnote 4 above at para 68.

[11] This was said in reference to the new penalty test set out in Cavendish.

[12] See footnote 4 above at para 76.

[13] British Glanzstoff Manufacturing Co Ltd v General Accident Fire and Life Assurance Corporation Ltd [1913] SC (HL) 1.

[14] See footnote 13 above.

[15] See footnote 13 above.

[16] See footnote 4 above at para 98.

[17] See footnote 4 above at para 100.

[18] See footnote 4 above at para 106.

[19] See footnote 4 above at para 110.

[20] See footnote 4 above at para 112.

[21] See footnote 4 above at para 113.

[22] Higgins, K. (2020, Mac 10). Damages at Large: Triple Point, FIDIC and the TCC. Corbett & Co. Reviewed from <https://www.corbett.co.uk/damages-at-large-triple-point-fidic-and-the-tcc/>. Site accessed on 30 Sept 2020.

[23] Furst, S., & Ramsey, V. (2019). Keating on Construction Contracts. London: Sweet & Maxwell, [10-039]-[10-039] (supp).
If the contract is brought to an end by determination or otherwise, then prima facie all future obligations cease and no claim can be made for liquidated damages accruing after determination.

[24] It is to be noted that the FIDIC 1999 Silver Book provision on LAD is similar to Clause 22 of the 2018 PAM contract in setting out the period for calculating LAD to be the period from the Completion Date to the Date of Practical Completion.

[25] PBS Energo AS v Bester Generacion UK Ltd and others [2020] EWHC 223 (TCC).

[26] See footnote 25 above at para 438.

[27] Howells, J. (2018, Jan 30). Triple Point Technology, Inc v PTT Public Company Ltd [2018] EWHC 45 (TCC). Atkin Chambers Barristers. Retrieved from <https://www.atkinchambers.com/triple-point>. Site assessed on 21 Sept 2020.

[28] Lion Engineering Sdn Bhd v Pauchuan Development Sdn Bhd [1996] MLJU 275.

[29] This provision on LAD has since been amended.

[30] See footnote 28 above at para 105 and 106.

[31] Excel Metro Capital Sdn Bhd v Mohd Salleh bin Sukiman [2017] MLJU 1490.

[32] See footnote 31 above at para 52.

[33] See footnote 23 above.

[34] Kerajaan Malaysia v KCSB Konsortium [2019] 10 MLJ 429.

[35] See footnote 34 above at para 92.

[36] This provision is incidentally more similar to Clause 22.1 of the PAM Contract 2018 which has been amended to use the phrase ‘from the Completion Date to the date of Practical Completion’.

[37] Balbeer Singh Karam Singh & Ors v Sentul Raya Sdn Bhd [2014] 7 CLJ 461.

[38] The sale and purchase agreements in this case were made pursuant to Schedule H of the Housing Development (Control and Licensing) Act 1966 prior to the 2002 amendment being discussed in Ganda Selat Sdn Bhd v Mohammadi bin Mt Abu @ Ramli & Ors Mohammadi bin Mt Abu @ Ramli & Ors.

[39] See footnote 37 above at para 17.

[40] Ganda Selat Sdn Bhd v Mohammadi bin Mt Abu @ Ramli & Ors [2019] MLJU 1651.

[41] By a letter dated 5th January 2018, the Ministry of Urban Wellbeing, Housing and Local Government declared that the project was an abandoned project.

[42] See footnote 40 above at para 19 and 20.
Her Ladyship went on to hold that the LAD pursuant to Clause 26(2) of the statutory SPAs is a debt accrued for purposes of winding up proceedings. 

[43] See footnote 4 above at para 110.

[44] The action of the developer in the case of Balbeer Singh was reprehensible and the Court of Appeal’s sympathy for the purchasers was understandable.

[45] See footnote 37 above.

[46] The drafting of the most recent LAD clauses in the PAM Contract 2018 as well as the Sale and Purchase Agreement pursuant to schedule H of the Housing Development (Control and Licensing) Act 1966 are problematic in the light of the Triple Point v PTT decision.

[47] Glanzstoff would be a part of our common law precedent.

[48] See footnote 1 at para 58.

[49] Rowe, A., & Wheal, R. (2017, Feb 21). Court of Appeal confirms the conventional operation of extension of time provisions. White & Case. Retrieved from <https://www.whitecase.com/publications/alert/court-appeal-confirms-conventional-operation-extension-time-provisions>. Site assessed on 21 Sept 2020.