When progress claims are duly and properly certified, then there is no issue about the value of works done in a construction contract. The problem arises when progress claims are not duly and properly certified. How does a contractor go about claiming for the uncertified portion of work done, whether in CIPAA or by way of arbitration/litigation?
In Brunsfield Construction Sdn Bhd v LDE Aluminium Industries Sdn Bhd [2019] 6 MLJ 674, LDE sued Brunsfield for uncertified sums under its progress claim no 27 (“PC 27”). Brunsfield, in defence, contended that PC 27 in and of its own was insufficient to prove the sum due and payable to LDE.
At the High Court, the learned High Court judge allowed LDE’s claim with interest. According to the learned High Court judge, Brunsfield’s failure to object to PC 27 and/or reply to letters from LDE meant that Brunsfield was estopped from disputing the contents of PC 27 at trial.
Dissatisfied, Brunsfield appealed. The Court of Appeal allowed Brunsfield’s appeal and held that PC 27 in and of itself cannot be proof of actual work done or materials supplied on site. Instead, LDE had to prove the detailed make-up of PC 27.
In other words, each and every line item in PC 27 must be substantiated, all the more so in the absence of joint inspection and/or certification. A progress claim is “far from sufficient to prove the respondent’s claim”.
Kheng Hoe Advocates advises clients in arbitration, litigation, mediation and adjudication (CIPAA) of construction disputes. We can be reached at [email protected].