The document discusses several issues related to construction contracts involving suspension of work by the employer. It addresses whether a contractor can claim interest for underpayment in interim certificates if works are still ongoing or completed. It also examines quantifying idle time during suspension, employer liability to pay full workforce costs, and claiming demobilization and remobilization costs during suspension periods. The document provides analysis of relevant contract clauses and case laws to determine contractors' entitlements in different suspension scenarios.

1. SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN
BACHELOR OF QUANTITY SURVEYING (HONOURS)
CONSTRUCTION LAW
GROUP ASSIGNMENT (PROBLEM 4)
LECTURER: MR. WONG CHONG WEI
GROUP MEMBERS STUDENT ID
ANDREW MAH KOON YAN 0318798
TAN JIA YI 0319476
CHEN SHIN YEE 0322650
LEE REN JET 0319058
HAZIM ABDUL AZIZ 0315773
YONG SING YEW 0318766

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TABLE OF CONTENT
NO TITLE PAGE
1 ANY ENTITLEMENT OF CONTRACTOR TO CLAIM
INTEREST FOR TWO INTERIM CERTIFICATES WHICH WERE
UNDER CERTIFIED BY SUPERINTENDING OFFICER
1.1 Introduction 3
1.2 Scene 1 3
1.2.1 Issue 3
1.2.2 Rules 3
1.2.3 Analysis 4
1.2.4 Conclusion 4
1.3 Scene 2 4
1.3.1 Issue 4
1.3.2 Rules 5
1.3.3 Analysis 6
1.3.4 Conclusion 7
2 ISSUE ON SUSPENSION OF PROJECT
2.1 Introduction 8
2.2 Quantification of assessment of idling time
during suspension period 8
2.2.1 Issue 8
2.2.2 Rules 8
2.2.3 Analysis 9
2.2.4 Conclusion 10

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2.3 Is employer liable to pay for full work force of
contractor during suspension period with
minimum work force 10
2.3.1 Issue 10
2.3.2 Rules 10
2.3.3 Analysis 11
2.3.4 Conclusion
2.4 How to claim and deal with demobilization& 12
remobilisation cost during suspension
2.4.1 Issue 12
2.4.2 Rules 12
2.4.3 Analysis 13
2.4.4 Conclusion 13
REFERENCES 14

4. TABLE OF ABBREVIATION
PAM Form PAM Contract 2006 (With Quantities)
FIDIC Contract FIDIC Conditions of Contract 2nd Edition for
Construction for Building and Engineering Works 2017
JKR Form JKR Forms. Standard Form of Building Contract (with
BQ) 203A 2007
CIPAA Construction Industry Payment and Adjudication Act
2012
EOT Extension of Time
AI Architect’s Instructions
QS Quantity Surveyor

5. 1.0 ANY ENTITLEMENT OF CONTRACTOR TO CLAIM INTEREST FOR
TWO INTERIM CERTIFICATES WHICH WERE UNDER CERTIFIED BY
SUPERINTENDING OFFICER?
1.1 Introduction
This case can be divided into two scenarios with different interpretations. First
scenario being where the contractor faces two under certifications by employer for his work
which are still being under progress. The second scenario is where the contractor faces two
under certifications by employer, upon which he has already completed his works.
1.2 Scene 1
1.2.1 Issue
After going through two under certified interim certificates by Superintending Officer
(S.O), is the Contractor allowed to claim interest? Assuming that the Contractor has not
completed the works 100% as claimed. Which means there are uncompleted works by
Contractor which is due before Interim Certificate period.
1.2.2 Rule
Based on PAM Form Clause 30.2 states that the amount due in Interim Certificate is the
total value of work properly executed and including a percentage of the value of materials
and goods.
Based on FIDIC Contract Clause 14.6 states that if any works done by contractor is not
in accordance with contract, or when contractor has failed to perform his duties in contract,
interim certificate will be withheld on the amount.
Also in the case of Nash Dredging v Kestrel Marine Ltd (1987], it was held that S.O
could not have failed to perform as a certifier to certify the interim payment wrongly, quoting

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the judge, “in my opinion the engineer could not be said to have failed to certify, provided
that it has been his honest opinion that the sum certified by him was the amount then due...”
1.2.3 Analysis
It is held that contractor would not be able to claim for interest for under certification of
interim payment due to the fact that the contractor has not complied with his duties of
contract. As every month the contractor has to achieve certain checkpoint of work
programme, it would be logical for S.O to certify the value of work lower than what the
contractor has expected. Another possibility would be that the S.O has found a work not
complete as claimed by the contractor. Even then, the contractor has no right to claim the full
amount when it is not complete.
1.2.4 Conclusion
In this scenario, contractor is not entitled to claim interest for under-certification of the 2
interim certificates by S.O. Reason being that contractor has failed to fully complete the
works as per what has been claimed in interim certificates and agreed upon between the
parties.
1.3 Scene 2
1.3.1 Issue
After going through two under certified interim certificates by S.O, is Contractor allowed
to claim for interest? Assuming that Contractor has completed the works 100% as claimed by
him. Which means the work is done by the Interim Certificate period, but under certified.

7. 1.3.2 Rule
Based on PAM Form Clause 30.17 states that if employer fails to pay the amount on
certificate after period stated in contract, contractor is entitled for interest. However, it is
silent on under certification.
Based on FIDIC Contract, Clause 14.8 states that if payment is not received by
contractor after certain period, interest may be claimed. Also, it does not speak about under
certification.
In the case of Hall and Tawse Construction Ltd v Strathclyde Regional Council
(1990), it is held that to obtain entitlement for interest, the S.O has to “fail to certify” an
interim payment, which means not issuing an interim certificate. This means that interest is
not claimable for under certification. But in this context, the contractor has been under
certified twice, which has deprived the contractor from profit in future means.
Case of Lubenham v South Pembrokeshire District Council (1986) states that “an
interim certificate represents an approximate value of work done at the time of its issuance
and may be adjusted in subsequent certificates for matters such as errors, over-valuation, etc”.
Based on the case of Woon Hoe Kan & Sons Sdn Bhd v. Bandar Raya Development
Bhd (1973), it was held that the plaintiffs were entitled to a reasonable rate of interest, which
means a rate that the plaintiffs would have it as an income when the money is paid on time,
due to the overdue payments by the defendant. This case is supported by Newacres Sdn Bhd
v Sri Alam Sdn Bhd (2000), it was held that interest should be awarded to the person who
was wrongfully not given the exact amount of money due to the possibility of having the
money being used to make profit in other means. An award of interest was given to the
plaintiff due to mere replacement of money will not suffice.
1.3.3 Analysis
There are no clear precedent case nor clauses in the contracts that states about the exact
problem of this situation. Though it can be held that the contractor is allowed to claim for

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interest. This is due to the fact that contractor is deprived of monetary benefits that will allow
the contractor to further pursue more profit in other projects.
In order to have entitlement of interest for under certification, the only situation where
possible would be when superintending officer has failed to certify, which is in the breach of
contract. Whereas there would not be entitlement of interest when the under certification
happens in good faith and discretion in the situation at the time.
As held in the case of Nash Dredging v Kestrel Marine Ltd (1987), amount of interest
should be based on the contractual rate, and judicial rate if contract interest period has
expired. The amount of interest to be claimed can be found in contract which is agreed and
signed by both parties. In this case, it would be the Maybank Base Lending Rate+1% as
found in PAM Form Clause 30.17 and 3% above the discount rate of the central bank in the
country of the currency of payment as found in FIDIC Contract Clause 14.8.
If the above decision is not able to be justified, PAM Form does allow for adjudication
and arbitration as an alternative dispute resolution in Clause 34.0, while FIDIC Contracts
Clause 20.2 and 20.6 allows for Dispute Board and Arbitration respectively.
Another method of dispute resolution would be to seek for CIPAA proceedings as it is a
dispute resolution that handles payment disputes in a speedy manner.
1.3.4 Conclusion
In conclusion to this scenario, contractor is basically underpaid by employer, which leads
to the opinion that employer is in breach of his duties and not complying with PAM Form
Clause 30.2. Therefore, by right the contractor is entitled to claim interest for under-
certification with the support of the stated clauses and case laws, provided that he has
completed the relevant works according to the contract.
Alternatively, in cases where the dispute is unsolvable or is taking too much time, which
may deprive the contractor’s monetary benefits, the contractor may refer to adjudication and
arbitration as a viable option.

9. 2.0 ISSUE ON SUSPENSION OF PROJECT
2.1 Introduction
During the construction period, employer is struggling with financial difficulties and
therefore, he decided to suspend most of the construction work. At the same time, he also
retained small part of the work with minimum workforce while the suspension is taking
place.
2.2 Quantification of assessment of idling time during suspension period
2.2.1 Issue
During suspension period, there is idling time which is a process where no activities have
been carried out throughout the time. In this project, idling time is caused by employer in
which construction resources such as machines, equipment and manpower are seen to be hold
back until following work front (Deka, 2016). Idling time may has time implication on
original work programme which in turn delay completion of work. On this point, how should
assessment of idling time be quantified during this suspension period?
2.2.2 Rule
Based on PAM Form Clause 23.1 states that Contractor can apply for EOT if he thinks
that completion of works is or will be delayed. Provided that delay is caused by relevant
events stated in Clause 23.8 and also, contractor shall give written notice of intention to
claim together with supporting documents and initial estimate of required EOT to Architect
within 28 days from commencement date of relevant event. Then, final claim for EOT shall
be sent to architect within 28 days of the end of cause of delay.
According to JKR Form Clause 50.2 states that if there is delay and/or expenses
suffered by Contractor to comply with instruction of S.O and not foreseeable by contractor,
Contractor shall give notice of EOT under Clause 43.1 which states that Contractor have to

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give written notice to S.O. and provide supporting document with calculation of length of
duration as well as proves that the cause of delay are within the stated events.
Whereby under FIDIC Contract Clause 8.4, Contractor is eligible to claim for EOT
when the delay is caused by events stated in Clause 8.4(a) to 8.4(e). Clause 20.1 states the
conditions to claim for extension of time, in which Contractor must give notice to S.O within
28 days of commencement of the event with supporting particulars. Contemporary records
shall be kept to substantiate any application that will help in supporting EOT claim.
Contractor shall then send a fully detailed claim with supporting particulars within 42 days
after Contractor is aware of the event.
2.2.3 Analysis
It is obvious that Contractor is entitled to claim for EOT, provided that contractor has
followed procedure and conditions stated in contact. In this case, idling time caused by
suspension instructed by employer falls under PAM Form Clause 23.8(g) which is AI
regarding suspension. Moreover, this circumstances comply with the condition under JKR
Form Clause 50.2 which is delay in order to comply with instruction of S.O and beyond
contractor’s control. And for FIDIC Contract, it is Clause 8.4(e), in which contractor is
entitled to claim EOT if the delay is caused by employer.
It is important for contractor to keep contemporary records which are records produced at
the time of event such as site diary because they helps to quantify contractor’s entitlement to
claim. Also, it is supported by the case of Falkland Islands v Gordon Forbes Construction
Limited (2003), in which court held that claim will fail when there is no contemporary record
and it may only succeed on the part which is supported by records.
2.2.4 Conclusion
In conclusion to this case, suspension by employer lead to idling time which in turn has
time implication on work programme and subsequently delay completion date. Hence,
contractor is entitled to claim for EOT since delay event is caused by employer, and

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unforeseeable by contractor or beyond his control. Provided that contractor has complied
with conditions and procedure to claim as well as keeping contemporary records to help
quantification of claim.
2.3 Is employer liable to pay for full work force of contractor during suspension
period with minimum work force?
2.3.1 Issue
Although contractor is instructed to suspend part or all of the works, he may already
brought in machineries, labour and equipment for the particular work. Also, contractor is still
required to provide protection, storage and security to the Works against any deterioration,
loss or damages. During the suspension period with minimum work force, is employer liable
to pay for the full workforce?
2.3.2 Rule
Based on PAM Form Clause 24.1 states that if contractor has or likely to incur loss and
expenses which are unable to be compensated by payment under other contract provision, he
may claim for loss and expense by giving written notice to architect of his intention to claim
with initial estimation and supportive document within 28 Days from date of AI. After the
event has ended, contractor shall send complete particulars of his claim to Architect and QS
with all necessary calculations to substantiate his claims.
According to JKR Form Clause 50.1(b) and 50.1(c), contractor must continue
performing his contractual obligations which are not affected by instruction of suspension
during suspension period. Also, Clause 44.1 states that contractor is entitled to claim for loss
and expense if he incurred loss/expense which cannot be reimbursed by payment in other
contract provision. Provided that contractor has complied with conditions stated in Clause
44.1 and 44.2.
Based on FIDIC Contract Clause 8.8 states that if there is suspension instructed by
Engineer which is not responsibility of contractor, contractor is entitled to claim for cost

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incurred as stated in Clause 8.9. Provided that contractor comply with conditions under
Clause 20.1.
In the case of Shore & Horwitz Construction Co Ltd v. Franki of Canada (1967),
court held that if contractor suffers delay because of employer, he is entitled to claim for head
office or off-site overheads during delay period as the workforce may had chances to be
employed on another project during idling period.
2.3.3 Analysis
There are no clear precedent case nor clauses in contracts that states about the exact
problem of this situation. Though it can be held that contractor is allowed to claim for loss
and expense on actual cost incurred which is supported by necessary documents. This is due
to the fact that there will be no interim payment for contractor during suspension period and
therefore, he is entitled to claim for additional cost incurred since they cannot be reimbursed
by payment in other contract provision.
Also, clauses in contracts highlighted that claimed shall be submitted with supporting
documents. Hence, extent of payment for workforce should be entitled based on documents
submitted. Although there is only minimum workforce during suspension, loss of profit shall
be paid by employer in which the workforce may had opportunities of being employed in
other project, supported by case law stated above.
2.3.4 Conclusion
In conclusion, employer is liable to pay for loss and expense of the actual cost incurred
on workforce including loss of profit. Provided that contractor submit sufficient supporting
documents to prove for claim as well as comply with time frame and conditions stated in
contract provision when he claim for loss and expenses.

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2.4 How to claim and deal with demobilization & remobilisation cost during suspension
2.4.1 Issue
Demobilization& remobilization costs are the common issues encountered relative to
suspension of works which are costs associated for transportation of contractor’s workforce,
supplies and equipment to and from site (Construction Specification-Mobilization and
Demobilization, 2001). In this suspension event, how does contractor claim and deal with the
demobilization& remobilisation cost?
2.4.2 Rule
Based on the PAM Form Clause 24.1, if there are any additional costs incurred caused
by any matters stated in Clause 24.3 and cannot be compensated by a payment made under
other contract provision, contractor may apply claim for loss and expenses. Provided that
contractor must give a written notice to Architect with all necessary supporting documents,
record and calculation within 28 days from AI issuance or commencement of events causing
the suspension.
According to JKR Form Clause 44.1 states that if contractor suffers loss and expense
due to delay caused by Clause43.1(c), (d), (e), (f), (h), contractor is entitled to make claim by
submitting written notice to S.O of his intention to claim within 30 days from occurrence of
suspension followed by full detail of all claims with necessary calculation and supporting
document not later than 90 days after practical completion of works as stated in Clause 44.2.
Whereby FIDIC Contract Clause 8.9 states that contractor shall entitled to Clause 20.1
if there is cost incurred to comply with engineer’s instruction to suspend work. Under Clause
20.1, if contractor thinks that he is entitled to EOT and/or additional payment, written notice
of intention to claim shall be submitted to Engineer within 28 days from occurrence of event.
Fully detailed claim of contractor should be then submitted to Engineer within 42 days after
arise of such event and also with supporting document and calculation. If the event has a
continuing effect, the fully detailed claim should consider as an interim and contractor
required to submit final claim after the end of the effects within 28 days.

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In the case law of Falkland Island v Gordon Forbes Construction (2003) as the court
held that claim must be supported by contemporary record, and if there is absence of
contemporary record to support a claim, the claim will not be considered. This is also
supported by PAM Form Clause 24.2 which states that contemporaneous record relating to
claim must be kept and submitted to Architect.
2.4.3 Analysis
Apparently contractor is entitled to claim for additional cost incurred for demobilization
and remobilization under loss and expense clauses in contract provision, provided that
contractor has followed procedure and conditions stated. In this case, demobilization and
remobilization caused by suspension instructed by employer falls under PAM Form Clause
24.3(c) which is AI regarding suspension, and comply with JKR Form Clause 8.9.
It is important that the contractor should comply with all the period of date stated in the
contracts for the procedure of making a claim. If the contractor fail to comply with such
period of date he is not entitled to any claim and additional payment. It is also vital that the
contractor must submit his claim with the support of contemporary records as claim will not
be considered with the absence of record, as held in the case law of Falkland Island v
Gordon Forbes Construction (2003).
2.4.4 Conclusion
In conclusion to this case, basically suspension by employer lead to demobilisation and
remobilisation which in turn has cost implication to contractor. Hence, contractor is entitled
to claim for Loss and Expenses since this event is instructed by employer, and unforeseeable
by contractor or beyond his control.
Contractor have to take note on the procedure to claim, which is written notice of
intention to claim, followed by final claim as well as keeping contemporary records to help
quantification of claim.

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References
Chappell, D. (2011). Construction Contracts: Questions and Answers (2nd ed). Abingdon:
Spon Press.
Construction Specification-Mobilization and Demobilization. (2001, October). Retrieved
from Natural Resources Conservation Service:
http://infohouse.p2ric.org/ref/02/01524/urb008cs.htm
Deka, L. (2016, May 6). "IDLE TIME" in Construction Projects. Retrieved from Linked in:
https://www.linkedin.com/pulse/idle-time-construction-projects-lachit-deka
Hughes , W. (2007). Construction Contracts: Law and Management (4th ed). Abingdon:
Routledge.
Knowles, R. (2012). 200 Contractual Problems and their Solutions (3rd ed). West Sussex:
John Wiley and Sons Ltd.
Woon Hoe Kan & Sons Sdn Bhd v Bandar Raya Development Bhd [1973] 1 MLJ 60
Nash Dredging v Kestrel Marine Ltd [1987] SLT 641
Hall and Tawse Construction Ltd v Strathclyde Regional Council [1990] SLT 775
Newacres Sdn Bhd v Sri Alam Sdn Bhd [2000] 2 MLJ 353
Lubenham v South Pembrokeshire District Council [1986] 33 BLR 39
Falkland Islands v Gordon Forbes Construction Limited (2003)
Shore & Horwitz Construction Co Ltd v. Franki of Canada (1967)