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1 DALAM MAHKAMAH TINGGI MALAYA DI SHAH ALAM DALAM NEGERI SELANGOR DARUL EHSAN, MALAYSIA SAMAN PEMULA NO: BA-24C-31-06/2017 ANTARA 5 Dalam Perkara Perjanjian Pembinaan (Letter of Award) di antara PWC Bina Sdn Bhd Dan Ideal City Development Sdn Bhd Bertarikh 20.3.2014 10 Dan Dalam Perkara Keputusan Adjudikasi bertarikh 22.5.2017yang diberikan oleh Puan Chui Yee Kwan Rujukan Adjudikasi No. KLRCA/D/AND- 15 0619-2016 Dan Dalam Perkara Seksyen 28(1), (2) dan (3) Akta 20 Pembayaran dan Adjudikasi Industri Pembinaan 2012 Dan 25 Dalam Perkara Aturan 92 Kaedah 4 Kaedah- Kaedah Mahkamah 2012 ANTARA 30 PWC BINA SDN BHD (No. Syarikat : 491422-U …PLAINTIF DAN 35 IDEAL CITY DEVELOPMENT (M) SDN BHD (No. Syarikat : 335622-W) DEFENDAN 40 DIDENGAR BERSAMA DENGAN SAMAN PEMULA NO. BA-24C-32-06/2017

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Page 1: DALAM MAHKAMAH TINGGI MALAYA DI SHAH ALAM DALAM … · Pembayaran dan Adjudikasi Industri Pembinaan 2012 Dan 25 Dalam Perkara Aturan 92 Kaedah 4 Kaedah-Kaedah Mahkamah 2012 30 ANTARA

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DALAM MAHKAMAH TINGGI MALAYA DI SHAH ALAM

DALAM NEGERI SELANGOR DARUL EHSAN, MALAYSIA

SAMAN PEMULA NO: BA-24C-31-06/2017

ANTARA 5

Dalam Perkara Perjanjian Pembinaan (Letter of Award) di antara PWC Bina Sdn Bhd Dan Ideal City Development Sdn Bhd Bertarikh 20.3.2014 10 Dan Dalam Perkara Keputusan Adjudikasi bertarikh 22.5.2017yang diberikan oleh Puan Chui Yee Kwan Rujukan Adjudikasi No. KLRCA/D/AND-15 0619-2016 Dan Dalam Perkara Seksyen 28(1), (2) dan (3) Akta 20 Pembayaran dan Adjudikasi Industri Pembinaan 2012 Dan 25 Dalam Perkara Aturan 92 Kaedah 4 Kaedah-Kaedah Mahkamah 2012

ANTARA 30

PWC BINA SDN BHD

(No. Syarikat : 491422-U …PLAINTIF

DAN 35

IDEAL CITY DEVELOPMENT (M) SDN BHD

(No. Syarikat : 335622-W) …DEFENDAN

40

DIDENGAR BERSAMA DENGAN

SAMAN PEMULA NO. BA-24C-32-06/2017

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Dalam Perkara Adjudikasi KLRCA No. KLRCA/D/ADJ-0721-2017 dimulakan oleh PWC Bina Sdn Bhd terhadap Ideal City Development Sdn Bhd. 5 Dan Dalam Perkara Keputusan bertarikh 22.5.2017 oleh Chui Yee Kwan, Adjudikator 10 Dan Dalam Perkara Satu Permohonan di bawah Seksyen 15 Akta Pembayaran dan Adjudikasi Industri Pembinaan 2012 15 Dan Dalam Perkara Aturan 7 dan Aturan 28 Kaedah Mahkamah 2012 20

ANTARA

IDEAL CITY DEVELOPMENT (M) SDN BHD

(No. Syarikat : 335622-W) … PLAINTIF 25

DAN

PWC BINA SDN BHD

(No. Syarikat : 491422-U …DEFENDAN

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GROUNDS OF JUDGMENT

Introduction

1. By BA-24C-31-06/2017 (OS 31) PWC Bina Sdn Bhd (PWC) filed an

application to enforce an adjudication decision (enforcement application)

dated 22-5-2017 (adjudication decision). In enclosure 5 Ideal City 35

Development Sdn Bhd (ICD) filed an application to stay the adjudication

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decision pending final determination by arbitration (stay application). By

BA-22C-32-06/2017 (OS 32) ICD filed an application to set aside the

adjudication decision (setting aside application).

2. Both applications along with the stay application were heard together, 5

with the Court proceeding first on the setting aside application.

3. In OS 32 ICD filed enclosure 16 to amend the OS to add 1 more

ground to set aside the adjudication decision. The additional ground

relates to the absolute assignment of PWC’s right, benefit and interest in 10

the contract sum or any other payment in favour of United Overseas Bank

(UOB) resulting in PWC having no locus standi to initiate the adjudication

proceeding or enforce the adjudication decision. This amendment was

allowed as it did not add any new remedy or damages prayed for.

15

4. ICD also filed an application in enclosure 18 to use a supplementary

affidavit affirmed on 29-8-2017 to adduce the deed of assignment. This

too was allowed. A similar application in enclosure 22 was filed for OS 31

which was allowed.

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Background facts on the project and Payment Claim

5. By letter of award dated 10-3-2014 (exhibit “SCK-3”) and PAM

Contract 2006 ICD appointed PWC as the contractor to carry out and

complete superstructure work on a project (work). Akipanel Architects Sdn

Bhd was the Architect (Architect). The contract sum was RM329.085 25

million, construction period was 19 months with date of completion at

31-10-2015.

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6. According to PWC, the Architect issued progress certificate dated

23-12-2016 (exhibit “SCK-4) which showed the value of work done by PWC

and nominated sub contractors to be RM31,847,202.49. The Architect had

earlier issued progress certificate dated 25-10-2016 (exhibit “SCK-5”)

certifying an amount RM1,743,471.44 as being due to PWC. This amount 5

was not paid to PWC whereby clause 4.1 of LA stated the period of

honoring interim certificate is 30 working days from the date of Payment

Certificate. PWC then filed its claim under the Construction Industry and

Payment Adjudication Act 2012 (CIPAA) and the result was for IDC to pay

an amount of RM1,743,471.44 (adjudicated amount). The adjudication 10

decision can be found in exhibit “SCK-6” [paragraphs 9-12 of PWC’s

affidavit in support for enforcement application].

A. Setting aside application

7. In paragraph 37 of affidavit in support ICD stated its grounds for 15

setting aside were premised on appointment of adjudicator being null and

void, excess of jurisdiction and denial of natural justice. OS 32 was

subsequently amended to allow a further ground of absolute assignment of

PWC’s rights to UOB.

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(a) Absolute assignment

8. In PWC’s Notice of Assignment to ICD, it was stated as follows –

“2. We hereby give you notice that by a Deed of Assignment of

Contract Proceeds dated the 20th day of March, 2013 (“the Assignment”)

made between us and UNITED OVERSEAS BANK (MALAYSIA) BHD. 25

(Company No. 271809-K) of Kuala Lumpur Main Branch, Level 2, Menara

UOB, Jalan Raja Laut, 50350 Kuala Lumpur (“the Lender”), we assigned

absolutely unto the Lender the full and entire of our present or future

benefits rights title and interest in and to and under and all contract sums,

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advance payments, fees, charges and any other proceeds and/or other

payments (collectively “the Contract Proceeds”) which may at any time

and from time to time be receivable by or payable to us from you under or

in connection with the Contract, whether on account of any claims, awards

and judgments made or given under or in connection with the Contract or 5

otherwise howsoever as security for certain banking facilities granted by

the Lender to us.”.

9. It was submitted by ICD that the words “assigned absolutely” was 10

clear evidence of PWC’s intention to an absolute assignment of rights and

benefits; the absolute assignment was still in force and the scope covered

the amount claimed by PWC which is the subject matter of both

applications. With the absolute assignment in place, whatever interests in

and benefit to the amount claimed by PWC had been assigned to UOB. 15

PWC thus had no locus standi or legal capacity to commence or maintain

the adjudication proceedings and the adjudication proceedings were null

and void and should be set aside.

10. ICD referred to the Federal Court case of Nouvau Mont Dor (M) Sdn 20

Bhd v Faber Development Sdn Bhd ]1987] CLJ (Rep) 231. In that case

the assignment was signed on 18-2-1978, appellant commenced legal

proceedings on 17-11-1982, and assignment revoked on 21-4-1983 with

the repayment and settlement of the fixed loan by appellant to Public Bank.

It was held by the Federal Court at page 235h “that the appellant was not 25

competent to maintain this action at the time when the originating summons

was filed on 17 November 1982”.

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11. It was further submitted Nouvau Mont (supra) laid down the following

principles –

(i) In deciding whether an assignor is competent to maintain an action

or proceeding, the material time to be considered is the time of the filing or

commencement of the action or proceeding; 5

(ii) if the assignor was not competent to maintain the action or

proceeding as at the time of its filing or commencement, the action or

proceeding would be struck out, for it was null and void; and

(iii) Even if the assignment was revoked or cancelled subsequent to the

filling or commencement of the action or proceeding, it would not make any 10

difference in the eyes of law, and the invalid or incompetent action or

proceeding would still be struck out. This shows that any revocation of the

assignment does not have any retrospective effect.

12. In arriving at its decision the assignment was absolute the Federal 15

Court stated at page 235a –

“… whether or not an assignment is an absolute one (not purporting to be by way of charge only) within the meaning of s.4 (3) of the Civil Law Act 1956 is to be gathered only from the four corners of the instrument itself.”.

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13. Further in page 235f it was stated –

“Looking at the whole document of 18 February 1978 and bearing in mind

the provision of s.6 of the Act, in our opinion, the document was an

absolute assignment and not purporting is to be by way of charge only

within the meaning of s. 4(3) of the Civil Law Act 1956. The assignment 25

was in terms absolute in the sense that the assignor (appellant) intended

to pass and transfer to the assignee (Public Bank) absolutely the

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beneficial interest as well as all the rights title and interest in the Sale

Agreement dated 1 April 1977 and the remedies of enforcing them. The

instrument clearly purported and was intended in point of form, to be an

absolute assignment because of the use of the word “absolutely” in

Clause 1 thereof…”. 5

14. This meant the Federal Court only considered the four corners of the

assignment and the fact that the word “absolutely” was used.

15. However in Berjaya Times Squares Sdn Bhd v M Concept Sdn 10

Bhd [2010] 1 MLJ 597 the Federal Court in looking at the passage referred

to in page 235a stated at page 622A that the view expressed in Nouvau

Mont (supra) “is not good law and should not be followed”.

16. The Federal Court in page 620 laid down how a contract is to be 15

interpreted –

“Hence it is important to bear in mind that a contract is to be interpreted in

accordance with the following guidelines. First, a court interpreting a

private contract is not confined to the four corners of the document. It is

entitled to look at the factual matrix forming the background to the 20

transaction. Second, the factual matrix which forms the background to the

transaction includes all material that was reasonably available to the

parties. Third, the interpreting court must disregard any part of the

background that is declaratory of subjective intent only. Lastly, the court

should adopt an objective approach when interpreting a private 25

contract…”.

17. In this regard the factual matrix of the transaction is to secure the due

repayment of the loan where UOB is not concerned with the alleged delay 30

of the project. This is because whatever may happen PWC is still bound to

repay UOB. This is evident from clause 3(ii) where PWC remains liable to

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perform all its obligations under the contract with UOB and UOB is under

no liability in the event of PWC’s failure to perform its obligations.

18. In Max-Benefit Sdn Bhd v Phuah Thean An & Anor [2001] 2 CLJ

70, it was stated at page 73 – 5

“Although the assignment is stated to be absolute in effect it is not. The

assignment was purely for the purpose of securing the loan. What I have

adverted to show is that there was a loan which the assignors-purchasers

had taken from the bank and that the loan had to be repaid over a period

of time and that the rights and interest over the property were assigned as 10

surety to ensure that the loan will be repaid. The loan or any balance or

part of it was given “upon the security of the same property”.

19. The same too is evident from clause 2 which was as security for 15

certain banking facilities and where despite the word “absolutely” what was

assigned was the Contract Proceeds as defined and not the right to sue.

20. This would be in consonance with the view expressed by Chow Kok

Fong in Security of Payments and Construction Adjudication Second 20

Edition where at page 174 it was stated –

“It is arguable that these provisions do not extend the statutory entitlement

to progress payment to an assignee of the benefit of the progress

payment. Such a construction would be consistent with the policy

objective of the Act since the regime was introduced to protect the cash 25

flow of the parties who actually carried out the work or services or supplied

goods for construction work. Thus, where a contractor assigns the

right to progress payments to a third party such as a bank, the bank

may assert its rights to unpaid progress payments under the terms

of the contract but it cannot make a payment claim under the Act.”. 30

(emphasis added)

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“These provisions” refer to the entitlement to progress payment to any

person who has carried out construction work.

21. The view expressed by the learned author found judicial recognition

in Thiang Sung Construction Pte Ltd v International Elements Pte Ltd 5

[2016] 1 SLR 1314. There the argument was that the right to avail to the

equivalent of CIPAA was a personal one that was incapable of assignment,

an argument which found favour with the court which referred to the

passage as quoted earlier.

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22. It thus follows that despite the word “absolutely” the assignment by

PWC to UOB was not absolute as it was for the purpose of securing the

banking facilities granted whereby only the Contract Proceeds were

transferred.

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23. In any event UOB’s letter of consent dated 18-9-2017 to PWC (exhibit

“SCK-9”) has made it clear PWC can proceed with its claim under CIPAA.

Paragraph 2 of the letter stated –

“2. At your request and solely out of the abundance of caution, we do

hereby agree and consent to you to commence and/or proceed with your 20

claims against ICD in relation to any breach of the Award in the form of

claims under the Construction Industry Payment and Adjudication Act

2012, litigation and/or arbitration provided always …”.

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24. Such consent has been recognized where in Malayan Banking Bhd

v Worthy Builders Sdn Bhd [2015] 3 MLJ 791 the Court of Appeal stated

at page 809 –

“It must be emphasized that the deed of assignment which is intended as

a security document, does not prohibit the assignor from obtaining the 30

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consent from the assignee to sue the debtor and it has been accepted

practice and have accepted judicial recognition…”.

B. Merits of setting aside application

25. ICD’s application is premised on section 15 of CIPAA as follows – 5

“15. An aggrieved party may apply to the High Court to set aside an

adjudication decision on one or more of the following grounds:

(a) …;

(b) there has been a denial of natural justice;

(c) … or 10

(d) the adjudicator has acted in excess of his jurisdiction.”.

i. Excess of jurisdiction

(a) Invalid and/or null and void appointment of adjudicator 15

26. It was ICD’s contention the appointment of adjudicator was invalid

and/or null and void as the appointing authority is PAM and not KLRCA. It

is not disputed in this instance KLRCA had appointed the adjudicator.

27. Clause 34.2 and 34.3 of PAM Contract 2006 provides as follows – 20

“34.2 Where a party requires a dispute or difference under Clause 34.1 to

be referred to adjudication, such disputes or differences shall be referred

to an adjudicator to be agreed between the parties. If after the expiration

of twenty-one (21) Days from the date of the written notice to concur on

the appointment of the adjudicator, there is a failure to agree on the 25

appointment, the party initiating the adjudication shall apply to the

President of Pertubuhan Akitek Malaysia to appoint an adjudicator, and

such adjudicator so appointed shall be deemed to be appointed with the

agreement and consent of the parties to the Contract.”.

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“34.3 Upon appointment, the adjudicator shall initiate the adjudication in

accordance with the current edition of the PAM Adjudication Rules or any

modification or revision to such rules.”.

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28. Section 21 of CIPAA provides as follows –

“21. An adjudicator may be appointed in the following manner:

(a) by agreement of the parties in dispute within ten working days

from the service of the notice of adjudication by the claimant; or

(b) by the Director of the KLRCA – 5

(i) upon the request of either party in dispute if there is no

agreement of the parties under paragraph (a); or

(ii) upon the request of the parties in dispute.”.

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29. The sequence of section 21 of CIPAA provides firstly for the

agreement of parties within 10 working days from the service of notice of

adjudication by the claimant and if there is no agreement, by KLRCA upon

the request of either party. According to ICD, clause 34.2 of PAM Contract

2006 is the agreement of parties within the meaning of section 21 of 15

CIPAA. However that cannot be so as section 21(a) requires the

agreement to be within 10 working days from the service of notice of

adjudication of which there was none. It cannot be presumed that clause

34.2 of PAM Contract 2006 is the agreement of parties. At best clause

34.2 is a contractual adjudication as opposed to section 21(b) which is a 20

statutory provision such that section 21(b) prevails. The appointment of the

adjudicator by KLRCAA Director pursuant to section 21(b) was therefore

valid.

(b) Premature commencement 25

30. In paragraph 40(4) of ICD’s affidavit in support it was stated that the

adjudicator had exceeded her jurisdiction and/or committed a jurisdictional

error when she adjudicated on a claim which commenced before the date

of accrual of the cause of action. This was because the adjudicator found

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on the facts the due date for payment was 6-12-2016 and the Payment

Claim was made and served on ICD on 29-11-2016.

31. The case of Doo Ree Engineering & Trading Pte Ltd v Taisei Corp

[2009] SGHC 218 was referred to. There a payment claim was submitted 5

by Doo Ree on 29-11-2008 and on 19-12-2008 before a payment response

was submitted by Taisei, the November 2011 claim was submitted for

adjudication. A preliminary issue whether the application for adjudication

was prematurely lodged was decided by the adjudicator to be so.

Lembaga Kumpulan Wang Simpanan Pekerja v Ong Lian Chee [2010] 10

5 CLJ 23 was also referred to by ICD. It was decided the cause of action

would only accrue when the EPF Board refused to grant the authority for

the withdrawal of an addition amount and not the death of the member. At

page 31 it was then said –

“In other words, the death per se could not have given rise to a cause of 15

action in favour of the dependant at that stage. As at 12 October 1998, it

was premature for the dependent to commence the originating summons

against the EPF Board. At best, it was an incomplete cause of action, and

the filling of an originating summons based on a premature cause of

action is bound to be dismissed in limine…”. 20

32. Lembaga KWSP (supra) can be distinguished where this instant

case has to be looked at in the context of adjudication within CIPAA. In this

regard the case of Terminal Perintis Sdn Bhd v Tan Ngee Hong 25

Construction Sdn Bhd and another case [2017] MLJU 242 is more

relevant where at page 11 it was stated as follows –

“[59] No doubt the expression of a “cause of action: is used in section

5(2)(b) CIPAA but that is nothing more than saying that the Claimant must

set out the basis of their claim in contract.”. 30

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33. Construction Adjudication in Malaysia by Ivan Loo and Lam Wai

Loon at page 74 was next referred to as follows –

“the amount claimed and due date for payment of the amount claimed”

“4.26 The unpaid party is required to state in his payment claim the 5

amount claimed and the due date for payment of the amount claimed.

These requirements necessarily imply that every construction contract

should provide an adequate mechanism for determining what, when and

how payments are due under the construction contract. In the absence of

such terms, or if the contract does not provide an adequate mechanism for 10

determining what, when and how payments are due under the

construction contract, the default provisions on the terms of payment

provided by section 36(1) of the CIPAA Act 2012 would be imported into

the construction contract.

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4.27 The unpaid party is only required to state in the payment claim the

amount claimed to be due. It does not matter whether the amount claimed

may not in law be due. The right of an unpaid party to serve a valid

payment claim is predicated on an amount being claimed, and not on

there being an actual entitlement to the amount so claimed.”. 20

34. Viewed in the light of Terminal Perintis (supra) the issue of the

cause of action being premature and/or having not accrued is immaterial

and does not affect the validity of the payment claim. 25

(c) Parties had contractually elected for arbitration

35. It was submitted by ICD that there was an excess of jurisdiction

where parties by contract as per clause 25.6(c) provided any dispute on 30

imposition of liquidated and ascertained damages (LAD) shall be referred

to arbitration. In this regard section 37(1) and (2) of CIPAA is relevant. It

provides as follows –

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“’37.(1) A dispute in respect of payment under a construction contract may

be referred concurrently to adjudication, arbitration or the court.

(2) Subject to subsection (3), reference to arbitration or the court in

respect of a dispute which is being adjudicated shall not bring the 5

adjudication proceedings to an end nor affect the adjudication

proceedings.”.

The net effect of section 37 is that there can be concurrent reference to 10

adjudication and arbitration and any reference to arbitration shall not bring

the adjudication proceedings to an end nor affect the adjudication

proceedings. There was thus no excess of jurisdiction.

(d) “Pay First Argue Later” 15

36. It was next submitted by ICD the adjudicator held there was a “CIPAA

principle of Pay First Argue Later” which swayed her decision or

interpretation of the contract terms. The short answer to this is that as

pointed out by PWC counsel this principle has been used extensively in

foreign jurisdictions and has also been recognized here too. In Esstar 20

Vision Sdn Bhd v ACFM Engineering & Contruction Sdn Bhd [2015] 1

LNS 756 it was stated –

“…CIPAA is intended to provide an intervening provisional decision or “a

temporary balance… in appropriate circumstances…in favour of those

who claim payment, at the temporary expense of those who pay”. These 25

adjudication decisions, ‘being quick and dirty’, also “provide a quick

enforceable interim decision under the rubric of ‘pay now, argue later’”, are

necessary so as to give “life” back to the enterprise or underlying contract

which had reached an impasse or stalemate. It is in the very nature of the

scheme or mechanism that the substantive issues relating to the payment 30

can still be argued at a later point; or taken concurrently at separate

proceedings initiated in Court or at arbitration.”.

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ii. Denial of natural justice

37. It is trite law that the rule against bias and the right to be heard is

encompassed in the principle of natural justice. The right to be heard

includes the right to know the case against a person and the right of fair

opportunity to correct or contradict any point or contention against such 5

person.

38. In Cantillion Ltd v Urvaso Ltd [2008] EWHC 282 the court stated at

page 20 –

“[57] From this and other cases, I conclude as follows in relation to 10

breaches of natural justice in adjudication cases; (a) It must be

established that the Adjudicator failed to apply the rules of justice; (b) Any

breach of the rules must be more than peripheral; they must be material

breaches; (c) Breaches of the rules will be material in cases where the

adjudicator has failed to bring to the attention of the parties a point or 15

issue which they ought to be given the opportunity to comment upon if it is

one which is either decisive or of considerable potential importance to the

outcome of the resolution of the dispute and is not peripheral or irrelevant;

(d) Whether the issue is decisive or of considerable potential importance

or it peripheral or irrelevant obviously involves a question of degree which 20

must be assessed by any judge in a case such as this…”.

39. The first denial of natural justice complained of was the manner in

which the adjudicator handled the issue on the date of accrual of cause of 25

action. Here it was stated that when a post submission query was raised

by the adjudicator ICD had asked to respond or submit further but the

adjudicator directed it was not necessary unless there was a need. It was

the Court’s finding this was well within the powers of the adjudicator as per

section 25(i) and (j) of CIPAA where the adjudicator shall have the powers 30

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to inquisitorially take the decision to ascertain the facts and issue any

direction as may be necessary or expedient.

40. On the 2nd denial of natural justice in the adjudicator not considering

ICD’s defence of set off relating to LAD, this is not a denial of natural justice 5

as section 27(1) of CIPAA provides that the adjudicator’s jurisdiction in

relation to any dispute is limited to the matter referred to adjudication by the

parties pursuant to section 5 and 6.

41. The denial of natural justice in the application of the principle “Pay 10

First Argue Later” had been dealt with under excess of jurisdiction.

42. It was also contended there was denial of natural justice in the award

of costs on solicitor and client basis where there was no opportunity for ICD

to rebut or address the adjudicator. As stated in BM City Realty 15

Construction Sdn Bhd v Merger Insight (M) Sdn Bhd [2016] 1 LNS 1096

an adjudicator has the jurisdiction to determine the quantum of costs on

such basis as he thinks fit and is something within the discretion of the

adjudicator unless it can be shown that he has acted on wrong principles.

Therefore there is no ground for this Court to interfere where costs is within 20

the discretion of the adjudicator and there has been no evidence of the

adjudicator acting on wrong principles.

iii. Court’s finding on setting aside application

43. In the premises there had been no excess of jurisdiction or denial of 25

justice and the setting aside application was dismissed.

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C. Stay application

44. Section 16(1) of CIPAA provides as follows –

“16. (1) A party may apply to the High Court for a stay of an adjudication

decision in the following circumstances:

(a) an application to set aside the adjudication decision under 5

section 15 has been made; or

(b) the subject matter of the adjudication decision is pending final

determination by arbitration or the court.”.

10

45. It is clear that both section 16(1)(a) and (b) of CIPAA are the

preconditions for a stay and that the use of the word “or” indicates it is

sufficient if either precondition is met. PWC has acknowledged the

precondition in section 16(1)(b) as been met as ICD has referred the

dispute to arbitration. 15

46. In Subang Skypark Sdn Bhd v Arcradius Sdn Bhd [2015] 11 MLJ

818 it was stated at page 830 –

“[27] Since the defendant has itself issued a notice of arbitration in which it

has raised the very same matters that it had raised in the adjudication, 20

sub-s. 16(12) operates. That is not to say that simply because the dispute

or subject matter of the adjudication decision is now in the arbitration

mode regime, the grant of stay is automatic. It is not, let alone as of right

or as a matter of course. Being in arbitration merely puts the plaintiff’s

case as one within s.16 for consideration; or one which has crossed the 25

threshold. The existence of concurrent proceedings merely prequalifies

the plaintiff for this application.”.

47. Further at page 831 the Court went on to state – 30

“[32] It is my further view that stay should only be granted in exceptional

circumstances; and such circumstances must necessarily refer to the

financial status of the other party. The merits of the case before the

arbitration or the court; or even the chances of success in setting aside the

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adjudication decision are not relevant considerations. The grant of any

stay must always weigh in the primary object of CIPAA 2012; that it is to

ensure a speedy resolution of a payment dispute; that it is to inject much

needed cash flow into the contractual arrangements between parties that

saw progressive payments of claims as the recognized and accepted way 5

of doing business in construction contract. It would be futile to encourage

parties to adjudication and then deprive a successful claimant of its claim

by staying the access to the cash simply because there is another

proceeding of the nature described in sub-s. 16(1) which is pending. The

whole concept of temporary finality would be lost and the object of the Act 10

defeated if such was the consideration.”.

48. Arising from Subang Skypark (supra) a stay should only be granted

in exceptional circumstances which must relate to the financial status of the 15

other party. It was the Court’s considered view the grounds raised by ICD

such as preserving cash flow of ICD so that the project can be completed

and LAD paid to innocent purchasers and unjust for PWC as the default

party to be paid the adjudicated amount and for it to cash out summarily

were not exceptional circumstances warranting a stay. On PWC not being 20

able to repay the adjudicated amount if the arbitration’s decision is in ICD’s

favour, PWC has shown this to be not the case with reference to exhibits

“SCK-1” and ”SCK-2”.

25

49. Accordingly the stay application was dismissed.

D. Enforcement application

50. Section 28(1) of CIPAA provides as follows –

“28. (1) A party may enforce an adjudication decision by applying to the 30

High Court for an order to enforce the adjudication decision as if it is a

judgment or order of the High Court.”.

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51. In WY Steel Construction Pte Ltd v Osko Pte Ltd [2013] SGCA 32

it was stated in paragraph 56 at page 12/16 –

“Ordinarily, if an application to set aside an adjudication determination is

refused, the adjudication determination will be enforced…”.

5

Here as the setting aside application was dismissed, it follows the

enforcement application was allowed.

Conclusion

52. For the above reasons, the setting aside application and stay 10

application were dismissed and the enforcement application allowed.

Dated : 26 December 2017

15

See Mee Chun Hakim Mahkamah Pembinaan Shah Alam 20

Solicitors for Plaintiff in OS 31 and Defendant in OS 32

Mr CK Oon and Mr Daniel Lau 25

Tetuan CK Oon & Co, Petaling Jaya

Solicitors for Defendant in OS 31 and Plaintiff in OS 32

Mr GH Tee and Ms Siew Kai Lee

Tetuan GH Tee & Co, Petaling Jaya 30