TERA VA SDN. BHD. AYAM BINTANG ISTIMEWA SDN. BHD.

BA-24C-60-08/2023 Kand. 24 15/01/2024 09:07:30 IN THE HIGH COURT OF MALAYA AT SHAH ALAM, SELANGOR DARUL EHSAN ORIGINATING SUMMONS NO: BA-24C-55-08/2023 BETWEEN AYAM BINTANG ISTIMEWA SDN. BHD. (Company No. : 201701018136 [123301-A]) AND TERA VA SDN. BHD. DANT (Company No. : 201101001113 [929247-P]) (HEARD TOGETHER WITH) IN THE HIGH COURT OF MALAYA AT SHAH ALAM, SELANGOR DARUL EHSAN ORIGINATING SUMMONS NO: BA-24C-60-08/2023 BETWEEN TERA VA SDN. BHD. (Company No. : 201101001113 [929247-P]) AND AYAM BINTANG ISTIMEWA SDN. BHD. (Company No. : 201701018136 [123301-A]) S/N 1Jltv/Izq0mij6KSNtDwGw 1 document via eFILING portal **Note : Serial number will be used to verify the originality of this JUDGMENT (2 Originating Summonses) A. INTRODUCTION [1] In April 2023, Tera Va Sdn. Bhd. (TV) had commenced Adjudication Proceedings pursuant to the Construction Industry Payment and Adjudication Act 2012 (CIPAA 2012) against the Ayam Bintang Sdn. Bhd. (AB) to claim a sum of RM294,750.00 being the unpaid sum arising from the completion of Phase 1 works based on a construction contract made between them. The Adjudicator decided in favour of the Defendant in her Adjudication Decision (AD). [2] As a result of the AD, the followings were filed by the parties: (i). OS No. BA-24C-55-08/2023 (Enforcement OS) was filed by AB for a court order to enforce the AD pursuant to s.28 of CIPAA 2012; and (ii). OS No. BA-24C-60-08/2023 (Setting Aside OS) was filed by TV to set aside the AD. [3] Since there are 2 OSs filed in relation to this AD, the parties agreed to having both the OSs heard together and for the decision to be delivered together. For ease of reference the parties will be referred to henceforth with the acronym of TV and AB respectively. S/N 1Jltv/Izq0mij6KSNtDwGw 2 document via eFILING portal **Note : Serial number will be used to verify the originality of this B. BRIEF BACKGROUND [4] TV was appointed by AB to install a Solar Photovoltaic (PV) Solution s 278.10 KWp for a total contract sum of RM613,000.00 to generate electricity using solar energy. [5] The performance of the contract between the parties were to be carried out in 2 phases: i. Phase 1 168.3 KWp for RM393,000.00 whereby 25% of the sum shall be paid upon AB submitting its application to the Malaysia Investment Development Authority (MIDA and the remaining 75% of the sum upon testing and commissioning of Phase 1; and ii. Phase 2 109.89 KWp for RM220,000.00. [6] TV completed Phase 1 works and had accordingly issued a final report on 30.9.2021 together with an invoice dated 30.9.2021 for the agreed balance of 75% of RM393,000.00 amounting to RM294,750.00 to AB. However, AB did not pay TV the invoiced sum and had further not continued with the construction of Phase 2. C. ADJUDICATION PROCEEDINGS [7] On 16.12.2022, TV issued a Payment Claim to AB for the unpaid sum of RM294,750.00 and a Payment Response dated 30.12.2022 was issued by AB rejecting the Payment Claim on the basis that TV had failed to observe and perform its contractual obligations and duties. S/N 1Jltv/Izq0mij6KSNtDwGw 3 document via eFILING portal **Note : Serial number will be used to verify the originality of this [8] In its Payment Response, AB had also made a cross claim, deductions and/or set-off for a sum of RM302,580.00 against the claim made by TV in the Payment Claim. [9] Due to non-payment by AB, TV commenced adjudication proceedings. An Adjudication Claim dated 28.4.2023 by TV was issued to AB. An Adjudication Response dated 12.5.2023 was issued by AB and the same was replied by TV via its Adjudication Reply dated 22.5.2023. [10] Upon conclusion of the adjudication proceedings, the Adjudicator, Loo Yee Mei had delivered her decision via her AD dated 6.6.2023 as follows: i. TV shall pay AB a sum of RM7,830.00; ii. TV shall bear all the costs of the adjudication proceedings amounting to RM13,326.26; and iii. TV shall pay AB for Costs of Reference amounting to RM28,000.00. [11] The parties agreed for this court to hear both the OSs together and a decision was delivered accordingly. [12] Being dissatisfied with the decision, a Notice of Appeal has been filed by TV. S/N 1Jltv/Izq0mij6KSNtDwGw 4 document via eFILING portal **Note : Serial number will be used to verify the originality of this D. OBJECT CIPAA 2012 [13] CIPAA 2012 is a creature of the legislation intended to facilitate speedy and regular payments in the construction industry. As cash flow is the utmost important factor in the construction industry, CIPAA provides interim measures to disputing parties to solve payment issues expeditiously so as not to jeopardise the continuance of the construction contract entered into by them. (see Martego Sdn Bhd v. Arkitek Meor & Chew Sdn Bhd and another appeal [2019] 8 CLJ 433; [2019] 5 AMR 516 FC; Bertam Development Sdn Bhd v. R&C Cergas Teguh Sdn Bhd [2017] 1 LNS 2228) E. ISSUES [14] TV of CIPAA 2012 is premised on the followings: i. That the Adjudication Decision was improperly procured through fraud under section 15(a) CIPAA 2012; and ii. That there had been a denial of natural justice under section 15(b) CIPAA 2012. [15] AB premised as follows; i. that the Adjudicated Amount is not paid by TV; ii. that the AD is not set aside or stayed; and ii. that there is no final determination by Arbitration or Court. S/N 1Jltv/Izq0mij6KSNtDwGw 5 document via eFILING portal **Note : Serial number will be used to verify the originality of this F. FINDINGS OF THE COURT I. Setting Aside OS -Suit 60 (s.15 of CIPAA 2012) [16] It is Defendant had misled the Adjudicator into believing that the entire roof had been damaged and that it had replaced the roof of its factory and paid for the same, when this was not the case (s.15(a) of CIPAA 2012). [17] TV also alleges that the Adjudicator had decided on a matter not submitted by the parties and concluded the same without giving the Plaintiff an opportunity to address the same (s.15(b) of CIPAA 2012). i. s.15(a) of CIPAA 2012 - Fraud [18] In addressing the issue of fraud (s.15(a) of CIPAA 2012), it must be understood that the burden to prove fraud lies on the one who asserts it. Since here, TV had alleged that AB had fraudulently obtained the AD in its favour, the burden is on TV to prove so on a balance of probabilities. [see the Federal Court case of Sinnaiyah & Sons Sdn Bhd v. Damai Setia Sdn Bhd [2015] 7 CLJ 584; [2015] 1 MLJ 1, at [48]-[53].] [19] cross claim by alleging that TV had damaged the roof of the premises when installing the SPS during Phase 1 stage which had resulted in AB incurring costs of RM286,780.00. A further RM15,800.00 was also allegedly incurred by AB for costs of materials supply and workmanship to paint the existing structure. S/N 1Jltv/Izq0mij6KSNtDwGw 6 document via eFILING portal **Note : Serial number will be used to verify the originality of this [20] According to AB during the adjudication proceedings, the area of damage on the roof covers 20,565 square feet and this measurement claimed by AB was disputed by TV whereby TV had stated in its Adjudication Reply at paragraph 83.8 as follows: (b) The Claimant had completed the Contract Works but had not been paid according to the payment terms in the Contract. The Claimant was actively pursuing the Respondent to pay and replace its entire roof, including those which were not dented, measuring 20,595 sf at a cost of RM12 psf including miscellaneous works for RM302,580.00. (c) After checking and investigating, the Claimant discovered that only 7,442.75 sf were dented (not 20,595 sf) and the costs was RM4 psf. The Claimant offered to replace them, without admission to any [21] In the Affidavit in Support filed in this suit, TV claimed that an independent party had taken photographs of the roof of the Premise on 17.8.2023 and that there were no replacement works done on the roof as alleged by AB. The damage on the roof was said to be extremely minimal. [22] AB on the other hand had in its Affidavit in Reply refuted the allegation made by TV that the replacement of the roof was not done and photographs by TV is that it is a mere afterthought as no such evidence was produced at the adjudication proceedings. By producing at this suit tantamount to revisit the merits of the case that was concluded at adjudication. S/N 1Jltv/Izq0mij6KSNtDwGw 7 document via eFILING portal **Note : Serial number will be used to verify the originality of this [23] above eye-view where there is no clarity as to whether the roof is damaged or not and that they only show a portion of the roof. [24] This court concurs with AB so far as to the manner the said photographs were taken and that these photographs do not show what it intended to show clearly. Additionally, since there are no digital dates marked on any of hat these photographs were taken on 17.8.2023 is not substantiated. Furthermore, there is no indication through the said photographs that the images in them are the images of the Premise. [25] Therefore, TV has failed to show to this court by the images in the the adjudication proceedings was untrue. [26] fact that the Premise does not belong to AB and is in fact a rented premise. towards the Premise even though it is a rented property as per the Tenancy Agreement dated 21.06.2021. [27] Being a tenant of a property does not mean that one can cause damage to the property and not bear the responsibility for the same only because one does not own the property. A tenant will have to make good such damages at its own costs as there is a duty of care owed as per the S/N 1Jltv/Izq0mij6KSNtDwGw 8 document via eFILING portal **Note : Serial number will be used to verify the originality of this this allegation is accepted by this court. [28] s that TV had failed to prove on a balance of probabilities that AB had obtained a decision from the Adjudicator by way of fraudulent means and as such aside the AD pursuant to s.15(a) of CIPAA 2012 has failed. ii. s. 15(b) of CIPAA 2012 [29] In examining whether s.15(b) of CIPAA 2012 i.e there has been a denial of natural justice, can be established in order to set aside the AD, I refer to the case of MRCB Builders Sdn Bhd v. Wazam Ventures Sdn Bhd and another case [2020] 1 LNS 891; [2020] MLJU 208, where Wong Kian Kheong J (as he then was) held that it is sufficient to dislodge a complaint of breach of natural justice if the Adjudicator had given just one reason to have arrived to his decision. [30] The principle of natural justice that is said to have been denied here is the right to being heard, audi alteram partem. In an Adjudication Proceedings, the Adjudicator has the duty to accord procedural fairness to the parties during the course of the proceedings whereby the issues raised by both parties are to be considered and a decision is to be derived therefrom. In the case of ACFM Engineering & Construction Sdn. Bhd. v. Esstar Vision Sdn Bhd & another appeal [2016] 1 LNS 1522; [2016] MLJU 1776, the Court of Appeal held: S/N 1Jltv/Izq0mij6KSNtDwGw 9 document via eFILING portal **Note : Serial number will be used to verify the originality of this When one speaks of natural justice, it is nothing more than what we call the concept of "procedural fairness" which needs to be accorded to the parties in a dispute of a hearing. [31] allegation that there had been a denial of natural justice when the Adjudicator had decided on a matter not submitted by the parties and concluded the same without giving TV an opportunity to address the same. The issue which TV refers to is on the issue pertaining to the rate for the cost of rectification of the roof. [32] Since the rate for the cost of rectification of the roof was provided by AB in its Adjudication Response, TV could very well have responded to the same via its Adjudication Reply. The Adjudicator had used all information made available to her in order to come to her conclusion. [33] The question that needs to be asked is whether TV was denied the right to being heard as alleged? In this case, as seen in the AD, the Adjudicator had deliberated on all the issues raised by both TV and AB at the adjudication proceedings at length and had come to her conclusion. The Adjudicator had provided both parties their opportunities to state their case at the adjudication proceedings and had not left any issues raised at the said proceedings undeliberated. Therefore, TV Adjudicator had denied it the right to be heard is unfounded. [34] I refer to the case of Bina Puri Construction Sdn Bhd v Hing Nyit Enterprise Sdn. Bhd. [2015] 8 CLJ 728 where it was stated as follows: Adjudicator may be set aside. Since an application under s.15 is not an appeal, the decision of the Adjudicator cannot be reviewed on S/N 1Jltv/Izq0mij6KSNtDwGw **Note : Serial number will be used to verify the originality of 10 this document via eFILING portal [35] As such, whether the Adjudicator had assessed the issues raised correctly or not is not up to this court to determine as the decision of the Adjudicator cannot be reviewed on its merits. [36] Furthermore, s.25(i) of CIPAA 2012 provides the Adjudicator the power to inquisitorially take the initiative to ascertain the fact and the law required for the decision. The Adjudicator is free to form his opinion independently of both parties and to rely on information which is obtained by her own investigation. [37] Since the Adjudication Proceedings pursuant to CIPAA 2012 is an interim measure to solve issues related to payments, any errors or omission arising from this proceeding can be remedied via a final determination through arbitration or court as provided for under s.13 of CIPAA 2012. (see: Econpile (M) Sdn Bhd v. IRDK Ventures Sdn Bhd & another case [2016] 5 CLJ 882) [38] Based on the foregoing, TV has failed to discharge its burden to show that the Adjudicator has breached the rules of natural justice pursuant to s.15(b) of CIPAA 2012. [39] Therefore, having failed to establish ss.15(a) and (b) of CIPAA 2012, ation to set aside the AD is dismissed with costs of RM5,000.00 to be paid to AB subject to allocatur fee. iii. Enforcement OS Suit 55 (s.28 of CIPAA 2012) S/N 1Jltv/Izq0mij6KSNtDwGw **Note : Serial number will be used to verify the originality of 11 this document via eFILING portal [40] As guided by Her Ladyship Mary Lim Thiam Suan JCA (as she then was) in the Court of Appeal case of Inai Kiara Sdn Bhd v. Puteri Nusantara Sdn Bhd [2019] 2 CLJ 229, the court may exercise its discretion to grant leave under s. 28(1) and (2) CIPAA to enforce an adjudication decision if the following three conditions (3 Conditions) are met: for leave under s. 28 CIPAA; (2) the party against whom an adjudication decision is made, has failed to pay the adjudicated amount on the date specified in the adjudication decision; and [41] In this case, all 3 conditions have been satisfied and since the Setting Aside has been dismissed, s application to enforce the AD is allowed with costs of RM5,000.00 to be paid by TV to AB subject to allocatur fee. G. CONCLUSION [42] Premised on the above evidences and reasons: (i) the Setting Aside OS is dismissed; (ii) the Enforcement OS is allowed; and S/N 1Jltv/Izq0mij6KSNtDwGw **Note : Serial number will be used to verify the originality of 12 this document via eFILING portal S/N 1Jltv/Izq0mij6KSNtDwGw **Note : Serial number will be used to verify the originality of this document via eFILING portal