TCS CONSTRUCTION SDN BHD KTCC MALL SDN BHD

TCS CONSTRUCTION SDN BHD KTCC MALL SDN BHD

The court held that s.30 CIPAA creates an independent statutory obligation on the principal to make direct payment to the subcontractor despite the contractor's winding up; TCS satisfied the statutory conditions (MPM failed to pay, TCS served the s.30 request, there was money at least payable from KTCC to MPM at the time and KTCC failed to pay after required notice) and KTCC failed to discharge its evidential burden to show no monies were due or payable; the adjudicated amount includes interest and costs; the Letter of Undertaking is unconditional and binds KTCC.

Citation
BA-24C-65-10/2022 (Mahkamah Tinggi)
Parties
Claimant/plaintiff: TCS Construction Sdn Bhd; Defendant/respondent: KTCC Mall Sdn Bhd
Court
High Court
Jurisdiction
Malaysia
Judgment Date
12 January 2024
Case Number
BA-24C-65-10/2022 (Mahkamah Tinggi)
Procedural Posture
Originating Summons / Judgment
Outcome
Originating Summons in favour of TCS Construction Sdn Bhd; KTCC Mall Sdn Bhd liable to make direct payment under s.30 CIPAA 2012
Legal Topics
CIPAA Section 30 Direct Payment, Pari Passu and Undue Preference, Letter of Undertaking, Service and Notice Requirements Under CIPAA, Interest and Costs in Adjudication
Source Language
Malay/English
Construction Law Insolvency Law Contract Law Statutory Adjudication CIPAA Section 30 Direct Payment Pari Passu and Undue Preference Letter of Undertaking Service and Notice Requirements Under CIPAA +1 more

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Parties

TCS Construction Sdn Bhd

Claimant/plaintiff

KTCC Mall Sdn Bhd

Defendant/respondent

Procedural Posture

Originating Summons / Judgment

Legal Issues

  1. 1 Whether Section 30 CIPAA can be invoked against a principal where the contractor has been wound up and whether that contravenes pari passu/undue preference
  2. 2 Whether the Section 30(1) written request was defective for being made before lapse of 14 days
  3. 3 Whether TCS proved on balance that monies were due or payable by KTCC to MPM at time of request

Ratio Decidendi

The court held that s.30 CIPAA creates an independent statutory obligation on the principal to make direct payment to the subcontractor despite the contractor's winding up; TCS satisfied the statutory conditions (MPM failed to pay, TCS served the s.30 request, there was money at least payable from KTCC to MPM at the time and KTCC failed to pay after required notice) and KTCC failed to discharge its evidential burden to show no monies were due or payable; the adjudicated amount includes interest and costs; the Letter of Undertaking is unconditional and binds KTCC.

Court Disposition

Originating Summons in favour of TCS Construction Sdn Bhd; KTCC Mall Sdn Bhd liable to make direct payment under s.30 CIPAA 2012

Orders

  • KTCC Mall Sdn Bhd is ordered to pay TCS Construction Sdn Bhd the adjudicated sum of RM6,141,557.77
  • Interest on the adjudicated sum at 5% per annum from 4 July 2020 until full payment