CABNET SYSTEMS [M] SDN. BHD. (Co. No.: 355065-V) 1. DEKAD KALIBER SDN. BHD. (Co. No.: 684176-H) 2. RIMARISAN SDN. BHD. (Co. No.: 292492-H)

CABNET SYSTEMS [M] SDN. BHD. (Co. No.: 355065-V) 1. DEKAD KALIBER SDN. BHD. (Co. No.: 684176-H) 2. RIMARISAN SDN. BHD. (Co. No.: 292492-H)

Novation effected under s63 Contracts Act made the 2nd Defendant the principal of the subcontractor within s4 CIPAA; the Plaintiff satisfied s30 CIPAA conditions and therefore the 2nd Defendant is liable to pay the adjudicated sum together with pre- and post-adjudication interest (but not adjudication costs); such payment does not constitute an undue preference under Companies Act s528(1) in light of CT Indah, and s471(1) did not prohibit commencement of the originating summons; the 1st Defendant is penalized in costs for withholding the novation document.

Citation
BA-24C-5-01/2019 (Mahkamah Tinggi)
Parties
Plaintiff: Cabnet Systems [M] Sdn. Bhd.; 1st Defendant: Dekad Kaliber Sdn. Bhd.; 2nd Defendant: Rimarisan Sdn. Bhd.
Court
High Court
Jurisdiction
Malaysia
Judgment Date
18 December 2019
Case Number
BA-24C-5-01/2019 (Mahkamah Tinggi)
Procedural Posture
Originating Summons Under CIPAA to Enforce Adjudication Decision / High Court Judgment Delivered (final)
Outcome
Originating Summons allowed in part in favour of Plaintiff against 2nd Defendant; declaratory and payment orders made against 2nd Defendant; costs awarded to Plaintiff against both Defendants.
Legal Topics
CIPAA S30 Direct Payment, Novation Under S63 Contracts Act 1950, Undue Preference Under Companies Act 2016 S528, Leave to Commence Proceedings After Winding Up S471 CA 2016, Interpretation of "adjudicated Amount", Costs (rules of Court O 59)
Source Language
Malay/English
Construction Law Contract Law Company/insolvency Law Civil Procedure CIPAA S30 Direct Payment Novation Under S63 Contracts Act 1950 Undue Preference Under Companies Act 2016 S528 Leave to Commence Proceedings After Winding Up S471 CA 2016 +2 more

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Parties

Cabnet Systems [M] Sdn. Bhd.

Plaintiff

Dekad Kaliber Sdn. Bhd.

1st Defendant

Rimarisan Sdn. Bhd.

2nd Defendant

Procedural Posture

Originating Summons Under CIPAA to Enforce Adjudication Decision / High Court Judgment Delivered (final)

Legal Issues

  1. 1 Whether novation under s63 Contracts Act made 2nd Defendant the "principal" of the subcontractor within s4 read with s30 CIPAA
  2. 2 Whether payment by the principal to the adjudication successful party would constitute an undue preference under s528(1) Companies Act 2016 given the subcontractor's winding up
  3. 3 Whether leave of the winding up court under s471(1) Companies Act 2016 was required before commencing the originating summons

Ratio Decidendi

Novation effected under s63 Contracts Act made the 2nd Defendant the principal of the subcontractor within s4 CIPAA; the Plaintiff satisfied s30 CIPAA conditions and therefore the 2nd Defendant is liable to pay the adjudicated sum together with pre- and post-adjudication interest (but not adjudication costs); such payment does not constitute an undue preference under Companies Act s528(1) in light of CT Indah, and s471(1) did not prohibit commencement of the originating summons; the 1st Defendant is penalized in costs for withholding the novation document.

Court Disposition

Originating Summons allowed in part in favour of Plaintiff against 2nd Defendant; declaratory and payment orders made against 2nd Defendant; costs awarded to Plaintiff against both Defendants.

Orders

  • Declaration that the 2nd Defendant is liable as SSB's principal to pay the Adjudicated Sum and pre- and post-adjudication interest (excluding adjudication costs)
  • Order that the 2nd Defendant shall pay to the Plaintiff the Adjudicated Sum, pre-AD interest and post-AD interest (adjudication costs excluded) pursuant to s30 CIPAA