CT INDAH CONSTRUCTION SDN BHD (NO. SYARIKAT: 505419-A) BHL GEMILANG SDN BHD (NO. SYARIKAT: 484693-W)

CT INDAH CONSTRUCTION SDN BHD (NO. SYARIKAT: 505419-A) BHL GEMILANG SDN BHD (NO. SYARIKAT: 484693-W)

Section 30(3) of CIPAA imposes an independent mandatory statutory obligation on a principal to pay the adjudicated sum to the successful claimant in the absence of proof of payment by the contractor, and such payment does not, per se, constitute an unlawful undue preference under s293 of the Companies Act; the...

Source-derived case information.

Citation
W-02(C)(A)-2056-10/2017 (Mahkamah Rayuan)
Parties
Appellant: CT Indah Construction Sdn Bhd; Respondent: BHL Gemilang Sdn Bhd
Court
C
Jurisdiction
Malaysia
Judgment Date
26 April 2019
Case Number
W-02(C)(A)-2056-10/2017 (Mahkamah Rayuan)
Procedural Posture
Civil Appeal (construction Adjudication Under Cipaa) / Court of Appeal Judgment on Appeal From High Court
Outcome
Appeal allowed; High Court decision set aside.
Legal Topics
Direct Payment Remedy, Undue Preference, Section 30 CIPAA, Section 293 Companies Act, Adjudication Enforcement
Construction Law Insolvency Law Company Law Contract Law Statutory Adjudication Direct Payment Remedy Undue Preference Section 30 CIPAA +2 more

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Parties

CT Indah Construction Sdn Bhd

Appellant

BHL Gemilang Sdn Bhd

Respondent

Procedural Posture

Civil Appeal (construction Adjudication Under Cipaa) / Court of Appeal Judgment on Appeal From High Court

Legal Issues

  1. 1 Whether s30(3) of CIPAA creates an independent statutory obligation on a principal to make direct payment to an adjudication successful party despite the main contractor being in liquidation
  2. 2 Whether a direct payment by the principal would constitute an undue/preferential payment under s293 of the Companies Act
  3. 3 Whether the determination of undue preference is for the liquidator/court and not for the principal when served with a s30 request

Ratio Decidendi

Section 30(3) of CIPAA imposes an independent mandatory statutory obligation on a principal to pay the adjudicated sum to the successful claimant in the absence of proof of payment by the contractor, and such payment does not, per se, constitute an unlawful undue preference under s293 of the Companies Act; the principal may thereafter recover the sum from the contractor under s30(4); accordingly the High Court was wrong to deny direct payment and to hold that such payment would be a preferential payment.

Court Disposition

Appeal allowed; High Court decision set aside.

Orders

  • High Court decision dismissed and set aside
  • Costs awarded to appellant in the sum of RM20000.00 subject to payment of the allocator fee