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2025 MarsdenLR 4705
HIGH COURT MALAYA KUALA LUMPUR
GLOBAL BUILT SDN BHD – Appellant
Versus
ONG YEN FENG & ANOTHER CASE – Respondent
[Originating Summons No: WA-24C-176-11/2024 & WA-24C-210-12/2024]
The court affirmed that the Adjudicator's decisions under CIPAA are not reviewable unless shown to be perverse, and confirmed the legal standing of a sole proprietorship represented by its owner.
Headnote:(A) Construction Industry Payment and Adjudication Act 2012 - Sections 15(b) and 35 - Adjudication Decision enforcement and setting aside - GBSB's application to set aside the Adjudication Decision was dismissed as the Adjudicator did not breach natural justice nor misinterpret payment provisions. LKL's locus standi was upheld based on the sole proprietor's legal standing. (Paras 1-22)
(B) Jurisdiction - Adjudicator's decision under CIPAA is not reviewable or appealable unless it is shown to be perverse or illegal. (Paras 12, 20)
(C) Legal Personality - A sole proprietorship does not possess separate legal personality; thus, the sole proprietor's actions were valid. (Paras 9-10)
Facts of the case:
GBSB appointed LKL as a subcontractor for a significant construction project. GBSB challenged the Adjudicator's decision on grounds of natural justice and misinterpretation of payment terms.
Findings of Court:
The court found no grounds for setting aside the Adjudication Decision, affirming that the Adjudicator acted within jurisdiction and did not violate procedural fairness.
Issues: The main issues were whether the Adjudicator breached natural justice and misinterpreted payment provisions, as well as LKL's locus standi.
Ratio Decidendi: The court held that the Adjudicator's decision was within his jurisdiction and that LKL, as a sole proprietorship represented by its owner, had the capacity to sue.
Result: OS 176 dismissed; OS 210 granted.
(Enclosure 1)
[1] Originating Summons No WA-24C-210-12/2024 (OS 210) is Wong Yen Fen t/a LKL Ceiling Enterprise ("LKL") application pursuant to s 28 of the Construction Industry Payment and Adjudication Act 2012 ("CIPAA") to enforce the Adjudication Decision dated 7 October 2024 ("AD") whilst Originating Summons No WA-24C-176-11/2024 (OS 176) is Global Built Sdn Bhd ("GBSB") supplication to set aside the AD in accordance with s 15 (b) CIPAA.
[2] In OS 176, GBSB had stated inter alia that its ground to set aside the AD was based on:
2.1 the Adjudicator acting in breach of natural justice when he failed to take into account GBSB's submission on the issue of the Final Account; and
2.2 the Adjudicator had misinterpreted the payment provisions under s 35 CIPAA.
[3] It was submitted by GBSB that LKL has used the Expired Registration No to file OS 210. LKL made no attempt to amend its registration number and/or to address this issue in their affidavits when GBSB had pointed the issue of their locus standi during the hearing of the stay application (encl 3) on 22 January 2025.
[4] It is further submitted by GBSB that LKL had no locus standi to file the adjudication proceeding nor to enforce the Adjudication Decision against GBSB and that the adjudication decision that was obtained by LKL is similarly defective and must be set aside as it was essentially awarded to a entity that did not exist.
[5] Based on the ground above alone, GBSB submits that OS 176 shouldbe allowed and OS 210 ought to be dismissed by this Honourable Court.
Brief Background Facts
[6] GBSB had appointed LKL as its Sub-Contractor to supply, deliver and carry out Plaster Ceiling Works (hereinafter referred to as "Subcontract Works") in a project known as "Cadangan Pembangunan Komplek Hotel 33 Tingkat (2 Menara) dan Taman Tema Dalaman Dengan Ruang Perniagaan Serta 11 Paras Sub- Besmen Yang Disambungkan Kepada Komplek Hotel First World Sedia Ada Di Atas Sebahagian Lot 9574, 9575, 9576 Dan Lot 17283, Genting Highlands Mukim Bentong, Daerah Bentong, Negeri Pahang Darul Makmur - Package 5A - VIP Casino at T2B" (hereinafter referred to as "Project"). The appointment of LKL was formalised by a Letter of Award dated 20 October 2016, Ref: GBSB/Laward/16/166 (hereinafter referred to as "LOA").
[7] The terms of the LOA, inter alia, are as follows:
i. Clause 1 of the LOA provides that the sub-contract price shall be a provisional sum of RM 1,375,804.60 as per Schedule ofPrice attached to the Contract. However, the actual subcontract sum shall be subject to final site measurement.
ii. Clause 2 of the LOA provides for the scope of works for LKL which is to supply, delivery and install Plaster Ceiling Works for VIP Casino for the Project. LKL's representative shall liaise with the client and/or the consultant shall be referred to GBSB for approval before implementation. If any additional cost incurred due to any unauthorized work, all the cost and/or expenses shall be borne LKL.
iii. Pursuant to cl 4 of the LOA, the completion period for the Sub-Contract Works shall be completed in 14 weeks and shall be partially handover to GBSB by 15 December 2016.
iv. Clause 5 of the LOA provides for a penalty of RM 50,000.00 imposed per day for any delay.
v. Clause 6 of the LOA express provides that LKL shall upon request of Interior Designer / Project Manager furnish him with voucher of prove that the materials comply with specification.
vi. Pursuant to cl 9 of the LOA, the payment for works shall follow Genting Malaysia Berhad ("Genting")'s payment terms and condition. All payment shall be subjected to a 10% retention sum of workdone to a maximum 5% of the Contract Sum or the adjusted final sum whichever is higher.
vii. Clause 12 of the LOA provides that when variation work ordered by Genting is carried out, LKL shall in writing, inform GBSB's contract department before commencement of work. The variation costs and completion schedule of the variation work is to be attached. Subs
