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2025 MarsdenLR 4450
HIGH COURT MALAYA MELAKA
COSTWIN CONSTRUCTION SDN BHD – Appellant
Versus
TEH CHONG PING & ANOTHER CASE – Respondent
Originating Summons No: MA-24C-1-02/2023 & MA-24C-3-04/2023]
The absence of a formal written contract does not preclude adjudication if sufficient evidence establishes a contractual relationship under the Construction Industry Payment and Adjudication Act 2012.
Headnote:(A) Construction Industry Payment and Adjudication Act 2012 - Sections 15(b), 15(d), 28, and 2 - Adjudication decision enforcement - Application to set aside adjudication decision dismissed; enforcement application allowed - No formal written contract existed, but sufficient documentation constituted a valid contract under CIPAA 2012 - Allegations of breach of natural justice and excess of jurisdiction by the adjudicator were found to be unsubstantiated. (Paras 1-67)
(B) Natural Justice - The principles of natural justice require that parties be given a fair opportunity to present their case - The adjudicator's findings were based on the evidence presented, and no material breach of natural justice was established. (Paras 18-36)
(C) Jurisdiction - The absence of a formal contract does not preclude adjudication if sufficient evidence exists to establish a contractual relationship. (Paras 56-66)
Facts of the case:
Costwin sought to set aside an adjudication decision favoring CJV regarding payment for construction work, claiming lack of a written contract and breach of natural justice. CJV sought enforcement of the adjudication decision.
Findings of Court:
The court found that the adjudicator acted within jurisdiction and provided procedural fairness, dismissing Costwin's application to set aside the adjudication decision and allowing CJV's enforcement application.
Issues: The main issues included whether there was a breach of natural justice and whether the adjudicator acted in excess of jurisdiction due to the absence of a written contract.
Ratio Decidendi: The court ruled that sufficient documentation constituted a valid contract under CIPAA 2012, and the adjudicator's conduct did not breach natural justice principles.
Result: CJV's enforcement application allowed; Costwin's application to set aside the adjudication decision dismissed.
JUDGMENT
Introduction
[1] This judgment is in respect of 2 Originating Summonses. They are:
(a) MA-24C-1-02/2023 is Costwin Constructions Sdn Bhd's ("Costwin") application to set aside the adjudication decision dated 25 January 2023 ("the AD") which was held in favour of CJV Trading Enterprise ("CJV"). This application is made pursuant to s 15(b) and s 15(d) of the Construction Industry Payment and Adjudication Act 2012 ("CIPAA 2012"). (Costwin's setting aside application).
(b) MA-24C-3-04/2023 which is CJV's enforcement application to enforce the AD pursuant to s 28 CIPAA 2012 (CJV's enforcement application).
[2] Costwin's setting aside application and CJV's enforcement application will collectively be referred to as "the applications". Parties agreed that the applications be heard together.
[3] After hearing submissions by both parties I decided to dismiss Costwin's setting aside application and allow CJV's enforcement application. Costwin has appealed to the Court of Appeal against both decisions.
Brief Background
[4] Sometime in May 2019 CJV had been requested by Costwin to supply temporary sheet piles for an ongoing project called "Design and Construction, Supply, Installation, Completion, Testing, Commissioning & Maintenance of Electrified Double tracking from Gemas to Johore Bahru- Section 4.20" ("the project"). CJV also carried out other work for Costwin in s 4.1 but this work was not connected to the applications.
[5] The was no formal written contract drawn out in respect of the project. There were however correspondences, exchanges of WhatsApp messages and other documents as to the supply of sheet piles by CJV to Costwin in respect of the project. The following documents was adduced by CJV:
[6] At all material time it was claimed by CJV that they had completed the work they were required to do in the project and demanded the balance payment. Costwin however denied the claim by CJV and refused payment.
[7] Thereafter CJV commenced legal action against Costwin on the amount due at the Sessions Court Melaka in Civil Suit No:MA-B52-4-09/2020. This suit was struck out by the Sessions Court because CJV was a sole proprietorship and did not have the capacity to sue under its business name. CJV appealed against the decision of the Sessions Court to the High Court . The appeal was however withdrawn.
[8] Subsequently CJV commenced an adjudication proceeding against Costwin pursuant to a Notice of Adjudication dated 3 August 2022. CJV claimed a total of RM625.362.80 from Costwin. CJV's payment claim was dated 27 June 2022. Costwin's Payment response was dated 12 July 2022.
[9] The breakdown of CJV's claim is as follows:
Opposition By Costwin
[10] Costwin opposed the adjudication proceeding on the following grounds:
(a) The was no written contract between Costwin and CJV. The dispute fell outside the ambit of s 2 CIPAA 2012.
(b) The subject matter of the Adjudication Claim was struck out by the Melaka Sessions Court in Civil Suit NO.MA-B52-4-09/20. The appeal against the decision was withdrawn without liberty to file afresh. The doctrine of Res Judicata applied as well as Estoppel.
(c) The documentation submitted for the Progressive Payments were unsupported, self-prepared and self-serving
(d) Costwin has made payment of RM 426,395.59 to CJV for the project 4.2 and this stated in the affidavit of CJV in Interrogatories at the Melaka Sessions Court .
[11] On 25 January 2023 the adjudicator delivered the AD allowed CJV's claim in part. The AD stated inter alia:
(a) CJV was awarded the sum of RM 431,331.10 with interest at a rate of 5% per annum on the said amount from 26 January 2023 until full settlement.
(b) Cost of RM 28,445.92 to be paid by Costwin.
[12] The adjudicator did not allow for the Variation Order Works claimed by CJV. He also concluded that Costwin only paid RM326,395.59 for works done and not RM426.395.59 as alleged by Costwin.
[13] Based on the above brief facts Costwin applied to set aside the AD b
