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2021 MarsdenLR 96
HIGH COURT MALAYA KUALA LUMPUR
TAN SRI DATO YAP SUAN CHEE – Appellant
Versus
CLT CONTRACT SDN BHD – Respondent
[Originating Summons No: WA-24C-17-03-2021]
Construction contracts under CIPAA require compliance with specific criteria; failure to meet any results in adjudicator jurisdiction.
Headnote:(A) Construction Industry Payment and Adjudication Act 2012 - Section 3 - Adjudication - Jurisdiction over construction contracts - The court examined if the construction work falls within the definition as per s 3 of the Act. The contract was found not to be a construction contract under this section as it involved five storeys, thus granting the Adjudicator the jurisdiction to adjudicate. (Paras 22, 30, 53)
(B) Burden of Proof - It is trite that the onus to prove that a contract is within the excluded class lies with the Plaintiff, who must provide evidence of the requirements in s 3 CIPAA. (Paras 33, 36, 48)
Facts of the case: The dispute arose over the construction contract related to a project described as a bungalow with basement levels, with the Plaintiff alleging the work was solely for personal occupation. (Paras 1-6)
Findings of Court: The Plaintiff failed to demonstrate the building fell within the exclusive application of s 3 CIPAA, resulting in dismissal of the application and costs ordered against the Plaintiff. (Paras 53)
Issues: The key issues revolved around the definition of 'storey' and the occupancy intention relevant to the adjudication process under the CIPAA. (Paras 22, 23)
Ratio Decidendi: The Court ruled that the Plaintiff had not met the requirements to exclude the contract from CIPAA's application, as the building was found to have five storeys, despite the Plaintiff's claims of it being solely for his occupation. (Para 53)
Result: The Plaintiff's application was dismissed with costs.
GROUNDS OF JUDGMENT
[1] The issue which arose for determination in this application was whether the construction contract entered into by the Plaintiff for the construction work is in respect of a building which is less than four storeys high and wholly intended for the Plaintiff's occupation within the meaning of s 3 of the Construction Industry Payment and Adjudication Act 2012 [Act 746] ('CIPAA') such that the adjudication proceedings commenced by the Defendant against the Plaintiff is null and void.
[2] The Plaintiff is an individual having his office address at No 5, Jalan Titiwangsa, 53200 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur and is the owner of the plot of land located at Lot 37902 & 37903, Persiaran Negeri Sembilan, Mukim Kuala Lumpur, Wilayah Persekutuan.
[3] The Defendant is a private limited company incorporated under the laws of Malaysia and has a registered address at 2-4A-1, Jalan Anggerik Vanilla Q31/Q, Seksyen 31, Kota Kemuning, Shah Alam, Selangor.
[4] By way of Work Order No 9 dated 6 May 2015 ('Contract'), the Plaintiff engaged the Defendant for the works described as "Supply Install Plaster Ceiling Work" ('Works') for the project known as "Cadangan Meroboh Dan Membina Semula Sebuah Rumah Banglo 3 Tingkat Dengan 2 Tingkat Aras Bawah Tanah Berserta Sebuah Kolam Renang Di Atas Lot 37902 & 37903, Persiaran Negeri Sembilan, Mukim Kuala Lumpur, Wilayah Persekutuan" ('Project') at the ''remeasurement price" of RM220,970.00.
[5] According to the Work Order, the Works are to commence immediately and to be completed as per the Main Contract Schedule.
[6] Subsequently, the parties became embroiled in a dispute. The Defendant claimed that it had executed and completed all of the Works including all Variation Orders pursuant to the Contract but the Plaintiff had failed, refused and/ or neglected to make full payment for the total outstanding sum of RM149,661.74. The Defendant then served the Payment Claim dated 26 February 2020 pursuant to s 5 CIPAA to the Plaintiff on 27 February 2020 (this document was not exhibited in any of the affidavits).
[7] The Plaintiff did not serve a Payment Response and thus, is deemed to have disputed the entire Payment Claim (see sub-section 6(4) CIPAA).
[8] Based on the Adjudication Claim dated 19 February 2021 (exhibit "T-1" in the Defendant's Affidavit In Reply ('AIR'), encl 13), the reliefs sought by Defendant are the sum of RM149,661.74; interest at 5% per annum on the balance amount of Progress Claim ('PC') No 4 and on PC Nos 5 and 6 (Final Penultimate), release of the retention sum and balance amount of Goods and Services Tax; all Adjudicator's fee and that of the Asian International Arbitration Centre; and party to party fee.
[9] On 19 February 2021, Ms Lim Pooi Pei had accepted the appointment to act as the Adjudicator and directions were accordingly given as to the conduct of the adjudication.
[10] However, on 26 February 2021, the Plaintiff's solicitors wrote to the Adjudicator inviting her to withdraw as the adjudicator for the adjudication proceedings since she does not have the requisite jurisdiction to decide on the dispute as the adjudication proceeding was allegedly invalidly commenced and is prohibited by virtue of s 3 CIPAA. The Adjudicator was also informed that the Plaintiff intends to file an Originating Summons ('O.S.') in the Kuala Lumpur High Court to seek, inter alia, for orders that the adjudication proceedings be stayed and that the same be declared as null and void.
[11] The Adjudicator replied on 1 March 2021 and stated, among others, that:
(a) it is common for parties to raise objections on jurisdiction in adjudication proceedings but that does not mean that the adjudicator has to withdraw whenever such an objection is raised;
(b) the jurisdiction objection warrants full arguments and responses for proper consideration;
(c) the Plaintiff is invited to fully ventilate the jurisdiction objection with authorities and evidence to support his contenti
