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2021 MarsdenLR 130
HIGH COURT MALAYA KUALA LUMPUR
MAJLIS PERBANDARAN KUANTAN – Appellant
Versus
KINING EXETON SDN BHD – Respondent
[Originating Summons No: WA-24C-24-01-2020]
The absence of an explicit prospective ruling in Federal Court cases permits retrospective application of adjudication decisions under CIPAA.
Headnote:(A) Construction Industry Payment and Adjudication Act 2012 – High Court's enforcement of adjudication orders challenged – Contracts made prior to the Act's effective date – Court affirms adjudication decisions were valid, as no retrospective effect was determined for relevant Federal Court cases. (Paras 10-11, 15-44)
(B) The adjudication decisions made on 23 March 2016 and 24 November 2016 were enforced as the Plaintiff failed to challenge these orders in a timely manner, which rendered adjudication decisions unassailable. (Paras 11, 43)
Facts of the case: Disputes arose from a construction contract entered on 8 August 2011. The defendant won two adjudication proceedings against the Plaintiff; however, the latter contested the validity of such under CIPAA, leading to this application. (Paras 5-9)
Findings of Court: The enforcement of adjudication decisions against the Plaintiff was upheld due to the absence of a pending dispute over adjudication outcomes. (Paras 43-44)
Issues: The primary question was whether adjudication decisions obtained before CIPAA became effective could be contested. (Paras 10, 15)
Ratio Decidendi: The court decided that the lack of explicit prospective overruling from the Federal Court on CIPAA allows its application to past adjudication without disruption to settled outcomes. (Paras 28-44)
Result: Application disallowed with costs.
Introduction
[1] This is an application to set aside adjudication decisions made under the Construction Industry Payment and Adjudication Act 2012 ("CIPAA") as well as High Court enforcement orders made pursuant thereto.
[2] The Plaintiff is a local authority constituted pursuant to the Local Government Act 1976.
[3] The Defendant is a private limited company involved in the construction business
Background
[4] By a contract made in writing (Contract No MPK/J/A/W/T: 03/2010 of 2011) dated 8 August 2011 ("Contract"), the Plaintiff appointed the Defendant as the main contractor to construct and complete the project described as "Cadangan Membina Kompleks Ibu Pejabat Majlis Perbandaran Kuantan (MPK) Di Atas Lot 29, Seksyen 30, Jalan Tanah Putih di Kuantan, Pahang Darul Makmur." ("Project").
[5] There were disputes and differences which arose between the parties pursuant to the Contract and the Defendant commenced two separate adjudication proceedings namely adjudication proceedings reference No KLRCA/D/ADJ-0173-2015 and KLRCA-D-ADJ-0341-2016 respectively against the Plaintiff.
[6] The Defendant succeeded in both adjudication proceedings and obtained adjudication decisions dated 23 March 2016 and 24 November 2016 respectively against the Plaintiff.
[7] The Plaintiff failed, refused or neglected to pay the Defendant on both the adjudication decisions.
[8] Consequently, the Defendant commenced KLHC Originating Summons No WA-24C-173-12/2016 and WA-24C-174-12/2016 to enforce the adjudication decisions pursuant to s 28 of the CIPAA respectively. The High Court allowed both enforcement applications on 18 July 2017.
[9] As the result, the Plaintiff on 26 April 2018 paid the Defendant the sum of RM8,228,744.41 in full and final settlement of both the adjudication decisions which was duly acknowledged by the Defendant's solicitor's letter dated 26 October 2018.
Preliminary
[10] By reason of the Federal Court cases of Jack-In-Pile (M) Sdn Bhd v. Bauer (Malaysia) Sdn Bhd, and Ireka Engineering & Construction Sdn Bhd v. PWC Corporation Sdn Bhd & Other Appeals; [2020] 1 CLJ 193 which on 16 October 2019 held that the CIPAA applied prospectively, the Plaintiff therefore on 29 January 2020 instituted this originating summons ("Application") to apply to set aside both the aforementioned adjudication decisions.
[11] The Plaintiff prayed for the following in the Application:
(i) The Adjudication Decision dated 23 March 2016 in respect of Adjudication Proceedings Reference No: KLRCA/D/ADJ-0173-2015 and the Adjudication Decision dated 24 November 2016 in respect of Adjudication Proceedings Reference No: KLRCA/D/ADJ-0341-2016 both issued by the Adjudicator, Daniel Tan Chun Hao, as well as all subsequent orders enforcing the same, be forthwith set aside and/or declared a nullity;
(ii) Consequentially, all monies previously paid by the Plaintiff to the Defendant pursuant to the said Adjudication Decisions be refunded within seven (7) days from the date of the order together with appropriate interest from the date of payment (26 April 2018) till return;
(iii) Costs of the OS be paid by the Defendant to the Plaintiff; and
(iv) Such further and/or other relief as this Honourable Court deems just and appropriate.
[12] The affidavits which were filed for purposes of the Application are as follows:
(i) Plaintiff's affidavit in support affirmed by Hajah Aliza binti Yahaya dated 24 January 2020;
(ii) Defendant's affidavit in reply affirmed by Nik Jailani bin Nik Jid dated 20 February 2020; and
(iii) Plaintiff's affidavit in reply affirmed by Hajah Aliza binti Yahaya 4 March 2020.
[13] The Application was fixed before me for hearing on 11 January 2021. After having read the written submissions filed by the parties and hearing oral arguments of counsel, I adjourned my decision to deliberate on the arguments advanced by them.
[14] Now having done so, I furnish my decision below together with the supporting grounds.
Contentions and Findings
[15] Dato' Bastian Vendar
