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2016 MarsdenLR 2566

HIGH COURT MALAYA KUALA LUMPUR
MARTEGO SDN BHD – Appellant
Versus
ARKITEK MEOR & CHEW SDN BHD & ANOTHER CASE – Respondent
[Originating Summons Nos: WA-24C-39-06-2016 & WA-24C-47-06-2016]



Architects can adjudicate claims for fees under CIPAA without breaching natural justice through lack of oral hearings.

Headnote:This judgment examines the application of the Construction Industry Payment and Adjudication Act 2012 (CIPAA) in adjudicating claims for outstanding architectural fees. It determines that an architect's consultancy contract qualifies as a 'construction contract' under CIPAA, thus allowing claims via adjudication. The court upholds that denial of a hearing, claimed by the respondent, did not amount to a breach of natural justice as the adjudicator adequately assessed the documentary evidence submitted. The final ruling confirmed the adjudication award to the architect while dismissing the respondent's application.

Table of Content
1. the nature of architectural contracts under cipaa. (Para 1 , 12 , 15 , 20)
2. architect's fees must be adjudicated under cipaa. (Para 2 , 3 , 4 , 8)
3. jurisdictional objections in adjudications. (Para 11 , 55 , 68)
4. definition of construction consultancy contract is expansive. (Para 13 , 26)
5. natural justice in adjudicative processes. (Para 95 , 96 , 120 , 122)
6. natural justice does not require oral hearings for all adjudications. (Para 97 , 100 , 102 , 106 , 129)

[1] This case deals with the interesting question as to whether, an architect rendering architectural services with respect to a construction project, may claim under adjudication, his fees outstanding from his client, the owner of the project.

[2] Martego Sdn Bhd ("Martego") is the plaintiff in the setting aside application (OS 39) of an adjudication decision delivered on 14 April 2016 and the defendant in the enforcement application (OS 47). Arkitek Meor & Chew Sdn Bhd ("ARMC") is the defendant in OS 39 and the plaintiff in OS 47. ARMC is the successful claimant in the adjudication and Martego is the respondent and they shall be referred to as such in these two OS and sometimes by their respective company names.

[3] Martego had also, on 10 June 2016, filed an application for stay ("stay application") of the adjudication decision pursuant to s 16(1)(a) of the Construction Industry Payment and Adjudication Act 2012 ("CIPAA").

[4] The stay application had become academic, as ARMCs solicitor had, at the case management on 16 March 2016, placed on record that a winding-up notice and/or petition shall not be served on Martego unless and until a prior five-day notice is given to Martego. No such notice had been issued to Martego evincing no intention on the part of ARMC to proceed with the winding-up before the hearing of both OS fixed to be heard together.

[5] Martego accepts that ARMCs application for enforcement in OS 47 shall follow consequently in the event Martegos setting aside application in OS 39 is dismissed.

Project

[6] Martego had engaged ARMC as the project architect for the proposed development on Lots 849, 851, 690 and PT78, Section 57, Changkat Perak, Off Lorong Perak, Kuala Lumpur (the "project") comprising the following:

(a) Three high-rise blocks (Tower 1, 2 and 3), 43 storeys high, with 832 residential units and two storeys of recreational facilities, on top of a podium with five storeys of car-parking areas, one storey of car-parking basement and ancillary M&E spaces.

(b) one high-rise block (Tower 4), 19 storeys high, with 46 residential units and two storeys of recreational facilities, on top of a podium with four storeys of car-parking areas and ancillary M&E spaces.

[7] Martego issued a letter of appointment (ref MSB/ECA/LOA/c1) dated 22 August 2014 (the "contract"), which was duly accepted by ARMC. ARMC commenced work under the contract but its contract was terminated by the plaintiff on or about 7 August 2015. ARMC accepted the termination on 10 August 2015.

Problem

[8] The dispute is on ARMCs claim for its fees and remuneration for architectural consultancy services rendered as an architectural consultancy practice.

[9] The claimant, ARMC had claimed the amount of RM599,500.00 being the balance of their professional fees. The adjudicator did not grant ARMC the whole of the sum claimed. The adjudicator determined that ARMCs total entitlement (RM631,228.00) less the amounts already paid over by Martego (RM372,678.00) prior to the commencement of adjudication was the balance sum of RM258,550.00 due and owing from Martego to ARMC, exclusive of pre and post-award interest and costs.

Prayers

[10] The grounds for Martegos application for setting aside is two-fold; first, it is on the ground that the adjudicator has acted in excess of his jurisdiction in delivering the adjudication decision and secondly, there has been a denial of natural justice in the adjudicators failure to hold a hearing despite numerous requests from Martego.

Principles

[11]

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