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2022 MarsdenLR 2963
HIGH COURT MALAYA KUALA LUMPUR
ANTAH SCHINDLER SDN BHD – Appellant
Versus
MAJU HOLDINGS SDN BHD – Respondent
[Originating Summons No: WA-24C-93-04-2022]
Under the Construction Industry Payment and Adjudication Act, direct payments do not include interest or costs awarded in adjudication decisions.
Headnote:(A) Construction Industry Payment and Adjudication Act 2012 – Sections 30 and 31 – Application for direct payment pursuant to an adjudication decision – Plaintiff entitled to direct payment of the principal adjudicated amount of RM3,430,377.67 plus costs, with no inclusion of interest as per the decision. (Paras 3, 26, 32)
(B) Legal Principles – Direct payment mechanism under CIPAA – Conditions established for invoking direct payment include failure to pay adjudicated amount by the Defendant and making a written request for payment. (Paras 15, 18)
(C) Findings of Court – The Court found the Defendant failed to prove money was not due to GBC, thereby ordering the direct payment. (Para 24)
Facts of the case: Plaintiff claimed for payment based on adjudication decision as the Defendant failed to fulfill its payment obligations under the contract arising from adjudication proceedings. (Para 6)
Findings of Court: The Court allowed the Plaintiff's application to receive direct payment of RM3,430,377.67 and costs of RM8,000.00, dismissing the inclusion of interest. (Paras 3, 32)
Issues: Whether the amounts including interest were payable under the adjudication decision, and if GBC owed money to the Plaintiff at the request time. (Paras 20, 26)
Ratio Decidendi: The court held that the CIPAA's provisions did not mandate inclusion of interest in direct payments for sums owed under adjudication decisions. (Para 30)
Result: Plaintiff's application for direct payment granted.
JUDGMENT
Introduction
[1] This is an application by the Plaintiff, vide the Originating Summons ('OS') dated 21 April 2022 for the Defendant to make direct payment to the Plaintiff according to the Adjudication Decision dated 19 August 2019 ('AD') by the learned Adjudicator Mr Michael Teo Seng Siong ('Adjudicator') in the adjudication proceedings between the Plaintiff and Golden Base Construction Sdn Bhd ('GBC') pursuant to the Construction Industry Payment and Adjudication Act 2012 [Act 746] ('CIPAA'). In the intitulement of the OS, the Plaintiff had cited ss 30 and 31 of the CIPAA and O 5, O 7, O 28, O 69A and/ or O 92 r 4 of the Rules of 2012 ('RC 2012').
[2] In the OS, the Plaintiff prayed for the following main orders to be made:
"1. that the Defendant shall make direct payment to the Plaintiff according to the AD as follows:
(a) the sum of RM3,430,377.67 as the principal adjudicated amount;
(b) interest at the rate of 7.90% per annum on the sum of RM927,037.02 calculated from 20 October 2018 until the sum of RM927,037.02 is paid in full;
(c) interest at the rate of 5% per annum on the sum of RM2,361,642.12 calculated from 24 February 2019 until the sum of RM2,361,642.12 is paid in full; and
(d) the sum of RM81,896.90 being the costs of the adjudication proceedings; and
2. that the Defendant shall pay costs to the Plaintiff for the proceedings.".
[3] After hearing oral submissions by the learned Counsels who represented the parties on 29 August 2022 and having considered the cause papers and both the oral and written submissions, the Court had, on 30 August 2022, allowed only the prayers in subpara 1(a) and para 2 of the OS namely, for the Defendant to make direct payment of the principal adjudicated amount of RM3,430,377.67 to the Plaintiff together with costs of RM8,000.00, subject to allocatur.
[4] Both the Plaintiff and the Defendant have lodged their appeals; the Plaintiff with regards to the decision where the Court did not include interest and cost as per the AD to form part of the amount which is to be paid directly by the Defendant to the Plaintiff; and the Defendant, as to the entire decision. Hereinbelow are my full grounds of judgment.
The Cause Papers
[5] The cause papers filed in respect of the Plaintiff's application, apart from the OS, are as follows:
(a) the Plaintiff's Affidavit in Support ('AIS') affirmed by its Head of Commercial, Mr Tan Wei Heong on 21 April 2022 (encl 2);
(b) the Defendant's Affidavit in Reply ('AIR') affirmed by its Group Chief Executive, Mr Mohamed Roslan Bin Mohamed Shariff on 25 May 2022 (encl 5);
(c) the Plaintiff's AIR affirmed by the same deponent on 8 June 2022 (encl 6); and
(d) the Defendant's Supplemental Affidavit affirmed by the same deponent on 27 July 2022 (encl 7).
Background Facts
[6] By way of a Letter of Award dated 25 April 2018 ('LoA'; exh "TWH-1" in the AIS, encl 2), the Plaintiff was appointed by GBC as the subcontractor for the supply, delivery, installation, testing, commissioning and maintenance of lift and escalator services ('Works') for the project known as "Cadangan Pembangunan Perdagangan Bercampur Yang Mengandungi 1 Blok Menara Pejabat 29 Tingkat (Menara 1), 6 Blok Bangunan Pejabat 7 Tingkat (Menara 2-7) Yang Mengandungi Tingkat Separa Bawah 1 (LG1), Tingkat Separa Bawah 2 (LG2) Dan Tingkat Bawah (GF), Tingkat 1-7 Ruang Pejabat Dan Komersil, 1 Tingkat Basemen Ruang Letak Kereta Di Atas Lot PT 35763 Dan Lot PT 35764, Bandar Tasik Selatan, Mukim Petaling, Kuala Lumpur Untuk Tetuan ASM Development Sdn Bhd" ('Project') for the fixed lump sum of RM4,523,417.12.
[7] The Plaintiff commenced adjudication proceedings against GBC by way of a Notice of Adjudication dated 27 March 2019 claiming for the total amount outstanding of RM3,430,377.67 consisting of the sum of:
(a) RM2,503,340.65 being the total value of work done by the Plaintiff under the sub-contract which was previously awarded to it by Lai Engineering Sdn Bhd ('LESB'). According to the Payment Claim dated
