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2022 MarsdenLR 1217
HIGH COURT MALAYA SHAH ALAM
OU YANG CHOW MIN – Appellant
Versus
GREEN VENTURE CAPITAL SDN BHD & ANOTHER CASE – Respondent
[Originating Summons No: BA-24C-21-05/2021 & BA-24C-27-05/2021]
The court affirmed that sole proprietors can enforce payment claims under CIPAA, emphasizing the lack of legal personality in partnerships and the adjudicator's binding jurisdiction over such claims.
Headnote:(A) Construction Industry Payment and Adjudication Act 2012 – Sections 2, 5, and 15 – Sole proprietorship versus partnership – Jurisdiction of adjudicator – Court held that the adjudicator had jurisdiction to adjudicate the payment claim under CIPAA and that the sole proprietor's payment claim was valid and complied with statutory requirements. The court emphasized that a partnership does not confer legal personality under the Partnership Act. The enforcement of the adjudication decision was allowed as the adjudicator's decision was binding unless set aside on valid grounds (Paras 15, 24, 52).
Facts of the case:
This judgment arose from disputes between an architect and his clients regarding claims for consultancy fees under the consultation agreements for various construction projects in Malaysia.
Issues
: The main issues included whether the adjudicator had jurisdiction, whether the payment claim complied with statutory requirements, and what relief should be granted in the enforcement issues.
Findings of Court:
The court found the adjudicator had jurisdiction over the claims and upheld the decision made in the adjudication process.
Ratio Decidendi:
The court concluded that a sole proprietorship can enforce payment claims under the CIPAA framework, rejecting arguments against the existence of a contractual cause of action based on strict compliance with procedural requirements under section 5(2).
Result:
The OS from the respondents was dismissed; the enforcement order was granted.
(Two Originating Summonses)
A. Background
[1] Mr Ou Yang Chow Min (Ou) is an architect who practises as a sole proprietor under the name of "Ou Yang Architect" (OYA).
[2] On 23 March 2015, OYA had issued a letter entitled "Consortium Consultancy Service Contract Agreement" (Consultancy Contract) to Wawasan Qi Properties Sdn Bhd (WQP) which was agreed by WQP on 25 March 2015. According to the Consultancy Contract, among others, WQP had appointed OYA as the "Lead Consultant" in respect of consultancy services for the construction of a new campus, hospital, condominium, shopping mall and service suites for "Quest International University Perak" in Meru Raya, Kinta District, Perak Darul Ridzuan (Project).
[3] OYA entered into a "Non-Disclosure Agreement" dated June 2015 (NDA) with Green Venture Capital Sdn Bhd (GVC). The NDA, among others, safeguarded the confidentiality of GVC's information regarding the Project which had been disclosed by GVC to OYA.
[4] On 14 February 2016, a "Memorandum of Agreement" (MOA) was entered into by OYA and GVC. The MOA provided as follows, among others:
(1) clause 8.1(a) to (l) (cl 8.1) provided for OYA's responsibilities regarding "Consultancy Services" (Services) which had been defined in cl 1.1 MOA as "architectural consultancy services" provided by OYA pursuant to "Scope of Services" (defined in cl 1.1 read with Schedule I to MOA) in relation to the Project;
(2) clauses 10.1(a) to (c) and 10.2(a) to (e) ("cl 10.1" and "cl 10.2") concerned the Scope of Services to be provided by OYA; and
(3) the fees for the Services are provided in:
(a) clause 17.1 (cl 17.1) read with Schedule III to the MOA (Schedule III); and
(b) clauses 17.2 and 17.3 ("cl 17.2" and "cl 17.3").
B. Adjudication Proceedings (AP)
[5] OYA instituted AP under the Construction Industry Payment and Adjudication Act 2012 (CIPAA) against GVC and WQP. OYA's "Payment Claim" (PC) claimed for the following three sums [3 Sums (PC)]:
(1) GVC and WQP owed a sum of RM4,739,818.90 to OYA as the balance of 30% interim payment for the Services performed by OYA [Claim Sum (Services)];
(2) an amount of RM192,750.00 was claimed from GVC and WQP by OYA as fees for the procurement of "Sijil Formula Unit Syer" [Fee (SiFUS)]; and
(3) OYA claimed a sum of RM3,064.40 against GVC and WQP as printing charges (Printing Charges).
[6] WQP's "Payment Response" (PR) disputed OYA's PC as follows, among others: OYA did not enter into any contract with both WQP and GVC. Hence, there was no written contract for which WQP and GVC were jointly liable to OYA;
(1) WQP was not a party in the NDA and MOA;
(2) NDA was not a "construction contract";
(3) the 3 Sums (PC) were made under the MOA and not under the Consultancy Contract (to which WQP was a party);
(4) OYA's invoices for the 3 Sums (PC) (OYA's Invoices) were issued to GVC (not to WQP); and
(5) if there was jurisdiction under CIPAA to adjudicate OYA's PC, the Consultancy Contract had been substituted by the MOA.
[7] GVC's PR resisted OYA's PC on the following grounds, among others:
(1) OYA's PC did not identify any cause of action against GVC. Hence, OYA's PC did not comply with s 5 CIPAA and was therefore invalid;
(2) GVC is a related corporation of WQP which had been identified in the Consultancy Contract to undertake the Project. It had been agreed by OYA, WQP and GVC that after the completion of the planning concepts regarding the Project, OYA and GVC would enter into separate agreements wherein OYA would act for GVC for the purpose of obtaining planning approval;
(3) until the pre-construction fee had been ascertained as due and payable from GVC to OYA (Alleged Pre-Construction Fee), OYA was only entitled to an interim fee from GVC based on the formula prescribed in Schedule III (Alleged Interim Fee). GVC had paid the Alleged Interim Fee to OYA. Once the Alleged Pre-Construction Fee had been ascertained as due and payable, all previous payments made to OYA with regard to the Alleged Interim Fee, would be set
