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2024 MarsdenLR 141
FEDERAL COURT PUTRAJAYA
ECONPILE (M) SDN BHD – Appellant
Versus
ASM DEVELOPMENT (KL) SDN BHD & ANOTHER APPEAL – Respondent
[Civil Appeal Nos: 02(f)-2-01-2023(W) & 02(f)-34-05-2023(W)]
An adjudication decision enforced under s 28 CIPAA cannot be stayed under s 16(1)(b) CIPAA, reaffirming the legislative intent for timely payments in construction disputes.
Headnote:(A) Construction Industry Payment and Adjudication Act 2012 – Sections 16 and 28 – Stay of adjudication decision – The court addressed whether a stay can be granted under s 16(1)(b) after enforcement under s 28 – The court found that an adjudication decision cannot be stayed once enforced as an order of the court. (Paras 1, 50)
(B) Adjudication – The court emphasized that the principles from View Esteem Sdn Bhd v. Bina Puri Holdings Sdn Bhd must be adhered to in stay applications under CIPAA, particularly regarding financial capacity and special circumstances. (Paras 51)
Facts of the case: The appeals arose from a construction dispute where ASM Development (KL) Sdn Bhd sought to stay adjudication decisions after they had been enforced, raising questions about the applicability of s 16 CIPAA post-enforcement. (Paras 4-6)
Findings of Court: The court concluded that a stay cannot be granted after an adjudication decision has been enforced under s 28 CIPAA, reaffirming the need for adherence to established principles in adjudication. (Paras 50-52)
Issues: The main issues included whether a stay can be granted post-enforcement and the interpretation of financial capacity in stay applications. (Paras 2, 3)
Ratio Decidendi: The court ruled that the enforcement of an adjudication decision as a court order precludes the possibility of a stay under s 16 CIPAA, emphasizing the legislative intent behind CIPAA to ensure timely payments in the construction industry. (Paras 30, 50)
Result: The appeal was allowed, restoring the High Court's decision and dismissing the subsequent appeal. (Paras 54)
JUDGMENT
[1] The appeals before us raised questions of significance relating to an application for a stay under s 16 of the Construction Industry Payment and Adjudication Act 2012 (CIPAA) in particular whether a stay can be granted under s 16(1)(b) CIPAA after the adjudication decision is enforced under s 28 CIPAA as an Order of the Court.
[2] In Appeal No. 02(f)-2-01/2023 (W), the questions for this Court's determination are as follows:
Question 1
Whether an adjudication decision, after having been enforced pursuant to s 28 of CIPAA 2012 as an Order of the Court can be stayed pursuant to s 16(1)(b) of the CIPAA 2012.
Question 2
Whether the Court of Appeal in so deciding to allow the stay application pursuant to s 16(1)(b) CIPAA 2012 has overruled or disagreed, or gone beyond the ratio decidendi of the Federal Court decision in View Esteem Sdn Bhd v. Bina Puri Holdings Sdn Bhd , .
[3] The questions of law in Appeal No. 02(f)-34-05/2023(W) are as follows:
(1) Is the 'financial capacity to repay' test the determinative criteria in considering an application for stay pursuant to s 16 of the Construction Industry Payment And Adjudication Act ("CIPAA"), in view of the liberalised interpretation on the ground of "justice of the case" by the Federal Court in View Esteem Sdn Bhd v. Bina Puri Holdings Bhd, ; in light of the conflicting decisions by the Court of Appeal in ASM Development (KL) Sdn Bhd v. Econpile (M) Sdn Bhd And Other Appeals, [2022] 6 MLJ 392 and ASM Development (KL) Sdn Bhd v. Econpile (M) Sdn Bhd ; [2023] 4 MLJ 720; [2023] 7 CLJ 374 [Civil Appeal No. W-02(C)(A)-443- 03/2021]?
(2) In a construction dispute where more than one CIPAA claim/ award is made in respect of the same construction contract, subject matter, issues and parties, and the Court has upon a wholesome assessment of all factors affecting the same construction contract, subject matter, issues and parties, granted a statutory stay of the first CIPAA adjudication decision pursuant to s 16 of the CIPAA, can a Court hearing an application for stay of a subsequent adjudication decision (arising out the same construction contract, subject matter, issues and parties) refuse the statutory stay?
(3) If the above question is answered in the affirmative, is the subsequent Court entitled to refuse the grant of a statutory stay by arriving at contradictory conclusions in the assessment of the same factors affecting the same construction contract, subject matter, issues and parties?
The Factual Background
[4] To appreciate and understand the issues argued before us it is necessary to set out the material facts. By a Letter of Award dated 26 September 2016, ASM Development (KL) Sdn Bhd (ASM), the Plaintiff in the High Court appointed Econpile (M) Sdn Bhd (Econpile) as its main contractor to carry out Work Package 1: Diaphragm Wall, Contiguous Bored Pile, Earthworks, Piling Works And Basement Structure Works (Basement 2 to LG1) for a project known as "Cadangan Pembangunan Bercampur 69 Tingkat Yang Mengandungi 7 Blok Pangsapuri Servis (4214 Unit), iaitu: Blok A - 58 Tingkat (678 Unit), Blok B - 58 Tingkat (618 Unit), Blok C - 58 Tingkat (560 Unit), Blok D - 58 Tingkat (678 Unit), Blok E - 58 Tingkat (618 Unit), Biok G - 58 Tingkat (502 Unit), 8 Tingkat Podium Tempat Letak Kereta, 7 Tingkat Ruang Perniagaan (Aras 1 - 7), 1 Tingkat Aras Kemudahan (Aras 9), 4 Tingkat Tempat Letak Kereta (Aras LG1, Basement 2 & Basement 1) Di Atas Lot 36190, Mukim Petaling Kuala Lumpur" (the Project) for contract sum of RM280 million. Econpile commenced works and submitted 27 progress claims to ASM in respect of the works done. The progress claims were duly valued by the Project Quantity Surveyor, and endorsed by Arkitek L2CA Sdn Bhd, the Architect for the Project.
[5] ASM contended that Econpile failed to perform their work diligently according to the terms of the contract which resulted in delays and the completion of the Project even with the extended completion date of 7 Ap
