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2017 MarsdenLR 2885

COURT OF APPEAL PUTRAJAYA
MARTEGO SDN BHD – Appellant
Versus
ARKITEK MEOR & CHEW SDN BHD & ANOTHER APPEAL – Respondent
[Civil Appeal Nos: W-02(C)(A)-1496-08-2016 & W-02(C)(A)-1497-08-2016]



Petitioner Advocates:M Nagarajah,Tanya Lopez,Corrinne Chin ,Respondent Advocate: Sivabalan Sankaran,Tharmini Paramasivan

CIPAA 2012 applies only to interim payment claims, excluding final payment claims in construction contracts.

Headnote:This judgment discusses two appeals regarding the applicability of the Construction Industry Payment and Adjudication Act 2012 (CIPAA 2012) in relation to architectural fees. The court found that CIPAA applies only to interim payment claims and not to final payments, thus dismissing Martego's appeals accordingly. The court noted that the decision of the adjudicator dated 14 April 2016 is set aside, emphasizing the nature of jurisdiction under CIPAA.

Table of Content
1. introduction to the appeals and definitions of appellant and respondent. (Para 1 , 2 , 4)
2. facts surrounding the arbitration and adjudication that took place. (Para 5 , 6 , 7 , 8 , 9 , 10)
3. arguments relating to the construction industry payment and adjudication act and its applicability. (Para 11 , 12 , 14 , 15 , 17)
4. court's observations on the applicability of statutory adjudication processes. (Para 13)
5. arguments regarding jurisdiction of cipaa in terms of architecture fee recovery. (Para 19)
6. court's deliberation on jurisdiction and conclusion about the applicability of cipaa. (Para 21 , 22 , 24 , 25 , 26)
7. final ruling on the nature of claims under cipaa and dismissal of appeals. (Para 37 , 41)
8. final conclusion regarding the appeals and orders made by the court. (Para 55 , 56)

[1] Before us are two appeals, namely, Appeal W-02 (C)(A)-1496-08-2016 (Appeal 1496) and W-02(C)(A)-1497-08-2016 (Appeal 1497). In Appeal 1496, the appellant sought to set aside an adjudication decision dated 14 April 2016 in the High Court but was rejected by the learned judge. In Appeal 1497, the appellant's appeal relates to the decision of the High Court allowing the enforcement of the aforesaid adjudication decision.

[2] We heard the appeals on 27 March 2017 and in view of a novel point raised, we saw fit to reserve our decision for deliberation.

[3] We have since read the draft grounds of our learned brother, Justice Hamid Sultan Abu Backer. However, with regret and respect, we are unable to concur with him on the outcome of this appeal. Hence the grounds herein are the views of myself and my sister Justice Umi Kalthum Abdul Majid and reasons as to what we think should be the outcome of this appeal.

[4] For easy reference, the appellant and respondent will be referred as Martego and ARMC.

Background Facts

[5] ARMC is a firm of architects and was engaged on 22 August 2014 by Martego as the Project Architect for the proposed development of four lots of land at Changkat Perak into four blocks of high rise of residential units cum recreation facilities.

[6] Works had been performed by ARMC and dispute arose as to the amount of fees which ARMC is entitled to. ARMC took refuge under the Construction Industry Payment and Adjudication Act 2012 (CIPAA 2012) to recover its fees. The claim made before the learned adjudicator was in the sum of RM599,500.00 being the professional fees. The learned adjudicator awarded the sum of RM258,550.00 being the balance amount of the total entitlement of RM631,228.00 less the amount paid of RM372,678.00.

[7] The termination of the ARMC's appointment as the architectural consultant occurred on 7 August 2015 and the same was accepted by ARMC on 10 August 2015.

[8] Martego being unhappy with the decision of the learned adjudicator dated 14 April 2016 applied to the High Court to set aside the same premised on s 15 CIPAA 2012. The learned judge dismissed Martego's application.

[9] ARMC armed with the adjudicator's decision applied to the High Court to enforce the same which was allowed by the learned judge.

High Court Proceedings

[10] Martego at the High Court premised its application on two grounds:

(i) the learned adjudicator had acted in excess of jurisdiction in that CIPAA has no application to claim in respect of the architectural fees, and

(ii) that there has been a breach of natural justice in the process of adjudication.

Excess Of Jurisdiction

(a) Application Of The Architects Act 1967

[11] Martego's contention was simply this. ARMC is a firm of architects and as such it is bound by the Architects Act 1967 ( AA ) to recover its professional fees as there exists therein a procedural regime for recovery of professional fees. Learned counsel in supporting his contention relied on the following:

(i) s 7A(1)(b) of AA , which essentially states that recovery of an architect's fee, charge, remuneration or other form of consideration for architectural consultancy services is to be done in any Court, reads

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