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2018 MarsdenLR 2728

COURT OF APPEAL PUTRAJAYA
BAUER (MALAYSIA) SDN BHD – Appellant
Versus
JACK-IN PILE (M) SDN BHD & ANOTHER APPEAL – Respondent
[Civil Appeal Nos: B-02(C)(A)-1187-06-2017 & B-02(C)(A)-1188-06-2017]



Petitioner Advocates:Sanjay Mohan,Adam Lee ,Respondent Advocate: Rohan Arasoo,Amy Hiew

Conditional payment clauses are void under s 35 of CIPAA 2012, and adjudicators must adhere strictly to their jurisdiction.

Headnote:The court analyzed the applicability of s 35 of the Construction Industry Payment and Adjudication Act 2012, determining it voids conditional payment clauses in contracts. The respondent's claim arose from a dispute over payments amid the winding up of the main contractor. The court upheld previous findings, concluding that the adjudicator acted beyond jurisdiction by ignoring said clause in the contract. The result was a reversal of the lower court's decision to enforce the adjudicator's ruling.

Table of Content
1. cipaa 2012 grants new substantive rights to claimants for contract fees. (Para 29)
"One of the most well-known statements of rule regarding retrospectively is contained in this passage from the judgment of R S Wright J in Re Athlumney [1898] 2 QB 511 at purchase price 551-552:

"Perhaps no rule of construction is more firmly established than thus - that a retrospective operation is not to be given to a statute so as to impair an existing right or obligation, otherwise than as regards matters of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only."

The rule has, in fact, two aspects, for it, "involves another and subordinate rule, to the effect that a statute is not to be construed so as to have a greater retrospective operation than its language renders necessary."

[25] In Francis Bennions Statutory Interpretation, 5th edn, the learned author at p 316 in similar vein states as follows:

"The essential idea of legal system is that current law should govern current activities. Elsewhere in this work a particular Act is likened to a floodlight switched on or off, and the general body of law to the circumambient air. Clumsy though these images are, they show the inappropriateness of retrospective laws. If we do something today, we feel that the law applying to it should be the law in force today, not tomorrows backward adjustment of it. Such, we believe, is the nature of law. Dislike of ex-post facto law is enshrined in the United States Constitution and in the Constitution of many American States, which forbid it. The true principle is that lex prospicit non respicit (law looks forward no back). As Willes, J said retrospective legislation is contrary to the general principle that legislation by which the conduct of mankind is to be regulated ought, when introduced for the first time, to deal with future act, and ought not to change the character of past transaction carried on upon the faith of then existing law."

[26] Another tool of interpretation of statute is this. Unless there are clear words in the legislation to the contrary, any legislation affecting substantive rights must be given a prospective effect. Similarly, if the legislation is procedural in nature, that legislation must be given a retrospective effect unless clear words in the same show to the contrary. (see NS Bindras Interpretation of Statute, (8th edn) at pp 768-769)

[27] The principle distilled from the aforesaid principles of law is that if the legislation does not take away any substantive rights of the citizens of the State, then that legislation would be only "procedural" in nature and can be interpreted as a retrospective legislation unless there are clear words to the contrary. Hence the question before us then is whether CIPAA 2012 gives rise to "substantive rights".

[28] What then are substantive rights? Prior to CIPAA 2012, the claimants in the construction industry can only resort to either the courts or arbitral tribunal to settle their disputes. So to speak, access to the courts and arbitral tribunals were the only legal rights available to the claimants to claim for their contractual fees. With the advent of CIPAA 2012, the claimants now have an additional avenue to claim for their contractual fees. CIPAA 2012 has in effect created a new regime in which claimants in the building industry can claim their contractual fees.

[29] Access to justice is in anyones view a substantive right. Here CIPAA 2012 has created and given a new avenue of access to justice to the claimants in the construction industry. Hence CIPAA 2012 is in essence a legislation relating to a substantive right. We are fully aware that within CIPAA 2012 there also exist a procedural regime dictating as to how claims are to be processed before the adjudicator. The procedural regime is noth

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