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2020 MarsdenLR 3206

HIGH COURT MALAYA KUALA LUMPUR
KLIAA-KLIAC CONSORTIUM & ORS – Appellant
Versus
LATIPAH ABU T/A LA ARCHITECT – Respondent
[Originating Summons No: WA-24C-122-07-2019]



Petitioner Advocates:Ms Murthi ,Respondent Advocate: Syed Fadzil Alhabshi,Syabzuhri Marzuki

The court affirmed that the adjudicator had jurisdiction as the contract was made post-CIPAA enforcement, dismissing claims of breach and jurisdictional excess by the plaintiffs.

Headnote:(A) Construction Industry Payment and Adjudication Act 2012 – Jurisdiction – Plaintiffs challenged the adjudicator's decision citing breaches of natural justice and excess of jurisdiction under s 15 of CIPAA – The court found that the contract was made on 19 May 2015, thus the adjudicator had jurisdiction as it was after the enforcement date of CIPAA. (Paras 19, 37)

(B) Contractual Intention – The plaintiffs claimed to be agents of Lembaga Getah Malaysia; however, it was determined that they were independent contractors with direct obligations to the defendant. (Paras 38)

Facts of the case: The plaintiffs sought to set aside the adjudicator's decision related to a construction project due to allegations of jurisdictional impropriety and lack of natural justice. (Paras 1-12)

Findings of Court: The adjudicator had jurisdiction to decide the case, and the plaintiffs' assertions were unsubstantiated. (Paras 37, 40)

Issues: Whether the contract was formed before the CIPAA came into effect and the question of the plaintiffs' agency status. (Paras 19, 38)

Ratio Decidendi: The contract was deemed to be effective after the CIPAA's operational date, affirming that the adjudicator could address the disputes between parties. (Paras 37)

Result: Plaintiffs' application to set aside the adjudicator's decision was dismissed.

JUDGMENT

Lim Chong Fong J:

Introduction

[1] This is an application to set aside the adjudicator's decision made pursuant to the Construction Industry Payment and Adjudication Act 2012 ("CIPAA").

[2] The 1st plaintiff is an unincorporated consortium of companies comprising the 2nd and 3rd plaintiffs.

[3] The 2nd plaintiff and 3rd plaintiff are related private limited companies involved in the provision of construction contracting and consultancy services.

[4] The defendant is an architect practising as a sole proprietorship under the style LA Architect.

Background Facts

[5] The 1st plaintiff has been appointed as the project delivery partner by Lembaga Getah Malaysia ("LGM") to undertake the project described as "Projek Pembangunan Pusat Kecemerlangan Tanah Lembaga Getah Malaysia (MRB) di Atas Lot 50830 (Lot Lama 481), Mukim Sungai Buloh, Daerah Petaling, Selangor Darul Ehsan ("Project") pursuant to a Project Delivery Partner Agreement dated 9 December 2013 ("PDP Agreement").

[6] By a letter of offer ref KLIACTM/LGM/U/PM/GEN 0.2(23) dated 13 January 2014 ("LO") and a consultancy agreement dated 19 May 2015 executed by the parties ("Agreement") (collectively "Contract"), the 1st plaintiff appointed the defendant as the design architect for the Project.

[7] The salient terms of the LO are as follows with emphasis added by me:

"We refer to the above subject-matter.

2. We also would like to refer to our clarification interview session held at our Bangi office on Friday, 3 January 2014 @ 3.00 pm and your subsequent response vide letter dated 3 January 2014 confirming the agreed scope, timeframe and fee for provision of the above consultancy services.

3. We, KLIAA-KLIACS Consortium, the Project Delivery Partner ("PDP") appointed by M/s Lembaga Getah Malaysia ("LGM") for the above mentioned project hereby offers LA Architect ("Consultant") to provide the Design Architect Consultancy Services ("Services") for the above Work package, subject to the following terms and conditions:

(i) Professional Fees

- Based on an estimated construction cost of RM227.0mill, the Fee for the abovesaid Services shall be Ringgit Malaysia: Five Million and Six Hundred Seventy Five Thousand (RM5,675,000.00) only.

- The above fee excludes 6% Government Service Tax (GST) and reimbursable item

- The fee shall be adjusted accordingly should the final construction cost varies.

- Provision of supervision on site is reimbursable with multiplying factor to be agreed by both parties.

- other terms and conditions shall also be negotiated and mutually agreed by both parties.

(ii) Service Period Effective Date

The effective date of your offer shall be the date you first perform the above Services and/or the date of this letter, whichever is earlier.

(iii) Scope of Services

The Consultant is required at all times to ensure strict compliance with the Scope of Services described in Appendix 1.

The Consultant shall make available all relevant expertise and qualification to perform its duties and shall be responsible for all the necessities in providing the required services.

4. Upon acceptance of this offer, the Consultant shall forward to PDP, a draft copy of the Professional Services Agreement (hereinafter referred to as "the Agreement") for the PDP's perusal and approval. The PDP shall have the right to make necessary amendments and alterations to any clauses in the Agreement for the purpose of compliance with the PDP's policies and requirement.

5. A Contract shall be deemed to have been entered between the PDP and the consultant upon acceptance by the Consultant of this Letter of Offer on the terms and conditions contained herein whether or not the formal Agreement is executed by the Consultant. In the event any terms and conditions herein being inconsistent or repugnant to the terms contained in the Agreement in form and substance, the terms contained in the Agreement shall prevail to the extent of the inconsistency. All costs and expenses associated with the preparation and execution of the

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