The court determined that under the Construction Industry Payment and Adjudication Act, the 'adjudicated amount' includes interest and costs, supporting timely payments to subcontractors.

Introduction

[1] There are two (2) related appeals before us which are as follows:

i. Civil Appeal No: W-02(C)(A)-314-02/2021 ("Appeal 314"); and

ii. Civil Appeal No: W-02(C)(A)-399-02/2021 ("Appeal 399") (collectively "Appeals")

[2] For convenience and clarity, the relevant parties in the Appeals will be addressed as follows:-

i. Pali PTP Sdn Bhd, the Appellant in Appeal 314 and Respondent in Appeal 399 - 'Bond'; and

ii. Bond M&E Sdn Bhd, the Respondent in Appeal 314 and Appellant in Appeal 399 - 'Pali'.

[3] The Appeals concerned emanated from Kuala Lumpur High Court Originating Summons No: WA-24C-121-06/2020 ('OS 121') filed by Bond pursuant to s 30 of the Construction Industry Payment and Adjudication Act 2012 ('CIPAA') for an order that Pali, as the principal company to JEKS Engineering Sdn Bhd ('JEKS'), pay directly to Bond the amount which is due and owing to Bond by JEKS pursuant to an Adjudication Decision dated 3 January 2020 ('Adjudication Decision').

[4] The learned High Court Judge ('HCJ') on 27 January 2021 adjudged and ordered Pali to pay Bond the principal sum of RM3,387,425.44 (but excluded costs and interests awarded in the Adjudication Decision) as well as costs of RM10,000.00 in favour of Bond ('Judgment').

[5] Consequently, Pali on 11 February 2021 lodged Appeal 314 against the Judgment. Bond thereafter on 24 February 2021 lodged Appeal 399 against that part of the Judgment which excluded costs and interests awarded in the Adjudication Decision from the 'adjudicated amount' pursued by Bond in its s 30 application under the CIPAA.

[6] We heard both Appeals together on 9 December 2022 and have unanimously found that there is no merit in Appeal 314 which warranted our appellate intervention. Appeal 314 is therefore dismissed with costs of RM10,000.00 to Bond subject to allocator.

[7] Concurrently, we have unanimously allowed Appeal 399 with costs of RM10,000.00 to Bond subject to allocator by reason that the learned HCJ had erred in law in construing the phrase 'adjudicated amount' in s 30 CIPAA to mean only the principal claim sum awarded in the Adjudication Decision. We thus ordered that the Judgment be varied in that the adjudicated amount comprising the principal sum of RM3,387,425.44 as well as both interest and costs awarded in the Adjudication Decision be paid directly from Pali to Bond as prayed in items (i), (ii), (iii), and (iv) of the notice of appeal dated 24 February 2021.

[8] We now provide below the grounds of judgment.

Background

[9] Bond is a private limited company incorporated in Malaysia with its business address at No 17, Jalan Angkasa Mas 5, Kawasan Perindustrian Tebrau II, 81100 Johor Bahru, Johor.

[10] Pali is also a private limited company incorporated in Malaysia with its business address at Jalan Tanjung A/6, Distripark A, Pelabuhan Tanjung Pelepas, 81560 Gelang Patah, Johor. Pali is the owner/ employer of the project known as "Cadangan Meroboh Dan Membina Semula Perindustrian Yang Mengandungi:- (i) 1 Unit Gudang Sesebuah 2 Tingkat Berserta Pejabat 3 Tingkat Dan Tempat Letak Kenderaan Berbumbung Di Aras Bumbung; (ii) 2 Unit Pondok Pegawal; (iii) 1 Unit Pencawang Elektrik; (iv) 1 Unit Kebuk Sampah; (v) 1 Unit Rumah Pump; Dan (vi) 5 Unit Pondok Rehat Di Atas Lot DW1 & DW2 (Sebahagian PTD 2423), Jalan Tanjung A/2, Pelabuhan Tanjung Pelepas, Mukim Tanjung Kupang, Daerah Johor Bahru, Johor Darul Ta'zim" ('Project').

[11] Pursuant to a letter of award dated 14 Februar