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2022 MarsdenLR 950
HIGH COURT MALAYA SHAH ALAM
LUA YIK HOR – Appellant
Versus
KTCC MALL SDN BHD – Respondent
[Originating Summons No: BA-24C-81-11/2021]
Construction Industry Payment and Adjudication Act emphasizes the burden of proof lies with the principal when discerning payment obligations under adjudication for unpaid works.
Headnote:(A) Construction Industry Payment and Adjudication Act 2012 – Section 30 – Originating Summons for payment of Total Adjudicated Amount – Plaintiff performed Works under contract, but not paid – Adjudication Decision awarded payment – Defendant claimed no sum due at time of demand – Court ruled evidential burden on Defendant, who failed to adduce requisite documents and thus could not prove no sum was due – Total Adjudicated Amount ordered to be paid by Defendant to Plaintiff. (Paras 12, 19-30)
Facts of the case: The Plaintiff, as sole proprietor of BOM, sued the Defendant for unpaid works under a contract, following an Adjudication Decision ruling owed payment.
Findings of Court: The Defendant failed to provide substantiating evidence of no payment due.
Issues: Whether there was any sum due or payable to MPM from the Defendant at the demand time, and if the Defendant could discharge the evidential burden.
Ratio Decidendi: The evidential burden shifts to the Defendant, who must prove no sum due or payable, failing which the Plaintiff is entitled to the adjudicated amount under CIPAA.
Result: OS allowed with costs.
JUDGMENT
(Originating Summons)
A. Background
[1] The plaintiff (Plaintiff) is the sole proprietor of a business named "Better One Marketing" (BOM). BOM provides, among others, painting works (Works).
[2] The defendant company (Defendant) is the employer of a mixed development project in "Muara Selatan", Kuala Terengganu, Terengganu, known as "KTCC Mall" (Project).
[3] MPM Project Management Sdn Bhd (MPM) had been appointed by the Defendant to be the main contractor of the Project by way of a "Letter of Award" (LA) dated 16 February 2015 [Contract (Defendant-MPM)]. The value of the Contract (Defendant-MPM) was RM224,053,767.00 [Contract Value (Defendant-MPM)].
[4] By way of a "Letter of Acceptance" dated 7 September 2019, MPM had appointed BOM to do the Works in the Project [Contract (MPM-Plaintiff)].
[5] The Plaintiff (through BOM) had performed the Works but had not been paid for the Works by MPM (Unpaid Works). Hence, the Plaintiff (through BOM) instituted proceedings against MPM under the Construction Industry Payment and Adjudication Act 2012 (CIPAA) to claim for the Unpaid Works (Adjudication Proceedings).
[6] In the Adjudication Proceedings, the adjudicator, Ms Phyllis Tay Yen Sin, delivered an adjudication decision dated 10 June 2021 (Adjudication Decision) which adjudicated that MPM shall pay to the Plaintiff a total sum of RM489,971.98 (Total Adjudicated Amount) which consisted of the sum due from MPM to the Plaintiff for the Unpaid Works with interest and costs as stipulated in the Adjudication Decision.
[7] The Plaintiff's representative in the Adjudication Proceedings, MAC Construction Consultant (MAC), had sent a demand dated 16 June 2021 for MPM to pay the Total Adjudicated Amount to the Plaintiff.
[8] As MPM did not pay the Total Adjudicated Amount to the Plaintiff, MAC sent a demand dated 21 July 2021 to the Defendant as MPM's "principal" for the Project (as understood in s 4 CIPAA) for the Defendant to pay the Total Adjudicated Amount to the Plaintiff pursuant to s 30 CIPAA (Plaintiff's Demand).
[9] The Defendant's solicitors replied to the Plaintiff's Demand by way of a letter dated 23 July 2021 [Reply (Defendant's Solicitors)]. The Reply (Defendant's Solicitors) stated as follows, among others:
"...
Kindly be informed that there is no money due or payable by [Defendant] to [MPM]. Hence, s 30(1) [CIPAA] is not engaged pursuant to s 30(5) [CIPAA]."
[Emphasis Added]
[10] On 28 February 2022, MPM was wound up by the Shah Alam High Court on the application of one of MPM's creditors (not the Plaintiff).
B. This Originating Summons (OS)
[11] In this OS, the Plaintiff has applied for, among others, an order to compel the Defendant to pay the Total Adjudicated Amount to the Plaintiff under s 30 CIPAA.
[12] The main issue in this OS is whether there was any sum "due or payable" from the Defendant to MPM under the Contract (Defendant-MPM) on 21 July 2021, (date of the Defendant's receipt of the Plaintiff's Demand) within the meaning of s 30(5) CIPAA. To resolve this main question, the Court will decide whether the Defendant can discharge the evidential burden to prove that there was no sum of money "due or payable" from the Defendant to MPM pursuant to the Contract (Defendant-MPM) on 21 July 2021 (Evidential Burden). In this regard:
(1) what documentary evidence should be adduced by the Defendant so as to enable the Defendant to discharge the Evidential Burden?;
(2) should the Court draw an adverse inference under s 114(g) of the Evidence Act 1950 (EA) against the Defendant for suppression of relevant documents regarding the Project (Project Documents) in this OS?;
(3) whether the Court can accept as credible the:
(a) alleged waiver by the Defendant of:
(i) MPM's Performance Bond (MPM's PB) totaling RM11,202,688.40 (MPM's PB Sum) [which was required by cl 4(a) LA]; and
(ii) "retention sum" which was supposed to be held by the Defendant (Retention Sum) from payment due from the Defendant to MPM [for construction work of the
