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1 IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE STATE OF WILAYAH PERSEKUTUAN, MALAYSIA ORIGINATING SUMMONS NO: WA-24C-112-06 /2018 In the matter of an Adjudication Conducted Pursuant To The KLRCA Rules And Construction Industry Payment and Adjudication Act 2012 (Adjudication Reference No: KLRCA/D/ADJ-1495-2018); And In the matter of Adjudication Decision dated 2nd May 2018 And In the Matter of Section 28 of the Construction Industry Payment and Adjudication Act 2012 And Order 69 Rule 8 of the Rules of Court 2012 2 BETWEEN AMT ENGINEERING SERVICES (COMPANY NO.: 001308097-V) … PLAINTIFF AND AH DESIGN COMMUNICATION SDN BHD (COMPANY NO.: 582639-K) ... DEFENDANT (heard together with) IN THE HIGH COURT OF MALAYA AT KUALA LUMPUR IN THE STATE OF WILAYAH PERSEKUTUAN, MALAYSIA ORIGINATING SUMMONS NO: WA-24C-154-07/2018 In the matter of an Adjudication under Construction Industry Payment and Adjudication Act 2012 between AMT ENGINEERING SERIVICES and AH DESIGN COMMUNICATION SDN BHD regarding to the project known as ‘Conduct Preliminary Works, Demolish, Construct Structural Work, Ceiling Works, Wall and Floor Finishes, Painting and Finishing Work, Electrical 3 and Mechanical Works, Custom Works, Tiles and Sanitary Fittings at Wisma DSV, Seksyen 33, Shah Alam, Selangor’ (‘Kerja-kerja Kontrak tersebut’) And In the matter of Adjudication Award by Adjudicator Chong Kian Fook dated 2.5.2018 And In the matter of Section 15 of the Construction Industry Payment and Adjudication Act 2012 And In the matter of Order 92 Rule 4 of the Rules of Court 2012 And In the matter of Order 7 Rule 2 and Rule 3 of the Rules of Court 2012 4 BETWEEN AH DESIGN COMMUNICATION SDN BHD (COMPANY NO.: 582639-K) … PLAINTIFF AND AMT ENGINEERING SERVICES (COMPANY NO.: 001308097-V) ... DEFENDANT THE JUDGMENT OF Y.A. LEE SWEE SENG [1] AMT Engineering Services (“AMT”) as Claimant in an Adjudication had applied to enforce an Adjudication Decision in their favour against AH Design Communication Sdn Bhd (“AH Design”). The statutory Adjudication was under the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”). [2] AH Design as the Respondent in the Adjudication had applied to set aside the Adjudication Decision on ground of breach of natural justice and the Adjudicator having acted in excess of his jurisdiction. [3] More particularly the grounds were founded on the fact that the Respondent AH Design had alleged that the Claimant AMT had not properly served the Adjudication Claim on the Respondent and that though they had applied for an extension of time of 14 days to serve their 5 Adjudication Response after the last day to serve the same, the Adjudicator should have allowed the extension of time. [4] The Respondent argued that the Adjudicator’s refusal to allow for the extension of time was premised on his misconceived notion of his powers under section 25(p) of the CIPAA, that his power to extend the time to serve the Adjudication Response could not be exercised after he had communicated to the parties that the Respondent had failed to serve their Adjudication Response on time and that he would proceed to deliver the Adjudication Decision within 45 days of the non-service of the Adjudication Response. [5] Without the extension of time there was no Adjudication Response before the Adjudicator when it should have been allowed to be put in and the result according to the Respondent was a denial of natural justice requiring the Adjudication Decision to be set aside under section 15(c) of the CIPAA. Project [6] By a Contract made on or about 8.9.2017, AH Design had appointed AMT to carry out a construction project known as ‘Conduct Preliminary Works, Demolish, Construct Structural Work, Ceiling Works, Wall and Floor Finishes, Painting and Finishing Work, Electrical and Mechanical Works, Custom Works, Tiles and Sanitary Fittings at Wisma DSV, Seksyen 33, Shah Alam, Selangor’ (“the said Project”). [7] AMT said they had completed 100% of the Works and so claimed for the balance amount due to them both under the Contract as well as under 3 Variation Orders and release of Retention Sum to the total tune of RM1,064,053.00. 6 Problem [8] A Payment Claim was served on AH Design and no Payment Response was received by AMT from the non-paying Party AH Design. AH Design under section 6(4) of the CIPAA are deemed to have disputed the whole of the Payment Claim. [9] Subsequently with the service of a Notice of Adjudication and the appointment of the Adjudicator, AMT served its Adjudication Claim by email to AH Design on 21.3.2018. [10] Though the Respondent had received the Adjudication Claim via email which was an agreed mode of communication between the parties, they were nevertheless waiting for the Claimant to serve on them the hard copy of the Adjudication Claim. [11] The Adjudicator, having been kept in the loop in the exchange of emails between the parties on the service of the hardcopy, wrote to the Respondent by emails on 2 occasions to remind them to apply for extension of time to serve their Adjudication Response but to no avail. [12] After the end of the business on 4.4.2018 which was the last day to serve the Adjudication Response under section 10(1) of the CIPAA, the Adjudicator wrote to the Respondent to state that the Respondent had failed to serve their Adjudication Response after the time specified and that he would proceed to deliver the Adjudication Decision within 45 days from 4.4.2018 as required under section 12(2)(b) of the CIPAA. [13] Upon receipt of this email from the Adjudicator the Respondent immediately replied and requested by way of letter on 5.4.2018 for 14 days extension to serve the Adjudication Response. The Adjudicator did not allow the extension requested for as the Adjudicator took the position that he did not have the power to extend time after it was determined that there 7 was no Adjudication Response pursuant to section 10(1) of the CIPAA and the commencement of 45 working days to deliver the Adjudication Decision pursuant to section 12(2)(b) of the CIPAA. Proceedings in Adjudication [14] The Adjudicator made a finding that only 90% of the Works had been completed and so allowed a reduced claim and also held that the Retention Sum was not due yet. He also held that the Contract Sum quoted was inclusive of GST for the original works but allowed GST for the Variation Orders. [15] The Adjudicator held the full amount outstanding to be in the sum of RM578,640.79 inclusive of costs of Adjudication plus interest of 5% per annum until full and final settlement and that payment is to be made within 14 days from the date of the Decision of 2.5.2018. Prayers [16] The Respondent’s chief complaint in their setting aside application is that the Adjudicator had misconceived his power to grant extension of time and that he should have allowed the extension asked for with the result that without the Adjudication Response there was a breach of natural justice resulting from the Adjudicator’s having unduly and unreasonably restricted his own jurisdiction in not granting the extension arising out of his misreading of the scope of his powers under section 25(p) of the CIPAA to allow extension of time. [17] The Claimant maintained that the Adjudicator had exercised his discretion properly in disallowing the extension of time to serve the Adjudication Response and more so when the Adjudicator had reminded 8 the Respondent twice before the last day to apply to him for an extension of time. The Adjudicator had properly considered the evidence before him bearing in mind that the Respondent was deemed to have disputed the Payment Claim as no Payment Response was served. [18] The Claimant had thus prayed for the enforcement of the Adjudication Decision. [19] This Court shall consider the setting aside application first as parties are agreed that if this Court were to set aside the Adjudication Decision then correspondingly the enforcement application would have to be dismissed. [20] Conversely if the application to set aside were to be dismissed then the enforcement application would be allowed. Principles Whether the Adjudication Claim had been properly served based on the parties agreed mode of service of documents [21] Section 38 of the CIPAA provides as follows: “38. Service of Notices and Documents Service of a notice or any other document under this Act shall be effected on the party to be served—