Pung Tiong Gee v Fortune Facade Treatment Sdn Bhd (W-02(C)(A)-1131-06/2025)

W-02(C)(A)-1131-06/2025 Kand. 29 08/05/2026 16:01:06 IN THE COURT OF APPEAL OF MALAYSIA (APPELLATE JURISDICTION) CIVIL APPEAL NO.: W-02(C)(A)-1131-06/2025 BETWEEN

1. PUNG TIONG GEE (I/C NO.:711004-10-5979)

2. PUNG TIONG CHENG (I/C NO: 730212-14-5573) Trading as a partnership under the name and style of PUNG & TEE ALUMINIUM WORK (Registration No.: 001013755-W) ... APPELLANTS AND FORTUNE FACADE TREATMENT SDN BHD [COMPANY NO.:201901026489 (1335818-M)] ... RESPONDENT [In the High Court of Malaya at Kuala Lumpur In the Federal Territory of Kuala Lumpur, Malaysia Originating Summons No.: WA-24C-181-11/2024 Between In the matter of an Adjudication (Reference No. A1AC/D/ADJ- 5377-2024) between Pung Tiong Gee and Pung Tiong Cheng as Claimants and Fortune Facade Treatment Sdn Bhd as Respondent; And In the matter of the Adjudication Decision dated 19.08.2024 issued by Khong Zhi Jian; And In the matter of Section 28 of the Construction Industry Payment and Adjudication Act 2012 ('CIPAA'); And In the matter of Order 69A, Rules 2 and 5 of the Rules of Court 2012; And In the matter of Order 92, Rule 4 of the Rules of Court 2012.]

1. PUNG TIONG GEE (I/C NO.:711004-10-5979) Between

2. PUNG TIONG CHENG (I/C NO.:730212-14-5573) Trading as a partnership under the name and style of Pung & Tee Aluminium Work (Registration No. 001013755-W) And FORTUNE FACADE TREATMENT SDN BHD (Company No.: 201901026489 (1335818-M) ...Defendant] CORAM: LIM CHONG FONG, JCA LIM HOCK LENG, JCA LATIFAH BINTI HAJI MOHD TAHAR, JHC GROUNDS OF JUDGMENT The Appeals

1. There are two related appeals against a decision of the High Court:

(ii) dismissing Originating Summons No: WA-24C-181- 11/2024 by Pung Tiong Gee and Pung Tiong Cheng trading as Pung & Tee Aluminium Works ("PT") to enforce the AD.

2. The appeals will be, respectively, referred to as Appeal1130 and Appeal 1131.

3. The parties will, in the main, be referred to by their abbreviated names. Background Facts

4. FFT, the Respondent before us, was the main contractor for the Cadangan Pembinaan Pusat Pentadbiran Sultan Ahmad Shah project in Kuantan, Pahang.

5. FFT appointed PT, the Appellants, as their sub-contractor for facade works for Blocks A, D and F in the project.

6. In 2023, the project owner/employer terminated FFT's contracts. PT, through another company they owned, were subsequently appointed to take over FFT's remaining works. The 1 $ ^{st} $ Legal Claim, Winding-Up Proceedings, and Settlement

7. In June 2023, PT issued a statutory notice of demand for RM143,779.02 comprising claims for certified amounts for Blocks A, D and F ("the 1 $ ^{st} $ Legal Claim"). There was no payment by FFT.

8. On 2 August 2023, PT filed a winding-up petition premised on the $ 1^{\mathrm{st}} $ Legal Claim.

9. In September 2023, the parties resolved their dispute through a settlement agreement by which FFT paid the $ ^{1 \mathrm{st}} $ Legal Claim in two instalments. The winding-up petition was thus discontinued on 27 September 2023. The 2 $ ^{nd} $ Legal Claim, and Adjudication

10. On 29 March 2024, PT served on FFT a Payment Claim under the Construction Industry Payment and Adjudication Act 2012 (CIPAA) for a combined total of RM243,527.10, comprising the sum of RM133,167-66 in Interim Claim No.18R and purported retention sums totalling RM110,359-44.

11. The monies were due before the winding-up petition was filed on 2 August 2023, but were not included in the statutory notice/winding-up petition, or the settlement agreement.

12. The dispute over the $ 2^{\mathrm{nd}} $ legal claim then proceeded to adjudication.

13. In August 2024, the Adjudicator found in favour of PT. He ordered FFT to pay the full amount claimed, viz, RM243,527.10. The High Court's Findings

14. Aggrieved by the outcome, FFT applied to set aside the Adjudication Decision ("AD") pursuant to section 15 of the Construction Industry Payment and Adjudication Act 2012 ("CIPAA") which provides: "An aggrieved party may apply to the High Court to set aside an adjudication decision on one or more of the following grounds:

15. FFT relied on limbs (b), (c), and (d).

16. On the other hand, PT applied to the High Court "for an order to enforce the adjudication decision as if it is a judgment or order of the High Court," pursuant to section 28 of CIPAA.

17. The High Court agreed with FFT's primary contention that natural justice had been denied because of the Adjudicator's direction that if FFT did not pay the advance security deposit ("ASD") by 22 July 2024, it "will be barred from submitting an Adjudication Response and the Claimant shall thereafter on or before 29.07.2024 pay the Respondent's deposit on behalf of the Respondent, further failing which, the time limit for me to furnish my adjudication decision will be extended in perpetuity and time to calculate my due date to submit the adjudication decision will only begin to run upon payment made in full to the AIAC and upon that notification of payment to me...(emphasis added)".

18. As noted by the High Court, "despite allegedly being barred on 24.7.2024, FFT submitted a bare and incomplete Adjudication Response dated 24.7.2024 as an attempt to formally meet its obligation under section 10 CIPAA 2012".

19. Then, on 24 July 2024, the Adjudicator issued his $ 2^{n d} $ direction for the parties to file their submissions to address his $ 1^{s t} $ direction, and he added that PT's Adjudication Reply which was due on 31 July 2024 was to be kept in abeyance until further directions.

20. By a letter dated 1 August 2024, PT indicated that it had no objection to FFT's submission of the Adjudication Response to avoid any breach of natural justice, biasness or prejudice.

21. By a letter dated 2 August 2024, FFT put on record that it had been barred from submitting an Adjudication Response, and by extension, from participating in the proceedings. It stated that as a result, it had only filed a bare Adjudication Response, and had not exercised its rights under CIPAA to make any applications.

22. The next day, after perusing the belated submissions on his $ 1^{\mathrm{st}} $ direction, the Adjudicator decided to admit the Adjudication Response but, by a $ 3^{\mathrm{rd}} $ direction, required the parties to "respond" to the belated submissions.

23. On 8 August 2024, FFT applied for the following orders and directions: "3... (a) that the Respondent be allowed to serve on the Claimant interrogatories in writing, pursuant to section 25(k) of CIPAA 2012, a copy of which is served herewith in Appendix A;

24. When asked by the Adjudicator to respond to FFT's application, PT stated by letter dated 14 August 2024 that they had "no objection to the Respondent's request for filing a supplementary Adjudication Response or refile Adjudication Response".

25. Nonetheless, the Adjudicator did not respond to FFT's application to file a supplementary Adjudication Response or refile the Adjudication Response. Instead, the Adjudicator dismissed FFT's application for interrogatories.

26. The High Court noted that after dismissing FFT's application for interrogatories on a Thursday, within 1 working day, whilst FFT was still waiting for a decision on the Adjudication Response, the Adjudicator issued the Adjudication Decision on 19.8.2024, Monday, allowing PT's claim.

27. PT argued that there is no breach of natural justice because the Adjudicator is the master of procedure. It relied on Rule 9(4) of the AIAC Adjudication Rules & Procedure ("the AIAC Rules") which reads: "If any parties fails to make payment within the time ordered by the adjudicator, the adjudicator shall within seven (7) days thereafter issue such direction as he thinks fit including inviting another party or parties to make such payment and notify the AIAC accordingly."

28. Nonetheless, the learned High Court Judge ("HCJ") was not persuaded. He was of the view that there is no provision in CIPAA or the AIAC Rules (which supplement CIPAA) allowing the Adjudication Response to be barred if the ASD or any other expense is not paid.

29. In meticulously going through CIPAA and the AIAC Rules, the learned HCJ highlighted, in particular:

(ii) Section 19(5) of CIPAA which reads: "Before releasing the adjudication decision to the parties, the adjudicator may require full payment of the fees and expenses to be deposited with the Asian International Arbitration Centre."

30. The Adjudicator was bound to carry on with the adjudication proceedings despite non-payment of the ASD, and could have withheld the AD until payment of the ASD.

31. The learned HCJ concluded that the Adjudicator's failure to address FFT's application to file a Supplementary Adjudication Response or refile the Adjudication Response could "give rise to the inference that the Adjudicator had overlooked or failed to give consideration to the said application as per Brookhollow Pty Ltd v. R & R Consultants Pty Ltd [2006] NSWSC 1 and BLB and anor v. BLC and others [2013] 4 SLR 1169."

32. The learned HCJ also concluded that the Adjudicator did not act fairly by imposing the $ 1^{\mathrm{st}} $ direction, and that the $ 3^{\mathrm{rd}} $ direction for belated submissions was improper, when he had already made up his mind to allow the bare Adjudication Response.

33. That brings us to the res judicata argument raised by FFT which found favour with the learned HCJ who held: [57] It would appear to me that Progress Claim no 18R dated 10.11.2022 which was allegedly due on 25.12.2022 which was a year before the 1st Legal Claim was filed was not included in or formed part of the 1st Legal Claim when PT could have done so but had for some reason or other failed to do so in the 1st Legal Claim. I have also observed that from the facts before me a settlement was reached in respect of the same through a Settlement Agreement reached between the parties and PT discontinued the 1st Legal Claim on 27.9.2023." [58] I hold prima facie that the above is res judicata in its broader sense which may disentitle the 2nd Legal Claim from being initiated. I rely on the Court of Appeal decision in Dato' Ahmad Johari Bin Tun Abdul Razak v. A Santamil Selvi A/P Alau Malay @ Anna Malay & Ors And Other Appeals [2020] 6 MLJ 133 where it was held "[50] On the factual matrix of this case, we are of the view, that the second present suit is in fact no more than a repetition, in thinly veiled new guise of the cause of action of the first or earlier suit and the second/present suit was filed with the intention to re-litigate and re-open the earlier suit which was struck out and dismissed by the first court. This is so since the parties, the facts of the case, the causes of action and the reliefs sought by the plaintiffs are identical, if not one and the same. Even if the 'continuing tort' as averred to in the second/present suit could be said to be a different cause of action, which we are of the view it is not; that cause of action was already present or in existence when the first suit was filed on 9 June 2014 and no reasons or explanations were proffered by the plaintiffs as to why it was not pleaded and brought or filed together with the first suit. In light of the principle expounded by Henderson v. [2020] 6 MLJ 133 at 159Henderson, that a party should bring forward once and for all every points which properly belonged to the subject of litigation and not to litigate by way of instalments, the second/present suit ought to be dismissed on the ground that it is res judicata in its extended or broader sense and an abuse of the process of court. The learned HCJ's finding to the contrary is thus unsustainable."

34. In the upshot, the High Court set aside the AD and dismissed PT's application to enforce it. Our Analysis and Findings

35. An Adjudication Decision may be set aside where there has been a denial of natural justice under section 15(b) of CIPAA. It is trite that each party must be given a reasonable opportunity to present its case, so that it can be truly heard. This principle of natural justice is enshrined in the legal maxim audi alteram partem.

36. We are mindful that PT had relied on Rule 9(4) of the AIAC Rules which reads: "If any parties fails to make payment within the time ordered by the adjudicator, the adjudicator shall within seven (7) days thereafter issue such direction as he thinks fit including inviting another party or parties to make such payment and notify the AIAC accordingly."

37. We would not think that Rule 9(4) should be given such a broad interpretation as to allow the Adjudicator to bar the filing of the Adjudication Response which is a statutory right.

38. Rule 9(4) should be read purposively together with the provision which follows, that is, Rule 9(5). Both these provisions specify the alternative solutions to non-payment, without impinging on a party's overriding right to be heard and for the proceedings to proceed expeditiously.

39. Notably, the Adjudicator had relied on sections 25(a), 25(j) and 26(2)(b) - instead of Rule 9(4) - when issuing his $ 1^{\mathrm{st}} $ Direction.

40. In any event, these CIPAA provisions, respectively, allow the procedure to be set, directions to be issued as may be necessary or expedient, and orders to be made as may be deemed fit in the event of non-compliance. They do not, in our view, negate FFT's statutory right to file its Adjudication Response on account of its non-payment of the security deposit.

41. The proper way forward was to invite the other party to pay the deposit, or to withhold the AD until payment is made.

42. In unilaterally barring the Adjudication Response, the Adjudicator acted in excess of his jurisdiction under section 15(d), and denied FFT its right to be heard which was a contravention of section 15(b).

43. After eventually deciding to admit FFT's Adjudication Response, the Adjudicator then directed the parties to make belated submissions. The direction suggests that the Adjudicator had actually already made up his mind, and was intended to provide support for his "admission" of the Adjudication Response, which would be another breach of natural justice.

44. Next, it will be recalled that the learned HCJ found FFT had filed a bare and incomplete Adjudication Response just to formally comply with the requirements of CIPAA.

45. PT's argument that FFT did not suffer any prejudice because its bare and incomplete Adjudication Response was admitted, is unmeritorious.

46. FFT had applied to file a supplementary or fresh Adjudication Response to present a complete defence, which could have made a difference to the outcome of the case.

47. Crucially, the Adjudicator failed to make a decision on the application, though PT had no objection.

48. The Adjudicator's failure to consider or give FFT its right to present its case properly was a clear denial of natural justice. In this regard, the Adjudicator did not act impartially too. See section 15(c), CIPAA.

49. In initially barring FFT's Adjudication Response, then backtracking, and finally disregarding or overlooking FFT's application to supplement its bare response, the Adjudicator effectively deprived FFT of a fair and reasonable opportunity to be heard, as result of which the outcome may have been different.

50. All that said, we do not agree with the High Court that the $ 2^{n d} $ Legal Claim was res judicata since the winding-up petition premised on certified sums - was discontinued with no decision on the merits of the $ 1^{s t} $ Legal Claim.

51. Moreover, the cause in the $ 2^{\mathrm{nd}} $ Legal Claim was about uncertified claims.

52. We are mindful that the doctrine of res judicata is not confined to causes of action or issues which the Court is actually asked to decide or has already decided. It covers also causes of action or issues or facts which, though not already decided as a result of the same not being brought forward due to negligence, inadvertence or deliberately, are so clearly part of the subject matter of the litigation and so clearly could have been raised, that it would be an abuse of the process of the Court to allow a new proceeding to be started in respect of them. See the decision of the Supreme Court in Asia Commercial Finance (M) Bhd v. Kawal Teliti Sdn Bhd [1995] 3 CLJ 783; [1995] 3 MLJ 189.

53. However, in the present case, the $ 1^{\mathrm{st}} $ Legal Claim concerned certified sums whereas the $ 2^{\mathrm{nd}} $ Legal Claim concerned uncertified sums which would not be suitable for disposal in winding-up proceedings. The nature of the uncertified sums is different, such that the uncertified sums cannot be classified as analogous or part of the certified sums in the winding-up proceedings.

54. As was held by Hayatul J (as Her Ladyship then was) in MRCB Engineering Sdn Bhd v MAC Construction Consultant Sdn Bhd & Anor [2022] CLJU 388; [2022] MLJU 432, the res judicata doctrine does not apply when, although the parties may be the same, the subject matter and relief sought in the previous and extant proceedings are different.

55. In addition, the settlement agreement here did not concern the uncertified sums, and there was no adjudication on merits. See the decision of the Court of Appeal in Ang Game Hong & Anor v Tee Kim Tiam & Ors [2018] 4 MLJ 432.

56. Although we are of the view that the res judicata doctrine does not apply here, we find ourselves in agreement with the High Court that the AD ought to be set aside under section 15(b), (c), and (d) of CIPAA. In that respect, we affirm the decision of the High Court.

57. Appeals 1130 and 1131 are accordingly dismissed. The Appellants are to pay total costs of RM30,000.00 (for the two appeals) to the Respondent subject to payment of the allocatur fee. Dated the 6th day of May 2026 (Lim Hock Leng) Judge Court of Appeal Malaysia Counsel for the Appellants

1. Lee Kai Jun

2. Sia Chee Shen [Messrs Wayne Siang, Kai & Co.] Counsel for the Respondents

1. Richard Kok Chi Wei

2. Chua Chee Ching [Messrs Richard Kok]