Chan Sock Mun and Lim Shuk Kim [Messrs Tan Chuan Yong & S.M. Chan] v Leong Chee Weng [Messrs Tuang, Chu & Co.] (SAMAN PEMULA NO. WA-24C-155-08/2022)

In the Originating Summons No. WA-24C-148-07/2022 dated 26.7.2020 (OS 148) in enclosure 1, China 1st Metallurgical Construction (M) Sdn Bhd (“CMC”) the Plaintiff therein had sought for inter alia various declarations against Galaxy Plumbing Construction (“GPC”), the Defendant relating to an Adjudication Decision dated 6.7.2022 (Decision) whereas in Originating Summons No. WA-24C- 155-08/2022 dated 10.8.2022 (OS 155), GPC had sought to enforce the Decision pursuant to section 28 of the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”).

The background chronology pertaining to the matters are in summary as follows:-

2.1 Following or pursuant to an Adjudication Notice dated 28.12.2021 as well as the Defendant's request to the Director of AIAC to appoint an adjudicator, the Director of AIAC has on 20.01.2022 appointed Mr. Chan Szu Fu (hereinafter referred to as the "First Adjudicator") as the adjudicator and the said First Adjudicator had on 26.01.2022 received appointment as Adjudicator. On 18.02.2022 the Defendant submitted to the Plaintiff an Adjudication Claim dated 18.02.2022 pursuant to Section 7 of CIPPA 2012. On 04.03.2022 without prejudice to the Plaintiff's right to raise any objection, the Plaintiff submitted an Adjudication Response dated 04.03.2022 against the Defendant. Upon the objection raised by the Plaintiff against the appointment of the First Adjudicator, the Defendant on

07.03.2022 informed the First Adjudicator that the Defendant will request the AIAC Director to appoint a new adjudicator.

2.2 However, the Defendant did not withdraw the adjudication and did not issue a new Adjudication Notice as required under the provisions of CIPAA 2012.

2.3 Although the Defendant did not withdraw the ongoing adjudication proceedings and did not issue a new Adjudication Notice, the Defendant continued on 17.03.2022 to ask the AIAC Director to appoint a new adjudicator. According to the Defendant's request, the director of AIAC had appointed Ir. Lai Sze Ching ("Second Adjudicator") but due to the Plaintiff's objection based on 'conflict of interest' and the Defendant's request, the Second Adjudicator had on 25.03.2022 rejected the appointment as an adjudicator. After that, on 28.03.2022 the Defendant again asked the Director of AIAC to appoint a new adjudicator and the Director of AIAC had on 01.04.2022 appointed Miss Yoong Li Chin as the new adjudicator.

Both OS matters were heard together as they were inter related and the main opposition by CMC to OS 155 and in support of their OS 148 was that:-

GPC does not have the locus standi to commence the Adjudication as it is a sole proprietor and not a company or partnership. This point was allegedly also raised in CMC’s

(ii) there is no construction contract in writing thus the Adjudication cannot come under CIPAA; and

(iii) the appointment of the Adjudicator who delivered the Decision was null and void as GPS had prior to the appointment of the Adjudicator commenced a 1st Adjudication Proceedings, in which an adjudicator had been appointed which had reached the Adjudication Response stage and for which GPS had not issued a written withdrawal for the said 1st Adjudication Proceedings nor had GPS issued a fresh notice of adjudication for the appointment of the current Adjudicator Submissions & Court’s Findings

This Court was referred to Global Built Sdn Bhd v LKL Ceiling Enterprise & Anor and another case [2022] MLJU 1535 in relation to the issue that GPC does not have the locus standi to commence the Adjudication as it is a sole proprietor and not a company or partnership and where the Court in that said case held: “[20] In respect of locus standi, GB contended that the adjudication proceedings were commenced not by Wong Yen Feng but by LKL Ceiling Enterprise that is not a legal personality or entity with capacity notwithstanding that LKL Ceiling Enterprise might have been named in the Sub-Contract. As the result, the adjudicator did not have the jurisdiction to decide the dispute and the Decision must accordingly be set aside. [20] I have held as follows in KLIA Associates Sdn Bhd v Mudajaya Corporation Bhd [2020] 1 LNS 1253 with emphasis added: “[28] KLIAA-KLIACS Consortium is merely a name used for convenience by KLIA Associates Sdn Bhd and KLIA Consultancy Services Sdn Bhd operating together in consortium. [29] It is trite law as seen from the cases of Haji Abdul Rahman v Government of Malaysia & Anor [1966] 1 LNS 215; [1966] 2 MLJ 174, Bencon Development Sdn Bhd v Majlis Perbandaran Pulau Pinang & Ors [1999] 8 CLJ 37; [1999] 2 MLJ 385, Vestime Corporation Sdn Bhd v YBLE Resources Sdn Bhd & Ors [2006] 2 CLJ 196; [2006] 3 MLJ 554, Selvaraju a/l Ponniah v Suruhanjaya Perkhidmatan Awam Malaysia & Anor [2007] 7 MLJ 1 and Tiffany Chau v Jabatan Imigresen Malaysia & Anor [2020] 2 CLJ 715; [2020] 8 MLJ 503 that an action could not be taken against a body that has no legal status. This is in my view applicable to all legal proceedings including arbitration proceedings as well as statutory adjudication under the CIPAA. [30] It therefore follows that the correct and proper parties must be brought in and named in all legal proceedings. Only cases commenced in court proceedings involving a partnership may use the name of the partnership as an alternative to the names of the partners; see Order 77 Rule 1 of the Rules of Court 2012. [32] I am mindful that LKLCE mentioned that this capacity or locus standi issue has not been previous raised before the adjudicator. This is however immaterial following Sun Plaza Development Sdn Bhd v Heijingkang Sdn Bhd [2020] 1 LNS 1255 where I have held as follows: “[29] First and foremost on jurisdiction, it has been held by the Court of Appeal in Martego Sdn Bhd v Arkitek Meor & Chew Sdn Bhd & Another Appeal [2018] 2 CLJ 163 that jurisdictional challenges have always been allowed by the courts at any stage. I have held in Giatreka Sdn Bhd v SGW Engineering Construction Sdn Bhd [2019] 1 LNS 1876; [2020] 1 AMR 193 that an adjudicator’s finding on jurisdiction is neither binding nor conclusive and the High Court may re-visit the same afresh and unfettered in a challenge made under s. 15 (d) of the CIPAA.” In addition, I am aware that this legal requirement may seem unfair to parties who are self-represented or represented by non-legally qualified representatives in statutory adjudication proceedings as permitted by the CIPAA but I wish to reiterate my following views in Giatreka Sdn Bhd v SGW Engineering Construction Sdn Bhd [2020] 1 AMR 193: “[36] In my opinion, albeit the CIPAA is permissive on the right of party representation whether by advocates and solicitors, claims consultants or even the disputant party itself, the prescribed requirements of the statute, particularly those pursuant to ss. 5(2), 6(2), 9(1), 10(1) and 11(1) of the CIPAA, must however be strictly met. There should be no relaxation based on the quality of the representation. I have also noticed that the Asian International Arbitration Centre, being the Adjudication Authority under the CIPAA has, towards this end, published A Practical Guide to Statutory Adjudication in Malaysia which contains specimen forms especially to assist lay self-represented disputants in the conduct of CIPAA adjudication proceedings. If the lay disputant is not competent to handle these prescribed requirements, then it is best to seek professional representation… [33] Consequently, I hereby find and hold that the adjudicator had unwittingly acted in excess of jurisdiction and the Decision must be hence set aside pursuant to s. 15(d) of the CIPAA.”

In reply to the said issue, GPC states that the above issue was only raised 7 months and 19 days after the Payment Claim dated 7.12.2021 was issued and they contend that CMC should be estopped from raising this and in support thereto argued amongst others that CIPAA was not an appeal mechanism and the Court was not to review the merits of the case as the purpose of CIPAA was to ensure the claimant’s statutory rights to adjudicate under CIPAA was not frustrated. I was then referred to Integral Acres Sdn Bhd v BCEG International (M) Sdn Bhd and other cases [2021] MLJU 1889 as support for the same.

It was further submitted by GPC that there is nothing in CIPAA which states that a sole proprietorship is not competent to commence an adjudication proceedings, and that the contract was entered into between CMC and GPC and that GPC is an ‘unpaid party’ as defined under CIPAA. GPC further submits that CMC had themselves admitted that GPC is an unpaid party in its OS 148 and relies on Ou Yang Chow Min (trading as Ou Yang Architect) v Green Venture Capital Sdn Bhd and another case [2022] MLJU 480, the Singapore case of Sito Construction Pte Ltd (trading as Afone International) v PBT Engineering Pte Ltd [2019] SGHC 7 and the English case of Durham County Council v Kendall (t/a HLB Architects) [2011] EWHC 780.

I have since read Global Built Sdn Bhd (supra), and compared the same to Ou Yang Chow Min (trading as Ou Yang Architect), Sito Construction Pte Ltd (trading as Afone International) and Durham County Council (all supra) and hold that this Court agrees with the ratio in Global Built Sdn Bhd (supra) as GPC is, with respect, not a legal personality or entity with capacity and for this I quote Tan Thoo Yow v Chia Kim San & anor [1997] MLJU 142 where Abdul Malik Ishak J (as His Lordship then was) held: “ It is clear as crystal that a partnership may sue or be sued in the name of the firm. But the same is not true in regard to a sole proprietorship. In Keow Seng & Company v. Trustees of Leong San Tong Khoo Kongsi (Penang) Registered (1983) 2 MLJ 103 F.C., the then Federal Court had to deal with the issue of whether a notice to quit addressed to a firm and not the individual partners who make up the firm was good in law. This was what Raja Azlan Shah L.P. (as His Majesty then was) had to say: "A plaintiff who sues such partners in their firm name sues them individually just as much as if he had set out all their names." Further down the same page, his Lordship (now His Majesty) said: "A fortiori when a plaintiff serves a notice to quit on the individual partners in their firm name, he serves them individually just as much as if he had set out all their names." In my judgment, if the defendant who is a sole proprietor of a firm can be sued in his own name by adding below his own name within brackets the name of the firm of that sole proprietor as envisaged in United Engineers (Malaysia) Bhd v. Yeong Sinn Hoong (supra), there is no reason why the reverse cannot be done. Thus, if the sole proprietor of a firm is suing he must sue in his own name and add below his own name within brackets the name of the firm of that sole proprietor so as to inform the defendant that he is suing as a sole proprietor. “

Thus, it is settled law, as can be seen apart from the above case of Tan Thoo Yow and the plethora of cases which have inter alia been referred to in Global Built Sdn Bhd (supra), that the sole proprietor of GPC must sue in his own name i.e in his own name and thereafter in brackets the name of his firm of which he is a sole proprietor as he is the correct and proper party to initiate all legal proceedings including arbitration proceedings as well as statutory adjudications under the CIPAA. There should be no exceptions on this point with regards matters under CIPAA.

I hold that the case of Ou Yang Chow Min (trading as Ou Yang Architect) can be differentiated from the case before me and indeed from Global Built Sdn Bhd (supra) when the learned Judge, Wong Khian Keong J had in the former case had itself had, and which is self explanatory, that: “[18] The title in the Enforcement OS has expressly stated Ou’s full name. Such a fact distinguishes all the cases cited by Mr. Goh in support of the 1st PO (in those cases, the suits merely stated the names of the business in question without citing the names of their sole proprietors). [19] I am of the view that the insertion of the words “trading as Ou Yang Architect” (after Ou’s full name) in the title of the Enforcement OS is irrelevant.’

Thus, in the case before me, unlike in Ou Yang Chow Min (trading as Ou Yang Architect) there was no express mention of the name of the individual who owns GPC in the Adjudication pleadings nor in the said OS 148 and 0S 155 before me and thus distinguishes the matter herein from the said aforementioned case.

As for Sito Construction Pte Ltd (trading as Afone International) and Durham County Council (all supra), with the former being a Singapore case and the latter an English case, I hold that they are not binding to the case before me as the decisions therein were not only foreign decisions but that they were based on a different regime altogether from the CIPAA matter to be decided herein.

A jurisdictional challenge can be raised at anytime, see Martego Sdn Bhd v Arkitek Meor & Chew Sdn Bhd & Another Appeal [2018] 2 CLJ 163, GPC’s arguments that the above issue was only raised 7 months and 19 days after the Payment Claim dated 7.12.2021 was issued and they contend that CMC should be estopped from raising this are thus untenable.

In respect of GPC’s submission that there is nothing in CIPAA which states that a sole proprietorship is not competent to commence an adjudication proceedings, and that the contract was entered into between CMC and GPC and that GPC is an ‘unpaid party’ as defined under CIPAA; I hold that CIPAA and the parties who are relying on the said act to initiate or defend any adjudication proceedings thereunder are still subject to the law on legal personality i.e only a legal personality or entity with capacity to sue or be sued. I echo the words of Lim Chong Fong J in Global Built Sdn Bhd (supra), “..this legal requirement may seem unfair to parties who are self-represented or represented by non-legally qualified representatives in statutory adjudication proceedings as permitted by the CIPAA”, but I must add that all parties be it in CIPAA or Arbitration proceedings are still bound by this law and that I am unable to hold that a party with no recognised legal capacity can take advantage of CIPAA and the provisions thereto and that it is merely a technical and/or legal argument.

I have decided this matter purely on the above issue of lack of locus standi and the Adjudicator’s jurisdiction as a result thereto. Thus, in light of my decision on the same, I have not found it necessary to consider the other points or submissions raised by GPS.

Accordingly based on all of the above matters, I hold that the Adjudicator did not have the jurisdiction to decide the adjudication dispute and deliver the Decision.

In the circumstances, this Court hereby grants Order In Terms for prayer (a) in OS 148 with no order as to costs and dismisses OS 155 with no order as to costs. Dated: 16th day of January 2023 sgd. NADZARIN WOK NORDIN JUDGE CONSTRUCTION COURT 1 KUALA LUMPUR COUNSEL FOR THE PLAINTIFF: Chan Sock Mun and Lim Shuk Kim [Messrs Tan Chuan Yong & S.M. Chan] COUNSEL FOR THE DEFENDANT: Leong Chee Weng [Messrs Tuang, Chu & Co.]