Engenious Solutions Sdn Bhd v Wah Loon (M) Sdn Bhd (WA-24C-205-12/2023)

2.1 the subject matter is pending final determination in WA-22C- 79-11/2023 i.e the Writ action;

2.2 ESSB is unable to repay the AD Sum once payment is made;

2.3 It is in the interest of justice to have the AD stayed. [3] Originating Summons No. WA-24C-205-12/2023 (OS 205) on the other hand is ESSB’s application to enforce the AD under section 28 of CIPAA. [4] As usual, both matters were heard together as the matters involve the same subject matter and the same parties. Brief Background Facts [5] Vide a Letter of Award dated 26.1.2021 (“LOA”) and a Subcontracting Purchase Order dated 23.07.2021 (collectively referred to as “Contract”), WLSB appointed ESSB as its sub-contractor to carry out “Infrastructure and Internal Electrical, Telephone and ELV System Sub-Contract Work” for the sum of RM5,250,000.00 (“Works”). [6] Subsequently, disputes arose between the parties. [7] On 24.05.2023, ESSB commenced an adjudication under CIPAA 2012 (“Adjudication”) against WLSB for:

work done of RM1,515,677.50 (“Work Done”); and

variations totalling RM733,325.00 (“Variations”). [8] WLSB resisted ESSB’s claims on the following grounds:

As regards the Work Done, there is nothing due and/or payable to ESSB under the contract after taking into account WLSB’s deduction and/or set-off of back-charges and liquidated and ascertained damages (“LAD”);

As regards the Variations, ESSB has failed to comply with the requirements under the Contract, and has failed to prove both the liability and quantum of its claim. In any event, WLSB is entitled to deduct and/or set-off back-charges and LAD against ESSB. [9] On 17.10.2023, the Adjudicator delivered the Adjudication Decision. In summary, the Adjudicator had:

allowed ESSB’s claim for Alleged Work Done;

dismissed ESSB’s claim for Alleged Variation; and

dismissed WLSB’s set-off of back-charges and LAD. [10] On 14.11.2023, WLSB filed A High Court Suit to challenge part of the AD, as well as to claim, amongst others, back-charges totalling RM1,586,130.17 (“Back-Charges”) and LAD totalling RM525,000.00 against ESSB and ESSB has filed a counterclaim against wlsb. [11] On the same day i.e. on 14.11.2023, WLSB applied to stay the enforcement and/or execution of the AD vide Originating Summons No.: WA24C-184-11/2023 filed in this Honourable Court (“Stay Application”). [12] On 8.12.2023, ESSB filed the Enforcement Application herein. Findings [13] It is trite that for OS 184 to be successful, WLSB must show ‘clear and unequivocal errors’ in the AD. In general, the Courts are slow to interfere to stay an AD. Progress Report No. 22 [14] I have perused the AD and the issues raised by WLSB in particular that the Adjudicator had failed to consider the documentation or evidence placed before him with regards Progress Report No. 22, the Certificate of Taking Over dated 9.12.2022, the set off by WLSB re the Back Charges, and the LAD claim. [15] I have noted that the Adjudicator had in the AD looked at Progress Report No. 22 and after considering in some detail the respective parties submissions on this issue and the contemporaneous documents in respect thereto, found and held that he was at the end of the day persuaded that Progress Report No. 22 was evidence that ESSSB had completed its sub contract works to the full value of the contract sum. Certificate of Taking Over [16] As to the Certificate of Taking Over dated 9.12.2022 it was submitted by WLSB that this does not prove that ESSB had fully completed its works but in the AD the Adjudicator was of the opinion that the issuance of Certificate of Taking Over ‘sufficiently affirms the completion of the Sub Contract Works’ by ESSB. [17] I do not find such a decision as to be a clear error as this is a finding of fact made by the Adjudicator for which the Adjudicator’s findings, be it right or wrong, cannot be challenged unless the Adjudicator had not asked himself the right question i.e in this matter this issue of ESSB’s completion of works was rightfully considered and answered by the Adjudicator. Set off and Back Charges [18] I now turn to the Set off and back charges issue. With respect, I again find that the Adjudicator had considered this issue and had held that based on the reasons that the Adjudicator had found, after carefully analyzing the documents and the submissions before him, that WLSB had failed on a balance of probabilities to prove the alleged breaches of contract they had contended and in particular there was no evidence that WLSB had notified ESSB of the alleged breach before proceeding to incur costs to remedy the alleged breaches for it to subsequently back charge the same to ESSB. [19] I therefore find that this is once again a challenge to the merits of the Adjudicators decision on this issue and that there is nothing special here which would support a stay of the AD based on the principles of View Esteem Sdn Bhd v Bina Puri Holdings Bhd [2018] 2 MLJ 22 as expounded by the Federal Court. [20] Thus, after reading the AD in toto, I do find that the Adjudicator had addressed each of the issues raised by WLSB and that he has asked himself the right questions pertaining to each of the issues. At the risk of repetition, the fact that his answer may be factually or legally incorrect is in my view merely an issue as to the merits of the Adjudicator’s decision and does not constitute in my eyes a clear and unequivocal error. [21] I also hold that the raising of a counter claim in the Writ is not evidence that the AD is erroneous as this is still subject to the Court hearing the Writ action to determine the same. Allegation That ESSB Is Unable To Repay The AD Sum [22] On the point of ESSB being unable to repay the AD Sum once payment is made, I have perused the Statutory Financial Statements in exhibit A-3 of enclosure 6 for the year ending 30.6.2022 and find that the revenue of ESSB for the financial year ending 2022 is RM32,868,937.00 and its gross profits stands for the same period at RM3,992,201.00, and with current assets standing at RM27,598.514 as opposed to its liabilities at RM19,781,070.00. [23] I am therefore based on the above, convinced that ESSB is a going concern. The statements, qualifications and caveats by ESSB’s auditors is in my view rather common and does not detract from the fact that I do find ESSB as a going concern. As to the number of charges which has been unsatisfied, there is no evidence before this Court that there are any issues or difficulties with regards the same or that any of the banks are taking legal proceedings on the same. I therefore find any contention on this point as being untenable.

For OS 184 [24] In the circumstances, I do not find any grounds to stay the AD and that OS 184 is to be dismissed with costs. For OS 205 [25] As there are no impediments with regards the AD and the same is still due and owing, prayers (a) and (b) in enclosure 1 of OS 205 is therefore allowed with costs. Dated: 15th day of March 2024 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE CONSTRUCTION COURT 1 COUNSEL FOR THE PLAINTIFF (OS 184)/DEFENDANT(OS 205): Victoria Loi & Ong Kun Sen (Messrs Shook Lin & Bok] COUNSEL FOR THE DEFENDANT(OS 184)/ PLAINTIFF(OS 205): TJ Lee (Messrs TJ Lee (Petaling Jaya)]