Global Built Sdn Bhd v Wong Yen Feng (T/A Lkl Ceiling Enterprise) (WA-24C-176-11/2024)

Content

1 DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR DALAM WILAYAH PERSEKUTUAN KUALA LUMPUR, MALAYSIA (BAHAGIAN SIVIL) SAMAN PEMULA NO. WA-24C-176-11/2024 Dalam Perkara Seksyen 15 (b) Akta Pembayaran dan Adjudikasi Industri Pembinaan 2012 Dan Dalam Perkara Aturan 92 Kaedah 4 Kaedah-kaedah Mahkamah 2012 Dan Dalam Perkara Adjudikasi antara Wong Yen Feng (T/A LKL Ceiling Enterprise) dan Global Built Sdn Bhd Dan Dalam Perkara Awad Adjudikasi yang diterbitkan pada 7.10.2024 oleh Cik Sunnie Yeoh Soat Shang S/N AzzicB84m0mlyBt7QtBX4g ANTARA GLOBAL BUILT SDN BHD (No. Syarikat: 887983-D) …PLAINTIF DAN WONG YEN FENG (T/A LKL CEILING ENTERPRISE) (No. Syarikat: SA0223433P) …DEFENDAN Di Dengar Bersama Dengan DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR DALAM WILAYAH PERSEKUTUAN KUALA LUMPUR, MALAYSIA (BAHAGIAN SIVIL) SAMAN PEMULA NO. WA-24C-210-12/2024 ANTARA S/N AzzicB84m0mlyBt7QtBX4g WONG YEN FENG (T/A LKL CEILING ENTERPRISE) (No. Syarikat: SA0223433P) …PLAINTIF DAN GLOBAL BUILT SDN BHD …DEFENDAN GROUNDS OF JUDGMENT (Enclosure 1) [1] Originating Summons No. WA-24C-210-12/2024 (OS 210) is Wong Yen Fen t/a LKL Ceiling Enterprise (“LKL”) application pursuant to section 28 of the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”) to enforce the Adjudication Decision dated 7.10.2024 (“AD”) whilst Originating Summons No. WA-24C-176-11/2024 (OS 176) is Global Built Sdn Bhd (“GBSB”) supplication to set aside the AD in accordance with section 15 (b) CIPAA. [2] In OS 176, GBSB had stated inter alia that its ground to set aside the AD was based on: S/N AzzicB84m0mlyBt7QtBX4g

Preamble

Pursuant to clause 4 of the LOA, the completion period for the Sub-Contract Works shall be completed in 14 weeks and shall be partially handover to GBSB by 15.12.2016. iv. Clause 5 of the LOA provides for a penalty of RM 50,000.00 imposed per day for any delay. v. Clause 6 of the LOA express provides that LKL shall upon request of Interior Designer / Project Manager furnish him with voucher of prove that the materials comply with specification. vi.

Preamble

Pursuant to Clause 9 of the LOA, the payment for works shall follow Genting Malaysia Berhad (“Genting”)’s payment terms and condition. All payment shall be subjected to a 10% retention sum of workdone to a maximum 5% of the Contract Sum or the adjusted final sum whichever is higher. S/N AzzicB84m0mlyBt7QtBX4g vii. Clause 12 of the LOA provides that when variation work ordered by Genting is carried out, LKL shall in writing, inform GBSB’s contract department before commencement of work. The variation costs and completion schedule of the variation work is to be attached. Subsequent payment shall follow Genting’s payment terms and conditions. in clause 13 of the LOA, it is stated that the variation order claim shall be followed back-to-back basis from the client. viii. Clause 14 of the LOA states that GBSB reserves the right to omit wholly or part of the work from the contract and the omission of work will reduce the contract sum. No claim will be entertained for such omission. ix. Clause 15 of the LOA provides that the Defects Liability Period (“DLP”) shall be 18 months from date of completion against inferior workmanship and manufacturing defect on materials and production. x.

Preamble

Pursuant to clause 25 of the LOA, the form of contract to be used was the Agreement and Conditions of PAM Contract 2006 (With Quantities). Hence, the LOA together with PAM Contract 2006 are collectively referred to as the Sub Contract (hereinafter referred to as “Sub-Contract”). S/N AzzicB84m0mlyBt7QtBX4g xi. Clause 26 of the LOA stipulates that all documents in support of the final account are to be submitted within 6 months after the Project completion and handover. If the sub-contractor does not meet the deadline, the main contractor shall deduct the final balance payable amount claim from the subcontractor. The penalty quantum is listed as follows: i. A 6 months delay: 20% from the balance payable amount ii. A 6 to 9 months delay: 40% from the balance payable amount iii. A 9 to 12 months delay: 80% from the balance payable amount iv. A 12 to 15 months delay: 100% from the balance payable amount. Further, clause 26 of the Contract provides that the final account shall follow Genting Malaysia Berhad’s procedure/format. Preliminary Issue [8] A preliminary point was raised by learned counsel for GBSB with S/N AzzicB84m0mlyBt7QtBX4g regards the recent discovery by them of the issue of whether LKL has capacity to enforce the AD as no such entity existed at the time of the Adjudication proceedings as LKL’s registration number had expired during the said CIPAA proceedings and learned counsel for GBSB had referred to enclosure 9 exhibit C2 in OS 176 which was to be compared with the registration number used in the Adjudication proceedings. [9] I have since examined the AD and found that the Claimant therein was named as Wong Yen Feng t/a LKL Ceiling Enterprise. This in my view makes it clear that Wong Yen Feng was suing in his personal capacity trading as LKL Ceiling Enterprise. [10] The law is clear in that a business entity which is a sole proprietorship does not have any legal personality or legal status. I hold from the facts that the filing of the Adjudication proceedings before me was done as mentioned by the sole proprietor of the business i.e Wong Fen Yeng t/a LKL Ceiling Enterprise and thus the facts of Global Built Sdn Bhd v LKL Ceiling Enterprise & Anor And Another Case [2022] MLJU 1535 which was quoted by counsel for GBSB can thus be differentiated before me as the party suing in that matter was only cited as LKL Ceiling Enterprise itself which His Lordship Lim Chong S/N AzzicB84m0mlyBt7QtBX4g Fong J had rightly decided had no legal capacity to sue unlike the matter before me where Wong Yen Feng, a natural person who was the sole proprietor of LKL Ceiling Enterprise who had initiated the Adjudication proceedings and the matters before me. [11] I therefore hold that GBSB’s contention on this point is totally untenable and misconceived and that there can be no issue of any excess of jurisdiction or breach of natural justice occurring as a result thereof. Alleged Failed To Take Into Account GBSB’s Submission On The Issue Of The Final Account [12] On the issue of GBSB’s contention that the Adjudicator had acted in breach of natural justice when he failed to take into account GBSB’s submission on the issue of the Final Account, my decision is as follows. [13] After reading the AD in enclosure 2 of OS 176 in toto, I find that the Adjudicator did, contrary to GBSB’s contention, make reference to and considered the issue of the Final Account as seen in inter alia his summation of GBSB’s case at para 39 b, d and e and thereafter S/N AzzicB84m0mlyBt7QtBX4g carefully considering the Adjudication Claim, Adjudication Response, and Adjudication Reply, the submission of parties on these issues including the difference in rates of the Additional Works under the VO’ and after perusing the relevant documents before coming to a decision on this issue that a. the payment terms could not be waived without a clear and unequivocal written consent of the parties b. clause 9 of the LOA did not represent a complete payment term and cannot prevail over clause 30.1 of the PAM Contract but was to be read jointly c. it was unreasonable for the Claimant to assert via a mere statement that the Claimant had failed to give cost breakdown and hence the Claimant had lost his chance to appeal the VO rates before the conclusion of the Final Account as the facts indicated that the revised cost breakdown was emailed to the Respondent on 11.4.2017 and no evidence to show that the Respondent disagreed with the rates at that point in time thus estopping the Respondent from objecting the VO rates S/N AzzicB84m0mlyBt7QtBX4g d. the adjustments made in the detailed breakdown as per the Final Account were not acceptable as they were unsubstantiated; and e. the Final Account were not yet finalized at the time of its submission on 6.4.2018. [14] I am thus satisfied that the Adjudicator did go through the issue of the Final Account in some great detail and that in the circumstances there is no reason for this Court to review the merits of his decision which under section 15(b) CIPAA the Adjudicators’ decision is neither reviewable or appealable. Issue Of Adjudicator Allegedly Misinterpreting The Payment Provisions Under Section 35 CIPAA [15] On the issue of the Adjudicator having allegedly misinterpreted the payment provisions under section 35 CIPAA wherein it was contended that the Adjudicator had classified the back to back payment mechanism as a prohibited ‘pay when paid’ clause, I find as follows. S/N AzzicB84m0mlyBt7QtBX4g [16] The said clause can be found at clause 9 of the Letter of Award and states: “Payment for works shall follow GMB’s payment terms and conditions…” [17] After perusing the said clause concerned, I rely on Jack-In Pile (M) Sdn Bhd V Bauer (Malaysia) Sdn Bhd [2019] MLJU 1212 where the Federal Court held: “ [33] It is a common feature in any construction contract to have a ‘pay-when-paid’ clause which makes the obligation of the main contractor to pay a subcontractor conditional upon the main contractor having received payment from the principal. What needs to be emphasised for the purpose of our deliberation on the issue of the change of forum is that, the prohibition of this conditional payment under section 35 is not a mere procedural matter. It is certainly a substantive right acquired pursuant to the construction contract. It manifestly affects parties’ freedom to contract. Under the statutory adjudication regime a clause on conditional payments in the construction contract will not be applicable…” S/N AzzicB84m0mlyBt7QtBX4g [18] It is thus settled law that a back to back payment clause is a conditional clause which is prohibited under section 35 CIPAA. [19] In any event, the Adjudicator had held in the AD that the Works and the VO works had been completed and that LKL was entitled to payment for such work and had also considered section 35 CIPAA on the back to back payment clause and held that the reliance of the back to back payment clause was prohibited under CIPAA after duly considering the parties positions and submissions on the same. [20] Again, I find that this is a challenge to the findings and merits of the Adjudicator’s decision which is akin to an appeal against the same.

Preamble

Pursuant to section 15 (b) CIPAA, I reiterate that the Adjudicators’ decision is neither not reviewable or appealable. Decision On OS 176 [21] I do hold at the end of the day that GBSB is making an attempt to revisit the issues as they are unhappy with the Adjudicator’s decision. S/N AzzicB84m0mlyBt7QtBX4g I therefore find no substance in GBSB’s grounds to support OS 176 and hereby dismiss the same with costs. On OS 210 [22] On OS 210, I hold that as there no further impediments on the AD, I hereby grant Order In Terms of prayers (a), (b), (c) and (d) of enclosure 1 in OS 210. Dated: 23rd day of May 2025 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE CONSTRUCTION COURT 1 COUNSEL FOR THE PLAINTIFF (OS176) & DEFENDANT (OS210): Sachpreetraj Singh Sohan and Izyan Azimi (Messrs Raj & Sach (Petaling Jaya)] COUNSEL FOR THE DEFENDANT (OS176) & PLAINTIFF (OS210): Reno Nga and Vidhya Pannirselvam (Messrs Nga Chambers] S/N AzzicB84m0mlyBt7QtBX4g