Green Field Engineering Sdn Bhd v Nobility Acclaim Sdn Bhd (BA-24C-67-09/2023)

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1 IN THE HIGH COURT OF MALAYA AT SHAH ALAM, SELANGOR DARUL EHSAN ORIGINATING SUMMONS NO: BA-24C-67-09/2023 BETWEEN NOBILITY ACCLAIM SDN BHD PLAINTIFF (Company No : 201101009523 (937662-X) AND GREEN FIELD ENGINEERING SDN BHD DEFENDANT (Company No : 199901013212 (488112-T) JUDGMENT A. INTRODUCTION [1] On 29.11.2022, Green Field Engineering Sdn Bhd (Green Field) had commenced an Adjudication Proceeding pursuant to the Construction Industry Payment and Adjudication Act 2012 (CIPAA 2012) against the Nobility Acclaim Sdn Bhd (Nobility) to claim a sum of RM316,951.58 as the unpaid sum. The Adjudicator, Ir. Kow Fuan Wai decided in favour of the Green Field in his Adjudication Decision dated 7.8.2023 (AD). [2] As a result of the AD, this Originating Summons (OS) was filed by Nobility for a Stay of Execution of the AD pursuant to Section 16(1)(b) CIPAA 2012. B. BRIEF BACKGROUND [3] On 28.1.2019, Nobility entered into a construction contract with Green Field by way of a Work Order, whereby Green Field was appointed as a sub-contractor for Supply, Deliver and Install Reinforced Earth Retaining Wall System (Works) for the project known as Retaining Wall at Cadangan Membina 54 Unit Rumah Bandar 3 Tingkat (Pembangunan (the Project), for the original contract sum of RM 487,338.44 (Contract). [4] In accordance with the terms of the contract, Green Field has constructed the GRE Wall where Certificate of Practical Completion (CPC) was issued subsequently. Upon the expiry of the defect liability period, Green Field issued its Final Claim for the amount of RM217,090.12 in accordance with the terms of the contract. [5] Green Field commenced Adjudication Proceedings against Nobility due to non-payment of the Final Claim and the Payment Claim made to Nobility on 8.11.2022. [6] The particulars of the sums claimed by Green Field are as follows:- No. Description Amount (RM)

Preamble

Pursuant to the AD, Nobility filed this OS for a Stay of Execution of the AD on the following grounds: i. There is a civil suit filed at the Shah Alam High Court (Suit No. BA-22NCvC-301-07/2023) (Suit 301) by Nobility against Green Field for breaches of the Work Order in the design and construction of a defective GRE Wall; and ii. There are special circumstances in making this application as Green Field is in dire financial condition and as such will not be able to pay back the Adjudication Amount in the event Nobility succeed in its claim in Suit 301. C. FINDINGS OF THE COURT [9] The Federal Court case of View Esteem Sdn Bhd v. Bina Puri Holdings Bhd [2019] 5 CLJ 479 His Lordship Zulkefli Ahmad Makinuddin PCA had in delivering the judgement stated the following: s. 16 of CIPAA would allow some degree of flexibility to the courts to stay the award where there are clear errors, or to meet the justice of the individual case. It is accepted that a stay of the award ought not be given readily and [10] In seeing the need to prevent abuse of s16 CIPAA, I fall back on what was said by Lee Swee Seng J (as his Lordship then was) in the case of Pasukhas Sdn Bhd v. Empire Multiple Sdn Bhd and Another Case [2019] 1 LNS 757; [2019] MLJU 1393. His Lordship in his judgment had succinctly reasoned that in spite of s.16(1)(b) of CIPAA 2012, allowing a stay merely on the fact that the arbitration had commenced with the service of a notice to arbitrate would render the entire purpose of the CIPAA futile and statutory adjudication wholly ineffective to ensure cashflow in the construction industry. It was further explained in the following terms: granted the moment there is a pending arbitration or litigation, then a losing party in an Adjudication would be tempted just to commence these proceedings with the sure and certain expectation that a stay would invariably be granted by the Court of the Adjudication Decision. That would scuttle and stultify the application of the CIPAA designed to facilitate cash flow in the construction industry such that a party that is already out of pocket for the [11] In evaluating this case based on the foregoing principles, the Court of Appeal case of ASM DEVELOPMENT (KL) SDN BHD v. ECONPILE (M) SDN BHD & OTHER, reminded that: [72] It must be stated however, that courts are not at liberty to review an adjudication decision in a stay application as if it were an appeal against the adjudication decision (see the High Court decision in ENRA Engineering And Fabrication Sdn Bhd v. Gemula Sdn Bhd & Another Case [2019] 10 CLJ 333; [12] Therefore, just on the basis that there is a litigation filed as a final determination of the dispute between the parties, I am unable to allow stay application. [13] In the case of Syarikat Berpakat v. Lim Kai Kok [1983] 1 MLJ 406, at 407 where His Lordship, Justice Hashim Yeop Sani (as he then was) had stated as follows: mined a number of times in the Courts of this country. It is trite law that the Court has an absolute and unfettered discretion to grant or refuse an application for stay. As a rule the Court will however only grant stay if there are special circumstances and which circumstances must be deposed in the affidavit supporting the application. The governing principle in all cases where the Court is asked to exercise its discretion is clearly expressed by Brown J in SERANGOON GARDEN ESTATE LTD. v. ANG KENG [1953] 1 LNS 98 and the principle is this: the Court will not deprive a successful party of the fruits of his litigation until an appeal is determined, unless the unsuccessful party can (Emphasis added) [14] that there are special circumstances which warrants for a Stay of Execution of the AD is on the following reasons: a. Green Field is in a dire financial condition; b. Green Field would not be able to be in the position to pay back any payment should Nobility Acclaim were to succeed in Suit 301; and c. There is uncertainty in Green Field continuing as a going concern due to the written confirmation by the shareholders which are not legally binding. [15] All the above three (3) reasons are related to the financial standing of Green Field. Although nobility had claimed that Green Field s financial standing is poor, Nobility failed to show to this court that Green Field is insolvent or impecunious. [16] standing had shown to this court that it is a going concern and that it currently has secured two