Hongler Enterprise Sdn Bhd v Chai Hon Sang (Berniaga Sebagai Hock Seng Trading & Construction) (WA-24C-130-08/2023)

3.5.2021

21.10.2022 Due to Hock Seng’s failure to pay Hongler for its work done under the Project, Hongler served a Payment Claim dated 21.10.2022 to Hock Seng pursuant to section 5 of the CIPAA.

7.11.2022 Hock Seng served its Payment Response dated 7.11.2022 to Hongler.

10.11.2022 Hongler then commenced the Adjudication proceeding against Hock Seng through a Notice of Adjudication dated 10.11.2022.

29.3.2023 The Adjudicator accepted its appointment by Asian International Arbitration Centre.

27.4.2023 Hongler served its Adjudication Claim dated 27.4.2023 (‘Adjudication Claim’) to Hock Seng.

15.5.2023 Hock Seng then served its Adjudication Response dated 15.5.2023 (‘Adjudication Response’) to Hongler.

22.5.2023 Hongler served its Adjudication Reply dated 22.5.2023 (‘Adjudication Reply’) to Hock Seng.

22.5.2023 The Adjudicator delivered the AD in favor of Hongler, which ordered Hock Seng to pay Hongler in the following manners: a) The sum of RM187,373.39 which comprises of: No. Description Amount (RM) i. Adjudicated sum 159,888.94 ii. Interest of 5% per annum on the Adjudicated sum, RM159,888.94 calculated from date of Payment Claim dated 21.10.2022 until the date of the Adjudication Decision, i.e., 26.7.2023 6,110.82 iii. Costs of the adjudication proceeding 21,373.39 Total Sum 187,373.39 b) The interest of 5% per annum will be imposed on the Adjudicated Sum from the date of the AD, i.e., 26.7.2023 until the date of full and final settlement of the Adjudicated Sum. (‘Adjudication Sum’)

28.7.2023 Due to Hock Seng’s failure to comply with the AD, Hongler through its solicitors had served a letter of demand dated 28.7.2023 (‘LOD’) to Hock Seng.

22.8.2023 Notwithstanding the LOD being served to Hock Seng, Hock Seng failed to pay the Adjudication Sum to Hongler, and thereafter Hongler filed OS 130 to enforce the Adjudication Decision. Analysis & Findings [3] It is not disputed that the business known as Hock Seng, which is the Respondent in the Adjudication proceedings, is a sole proprietorship owned by one Chai Hock Seng. [4] The sole proprietor of the business i.e Chai Hock Seng was not named in the AD or the Adjudication proceedings. [5] Under section 28 of CIPAA it provides that: “(1) A party may enforce an adjudication decision by applying to the High Court for an order to enforce the adjudication decision as if it is a judgment or order of the High Court.

The High Court may make an order in respect of the adjudication decision either wholly or partly and may make an order in respect of interest on the adjudicated amount payable.

The order made under subsection (2) may be executed in accordance with the rules on execution of the orders or judgment of the High Court.” [6] For the record, on 20.9.2023 vide Originating Summons No. WA- 24C-144-09/2023 (OS 144), Hock Seng Trading & Construction had applied to set aside the AD pursuant to section 15 CIPAA but the same was dismissed by this Court on 10.5.2024 on the grounds that as the business known as Hock Seng Trading & Construction was a sole proprietorship, the business known as Hock Seng Trading & Construction does not have the necessary locus to bring the action in OS 144. [7] It is trite that the law is that the correct and proper parties should be named in the Adjudication Proceedings. Thus, in the matter before me Chai Hock Seng in his individual capacity should have been named in the Adjudication proceedings as the Respondent therein as he is the sole proprietor of the business known as Hock Seng Trading & Construction. [8] On the authorities that this Court has previously decided in particular China 1st Metallurgical Construction (M) Sdn Bhd v Galaxy Plumbing & Construction (Didakwa Sebagai Firma/Pemilik Tunggal) And Another Case [2023] MLJU 217 which is based on Global Built Sdn Bhd v LKL Ceiling Enterprise & Anor And Another Case [2022] MLJU 1535 and authorities such as Tan Thoo Yow v Chia Kim San & anor [1997] MLJU 142, I do hold as I did in China 1st Metallurgical Construction (M) Sdn Bhd (supra) that, and I quote and repeat herein: “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.” [9] Such a jurisdictional challenge can be raised at any time and on this I rely on Sun Plaza Development Sdn Bhd v Heijingkang Sdn Bhd [2020] 1 LNS 1255 where the Court therein has 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.” Decision [10] Accordingly, I am bound to dismiss the matter herein filed against the Defendant herein with costs on the ground that the AD itself is unenforceable due to the fact that the individual sole proprietor herein being Chai Hock Seng was not named as a party to the Adjudication proceedings thereby rendering the AD against Hock Seng Trading & Construction as being invalid as the latter has no legal capacity in law to be sued. Dated: 16th day of August 2024 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE CONSTRUCTION COURT 1 COUNSEL FOR THE APPLICANT: Pung Kian Bang and Luvenia Mark (chambering) (Messrs Vilasiny Gan & Co.] COUNSEL FOR THE RESPONDANT: Vilasiny a/p Gannasen and Munira binti Hasnim (Messrs Chong + Kheng Hoe]