Interia Sdn Bhd v Haluan Prisma Sdn Bhd (WA-24C-27-02/2024)

Originating Summons No. WA-24C-10-01/2024 (OS 10) is Haluan Prisma Sdn Bhd (“HP”) application to set aside the Adjudication Decision dated 19.12.2023 (“AD”) given in favour of Interia Sdn Bhd 4 (“ISB”) in accordance with section 15 (b), (c) or (d) of the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”).

Originating Summons No. WA-24C-27-02/2024 (OS 27) on the other hand is ISB’s application to enforce the AD pursuant to section 28 CIPAA.

ISB’s business includes trading, renting of tower cranes, machinery and other related services.

HP’s business includes construction works and project management.

Vide a “Tower Cranes Rental Agreement – MODEL TL186-12, referenced no. ISB/HPSB/1015/A2017” dated 02.06.2017 (“Contract”), ISB had rented one (1) unit Luffing Crane (“tower crane”) to HP for the project known as “Cadangan Membina Dan Menyiapkan Sebuah Bangunan (1 Blok Asrama 1 Tingkat Dan 1 Blok Podium Letak Kereta 3 Tingkat) Di Atas Sebahagian PT. 2875, Majlis Sukan Negara Malaysia, Kompleks Sukan Bukit Jalil, Mukim Petaling, Daerah Kuala Lumpur, Wilayah Persekutuan Untuk Kementerian Belia dan Sukan Malaysia” (“the Project”).

ISB had at the request of HP provided services of operator, signalman, technician and other services / labours/ materials to HP. 5 [7] The tower crane was dismantled and transported from the site on 30.07.2020.

Payment disputes and differences arose between the parties pursuant to the Contract and variation works were referred to the Adjudication.

The Learned Adjudicator made his decision on 19.12.2023 in favour of ISB by ordering as follows:-

the adjudicated amount payable by HP to ISB is RM568,083.92 (“Adjudicated Amount”);

HP shall pay to ISB on the Adjudicated Amount of RM568,083.92 calculated at the rate of 5% per annum beginning on 20.12.2023 and continuing until the Adjudicated Amount together with the interest are paid;

costs of the Adjudication proceedings are to be borne by HP pursuant to Section 18(1) of CIPAA in the amount of RM17,356.49 which shall include the Adjudicator’s fees and expenses in the amount of RM1,313.11; and

the adjudicated amount and costs are to be paid on or before 20.01.2024 in a form of a secure financial instrument. Findings Adjudicator Asking For Advice From The Parties [10] Learned counsel for HP submits that their main point relates to the Adjudicator asking for advice from the parties with regards clause 2.1 & 2.2 of the Contract which the parties had reverted to in writing but refused to allow HP the right to reply to a Further Reply by ISB after which thereafter the Adjudicator had held that there was no variation on the Contract Works. It was submitted that the Adjudicator had refused to consider the answers to the queries posed and HP thus submits that this is a breach of natural justice as the Adjudicator had refused to act impartially and wrongly ruled out HP’s defence & issues raised. [11] ISB’s learned counsel response to this is that the fundamental issue herein is that the Plaintiff are attempting to go through with a find tooth comb on the AD and the evidence referred to therein, which he submits of which all the evidence have been submitted in the Adjudication proceedings itself and is now not open to the Plaintiff to regurgitate the same and accordingly allege such points are a breach of natural justice. [12] After perusing the AD, I do indeed find that the issue of clause 2.1 & 2.2 of the Contract was referred to in the AD and that the Adjudicator had also referred to the responses from both sides as to his query on the same after which the Adjudicator had decided there ‘were never any exchange of correspondence and / or issued any instruction in relation to clause 2.1 and/or 3.1 of the Tower Crane Rental Agreement”. [13] I am thus satisfied that the Adjudicator did indeed consider the said clause 2.1 & 2.2 of the Contract and the respective parties responses to his query on the same. I further find that there is nothing before me which shows that the Adjudicator had considered the further reply made by ISB. Thus, I am unable to conclude that there was any form of breach of natural justice by the Adjudicator’s said alleged acts or omissions as the case maybe. Other Contentions Raised [14] I have also looked at the other contentions raised by HP and in particular that the Adjudicator had refused to consider the defences raised by HP and thus it was argued that the Adjudicator had misconstrued the scope of his jurisdiction under section 27(1) CIPAA and acted in breach of natural justice. [15] The other said contentions are as follows:-

15.1 that the Adjudicator had failed to act impartially and/or acted in breach of natural justice by allowing ISB to file Further Reply dated 12.12.2023 and disregarding HP’s defences;

15.2 the lack of consideration for agreed waiver of rental charges, operator charges and signalman charges during the

15.3 the lack of consideration for agreed waiver of rental charges, operator charges and signalman charges during the SEA

15.4 that the operator and signalman charges were wrongly imposed; 8 15.5 the failure to attend to the breakdown of the Crane within the agreed time frame;

15.6 replacement and repair of wire rope charges wrongfully imposed by ISB;

15.7 the non renewal of the Certificate of Fitness (“PMA”);

15.8 unlawful operation of the Crane by the Operator without licence;

15.9 excess payment made by HSB;

15.10 damages suffered by HSB as a result of ISB’s breaches; and

15.11 the Adjudicator acted in excess of jurisdiction by imposing time period and mode of payment for the adjudicated amount and cost. [16] A reading of the AD will show that the aforesaid contentions raised by HP are in fact issues raised in the Adjudication proceedings itself which have been duly considered and decided by the Adjudicator and raising the same issues will now tantamount to asking this Court to intervene in the AD and inviting this Court to look at the merits of the decision. With respect the application under section 15 CIPAA is neither a review on merits or acts as an appeal on the AD. The law on this is settled and reference can be made to cases such as ACFM Engineering & Construction Sdn Bhd V Esstar Vision Sdn Bhd And Another Appeal [2016] MLJU 1776. [17] For the record I will however address the specific issue of HP’s contention that the Adjudicator had failed to act impartially and/or acted in breach of natural justice by allowing ISB to file a Further Reply. [18] From the records before me, I note that both HP and ISB had responded to the Adjudicators queries with regards clause 2.3 and 3.1 of the Contract but that the said Further Reply from ISB had been sent by an email dated 12.12.2023 after the deadline of 5 p.m on 12.12.2023 imposed by the Adjudicator had lapsed. The AD however does not make reference to this Further Reply from ISB. [19] I however do not hold that the Adjudicator had acted in breach of natural justice on this issue as the Adjudicator had already given a deadline as to the replies with regards these issues which did not appear to have been complied with by HP. Section 25 of CIPAA does mandate that the Adjudicator is the master of the Adjudication proceedings and has the power to act as he did as the section reads The adjudicator shall have the powers to:-

establish the procedures in conducting the adjudication proceedings including limiting the submission of documents by the parties; [20] I have also examined the allegation that the Adjudicator had disregarded HP’s defences with particular regards to the defences raised in the Response to the Adjudicators queries with regards clause 2.2 and 3.1 of the Contract. The Adjudicator did in the AD state that both sides “...agreed that there have never exchange any correspondence and/or issued any instruction in relation to clause 2.2 ad 3.1 of the Tower Crane Rental Agreement” and as such pursuant to section 27(1) CIPAA the Adjudicator was not addressing this new issue. [21] I find that there is nothing objectionable with the Adjudicator’s decision on this point. [22] As to the issue of the allegation that the Adjudicator acted in excess of jurisdiction by imposing a time period and mode of payment for the adjudicated amount and cost, I hold that this contention is wholly untenable as section 12 (5) CIPAA provides that:

The adjudication decision shall also determine the adjudicated amount and the time and manner the adjudicated amount is payable. Decision [23] In the circumstances, the Application as per enclosure 1 of OS 10 is hereby dismissed with costs and as there are no further impediments on the enforcement of the AD, the enforcement application in OS 27 as in enclosure 1 is hereby allowed as the sums under the AD are still due and owing. I therefore grant Order In Terms as per prayers (a), (b) (i) to (iii) and (c) of enclosure 1 in OS

Dated: 20th day of September 2024 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE CONSTRUCTION COURT 1 COUNSEL FOR THE PLAINTIFF (OS 10)/DEFENDANT (OS 27): Lee Chee Yang and Low Yu Keen (Messrs Desmond Chan & Jeff Low] COUNSEL FOR THE DEFENDANT (OS 10)/PLAINTIFF (SUIT OS 27): Kalearasu a/l K. Veloo and Eva Chang Chon Peng (Messrs SF Chan & Co.]