Ireka Engineering & Construction Sdn Bhd v PWC Corporation Sdn Bhd (WA-24C-17-01/2018 & WA-24C-27-01/2018)

That there was no dispute before the Adjudicator as Ireka had admitted the Payment Claim and so the Adjudicator has no jurisdiction to proceed with the Adjudication and delivered his

That PWC as Claimant in the Adjudication ought to have proceeded afresh with the service of another Notice of Adjudication upon the first appointed Adjudicator declining to act or as Ireka contended, having resigned as the Adjudicator and 3. That the Adjudication Decision is null and void or otherwise liable to be set aside in that the Adjudicator had not stated the manner of payment of the Adjudicated Amount as required under section 12(5) of the CIPAA. [3] PWC, on the other hand, had applied to enforce the Adjudication Decision in another Originating Summons (“the Enforcement Application”) under section 28 of the CIPAA. Project [4] The payment dispute had arisen from a contract pursuant to a Letter of Award dated 25.9.2008 between PWC and Ireka where Ireka as Main Contractor appointed PWC as their subcontractor for a project for “The Design, Supply and Installation of Aluminium Glazing Works for a development consisting of 2 Office Blocks, a block of shopping complex 7 with recreational facilities on a plot of land at Jalan Kiara, Mont’ Kiara, Mukim Batu Kuala Lumpur“ for the owner Ireka Land Sdn Bhd. [5] It was, inter-alia, agreed that PWC shall provide skilled labour, materials, tools, equipment and the necessary machineries for the execution and completion of aluminium composite panel to isolated columns at basement P1 and podium retail areas (“Subcontract Works”). Problem [6] A dispute arose between the parties with respect to non-payment by Ireka of the sum of RM145,857.43 alleged to be due and payable to the Claimant for work done under the Subcontract. [7] Ireka’s solicitors in its Payment Response dated 21.12.2016 confirmed that Ireka did not dispute PWC’s claim of RM145,857.43. On 26.1.2017 the solicitors for PWC wrote to Ireka’s Solicitors demanding the payment of RM145,857.43 within 7 days from the date thereof. [8] The Solicitors for Ireka responded by their letter dated 2.2.2017 reiterating that their client did not dispute the Claim but requested PWC to pay within 7 days thereof the sum of RM3,740,790.45 which was alleged to be owing by PWC for 2 other projects as follows: 8

The sum of RM3,723,000.00 as liquidated damages for the project known as Sandakan and

The sum of RM17,790.45 in the project known as P2 Hotel. [9] On 20.4.2017 PWC served their Notice of Adjudication and the First Adjudicator was appointed by the Director of KLRCA. Ireka’s solicitors wrote on 18.5.2017 to the First Adjudicator objecting to his appointment in that since there was no dispute on PWC’s Payment Claim then the First Adjudicator had no jurisdiction to proceed with the Adjudication. The First Adjudicator agreed with Ireka’s solicitors on his lack of jurisdiction and so he rejected his appointment by his letter to the parties dated 30.5.2017. [10] The Director of KLRCA then appointed the Second Adjudicator who is the current Adjudicator by their letter of 9.6.2017 Ireka’s solicitors once again wrote on 13.6.2017 to the Second Adjudicator objecting to his appointment in the same ground. [11] The Second Adjudicator replied to the said solicitors by his letter of 19.6.2017 stating that he had jurisdiction to hear the dispute. PWC served their Adjudication Claim on 4.7.2017 and the Second Adjudicator handed down his Adjudication Decision on 24.8.2017. [12] The Second Adjudicator had held that claim of RM3,723,000.00 had been the subject of another Adjudication bearing reference no. 9 KLRCA/aD/ADJ-0722-2017 where the Adjudicator there had held that Ireka was not entitled to set off the said sum as liquidated and ascertained damages against PWC. [13] In any event nothing turns on this as Ireka did not seek to set aside the Adjudication Decision on ground of the set off that they had against PWC with respect to other projects which disputes had been adjudicated separately between the parties. [14] As for this Adjudication the Adjudicator had decided in favour of PWC for the sum claimed of RM145,857.43 and directed that the Adjudicated amount be paid forthwith. [15] By consent the 2 Originating Summonses were heard together as if the Court were to allow the Setting Aside Application then invariably the Enforcement Application would have to be dismissed. Conversely and correspondingly, if the Court were to dismiss the Setting Aside Application, the Enforcement Application would invariably by allowed. [16] For the avoidance of confusion in the identities of the parties and for consistency, PWC shall be referred to as the Claimant and Ireka shall be referred to as the Respondent as they were so referred to in the Adjudication as these 2 Originating Summonses were heard together. 10 [17] Any reference to the “Adjudicator” is a reference to the Second Adjudicator appointed unless otherwise stated. Principles Whether the Adjudicator has jurisdiction to proceed to hear and deliver his Adjudication Decision when the Respondent had admitted the Payment Claim [18] Learned counsel for the Respondent submitted that the Adjudicator acted in excess of jurisdiction when he proceeded to hear the matter when there was no dispute before him in that the Respondent had admitted the Payment Claim. [19] That is an interesting, if not ingenious, argument though learned counsel for the Claimant would rather castigate it as an argument bordering on absurdity! [20] The Respondent contended that the amount claimed by the Claimant in its Payment Claim was completely undisputed and so it followed that there was no dispute at all to refer to Adjudication or to confer jurisdiction on the Adjudicator pursuant to sections 7(1) or 27(1) of the CIPAA. 11 [21] To be sure the Respondent through their solicitors, Messrs Azman Davidson & Co in their Payment Response dated 21.12.2016 stated as follows: “We wish to state that our client does not dispute your client’s claim. In the premises, we reiterate that there is no dispute between the parties for the matter to proceed to adjudication under the provisions of the Construction Industry Payment & Adjudication Act 2012.” [22] The English Court of Appeal case of Halki Shipping Corporation v Sopex Oils Ltd [1998] 2 All ER 23 was cited as authority for this proposition. However upon a closer reading of the majority decision, it was held as follows at page 56 by Swinton Thomas LJ as follows: “In my view, .....there is a dispute once money is claimed unless and until the defendants admit that the sum is due and payable...... In my judgment if a party has refused to pay a sum which is claimed or has denied that it is owing then in the ordinary use of the English language there is a dispute between the parties.” (emphasis added) [23] It must be noted that Halki Shipping Corporation (supra) was with respect to a Stay Application of proceedings in Court under their section 9 12 of the UK Arbitration Act 1996 from which our section 10 of our Arbitration Act 2005 had drawn inspiration. It was a stay pending reference to arbitration and at the same time there was a summary judgment application already filed with the Court there. The argument there was whether or not there was a dispute that merits proceeding to arbitration or whether the Court should give summary judgment if there were no disputes. [24] The High Court had granted a stay of proceedings even though the Defendant there had no arguable defence. On appeal, the appeal was dismissed and the Court of Appeal held that once the court was satisfied that there was a dispute under an arbitration agreement which governed the contract between the parties, it was not open to a plaintiff to bring an Order 14 proceedings to enforce a claim to which the defendant had no arguable defence, and the court had to grant a stay unless it found the arbitration agreement to be null and void. In that case, there was a dispute which arose once the plaintiff claimed damages for breach of the charterparty and therefore, until the defendant admitted that the sum was due and payable, the matter had to be referred to arbitration for determination. [25] Even if the test for whether or not there is a “dispute” be extended by analogy or application to Statutory Adjudication under our CIPAA, one 13 would still have to conclude that there is a dispute for the Adjudicator to assume jurisdiction and to decide. [26] However as the CIPAA is a sui generis statute, there is no need to refer to another statute in the Arbitration Act 2005 for guidance. The meaning of a “dispute” is clearly set out in the circumstances referred to in section 6 of the CIPAA. [27] If indeed Ireka did not dispute the Payment Claim then the expected course of action under the CIPAA is to accompany the service of the Payment Response with the payment for the amount claimed in the Payment Claim. Section 6(1) and (2) of the CIPAA could not be clearer for it reads: “6. Payment Response

A non-paying party who admits to the payment claim served on him shall serve a payment response on the unpaid party together with the whole amount claimed or any amount as admitted by him.

A non-paying party who disputes the amount claimed in the payment claim, either wholly or partly, shall serve a payment response in writing on the unpaid party stating the amount disputed and the reason for the dispute.” (emphasis added) 14 [28] However much the Respondent may want to argue as the non-paying party, its action in admitting the amount claimed by the unpaid party in the Payment Response served but refusing to accompany the payment of the sum claimed in the Payment Claim, is a dispute to the Payment Claim within the meaning of section 6(1) of the CIPAA. [29] This Court had stated in an earlier case involving the same parties and solicitors where this self-same argument had been raised in PWC Corporation Sdn Bhd v Ireka Engineering & Construction Sdn Bhd and another appeal [2018] MLJU 170 as follows: “[36] However the Respondent may want to argue as the non-paying party, its action in admitting the amount claimed by the unpaid party in the Payment Response served but refusing to accompany the payment of the sum claimed in the Payment Claim, is not a dispute to the Payment Claim within the meaning of section 6(1) of the CIPAA. [37] Such a Payment Response is not in compliance with section 6(1) of the CIPAA for failure to enclose the payment of the amount claimed in the Payment Claim and the non-paying party is deemed to have disputed the entire Payment Claim as provided for in section 6(4) of the CIPAA which reads as follows: 15 “(4) A non-paying party who fails to respond to a payment claim in the manner provided under this section is deemed to have disputed the entire payment claim” (emphasis added) [38] The Adjudicator would thus have the jurisdiction to proceed to decide and adjudicate on the dispute. Otherwise any non-paying party would be able to skirt and scuttle and indeed stop any Adjudication before it could start by simply admitting the Payment Claim but refusing to accompany payment with the service of the Payment Response. [39] To admit the Payment Claim but refusing to accompany payment and then to audaciously assert that there is no “dispute” over which the Adjudicator has jurisdiction to proceed with Adjudication, would be to denude the CIPAA of its bite and reduce it to a mere bark. It would be to defeat the purpose of the CIPAA altogether. ....... [41] I agree with the Claimant that the wording of section 6(1) of the CIPAA is such that any admitted amount in the Payment Response must be immediately and simultaneously followed 16 with payment of the sum admitted. In the present case, there was no payment by Ireka of the monies admitted in its Payment Response. [42] In effect by giving reasons for not paying the Respondent is in reality disputing the Payment Claim and therefore the Adjudicator clearly had jurisdiction to proceed to hear the dispute and to deliver the Adjudication Decision. [43] There is no room for the Respondent to argue that the Adjudicator had acted in excess of her jurisdiction.” (emphasis added) [30] If such a ground could be raised and sustained successfully by a Respondent in an Adjudication, then I can think of no better method to skirt a Payment Claim than by refusing to accompany the Payment Claim admitted or not disputed with the payment. Such a proposition needs to be stated for it to be dismissed as preposterous! It would lead to a perverse situation where all that is required for the non-paying party (later the Respondent in the Adjudication Proceedings) to defeat the very intent and object of the Act would be just to admit on the face of its Payment Response that the amount claimed in the Payment Claim is due but to still refuse to make payment. 17 [31] Taking the matter to its logical conclusion, any decision of the Adjudicator who subsequently makes a decision is liable to be set aside on ground of lacking in jurisdiction or having acted in excess of jurisdiction. That cannot be the legislative intent of the Act in the light of the clear meaning of a dispute under section 6 of the CIPAA. [32] To accede to such an argument by Ireka, the Respondent, would be tantamount to permitting a non-paying party to persist obstinately in its willful non-payment, despite having admitted to the Payment Claim completely in its Payment Response, such that no dispute could be referred to Adjudication and with that no Adjudication Decision could be made and no enforcement could proceed! [33] The Claimant would then perforce have to proceed with litigation and hopefully may succeed in summary judgment or to arbitration if there is an arbitration clause. Nothing could be further from the truth then to have a case where Statutory Adjudication under the CIPAA is not available to a Claimant where the Respondent therein has admitted to the Payment Claim but does not, would not or could not accompany the amount claimed together with the Payment Response served. [34] This ground resorted to by the Respondent is, at its core, fundamentally flawed. No legal gymnastics can be employed to explain 18 away the legal logic that by not accompanying the payment admitted or not disputed, there arose a dispute that is well within the jurisdiction of the Adjudicator to decide. [35] The Adjudicator in so deciding, was proceeding under section 27(3) of the CIPAA, and had not acted in excess of jurisdiction as there was a dispute for him to decide within the meaning of section 27(1). Section 27(1) and (3) read as follows: “(1) Subject to subsection (2), the adjudicator’s jurisdiction in relation to any dispute is limited to the matter referred to adjudication by the parties pursuant to sections 5 and 6. ......

Notwithstanding a jurisdictional challenge, the adjudicator may in his discretion proceed and complete the adjudication proceedings without prejudice to the rights of any party to apply to set aside the adjudication decision under section 15 or to oppose the application to enforce the adjudication decision under subsection 28(1).” [36] What the Second Adjudicator did in exercising his discretion to proceed even in the light of a jurisdictional challenge is perfectly permitted for under section 27(3) of the CIPAA. An Adjudicator when faced with such 19 a jurisdictional challenge may proceed, with or without giving any reasons, for being convinced that he has jurisdiction to hear the dispute. [37] Even when he has doubt he is still perfectly permitted to proceed to hear the parties and deliver his Adjudication Decision and it is for the party against whom the Decision is made to mount a challenge under section 15 of the CIPAA or to oppose the enforcement of the Decision under section 28(1) of the CIPAA. [38] By deciding to proceed to hear the dispute an Adjudicator need not fear that he is violating the principle of kompetenz – kompetenz, which is a jurisprudential doctrine whereby a tribunal may have competence, or jurisdiction, to rule as to the extent of its own competence on an issue before it. Whether or not an Adjudicator gave reasons for agreeing that he had jurisdiction, that does not fetter the High Court to consider the issue of a jurisdictional challenge afresh in a section 15 application for setting aside or section 28 application for enforcement of an Adjudication Decision or in an application for a declaration that the Adjudicator had no jurisdiction to begin with. [39] Likewise if an Adjudicator declines or rejects his appointment on ground that he has no jurisdiction to hear the dispute, as was done by the 20 First Adjudicator, the Claimant may still proceed by asking the Director of KLRCA to appoint a new Arbitrator as happened in this case. [40] Granted the expression of a “jurisdictional challenge” may be understood in at least 3 different senses as was held in Terminal Perintis Sdn Bhd v Tan Ngee Hong Construction and another case [2017] MLJU 242 which was cited with approval by the Federal Court in View Esteem Sdn Bhd v Bina Puri Holdings Berhad [2018] 2 MLJ 22 as follows: [16] The term ‘jurisdiction’ under the CIPAA is not used in the administrative or public law sense but in relation to matters within the scope of the CIPAA. On this point, in Terminal Perintis Sdn Bhd v Tan Ngee Hong Construction Sdn Bhd and another case [2017] MLJU 242 Lee Swee Seng J observed as follows (at para [70]): In the application of our CIPAA, we are free from the shackles of the language of administrative law and judicial review. The word ‘jurisdiction’ is used in s 15(d) as in the adjudicator having acted in ‘excess of his jurisdiction’ as a ground for setting aside an adjudication decision. It is also used in s 27(1) with respect to an adjudicator’s jurisdiction being limited to the matters raised in the payment claim and the payment response. Then 21 there is a reference to it in s 27(2) with respect to extending his jurisdiction by way of agreement in writing to deal with matters not specifically raised in the payment claim and payment response. Finally there is the reference to a ‘jurisdictional’ challenge, which when raised, does not prevent the adjudicator from proceeding and completing the adjudication without prejudice to the rights of any party to set it aside under s 15 or to oppose its enforcement under s 28 ... Issues as to whether there is a valid cause of action, does not go towards jurisdiction but rather to the merits of the claim ... [17] The learned judge also made note of the various types of jurisdictional complaints within the CIPAA which may be categorised as core jurisdiction, competence jurisdiction and contingent jurisdiction. The common feature in all of them is the presupposition that the CIPAA applies to determine if the adjudicator had kept within his jurisdiction. [18] We are in agreement with the contention of the appellant that the error in the judgment of the Court of Appeal is the failure to recognise that the jurisdictional complaint in the present case is that the CIPAA did not apply at all because of s 41, and not an ‘excess of jurisdiction’ 22 under s 15, on the basis that CIPAA applied. It is what is termed as an absolute lack of jurisdiction that may be taken up at any time. On this point, the Singapore High Court case of Chip Hup Hup Kee Construction Pte Ltd v Ssangyong Engineering & Construction Co Ltd [2010] 1 SLR 658 had this to say: Thus, it seemed that when what was being alleged was an absolute lack of jurisdiction on the part of a particular tribunal or court to hear a particular dispute, ‘jurisdiction’ being used in the strict sense of capacity to hear, then if the tribunal concerned does not have such jurisdiction, any party to the dispute may assert the lack of jurisdiction at any stage and can never be held to be estopped from doing so or to have waived its right of protest. On the contrary, when it is a question of irregularity of procedure or contingent jurisdiction or non-compliance with a statutory condition precedent to the validity of a step in the litigation, such irregularity or non-compliance can be waived because the effect of the waiver would not be to create or confer any jurisdiction that did not previously exist.” (emphasis added) 23 [41] Indeed some jurisdictional challenges may involve convoluted facts combined with no less complicated questions of law to consider. The intention of Parliament under section 27(3) of the CIPAA is clearly not to ruffle and trouble the Adjudicator with such difficult question of mixed fact and law where jurisdiction is concerned, but to allow him to proceed as if he has jurisdiction and to hear the parties on the dispute and to make his finding of facts on the dispute and determine if there are any sums owing for work done or services rendered as claimed, taking into consideration the defenses and set-offs and then without prejudice to the rights of the party unhappy with the issue of jurisdiction, to allow that dissatisfied party to raise the jurisdictional challenge in the High Court. [42] In a case where there is no jurisdiction to begin with rather than one where there is jurisdiction but that the Adjudicator has exceeded his jurisdiction, the Court may even allow a determination to be made first before the Adjudication in a case that warrants it. [43] In View Esteem FC (supra) it was observed as follows: “[19] It is our considered view that the appellant had rightly not invoked s 15 of the CIPAA at the beginning in making its application to challenge jurisdiction because it could not on the one hand complain that CIPAA did not apply to the case and yet on the other 24 hand invoke a provision of CIPAA to seek relief. In the circumstances, our answer to question 1 posed in this appeal is in the positive in the first part and negative in the second part.” [44] Here the jurisdictional challenge seems to be one of contingent jurisdiction in that if there is a dispute within the meaning of section 6 of the CIPAA then the Adjudicator would have the jurisdiction to hear the matter. The Adjudicator was not obliged to give his reasons for concluding that he did have jurisdiction as section 27(3) allows him to proceed as if he has. However he had given his reasons in paragraphs 26-31 of his Adjudication Decision citing section 6(1) and the dicta of Swinton Thomas LJ in Halki Shipping Corp (supra) as quoted above. I agree with the reasons given. This ground that the Adjudicator has no jurisdiction to adjudicate under the CIPAA when clearly there was a dispute, is without merit and has to be dismissed. Whether the Claimant in the Adjudication ought to have proceeded afresh with the service of another Notice of Adjudication upon the first appointed Adjudicator declining to act or as Ireka contended, having resigned as the Adjudicator 25 [45] In this case the first Adjudicator had rejected his appointment as an Adjudicator by the Director of KLRCA which appointment was made under section 23 of the CIPAA. He himself said so in Exhibit NYS 5 to both parties and to KLRCA and the solicitors for both parties. [46] The time frame for his acceptance of appointment by KLRCA had not expired yet and so he had yet to accept his appointment. Section 23(2) of the CIPAA read as follows: “(2) The adjudicator shall propose and negotiate his terms of appointment including fees chargeable with the parties and shall within ten working days from the date he was notified of his appointment, indicate his acceptance and terms of his appointment.“ (emphasis aded) [47] The Adjudicator’s rejection of his appointment comes within section 23(3) of the CIPAA where he is entitled to reject his appointment before his acceptance of the appointment. Section 23(3) provides as follows: “(3) If the adjudicator rejects his appointment or fails to indicate his acceptance of the appointment within the period specified in subsection (2)-

The parties may agree to appoint another adjudicator in the manner provided under paragraph 21(a); or 26

The Director of the KLRCA may proceed to appoint another adjudicator in the manner provided under paragraph 21(b).” (emphasis added) [48] Section 21(b) of the CIPAA provides as follows: “An adjudicator may be appointed in the following manner:

By agreement of the parties in dispute within ten working days from the service of the notice of adjudication by the claimant; or

By the Director of the KLRCA-

Upon the request of either party in dispute if there is no agreement of the parties under paragraph (a); or

(ii) Upon the request of the parties in dispute.”(emphasis added) [49] This is not a case where he had resigned after acceptance of his appointment. This is clearly a case where the Adjudicator appointed had rejected his appointment. [50] An Adjudicator may reject his appointment for a variety of reasons and even though he is not obliged to state his reasons, one may surmise that he may reject the appointment for fear that his discharge of his duties 27 under section 24 of the CIPAA might be compromised for the reasons set out therein as follows: “24. Duties and Obligations of the Adjudicator The adjudicator shall at the time of the acceptance of appointment as an adjudicator make a declaration in writing that—

There is no conflict of interest in respect of his appointment;

He shall act independently, impartially and in a timely manner and avoid incurring unnecessary expense;

He shall comply with the principles of natural justice; and

There are no circumstances likely to give rise to justifiable doubts as to the adjudicator’s impartiality and independence.” (emphasis added) [51] That being the case s 23(3)(b) CIPAA would kick in and that the Director of KLRCA may proceed to appoint another Adjudicator which KLRCA did. [52] It was thus perfectly proper for the new Adjudicator to proceed with the Adjudication that was still at the very preliminary stage of appointment of Adjudicator. 28 [53] Even if it is a case of resignation, I see no good reason why under section 17(4)(b) of the CIPAA, the Director of KLRCA cannot appoint a new Adjudicator to continue with the proceedings that had hardly commenced. It reads as follows: “(4) If an adjudicator dies, resigns or is unable through illness or any other cause to complete the adjudication proceedings—

The adjudication proceedings come to an end and the parties are free to recommence adjudication proceedings afresh; or

The adjudication proceedings may be continued by a new adjudicator appointed by the parties and the adjudication proceedings shall continue as if there is no change of adjudicator.” (emphasis added) [54] Learned counsel for the Respondent however highlighted that such an appointment of a new Adjudicator is only permitted if both parties could agree on the new Adjudicator to be appointed and in a case where they could not agree, then section 17(4)(a) would apply such that parties may commence a fresh Adjudication by serving a fresh notice of Adjudication under section 8 of the CIPAA. 29 [55] Learned counsel for the Respondent cited the case of Terminal Perintis Sdn Bhd v Tan Ngee Hong Construction Sdn Bhd and another [2017] MLJU 242 with particular emphasis given to the jurisdiction challenge on the competence of Adjudicator to adjudicate as in he was not properly appointed: [72] Core Jurisdiction would be the question of whether the subject matter of the dispute is one which the Act has conferred on the Adjudicator. Thus if a contract is not a construction contract, but a shipping or mining contract or a contract for legal fees with respect to advice given in construction contract, or that the contract is with respect to construction of a dwelling house for a natural person, then this Court will interfere if the Adjudicator got it wrong. It is a case where the Adjudicator has no jurisdiction to begin with. So too if the construction contract is carried out wholly outside Malaysia. [73] If it is a question of the competence of the Adjudicator as in he has not been properly appointed in that what purported to be a Payment Claim, is not on the face of it a Payment Claim or that the Payment Claim was not served or that it was not expressly stated as a claim made under CIPAA, then this Court would be at liberty to set aside the Adjudication Decision on ground of excess of 30 jurisdiction. This is not only because the Adjudicator cannot decide on his own competence or capacity to adjudicate when the very validity of his appointment is questioned but also that it is part of the legislative intent that if there is non-compliance with a basic and essential requirement of CIPAA with respect to a Payment Claim under Section 5, then the Adjudication Proceedings and the Decision made would be a nullity. [74] In a case of contingent jurisdiction, it would be a case where for there to be jurisdiction, there must be further compliance with the requirements of the Act as in that the dispute must be one falling within the matters raised in the Payment Claim and the Payment Response as provided for under section 27(1) CIPAA. In that example the word “jurisdiction” is used in the sense of the scope of the dispute that is before the Adjudicator for decision. So for example an Adjudicator may not be able to decide on the defence of set-off arising out of costs of rectifying defective works if this has not been raised in the Payment Response. If he so decides, then this Court may set it aside as been made in excess of jurisdiction.” (emphasis added) 31 [56] I see no good reason for reading section 17(4)(a) so restrictively as confining the continued Adjudication under a new Adjudicator only if both parties could agree on who the new Adjudicator is. Precisely because the parties could not agree on the appointment of a new Adjudicator, which is why both the parties may then request the Director of KLRCA to so appoint for them. [57] As can be seen, other than service of the Notice of Adjudication, no Adjudication Claim had been served yet by the Claimant and no hearing had commenced as yet. There is thus, no prejudice, at least in this case, to the Respondent for the newly appointed Adjudicator to commence hearing the dispute for only the Payment Claim and Payment Response had been served at the point the new Adjudicator was appointed. [58] Section 21(b)(i) can be activated by either party in a case of an appointment of an Adjudicator irrespective if the appointment is a fresh appointment or one where after the First Adjudicator had declined or rejected the appointment, or where he had resigned. [59] I would thus dismiss this ground of setting aside the Adjudication Decision on ground that the new Adjudicator had not been properly appointed and hence had no jurisdiction to hear and deliver the Adjudication Decision. 32 Whether the Adjudication Decision is null and void or otherwise ought to be set aside in that the Adjudicator had not stated the manner of payment of the Adjudicated Amount as required under section 12(5) of the CIPAA [60] Section 12(5) of the CIPAA provides as follows: “The adjudication decision shall also determine the adjudicated amount and the time and manner the adjudicated amount is payable.” [61] What is meant by “the manner of the adjudicated amount is payable?” We all know the meaning of “the time .....the adjudicated amount is payable”. By that is meant when in point of time the adjudicated amount is to be paid. By “manner of payment” is meant the period and time of payment should the payments be by installments. [62] There are some legislations that have used the expression “the manner of payment” for instance in section 116 of the Legal Profession Act 1976 where it is provided that an Advocate and solicitor may enter agreement for costing contentious business as follows: “(1) Subject to the provisions of any written law, an advocate and solicitor may make an agreement in writing with his client respecting 33 the amount and manner of payment for the whole or any part of his costs in respect of contentious business done or to be done by such advocate and solicitor, either by a gross sum, or otherwise, and either at the same rate or at a greater or a lesser rate than the rate at which he would otherwise be entitled to be remunerated.

Every such agreement shall be signed by the client and shall be subject to this Part.” (emphasis added) [63] Likewise under the Standard Form Sale and Purchase Agreement prescribed under Schedule G to the Housing Development (Control & Licensing) Regulation 1989 in Clause 5 thereof is provided the following:

“Manner of payment of purchase price

The purchase price shall be paid by the Purchaser to the Developer by instalments and at the time and in the manner prescribed in the Third Schedule. The Developer is not bound to commence or complete the works in the order referred to in the Third Schedule and the Purchaser shall pay the installments according to the stage of works completed by the Developer provided that any damage to the completed works by subsequent stage of works shall be repaired and made good by the Developer at its own cost 34 and expense before the Purchaser takes vacant possession of the said Property.” (emphasis added) [64] As can be seen from the syntax and context, generally by “manner of payment” is meant the payment by installments in relation to an event or stage of progress of work done. In this case as the Adjudicated Amount is ordered to be paid “forthwith” in paragraph 37 b) of the Adjudication Decision, there is then no need for the Adjudicator to prescribe the manner of payment since the time and manner of payment had fused into one event. [65] Even if, as contended by learned counsel for the Respondent, that the Adjudicator should stated by way of “manner of payment” the “method of payment” whether by way of cheque, bank transfer, bank draft, cashier order, cash, credit card or as postulated by the learned counsel for the Claimant, by barter - that is certainly too de minimis a matter to argue over! The Court should not be troubled by trifles and trivialities nor be asked to unravel the fanciful and frivolous! The court must consider the substance of the matter and will not regard or give effect to something of a trivial and negligible nature. See Boon & Cheah Steel Pipes Sdn Bhd v Asia Insurance Co Ltd & Ors [1973] 1 MLJ 101 at 105 as per Raja Azlan Shah J. 35 [66] As was observed in Ong Ah Goh v Kuan Keh Lan & Ors [1968] 2 MLJ 57 at 61 by Justice Chang Min Tat J: “.... The law permits the qualification implied in the ancient maxim de minimis non curat lex. Where there are irregularities of very slight consequence, it does not intend that the infliction of penalties should be inflexibly severe. If the deviation were a mere trifle, which, if continued in practice, would weigh little or nothing on the public interest, it might properly be overlooked.’” [67] Suffice to say, it is absurd for the Adjudication Decision to be improper, defective, null and void and unenforceable on the ground that there was not specified “manner the adjudicated amount is to be paid”. In fact section 12 of the CIPAA does not spell out the consequence of a non-compliance with section 12(5) unlike a non-compliance with section 12(2) with respect to the period within which the Adjudicator shall decide the dispute in that under section 12(3) an Adjudication Decision not made within the period specified in section 12(2) is void. [68] I agree with learned counsel for the Claimant that it would be highly undesirable and contrary to the intention and purpose of the CIPAA that 36 this Adjudication Decision, or any other, be deemed to fail on so spurious a ground. [69] Generally payment is by Legal Tender or by cheque or Bank draft or Cashier’s Order and to say that the Respondent was left in a quandary as to the manner of payment in that one of the chosen methods might not be sufficient compliant with the order to pay forthwith, would be rather frivolous if not fanciful, to say the least! [70] Further, there is tremendous flexibility afforded to the Respondent who has to pay the Adjudicated Amount in that with respect to “manner of payment” if that be understood to be “the method of payment” to be made, the Respondent or the person making payment would have the flexibility of payment other than by legal tender of cash. [71] In some cases parties may even agree as to contra payment if they have a running account with each other or even contra of properties for the Adjudicated Amount or any part thereof. [72] I would for the reasons given dismiss this ground of setting aside the Adjudication Decision. Pronouncement 37 [73] For the reasons set out above, the Setting Aside Application was dismissed and correspondingly and consequently, the Enforcement Application was allowed. [74] I had ordered costs of RM5,000.00 to be paid by Ireka to PWC for each application. Dated: 27 June 2018 - signed - Y.A. LEE SWEE SENG Judge Construction Court High Court Kuala Lumpur For the Plaintiff in OS : Daniel Lau WA-24C-17-01/2018 (Messrs C.K. Oon & Co) For the Defendant in OS WA-24C-27-01/2018 38 For the Defendant in : Michael Koh OS WA-24C-27-01/2018 (Messrs Azman, Davidson & Co) For the Plaintiff in OS WA-24C-17-01/2018 Date of Decision: 27 February 2018