Jalex Sdn Bhd v China Construction Yangtze River (M) Sdn Bhd (WA-24C-90-04/2022)

These are cross applications to set aside as well as enforce an adjudication decision made under the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”) in respect of an interior furniture contract.

The Plaintiff in Originating Summons no. WA-24C-90-04/2022 (“OS 1”) and the Defendant in Originating Summons no. WA-24C-105-05/2022 (“OS 2”) is a private limited company involved in the building interiors business.

The Defendant in OS 1 and Plaintiff in OS 2 is a private limited company involved in the business of construction business.

For purposes herein, the parties will hereinafter be referred to as Jalex and CCYR respectively.

CCYR is the main contractor appointed by Agile PJD Development Sdn Bhd (“Agile PJD”) for the carrying out and completion of a condominium project described as “Superstructure for Cadangan Pembangunan Kondominium (813) Unit Mengandungi: (A) 5 Blok Pangsapuri 8 Tingkat (Blok A, B, C, D dan E) (71 Unit): (B) 2 Blok Pangsapuri 18 Tingkat (Blok F dan G) (70 Unit) dan 1 Tingkat Kemudahan; (C) 2 Blok Pangsapuri 44 Tingkat (Blok H dan K) (342 Unit) dan 1 Tingkat Kemudahan; (D) 2 Blok Pangsapuri 44 Tingkat (Blok I dan J) (330 Unit) dan 1 Tingkat Kemudahan; (E) 3 Tingkat Bawah Rendah Tempat Letak Kereta Di Atas Lot 67756 (Lot P.T. 15230), Jalan Duta Hartamas, Mukim Batu, Bandaraya Kuala Lumpur, Wilayah Persekutuan” (“Project’).

By a letter of award dated 12 February 2018 (“Contract”), CCYR appointed Jalex as its sub-contractor to supply, deliver, install and complete vanity counters with cabinet, wardrobe, and kitchen cabinets for the Project (“Works”).

During the carrying out of the Works, CCYR failed, refused and or neglected to fully pay Jalex on several interim payment certificates certified by the Project architect amounting to RM930,356.63.

As the result, Jalex on 19 October 2020 served its payment claim made pursuant to the CIPAA on CCYR.

CCYR did not respond to Jalex’s payment claim.

Consequently, Jalex commenced adjudication proceedings against CCYR under the CIPAA.

The adjudicator appointed by the Asian International Arbitration Centre (“Adjudicator”) on 14 April 2021 made his decision in favour of Jalex by ordering CCYR to pay the sum of RM930,356.63 as well as adjudication fees of RM21,749.14 totalling to RM952,105.77 (“Decision”).

Subsequently upon the demand of Jalex, Agile PJD made a direct payment of RM417,608.83 to Jalex based on the Decision.

As for the unpaid remainder of RM534,496.94 under the Decision, Jalex on 14 April 2022 instituted OS 1 to enforce the Decision.

The affidavits that were filed for purposes of OS 1 are as follows:

Jalex’s affidavit in support affirmed by Lucy Yong date 13 April 2022;

(ii) CCYR’s affidavit in reply affirmed by Dai Wen Feng dated 19 May 2022;

(iii) Jalex’s affidavit in reply affirmed by Lucy Yong dated 1 June 2022;

(iv) Jalex’s affidavit in reply (2) affirmed by Low Sow Yoong dated 1 June 2022; and

CCYR’s affidavit in reply affirmed by Dai Wen Feng dated 28 June 2022. [15] In addition, CCYR on 19 May 2022 filed OS 2 to set aside the Decision. [16] The affidavits which were filed for purposes of OS 2 are as follows:

CCYR’s affidavit in support affirmed by Dai Wen Feng dated 19 May 2022;

(ii) Jalex’s affidavit in reply affirmed by Lucy Yong dated 1 June 2022;

(iii) Jalex’s affidavit in reply (2) affirmed by Low Sow Yoong dated 1 June 2022; and

(iv) CCYR’s affidavit in reply affirmed by Dai Wen Feng dated 28 June 2022. [17] Both OS 1 and OS 2 were fixed before me for hearing on 1 September 2022. At the outset, the parties agreed that if OS 2 is allowed, then OS 1 will automatically be disallowed and vice versa. After having read the written submissions of the parties and heard oral arguments of counsel, I dismissed OS 2 and accordingly allowed OS 1 each with costs of RM4,000.00 subject to the usual allocator. [18] I now furnish below the grounds of my decision. Contentions and Findings Setting Aside Application (OS 2) [19] Generally, CCYR contended that the Adjudicator acted in excess of jurisdiction by advancing a threefold contention to justify setting aside the Decision, viz.:

the payment claim is not in compliance with the mandatory requirements of s. 5 of the CIPAA and reliance is made on the Court of Appeal case of Ideal City Development Sdn Bhd v PWC Bina Sdn Bhd and other appeals [2019] 2 CLJ 615;

(ii) the party named by Jalex is not CCYR’s legal name; and/or

(iii) the adjudication proceedings cause papers were not served by Jalex on CCYR in accordance with the provisions in s. 38 of the CIPAA. [20] Jalex in rebuttal counter contended that its payment claim as well as other adjudication proceedings cause papers were in order and properly served upon CCYR. [21] The relevant provision on setting aside an adjudication decision is s. 15 of the CIPAA which provides as follows:

Improperly procured adjudication decision An aggrieved party may apply to the High Court to set aside an adjudication decision on one or more of the following grounds:

the adjudication decision was improperly procured through fraud or bribery;

there has been a denial of natural justice;

the adjudicator has not acted independently or impartially; or

the adjudicator has acted in excess of his jurisdiction. [22] Firstly in respect of CCYR’s contention that Jalex’s payment claim is bad for not conforming with the provisions in s. 5(2) of the CIPAA, it is apposite that I reproduce below that payment claim: [23] It is provided as follows in s. 5 of the CIPAA:

Payment Claim

An unpaid party may serve a payment claim on a non paying party for payment pursuant to a construction contract.

The payment claim shall be in writing and shall include-

the amount claimed and due date for payment of the amount claimed;

details to identify the cause of action including the provision in the construction contract to which the payment relates;

description of the work or services to which the payment relates; and

a statement that it is made under this Act. [24] In Ideal City Development Sdn Bd v PWC Bina Sdn Bhd and other appeals (supra), Mary Lim JC (now FCJ) held as follows: “[59] The regime is not intended for all disputes between the parties; it is only for payment disputes where either the amounts claimed for work or services rendered are not met in full or in part, or where such payments are not regular or timely. Certainly in our present appeal, it is a material and relevant consideration and complaint in terms of jurisdiction. [60] Hence, the first requirement that the payment dispute must state the due date for payment of the sum claimed; that at the time of initiation of the claim, it must be immediately obvious that the payment has been delayed or has not been forthcoming. This is part of the minimums required to trigger the adjudication regime. The merits of such a claim is a matter for the determination of the adjudicator using her inquisitorial powers. [61] In fact, the learned authors, Chow Kok Fong, Lim Chong Fong and Oon Chee Kheng in the first book to be written on adjudication entitled "Adjudication of Construction Payment Disputes in Malaysia: Navigating the Construction Industry Payment and Adjudication Act ", p. 227 [LexisNexis 2014] acknowledged that there are certain jurisdictional matters which are material and which affect the validity of the whole adjudication claim. Amongst them is the validity of the payment claim itself, that it is essential that such a claim is valid in order "to trigger the process which eventually leads to the adjudication proceedings. An invalid payment claim is not capable of crystallising a dispute which falls within the ambit of the Act."” (emphasis added) See also Terminal Perintis Sdn Bhd v Tan Ngee Hong Construction Sdn Bhd & Anor Case [2017] MLRHU 144. [25] The adequacy or otherwise of the payment claim is a question of construction of the payment claim itself and this obviously varies from case to case. [26] In Giatreka Sdn Bhd v SWG Engineering Sdn Bhd (And Another Originating Summons) [2020] 1 AMR 193, I have held as follows: “[32] First and foremost, I noticed that the provision in s. 5(2) of the CIPAA on the requisite contents of a payment claim has been couched in imperative language. On interpretation of statutes, Mohd Ghazali Yusoff FCJ said in the Federal Court case of Dr Koay Cheng Boon v Majlis Perubatan Malaysia [2012] 4 CLJ 445 that: "[48] A statute is the written will of the legislature and it is the fundamental rule of interpretation of a statute that it should be expounded according to the intent of Parliament. The courts must use the literal rule where a clear meaning of a statute will allow it, ie, interpret the statute literally, according to its ordinary plain meaning." There is hence no doubt that compliance of the requirements set out in s. 5(2) of the CIPAA is strict and mandatory. [33] The validity of the Payment Claim therefore hinges upon whether the provisions in s. 5(2) of the CIPAA are met...” (emphasis added). [27] Upon my scrutiny of the payment claim, I am satisfied that Jalex has satisfactorily stated details of the interim certificates that were unpaid in the payment claim which included the amount claimed and respective due date when read together with the relevant extracts of Contract provisions annexed thereto. It can therefore be discerned and identified that the cause of action is for breach of contract for non-payment of interim certificates no. 36 and 37 in default of clause 7 of the Contract. There is also plainly the statement that it is a payment claim issued under the CIPAA. [28] In the premises, I find and hold that Jalex’s payment claim conformed with s. 5(2) of the CIPAA contrary to that as asserted by CCYR. [29] Secondly regarding CCYR’s contention that the party named by Jalex is not CCYR’s legal name, I find and hold that the use of (M) in CCYR’s name by Jalex on the payment claim is merely an abbreviation to (Malaysia). There is no confusion on the identity or entity of the intended party to be named as there is no other company or entity with the same name with abbreviation (M) or registered as such in the Companies Commission of Malaysia. [30] Additionally, I noticed that CCYR had never throughout the currency of the Contract disputed the use of the abbreviation (M) by Jalex in naming CCYR as China Construction Yangtze River (M) Sdn Bhd instead of China Construction Yangtze River (Malaysia) Sdn Bhd. In fact, CCYR themselves had through its own official documentation including letterhead and name card acknowledged and adopted the use of the abbreviation (M) in naming and representing itself as China Construction Yangtze River (M) Sdn Bhd as well as China Construction Yangtze River (Malaysia) Sdn Bhd interchangeably. The certificates issued by Agile PJD’s architect for purposes of the Project were also in the name of China Construction Yangtze River (M) Sdn Bhd. [31] As the matter of law, Abdul Aziz J (later JCA) held as follows in Selvam Holdings (Malaysia) Sdn Bhd v Toby Lam & Anor [1994] MLJU 429: “Looking only at the facts disclosed by and through the first part of Balasingam's affidavit in support of this application and his affidavit of 18 September 1992, the only conclusion I can possibly come to is that Selvam Holdings (M) refers to the applicant. There are no two companies. There is only the applicant, which has sometimes been referred to as Selvam Holdings (M) What Balasingam is attempting to do in his affidavit is to take advantage of a technical defect, that is the imprecision in the naming of the company, to project the illusion of a factual existence of two companies. The fact that there was no company registered as Selvam Holdings (M) is, as I said, established in Balasingam's affidavit of 18 September 1992, which exhibits a letter from the Registrar of Companies to that effect. Balasingam's affidavit in support also exhibits a letter from the Official Assignee which certified that no winding-up order had been made in respect of Selvam Holdings (Malaysia) Those letters, however, merely stated the true position by strict reference to the given company name. They did not mean to say that Selvam Holdings (M) was not the company registered as Selvam Holdings (Malaysia) or that that company had not, as Selvam Holdings (M), been ordered to be wound up. Recognition of the fact that there was only one company and the name Selvam Holdings (M) referred to that company, which is the applicant, was unwittingly betrayed by learned Counsel for the applicant at that time at the very outset of his oral submission when he stated the question in this application as being - according to my notes - "Whether a company can be wound up in its wrong name". The question being put thus, it carried the admission that the issue was one of improper naming and not one of confusion of identity between two companies. I need not set out the contents of the affidavits of the respondents. I need only say that they furnish ample proof that Selvam Holdings (M) refers to the applicant and that the applicant itself, through its servants and agents, has been in the habit of referring to itself in its dealings by the shortened name of Selvam Holdings (M) Those are facts that I would find it impossible that Balasingam and the past and present legal advisers and agents of Balasingam or the applicant were not aware of. The fact that there has been only one company having been established, the question in this application remains one only of law, and that is whether the order to wind up the applicant is null and void and ineffective by reason that it refers to the applicant as Selvam Holdings (M) instead of by its registered name of Selvam Holdings (Malaysia) Were I not to be restrained by some clear and binding authority, I should think I would be contributing to making an ass indeed of the law if I were to answer the question in the affirmative. The applicant has not come up with such authority.” (emphasis added) [32] In the premises, I find and hold that Jalex has not breached s. 5(1) of the CIPAA by having served the payment claim on the wrong party. [33] Thirdly and finally as to CCYR’s contention that the adjudication proceedings cause papers were not served by Jalex on CCYR in accordance with the provision in s. 38 of the CIPAA, it is provided as follows in s. 38 of the CIPAA:

Service of notices and documents Service of a notice or any other document under this Act shall be effected on the party to be served-

by delivering the notice or document personally to the party;

by leaving the notice or document at the usual place of business of the party during the normal business hours of that party;

by sending the notice or document to the usual or last-known place of business of the party by registered post; or

by any other means as agreed in writing by the parties. [34] From the affidavits adduced by the parties, I find that Jalex has served the following:

the payment claim dated 19 October 2020 personally on CCYR on 21 October 2020 on CCYR’s representative Ren Kai Xuan who duly acknowledged service;

(ii) the notice of adjudication dated 20 November 2020 personally on CCYR 2 December 2020 on CCYR’s representative Ren Kai Xuan who duly acknowledged service; and

(iii) the adjudication claim dated 29 January 2021 personally on CCYR on 12 March 2021 on CCYR’s representative Ere Teoh Pan Yi who duly acknowledged service all at CCYR’s usual business address located Level 9, Suite 9-03 & Suite 9-03A, Vertical Corporate Tower B, Avenue 10, Bangsar South, No. 8 Jalan Kerinchi, 59200 Kuala Lumpur. [35] In Mammoth Empire Construction Sdn Bhd v STAM Engineering Sdn Bhd and Another Case [2019] 10 MLJ 58 that s.38(b) of the CIPAA does not require the service of the payment claim to be done at the registered office. [36] In the premises, I find and hold that Jalex has correctly and properly served the adjudication cause papers on CCYR either personally or leaving at its business address which fulfilled s. 38 of the CIPAA. [37] Consequently, I further find and hold that CCYR has in the circumstances failed to make out a meritorious application to set aside the Decision. OS 2 must accordingly be dismissed. Enforcement application (OS 1) [38] By virtue of the agreement reached between the parties as stated in paragraph [17] above, it follows that OS 1 must be allowed pursuant to s. 28 of the CIPAA that provides:

Enforcement of adjudication decision as judgment

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. [39] Furthermore, I am satisfied and find that Jalex has met the requirements set out in the case of Tan Eng Han Construction Sdn Bhd v Sistem Duta Sdn Bhd [2018] 1 LNS 428 and the case of Inai Kiara Sdn Bhd v Puteri Nusantara Sdn Bhd [2019] 2 CLJ 229 CA on the enforcement of an adjudication decision. [40] In other words, Jalex has made out a meritorious application to enforce the Decision as sought in OS 1. Conclusion [41] It is for the foregoing reasons that I disallowed OS 2 and allowed OS 1 as so ordered. Dated this 22 September 2022 t.t. LIM CHONG FONG JUDGE CONSTRUCTION COURT 1 HIGH COURT KUALA LUMPUR COUNSEL FOR THE PLAINTIFF IN OS 1 AND DEFENDANT IN OS 2: GOH HUI RING & NAVEENRAJ RAJENDRA SOLICITORS FOR THE PLAINTIFF IN OS 1 AND DEFENDANT IN OS 2: GOH PARTNERSHIP COUNSEL FOR THE DEFENDANT IN OS 1 AND PLAINTIFF IN OS 2: LEE TZE JIET SOLICITORS FOR THE DEFENDANT IN OS 1 AND PLAINTIFF IN OS 2: CHEOK NG LEE LAW CHAMBERS