Key Project Resources v Chong Chook Yew Sdn Bhd (WA-24C-24-02/2023)

1.1. This Application by the Plaintiff is made under Section 15 (b) and (d) of the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”).

1.2. The Adjudicator erred by exceeding his jurisdiction when he gave an extension of time to the Defendant to serve the Adjudication Response out of time from what was provided for in the Construction Industry Payment and Adjudication Act 2012. S/N fA37UdVDR0mbfoYWcmRtdw

1.3. The Adjudicator erred by declining to exercise his jurisdiction by refusing to consider the application for extension of time when considering the Plaintiff’s defence against the Defendant’s claim for Liquidated Ascertained Damages (LAD) as a set off against the Plaintiff’s claim in view of the fact that both the Extension of Time (EOT) and LAD are closely interlinked with each other.

1.4. The Adjudicator was in breach of the rules of natural justice by not taking into account the issue of vacant possession when considering the claim for LAD by the Defendant.

1.5. The Adjudicator was in breach of the rules natural justice when he rejected the submission of documentary evidence by the Plaintiff for the Penultimate Claim without providing any substantive reasons. [2] The part of the AD which is sought to be set aside is a. the part of the Decision that allowed the Defendant to serve the Adjudication Response out of time beyond what was provided in the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”); b. the part of the Decision that allowed a set-off for LAD for RM1,178,000.00; c. the part of the Decision where the Adjudicator dismissed the Plaintiff’s claim for the Penultimate Claim; d. the part of the Decision where the Adjudicator declined to exercise his jurisdiction when he did not consider the application for EOT by the Plaintiff; and S/N fA37UdVDR0mbfoYWcmRtdw e. the part of the Decision where the Adjudicated Amount to be paid to the Plaintiff was RM140,591.79 with simple interest. Background Facts [3] By a Letter of Award dated 15.02.2019, the Defendant appointed the Plaintiff as the Main Contractor for the Demolition Works, main Building Works, Mechanical & Electrical Services and External Works for the following Project (Project) referred to and defined below: “Letter of Award for Cadangan Tambahan Dan Perubahan Serta Menukar Kegunaan Bangunan Kediaman 4 Tingkat Sediaada Di Atas A) Lot 9378 (Fasa 1)- Tingkat Bawah dan 1 Dari Pejabat kepada Retail B) Lot 9379 (Fasa 2)- Tingkat Bawah Dari Pejabat Kepada Retail Jalan Langgak Tunku, Bukit Tunku, 50480 Kuala Lumpur untuk Tetuan Chong Chook Yew Sdn. Bhd.” [4] The Project comprised of the following components: Fasa 1 Lot 9378 Blocks A & B Tingkat Bawah Dan 1 dari Pejabat kepada Retail Fasa 2 Lot 9379 Blocks E-K Tingkat Bawah Dari Pejabat kepada Retail [5] The Project commenced on 18.02.2019 for Fasa 1 (Blocks A & B) and 08.07.2019 for Fasa 2 (Blocks E-K). [6] With the issuance of the Certificate of Completion and Compliance (“CCC”) for Fasa 2 on 23.11.2020, all works for the Project had been S/N fA37UdVDR0mbfoYWcmRtdw completed save for 4.5% of minor works which was completed on 23.4.2021. [7] There were delays in the completion of the Project due to the circumstances beyond the control of the Plaintiff, amongst others, the Standard Operating Procedures (“SOPs”) issued under the Movement Control Orders arising from the Covid-19 pandemic, numerous variation orders issued by the Architect which increased the scope of the works and insufficient number of days approved under the applications for extension of time (“EOT”). [8] However, all the works for both Fasa 1 and Fasa 2 were completed, and Payment Certificates were issued accordingly. [9] The payment received by the Plaintiff was RM14,585,944.06. [10] The Defendant still owed RM2,447,170.59 which comprised:

the Outstanding Amount for certificates 15 to 20 for RM1,364,170.60;

balance of the Penultimate Claim for RM632,999.99; and

the 2nd Moiety Retention for RM450,000.00 which was due on 30.102022. Courts Analysis [11] As a starting point I would like to reiterate section 15 (b) and (d) of CIPAA which states: S/N fA37UdVDR0mbfoYWcmRtdw “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.” [12] I will also refer to Order 69 A rule 3 (1) (b) of the rules of Court 2012 which provides: “(1) In every application to set aside an adjudication decision under section 15 of the Act, the originating summons shall, in addition to the matters stated in subrule 2(1)

give details of the adjudication decision challenged;

identify which part or parts of the adjudication decision are challenged; and

specify the grounds on which it is contended that the adjudication decision should be set aside.” Preliminary Issue [13] On the preliminary issue of whether the above section allows part of the AD to be set aside, it was argued on behalf of the Defendant that the said section does not permit for an AD to be set aside in part. S/N fA37UdVDR0mbfoYWcmRtdw [14] After going through section 15 of CIPAA and Order 69 A rule 3 (1) (b) of the Rules of Court 2012 in its entirety, I am satisfied that the said section is silent as to whether the AD can be set aside partially and in the circumstances I hold that as the said section 15 of CIPAA does not state that the AD cannot be set aside in part and in the absence of such express words prohibiting the setting aside of part of the AD, the AD can be set aside in part. I am also of the view that Order 69 A rule 3 (1) (b) of the Rules of Court 2012 support that proposition by the words in sub rule (b) of rule 3 (1) when the words ‘identify which part or parts of the adjudication decision are challenged’ implies that the AD can be set side partially. [15] I am thus in consonant with the decision of Lee Swee Seng J (as he then was) in Emerald Capital (Ipoh) Sdn Bhd V Pasukhas Sdn Bhd And Another Appeal [2018] MLJU 440 that the AD can be set aside in part. Substantive Issues A. Jurisdictional Challenge & Error in Jurisdiction [16] I will now deal with each of the said issues in support of Enclosure 1 with the first issue being whether the Adjudicator had erred in his jurisdiction when he gave an extension of time to serve the Adjudication Response out of time from what was provided in CIPAA i.e after the expiry of the stipulated 10 days time frame as stated in section 10 of CIPAA. S/N fA37UdVDR0mbfoYWcmRtdw [17] With respect, I have noted from the AD that the Adjudicator had sought the views of the respective parties on this issue and I accept that section 25 (p) CIPAA gives the Adjudicator a wide discretionary power to extend time. I also hold that the said section does not only take effect where there is an application for extension of time to serve the Adjudication Response is made before the expiry of the time line, as contended by the Plaintiff, as the said section provides that: “The adjudicator shall have the powers to:-

extend any time limit imposed on the parties under this Act as reasonably required.” [18] See also the case of AMT Engineering Services b Ah Design Communication Sdn Bhd And Another Appeal [2018] MLJU 1860 where a similar decision was made on the issue of extension of time line. It is thus my decision that the Adjudicator’s power to extend the time under section 25 (p) CIPAA is equally applicable even after the expiry of the stipulated period in section 10 of CIPAA as section 25

CIPAA gives the Adjudicator wide powers to extend and regularize time. [19] I thus hold that there is no breach of natural justice in respect of this issue and that the Adjudicator had not acted in excess of his jurisdiction when he gave an extension of time to the Defendant to serve the Adjudication Response. Delay [20] The Plaintiff had further submitted that the Adjudicator had declined to exercise the Plaintiff’s application for EOT when there were delays S/N fA37UdVDR0mbfoYWcmRtdw in the completion of the Project with inter alia the delay in commencing the Project as a result of the designs beings submitted late, the numerous variation orders (VO’s) and the Movement Control Order (“MCO”) vis a vis the Covid19 pandemic being implemented. These had led to the LAD being claimed by the Defendant. [21] It was pointed out to this Court that the said delays were referred to at paragraphs 32 to 42 of the Adjudication Claim and at paragraph 15 of the Adjudication Reply. [22] On this issue of the Adjudicator declining to exercise his jurisdiction to consider the Plaintiff’s application for EOT, I find that Adjudicator did address his mind to the same as can be seen at paragraphs 88, 89, 92 and 95.7, 95.8, 114 (c) of the AD where the Adjudicator has inter alia

indicated that to enable him to determine the Plaintiff’s/Claimant’s claim he will have to consider the issues and facts related to the EOT as it is interlinked to the LAD and completion of works

(ii) drew on his own knowledge pursuant to section 25 (d) of CIPAA that where the facts and issues are inter linked he has jurisdiction to consider the same as per the case of SKS Pavillion Sdn Bhd v Tasoon Injection Pile Sdn Bhd [2019] 9 MLJ 396

(iii) in paragraph 92 of the AD stated ‘Notwithstanding, I agree with the Respondent that I do not have the jurisdiction to decide on whether EOT should be allowed or dismissed but I will consider the issues and facts involving EOT in the Project’ S/N fA37UdVDR0mbfoYWcmRtdw

(iv) gave his views on the EOT and the Defendant taking over site possession either in whole or in part and that he was of the view that clause 16 (c) of the CoC was applicable and thus the LAD claimable should be reduced or apportioned as the cause provided

the fact that the Defendant amongst others admitted taking possession whether in whole or in part, the Plaintiff’s applications for EOT was not dealt with, the Plaintiff’s increase scope of works, that there were evidence that works were still in progress after 13.10.2020 which were pertinent to be taken into consideration in the Plaintiff’s/Claimant’s dispute for the unpaid works and the EOT

(vi) the issues of EOT no. 3 and that it had the effect of revoking the CMC for the previous completion dated i.e 12.8.20220

(vii) the issue of clause 23.1(a) of CoC

(viii) the issue of estoppel

(ix) the notice to impose LAD

the differing amounts to set off

(xi) the issue of time being at large

(xii) the issue of shortage of manpower

(xiii) given his reasonings why the defendant should be allowed to set off the LAD for section 1 and 2

(xiv) that he did not have jurisdiction to determine on EOT but that he was allowed to consider the issues and facts involving the EOT in the Project [23] I hold from the above findings that the Adjudicator was not only rather meticulous but also being merely extra cautious when addressing this issue of delay and EOT’s. S/N fA37UdVDR0mbfoYWcmRtdw [24] Accordingly, I hold that there is nothing in the contention that the Adjudicator had taken a restrictive view of his jurisdiction as he did make a decision that he had no jurisdiction to determine the EOT but that he was allowed to consider the issues and facts involving the EOT in the Project. [25] Thus, this was not a situation where the Adjudicator did not hear at all the arguments vis a vis the delay and EOT’s, but what is being challenged is his decision thereafter that he had no jurisdiction to hear the same. [26] It was held in Syarikat Bina Darul Aman Berhad & Anor v Government of Malaysia [2017] MLJU 673 that: “[70] A refusal to assume jurisdiction and decide on the matter submitted to it on the erroneous understanding of his lack of jurisdiction would be equally a breach of natural justice in that the Claimant’s Claim, in this case, under Claim No.4 for “Loss and Expense Claim” was not heard at all when it has been properly submitted for Adjudication.” [27] The facts before me, however, shows that the Adjudicator did answer the question or issue of delay and EOT albeit the fact that he may have made a mistake as to the said answer is not a matter which will affect the enforcement of the AD, see the case of Bouygues (UK) Ltd v Dahl-Jensen (UK) Ltd [2000] BLR 49 which was quoted and referred to in Syarikat Bina Darul Aman Berhad & Anor (supra). Hence in this Court’s view, no breach of natural justice has been occasioned here due to the same. S/N fA37UdVDR0mbfoYWcmRtdw Liquidated Ascertained Damages [28] I have observed that there was some disagreement with regards the LAD between the parties on this issue. In any event, after due perusal of the AD in toto, I find that the Adjudicator had

adopted the position not to consider the EOT as a defence against the LAD

(ii) decided that the practical completion for the Project was 3.3.2021

(iii) the Defendant could retain and set off the LAD for the period 14.10.2020 to 3.3.2021 (a total of 141 days) from the aforementioned paragraphs in the AD and

(iv) that his reasons for the same were given by the Adjudicator in the AD. [29] On this point, I hold that the Adjudicator had correctly addressed the issue of the LAD. Whether the Adjudicator may have decided the same correctly or not is an issue which goes to the merit of the matter and does not come within the ambit of section 15 of CIPAA. Accordingly, the AD cannot be set aside for the alleged incorrectness of the AD on this issue. Once again I hold on this point that there is no breach of natural justice in respect of this issue and that the Adjudicator had not acted in excess of his jurisdiction Vacant Possession Issue [30] The Plaintiff had also asserted that the issue of vacant possession (VP) was not properly considered by the Adjudicator and that it had established the nexus between the VP and the LAD whilst the S/N fA37UdVDR0mbfoYWcmRtdw Defendant submits that the issue of VP is not relevant to the determination of the LAD. [31] I have observed that this issue of VP was not raised in the Plaintiff’s Adjudication Response or Reply at the Adjudication proceedings and that in the AD itself, the Adjudicator had touched on this issue when under the heading “Determination on completion of Works, Liquidated Damages and Costs for Appointing Third Party Contractors and Utility Bill” he held that there was no practical completion when CCC was issued. [32] I thus conclude that the Adjudicator did consider this issue of VP but it is at most, an error regarding a finding of fact and is not a breach of natural justice. Alleged Failure to Consider Documentary Evidence For The Penultimate Claim [33] As to the documentary evidence for the penultimate claim, which consisted of 400 pages of documentary evidence which the Plaintiff submits was not considered by the Adjudicator, I hold as per Ireka Engineering and Construction Sdn Bhd v PWC Corp Sdn Bhd and another appeal [2019] MLJU 35 that the weight to be attached to any evidence is within the domain of the Adjudicator. [34] In Ireka Engineering and Construction Sdn Bhd (supra), the Court of Appeal had held: “ [40]….The learned judge stated that the sufficiency of the evidence and/or the weight to be attached to the evidence is a S/N fA37UdVDR0mbfoYWcmRtdw matter within the domain of the adjudicator and that it was not a ground to be raised in an application to set aside the adjudication decision. We were in full agreement with that proposition given that section 12(a) of the CIPAA has provided that the Evidence Act 1950 shall not apply to adjudication proceedings under the Act….” [35] I do however find that in the AD, the Adjudicator did however consider the penultimate claim where he had amongst others held “…I am not satisfied that the claimant had substantiated with documentary proof in its Penultimate Claim”. [36] I hold that this issue raised by the Plaintiff is thus not a ground to set aside the AD and is not a breach of natural justice and that the Adjudicator had not acted in excess of his jurisdiction on this issue. Decision [37] Based on all of the above, I hereby dismiss Enclosure 1 with costs. Dated: 8th day of September 2023 sgd. NADZARIN WOK NORDIN HIGH COURT JUDGE CONSTRUCTION COURT 1 COUNSEL FOR THE PLAINTIFF: Dato’ Selwyn Vijayarajan Das and James Lopez [Messrs Fernandez & Selvarajah] S/N fA37UdVDR0mbfoYWcmRtdw COUNSEL FOR THE DEFENDANT: Jocelyn Lim Yean Tse and Jeremiah Ch'ng Khoo Ern [Messrs Skrine] S/N fA37UdVDR0mbfoYWcmRtdw