Kl Landmark Development Sdn Bhd (dalam Penggulungan) v Jalex Sdn Bhd (WA-24C-79-03/2022)

the Defendant had wrongly referred the dispute pursuant to the construction contract dated 18.11.2013 between the parties to adjudication under the CIPAA;

the Adjudicator had issued the AD in favour of the Defendant; and

the Adjudicator had acted in excess of jurisdiction as the CIPAA is not retrospective in nature and does not apply to the construction contract that is entered prior to the commencement of the CIPAA. [3] When the matter was called up for hearing of the Setting Aside Application on 4.7.2022, the Court had already received the Defendant’s solicitors’ letters dated 28.6.2022 which were addressed (encl. 13) and copied (encls. 14 and 15) to the Court wherein the Defendant had taken objections to the Notice of Change of Solicitors (‘NCS’) which was filed by Messrs. Mah-Kamariyah & Philip Koh (‘Messrs. MKPK’) on 27.6.2022 (encl. 12). Up until the filing of encl. 12, the firm of solicitors on record representing the Plaintiff was Messrs. Cheok Ng Lee Law Chambers (‘Messrs. CNL’). [4] Mr. Kamraj Nayagam who appeared for the Plaintiff had requested for an adjournment of the hearing to enable the Plaintiff to “regularise matters”. The Court, in the exercise of its discretion, denied the application and proceeded with the hearing. [5] The Court considered the preliminary objections and issues raised by the Defendant in defending the Setting Aside Application and found that there was merit to some of these objections and issues. The Setting Aside Application was accordingly dismissed with costs of RM5,000.00, subject to allocator. [6] The Plaintiff is aggrieved by the decision and for purposes of the appeal, my full reasonings are elaborated in the succeeding part of this judgment. The Cause Papers [7] The cause papers in relation to the Setting Aside Application are as follows:

the Plaintiff’s Affidavit In Support (‘AIS’) affirmed by Zulkifli bin Mohamed (‘Zulkifli’) on 29.3.2022 (encl. 2);

the Plaintiff’s AIS (2) affirmed by Zulkifli on 6.4.2022 (encl. 3; in para 6, the deponent averred that he has been advised by the Plaintiff’s solicitors to re-affirm the AIS although the contents of both affidavits are the same and AIS(2) is to substitute the AIS in the event of any conflict with the AIS); and

the Defendant’s Affidavit In Reply (‘AIR’) affirmed by its Financial Director, Wong Ping Kong dated 20.5.2022 (encl. 9). [8] The Plaintiff did not file an AIR to encl. 9 within the time as directed by the Court during the case management (‘CM’) on 27.4.2022. The Defendant’s Application for Security for Costs [9] On 11.4.2022, the Defendant had filed an application (encl. 5) pursuant to, among others, O. 23, rr. 1 and 2A and O. 92, r. 4 of the Rules of Court 2012, ss 25 and 25A of the Courts of Judicature Act 1964 [Act 91], s 580A of the Companies Act 2016 [Act 777] (‘CA 2016’) and/ or the inherent jurisdiction of the Court for an order, inter alia, that the Plaintiff, City Properties Sdn Bhd (‘City Properties’), Tan Sri Yap Yong Seong (‘Tan Sri Yap’) and/ or such other parties the Court may order, do within seven days from the date of the Court Order to furnish security for the Defendant’s costs in these proceedings in the sum of RM100,000.00 and/ or such other sum to the satisfaction of the Court. A Certificate of Urgency (encl. 7) was also filed on 12.4.2022. [10] The solicitors representing the parties appeared before the Court on 15.4.2022 and informed that the parties had reached an agreement on encl. 5. A Consent Order was duly recorded whereby (i) the Plaintiff is to pay RM20,000.00 to the Plaintiff's clients account as stakeholder by 22.4.2022; (ii) the amount will be disbursed upon the order of the Court;

(ii) if the Plaintiff fails to pay as per the agreed term, the Setting Aside Application shall be struck out.; and (iv) cost in the cause. [11] At the CM on 27.4.2022, the Defendant’s solicitors confirmed that the agreed sum for security of costs has been deposited in the client’s account. The Court then gave directions for the filing of affidavits and written submissions for the Setting Aside Application and the hearing date was set on 4.7.2022 via video conferencing. Background Facts [12] By a Letter of Award dated 18.11.2013 (‘LoA’), the Plaintiff appointed the Defendant to carry out the “Level 4 Renovation For Cadangan Ubahsuai Pada Aras 4 Pada Bangunan Avenue “K” 52 Tingkat Yang Sedia Ada Di Atas Lot PT 44, Seksyen 43, Jalan Ampang, Daerah Kuala Lumpur, Wilayah Persekutuan Untuk Tetuan KL Landmark Development Sdn Bhd” (‘Project’) for the contract sum of RM2,886,931.30. According to the LoA, the date of commencement of the Project is 18.11.2013 and the completion date is 15.2.2014. [13] The Certificate of Practical Completion for the Project was issued on 27.5.2014 certifying that the works have been satisfactorily completed and taken into possession by the Plaintiff on 20.5.2014. The Certificate of Making Good Defects was subsequently issued on 19.5.2015. [14] On 1.6.2015, the Defendant wrote to the Plaintiff claiming that there were outstanding payments due to the Defendant under Interim Certificates Nos. 6, 7, 8 and 9 together with overdue interest for the delay in payment. [15] As no payments were forthcoming, the Defendant served a Payment Claim on the Plaintiff pursuant to s 5 the CIPAA on 21.10.2015. This was followed with the Notice of Adjudication on 18.11.2015, the Adjudication Claim on 6.1.2016 and Written Submissions and Bundle of Authorities on 12.2.2016. [16] The Plaintiff did not serve a Payment Response and an Adjudication Response to the Defendant. [17] On 29.3.2016, the Adjudicator decided as follows: “41. …

The Respondent shall pay the Claimant the sum of RM1,471,142.44 within seven (7) days from the date of this Adjudication Decision.

The Respondent shall pay the Claimant interest based on Maybank Base Lending Rate plus one

percent on the sum of RM1,356,792.99 from 16.10.2015 to the date payment is made.

The Respondent shall, within seven (7) days from the date of this Adjudication Decision, pay Costs to the Claimant as follows:-

Legal Costs of RM20,000.00

(ii) Adjudicator’s Fee of RM24,132.07.

(iii) Adjudicator’s Expenses of RM195.29.

(iv) KLRCA Administrative Fee of RM5,115,99.”. [18] The sum of RM1,471,142.44 is made up of the following (see para 28 of the AD): Interim Certificate No. Date of Certificate Payment Due Date Interim Certificate Amount for works carried out by Claimant Interest from Payment Due Date to 15.10.2015 Total 6

29..4.2014

29.6.2014 372,872.61 37,807.75 410,680.36 7

19.5.2014

19.7.2014 307,996.42 30,006.87 338,003.29 8

20.8.2014

20.10.2014 454,936.37 35,223.29 490,159.66 9

20.12.2014

19.2.2015 220,987.59 11,311.54 232,229.13 Total 1,356,792.99 114,349.45 1,471,142.44 [19] On 11.4.2016, the Defendant issued a statutory demand pursuant to s 218 of the Companies Act 1965 [Act 125] (‘CA 1965’) for the amounts awarded under the AD. [20] The Plaintiff failed to comply with the statutory demand. Hence, the Defendant commenced winding-up proceedings against the Plaintiff and the Winding-up Order was obtained on 29.9.2016. The issuance of the statutory demand and the winding-up proceedings were not opposed or challenged by the Plaintiff. [21] In para (B) of the Winding-up Order, the Official Receiver was appointed as provisional liquidator or liquidator of the Plaintiff. [22] On 22.6.2017, the Defendant commenced a claim against, among others, the Plaintiff’s contributory and 100% holding company, City Properties Sdn Bhd (‘City Properties’) at the Kuala Lumpur High Court vide Suit No. WA-22NCC-247-06/2017 for fraudulent trading through the Plaintiff under s 540 CA 2016 (‘Fraud Suit’). The Fraud Suit has been heard and as at the date of hearing of the Setting Aside Application, the decision of the court was pending. [23] Meanwhile, the Plaintiff decided to pursue the Setting Aside Application by filing encl. 1 on 28.3.2022 through its then solicitors, Messrs. CNL. Preliminary Objections [24] In its AIR, the Defendant affirmed, among others, that: “5. I have been advised by the Defendant’s solicitors and I verily believe and state that the Plaintiff’s OS filed herein is defective as the Plaintiff as well as the deponent of the Plaintiff’s 1st AIS and the Plaintiff’s 2nd AIS, Zulkifli bin Mohamed, do not have the locus standi to file the Plaintiff’s OS nor to affirm the affidavit in support of the Plaintiff’s OS.

I state that the deponent, Zulkifli bin Mohamed is neither a shareholder or director of the Plaintiff and had affirmed the Plaintiff’s 1st AIS and the Plaintiff’s 2nd AIS as an attorney for one Tan Sri Yap Yeong Seong (“Tan Sri Yap”) pursuant to a power of attorney as shown in Exhibit “ZU 11” of the Plaintiff’s 2nd AIS. However, the said Tan Sri Yap is also not a shareholder or director of the Plaintiff.

Further there was no proper sanction obtained by the Plaintiff for the Plaintiff’s OS to be commenced against the Defendant, and the terms of the said sanction being relied upon as shown in Exhibit “ZU-10” do not cover the present action.

I have been advised by the Defendant’s solicitors that the Plaintiff’s OS ought to be struck off forthwith”. [25] The averments were further accentuated by the Defendant’s Written Submission (encl. 10) to persuade the Court to dismiss the suit in limine as it is said to be flawed and defective in law for the following reasons:

the alleged sanction dated 28.3.2022, which was issued by the Malaysia Department of Insolvency (‘MdI’) and signed by its Director at the Federal Territory of Kuala Lumpur Branch (‘Alleged Sanction’) and relied upon by the Plaintiff in instituting the Setting Aside Application, contravenes sub-s 486(1) and the

the Alleged Sanction does not cover the present proceedings and is for commencing an action in the Court of the Special Commissioner of Income Tax (‘SCIT’), and not the High Court in

the Plaintiff’s AIS and AIS(2) are defective as Zulkifli has no proper authority to affirm the affidavits on behalf of the Plaintiff and nor does he have personal knowledge of the details as affirmed. [26] Having been given notice of the preliminary objection vide the Defendant’s AIR and Written Submission and having received the Defendant’s solicitors’ letters regarding the objection to the NCS as mentioned in para 3 above, the Plaintiff’s counsel immediately requested for an adjournment of the hearing when the case was called up to allow the Plaintiff to regularise the following:

the Defendant’s objection to the Alleged Sanction as a result of the recent decision by Azlan Sulaiman JC in Small Medium Enterprise Development Bank Malaysia Bhd v. Oren Venture Sdn Bhd & Ors And Another Case [2022] 6 CLJ 148 (‘SME’s Case’) by seeking a sanction from the Insolvency Court;

the terms of the Alleged Sanction in para 2 refers to “Mahkamah Pesuruhjaya Khas Cukai Pendapatan” which the Plaintiff believes is a typographical error; and

subpara 2(e) of the Alleged Sanction on the procedure where there is a change of solicitors. [27] The Defendant’s counsel submitted that the Setting Aside Application ought to be dismissed because –

the Plaintiff’s counsel request to be given time to regularise the Alleged Sanction by making an application to the Insolvency Court is an admission that the Alleged Sanction and the proceedings are invalid;

even if the Court accepts that the Alleged Sanction is valid, the term in subpara 2(e) of the Alleged Sanction has not been complied with. The Plaintiff’s counsel has also admitted that the NCS is not in order and has to be regularised;

flowing from the above, the Plaintiff’s counsel cannot be heard;

the Setting Aside Application is an abuse of the process of the court as no AIR and written submission were filed although directions were given; and

the Plaintiff’s application for the hearing to be postponed in order to give time to the Plaintiff to regularise the proceedings should not be entertained as there is no justifiable reason for a postponement when the Plaintiff should not have commenced the proceedings in the first place. The matter has been unnecessarily prolonged as the AD was issued since 29.3.2016. [28] In response, Mr. Kamraj conceded that there are difficulties on the face of the Alleged Sanction, particularly in relation to para 2 and subpara 2(e). However, the learned counsel did not concede that the Alleged Sanction must be from the Insolvency Court. In this regard, he relied on the Federal Court decision in Zaitun Marketing Sdn Bhd v Boustead Eldred Sdn Bhd (formerly known as Bousted Trading (1985) Sdn Bhd) [2010] 2 MLJ 749. It was posited that, under the circumstances, the Court has three options viz. (i) to allow the adjournment on the solicitor’s undertaking that they will do the needful to regularise the Alleged Sanction; (ii) to proceed with the hearing and to accept the Plaintiff’s Skeletal Written Submissions which was e-filed and e-mailed to the Defendant’s solicitor at 8.45 a.m. (the hearing began at 9.14 a.m.); or (iii) to strike out the Setting Aside Application with liberty to the Plaintiff to file afresh as it would be unfair if the matter is struck out when the Plaintiff has not been heard. [29] Ms. Joshinae drew the attention of the Court to the fact that Zaitun Marketing (supra) was considered in SME’s Case. The learned counsel further argued that there is a contradiction to Mr. Kamraj’s submission; on one hand he has instructions to apply for a sanction from the Insolvency Court and on the other hand, he cited Zaitun Marketing as authority for the proposition that the liquidator can issue the Alleged Sanction. [30] Having heard the oral submissions by the learned counsels, I took time to deliberate, and the case was recalled two hours later for the pronouncement of the decision of the Court. Findings of the Court - The Plaintiff’s application for postponement of the hearing [31] I was not inclined to postpone the hearing to another date because the directions on the filing of affidavits and written submissions had been given on 27.4.2022 when Messrs. CNL represented the Plaintiff. The NCS was filed only on 27.6.2022 even though the Plaintiff is aware that there are certain conditions that must be fulfilled before Messrs. MKPK can represent the Plaintiff (see subpara 2(e) of the Alleged Sanction which will be further discussed in the succeeding paras of this judgment). [32] Furthermore, there is no justifiable reason for the Plaintiff to be given the chance to “regularise matters”. There should not be a need to regularise anything as the Plaintiff should not have initiated the present proceedings in this Court if there are irregularities which have to be addressed beforehand. [33] With my decision to proceed with the hearing, I did not consider the Plaintiff’s Skeletal Written Submissions as it was e-filed only 29 minutes before the online hearing began and it had not been processed yet. [34] It is trite that positive averments on material issues in an affidavit must be contradicted, otherwise they are taken as admitted (see Ng Hee Thoong & Anor v Public Bank Bhd [1995] 1 MLJ 281 and the numerous cases which have applied this legal principle). However, this Court recognises that the Defendant’s objections involve primarily issues of law. It was on this basis that Mr. Kamraj was heard on the law. [35] Ultimately, after having considered the cause papers as listed in para 7 above, and the oral submissions by Mr. Kamraj and Ms. Joshinae as well as the Defendant’s Written Submission, I found that there is merit in some of the Defendant’s preliminary objections and other issues as discussed in turn below. 1st Objection: Whether the liquidator has power to grant the Alleged Sanction [36] Following the Winding-Up Order, the power to bring legal proceedings in the name of the Plaintiff or on its behalf lies with the liquidator. Sub-s 486(1) and Part I of the Twelfth Schedule of the CA 2016 provides that: “Powers of liquidator in winding up by Court

(1) Where a company is being wound up by the Court, the liquidator may ‒

without the authority under paragraph (b), exercise any of the general powers specified in Part I of the Twelfth Schedule; and

with the authority of the Court or the committee of inspection, exercise any of the powers specified in Part II of the Twelfth Schedule.

The exercise by the liquidator in a winding up by the Court of the powers conferred by this section is subject to the control of the Court and any creditor or contributory may apply to the Court with respect to any exercise or proposed exercise of any of those powers.” “TWELFTH SCHEDULE POWERS OF LIQUIDATOR IN WINDING UP BY COURT

Berdasarkan Surat Aku Janji tuan/puan bertarikh 18.2.2022, Pegawai Penerima dan Penyelesai (‘PPP’) bagi syarikat KL LANDMARK DEVELOPMENT SDN BHD (No. Syarikat : 833392-P) (dalam penggulungan) telah meluluskan kebenaran penyelesai (‘sanksi’) untuk tuan/puan memulakan dan/atau meneruskan tindakan di Mahkamah Pesuruhjaya Khas Cukai Pendapatan dan melantik TETUAN CHEOK NG LEE LAW untuk mewakili KL LANDMARK DEVELOPMENT SDN BHD (No. Syarikat: 833392-P) (dalam penggulungan) dalam guaman tersebut tertakluk kepada syarat-syarat seperti yang berikut: …

Sekiranya terdapat penukaran peguam dan firma guaman oleh Penyumbang, peguam yang telah diberi kebenaran penyelesai (‘sanksi’) oleh PPP bagi mewakili syarikat hendaklah memaklumkan berkenaan pertukaran ini kepada PPP secara bertulis. Lanjutan itu, Penyumbang syarikat dikehendaki untuk memohon kebenaran penyelesai (‘sanksi’) yang baharu kepada PPP sebelum apa-apa tindakan guaman dimulakan dan/atau diteruskan di mahkamah oleh peguam dan firma guaman yang baharu; …

Sila ambil perhatian bahawa kebenaran penyelesai (‘sanksi’) ini berkuat kuasa pada tarikh surat ini dikeluarkan. …”. [49] Based on the above quoted part of the Alleged Sanction, it can be seen that:

the opening para refers to the application by the contributory dated 21.2.2022 but the Alleged Sanction is addressed to Messrs. CNL and not to Tan Sri Yap or City Properties;

the liquidator has approved the Alleged Sanction to Messrs. CNL to commence and/ or to continue the action in the Court of the SCIT;

the liquidator has appointed Messrs. CNL to represent the Plaintiff in the said action subject to seven conditions; and

one of the conditions is that, if there is a change of solicitors and law firm by the contributory, Messrs. CNL shall inform the liquidator in writing regarding this change. The contributory is required to apply for a fresh sanction from the liquidator before any legal action is commenced and/ or continued in court by the new solicitor and law firm. [50] The affidavit evidence has established that the scenario in this case is one where Tan Sri Yap had applied for a sanction for the Plaintiff to commence this suit against the Defendant. However, the Alleged Sanction was issued to Messrs. CNL. The liquidator’s approval on the appointment of Messrs. CNL was not made pursuant to item (k) of Part I in the Twelfth Schedule of the CA 2016 i.e. to assist the liquidator in his duties, but rather as the purported contributory’s solicitors. As submitted by the Defendant, the liquidator’s power under item (k) does not extend to appointing an advocate to assist a contributory, assuming that Tan Sri Yap is indeed a “contributory” within the meaning of s 2 CA 2016, to carry out a liquidator’s duties. [51] In the circumstances, the Defendant has solid reasons to object to the Setting Aside Application as the liquidator does not have the power to grant the Alleged Sanction in the manner that it has been issued. Whilst the liquidator cannot sanction a third party to bring an action on behalf of a wound-up company, the CA 2016 does allow the court to give a sanction to a contributory on an application made for such order. [52] Therefore, the Court finds and holds that the Alleged Sanction is invalid as the liquidator has no power to issue the same. The Setting Aside Application is defective and must be dismissed in limine. 2nd Objection: Whether the terms of the Alleged Sanction cover the present proceedings [53] The Defendant relied on the case authorities of Lai King Lung & Anor v Merais Sdn Bhd [2020] 9 CLJ 449 at para 36 and Summit Streams Sdn Bhd (in winding-up) v Yayasan Selangor (Sap Ulu Yam Sdn Bhd (in liquidation), intervener) [2021] MLJU 2611 at para 39 in submitting that a sanction must be for a specific proceeding and hence, even if the Court decides that the liquidator has the power to grant the Alleged Sanction, para 2 of the same clearly refers to the Court of the SCIT and not the High Court at Kuala Lumpur. [54] Mr. Kamraj reckoned that the reference to the Court of the SCIT in the Alleged Sanction is a typographical error and this is one of the irregularities which the learned counsel sought time to rectify. [55] Irrespective of whether the reference to the Court of the SCIT in para 2 the Alleged Sanction is a typographical error or otherwise, the fact remains that Messrs. CNL must have received the Alleged Sanction on 28.3.2022 as encl. 1 was filed on that date. The Plaintiff’s previous solicitor had ample time to write to the liquidator on this matter, but this was obviously not done. As for Messrs. MKPK, they were appointed just six days before the hearing. [56] In my opinion, the Defendant has rightly raised the 2nd Objection, and this is another reason justifying the dismissal of the Setting Aside Application. 3rd Objection: Whether the Plaintiff’s AIS is defective [57] In subpara 1(d) of the Plaintiff’s AIS and AIS(2), the deponent Zulkifli affirmed that: “On 29.3.2022, via the power of attorney of Tan Sri Yap dated the same, Tan Sri Yap has given me full authority to affirm this affidavit on behalf of CP and/or the Plaintiff in winding up….”. [58] The Defendant took issue with the fact that Tan Sri Yap is not a director or contributory of the Plaintiff as shown in the SSM search on the Plaintiff (see exhibit “ZU-9”). It was argued that Tan Sri Yap has no locus to grant the Power of Attorney to Zulkifli to affirm any affidavit on behalf of the Plaintiff for the purpose of the present proceedings. [59] Ms. Joshinae referred to the definition of “contributory” in s 2 CA 2016 and para 19 in the judgment in Zaitun Marketing in submitting that, pursuant to sub-s 486(2) CA 2016, a sanction can only be granted to a creditor or contributory and Tan Sri Yap is a shareholder of a contributory and not a contributory of the Plaintiff. Being a shareholder of City Properties does not authorise Tan Sri Yap alone to act on behalf of City Properties, or the Plaintiff, due to the principle of separate legal entities. [60] Further, it was submitted, this time relying on the case of Klasari Sdn Bhd & Ors v Chan Kwong Chee [2017] MLJU 2242, that Zulkifli has no personal knowledge of the matters stated in the affidavits as there is no indication on who he is and how he could have knowledge of any of the facts as affirmed in the affidavits. [61] Upon scrutiny of the Power of Attorney given by Tan Sri Yap in exhibit “ZU-11”, among the scope of the matters therein is to allow Zulkifli – “1. To represent: a. Me in my personal capacity; b. Me in my capacity as a director and/or shareholder of City Properties Sdn Bhd; c. Me in my capacity as a contributory of City Properties Sdn Bhd; and/or d. Me in my capacity and manner as sanctioned by the office of the Official Receiver and Liquidator and/or Insolvency Department of Malaysia to commence proceedings against Jalex Sdn Bhd on behalf of KL Landmark Development Sdn Bhd before any court. …”. [62] I have considered the 3rd Objection but I am not prepared to conclude that the Plaintiff’s AIS and AIS(2) are defective. The 1st and 2nd Objections by the Defendant is premised on the Alleged Sanction which is exhibited in AIS(2). In the AIR, the Plaintiff had only exhibited the Writ and Statement of Claim for the Fraud Suit (exhibit “WPK-1”) and the SSM search on City Properties (exhibit “WPK-2”). If the Court accepts the 3rd Objection, the entire foundation for the 1st and 2nd Objections would collapse.

Whether there is inordinate delay in the filing of the Plaintiff’s application [63] The Defendant asserted that at all material times, the Plaintiff did not challenge the AD and the Setting Aside Application was initiated only after six years since the issuance of the AD. In actuality, the Setting Aside Application is said to be a backdoor way to challenge a valid decision given on the merits by the Adjudicator. [64] In my analysis, it is indisputable that the Plaintiff had chosen not to participate in the adjudication proceedings and that six years have passed since the date of the AD. To aggravate matters, no explanation was offered by the Plaintiff for having awoken from the slumber only in March 2022, especially since the Federal Court had pronounced the decisions in Jack-In Pile (M) Sdn Bhd v Bauer (M) Sdn Bhd and another appeal [2020] 1 MLJ 174 and Ireka Engineering & Construction Sdn Bhd v PWC Corporation Sdn Bhd & Other Appeals [2020] 1 MLJ 311, which form the main thrust of the Setting Aside Application, on 16.10.2019. [65] There is, of course, no provision in the CIPAA which provides the period within which an application to set aside the AD must be made. This is in contrast to the Arbitration Act 2005 [Act 646] where sub-s 37(4) expressly provides, inter alia, that an application to set aside an award may not be made after the expiry of 90 days from the date on which the party making the application had received the award. [66] Sub-s 54(2) of the Interpretation Acts 1948 and 1967 [Act 388] provides that “Where no time is prescribed within which anything shall be done, that thing shall be done with all convenient speed and as often as the prescribed occasion arises.”. In Damai Motor Kredit Sdn Bhd & Anor v Kementerian Kerja Raya Malaysia [2012] MLJU 1803, the Court of Appeal considered the meaning of the words “convenient speed” in the said provision and said: “[28] The question is, what is a convenient speed? The Federal Court in Pemungut Hasil Tanah, Daerah Barat Daya, Pulau Pinang v. Ong Gaik Kee [1983] 1 LNS 14; [1983] 2 MLJ 35, had said that “what amounts to convenient speed vary from case to case and it appears that a convenient speed is period which in a normal course of event would be considered as reasonable. Anything that does not come within that range and which no reasonable authority would regard it as reasonable is not a convenient speed.” The Federal Court in that case was dealing with an application to strike out land acquisition on the ground that, that was a delay of seven years after the declaration of acquisition before an inquiry as to compensation was held by the Collector of Land Revenue resulting in an adequate compensation in that case as to whether the period seven years delay comes within the expression of convenient speed. The Federal Court express the following view. What then is the “convenient speed”? In our view it must be “as soon as possible” or “within a reasonable time”, and not “as late as possible”. Obviously what amounts to “convenient speed” must vary from case to case and in our judgment seven years delay is certainly not a “convenient speed” as it is so far outside the normal period of time that no reasonable authority could ever regard it as reasonable. That being the case the court is entitled to strike down the impugned acquisition proceedings as illegal.” (emphasis added; see too, Tenaga Nasional Berhad (No Syarikat: 200866-W) v Teobros Development Sdn Bhd (No Syarikat: 352220-A) [2008] MLJU 415). [67] In the majority of cases brought before this Court pursuant to s 15 of the CIPAA which, with the consent of the parties, are usually heard together, with applications under s 28 CIPAA and at times, coupled with applications under s 16 CIPAA, the applicant/ plaintiff would initiate the setting aside application soon after the adjudication decision is issued, or the s 28 application is filed in court. Such prompt action would certainly fulfil the meaning of “convenient speed” as the applicant/ plaintiff concerned has shown urgency in the matter by commencing proceedings as soon as possible or within a reasonable time from the date of the adjudication decision or the date of filing of the enforcement application. [68] However, I am unable to say that the Plaintiff’s act of filing the application on 28.3.2022 as falling within a period which, in the normal course of events, would be considered as reasonable. In this regard, the purpose and objective of the CIPAA as explicated in many case authorities to date such as UDA Holdings Bhd v Bisraya Construction Sdn Bhd & Anor and another case [2015] 11 MLJ 499 (HC), View Esteem Sdn Bhd v Bina Puri Holdings Sdn Bhd [2018] 2 MLJ 22 (FC), MRCB Builders Sdn Bhd v Southern Builders (J) Sdn Bhd [2018] MLJU 1426 (CA), Inai Kiara Sdn Bhd v Puteri Nusantara Sdn Bhd [2019] 2 MLJ 362 (CA) and Martego Sdn Bhd v Arkitek Meor & Chew Sdn Bhd and another appeal [2019] 8 CLJ 433 (FC), to name a few, bears relevance in determining whether the Setting Aside Application has been made with all convenient speed. In Martego’s case, it was recognised that the purpose of the CIPAA is to “alleviate cash flow issues in the construction industry through an effective and economical mechanism by creating an expedited adjudication process”. [69] In Construction Adjudication in Malaysia, Third Edition, Sweet and Maxwell, 2022, the learned authors Lam Wai Loon and Ivan YF Loo had emphasised in para [1.005] at p 3 that the central characteristic of the CIPAA is “… to alleviate payment problems which stifle cash flow through the process of adjudication, and not by any other means. In other words, it is this new dispute resolution process itself that will be used as a tool to alleviate cash flow problems in the construction industry. How it will achieve this objective is with speed as the adjudication process is meant to be a much faster process than either arbitration or court litigation. The faster a payment dispute is resolved, the quicker cash flow problems are alleviated and settled, albeit on a provisional interim basis.”. [70] Speed being the central feature of statutory adjudication in this country is further augmented by the untiring efforts of the specialised construction courts to hear and dispose of applications made under the CIPAA within the shortest time possible from the date of filing of such applications. [71] In sharp contrast, the Plaintiff had intentionally stayed away from the adjudication proceedings and the winding up proceedings. Not only that, but the Plaintiff also saw it fit to commence the Setting Aside Application approximately two years and five months after the purported basis for the same through the dual decisions by the apex court. [72] In my opinion, the Plaintiff’s conduct is the epitome of indolence. In seeking to set aside the AD only now, the Plaintiff has clearly chosen to act as late as possible rather than with all convenient speed. There is no doubt in my mind that the weight of arguments on Issue (i) is in favor of the Defendant.

(ii) Whether the Plaintiff’s application is mala fide and an abuse of process [73] In furtherance of the contentions in relation to Issue (i) above, the Defendant highlighted that six years have also passed since the Winding-up Order was entered against the Plaintiff. Hence, this suit does not merely seek to set aside the AD but rather, to extinguish all the Plaintiff’s liability towards the Defendant. [74] The Defendant, armed with the AD, is perfectly entitled to present a winding up petition (see the decisions of the Court of Appeal in Likas Bay Precinct Sdn Bhd v Bina Puri Sdn Bhd [2019] 3 MLJ 244 and Sime Darby Energy Solution Sdn Bhd v. RZH Setia Jaya Sdn Bhd [2021] 6 MLRA 485. [75] In my view, the Defendant’s contentions are similarly worthy of favorable consideration as the Defendant would be seriously prejudiced if the Setting Aside Application is allowed in that –

it is very likely that the Winding-up Order would be impaired;

the Defendant would be time-barred from commencing any other legal action for the claims as in the Payment Claim. The payment due date for Interim Certificate No. 9 is 19.2.2015 and the Defendant’s letter to the Plaintiff regarding the outstanding amounts is dated 1.6.2015 (see paras 21 and 28 of the AD); and

the Plaintiff would be unjustly enriched as the Defendant has completed the works to upgrade, refurbish and renovate the Avenue-K Shopping Mall located at Jalan Ampang, Kuala Lumpur.

(iii) Whether there is basis to set aside the AD [76] In paras 10 and 11 of the AIS and paras 13 and 14 of AIS(2), Zulkifli affirmed that the AD should be set aside because the Adjudicator had acted in excess of his jurisdiction as the construction contract between the parties (the LoA is dated 18.11.2013) was entered before the commencement of the CIPAA (which is on 15.4.2014) and that the CIPAA is not applicable to the said construction contract. This averment must necessarily be in consequence of the decisions of the Federal Court in Jack-In Pile (supra) and Ireka Engineering (supra) where it was held, among others, that the provisions of the CIPAA shall apply prospectively and not retrospectively. [77] However, Ms. Joshiae relied on the decision of the High Court in Majlis Perbandaran Kuantan v Kining Exeton Sdn Bhd [2021] 6 CLJ 88 (‘MPK’s Case’) in arguing that both decisions of the apex court are not applicable to the present suit. [78] In the light of my findings in allowing the 1st Objection and 2nd Objection and in favor of the Defendant on Issues (i) and (ii) as previously discussed, and as these suffice to seal the fate of the Setting Aside Application, I do not think that it is necessary for me to make a conclusive determination on Issue (iii). Conclusion [79] Premised on the aforesaid considerations, the Setting Aside Application was dismissed. In the exercise of my discretion, I was not minded to make an order that the dismissal is with liberty to file afresh as there is already considerable delay in the filing of the Setting Aside Application and no explanation for the delay was proffered by the Plaintiff. The Plaintiff’s tardiness should not be “rewarded” with a second bite at the proverbial cherry. [80] With regards to costs, the Defendant’s counsel requested for the security for costs of RM20,000.00 to be released to them within seven days from the date of hearing. When asked whether the learned counsel was asking for costs in the sum of RM20,000.00, Ms. Joshinae answered in the positive. [81] The Court took the view that the application is not complex, and it does not fall within the category of cases which merits a high amount of cost. Hence, cost of RM5,000.00 was ordered to be paid to the Defendant, subject to allocator. [82] Ms. Joshinae’s application for the allocator fees to be paid out from the cost that has been deposited was allowed. Following Mr. Kamraj’s request for clarification, the order of the Court is to be made to Messrs. CNL. Dated: 15 September 2022 (ALIZA SULAIMAN) Judge Construction Court 2 High Court Kuala Lumpur Counsels/ Solicitors: For the Plaintiff: Kamraj Nayagam (Nicole Lee Shih En with him) Messrs. Mah-Kamariyah & Philip Koh Advocates & Solicitors 3A07, Block B, Phileo Damansara II 15, Jalan 16/11 Off Jalan Damansara 46350 Petaling Jaya Selangor For the Defendant: Joshinae Wong Peism Ting Messrs. Christina Chia Law Chambers Advocates & Solicitors Mezzanine Floor Menara Goldstone (Holiday Inn Express) No. 84, Jalan Raja Chulan 50200 Kuala Lumpur Cases, legislation and other sources referred to in the submissions by learned counsels and in the Grounds of Judgment: Cases: Bank Simpanan Nasional v. Rudysham Abdul Raof [2017] 4 CLJ 234 Damai Motor Kredit Sdn Bhd & Anor v Kementerian Kerja Raya Malaysia [2012] MLJU 1803 Hamzah bin Mat Sah v Ambank (M) Berhad [2017] MLJU 120 Inai Kiara Sdn Bhd v Puteri Nusantara Sdn Bhd [2019] 2 MLJ 362 (CA) Ireka Engineering & Construction Sdn Bhd v PWC Corp Sdn Bhd and other appeals [2020] 1 MLJ 311 Jack-In Pile (M) Sdn Bhd v Bauer (M) Sdn Bhd and another appeal [2020] 1 MLJ 174 Klasari Sdn Bhd & Ors v Chan Kwong Chee [2017] MLJU 2242 Konsesi Kota Permatamas Sdn Bhd v Tech Art Sdn Bhd and another case [2020] MLJU 315 Lai King Lung & Anor v. Merais Sdn Bhd [2020] 9 CLJ 449; [2020] 5 MLJ 614 Likas Bay Precinct Sdn Bhd v Bina Puri Sdn Bhd [2019] 3 MLJ 244 Majlis Perbandaran Kuantan v. Kining Exeton Sdn Bhd [2021] 6 CLJ 88 Martego Sdn Bhd v Arkitek Meor & Chew Sdn Bhd and another appeal [2019] 8 CLJ 433 (FC) MRCB Builders Sdn Bhd v Southern Builders (J) Sdn Bhd [2018] MLJU 1426 (CA) Ng Hee Thoong & Anor v Public Bank Bhd [1995] 1 MLJ 281 Pengurusan Danaharta Nasional Berhad v Yong Wan Hio & Anor [2007] 6 MLJ 709 Saujana Resort (M) Bhd v Chin Cheen Foh & Ors and another appeal [2021] 3 MLJ 873 Selvam Holdings (Malaysia) Sdn. Bhd. v. Toby Lam As The Receiver And Manager And Liquidator Of Selvam Holdings (M) Sdn. Bhd. & Anor. [1994] 4 CLJ 899 Sha Kannan & Anor v Arunachalam a/l Venkatachalam & Anor and another appeal [2017] MLJU 1568 Sime Darby Energy Solution Sdn Bhd v. RZH Setia Jaya Sdn Bhd [2021] 6 MLRA 485 Small Medium Enterprise Development Bank Malaysia Bhd v. Oren Venture Sdn Bhd & Ors And Another Case [2022] 6 CLJ 148; [2022] MLJU 410 Summit Streams Sdn Bhd (in winding-up) v Yayasan Selangor (Sap Ulu Yam Sdn Bhd (in liquidation), intervener) [2021] MLJU 2611 Tan Ah Tong v Perwira Affin Bank Bhd & Ors [2002] 5 MLJ 49 Tebin bin Mostapa (as administrator of the estate of Hj Mostapa bin Asan, deceased) v Hulba-Danyal bin Balia & Anor (as joint administrators of the estate of Balia bin Munir, deceased) [2020] 4 MLJ 721 Tekun Nasional v Plenitude Drive (M) Sdn Bhd and another appeal [2021] 6 MLJ 619 Tenaga Nasional Berhad (No Syarikat: 200866-W) v Teobros Development Sdn Bhd (No Syarikat: 352220-A) [2008] MLJU 415 UDA Holdings Bhd v Bisraya Construction Sdn Bhd & Anor and another case [2015] 11 MLJ 499 University Of Malaya (University Malaya Medical Centre) v. FBSM Ctech Sdn Bhd [2018] 8 CLJ 71 View Esteem Sdn Bhd v Bina Puri Holdings Sdn Bhd [2018] 2 MLJ 22 (FC) Zaitun Marketing Sdn Bhd v Boustead Eldred Sdn Bhd (formerly known as Bousted Trading (1985) Sdn Bhd) [2010] 2 MLJ 749 Legislation: Companies Act 1965, ss 218, 232 & 236 Companies Act 2016, ss 2, 486, 540, 580A & Part I of Twelfth Schedule Construction Industry Payment and Adjudication Act 2012, ss 5, 15, 16 & 28 Courts of Judicature Act 1964, ss 25 & 25A Interpretation Acts 1948 and 1967, s 54(2) Rules of Court 2012, O. 23 rr. 1 and 2A, O. 69 r. 2 & O. 92 r. Other sources: Construction Adjudication in Malaysia, Third Edition, Sweet and Maxwell, 2022, Lam Wai Loon and Ivan YF Loo Halsbury’s Laws of Malaysia: Companies Winding-Up, Volume 6, Malaysian Law Journal

bring or defend any action or other legal proceedings in the name and on behalf of the company; …

appoint an agent to do any business which the liquidator is unable to do;

appoint an advocate to assist him in his duties; and …;” (emphasis added). [37] In para 1 of the Plaintiff’s AIS(2), Zulkifli affirmed, among others, that: “…

The sole contributor of KLLD is City Properties Sdn Bhd ("CP") as CP holds all the shares of KLLD. See exhibit “ZU-9" with regards to the SSM search of KLLD.

Tan Sri Yap Yong Seong ("Tan Sri Yap") is one of the contributors, shareholder and/or director to CP. Around Februari 2022, Tan Sri Yap had applied a sanction for KLLD to commence this action against the Defendant. On 28.3.2022, Tan Sri Yap on behalf of CP had obtained the KLLD sanction to commence this proceeding against the Defendant. See exhibit "ZU-10" on the second sanction application dated 28.3.2022. …”. [38] The word “contributory” is defined in s 2 of the CA 2016 as “… in relation to a company, means a person liable to contribute to the assets of the company in the event of its being wound up, and includes the holder of fully paid shares in the company and, prior to the final determination of the persons who are contributories, includes any person alleged to be a contributory;”. [39] In Zaitun Marketing, leave to appeal to the Federal Court was granted on the question as to whether the official receiver/ liquidator can appoint an advocate and solicitor to bring an action or to defend an action solely by relying on s 236(2)(a) of the CA 1965, independent of s 236(1)(e). These provisions read as follows: “236 Powers of liquidator

The liquidator may with the authority either of the Court or of the committee of inspection – …

appoint an advocate to assist him in his duties.

The liquidator may –

bring or defend any action or other legal proceeding in the name and on behalf of the company; …”. [40] The dispute in that case arose because the firm of solicitors was appointed without authority of the court or the committee of inspection. The appellant’s argument was that the authority of the court or the committee of inspection is not necessary because they are relying on s 236(2)(a) CA 1965. The apex court agreed with the appellant, but the appeal was dismissed as the court found that the order made by the High Court was correct albeit the reasoning was wrong. In his judgment, Gopal Sri Ram FCJ said (with my added emphasis): “[17] What appears to have been overlooked all round is the fundamental principle that once a limited company is wound up, its assets and liabilities vest in the liquidator. It is up to him to decide whether to institute, continue the prosecution of or defend legal proceedings. However, there is jurisdiction in the court to authorise other persons to conduct litigation in the name of the company. … [19] Of course, resort to the court’s power to authorise someone other than the liquidator to institute, continue or defend proceedings only arises where the liquidator refuses to do so and declines authority. But where, as here, the liquidator grants authorisation, there is no necessity to move the court. Once authority is given either by the liquidator or by the court, the person authorised may appoint counsel of his or her choice to prosecute the proceedings in question. The only issue is whether it is competent for the liquidator to authorise a former director of the company in liquidation to use the company’s name to commence, continue or defend proceedings. The answer to that question was provided by Cotton LJ in Cape Breton Company v Fenn

17 Ch D 198 as follows: … prima facie proceedings in the name of the company ought to be conducted by the liquidator — as officer appointed by the court and subject to the supervision of the court. There may be, no doubt, special cases where, although the court does not think fit to remove the liquidator on the ground that his conduct in not bringing an action is improper, it may give power to other persons to conduct the litigation upon their giving proper indemnity against any consequences of that litigation. But who are the persons who can be authorised to take these steps? In my opinion the creditors and the contributories only, not under any special clause of the Act, but because they are the persons who, under the terms of the Act can intervene if they are advised that the liquidator does not properly do his duty. They have a right in special cases to ask the court for leave to do that which the liquidator is advised not to do, or which the liquidator is advised not do, viz, take proceedings in the name of the company, but in my opinion the power of the court to give leave to use the name of the company, but in my opinion the power of the court to give leave to use the name of the company stops there, and is confined to those who are parties to the liquidation. The court has, in my opinion, no power whatever to give persons in the position of the solicitors authority to use the name of the company in any litigation against any person. [20] Since a director — or more appropriately a former director — of a company in liquidation is not a party to the liquidation a court will not authorise him or her to launch or to continue proceedings or indeed to defend them. A fortiori, the liquidator has no power to confer such authority, since he cannot do what the court will not do on his default. It follows that Khaidzir bin Hj Ishak ought not to have been authorised to continue with the proceedings. I would on that ground support the ultimate order made by the learned judge in the High Court. It may well have been different if Khaidzir had also been a creditor or a contributory.”. [41] In SME’s Case, the preliminary issue which was determined by Azlan Sulaiman JC was whether the liquidator of a wound-up company can issue a sanction or delegate his power under Item (a) of the Twelfth Schedule of the CA 2016 to any other person to bring or defend any action or other legal proceedings in the name and on behalf of that company. [42] In the course of the analysis, His Lordship stated that: “[10] The starting point is that a liquidator is a creature of statute, and he derives his powers from the statute that creates him and enables him. In other words, he only has and can only exercise those powers that the statute expressly gives him. In Malaysia, s. 486(1) and the Twelfth Schedule of the Act are the source of a liquidator’s powers in a winding-up by the court, which this is. [11] By s. 486(1)(a), the liquidator may, without the authority of the court or of the committee of inspection exercises any of the general powers in Part I of the Twelfth Schedule. Part I consists of items (a) to (l). Under item (a) of Part 1 of the Twelfth Schedule, a liquidator may “bring or defend any action or other legal proceedings in the name and on behalf of the company.” Under item (j) he may “appoint an agent to do any business which the liquidator is unable to do”, and under item

he may “appoint an advocate to assist him in his duties.” The language used in respect of those general powers in Part I connote that the liquidator must exercise those powers personally.” (emphasis added). [43] His Lordship also considered the equivalent provisions under the CA 1965 namely, ss 236(2)(a), 232(i) and 236(3) and the decision of the Court of Appeal in University of Malaya v FBSM Ctech Sdn Bhd [2018] 8 CLJ 71 where it was held that the law relating to companies’ liquidation does not empower a liquidator to sanction any creditor to sue on behalf of a company in liquidation. [44] On Zaitun Marketing, His Lordship said in para 14 that it was a case where the Federal Court held that “… the liquidator could only do that “with the authority either of the court or of the committee of inspection.” However, in Zaitun Marketing, the Federal Court held that the liquidator can still appoint an advocate to assist him to bring or defend an action without the authority of the court or the committee of inspection, because he clearly needs the services of an advocate to do so.”. And additionally in para 42: “[42] Further, as Rohana Yusuf JCA (as Her Ladyship then was) in the UMMC case (supra), the sole question on which leave to appeal to the Federal Court had been granted in Zaitun Marketing was whether the official receiver/liquidator can appoint an advocate and solicitor to bring an action or to defend an action solely by relying on s. 236(2)(a) of the Companies Act 1965 independently of s. 236(1)(e). Both Zaki Tun Azmi CJ and Gopal Sri Ram FCJ, who delivered the judgments of the Federal Court, held that he can (see paras. [10] and the last part of para. [21] of the judgment). The question as to whether or not a liquidator could issue a sanction to another person to bring an action for and on behalf of a wound-up company was not directly before the Federal Court in Zaitun Marketing.” (emphasis added). [45] It was finally determined by the High Court in SME’s Case (with my added emphasis) that: “[23] As for appointing solicitors, even though item (k) of Part 1 of the Twelfth Schedule of the Act allows a liquidator to “appoint an advocate to assist him in his duties”, it would not extend to appointing an advocate to assist a contributory to carry out a liquidator’s duties. [24] Thus, as that power to continue to bring Suit 102 and defend Suit 286 were bestowed on the PPP by s. 486 and item (a) of Part 1 of the Twelfth Schedule of the Act, and as there are no provisions in the Act for him to delegate that power, then based on the cases I have referred to, I would hold that the PPP did not have the power to issue a sanction to the contributory to continue with Suit 102 or defend Suit 286. That supposed “sanksi” that JIM/PPP issued to the contributory is invalid and inoperable. [25] Nevertheless, I am also of the view that the Act does provide for giving a sanction to a creditor or contributory – and only a creditor and contributory – to bring an action on behalf of a wound-up company. However, that power to issue such sanction is only exercisable by the court. The basis for this is s. 486(2) of the Act and Zaitun Marketing.”, and for practical purposes, was neatly summarised in para 35 as follows (with four points of justification as explained in paras 36 to 39 of the judgment): “[35] Thus, under the Act, the scheme for a wound-up company bringing, continuing with or defending an action is very straightforward and simple. Firstly, only the liquidator has the power to do so. It is only when he refuses to, or is unable to, or is advised not to, or has no funds to (and I stress that those grounds are not exhaustive), can a creditor or contributory apply to the winding-up court for one of two orders: either to compel the liquidator to bring, continue with or defend that action, or alternatively for an order that they be given the sanction by the court to bring, continue with or defend that action. In their application, they would have to satisfy the court that doing so would be in the interests of the company. And, in giving that sanction, the court can impose terms and conditions, including requiring security and indemnity. But the liquidator does not have that power.”. [46] The Defendant’s counsel highlighted that the Alleged Sanction is in pari materia with the liquidator’s sanction which was the subject matter of the SME Case viz. both –

share the same title;

refer to a Letter of Undertaking that had been submitted to MdI;

state that the “Pegawai Penerima dan Penyelesai (PPP)” for the company had granted a sanction to commence and/ or to continue the action and had appointed the respective legal firm to represent the company in the action subject to certain conditions; and

have similar conditions. [47] Upon reading para 8 in the SME Case and the Alleged Sanction, I would agree with the above-mentioned contention except that there is a slight difference in the title of the letters from MdI where the words “Syarat-syarat bagi” were inserted before the words “Permohonan Kebenaran Penyelesai Di Bawah Akta Syarikat 1965 / Akta Syarikat 2016” in the SME Case. [48] Returning to the facts of the present case, the relevant excerpt from the Alleged Sanction (exhibit “ZU-10”) is shown below: “… saya merujuk kepada perkara di atas dan permohonan Penyumbang bertarikh 21.2.2022 adalah berkaitan.