Mayland Projects (Johor) Sdn Bhd v Rdc Arkitek Sdn Bhd (WA-24C-117-07/2019)

By a Letter of Appointment dated 18.3.2010 (‘LoA’), the Plaintiff had appointed the Defendant to provide professional architectural services (‘Services’) for the project known as “Proposed Service Apartment Development on Lot 71202 (PTD 116067), Mukim Plentong, Johor Bahru, Johor Darul Takzim” (‘said Project’). 2

In para A of the LoA, the professional fee is stated as 1% of the overall construction cost which includes the building and infrastructure works and excluding 5% Government Service Tax (‘GST’).

The Defendant claimed that they had completed its scope of works under the LoA and demanded payment in the sum of RM2,592,426.75, of which the Plaintiff is said to have paid RM2,118,000.00. Thus, the outstanding amount that the Defendant alleged was due from the Plaintiff is RM474,426.75.

No payment was forthcoming from the Plaintiff and as a result, the Defendant commenced an adjudication claim pursuant to the Construction Industry Payment and Adjudication Act 2012 [Act 746] (‘CIPAA’).

On 8.5.2019, Sr. Che Zaki Che Mat, the learned Adjudicator, in accordance to s 12 CIPAA determined that: 3

the Defendant has succeeded in their claim of RM345,732.15 to be paid by the Plaintiff to the Defendant within 14 days from the decision i.e. not later than 22.5.2019 pursuant to s 25(o) CIPAA;

the rate of interest payable is 7.11% per annum to be paid by the Plaintiff to the Defendant on the sum of RM345,732.15 from 7.12.2018 until payment has been made pursuant to s 25(o)

the costs of the adjudication proceedings of RM19,756.00 to be borne by the Plaintiff pursuant to sub-s 18(1) CIPAA, which include the Adjudicator’s fees and expenses in the amount of RM17,000.00 and the charges by the Asian International Arbitration Centre (‘AIAC’) in the sum of RM2,756.00. Payment is to be made within 14 days from the decision, (‘Adjudication Decision’; all the aforesaid amounts are hereinafter collectively referred to as the ‘Adjudicated Sum’). 4 [6] The Plaintiff did not pay the Adjudicated Sum to the Defendant. This prompted the Defendant to file a winding up petition at the Kuala Lumpur High Court on 21.6.2019 against the Plaintiff. The Plaintiff then paid the Adjudicated Sum to the Defendant on 19.8.2019, which the Plaintiff claimed was made under protest, without admission of liability and without prejudice to their rights to proceed with this Originating Summons (‘O.S.’). In any event, the winding up petition was withdrawn and accordingly struck out by the Court on 20.8.2019. [7] The Plaintiff filed this O.S. on 5.7.2019, seeking to set aside the Adjudication Decision on the following grounds:

the Adjudication Decision was improperly obtained as there was a denial of natural justice, and the Adjudicator had acted in excess of jurisdiction;

the Adjudicator’s failure in giving directions to the parties to prepare written submissions even though the Plaintiff had 5 requested for the same in order to reply to certain issues raised in the Adjudication Reply is a denial of natural justice;

the Adjudicator had, without any basis and/ or proof, decided that the Progress Claim and/ or Payment Request had been served on the Plaintiff on 6.12.2018 merely based on a payment reminder letter without enclosing any Progress Claim and/ or Payment Request;

the Adjudicator had, without any basis, decided that the Plaintiff had the right to hold only 5% of the contract sum and must release half of that amount after issuance of the Certificate of Completion and Compliance (‘CCC’)/ Certificate of Practical Compliance (‘CPC’) even though there are no terms in the contract to that effect;

although the Adjudicator had taken into account that Payment Claim No. 52 had not been certified by the Plaintiff, the Adjudicator had acted in excess of jurisdiction when he had, 6 without any basis, made comparisons between the said Payment Claim and Payment Claim No. 51, and made his own assumptions in calculating the Defendant’s claim;

the Adjudicator had rewritten the contract and acted in excess of jurisdiction when he made his own assumptions in the calculations of the Defendant’s claim even though the Defendant and the Plaintiff had never requested the Adjudicator to do so; and

the Adjudicator had rewritten the contract when he allowed the Defendant’s claim by making his own adjustments to the claim although the CCC and/ or Final Account Statement has not been acknowledged and/ or issued. [8] Having heard oral submissions by learned counsels representing the Plaintiff and the Defendant, and having read the O.S. (encl. 1); Affidavit In Support (‘AIS’) affirmed by Mr. Lau Siang Ee, the Plaintiff’s Director on 5.7.2019 (encl. 2); Affidavit In Reply (‘AIR’) 7 affirmed by Mr. Tan Choon Kiat, the Defendant’s Director on 5.8.2019 (encl. 4); Affidavit In Response affirmed on 19.8.2019 (encl. 5); and written submissions, I had dismissed the Plaintiff’s application in encl. 1 with costs of RM5,000.00, subject to allocator. [9] The Plaintiff is pursuing an appeal against my decision and I now provide my full grounds in the ensuing paras. The Setting Aside Application [10] In the intitulement to the O.S., the Plaintiff had mentioned “Seksyen 15 (a), (b), (c) and/or (d)” of CIPAA whilst there is no reference at all to s 15 in the body of the O.S. In para 21 of the AIS, the Plaintiff affirmed that “The Adjudication Decision ought to be set aside as the Adjudication Decision was improperly obtained as there has been a denial of natural justice and the Adjudicator had exceeded his jurisdiction.”. Paras 22 and 23 in the AIS then elaborate on the basis 8 for the allegations of denial of natural justice and the Adjudicator having acted in excess of his jurisdiction, respectively. [11] Upon reading the Plaintiff’s submissions, my understanding is that they are basically relying on two out of the four grounds as expressly provided in s 15 CIPAA to set aside the Adjudication Decision, namely limbs (b) and (d) that there has been a denial of natural justice, and the Adjudicator has acted in excess of his jurisdiction. I sought confirmation from Mr. Andrew Davis on this matter on the hearing date. Initially learned counsel said that his client is relying on all four grounds in s 15 CIPAA. However, following further reflection, Mr. Andrew Davis tendered his apologies to the Court and agreed that, based on the O.S. and submissions, the Plaintiff was indeed basing its arguments only on s 15(b) and (d) CIPAA. [12] The legal principles applicable in an application to set aside an adjudication decision pursuant to the grounds in paras (b) and (d) of s 15 CIPAA have been explicated in an innumerable number of cases to date. 9 [13] Mr. Andrew Davis, who appeared for the Plaintiff, chose to rely on an excerpt from Anandan Krishnan’s Words, Phrases & Maxims, Legally & Judicially Defined, Volume 11, M,N and O pp 321 - 324 and 326 - 327 as to the meaning of “natural justice” and in particular at pp 323 and 327: “‘Natural Justice’ is an emotive phrase, particularly to judges. But, as Sir Robert Megarry VC pointed out in McInnes v Onslow Fane [1978] 3 All ER 211 at 219, (1978) 1 WLR 1520 at 1530, justice is far from being a natural concept. It is rather a term of art meaning a legal duty to act fairly or, as Sachs LJ out in Edwards v Society of Graphical and Allied Trades [1970] 3 All ER 689 at 701, (1971) Ch 354 at 382, ‘fair play in action’. … A widely-used textbook, with a fundamental grasp of the subject matter, Constitutional and Administrative Law (6th Ed) at 557-558, summarises the doctrine in the following words: 10 The rules of natural justice are minimum standards of fair decision-making, imposed by the common law on persons or bodies who are under a duty to ‘act judicially’. They were applied originally to courts of justice and now extend to any person or body deciding issues affecting the right or interests of individuals where a reasonable citizen would have a legitimate expectation that the decision-making process would be subject to some rules of fair procedure. The content of natural justice is therefore flexible and variable. All that is fundamentally demanded of the decision-maker is that his decision in its own context be made with due regard for the affected parties’ interests and accordingly be reached without bias and after giving the party or parties a chance to put his or their case. Nevertheless some judges now prefer to speak of a duty to act fairly rather than a duty to observe the rules of natural justice. … Perhaps the most practical guidance for application of the rule is given by Atkins Court Forms (2nd Ed) Vol 40 at 136; 11 There is no precise definition of this term, natural justice, which relies upon what a reasonable man instinctively regards as being fair and just.” (emphasis added). [14] In the context of adjudication proceedings, the following guidelines laid down by Akenhead J in Cantillon Ltd v Urvasco Ltd [2008] 117 ConLR 1 at p 20 has been widely adopted and applied by the local courts: “[57] From this and other cases, I conclude as follows in relation to breaches of natural justice in Adjudication cases:

it must first be established that the Adjudicator failed to apply the rules of natural justice; (b) any breach of the rules must be more than peripheral; they must be material breaches; (c) breaches of the rules will be material in cases where the Adjudicator has failed to bring to the attention of the parties a point or issue which they ought to be given the opportunity to comment upon if it is one which is either decisive or of considerable potential importance to the outcome of the resolution of the dispute and is not peripheral or irrelevant; (d) whether the issue is decisive or of considerable potential importance 12 or is peripheral or irrelevant obviously involves a question of degree which must be assessed by any judge in a case such as this; (e) it is only if the Adjudicator goes off on a frolic of his own, that is wishing to decide a case upon a factual or legal basis which has not been argued or put forward by either side, without giving the parties an opportunity to comment or, where relevant put in further evidence, that the type of breach of the rules of natural justice with which the case of [Balfour Beatty Construction Company Ltd v Lambeth London BC [2002] EWHC 597 (TCC), (2002) 84 ConLR 1] was concerned comes into play….” (emphasis added). [15] As for s 15(d) CIPAA, the Federal Court in View Esteem Sdn Bhd v Bina Puri Holdings Bhd [2018] 2 MLJ 22 explained the meaning of “jurisdiction” in the following paras: “[15] We are of the view in substance, the ‘jurisdiction’ spoken of in s 15(d) of the CIPAA are in circumstances where CIPAA applies and where there is a dispute if the adjudicator has kept himself within his jurisdiction. Thus, by s 27(2) of the CIPAA the parties may by consent extend the jurisdiction of the adjudicator to decide on matters outside the claim on which he first acquired jurisdiction. This is 13 possible only if the term ‘jurisdiction’ is used in the sense of CIPAA being applicable in the first place. [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 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 14 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.”. [16] Although the Plaintiff had outlined seven grounds in their O.S. to justify the setting aside application, in my view, these can be dealt with under three main issues as set out below. 15 Issue 1: Service of the progress claims/ payment requests - The parties’ submissions [17] The Plaintiff contended that the Adjudication Decision was improperly obtained as the Adjudicator had failed to consider the Plaintiff’s statement that the Payment Claim/ Payment Request was not served by the Defendant on the Plaintiff. In this regard, the Adjudicator is said to have merely relied on the Defendant’s letter dated 30.11.2018, which had the Plaintiff’s acknowledgement receipt dated 6.12.2018, in deciding that the Payment Claim/ Payment Request was served by the Defendant on the Plaintiff on 6.12.2018. [18] In the absence of cogent evidence in the Adjudication Claim/ Adjudication Reply to prove that there was in fact such service, it was submitted that the Adjudicator’s finding was baseless and the Defendant is not entitled for payment. [19] The Defendant refuted the Plaintiff’s contention by referring to the Defendant’s letters to the Plaintiff dated 30.11.2018 and 3.1.2019 in 16 exhibit “LSE-4” in the Plaintiff’s AIS at pp 81 and 82 which show that the Plaintiff had acknowledged receipt of the claim or reminder of the outstanding payment on 6.12.2018 and 7.1.2019, respectively. - Determination by the Court [20] The learned Adjudicator’s findings and reasons on this issue can be seen at para 34 of the Adjudication Decision which is re-produced below: “a. Respondent is claiming that no claim is served to them but Claimant quoted it was submitted on 14/Nov/18 followed by two reminders on 30/Nov/18 and 6/Jan/19 respectively. In adjudication reply, Claimant quoted that the claim was also sent through email to En Azhar dated 22/Dec/17. b. Based on my observation, I found that the only proof of submission was in schedule 2 of the adjudication claim, where Respondent had acknowledge receipt the claim/ reminder dated 30/Nov/18 on 6/Dec/18 and dated 3/Jan/19 on 7/Jan/19 respectively. Thus, I 17 conclude that the claim was served on 6/Dec/18 to Respondent.”. [21] In its Payment Claim and Adjudication Claim, the Defendant had attached the relevant extracts of the progress claims/ requests for payment to the Plaintiff in Schedule 2 and these include the letters dated 30.11.2018 and 3.1.2019. [22] The letter dated 30.11.2018 states as follows: “REF : OUTSTANDING PAYMENT … We would like to bring to your attention that Request for payment dated November 14, 2018 with outstanding payment up to date to us for Project PARC Regency Phase 1 & Phase 2 (Block E) is RM 474,426.75 (Included 6% of GST OR Services Tax)(Bill attached). As you know, we have completed substantial work for this project since February 21, 2016 (refer Appendix I). Our fee received does not only tally with our stages of work done. 18 Based on the status project, the quantum of the professional fees for work done to date is estimated RM 2,592,426.75 (Included GST or Service Tax). However, the amount of fees collected to date is only RM 2,118,000.00 (Included GST or Service Tax), balance outstanding our professional fee is RM 474,426.75 for the Phase 1 & Phase 2 (Tower E). Please make necessary arrangement for long outstanding fees for substantial work done. We wish to extend our best wishes to you and your company and look forward to your urgent settlement of the outstanding fees. Your prompt action on this matter is highly appreciated.”. [23] The other letter dated 3.1.2019 reads: “REF : OUTSTANDING PAYMENT ( 2nd REMINDER) … We refer to the above matter and our reminder payment to you dated November 30, 2018 with our Request For Payment: (RDC/RFP/MASB/ServicesApartment/52) amount 19 RM 474,426.75 for your attention. Until now, we have not received payment up to date. Please make necessary arrangement for fully settlement for long outstanding fees which we have been completed substantial work done since February 21, 2016 (refer Appendix I). Our fee received does not tally with out stages of work done. I seek your kind assistance to fully payment to our company as soon as possible. Your prompt action on this matter is highly appreciated.”. [24] In the Payment Response, the Plaintiff disputed the sum claimed as being “without any basis and that the unpaid party failed to prove its claim for the said sum”. In para 5.0 of the Adjudication Response, the Plaintiff stated, among others, – “(x) that the Respondent has not received any progress claim and/or payment request by the Claimant namely it is not being consented by the Respondent and not in accordance with term of the Contract; 20

(xi) that the Claimant’s claim is premature and without any basis;

(xii) that the Claimant has produced the alleged payment request marked as schedule 2 at pages 13 in the Adjudication Claim, however they are mere unilateral documents that have been prepared by the Claimant and in contravention with term of the contract;

(xiii) that there is no cogent evidence that the progress claim and/or payment request was served on the Respondent;”. [25] The Defendant subsequently retorted in para 5 in the Adjudication Reply that: “(x) In response to the averment of the Respondent that it has not received any progress claim and/or payment request by the Claimant, the Claimant wishes to reiterate that it has sent its Requests for Payment to one Mr Chin and one En. Ezhar by email dated 22/12/2017 and by Reminder Letters dated 30/11/2018 and 03/01/2019 respectively for Outstanding Payment 21 which was acknowledged receipt by the Respondent on 06/12/2018 and 07/01/2019 respectively; …

(xi) that the Claimant’s claim is well within the ambit and jurisdiction of the CIPA Act 2012;

(xii) the Claimant repeats (x) above in response as proof that there is cogent evidence that payment requests have been served on the Respondent;”. [26] The letter dated 30.11.2018 makes reference to the Request For Payment (‘RFP’) dated 14.11.2018 (refer exhibit “LSE-4” at p 83) but the proof receipt of the RFP was not produced at the adjudication proceedings and neither was the e-mail dated 22.12.2017 as mentioned in the Adjudication Reply. This thus led the learned Adjudicator to conclude in para 34(b) of his decision that the only proof of submission was in Schedule 2 of the Adjudication Claim where the Plaintiff had acknowledged receipt of the claim/ reminder as shown by the placement of the Plaintiff’s chop on the letters dated 30.11.2018 and 3.1.2019. 22 [27] In my opinion, with the Plaintiff’s acknowledgement of receipt of the letters dated 30.11.2018 and 3.1.2019 on 6.12.2018 and 7.1.2019, respectively, and in the absence of any correspondence from the Plaintiff at the material time to the effect that it has not received the RFP, it cannot be said that the Adjudicator’s conclusion that the claim was served on the Defendant on 6.12.2018 is completely baseless. [28] A Bill for the sum of RM474,426.75 and proof of the completion of works since 21.2.2016 were attached to the letter dated 30.11.2018. Appendix 1 to the said letter are the Defendant’s letters to the Johor Bahru City Council enclosing, inter alia, Forms G1 – G21, F1 (Perakuan Siap Dan Pematuhan Sebahagian pursuant to Undang-Undang Kecil 27, Undang-Undang Kecil Bangunan Seragam 1986) dated 15.2.2016 and copies of Form T – 09 (Valuation Department) (refer exhibit “LSE-4” at pp 86 - 91). Yet, the Plaintiff did not immediately dispute these documents at the material time for the reasons as stated in the Adjudication Response and quoted at para 24 above. 23 [29] The Plaintiff relied on the decision in Ideal City Development Sdn Bhd v. PWC Bina Sdn Bhd & Other Appeals [2019] 2 CLJ 615 where the Court of Appeal held (as per the head notes in the law report), inter alia, that: “(1) It is not just anyone who may make a payment claim under the CIPAA regime. Under s. 5(1), and consistent with the object and purpose of the CIPAA, a payment claim may only be made by an ‘unpaid party’. The essential characteristic of the ‘unpaid party’ is the fact that it is a party who claims that it has not been paid, whether wholly or partially, a sum under a construction contract. Such a claim could not be validly raised unless and until the timing for payment has lapsed and the obligation to pay, breached. Where the time period of the date due for payment has lapsed, the party who has not been paid is then the ‘unpaid party’. This unpaid party may now properly make a payment claim. (paras 48 & 50)

… Since the payment of the sum was not due, the respondent could not claim to be an ‘unpaid party’. The respondent could only ascribe itself as an unpaid party 24 after 6 December 2016, the due date for payment of interim progress certificate no. 29; even then, only where there is still non-payment after this date. The adjudication regime is not intended to deal with in futuro payments (paras 52 – 54)

… The ‘adjudication dispute’ here that went to the adjudication was not within the jurisdiction of the adjudicator to decide. Although this complaint was not raised in the adjudication proceedings, this complaint raised at the High Court meant that the adjudication in the present appeal was a non-starter. The adjudicator exceeded her jurisdiction and/ or committed a jurisdictional error when she adjudicated on a claim which commenced before the date of accrual of the cause of action. (paras 21, 59 & 62)”. [30] However, in my view, the facts in Ideal City Development can be distinguished from the instant case. As explained by Mary Lim JCA in delivering the decision of the Court at p 628, “[52] … It is not in dispute that the due date for payment of the sum specified in the interim progress certificate no. 29 is 6 December 2016. However, without waiting for this date to lapse, on 29 November 2016, the 25 respondent issued and served on the appellant, a payment claim for the payment of the sum of RM1,743,471.44 as certified under interim payment certificate no. 29 dated 25 October 2016. As at 29 November 2016, the payment of this sum is not due.”. [31] In the case before this Court, the learned Adjudicator had considered the adjudication pleadings as well as the documentary evidence submitted by the parties. The duty to act fairly was therefore fulfilled. [32] Further, any argument that the learned Adjudicator had acted in excess of his jurisdiction in making the Adjudication Decision cannot hold water considering all the factors as outlined above. In my view, the Plaintiff’s contention that the Adjudication Decision was improperly obtained as the Adjudicator had failed to consider the Plaintiff’s statement that the Payment Claim/ Payment Request was not served by the Defendant on the Plaintiff is completely unfounded. 26 Issue 2: Adjudicator’s failure to give directions for written submissions - The parties’ submissions [33] The Plaintiff submitted that the Defendant had served the Adjudication Reply on 22.4.2019. Thereafter, vide their solicitors’ letter to the Adjudicator dated 25.4.2019, the Plaintiff put on notice that there are certain issues raised in the Adjudication Reply which warrants a response by the Plaintiff and they requested the Adjudicator to exercise his discretion under section 25(j) CIPAA to provide directions for parties to put in written submission. [34] However, the Adjudicator allegedly failed to reply to the said solicitors’ letter and to give the directions as desired by the Plaintiff. In this regard, it was contended that the Adjudicator had acted in breach of natural justice. Furthermore, according to the Plaintiff, the Adjudication Decision could turn out differently if they had been allowed to place written submissions. 27 [35] Mr. Andrew Davis cited several authorities to support his submissions. The Court of Appeal decision in Guangxi Dev & Cap Sdn Bhd v. Sycal Bhd & Another Appeal [2019] 1 CLJ 592 was put forward for the proposition that since the request for written submissions was made at the earliest opportunity, there was ample time for the Adjudicator to consider the same and give a favorable answer to the Plaintiff. Any hearing concluded without a full consideration of a party’s case would not inspire confidence in the adjudication process. The Adjudicator had completed the adjudication proceedings in a hurry without undertaking a proper analysis of the issues raised by the Plaintiff in the Adjudication Response as the Adjudicator had taken only 12 working days to deliver the Adjudication Decision. Since the Adjudication Decision could not be reviewed on merits, it is crucial that all assertions put forward in opposing the Adjudication Claim be considered in the adjudication proceedings. 28 [36] Learned counsel proceeded to distinguish the case of TYL Land and Development Sdn Bhd v. Sis Integrated Sdn Bhd & Other Case [2018] 1 LNS 145 from the instant case whereby in TYL Land, the Adjudicator had considered the request by the respondent’s solicitors and found that there was no necessity for further submissions and therefore the Court decided that the Adjudicator had not acted in breach of natural justice. In the present case, the Adjudicator did not consider the Plaintiff’s request at all. [37] Additionally, citing the case of Rohana Bte Ariffin & Anor v Universiti Sains Malaysia [1989] 1 MLJ 487, it was submitted that the requirement to give reasons is essential but the Adjudicator did not give any explanation in the Adjudication Decision for not giving directions to the parties to put in written submissions. The Plaintiff also relied on the decisions in Ranhill E&C SdnBhd v Tioxide (Malaysia) Sdn Bhd [2015] 1 LNS 1435 and BM City Realty & Construction Sdn Bhd v Merger Insight (M) Sdn Bhd [2016] 1 LNS 1096 to bolster the argument that the breach of natural justice in this 29 case is decisive or of considerable potential importance to the outcome of the adjudication. [38] For the Defendant, Ms. Melody Woon initially submitted that the learned Adjudicator had rightly made the decision in refusing to allow the parties to submit further written submissions. The Adjudicator is not in any way bound to allow the Plaintiff’s request. Learned counsel relied on the decisions in ACFM Engineering & Construction Sdn Bhd v Esstar Vision Sdn Bhd and another case [2015] MLJU 1951 and WRP Asia Pacific Sdn Bhd v NS Bluescope Lysaught Malaysia Sdn Bhd [2015] MLJU 1125 for the meaning and effect of s 25(a) CIPAA. [39] However, in the Reply Submissions, Ms. Melody Woon submitted that the learned Adjudicator had in fact replied to the parties by way of an e-mail dated 25.4.2019 stating that the parties are to respond and furnish documents which were requested by the Adjudicator only. The Adjudicator had considered the Plaintiff’s request to put in further written submissions, but having found that there was no necessity for such submissions, the Adjudicator had rightfully decided upon the 30 documents presented before him in the adjudication proceedings and made a reasoned finding that the claims in the Payment Claim are valid and the amount stated therein is due. [40] It was further contended that the Adjudication Decision was made within 12 working days from service of the Adjudication Reply in compliance with para 12(2)(a) and sub-s 12(3) CIPAA. It is perfectly well within the Adjudicator’s power to make the Adjudication Decision whenever he has completed his deliberations regarding the matter. [41] Finally, the Defendant vehemently argued, with reference to Gazzriz Sdn Bhd v Hasrat Gemilang Sdn Bhd [2016] MLJU 1054, that the Adjudication Decision cannot be set aside on the grounds that the Plaintiff disagrees with the merits and/ or assessment of the case by the learned Adjudicator. The Adjudicator had acted in accordance to the rules of natural justice in applying his expertise, knowledge and experience to consider the matters in the dispute before him and accordingly, informed the parties of his conclusions in the Adjudication Decision. 31 - Determination by the Court [42] The letter written by the Plaintiff’s solicitors to the Adjudicator on 25.4.2019 is as per exhibit “LSE-7” in the Plaintiff’s AIS in encl. (‘said Letter’). For ease of reference, the gist of the said Letter is re-produced below: “We refer to the above matter and the Claimant’s Adjudication Reply dated 22.4.2019. We are instructed to state that there are certain issues raised in the Adjudication Reply which warrants a response by the Respondent, nevertheless we understand that this is not permitted under the CIPAA 2012. However, we are instructed to seek the Adjudicator’s exercise of discretion under section 25 (j) of CIPAA 2012 to provide direction for parties to put in Written Submissions, failing which this may tantamount to a breach of natural justice.”. 32 [43] The solicitors for the Defendant responded by way of a letter to the Adjudicator, also dated 25.4.2019 (exhibit “TCK-2” in the AIR, encl. 4), stating as follows: “We refer to the above matter and the Respondent counsel’s email of even date. We write to object to the contention made by the Respondent as parties are bound by their respective Claims, Response and Reply. And it is not open to the parties to extend their right to make further submission pertaining thereto, and the Adjudicator is obliged to decide the dispute and to deliver the Adjudication Decision within forty-five (45) working days from the service of the Adjudication Reply. Moreover, the Respondent has failed to adhere to your directions to remit the necessary Security Deposit. In the circumstances, we pray that the application made by the Respondent be dismissed forthwith.”. 33 [44] A chop with the words “ACKNOWLEDGEMENT COPY”; a signature and handwritten date “29/4/19”; and the typed words “By Email: …/Hand” can be seen at the top right-hand corner of the said Letter, whilst the letter in exhibit “TCK-2” states “By Email”. No explanation was provided by the Plaintiff as to the person who had placed the signature and date on the said Letter. [45] In the Adjudication Decision, the learned Adjudicator mentioned the various requests that he had made to the parties, but nothing was said about the Plaintiff’s request for written submissions vide the said Letter. The relevant part of the Adjudication Decision is extracted as shown below: “K: ADJUDICATOR’S REQUESTS: HEARING / MEETING / SITE VISIT / DOCUMENTS

On the 4th, 15th and 18/Apr/19, I requested Claimant to submit the excel file for their claim which submitted to me on 19/Apr/19. 34

On 24/Apr/19, I requested Claimant to give the CCC for Phase 2 Block E. There is no CCC yet but there is an interim certificate of completion dated 22/Jan/18.

On 25/Apr/19, I requested Respondent/Claimant to submit the excel file for previous certification no. 51. This document supposed to be given by Respondent but no submission is made.

On 26/Apr/19, I requested Claimant to give a clearer copy of interim certificate of completion for Phase 2 Block E and it was given on the same day.”. [46] It is rather curious that the learned Adjudicator had taken the trouble to expressly mention all the requests made to the parties for the submissions of further documents, including on 25.4.2019, being the same date that the counsels representing the parties had written to him, in the Adjudication Decision, but concurrently omitting to mention about the said Letter. Since there is no evidence to prove that the learned Adjudicator had indeed received the said Letter and the other letter from the Defendant’s solicitors, it could be inferred that the Adjudicator did not receive these letters. 35 [47] In para 17 of the AIS, the Plaintiff averred that the Adjudicator did not respond to their solicitor’s request. There was no counter averment by the Defendant. [48] In para 12 of the Defendant’s Reply Submission, it was submitted that “… the Learned Adjudicator had replied to both the Plaintiff and the Defendant by way of email dated 25/04/2019 stating that both parties are to respond and furnish documents which were requested by the Adjudicator only.”. However, the e-mail dated 25.4.2019 was not exhibited in any of the Affidavits and this was admitted by Ms. Melody Woon at the hearing of the Plaintiff’s O.S. [49] Therefore, assuming that the Adjudicator did receive the said Letter and the Defendant’s solicitor’s letter, there is no evidence before this Court to support a finding that the learned Adjudicator had addressed his mind to the Plaintiff’s application in the said Letter and replied to the same. 36 [50] Section 25(j) CIPAA provides that the adjudicator shall have the power to issue any direction as may be necessary or expedient. The provision is expressed in permissive rather than mandatory language. The learned authors Lam Wai Loon and Ivan YF Loo in Construction Adjudication in Malaysia, Second Edition, Sweet & Maxwell, 2018 elaborated on this provision at pp 265 - 266 as follows: “Section 25(j) of the CIPA Act 2012 confers on the adjudicator a wide discretion to give any direction for the disposal of the adjudication. The directions which may be given by the adjudicator include the timetable for submissions, the filing of a statement of agreed facts, the filing of a statement of issues or matters required to be determined by the adjudicator, the period within which the parties are to exchange witness statements or expert reports, whether the number of witnesses or experts is to be limited, whether any direction should be given for a discussion between the experts prior to the exchange of their reports for the purposes of identifying the issues relating to the payment dispute and where possible, reach an agreement on the issue, and whether there should be any hearing and the length of the hearing, if there is to be one. In 37 Milsonland Development Sdn Bhd v Macro Resources Sdn Bhd and another appeal, the learned judge held that it was within the adjudicator’s power under section 25(j) to order the parties to each file a Statutory Declaration as to the amounts already paid by the claimant to the respondent for the work done. The power provided in section 25(j) enables the adjudicator to oversee and guide the progress of the adjudication with the aim of disposing of the adjudication in a manner as may be necessary and expedient. Notwithstanding the wide power, the adjudicator has to conduct the proceedings in accordance with the rules of natural justice or as fairly within the limitations imposed by the CIPA Act 2012.”. [51] There is no doubt that, viewed in its entirety, s 25 CIPAA bestows wide powers on an adjudicator in conducting the adjudication proceedings including to establish the procedures and limiting the submission of documents by the parties as stipulated in para (a) of the said provision. Added to this is the requirement under para 12(2)(a) CIPAA that the adjudicator shall decide the dispute and deliver the adjudication decision within 45 working days from the service of the adjudication response or reply to the adjudication response, whichever is later. An adjudicator is thus given ample “… 38 powers and flexibility in determining the procedures to be applied to the adjudication as he deems fit and proper according to the circumstances of the case, so that he can manage the proceedings within the strict timetable imposed by the CIPA Act 2012, and in a manner that would enable him to determine the dispute and deliver his decision impartially, fairly and timely …”: see Construction Adjudication in Malaysia (supra) at p 243. [52] Even though the letter sent by the solicitors for the Plaintiff dated 25.4.2019 states that the failure by the Adjudicator to provide the direction as requested may tantamount to a breach of natural justice, the issue as to whether such a breach was occasioned is for this Court to decide. [53] In Tidalmarine Engineering Sdn Bhd v Conlay Constructions Sdn Bhd and another appeal [2017] MLJU 738, the High Court held that there was no breach of natural justice on the part of the adjudicator in declining to allow the filing of written submissions and bundle of authorities as requested by the respondent in that case. 39 [54] In the case before me, I find that the said Letter does not explain what are the “certain issues raised in the Adjudication Reply which warrants a response” by the Plaintiff. There is also no averment in the Plaintiff’s AIS and AIR as to what the Plaintiff wanted to submit to the Adjudicator and how that would have made a difference in the findings and conclusions of the Adjudicator. [55] Reading the Adjudication Decision, it is evident that the Adjudicator has considered the Payment Claim, Payment Response, Adjudication Claim, Adjudication Response and Adjudication Reply in arriving at his “Findings and Reasons” as set out in Part L. In my view, the evidence placed by the Plaintiff before this Court falls short of proving its claim that there was a failure of procedural fairness on the part of the learned Adjudicator in not allowing the Plaintiff’s request for Written Submissions to be put in. 40 Issue 3: Adjudicator allegedly acted in excess of jurisdiction by re-writing the contract and/ or deciding in contravention to the payment terms in the contract - The parties’ submissions [56] The Plaintiff’s submissions in respect of Issue 3 basically comprise three sub-issues, namely that the Adjudicator –

without any basis, adjusted the calculation for work done;

failed to consider that the Defendant’s claim is premature; and

had re-written the contract when he decided that s 36 CIPAA is applicable. [57] As regards subpara 56(a) above, the Plaintiff contended that they had disputed the Defendant’s total claim on the ground that it was premature. However, despite knowing that Payment Claim No. 52 was not approved by the Plaintiff, the Adjudicator nevertheless made 41 comparisons to that Payment Claim and adjusted the percentage for works done and found that the Defendant is entitled to the sum RM345,732.15. Mr. Andrew Davis argued that the Adjudicator should not have made any adjustment or recommendation to the works done and the total claim when the LoA has specific payment terms as re-produced below: “C. MODE OF PAYMENT The schedule of payment shall only be effective upon completion of the following stages of work:- a. Upon completion of schematic design and submission of DO plans to Authority. 5 % b. Upon issuance of DO approval by the Authority. 5 % c. Upon complete preparation of building plans for submission to Authority for approval.

7.5 % d. Upon approval of building plans by the Authority.

7.5 % e. Upon finalisation of all tender drawings and documents, calling of tender and award of contract. 10 % 42 f. Construction stage (progressively throughout construction period) and extended period and completion of all the defective work complaints of by the purchasers, consultants and employer. 60 % g. Upon issuance of Certificate of Fitness for occupation and/or Certificate of Completion and Compliance (CCC) or settlement of Final Accounts whichever is later. 5 % [58] The Plaintiff posited that the adjustment made by the Adjudicator is not in accordance to the above payment terms. It was further argued that the Adjudicator exceeded his jurisdiction in making such adjustment and recommendation without consent of the parties. Moreover, the parties never requested the Adjudicator to do so and the Plaintiff is prejudiced by the Adjudicator’s decision. [59] Moving on to the sub-issue in subpara 56(b) above, the Plaintiff drew the attention of the Court to the word “upon” in the aforesaid Schedule of Payment, which means “after” and thus, the Defendant’s entitlement for payment arises only after each stage of works as set 43 out in the above schedule are completed. Payments for stage (f) is during the construction period, extended period and completion of all the defective work complaints by the purchasers, consultants and employer. In this regard, the purchasers are still within the statutory defective liability period to make any complains concerning the defective works in accordance with the Sale and Purchase Agreement under the said Project. As for payment for stage (g), it is upon construction stage and issuance of the Certificate of Fitness for occupation (‘CoF’) and/ or CCC or settlement of Final Accounts, whichever is later. It was submitted that the Defendant is not entitled to payments for stages (f) and (g) because the CCC and Final Statement of Account have not been issued. Furthermore, the Defendant cannot rely on the partial CCC which was attached in the Adjudication Claim to demand for payment for stage (g). [60] Learned counsel for the Plaintiff further argued that the Defendant’s claim against the Plaintiff is premature and the Defendant is not entitled to demand the payment as per the Adjudication Claim. Reference was made to the decisions in WRP Asia Pacific Sdn Bhd v 44 NS BluecopeLysaght Malaysia Sdn Bhd (supra) and Ranhill E&C Sdn Bhd v Tioxide (Malaysia) Sdn Bhd (supra) to support the proposition that the learned Adjudicator had, in effect, failed to consider or had voided the payment terms in the LoA, and in doing so had exceeded his jurisdiction. [61] Finally, in relation to subpara 56(c) above, the Plaintiff contended that s 36 CIPAA is only applicable in the absence of provisions for payments terms whereas in this case, the LoA has clearly specified such terms. Therefore, the Adjudicator is said to have exceeded his jurisdiction when he decided that s 36 CIPAA is applicable instead of the mode of payment by stages. In any event, it was submitted that if s 36 CIPAA is applicable, the Defendant is not entitled for any payment as the claim is premature. [62] The Defendant, on the other hand, defended the Adjudicator’s justification and reasoning which they contended was meticulously explicated in the Adjudication Decision. This includes the explanation that the mode of payment in the LoA only specifies the stages or 45 schedule of payment, but not the period for honouring the payment. In the circumstances, the Adjudicator recommended that s 36 CIPAA, which is to pay 30 days upon receiving the claim, applies in this case, subject to the amount of work done as determined by the Adjudicator. [63] Ms. Melody Woon advocated that the Adjudicator had rightfully decided that a standard construction contract would allow the Plaintiff to retain 5% from the total sum and to release half of that amount upon issuance of the CPC/ CCC before applying the same practice in the instant case. Furthermore, section 25(n) CIPAA confers the power on the Adjudicator to decide or declare on any matter notwithstanding no certificate has been issued in respect of the matter. - Determination by the Court [64] The Plaintiff’s application to set aside the Adjudication Decision pursuant to s 15(d) CIPAA is not premised on the ground that the 46 learned Adjudicator is not clothed with any jurisdiction at all to decide on the dispute that was referred to him, but rather on the basis that the Adjudicator had decided on matters which were beyond his jurisdiction. [65] Sub-s 27(1) CIPAA provides that “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.”. The applicability of sub-s 27(2) CIPAA, which allows the parties to an adjudication, by a written agreement, to extend the jurisdiction of the adjudicator to decide on any other matter not referred to the adjudicator pursuant to ss 5 and 6 CIPAA, does not arise in this case. [66] According to sub-s 5(1) CIPAA, an unpaid party may serve a payment claim on a non-paying party for payment pursuant to a construction contract whilst sub-s 6(2) provides that 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 47 unpaid party stating the amount disputed and the reason for the dispute. [67] Now, the answer to the question as to what is the matter that was referred to adjudication by the parties necessitates an examination of the Payment Claim and Payment Response. [68] In the Payment Claim, the Defendant has clearly stated the claimed amount as RM474,426.75 being the payment due for Progress Claim No. 52 dated 14.11.2018 for architectural services rendered for the said Project. The due date for payment is stated as 29.12.2018 based on the default provisions in sub-s 36(1) and (4) CIPAA. The LoA and the letter dated 30.11.2018, which was discussed in the earlier part of this judgment, are attached to the Payment Claim as Schedule 1 and