Rentak Segar Sdn Bhd v Bricomp Maju Sdn Bhd (BA-24C-81-11/2023)

(i). OS No. BA-24C-94-12/2023 (Suit 94) was filed by Bricomp to set aside the AD pursuant to Section 15(b) and (b) of CIPAA 2012; and

(ii). OS No. BA-24C-81-11/2023 (Suit 81) was filed by Rentak Segar to enforce the AD pursuant to Section 28 of CIPAA

[3] Since there are 2 OSs filed in relation to this AD, the parties agreed via a Consent order dated 7.3.2024 for both OSs to be heard together and for the decision for both the OSs to be delivered together. S/N SqEodxTrfUNsIqum5dzJw Since this is a cross suit between the parties, for ease of reference the parties will be referred to henceforth with the acronym of Rentak Segar and Bricomp wherever applicable. [4] Bricomp had amended its Originating Summons suit 94 via Enclosure No. 20 of this suit removing its application for Stay of Execution pursuant to Section 16 of the CIPAA 2012. As such, this court decided on the Setting Aside application before deciding on the Enforcement application. Since this is a cross suit between the parties, for ease of reference the parties will be referred to henceforth with the acronym of Bricomp and Rentak Segar wherever applicable. B. BRIEF BACKGROUND [5] Vide a Letter of Award dated 05. OA subcontractor had appointed Rentak Segar to perform the sub-sub contract work for the for a project known as Projek Pembinaan Loji Rawatan Kumbahan Serantau dan Rangkaian Paip Pembetungan di Bandar Kuantan, Pahang (Reka dan Bina) S/N SqEodxTrfUNsIqum5dzJw [6] Rentak Segar had submitted its progress claims for the works done by it vide Progress Billings No. 1 to No. 6 to Bricomp. In accordance to the terms in the LOA, Bricomp had, upon verification of the total works done, certified a total sum of RM2,421,000.00 vide Payment Certificates No. 1 to No. 6 and had made the relevant payment to Rentak Segar, amount of which had been received by Rentak Segar. [7] However, Rentak Segar had alleged that they had performed and completed all works for the project which amounts to the value of RM3,685,500.00 (excluding retention sum), and there is an outstanding sum of RM1,264,500.00 (RM3,685,500.00 - RM2,421,000.00) due and owing to Rentak Segar by Bricomp. [8] Subsequently, Rentak Segar alleged that Bricomp had failed to make payment for the works that have been performed and completed by it. As such, Rentak Segar had issued a Payment Claim dated 26.6.2023 pursuant to Section 5 of the CIPAA 2012, however, Bricomp did not issue any Payment Response to the Payment Claim issued by Rentak Segar. S/N SqEodxTrfUNsIqum5dzJw [9] Rentak Segar had proceeded to commence Adjudication Proceedings against Bricomp by issuing a Notice of Adjudication dated 12.7.2023 and had served the same to Bricomp both by registered post and by hand. C. ADJUDICATION PROCEEDINGS [10] claim pursuant to the CIPAA against Bricomp was then registered under reference number AIAC/D/ADJ-4885-2023 where parties had filed the following adjudication papers before the Learned

(i)

(ii)

(iii) [11] had not disputed the outstanding sum owed to it but had not paid the said sum only because there were outstanding works still not completed S/N SqEodxTrfUNsIqum5dzJw by other contractors and as such had not received payments from the main contractor, Puncak Niaga. [12] Bricomp on the other hand in its Adjudication Response denied that Rentak Segar had completed its works as the Certificate of Completion (CPC) is not issued as yet. Although, Bricomp had in the Adjudication Response denied that it owed Rentak Segar the sum of RM1,264,500.00, it had also admitted that the outstanding sum still owing to Rentak Segar is RM1,170,000.00. [13] In its Adjudication Reply, Rentak Segar adjusted its claim in accordance to the admitted sum by Bricomp of RM1,170,000.00, interest of 5% on the RM1,170,000.00 and the cost of RM45,750.48 as per its Adjudication Claim. [14] Upon conclusion of the Adjudication Proceedings, the Adjudicator, had delivered his decision in favour of Rentak Segar via his AD as follows: a) The Respondent shall pay the Claimant the sum of RM1,170,000.00 this decision; S/N SqEodxTrfUNsIqum5dzJw b) The Respondent shall pay the Claimant interest at the rate of 5.00% per annum on the Adjudicated Sum from 7th February 2023 until full payment. c) The Respondent shall pay th RM45,750.48 and RM13,061.48 which the Claimant had paid to AIAC for and on behalf of the Respondent, within 14 days from the date of this decision, failing which, the Respondent shall pay 5.00% interest [15] Upon perusing through both the applications, the respective affidavits, the AD, the documentary evidence filed as exhibits and the submissions s application to set aside and Being dissatisfied with ecision, a Notice of Appeal to the Court of Appeal has been filed by Bricomp. D. ISSUES [16] application to set aside the AD pursuant to Section 15 of the CIPAA 2012 is premised on: S/N SqEodxTrfUNsIqum5dzJw

The Learned Adjudicator had breached the principle of natural justice and/or acted in excess of his jurisdiction, and had misdirected himself by determining that Bricomp ought to pay to Rentak Segar the amount of RM1,170,000.00 simply based on an alleged admission made by Bricomp, when in fact it was not at all an admission by Bricomp

(ii) The Learned Adjudicator had breached the principle of natural justice and/or acted in excess of his jurisdiction in delivering the Adjudication Decision based on the alleged admission without taking into account the material aspects and terms of payment as provided in the Letter of Award

(iii) The Learned Adjudicator had breached the principle of natural justice and/or acted in excess of his jurisdiction by delivering the Adjudication Decision without taking into account the material aspects that there are Works that have not been completed by Rentak Segar as raised by Bricomp S/N SqEodxTrfUNsIqum5dzJw [17] application to enforce the AD pursuant to Section 28 of CIPAA 2012 is premised as follows; i. that the Adjudicated Amount is not paid by Bricomp; and ii. that the AD is neither set aside nor stayed. E. FINDINGS OF THE COURT [18] The CIPAA 2012 is a creature of the legislation intended to facilitate speedy and regular payments in the construction industry. As cash flow is the utmost important factor in the construction industry, the CIPAA provides interim measures to disputing parties to solve payment issues expeditiously so as not to jeopardise the continuance of the construction contract entered into by them. (see Martego Sdn Bhd v. Arkitek Meor & Chew Sdn Bhd and another appeal [2019] 8 CLJ 433; [2019] 5 AMR 516 FC; Bertam Development Sdn Bhd v. R&C Cergas Teguh Sdn Bhd [2017] 1 LNS 2228). I. Setting Aside OS - Suit 94 (Section 15 of CIPAA 2012) [19] The issues which Bricomp have raised against the AD are particularly pursuant to Section 15(b) and (d) of the CIPAA 2012. As such, this court consider whether Bricomp has discharged its burden on a balance of probabilities to prove to this court that there has been a S/N SqEodxTrfUNsIqum5dzJw denial of Natural Justice by the Adjudicator and that the Adjudicator had acted in excess of his jurisdiction respectively in arriving to his AD. a. Section 15(b) of the CIPAA 2012 [20] It is Bricomp Adjudicator had failed to properly or not consider at all the that Rentak Segar had not completed the works and that CPC has not been issued as yet and as such, Rentak Segar is not entitled for the payment claimed by it. [21] I refer to the case of MRCB Builders Sdn Bhd v. Wazam Ventures Sdn Bhd and another case [2020] 1 LNS 891; [2020] MLJU 208, where Wong Kian Kheong J (as he then was) held that it is sufficient to dislodge a complaint of breach of natural justice if the Adjudicator had given just one reason to have arrived to his decision. [22] The principle of natural justice that is said to have been denied here is the right to being heard, audi alteram partem. In Adjudication Proceedings, the Adjudicator has the duty to accord procedural fairness to the parties during the course of the proceedings whereby the issues raised by both parties are to be considered and a decision is to be derived therefrom. In the case of ACFM Engineering & Construction S/N SqEodxTrfUNsIqum5dzJw Sdn. Bhd. v. Esstar Vision Sdn Bhd & another appeal [2016] 1 LNS 1522; [2016] MLJU 1776, the Court of Appeal held: When one speaks of natural justice, it is nothing more than what we call the concept of "procedural fairness" which needs to be accorded to [23] The Learned Adjudicator had accorded procedural fairness to both parties at the adjudication proceedings. On whether the adjudicator had deliberated on the issues raised by Bricomp in its Adjudication Response, at paragraphs 25 to 27 of the AD, the issue whether Rentak Segar had completed the works and that the same was evidenced by the fact that CPC was not issued as yet had been deliberated and decided upon by the Adjudicator. [24] The Adjudicator had also made reference to the letters issued by Bricomp to Rentak Segar acknowledging the outstanding sum and explaining as to why the same could not be paid as yet when deliberating on the same and to support his findings. Since in the Adjudication Response, Bricomp admitted the outstanding sum to be under the Adjudication Claim. S/N SqEodxTrfUNsIqum5dzJw [25] but had also made his findings in accordance to all the documents in relation to this issue which had been submitted for the purpose of the Adjudication Proceedings. [26] I refer to the case of Bina Puri Construction Sdn Bhd v Hing Nyit Enterprise Sdn. Bhd. [2015] 8 CLJ 728 where it was stated as follows: Section 15 has provided limited grounds on which the decision of the Adjudicator may be set aside. Since an application under s.15 is not an [27] the Adjudicator had failed to address the issues raised by it at the Adjudication Proceedings and as such had breached the principles of natural justice is totally unsubstantiated and unfounded. b. Section 15(d) of the CIPAA 2012 [28] Section 27 of the CIPAA 2012 provides the jurisdiction in which the Adjudicator can conduct the Adjudication Proceedings. Section 27(3) of the CIPAA particularly gives the Adjudicator the discretion to proceed S/N SqEodxTrfUNsIqum5dzJw and complete the adjudication proceedings not withstanding any jurisdiction challenge, without prejudice to the rights under Section 15 and Section 28 of the CIPAA 2012 accordingly. [29] An AD is commonly applied to be set aside in reliance of Section15(d) of the CIPAA 2012, as such the case of Terminal Perintis Sdn. Bhd. v Tan Ngee Hong Construction Sdn. Bhd. and another [2017] 1 LNS 177; [2017] MLJU had laid down the classification in .e. core jurisdiction, competence jurisdiction and contingent jurisdiction. [30] In this case, the jurisdiction challenge is on the contingent jurisdiction as stated in the Terminal Perintis Sdn. Bhd. v Tan Ngee Hong Construction Sdn. Bhd. and another (supra): compliance with the requirements of the Act as in that the dispute must be one falling within the matters raised in the Payment Claim and the Payment Response as provided for under section 27(1) CIPAA. In that example the word "jurisdiction" is used in the sense of the scope of the dispute that is before the Adjudicator for decision. So, for example an Adjudicator may not be able to decide on the defence of set-off arising out of costs of rectifying defective works if this has not been raised in the Payment S/N SqEodxTrfUNsIqum5dzJw Response. If he so decides, then this Court may set it aside as been made in [31] B allegation that the Adjudicator had acted in excess of his jurisdiction is not substantiated in anyway. In the AD, the is nothing that the Adjudicator had deliberated on which was not brought to the Adjudication Proceedings by the parties. Therefore, whether the decision of the Adjudicator is acceptable or not to Bricomp cannot be the basis of an application to set aside the AD. [32] Bricomp had raised an additional issue through its submission i.e. Section 15(c) of CIPAA 2012, since this is an issue which was not pleaded in its OS and/or its affidavits, I see no merits in addressing this issue. Be that as it may, this issue seems to have been raised with no evidence whatsoever to substantiate the same. Therefore, it is my view that this is a mere allegation and the manner in which it has been brought in is clearly an afterthought. [33] In the upshot, Bricomp has failed to prove to this court on a balance of probabilities the allegations made against the Adjudicator and as such, I dismiss this application with cost of RM5,000.00 to be paid by Bricomp to Rentak Segar subject to allocatur fee. S/N SqEodxTrfUNsIqum5dzJw II. Enforcement OS Suit 43 (Section 28 of the CIPAA 2012) [34] As guided by Her Ladyship Mary Lim Thiam Suan JCA (as she then was) in the Court of Appeal case of Inai Kiara Sdn Bhd v. Puteri Nusantara Sdn Bhd [2019] 2 CLJ 229, the court may exercise its discretion to grant leave under Section 28(1) and (2) of the CIPAA 2012 to enforce an adjudication decision if the following three conditions (3 Conditions) are met: as been made in favour of the party applying for leave under Section 28 CIPAA;

the party against whom an adjudication decision is made, has failed to pay the adjudicated amount on the date specified in the adjudication decision; and

there is no prohibition on the c [35] In this case, in the absence of any evidences to say otherwise, all 3 conditions have been satisfied and since the setting aside application of the AD has been dismissed, Rentak Segar AD is allowed with costs of RM5,000.00 to be paid to Juang by BMG subject to allocatur fee. S/N SqEodxTrfUNsIqum5dzJw F. CONCLUSION [36] Premised on the above evidences and reasons:

the Setting Aside OS is dismissed;

(ii) the Enforcement OS is allowed; and

(iii) a total costs of RM10,000.00 subject to allocatur fee shall be paid to Rentak Segar by Bricomp accordingly. SUMATHI A/P MURUGIAH Judicial Commissioner High Court of Malaya Shah Alam, Selangor Darul Ehsan DATE : 7 AUGUST 2024 Counsel for Brimcorp : Mr. Kuldeep Kumar & Mr. Adrian Ng Chen Yip (Messrs. YC Pang, Chong & Gordon) Counsel for Rentak : Mr. Alvin Tan & Mr. Alvin Lai (Messrs. Justin Voon Chooi & Wing) S/N SqEodxTrfUNsIqum5dzJw