Teguh Majuria Sdn Bhd v ATSA Architects Sdn Bhd (WA-24C-99-07/2021)

(a) the application by ATSA Architects Sdn Bhd (‘ATSA’) pursuant to s 28 of the Construction Industry Payment and Adjudication Act 2012 [Act 746] (‘CIPAA’) and O. 5, O. 7, O. 28 and/or O. 92, r. 4 of the Rules of Court 2012 (‘RC 2012’) in Originating Summons (‘O.S.’) No. WA-24C-85-07/2021 (‘O.S. No. 85’) to enforce the Adjudication Decision dated 17.6.2021 (‘AD’) by the learned Adjudicator, Wai Chan Ming (‘Adjudicator’) (encl. 1; ‘Enforcement Application’);

(b) the application by Teguh Majuria Sdn Bhd (‘TM’) pursuant to s 15 CIPAA, O. 28 and O. 69A RC 2012 and/ or the inherent jurisdiction of the Court in O.S. No. WA-24C-99-07/2021 (‘O.S. No. 99’) to set aside the AD (encl. 1; ‘Setting Aside Application’); and

(c) the application by TM pursuant to s 16 CIPAA and O. 32, O. 69A and/ or O. 92 RC 2012 in the Notice of Application (‘NoA’) in O.S. No. 99 to stay the AD (encl. 3; ‘Stay Application’) pending the disposal of the Setting Aside Application and/ or High Court Kuala Lumpur Civil Suit No. WA-22NCvC-479-07/2021 (‘Suit 479’). [2] After having given careful consideration to the cause papers and written submissions filed and having heard oral submissions by Ms. Ng Sim Hong who appeared for ATSA and Mr. Wee Choo Keong for TM, the Enforcement Application and the Setting Aside Application were dismissed with costs of RM3,000.00 and RM10,000.00 respectively, and the Stay Application was allowed with costs of RM5,000.00. All orders as to costs are subject to payment of the standard allocatur fees. [3] Both ATSA and TM, being aggrieved with the said decision, are pursuing their rights to appeal against the same. Hereinbelow are my full grounds for the decision. The Cause Papers [4] The cause papers are as follows: The Enforcement Application:

(a) ATSA’s O.S. dated 2.7.2021 (encl.1);

(b) ATSA’s Affidavit In Support (‘AIS’) affirmed by its Director, AR Azim Bin Abdul Aziz on 2.7.2021 (encl. 2);

(c) TM’s Affidavit In Reply (‘AIR’) affirmed by its Senior Manager - Contract, Mohd Fuad Bin A. Manaf on 13.7.2021 (encl. 3); and

(d) ATSA’s Notice of Intention to Use Affidavit (encls. 7 and 8 in O.S. No. 99) on 29.7.2021 (encl. 4). The Setting Aside Application:

(a) TM’s O.S. dated 12.7.2021 (encl. 1);

(b) TM’s AIS affirmed by the same deponent on 12.7.2021 (encl. 2);

(c) ATSA’s AIR affirmed by the same deponent on 29.7.2021 (encl. 7);

(d) ATSA’s Notice of Intention to Use Affidavit (encl. 2 in O.S. No. 85) on 29.7.2021 (encl. 9);

(e) TM’s AIR affirmed by the same deponent on 12.8.2021 (encl. 10); and

(f) TM’s Notice of Intention to Use Affidavit (encl. 10) on 24.8.2021 (encl. 18). The Stay Application:

(a) TM’s Notice of Application dated 12.7.2021 (encl. 3);

(b) TM’s AIS affirmed by the same deponent on 12.7.2021 (encl. 4);

(c) TM’s Notice of Intention to Use Affidavit (encl. 4) on 14.7.2021 (encl. 6);

(d) ATSA’s AIR affirmed by the same deponent on 29.7.2021 (encl. 8);

(e) TM’s AIR affirmed by the same deponent on 12.8.2021 (encl. 11);

(f) TM’s Additional Affidavit affirmed by the same deponent on 12.8.2021 (encl. 12); and

(g) TM’s Notice of Intention to Use Affidavit (encls. 2 and 10 - 11) on 24.8.2021 (encl. 19). Background Facts [5] TM is a private limited company incorporated under the Companies Act 1965 [Act 125] with its business address at No. 8 & 10, Jalan Jurutera U1/23, Seksyen U1, Kawasan Perindustrian Hicom Glenmarie, 40150 Shah Alam, Selangor. [6] ATSA is a private limited architectural company incorporated in Malaysia under Act 125 with its business address at No. 45, Jalan Tun Mohd Fuad 3, Taman Tun Dr Ismail, 60000 Kuala Lumpur. [7] TM is the employer for the project known as: “Cadangan Pembangunan Berstrata Yang Terdiri Daripada:

6 Blok Pangsapuri 12 Tingkat (Dari Tingkat 7 Hingga Tingkat 18) Yang Terdiri Daripada:

6 Tingkat Podium Letak Kereta (Dari Tingkat 1 Hingga Tingkat 6)

18 Unit Kedai (Dari Tingkat Bawah Hingga Tingkat Mezanin);

Kemudahan-Kemudahan Sokongan Seperti Tadika, Pejabat Pengurusan, Gimnasium, Dewan Serbaguna, Perpustakaan (Tingkat 7 Atas Podium), Sky Lounge Dan Perpustakaan (Atas Bumbung) Dan 5. 1 Unit Kebuk Sampah & Pencawang Elektrik PPU (Aras Bawah) Di Atas Tapak Seluas 8.762 Ekar Yang Terdiri Daripada Lot PT 797, PT 814, PT 815, PT 816, PT 817, PT 798, PT 799, PT 800, PT 801 & Sebahagian PT 818, PT 802 Dan Tanah Kerajaan, Di Seksyen U5, Mukim Sungai Buloh, Daerah Petaling, 40150 Shah Alam, Selangor Darul Ehsan” (‘Project’). [8] Juteras Vision Sdn Bhd is the main contractor (‘Main Contractor’) and AQS Services Sdn Bhd is the quantity surveyor (‘QS’) for the Project. [9] By a letter of appointment dated 15.3.2016 (‘LoA’), TM had appointed ATSA as the architect to provide architectural consultancy services for the Project. Clause 2 of the LoA states that the total professional fees is 1.8% of the total construction cost (fee excluding 6% GST) and the construction cost excludes Contingency Sum, Interior Design Works and Landscaping Works. [10] Clause 3 of the LoA provides that payment of fees shall commensurate with the professional services rendered by ATSA based on the following schedule: Item Upon Completion of Each Phase Percentage Fee for Phase A Upon completion and approval of schematic design by TM 5% B Upon submission & approval of plans by the relevant authorities (KM) 10% C Upon completion of Design Development Phase (submission and approval of BP) 15% D Upon completion of contract documentation, tendering and contract awarding/ binding 10% E Contract Implementation And Management Phase 50% F Upon issuance of Certificate of Compliance and Completion stage

(a) Abortive Fees as it had to amend and re-submit the Building Plans to the authorities for approval several times due to TM’s repeated instructions to change and re-submit the plans that had earlier been approved by TM and the authorities; and

(b) certification of SiFUS Plan as required under sub-s 6(3) of the Strata Management Act 2013 [Act 757] (‘SMA 2013’). [18] ATSA asserted that TM had made partial payment of RM2,060,836.44 from the sum of RM4,296,787.23 being the total value of architectural services rendered by ATSA leaving an outstanding sum of RM2,235,950.79. [19] In the Adjudication Response, TM submitted, inter alia, that ATSA was not entitled to this outstanding amount because the LoA is illegal under s 24 of the Contracts Act 1950 [Act 136] (‘CA 1950’) as ATSA had charged architectural fees at 1.8% of the total construction cost, contrary to the fees provided under the Architects (Scale of Minimum Fees) Rules 2010. ATSA is said to have violated the mandatory rule 29 of the Architects Rules 1996 and had failed to sign the Memorandum of Agreement as stipulated in the said rule. [20] TM further submitted that ATSA had violated the Architects Act 1967 [Act 117] (‘AA 1967’) by appointing an unqualified person, namely En. Mohd Fathi bin Abdullah (‘En. Fathi’), to act on ATSA’s behalf as the Architect for the Project when he is not an architect as provided under s 7 of the AA 1967. [21] TM brought a cross claim in the sum of RM2,060,836.44 as it alleged that it was deceived by ATSA into paying under the illegal contract for services rendered by an unqualified person under the AA 1967. [22] On 17.6.2021, the Adjudicator determined in para 101 of the AD that: “(i) the Respondent shall pay the Claimant the sum of RM1,337,211.71. This is hereby recorded as the adjudicated sum.

(v) the parties have each paid the equal sum of the Adjudicator's fee and the AIAC administration cost. The Claimant is entitled to the reimbursement of its portion.”. I. O.S. No. 99: The Setting Aside Application (encl. 1) [23] In its Setting Aside Application, TM argued that the Adjudicator had failed to act impartially and/ or acted in a biased manner, had breached the principle of natural justice and/ or had exceeded his jurisdiction, hence, the grounds for setting aside of the AD under the following limbs

(b), (c), and/ or (d) of s 15 CIPAA has, or have, been fulfilled: “Improperly Procured Adjudication Decision

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

(a) …;

(b) There has been a denial of natural justice;

(c) The adjudicator has not acted independently or impartially; or

(d) The adjudicator has acted in excess of his jurisdiction.”. [24] Each of TM’s grounds are dealt with in the ensuing part of this judgment. Ground pursuant to s 15(c) CIPAA: The Adjudicator has not acted independently or impartially - The Parties’ Submissions [25] Basically, TM cited two specific instances in alleging that the Adjudicator was bias and had given undue weight to ATSA’s evidence while ignoring TM’s evidence of the same status:

(a) The evidence with regards to the General Circulars issued by Lembaga Arkitek Malaysia (‘LAM’) which are of the same standing, specifically General Circular No. 1/2017 dated 24.3.2017 on the ARCHITECTS RULES 1996 (Amendment 2015) and ARCHITECTS (SCALE OF MINIMUM FEE) RULES 2010 which was purportedly ignored by the Adjudicator in favour of ATSA’s evidence on General Circular No. 5/2017 dated

24.11.2017 on the ARCHITECT’S ADDITIONAL SCOPE OF SERVICES FOR CERTIFICATION UNDER THE STRATA MANAGEMENT ACT 2013 (ACT 757) FOR STRATIFIED DEVELOPMENT. In para 86 of the AD, the Adjudicator said: “Further, I did not find any Clauses of the LOA stated the scope of works for Certification of SIFUS, and the Certification of SIFUS plans are statutory obligations for the Architect pursuant to LAM’s General Circular No. 5/2017 dated 24.11.2017. Therefore, I hold this is an additional works to the Contract.”. General Circular No. 1/2017 was issued to remind all Architects – “On the compliance to Architects Rules 1996, Third Schedule [Rule 29] – Conditions of Engagement of an Architect [Sub-rule 29(1)], which requires the Architect providing Architectural consultancy services to be in accordance with the Memorandum of Agreement between the Architect and the client; and On the compliance to the Architects (Scale of Minimum Fees) Rules 2010, which requires the architectural consultancy services provided by the Architect to be in accordance with the Rules. It is MANDATORY for architectural consultancy practice to charge their professional fees according to the Architects (Scale of Minimum Fees) Rules 2010 which has come into force from 1st March 2010. The Board may from time to time request for proof of compliance.”. General Circular No. 5/2017 was subsequently issued to advise all architects in their role as principal submitting person under the present regulations to certify the drawings prepared by a Licensed Land Surveyor for the purpose of filing of schedule of parcels.

(b) The evidence on the Site Progress Reports whereby the Adjudicator relied on ATSA’s Site Progress Report No. 52 (with the percentage of work done as 35.03%) which was superseded by Site Progress Report No. 55 (with the percentage of work done as 27%) as submitted by TM. Both Reports were signed and verified by the same construction manager employed by TM, Mr Ranjeet Kumar, however, the Adjudicator allegedly chose to ignore Site Progress Report No. 55 and made his decision based on the erroneous Site Progress Report No. 52 with the predominant purpose to unjustly enrich ATSA. Specifically, the following is what the Adjudicator said: “65. I note that the Respondent did not dispute the percentage completion for the Progress Report No.1 to 52. I further note that the Site Progress Report No. 52 was verified by the Respondent’s Construction Manager Ranjeet Kumar. …

Having considered the Respondent and Claimant’s submission and my analysis, I incline to accept the percentage of work done shall be based on 35.03% as recorded in Site Progress Report No.52.”. [26] TM submitted that the applicable test is as laid down in Metramac Corporation Sdn Bhd v Fawziah Holdings Sdn Bhd; Tan Sri Halim Saad & Che Abdul Daim Hj Zainuddin (Interveners) [2007] 4 CLJ 725, namely whether the allegation and the factual circumstance could have caused a fair-minded and informed bystander to entertain a fear of real danger of bias. [27] ATSA vigorously refuted TM’s contentions by emphasising that there is no single evidence of the Adjudicator being bias to the parties throughout the adjudication proceedings. ATSA used the following instances to support its argument that the Adjudicator has always acted independently and impartially in conducting the adjudication:

(a) on 24.2.2021, the Adjudicator received a phone call from TM’s representative, and he instantly explained that unilateral communication to the Adjudicator is prohibited under the CIPAA. The conversation ended immediately. On the next day, the Adjudicator sent an e-mail to both parties to remind them that all communication to the Adjudicator should be via e-mail/ facsimile only and must be copied to the other party at the same time; and

(b) ATSA had claimed a sum of RM2,235,950.79 against TM. The Adjudicator had considered all the documents and submissions and decided that TM is liable to pay only RM1,337,211.71 to ATSA for architectural fees, Abortive Fees and the SiFUS claim. This is a finding of fact by the Adjudicator. The mere fact that the Adjudicator made a finding of fact which was not aligned with TM’s position is not proof that he had failed to act independently and impartially. - Findings of the Court [28] Section 24 of the CIPAA requires that: “The adjudicator shall at the time of the acceptance of appointment as an adjudicator make a declaration in writing that –

(a) there is no conflict of interest in respect of his appointment;

(b) he shall act independently, impartially and in a timely manner and avoid incurring unnecessary expense;

(c) he shall comply with the principles of natural justice; and

(d) there are no circumstances likely to give rise to justifiable doubts as to the adjudicator's impartiality and independence.”. [29] The allegation of bias on the part of the Adjudicator is a serious one to make. Litigants in this Court, through their solicitors, have repeatedly been reminded that limb (c) of s 15 CIPAA should only be utilised as a ground to set aside an adjudicated decision where there is clear incontrovertible evidence pointing inexorably to a lack of independence or impartiality in the hearing and the delivery of the adjudication decision (see Rentak Segar Sdn Bhd v Transmission Technology Sdn Bhd and another appeal [2018] MLJU 1938 and Teguh Wiramas Sdn Bhd v Thien Seng Chan Sdn Bhd and another application [2017] MLJU 633) and not to be simply added to the “shopping cart” so as to attack the adjudication decision from all possible angles. [30] This warning was expressed by the High Court in lnovatif Engineering

(M) Sdn Bhd v Nomad Engineering Sdn Bhd [2016] MLRHU 1443 in these words: “[13] Apart from citing limb (c) of s 15, that is the allegation that Adjudicator had not acted independently or impartially, the plaintiff placed no material before this court to support it. Merely because an Adjudicator refused to grant indulgence to overcome breach of stipulated timelines does not mean that he or she had acted impartially. It is a serious matter to suggest impartiality on the part of the Adjudicator and therefore the plaintiff should have adduced evidence of bias instead referring to her conduct in making apparent errors in her decision or her refusal to consider counsel's reply submission. The fact that she advanced the decision date by two is not a ground to allege bias either as it was within her powers. I see no merit in this ground.”. [31] As the law currently stands, the test for bias in the context of s 15(c) CIPAA is the “real danger” of bias test. This test was applied in PCP Construction Sdn Bhd v Leap Modulation Sdn Bhd and other appeals [2018] MLJU 1357 (see also the cases of high authority as discussed in Rosha Dynamic Sdn Bhd v Mohd Salehhodin bin Sabiyee & Ors and other cases [2021] MLJU 1222 wherein it is observed that Wong Kian Kheong J had indicated a personal preference for the “reasonable suspicion” of bias test). [32] In her submissions for ATSA, Ms. SH Ng cited the case of AMEC Capital Projects Ltd v Whitefriars City Estates Ltd [2005] 1 All ER 723 where the English Court of Appeal held that: “[21] The mere fact that the tribunal has decided the issue before is therefore not enough for apparent bias. There needs to be something of substance to lead the fair-minded and informed observer to conclude that there is a real possibility that the tribunal will not bring an open mind and objective judgment to bear . . . [22] It is easy enough to make challenges of breach of natural justice against an adjudicator. The purpose of the Scheme of the 1996 Act is now well known. It is to provide a speedy mechanism for settling disputes in construction contracts on a provisional interim basis, and requiring the decisions of adjudicators to be enforced pending final determination of disputes by arbitration, litigation or agreement. The intention of Parliament to achieve this purpose will be undermined if allegations of breach of natural justice are not examined critically when they are raised by parties who are seeking to avoid complying with adjudicators' decisions. It is only where the defendant has advanced a properly arguable objection based on apparent bias that he should be permitted to resist summary enforcement of the adjudicator’s award on that ground.” (emphasis added). [33] In the present case, there is no necessity for this Court to embark on a treatise on the tests for establishing apparent bias as TM’s application to set aside the AD premised on s 15(c) CIPAA is simply not substantiated with any cogent evidence. In raising this ground of challenge, TM has not even addressed the issue as to whether the test for establishing bias on the part of the Adjudicator has been fulfilled. [34] In a nutshell, TM’s basis in hurling the accusation of bias against the Adjudicator stems from its dissatisfaction with the Adjudicator’s decision in accepting ATSA’s evidence as opposed to TM’s. Armed with merely bare assertions, TM comes nowhere close in discharging the burden to prove, on a balance of probabilities, that the Adjudicator lacks independence or impartiality in the conduct of the adjudication proceedings and delivery of the AD. Grounds pursuant to s 15(b) CIPAA: Denial of natural justice [35] TM submitted eight reasons to support its allegation that the Adjudicator had breached the rules of natural justice. These reasons may be grouped into five categories and the decision of the Court in respect of each them are elucidated below: Whether there is a denial of natural justice when the Adjudicator –

(i) denied TM’s application to file a rejoinder/ reply and for an oral hearing [36] Four days after TM received ATSA’s Adjudication Reply i.e. on 12.4.2021, TM’s solicitor wrote to the Adjudicator stating, among others, that: “You will note that Claimant had Responded / Replied to the Respondent’s Cross Claim / Counter Claim. It is only fair that the Respondent should be accorded with the same rights of reply to the Claimant's Reply / Response to the Respondent’s Cross Claim / Counter Claim. In the interest of justice, we are seeking leave from your good self for our client to file a Rejoinder / Reply to the Claimant’s Response / Reply to the Cross Claim / Counter Claim and to fix a hearing date for both parties to orally submit on the above matter before the decision is made.”. [37] On 13.4.2021, ATSA’s solicitors informed the Adjudicator of ATSA’s objection to TM’s request on the grounds that –

(a) there is no provision under the CIPAA for filing of the rejoinder/ reply to ATSA’s Response/ Reply to TM’s cross claim/ counterclaim;

(b) TM had the opportunity to file the 52 pages of Adjudication Response which includes a counterclaim; and

(c) there is no necessity for an oral hearing as all the evidence has been submitted by the parties to the Adjudicator and the dispute is straightforward and does not involve complex issues to necessitate an oral hearing. [38] The Adjudicator, in his letter to the parties’ solicitors dated 14.4.2021, made reference to TM’s request and ATSA’s objection and stated that he agreed with ATSA that “… there is no provision under the CIPAA for filing of the rejoinder/ reply to the Claimant’s Response/ Reply to the Respondent’s Cross Claim/ Counterclaim. I further find that the disputes are straightforward, does not involve complex issues and no new issue/s has been raised in the Adjudication Reply.”. ATSA’s request was duly dismissed. [39] The issue of this request was mentioned in the AD wherein the Adjudicator said that he was exercising his discretion under s 25 CIPAA to dismiss the request to file the rejoinder/ reply and that he did not find it necessary to call for any meetings or hearings. The Adjudicator found it appropriate to decide on the dispute based on the documents and submissions by the parties (see paras “30” and “22” at p 40 of the AD; there is an error in the numbering of the paragraphs in the AD). [40] Before this Court, the learned counsel for TM submitted that the Adjudicator had blindly followed ATSA’s contention in the letter of objection without considering that –

(a) he had another 41 days to make his decision and if that was insufficient, he could have asked for further time from the parties (see paras 12(2)(a) and (c) CIPAA);

(b) he has wide powers under s 25(g) CIPAA to conduct any hearing and the request was made at the earliest opportunity. The decisions in Guangxi Dev & Cap Sdn Bhd v. Sycal Bhd & Another Appeal [2019] 1 CLJ 592 and Sinlexion Construction & Decoration Sdn Bhd v BCB Berhad [2020] MLJU 610 were cited to support the submission that an oral hearing should have been allowed in the circumstances of this case; and

(c) ATSA had raised new facts, points of law and documents comprising of 636 pages in the Adjudication Reply, specifically s 25 of the CA 1950 and TM’s letters dated 28.6.2019 and 18.1.2021 and e-mail dated 10.12.2020 which were relied upon by the Adjudicator in paras 53, 66 and 75 at pp 46, 49 and 51 of the AD. [41] Furthermore, the Adjudicator awarded party and party cost of RM30,000.00 due to the complexity of the matter (para 92, p 54 AD). TM argued that this goes against the Adjudicator’s statement in his letter dated 14.4.2021 that the dispute does not involve complex issues. [42] Cases involving a complaint against the manner in which an adjudicator has exercised the powers under s 25 CIPAA, particularly s 25(g), are aplenty. Apart from the two cases cited by TM as above mentioned, ATSA had also referred to Permintex JSK Resources Sdn Bhd v. Follitile (M) Sdn Bhd & Another Case [2017] 6 CLJ 406 and Geoforce East Sdn Bhd v. Melati Evergreen Sdn Bhd & Another Appeal [2020] 1 LNS 862 and had quoted the following excerpt from the judgment of this Court in Mei He Development Sdn Bhd v. EOSH Industries Sdn Bhd [2021] 1 LNS 425: “[35] The wide powers given to the Adjudicator to conduct the adjudication including in an inquisitorial manner are set out in s 25 of the CIPAA. These powers relate substantially to administrative and procedural matters that will better promote an expeditious and efficient conduct of the adjudication proceedings (see WRP Asia Pacific Sdn Bhd v. Ns Bluescope Lysaght Malaysia Sdn Bhd [2015] MLRHU 1018). [36] The specific power which is relevant for present purposes is as provided in s 25(g) CIPAA i.e. to conduct any hearing and limiting the hearing time. In Geoforce East Sdn Bhd v. Melati Evergreen Sdn Bhd & Another Case [2020] MLRHU 811, this Court said (with emphasis added): “[28] In this regard, sub-section 12(1) CIPAA provides that the adjudicator shall conduct the adjudication in a manner as the adjudicator considers appropriate within the powers set out in s 25 CIPAA. The legal principles that can be distilled based on the case authorities submitted by Geoforce on the powers of an adjudicator as provided under s 25 CIPAA are summed up as follows:

(a) CIPAA does not demand a certain method of process of adjudication. The main requirement is that both sides are accorded the opportunity to advance their case by way of written submissions or by hearing oral evidence. The choice is for the adjudicator to make and in the exercise of his discretion, he is not obliged to utilise all or any of the powers under s 25 CIPAA or to be dictated by any party to the adjudication; and

(b) the refusal by an adjudicator to allow an application by one party for extension of time to submit an adjudication pleading or to conduct an oral hearing does not automatically equate to a breach of natural justice.”. [43] I have considered the parties’ averments and submissions and, in my view, the Adjudicator did not breach the rules of natural justice by not allowing TM’s application to file a rejoinder/ reply and for an oral hearing because –

(a) in the letter written by TM’s solicitors on 12.4.2021, the basis for the application was only that it is fair for TM to be given the same rights of reply and that a hearing date would enable the parties to orally submit on the matter. The issue of new facts, points of law and documents raised for the first time in the Adjudication Reply and the complexity of the issues of mixed facts and law as were affirmed in TM’s AIS in the instant application were not mentioned at all in the solicitors’ letter;

(b) the CIPAA does not provide for the filing of a rejoinder or reply to the Adjudication Reply. TM was afforded the fullest opportunity to put its case in the adjudication proceedings vide its 52 pages of Adjudication Response and six volumes of supporting documents;

(c) in so far as TM’s letter dated 28.6.2019 is concerned, this was in fact raised by TM in the Adjudication Response (see subpara 54.1). With regards to s 25 CA 1950, TM had pleaded illegality of the contract and s 24 CA 1950 was among the statutory provisions relied on to support this contention (see paras 25 and 26, Adjudication Response). For ease of reference, s 24 CA 1950 is shown below: “What considerations and objects are lawful, and what not

The consideration or object of an agreement is lawful, unless –

(a) it is forbidden by a law;

(b) it is of such a nature that, if permitted, it would defeat any law;

(c) it is fraudulent;

(d) it involves or implies injury to the person or property of another; or

(e) the court regards it as immoral, or opposed to public policy. In each of the above cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void.”. Hence, to counter this argument, ATSA had submitted in its Adjudication Reply that the contract is valid as there is nothing unlawful in its considerations and objects. Section 25 CA 2015 provides that: “Agreements void if considerations and objects unlawful in part

If any part of a single consideration for one or more objects, or any one or any part of any one of several considerations for a single object, is unlawful, the agreement is void.”;

(d) whilst TM did submit its request at the earliest opportunity, however, the Adjudicator did not decide to reject the request purely on the ground that time is limited, but it was based on the grounds as stated in paras 38 and 39 above. It is trite that the exercise of the powers conferred under s 25 CIPAA is a matter within the discretion of the Adjudicator, and I am not prepared to say that the exercise of the Adjudicator’s discretion in this case amount to a breach of the audi alteram partem rule of natural justice; and

(e) nothing turns on the fact of the Adjudicator’s award of party and party cost of RM30,000.00 as sub-s 18(1) CIPAA provides that the Adjudicator shall order the costs to follow the event and shall fix the quantum of costs to be paid. The factors which were taken into account by the Adjudicator in determining the quantum of costs is again a matter within his discretion (see Multazam Development Sdn Bhd v Felda Global Ventures Plantations (M) Sdn Bhd [2020] MLJU 606).

(a) the Adjudicator’s “ruling” in para 67 of the AD that TM shall pay the sum of RM11,946.44 to AKSA is not reflected in Part S of the AD on the “Decision” and in particular, in para 101 which is the final determination of the Adjudicator and in APPENDIX A to the AD (which sets out the detailed breakdown of the adjudicated sum of RM1,337,211,71). As the Court had pointed out during the hearing, either party or both parties, upon realising the inclusion of para 67 in the AD, should have immediately alerted the Adjudicator so that he can decide whether this is a case which comes within the ambit of sub-s 12(7) CIPAA which reads “The Adjudicator may at any time correct any computational or typographical error on the adjudicator’s own initiative or at the request of any party.”. In any event, it is incontrovertible that the sum of RM11,946.44 was never awarded by the Adjudicator; and

(b) in subpara 37(b) of the Adjudication Claim, one of the reliefs sought by ATSA was interest at 5% per annum on the said sum from 5.1.2021 until the date of the adjudication decision. The interest awarded in subpara 101(iii) of the AD is clearly stated to be calculated from the due date of payment i.e. 4.1.2021. This same date appears as the “Due date for payment” in the Payment Claim. As for interest which was decided until the payment of the adjudicated sum, s 25(o) of the CIPAA confers power on the Adjudicator to award interest. Interest on the adjudicated amount may be awarded from the date the payment becomes due and payable up to the date of the AD and from the date of the AD until the date of full payment of the adjudicated sum.

4.6(f) and 5.1 of the LoA

(a) Clause 2 on “Professional Fees” where the Adjudicator is said to have blindly relied on ATSA’s contentions and awarded an excessive sum without due deductions of the costs for Interior Design Works and Landscaping Works as expressly stipulated in the said Clause. TM cited two paragraphs in the AD to support its contentions i.e. paras 53 and 55 (pp 46 and 47). However, in order to appreciate the Adjudicator’s findings on Issue No. 3 as to whether the fee of 1.8% should be based on the total construction cost of RM298,611,744.69 or RM277,711,744.69, attention must be given to the discussion of this Issue from paras 47 until 55 AD (pp 45 to 47) whereupon it can be seen that the Adjudicator took cognizance of the fact that the main contract sum is RM323,011,744.49 and that, after deduction for ID Works and Landscaping, the sum would be RM302,111,744.49. However, based on the statements, submissions and documents before him, the Adjudicator found that both ATSA and TM have agreed on the total construction cost of RM298,611,744.69 and that at the adjudication, they did not submit the breakdown for this figure. The Adjudicator went on refer to the letter signed by TM’s Director dated 28.6.2018 wherein it was confirmed that the calculation of the professional fees will be based on the total construction cost of RM298,611,744.69. The Adjudicator deduced that “… if the Total Construction Cost is required to exclude ID Works and Landscaping works, the Respondent will be specified clearly.” and thereafter ruled that the total construction cost of RM298,611,744.69 is not required to exclude the ID Works and Landscaping and shall be used for professional fees calculation with the total fee amounting to RM5,375,011.40, and ATSA’s entitlement for Stage A to Stage C was then determined.

(b) Clauses 4.4(d) and (e) and 5.1 which govern the Design Development Phase and Architect’s Responsibilities. TM took issue with the Adjudicator’s finding on Issue No. 6 as to whether ATSA is entitled for abortive cost in respect of TM’s Changes Nos. 01 to 04 amounting to RM313,363.15 and Changes No. 05 in the sum of RM150,000.00. In para 73 AD (p 50), the Adjudicator agreed with ATSA “... that the instruction for changes were additional works to the Claimant’s original works (which had been completed by the Claimant after obtaining the KM and approved BP from MBSA).” whereas TM argued that this finding is contrary to the clear provisions of the LoA that all amendments to the building plans were part of the scope of work of ATSA. The Clauses relied upon by TM are quoted below: Clause 4.4 (d) “The scope of services shall be inclusive of all amendment of plans as required by the Client or the Authorities. There shall be no additional charges due to the amendments to meet the requirements of the Authorities.” Clause 4.4 (e) “Should there be any variation to the approved plans and or drawings at any stage, the Architect is to amend, submit and procure approval from the relevant authorities with no additional cost.” Clause 5.1 (e) “The scope of services shall be inclusive of all amendment of plans as required by the Client or authorities. There shall be no additional charges due to the amendments to meet the requirements of the Authorities.” The Adjudicator finally concluded in respect of Changes Nos. to 04 that ATSA’s claim of 40% based on Stage B is excessive and the reasonable abortive cost should be 10% and the same percentage of 10% shall apply for Stage B and Stage C. Whilst for Changes No. 05, the Adjudicator was of the view that ATSA did not provide evidence to proof that these additional works have been performed and thus, ATSA’s claim was disallowed.

(c) Clause 4.6(f) on Contract Implementation & Management Phase. TM submitted that the Adjudicator went on a frolic of his own when he decided, in para 85 AD (p 53), that Clause 4.6(f) does not cover the scope of works for Certification of SiFUS when dealing with Issue No. 7 on whether ATSA is entitled for SiFUS claim. Clause 4.6(f) of the LoA reads “Preparation of As-Built Drawings for submission to authorities, if required. Certification of As-Built Drawings to assist in the application of strata title for all strata properties.”. Before making his decision in para 85 AD, the Adjudicator referred to the parties’ respective contentions and he noted that sub-s 6(3) SMA 2013 is an additional statutory obligation for which the Architect is entitled to charge additional fees for work done as provided under General Circular No. 5/ 2017; the certification of SiFUS is required for buildings or land parcels which are to be constructed in accordance with the approved plans and specifications; and the dictionary meaning of “As-built”. The Adjudicator then said that: “85. Premised that the Certification of SIFUS will be submitted before the buildings or land parcels constructed and the Clause 4.6(f) of LOA is referred to the Certification of As-Built Drawings after the buildings or land parcels actually constructed, therefore the Clause 4.6(f) of LOA does not cover the scope of works for Certification of SIFUS.

...”. [52] A scrutiny of the adjudication documents shows that Clauses 2, 4.4(d) and (e), 4.6(f) and 5.1 of the LoA were first raised by TM in the Adjudication Response (see, inter alia, paras xx and xxiii under the “Preamble” and subparas 5.1 and 10). ATSA then submitted its points of rebuttal to TM’s arguments in relation to these Clauses in the Adjudication Reply. The Adjudicator had alluded to the parties’ submissions before making his findings of fact and/ or law. [53] The law is crystalline that it is not the function of the court to review the merits of the case or to decide the facts of the case (see, among others, ACFM Engineering & Construction Sdn Bhd v Esstar Vision Sdn Bhd and another case [2015] MLJU 1951, Terminal Perintis Sdn Bhd v Tan Ngee Hong Construction Sdn Bhd and another case [2017] MLJU 242, Pembinaan Melima (M) Sdn Bhd v ATM Development Sdn Bhd and another case [2021] MLJU 2416, Naza Engineering & Construction Sdn Bhd v SSL Dev Sdn Bhd [2020] 9 MLJ 499 and Econpile (M) Sdn Bhd v ASM Development (KL) Sdn Bhd and another summons [2020] MLJU 1146). Even though the Adjudicator may have wrongly disregarded and/ or interpreted Clauses 2, 4.4(d) and (e), 4.6(f) and 5.1 of the LoA and consequently, awarded an excess sum in favor of ATSA, these are not justifiable reasons to set aside the AD pursuant to limb (b) of s 15 CIPAA.

(v) failed to consider relevant matters and to come to a reasoned decision [54] TM’s grievance here is that the Adjudicator had merely copied and pasted the submissions of the parties in an attempt to make it look as though he had considered all relevant matters and as justification for his conclusions on the issues in dispute. However, Mr. Wee Choo Keong posited that this exercise could not conceal the fact that the Adjudicator had given his decision without any reasoning at all. [55] The “copy and paste” mode of explaining the respective pleadings and positions of the parties in the adjudication decision is not unique. This Court has come across adjudication decisions with this approach, although they are, fortunately, the exception rather than the rule. [56] Having perused the AD, I find that there are extensive excerpts from the Adjudication Response and Adjudication Reply consisting of around 20 pages and 12 pages, respectively, before the Adjudicator outlined the 10 issues for his determination. [57] I have further examined Part N of the AD as to the Adjudicator’s “Decision And Conclusion On Issues” and I would agree with TM that the failure by the Adjudicator to give a reasoned decision is in relation to “Issue No. 1: Jurisdiction Issue – Whether The Contract is Illegal And The Dispute Is Not Fall Within The Ambit Of The CIPAA” and “Issue No. 2: Whether the Claimant Appointing An Unqualified Person En. Mohd Fathi Bin Abdullah To Act On Behalf Of The Claimant And Perform The Job Of An Architect”. [58] Both these issues concern the jurisdictional matters raised by TM. Although the Adjudicator’s analysis and reasoning leaves much to be desired as he had merely set out excerpts from the Adjudication Response and Adjudication Reply before stating that he agrees with ATSA’s submissions, nevertheless in my opinion, this does not amount to a breach of natural justice because the issues relate to core jurisdiction, a situation where the Adjudicator does not have jurisdiction at all and any decision made would be liable to be set aside (see Terminal Perintis (supra) and View Esteem Sdn Bhd v Bina Puri Holdings Bhd [2018] 2 MLJ 22). [59] The Adjudicator does not have the jurisdiction or the power to make a binding decision on his own jurisdiction unless the parties agree in writing to extend the jurisdiction of the Adjudicator pursuant to sub-s 27(3) CIPAA. When a jurisdictional objection is raised by a party in an adjudication proceeding, the adjudicator may exercise his discretion to proceed with, and complete, the adjudication proceedings without prejudice to the rights of any party to subsequently apply to set aside the adjudication decision under s 15 CIPAA or to oppose the application for enforcement of the adjudication decision under sub-s 28(1) CIPAA. When an adjudicator decides to exercise his discretion under sub-s 27(3) CIPAA, he is not obliged to give his reasons for concluding that he does have jurisdiction. If reasons are given, these would not have any legal effect and would not bind the parties (see VVO Construction Sdn Bhd v. Bina MYK Sdn Bhd and another appeal [2017] 1 LNS 2179, Euroland & Development Sdn Bhd v Tack Yap Construction (M) Sdn Bhd [2018] MLJU 861 and Construction Adjudication in Malaysia, Second Edition, Sweet & Maxwell, 2018 by Lam Wai Loon and Ivan YF Loo at pp 285 - 287). [60] In this case, the Adjudicator in paras 35 and 46 at pp 43 and 45 of the AD ruled that the contract did not become void and the dispute is within the ambit of the CIPAA. However, in the event he is found to be wrong, the Adjudicator said that would exercise his powers under sub-s 27(3) CIPAA to proceed and complete the adjudication proceedings. [61] In AMEC Capital (supra), Dyson LJ held that: “A more fundamental question was raised as to whether adjudicators are in any event obliged to give parties the opportunity to make representations in relation to questions of jurisdiction. I respectfully disagree with the judge’s view that the requirements of natural justice apply without distinction, whether the issue being considered by the adjudicator in his own jurisdiction or the merits of the dispute that has been referred to him for decision. The reason for the common law right to prior notice and an effective opportunity to make representations is to protect the parties from the risk of decisions being reached unfairly. But it is only directed at decisions which can affect parties’ rights. Procedural fairness does not require the parties should have the right to make representations in relation to decision which do not affect their rights, still less in relation to “decisions” which are nullities and which cannot affect their rights. Since the “decision” of an adjudicator as to his jurisdiction is of no legal effect and cannot affect the rights of the parties, it is difficult to see the logical justification for a rule of law that an adjudicator can only make such a “decision” after giving the parties an opportunity to make representations.” (emphasis added). [62] Based on the above authority, the Adjudicator’s decision on Issue No. 1 in para 34 AD (p 43) that “Having considered the Respondent and Claimant’s submission, I agreed with the Claimant that the determining factor whether a contract is void or not are the lawfulness of the consideration and object of the contract, as provided in Section 25.” and on Issue No. 2 in para 45, p 45 AD that “Having considered both parties submission, I am satisfied with the Claimant submission that the Contract was signed between the Claimant (through AR. Zulqaisar Bin Hamidin) and the Respondent and the En. Fathi is merely the Claimant’s employee. The Contract between the parties cannot become void merely because En. Fathi, being the Claimant’s employee has assisted the Architect of the firm in the above project.” is of no legal effect and does not affect the rights of the parties. Therefore, the duty to comply with the principles of natural justice as stipulated in s 24(c) CIPAA does not apply in this scenario. [63] Before closing the chapter on TM’s Setting Aside Application based on limb (b) of s 15 CIPAA, there is one final matter to address and that is TM’s argument that the AD should be set aside as TM has filed Suit 479 against ATSA, its two principals and En. Fathi and this suit will globally settle all disputes including those raised in the Adjudication Claim. With respect, TM cannot go far with this submission as sub-s 37(1) expressly provides that a dispute in respect of payment under a construction contract may be referred concurrently to adjudication, arbitration or the court. Grounds based on s 15(d) CIPAA: Excess of jurisdiction [64] The jurisdiction of the Adjudicator is set out in s 27 CIPAA and it reads: “Jurisdiction of adjudicator

27.

(i) Whether the Adjudicator acted in excess of jurisdiction when he decided in para 67 of the AD that TM shall pay the sum of RM11,946.44 to AKSA and that the interest awarded shall be calculated from 4.1.2021 instead of 5.1.2021 [66] The first reason put forth by TM falls within the category of contingent jurisdiction as described in Terminal Perintis (supra) and endorsed by the Federal Court in View Esteem (supra). The existence of valid jurisdiction is dependent on further compliance with the requirements of the CIPAA i.e. the dispute must be one falling within the matter raised in the Payment Claim (see sub-s 27(1) CIPAA). In this case, it is undeniable that TM and ATSA have never entered into any written agreement to extend the jurisdiction of the Adjudicator to decide on any matter which is not referred to the Adjudicator pursuant to ss 5 and 6 of the CIPAA on “Payment claim” and “Payment response”. [67] However, the issues surrounding the sum of RM11,946.44 and the date from which the interest shall be computed have been dealt with in para 48 above in respect of the denial of natural justice argument and the reasoning of the Court would similarly apply here. This would lead to the conclusion that the first reason put forth by TM to support its case on excess of jurisdiction is misconceived because the sum of RM11,946.44 did not form part of the adjudicated amount which was finally awarded by the Adjudicator, and the date from which interest was calculated is the same as the due date for payment in the Payment Claim whilst the post-adjudication interest is within the powers of the Adjudicator to award. [68] I am not prepared to find and hold that the Adjudicator had acted in excess of jurisdiction by granting interest until payment of the adjudicated sum as opposed to until the date of the AD only. Sub-s 28(2) CIPAA empowers the Court to make an order in respect of the AD either wholly or partly and the Court may even make an order in respect of interest on the adjudicated amount payable. [69] Hence, even if I have erred with regards to the interest element, and if my decision that TM has not established its case under s 15(b) CIPAA and for the other two reasons pursuant to s15(d) CIPAA is upheld, the AD may be enforced in part viz. for interest at the rate of 5% per annum to be paid from 4.1.2021 until the date of the AD. Nevertheless, I have also decided that this is an apt case for the AD to be stayed pending the disposal of Suit 479 as shall be explained in the succeeding paras of this judgment. [70] Reasons (ii) and (iii) as submitted by TM relate to the allegation that the contract entered into between TM and ATSA is illegal and void and therefore, the Adjudicator has no jurisdiction to hear the dispute. The type of jurisdiction which is in question is thus, core jurisdiction or the absolute lack of jurisdiction which would result in the AD being susceptible to be set aside. [71] The jurisdictional issues were raised by TM in the Adjudication Response and the Adjudicator dealt with these in the AD as “Issue No. 1: Jurisdiction Issue – Whether The Contract Is Illegal And The Dispute Is Not Fall Within The Ambit Of The CIPAA” and “Issue No. 2: Whether The Claimant Appointing An Unqualified Person En. Mohd Fathi Bin Abdullah To Act On Behalf Of The Claimant And Perform The Job Of An Architect”. [72] Basically, the Adjudicator agreed with ATSA’s submissions, but he recognised that if he is wrong in his conclusion, he may nevertheless proceed and complete the adjudication proceedings under sub-s 27(3) CIPAA. It is trite that an absence of core jurisdiction can be raised at any time and since it was raised again in the Setting Aside Application, the Court is duty bound to consider the matter.

(a) under the completed Schematic Design Phase, Design Development Phase and Contract Documentation Phase, shall be based on the original contract sum; and

(b) under the completed Contract Implementation and Management Phase and Final Completion Phase, shall be based on the final cost of works, including variations.

(a) in respect of the completed services under a phase, the full fees for the services rendered; and

(b) in respect of the incomplete services under a phase, the fees for the portion of the services rendered.

[93] It means that an architect in breach of the minimum fees under the Architect (Scale of Minimum Fees) Rules 1986 has to forfeit his/her fees, charges or remunerations for the services rendered to his/her client in addition to the penalties that an architect may be liable for the offences arising therefrom. [94] Further, the architect fees, charges or remunerations for the services rendered to his/her client forfeited will not go to the public coffer. They go to the clients as a windfall. This cannot be the object or purpose that the Architect Act, 1967 and the rules made thereunder intended to serve. [95] Is it the public policy that architect’s service contract with his/her client should be rendered void or otherwise unenforceable when the fees charged was lower than the minimum fees contravening the provisions of the Architect (Scale of Minimum Fees) Rules 1986? I do not think so. … [97] There is no conceivable harm that could be caused to the Plaintiff by the Defendant in charging his fees lower (if at all) than the minimum fees as prescribed by the Architect (Scale of Minimum Fees) Rules 1986 but only benefit to the Defendant in having to pay a lower fees, if and when the Defendant agreed to do so. … [99] It would amount to wicked injustice and against public policy to allow the Plaintiff to exploit the generosity of the Defendant in charging his fees lower (if at all) than the minimum fees as prescribed by the Architect (Scale of Minimum Fees) Rules 1986 for the services rendered to the Plaintiff and while the Defendant taking the risk of being subject to disciplinary action and prosecution of an offence, and to allow the contention that the Defendant’s service contract with the Plaintiff is null and void for contravening the minimum fees so that the Plaintiff is not liable to pay the Defendant anything. [100] Based on the analysis and consideration of the provisions of Architect Act, 1967, the Architect Rules 1973 and the Architect (Scale of Minimum Fees) Rules 1986, in summary, I find that:

(a) there is no provision which prohibit the Defendant’s service contract or engagement contract with the Defendant relating to the provision the services concerned;

(b) there is provision which prohibit the Defendant to charge his fees lower than the minimum fees as prescribed under the Architect (Scale of Minimum Fees) Rules 1986 and provision for disciplinary action and prosecution of offence for breach thereof.

(c) there is contrary intentions which can be reasonably read or inferred from the Architect Act, 1967 such that the non observance or contravention or breach of the provision in respect of the minimum fees as prescribed under the Architect (Scale of Minimum Fees) Rules 1986 should not vitiate the Defendant’s service contract with the Plaintiff so as to render it null or unenforceable so as to deny the Defendant’s right in recovering his fees, charges, remuneration or consideration. … [104] For the reasons as stated before, I therefore hold that charging of professional fees by Defendant less or lower than the minimum fees as prescribed by and in breach of the Architects (Scale of Minimum Fees) Rules 1986 does not render the architect’s service contract or contract of engagement with his/her client void or unenforceable so as to deprive the architect of any right to recover his/her fees or remuneration.”. [83] In the premises, TM’s contention that the LoA is illegal because of non-compliance with Rule 29 of the Architect Rules 1996 and Rule 23 of the Architect (Scale of Minimum Fees) Rules 2010 is, in my view, unfounded.

(a) the letter by LAM to TM’s solicitors dated 30.3.2021 stating that, based on LAM’s records, En. Fathi “… tidak lagi berdaftar sebagai seorang Arkitek Graduan dengan Lembaga Arkitek Malaysia mulai 11 April 2008.” (exhibit “A-11”, AIS); and

(b) copies of the letters and e-mails on matters pertaining to the Project viz. the Notice of Site Meetings and Special Meetings, Handing Over of Block C, Separate Detail Work Programme for Mock-up, Response on the Main Contractor’s application for extension of time (‘EoT’), TNB Manholes for Feeder Pillar at Blocks B to F, improvement of site safety measures, increasing manpower to speed up the work progress at site etc. and documents such as Minutes of Meeting and Certificate of Payments Nos. 1 to 29 for the period from 9.8.2018 to 26.1.2021 which were signed and/ or prepared by En. Fathi on behalf of ATSA as the “Project Architect” (exhibit “A-12”, AIS). En. Fathi is said to have considered the Main Contractor’s application for EoT No. 1 without discussing with the other consultants and he had arbitrarily granted the EoT No. 1 for 304 days. [85] Section 2 AA 1967 defines an “Architect” as a person registered under sub-s 10(2). [86] Section 10 AA 1967 provides for the “Qualifications for registration of Architects, etc.” as follows: “10. (1) (a) Subject to this Act, any person who holds the qualification recognized by the Board thereto; shall be entitled on application to be registered as a registered Architect.

(b) Subject to this Act, a person who is registered as a registered Architect under paragraph (a) shall be required to obtain such practical experience as may be prescribed by the Board and to pass the examinations as may be determined by the Board in order to be entitled to apply for registration as a Professional Architect under subsection (2).

(a) any person who—

(i) is a registered Architect;

(a) practise or carry on business or take up employment which requires him to perform architectural consultancy services; (aa) be entitled to describe himself or hold himself out under any name, style or title –

(i) bearing the words “Professional Architect” or the equivalent thereto in any other language; or

(b) use or display any sign, board, card or other device representing or implying that he is a Professional Architect; (ba) be entitled to describe himself as a “Professional Architect” and to use the abbreviation “Ar.” before his name and/ or the abbreviation “P.Arch.” after his name or in association with his name; or

(c) be entitled to recover in any court any fee, charge, remuneration or other form of consideration for any architectural consultancy services rendered as a Professional Architect.

(a) illegality of contract was raised for the first time in the Adjudication Reply and is thus, not bona fide and an afterthought;

(b) TM is estopped from raising the alleged illegality of contract in an attempt to evade its obligations;

(c) En. Fathi is a graduate architect with 26 years’ experience and employed by ATSA to assist AR. Zulqaisar Bin Hamidin and AR. Azim Bin Tan Sri Abdul Aziz who are registered as architects under AA 1967. The LoA cannot become void just because En. Fathi had assisted the Architects in the firm. Reliance was placed on s 7A of the AA 1967. Moreover, ATSA is a body corporate registered with LAM to provide architectural consultancy services. The said s 7A reads: “7A. (1) Notwithstanding subsection 7(1), a sole proprietorship, partnership or body corporate may practise as an architectural consultancy practice and recover in any court any fee, charge, remuneration or other form of consideration for any architectural consultancy services rendered by it pursuant to its practice as an architectural consultancy practice carried on by virtue of this section, if it is registered with the Board as an architectural consultancy practice and has been issued with a certificate of registration.

(a) in the case of the sole proprietorship, the sole proprietor is a Professional Architect;

(b) in the case of the partnership, all the partners are Professional Architects; or

(c) in the case of the body corporate, it—

(i) has a board of directors comprising persons who are Professional Architects;

(d) the LoA was signed by AR. Zulqaisar Bin Hamidin on behalf of ATSA. The submission to the authorities, the Building Plans and ATSA’s letters to TM were signed by the firm’s architect;

(e) the contract between the parties is not unlawful in terms of the object and consideration as provided under s 25 CA 1950; and

(f) if the contract is truly illegal, there would then be no necessity for TM to issue the Notice of Termination dated 15.1.2021 to ATSA. [91] In the AD, the Adjudicator, after having set out the parties’ contentions in the Adjudication Response and Adjudication Reply initially at length, and then under Issue 2, in summary, gave a one paragraph decision that: “45. Having considered both parties submission, I am satisfied with the Claimant submission that the Contract was signed between the Claimant (through AR. Zulqaisar Bin Hamidin) and the Respondent and the En. Fathi is merely the Claimant's employee. The Contract between the parties cannot become void merely because En. Fathi, being the Claimant's employee has assisted the Architect of the firm in the above project.”. [92] In the Setting Aside Application, whilst I am able to arrive at a finding that the earlier ground on illegality of contract is devoid of merit, I am unable to say the same for this ground. This is due to the fact that, in the Adjudication Response (see subparas 31.1 to 31.10), TM had submitted, among others, that –

(a) ATSA knew or ought to have known that En. Fathi is not an architect registered with LAM since 11.4.2008;

(b) ATSA had continuously permitted and/ or encouraged En. Fathi to hold himself out as an Architect for the Project and to perform the role and duties of an Architect by calling and chairing site meetings and client consultants meetings, giving instructions to the Main Contractor and consultants and signing the minutes of meetings and letters on behalf of ATSA as the Project Architect;

(c) from 2018 until February 2021, En. Fathi had been giving instructions, supervising, monitoring and making decisions on the Project;

(d) ATSA had left all the supervision and designing works to En. Fathi except the signing of formal documents like the AI, drawings and plans for submission to the authorities and to be used in formal documents such as the sale and purchase agreement; and

(e) TM was dissatisfied with En. Fathis’ performance and had asked ATSA to replace him but ATSA insisted that En. Fathi was the only qualified architect in the company to supervise and monitor the progress of the Project. [93] However, in its AIR, ATSA merely averred that: “46.1 The issue of the illegality of contract has been referred by the Plaintiff and decided upon by the Adjudicator.

46.2 The Adjudicator did not act in excess of his jurisdiction by adjudicating on the said referred issue.

46.3 Furthermore, the Contract dated 15/3/2016 between the parties cannot suddenly become illegal after the Defendant completed the architectural works up to 35.03% under stage E of the said contract and claimed against the Plaintiff for the outstanding fees in the adjudication proceeding.

46.4 The Plaintiff has itself by letter dated 3/9/2020 sought for the Defendant's understanding in their difficult time and not to suspend work until all the outstanding fees are settled by the Plaintiff. …

46.5 Hence, the Plaintiff's allegation of illegality of contract for the first time in the Adjudication Response dated 1/4/2021 is clearly an afterthought.

46.6 The Plaintiff in this application is now attempting to re-litigate on the factual findings made by the Adjudicator.”. [94] In this Court, Ms. SH Ng in her submission for ATSA emphasised that the doctrine of estoppel applies against TM and that the issue of illegality of contract based on the alleged qualification of En. Fathi has been considered and determined by the Adjudicator after considering the parties’ submissions and reasons were provided. It was further submitted that TM’s allegation goes to the merit of the AD and not to the Adjudicator’s jurisdiction. [95] Although the Adjudicator gave only one paragraph of reasoning, this is not a cause for complaint as, contrary to ATSA’s contention, the Adjudicator is not obliged to provide the findings on his own jurisdiction. In this case, the Adjudicator’s brief reasons are not binding on the parties and this Court, and it is for this Court to consider the jurisdictional objection unbridled by the Adjudicator’s views on the matter. [96] The issues surrounding En. Fathi’s actual role in the Project involve mixed questions of fact and law to which the Court is not in the position to make a determinative finding based on the affidavit evidence. [97] The following excerpt from the case of Hardie Development (supra) is also insightful: “[75] It is to be observed that Section 7 of Architect Act, 1967 specifically prohibits any person not registered under the Act to carry out practice as architect. Section 7(c) expressly provides that such person shall not be entitled from recovering in court any fee, charge, remuneration or other form of consideration for architectural consultancy services rendered. This is in addition to specifically make it an office punishable under section 33(h) of the Architect Act, 1967. [76] Thus, it can be said that there is clear intention on the part of the legislature to deprive person of his/right to recover his/her remuneration when he/she is not registered under the Architect Act, 1967 in addition to being subject to disciplinary action under section 15A of the Architect Act, 1967 and prosecution under section 33(h) of the Architect Act, 1967. [77] However, there is no provision under the Architect Act, 2017 and the Architect Rules 1996 to make an architect’s service contract his/her client void in the event of any contravention or breach of the Architect (Scale of Minimum Fees) Rules 1986.”. [98] In the circumstances, the Court cannot affirmatively pronounce that ATSA had violated the provisions of the AA 1967 and that this resulted in the LoA being tainted with illegality and consequently, that the AD, being premised on a contract which had violated a statute, must be set aside pursuant to s 15(d) CIPAA. II. O.S. No. 99: The Stay Application (encl. 3) [99] TM’s application was made pursuant to s 16 CIPAA as follows: “Stay of Adjudication Decision

16.

(a) an application to set aside the adjudication decision under section 15 has been made; or

(b) the subject matter of the adjudication decision is pending final determination by arbitration or the court.

(a) the adjudication is not a simple and straightforward case as the Adjudicator had tried to make it out to be as this is not a normal claim by the contractor of a construction project where sums have been certified for payment by the architect or quantity surveyor, but it is a case which involves payment claims by the Architect for fees on a contract which is tainted with illegality. Suit 479 has been filed and it will settle all issues between the parties; and

(b) the company search on ATSA shows that it has a paid-up capital of only RM250,000.00 and its profit after tax is merely RM35,878.00 for the year ended 31.12.2019. ATSA is thus not in a financial position to pay the adjudicated sum of RM1,337,211.71 and all costs to TM. [104] According to sub-s 37(1) of the CIPPA, “A dispute in respect of payment under a construction contract may be referred concurrently to adjudication, arbitration or the court.”. [105] Having carefully considered the outcome of the Setting Aside Application, and especially in the light of what has been adumbrated in para 96 above, I am inclined to exercise my discretion to allow the AD to be stayed until the disposal of Suit 479 to meet the justice of this case. [106] In BM City Realty & Construction Sdn Bhd v. Merger Insight (M) Sdn Bhd [2016] MLJU 1567, the court said that “A possible scenario for the Court to exercise its discretion in favour of allowing a stay application to meet the justice of the individual case is where it would result in double payment to a claimant if the adjudication decision is enforced as it is.”. [107] In CRCC Malaysia Berhad v. M101 Entity Sdn Bhd [2021] MLRHU 937, this Court said: “[57] As for the phrase “to meet the justice of the individual case”, this Court in Genbina Sdn Bhd v. Bina Puri Construction Sdn Bhd and another appeal [2020] 2 MLRH 101 at p 111 said that the determination as to what is right and fair must necessarily be dependent on the factual matrix and circumstances arising in each case whilst in EA Technique

(M) Sdn Bhd v. Malaysia Marine and Heavy Engineering Sdn Bhd [2020] MLRHU 654; [2021] 1 AMR 594 at p 603, Lim Chong Fong J expressed the following view: “[27] Furthermore in the View Esteem case, it is also stated that the financial status is not the sole factor in determining the grant of the stay. The stay may be allowed to meet the justice of the individual case aside from clear error. They seem to be disjunctive as explained in the Leap Modulation case. Justice of the case is of course even more subjectively objective. It involves the exercise of discretion. However in light of the caveat of caution mentioned in the View Esteem case, I am also only minded to grant the stay if my conscience is pricked in the special circumstances of the case. Beyond that, it is incapable of definition or illustration. [28] The bottom line is that considerations of both clear error as well as justice of the individual case to justify the stay of an adjudication decision have to be stringently applied as this would otherwise defeat the statutory intent of the CIPAA to ensure cash flow in the construction industry; see Subang Skypark Sdn Bhd v. Arcradius Sdn Bhd [2015] MLRHU 398; [2015] 11 MLJ 818; [2015] 10 CLJ 801.”” (see too, paras 64 to 66 in Office 2 Go (M) Sdn Bhd v Probina Projek Sdn Bhd and another case [2021] MLJU 2009). [108] Since the issue as to whether there is a violation of the AA 1967 such as to render the contract void for illegality is one which will be decided in Suit 479, this is an apt case for the Court to exercise its discretion to allow the stay of the enforcement of the AD pending the disposal of Suit 479 for the reason that it is just to do so in the circumstances of this case. III. O.S No. 85: The Enforcement Application [109] It necessarily follows from the decision in the Stay Application that ATSA’s Enforcement Application to enforce the AD as if it is a judgment or order of the High Court pursuant to s 28 CIPAA must be dismissed. Conclusion [110] Based on the aforesaid considerations, both the Setting Aside Application and Enforcement Application were dismissed whilst the Stay Application was allowed. [111] On the issue of costs, Mr. CK Wee sought no order as to costs for the Setting Aside Application and Enforcement Application. The learned counsel prayed for RM30,000.00 for the Stay Application and contended that all three applications are inter-related so there should not be separate orders on costs. [112] On the other hand, Ms. SH Ng submitted that the building has been built based on ATSA’s work and much of the solicitor’s efforts was concentrated on the Setting Aside Application. Hence, costs of RM10,000.00 was requested for it. As for the Stay Application, the learned counsel prayed for a minimum cost of RM3,000.00 and the same amount was offered for the Enforcement Application. [113] After hearing the learned counsels, the Court ordered that cost of RM10,000.00 is to be paid by TM to ATSA for the Setting Aside Application. For the Enforcement Application, RM3,000.00 is to be paid by ATSA to TM and for the Stay Application, RM5,000.00 is to be paid by ATSA to TM. All orders as to costs are subject to the standard allocator fees. Dated: 16 December 2022 (ALIZA SULAIMAN) Judge Construction Court 2 High Court Kuala Lumpur Counsels/ Solicitors: For the Plaintiff in O.S. No. WA-24C-85-07/2021 and the Defendant in O.S. No. WA-24C-99-07/2021: Ng Sim Hong Messrs. Edwin Lim & Suren Advocates & Solicitors Suite 12-10, 12th Floor Wisma UOA, No. 21 Jalan Pinang 50450 Kuala Lumpur For the Plaintiff in O.S. No. WA-24C-99-07/2021 and the Defendant in O.S. No. WA-24C-85-07/2021: Wee Choo Keong Messrs. Wee Choo Keong & Faaiz Advocates & Solicitors Business Suite 19A-14-1, UOA Centre 19, Jalan Pinang 50450 Kuala Lumpur Cases referred to: ACFM Engineering & Construction Sdn Bhd v Esstar Vision Sdn Bhd and another case [2015] MLJU 1951 AMEC Capital Projects Ltd v Whitefriars City Estates Ltd [2005] 1 All ER 723 Ann Joo Integrated Steel Sdn Bhd v. Lim Chuan Hock & Sons Sdn Bhd [2017] MLJU 1552 Asian Pacific Building Corp Pty Ltd v Aircon Duct Fabrication Pty Ltd & Ors [2010] VSC 340 BM City Realty & Construction Sdn Bhd v. Merger Insight (M) Sdn Bhd [2016] MLJU 1567 Broadway Power Sdn Bhd v. Eden Construction (M) Sdn Bhd [2020] 1 LNS 1188 CRCC Malaysia Berhad v. M101 Entity Sdn Bhd [2021] MLRHU 937 Econpile (M) Sdn Bhd v ASM Development (KL) Sdn Bhd and another summons [2020] MLJU 1146 Euroland & Development Sdn Bhd v Tack Yap Construction (M) Sdn Bhd [2018] MLJU 861 Euroland & Developments Sdn Bhd v Tack Yap Construction (M) Sdn Bhd and other appeals [2018] MLJU 1453 Geoforce East Sdn Bhd v. Melati Evergreen Sdn Bhd & Another Appeal [2020] 1 LNS 862 Guangxi Dev & Cap Sdn Bhd v. Sycal Bhd & Another Appeal [2019] 1 CLJ 592 Hardie Development Sdn Bhd v David Shen I-Tan [2020] 1 LNS 1269 Inovatif Engineering (M) Sdn Bhd v Nomad Engineering Sdn Bhd [2016] MLRHU 1443 Ireka Engineering and Construction Sdn Bhd v. PWC Corporation Sdn Bhd & another appeal [2019] 1 LNS 51 Luxor Holdings Sdn Bhd v. Hainal-Konyi (M) Sdn Bhd [2006] 2 CLJ 856 Maju Holdings Sdn Bhd v Spring Energy Sdn Bhd [2020] MLJU 1162 Martego Sdn Bhd v Arkitek Meor & Chew Sdn Bhd and another appeal [2018] 4 MLJ 496 Martego Sdn Bhd v. Arkitek Meor & Chew Sdn Bhd & Another Appeal [2019] 8 CLJ 433 Mecomb Malaysia Sdn Bhd v VST M&E Sdn Bhd [2018] 12 MLJ 446 Mei He Development Sdn Bhd v. EOSH Industries Sdn Bhd [2021] 1 LNS 425 Metramac Corporation Sdn Bhd v. Fawziah Holdings Sdn Bhd; Tan Sri Halim Saad & Che Abdul Daim Hj Zainuddin (Interveners) [2007] 4 CLJ 725 Milsonland Development Sdn Bhd v. Macro Resources Sdn Bhd And Another Appeal [2018] 1 LNS 2078 Multazam Development Sdn Bhd v Felda Global Ventures Plantations (M) Sdn Bhd [2020] MLJU 606 Naza Engineering & Construction Sdn Bhd v SSL Dev Sdn Bhd [2020] 9 MLJ 499 Office 2 Go (M) Sdn Bhd v Probina Projek Sdn Bhd and another case [2021] MLJU 2009 Panzana Enterprise Sdn Bhd v MKP Builders Sdn Bhd [2020] MLJU 607 PCP Construction Sdn Bhd v Leap Modulation Sdn Bhd and other appeals [2018] MLJU 1357 Pembinaan Melima (M) Sdn Bhd v ATM Development Sdn Bhd and another case [2021] MLJU 2416 Permintex JSK Resources Sdn Bhd v. Follitile (M) Sdn Bhd & Another Case [2017] 6 CLJ 406 Ranhill E & C Sdn Bhd v. Tioxide (Malaysia) Sdn Bhd & Other Cases [2015] 1 LNS 1435 Rentak Segar Sdn Bhd v Transmission Technology Sdn Bhd and another appeal [2018] MLJU 1938 Rosha Dynamic Sdn Bhd v Mohd Salehhodin bin Sabiyee & Ors and other cases [2021] MLJU 1222 Sami Mousawi-Utama Sdn Bhd v Kerajaan Negeri Sarawak [2004] 2 MLJ 414 Sinlexion Construction & Decoration Sdn Bhd v BCB Berhad [2020] MLJU 610 Subang Skypark Sdn Bhd v Arcradius Sdn Bhd [2015] 11 MLJ 818 Teguh Wiramas Sdn Bhd v Thien Seng Chan Sdn Bhd and another application [2017] MLJU 633 Terminal Perintis Sdn Bhd v Tan Ngee Hong Construction Sdn Bhd and another case [2017] MLJU 242 TRT Engineering (M) Sdn Bhd v. Hansol Knm Greentech Sdn Bhd & Another Case [2020] 1 LNS 88 View Esteem Sdn Bhd v Bina Puri Holdings Bhd [2018] 2 MLJ 22 VVO Construction Sdn Bhd v. Bina MYK Sdn Bhd and another appeal [2017] 1 LNS 2179 W Y Steel Construction Pte Ltd v Osko Pte Ltd [2013] 3 SLR 380 Wimbledon Construction Company 2000 Limited v Derek Vago [2005] BLR 374 Wong Huat Construction Co v. Ireka Engineering & Construction Sdn Bhd [2018] 1 CLJ 536 Legislation referred to: Architects Act 1967, ss 2, 7 & 10 Architect Rules 1996, r. Architects Rules 1996 (Amendment 2015) Architects (Scale of Minimum Fees) Rules 2010, r. Construction Industry Payment and Adjudication Act 2012, ss 5, 6, 12, 13, 15, 16, 18, 24, 25, 27, 28 & 37 Contracts Act 1950, ss 24 & 25 Rules of Court 2012, O. 5, O. 7, O. 28, O. 69A & O. 92, r. Strata Management Act 2013, s 6(3) Other sources: Lam Wai Loon and Ivan YF Loo, Construction Adjudication in Malaysia, Second Edition, Sweet & Maxwell, 2018