CASE SUMMARY – Peck Chew Piling (M) Sdn Bhd v Panzana Enterprise Sdn Bhd [2022] MLJU 390

High Court (Kuala Lumpur) – Originating Summons No WA-24C-129-06 of 2020

Aliza Sulaiman J

7 March 2022

Facts

This was an application pursuant to Section 30 of the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”) for among others, that the Adjudication Decision dated 19.12.2019 (‘AD’) between the Plaintiff and MKP Builders Sdn. Bhd. (‘MKP’) be enforced against the Defendant, as principal of MKP.

The Defendant was awarded the contract to carry out the “Projek Penswastaan Lebuhraya Bertingkat Damansara – Shah Alam (DASH)” (‘Project’) by Turnpike Synergy Sdn Bhd. MKP was appointed as a sub-contractor of the Defendant for elevated structures and ramps works for the Project. MKP then engaged the Plaintiff to provide rental services of the piling rig hammer and its associated services for the Project.

Pursuant to the Project, payment disputes arose, and the Plaintiff commenced adjudication proceedings against MKP, where a sum of RM176,088.43 was awarded in the Plaintiff’s favour. (“Plaintiff-MKP AD”)

It is pertinent to note that pursuant to the Project, MKP has also commenced adjudication proceedings against the Defendant where among others, a sum of RM17,475,017.31 was awarded in favour of MKP. (“MKP-Defendant AD”) On 11.2.2020, the High Court conditionally stayed the MKP-Defendant AD.

On 21.2.2020, the Plaintiff served on the Defendant a written notice dated 17.2.2020 (“Said Notice”) requesting the amounts pursuant to the Plaintiff-MKP AD, i.e. RM176,088.43 (inclusive of interest as of 17.2.2020) to be immediately paid directly to the Plaintiff.

Issues

1. Whether the Defendant is the principal of MKP at the time it received the Said Notice on 21.2.2020?
2. Whether there are any monies due or payable by the Defendant to MKP as at 21.2.2020?

Decision

Held

1. The first issue was answered in the affirmative. The Defendant contended that it was not a “principal” within the meaning of Section 4 CIPAA because it terminated MKP’s employment on 15.4.2019, which was before the date of service of the Said Notice. However, the Court was of the view that the said termination does not affect the Defendant’s position as a “principal” to MKP for the Project for the same reasons as explicated by the court in Econpile (M) Sdn Bhd v IRDK Ventures Sdn Bhd and another case [2017] 7 MLJ 732, Binastra Ablebuild Sdn Bhd v JPS Holdings Sdn Bhd and another case [2018] 8 MLJ 190 and Terminal Perintis Sdn Bhd v Tan Ngee Hong Construction Sdn Bhd and another case [2017] MLJU 242. Basically, if Parliament had intended to confine the applicability of s. 30 CIPAA to only existing or surviving contracts, it could have easily provided express words to that effect in the statute.

2. The second issue was answered in the affirmative. As at 21.2.2020, a sum of RM17,475,017.31, excluding interest and costs, was payable by the Defendant to MKP as a result of the MKP-Defendant Although MKP has commenced a suit against the Defendant which was ongoing at that time, the MKP-Defendant AD remains a valid and binding decision unless, among others, it is set aside by the High Court pursuant to s. 15 CIPAA 2012 or the dispute is finally decided by the court (see s. 13 CIPAA 2012). The Court found that as neither of these two events had occurred at the material time, there are indeed monies due or payable by the Defendant to MKP.