High Court (Kuala Lumpur) – Originating Summons No WA-24C-12-01 of 2022
Lim Chong Fong J
22 April 2022
Facts
This is an application for direct payment from the principal under s.30 of the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”). The parties are both private limited companies and the former is involved in the construction and renovation business whereas the latter company is involved in the property development, construction and project management business. The Defendant entered into a development venture agreement (“Principal Contract”) with Kini Murni Development Sdn Bhd (“KMD”) to develop the project. KMD appointed the Plaintiff as the main contractor. Payment disputes which arose between the Plaintiff and KMD, and the Plaintiff commenced adjudication proceedings against KMD pursuant to the CIPAA.
The Adjudicator on 2 November 2018 delivered his adjudication decision in favour of the Plaintiff in allowing its claim of RM 8,363,046.35 with interest and costs. The Adjudication Decision was subsequently enforced as a judgment of the High Court pursuant to s.28 CIPAA. As the Defendant failed to pay the outstanding sum pursuant to the adjudication decision, the Plaintiff instituted this originating summons (“Application”) on 13 January 2022.
The Plaintiff contended that the Defendant as the principal of KMD has failed to timeously comply with s.30(2) of the CIPAA following the principles relating to s.30 of the CIPAA.
The Defendant however contended that it is not obliged to pay the Plaintiff because there is no money due or payable to KMD based on s.30(5) of the CIPAA. The Defendant primarily challenged KMD’s claim no.19 for RM 4,848,000.00 as well as several other claims are not due or payable. As to the former, the claim by KMD is not in accordance with the work done in the sequence in Appendix 2 (Table 1) of the Principal Contract consecutively from items 1 to 7 whereas in the latter, the claims of KMD have not been served on the Defendant.
Issues
- The sole issue here is whether there is money due or payable from the Defendant to KMD at the material time the s.30(1) notice was served by the Plaintiff on the Defendant.
Decision
Held (amongst others)
- The Learned High Court Judge allowed the application and found that KMD has properly submitted all relevant claims via progressive notices of payment requesting for payment from the Defendant duly supported with a certificate endorsed by KMD’s architect or engineer in charge of the Project. Both conditions on the submission of notice of payment as well as the supporting certificates have been met and that suffices making the Defendant liable to pay the Adjudicated Sum excluding late payment interest. Hence, there were monies due or payable in the sum of RM94,62,253.45 to KMD.
- As to the Defendant’s contention that KMD has failed to carry out the work in accordance with the work sequence of Appendix 2 of the contract, this was found to be irrelevant for the purposes of the Principal Contract and this application. In any event, the Court found that KMD and its contractor are at liberty to carry out the sequence of work as it deems fit so long as the work was certified to be done by the relevant consultants.
