Tasha Lim Yi Chien August 9 2022 CIPAA: made, released or delivered? Gan Partnership | Litigation - Malaysia Tasha Lim Yi Chien Litigation IntroductionFactsDecisionCommentIntroductionIn adjudication, time is key. Parties to an adjudication, including the adjudicator, are held to strict timelines. However, for purpose of an adjudication decision (AD), how is time to be computed? This was the primary question that the High Court tackled in Utama Motor Workshop (S) Sdn Bhd v Besicon Engineering Works Sdn Bhd.(1) The other issue addressed by the Court was whether an adjudicator could unilaterally extend the deadline of the AD.FactsThe plaintiff company appointed the defendant company to build a three-storey car service workshop and office in Selangor Darul Ehsan, Malaysia. Thereafter, the defendant commenced adjudication proceedings against the plaintiff.On 8 October 2021, the defendant's solicitors informed the plaintiff that an adjudication reply had been served on the plaintiff's solicitors on 7 October 2021.Subsequently, on 3 December 2021, the defendant's solicitors sent an email to the adjudicator, seeking, among other things, the adjudicator's confirmation of the date of delivery of the AD. The adjudicator replied stating that the latest date that the AD could be issued was 15 December 2021. There was no reply from either of the parties' solicitors to the adjudicator's email sent on 3 December 2021.The AD was eventually delivered on 14 December 2021.DecisionIn addition to seeking an order to set aside the AD, the plaintiff sought:a declaration rendering the AD void;a refund of the fees and expenses paid to the adjudicator; andthe costs of the application to be borne by the defendant.In deciding this matter, the Court made a few salient findings.Is an AD made, released, or delivered?The Court dissected the terminology in sections 12 and 19 of the Construction Industry Payment and Adjudication Act 2012 (CIPAA), as well as section 4, which sets out the definitions in the CIPAA.While perusing these sections and referring to the case of Celtex Supreme Sdn Bhd v Mega Bina Garisan Sdn Bhd,(2) the Court held that the key word is "made" and not "decide", "deliver" or "release". This is due to section 12(3) of the CIPAA mandatorily requiring an adjudicator to "make" an AD within the prescribed time periods. Section 4 of the CIPAA has defined an AD as a decision "made" by an adjudicator.As such, if an AD is made outside of the time periods prescribed in section 12 of the CIPAA, the AD is void.To recap, the prescribed time periods are:45 working days from the service of the adjudication response or adjudication reply (the AD deadline);45 working days from the expiry for service of the adjudication response if there is none; orsuch further time as agreed by the parties.When is the AD made?Given the serious consequences of an AD made beyond the prescribed time periods, it is necessary to ascertain when an AD is made.The Court held that this was a question of fact which depends on evidence such as the date stated on the first and last pages of the AD as well as the date of the adjudicator's email, notice or letter to the parties to which the AD is attached or enclosed.The Court further held that if the fees and expenses regarding the adjudication have not been deposited in full, the adjudicator is required not to "deliver" or "release" the AD, but to "make" it. In such circumstances, the AD would not be rendered void if the AD was made within the prescribed time periods.In the present case, the AD had been required to be made on 12 December 2021, taking into account weekends and public holidays. Instead, the evidence showed that the AD had been made on 14 December 2021. This rendered the AD void.Did the parties "agree" to extend the deadline for AD?The defendant sought to persuade the Court that, as the parties had not objected or replied to the adjudicator's email, they could move the AD deadline to 15 December 2021.However, the Court held that, for purposes of an extension of time, there must be a written request by the adjudicator for the parties' agreement. Thus, there must first be a written request and, second, parties must agree to it.Further, the Court held that if it had agreed with the defendant's submission, section 12(3) of the CIPAA would be rendered null as an adjudicator may send a mistaken computation of the deadline to parties, or parties may fail to correct the mistaken computation.Do adjudicators have the power to unilaterally extend the AD deadline?The Court held that an adjudicator cannot unilaterally extend the AD deadline as this would inevitably delay the adjudication proceedings and is inconsistent with the purpose of the CIPAA, as a purposive construction of section 25(p) of the CIPAA must be given. Section 25(p) of the CIPAA only applies to "any time limit imposed on the parties" under the CIPAA and not the adjudicators.Can parties rely on estoppel due to failure to reply to the adjudicator's email?Although the parties had not replied to or corrected the adjudicator's email, the Court held that the doctrine of equitable estoppel cannot apply to bar an application to set aside an AD. This is because the doctrine of equitable estoppel is based on case law and case law is subject to written laws which embody the intention of the legislature. Accordingly, the said doctrine cannot apply given the mandatory provisions of section 12 of the CIPAA.Could acquiescence apply?For the same reasons that the doctrine of equitable estoppel did not apply, the Court found that the doctrine of acquiescence could not apply either, due to the adjudicator's email.Refund of costs by adjudicatorThe Court went on to hold that due to the adjudicator having failed to "make" the AD within the prescribe time periods, the adjudicator was mandatorily required under section 19(6) of the CIPAA and regulation 8(2)(b) of the Construction Industry Payment and Adjudication Regulations 2014 to refund the adjudicator's fees/expenses to the parties. This was despite the adjudicator possibly having acted in good faith in the performance of his duties under the CIPAA.Declarations under CIPAAThe Court referred to and followed the case of Ou Yang Chow Min (trading as Ou Yang Architect) v Green Venture Capital Sdn Bhd and another case(3) where it was held that in light of section 13(c) of the CIPAA, the Court had no power under section 41 of the Specific Relief Act 1950 and Order 15 rule 16 of the Rules of Court 2012 to grant any declaration in proceedings under the CIPAA regarding the dispute between the parties. This is to avoid a declaration which may conflict with the subsequent outcome of dispute that may be resolved by way of litigation or arbitration.Regardless, the Court allowed the declaration sought for by the plaintiff as it concerned the validity of the AD and not the dispute between the parties.CommentAccording to Wong Kian Kheong J, this was an unfortunate case where the AD was void due to the adjudicator's failure to deliver the AD in time. Parties to an adjudication, particularly the adjudicator themselves, should always ensure compliance with the timelines.Unfortunately, while the defendant did seek confirmation of the delivery of the AD, no steps were taken to confirm or check the adjudicator's calculation for delivery of the AD.Parties should take proactive steps to confirm the date for when the AD must be made and assist the adjudicator in calculating this. If parties notice a mistake in computation, either party may write to the adjudicator to seek clarification or risk having an entire AD rendered void. As this case demonstrates, it is in the interest of the claimant to ensure that the AD is issued in good time; otherwise, there will be nothing to show for the time and money spent.For further information on this topic please contact Tasha Lim Yi Chien at Gan Partnership by telephone (+603 7931 7060) or email ([email protected]). The Gan Partnership website can be accessed at www.ganlaw.my.Endnotes(1)  MLJU 1280.(2)  1 LNS 630.(3)  MLJU 130.