REBANA MAJU SDN. BHD. v HONG XIN CONSTRUCTION SDN. BHD.

Case Significance

Illustrates the courts' reluctance to injunct a CIPAA adjudication: the statutory scheme for speedy resolution of construction payment disputes will not be halted absent a serious question to be tried and where damages are an adequate remedy.

This High Court decision at Shah Alam concerns an attempt by an employer in a construction project to injunct a contractor from pursuing adjudication under the statutory payment regime, and it applies the familiar test for an interim injunction. The plaintiff, a property developer and the employer of a project in Gombak, sought by originating summons to restrain the defendant contractor from proceeding further with an adjudication it had commenced against the plaintiff under the Construction Industry Payment and Adjudication Act 2012 (CIPAA), following a payment claim the contractor had issued. The plaintiff invoked the Specific Relief Act 1950 and the inherent jurisdiction of the court.

The court applied the well-established principles for the grant of an interim injunction associated with Keet Gerald Francis Noel John v Mohd Noor bin Abdullah — whether there is a serious question to be tried, whether damages would be an adequate remedy, and where the balance of convenience lies. It concluded that the plaintiff had not established any serious or bona fide issue to be tried that would warrant restraining the statutory adjudication, and that the defendant should be allowed to exercise the rights conferred on it by CIPAA. It further found that damages would be an adequate remedy for the plaintiff, and that the balance of convenience tilted in favour of refusing the injunction and allowing the swift, statutory dispute-resolution mechanism to run its course.

The court held that the plaintiff had not met the threshold for an injunction and dismissed the originating summons with costs of RM6,000, subject to allocator; the plaintiff appealed. The judgment illustrates the reluctance of the courts to injunct a CIPAA adjudication: the statutory scheme for the speedy resolution of construction payment disputes will not be halted absent a serious question to be tried, and where damages are an adequate remedy.