Can a claim for payment be made after the termination of a construction contract?
MARTEGO SDN BHD V ARKITEK MEOR & CHEW SDN BHD & ANOTHER APPEAL  1 LNS 1067
- Martego Sdn Bhd is a private limited company carrying on business in property investment (“Martego”).
- Arkitek Meor & Chew Sdn Bhd is a private limited company providing architectural consultancy services (“Architect”).
- Vide a letter of appointment dated 22 August 2014 (“Construction Contract”), Martego engaged Architect as a project architect for a multi-storey development project in Kuala Lumpur.
- On 7 August 2015, Martego terminated the Architect’s service under the Construction Contract and the Architect accepted the termination.
- After the termination of the Construction Contract, the Architect sought to recover its professional fees for works done under the Construction Contract (“Professional Fees”) by relying on section 5 of the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”).
- The Adjudicator awarded the Architect payment in the sum of RM258,550-00.
- Martego appealed to the High Court to set aside the decision on the basis that, amongst others, the Architect could not have made a valid claim under CIPAA when the payment claim was served after the termination of the Construction Contract.
- The High Court dismissed Martego’s application and Martego appealed to the Court of Appeal.
- The Court of Appeal dismissed Martego’s appeal and Martego appealed to the Federal Court.
FEDERAL COURT DECISION – APPEAL DISMISSED!
The Federal Court dismissed the appeal and held as follows:
- The Construction Contract expressly contemplates payment being made after the Construction Contract has been terminated as it sets out the mechanism for the parties to value works done up to the date of termination. Therefore, Architect is entitled to payment for work done up to the date of termination as per the Construction Contract and the claim can be made under CIPAA.