KTCC Mall Sdn Bhd v TCS Construction Sdn Bhd

Appellant(s): Ktcc Mall Sdn Bhd

Respondent(s): Tcs Construction Sdn. Bhd.

• YA Dato' Lim Chong Fong
• YA Dato' Nadzarin Bin Wok Nordin
• YA Tuan Muniandy a/l Kannyappan

• The appellant (employer) engaged a main contractor (MPM) for a construction project; MPM in turn appointed the respondent as subcontractor, and the appellant issued a Letter of Undertaking to settle MPM's outstanding amounts if MPM defaulted. MPM was subsequently wound up in February 2022.
• An adjudicator awarded the respondent RM6,141,557.77 against MPM under CIPAA, and the respondent then invoked s.30 CIPAA to seek direct payment of that adjudicated sum from the appellant as MPM's principal.
• The High Court allowed the respondent's s.30 CIPAA application and dismissed the appellant's application for a declaration that no sums were due and payable by it to MPM — decisions which the appellant appealed.

• Whether the doctrine of stare decisis was breached by the High Court in failing to follow a prior Court of Appeal decision (the "Better One Case") which, on materially identical facts, held that no money was due and payable by the appellant to MPM, thereby precluding the invocation of s.30(5) CIPAA.
• Whether s.30 CIPAA can be invoked where the principal (employer) has proven that no money is due or payable to the main contractor, particularly where the main contractor is in liquidation.
• Whether s.30 CIPAA, as a general statutory payment remedy, can override or displace the insolvency law principles of pari passu and undue preference under ss.527–528 of the Companies Act 2016, applying the maxim *generalibus specialia derogant*.

• The Court held that the High Court erred in failing to apply the doctrine of stare decisis by disregarding the binding Court of Appeal decision in the Better One Case, which was decided on materially indistinguishable facts and which found no money due and payable by the appellant to MPM; the Court independently reached the same finding on the documentary evidence before it.
• As s.30(5) CIPAA is a threshold condition requiring proof that money is due or payable by the principal to the main contractor at the time of the request, and no such money was due, s.30 CIPAA could not be invoked and the respondent's claim must be dismissed.
• The Court further held that s.30 CIPAA, being a general law, cannot override the specific insolvency regime under the Companies Act 2016; applying *generalibus specialia derogant* and following *Dubon Bhd (In Liquidation) v Wisma Cosway Management Corp*, the pari passu principle and undue preference provisions under the Companies Act 2016 prevail, and s.30 CIPAA does not confer any secured or preferential status on the respondent's claim. Both appeals were unanimously allowed with costs of RM20,000.