The Construction Industry Payment and Adjudication Act 2012 came into effect on April 15 2014. Since then, the Malaysian courts have had the opportunity to consider various aspects of the act on numerous occasions. Some significant decisions have been handed down by the courts in the past two-and-a-half years and although statutory adjudication in Malaysia is still in its infancy, it is evident that a body of local decisions is steadily being built up to assist in the interpretation of the act.
Recovering pure economic loss in negligence is a difficult and complex area of law, and developing this area in Malaysia has been a prolonged and sometimes difficult process. In recent years the courts have delivered a series of judgments in construction cases indicating the approach to be taken.
The recent decision in Tan Tien Seng v Grobina Sdn Bhd is significant for both property purchasers and developers, as it limits the circumstances in which a developer may make changes to or deviations from building plans without the purchaser's consent.
Standard form contracts are often used to in order to save time and money instead of drafting a fresh construction contract for each new project. Familiarity with the available standard forms and types of construction contract enables prudent employers to ensure that they achieve the appropriate contractual framework for the physical execution of their needs.
In Pernas Construction Sdn Bhd v Syarikat Rasabina Sdn Bhd a majority of the Malaysian Court of Appeal upheld the decision of the Kuala Lumpur High Court. The majority found that the plaintiff was forced or coerced into signing the mutual termination agreement despite the absence of any contention to that effect in the pleadings or evidence before the High Court.
In Ekovest-KMZ-Dragages Sdn Bhd v HSBC Bank Malaysia the Kuala Lumpur High Court considered an application for an interim injunction to restrain payment under a performance bond where the beneficiary had yet to make any demand under the bond.