The construction industry can be very dodgy when it comes to payment. Let me tell you about a case we handled recently involving over RM1 million in claims.
Our client was chasing payment, including the release of his retention sum. He told us that the recovery was going to be a challenge because the other side was using all sorts of unsubstantiated grounds to deny payment: LAD + deduction of retention monies.
We arranged for a settlement meeting at a Starbucks (with lawyers present), and the debtor attended personally with his 2 lawyers from a well-known large local law firm. He was a stocky Dato' with a strong air of arrogance and apparent anger issues.
From the start of the meeting, he raised his voice at my client and me.
"Money?! What money is owed?! Your fcking client owes me money. You ask him to count how much LAD he owes me. Even his retention sum is not enough to deduct for all the defects in his work!"
Thankfully, my client was a calmer and more composed gentleman who refused to get dragged into this childish show. My client whispered to me, "Ask him for a list of the defects and deductions. They have nothing. They are making it up."
I told the opposing lawyer that since their client was clearly emotional, it would be pointless to continue the meeting in a hostile environment like this. I told them that we would write in to discuss the facts further.
We requested particulars of the alleged non-completion and defects, as none had been provided from day one. Merely citing "delays" and "defects" without providing real particulars and evidence cannot hold up.
Weeks went by, and no substantiation was provided despite multiple follow-ups on our side. We could tell that even the opposing counsel were somewhat ashamed of their client's behavior and unsustainable position. But we understood they had a job to do.
To avoid wasting any more time, my counsel and I decided that the right path forward would be CIPAA adjudication. During the proceedings, indeed, the counterparty could not produce strong grounds to substantiate non-completion. The alleged defects were not even related to our client's supply and installation works. All this was fabricated to delay/frustrate our client's claim. Our client obtained an award in his favor easily.
Eventually, the Dato' realized that the outcome was not going to be in his favor. Right before we commenced enforcement proceedings, his lawyers contacted us to discuss an installment repayment schedule. We insisted on post-dated cheques + an acceleration clause + a late payment interest clause in the event of default, as we knew we could not rely on this Dato's goodwill to fulfill his obligations without guardrails.
Thankfully, with the help of opposing counsel, despite a number of payment delays, we managed to settle the entire outstanding amount, and our client got back his principal claims + retention sums in full. There are many other contractors out there who are similarly suffering or have given up on their claims after being bullied by unethical main contractors. Worse, some have just opened shell companies and allowed them to be wound up to avoid paying up.
Construction can be a very dodgy industry.
Rudi Cheu (rudi@rulecolaw.com) is a content creator under the Newswav Creator programme, where you get to express yourself, be a citizen journalist, and at the same time monetize your content & reach millions of users on Newswav. Log in to creator.newswav.com and become a Newswav Creator now!
The User Content (as defined on Newswav Terms of Use) above including the views expressed and media (pictures, videos, citations etc) were submitted & posted by the author. Newswav is solely an aggregation platform that hosts the User Content. If you have any questions about the content, copyright or other issues of the work, please contact creator@newswav.com.
