Interpretation dilemma: payment response in CIPAA 2012

Abstract

By virtue of section 6(4) of the CIPAA 2012, the entire amount is deemed disputed if the non-paying party chooses not to respond to the payment claim. Hence, the non-paying party will not be precluded from challenging the payment claim in the adjudication proceeding even if he has failed to serve a payment response. The stand taken by section 6(4) is conflicting to the jurisdiction of the adjudicator as set out in subsection 27(1), where any dispute is limited to the matter referred to by the parties pursuant to sections 5 and 6. In contrast with the deeming provision provided under section 6(4), the decided CIPAA cases has proven that the interpretation of section 6(4) is rigid and failure to submit payment response will cause the later defence and/or counter-claim in the adjudication response to be estopped. In the application of statutory interpretation, it is critical to note that irrespective of any perspective, it is trite that court must give effect to the statute according to the intent of Parliament. This research intended to identify the proper interpretation of section 6(4) of CIPAA. In achieving the objective of this research, in depth study would be made to understand the application of payment response in other statutory adjudication jurisdictions, the intention of the Parliament and the principle of statutory interpretation, namely the literal, golden and mischief rule (known also as the purposive approach). From the findings, it is pertinent to note that the crux behind the introduction of statutory adjudication exclusively to ensure timely, consistent and prompt payment. Despite section 25 of CIPAA empowers wide ranging authorities to the adjudicator, however an absurdity cannot be the intent of Parliament as the limit of the adjudicator is governed by subsection 27(1) of CIPAA, which clearly circumscribes under payment claim and payment response. As the current CIPAA is adequate to serve the intention of the Parliament, therefore it is highly recommended for section 6(4) to be amended to avoid any ambiguity.