Lavania & Balan Chambers

Introduction

Architecture in Malaysia is a vibrant and rapidly evolving field that plays a crucial role in shaping the country’s built environment. As Malaysia continues to develop, architects are at the forefront of designing innovative and sustainable structures that reflect both the nation’s unique cultural heritage and contemporary needs.

Throughout the years, we have seen a surge in the need for architectural services, driven by developments in industrial, residential, and infrastructure sectors.^[1] Additionally, the rise of e-commerce, logistics, and government initiatives such as the Industrial Master Plan 2030^[2] has heightened the need for specialized architectural expertise.

The "China plus one" strategy — where companies diversify their supply chains beyond China — has further increased Malaysia’s appeal as a key player in the region.^[3] This growth has led to more collaboration between local and international architecture firms, especially for complex and/or high-value projects.

However, these collaborations are not without challenges. A recent High Court decision in Falconer Chester (UK) Limited & Anor v LFE Engineering Sdn Bhd^[4] illustrates this issue in relation to instances where foreign architecture firms are engaged to render services to local projects.

Brief facts of the case

Falconer Chester Hall (UK) Limited ("1st Plaintiff") entered into a contract with Shapadu Corporation Sdn Bhd ("2nd Defendant") to provide architectural consultancy services for a development project in Putrajaya. To meet the requirement of local regulations, the 1st Plaintiff established a local subsidiary, Falconer Chester Hall (Asia) Sdn Bhd ("2nd Plaintiff"), and collaborated with RSP Architects Sdn Bhd, a local registered architectural firm.

Later, the 2nd Defendant appointed LFE Engineering Sdn Bhd ("1st Defendant") as the project management consultant. Through a Novation Agreement, the 1st Defendant assumed all contractual responsibilities initially held by the 2nd Defendant.

During the contractual period, the Plaintiffs rendered services, including value engineering and redesign work. However, a stop work order was issued to the Plaintiffs.  Consequently, the Plaintiffs issued its fee notes No. 019 and No. 020, both dated 8.5.2019, in the sum of RM2,863,090.28.

When the Defendants failed to settle the fees, the Plaintiffs initiated legal proceedings to recover the outstanding fees. In response, the Defendants argued that the Plaintiffs were not entitled to the fees due to their non-registration under the Architects Act 1967 (“AA”).

Court’s Findings

The High Court ruled that the services provided by the 1st Plaintiff fell squarely within the definition of architectural consultancy services under the AA. In interpreting Sections 2, 7, and 7A of the AA, the court referred to the precedent set in The Government of Sarawak v Sami Mousawi-Utama Sdn Bhd^[5], affirming that unregistered architects are not entitled to recover fees for services rendered, as stipulated in Section 7(1)(c) of the AA.

For reference, the relevant portions of Sections 2, 7, and 7A of the AA are reproduced below:

“Section 2: (1) In this Act unless the context otherwise requires -

“Architect” means a person registered under subsection 10(2);

“architectural consultancy practice” means a sole proprietorship, partnership or body corporate incorporated under the Companies Act 1965, providing architectural consultancy services and is registered by the Board under section 7A or 7B;

“architectural consultancy services” means the provision of architectural consultancy advice and services pertaining to all or any of the following:

(a) submission of plans or drawings to any person or local authority in Malaysia;

(b) conceptualization, research and development of any design for the built environment;

(c) any survey, preparation of reports including environmental impact assessment reports, or investigation relating to the built environment;

(d) project programming, construction and manufacturing programming, and product design;

(e) planning and development services including interior design, financial advisory services, project management, contract administration and landscaping;

(f) preparation of feasibility studies and cost estimates;

(g) preparation of plans and other means of presentation;

(h) all services in compliance with statutory requirements;

(i) any other activities relating to the creation, preservation and enhancement of the built environment;

Section 7. Restrictions on unregistered persons

7. (1) No person shall, unless he is an Architect –

(a) practise or carry on business or take up employment which requires him to perform architectural consultancy services;

(aa) be entitled to describe himself or hold himself out under any name, style or title –

(i) bearing the words “Architect” or the equivalent thereto in any other language; or

(ii) bearing any other word whatsoever in any language which may reasonably be construed to imply that he is an Architect;

(b) use or display any sign, board, card or other device representing or implying that he is an Architect;

(ba) be entitled to describe himself as a “Architect” and to use the abbreviation “Ar.” before his name and/or the abbreviation “P.Arch” after his name; or

(c) be entitled to recover in any court any fee, charge, remuneration or other form of consideration for architectural consultancy services rendered as an Architect.

Section 7A. Architectural consultancy practice

7A.(1) Notwithstanding subsection 7(1), a sole proprietorship, partnership or body corporate may practise as an architectural consultancy practice and recover in any court any fee, charge, remuneration or other form of consideration for any architectural consultancy services rendered by it pursuant to its practice as an architectural consultancy practice carried on by virtue of this section, if it is registered with the Board as an architectural consultancy practice and has been issued with a certificate of registration.”

The Court further held that, based on the clear provisions of Section 7(1)(c) read with Section 2 of the AA, the doctrine of proportionality—based on public policy considerations as outlined in the English case Patel v Mirza — could not be applied. The Court found that using this doctrine to seek fair remuneration would essentially be an attempt to bypass the statutory prohibition against unregistered architects claiming fees.

Conclusion

In conclusion, this case serves as a reminder that the Malaysian Courts do not shy away from upholding strict compliance with the laws governing professional bodies i.e.  Architects Act 1967.

For foreign firms planning to collaborate on Malaysian projects, it is essential to ensure full compliance with local registration requirements. Failing to do so may lead to severe financial and legal consequences, including the inability to recover fees and potential criminal liability^[6].

As a practical guide, the Malaysian Investment Development Authority (“MIDA) has published a booklet aimed at guiding investors/architecture firms through the process of setting up firms in Malaysia^[7]. For additional guidance, foreign firms should also consult Lembaga Arkitek Malaysia (“LAM”) if they have any further queries.

This article is authored by Balan Nair Thamodaran (Partner) and Julian Chen (Associate) of the Construction and Adjudication Practice of Lavania & Balan Chambers. It contains general information only. The contents are not intended to constitute legal advice on any specific matter nor is it an expression of legal opinion and should not be relied upon as such.