Nam Hong Construction & Engineering Pte Ltd v Kori Construction (S) Pte Ltd

JudgeSundaresh Menon CJ
Judgment Date08 July 2016
Neutral Citation[2016] SGCA 42
Published date14 July 2016
Citation[2016] SGCA 42
Docket NumberCivil Appeal No 44 of 2015
Subject MatterStatutes and regulations,Building and Construction Law,Building control
CourtCourt of Three Judges (Singapore)
Defendant CounselTwang Kern Zern (Central Chambers Law Corporation)
Plaintiff CounselAndrew John Hanam (Andrew LLC)
Hearing Date30 March 2016,04 November 2015
Sundaresh Menon CJ (delivering the judgment of the court):

This is an appeal against the decision of the learned Judicial Commissioner which in turn was an appeal from the decision of a District Judge. At the start of the trial before the District Judge, the respondent raised as a preliminary question of law the following issue: whether the appellant, which was not itself licensed to carry out the building works in question, was precluded by s 29B(4) of the Building Control Act (Cap 29, 1999 Rev Ed) (“the Act”) from maintaining an action for the recovery of its fees. This issue arose in the context of an action brought by the appellant against the respondent over the non-payment of sums owed under a construction contract. The District Judge answered the question of law in the negative and held that the claim was not precluded by s 29B(4) of the Act (“s 29B(4)”). The respondent appealed and its appeal was allowed by the Judicial Commissioner.

Lying at the heart of this dispute is the licensing regime set out in Part VA of the Act. Ostensibly, this appeal turns on the scope of s 29B(4), which reads:

Subject to the provisions of this Act, a person who carries out any general building works or specialist building works in contravention of subsection (2) shall not be entitled to recover in any court any charge, fee or remuneration for the general building works or specialist building works so carried out.

Section 29B(2)(c) of the Act prohibits the carrying out of the business of specialist building works without the required licence. As the appellant did not have such a licence, the precise question which the parties posed was whether the appellant had performed “specialist building works” within the meaning of s 29B(4) read with s 2(1) of the Act. However, it became clear to us that the substantial question on appeal was whether the licensing regime set out in Part VA (of which s 29B(4) was but a part) applied at all to subcontractors such as the appellant. Given the serious ramifications that this would likely have on the construction industry as a whole, we invited – with the consent of the parties – the Building and Construction Authority (“BCA”) to assist the court by furnishing written submissions on the practical aspects of the licensing regime and the policy objectives which undergird it.

We appreciate the assistance rendered by the BCA. Their input was helpful. While their views cannot, of course, be determinative of the questions of statutory interpretation which we are confronted with, they provided us with some insight into the operational aspects of the Act and this helped inform our analysis. We now deliver our judgment on this matter.


The respondent, Kori Construction (S) Pte Ltd (“Kori”), was a subcontractor for the MRT Downtown Line project (“the Project”). Sato Kogyo (S) Pte Ltd (“Sato Kogyo”) was the main contractor for the Project. Kori engaged the appellant, Nam Hong Construction & Engineering Pte Ltd (“Nam Hong”), to perform a part of the works which it had been subcontracted to perform. In a Letter of Award issued by Kori to Nam Hong, the latter’s scope of work was said to “consist of fabrication, loading and unloading of steel strutting works”. It was not disputed that at the material time Sato Kogyo and Kori held both a general builder’s licence as well as a specialist builder’s licence granted by the BCA but Nam Hong held neither.

The works were carried out between February and August 2013 and a total of 11 invoices were issued. The sums owed under the first ten invoices were duly paid but Kori did not pay Nam Hong the sum of $147,538.39 owing under the 11th and final invoice. Nam Hong then commenced District Court Suit No 3508 of 2014 (“DC Suit 3508”) for the recovery of that sum. In its defence, Kori pleaded, among other things, that Nam Hong had carried out “structural steelwork”, which is a type of “specialist building works” within the meaning of s 2(1) of the Act, without a specialist builder’s licence and was therefore barred from maintaining an action for the recovery of its fees by virtue of s 29B(4).

At the commencement of the trial, Nam Hong raised the preliminary issue of whether Nam Hong’s claim was precluded by s 29B(4) for determination pursuant to O 33 r 5 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed). The District Judge agreed to hear the preliminary issue and invited written submissions on this from the parties. When the matter was argued, it was common ground that the crux of the issue was whether the steelwork which Nam Hong performed fell within the meaning of “specialist building works” as defined in s 2(1) of the Act. The relevant parts of that section, which we shall refer to as “para (d)”, provide:

“specialist building works” means the following types of building works:… (d) structural steelwork comprising — (i) fabrication of structural elements; (ii) erection work like site cutting, site welding and site bolting; and (iii) installation of steel supports for geotechnical building works; …

Nam Hong contended that only steelwork that involved all three tasks in para (d), that is to say: (i) the fabrication of structural elements; (ii) the carrying out of erection works; and (iii) the installation of steel supports for “geotechnical building works” (ie, underground building works), would be considered “structural steelwork” within the meaning of s 2(1) of the Act. On the other hand, Kori contended that the performance of any one of the tasks listed in para (d) would amount to the performance of “specialist building works”. We shall refer to these as the “conjunctive interpretation” and the “disjunctive interpretation” respectively.

Given that it was common ground that Nam Hong did not install any steel supports for geotechnical works, but that it did engage in the fabrication of structural elements, the difference between the conjunctive and disjunctive interpretations is critical. If the conjunctive interpretation were adopted, Nam Hong’s claim would not be precluded because it would not be taken to have performed specialist building works and s 29B(4) would not bite. By contrast, if the disjunctive interpretation were adopted, Nam Hong’s claim would seem bound to fail because of s 29B(4) of the Act. The District Judge held that the conjunctive interpretation was to be preferred and Kori appealed.

The Judicial Commissioner’s decision

The Judicial Commissioner’s decision is reported as Kori Construction (S) Pte Ltd v Nam Hong Construction & Engineering Pte Ltd [2015] 2 SLR 616 (“the GD”). When the matter came before her, the focus continued to be whether the conjunctive or disjunctive interpretation was to be preferred (see the GD at [13]). The Judicial Commissioner disagreed with the District Judge and agreed with Kori that the disjunctive reading should be preferred. She gave three reasons for her decision: The licensing regime in Part VA of the Act was meant to enhance safety standards in the construction of buildings generally and not just “structural steelwork” carried out underground (at [36]). Viewed in this light, a disjunctive reading of the three limbs of para (d) would promote the object of the Act whereas a conjunctive reading would not because the latter would “confine the licensing requirements in respect of ‘structural steelwork’ only to the narrow situation where a portion of such work is carried out underground” (at [33]). The conjunctive interpretation would defeat the objects of the licensing regime, since it would enable industry players to easily circumvent the licensing requirements by “employing separate contractors to perform separate functions under [para (d)]” (at [37]). The conjunctive interpretation would render the definition of “minor specialist building works” under s 29(1)(b) of the Act otiose (at [41]–[42]).

The Judicial Commissioner also rejected Nam Hong’s alternative argument, which was that s 29B(4) of the Act did not apply because Nam Hong was merely a subcontractor and was therefore not a “builder” within the meaning of s 2(1) of the Act who was subject to the licensing regime in Part VA. The Judicial Commissioner held that the argument was misconceived because it disregarded specific definitions of “builder”, “general builder”, and “specialist builder” contained in s 29A of the Act, which applied for the purposes of Part VA in preference to the general definitions set out at s 2(1). In her assessment, the Act required all persons who carried out specialist building works to be licensed, irrespective of whether they were main contractors or subcontractors (at [38]–[40]).

The parties’ cases on appeal

Mr Andrew John Hanam, counsel for Nam Hong, advances many of the same arguments before us that he did before the Judicial Commissioner. First, he submits that the conjunctive reading should be preferred. He contends that para (d) refers to a single composite activity which is made up of three constituent elements (found in each of the sub-limbs of the paragraph), all of which must be present before it can be said that “structural steelwork” has been carried out. He gives two reasons for preferring this interpretation: First, it will be consistent with the purpose of the licensing regime, which is that only inherently “dangerous work” with the potential to cause extensive damage is to be regulated. Under the disjunctive reading, even those who carry out “non-risky” structural steelwork (such as welding) would require specialist builder’s licences. This would result in overregulation and will prevent smaller businesses from entering the market, thus pushing building costs up. Second, he invokes the rule against doubtful penalisation. Mr Hanam points out that persons who perform specialist building works without a licence are liable to criminal sanction (see s 29B(3) of the Act). Since the wording of the...

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