KCS Design & Construction Pte Ltd v Miracle Management Pte Ltd

• Jurisdiction: Singapore
• Judge: Leslie Chew
• Judgment Date: 02 November 2011
• Neutral Citation: [2011] SGDC 346
• Citation: [2011] SGDC 346
• Docket Number: District Court No. 320 of 2007
• Published date: 13 May 2013
• Hearing Date: 15 March 2011,27 January 2011,28 January 2011,22 September 2011,17 March 2011,16 March 2011
• Plaintiff Counsel: Mr Chan (M/s C H Chan & Co.)
• Defendant Counsel: Mr Eugene Tan (M/s Drew & Napier LLC)
• Court: District Court (Singapore)

District Judge Leslie Chew: Background

The Plaintiffs and the Defendants entered into a contract on 10 May 2005 (‘the Contract’) under which the Defendants contracted for the services of the Plaintiffs to carry out Alteration and Addition works (A & A Works) to the Plaintiffs’ property known as 2H Brighthill Crescent, Singapore (‘the Property’).

The Contract was accompanied by Bills of Quantities which were attached to the Terms and Conditions of the Contract. These are exhibited as agreed documents in the bundle marked AB 1-9.

As set out in the Bills of Quantities, the Contract involved, among other things, the construction of a swimming pool and a basement next or ‘behind the swimming pool’.

The original contract sum according to the Plaintiffs which is set out in the affidavit of David Soh Kok Chuan dated 30 May 2009 was $218,000 (excluding GST)(‘the Contract Price’).

Arising from the Plaintiffs’ claims for variation works, based on the Plaintiffs’ claims for variation works, based on the Plaintiffs’ Statement of Claim (Amendment No. 2) dated 31 July 2007, the Plaintiffs had originally claimed against the Defendants for the balance sums due under the Contract in the sum of $126,781.86. This was based on a contract sum of $300,337.41.

Subsequently, at trial however, the Plaintiffs accepted that their balance claim against the Defendants should only be $66,557.81 after conceding that the Plaintiffs had in fact paid $199,563.33 to-date and that the Variation Orders 1 to 6 amounted to $18,377:

“Chan: Your Honour, because my ....my client is prepared....Mr (Soh?) is prepared to confirm that that amount paid and received by the Defendant to the Plaintiff is the amount stated in this Mr (Foo’s) affidavit.”

Mr Foo in his affidavit of 16 Mar 2010 put the sum at $199,563.33. Accordingly, the amount paid by the Defendants to the Plaintiffs was agreed as $199,563.33.

In respect of the value of Variation Orders Nos 1 to 6, which the Plaintiffs had originally claimed to be in the sum of $52,593, in a similar manner, the Plaintiffs again conceded at trial that in connection with the said Variation Orders, only a sum of $11,377 was actually due:

“Tan: In the VO 1to 6, I’ve gotten my client’s approval that he is prepared to offer $11,377 for VO 1-5.” (See Notes of Evidence of 27 Jan 2011 at p 103, lines 21-22)

“Tan: And VO 6 would be at 7,000 that was agreed and signed by him.” (See Notes of Evidence of 17 Mar 2011 at p 103, lines 28-29)

“Court: Mr Chan, you confirm?

Chan: Yes. Your Honour. I confirm that my client accepts this figure....”. (See Notes of Evidence of 17 Mar 2011 at p 104, lines 16-17)

The Defendants on their part counterclaimed the sum of $86,700 being the loss they will (save for an item where they have claimed the actual expenditure of $8,610.00) suffer in having to rectify what they say were defects in the A & A Works undertaken by the Plaintiffs. Additionally, they claimed the sum of $175,000 as liquidated damages under the Contract.

Decision

I gave my decision on 22 September 2011. Since the parties have appealed my decision. These are the grounds of my decision.

Plaintiffs’ Claims – Variation Works in the sum of $66,557.81

The Plaintiffs’ claim for the balance sums due from the Defendants, arising from what transpired at trial were based on the variation works which the Plaintiffs say the Defendants had directed them to carry out.

The Defendants deny that the sum of $66,557.81 was due based on the variation works that the Plaintiffs claimed were carried out on the instructions of the Defendants.

The Plaintiffs’ evidence both in the affidavit evidence of David Soh (PW1) and his evidence during cross-examination was based primarily on what David Soh asserts in paragraph 4 of the Statement of Claim (Amendment No. 2). Essentially, it was the evidence of PW1 that the variation works as claimed in this action, were ordered by the Defendants through Dr Chuang (DW 1). According to David Soh, the instructions for the variation works were given orally by the Defendant’s Dr Chuang or his agent to the Plaintiffs’ agent, Ms Alice Phebe Koh and/or Mr Nico Kerk and / or Mr Benjamin Seah. This, as I have noted, is based on the assertions particularized in paragraph 4 of the Plaintiffs’ own Statement of Claim (Amendment No. 2). That is further reiterated by David Soh (PW 1) on the stand when he was cross-examined.

The Defendants’ response to the Plaintiffs’ claim is that the claimed variation works were never confirmed in writing by the Defendants. The thrust of the defence is therefore that the Defendants did not order the same. In their closing submission, the Defendants also specifically challenged the Plaintiffs’ variation works claims as being unsupported by any evidence. In short, in the view of the Defendants, the Plaintiff had failed to prove their claims on the evidence.

The basis of the Defendants’ assertion that the Plaintiff s failed at trial to produce the evidence to support the variation works is essentially premised on the following: There was no evidence of the oral instructions given by the Defendants to the Plaintiffs for the variation works because the only evidence adduced at trial was based on what David Soh (PW1) says were requested by the Defendants to his staff either Ms Koh and/or Mr Kerk and/or Mr Seah referred to above. The evidence offered at trial was based on hearsay. This was because none of the named recipients of the oral instructions purportedly given by the Defendants with respect to the Variation Works (save for what was referred to as ‘Variation A’ dealing with the micro-piling for the basement works which I shall deal with separately) were called to give evidence. The Defendants submitted in their closing submissions that the evidence offered was hearsay and inadmissible as evidence of the Plaintiffs’ claims for the variation works. Alternatively, the instructions for the variation works were required to be in writing under the Contract. In the event, in the present case, there is no evidence of written instructions for the variation works. The Defendants assert that the Contract at clause 10 required “... all variation orders must be [in] writing otherwise it will be treated as invalid”. As to the said ‘Variation A’, the Defendants’ position is that the micro-piling required for the project was not a variation but already part of the original scope of works. In any event, the Defendants also argued that the Plaintiffs’ claims for Variation Works were not supported by any contemporaneous documentary evidence.

The Plaintiffs’ response to the Defendants defence is simply that a) they did carry out the variation works; b) the works were carried out on the oral instructions of the Defendants and c) even though the Contract at clause 10 thereof required the Variation Works to be confirmed in writing otherwise they would not be valid, the Defendants had waived the requirement in the Contract.

Court’s Finding on the Plaintiffs’ Variation Claims

I will deal with the Variation Works as claimed by the Plaintiffs that are other than what has been called ‘Variation A’. These are referred to by the parties as Variation Works, B, C and D.

As to Variation Works B to D as claimed by the Plaintiffs, there is no doubt that the claims are based on the Plaintiffs’ assertions that these works were ordered orally by the Plaintiffs to one of the Defendants’ staff either Ms Koh or Mr Kerk or Mr Seah. It is also clear from the evidence of David Soh, PW1 on behalf of the Plaintiffs that he did not deal directly with the Plaintiffs Dr Chiang DW1, on the variation works which the Plaintiffs are now claiming but relied on information provided to him by Ms Koh and/or Mr Kerk and/or Mr Seah. This was very clear from his answers during his cross-examination by Defendant Counsel.

Here it is important to recall that it appears doubtful that the Contract calls for Variation Works to be ordered or certainly confirmed in writing. That is clear from clause 10 of the Contract. There is also no dispute that the instructions for the variation works undertaken by the Plaintiffs were based on the purported oral instructions of the Plaintiffs. Accordingly, the Plaintiffs did not and indeed cannot rely on written instructions for there was none.

However, does it follow that the instructions not being written must as clause 10 of the Contract appear to call for, be considered invalid, i.e. not valid instructions upon which the Plaintiffs should act upon or if they, as here have acted upon, would not be entitled to rely on the claimed payments for Variation Works? This would depend on the language of clause 10 of the Contract to which parties had subscribed. If the literal meaning of clause 10 was clear then, I think it must be given effect to without more for that would have been the bargain between the parties. Here however, the language of clause 10 is somewhat garbled. While it refers to ‘All verbal communications’, it nevertheless, also provides that such ‘verbal communications’ “... must be in writing....”. The contradiction is evident on the face of it. Garbled though it may be, this court must give meaning to the words of clause 10 for otherwise it would simply be extraneous or redundant verbiage. That cannot be in the case of a commercial document such as the Contract. Parties must have intended the clause to mean something with respect to their business relationship represented by the Contract – see CST Cleaning & Trading Pte Ltd v National Parks Board [2009] 1 SLR(R) 55 at [29].

If the literal interpretation of clause 10 fails to make sense then it must be taken that the express language is unclear. That being the case, it is clearly permissible for me to adopt an interpretation of that clause that will give reasonable meaning. Here I am satisfied that the purpose of the clause must be, in the context of...