Animal Concerns Research & Education Society v ANA Contractor Pte Ltd and another

• Jurisdiction: Singapore
• Judge: Kan Ting Chiu J
• Judgment Date: 17 March 2010
• Neutral Citation: [2010] SGHC 85
• Court: High Court (Singapore)
• Docket Number: Suit No 639 of 2008
• Year: 2010
• Published date: 28 April 2011
• Hearing Date: 26 May 2009,11 June 2009,25 May 2009,04 June 2009,27 May 2009,28 May 2009
• Plaintiff Counsel: Suresh Sukumaran Nair and Muralli Rajaram (Allen & Gledhill LLP)
• Defendant Counsel: Lee Kwok Weng (Lee Kwok Weng & Co),Spencer Gwee (Spencer Gwee & Co)
• Subject Matter: Contract,Breach,Building and construction law,Contractors' duties
• Citation: [2010] SGHC 85

Kan Ting Chiu J:

The plaintiff, the Animal Concerns Research & Education Society, an Institution of Public Character under the Charities Act (Cap 37, 2007 Rev Ed), had planned to establish a shelter for animals (“the shelter”) comprising several structures on a plot of land along Jalan Lekar (“the site”) leased from the Singapore Land Authority (“SLA”).

The first defendant, A.N.A. Contractor Pte Ltd, a general contractor, became involved in the construction of the shelter. The second defendant, Tan Boon Kwee, was a director of the first defendant as well as the first defendant’s clerk of works and site supervisor for the project.

Following discussions between the plaintiff and the first defendant, the latter sent a letter dated 27 September 2006 to the plaintiff, setting out the estimated costs of $694,000 for constructing the shelter. On the basis of this letter the plaintiff and the first defendant entered into a Memorandum of Undertaking dated 28 September 2006 (“MOU”) which set out in greater detail the first defendant’s scope of works, which included: 1) The preparation of plans for the proposed development for submission to obtain the necessary approval from the relevant authorities. 2) The preparation of the site which includes site clearance, removal of unwanted trees and shrubs, earthfill and disposal of surplus material to formation of the required level of development. Under the heading “Summary and Understanding” it was stated that:

The [first defendant has] forwarded a preliminary pricing of the development to the [plaintiff]. The [plaintiff] will begin to source and raise the fund required for the development. The [plaintiff] will advise the [first defendant] accordingly on the status of the fund raised from time to time so as the [first defendant] will be able to gauged [sic] as and when the next stage of work can proceed. The [plaintiff] will also inform the [first defendant] on the status of the proposed project development from time to time.

(the “status-of-funding provision”).

The first defendant commenced work in January 2007, and in February 2007, the plaintiff issued another document (“the 2007 Agreement”) which set out in even greater detail the scope of work, concluding with:

The scope of work shall also include the following:

– The preparation of plans for the proposed development for submission to obtain the necessary approval from the relevant authorities. – The preparation of the site which includes site clearance, removal of unwanted trees and shrubs, earthfill and disposal of surplus material to formation of the required level for the development. – Supply machinery with operator to break and excavate area for the construction of reinforced concrete work such as footings, slab, ramp, apron and surface drain for the various buildings and enclosures. – The list of buildings and enclosures to be constructed are as shown in the Acres Wildlife Rescue Centre (AWRC) layout plans.

The construction of the AWRC will be completed and the site handed over to [the plaintiff] by the end of April 2007.

[emphasis added]

This document was initialled by Choo Kong Leong, project manager of the first defendant.

The first defendant did not see the construction of the shelter to fruition. Four issues arose which led to the present proceedings. The first was the delay in the execution of the works. The second was the use of wood chips as landfill and the consequences of that. The third was the plaintiff’s complaint that the first defendant had failed to construct the shelter in accordance with the specifications. The last issue was the plaintiff’s refusal to pay some of the first defendant’s claims.

The plaintiff sued the defendants for the delay, the backfilling with the wood chips and the deficient construction, and the first defendant counterclaimed against the first defendant for the unpaid claims. The plaintiff based its action against the first defendant on contract and negligence, and against the second defendant on negligence. The first defendant’s counterclaim was founded on contract.

The delay

The first defendant denied that there was an agreement that the shelter was to be constructed by end April 2007, and maintained that time for completion was at large under the status-of-funding provision.

The first defendant also raised a second defence that the delay was caused by some unspecified “supervening event” and “circumstances beyond the control of the 1st Defendant”.¹

The records of the correspondence exchanged between the parties revealed the plaintiff’s concern over the progress of the construction and the consequences of any delay. It wrote to inform the first defendant on 15 May 2007² that all buildings must be completed by 20 May 2007 and on 17 May 2007³ that the first defendant was to pay the ground rent for the site until such time as the buildings were handed over to the plaintiff.

The first defendant’s responded in an email dated 19 May 2007⁴ stating, inter alia:

Pursuant to our agreement whether in writing or verbally, we have not at any point in time agreed to any compensation or damages resulting from our performance although we are abide [sic] to follow a schedule and the target date set.

Due to the unforeseen disruption of sand and granite supply nation wide since February 2007, its [sic] unavoidable for any project to delay. In addition at our contracted sum without material price compensation, any contractor would have abandoned the job by now. Legal proceedings and arbitrations will only lead to further delay and kill the project totally.

Even at the cost of material tripled [sic] today, we took pain [sic] to continue since its [sic] a charity funding project but only to met [sic] with further critisms [sic]. The delay in our April 2007 progress payment further dampened the situation.

Despite the above, on a strictly without prejudice and goodwill basis, we will pay your rental cost of $7,875 for May 2007. Beyond that, we will further evaluate the occupational condition of the various buildings before deciding further. Our offer will only apply if we receive our May 2007 and subsequent progress payment promptly.

[emphasis added]

Apparently no handover was made after that, and on 4 July 2007, the plaintiff’s executive director, Louis Ng, wrote to the first defendant:⁵

Please send us an official letter on [the first defendant’s] letterhead explaining why the completion of the construction has been delayed and when it is expected to be completed.

The first defendant complied with its letter of 5 July 2007 which stated: ⁶

Delay in Completion

Main reasons caused for delay of the project

1) Commencement of site work begin [sic] only in early Mar 2007 instead of end Jan 2007 as planned (Authorities requirements) 2) The unforeseen sand and granite supply disruption causing severe material shortages in March 2007 and only stabilized sometime in April 2007. 3) The unusually heavy rainfall in the month of April 2007 at Sungei Tengah area causing slow progress in work done.

These replies of the first defendant are revealing and significant. The email of 19 May 2007 showed that there was a set target date, in contradistinction to the defence that time for completion was at large and dependent on the plaintiff’s ability to pay for the development, and the letter dated 5 July 2007 indicated that completion was delayed, allegedly by the shortage of supply of sand and granite and unusually heavy rainfall.

In the light of the admission that a target completion date had been set, and that there was a delay, it was clear that the first defendant had delayed the completion of the construction of the shelter.

The first defendant’s argument that the date for completion was at large was unfounded as it was inconsistent with the clear words of the 2007 Agreement and the clear admission of the first defendant.

The plea that the delay was caused by events and circumstances beyond the first defendant’s control was not supported by any evidence in respect of the disruption of supply of sand and granite and unusually heavy rainfall and the first defendant also did not show that if those conditions had existed, they had the effect of extending the target date or excusing or reducing the liability of the first defendant to meet it.

The wood chips

The site was not level ground. Before the construction of the structures was to proceed, the land had to be levelled, and it was the first defendant’s duty to do that.

The first defendant sought to do that by using backfill to raise the lower areas. It arranged with an entity known as Lok Sheng Enterprises (“Lok Sheng”) to truck in wet soil and wood chips as the backfill for that purpose. Lok Sheng was a one-man operation. The first defendant did not know if the operator had any special qualification in land fills. In its agreement with Lok Sheng, while there was mention of “wet soil and wood chips”, there were no specifications set for the soil and wood chips to be used.⁷ Lok Sheng did not charge for the soil and the wood chips, and the first defendant only paid the transport and labour costs for them to be delivered to the site.

Soon after the back filling was done, there were signs that something was amiss. A foul smell was detected, and dirty...