SC Construction & Renovation Pte Ltd v Jinzhou Construction Pte Ltd

• Jurisdiction: Singapore
• Judge: Tan May Tee
• Judgment Date: 16 May 2019
• Neutral Citation: [2019] SGDC 98
• Court: District Court (Singapore)
• Hearing Date: 16 May 2019,18 April 2019,12 April 2019
• Docket Number: Summons No. 1400 of 2019, District Court Originating Summons No. 42 of 2019, RAS 13/2019
• Plaintiff Counsel: Mr Ng Hweelon (Veritas Law Corporation)
• Defendant Counsel: Mr Ashok Kumar Rai (Eversheds Harry Elias LLP)
• Subject Matter: Building and Construction Law,Building and Construction Industry Security of Payment Act,Stay of enforcement of adjudication determination
• Published date: 07 August 2019

District Judge Tan May Tee: Background

The Plaintiff was engaged by the Defendant pursuant to a Letter of Award dated 8 March 2018 (“LOA”) as its sub-contractor for the works described as “BUILDING WORKS AT SENGKANG N4C30: SUB-CONTRACT WORK FOR THE SUPPLY LABOUR FOR MASONRY WORK TO BLK 455B AND BLK 458A” (the “Sub-Contract Works”). The Sub-Contract Works were part of the works contracted to the Defendant by the main contractor of the project, Kay Lim Construction & Trading Pte Ltd.

The LOA provided that the Plaintiff would carry out the Sub-Contract Works in accordance “with the agreed rates reflected in the confirmation as specified in the Main Contractor’s Letter of Award and comply with the terms and conditions of subcontract.” The LOA further provided that “Progress payments shall be in accordance with the Main Contractor’s terms and conditions. Upon receiving payment base (sic.) from the Main Contractor’s amount, a 5% Goodwill will be deducted from the amount received to (the Defendant) in his favour.” The Main Contractor’s terms and conditions stipulated that progress payment claims were to be made monthly based on the actual value of work done on site and that the progress claims were to be submitted on the 25th day of each calendar month.

On 25 December 2018, the Plaintiff sent a payment claim, Payment Claim No. 16, to the Defendant by email claiming the sum of $193,040.63 (inclusive of 7% GST) for work done up to and including 25 December 2018. The Defendant responded by email on 26 December 2018 stating that the claim was not accepted with the reasons inter alia that the works were not done to the percentage as claimed. The Defendant’s email further stated that it wished to terminate the contract with immediate effect and would work out the actual balance amount to be paid to, or claimed from, the Plaintiff.

When no payment was received, the Plaintiff proceeded with an Adjudication Application under the Building and Construction Industry Security of Payment Act (Cap 30B) (“SOPA”) on 28 January 2019. While the Adjudication Application was still being determined, the Defendant commenced action in the High Court in HC/S 218/2019 claiming inter alia for losses due to the contractual breaches committed by the Plaintiff in particular the cost incurred in having to engage another contractor to complete the Plaintiff’s scope of works.

The Adjudicator issued his Adjudication Determination dated 5 March 2019 wherein he identified two issues that he had to deal with, namely: whether the Defendant had provided a valid payment response under SOPA by way of its email dated 26 December 2018, and the amount of progress payment properly due to the Plaintiff (if any).

With regard to the first issue, the Adjudicator made the finding that the email sent by the Defendant on 26 December 2018 was not a valid payment response as required by the relevant provisions in SOPA and related regulations. The Defendant’s complaints with regard to the Sub-Contract Works carried out by the Plaintiff’s workers and its counterclaim were therefore not taken into consideration by the Adjudicator. On the second issue, the Adjudicator found that the Plaintiff had established a prima facie case for Payment Claim No. 16 and went on to determine that: the Defendant shall pay the Plaintiff the sum of $180,582.55 being the adjudicated amount of the determination; the date on which the adjudicated amount became due was 14 February 2019, and the Defendant shall pay interest on the adjudicated amount at the rate of 5.33% per annum from 15 February 2019 up to the date of full payment; the Defendant shall pay the adjudicated amount and interest to the Plaintiff within 7 days after the Adjudication Determination is served on the Defendant; and the costs of the Adjudication being the Adjudication Application Fee of S$642.00 (inclusive of 7% GST) and the Adjudicator Fee of $19,153.00 and disbursements of S$85.60 (both figures inclusive of 7% GST) shall be borne by the Defendant in full.

As the Adjudication Determination was served on the Defendant on 6 March 2019, the Defendant was obliged to make payment of the adjudicated amount with interest by 13 March 2019. Payment was not made as required which led to the Plaintiff filing an ex parte originating summons on 15 March 2019 for leave to enforce the Adjudication Determination in the same manner as a judgment or an order of the court to the same effect pursuant to s 27 of SOPA.

On 18 March 2019, the Court granted leave for enforcement of the Adjudication Determination as prayed for in the originating summons and entered judgment in the Plaintiff’s favour together with costs of the application fixed at $1,200. The Order of Court was extracted on 19 March 2019.

On 11 April 2019, the Defendant filed a summons (DC/SUM 1400/2019) seeking the following orders: the enforcement of the Order of Court be stayed permanently; alternatively to (1), that the enforcement of the Order of Court be stayed pending the disposal of the High Court action in HC/S 218/2019; alternatively to (1) and (2), that the Plaintiff be restrained from bringing winding up proceedings against the Defendant pending the disposal of the High Court action in HC/S 218/2019 or further order.

Although the summons was filed as an ex parte application, counsel for the Plaintiff had been notified to attend the hearing which was fixed before me on an urgent basis. After hearing the arguments from both parties, I dismissed the Defendant’s application with...