Admin Construction Pte Ltd v Vivaldi (S) Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 03 May 2013
• Date: 03 May 2013
• Docket Number: Originating Summons No 165 of 2012
• Court: High Court (Singapore)

Admin Construction Pte Ltd

Plaintiff

and

Vivaldi (S) Pte Ltd

Defendant

[2013] SGHC 95

Quentin Loh J

Originating Summons No 165 of 2012

High Court

Building and Construction Law—Dispute resolution—Adjudication—Settlement agreements—Whether settlement agreement extinguished all claims between parties—Whether there was any dispute capable of being referred to adjudication under Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed)—Whether payment claim was invalid under Building and Construction Industry Security of Payment Act—Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed)

The plaintiff, the main contractor for a residential construction project, subcontracted certain aluminium glazing and associated metal works to the defendant. A dispute broke out as to whether the work was done to specifications. The parties apparently agreed to settle their dispute and that the defendant's liability for rectification costs was to be set off against its entitlement to payment for work done, resulting in a full and final settlement sum of $176,840.83 due to the defendant. Accordingly, on 31 January 2011, a cheque for that sum was given that same day to a director of the defendant who acknowledged the payment and signed a letter of acceptance evidencing the settlement agreement.

Subsequently, the defendant allegedly in breach of the settlement agreement made three payment claims under the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) (‘the Act’) against the plaintiff for work done under the subcontract. The claims were dated respectively 15 February 2011 (‘the First PC’), 12 October 2011 (‘the Second PC’) and 24 November 2011 (‘the Third PC’), and all three bore the same claim number, 2744. Only the Third PC proceeded to adjudication.

The adjudicator found that the First PC was not a payment claim within the meaning of the Act. He also found that because the plaintiff had sent a payment response to the Third PC out of time, he was not permitted under s 15 (3) (a) of the Act to consider the settlement agreement. Accordingly he ruled in favour of the defendant and awarded it the sum of $326,614.29 (including goods and services tax) under the Third PC as well as costs and interest from 18 January 2012.

The plaintiff applied to set aside the adjudicator's determination on the basis that as the parties had settled their dispute by way of the settlement agreement, there was no claim capable of adjudication. Therefore the adjudicator had no jurisdiction to make his determination. The plaintiff also contended that the Third PC was not a valid payment claim under the Act because it was not stated to be a payment claim under the Act, had been served out of time and was a repeat claim that was identical to the Second PC.

Held, allowing the application:

(1) The defendant claimed that the settlement agreement was induced by misrepresentation but even then the agreement was voidable, not void ab initio, and remained in force until set aside. Since the defendant had not taken any steps to set aside the settlement agreement, the agreement ex facie extinguished all disputes between the parties that existed on or before 31 January 2011. There was therefore no dispute in relation to the Third PC capable of being referred to adjudication so the defendant had no right to apply for adjudication in relation to the Third PC under the subcontract. The adjudicator therefore had no jurisdiction to deal with the defendant's adjudication application and the determination rendered was therefore set aside: at [25], [31] and [32].

(2) The Act did not require a payment claim to state that it was made under the Act. The absence of such a statement could not make it any less a payment claim if it otherwise satisfied all the formal requirements in s 10 (3) (a) of the Act and reg 5 (2) of the Building and Construction Industry Security of Payment Regulations (Cap 30B, Rg 1, 2006 Rev Ed) (‘SOPR’). Thus the plaintiff's claim that the Third PC was invalid because it was not stated to be a payment claim under the Act failed: at [35].

(3) The mandatory language of reg 5 (1) of the SOPR, read with s 10 (1) of the Act, had the effect of imposing a maximum frequency of one payment claim per month. On this basis, the Third PC was not invalid for being served out of time: at [37] and [38].

(4) Any payment claim or claims, even if ’repeated’ in more than one payment claim, could only be the subject, on the merits, of one adjudication. The Second PC and Third PC were identical and repeat claims but this was permitted subject to the stipulation as to maximum frequency unless the earlier claim had been adjudicated upon. As the Second PC was not adjudicated upon the Third PC was not invalid on this basis: at [47], [52] and [55].

(5) The defendant was not estopped from raising the issue of the Third PC being a repeat claim on the basis that it had ample opportunity to do so at the adjudication conference below but failed to do so. The issue amounted to a challenge to the validity of the appointment of the adjudicator and could only be raised to a court and not the adjudicator himself to decide. Therefore no estoppel could have arisen: at [57] and [60].

[Observation: One issue perhaps for legislative review was whether it was permissible for a party to issue a payment claim long after works had been completed and the contract or subcontract had ended. In certain cases this could amount to abuse of process. The adjudication process was perhaps not a suitable procedure, with its time pressures, especially on the adjudicator, to decide complex and detailed building and construction disputes, which were notorious for their involved and detailed documentation and evidence. On the other hand, a downstream party who was delayed from making a claim by rounds of negotiation in good faith should not be disentitled from bringing his claims to adjudication. The courts should not be left to develop a doctrine of ‘reasonable time’ within which a claimant was entitled to apply for adjudication: at [40], [42] and [44].

‘Repeat claim’ is a term of art used in the industry which has passed into the lexicon of the courts but is not defined within the Act and some thought should be given to this, particularly as there is a possibility that some claimants may abuse repeat claims: at [48] and [51].

Some thought should also be given to how to deal with challenges to an adjudicator's jurisdiction as the present arrangements whereby such challenges were to be raised with the court and not the adjudicator were not entirely satisfactory. The timelines under the Act were tight enough without having to add a layer to court proceedings on to adjudication proceedings. Some thought could be given to having challenges to adjudication determinations heard in the first instance by assistant registrars as that would add another layer of appeal but this could also cause undue delay where there had been a stay of payment out to the claimant. There was also a question whether there should be a statutory estoppel so that a respondent could not raise a jurisdictional challenge to a court unless it was also made in its payment response: at [61] and [65].]

Australian Timber Products Pte Ltd v A Pacific Construction & Development Pte Ltd [2013] 2 SLR 776 (refd)

Bristol and West Building Society v Mothew [1998] Ch 1 (folld)

Brookhollow Pty Ltd v R&R Consultants Pty Ltd [2006] NSWSC 1 (refd)

Chua Say Eng v Lee Wee Lick Terence [2011] SGHC 109 (refd)

JFC Builders Pte Ltd v Lion City Construction Co Pte Ltd [2013] 1 SLR 1157 (refd)

Lee Wee Lick Terence v Chua Say Eng [2013] 1 SLR 401 (folld)

RN & Associates Pte Ltd v TPX Builders Pte Ltd [2013] 1 SLR 848 (refd)

Shepherd Construction Ltd v Mecright Ltd [2000] BLR 489 (folld)

Sungdo Engineering & Construction (S) Pte Ltd v Italcor Pte Ltd [2010] 3 SLR 459 (refd)

Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) s 12 (consd) ; ss 5, 10 (1) , 10 (2) , 10 (3) (a) , 10 (4) , 15 (3) (a) , 16 (7)

Building and Construction Industry Security of Payment Regulations (Cap 30B, Rg 1, 2006 Rev Ed) regs 5 (1) , 5 (2)

Limitation Act (Cap 163, 1996 Rev Ed)

Building and Construction Industry Payments Act 2004 (Qld) s 17 (4) (b)

Building and Construction Industry Security of Payment Act 1999 (Act 46 of 1999) (NSW) ss 13 (4) (b) , 13 (5)

Housing Grants, Construction and Regeneration Act 1996 (c 53) (UK) s 108 (1)

S Magintharan and Liew Boon Kwee James (Essex LLC), Raymond Ng Yong Ern (Tan Lay Keng & Co) for the plaintiff

Xhuanelado Owen (Kalco Law LLC) for the defendant.

Judgment reserved.

Quentin Loh J

The facts

1 The plaintiff, Admin Construction Pte Ltd (‘Admin Construction’), was the main contractor for the construction of a 21-storey, 102-unit block of residential flats at Akyab Road (‘the Project’). The defendant, Vivaldi (S) Pte Ltd (‘Vivaldi’), was Admin Construction's subcontractor for the aluminium glazing and associated metal works for the Project.

2 In these proceedings, Admin Construction seeks to set aside an adjudication determination for a sum of $326,614.29, interest and costs, in favour of Vivaldi under the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) (‘the Act’).

3 The parties entered into a written subcontract dated 24 July 2009 (‘the subcontract’), for Vivaldi to undertake the design, supply and installation of aluminium, glazing and metal works for the Project, with a 15-month maintenance period and a warranty of its works for ten years for a lump sum of $1,600,000. Clause 12 of the subcontract provided that the subcontract works were to commence on 24 July 2009 and were to be completed by 25 September 2010. Clause 14 (1) provided that Vivaldi should submit their payment claim for the relevant period ‘before the 26^thday...