Airnovation Engineering Pte Ltd v Orange Global Pte Ltd

• Jurisdiction: Singapore
• Judge: Vince Gui
• Judgment Date: 05 July 2023
• Neutral Citation: [2023] SGDC 127
• Court: District Court (Singapore)
• Docket Number: District Court Suit No. 2458 of 2021, District Court Appeal No. 19 of 2023
• Hearing Date: 13 June 2023,09 May 2023,03 March 2023,24 March 2023
• Citation: [2023] SGDC 127
• Year: 2023
• Plaintiff Counsel: Yip Shee Yin and Khoo Meixin Clarisse (Ascentsia Law Corporation)
• Defendant Counsel: Ong Kok Seng Patrick and Yang Liyuan Ian (Patrick Ong LLC)
• Subject Matter: Restitution,Quantum Meruit,Building and Construction Law,Contractors' duties,Defects
• Published date: 18 July 2023

District Judge Vince Gui: Introduction

The Plaintiff sued the Defendant for payment of construction works carried out by the Plaintiff. The Defendant accepted that the works were carried out, but refused payment because it did not agree to the invoice sum.

The Defendant also counter-sued for defects in the Plaintiff’s works.

After hearing parties, I allowed the Plaintiff’s claim in part. I found that the Plaintiff was not entitled to claim the full invoice sum because there was no agreement for the Plaintiff to charge that amount. But as the Plaintiff did perform the work requested, I allowed the Plaintiff to recover an amount representing the reasonable value of the work done.

I also allowed the Defendant’s counterclaim. As the counterclaim exceeded the claim sum, the judgment sum was awarded in favour of the Defendant.

The Plaintiff has since filed an appeal against my decision. I now deliver my written grounds.

Background facts

The Defendant was the main contractor for a building and construction project at 3 Senoko Way (the “Project”).

The Defendant engaged the Plaintiff as a sub-contractor to supply and install polyisocyanurate sandwich panels for the Project.

On 30 September 2020, the Plaintiff issued a quotation to the Defendant for the said works in the sum of $320,688 (the “Original Quotation”).¹ The Plaintiff commenced works in early October 2020 in accordance with the Original Quotation. While the Original Quotation was not signed off by the Defendant, the Defendant had orally agreed to the terms thereunder.²

On 2 November 2020, the Defendant sent a letter of intent to the Plaintiff, formally appointing the Plaintiff as a subcontractor. The Plaintiff did not sign off the letter of intent because it did not agree to the terms and conditions proposed thereunder.³ Nevertheless, it was common ground that the Plaintiff performed the works under the Original Quotation.

The Original Quotation provided for 61 openings in the panel works. It was common ground that the Defendant performed an additional 162 openings pursuant to the Plaintiff’s request (the “Additional Openings”).⁴ The Defendant however was not agreeable to the Plaintiff’s price quotation for the Additional Openings.

The Plaintiff brought this claim to recover two unpaid invoices: an invoice issued for the outstanding payment under the Original Quotation in the sum of $35,136.15; and an invoice issued for the Additional Openings in the sum of $40,014.58.

The Defendant did not dispute the invoice in the sum of $35,136.15. The dispute was with the invoice issued for the Additional Openings. The Defendant’s case was that the invoice was not payable as it did not agree to the invoice sum, which in its view, was too expensive.

The Defendant also brought a counterclaim against the Plaintiff for defects in the works under the Original Quotation. The Defendant’s case was that the Plaintiff failed to rectify the defects despite being notified of the same on multiple occasions. The Defendant had notified the Plaintiff of the defects on 10 February 2021 and 6 April 2021. It gave the Plaintiff a final reminder on 6 August 2021 to rectify the defects, failing which it would engage third party contractors to do the same. As rectification works were not forthcoming, the Defendant engaged Pentas Services Contractor (“Pentas”) to rectify the defects. The Defendant sought to recover the rectification cost paid to Pentas in the sum of $176,121.40.

Parties’ pleaded case and submissions Additional Openings

The Plaintiff’s pleaded case was simply that it was entitled to the invoice sum.⁵

The Defendant’s pleaded case was that the Plaintiff was not entitled to charge the prices in its invoice because it had not agreed to the same.⁶

The Defendant argued that the Plaintiff’s claim should be dismissed since its own witness admitted that there was no agreement reached on the prices of the Additional Openings.⁷ The Defendant further argued that the Plaintiff did not plead quantum meruit,⁸ but in the event the court decides to allow the Plaintiff’s claim on quantum meruit, it should recover no more than the prices proposed by the Defendant, since the Plaintiff failed to lead objective evidence on the reasonable value of the Additional Openings.⁹

Defects in the Plaintiff’s works

The Defendant pleaded that the Plaintiff should be liable for the cost of rectifying the defects in their works. The Plaintiff failed to rectify the defects despite various reminders. The Defendant paid $176,121.40 to a third party contractor to rectify the defects.

The Plaintiff pleaded that the “rectification works was hindered by the Defendant’s conduct [in furnishing the list of defects on 6 April 2021], and not because the Plaintiff refused to carry out the rectification works.”¹⁰

The Plaintiff did not advance its case after trial

I should also highlight that I have summarised the Plaintiff’s case by reference to its pleadings and not written closing submissions because the Plaintiff did not advance closing submissions after trial. In this regard: It did not file written submissions by the prescribed deadline of 8 May 2023. The Defendant’s solicitors wrote to apprise the court of this on 16 May 2023. As substantial time had passed after the deadline, I proceeded to deliberate the matter by reference to the available materials, and on 7 June 2023, informed parties that I would be delivering my decision on 13 June 2023. It was only on 13 June 2023 when I opened the case file that I discovered the Plaintiff had, without leave, filed a document titled “written submissions” on 9 June 2023. At the hearing on 13 June 2023, I informed counsel for the Plaintiff that the written submissions were filed out of time. Counsel for the Plaintiff did not seek leave to file written submissions. In any event, the Plaintiff’s written submissions did not advance the Plaintiff’s case. It was a three-page document purporting to set out the agreed facts of the case. It did not purport to advance arguments or seek to rationalise how the evidence supports its case. In fact, the contents of the “written submissions” mirrored the Plaintiff’s opening statement filed before trial. It appears that the Plaintiff had simply changed the title of the opening statement to read “closing submissions” and re-filed that document right before the decision hearing.

As such, I assessed the Plaintiff’s position by reference to my understanding of its pleaded case and its evidence.

The Plaintiff’s claim for Additional Openings

I first discuss the Plaintiff’s claim in respect of the Additional Openings. It was not disputed that the Plaintiff did perform the Additional Openings. The dispute was on the valuation of the work done.

The Plaintiff’s managing director, Mr Chai Ying Kiong (“Mr Chai”) testified at trial that there was no contract between the parties in respect of the Additional Openings.¹¹ Parties were still negotiating on the price. The Defendant did not agree to the Plaintiff’s price quotations as it found them to be overpriced. Mr Chai explained that he nevertheless proceeded to perform the Additional Openings without an agreement on the price.

It was also clear from the evidence and undisputed that the Original Quotation did not provide for the prices of the Additional Openings. In the Original Quotation, the Plaintiff quoted $150 per unit for 61 openings of “size less than 100mm”. The Additional Openings were of different sizes, namely, between 0.01m2 to 0.1m2.

The prices proposed by the Plaintiff for the Additional Openings far exceeded the price under the Original Quotation. They range from $150-$900 per opening, depending on the size.¹² Specifically, for openings less than 0.1m2, the Plaintiff proposed charging a minimum rate of $300.¹³ The prices proposed by the Defendant range from $150-$242.¹⁴

In short, parties were seeking to enter into a variation contract for the Additional Openings. But no agreement was reached on the price. Parties were at divergence on the price which they considered to be fair and reasonable. The Plaintiff did the works in anticipation that parties would reach an agreement. But at the same time, the Plaintiff performed the works knowing full well that there was no agreement on the prices and the Defendant could well not agree to its prices.

In these circumstances, the Plaintiff was not entitled to proceed based on its own price quotations.

But since the Plaintiff did perform the Additional Openings which the Defendant had asked for and accepted, the Plaintiff should have a claim in quantum meruit. A claim in quantum meruit seeks to recover an amount representing the reasonable value of the work done by the claimant.

The facts of the present case are similar to that in British Steel Corp v Cleveland Bridge Engineering Co Ltd [1984] 1 All ER 504 (“British Steel Corp”). In British Steel Corp, the claimant was approached by the defendants to produce cast-steel nodes for a project. The defendants requested the claimants to commence work pending a formal agreement. As it turned out however, parties were unable to agree on the prices and specifications of the nodes. The claimant went ahead with the manufacture and delivered the nodes. As the defendants refused to make payment, the claimant sued, claiming that they were entitled to a reasonable sum for the nodes on quantum meruit. Goff J allowed the claim, explaining that, if contrary to parties’ expectations a contract was not entered into, then the performance of the work is not referrable to any contractual terms. Instead, the law imposes an obligation on the party who made the request to pay a “reasonable sum” for such work as has been done pursuant to that request (at 511).

British Steel Corp was cited approvingly by the Court of Appeal in Foo Song Mee v Ho Kiau Seng [2011] SGCA 45 at [15]. The Court of Appeal went on to...