AM Associates (Singapore) Pte Ltd v Laguna National Golf and Country Club Ltd

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 23 November 2009
• Neutral Citation: [2009] SGHC 260
• Court: High Court (Singapore)
• Year: 2009
• Citation: [2009] SGHC 260
• Plaintiff Counsel: Ng Yuen (Malkin & Maxwell LLP)
• Defendant Counsel: Lim Lian Kee (Chong Chia & Lim LLC)
• Subject Matter: Building and Construction Law
• Published date: 25 November 2009

23 November 2009

Judith Prakash J:

Introduction

1 This registrar’s appeal came before me as a result of the refusal of the Assistant Registrar to set aside a judgment entered by A.M. Associates (Singapore) Pte Ltd (“AMA”), the plaintiff herein, against Laguna National Golf and Country Club Ltd (“Laguna”), the defendant herein, under s 27(2) of the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) (“the SOP Act”). I dismissed Laguna’s appeal and Laguna now wishes to take its case to the Court of Appeal.

2 The background to the dispute is as follows. In July 2008, Laguna employed AMA to undertake certain project management work in relation to a construction project. On 15 January 2009, AMA served its Payment Claim No 1 (“Payment Claim 1”) on Laguna. Payment Claim 1 was in respect of the work period from July 2008 to 2 December 2008. The contract between the parties provided for stage payments and Payment Claim 1 covered three stages viz Stage 1 (upon approval of concept design), Stage 2 (WP submission) and Stage 3 (URA approval of WP submission). The total amount stated in Payment Claim 1was $1,027,000.

3 Under the terms of the SOP Act, Laguna should have issued a payment response to relation to Payment Claim 1 by 22 January 2009. No such payment response was made and on 5 February 2009, AMA served on Laguna a notice of intention to apply for adjudication. This application was duly made on 6 February 2009 and on 13 February 2009, the Singapore Mediation Centre (“SMC”) nominated Mr Chow Kok Fong to be the adjudicator (“the Adjudicator”). The Adjudicator accepted the nomination on the same day. On 16 February 2009, Laguna lodged an Adjudication Response with the SMC.

4 The Adjudicator convened an adjudication conference on 23 February 2009. This was attended by representatives of both parties and their respective counsel. Following the conclusion of the adjudication conference, the Adjudicator directed the parties that if they wished to make any further points, such submissions had to be filed no later than 5pm on 24 February 2009. The next day, both parties did file supporting documents and comments. The Adjudicator issued his Adjudication Determination on 2 March 2009. He determined (inter alia) that Laguna was to pay AMA the sum of $1,027,000 inclusive of GST (the Adjudicated Amount) by 9 March 2009.

5 Laguna was not satisfied with the Adjudication Determination. It did not, however, make an application for an adjudication review. Nor did it pay the Adjudicated Amount or any part of the same. Accordingly, on 12 March 2009, AMA filed the originating summons herein for leave to enforce the Adjudication Determination against Laguna and for judgment to be entered in its favour for the Adjudicated Amount with interest and costs. On 16 March 2009, AMA obtained an order in terms of its summons. Laguna’s application to set aside the Adjudication Determination and the judgment was filed about three weeks later.

The Adjudication Determination

6 The Adjudication Determination is a fairly detailed document (consisting of some 34 pages of text) in which the Adjudicator sets out the reasons for his determination. I will summarise the main points of the Adjudication Determination.

7 First, the Adjudicator dealt with the four jurisdictional grounds on which Laguna had challenged the Adjudication Application. These were as follows:

(a) that the Adjudication Application had been served on the wrong party;

(b) that Payment Claim 1 was not a payment claim for a progress payment under s 10 of the SOP Act;

(c) that the Adjudication Application had been made out of time; and

(d) that a claim relating to project management services in the manner that was defined in the contract between the parties did not fall within the purview of the SOP Act.

8 In relation to the first challenge, Laguna submitted that the subject contract had been made between AMA and an entity named Laguna Golf Resort Holding Pte Ltd and not between AMA and Laguna. The Adjudicator discussed the submissions, the law and the facts in paragraphs 21 to 31 of the Adjudication Determination and concluded that on the basis of both the construction of the SOP Act and the conduct of the parties, AMA was entitled to deal with Laguna for the purpose of the project and that it would have been inexplicable had AMA served Payment Claim 1 on any other entity.

9 In paragraphs 34 to 42 of the Adjudication Determination, the Adjudicator dealt with the contention that Payment Claim 1 was not a payment claim for progress payment under s 10 of the SOP Act. The argument was advanced on two grounds. The first was that Payment Claim 1 was not served on the person who was liable to make payment under the contract. This argument had been dealt with in relation to the first challenge. The second ground was that s 10(1) of the SOP Act entitled a claimant to serve only one payment claim in respect of a particular progress payment entitlement in a contract. Laguna submitted that Payment Claim 1 was a payment claim made in respect of progress payments for stages 1, 2 and 3 of the consulting work and this was identical to three earlier payment claims which AMA had made. In dealing with this point, the Adjudicator discussed the Australian cases of Doolan (Sandra & Stephen) v Rubikcon [2007] Adj LR 07/10 (“Doolan”) and Brodyn Pty Ltd v Davenport [2004] 61 NSWLR 421 (“Brodyn”) and also went into the facts of the Adjudication Application. He concluded that Payment Claim 1 could not be said to be a mere repetition of the earlier claims and that unlike Doolan, this was not a situation where the claimant reissued the claim because it had failed before a prior adjudicator. He therefore determined that Laguna’s challenge to the Adjudication Application on this ground failed.

10 The Adjudicator also mentioned that AMA had offered an alternative argument against this aspect of Laguna’s challenge. It had suggested that an invoice was a different instrument from a payment claim for the purpose of the SOP Act. The Adjudicator did not find it necessary to decide on the merits of this argument since he had already made his decision on the validity of Payment Claim 1.

11 The third challenge, ie that the Adjudication Application had been made out of time, was rejected since the validity of Payment Claim 1 had been upheld. Payment Claim 1 was made on 15 January 2009 and by virtue of s 11(1) of the SOP Act, the due date for making the payment response was therefore 22 January 2009. The dispute resolution period for the purpose of s 12(2) expired on 31 January 2009. Accordingly, the Adjudication Application had to be served not later than seven days after this date, that is to say 7 February 2009. Since AMA lodged the Adjudication Application on 6 February 2009, the Adjudicator ruled that it was not served out of time.

12 The final challenge involved construing s 3 of the SOP Act to ascertain whether the services provided by AMA to Laguna pursuant to the contract fell outside the purview of the SOP Act. The Adjudicator did not accept Laguna’s submissions on this point. He found that its challenge was unsustainable on the basis of a proper reading of s 3 and the scope of services as set out in the contract between the parties.

13 The Adjudicator then turned to the substantive issues surrounding the claim in the Adjudication Application. He noted that Laguna had not furnished the payment response by 22 January 2009, the deadline for such response in the circumstances of this case. He then considered AMA’s contention that having failed to furnish the payment response, by virtue of s 15(3) of the SOP Act, Laguna was not entitled to advance any reason for withholding payment in the Adjudication Response. Having considered the arguments and cases cited to him, the Adjudicator concluded that:

(a) first, in a s 15(3) situation, an adjudicator would be precluded from considering any reasons which the respondent may advance beyond matters of jurisdiction and procedural regularity; and

(b) second, the adjudicator would then have to ensure that (i) the adjudication process was not abused, (ii) there were no manifest flaws in the payment claim and (iii) the adjudication application complied with the SOP Act and the provisions of the underlying contract.

14 The Adjudicator found that he was precluded from considering the material and representations made by Laguna in support of its attempt to justify the withholding of the claimed amount since it had not filed a payment response. He then went on to consider the contract and whether the circumstances of the case entitled AMA to make a payment claim for progress claim. He found that it did and that the requirements set out in [13(b)] above had been met. He was satisfied that AMA’s claim should be accepted at its face value and that it was entitled to receive $1,027,000 from Laguna.

The court proceedings to set aside the Adjudication Determination and the judgment

15 According to the affidavit of Peter Kwee Seng Chio filed in support of Laguna’s application to set aside the judgment obtained by AMA and the Adjudication Determination, the grounds of the application were as follows:

(a) Laguna was not the person who was liable to make payment to AMA under the contract;

(b) the SOP Act only empowered the Adjudicator to determine the Adjudicated Amount, the date of payment, the interest and the costs and did not empower him to determine any question of law;

(c) the Adjudicator had no jurisdiction to adjudicate on the Adjudication Application as there was no valid payment claim; and

(d) the Adjudicator had failed to comply with the rules of natural justice because in coming to the...