Anwar Siraj & Another v Teo Hee Lai Building Construction Pte Ltd

JurisdictionSingapore
CourtCourt of Three Judges (Singapore)
JudgeChao Hick Tin JA
Judgment Date25 November 2002
Neutral Citation[2002] SGCA 51
Citation[2002] SGCA 51
Date25 November 2002
Plaintiff CounselG Raman and V Suriamurthi (G Raman & Partners)
Published date19 September 2003
Defendant CounselS Thulasidas (Ling Das & Partners)
Docket NumberCivil Appeal No 53 of 2002
Subject MatterBuilding contract,Setting aside interim injunction restraining call on performance bond,Whether call on performance bond unconscionable,Banking,Performance bonds

Judgment

GROUNDS OF DECISION

1 The appellants, Mr Anwar Siraj and Madam Norma Khoo Cheng Neo, engaged the respondent building contractors, Teo Hee Lai Building Construction Pte Ltd ("THL"), to construct a house for them. They lodged this appeal in order to set aside an injunction restraining them from making a demand under a performance bond issued by Tai Ping Insurance in their favour pursuant to the terms of the building contract. We allowed the appeal and now give the reasons for our decision.

Background

2. The appellants, the owners of No 2 Siglap Valley, entered into a contract with THL on 30 December 1999 for the demolition of the house then standing on the property and the construction of a new house. The cost of the construction work was $1,200,000 and the agreed date for the completion of the new house was 9 January 2001.

3. THL was required by the building contract to procure a performance bond in the appellants’ favour for 10% of the cost of construction. As such, they arranged for Tai Ping Insurance Co ("Tai Ping") to furnish a performance bond for the sum of $120,000 on 12 January 2001. The bond provided that the insurance company would pay the appellants the sum of $120,000 "unconditionally and immediately on demand and without any reference to the contractor and notwithstanding any dispute or difference which may have arisen under or in connection with the contract".

4. The construction of the house was not completed by 9 January 2001 and the house was handed over to the appellants on 5 April 2001. As such, liquidated damages at the rate of $1,000 per day was payable by THL to the appellants. At the date of handing over of the house, a number of defects listed by the appellants’ architect, Mr Tan Hock Beng of Maps Design Studio, had not been rectified. The architect then wrote to THL to request for an undertaking that the latter would rectify all the stated defects.

5. THL complained that that they were denied access to the appellants’ premises to carry out the rectification work. In August 2001, they gave the appellants notice of arbitration. THL said that they would bear the cost of rectification work pending the arbitrator’s finding as to who should be responsible for the cost.

6. On 20 September 2001, the appellants, who contended that THL breached their contractual obligation to rectify the defects noted by the architect, made a demand under the performance bond for $120,000. When Tai Ping did not pay the amount claimed, the appellants issued a writ against them. THL then sought an interim injunction to restrain the appellants from obtaining any payment from Tai Ping under the performance bond. An ex-parte interim injunction was granted by the District Court but it was set aside on 14 January 2002. THL appealed to the High Court and persuaded the judicial commissioner who heard the appeal to restore the interim injunction. The appellants sought and obtained leave to appeal to...

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8 cases
  • BS Mount Sophia Pte Ltd v Join-Aim Pte Ltd
    • Singapore
    • Court of Three Judges (Singapore)
    • 9 May 2012
    ...in a building contract (see, eg, the decisions of this court in Anwar Siraj and another v Teo Hee Lai Building Construction Pte Ltd [2003] 1 SLR(R) 394 at [16] and Eltraco International Pte Ltd v CGH Development Pte Ltd [2000] 3 SLR(R) 198 (“Eltraco”) at [30]). The bid price or other terms ......
  • CEX v CEY and another
    • Singapore
    • High Court (Singapore)
    • 18 May 2020
    ...overtly technical analysis at this stage of the proceedings: Anwar Siraj and another v Teo Hee Lai Building Construction Pte Ltd [2003] 1 SLR(R) 394 at [14] (“Anwar Siraj”). In Anwar Siraj, the obligor argued that the architect’s designs had been defective to begin with and any breaches com......
  • MCC OVERSEAS (M) SDN BHD vs MALAYAN BANKING BERHAD, 05-17-2021
    • Malaysia
    • High Court (Malaysia)
    • 17 May 2021
    ...Sugar and Food Industries Corp [1998] 2 All ER 406 (CA) and Anwar Siraj and another v Teoh Hee Lai Building Construction Pte Ltd [2003] 1 SLR 394. In addition, DC contended that there is no over-securitization contrary to that alleged by MCCO but as a matter of fact, it was instead MCCO tha......
  • CKR Contract Services Pte Ltd v Asplenium Land Pte Ltd and another
    • Singapore
    • High Court (Singapore)
    • 18 December 2014
    ...Join-Aim Pte Ltd [2012] 3 SLR 352 (“BS Mount Sophia v Join-Aim”); Anwar Siraj and another v Teo Hee Lai Building Construction Pte Ltd [2003] 1 SLR(R) 394; Eltraco International Pte Ltd v CGH Development Pte Ltd [2000] 3 SLR(R) 198 (“Eltraco v CGH Development”)). Therefore, in my judgment, c......
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