Assoland Construction Pte Ltd v Malayan Credit Properties Pte Ltd

• Jurisdiction: Singapore
• Judge: Goh Phai Cheng JC
• Judgment Date: 12 July 1993
• Neutral Citation: [1993] SGHC 161
• Date: 12 July 1993
• Subject Matter: Payments under interim certificates,Summary judgment,Whether extension of time validly given,Delay certificate issued,Set-off against the amounts due under interim certificates,Effect of implied undertaking on defendants' rights under the contract,Building and construction contracts,Application for summary judgment,Sham defence,Use of standard form contract,Building and Construction Law,Architect granted extension of time after the works were practically completed,Whether defendants had defence of set-off,Civil Procedure
• Docket Number: Suit No 271 of 1993
• Published date: 19 September 2003
• Defendant Counsel: Woo Bih Li (Bih Li & Lee)
• Court: High Court (Singapore)
• Plaintiff Counsel: Lim Chung Wei (Boey Ng & Wan)

The background

The plaintiffs are building contractors. The defendants are the owners of a building. On 14 November 1990 the parties executed a formal agreement whereby the plaintiffs undertook the works for the construction and completion of a 12-storey building with a basement at Ardmore Park. The agreement was in the form of the 1987 revised version of the standard form of contract of the Singapore Institute of Architects. Forming part of and attached to the agreement are, inter alia, the conditions of contract (`conditions of contract`) and an appendix. In this judgment, unless the context otherwise requires, a reference to a cl by number is a reference to a cl by the same number in the conditions of contract.

Under the contract, the scheduled completion date for the works was 19 September 1991. The works were not completed by that date.

On the following dates the plaintiffs submitted to the architect of the project (`the architect`) claims for extensions of time to complete the works pursuant to cl 23(1):

Date No of days sought Revised completion date 15 October 1991 174.5 days 11 March 1992 19 September 1991 343.8 days 27 August 1992 27 March 1992 450 days 13 December 1992

In addition to the above claims for extensions of time, the plaintiffs notified the architect in writing, pursuant to cl 23(2), of the events, directions or instructions which the plaintiffs relied on for their claim to be entitled to extensions of time under cl 23(1). A curious feature in the present case is that the architect failed to comply with cl 23(2) which requires him to inform the plaintiffs of his decision within one month of the plaintiffs` notification of the particular event, instruction or direction which formed the basis of the extension of time. All of sudden on 4 November 1992, the architect issued a `delay certificate` pursuant to cl 24(1) stating, inter alia, that the time for the completion of the works was extended for a total of 218 days and accordingly the latest date for the completion of the works was 24 April 1992. I shall revert to the `delay certificate` later.

On 20 July 1992 the architect wrote to the developers stating, inter alia, that:

(a) the date of completion was extended to 31 January 1992 and the `delay certificate` will be issued thereafter; and

(b) the date of practical completion will be 1 July 1992.

On 31 July 1992 the architect issued a certificate of completion certifying that the works were practically completed on 1 July 1992.

Monthly interim payment certificates (`interim certificates`) were issued by the architect under cl 31(1) for payment to the plaintiffs of the sums stated in those certificates and the plaintiffs were entitled to be paid those sums by the defendants within 14 days of the receipt of the interim certificates.

The architect had issued interim certificates Nos 23 and 24 on the following dates for the following amounts:

Date Interim certificate Amount 15 July 1992 No 23 $309,160 11 August 1992 No 24 $170,860

Total

$480,020

Those interim certificates were not paid by the defendants within the period named in the contract for honouring interim certificates.

Subsequently, the architect also issued two other interim certificates, namely:

(a) interim certificate No 23R dated 15 July 1992 consisting of one page, the contents of which are essentially the same as that of the first page of interim certificate No 23; and

(b) interim certificate No 24R dated 11 August 1992 also consisting of one page, the contents of which are also essentially the same as that of the first page of interim certificate No 24.

No payment was made to the plaintiffs under interim certificate Nos 23R and 24R.

On 16 October 1992, the representatives of the plaintiffs and the defendants together with the architect met with a view to resolving the settlement of the outstanding sums owing by the defendants to the plaintiffs under the contract. An agreement was reached by the parties that:

(a) the architect`s interim certificate Nos 23R and 24R would be withdrawn;

(b) the architect would issue a new interim certificate No 23A dated 16 October 1992 to the defendants for the amount of $480,020;

(c) the plaintiffs would forward a letter agreeing to the withdrawal of interim certificate Nos 23R and 24R and thus there will be no interest due for late payment of the sums stated in those certificates; and

(d) the defendants would release payment within two weeks from the date of new interim certificate No 23A.

An interim certificate No 23A dated 16 October 1992 for the amount of $480,020 was duly issued by the architect.

On 20 October 1992 the plaintiffs wrote to the defendants stating that they will not claim `any interest in respect of interim certificate No 23A providing (sic) payment for the certificate which amounts to $480,020 is received by us before 30 October 1992`. The plaintiffs further confirmed that interim certificate Nos 23R and 24R should be withdrawn and that they will not claim any interest in respect of the sums stated in those two certificates.

On 4 November 1992 the plaintiffs received a cheque for $280,000 from the defendants being payment for interim certificate No 23A. On the same day, the plaintiffs wrote to the defendants stating that the payment of the said sum did not constitute a discharge for interim certificate No 23A and informing them that unless the difference was paid within seven days thereof action will be taken against the defendants.

On 4 November 1992 the architect also issued a `delay certificate` under cl 24(1) and it states:

Pursuant to cl 24(1) of the conditions of contract, I hereby certify that the contract completion date (as revised in my revision certificate dated ... ) was 19 September 1991; that pursuant to cl 23 of the conditions I have further extended the time for completion for a total of two hundred and eighteen (218) days; that no grounds exist for any further extension of time to the [plaintiffs]; that accordingly the latest date for completion of the works pursuant to cl 22(1) of the conditions is 24 April 1992 and that the [plaintiffs] is and has been in default in not having completed the works by this latest date now certified by me.

In this action the plaintiffs claimed (a) the sum of $200,020 which was due and owing to them being the balance of the said sum of $480,020; (b) interest on the sum of $200,020; and (c) costs.

The plaintiffs applied for summary judgment. The defendants applied for a stay of proceedings pursuant to s 7 of the Arbitration Act (Cap 10) on the ground that the conditions of contract contained an agreement to arbitrate the matters in respect of which the action was brought. The two applications were heard by the assistant registrar on 29 March 1993 and he decided that the defendants should be given unconditional leave to defend and that these proceedings should be stayed pending arbitration.

Against this order the plaintiffs appealed. The parties agreed that the outcome of the appeal on the stay of proceedings should be determined by the outcome of the appeal on the plaintiffs` application for summary judgment. I heard the plaintiffs` appeals on 18 May 1993 and decided on 22 May 1993 to allow the appeals; and accordingly gave the plaintiffs judgment for the balance of their claim of $200,020 together with interest at 8% pa from 9 February 1993 to the date of judgment with no stay of the proceedings.

The defendants have appealed against my decision. I now give my reasons.

The issues

(a) The plaintiffs` cause of action

Before the assistant registrar, the defendants contended that...