Australian Timber Products Pte Ltd v APacific Construction & Development Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 01 March 2013
• Date: 01 March 2013
• Docket Number: Originating Summons No 210 of 2012 (Summons No 1633 of 2012)
• Court: High Court (Singapore)

Australian Timber Products Pte Ltd

Plaintiff

and

APacific Construction & Development Pte Ltd

Defendant

[2013] SGHC 56

Woo Bih Li J

Originating Summons No 210 of 2012 (Summons No 1633 of 2012)

High Court

Building and Construction Law—Statutes and regulations—Adjudication determination made under Building and Construction Industry Security of Payment Act (Cap 30 B, 2006 Rev Ed)—Whether determination to be set aside for invalidity of payment claim—Building and Construction Industry Security of Payment Act (Cap 30 B, 2006 Rev Ed)

There was a project to build some Housing and Development Board flats and facilities in Punggol West (‘the Project’). The defendant, A Pacific Construction & Development Pte Ltd (‘APCD’), had appointed the plaintiff, Australian Timber Products Pte Ltd (‘ATP’), to carry out the supply, delivery and installation of parquet flooring and timber skirting for the Project.

On 23 December 2011, ATP sent via registered mail, facsimile and e-mail what it stated to be ‘Progress Claim No. 9’ to APCD's representatives (‘Progress Claim No 9’). This was a claim for APCD to pay ATP a sum of $427,373.61. However, APCD did not make a payment response within the meaning of the Building and Construction Industry Security of Payment Act (Cap 30 B, 2006 Rev Ed) (‘the Act’). ATP therefore served a notice of intention to apply for adjudication on APCD on 16 January 2012. The next day, ATP served an adjudication application on APCD.

An adjudication hearing on 3 February 2012 was thereafter convened, where the adjudicator heard arguments from both parties. The adjudicator later issued an adjudication determination on 21 February 2012 (‘the Adjudication Determination’), where he found that Progress Claim No 9 was a valid ‘payment claim’ within the meaning of the Act. APCD was therefore to pay ATP the sum of $427,373.61, adjudication costs of $535, and the adjudicator's fee of $8,125 plus goods and services tax at 7%.

APCD did not pay these amounts to ATP, leading the latter to file Originating Summons No 210 of 2012 on 8 March 2012 to obtain leave of court to enforce the Adjudication Determination as a judgment debt. An assistant registrar granted ATP leave on 15 March 2012 (‘the AR's order’). APCD then applied on 2 April 2012 to set aside both the Adjudication Determination and the AR'sorder.

Held, dismissing the application:

(1) APCD's argument, that in order for a document to amount to a ‘payment claim’ under the Act it had to be intended to be such by the claimant and this intention had to be communicated to the respondent, must fail in view of the Court of Appeal's decision in Lee Wee Lick Terence v Chua Say Eng[2013] 1 SLR 401 (‘Chua Say Eng’): at [15] and [16] .

(2) There was no statutory imperative on the claimant to state expressly that he was making a claim for payment. The fact that Progress Claim No 9 was expressed to be for APCD's ‘perusal and evaluation’ was neither here nor there. This alone did not make Progress Claim No 9 any less a payment claim than the previous eight progress claims made by ATP: at [19] .

(3) While APCD argued that Progress Claim No 9 should have been addressed to Ms Julia Koh, the latter was but one of the persons on whom Progress Claim No 9 could be served. The wording in s 10 (1) of the Act was clear: a payment claim could be addressed to a person specified in the contract for this purpose (here, APCD's Quantity Surveyor) or to a person who was or might be liable to make the progress payment in question: at [21] and [23] .

(4) Pursuant to s 11 (3) (c) of the Act, any allegation by a respondent which would affect the determination of the adjudication amount (eg, that the claimant was double-claiming, that the contract price was unilaterally increased by the claimant, or that the work done was not something for which payment could be claimed under the contract) should be contained in a payment response. This appeared to be so central a pillar of the Act's adjudication mechanism that the adjudicator could not consider such allegations at all unless they were included in a payment response (s 15 (3) (a) of the Act). Given this statutory impetus on a respondent to raise his objections to the adjudication amount in a particular fashion and the serious consequences visited on the respondent for failing to do so, the court would not now intervene to consider APCD's protestations in this regard, whether presented as outright attacks on the validity of Progress Claim No 9 or more subtly disguised as objections to jurisdiction: at [25] and [26] .

(5) A purported payment claim satisfying 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 30 B, Rg 1, 2006 Rev Ed) (‘the SOPR’) was a valid payment claim. However, this did not mean that a purported payment claim which failed to meet some of these formal requirements was necessarily an invalid one. The two-step analysis therefore proceeded as follows. If a purported payment claim complied with s 10 (3) (a) of the Act and reg 5 (2) of the SOPR, it was a valid payment claim and no further question arose as to its validity, although an argument based on estoppel against the claimant could still be made. If, however, the purported payment claim did not comply with these statutory provisions, it was not necessarily rendered invalid and the adjudication determination was not automatically invalidated. The court should instead proceed to examine whether any of the provisions which were not complied with was so important that it was the legislative purpose that an act done in breach of the provision should be invalid, so that non-compliance with such a provision would invalidate the adjudication determination: at [29] and [30] .

(6) ATP's first preliminary argument was that because APCD did not object to the adjudicator regarding the lack of sufficient details of certain variation works for which payment was claimed in Progress Claim No 9, APCD was now estopped from raising that objection before the court. However, this argument was not persuasive given the holding in Chua Say Eng(at [64] )that there were only two matters properly within an adjudicator's remit: (a) to decide whether the adjudication application in question was made in accordance with ss 13 (3) (a)-13 (3) (c) of the Act; and (b) to determine the adjudication application under s 17 (2) of the Act. The formal validity of a payment claim under s 10 (3) of the Act was therefore not a matter on which an adjudicator was entitled to decide; and in this regard, it would be superfluous to raise for the adjudicator's consideration any objection to validity stemming from the lack of detail in a purported payment claim. No question of any estoppel could arise, given that the adjudicator could not decide on the point even if it was brought up for his consideration: at [33] and [36] .

(7) ATP's second preliminary argument was that APCD's objection to the lack of detail in Progress Claim No 9 was not made in a payment response. As to this argument, the views expressed in JFC Builders Pte Ltd v Lion City Construction Co Pte Ltd[2013] 1 SLR 1157 (at [35] - [41] ) showed that a respondent's failure to raise in a payment response his objections relating to the alleged invalidity of a payment claim did not necessarily preclude him from challenging the validity of that claim in a setting-aside action: at [38] .

(8) There was a further reason why the court at the setting-aside stage should ordinarily be entitled to review the validity of a payment claim, namely, that this was a matter which would potentially affect the jurisdictional substratum of an adjudication determination: at [41] .

(9) Applying the first step of the test, Progress Claim No 9 met the formal requirements in s 10 (3) (a) of the Act and regs 5 (2) (a), 5 (2) (b)and 5 (2) (c) (i)-5 (2) (c) (ii) of the SOPR, but it did not satisfy the requirements in reg s 5 (2) (c) (iii)-5 (2) (c) (iv) of the SOPR: at [71] .

(10) Proceeding to the second step of the test, in the circumstances of this case, regs 5 (2) (c) (iii)-5 (2) (c) (iv) of the SOPR were not so important that it was the legislative purpose that an act done in breach of these provisions should be invalid. Progress Claim No 9 was therefore not an invalid payment claim, and the Adjudication Determination could not be set aside on this ground: at [72] and [81] .

Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd (2010) 78 NSWLR 393 (refd)

Clarence Street Pty Ltd v Isis Projects Pty Ltd (2005) 64 NSWLR 448 (refd)

Coordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd [2005] NSWCA 229 (refd)

Gantley Pty Ltd v Phoenix International Group Pty Ltd [2010] VSC 106 (refd)

Hon Industries Pte Ltd v Wan Sheng Hao Construction Pte Ltd [2011] SGHC 247 (distd)

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

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

Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140 (refd)

Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (2005) 64 NSWLR 462 (refd)

Protectavale Pty Ltd v K2K Pty Ltd [2008] FCA 1248 (refd)

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

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

Building and Construction Industry Security of Payment Act (Cap 30 B, 2006 Rev Ed) ss 10 (1) , 10 (3) (a) , 11 (3) (a) , 11 (3) (c) , 15 (3) (a) , 17 (2) (a) (consd) ;ss 12 (4) (a) , 12 (5) , 13 (3) , 13 (3) (a) - (c) , 17, 17 (2)

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

Building and Construction Industry Security of Payment Act 1999 (Act 46 of 1999) (NSW) s 13 (2) , 13 (2) (a)

Building and Construction Industry Security of Payment Act 2002 (Act 15 of 2002) (Vic) ss 14, 14 (2) , 14...