Building and Construction Law
| Citation | (2021) 22 SAL Ann Rev 153 |
| Publication year | 2021 |
| Date | 01 December 2021 |
7.1 During the year under review, the COVID-19 pandemic continued to ravage the industry. Uncertainties persisted with the industry's myriad supply chains and labour resources, accentuated by the need to vary pandemic site movement control protocols to address changes in the dominant variants of the virus. Not surprisingly, the level of construction activity remained suppressed throughout much of 2021. In turn, this affected the volume of local construction cases and the number of adjudication applications during the year. Nevertheless, despite the low volume of cases, the judgments delivered during the year raised a number of interesting points. Regular readers of this segment of the review will appreciate, in particular, the careful exposition of the principles relating to variation instructions,1 extension of time, certification and the recognition of completion of a project.2
7.2 Where a contract provides for a variation to be ordered by way of a written instruction, a claimant will face formidable issues to mount a variation claim made on the basis of an oral instruction. In
7.3 The High Court held that Vim's variation claims failed because there were no written instructions from Deluge's project manager as required under the sub-subcontract. In the course of his decision, Andre Maniam JC (as he then was) cited with approval an earlier decision where the same court had rejected variation claims carried out pursuant to verbal instructions.4 The learned Judicial Commissioner also rejected the submission that Deluge has waived the requirement for written instructions. He stated in his judgment that the fact that Vim acted on verbal instructions itself “cannot amount to waiver or estoppel”.5 Maniam JC explained the objectives of a contractual provision requiring variations to be instructed in writing:6
The requirement of written instructions from a designated person serves various objectives. First, it provides for a written record, thus obviating disputes as to what was allegedly said (which happened in the present case). Second, it focuses the parties' attention, at the time, on whether in principle there may be an adjustment to the contract sum. If, without written instructions, Vim proceeded to do work that it considered to be a variation, it did so at its own risk. As a corollary, if there had been written instructions from Deluge's project manager, Deluge would be recognising that — in principle — Vim might get additional payment.
7.4 The saga of a protracted construction dispute continued during the year under review. In 2015, an earlier case on the same contract provided an opportunity for the Court of Appeal to elaborate on the construction of conflicting terms between different documents in a building contract and the exercise of the certification machinery under a building contract.7
7.5 The parties came before the courts again in 2021 in GTMS Construction Pte Ltd v Ser Kim Koi8 (“GTMS Construction”). In the course of a detailed 430-page judgment, the High Court took the opportunity to examine the law on several areas, including extension of time, due diligence, temporary occupation permit (“TOP”) and practical completion, acts of prevention and the duty of supervision. The High Court also had to address complex questions of interpretation involving the Singapore Institute of Architects' Standard Form of Contract9 (“the SIA Conditions”) and the implications arising therefrom. This is a judgment written, no doubt, with considerable care and effort and helpfully demonstrates the application of settled principles in this area of law.
7.6 The facts in GTMS Construction relate to a contract to build three bungalows. The contract incorporated the SIA Conditions. The contract sum was $13.13m and the works were to be completed within 20 months, effectively by 21 February 2013. On 15 May 2013, the architect certified completion as at 17 April 2013, granting full extension of time (“EOT”) up to that date. This was notwithstanding that the buildings failed their inspection for the TOP two weeks earlier. It was not disputed that the TOP was not obtained until 16 September 2013. The contractor brought the action to claim a sum of $1,103,915 as certified by the architect in respect of its final payment claim. The employer refused to pay the certified sum and the architect's fee of $60,990. On its part, the employer counterclaimed the contractor for the sum of $12,752,651 and took out a third-party claim against the architect and other third parties for the sum of $10,853,718, alleging that the contractor and the third parties had conspired to injure him. As a corollary of that conspiracy, the employer claimed that the architect had, inter alia, granted EOTs improperly,
7.7 The dispute surrounding EOT related to the delay caused to the works when a power utility, SP PowerGrid Ltd, took a longer time than expected for the power supply connection and the utility's late notification of the need for an “over ground distribution box” (“OG box”). The contractor and the architect had submitted that this event amounted to a force majeure and was therefore an event in respect of which an EOT may be granted under cl 23(1)(a) of the SIA Conditions. The employer argued that cl 23(1)(a) was meaningless as the contract did not contain a definition of force majeure.
7.8 Tan Siong Thye J dismissed the employer's argument. He considered that the meaning of the term “force majeure” is generally understood.10 Referring to two textbook authorities11 and the Court of Appeal's decision in RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd,12 the learned judge considered that the term “force majeure” is generally understood in those terms:13
Thus, a force majeure event generally refers to an event that impedes or obstructs the performance of the contract, which was out of the parties' control and occurred without the fault of either party. Whether a force majeure event arises is ultimately a matter of construction based on the facts of each case, with a view to giving effect to the parties' intentions. Furthermore, the element of unforeseeability is not strictly necessary.
7.9 The essence of the term is that of an event that “was radical and out of the parties' control”. Given this “general and established meaning”, the court should be slow to find the force majeure clause unenforceable on the basis that it was not defined in the contract.14 The learned judge further observed that the delayed events in respect of which an EOT may
7.10 In the case before him he found that the relevant delay was occasioned by the need to determine a location for the OG Box and the delay occasioned by the time taken by the utility to install the OG Box and complete the power connection. He found that not only was the OG Box requirement entirely unexpected, but the delay thereby caused by the OG Box requirement also occurred without the fault of either party and was out of their control. Similarly, the time taken by the utility to carry out the power connection works was also out of the control of both parties and occurred without either party's fault.16 The fact that the contractor had provided for the power supply connection in the master programme did not take the delay outside the scope of cl 23(1)(a)17 and, in any case, the element of foreseeability is not critical to the concept of force majeure. The learned judge proceeded to hold that in accordance with the “spirit and intent” of cl 23(1), this delay event “could easily justify” the grant of the EOT to the contractor.18
7.11 In GTMS Construction, the employer further contended that the contractor failed to exercise due diligence in the execution of the works. This contention was made with reference to the time allowed in the master programme for the construction of electrical meter compartments. On the same basis, the employer also pointed to the delay in the contractor's other ongoing works which obstructed the cable-laying works. However, the court found that these items of works could only be installed after the utility had completed its connection works. There was no factual basis therefore for the employer's allegations.19
7.12 In any case, Tan J considered that the fact that an activity was shown to be behind the date indicated in the master programme could not mean that the contractor was in delay. This was because the master programme allowed for a “float”. He accepted a textbook's definition of
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