Bumi Geo Engineering Pte Ltd v Civil Tech Pte Ltd

• Jurisdiction: Singapore
• Judge: Lee Seiu Kin J
• Judgment Date: 12 October 2015
• Neutral Citation: [2015] SGHC 261
• Citation: [2015] SGHC 261
• Docket Number: Suit No 803 of 2013
• Published date: 14 October 2015
• Hearing Date: 08 April 2015,16 April 2015,17 April 2015,14 April 2015,09 April 2015,10 April 2015,15 April 2015,30 April 2015
• Plaintiff Counsel: Raj Singh Shergill (Lee Shergill LLP)
• Date: 12 October 2015
• Defendant Counsel: Tan Tian Luh and Lin Zixian (Chancery Law Corporation)
• Court: High Court (Singapore)
• Subject Matter: Objections,Measurement contracts,Admissibility of evidence,Hearsay,Civil Procedure,Pleadings,Evidence,Building and Construction Law,Building and construction contracts

Lee Seiu Kin J: Introduction

This is a dispute arising out of payment for work done under a construction sub-contract.

Background

In early 2010, the defendant appointed the plaintiff as its subcontractor to carry out ground improvement works by jet grout pile (“JGP”) method in the project titled proposed common services tunnel (CST) at Downtown Marina Bay (“the MC01 Project”). The plaintiff was to install JGP columns with pre-set nominal widths at specified treatment depths, and would be paid $92 for every cubic metre of soil treated.

Significantly, this was not the first time the parties had dealt with each other. Prior to the MC01 Project, the parties had worked on a project known as “Proposed Construction of C482 Marina Coastal Expressway Marina South – Section 1” (“the C482 Project”).

By way of background, the JGP process is a method of soil treatment involving the mixing of cement grout into soil so that the resultant cemented soil forms a stable mass that can support any structure above it, or form an impermeable layer against water ingress. The process is carried out in the following manner. A surveyor marks out the points at which JGP columns are to be installed. At each point, the JGP machine drills a hole to the required depth using a rod. Water is then injected at very high pressure through the rotating rod. This water pre-cutting erodes a circular area of the soil and this is followed by injection of cement grout. The rod is retracted at a predetermined rate so that a vertical cylinder of cemented soil to the required diameter and depth is left behind. The installation of multiple overlapping columns will eventually produce an entire concrete block of cemented soil. The overlaps between the columns ensure that there are no pockets of untreated soil.

The volume of soil treated by the installation of the first JGP column would be the area of the circular cross section of the column multiplied by its length. This is the volume of the whole column, or nominal volume. The volume of the JGP column installed next to this first one will be less than the nominal volume. Once the first JGP column has cured, it will not be displaced by the installation of an adjacent column. Therefore, the volume of soil treated in the second JGP column will be less than the nominal volume to the extent of the overlap of the two circles. Similarly a third column would be reduced by two overlaps, and so on. A further complication arises where a JGP column abuts sheet piles. These form a barrier to the soil treatment and the treatment would not go beyond the sheet piles. A JGP column abutting sheet piles would therefore treat a smaller volume of soil than the nominal volume.

The contract between the parties called for payment of $92 per cubic metre of soil treated. In this suit, the defendant’s position was that payment would be based on the actual volume of soil treated and any overlap, whether with a neighbouring JGP column or with sheet piles, would not be counted as otherwise there would be payment for untreated soil. The plaintiff’s position was that the overlaps should be rounded to a 10% deduction based on the nominal volumes of all JGP columns installed, and alternatively, that an 18% deduction should be used.

The payment dispute

The contractual works were completed on 24 April 2012. Upon completion, the plaintiff requested for the final account and release of retention monies.

On the morning of 21 January 2013, the defendant put out a Statement of Final Accounts (“1SOFA”) that valued the plaintiff’s work at $2,419,789.61. 1SOFA was prepared on the basis of a 17% deduction per column (ie, regardless of actual overlaps). After deducting back charges of $378,832.87 and previous payments of $1,841,920.64, 1SOFA indicated that an outstanding balance of $199,036.10 was due to the plaintiff.

Some six hours later, the defendant produced a revised Statement of Final Account (“2SOFA”), which valued the plaintiff’s work at $1,924,462.58. 2SOFA was purportedly prepared on the basis of the volume of the JGP columns installed by the plaintiff, nett of the actual overlaps (ie, not a fixed deduction). After deducting back charges and previous payments, the revised document showed a negative balance (ie, an overpayment) of $296,290.93.

The plaintiff accepted the deductions made by the defendant for back charges. However, it disputed the defendant’s valuation of the work done. According to the plaintiff, the correct valuation of the works was $2,670,818.74. This figure translated to an unpaid balance of $481,569.80 due to the plaintiff, after accounting for the back charges and previous payments. The plaintiff’s valuation was derived by deducting 10% (a fixed percentage) from the nominal volume of the JGP columns installed by the plaintiff, and multiplying that figure by the unit rate of $92 per cubic metre.

On 9 September 2013, the plaintiff commenced the present action, claiming the unpaid value of its works. On 17 October 2013, the defendant filed its defence and counterclaimed for $62,886.07 for overpayment to the plaintiff, and $55,348.40 for outstanding machinery rental incurred by the plaintiff. The plaintiff admitted liability for the outstanding machinery rental.

Up to this point, the plaintiff was relying on its valuation of $2,670,818.74 (after applying the 10% fixed deduction). The defendant had at various points, produced different valuations: 21 January 2013 (at 10.25a.m.): $2,419,789.61. 22 January 2013 (at 4.27p.m.): $1,924,462.58. 17 October 2013: $2,157,867.44.

The versions of the Agreement

There are two versions of the contract, one produced by each party, with slightly different terms.

In the plaintiff’s version (“the Plaintiff’s Contract”), the term “triangle grid spacing” is used in item 2 of Appendix A – Schedule of Prices, as follows: 2. Supply and install nominal 1600mm, 1800mm & 2000mm diameter with triangle grid spacing to the required treatment depth as per Civil Tech’s Consultant design and drawing (quantities are provisional).

[emphasis added]

In the defendant’s version (“the Defendant’s Contract”), the term “triangle grid spacing” is not used. Item 2 of Appendix A – Schedule of Prices in the Defendant’s Contract states as follows: 2. Supply & install jet grout piles, drilling commencing from existing ground level to required design depth varies from 17 to 36m, treatment depth varies from 1.5 to 4m, all in accordance to Specification and drawing (Quantity shall measure nett on as-built drawing)

[emphasis added]

There are two issues to be determined to resolve the dispute between the parties: Whether the Plaintiff’s Contract or the Defendant’s Contract represented the final agreement between the parties. How the plaintiff’s work should be measured.

Which version is the binding contract

The parties agree that there was an earlier version of the agreement and that it was revised at an unascertained date. This revised version constituted the contract between them. The sole question is whether this was the Plaintiff’s Contract or the Defendant’s Contract.

The plaintiff’s sole witness was Chim Chee Kan (“Mr Chim”) who was its executive director at the material time. He testified that he went to the defendant’s office and was provided with the Defendant’s Contract in duplicate. He proceeded to sign the acceptance page of both copies. He then affixed the plaintiff’s company stamp on every page of the document and initialled each page of it, starting from the last page and proceeding to the first. However he stopped initialling midway as he noticed terms that were not in order. He requested for amendments to be made and returned the duplicates to Dora Tay (“Ms Tay”), the defendant’s contracts manager. He testified that it was this amended version, which is the Plaintiff’s Contract, that was the one that the parties had agreed to.

The defendant takes a diametrically opposite position. The defendant submits that the Defendant’s Contract reflects the final agreement between the parties. The defendant’s project director at the material time, Chua Thing Chong (“Mr Chua”) testified that, he re-read the Plaintiff’s Contract sometime after the document was signed by all the relevant parties. It was at this point that he realised Appendix A – Schedule of Prices of the Plaintiff’s Contract did not provide that the plaintiff would be paid on the basis of nett treated volume, as was agreed between the parties. Thus, he instructed Ms Tay to amend the Plaintiff’s Contract, and the Defendant’s Contract was the product of this amendment.

Decision

After careful consideration of the evidence of the witnesses, I am satisfied that the Plaintiff’s Contract had come later in time. Unlike Mr Chua’s account which appears to be largely uncorroborated, I find Mr Chim’s account of events to be largely consistent with the contemporaneous evidence. I set out my reasons below.

Versions of the Defendant’s Contract

I note that the defendant had produced two different copies of the Defendant’s Contract ie, with slight differences in the placement of the signatures and company stamps on each copy. This indicates that the defendant had retained both copies of the Defendant’s Contract after they were signed. This means that a copy of the Defendant’s Contract was not handed to the plaintiff, which is consistent with the plaintiff’s position that this was not the final version of the contract between them because if it was, then the defendant would not be in possession of both copies as one would be handed to the plaintiff. Indeed in both versions of the contract it is stated that “the duplicate copy is for [the subcontractor’s] retention”. I further note that this part of the evidence appears to corroborate another aspect of Mr Chim’s evidence – his claim that he had returned to the defendant the duplicates of the Defendant’s Contract for...