C S Geotechnic Pte Ltd v Neocorp Innovations Pte Ltd

CourtHigh Court (Singapore)
JudgeTan Lee Meng J
Judgment Date30 June 2005
Neutral Citation[2005] SGHC 116
Citation[2005] SGHC 116
Published date19 July 2005
Plaintiff CounselChia Chor Leong and Leila Ashraf (CitiLegal LLC)
Defendant CounselMirza Namazie, Tan Teng Muan and Wong Khai Leng (Mallal and Namazie)
Subject MatterContract,Assignment,Plaintiff claiming for outstanding payments under contract with defendant,Defendant purporting to assign contractual rights and liabilities to third party,Whether valid assignment of contractual burden,Whether plaintiff consenting to assignment,Formation,Parties to contract,Whether third party or defendant was true party to contract with plaintiff,Equity,Estoppel,Estoppel by convention,Defendant allegedly giving notice to plaintiff of assignment of contract to third party,Whether plaintiff clearly and unequivocally consenting to assignment,Whether defence of estoppel applied

30 June 2005

Tan Lee Meng J:

1 The plaintiff, C S Geotechnic Pte Ltd (“Geotechnic”), entered into a building subcontract for piling work with the defendant, Neocorp Innovations Pte Ltd (“NIPL”), who represented in the said contract that it was the main contractor at a Housing and Development Board (“HDB”) upgrading project at Marine Crescent Precinct (the “building project”). Geotechnic sued NIPL for unpaid sums due to it under the said subcontract. NIPL denied liability on the ground that it had assigned the subcontract to another company, Neo Corporation Pte Ltd (“Neo Corporation”), against whom a winding-up order was made in February 2005.


2 In April 2002, the HDB awarded Neo Corporation the main contractor’s job for the building project.

3 Neo Corporation approached Geotechnic to carry out the piling work required in the building project. However, it was NIPL and not Neo Corporation, who signed the piling subcontract that was awarded to Geotechnic in July 2002. The reason for this was that Neo Corporation’s parent company, Neo Investments Pte Ltd (“Neo Investments”), was then involved in a reverse takeover of a public-listed company, Presscrete Holdings Ltd (“Presscrete”), now known as Neocorp International Ltd. The takeover arrangements included the transfer of Neo Corporation’s assets and building contracts to NIPL, a wholly-owned subsidiary of Presscrete. In turn, through the issue of shares in NIPL and Presscrete, Neo Investments would acquire control of Presscrete.

4 The original plan for the transfer of building contracts from Neo Corporation to NIPL included the main building contract for the building project. Before the transfer of this contract was effected, NIPL took charge of the building project and awarded subcontracts to several subcontractors, including Geotechnic.

5 Subsequently, there was a change of mind regarding the transfer of the building project to NIPL because it was forecast that the main contractor for this project was likely to make a loss. In its circular to shareholders, Presscrete stated as follows:

The Marine Crescent Precinct Project with a contract value of approximately $18.0 million and which was secured after the date of the Neo MOU was to have been novated or assigned to NIPL under the Acquisition Agreement. However, having considered the negative forecast margin for the contract, the Directors are of the opinion that it is in the best interests of the Group that the Marine Parade Crescent Precinct Project is not novated or assigned to the Company as provided for under the Acquisition Agreement.

6 Following the decision that NIPL would not take over the building project, arrangements were made by NIPL to disengage itself from the piling subcontract with Geotechnic. These attempts and Geotechnic’s subsequent response left much to be desired and led to the present action.

7 NIPL asserted that it assigned all its rights and obligations under its piling subcontract with Geotechnic to Neo Corporation on 7 January 2003. It also claimed to have given notice to Geotechnic of the said assignment in a letter dated 8 January 2003. That letter was so badly drafted and vague that Geotechnic claimed to have understood it as saying that Neo Corporation would be acting as NIPL’s agent and that all future progress payment claims were to be addressed to Neo Corporation.

8 After 8 January 2003, Geotechnic addressed many of its letters and claims for progress payments to both NIPL and Neo Corporation. Geotechnic claimed that this showed that it did not agree to any assignment to Neo Corporation of NIPL’s obligations under the piling subcontract.

9 Neo Corporation went into judicial management on 5 May 2004 and an order to wind up this company was made on 18 February 2005. Faced with this, Geotechnic insisted that NIPL should shoulder the responsibility of paying the amounts due to it under the piling subcontract. When NIPL refused to do so, Geotechnic instituted the present proceedings to claim the money purportedly owed to it.

Geotechnic’s claim and NIPL’s defence

10 Geotechnic’s case is that it did not release NIPL from the piling subcontract and was thus entitled to claim from the latter the amount still due to it under that contract.

11 NIPL mounted a three-pronged defence against Geotechnic’s claim. First, it insisted that Neo Corporation and not NIPL was the “real party” to the piling subcontract with Geotechnic. Secondly, it asserted that it had assigned the contract in question to Neo Corporation in January 2003 and that Geotechnic had consented to this assignment. Thirdly, NIPL alleged that Geotechnic was estopped by its actions from denying that the said contract had been assigned to Neo Corporation.

12 Geotechnic responded to NIPL’s defences by pointing out that NIPL was a real party to the piling subcontract, that it had not consented to the assignment of NIPL’s obligations under the said contract to Neo Corporation and that it had not acted in a way that prevented it from insisting that NIPL perform its obligations under the piling subcontract.

13 Geotechnic also asserted that NIPL was not entitled to rely on estoppel as it did not come to court with clean hands. NIPL knew, when it decided to assign the piling subcontract to Neo Corporation, that the latter had been stripped of its profitable building projects and key personnel and that the building project was kept in Neo Corporation’s hand only because the main contractor in that project was expected to make a loss. Geotechnic submitted that, stripped of its assets and key personnel and saddled with a building project that was bound to make a loss, it was not surprising that Neo Corporation collapsed.

14 Geotechnic urged the court to note that NIPL continued to provide services and other facilities for the building project to Neo Corporation after the purported assignment of the piling subcontract on 7 January 2003. NIPL’s project director, Mr Quek Bak Hong, remained a part of the project team and NIPL had furthermore charged Neo Corporation for its services. Geotechnic alleged that NIPL stole a march on the subcontractors in the building project by making itself a secured creditor of Neo Corporation for the sum of almost $1.5m. Geotechnic’s counsel summed up the position as follows:

The net result is that when Neo Corporation went into judicial management, … subcontractors were left high and dry. These subcontractors became unsecured creditors, whilst [NIPL] enjoyed priority as a secured creditor.

15 It was thus argued that if all the circumstances of the case are taken into account, it is inequitable for NIPL to avoid liability under the piling subcontract on the ground of estoppel.

Whether NIPL was a real party to the subcontract with Geotechnic

16 NIPL’s claim that it was not a real party to the subcontract with Geotechnic will first be considered. In para 2 of its Re-Amended Defence, NIPL pleaded as follows:

[NIPL] plead[s] that the true contracting parties of the agreement were [Geotechnic] and [Neo Corporation] and that [NIPL was] not a real party to the same. [NIPL] also plead[s] that [Geotechnic was] aware that the real party to the agreement was [Neo Corporation] and not [NIPL].

17 Why NIPL took the line that it was not a real party to the piling subcontract cannot be fathomed. After all, as NIPL intended at the material time to take over the building project from Neo Corporation, it went so far as to misrepresent in the piling subcontract that it was already the main contractor for the said project even though that contract had not yet been assigned to it. Furthermore, NIPL took actual control of the said project. When cross-examined, NIPL’s director, Mr Liew Choon Min, confirmed this as he said as follows:

Q. [NIPL] had engaged subcontractors for the Marine Crescent project. Do you agree that up to … 7 January 2003, [NIPL] had already been undertaking this Marine Crescent project?

A. Yes.

18 Mr Liew admitted that his contracts department thought that it would save time and energy if NIPL, and not Neo Corporation, entered into the subcontracts required for the building project. As for whether NIPL intended to engage Geotechnic as its subcontractor, Mr Liew conceded as follows during cross-examination:

Q. Therefore, do you not agree that when this subcontract was signed on 23rd August 2002, there was in fact an intention on the part of [NIPL] to engage [Geotechnic] as its subcontractor for piling works? ….

A. Yes.

19 In view of the aforesaid, NIPL’s claim that it was not a true party to the piling contract with Geotechnic must be rejected.

Whether Geotechnic consented to the assignment to Neo Corporation

20 NIPL’s next line of defence was that it had assigned its rights and obligations under its piling subcontract with Geotechnic to Neo Corporation in a letter dated 7 January 2003, which was as follows:

We refer to Housing & Development Board’s letter of award given on 29 April 2002 to you as main contractors for HDB upgrading to blocks 43 to 47 at Marine Crescent Precinct.

As agreed, we assign to you all our rights and responsibilities in all sub-contracts we have entered into with the sub-contractors for the above works. This is on the condition that you shall take over the benefits of these sub-contracts as well as be responsible for performing all obligations including payments to the sub-contractors.

21 At the bottom of the same letter, Neo Corporation acknowledged as follows:

We, NEO CORPORATION PTE LTD accept the transfer and assignment. We confirm that we are responsible for the discharge of all obligations under the Sub-Contracts.

22 NIPL’s assertion that it had effectively assigned its rights and obligations under its piling subcontract with Geotechnic to Neo Corporation is fraught with difficulty. Although NIPL pointed out that Neo Corporation’s liquidator had confirmed that the latter was the main contractor of the building project and that the...

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2 books & journal articles
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2005, December 2005
    • 1 Diciembre 2005
    ...the findings of the court, the counter-party was SL Link. 9.8 In similar vein, in C S Geotechnic Pte Ltd v Neocorp Innovations Pte Ltd[2005] SGHC 116 (see para 9.22 below on ‘Estoppel’), it was held that where there was clear evidence that a party had entered into a contract with the intent......
  • Building and Construction Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2005, December 2005
    • 1 Diciembre 2005
    ...following the agreement. 5.9 Estoppel was again raised as an alternative argument in C S Geotechnic Pte Ltd v Neocorp Innovations Pte Ltd[2005] SGHC 116. In an action by the plaintiff to recover amounts due under a subcontract, the defendant contended that it was not the ‘real party’ to the......

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