Chip Hup Hup Kee Construction Pte Ltd v Ssangyong Engineering & Construction Co Ltd

• Jurisdiction: Singapore
• Judge: Ho May Kim AR
• Judgment Date: 26 November 2009
• Neutral Citation: [2009] SGHC 269
• Court: High Court (Singapore)
• Published date: 08 December 2009
• Citation: [2009] SGHC 269
• Plaintiff Counsel: Melvin Chan and Jonathan Yang (TSMP Law Corporation)
• Defendant Counsel: Soh Lip San, Sim Chee Siong and Paul Lie (Rajah &Tann LLP)
• Subject Matter: Building and Construction Law,Dispute resolution,Alternative dispute resolution procedures
• Year: 2009

26 November 2009 Judgment reserved.

Ho May Kim AR:

Introduction

1 This summons raises two questions in the context of an application to set aside an adjudication determination pursuant to s 27(5) of the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) (“SOP Act”), namely, (i) whether an 18-day delay by the Singapore Mediation Centre (“SMC”) in the service of an adjudication determination on the parties to an adjudication determination affects the validity of the adjudication determination; and (ii) whether an adjudication determination must be signed by the adjudicator in order for it to be valid.

2 The respondent, Ssangyong Engineering & Construction Co Ltd (“Respondent”), is the Main Contractor in the proposed Marina Bay Sands Integrated Resort Project (“the Project”). By a letter of acceptance dated 3 September 2007, the Respondent engaged the claimant, Chip Hup Hup Kee Construction Pte Ltd (“Claimant”) as the RC Structural Works Sub-Contractor for Tower 1 of the Project. Progress Claim No.7 gave rise to a payment dispute between the Claimant and Respondent (collectively “the Parties”). On 11 September 2008, the Claimant invoked the adjudication process under the SOP Act by issuing a Notice of Intention to Apply for Adjudication and by lodging an adjudication application for Progress Claim No.7, Adjudication Application No. SOP/AA48 of 2008, with the SMC on the same day.

3 On 18 September 2008, the SMC notified the Parties that Ms Lim Ee Ping had been appointed the adjudicator (“Adjudicator”). On the same day, the Respondent submitted its adjudication response. The Parties attended an adjudication conference with the Adjudicator on 25 September 2008. On 29 September 2008, the Parties submitted their written submissions to the Adjudicator in accordance with the timeline stipulated by the SOP Act.

4 Pursuant to s 17(1)(b) of the SOP Act, the Adjudicator was required to determine the adjudication by 4 October 2008. On 30 September 2008, the Adjudicator requested the Parties to extend the deadline for her to determine the adjudication. On 1 Oct 2008, the Parties acceded to her request and extended the deadline to 8 October 2008.

5 The SMC received from the Adjudicator an adjudication determination on 4 October 2008. I shall refer to it as the Unsigned Adjudication Determination (“Unsigned Adjudication Determination”) as it was not signed. The SMC did not serve the Unsigned Adjudication Determination on the Parties until 22 October 2008, some 18 days after it was received by the SMC, for reasons unknown to the parties.

6 On the 4 October 2008, after the Adjudicator sent the Unsigned Adjudication Determination to the SMC, she sent an email to the Parties on 6 October 2008 seeking their agreement on whether they would like the cost of the room for the adjudication conference to be paid and apportioned upfront or to be apportioned and determined by her. The Claimant’s solicitors replied the Adjudicator by email on 7 October 2008 stating that the Claimant “would like the costs of the room for the conference to be determined by the [A]djudicator as part of the adjudication costs” whereas the Respondent’s solicitors replied on 9 October 2008 stating that “the costs should not form part of [the Adjudicator’s] determination and should be paid and apportioned upfront”.

7 This led to another determination which I shall refer to as the Signed Adjudication Determination (“Signed Adjudication Determination”). This determination, unlike the Unsigned Adjudication Determination, was signed. Although the Signed Adjudication Determination is dated 4 October 2008, it came into existence presumably between 9 October 2008 (date of the Respondent’s solicitors’ reply email to the Adjudicator) and 13 October 2008 (date the Adjudicator sent the Signed Adjudication Determination to the SMC). The SMC served the Signed Adjudication Determination on the Parties the very next day on 14 October 2008.

8 On 15 October 2008, the Respondent’s solicitors wrote to the SMC enquiring when the Signed Adjudication Determination was received by the SMC. It was through a series of correspondence between the Respondent’s solicitors and the SMC that the Parties came to know of the existence of the Unsigned Adjudication Determination which the SMC served on the Parties on 22 October 2008. It also became apparent on 22 October 2008 that there were differences in the substance of the Signed and Unsigned Adjudication Determinations.

9 The Signed and Unsigned Adjudication Determinations are identical except in respect of the cost of sharing of the conference room (para [3(d)] and [75] of the Adjudication Determinations) and the extension of time for the Adjudicator to render an adjudication determination (para [17] of the Adjudication Determinations).

10 The Signed Adjudication Determination includes the Adjudicator’s determination that the room fees for both Parties would be deducted from the Claimant’s deposit and that the Respondent would pay the Claimant accordingly, whereas the Unsigned Adjudication Determination is silent on this issue. The other difference between the two Adjudication Determinations is that the Unsigned Adjudication Determination contains the statement (at para [17]), “As it turned out, I did not require the extension of time for making this determination” whereas this sentence is not present in the Signed Adjudication Determination, presumably because it had been deleted by the Adjudicator.

11 The Claimant seeks to rely solely on the Unsigned Adjudication Determination. There is, therefore, no need for me to determine the validity of the Signed Adjudication Determination.

12 On 9 September 2009, the Claimant was granted leave of Court to enforce the Unsigned Adjudication Determination. On 2 October 2009, the Respondent filed this summons, seeking to set aside:

a) the Unsigned Adjudication Determination; and

b) the Order of Court dated 9 September 2009 granting leave to the Claimant to enforce the Unsigned Adjudication Determination.

13 The Respondent sought to set aside the Unsigned Adjudication Determination on the following grounds:

b) the Unsigned Adjudication Determination is merely a draft and is not a proper adjudication determination and further the Signed Adjudication Determination is out of time for the purposes of the SOP Act (“First Ground”);

c) the Adjudicator has no jurisdiction to adjudicate on the Adjudication application as:

a. the Claimant has failed to serve a valid payment claim under the SOP Act on the Respondent (“Second Ground”); and

b. the Claimant has claimed for items which fall outside the scope of the SOP Act thereby rendering the Payment Claim No. 7 dated 20 June 2008 invalid (“Third Ground”).

d) The Adjudicator had breached the rules of natural justice (“Fourth Ground”).

14 At the request of the Respondent and with the Claimant’s consent, I agreed to hear the Parties submissions on the First Ground alone and to determine this ground without prejudice to the other three grounds of the Respondent. As such, the First Ground raises two issues, namely whether the Unsigned Adjudication Determination should be set aside on the ground that:

(1) it is a draft and is unsigned; and

(2) it was not serve on the Parties until 18 days after it was received by the SMC.

Setting aside of an adjudication determination under the SOP Act

15 The court’s powers in relation to an adjudication determination is set out at s 27(5) of the SOP Act which provides:

Enforcement of adjudication determination as judgment debt, etc.

27. — (5) Where any party to an adjudication commences proceedings to set aside the adjudication determination or the judgment obtained pursuant to this section, he shall pay into the court as security the unpaid portion of the adjudicated amount that he is required to pay, in such manner as the court directs or as provided in the Rules of Court (Cap. 322, R 5), pending the final determination of those proceedings.

16 In the recent case of SEF Construction Pte Ltd v Skoy Connected Pte Ltd [2009] SGHC 257 (“SEF Construction”) concerning an application by SEF to set aside an adjudication determination on the grounds that the adjudicator had breached the rules of natural justice and had failed to engage in a bona fide exercise of his powers, Judith Prakash J in SEF Construction at [27] noted that s 27(5) of the SOP Act had nothing to say on the grounds on which an application for setting aside may be based or on the approach that the court should take to such an application. In her view, the court was guided in its approach mainly by s 9A of the Interpretation Act (Cap 1, 2002 Rev Ed) which called for a purposive reading of statutory wording. In considering applications to set aside an adjudication determination, she was of the opinion that the court must view adjudication determinations and the SOP Act itself in the light of the legislative intention.

17 In determining the grounds on which an adjudication determination may be set aside, Prakash J considered and applied with suitable modifications, the approach of Hodgson JA in Brodyn v Davenport [2004] NSWCA 394 (“Brodyn”). In Brodyn, Hodgson JA was of the view (at [52]) that for a document purporting to be an adjudicator's determination to have the strong legal effect provided by the New South Wales Building and Construction Industry Security of Payment Act 1999 (“1999 NSW Act”), it must satisfy whatever were the conditions laid down by 1999 NSW Act as essential for there to be such a determination, otherwise it would be void, not merely voidable. He then proceeded to set out a non-exhaustive list of the basic and essential requirements for the existence of an adjudicator’s determination (at para [53]).

18 Similarly, in Transgrid v Siemens Ltd & Anor [2004] NSWCA 395 (“TransGrid”), Hodgson JA at [29] said that “review is available only where the determination is not a determination within the meaning of the...