Choi Peng Kum and another v Tan Poh Eng Construction Pte Ltd

• Jurisdiction: Singapore
• Judge: Woo Bih Li J
• Judgment Date: 18 December 2013
• Neutral Citation: [2013] SGHC 272
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 275 of 2013 (Registrar’s Appeal Nos 218 and 261 of 2013)
• Published date: 09 January 2014
• Year: 2013
• Hearing Date: 12 August 2013,23 August 2013,13 September 2013,02 August 2013
• Plaintiff Counsel: Philip Ling and Ang Hou Fu (Wong Tan & Molly Lim)
• Defendant Counsel: Tan Joo Seng and Wee Qian Liang (Chong Chia & Lim LLC)
• Subject Matter: Building and Construction Law
• Citation: [2013] SGHC 272

Woo Bih Li J: Introduction

The plaintiffs, Choi Peng Kum and Pay Ah Lui (“the Plaintiffs”) are husband and wife who are owners of a dwelling house in Chancery Lane. On 25 November 2011, they entered into a contract (“the Contract”) to appoint the defendant Tan Poh Eng Construction Pte Ltd (“the Defendant”) as the main contractor for reconstruction works for their house. The Contract is subject to the Singapore Institute of Architects, Articles and Conditions of Building Contract (Lump Sum Contract, 9th Ed) (“SIA Conditions”).

As disputes arose between them, the Defendant lodged an adjudication application (“AA”) on 7 March 2013 under the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) (“SOPA”). Mr Lam Wei Yaw was appointed as the adjudicator (“the Adjudicator”). He made an adjudication determination (“AD”) on 22 March 2013 in which he decided that the Plaintiffs were to pay the Defendant $480,109.97 (excluding GST) with interest and costs.

The Plaintiffs filed the present originating summons on 28 March 2013 to set aside the AD. On 3 April 2013, the Plaintiffs paid $486,076.26 (“the Sum”) into court pursuant to s 27(5) SOPA and O 95 r 3(3) of the Rules of Court (Cap 322, R 5 2006 Rev Ed). The Sum was supposed to be the unpaid portion of the adjudicated amount under the AD. There was no explanation for the difference between the Sum and the amount allowed under the AD. Perhaps the difference was attributable to interest and costs. On 5 July 2013, an Assistant Registrar dismissed the Plaintiffs’ application. The Plaintiffs then filed an appeal to the judge in chambers by way of Registrar’s Appeal No 218 of 2013 (“RA 218/2013”). I heard the appeal on 23 August 2013. On 13 September 2013, I dismissed the appeal.

There was also an appeal by the Defendant by way of RA No 261 of 2013 (“RA 261/2013”). This appeal was against the decision of another Assistant Registrar made on 26 July 2013 in which that Assistant Registrar decided that the Sum paid into court by the Plaintiffs was to remain in court pending the outcome of RA 218/2013. Apparently, the Defendant was of the view that it was entitled to receive the Sum after the decision of the Assistant Registrar in its favour in the originating summons and that it did not have to await my decision in RA 218/2013. I heard arguments on RA 261/2013 on 12 August 2013 and reserved my decision.

After I dismissed RA 218/2013 on 13 September 2013, I gave my decision on RA 261/2013 on the same day.

I decided that, strictly speaking, the Plaintiffs were not entitled to a further stay after the Assistant Registrar’s decision on the originating summons. However, as the point was novel, for reasons which I shall elaborate on later, I nevertheless ordered a stay of execution in respect of $350,000 pending the outcome of the Plaintiffs’ intended appeal to the Court of Appeal. The balance was to be paid to the Defendant’s solicitors who were allowed to release the same to the Defendant.

The Plaintiffs have filed an appeal to the Court of Appeal against both my decisions in RA 218/2013 and RA 261/2013. I elaborate below on the background to the appeals and the reasons for my decisions.

Background

On or about 31 January 2013, the Defendant issued Progress Claim No 9 (“PC No 9”) directly to the Plaintiffs. The Plaintiffs said that they did not respond to this claim as it did not appear to be supported by any valuation from the quantity surveyor PQS Consultants (“PQS”). Furthermore, they alleged that PC No 9 did not have any supporting documents. They were unable to evaluate the claim.

Subsequently, as a result of various disputes between the parties, the Plaintiffs’ solicitors, Wong Tan and Molly Lim (“WTL”) issued a letter dated 7 February 2013 to the Defendant to terminate the Plaintiffs’ contract with the Defendant with immediate effect.

As mentioned above, the Defendant lodged the AA on 7 March 2013. It was lodged with the Singapore Mediation Centre (“SMC”) in respect of PC No 9 and was served on the Plaintiffs on 8 March 2013. PQS prepared a Progress Valuation No 9 on 14 March 2013. The Plaintiffs lodged the Adjudication Response (“AR”) with SMC at 5.20pm on 15 March 2013.

Under s 15(1) SOPA, the Plaintiffs had seven days to lodge the AR. However under cl 2.2 of SMC’s Adjudication Procedure Rules, “[A]ll documents to be lodged with [SMC] shall be lodged during the opening hours of 9am to 4.30pm from Monday to Friday (except public holidays) and 9am to 12.00noon on the eve of Christmas, New Year and Chinese New Year. Documents which are submitted after opening hours shall be treated as being lodged the next working day.”

As the AR was lodged at 5.20pm on 15 March 2013, it was treated as being lodged the next working day, which was outside the seven-day time limit.

Accordingly, under s 16(2)(b) SOPA, the Adjudicator had no choice but to reject the AR.

Nevertheless, the Adjudicator proceeded to scrutinise the AA to satisfy himself that there was a basis for the various claims made by the Defendant. After doing so, he made the AD for $480,109.97 plus interest and costs on 22 March 2013. The $480,109.97 was the full amount claimed under PC No 9.

The Plaintiffs filed the present originating summons on 28 March 2013 and paid the Sum into court as security. As mentioned above, an Assistant Registrar dismissed their application and I dismissed their appeal.

The court’s reasons for RA 218/2013

The Plaintiffs did not dispute that they were out of time in lodging the AR. Neither did they allege that the Adjudicator was wrong in rejecting the AR. Before me, they raised two arguments of law: First, they submitted that because PC No 9 was not supported by a valuation from PQS, PC No 9 was not a valid claim for the purpose of SOPA. Secondly, they submitted that as the Defendant’s contract had been terminated on 7 February 2013, the Adjudicator had no jurisdiction to entertain the AA by virtue of cl 32(8)(a) of the SIA Conditions.

Whether PC No 9 is a valid claim

Under s 10(1)(a) SOPA, a claimant may “serve one payment claim in respect of a progress payment on one or more other persons who, under the contract concerned, is or may be liable to make the payment”.

Under s 11(1), a respondent named in a payment claim is required to respond to a payment claim by providing a payment response within a certain time frame set out in s 11(1)(a) or (b) (whichever is applicable). It is undisputed that after the Plaintiffs received PC No 9, they did not provide a payment response.

Under s 12(2)(b), a claimant is entitled to make an AA under s 13 if there is no payment response.

However, the Plaintiffs submitted that the Defendant had to be “entitled” to serve a payment claim in the first place before it could serve a payment claim under s 10(1)(a). The Plaintiffs relied on various provisions in SOPA and in the Contract.

Section 5 SOPA states that:

Any person who has carried out any construction work, or supplied any goods or services, under a contract is entitled to a progress payment.

Section 6 SOPA states that:

The amount of a progress payment to which a person is entitled under a contract shall be —

(a) the amount calculated in accordance with the terms of the contract; or (b) if the contract does not contain such provision, the amount calculated on the basis of the value of the construction work carried out, or the goods or services supplied, by the person under the contract.

Section 2 SOPA defines “progress payment” as “a payment to which a person is entitled for the carrying out of construction work … under a contract”.

The Plaintiffs submitted that because of the reference to “entitled” in the above provisions, the clear intention of Parliament is that only a party who is entitled to a progress payment for work done under a contract may have recourse to the fast and low cost adjudication system established by SOPA. They submitted that the...