Choi Peng Kum v Tan Poh Eng Construction Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 18 December 2013
• Date: 18 December 2013
• Docket Number: Originating Summons No 275 of 2013 (Registrar's Appeals Nos 218 and 261 of 2013)
• Court: High Court (Singapore)

Choi Peng Kum and another

Plaintiff

and

Tan Poh Eng Construction Pte Ltd

Defendant

[2013] SGHC 272

Woo Bih Li J

Originating Summons No 275 of 2013 (Registrar's Appeals Nos 218 and 261 of 2013)

High Court

Building and Construction Law—Dispute resolution—Adjudication—Defendant sending progress claim to the plaintiffs—Plaintiffs did not respond and later terminated contract—Plaintiffs applying to set aside adjudication determination—Whether it was necessary for defendant to obtain valuation from surveyor to serve payment claim under Building and Construction Industry Security of Payment Act (Cap 30 B, 2006 Rev Ed) —Whether adjudicator had jurisdiction notwithstanding cl 32 (8) (a) of Singapore Institute of Architects, Articles and Conditions of Building Contract (Lump Sum Contract, 9th Ed) —Whether plaintiffs were to pay into court the adjudicated amount pending decision of first court hearing setting aside application or pending exhaustion of all avenues of appeal—Sections 2, 5, 6, 10 (1) (a), 12 (2) (b), 27 (5), 36 (1), 36 (2) (a) and 36 (2) (b) Building and Construction Industry Security of Payment Act (Cap 30 B, 2006 Rev Ed)

The plaintiffs (‘the Plaintiffs’) were owners of a dwelling house and entered into a contract (‘the Contract’) to appoint the defendant (‘the Defendant’) as the contractor for reconstruction works for their house. The contract was subject to the Singapore Institute of Architects, Articles and Conditions of Building Contract (Lump Sum Contract, 9th Ed) (‘SIA Conditions’). The Defendant issued Progress Claim No 9 (‘PCNo 9’) directly to the Plaintiffs, but the Plaintiffs did not respond to this claim. The Plaintiffs' solicitors issued a letter to the Defendant to terminate the Contract. The Defendant lodged an adjudication application (‘AA’) under the Building and Construction Industry Security of Payment Act (Cap 30 B, 2006 Rev Ed) (‘SOPA’). The adjudicator made an adjudication determination (‘AD’) in which he decided that the Plaintiffs were to pay the Defendant $480,109.97. The Plaintiffs filed the present originating summons to set aside the AD.

An assistant registrar dismissed the Plaintiffs' application, and the Plaintiffs filed an appeal (‘RA 218/2013’). On the other hand, the Defendant filed an appeal (‘RA 261/2013’) against the decision of another assistant registrar 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. For RA 218/2013, the Plaintiffs argued that: (a) PCNo 9 was not a valid claim for the purpose of SOPA because PCNo 9 was not supported by a valuation from the quantity surveyor (‘PQS’); and (b) the Adjudicator had no jurisdiction to entertain the AA by virtue of cl 32 (8) (a) of the SIA Conditions as the Defendant's contract had been terminated. For RA 261/2013, the Plaintiffs argued that ‘the final determination of those proceedings’ in s 27 (5) SOPA meant the outcome after all avenues of appeal had been exhausted.

Held, dismissing RA 218/2013:

(1) The Defendant was entitled under the contract to be paid the amount certified by a valuer but it was also entitled under SOPA to lodge an AA for the difference between its claim and the certified amount. Section 5 SOPA did not preclude the Defendant from lodging an AA. PCNo 9 was a valid claim for the purpose of SOPA notwithstanding the absence of any valuation by PQS: at [24] , [25] and [31] .

(2) The fact that a project was ended by termination and that the contractor was no longer carrying out works thereunder did not necessarily mean that his concern for cash flow ended and that all his expenses came abruptly to a halt: at [38] .

(3) Clause 32 (8) (a) of the SIA Conditions did not preclude a contractor from lodging an AA or an adjudicator from making an AD. Clause 32 (8) (a) applied only to preclude certificates from being issued under the Contract: at [39] .

(4) If cl 32 (8) (a) had the effect contended by the Plaintiffs it would in any event be rendered void by ss 36 (1), 36 (2) (a) and 36 (2) (b) SOPA: at [40] .

Held, as regards RA 261/2013:

(5) The phrase ‘pending the final determination of those proceedings’ in s 27 (5) SOPA meant that the payment into court was to be held as security pending the final decision of the first court, to hear the setting aside proceedings, only. It would not be consistent with the purpose of SOPA, which was to provide an expeditious means of resolving payment claims, if the security were to be held pending the exhaustion of all avenues of appeal: at [49] .

R v Kuxhaus [1988] QB 631 (distd)

Roseville Bridge Marina Pty Ltd v Bellingham Marine Australia Pty Ltd [2009] NSWSC 320 (distd)

S A Shee & Co (Pte) Ltd v Kaki Bukit Industrial Park Pte Ltd [2000] 1 SLR (R) 192; [2000] 2 SLR 12 (distd)

VN Pte Ltd v VO Pte Ltd [2010] SCAdj R 259 (folld)

Walter Construction Group Ltd v CPL (Surry Hills) Pty Ltd [2003] NSWSC 266 (refd)

Building and Construction Industry Security of Payment Act (Cap 30 B, 2006 Rev Ed) ss 5, 27 (5) (consd) ;ss 2, 6, 10 (1) (a) , 11 (1) , 11 (1) (a) , 11 (1) (b) , 12 (2) (b) , 15 (1) , 16 (2) (b) , 18 (1) , 18 (2) , 18 (3) , 36 (1) , 36 (2) (a) , 36 (2) (b)

Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 95 r 3 (3)

Philip Ling and Ang Hou Fu (Wong Tan & Molly Lim) for the plaintiffs

Tan Joo Seng and Wee Qian Liang (Chong Chia & Lim LLC) for the defendant.

Woo Bih Li J

Introduction

1 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’).

2 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 30 B, 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.

3 The...