Chua Say Eng (formerly trading as Weng Fatt Construction Engineering) v Lee Wee Lick Terence (alias Li Weili Terence)

• Jurisdiction: Singapore
• Judge: Tay Yong Kwang J
• Judgment Date: 29 April 2011
• Neutral Citation: [2011] SGHC 109
• Citation: [2011] SGHC 109
• Court: High Court (Singapore)
• Published date: 09 April 2013
• Docket Number: Originating Summons No 783 of 2010 (Registrar’s Appeal No 454 of 2010) (Summonses 387 of 2011 and 402 of 2011)
• Plaintiff Counsel: Edwin Lee and Joni Tan (Eldan Law LLP)
• Defendant Counsel: Adrian Wong and Nelson Goh (Rajah & Tann LLP) (briefed) and Koh Kok Kwang (CTLC Law Corporation)
• Subject Matter: Building and Construction Law,Statutes and regulations
• Hearing Date: 24 March 2011,14 January 2011,20 January 2011

Tay Yong Kwang J: Introduction

This was an appeal against the decision of an Assistant Registrar (“the AR”) dismissing the defendant’s application to set aside an adjudication determination dated 7 July 2010 (“the Adjudication Determination”) made under the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) (“the SOPA”). The defendant’s application was made in response to the plaintiff’s application (by way of Originating Summons No 783 of 2010) to enforce the Adjudication Determination as a judgment under section 27 of the SOPA.

The defendant raised three issues before the AR, who decided all three of them against him. Before me, the defendant only appealed against the AR’s findings on two of the three issues. After hearing the arguments from both parties, I agreed with the AR on one issue but disagreed with him on the other. In the result, I allowed the defendant’s appeal and his application.

As the Adjudication Determination was for the sum of only $125,450.40, the parties required leave under section 34(2)(a) of the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed) if they wished to appeal to the Court of Appeal. The defendant applied for leave to appeal against my decision on the issue on which I agreed with the AR and ruled against him. The defendant’s application was however contingent on the plaintiff also seeking leave to appeal to the Court of Appeal. One day after the defendant filed his application, the plaintiff did apply for such leave.

The SOPA has been the subject of several High Court decisions. In my opinion, a decision of the Court of Appeal would help clarify the law on payment claims under the SOPA for the construction industry. I therefore gave both parties leave to appeal despite the fact that they had already proceeded to litigate their dispute in court. Both the plaintiff and the defendant have filed their appeals accordingly (Civil Appeal No 46 of 2011 and Civil Appeal No 44 of 2011 respectively) and I now set out the grounds of my decision.

Brief factual background

The AR has set out the facts in detail at [3] to [9] of his decision (see Chua Say Eng (formerly trading as Weng Fatt Construction Engineering) v Lee Wee Lick Terence @ Li Weili Terence [2010] SGHC 333) (“the AR’s decision”). I will limit my account here to the salient facts.

The plaintiff is in the business of building and renovation works. The defendant is a private individual who engaged the plaintiff in August 2008 as the main contractor for the conversion of his two-storey house at 1 Pasir Ris Heights into a three-storey house. Relations soured and the defendant purported to terminate his contract with the plaintiff by way of a letter dated 21 April 2010. In the same letter, the plaintiff was instructed to vacate the construction site by 12 noon on 26 April 2010. On 2 June 2010, the plaintiff served “Payment Claim No 6” on the defendant. The defendant did not serve a payment response.

On 18 June 2010, the plaintiff served the defendant with a “Notice of Intention to Apply for Adjudication” in compliance with section 13(2) of the SOPA. On 22 June 2010, the plaintiff filed an adjudication application (“the Adjudication Application”) with the Singapore Mediation Centre (“the SMC”). The SMC served the Adjudication Application on the defendant that same day. The defendant did not lodge an adjudication response with the SMC.

On 7 July 2010, the Adjudication Determination was made, awarding the plaintiff $125,450.40. As stated above, the plaintiff applied to enforce this and hence the defendant’s application to set it aside.

The issues

The AR identified the three issues which arose before him as follows (see [10] of the AR’s decision): (a) Whether Payment Claim No 6 was a valid payment claim under the SOPA; (b) Whether Payment Claim No 6 was served in accordance with the SOPA; (c) Whether Payment Claim No 6, if it had been served in accordance with the SOPA, was nevertheless served out of time. The AR decided all three issues against the defendant and dismissed his application to set aside the Adjudication Determination. Before me, on the defendant’s appeal against the AR’s dismissal of his application, the defendant only contested the AR’s findings on the first and the third issues.

Preliminary issue: what should the court review?

The preliminary question which these two issues raised was whether the court ought to even review the Adjudicator’s decision on the said issues.

The earlier cases

Following Judith Prakash J’s (“Prakash J’s”) decision in Chip Hup Hup Kee Construction Pte Ltd v Ssangyong Engineering & Construction Co Ltd [2010] 1 SLR 658 (“Chip Hup”), it would appear that the two issues do not pertain to whether an adjudicator has properly assumed jurisdiction and thus should not be considered by the court. Prakash J held the following at [54]:

54 I was unable to accept the respondent's argument that the jurisdiction of the Adjudicator was determined according to whether the claimant had followed the requirements of the SOP Act in connection with the form and content of the payment claim and the time at which it had to be served, or not. I took the view that the Adjudicator's jurisdiction, in the sense of his power to hear and determine the adjudication, could not depend on such adventitious elements. It appeared to me that, as the claimant submitted, the Adjudicator's jurisdiction arose from his appointment by an authorised nominating body under s 14(1) of the SOP Act and from his acceptance of such appointment. Whether the payment claim was in proper order or not would not have an impact on the Adjudicator's jurisdiction, though of course if it was not in order, the Adjudicator would be able to throw out the claim on that basis. Once an appointment had been made and confirmed to the parties by the authorised nominating body under s 14(3), jurisdiction would have been conferred on the Adjudicator in relation to that particular adjudication application.

[emphasis added]

At [55], the judge made reference to two New South Wales Supreme Court decisions and went on to hold at [56]:

56 Similarly, under our legislation, the jurisdiction of an adjudicator stems from his appointment. It does not stem from a properly completed and served payment claim. The powers and functions of the adjudicator come from s 16 of the SOP Act and not from any action on the part of the claimant. The respondent's argument in respect of the Adjudicator's jurisdiction was analogous to an argument that the High Court's jurisdiction to hear any particular dispute depends on whether the writ of summons or other originating process is in proper form when in fact the court's jurisdiction comes from the provisions of the SCJA or other relevant legislation, depending on the nature of the proceedings.

[emphasis added]

Therefore, according to Prakash J, an adjudicator obtains jurisdiction to hear and determine an adjudication application as soon as he accepts the appointment made by the SMC. Applying that to the case before me, it appears that as an adjudicator’s jurisdiction does not stem from a “properly completed and served payment claim”, this court should not be reviewing the Adjudicator’s decision on the two issues raised in this appeal.

About two months after her decision in Chip Hup, Prakash J set out her views in SEF Construction Pte Ltd v Skoy Connected Pte Ltd [2010] 1 SLR 733 (“SEF Construction”) on the court’s role when asked to set aside an adjudication determination or a judgment arising from the same. She said at [42]:

42 Accordingly, instead of reviewing the merits (in any direct or indirect fashion), it is my view that the court's role must be limited to supervising the appointment and conduct of the adjudicator to ensure that the statutory provisions governing such appointment and conduct are adhered to and that the process of the adjudication, rather than the substance, is proper. After all, in any case, even if the adjudicator does make an error of fact or law in arriving at his adjudication determination, such error can be rectified or compensated for in subsequent arbitration or court proceedings initiated in accordance with the contract between the claimant and the respondent and intended to resolve all contractual disputes that have arisen.

[emphasis added]

To further elucidate the limits of the court’s role, Prakash J had regard to the New South Wales Court of Appeal (“NSW CA”) case of Brodyn Pty Ltd v Davenport [2004] NSWCA 394 (“Brodyn”). In Brodyn, Hodgson JA first stated (at [51]) that the scheme of the equivalent New South Wales Act (“the NSW Act”) “appears strongly against the availability of judicial review on the basis of non-jurisdictional error of law.” The judge went on (at [53]) to consider what the conditions for the existence of an adjudicator’s determination were:

The basic and essential requirements appear to include the following:

1. The existence of a construction contract between the claimant and the respondent, to which the Act applies (ss 7 and 8). 2. The service by the claimant on the respondent of a payment claim (s 13). 3. The making of an adjudication application by the claimant to an authorised nominating authority (s 17). 4. The reference of the application to an eligible adjudicator, who accepts the application (ss 18 and 19). 5. The determination by the adjudicator of this application (ss 19(2) and 21(5)), by determining the amount of the progress payment, the date on which it becomes or became due and the rate of interest payable (ss 22(1)) and the issue of a determination in writing (ss 22(3)(a))."

[emphasis added]

As for more detailed statutory requirements of the NSW Act such as “section 13(2) as to the content of payment claims; section 17 as to the time when an adjudication application can be made and as to its...