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

• Jurisdiction: Singapore
• Judge: Leo Zhen Wei Lionel AR
• Judgment Date: 11 November 2010
• Neutral Citation: [2010] SGHC 333
• Court: High Court (Singapore)
• Docket Number: Originating Summons No. 783 of 2010 (Summons No. 4136 of 2010)
• Published date: 22 November 2010
• Year: 2010
• Hearing Date: 05 October 2010
• Plaintiff Counsel: Edwin Lee and Joni Tan (Eldan Law LLP)
• Defendant Counsel: Adrian Wong and Nelson Goh (Rajah & Tann LLP), Koh Kok Kwang (CTLC Law Corporation)
• Subject Matter: Civil Procedure
• Citation: [2010] SGHC 333

Leo Zhen Wei Lionel AR: Introduction

In this summons, the defendant, Lee Wee Lick Terence (“the Defendant”), applied to set aside the adjudication determination dated 7 July 2010 (“the Adjudication Determination”) made by Mr Ian de Vaz (“the Adjudicator”) in which the Adjudicator awarded the plaintiff, Chua Say Eng (“the Plaintiff”), the sum of $125,450.40. The Adjudication Determination had been made pursuant to an application by the Plaintiff under s 17 of the Building and Construction Industry Security of Payment Act (Cap. 30B, 2006 Rev Ed) (“the SOPA”).

This application raises three interesting issues. First, I have to consider whether the court, in a setting aside application, should review the adjudicator’s decision as to the validity of an alleged payment claim. Second, a question arose as to whether service, in the case of an individual, can be effected by leaving the payment claim at the last known address of the place of residence of that individual. Third, I have to determine whether the SOPA prescribes a limitation period within which a payment claim must be served. Before delving into a discussion of these issues, it is apposite that I set out the relevant factual background.

Background

The Plaintiff is in the business of building and renovation works. On 16 August 2008, the Defendant engaged the Plaintiff as the main contractor for reconstruction works to convert his two-storey house at 1 Pasir Ris Heights (“the Construction Address”) into a three-storey house (“the Project”) for the sum of $420,000.00 (“the Contract”). Subsequently, the Plaintiff and the Defendant agreed to increase the scope of the Contract to cater for additional works and changes in design. As a result, the total contract sum increased to $542,000.00.

On 8 February 2010, the Defendant alleged that the Plaintiff was in repudiatory breach and gave the Plaintiff ‘Final Notice’ to provide certain information, undertakings and documents by 13 February 2010, failing which the Defendant would accept the Plaintiff’s alleged repudiation. By way of letter dated 21 April 2010, the Defendant purported to accept the Plaintiff’s repudiation and terminated the Contract. In the same letter, the Plaintiff was instructed to vacate the site of the Project by 12pm on 26 April 2010.

In early May 2010, the Plaintiff obtained a valuation report which expressed the view that the value of the work done as at 1 May 2010 was $350,450.40 (“the Evaluated Amount”). Accordingly, on 2 June 2010, the Plaintiff served a Payment Claim No. 6 (“the Payment Claim”) on the Defendant claiming a sum of $140,450.40 for work done from June 2009 to 26 April 2010. This sum represented the outstanding amount due after deducting the previous payments made from the Evaluated Amount. Service (of the Payment Claim) was effected by leaving the Payment Claim under the front door of the Defendant’s residential address at Block 117, Edgefield Plains #17-316 (“the Residential Address”) at around 7.30pm, and by depositing the Payment Claim in the mailbox of the Construction Address at around 6.45pm.

As the Contract is silent on when a payment response should be served, s 11(1)(b) of the SOPA mandates that the payment response be served within 7 days after the payment claim is served. As the Payment Claim was served on 2 June 2010, the due date for the relevant payment response was 9 June 2010. It is common ground that the Defendant did not serve a payment response on the Plaintiff by 9 June 2010 or at all.

The Adjudication Determination

Pursuant to s 12(5) of the SOPA, the dispute settlement period expired on 16 June 2010. On 18 June 2010, in compliance with s 13(2) of the SOPA, the Plaintiff served the Defendant with a Notice of Intention to Apply for Adjudication (“the Notice”) by leaving the Notice under the front door of the Residential Address at 6.45pm, and by depositing the Notice in the mailbox of the Construction Address at 7.10pm.

On 22 June 2010, the Plaintiff filed an adjudication application (“the Adjudication Application”) with the Singapore Mediation Centre (“SMC”). Later that same day, the SMC served the Adjudication Application on the Defendant at the Residential Address. Pursuant to s 15(1) of the SOPA, the Defendant must, within 7 days of receipt of a copy of an adjudication application, lodge an adjudication response with the SMC. Accordingly, the Defendant had up to 29 June 2010 to lodge an adjudication response with the SMC. It is again not disputed that the Defendant did not lodge an Adjudication Response with the SMC by 29 June 2010 or at all.

On 7 July 2010, the Adjudicator released the Adjudication Determination, which awarded the Plaintiff a sum of $125,450.40. The Defendant has now applied to set aside the Adjudication Determination.

Issues

The issues arising out of this application are as follows: Whether the Payment Claim was a valid payment claim under the SOPA; Whether the Payment Claim was served in accordance with the SOPA; Whether the Payment Claim, if it had been served in accordance with the SOPA, was nevertheless served out of time. I will now address each of these issues in turn.

My decision Whether the Payment Claim was a valid payment claim under the SOPA

The issue of whether the Payment Claim constituted a valid payment claim under the SOPA was raised before the Adjudicator. As such, a preliminary question that needs to be answered is whether, in a setting aside application, the court ought to be reviewing the Adjudicator’s decision on such matters. On this point, there appears to be a possible conflict of authority. In SEF Construction Pte Ltd v Skoy Connected Pte Ltd [2010] 1 SLR 733 (“SEF Construction”), Judith Prakash J held that a court hearing a setting aside application under s 27(5) of the SOPA may only consider issues relating to the “appointment and conduct of the adjudicator” and not the merits of the case. At [42] of her Judgment, Prakash J held that:

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.

More pertinently, Prakash J went on to hold, at [46] that:

Similarly, although the SOP Act requires a payment claim to be served, whether or not the document purporting to be a payment claim which has been served by a claimant is actually a payment claim is an issue for the adjudicator and not the court. In this respect, I agree entirely with Hodgson JA's reasoning in Brodyn (([32] supra) at [66]): ... If there is a document served by a claimant on a respondent that purports to be a payment claim under the Act, questions as to whether the document complies in all respects with the requirements of the Act are generally, in my opinion, for the adjudicator to decide. Many of these questions can involve doubtful questions of act and law; and as I have indicated earlier, in my opinion the legislature has manifested an intention that the existence of a determination should not turn on answers to questions of this kind. However, I do not need to express a final view on this.

[emphasis added]

On this reasoning, the issue of whether a document purporting to be a payment claim is a payment claim under the SOPA would be a matter for the adjudicator, and not the court. It would logically follow from this that a court should not consider the issue of the validity of a payment claim in a setting aside application. However, in the recent case of Sungdo Engineering & Construction (S) Pte Ltd v Italcor Pte Ltd [2010] 3 SLR 459 (“Sungdo”), Lee Seiu Kin J took the view that since the validity of a payment claim goes to jurisdiction, the court is not precluded from examining this issue on judicial review. At [34] of his Grounds of Decision, Lee J held that:

In principle, if the validity of a Payment Claim goes to jurisdiction, I do not see how a court is precluded from examining this issue on judicial review and I would, with respect, disagree with this. Notwithstanding this, the 2008 Letter did not purport to be a payment claim under the Act as nothing therein states that it is so. Therefore SEF Construction does not stand in the way of my decision in the present case. However I should state that in practice, where a document purports to be a Payment Claim, then unless the adjudicator has made an unreasonable finding on the evidence (unreasonableness as in Associated Provincial Picture Houses, Limited v Wednesbury Corporation [1948] 1 KB 223), his decision that it satisfies all the requirements of a Payment Claim may not be interfered with by the court when exercising its powers of judicial review. This appears to be the offset of the following passage in Brodyn (at [66]), which was cited in SEF Construction at [46]: ... If there is a document served by a claimant on a respondent that purports to be a payment claim under the Act, question as to whether the document complies in all respects with the requirements of the Act are generally, in my opinion, for the adjudicator to decide. Many of these questions can involve doubtful questions of [f]act and law; and as I have indicated earlier, in my opinion the legislature has manifested an intention that the existence of a determination should not turn on answers to questions of this kind. However, I do not need to express a final view on this.

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