Citiwall Safety Glass Pte Ltd v Mansource Interior Pte Ltd

• Jurisdiction: Singapore
• Judge: Sundaresh Menon CJ
• Judgment Date: 20 August 2015
• Neutral Citation: [2015] SGCA 42
• Published date: 09 October 2015
• Date: 20 August 2015
• Year: 2015
• Hearing Date: 06 May 2015
• Plaintiff Counsel: A Rajandran (A Rajandran)
• Citation: [2015] SGCA 42
• Defendant Counsel: Lee Peng Khoon Edwin, Poonaam Bai, Vani Nair and Tay Kuan Seng Charles (Eldan Law LLP)
• Court: Court of Appeal (Singapore)
• Docket Number: Civil Appeal No 39 of 2014

Chao Hick Tin JA:

This appeal was against the Judge’s decision in Mansource Interior Pte Ltd v Citiwall Safety Glass Pte Ltd[2014] 3 SLR 264 (“the Judgment”). The Appellant, Citiwall Safety Glass Pte Ltd, asked that we set aside the Judge’s decision below and uphold an Adjudication Determination which was made by the Adjudicator in disregard of the Adjudication Response of the Respondent, Mansource Interior Pte Ltd, because the Response was filed two minutes out of time. We allowed the appeal, and these grounds are issued to explain why we disagreed with the Judge.

Subsequent to our decision allowing the appeal, the Respondent requested for further arguments with the view to persuading us to review our decision. We declined to do so. In these grounds, we will also address the points which the Respondent had raised in its request for further arguments.

FactsBackground to the dispute

On 21 December 2012, the Respondent awarded the Appellant a subcontract (“the Subcontract”) for certain construction works with a value of $1,252,750. Progress payments were to be made by the Respondent according to a schedule of payment under the Subcontract (the Judgment at [2]).

On 5 August 2013, the Appellant served on the Respondent a Payment Claim under s 10(1)(a) of the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) (“SOPA”). This claim was for $322,536.65. On 21 August 2013, the Respondent provided the Appellant with a Payment Response under s 11(1)(a) of the SOPA, and the response amount provided was only $93,732.10. This was $228,804.55 (“the Disputed Sum”) less than that claimed by the Appellant (the Judgment at [3]).

The adjudication

The Appellant decided to seek adjudication under the SOPA in respect of the Disputed Sum. On 28 August 2013, the Appellant lodged an Adjudication Application with the Singapore Mediation Centre (“SMC”) under s 13(1) of the SOPA. The Adjudication Application was served on the Respondent the following day, 29 August 2013, at 5.25pm as per s 13(4)(a) of the SOPA (the Judgment at [5]). The Respondent was then required to lodge its Adjudication Response with the SMC within seven days after it received the Adjudication Application from the SMC, which was by 5 September 2013 at 4.30pm according to the SMC Adjudication Procedure Rules (1 December 2012) (“the SMC Rules”). It lodged its Adjudication Response with the SMC on 5 September 2013 at 4.32pm, two minutes after the official closing hours of the SMC. The late lodgement of the Adjudication Response was the critical issue of the appeal, as r 2.2 of the SMC Rules states that the “opening hours” of the SMC are from 9.00am to 4.30pm on weekdays and any document lodged after 4.30pm shall be treated as being lodged the next working day (the Judgment at [5]).

The Adjudicator took the view that by virtue of r 2.2 of the SMC Rules, the Respondent only filed its Adjudication Response on 6 September 2013. It was therefore out of time. As such, he rejected the Adjudication Response pursuant to s 16(2)(b) of the SOPA and only considered the Appellant’s written submissions attached to its Adjudication Application. He allowed the Appellant’s claim for nearly the whole Disputed Sum, and ordered the Respondent to pay $233,956.50 as well as the Appellant’s costs of the Adjudication Determination (the Judgment at [7]). The Respondent thus took out an application to set aside the Adjudication Determination but failed before the Assistant Registrar (“AR”). It then appealed to the Judge, who allowed the Respondent’s appeal. The Appellant appealed against the Judge’s decision to this court.

Decision Below

The Judge allowed the Respondent’s appeal for the following reasons:Section 15(1) of the SOPA states that a respondent to an adjudication claim “shall, within 7 days after receipt of a copy of an adjudication application under s 13(4)(a), lodge with the authorised nominating body [ie, the SMC] a response to the adjudication application.” However, as there was no provision under the SOPA to explain how time was computed, s 50(a) of the Interpretation Act (Cap 1, 2002 Rev Ed) (“Interpretation Act”) provides guidance and it states that “a period of days from the happening of an event or the doing of any act or thing shall be deemed to be exclusive of the day on which the event happens or the act or thing is done”. Since the Respondent received the Appellant’s adjudication application at 5.25pm on 29 August 2013, s 50(a) of the Interpretation Act meant that the seven days should only start running from 30 August 2013 (the Judgment at [14]).Section 2 of the SOPA defined day as “any day other than a public holiday within the meaning of the Holidays Act (Cap 126)”. In Black’s Law Dictionary (Bryan A Garner ed) (West Group, 9th Ed, 2009) at p 453, “day” is defined as any period of 24 hours beginning with one midnight and ending with the next. Therefore a seven-day period starting from 30 August 2013 ended on 5 September 2013 and the last day for the lodgement of the Adjudication Response would be before midnight of 5 and 6 September 2013; as long as the Respondent lodged its Adjudication Response on or before 11.59pm of 5 September 2013, it was lodged within time (the Judgment at [15]).The enactment of r 2.2 of the SMC Rules was ultra vires the powers of the SMC under the SOPA. The SMC’s main role was to administer the adjudication process and merely serve as a conduit for the service of documents between the claimant, the respondent and the adjudicator. The SMC Rules should only be facilitative and should not affect the parties’ substantial rights. Therefore, it was wrong for the SMC Rules to deem that the Respondent’s Adjudication Response was lodged out of time on the following day (the Judgment at [22]–[24]).Section 16(3)(c) of the SOPA required that an adjudicator “comply with the principles of natural justice” and if he failed to comply with those principles, the Adjudication Determination could be set aside (the Judgment at [26]). The Respondent had chosen to exercise its opportunity to be heard by lodging the Adjudication Response within time but the Adjudicator had relied on r 2.2 of the SMC Rules to reject its Adjudication Response. That was wrong and hence the Adjudication Determination was set aside on the ground that a rule of natural justice had been breached (the Judgment at [29]).

The Judge also dealt with the Respondent’s two other submissions relating to fraud and the Adjudicator’s failure to consider the material before him. For the purposes of this appeal, they were irrelevant.

The appeal

Four issues were raised in the appeal and they are being dealt with seriatim in the paragraphs that follow. As a preliminary point, the Appellant pointed out that the Judge at [16] of the Judgment had referred to the previous version of r 2.2 of the SMC Rules in his decision. The current r 2.2 (which was in effect when the adjudication was commenced) reads:

All 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 eves 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. [emphasis in original]

Issue 1: Is r 2.2 of the SMC Rules ultra vires s 15(1) of the SOPA?

First, the Appellant submitted that r 2.2 of the SMC Rules is not ultra vires s 15(1) of the SOPA. In its view, the SMC was appointed to administer the SOPA and the SMC Rules supplemented the Act for administration matters. It submitted that the Judge had paid undue attention to the technical definition of the word “day” without regard to practical reality; the SOPA was silent on procedure and left it to the SMC to set the procedural rules for the proper administration of the SOPA. By rejecting the Adjudication Response lodged, the Adjudicator was only abiding by s 16(2)(b) of the SOPA. The Respondent had to bear the consequences of its actions for filing the Adjudication Response late.

In response, the Respondent submitted that while s 28(4)(e) of the SOPA empowers the SMC to establish rules to facilitate SOPA adjudications, s 19(c) of the Interpretation Act states that no subsidiary legislation made under an Act shall be inconsistent with the provisions of the Act. Thus when the SMC makes a rule which is inconsistent with the SOPA, the rule has to be read subject to the SOPA. In its view, r 2.2 of the SMC Rules is inconsistent with s 15(1) of the SOPA as it changes the SOPA’s position on deadlines for the lodgement of Adjudication Responses.

We agreed with the Appellant that r 2.2 is perfectly consistent with s 15(1) of the SOPA. Section 15(1) of the SOPA states that the respondent should file its Adjudication Response within seven days after receipt of the Adjudication Application and the issue in this appeal was whether the SMC had the power to make rules that restricted the lodgement of documents on a particular day to 4.30pm, which was its official closing time. Section 28(4)(e) of the SOPA reads as follows:

(4) An authorised nominating body shall, in relation to its authorisation under subsection (1) —…(e)facilitate the conduct of adjudications under this Act, including the establishing of rules therefor not inconsistent with this Act or any other written law, and provide general administrative support therefor; and

…

[emphasis added]

The SMC’s power under s 28 to make rules must be read together with s 37 of the SOPA, which states:

Service of documents

37 —(1)Where this Act authorises or requires a document to be served on a person, whether the expression “serve”, “lodge”, “provide” or “submit” or any other expression is used, the document may be served on the person —(a)by delivering it to the person personally;(b)by leaving it...