Eltron Electrical Engineering Pte Ltd v Right Engineering Pte Ltd

• Jurisdiction: Singapore
• Judge: Loo Ngan Chor
• Judgment Date: 15 September 2017
• Neutral Citation: [2017] SGDC 256
• Court: District Court (Singapore)
• Hearing Date: 16 March 2017,09 March 2017,19 May 2017,08 August 2017,26 January 2017,07 April 2017
• Docket Number: DC/DC Suit No. 2202 of 2015, District Court Appeal No. HC/DCA 13 of 2017
• Plaintiff Counsel: Mr Tang King Kai (M/s TANG & PARTNERS) -
• Defendant Counsel: Mr Nandwani Manoj Prakash (M/s GABRIEL LAW CORPORATION) -
• Subject Matter: Liquidated damages,additional damages,adjudication determination,temporary finality,declaration
• Published date: 18 January 2018

District Judge Loo Ngan Chor: Introduction:

I allowed the plaintiff’s claim following a trial. I now set out the reasons for my decision for the purpose of the defendant’s appeal. I do this essentially by enlarging a little on, and adapting from, the brief reasons that I gave parties for my decision.

Background facts:

The defendant was the plaintiff’s labour sub-contractor for certain electrical works connected to the so-called revitalisation of the shops and concourses at Boon Lay Shopping Centre. Materials were provided by the plaintiff. The written sub-contract of the parties was dated 4th August 2014 (“the contract”), which the defendant accepted on 5th August 2014.ⁱ

The contract:

Clause 1 of the contract stated that the value of the “lump sum contract” was $68,700, excluding GST. By clause 2, the duration of the contract was to be from 1st August 2014 to 15th December 2014.

In essence, the contract required the defendant to install, among other things, the public announcement (“PA”) and fire alarm systems. Clause 3 of the contract read:

The scope of works shall be, but not limited to: A. PA system installation works • Installation of ceiling speakers, horn speakers, box speakers c/w testing and commissioning and installation of speaker point. B. Fire alarm system installation works • Installation of heat detector, smoke detector c/w testing commissioning and installation of heater and smoke detector points. C. Electrical installation of works …

According to a tabular summary accompanying the contract, the total value of the contract was arrived at by toting up the total number of units of the devices, ie, speakers, heat or smoke detectors, and device points, ie, speaker points, heater points or smoke detector points, multiplied by their unit rates. The unit rate per device was $10 and per device point was $30. Testing and commissioning of each lot was priced at $350.ⁱⁱ It was not disputed that the installation of functional device points entailed, not only the putting in place of the device points, but also the laying of conduits, trunkings or cables ending at the device points.

Clause 6 spoke of the defendant having to “comply to our standard terms and conditions as per attached.”

Several of the standard terms may be set out: 1.0 Contract sum 1.2 This is a firm price lump sum contract. No adjustment shall be made in respect of any fluctuation in the cost of labour, materials, plan, equipment, services etc that may occur during the contract period or extended period. 3.0 Scope of Works 3.1 The scope of works shall be as per defined in the Letter of Award. 3.2 You shall include all other works whether separately mentioned or described which are indispensable necessary for the completion of the above works. 6.0 Extension of time 6.1 The time within the sub-contract works or any phase or part of the works is to be completed may be extended by the main contractor either prospectively or retrospectively and before or after the contract period by such further period or periods of time as may reasonably reflect delay in completion of the works, provided the sub-contractor takes all reasonable steps and due diligence to avoid or reduce such delay. 7.0 Liquidated damages 7.1 If the sub-contract works shall not have been substantially completed within the contract period or any extended time made pursuant to 6.0, the sub-contractor shall pay liquidated damages calculated at S$500.00 per calendar day for the period which the sub-contract works remain incomplete, inclusive of Sundays and Public Holidays.

The dispute:

In all, the defendant rendered seven progress claims starting from 3rd September 2014 and ending on 4th March 2015. By the defendant’s fourth progress claim on 28th November 2014, it was very unhappy with the plaintiff for what it felt was an under-valuation of their work to-date. I set out now a table, provided in the Scott Schedule by the parties,ⁱⁱⁱ which provides an outline of the claims and the plaintiff’s responses.

ANNEX 1 - Table of progress payments
S/No.	Date of Progress Claim	Value of work done/gross amount (S$)	Amount claimed including GST (S$)	Date of Payment Certificate	Amount certified including GST (S$)	Date of Payment	Amount received including GST (S$)
1	3-Sep-14	$14,985.00	$16,033.95	9-Sep-14	$7,616.53	11-Sep-14	$7,616.53
2	29-Sep-14	$44,955.00	$38,080.23	13-Oct-14	$12,987.93	23-Oct-14	$12,987.93
3	3-Nov-14	$34,642.00	$15,639.36	15-Nov-14	$6,764.81 revised to $9,482.52	11-Dec-14	$9,482.52
4	28-Nov-14	$44,675.50	$28,196.69	16-Feb-14	$6,141.08	Nil	Nil
5	29-Dec-14	$49,040.50	$23,625.32	Nil	Nil	Nil	Nil
6	31-Jan-15	$52,337.00	$26,976.21	Nil	Nil	Nil	Nil
7	4-Mar-15	$54,844.50	$29,525.09	Nil	Nil	Nil	Nil
	Total paid (S$)						$28,118.67

I should note, for completeness, that the total amount with GST paid based on the plaintiff’s certification as stated in the table should have read $30,086.98 (this being the sum of its three component figures) ($7,616.53 + $12,987.93 + $9,482.52) rather than $28,118.67. The sum of $30,086.98 works out to $28,118.67 plus 7% GST. For this purpose, the balance unpaid on the contract, without factoring in GST, was $40,581.33 ($68,700 - $28,118.67).^iv I mention this last figure as it was germane to the calculation of certain additional damages which I allowed. (See [42] below.)

The defendant did not wish to accept the plaintiff’s cheque dated 16th February 2015 for $6141.08^v, this being the balance due on what the plaintiff considered to be the right value of the work for the purpose of the fourth payment certificate.

The cheque that I just mentioned was the outcome of a joint inspection by parties on 13th February 2015 during which the value of the completed work was assessed by the plaintiff at $35,640^vi. After factoring in contra charges, the retention sum pegged at 5% and GST, the plaintiff certified the amount of $5739.33 before GST.^vii The cheque amount of $6141.08 included GST. It was not disputed that the plaintiff’s computation was based on actually completed devices and device points, that is to say that they were accompanied by conduits, trunkings and cables.^viii

The defendant stopped work completely on 14th March 2015.

The plaintiff’s claim:

The plaintiff thereafter took over the works and incurred a sum of $60,967.50 for the labour costs of completing the works, which it did on 27th April 2015. It claimed this sum in special damages.^ix It was in addition to liquidated damages.

The plaintiff also claimed liquidated damages from 16th December 2014 to the end of April 2015, at the contractual rate of $500 a day, totalling $68,000.^x

The defendant had taken out an adjudication application under the Building and Construction Industry Security of Payment Act (Cap 30B) (“the Act”) in SOP/AA 115 of 2015 on 24th March 2015. As the plaintiff did not provide the requisite payment response, the defendant secured an adjudication determination for the amount of $27,593.54 based on its 7th progress claim. This amount corresponds with the amount of $29,525.09 (at item 7 of the table at [8] above) before GST. The adjudicator felt bound by s15(3) of the Act to “not consider any reason for withholding the amount due to the claimant as directed by the Act.”^xi

The plaintiff thus wanted a declaration that it was not liable to pay the adjudicated sum of $27,593.54. The plaintiff relied on s21(3) of the Act and WY Steel Construction Pte Ltd v Osko Pte Ltd [2013] SGCA 3 at [27]. This case was relied on by my learned brother DJ James Leong, as a reason for not striking out paragraph 2 of the plaintiff’s Reply, a decision which was upheld by the High Court on appeal.

The Defence:

The defence comprised several points, which I shall deal with when I state my findings below.

The reason for the parties’ different ideas of how much the defendant should be paid for its work turned on whether the defendant should be paid for work it had done towards completing the device points, even though the corresponding conduits, trunkings or cables may not have been, or been fully, laid. The defendant took the view that even where it had not strictly speaking completed a device point, it should have been paid a proportionate amount based on the work it had completed, ie, the laying of conduits or trunkings or cables ending at the corresponding device points. The plaintiff did not agree to this way of looking at it in that it says that it needs to pay only when a device point had been finally completed by connection with the relevant conduits, trunkings and cables.

The trial:

At the trial, the plaintiff’s director, Mr Tan Meng Choon, and site supervisor, Mr Sivanesan Narainasamy, testified for the plaintiff.

The defendant had three witnesses: Mr Chua Siong Gee, its director, Mr Santiago Domingo Jr Aganan, its assistant project manager, and Mr Chin Loon Choon, its site supervisor.

Owing to the way in which my findings were arrived at, by reference to the objective indicia arising out of relevant documents in the record, I would not be recounting the witnesses’ testimony (although footnote ix below contains a brief reference for the purpose of [11] above).

My findings:

No apportionment:

I deviate briefly. In my way of looking at it, it is clear that if a device point was completed, the unit rate of $30 became payable. Where it was not completed, the defendant’s claim, if such it was, would really have been one in quantum meruit. If this had been the...