Engineering Construction (Pte) Ltd v Ohbayashi-Gumi Ltd

• Jurisdiction: Singapore
• Judge: Lai Kew Chai J
• Judgment Date: 23 April 1985
• Neutral Citation: [1985] SGHC 12
• Docket Number: Suit No 3297 of 1979
• Date: 23 April 1985
• Year: 1985
• Published date: 19 September 2003
• Plaintiff Counsel: Cheng Tim Pin (Yap & Yap)
• Citation: [1985] SGHC 12
• Defendant Counsel: CS Wu (Donaldson & Burkinshaw)
• Court: High Court (Singapore)
• Subject Matter: Counterclaim,Consent,Whether plaintiffs released from responsibilities for certain works,Intention to be bound,Whether wrongful,Termination of subcontract,Lack of progress in certain works,Damages Arbitration,Contract,Claim for work done and materials supplied,Amended sub-contract,Formation,Set-off

In this case, the plaintiffs, who had acted as the building sub-contractors of the defendants, are claiming that the termination of their employment on 17 October 1979 by the defendants was wrongful and accordingly they are claiming the price of work done and materials supplied, the refund of the retention monies, damages and other consequential reliefs. The defendants for their part relied on the unsatisfactory performance of the plaintiffs and contended that they had accepted such repudiation by their notice of termination. In the result, the defendants are counterclaiming the sum of $689,893.60 as damages for the work left undone by the plaintiffs in respect of the Stage III works. They also claim the repayment of a loan of $210,000 with interest.

In the course of the resumed hearing of the case, learned counsel for the defendants informed me that the defendants were relying solely on the lack of progress in respect of the remaining aluminium works for Stage III to justify the termination. This stand has since its adoption considerably reduced the scope of the disputes relating to the ground of the termination.

The matter arose in this way. In 1976 the Ministry of Environment (MOE) of the Government of Singapore had invited tenders for the execution of the Kim Chuan Sewage Treatment Works Stages II and III (the said works). Stage III of the said works involved modifications of the treatment plant and although it was described as `Stage III`, this stage of the said works, which included some extensive road works (the roadworks), had to be completed and commissioned before the commencement of the Stage II works. The plaintiffs, not being eligible to tender for the said works, towards the end of 1976 offered to act as the sub-contractor of the defendants and to prepare quotations, which included the provisional bills of quantities, for submission by the defendants. Much groundwork was done by both parties and in January 1977 the defendants submitted their tender based substantially on the quotations of the plaintiffs.

On 6 May 1977 the defendants were awarded the contract by the MOE at the price of $14,319,877.45 subject, of course, to final measurements upon the practical completion of the said works. In turn, the parties proceeded as if the said works would be sub-contracted to the plaintiffs, save and except the prime cost items, and on the basis that the plaintiffs would carry out the sub-contract works at 6.5% less than the main contract sum. It was agreed that parties would later enter into a written sub-contract. On 4 July 1977 the plaintiffs commenced their work, although no written sub-contract was ever signed by the plaintiffs. As a result, the plaintiffs have maintained throughout that no concluded sub-contract was entered into.

On this aspect of the case, what had happened was this. On 1 October 1977 the defendants sent to the plaintiffs the draft sub-contract. After some...