Evergreat Construction Co Pte Ltd v Presscrete Engineering Pte Ltd

• Jurisdiction: Singapore
• Judge: V K Rajah J
• Judgment Date: 08 December 2005
• Neutral Citation: [2005] SGHC 224
• Docket Number: Suit No 1044 of 2003 (Summons In Chambers No 3965 of 2005)
• Date: 08 December 2005
• Year: 2005
• Published date: 09 December 2005
• Plaintiff Counsel: Mohd Sadique Bin Ibrahim Marican and Anand Kumar (Sadique Marican and Z M Amin)
• Citation: [2005] SGHC 224
• Defendant Counsel: Shahiran Ibrahim and Lim Ker Sheon (Asia Law Corporation)
• Court: High Court (Singapore)
• Subject Matter: Whether grounds existing for setting aside award made by independent assessor,Contract,Whether conduct precluding plaintiff from taking advantage of own wrong existing,Whether duty of plaintiff to co-operate arising,Parties agreeing to resolve differences through independent assessor,Prevention principle,Difference between arbitration and expert determination,Whether terms of reference appointing independent assessor as expert or arbitrator,Contractual terms,Whether terms of reference obliging independent assessor to give reasoned award existing

8 December 2005

V K Rajah J:

1 What is the difference between the role of an expert as contrasted to that of an arbitrator? In what circumstances can a decision of an expert be challenged? Is an expert under any legal obligation to give reasons for his determination? These are some of the issues raised in these proceedings. The plaintiff’s attempt to set aside an expert’s award also shines the light brightly on its rather remarkably cavalier conduct in patently flouting the assessment process. Can the “prevention principle” apply in such circumstances to deny it any relief?

Introduction

2 The plaintiff was the main contractor for the construction of Woodlands Junior College (“the Project”). The defendant was the subcontractor appointed by the plaintiff to design, supply and install the micro-piling foundation (“the micro-piling”) for the Project.

3 The defendant did not meet the contractually stipulated deadline for the completion of the micro-piling. Both parties then promptly blamed each other for the consequential delay and resulting losses. Unable to resolve their differences, the plaintiff initiated proceedings to recover its alleged losses. The defendant in turn counterclaimed for the unpaid balance of the price of the works rendered as well as damages.

4 The hearing of the claims was fixed for five days from 7 to 8 and 11 to 13 October 2004. On the second day of the hearing, in an apparent attempt to diminish the expenditure of costs, the parties agreed to resolve all their differences by referring all pending claims to an independent assessor from the construction industry, who would assess the respective claims as an expert rather than as arbitrator. It is as plain as day that the parties desired a swift resolution of their outstanding disputes while avoiding the technicalities of arbitration, and needless to say, the costs and inconvenience of further court proceedings.

5 Counsel jointly settled and submitted a Consent Order which stated:

1. The matter be submitted to an independent assessor for assessment of liability and quantum;

2. Each party to nominate two (2) reputable persons as an independent assessor within 14 days from the date of this order;

3. In the event, parties are unable to agree to the identity of the independent assessor within 21 days of this order, the Honourable Court shall select a suitable assessor which shall be binding on the parties subject to the hearing of objections as hereinunder provided;

a. The appointed assessor and his employer be a party whom/which has no commercial dealings with either or both of the parties for the preceding three (3) years;

b. If such dealings exist, the same be declared by way of a sworn or affirmed statement presented to the parties for objections, if any and to the Honourable Court within 21 days from the date of this order;

c. Any objections thereto are to be submitted in writing within 28 days from the date of this order;

d. Once selected, the independent assessor be at liberty to determine all issues of procedure for the assessment which shall be final;

4. The independent assessor be at liberty, including but not limited to, interview witnesses, consult parties, collate information and evidence as in [sic] his sole discretion deems fit;

5. The independent assessor shall submit his report to the parties and to the Honourable Court within 120 days from the date of appointment. The independent assessor’s decision and findings on all issues of procedure, liability and quantum be final;

6. The timelines provided herein may be extended by consent of the parties in writing;

7. The initial costs of appointing the independent assessor is to be borne equally. However, all reasonable costs occasioned by the assessment shall be at liberty to the assessor to award all costs [sic] upon completion of the assessment; and

8. There be liberty to apply for directions, if any.

[emphasis added]

6 The parties were subsequently unable to agree on the identity of the independent assessor (“IA”). Pursuant to the Consent Order, I then appointed Mr Seah Choo Meng, a well-regarded quantity surveyor as the IA. In the light of the subsequent events, it bears mention that the IA was in point of fact the plaintiff’s nominee.

7 The IA held his first meeting with counsel on 12 January 2005. Various timelines for the filing of the relevant claim papers, exchange of relevant contractual documents, payment of the IA's fees and the hearing dates were set out by the IA. Both parties unequivocally accepted this schedule. Notwithstanding, the plaintiff apart from filing its Claim and its response to the defendant’s Counterclaim failed to comply with any of the remaining directions of the IA. It also omitted to pay the IA its half share of his professional fees (contrary to para 7 of the Consent Order) and/or to comply with its discovery obligations. The IA made numerous attempts to repair the plaintiff’s defaults through a number of consequential directions but to no avail. On 16 May 2005 the IA issued Order for Directions No 7 directing, inter alia:

I hereby order that unless the Plaintiffs comply with my Order for Directions No 6 by 25 May 2005, I shall proceed with the assessment of the Counterclaim of the Defendants, leaving the Claim and Defence to Counterclaim of the Plaintiffs to be assessed as and when he [sic] complied with my Order for Directions No 6. [emphasis added]

8 Once again the plaintiff failed to respond to the IA’s direction. The defendant was naturally deeply perturbed by the plaintiff’s persistent defaults. It applied to court for further directions. On 31 May 2005, Mr Tan Kin Hoon (“Mr Tan”) and his wife (both directors of the plaintiff) together with the defence counsel, appeared before me to explain the plaintiff’s position in relation to its failure to comply with the IA’s directions. Mr Tan stated that the plaintiff had just discharged its solicitors. He added that it was “not viable for [the] company to proceed with [the] matter”. I adjourned the matter to allow him time to consider whether the company could obtain legal representation and/or intended to reconsider its stance on the matter.

9 On 3 June 2005, the plaintiff’s original counsel appeared with Mr Tan and defence counsel, stating that his firm had discharged itself from further involvement in the matter as its professional fees had not been settled. Mr Tan did not dispute this, lamely claiming that he was still attempting to find new solicitors. I then directed both defence counsel and Mr Tan to inform the IA that he ought to vary his existing directions and/or timelines to take into account the change of circumstances. Neither party sought any precise directions from the court itself on the IA’s timelines or scheduling.

10 On 8 June 2005, the IA issued a peremptory directive to the plaintiff:

1 That the Plaintiffs shall permit the Defendants to inspect the documents that they shall use at the hearing and the documents that have been requested by the Defendants, during office hours, on or before 12noon, 11 June 2005. Written notice shall be given by the Plaintiffs to the Defendants’ solicitors of their intention to comply with this Order for Directions by no later than 12noon, 11 June 2005. Should the Plaintiffs fail to comply with Order for Directions, the Plaintiffs’ Claim and Defence to Counterclaim shall be struck off forthwith.

2 That the Plaintiffs shall file the Plaintiff’s List of Documents and the Bundle of Documents in my office and serve a copy of the same on the office of the Defendants on or before 12noon, 11 June 2005, failing which the Plaintiffs’ Claim and Defence to Counterclaim shall be struck off forthwith.

3 That the Plaintiffs comply with paragraphs 1 and 2 of this Order and do pay the required deposit as security for my costs in compliance with my Order for Directions No 6 no later than 12noon, 11 June 2005, failing which:

3.1 the Plaintiffs’ Claim and Defence to Counterclaim shall be struck off forthwith; and

3.2 I shall consider the merits of the award to the Defendants in the sum of $358,184.36 together with interest and costs as claimed, and damages to be assessed at a date to be fixed by me.

4 Should you comply with this Order for Directions on or before 12noon, 11 June 2005, the hearing will be held from 20 to 22 June 2005, commencing at 10am on each day.

[emphasis added]

11 Suffice it to say, that the plaintiff again ignored this directive. Indeed, the plaintiff did not so much as bother to attend the meeting with the IA on 8 June 2005 despite being accorded adequate prior notice. The defendant on its part complied with all of the IA’s directions applicable to it.

12 On 14 June 2005, the IA informed the parties, inter alia, that:

As directed in my Order for Direction No 8, in the event the Plaintiffs failed to comply with the directions in that said Order, I shall consider the merits of the award to the Defendants of the sum of $358,184.36. In this connection, I shall inform the parties separately on the available dates for the hearing and make the award on the basis of the evidence before me as submitted by the Defendants. [emphasis added]

13 Despite this very precise direction and actual notice of it, the plaintiff steadfastly chose not to respond to and or participate in the assessment. The plaintiff was to all intents and purposes completely uninterested and unconcerned about the assessment procedure and/or outcome.

14 In response to a query from the defendant’s solicitors in relation to the procedure applicable to the assessment, the IA on 20 June 2005 clarified that:

For the sake of good order, as the appointed Independent Assessor, in making an award, I have to review all the evidence before me as submitted by the Defendants in their bundle of documents and consider the merits. Once that is completed, I will then proceed to make a reasoned award. [emphasis added]

15 After receipt of the relevant information from the defendant, the IA...