Central Provident Fund Board v Ho Bock Kee

• Judge: Chua F A J
• Judgment Date: 05 March 1981
• Neutral Citation: [1981] SGCA 4
• Citation: [1981] SGCA 4
• Defendant Counsel: Desmond Wright QC and Wong Meng Meng (Lee & Lee)
• Published date: 19 September 2003
• Plaintiff Counsel: AJ Butcher QC and Goh Heng Leong (Allen & Gledhill)
• Date: 05 March 1981
• Docket Number: Civil Appeal No 29 of 1980
• Court: Court of Appeal (Singapore)
• Subject Matter: Specific conditions for termination in contract,Traditional type of contracts,s 28(1)(a) Arbitration Act (Cap 16),Breach,Whether notice effective,Building and Construction Law,Power of arbitrator to review and revise notice,Building and construction contracts,Notice,Arbitration,Alleged breach of conditions,Notice to terminate,Termination,Building contract,Power to review notice which was a procedural step in forfeiture clause,Conduct of arbitration,Notice sent to contractor,Scope of 'all matters in dispute' in arbitration clause

By a contract in writing made 4 June 1971 the respondent who is a contractor agreed to erect a large building for the appellants at Robinson Road, Singapore (the work to be carried out under the contract is hereinafter referred to as the works). The contract contained conditions of contract. Subsequently, the parties entered into a Supplementary agreement which made certain variations to the contract. The Conditions of Contract contained an arbitration clause. Disputes and differences having arisen between the parties within the scope of the arbitration clause an arbitrator was appointed to hear and determine such disputes.

The parties having agreed that certain questions of law arise asked the arbitrator to state a special case for the decision of the High Court. During the carrying out of the works by the respondent the appellants purported to exercise their rights under cl 34(a) of the conditions of contract to determine the contract.

The respondent contended before the arbitrator that such purported determination was unjustified because, inter alia, the procedure for determination required by the contract was not followed and it is in this regard that the special case arises. The following facts were agreed:

(1) By notice in writing dated 25 October 1974 Mr Seah signing himself as Superintending Officer gave notice to the respondent pursuant to the provisions of cl 34(a) in his opinion the respondent was failing to proceed with reasonable diligence with the works and that the respondent was accordingly in default under the provisions of cl 34. Such notice also informed the respondent that in the event that such default should continue for seven days after 25 October 1974, Mr Seah reserved the right without prejudice to any other rights under the contract to determine the contract in which event Mr Seah would advise the appellants of their rights under the provisions of cl 34(d) of the Conditions.

(2) Although the notice dated 25 October 1974 bears the words `AR Registered`, it was not sent by registered post but was delivered by hand by Mr Seah on 25 October 1974 to Mr Ho Chung Kee, a member of the respondent`s staff.

(3) By notice in writing dated 2 November 1974 the chairman of the appellant Board gave notice to the respondent terminating the contract with effect from the date of the notice.

(4) Although the notice dated 2 November 1974 bears the words `AR Registered`, it was not sent by registered post but was delivered by hand on 2 November 1974 to Mr Michael Chan, a member of the respondent`s staff.

The notice dated 25 October 1974 reads:

Messrs Ho Bock Kee

597-A Geylang Road

Singapore 14

RE: CENTRAL PROVIDENT FUND BOARD BUILDING AT ROBINSON ROAD - CONTRACT NO PWD 288/1971

I HEREBY GIVE YOU NOTICE pursuant to the provisions of cl 34(a) of the conditions of contract forming part of the contract dated 4 June 1971, and made between you and the Central Provident Fund Board for the construction of the Central Provident Fund Board building at Robinson Road, Singapore that in my opinion you are failing to proceed with reasonable diligence with the Works specified in the said contract and the supplemental agreement dated 7 February 1974 and that you are accordingly in default under the provisions of cl 34 aforesaid. Particulars of your failure are set out in the schedule to this Notice. I also hereby give you notice that in the event that such default shall continue for seven days after the date of this notice, I reserve the right without prejudice to any other rights under the said contract to determine the said contract, in which event I shall advise the Central Provident Fund Board of their rights under the provisions of cl 34(d) of the said conditions of contract.

Dated this 25 October 1974

Sd: (illegible)

Superintending Officer

cc Chairman, CPF Board

General Manager, CPF Board

DPW.

The notice dated 2 November 1974 reads:

AR REGISTERED

M/s Ho Bock Kee General Contractor

597A Geylang Road

Singapore 14

WHEREAS

(i) By a contract dated 4 June 1971 and made between you, Ho Bock Kee and the Central Provident Fund Board it was agreed that you would construct the Central Provident Fund Building at Robinson Road for the consideration therein stated.

(ii) By condition 34(a) of the conditions of the said contract the Superintending Officer is empowered to terminate the said contract after giving you, by registered post, notice of default and upon your failure to comply therewith within seven days of the date of the said notice.

(iii) Notice of default was served upon you and you have failed to comply with such notice. <6> NOW TAKE NOTICE that I the chairman acting under powers reserved by condition 34 of the said contract hereby terminate the said contract with effect from the date of this notice.

Dated 2 November 1974.

Sd: William Cheng

Chairman

Central Provident Fund Board.

The questions of law stated in the special case are:

(1) Is the notice of 25 October 1974 invalid on account of its having been given by Mr Seah?

(2) Is the notice of 25 October 1974 invalid on account of its not having been sent by registered post?

(3) Is the notice of 2 November 1974 invalid on account of there being no valid notice of default?

(4) Is the notice of 2 November 1974 invalid on account of its not having been sent by registered post?

(5) Does the arbitrator under cl 40 have power to review and revise the notice of 25 October 1974?

The High Court answered questions (1) and (5) in the negative and questions (2), (3) and (4) in the affirmative. The appellants now appeal against the decision of the High Court in respect of questions (2), (3) and (4) and the respondent appeals against the decision of the High Court in respect of questions (1) and (5).

Question 1

The answer to this question depends on the true construction of cl 1A(d) and cl 34(a) of the conditions of contract. Clause 1A(d) reads:

1A. (d) Notwithstanding any provision to the contrary in these conditions contained, it is hereby agreed that the right to take action and/or initiate proceedings on behalf of the Board under cll 31, 32, 34, 35 or 40 hereof is expressly reserved to the chairman, Central Provident Fund Board.

Clause 34(a) reads:

34(a) Default - If the contractor shall make default in any of the following namely:

(i) without reasonable cause wholly suspends the works before completion;

(ii) fails to proceed with the works with reasonable diligence;

(iii) refuses or to a substantial degree persistently...