Ho Pak Kim Realty Co Pte Ltd v Revitech Pte Ltd

• Jurisdiction: Singapore
• Judge: Lai Siu Chiu J
• Judgment Date: 08 April 2010
• Neutral Citation: [2010] SGHC 106
• Court: High Court (Singapore)
• Docket Number: Suit No 36 of 2006
• Year: 2010
• Published date: 15 April 2010
• Hearing Date: 12 May 2009,14 May 2009,18 May 2009,08 January 2009,06 January 2009,07 January 2009,15 May 2009,09 January 2009,19 May 2009,13 May 2009,28 September 2009,11 May 2009
• Plaintiff Counsel: Thrumurgan s/o Ramapiram (Thiru & Co)
• Defendant Counsel: Tito Shane Isaac, Justin Chan Yew Loong and Wayne Ong Zhenhui (Tito Isaac & Co LLP)
• Subject Matter: Contract
• Citation: [2010] SGHC 106

Lai Siu Chiu J:

This is yet another chapter in the on-going dispute between Ho Pak Kim Realty Co Pte Ltd (“the plaintiff”) and Revitech Pte Ltd (“the defendant”) over the construction of 22 units of flats by the former for the latter situated at No 80 Kovan Road, Singapore (“the project”).

There were two previous tranches in the trials relating to this dispute. In the first tranche (in October 2006) heard by another court, the plaintiff’s claim for the balance payment outstanding under the construction contract was adjourned in the midst of trial because of the last minute change in its stance, which necessitated amendments to its pleadings.

In the second tranche heard in May 2007 (see judgment at [2007] SGHC194), this court determined the scope of works of the plaintiff and what comprised the contractual documentation between the parties. This judgment should therefore be read together with the judgment for the second tranche. To recapitulate, the consultants involved in this project were:- ACME Architects (ACME); BKP Associates Pte Ltd (“BKP”) who were the quantity surveyors: HY M&E Consultancy Services Pte Ltd (“HYME”) who were the mechanical and electrical engineers: PEC Consultant (‘PEC”) who were the civil and structural engineers.

In this third tranche, the plaintiff proceeded on its substantive claims for: (i) outstanding progress payments certified by the architect; (ii) under-valuation of works carried out and (iii) damages for wrongful termination. The defendant on its part proceeded on its defence and counterclaim against the plaintiff for liquidated damages for delay in the construction works and cost of rectification of defective works. (I should point out that the plaintiff changed solicitors for this third tranche of the hearing).

Hearing of the third tranche took twelve days during which the plaintiff’s director Ho Soo Fong also known as Benson Ho (“Ho”) continued his testimony from the second tranche while on the defendant’s part Abishek Murthy (“Murthy”) its director was recalled together with the project’s architect from ACME, Nguyen Trung Chon (“the architect”) as well as the engineer from PEC, Samuel Kuan (“Kuan”). The plaintiff had two while the defendant had three expert witnesses and some of the consultants who worked on the project testified for either the plaintiff or the defendant. The defendant also called a director Chong Hai Wah (“Chong”) from Harico Construction Pte Ltd (“Harico”) to testify. Harico was the contractor engaged by the defendant to rectify some defects in the plaintiff’s works.

For expediency and costs consideration, I had directed the parties on the first day of hearing of this third tranche, to limit evidence on building defects to those valued at $10,000 and above while defects of lesser values should be addressed in their closing submissions. In the course of trial, the court was informed that the parties had reached agreement on various items of variations and omissions found in an exhibit (HSF-38) in Ho’s second supplemental AEIC, which resulted in a net sum of $8,234.69 being payable by the plaintiff to the defendant after adjustments. The breakdown for the $8,234.69 is to be found in para 72 of the defendant’s closing submissions dated 26 October 2009.

Consequently, for this tranche the court was tasked to determine the following: the plaintiff’ claim for $771,630.97 for non-payment of certified progress claims; the plaintiff’s claim for undervalued works amounting to $239,337.50; the plaintiff’s claim for damages for wrongful termination of the construction contract; the defendant’s claim for $73,606.62 overpaid to the plaintiff; the defendant’s claim for liquidated damages for delays; and the defendant’s claim for rectification of the plaintiff’s defective works. With regards to item (a), the defendant did not dispute that the amount had been certified by the architect but disputed the plaintiff’s entitlement to be paid on the basis of its counterclaim. Consequently, there was no need for the plaintiff to prove item (a) of its claim, only items (b) and (c).

The evidence

Apart from the remaining two items of the plaintiff’s claim, the evidence that was adduced at trial particularly from the parties’ experts focussed on the defendant’s counterclaim for defects in the plaintiff’s works in three main areas viz (i) the roof which the defendant alleged was not waterproofed in accordance with contract specifications; (ii) omission of works for the basement and roof parapet walls; (iii) faulty installation of windows and sliding doors.

The plaintiff’s case

The plaintiff’s main witness of fact was again Ho, whose testimony in the second tranche had previously been criticised by this court. As the plaintiff did not appeal against this court’s judgment for the second tranche referred to in [3] above, Ho quite correctly (and repeatedly) said he would accept and abide by the court’s findings therein.

The plaintiff’s claim for undervalued works amounting to $$239,337.50

In his second supplemental AEIC filed on 12 December 2008, Ho had deposed that the architect had in interim certificate no. 25 (at AB2878), certified that work to the value of $4,109,267 had been carried out. The architect then certified that a net amount of $3,903,803.65 was due to the plaintiff after deducting 5% ($205,463.35) retention sum. Ho claimed that because of the supplemental agreement dated 2 December 2003 (“the Supplemental Agreement”) (at AB521), payment terms between the parties were varied such that: the plaintiff was entitled to full payment of $570,000 of work certified; the next $494,375 of the works would be paid once the Temporary Occupation Permit (“TOP”) was obtained; the remaining works certified less GST would be financed by the defendant’s loan from Hong Leong Finance Limited; clause 3 of the Supplemental Agreement removed the defendant’s right to withhold retention monies under cl 31(6) of the Conditions of Contract.

Ho contended that as TOP had been obtained on 18 August 2005, the sum of $4,109,267 was due to the plaintiff under certificate no. 25. However the defendant only paid the plaintiff $3,287,636.03 plus a further $50,000. Ho claimed the defendant still owed the plaintiff $771,630.97 ($4,109,267.00 – [$3,287,636.03 + $50,000]).

The defendant disputed Ho’s contention pointing out that as of 26 May 2005, certificate no. 25 valued payments to the plaintiff at $3,903,803.65. Consequently, the actual sum payable to the plaintiff then was $616,167.62 ($3,903,803.65 - $3,287,636.03 paid). However, the plaintiff owed the defendant back charges of $95,399.34. Further, the defendant was also entitled to withhold $494,375 until TOP under the Supplemental Agreement as set out in [10(b)]. The two sums totalled $589,774.34. The amount of GST on $2,839,428.65 (($3,903,803.65 less [$570,000 + $494,375]) was $141,971.43 which the defendant was entitled to withhold under cl 3.3 of the Supplemental Agreement ([10(d) above].

Additionally, in a letter dated 31 May 2005 to the defendant, the architect had pointed out that the 5% retention sum of $205,463.35 deviated from the contract requirement of 10% retention sum whilst liquidated damages due from the plaintiff then totalled $394,000 (@ $2,000 per day x 197 days) based on the architect’s delay certificate dated 16 November 2004 (“the Delay Certificate”). Counsel for the defendant conceded that the figure of $394,000 was incorrect as liquidated damages were calculated at $1,500 per day and should therefore amount to $295,500.

Consequently the defendant contended, nothing was owing to the plaintiff under certificate no. 25. In fact, the plaintiff had overpaid the defendant $73,606.62 as of 26 May 2005 based on the following computation:-

Amount certified	$3,903,803.65
Amount already paid to the plaintiff	$3,287,636.03
Withheld pursuant to the Supplemental Agreement	($ 494,375.00)
Back charges	($ 95,399,24)
GST (approximate)	($100,000.00)
	($ 73,606.62)

If the defendant’s argument is accepted, the correct GST amount (calculated at 5%) should be $141,971.43 and the sum overpaid to the plaintiff would increase to $115,578.05. The plaintiff’s claim for additional works

The plaintiff claimed that it had done extra work for the defendant for eleven months after 24 March 2005 which work was not certified, until the plaintiff’s services were terminated on 1 February 2006. Ho attributed the non-payment to the fact that following BKP’s resignation on 1 June 2005 (after it had issued certificate of payment no. 25), the defendant failed to appoint another quantity surveyor. Ho claimed that when he approached the architect for assistance, he was rebuffed with the excuse that without the appointment of a quantity surveyor, the latter could not certify the plaintiff’s work.

The defendant refuted the plaintiff’s allegations. It was pointed out that the presence or absence of a quantity surveyor would have no practical effect on the valuation of the plaintiff’s work because the plaintiff was then in negative territory when it came to payment and there were no further works left to value.

After BKP’s resignation, the plaintiff submitted three further progress claims numbered 26, 27 and 28 on 28 April 2004, 28 May 2005 and 28 June 2005 respectively. The defendant pointed out that by progress claim no. 23, the plaintiff had claimed for almost 100% of the works done. Further there was no significant difference between the plaintiff’s progress claims no. 25 and no. 28, according to Ho’s testimony under cross-examination (at N/E 1183). That being the case, logically there was nothing significant to be certified.

In the course of Ho’s cross-examination, the defendant adduced evidence that in progress claim no. 23 dated 28 January 2005, the plaintiff had claimed 100% of the works carried out...