Hong Huat Development Company (Pte) Ltd v Hiap Hong & Company Pte Ltd

JurisdictionSingapore
CourtCourt of Three Judges (Singapore)
Judgment Date16 March 2001
Date16 March 2001
Docket NumberCivil Appeal No 85 of 1999,Civil Appeal No 104 of 2000

[2000] SGCA 14

Court of Appeal

L P Thean JA

,

Chao Hick Tin JA

and

Tan Lee Meng J

Civil Appeal No 85 of 1999

Hong Huat Development Co (Pte) Ltd
Plaintiff
and
Hiap Hong & Co Pte Ltd
Defendant

Lawrence Teh (Rodyk & Davidson) for the appellant

John Chung and Sharon Tay (Donaldson & Burkinshaw) for the respondent.

American Home Assurance Co v Hong Lam Marine Pte Ltd [1999] 2 SLR (R) 992; [1999] 3 SLR 682 (refd)

Antaios, The [1985] AC 191 (refd)

Archipelagos and Delfi, The [1979] 2 Lloyd's Rep 289 (folld)

Brooke v Mitchell (1840) 9 LJ Ex 269 (folld)

Faith, The [1993] 2 Lloyd's Rep 408 (refd)

Frederick Leyland & Co Ltd (J Russell & Co) v Compania Panamena Europea Navigacion Limitada (1943) 76 Ll L Rep 113 (folld)

Lubenham Fidelities and Investments Co Ltd v South Pembrokeshire District Council (1986) 33 BLR 39 (refd)

Macarthur v Campbell (1833) 5 B & Ad 518; 110 ER 882 (refd)

Mebro Oil SA v Gatoil International Inc [1985] 2 Lloyd's Rep 234 (refd)

Mortgage Corp Ltd v Sandoes [1996] TLR 751 (refd)

Musselbrook v Dunkin (1833) 9 Bing 605; 131 ER 741 (refd)

Nema, The [1980] QB 547, CA (refd)

Nema, The [1982] AC 724, HL (refd)

Ong Chen Leng v Tan Sau Poo [1993] 2 SLR (R) 545; [1993] 3 SLR 137 (refd)

Pearson Judith Rosemary v Chen Chien Wen Edwin [1991] 2 SLR (R) 260; [1991] SLR 212 (folld)

Perini Corp v Commonwealth of Australia (1969) 12 BLR 82 (folld)

Rio Sun, The [1982] 1 All ER 517; [1982] 1 WLR 158 (refd)

Tokai Maru, The [1998] 2 SLR (R) 646; [1998] 3 SLR 105 (refd)

Arbitration Act (Cap 10,1985 Rev Ed)ss 28 (2), 28 (3), 28 (7) (consd);ss 18,28 (1)

Interpretation Act (Cap 1,1999 Rev Ed)s 53

Rules of Court (Cap 322,R 5, 1997 Rev Ed)O 69rr 2 (2), 4 (2) (consd)

Arbitration Act 1979 (c 42) (UK)s 1 (6A)

Rules of the Supreme Court1999 (UK)O 73

Arbitration–Award–Recourse against award–Appeal under Arbitration Act–Appeal against refusal to grant extension of time to file application for leave to appeal against arbitration award–Time limit within which application for leave ought to be brought–When time began to run–Principles governing extension of time for application for leave to appeal–Reasons for delay–Prospects of success in appeal–Whether substantial rights of parties affected–Whether there was prejudice–Sections 28 (2), 28 (3) and 28 (7) Arbitration Act (Cap 10, 1985 Rev Ed)–Order 69 rr 2 (2) and 4 (2) Rules of Court (Cap 322, R 5, 1997 Rev Ed)–Arbitration–Award–Recourse against award–Setting aside–Misconduct of arbitrator–Whether prolonged delay in delivering award a good ground to set aside award–Whether issues adequately dealt with by arbitrator–Whether reasons in award deficient–Whether award of interest justified–Whether arbitrator dealt with counterclaim–Building and Construction Law–Standard form contracts–Singapore Institute of Architects standard–Whether implied term that employer under obligation to ensure proper discharge by architect of certification duties as set out in contract–Nature and extent of implied obligation–Whether need for knowledge on employer's part as to breach by architect–Words and Phrases–“Substantially affect the rights”–Section 28 (2) Arbitration Act (Cap 10, 1985 Rev Ed)–“After an award has been made and published to the parties”–Order 69 r 4 (2) Rules of Court (Cap 322, R 5, 1997 Rev Ed)

The appellant engaged the respondent as the contractor for the construction of a building. The contract incorporated the 1979 Singapore Institute of Architects Standard Conditions of Building Contracts (“the SIA Conditions”). Disputes arose and were referred to arbitration as provided for under the contract. The award was only delivered some ten years after the hearings were completed.

The appellant disputed the arbitrator's determination that it was liable for the architect's delay in issuing the interim certificates. Some three months after the award was made and published, it filed a notice of originating motion and sought leave to appeal against the award under s 28 (2) of the Arbitration Act (Cap 10, 1985 Rev Ed). The motion was treated by the judge as an application for an extension of time to file an application for leave to appeal under s 28 (2). He refused the application and dismissed the entire motion.

On appeal, the appellant canvassed the following issues: (a) what was the time limit on an application for leave to appeal under s 28 (3), and from which event did that time run; (b) whether the judge erred in exercising his discretion to dismiss the application for extension of time; and (c) whether the award should be set aside on account of the arbitrator's misconduct.

Held, allowing the appeal:

(1) The time limit of 21 days provided for in O 69 r 4 (2) of the Rules of Court in respect of appeals under s 28 (2) applied to the application for leave to appeal: at [20].

(2) An award was made and published when the arbitrator gave notice to the parties that it was ready for collection, and not when they had actual notice of its contents: at [22] to [25].

(3) The principles governing the grant of extension of time to apply for leave to appeal against an award under s 28 were no different from those relating to an application for extension of time to file a notice of appeal against a decision of the High Court. Both are in the nature of an appeal, notwithstanding their difference in scope. The principles are (a) the length of the delay, (b) the reasons for the delay, (c) the chances of the appeal succeeding if the extension was granted, and (d) the degree of prejudice to the respondent if this was done: at [12], [32] and [33].

(4) The appellant's delay in applying for leave to appeal was not inordinate as the possibility of a settlement was discussed and the respondent represented that the time for bringing an application for leave could be extended by agreement. Hence, it was entitled to infer that time would not begin to run for the purpose of filing an application for leave to appeal: at [37] and [38].

(5) The appellant was not liable for the architect's delay. It was liable only if it was aware of such default and no evidence existed to suggest that it did. Hence, there was a chance that the appeal would succeed if the extension was granted. Further, as the dispute concerned a standard form contract, it was necessary for the court to establish the correct nature or extent of the implied obligation of an employer in relation to the certifying functions of the architect under a building contract: at [43] and [50].

(6) The application was further justified as the determination of the question of law in respect of the appellant's liability for the architect's default could substantially affect its rights. The question was a point of practical importance, and not an academic or minor point: at [51] and [52].

(7) No prejudice would be caused to the respondent if the application was granted. It would be kept out of its money but this would not cause irreparable harm since interest continued to run on the sums outstanding under the award: at [53].

(8) No basis existed to set aside the award on account of the arbitrator's misconduct. Firstly, while his delay in making the award was deplorable, neither party applied to remove him. Secondly, that the issues were not adequately dealt with was in reality a ground of appeal. Thirdly, the appellant did not show how the interest rate imposed was wrong and in any event, it had use of the money prior to the award's publication. Lastly, the award had dealt with the appellant's counterclaim in working out the final accounts of the project: at [56] to [60].

[Observation: Section 28 (7) of the Act only applied to a decision on appeal and not to an application for leave to appeal: at [15] and [16].]

Judgment reserved.

Chao Hick Tin JA

(delivering the judgment of the court):

1 This is an appeal against the decision of the High Court refusing to grant an extension of time for the filing of an application for leave to appeal against an arbitration award and refusing to set aside the award on the ground of alleged misconduct on the part of the arbitrator.

The facts

2 The facts giving rise to the issues forming this appeal are largely undisputed. The appellants were the owners of a six-storey shopping centre development situated along Upper Serangoon Road. The respondents were the main contractors. Building works commenced in 1979 pursuant to a written agreement between them dated 27 January 1979 (“the contract”) at a price of $10,243,091.26. The contract incorporated,inter alia, the 1979 Singapore Institute of Architects Standard Conditions of Building Contracts (“the SIA Conditions”). Clause 34 provides for the reference of any dispute arising under the contract to arbitration.

3 During the course of and at the conclusion of the building project, disputes arose between the parties over, inter alia,

  1. (a) the proper amounts recoverable under the final certificate;

  2. (b) the delayed issuance and honouring of interim certificates under cl 30 (1);

  3. (c) excessive deductions of retention sums in those interim certificates under cl 30 (2);

  4. (d) the late release of the retention sums upon practical completion and the expiration of the defects liability period under cl 30 (4) (b) and (c);

  5. (e) the late release of the final certificate under cl 30 (6).

4 The disputes were referred to an arbitrator, Raymond Kuah (“the arbitrator”), an architect nominated by the Singapore Institute of Architects in accordance with cl 34 (1). The arbitrator accepted his appointment on 4 October 1986. The hearing before the arbitrator was completed by 18 March 1988. Nothing further was heard from the arbitrator despite several requests from the respondents for an indication when the award would be published. Some two years later, on 15 June 1990, the arbitrator requested that a quantity surveyor be appointed to assist him on certain aspects of valuation. The...

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2 books & journal articles
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