JFC Builders Pte Ltd v LionCity Construction Company Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 30 November 2012
• Date: 30 November 2012
• Docket Number: Originating Summons No 547 of 2012 (Registrar's Appeal No 316 of 2012)
• Court: High Court (Singapore)

JFC Builders Pte Ltd

Plaintiff

and

LionCity Construction Co Pte Ltd

Defendant

[2012] SGHC 243

Woo Bih Li J

Originating Summons No 547 of 2012 (Registrar's Appeal No 316 of 2012)

High Court

Building and Construction Law—Dispute resolution—Alternative dispute resolution procedures—Notice to apply for adjudication was given before defendant was entitled to apply for arbitration—Whether such notice was invalid

Building and Construction Law—Dispute resolution—Alternative dispute resolution procedures—Payment claim—Whether court had power to review validity of payment claim

Building and Construction Law—Dispute resolution—Alternative dispute resolution procedures—Payment response—Plaintiff failing to tender payment response—Whether plaintiff was precluded or estopped from relying on alleged invalidity of payment claim in setting aside adjudication application

Building and Construction Law—Dispute resolution—Alternative dispute resolution procedures—Plaintiff making partial payment after receiving payment claim—Insufficient evidence to show if partial payment was made pursuant to payment claim—Whether plaintiff had waived formalities of payment claim and its right to challenge validity of payment claim

Building and Construction Law—Dispute resolution—Alternative dispute resolution procedures—Whether s 10 (1) Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) impliedly precluded claimant from making claim which merely repeated earlier claim without any additional item of claim—Section 10 (1) Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed)

This was an appeal by the defendant (‘LionCity’) against a decision by an assistant registrar to set aside an adjudication determination (‘AD’) in favour of LionCity under the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) (‘SOPA’). The plaintiff (‘JFC’) was the main contractor for a construction project (‘the Project’) which had engaged LionCity to supply material, tools and labour to undertake the structural and architectural works for the Project.

On 15 December 2010, LionCity submitted a progress claim (‘Progress Claim No 7’) for the sum of $360,254.34 for work done for the Project. Subsequently, JFC made payment of the sum of $125,000 in respect of Progress Claim No 7. On 24 January 2011, LionCity submitted another progress claim (‘Progress Claim No 8’) for the sum of $235,285.34 but JFC did not submit a payment response. LionCity thereafter applied for adjudication for the sum of $251,722.14 (the sum contained in Progress Claim No 8 including GST) and obtained an adjudication determination in its favour (‘the AD’). LionCity also applied for and obtained leave of court from the District Court to enforce the AD as an order of court (‘the Order’). JFC made a payment of $110,000 to LionCity after the date of the AD but subsequently applied to set aside the AD and the Order, arguing that Progress Claim No 8 was a repeat claim of Progress Claim No 7 and was also served out of time. The assistant registrar (‘the AR’) allowed JFC's application on the second ground and made no order as to the prayer to set aside the Order as the AR was of the view that the District Court was the appropriate court to set aside the Order. LionCity appealed against the AR's decision.

Held, dismissing the appeal:

(1) The Court of Appeal's recent decision in Lee Wee Lick Terence v Chua Say Eng[2013] 1 SLR 401 (‘Lee Wee Lick’) affirmed the court's power to review the validity of a payment claim: at [26].

(2) The failure of a respondent to serve a payment response does not preclude him from relying on an alleged invalidity of a payment claim in an application made to the court to set aside an adjudication determination as a payment claim given in breach of the Building and Security Industry Security of Payment Act(‘SOPA’) would undermine the jurisdiction of the adjudicator to give the AD. Accordingly, neither s 15 (3) SOPA nor estoppel would preclude JFC from challenging the validity of Progress Claim No 8: at [35] to [41].

(3) The validity of an allegedly defective payment claim and the right to challenge the validity of such a payment claim could not be waived by the making of a partial payment of the amount awarded under the AD if the payment claim was in breach of s 10 (1) SOPA. In any case, LionCity had not adduced sufficient evidence to establish that the payment of $110,000 made by JFC after the date of the AD was made pursuant to the AD rather than pursuant to a settlement agreement alleged by JFC to have been entered into by parties: at [42] to [44].

(4) Section 10 (1) SOPA impliedly precluded a claimant from making a repeat claim, that is, a claim which merely repeated an earlier claim without any additional item of claim (although it might and should give credit for any payment received since the earlier claim was made) otherwise the starting words in s 10 (4) SOPA were unnecessary. It was an abuse to allow a claimant to make repeat claims which he would do if, for example, he had missed the deadline under SOPA to serve his earlier payment claim. Indeed, the deadline to do so would also be rendered largely nugatory if he could resurrect a new deadline by merely issuing and serving a repeat claim. Here, there was no doubt that Progress Claim No 8 was a repeat claim. Hence, Progress Claim No 8 was not a valid claim for the purpose of SOPA, and the AD, which was based on Progress Claim No 8, was to be set aside: at [47], [48], [67], [68] and [76].

(5) While SOPA envisaged that a notice of intention to apply for adjudication (‘NIAA’) would be given after a claimant was entitled to apply for adjudication, ie, after the expiry of the dispute settlement period, there was no express prohibition in SOPA against issuing an early NIAA. There was also no academic material in support of this position. In the present case, there was also no prejudice to JFC arising from the NIAA issued by LionCity before the end of the dispute resolution period. Hence, the NIAA was not invalid: at [99] to [104].

[Observation: It appeared strange that an application for leave to enforce an AD might be made to the District Court but an application to set aside such an AD had to be made in the High Court: at [20].

While the Court of Appeal in Lee Wee Lick did not approve the finding of the AR in Doo Ree Engineering & Trading Pte Ltd v Taisei Corp[2009] SGHC 218 that s 10 (1) SOPA prohibited all repeat claims, it was unclear whether the Court was referring to a repeat claim as defined in the present case. Further, no reasons were given for the Court's view: at [78].]

Brodyn Pty Ltd v Davenport [2004] NSWCA 394 (refd)

Brookhollow Pty Ltd v R&R Consultants Pty Ltd [2006] NSWSC 1 (refd)

CC No 1 v Reed [2010] NSWSC 294 (refd)

Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190 (refd)

Chip Hup Hup Kee Construction Pte Ltd v Ssangyong Engineering & Construction Co Ltd [2010] 1 SLR 658 (refd)

Chua Say Eng v Lee Wee Lick Terence [2011] SGHC 109 (refd)

Doo Ree Engineering & Trading Pte Ltd v Taisei Corp [2009] SGHC 218 (refd)

Dualcorp Pty Ltd v Remo Constructions Pty Ltd [2009] NSWCA 69 (refd)

Falgat Constructions Pty Ltd v Equity Australia Corp Pty Ltd [2006] NSWCA 259 (refd)

Lee Wee Lick Terence v Chua Say Eng [2013] 1 SLR 401 (folld)

Olympia Group Pty Ltd v Tyrenian Group Pty Ltd [2010] NSWSC 319 (refd)

RN & Associates Pte Ltd v TPX Builders Pte Ltd [2013] 1 SLR 848 (refd)

Sandra Doolan and Stephen Doolan v Rubikcon (Qld) Pty Ltd [2007] QSC 168 (refd)

Shellbridge Pty Ltd v Rider Hunt Sydney Pty Ltd [2005] NSWSC 1152 (refd)

Spankie v James Trowse Constructions Pty Ltd [2010] QCA 355 (refd)

Watpac Constructions v Austin Corp [2010] NSWSC 168 (refd)

Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) s 10 (1) (consd) ;ss 10 (4) , 11 (1) , 11 (1) (b) , 12 (2) (b) , 12 (3) , 12 (5) , 13 (1) , 13 (2) , 13 (3) (a) , 15 (3) , 15 (3) (a) , 27 (1) , 27 (5)

Building and Construction Industry Security of Payment Regulations (Cap 30B, Rg 1, 2006 Rev Ed) r 5 (1)

Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 95 r 2 (1)

Building and Construction Industry Payments Act 2004 (Qld) ss 17 (1) , 17 (2) , 17 (4) , 17 (5) , 17 (6)

Building and Construction Industry Security of Payment Act 1999 (Act 46 of 1999) (NSW) ss 8 (2) , 8 (2) (a) , 13 (5) , 13 (6) , 20 (2 A)

Melvin Chan and Kishan Pillay (TSMP Law Corp) for the plaintiff

Lam Wei Yaw and Cynthea Zhou (Rajah & Tann LLP) for the defendant.

Woo Bih Li J

Introduction

1 This is an appeal by LionCity Construction Company Pte Ltd (‘the Defendant’) against a decision by an assistant registrar to set aside an adjudication determination in favour of the Defendant under the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) (‘SOPA’). JFC Builders Pte Ltd is the plaintiff (‘the Plaintiff’). After hearing arguments, I dismissed the appeal.

Background

2 Igratefully adopt the background as set out by counsel for the Plaintiff.

3 The Plaintiff is the main contractor for a project titled ‘Proposed Change of Use from Shop to Erection of a Hotel Development Comprising of 1 Block of 10-Storey Building with Swimming Pool, a Restaurant and a Basement Carpark on Lot 01698 N and 01699 X (PT) MK 01 at 50 Telok Blangah Road (Bukit Merah Planning Area)’ (‘the Project’).

4 Pursuant to a letter of offer - structural works dated 12 May 2010, the Plaintiff engaged the Defendant to supply material, tools and labour to undertake the structural works for the Project.

5 Separately, pursuant to another letter of offer - architectural works dated 26 June 2010, the Plaintiff engaged the Defendant to supply material, tools and labour to undertake the architectural works for the Project.

6 The owner of the Project is Fiesta Development Pte Ltd (‘the Owner’).

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