JFC Builders Pte Ltd v LionCity Construction Co Pte Ltd

• Jurisdiction: Singapore
• Judge: Woo Bih Li J
• Judgment Date: 30 November 2012
• Neutral Citation: [2012] SGHC 243
• Court: High Court (Singapore)
• Hearing Date: 11 October 2012,06 September 2012
• Docket Number: Originating Summons No 547 of 2012/K (Registrar’s Appeal No 316 of 2012/K)
• Plaintiff Counsel: Melvin Chan and Kishan Pillay (TSMP Law Corporation)
• Defendant Counsel: Lam Wei Yaw and Cynthea Zhou (Rajah & Tann LLP)
• Subject Matter: Building and Construction Law
• Published date: 15 January 2013

Woo Bih Li J: Introduction

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

I gratefully adopt the background as set out by counsel for the Plaintiff.

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 01698N and 01699X (PT) MK 01 at 50 Telok Blangah Road (Bukit Merah Planning Area)” (“the Project”).

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.

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.

The owner of the Project is Fiesta Development Pte Ltd (“the Owner”).

The chronology of material events leading to the present proceedings is as follows:

S/No	Date	Event
(a)	15.12.10	Defendant submits Progress Claim No 7 to Plaintiff for work done up to 30 November 2010 for the sum of $360,254.34.
(b)	Prior to 24.01.11	Plaintiff makes payment of the sum of $125,000 in respect of Progress Claim No 7.
(c)	24.01.11	Defendant submits Progress Claim No 8 to Plaintiff for work done up to 30 November 2010 for the sum of $235,254.34. In the same letter, Defendant gives notice of intention to apply for adjudication.
(d)	31.01.11	Plaintiff does not submit payment response.
(e)	01.02.11	Start of dispute settlement period. Defendant writes to notify Plaintiff that it shall proceed with adjudication.
(f)	09.02.11	End of dispute settlement period.
(g)	14.02.11	Defendant submits Adjudication Application in respect of Progress Claim No 8 for the sum of $251,722.14 (including GST) – AA24/2011.
(h)	22.02.11	Plaintiff does not lodge Adjudication Response.
(i)	01.03.11	Adjudicator issues Adjudication Determination, determining that the following amounts shall be payable by the Plaintiff to the Defendant: (i) Adjudicated Sum of $204,734.09; (ii) Interest at the rate of 5.33% from the date of the Adjudication Determination; (iii) 90% of the Adjudication Application Fee of $535.00; and (iv) 90% of the Adjudicator’s Fees of $11,235.
(j)	19.04.12	Defendant applies for leave to enforce the Adjudication Determination in the same manner as a judgment or order of court in OS 141/2012.
(k)	18.05.12	Defendant obtains Order of Court in OS 141/2012 granting leave to enforce the Adjudication Determination in the same manner as a judgment or order of court.
(l)	22.05.12	Order of Court in OS 141/2012 served on Plaintiff.
(m)	08.06.12	Plaintiff applies by OS 547/2012 (ie, the present proceedings) to set aside the Adjudication Determination and Order of Court in OS 141/2012.

The Plaintiff stressed that the Defendant’s Progress Claim No 8 was for exactly the same work claimed under Progress Claim No 7. The amount claimed under Progress Claim No 8 would have been for the same sum as was claimed under Progress Claim No 7 but for the fact that the Plaintiff had made payment of $125,000 after receiving Progress Claim No 7. Therefore, the Defendant had given credit for this $125,000 in its Progress Claim No 8.

As can be seen from the above chronology, the Plaintiff did not issue a payment response to Progress Claim No 8. Neither did it participate in the adjudication process which arose from the Adjudication Application of the Defendant. The Adjudicator issued his Adjudication Determination (“the AD”) as set out in the chronology. After this, the Defendant applied and obtained leave of court from a District Court to enforce the AD in the same manner as a judgment or order of court. After the District Court made an order to grant the Defendant such leave and that order was served on the Plaintiff, the Plaintiff then filed the present Originating Summons in the High Court (“OS 547/2012”) seeking, firstly, to set aside the AD and, secondly, to set aside the District Court Order granting leave to the Defendant to enforce the AD as mentioned above.

OS 547/2012 was heard by an Assistant Registrar (“AR”) on 11 and 18 July 2012 who allowed the Plaintiff’s application and ordered, inter alia, that the AD be set aside.

On 8 August 2012, the AR issued her Grounds of Decision stating, inter alia, that: the court can review the validity of a payment claim; there was insufficient basis to support setting aside the AD on the ground alone that Progress Claim No 8 was a repeat claim; and the AD was set aside on the basis that Progress Claim No 8 had been served out of time.

The AR declined to hear any argument in respect of the prayer to set aside the District Court Order which granted the Defendant leave to enforce the AD. She made no order on that prayer save that leave was granted to the Plaintiff to bring an application to set aside the District Court Order.

On 31 July 2012, the Defendant filed the present appeal (Registrar’s Appeal No 316 of 2012) against the AR’s decision.

The process of applying for leave to enforce or to set aside an AD

As can be seen from the facts enunciated above, the Plaintiff filed OS 547/2012 in the High Court even though the order granting leave to the Defendant to enforce the AD was made by the District Court.

Counsel for the Plaintiff explained that in a previous similar case, a District Judge had decided that the District Court has no jurisdiction to set aside an AD because the review or consideration of such a determination is an exercise of supervisory power which the District Court does not have. After an appeal was filed to the High Court against that decision, the High Court agreed with the decision of the District Judge. Accordingly, in the present case, counsel for the Plaintiff filed its application in the High Court to set aside both the AD and the District Court Order granting leave to enforce the AD.

However, the AR apparently was of the view that since the order granting leave to enforce the AD was made by the District Court, then the District Court was the appropriate court to set aside such an order.

The Plaintiff’s counsel said it was not clear in the first place whether the District Court has jurisdiction to grant leave to enforce the AD although he was of the view that it does have such a jurisdiction. Section 27(1) of SOPA which stipulates that an AD “may, with leave of the court, be enforced in the same manner as a judgment or an order of the court to the same effect” does not specify from which court the leave should be sought. Accordingly, it does not stipulate that leave to enforce must be sought from the High Court. Secondly, the granting of leave to enforce an AD was not an exercise of supervisory power.

He also said that O 95 r 2(1) of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“the Rules”) states that an application for such leave is to be made to the Registrar without qualification and the definition of the “Registrar” refers to the Registrar of the Supreme Court and of the Subordinate Courts (of which the District Court is part).

As for the prayer to set aside the order granting leave to enforce, it seemed to me that there is no need to apply to set aside the order granting leave to enforce the AD if the AD itself is set aside. The order granting leave to enforce would then cease to be effective.

Nevertheless, it does seem strange that an application for leave to enforce an AD may be made to the District Court but an application to set aside such an AD must be made in the High Court. I am of the view that such a dichotomy will trip many a solicitor as happened in the previous case mentioned by the Plaintiff’s counsel. Indeed, it seemed to me that he was aware of it only because he or his firm acted in the previous case when the client’s application to set aside an AD failed because it was filed in the wrong court.

I hope that the process can be streamlined, whether by amendment of the Rules or otherwise, so that in future any application for leave to enforce will be made in the High Court.

Issues arising in this appeal

The issues to be determined in the appeal were: whether the court may review the validity of a payment claim; whether it was inequitable for the Plaintiff to challenge the AD or the Plaintiff had waived its right to do so. This was a new issue raised by the Defendant’s counsel, Mr Lam, at the appeal. whether Progress Claim No 8 was an invalid payment claim under SOPA and, if so, its effect; whether Progress Claim No 8 was served out of time; and, if so, its effect; whether the adjudication application was invalid as a result of the Defendant failing to serve a Notice of Intention to Apply for Adjudication in accordance with the provisions of SOPA. This was a new issue raised by the Plaintiff’s counsel, Mr Chan, at the appeal.

Issue 1- Whether the court may review the validity of a payment claim

SOPA does not expressly state that a court may set aside an AD but, as Mr Chan submitted, s 27(5) of the SOPA clearly contemplates that a court can do so. Section 27(5) states, “Where any party to an adjudication commences proceedings to set aside the adjudication determination or the judgment obtained pursuant to this section, ...”. The court’s power to set aside...