JSD Construction Pte Ltd v Progen Pte Ltd

• Jurisdiction: Singapore
• Judge: Liew Thiam Leng
• Judgment Date: 21 February 2001
• Neutral Citation: [2001] SGDC 56
• Published date: 19 September 2003
• Year: 2001
• Citation: [2001] SGDC 56
• Court: District Court (Singapore)

JUDGMENT:

Grounds of Decision

1. The Plaintiffs claimed against the Defendants for the sum of $92,532.68 as payment due under an Architect's Final Certificate pursuant to a building contract. The Plaintiffs' application for Summary Judgment was dismissed by the Registrar and the Defendants were given unconditional leave to defend. The Plaintiffs appealed against the Registrar's decision and the appeal was allowed with Summary Judgment being given. The Defendants are appealing against the order for Summary Judgment.

2. The Defendants main contention was that there was fraud or improper certification by the Architect in relation to the Final Account.

3. The contract between the parties was based on the SIA (Singapore Institute of Architects) Conditions of Contract and under the terms of the contact, the issuance of a Final Certificate by the Architect would entitle the Plaintiffs to Summary Judgment.

Architects Final Certificate in SIA Building Contracts

4. The Plaintiffs were engaged by the Defendants as the Main Contractor to carry out works for the erection of a building. The Contract incorporates the SIA Conditions. The relevant clauses are:-

Clause 31 (10)(a)

"Within 3 months of receipt from the Contractor of the documentation referred to in the preceding sub-clause of this Condition or of the Maintenance Certificate (whichever is the later) the Architect shall issue a Final Certificate. Such Certificate, after setting out and allowing for all payments or other expenditure of the Employer or any permitted deductions by him shall state any final balance due from the Employer to the Contractor or from the Contractor to the Employer, as the case may be, which shall thereupon become a debt due..."

Clause 31(11)

"No certificate of the Architect under this Contract shall be final and binding in any dispute between the Employer and the Contractor, whether before an arbitrator or in the Courts, save only that, in the absence of fraud or improper pressure or interference by either party, full effect by way of Summary Judgment or Interim Award or otherwise shall, in the absence of express provision, be given to all decisions and certificates of the Architect (other than a Cost of Termination Certificate or Termination Delay Certificate under clause 32(8) of these Conditions), whether for payment or otherwise, until final judgment or award, as the case may be, and until final judgment or award such decision or certificates shall (save as aforesaid and subject to sub-clause (4) of this Condition) be binding on the Employer and the Contractor in relation to any manner which, under the terms of the Contract, the Architect has as a fact taken into account or allowed or disallowed, or any disputed matter upon which under the terms of the Contract he has as a fact ruled, in his certificates or otherwise."

5. Pursuant to the contract, the Architect issued the Final Certificate dated 28 April 2000.

6. In the case of Lojan Properties Pte Ltd v Tropicon Contractors Pte Ltd [1991] 1 SLR 80, it was held that "where the Contractor had the benefit of a certificate of payment from the Architect, the employer was obliged to pay the amount certified unless he has a cross-claim, the validity of which had itself been certified by the Architect."

7. In Aurum Building Services (Pte) Ltd v Greatearth Construction Pte Ltd [1991] 3 SLR330, in a dispute between a contractor and his sub-contractor, it was held that the contractor had to pay the certified amount first and pursue the counterclaim against the sub-contractor separately.

8. In China Construction South Pacific) Development Co Pte Ltd v Leisure Park (Singapore) Pte Ltd. [2000] 1 SLR 622, it was held that an Interim Certificate for payment issued by the architect under the SIA form of contract, like other certificates issued by him, is prima facie to be honoured. It enjoys 'temporary finality', ie finality pending resolution of any underlying disputes between the parties by review in arbitration or court proceedings. Summary Judgment is to be given in the meantime on the certificate unless it can be shown in a summary way that the Certificate has not been issued in the proper exercise of the architect's certification powers under the contract. All this is provided in clause 31 (11) of the general conditions. The burden of showing that the power has not been properly exercised in respect of any certificate is on the party challenging its validity. [Clause 31 (11) referred to is identical to the present case.]

9. Finally, in All-Trade Construction Pte Ltd v Lo Geok Kwee [2000] 4 SLR 204. It was held that the Main Contractor's right to receive payment from the Employer was clear. Pursuant to the terms of the SIA Conditions, a party who has the benefit of a certificate in his favour and who does not receive payment can seek to enforce the same by taking legal proceedings and obtaining summary judgment against the defendant. The effect of such judgment is that it requires the other party to pay the amounts certified. Any alleged false claims which had not been certified by the architects or any disputes as to the certificates in question are reserved for resolution at trial.

Material Facts

10. The Plaintiffs were engaged by the Defendants to provide construction work in a building contract which was based on the SIA (Singapore Institute of Architects) Conditions of Contract which included clauses 31 (10) and 31 (11) referred to above. In compliance with the two clauses, the Architect had made certain deductions and revisions based on the actual work done, after taking into consideration the various complaints raised by the Defendants. This was confirmed by the Defendants' Quantity Surveyors and Consultants. Pursuant to this, the architect issued a Final Certificate confirming that the sum of $92,532.68 was due for payment to...