Ser Kim Koi v GTMS Construction Pte Ltd and others and another appeal

• Jurisdiction: Singapore
• Judge: Woo Bih Li JAD
• Judgment Date: 03 October 2022
• Neutral Citation: [2022] SGHC(A) 34
• Citation: [2022] SGHC(A) 34
• Docket Number: Civil Appeals Nos 20 and 36 of 2021
• Published date: 05 October 2022
• Year: 2022
• Plaintiff Counsel: Kirindeep Singh, Ajinderpal Singh, Thng Huilin Melissa and Toh Wei Qing Geraldine (Dentons Rodyk & Davidson LLP)
• Defendant Counsel: Thulasidas s/o Rengasamy Suppramaniam and Ling Koon Hean David (Ling Das & Partners),Thio Shen Yi SC and Monisha Cheong (TSMP Law Corporation)
• Subject Matter: Building and Construction Law,Architects, engineers and surveyors,Duties and liabilities,Building and construction contracts,Lump sum contract,Standard form contract,Singapore Institute of Architects standard form contracts,Damages,Damages for defects,Delay in completion,Liquidated damages,Construction torts,Negligence
• Hearing Date: 22 July 2021
• Court: High Court Appellate Division (Singapore)

Quentin Loh JAD (delivering the judgment of the court): Introduction

This is a bitterly fought and long running dispute between Mr Ser Kim Koi (“Mr Ser”), the owner of No. 12, No. 12A and No. 12B Leedon Park (collectively, the “Project”), his building contractor, GTMS Construction Pte Ltd (“GTMS”), as well as his architect, Mr Chan Sau Yan (“Mr Chan”). Mr Chan practised under a sole proprietorship, Chan Sau Yan Associates (“CSYA”). In October 2011, Mr Chan incorporated CSYA Pte Ltd and thereafter carried out his practice thereunder. References to Mr Chan will include CSYA and/or CSYA Pte Ltd, as the context shall require.

Mr Ser owned the plot of land, Lot 98388L, Mukim IV, at Leedon Park and decided to build three good class bungalows on that plot. They were designated No. 12, No. 12A and No. 12B by the relevant authorities. Mr Ser engaged Mr Chan as his architect under a memorandum of agreement dated 16 June 2009 (“MOA”)¹ and subsequently engaged GTMS, on the Singapore Institute of Architects, Articles and Conditions of Building Contract (Lump Sum Contract) (9th Ed, September 2010) (the “SIA Conditions”), to construct the three bungalows. The construction works and the parties’ relationship started off well, but unfortunately as the works progressed, things did not proceed smoothly and it rapidly descended into acrimonious disputes between Mr Ser, GTMS, and Mr Chan.

In GTMS Construction Pte Ltd v Ser Kim Koi (Chan Sau Yan and Chan Sau Yan Associates, third parties) [2015] 1 SLR 671, GTMS applied for summary judgment against Mr Ser on the basis of two Interim Payment Certificates 25 and 26 (“IC 25” and “IC 26” respectively) which were issued by Mr Chan. Mr Ser resisted the application arguing that IC 25 and IC 26 were tainted by fraud. GTMS prevailed before the High Court but on appeal (see Ser Kim Koi v GTMS Construction Pte Ltd [2016] 3 SLR 51 (the “CA Judgment”)), the Court of Appeal (the “CA”) set aside the summary judgment. The CA found that on the evidence presented before it, neither IC 25 nor IC 26 had temporary finality (CA Judgment at [70]–[92]) and Mr Chan had issued the Completion Certificate (“CC”), IC 25, and IC 26 improperly, without belief in their truth and/or recklessly, without caring whether they were true or false. The CA also held that the fraud exception in cl 31(13) of the SIA Conditions included recklessness in certification (CA Judgment at [38]–[40]). Further the CC, IC 25 and IC 26 were not properly issued under the SIA Conditions (CA Judgment at [98]).

The dispute then went back before the High Court for trial (the “Suit”). GTMS claimed unpaid sums from Mr Ser arising from two interim payment claims (ie, IC 25 and IC 26) and the final payment claim that were certified by Mr Chan. Mr Ser, in counterclaim, mounted a litany of allegations that GTMS and Mr Chan had entered into an unlawful means conspiracy against him by, among other things, improperly granting extensions of time, certifying as satisfactory deficient works that were not rectified, and certifying the Project as being complete when it was not safe for occupation. Mr Ser also alleged other contractual and tortious claims against GTMS and Mr Chan. In response, Mr Chan counterclaimed against Mr Ser for unpaid architect’s fees.

After a trial spanning close to 60 days, the High Court judge (the “Judge”), in a detailed judgment spanning some 419 pages, allowed GTMS’s and Mr Chan’s claims. However, he dismissed the bulk of Mr Ser’s claims. The Judge’s decision is reported in GTMS Construction Pte Ltd v Ser Kim Koi (Chan Sau Yan (formerly trading as Chan Sau Yan Associates) and another, third parties) [2021] SGHC 9 (the “Judgment”). Thereafter, the Judge issued a supplemental judgment on costs in GTMS Construction Pte Ltd v Ser Kim Koi (Chan Sau Yan (formerly trading as Chan Sau Yan Associates) and another, third parties) [2021] SGHC 33 (the “Costs Judgment”), in which he ordered, among other things, for Mr Ser to pay part of the costs of the action to GTMS and Mr Chan on an indemnity basis.

Dissatisfied, Mr Ser appealed against the Judgment in AD/CA 20/2021 (“CA 20”), and subsequently against the Costs Judgment in AD/CA 36/2021 (“CA 36”) as well, after he was granted leave to do so (see Ser Kim Koi v GTMS Construction Pte Ltd and others [2021] 1 SLR 1319).

Having considered the evidence and the parties’ submissions, we allow CA 20 in part and dismiss CA 36. In our judgment, the Judge was correct to find that there was a delay in the completion of the works. However, with respect, we consider that he erred in his determination of the length of the delay, the certification process that should have been carried out, and the determination of liquidated damages. Further, the Judge erred in finding that Mr Ser had no claim against GTMS in liquidated damages for the delay, and the Judge erred in denying Mr Ser’s claim against Mr Chan. However, we affirm the Judge’s costs orders below. Before we give our reasons, we provide a brief factual background to the dispute.

Factual background

The full factual background has been set out comprehensively by the Judge in the Judgment. We need only refer to the salient facts for the purposes of these appeals.

It is important to appreciate that Mr Chan had a dual role in this Project. First, under cl 1.1(2) of the MOA,² Mr Chan was authorised to act as Mr Ser’s agent in matters relating to the construction of the Project. Secondly, Mr Chan was also appointed to carry out certification duties under the SIA Conditions and cl 1.1(10)(a) of the MOA provided that in doing so, he “… shall discharge his certification duties under the building contract fairly and impartially and [Mr Ser] shall not interfere in the exercise of such certification duties”.

GTMS was appointed as main contractor to carry out the construction of the bungalows (“the Works”) for the Project pursuant to a tender exercise. The terms of engagement between GTMS and Mr Ser were governed by a Letter of Acceptance dated 13 May 2011 (the “LOA”), which incorporated the SIA Conditions.³ The contract governing the relationship between GTMS and Mr Ser in relation to the Works (the “Contract”) consisted of the LOA, the SIA Conditions, and other contractual documents as we shall elaborate on below. Under the terms of the Contract, GTMS was to undertake the Works for a sum of $13.13m. In addition, Mr Ser engaged several consultants on the recommendation of Mr Chan, namely: (a) Chee Choon & Associates (“CCA”), as the mechanical and engineering (“M&E”) consultant; (b) Faithful+Gould Pte Ltd (“F+G”), as the quantity surveyor; (c) Web Structures Pte Ltd, as the civil and structural engineer (“Web”); and (d) Mr Leong Kien Keong, as the Resident Technical Officer (“RTO Leong”) (collectively, the “Consultants”).

The original completion date for the Works was 21 February 2013.⁴ Over the course of the Works, GTMS made three requests for extension of time (“EOT”). The relevant extensions, for the purposes of these appeals, are the second and third EOTs (“EOT 2” and “EOT 3” respectively), both of which were granted by Mr Chan and totalled 55 days during the pendency of the Works: EOT 2: On 20 December 2012, GTMS requested for an EOT of 45 days due to, among other things, a delay by SP PowerGrid Ltd (“SPPG”) in connecting the main incoming power supply and SPPG’s late notice of the requirement to install an overground distribution box (the “OG Box”). Mr Chan granted EOT 2 on 7 February 2013 for a period of 40 days from 21 February 2013 (ie, the original completion date) to 2 April 2013 (see the Judgment at [14(b)]). EOT 3: On 1 April 2013, GTMS requested for an EOT of 40 days to complete the testing and commissioning for M&E works and the installation of light fittings for the Project. Mr Chan granted EOT 3 on 10 April 2013 for a period of 15 days, extending the previous completion date further from 2 April 2013 to 17 April 2013 (see the Judgment at [14(c)]. Over the course of the Works, Mr Chan issued a total of 26 interim payment certificates. Mr Ser made payment for the first 24 interim payments, but not for IC 25 and IC 26.

A summary of the timeline of events relevant to these appeals would be apposite:

Date	Event
20 December 2012	GTMS requests for a 45-day extension by way of EOT 2.
7 February 2013	Mr Chan grants EOT 2 for a period of 40 days, from 21 February 2013 (ie, the original completion date under the LOA) to 2 April 2013.
1 April 2013	GTMS requests for a 40-day extension by way of EOT 3.
10 April 2013	Mr Chan grants EOT 3 for a period of 15 days from 2 April 2013 to 17 April 2013.
17 April 2013	The final site inspection for the Project is conducted, for which Mr Chan, GTMS’s representatives and the M&E engineers were present.
18 April 2013	The maintenance period of the Project commences.
30 April 2013	The Building and Construction Authority (“BCA”) inspects the Project for the issuance of Temporary Occupation Permit (“TOP”) (the “First TOP Inspection”). The Project fails the First TOP Inspection.
15 May 2013	Mr Chan issues the CC certifying completion of the Project as of 17 April 2013, with a Schedule listing outstanding minor works.
18 June 2013	A second TOP inspection for the Project (the “Second TOP Inspection”) is conducted. The Project fails the Second TOP Inspection.
3 September 2013	Mr Chan issues IC 25 for some $390,000 pursuant to GTMS’s Payment Claim No 25. The first moiety of retention money is also released under IC 25.
16 September 2013	The TOP is approved by way of photographic submissions.
6 November 2013	Mr Chan issues IC 26 for some $190,000 pursuant to GTMS’s Payment Claim No 26.
December 2013	Mr Chin Cheong ("Mr Chin"), managing director of Building Appraisals Pte Ltd ("BAPL"), compiles the report of defects and methods of

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