Kwang In Tong Chinese Temple v Fong Choon Hung Construction Pte Ltd

• Jurisdiction: Singapore
• Judge: Warren Khoo L H J
• Judgment Date: 12 May 1997
• Neutral Citation: [1997] SGHC 124
• Docket Number: Originating Summons No 85 of 1997
• Date: 12 May 1997
• Year: 1997
• Published date: 19 September 2003
• Plaintiff Counsel: Khush Chopra (Kush Chopra)
• Citation: [1997] SGHC 124
• Defendant Counsel: Charan Singh (Myintsoe Mohamed Yang & Selvaraj)
• Court: High Court (Singapore)
• Subject Matter: Stay of court proceedings,Arbitration,Grounds,Whether plaintiffs' claim for set-off or counterclaim supported with sufficient particularity,Whether plaintiffs' cross-claim for damages ground for stay,Whether court to order stay of proceedings

This is an application to stay proceedings in the subordinate courts and to refer the claim of the defendants for arbitration. The defendants are contractors. They were engaged by the plaintiffs on a contract to build a temple on land at Paya Lebar Road. The contract is not in the Singapore Institute of Architects form of contract. It is headed `Private Edition (For Minor Works) 1978 Printing`. I am not sure about the origin of this form of contract. Only the articles of agreement and the general conditions have been produced. It appears that the contract sum was $760,000. Clause 10(ii) of the general conditions provides that if it becomes apparent that the works will not be completed by the date for completion for reasons beyond the control of the contractor, the contractor shall so notify the architect, who shall extend the time for completion by a reasonable period. Clause 10(iii) provides that if the works are not completed by the completion date or by any extended completion date fixed under sub-clause (ii), then the contractor shall pay the employer liquidated damages stated in the appendix. The appendix, which also appears to contain stipulations regarding the commencement and completion date, has not been produced.

Clause 14 provides that the architect shall if requested by the contractor at intervals of four weeks certify interim payments to the contractor in respect of the value of the works executed, and the employer shall pay to the contractor the amount so certified within 14 days of the date of the certificate. Clause 15 provides that any dispute or difference concerning the contract shall be referred for arbitration.

The contractors claim in the subordinate courts the sum of $55,590.42, being the amount due on an interim certificate issued by the architect. The owners apply for a stay of the proceedings on the ground that they have a cross-claim for damages for defective works and for liquidated damages for delay in completion. The application is made here rather than in the subordinate courts as `court` in the Arbitration Act (Cap 10) is defined as the High Court.

The affidavit for the owners is brief in the extreme. The defective works are not particularised, but a letter dated 23 August 1996 from the architect to the contractors is exhibited, in which the architect said that on a site inspection on the previous day, the following defects had been noted (sic):

(a) sinking and crack at the apron concrete area,

(b) crack and loose ceramic floor tiles to the apron area,

(c) sinking and stagnant of water at the toilet floors.

Particulars of the cross-claim for liquidated damages are equally lacking. The owners only exhibit a letter which they had written on 24 November 1995 to the contractors. In this letter the owners purported to reject the contractors` request for an extension of time. They also told the contractors that because of the contractors` delay, they would stop progress payments until `your outstanding work is completed`.

The contractors in their affidavit say that the delays in the completion of the building were due to the owners` engineers` delay in approving drawings; to the Drainage Department`s delay in approving drawings for the road works and culverts; to the delay of the piling contractors in cutting off excess piles; to the owners` requests for variations; and to inclement weather. By letters dated 18 and 20 December 1995 to the architect, the contractors had applied for extension of time to complete, on these grounds. However, there is no evidence that this application or any part of it was granted. So far as the defects are concerned, the contractors say that there is a retention sum from which the owners could deduct any damages that might be payable. The contractors therefore submit that there is no dispute fit to go to arbitration.

There is no reply affidavit from the owners. In these circumstances, the question is whether the claim of the contractors for payment of the interim certificate should be stayed, so that the contractors` entitlement as well as the owners` claim for liquidated damages and defects should all be referred for arbitration.

Counsel for the owners submits that, on the terms of the contract, the owners` right to set up cross-claims in resistance of the contractors` claim for payment, has not been taken away or qualified in any way. He refers to the decision of the House of Lords in the case of Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) [1974] AC 689. Since the employers have...