Lai Yew Seng Pte Ltd v Pilecon Engineering Bhd

• Jurisdiction: Singapore
• Judgment Date: 18 April 2002
• Date: 18 April 2002
• Docket Number: Suit No 1457 of 2001 (Registrar's
• Court: High Court (Singapore)

Lai Yew Seng Pte Ltd

Plaintiff

and

Pilecon Engineering Bhd

Defendant

[2002] SGHC 75

Choo Han Teck JC

Suit No 1457 of 2001 (Registrar's Appeal No 44 of 2002)

High Court

Contract–Privity of contract–Whether subcontractor can sue on contract made in capacity of former entity–Whether contractor liable to subcontractor when contract made with the latter's former entity–Whether subcontractor's pleadings sufficiently establishes its claim

The defendant (“Pilecon”) entered into three contracts with a partnership firm (“the firm”), which later took on an incorporated identity and became the plaintiff (“LYS”). The firm informed Pilecon of this by letter (“the letter”).

When Pilecon terminated the contracts, LYS then sued for outstanding progress payments pursuant to work done by the firm under the contracts. It obtained judgment for the sums due under one of the contracts, while Pilecon was given conditional leave to defend the sums due under the other two contracts.

On appeal, Pilecon asserted that the contracts were made with the firm and it was not contractually liable to LYS as such.

Held, dismissing the appeal:

(1) The evidence showed that Pilecon dealt with LYS in relation to the contracts. Pilecon knew that the firm was to become a private limited company through the letter which it received. It also corresponded with LYS, and paid LYS pursuant to its invoices: at [4].

(2) LYS' existence was indisputable and credit had to be given for the work it executed. In this regard, Pilecon could not refuse payment by asserting that it contracted with another entity. LYS was entitled to payment on the terms of the original contract or, if not, on a quantum meruit basis as it was the contracting party and was not acting as the firm's agent: at [4].

(3) The order for conditional leave to defend was appropriate, and the court declined to grant unconditional leave to defend. First, Pilecon's belief that it was dealing with the firm was incredulous in view of the circumstances. Second, although LYS' statement of claim was insufficiently precise, it pleaded its case with sufficient clarity by informing Pilecon that the work upon which it claimed was that done pursuant to the contracts, and the actual work done and the amounts claimed were also sufficiently set out. Third, Pilecon did not dispute that it received the benefit of LYS' work. In the result, the two parties clearly had contractual relations regardless of what became of the original contracts between Pilecon and the firm: at [6] and [7].

Central London Property Trust Ltd v High Trees House Ltd [1947] 1 KB 130; [1956] 1 All ER 256 (distd)

Combe v Combe [1951] 2 KB 215; [1951] 1 All ER 767 (distd)

Sea-Land Service Inc v Cheong Fook Chee Vincent [1994] 3 SLR (R) 250; [1994] 3 SLR 631 (distd)

S Thulasidas (Ling Das & Partners) for the appellant/defendant

M M Namazie and K L Wong (Mallal & Namazie) for the respondent/plaintiff.

Choo Han Teck JC

1 The defendant was at all material times the main contractor to three building projects for the Government. These concerned the building of a secondary school at Marsiling (“the Marsiling project”), a primary school at Ponggol (“the Ponggol project”), and a primary school at Ang Mo Kio (“the Ang Mo Kio project”). Lai Yew Seng Iron Works was one of the defendant's subcontractors. It was not disputed that the defendant's main contracts on the Marsiling and Ponggol projects were terminated by the employer on 27 April 2001 and 3 May 2001 respectively. The defendant wrote a letter to Lai Yew Seng Iron Works (at the plaintiff's address) informing them of the termination by the employer. This letter was received by the plaintiff on 26 June 2001. The plaintiff company, Lai Yew Seng Pte Ltd, was incorporated on 29 June 2000. It is not disputed that the partners of the...