Lau Fook Hoong Adam v GTH Engineering & Construction Pte Ltd

• Jurisdiction: Singapore
• Judge: Aedit Abdullah JC
• Judgment Date: 25 May 2015
• Neutral Citation: [2015] SGHC 141
• Year: 2015
• Date: 25 May 2015
• Published date: 05 June 2015
• Hearing Date: 09 January 2015
• Plaintiff Counsel: Chia Chee Hyong Leonard and Tan Hin Wa Jason (Asia Ascent Law Corporation)
• Citation: [2015] SGHC 141
• Defendant Counsel: Lam Kuet Keng Steven John (Templars Law LLC)
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 915 of 2014

Aedit Abdullah JC: Introduction

The plaintiff in this case seeks to resist the enforcement of an adjudication determination dated 1 October 2014 made pursuant to the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) (“the SOPA”). What is unusual, however, is that the plaintiff’s application is not made pursuant to O 95 r 3 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) which requires the plaintiff to provide security for the unpaid portion of the adjudicated amount that he is required to pay in consequence of the adjudication determination at the time of the filing of the application.

Instead, the plaintiff, without providing security, seeks a declaration that the adjudication determination is null and void and, in the alternative, a declaration that the adjudicator lacked jurisdiction to adjudicate the matter under the SOPA. He alleges, inter alia, that the payment claim issued by the defendant on 31 July 2014 which triggered the adjudication is not a valid payment claim under the SOPA and that there was a breach of natural justice during the course of the adjudication.

Lastly, in the event that the court refuses to grant the declarations sought, the plaintiff requests for an order to stay the enforcement of the adjudication determination.

Facts Background

The plaintiff and the defendant were engaged in an employer-contractor relationship under a building and construction contract entered into on 10 December 2008 which incorporated Singapore Institute of Architects’ Articles and Conditions of Building Contract (Lump Sum Contract) (7th Ed, April 2005) (“the SIA Conditions 2005”) .¹ The agreed fee was $1,906,891.31 and 5 December 2009 was the stipulated date for completion.²

The defendant was unable to complete its works by the completion date and the architect for the building project issued a delay certificate on 10 December 2009. The architect thereafter only issued the completion certificate on 3 March 2011, certifying that the defendant had completed its works.³ Prior to this, the defendant had issued 15 progress payment claims and corresponding interim architect’s certificates were issued pursuant to the mechanism provided for under cl 31 of the SIA Conditions 2005. The fifteenth progress payment claim and corresponding interim certificate were issued on 23 June 2010 and 6 July 2010 respectively.⁴ The plaintiff paid the amounts certified in all of the 15 interim certificates issued.

Payment claims leading up to the adjudication

On 22 February 2012, the architect reminded the defendant to submit its “final claim”⁵ pursuant to cl 31(11) of the SIA Conditions 2005 which provides as follows:

Final Claim Documents

31.(11) The Contractor shall before the end of the Maintenance Period submit a final claim to the Architect with a copy to the Quantity Surveyor. Such claim shall contain details of all quantities, rates and prices and any adjustment of the Contract Sum or additional payments or compensation claimed by the Contractor under the terms of the Contract, together with any explanations and supporting vouchers, documents or calculations, including documents relating to the accounts of Designated or Nominated Sub-Contractors or Suppliers, which may be necessary to enable the Final Account to be prepared by the Quantity Surveyor.

The defendant thereafter served on the architect a payment claim which it referred to as “Progress Claim No.16A (FINAL ACCOUNT)” on 27 February 2012.⁶ I shall henceforth refer to this payment claim as “Payment Claim 16A”. Payment Claim 16A did not specify which period of time for works done by the defendant it related to. Instead, it purported to represent the “FINAL SUMMARY (FINAL ACCOUNT)”⁷ for works done by the defendant. The architect and quantity surveyor, assuming that Payment Claim 16A was intended to be the defendant’s final claim under cl 31(11) of the SIA Conditions 2005, did not take any action because the defendant failed to produce the supporting documents needed for the preparation of the Final Account as required under that very clause.

After some intermittent communications between the parties, and upon the request of the plaintiff for the defendant to issue its final claim pursuant to cl 31(11) of the SIA Conditions 2005, the defendant served another payment claim on 6 January 2014. The respective letter attaching the payment claim states as follows:⁸

RE: 4 TAI YUAN HEIGHTS – PROGRESS CLAIM NO. 16B (FINAL ACCOUNT)

We refer to the above and are pleased to submit herewith our Progress Claim No.16B (FINAL ACCOUNT) for your perusal and consideration.

I shall henceforth refer to this payment claim as “Payment Claim 16B”. Payment Claim 16B similarly did not specify which period of time for works done it related to. Instead, like Payment Claim 16A, it purported to represent the “FINAL SUMMARY (FINAL ACCOUNT)” for works done by the defendant.⁹ Vouchers, invoices and other supporting documents were also appended to Payment Claim 16B.

The quantity surveyor then sought to clarify with the defendant the nature of Payment Claim 16B. In an email from the quantity surveyor, Mr Oliver Ho (“Mr Ho”) to an employee of the defendant, Ms Angie Ang (“Ms Ang”), dated 27 January 2014, Mr Ho asked:¹⁰

Hi Angie,

Please confirm whether your Claim No 16B is actually your Final Account Document submission pursuant to [cl] 31(11)(a) of the SIA Conditons [sic] of Contract.

[emphasis added]

Ms Ang then replied on the same day:¹¹

Dear Oliver

We would like to confirm that our Claim No.16B dated 6 January 2014 is our Final Account.

[emphasis added]

It bears noting that the SIA Conditions 2005 does not contain a cl 31(11)(a). Clause 31(11) of the SIA Conditions 2005 does not contain any sub-clauses (see above at [6]). Rather, cl 31(11)(a) is only found in later editions of the standard form contract, such as the most recent Singapore Institute of Architects’ Articles and Conditions of Building Contract (Lump Sum Contract) (9th Ed, Reprint August 2011) (“the SIA Conditions 2011”). Clause 31(11) of the SIA Conditions 2011 in fact provides for a final claim procedure different from that found in cl 31(11) of the SIA Conditions 2005:

Final Account Documents

31.(11)(a) The Contractor shall before the end of the Maintenance Period submit his Final Account Documents to the Architect with a copy to the Quantity Surveyor showing the final value of all Works carried out including variations and such other amounts which he considers he is entitled to under the Contract together with supporting documents, vouchers and other documents including documents relating to the accounts of the Designated or Nominated Sub-Contractors or Suppliers to enable the Quantity Surveyor and the Architect to prepare the Statement of Final Account under paragraph (b) hereof. 31.(11)(b) The Architect shall within 3 months from: (i) the date of receipt of the Final Account Documents from the Contractor under paragraph (a) hereof; or (ii) the date of the issue of the Maintenance Certificate;

(whichever is the later) provide to the Contractor the Statement of Final Account which shall show the Architect’s final measurement and valuation of all Works carried out together with any permitted deductions (including liquidated damages) under the terms of the Contract whether or not such deductions have been made by the Employer unless in respect of permitted deductions not yet made by the Employer, the Employer has informed the Architect of his decision to forgo or postpone the same.

31.(11)(c) The Contractor shall serve his final payment claim to the Employer (with a copy to the Architect and the Quantity Surveyor) within 14 days after the occurrence of either of the following events whichever is the later: (i) the issue of the Maintenance Certificate; or (ii) the receipt by the Contractor of the Statement of the Final Account under paragraph (b) hereof.

…

It thus appears to be the case that both the quantity surveyor and the defendant had, at least as of 27 January 2014, proceeded on the incorrect basis that it was the SIA Conditions 2011 (or any other editions of the standard form contract subsequent to the SIA Conditions 2005) that governed the final claim procedure instead of the SIA Conditions 2005 that was incorporated into the building contract between the parties. This is a significant point which I will return to later on in this judgment.

Upon confirmation by the defendant that Payment Claim 16B was intended to be a “Final Account”, the parties, including the quantity surveyor, began to prepare the Final Account. However, the documentation provided together with Payment Claim 16B was deemed deficient by quantity surveyor and more documents were requested. The documentation required for the preparation of the Final Account pursuant to cl 31(11) of the SIA Conditions 2005 was only fully consolidated on 26 June 2014. The architect then issued the maintenance certificate on 30 June 2014 and began to prepare the final certificate pursuant to cl 31(12)(a) of the SIA Conditions 2005 which provides as follows:

Final Certificate

31.(12)(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 issue of the Maintenance Certificate (whichever is the later) the Architect shall issue a Final Certificate. Such Certificate shall be supported by documents showing the Architect’s final measurement and valuation of the Works in accordance with all the terms of the Contract, and 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....