Lee Wee Lick Terence v Chua Say Eng

• Judgment Date: 02 November 2012
• Date: 02 November 2012
• Docket Number: Civil Appeals Nos 44 and 46 of 2011
• Court: Court of Appeal (Singapore)

Lee Wee Lick Terence (alias Li Weili Terence)

Plaintiff

and

Chua Say Eng (formerly trading as Weng Fatt Construction Engineering) and another appeal

Defendant

[2012] SGCA 63

Chan Sek Keong CJ

,

Andrew Phang Boon Leong JA

and

V K Rajah JA

Civil Appeals Nos 44 and 46 of 2011

Court of Appeal

Building and Construction Law—Statutes and regulations—Payment claim not stating that it was made under the Building and Construction Industry Security of Payment Act (Cap 30 B, 2006 Rev Ed)—Whether payment claim was valid payment claim under the Act—Section 10 (3) Building and Construction Industry Security of Payment Act (Cap 30 B, 2006 Rev Ed)—Building and Construction Law—Statutes and regulations—Whether s 10 (2) Building and Construction Industry Security of Payment Act (Cap 30 B, 2006 Rev Ed) read with reg 5 (1) Building and Construction Industry Security of Payment Regulations (Cap 30 B, Rg 1, 2006 Rev Ed) required payment claims to be made at monthly intervals—Whether payment claim was served out of time—Section 10 (2) Building and Construction Industry Security of Payment Act (Cap 30 B, 2006 Rev Ed)—Regulation 5 (1) Building and Construction Industry Security of Payment Regulations (Cap 30 B, Rg 1, 2006 Rev Ed)

On 16 August 2008, Lee Wee Lick Terence (‘TL’) engaged Chua Say Eng (‘CSE’), a contractor, to convert his two-storey house into a three-storey house. Disputes arose, and this resulted in TL terminating the contract. In the letter of termination, TL required CSE to vacate the construction site by 12.00 pm on 26 April 2010, which CSE did. On 2 June 2010, CSE served a document described as ‘PAYMENT CLAIM NO. 6’ (‘PC6’) on TL. PC6 was a claim for $140,450.40 for work done from June 2009 to 26 April 2010. There was no reference in PC6 that it was made or served under the Building and Construction Industry Security of Payment Act (Cap 30 B, 2006 Rev Ed) (‘the Act’). Upon CSE's application, an adjudicator (‘the Adjudicator’) was appointed under s 14 of the Act. In his adjudication determination (‘the AD’), the Adjudicator awarded CSE the sum of $125,450.40.

Upon TL's failure to pay the amount awarded to CSE under the AD, CSE made an ex parte application to the Registrar for leave to enforce the AD under s 27 (1) of the Act as a judgment of the court. Leave was granted and the order of court was served on TL. In response, TL applied under s 27 (5) of the Act to set aside the order granting leave as well as the AD. The assistant registrar (‘the AR’) found in favour of CSE. TL appealed against the AR's decision on the grounds that (a)PC6 was not a valid payment claim under the Act and (b)PC6 was served out of time. The High Court judge (‘the Judge’) decided the appeal on the first ground against TL, but the appeal on the second ground in TL's favour. Accordingly, the Judge allowed TL's appeal.

Civil Appeal No 44 of 2011 (‘CA 44 of 2011’) was TL's appeal against the Judge's decision that PC6 was a valid payment claim, and Civil Appeal No 46 of 2011 (‘CA 46 of 2011’) was CSE's cross-appeal against the Judge's decision that PC6 was served out of time.

Held, dismissing the appeal and allowing the cross-appeal:

(1) Since the Act did not require a payment claim to state that it was made under the Act, the absence of such a statement could not make it any less a payment claim if it otherwise satisfied all the requirements of a payment claim. The correct test for determining the validity of a payment claim was whether a purported payment claim satisfied all the formal requirements in s 10 (3) (a) of the Act and reg 5 (2) of the Security of Payment Regulations (Cap 30 B, Rg 1, 2006 Rev Ed) (‘the SOPR’). If it did, it was a valid payment claim. Accordingly, PC6 was a valid payment claim under the Act: at [73] and [78].

(2) Section 10 (2) of the Act had no effect on reg 5 (1) of the SOPR other than to make reg 5 (1) applicable to construction contracts. There was nothing in the language of reg 5 (1) of the SOPR to compel a claimant to make monthly payment claims for work done in the previous month, whether he wanted to or not. The mandatory language of reg 5 (1) of the SOPR in relation to service of the payment claim, when read with s 10 (1) of the Act, served to impose a maximum frequency of one payment claim per month. It barred the claimant from making more than one monthly claim in respect of a progress payment: at [88] and [90].

(3) PC6 was a final claim for work done and included work done from June 2009 to 26 April 2010 under the building contract made on 16 August 2008. As this contract was supplemented by a second contract for additional works agreed on 3 December 2008, the later date would be the critical date for the purpose of calculating the monthly period under reg 5 (1) of the SOPR. On this basis, the last day of the calendar month following the calendar month in which the contract was made, would be the third day of each calendar month. PC6 was served on 2 June 2010, and therefore PC6 was served in compliance with reg 5 (1) of the SOPR and not served out of time: at [94].

[Observation: In a setting-aside application, the court could decide whether the adjudicator was validly appointed. If there was no payment claim or service of a payment claim, the appointment of an adjudicator would be invalid, and the resulting adjudication determination would be null and void. Even if there was a payment claim and service of that payment claim, the court might still set aside the adjudication determination on the ground that the claimant, in the course of making an adjudication application, had not complied with one (or more) of the provisions under the Act which was so important that it was the legislative purpose that an act done in breach of the provision should be invalid, whether it is labelled as an essential condition or a mandatory condition. A breach of such a provision would result in the adjudication determination being invalid: at [66] and [67].

A payment claim which had not been paid or partially paid before or without any adjudication under the Act was an unpaid claim. Furthermore, an untimely payment claim under reg 5 (1) of the SOPR (whether served prematurely or out of time) would not be barred under reg 5 (1) of the SOPR: at [92].

The definition of ‘progress payment’ in s 2 of the Act was wide enough to include a final payment under a construction contract: at [95].]

AM Associates (Singapore) Pte Ltd v Laguna National Golf and Country Club Ltd [2009] SGHC 260 (refd)

Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223 (refd)

Brodyn Pty Ltd t/as Time Cost and Quality v Davenport [2004] NSWCA 394 (refd)

Chase Oyster Bar v Hamo Industries [2010] NSWCA 190 (refd)

Chip Hup Hup Kee Construction Pte Ltd v Ssangyong Engineering & Construction Co Ltd [2010] 1 SLR 658 (refd)

Chua Say Eng v Lee Wee Lick Terence [2010] SGHC 333 (refd)

Colonial Bank of Australasia, The v Robert Willan (1874) LR 5 PC 417 (refd)

Craig v South Australia [1995] HCA 58 (refd)

Doo Ree Engineering & Trading Pte Ltd v Taisei Corp [2009] SGHC 218 (not folld)

Doolan v Rubikcon (Qld) Pty Ltd [2008] 2 Qd R 117 (refd)

Dualcorp Pty Ltd v Remo Constructions Pty Ltd [2009] NSWCA 69 (refd)

General Ceramics Manufacturers Sdn Bhd v Non-Metallic Mineral Products Manufacturing Employees Union [1988] 3 MLJ 474 (refd)

Hastie & Jenkerson v Mc Mahon [1990] 1 WLR 1575 (refd)

Kirk v Industrial Relations Commission of New South Wales [2010] HCA 1 (refd)

Migotti v Colvill (1879) 4 CPD 233 (refd)

Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 (refd)

SEF Construction Pte Ltd v Skoy Connected Pte Ltd [2010] 1 SLR 733 (refd)

Sungdo Engineering & Construction (S) Pte Ltd v Italcor Pte Ltd [2010] 3 SLR 459 (distd)

Tiong Seng Contractors (Pte) Ltd v Chuan Lim Construction Pte Ltd [2007] 4 SLR (R) 364; [2007] 4 SLR 364 (refd)

Building and Construction Industry Security of Payment Act (Cap 30 B, 2006 Rev Ed) ss 2, 5, 6, 10 (consd) ;ss 4 (1) , 4 (2) (a) , 10 (1) , 10 (2) , 10 (2) (b) , 10 (4) , 11, 11 (1) (b) , 12, 13 (2) , 13 (3) , 13 (4) , 14, 14 (1) , 14 (3) , 15 (1) , 15 (3) , 15 (3) (a) , 17, 17 (3) (h) , 21 (1) , 21 (3) , 23-27, 27, 27 (1) , 27 (5) , 34 (4) , 37 (1) , 37 (3)

Building and Construction Industry Security of Payment Regulations (Cap 30 B, Rg 1, 2006 Rev Ed) reg 5 (1) (consd) ;reg 5 (2)

Building Control Act (Cap 29, 1999 Rev Ed) ss 4 (1) , 4 (2) (a)

Interpretation Act (Cap 1, 2002 Rev Ed) s 2

Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 95

Building and Construction Industry Security of Payment Act 1999 (Act 46 of 1999) (NSW) ss 8 (2) , 13 (2) (c) , 13 (5) , 17, 17 (2) , 17 (2) (a) , 25, 25 (4) (a) (iii)

Occupational Health and Safety Act 1983 (NSW) s 15 (1)

Supreme Court Act 1970 (NSW) s 69

Wong Soon Peng Adrian, Nelson Goh Kian Thong and Liew Mei Chun (Rajah & Tann LLP) and Koh Kok Kwang (CTLC Law Corporation) for the appellant in CA 44/2011 and the respondent in CA 46/2011

Edwin Lee Peng Khoon and Poonaam Bai d/o Ramakrishnan Gnanasekaran (Eldan Law LLP) for the respondent in CA 44/2011 and the appellant in CA 46/2011.

Judgment reserved.

Chan Sek Keong CJ

(delivering the judgment of the court):

Introduction

1 Civil Appeal No 44 of 2011 (‘CA 44 of 2011’) is an appeal by Lee Wee Lick Terence (‘TL’) and Civil Appeal No 46 of 2011 (‘CA 46 of 2011’) is a cross-appeal by Chua Say Eng (‘CSE’) against the decision of a High Court judge (‘the Judge’) to set aside an adjudication determination made in favour of CSE under s 17 of the Building and Construction Industry Security of Payment Act (Cap 30 B, 2006 Rev Ed) (‘the Act’) (see Chua Say Eng v Lee Wee Lick Terence [2011] SGHC 109 (‘the GD’)).

The background of the Act

2 Before addressing the facts of this case, we ought to briefly set out the policy behind and the purpose of the Act and the scheme of adjudication that it provides for. According to...