Liew Ter Kwang v Hurry General Contractor Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 11 May 2004
• Date: 11 May 2004
• Docket Number: Originating Motion No 30 of 2003
• Court: High Court (Singapore)

Liew Ter Kwang

Plaintiff

and

Hurry General Contractor Pte Ltd

Defendant

[2004] SGHC 97

Judith Prakash J

Originating Motion No 30 of 2003

High Court

Arbitration–Award–Recourse against award–Whether leave to appeal on questions of law arising from standard form contract should be granted–Whether resolution of questions of law would add to certainty and comprehensiveness of law–Arbitration–Award–Recourse against award–Whether leave to appeal should be granted where determination of questions of law could substantially affect rights of one or more parties to arbitration agreement

The applicant hired the respondent to reconstruct his house (“the works”). The contract incorporated the Singapore Institute of Architects' Articles and Conditions of Building Contract (Lump Sum Contract) 5th Ed, 1997 (“the Conditions”). Subsequently, the respondent requested, and was granted, various extensions of time by the architect in charge of the works. Disputes arose between the applicant and the respondent in relation to the works, especially with respect to the extensions of time. The respondent gave notice of arbitration to the applicant and a sole arbitrator was appointed to adjudicate on the matter.

In the Arbitration Award (“the Award”) the arbitrator decided,inter alia, that the extensions of time granted by the architect to the respondent were in order. To the arbitrator's mind, the architect rightly considered that the reason for the extension of time was due to a delay in the supply of roof tiles, which was not solely caused by the respondent. The arbitrator also approved the architect's act of assessing the application for extension of time by simply making an empirical estimate. He further upheld the architect's decision to extend time on the ground that there was no evidence to show that the architect and the engineers had acted unprofessionally or unfairly.

The applicant applied for leave to appeal on three questions of law arising out of the Award. First, whether the arbitrator erred in agreeing with the architect that extensions of time could be granted on the ground of delay in supply of roof tiles, which was not a ground provided under cl 23 of the Conditions. Second, whether the arbitrator erred in agreeing that an architect could assess an extension of time by making an empirical estimate, without carrying out methodical analysis based on supporting documents. Third, whether the arbitrator could only review the architect's decision under cl 37 (3) of the Conditions if there was clear evidence that the architect acted unprofessionally or unfairly, or whether the arbitrator could do so on other grounds.

Held, granting leave to appeal against arbitration award:

(1) All three questions dealt with the interpretation of clauses in the Conditions relating to the grant of extension of time by the architect. The Conditions were standard contractual clauses used in building contracts in Singapore. Therefore, the less restrictive approach in deciding whether to grant leave to appeal was the appropriate approach. In this case, a resolution of the three questions would add to the certainty and comprehensiveness of the law. There was also strong prima facie evidence that the arbitrator had erred in his approach: at [6], [7], [14], [18] and [22].

(2) The architect's powers were derived from and circumscribed by cl 23 of the Conditions. Thus, he could only grant an extension of time if the event justifying the extension fell within one of the applicable sub-paragraphs of cl 23 (1). The arbitrator did not consider how, if at all, the extension of time granted by the architect could be fitted within the bounds of one of the sub-paragraphs: at [13] and [14].

(3) In making any determination under a building contract, an architect had a duty to act fairly and on a rational basis. The architect should have carried out a detailed and methodical analysis of the evidence in support of the application for an extension of time, and not merely based the extension on estimates: at [17] and [18].

(4) The arbitrator's presumption that the architect was right unless it was proved that the latter did not act professionally or fairly, placed an onerous burden on the applicant which was not required by cl 37 (3) of the Conditions. The wording in cl 37 (3) indicated that the arbitrator should review the decision of the architect, and, if it did not accord with the facts as found by him or the true meaning of the contract as determined by him, the arbitrator could disregard that decision even if the architect did not act unprofessionally or unfairly: at [20] and [21].

(5) The determination of the three questions would have a substantial effect on the rights of one or more parties to the arbitration. Each of the questions of law affected the number of days which the contractor had to complete the works in. If the extensions of time granted by the architect were set aside or varied, there would be financial implications in respect of the liquidated damages payable by the respondent to the applicant: at [23].

American Home Assurance Co v Hong Lam Marine Pte Ltd [1999] 2 SLR (R) 992; [1999] 3 SLR 682 (folld)

Hong Huat Development Co (Pte) Ltd v Hiap Hong & Co Pte Ltd [2000] 1 SLR (R) 510; [2000] 2 SLR 609 (folld)

John Barker Construction Ltd v London Portman Hotel Ltd (1996) 50 Con LR 43 (folld)

Nema, The [1982] AC 724 (folld)

Super Keen Investments Ltd v Global Time Investments Ltd v Grand Million Development Ltd [1998] 2316 HKCU 1 (refd)

Token Construction Co Ltd v Charlton Estates Ltd (1973) 1 BLR 48 (refd)

Arbitration Act (Cap 10, 1985 Rev Ed)ss 28 (2),28 (3),28 (4)

George Tan (ChanTan LLC) for the applicant

Winston Quek (B T Tan & Company) for the respondent.

Judith Prakash J

Introduction

1 Mr Liew Ter Kwang is the owner of a...