Motor Image Enterprises Pte Ltd v SCDA Architects Pte Ltd

JudgeJudith Prakash J
Judgment Date17 September 2010
Neutral Citation[2010] SGHC 278
Citation[2010] SGHC 278
Docket NumberOriginating Summons No 264 of 2009
Published date23 September 2010
Hearing Date10 March 2010,14 April 2010
Plaintiff CounselDavinder Singh SC, Tan Siu-Lin and Alexander Lee (Drew & Napier LLC)
Date17 September 2010
Defendant CounselThio Shen Yi SC, Tan Sue-Ann and Jonathan Yang (TSMP Law Corporation)
CourtHigh Court (Singapore)
Subject MatterArbitration
Judith Prakash J: Introduction

This is an appeal on a question of law arising out of an arbitration.

The parties to the arbitration were SCDA Architects Pte Ltd (“SCDA”), a firm of architects that was engaged by Motor Image Enterprises Pte Ltd (“Motor Image”) to be the architects in respect of the proposed retrofitting works and alterations (“the project”) to be carried out to Motor Image’s premises at 25 Leng Kee Road. The arbitration proceedings resulted from a dispute by the parties over the fees payable for the services rendered by SCDA.

SCDA was the claimant in the arbitration. It claimed the sum of $334,367.44 which it alleged constituted unpaid fees due to it for its work on the project. SCDA was largely successful in respect of its claim and by his award dated 5 February 2009 (“the Award”), the arbitrator, Dr Goh Chong Chia (“the Arbitrator”) ordered, inter alia, that Motor Image was to pay SCDA its claim of $463,335 less payment to date.

Subsequently, Motor Image applied for leave to appeal to the High Court on a question of law arising out of the Award. On 2 October 2009, I granted leave to Motor Image to appeal on the following question of law (“the Question”): Where an architect who is engaged under the Singapore Institute of Architects Conditions of Appointment and Architect’s Services and Mode of Payment (“the Appointment Conditions”) has agreed with his client to call for tenders based on an agreed set of drawings but instead calls for and receives tenders based on a different set of drawings, is the architect entitled to fees based on the lowest of the tenders under or by reference to clause 1.3(3)(b) of the Appointment Conditions?

On 12 October 2009, SCDA took out a summons (“SUM 5332/09”) asking for leave under s 49(7) of the Arbitration Act (Cap 10, 2002 Rev Ed) (“the Act”) to appeal against the grant of leave to Motor Image to appeal on the Question. I dismissed this application some two weeks later and the appeal proper then came on for hearing in March and April this year.


The appointment of SCDA as architects for the project took place in February 2004. The contract of service between the parties was subject to the Appointment Conditions. It was agreed that SCDA would be paid fees equivalent to 8.5% of the total construction cost subject to a minimum lump sum fee of $200,000. The Appointment Conditions provide by Condition 1.3(3) for the manner of calculating the construction cost as follows: The total construction cost of the works for the purpose of calculating the fees shall include all builders’ works as set out in the Building Contract and all specialists and/or sub-contractors’ works forming part of the project. The total construction cost of the Works shall be arrived at in accordance with the order of priority as follows:- For completed works, the total construction costs of all works including variations and additional work. For works not contracted, the lowest bona fide tender received by the Architect. For works where tenders have not been received by the Architect, the latest estimate of the total construction costs prepared by the appointed Quantity Surveyor, if any; or in the absence of the Quantity Surveyor, the Architect.

After its appointment, SCDA made three submissions of drawings to the Urban Redevelopment Authority (“the URA”) for approval. The first submission was made on 18 August 2004, the second on 28 June 2005 and the final one on 18 August 2005. In addition, on 29 June 2005, Motor Image received another set of drawings from SCDA (“the 29 June 2005 drawings). Written permission for construction was finally obtained from the URA in September 2005. Motor Image was aware that the “use quantum” (ie the URA’s requirement that only 40% of the premises could be used as a showroom or for ancillary purposes such as for offices or storerooms) was the major issue raised by the URA in the latter’s written directions in response to the submissions and was responsible for the URA’s rejection of the first two sets of drawings. Nonetheless, Motor Image briefed SCDA shortly before the second submission saying that it wanted more offices. It was common knowledge that this would delay and complicate the URA approval process.

After written permission was obtained, SCDA called a tender for the project (the “Main Contract Tender”). Motor Image subsequently decided to reduce the scope of the project. After Motor Image accepted a revised scope of works, SCDA called a second tender (“Tender No 2”). Finally, Motor Image decided to call the project off. The lowest tender for the Main Contract Tender was $9,480,000 and the lowest tender for Tender No 2 was $3,782,912.

The fees claimed by SCDA were calculated on the basis of 57.5% (being the stage of the work reached when the project was terminated, something that was not in dispute) of 8.5% of $9,480,000 being the lowest tender for the Main Contract Tender. Motor Image was not happy with this claim: it considered that it had been grossly overcharged for the work done especially because various mistakes had been made in the tender drawings.

The claim and the Award

SCDA based its claim in the arbitration on the results of the Main Contract Tender and the application to the same of Condition 1.3(3). The defences that Motor Image put up involved allegations of breach of contract, negligence, breach of statutory duty and or professional duties and/or ethical duties and illegality. The gravamen of these allegations (apart from illegality) revolved around SCDA’s alleged failure to ensure that the drawings complied with all relevant laws and regulations and to give proper advice to Motor Image on whether the design brief and drawings could be implemented lawfully or complied with the URA’s prescribed use quantum and its further failure to advise Motor Image in a timely fashion that the prescribed use quantum had been breached and the design brief could not have been achieved. The allegation of illegality was based on the assertion that SCDA in the third submission to the URA had submitted an application and drawings which contained particulars or statements which were false, misleading, inaccurate and constituted a sham. This submission, it alleged, had resulted in a breach of the Planning Act (Cap 232, 1998 Rev Ed). Motor Image also put in a counterclaim.

The Arbitrator found no merit in any of Motor Image’s defences or its counterclaim. His key findings were as follows:

Counterclaim for breach of contract of statutory duty/ obligations of professional duties and/or ethical duties.

It is my belief that two separate schemes were being prepared concurrently and it would be incorrect to conclude that one scheme was to mislead the URA and the other [Motor Image]. … [SCDA] was trying to fulfil Motor Image’s brief in one, the URA in the other and at the same time preparing for tender. It is not unusual for the submission drawings to be different from the tender drawings and not in full compliance to [Motor Image’s] brief. It is common practice for an amendment to be submitted later to regularise the works. … (Emphasis added)

… [Motor Image] had full knowledge of the various steps and actions being taken by [SCDA].

I dismiss the allegation that SCDA had breached their statutory duties/obligations, professional duties and/or ethical duties.

Counterclaim on Negligence

[SCDA] made mistakes, however, mistakes in themselves do not amount to negligence. [Motor Image] had alleged negligence by [SCDA], but did not present any assessment of the damage during the hearing ...

This claim is rejected as no evidence was presented to establish the damage.

Defence of Illegality

[Motor Image] had pleaded in their Defence and Counterclaim dated 27 May 2007 that the contract and/or its performance thereof is illegal and/or unenforceable by reason of an alleged contravention/breach of the Planning Act and/or the Rules and Notifications and thus [SCDA] is not entitled to their claim for $334,674.44. [Motor Image’s] contention was that the 3rd submission plans were false, misleading, inaccurate and/or for show/appearance sake in order to obtain Written Permission.

… Planning and developing a project is a process. To alleged [sic] illegality in midstream of the process is not appropriate. Any difference in the submission drawings from the tender drawings would have had to be regularised through amendment submissions, appeals, waivers or concessions made as required to get approval. This is normal procedure.

I do not believe that after 2 years of developing the project with [SCDA], [Motor Image is] not aware, of the details in the design and the implication of use quantum, after having followed the process of obtaining [written permission] through its 3 submissions and re-terming.

The process of submission and compliance to Authority requirements by [SCDA] although took 3 submission [sic] cannot be said to have been in breach of the Planning Act or were in any way illegal. I conclude that [SCDA] had not made any inaccurate, misleading or false statements to URA.

URA Submissions

In April 2005, shortly before the 2nd submission, [Motor Image] wanted more offices, conference/training room, meetings etc [sic] and not larger display area on the 2nd storey. A set of drawings responding to [Motor Image’s] requirement[s] was prepared and submitted (ICB55) to [Motor Image] titled, as “Schematic Design-Planning submission.” These drawings … received [by Motor Image] on 29 June 2005, were clearly drawings incorporating clients’ brief and were not the 2nd submission to URA. … these were not the submission drawings.

Meanwhile on 29 June 2005, [SCDA] proceeded with the 2nd submission to URA which consisted of amended drawings from the 1st submission which continued to have “new parts display area” and no part of the previous showroom had been allocated for use as...

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1 cases
  • Motor Image Enterprises Pte Ltd v SCDA Architects Pte Ltd
    • Singapore
    • Court of Appeal (Singapore)
    • 3 Noviembre 2011
    ...(‘the Judge’) dismissing an appeal against a domestic arbitration award (seeMotor Image Enterprises Pte Ltd v SCDA Architects Pte Ltd [2011] 1 SLR 497 (‘the Judgment’)). In dismissing the appeal, the Judge held that it was not appropriate for her to make a ruling on a question of law for wh......
2 books & journal articles
  • Arbitration
    • Singapore
    • Singapore Academy of Law Annual Review No. 2011, December 2011
    • 1 Diciembre 2011
    ...High Court, which initially granted leave to appeal but dismissed the appeal (Motor Image Enterprises Pte Ltd v SCDA Architects Pte Ltd[2011] 1 SLR 497) following the hearing on the substantive appeal. 4.55 At the hearing for grant of leave before the High Court, the question of law that wa......
  • Arbitration
    • Singapore
    • Singapore Academy of Law Annual Review No. 2010, December 2010
    • 1 Diciembre 2010
    ...leave to appeal and the hearing of the substantive appeal. Judith Prakash J in Motor Image Enterprises Pte Ltd v SCDA Architects Pte Ltd [2011] 1 SLR 497 clarified that a court hearing an application of leave to appeal would not render any final and conclusive decision on the issues raised,......

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