Newtech Engineering Construction Pte Ltd v BKB Engineering Construction Pte Ltd and Others

• Jurisdiction: Singapore
• Judge: Kan Ting Chiu J
• Judgment Date: 27 March 2004
• Neutral Citation: [2004] SGHC 61
• Plaintiff Counsel: Lawrence Lim, Chong Kuan Keong and Michael Chong (Chong Chia and Lim LLC)
• Published date: 05 April 2004
• Court: High Court (Singapore)
• Defendant Counsel: Josephine Chong (UniLegal LLC)
• Subject Matter: Contract,Remedies,Claim for work done under two sub-contracts,Whether plaintiff successful in proving claim.,Liquidated damages,Defendant counterclaimed for liquidated damages arising from delays under sub-contracts,Whether delays attributable to plaintiff,Whether defendant successful in proving counterclaim.

27 March 2004 Judgment reserved.

Kan Ting Chiu J:

1 The action is between the plaintiff, Newtech Engineering Construction Pte Ltd, and BKB Engineering Constructions Pte Ltd which I shall refer to as “the defendant”. The other two defendants are insurance companies and were made defendants because the plaintiff sought to restrain them from making payment under performance bonds issued by them in favour of the defendant. As that issue was dealt with in a separate hearing, these two defendants were not involved in the trial before me.

2 The parties are contractors in the construction industry. The defendant was a main contractor of the Ministry of Defence (hereinafter referred to as “the employer”) for the construction of Phase 1 of the development of the Sembawang Camp.

3 The defendant in turn entered into two contracts with the plaintiff to carry out parts of the works that it had been awarded. These two sub-contracts were dated 31 January 2000 and 18 April 2000. The first sub-contract was for the construction of a box culvert. The second sub-contract was for external works, essentially road works.

4 The plaintiff claimed that after it had carried out the sub-contract works, as well as other variation/additional works requested by the defendant, there was a sum of $376,944.99 inclusive of goods and services tax (“GST”) (or $365,966 without GST) owing by the defendant to the plaintiff under the statements of account between them.

5 In the course of the trial, the parties were able to agree on two figures for the main items of the claim. They are (a) the amount payable for the road works at $739,649.18 (a reduction of $104,851.94 from the plaintiff’s figure) and (b) $275,500.00 paid by the defendant for material used by the plaintiff (an increase of $57,500.00 over the plaintiff’s figure).

The first sub-contract

6 The box culvert works were completed by the plaintiff. The work was originally scheduled to be completed by 31 May 2000. The date of completion was revised to 10 November 2000 and the work was completed on 9 November 2000. There were no complaints from the defendant of the late completion until two years later, on 3 January 2003, when the defendant attempted to call on the performance bonds furnished under the sub-contracts. (The plaintiff restrained the defendant from doing that, see Newtech Engineering Construction Pte Ltd v BKB Engineering Constructions Pte Ltd [2003] 4 SLR 73 which was affirmed on appeal.)

7 There was a dispute over piling works for the culvert. This was not specifically provided for in the sub-contract. The defendant offered the works to the plaintiff as provisional variation works but the plaintiff declined to take on the works. It is not the defendant’s case that the plaintiff was obliged to accept the works or that the plaintiff was in breach of contract in refusing them. The piling works were eventually done by another sub-contractor, Leong Seng Hin Pte Ltd (“LSH”).

The second sub-contract

8 The second sub-contract was for the execution of road and kerb works. Some parts of the works were subsequently omitted from the sub-contract.

9 The dispute between the parties is the cause of the delay in the works which were done. The plaintiff’s case is that the works can be completed only after mechanical and electrical and drainage works which were outside its scope of works have been completed, and that delays in those works delayed its road and kerb works.

10 The defendant on the other hand blamed the plaintiff for delaying the works. It also claimed that it had actually overpaid the plaintiff, and that it had substantial claims for liquidated damages arising from the delays under both the sub-contracts.

Breakdown of the plaintiff’s claim

11 The defendant put up a “Breakdown of Plaintiff’s Claim” in its closing submissions at pp 4–13. The breakdown was divided into five parts:

I. Box Culvert (First Sub-contract)

II. External Works (Second sub-contract)

III. Additional Works

IV. Abortive Works, and

V. Day Works.

The parties agreed on some items in the breakdown, and on the items on which they cannot agree, they set out their reasons. I shall deal with each item where there is an agreed variation in the amount claimed, or where there is a dispute.

I. Box Culvert

The agreed sum for the first sub-contract is $437,328, representing an increase of $7,512.61 over the plaintiff’s original claim.

II. External Works

The sum agreed is $718,106, a reduction of $101,798 from the plaintiff’s claim.

III. Additional Works

Item 2 – a retaining wall, for which the plaintiff claimed $175,050, and which the defendant assessed at $144,540. The sub-contract provided a rate for walls of 2m to 5m. The defendant claimed that was a mistake, and the rate should be for walls above 2.5m, and unilaterally applied a reduced rate. The defendant should seek a rectification of that term. As it did not, the full claim of the plaintiff is allowed.

Item 4 – the plaintiff’s claim for $26,840 for an additional layer of weephole and hardcore along the sides of a drain. The defendant asserted that the employer’s contract drawings have referred to the “Code of Practice on Surface Water Drainage” and “The Surface Water Drainage Regulations 1976” which specify the weepholes and that the plaintiff’s own tender drawings had provided for them. There is some uncertainty whether the claim was for work over and above the requirements of the Code and Regulations, or whether they were done to comply with them. As the onus is on the plaintiff to prove its claims, I find that it has failed to do so.

Item 5 – there was a dispute for the construction of weepholes for retaining walls. This dispute was over the rate to be charged. The plaintiff claimed a rate of $22 per metre, as stated in its variation claim, but there was no evidence that the defendant agreed to the rate. The defendant put forward a rate of $12.65 based on the Fixed Schedule of Rates. I find that reasonable and reduced this claim by $4,446.09.

Item 6 – the claim for raising the level of a drain. The plaintiff used the rate of $43.65 per metre. The defendant asserted that the parties had agreed that it should be subject to a 3% discount. The plaintiff explained the 3% discount had been given on the initial rate of $45 and I accept the explanation. There was also a dispute over the measurement of the works. The plaintiff claimed 190m, whereas the defendant and its expert put it as 130m without comment from the plaintiff. On the evidence, I accept the defendant’s figure. This means a reduction of $2,619 to the plaintiff’s claim.

Item 8 – 1.5m box drain. The parties could not agree on the rate. The plaintiff claimed $7,000 at the rate of $700 x 10m. The defendant halved the rate on the basis that no rate was agreed. The plaintiff pointed out that the parties have agreed to $555 for a narrower 1m drain. There is no basis for the defendant’s figure and I accept the plaintiff’s rate of $700. Having done that, I am unable to understand the claim for $7,900. That must be a mistake, and it should be reduced to $7,000.

Item 12 – drain with mild steel grating. There is a dispute over the rate. The plaintiff used $275 without giving the agreed 3% discount. The plaintiff also conceded that no mild steel grating was installed. I accept the defendant’s quantification and deduct $16,445.87 from this claim.

Item 14 – drain at car park. The parties have agreed to a reduction of $3,485.00.

Item 15 – culvert drain with grating. There was a dispute whether the grating was installed. The plaintiff did not show any proof it was installed. I allow a reduction of $2,054.35.

Item 16 – drain with grating at car park. I accept that the 3% discount was already given by the plaintiff, and there is no cause for a further reduction.

Items 17 and 18 – drain and reinforced concrete pipe. The difference here was over the measurement of the drain and the pipe. By the plaintiff’s measurement, the total price is $62,675 whereas it is $59,000 by the defendant’s measurement. The plaintiff has not objected to the defendant’s measurements. The price for these two items is to be reduced by $3,675.

Item 19 – manhole cover. The defendant contends that this forms part of the original contract, but adduced no evidence to support that through its witnesses. No reduction is to be made.

Item 20 – road kerb. The defendant reduced the plaintiff’s claim from $3,333.08 to $1,618.00. The plaintiff did not object, so the claim is reduced by $1,715.08.

Item 21 – reinforced concrete wall. The defendant reduced the plaintiff’s claim from $200 to $100. The plaintiff did not object, so the claim is reduced by $100.

Item 22 – scupper pipe. The defendant reduced the plaintiff’s claim from $1,142.40 to $571.20. The plaintiff did not object, so the claim is reduced to $571.20.

Item 23 – topping up of drain. The defendant disputed the plaintiff’s entitlement to make this claim on the basis that it was caused by the plaintiff’s own failure in construction but the defendant did not produce any basis for its assertion. The plaintiff’s witness Ong Hin Leong had denied that. I accept his explanation. No reduction is to be made on this claim.

IV. Abortive Works

Item 1 – Retaining wall. There is no dispute that the works were aborted on the defendant’s instructions. The plaintiff conceded at the hearing that some of the material can be re-used and valued that at $8,137.00. This sum should be reduced from the claim.

Item 2 – extra pipes and manhole cover. The plaintiff explained that the materials were of special dimensions and cannot be re-used. This claim for $1,456.42 will stand.

Item 3 – change of kerb position. The defendant submitted that this was not accepted by the employer, but without adducing evidence of the rejection or the reason therefor. This claim for $1,656.00 will stand.

V. Day Works

There is a difference in the plaintiff’s figure of $12,739.38 and the defendant’s figure of $10,739.38. The defendant disputed...