Ng Tze Chew Diana v Aikco Construction Pte Ltd

• Judge: Ang Cheng Hock J
• Judgment Date: 05 November 2019
• Neutral Citation: [2019] SGHC 259
• Citation: [2019] SGHC 259
• Defendant Counsel: Por Hock Sing Michael and Li Jiaxin (Michael Por Law Corporation)
• Published date: 08 November 2019
• Hearing Date: 18 February 2019,24 May 2019,30 January 2019
• Plaintiff Counsel: Koh Choon Guan Daniel, Lim Khoon and Ang Minghao (Eldan Law LLP)
• Date: 05 November 2019
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 730 of 2018
• Subject Matter: Date of award,Recourse against award,Arbitration,Extension of time,Appeal under Arbitration Act,Award,Requirements for leave to appeal,Application to appeal out of time

Ang Cheng Hock J: Introduction

This is an application under the Arbitration Act (Cap 10, 2002 Rev Ed) (the “Act”) by a party to an arbitration for leave to appeal to the High Court on questions of law arising out of an arbitral award. What is immediately noticeable about the application is the fact that it was filed in Court almost ten months after the date of the arbitral award, which is well beyond the statutory time limit of 28 days from the date of the award. This raises questions as to whether the court should grant an extension of time for the application to be made, and what principles the court should apply in such circumstances.

Background facts The construction contract

The applicant is an owner of a property situated at Jalan Sedap in Singapore (“the property”).¹ By a contract which incorporated the Singapore Institute of Architects Articles and Conditions of Building Contract (7th Edition, 2005) (“the SIA Conditions”),² the applicant hired the respondent as the main contractor for the construction of a two-storey semi-detached house on the property (“the contract”).³

The construction of the house did not go smoothly, and the completion certificate for the project was only issued on 8 March 2011⁴ when the contractually stipulated completion date was 25 June 2010.⁵ Under the completion certificate, it was stated that the date of actual completion was 19 January 2011, and that the maintenance period would end a year later on 19 January 2012.⁶ After the completion certificate was issued, the applicant alleged that there were numerous defects in the completed works that required rectification. Hence, up to 30 May 2012, after the maintenance period had expired,⁷ the respondent continued to carry out rectification works at the property from time to time.⁸

Arbitration proceedings

In October 2012, the applicant commenced arbitration proceedings against the respondent in respect of the delay in completion and defects in the works.⁹ In response, the respondent counterclaimed for S$135,676.58, this being the outstanding sum which it was allegedly owed by the applicant for works carried out.¹⁰ The respondent further counterclaimed an additional S$54,304 for additional labour costs.¹¹

A sole arbitrator was appointed for the matter.¹² Having considered the parties’ respective claims, he awarded as follows: In respect of the applicant’s claims: S$156.25¹³ of the S$89,215.26¹⁴ claimed for the alleged discrepancies between the as-built condition of the house and the construction drawings issued by the architect; S$42,979.06¹⁵ of the S$374,305.24¹⁶ claimed for the alleged costs of rectifying various defects in the works; Nothing¹⁷ of the S$522,000¹⁸ and S$1,200,000¹⁹ claimed for the loss of rental and loss in value of the property respectively; and Nothing²⁰ of the S$58,500²¹ claimed for liquidated damages. In respect of the respondent’s counterclaim for outstanding works and additional labour costs, the arbitrator allowed the sum of S$98,797.34 in the respondent’s favour.²²

As a result of the arbitrator’s decision, a net sum of S$59,558.37 was due from the applicant to the respondent.²³

Summary of arbitrator’s findings

The arbitrator’s award ran 674 pages in length, and his key findings are detailed in my judgment to Originating Summons Nos 1010 of 2018 and 1108 of 2018 (“OS 1010/2018”), where the applicant is seeking to set aside the arbitral award, and to resist enforcement of the same. In this judgment, I will endeavour to set out the gist of the arbitrator’s reasons for his award. This is relevant as the questions of law which the applicant raises in support of her leave to appeal will have to be examined against the arbitrator’s reasons to determine if the various requirements for granting leave to appeal are met.

First, in relation to the alleged discrepancies between the as-built condition of the house and the construction drawings issued by the architect, the arbitrator noted that the architect had confirmed during cross-examination that the alleged discrepancies (or deviations) had been authorised by him, save for one item.²⁴ The arbitrator also concluded that the architect had presented himself as a credible witness, who acted in a non-partisan manner during the hearings before him.²⁵ Since clause 12(1) of the SIA Conditions permits the architect to sanction all variations previously carried out by the contractor, the arbitrator found that the alleged discrepancies were in fact variations that had been sanctioned by the architect. Accordingly, save for the one item of work which had not been sanctioned by the architect, for which the arbitrator awarded the applicant S$156.25, the arbitrator found that the respondent was not liable for the other alleged discrepancies between the respondent’s completed works and the works specified in the contract.²⁶

Second, in relation to the claim for defective works, the architect considered the various defects claimed by the applicant, as well as the evidence of the parties’ quantum experts, in determining the appropriate sum to award for each item that he found to be a defect. On the whole, the arbitrator was more inclined towards the evidence of the respondent’s quantum expert, Mr Stanley Wong, than that of the applicant’s quantum expert, Mr Amos Teo (“Mr Teo”).²⁷ This was because he found Mr Teo’s evidence to be less reliable. Just as an example, Mr Teo had provided a separate amount for scaffolding for a single item of hairline crack, even though scaffolding was already provided for under the section of “Preliminaries”. According to the arbitrator, this separate provision for scaffolding was not logical, unless Mr Teo was suggesting that for “ten such areas of defects, the [applicant] is going to appoint ten different contractors … and each individual contractor must install its own scaffold” to make good the defects.²⁸

As for the claim for loss of rental, the arbitrator found that the applicant had not submitted any concrete or substantiated evidence to show proof that there was any intention to rent out the property. In this regard, the arbitrator considered that the evidence showed that the applicant’s intention at all times was to sell, rather than rent, the property. In any case, there was no proof that her inability to rent out the property was due to the alleged defects. Furthermore, the loss of rental was too remote a loss, as it was not within the reasonable contemplation of parties at the time of the signing of the contract that there would be a claim for loss of rental in the event that there were defects.²⁹

Turning to the claim for loss in value of the property, the arbitrator concluded that there was insufficient evidence to show that the property could not be sold at the applicant’s expected price of S$7m due to the alleged defects.³⁰ The S$7m valuation was based on a text message from a bank officer to the applicant’s real estate agent.³¹ However, the arbitrator rejected this text message as hearsay evidence, given that the bank officer that sent the message was not called to give evidence as to how she arrived at the figure of S$7m.³² The arbitrator further rejected the evidence of the applicant’s expert on property valuation, Mr Goh Tiam Lock (“Mr Goh”). While Mr Goh’s evidence supported the valuation of S$7m, the arbitrator found that Mr Goh’s valuation appeared to have been arbitrary and significantly higher than the other transactions concluded around the same time in the vicinity of the property, as shown by the records of property transactions maintained by the Urban Redevelopment Authority.³³ Apart from being unable to prove that the price of the property was S$7m,³⁴ the arbitrator also found that the applicant had not proven that the defects were the cause of the property’s loss in value (if any). This was because there had been two offers from prospective buyers for the property. Although these two offers were lower than the applicant’s expected price of S$7m, the applicant failed to show that the alleged defects were the cause of the lower prices offered by the prospective buyers. Thus, it could very well have been that the applicant’s inability to sell the property at S$7m was caused by the fact that the expected price of S$7m was simply unrealistic, and not because of the alleged defects.³⁵ As such, the arbitrator found that the applicant did not adduce sufficient evidence to support her contention that the loss in value of the property was due to the alleged defects.³⁶

In relation to the claim for liquidated damages, the arbitrator considered that, pursuant to clause 24(2) of the SIA Conditions, a claim of liquidated damages must be founded on a valid delay certificate. In this respect, clause 24(2) provides that “[u]pon receipt of a [d]elay [c]ertificate the [applicant] shall be entitled to recover from the [respondent] liquidated damages”.³⁷ The architect had issued two delay certificates, with the second purporting to supersede the first. The architect himself admitted that the first delay certificate was flawed as it did not state the information required under clause 24(1) of the SIA Conditions. Hence, he issued a second delay certificate on 26 October 2015. However, this second delay certificate was also invalid as clause 31(6) of the SIA Conditions makes clear that an architect cannot correct or amend or supersede a previous delay certificate issued by him.³⁸ As both delay certificates issued by the architect were invalid, the applicant’s claim for liquidated damages failed.³⁹

Finally, in relation to the respondent’s counterclaim, the arbitrator awarded the sum of S$98,797.34 to the respondent in respect of works that remained unpaid for. This sum in main consisted of sums which had been reflected in the architect’s Statement of Final Account, as well as other variation works.⁴⁰ However, the respondent’s claim for additional labour costs was rejected...