OGSP Engineering Pte Ltd v Comfort Management Pte Ltd

JurisdictionSingapore
JudgeTan Siong Thye J
Judgment Date04 October 2017
Neutral Citation[2017] SGHC 247
Plaintiff CounselNicholas Philip Lazarus and Elizabeth Toh Guek Li (Justicius Law Corporation)
Docket NumberOriginating Summons No 478 of 2017 (Summons Nos 2425 and 3856 of 2017)
Date04 October 2017
Hearing Date08 September 2017,11 August 2017,14 August 2017
Subject MatterBuilding and construction law,Patent errors,Dispute resolution,Stay of enforcement pending appeal,Building and Construction Industry Security of Payment Act,Statute and regulations
Year2017
Defendant CounselPaul Wong Por Luk, Gan Yingtian Andrea and Wu Wenbang Francis (Dentons Rodyk & Davidson LLP)
CourtHigh Court (Singapore)
Citation[2017] SGHC 247
Published date18 April 2018
Tan Siong Thye J: Introduction

OGSP Engineering Pte Ltd (“OGSP”) was hired by Comfort Management Pte Ltd (“Comfort”) as a sub-contractor for its project. A dispute arose between OGSP and Comfort, as a consequence of which OGSP lodged a payment claim titled Payment Claim No 12 (“PC12”) against Comfort for certain work done. Comfort did not file a payment response. Although Comfort eventually filed an adjudication response during the adjudication proceedings, the adjudication response was invalid as it was out of time. Hence, OGSP obtained an adjudication determination dated 21 April 2017 in its favour (“the AD”).

OGSP filed Originating Summons No 478 of 2017 (“OS 478”) to enforce the AD as a judgment debt. In response, Comfort filed Summons No 2425 of 2017 (“SUM 2425”) to set aside the AD.1 Having heard the parties’ submissions, I gave brief reasons to explain why I dismissed Comfort’s application to set aside the AD. I now explain my reasons in further detail.

Background

Both Comfort and OGSP are Singapore-incorporated companies with the principal business of general construction and building works.2 In October 2013, Comfort engaged OGSP under a sub-contract where OGSP was to supply and install a ventilation and ducting system for a warehouse in Joo Koon Circle for a fixed sum of $1.25m (excluding GST) (“the Contract”).3

On 16 March 2017, OGSP issued PC12 to Comfort for work done between October 2013 and October 2014. The amount claimed was $890,262.23 (including GST).4 On 30 March 2017, Comfort’s lawyers sent an email to OGSP stating that the invoices in PC12 had already been paid and asked for additional supporting documents.5 Notwithstanding that letter, OGSP served its Notice of Intention to Apply for Adjudication on Comfort on 4 April 2017. On 6 April 2017, OGSP served its adjudication application on the Singapore Mediation Centre (“SMC”) and filed its submissions for the adjudication application.6 SMC served a copy of the adjudication application on Comfort on 7 April 2017. Comfort filed its adjudication response and its submissions with the SMC on 17 April 2017.7 OGSP objected to the adjudication response on the ground that it was out of time.

On 21 April 2017, the adjudicator issued his AD and held, among other things, that the sum of $890,262.23 was payable by Comfort to OGSP within seven days after the service of the AD on Comfort.8 OGSP filed OS 478 on 3 May 2017 seeking to enforce the AD as a judgment debt and Comfort sought to set aside the AD in SUM 2425.

Parties’ submissions Comfort’s submissions

Comfort accepted the adjudicator’s finding that there was no valid payment response and adjudication response within the meaning of the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) (the “SOPA”). Hence, Comfort also accepted that, under s 15(3) of the SOPA, the adjudicator could not consider any matter that had not been raised in the payment response.9 However, it submitted that the court should still set aside the AD on two grounds.

First, Comfort submitted that the AD should be set aside as the adjudicator did not consider the patent errors in OGSP’s claims.10 According to Comfort, almost the whole AD dealt with whether there was a valid payment response and adjudication response and the adjudicator had applied a “blank and unthinking mind” to the substantive claims before him.11 These substantive claims pertained to the claims for the contract sum, the retention money, the variation works and the cost of the materials.

In relation to the contract sum and the retention money, Comfort alleged that OGSP had provided “absolutely no supporting documents” evincing that the work claimed for had been done.12 The supporting documents related to 92% of the work which had already been completed but not the remaining 8% which was part of the claim in PC12.13 The adjudicator made a leap of logic by concluding at para 68.1 of the AD that there were “no materials or information… to suggest that the Works were not completed or that the Retention Money [was] not due for release”.14 Instead, the adjudicator should have required OGSP to provide evidence of its claims.

In relation to OGSP’s claims for variation works, Comfort submitted that the only paragraph which dealt with this in the AD – para 68.2 – did not make any mention of the relevant contractual provisions such as cl 11 of the Contract.15 If the adjudicator had applied his mind to the contractual provisions, it would have been “readily apparent” that OGSP provided no evidence of the variation works, as required under the Contract.16 In addition, OGSP did not set out the sums it claimed in the adjudication application or in PC12, but rather only did so subsequently in its submissions in the adjudication application.17

Finally, in relation to the cost of materials claimed, Comfort submitted that based on para 68.3 of the AD, the adjudicator had not gone beyond reading OGSP’s claim as presented. He did not consider that the table tendered in support of OGSP’s claim did not correlate to the alleged work done.18

Comfort’s second ground for setting aside the AD was that there was a fraudulent conspiracy involving OGSP, RSP Engineering Pte Ltd (formerly known as SS Mechanical and Electrical Engineering Pte Ltd) (“SS Mechanical”), and Pintu Kumar Sarker (“Pintu”) who was Comfort’s project manager and SS Mechanical’s initial sole director and shareholder. The alleged conspiracy was that OGSP would present inflated invoices for work done when no such work had in fact been done by that time, and that Pintu would facilitate the invoices.19 Ultimately, the aim was to obtain frontloaded payments from Comfort for work not yet done, to benefit the conspirators.

Comfort submitted that Pintu was originally the sole director and shareholder of SS Mechanical but gave his directorship and shares to his friend, one Sankara Kumara Kannan, in July 2013.20 However, Pintu still maintained control over SS Mechanical.21 At the same time, in October 2013, Pintu would represent Comfort in its discussions with OGSP regarding the Contract, and managed the project until it concluded in July 2015.22 During this time, Pintu would facilitate OGSP’s fraud.23 Comfort alleged that OGSP would award a purchase order to SS Mechanical. The latter would then issue invoices to OGSP under the purchase order which were actually false. But OGSP could then submit these invoices to Comfort for work done although there had in fact been no work done. When OGSP claimed payment for almost all the work, it then abandoned the project and forced Comfort to engage other contractors to complete the project.24

OGSP’s submissions

OGSP submitted that neither of Comfort’s two grounds was sufficient for the court to set aside the AD.

In relation to Comfort’s first ground to set aside the AD which was that the adjudicator had failed to consider patent errors, OGSP made two arguments. First, OGSP submitted that the adjudicator had correctly dismissed Comfort’s arguments that there were patent errors in OGSP’s claim. OGSP said that Comfort was “abusing” the setting-aside application to ask the court to infer that the adjudicator had merely “rubber-stamped” the adjudication application when he had not.25 OGSP relied on para 65 of the AD, where the adjudicator expressly noted that “even in the absence of a payment response or an adjudication response, [he] must not merely rubber stamp a claim”.26 OGSP also argued that by failing to raise the alleged patent errors at the payment response stage, Comfort had waived its right to raise this objection before the adjudicator and in court.27

Second, OGSP said that in any event there were no patent errors in its claim. For the contract sum and the retention money, OGSP submitted that it was Comfort who continually refused to verify the work done despite multiple email chasers.28 OGSP relied on the fact that the registered inspector’s inspection and the Temporary Occupation Permit (“TOP”) inspection had been completed. These indicated that the work concerned had been completed.29 OGSP acknowledged Comfort’s allegations that no invoices were attached to PC12 for 8% of the work, but said that the Contract was still substantially completed since Comfort had certified that the remaining 92% was complete and because the warehouse itself had already gone into operation and was accessible to the public.30

For the variation works, OGSP said that Comfort could not object to OGSP’s claims as it took a “hands off” approach and left the issue of the variation works to OGSP.31 When OGSP asked Comfort for clear written instructions, Comfort’s representatives refused to provide any.32

Finally, for the cost of materials, OGSP said that Comfort had, on multiple occasions and through Pintu, asked OGSP to order additional materials for the project.33 OGSP left the materials on site which were used without its permission. When it raised the issue to Comfort, the latter did not respond or offer any solutions. Hence, these were costs that were properly incurred for the project. In the circumstances, OGSP submitted that there were no patent errors in its claims.

In relation to Comfort’s second ground to set aside the AD which was that there was a conspiracy of front loading the invoices, OGSP submitted that apart from SS Mechanical’s invoices, no documents linked Pintu to OGSP. Even SS Mechanical’s invoices presented were nothing out of the ordinary.34 In fact, it was Comfort who told OGSP that the latter should contact Pintu as he was the project manager.35 Finally, OGSP highlighted that Comfort did not raise the allegation of conspiracy in the adjudication response and this was only raised for the first time in the affidavit of one Lew Sien Yen Wenda (“Wenda Lew”) dated 26 May 2017.36 Therefore, this showed that the allegation of conspiracy was nothing more than an afterthought.

The court’s...

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4 cases
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    • High Court (Singapore)
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    ...Kingsford Construction Pte Ltd v A Deli Construction Pte Ltd and another matter [2017] SGHC 174 (“Kingsford”) at [35], quoted with approval in OGSP Engineering Pte Ltd v Comfort Management Pte Ltd [2017] SGHC 247 (“OGSP”) at [23]. Conclusion I note in passing that another possible ground on......
  • Facade Solution Pte Ltd v Mero Asia Pacific Pte Ltd
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    • Court of Appeal (Singapore)
    • September 7, 2020
    ...Interior Pte Ltd v Citiwall Safety Glass Pte Ltd [2014] 3 SLR 264 (refd) OGSP Engineering Pte Ltd v Comfort Management Pte Ltd [2018] 3 SLR 1031 (refd) Panatron Pte Ltd v Lee Cheow Lee [2001] 2 SLR(R) 435; [2001] 3 SLR 405 (refd) QC Communications NSW Pty Ltd v CivComm Pty Ltd [2016] NSWSC ......
  • Comfort Management Pte Ltd v OGSP Engineering Pte Ltd
    • Singapore
    • Court of Appeal (Singapore)
    • April 13, 2018
    ...ss 4, 15(2)(a)(i), 17(1)(b), 17(2)(b), 20(2A), 20(2B), 22(2) [Editorial note: The decision from which this appeal arose is reported at [2018] 3 SLR 1031.] Paul Wong, Andrea GanandFrancis Wu (Dentons Rodyk & Davidson LLP) for the Nicholas Lazarus and Jocelyn Toh (Justicius Law Corporation) f......
  • CFA v CFB
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    ...Interior Pte Ltd v Citiwall Safety Glass Pte Ltd [2014] 3 SLR 264 at [31] and OGSP Engineering Pte Ltd v Comfort Management Pte Ltd [2018] 3 SLR 1031 at [34]–[37] (“OGSP”). Though there are no explicit provisions in the 2006 statutory scheme that allow adjudication determinations to be set ......
1 books & journal articles
  • Building and Construction Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2017, December 2017
    • December 1, 2017
    ...SLR 1011 at [63] and [67]. 76 [2013] 1 SLR 401. 77 Audi Construction Pte Ltd v Kian Hiap Construction Pte Ltd [2018] SGCA 4 at [45]. 78 [2017] SGHC 247. 79 OGSP Engineering Pte Ltd v Comfort Management Pte Ltd [2017] SGHC 247 at [34]. 80 [2016] NSWSC 1095. 81 Building and Construction Indus......

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