Republic Airconditioning (S) Pte Ltd v Shinsung Eng Company Ltd (Singapore Branch)

Judgment Date06 March 2012
Date06 March 2012
Docket NumberSuit No 351 of 2011 (Registrar's Appeal No 397 of 2011)
CourtHigh Court (Singapore)
Republic Airconditioning (S) Pte Ltd
Plaintiff
and
Shinsung Eng Co Ltd (Singapore Branch)
Defendant

[2012] SGHC 46

Lai Siu Chiu J

Suit No 351 of 2011 (Registrar's Appeal No 397 of 2011)

High Court

Civil Procedure—Summary judgment—Labour company seeking payment from construction company for supply of labour—Whether construction company raised any bona fide defence against labour company's claim for payment—Order 14 rr 1 and 3 Rules of Court (Cap 322, R 5, 2006 Rev Ed)

The plaintiff was a Singapore company involved in the supply of labour, while the defendant was a Korean company registered in Singapore involved in building and construction works in Singapore. In or about December 2009, the defendant secured a project for the erection of a single-user industrial factory at the Seletar Aerospace Park (‘the project’). On 2 September 2010, the parties entered into an agreement (‘the contract’) for the plaintiff to supply labour for the project.

The plaintiff issued various invoices to the defendant for payment of the labour charges as the contract was carried out. As the defendant failed to pay on some of the invoices (‘the outstanding invoices’), the plaintiff removed their workers from the construction site on 11 November 2010 and stopped work with effect from 12 November 2010. On 18 March 2011, the defendant sent an ‘Audit Confirmation’ to the plaintiff, acknowledging that there was a sum of $389,950.96 owing from the defendant to the plaintiff, and that nothing was owed by the plaintiff to the defendant. That figure was later reduced to $323,500.31, to take into account an invoice of the plaintiff dated 11 November 2010 for $23,549.36 and a payment of $90,000 by the defendant to the plaintiff on 14 January 2011.

On 13 May 2011, the plaintiff commenced this action against the defendant for $323,500.31 (‘the sum’). On 7 December 2011, the plaintiff was granted summary judgment by the assistant registrar and the defendant appealed against the assistant registrar's decision.

Held, dismissing the appeal:

(1) The primary concern of the court in determining whether summary judgment ought to be granted was whether the plaintiff was entitled to relief at this stage, and, whether it was just to deprive the defendant of the opportunity to challenge the plaintiff's claim at trial. In deciding whether leave to defend ought to be granted, the court would look at the whole situation critically to examine whether the defence was credible and not rely on ‘mere assertions’ made by the defendant: at [9] and [10].

(2) While the summary jurisdiction of the court was to be exercised with great circumspection, the court had to also be wary of defendants who seek to evade summary liability by raising spurious allegations, assertions and afterthoughts as triable issues. Such defendants not only waste precious court resources, but more importantly, could potentially cause serious hardship and irreparable loss to plaintiffs, for some of whom time was of the essence. Courts should therefore take a robust approach in summary proceedings in order to resolve disputes at this stage. This was particularly so in commercial and construction cases where cash flow was the lifeblood: at [11] and [12].

(3) There was no question that the scope of the contract encompassed only the supply of labour for the project, and nothing more. The defendant's attempt to rely on the ‘factual matrix’ to argue that the contract encompassed more than the supply of labour was wholly misguided and totally inconsistent with a plain reading of its terms: at [15] and [16].

(4) The defendant's argument that the plaintiff had repudiated the contract on 12 November 2010 by withdrawing its workers from the project site and ceasing work, thus entitling it to the defence of set-off, was frivolous. The defendant's argument, based on two authorities, that in construction and building contracts failure to make payment was not a valid reason to abandon works and such abandonment amounted to wrongful repudiation, was misconceived. Those authorities stated clearly that while there was no general right to suspend works, this was subject to the parties expressly providing for such a right in their contract. The contract clearly provided for such a right: at [21].

(5) The defendant's assertion that the plaintiff's labour charges incorporated ‘phantom’ worker billings was vague and feeble, such as to call into question the bona fides of this defence. The defendant had obliquely raised the issue in three letters, but did little to follow through with its complaint. There was no attempt by the defendant to either identify the phantom workers, or to set out in any detail its counterclaim for those phantom workers. In fact, the defendant made two payments to the plaintiff after it had raised the issue: at [22] and [23].

(6) An audit confirmation, while not conclusive, constituted strong prima facie evidence of a debt. Although in an application for summary judgment - unlike a trial - it was not appropriate for the court to delve into a precise evaluation of the merits of the rival contentions or to assess the relative probabilities, it was nevertheless obliged to look at the totality of the evidence to examine whether the defence raised by the defendant was credible. In the present case, there was nothing to argue against the strong prima facie evidence of the Audit Confirmation being an admission of a debt: at [25] and [28].

(7) The defendant's claim that the contract was tainted with illegality, due to breaches of the Employment Agencies Act (Cap 92, 1985 Rev Ed) and the Employment of Foreign Manpower Act (Cap 91 A, 2009 Rev Ed), was also doomed to fail. There was no basis for the application of s 6 of the Employment Agencies Act, as it had always been the plaintiff's case that it was not an employment agency as it was the employer of the workers. This was supported by the terms of the contract itself. The defendant was merely charged a daily rate for the workers provided by the plaintiff: at [33].

(8) The contract was not in breach of s 5 (3) of the Employment of Foreign Manpower Act, as the plaintiff was not precluded from using workers obtained from its subcontractors to fulfil the contract. Paragraph 7 of the First Schedule (Pt III) of the Employment of Foreign Manpower (Work Pass) Regulations (Cap 91 A, Rg 2, 2009 Rev Ed) contemplated that a foreign worker might be sent to work for a third party engaged in the construction industry, so long as the worker consents: at [39].

Associated Development Pte Ltd v Loong Sie Kiong Gerald [2009] 4 SLR (R) 389; [2009] 4 SLR 389 (folld)

Bentimi Pte Ltd, Re; In the matter of Part X of the Companies Act, Chapter 50 (1994 Revised Edition) v In the Matter of Bentimi Pte Ltd [2003] SGHC 92 (distd)

Camillo Tank SS Co Ltd v Alexandria Engineering Works (1921) 38 TLR 134 (folld)

Capital Realty Pte Ltd v Chip Thye Enterprises (Pte) Ltd [2000] 3 SLR (R) 419; [2000] 4 SLR 548 (folld)

Eng Mee Yong v VLetchumanan [1979] 2 MLJ 212 (folld)

Gobind Lalwani v Basco Enterprises Pte Ltd [1998] 3 SLR (R) 1019; [1999] 3 SLR 354 (folld)

Goh Chok Tong v Chee Soon Juan [2003] 3 SLR (R) 32; [2003] 3 SLR 32 (folld)

HSBC Institutional Trust Services (Singapore) Ltd v Elchemi Assets Pte Ltd [2010] SGHC 67 (refd)

Hua Khian Ceramics Tiles Supplies Pte Ltd v Torie Construction Pte Ltd [1991] 2 SLR (R) 901; [1992] 1 SLR 884 (folld)

Jia Min Building Construction Pte Ltd v Ann Lee Pte Ltd [2004] 3 SLR (R) 288; [2004] 3 SLR 288 (refd)

Lim Leong Huat v Chip Hup Hup Kee Construction Pte Ltd [2008] 2 SLR (R) 786; [2008] 2 SLR 786 (refd)

Lin Securities (Pte) v Noone & Co Sdn Bhd [1989] 1 MLJ 321 (refd)

MP-Bilt Pte Ltd v Oey Widarto [1999] 1 SLR (R) 908; [1999] 3 SLR 592 (refd)

PMA Credit Opportunities Fund v Tantono Tiny [2011] 3 SLR 1021 (refd)

Poh Soon Kiat v Desert Palace Inc [2010] 1 SLR 1129 (refd)

Rankine Bernadette Adeline v Chenet Finance Ltd [2011] 3 SLR 756 (refd)

Sandar Aung v Parkway Hospitals Singapore Pte Ltd [2007] 2 SLR (R) 891; [2007] 2 SLR 891 (distd)

United States Trading Co Pte Ltd v Ting Boon Aun [2008] 2 SLR (R) 981; [2008] 2 SLR 981 (refd)

Employment Agencies Act (Cap 92, 1985 Rev Ed) ss 2, 6

Employment of Foreign Manpower Act (Cap 91A, 2009 Rev Ed) s 5 (3)

Employment of Foreign Manpower (Work Pass) Regulations (Cap 91A, Rg 2, 2009 Rev Ed) First Schedule paras 2, 5, 7

Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 14, O 14 r 1, O 14 r 3

Cheah Kok Lim (instructed), C P Lee (C P Lee & Co) for the plaintiff

S Magintharan and James Liew (Essex LLC) for the defendant.

Lai Siu Chiu J

1 This was an appeal by Shinsung Eng Co Ltd (‘the defendant’) in Registrar's Appeal No 397 of 2011 (‘the Appeal’) against the decision of the assistant registrar in granting Republic Airconditioning (S) Pte Ltd (‘the plaintiff’) summary judgment for the sum of $323,500.31 together with interest. I dismissed the Appeal. As the defendant has appealed (in Civil Appeal No 9 of 2012) against my decision, I now set out the grounds for my decision.

The background

2 The plaintiff is a company incorporated in Singapore, while the defendant is a Korean company registered in Singapore whose business comprises of building and construction works in Singapore. In or about December 2009, the defendant secured a project with Rolls Royce Pte Ltd for the erection of a single-user industrial factory at the Seletar Aerospace Park (‘the project’). On 2 September 2010, the defendant entered into an agreement with the plaintiff (‘the contract’), for the latter to supply labour for the project. The contract sets out, inter alia, the following terms:

(a) the daily rates for skilled workers and semi-skilled workers;

(b) the normal working hours and what constituted over-time;

(c) that all workers...

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3 cases
  • Han Kok Kwong and another v Lye Kok Leong
    • Singapore
    • District Court (Singapore)
    • 8 December 2022
    ...critically to examine whether the defence is credible: Republic Airconditioning (S) Pte Ltd v Shinsung Eng Co Ltd (Singapore Branch) [2012] 2 SLR 601 at [10]. When one considers the contemporaneous documentary evidence and the context of the negotiations, I am simply unable to conclude that......
  • Australia and New Zealand Banking Group Ltd v Bombay Talkies (S) Pte Ltd and another
    • Singapore
    • High Court (Singapore)
    • 24 April 2015
    ...[2009] 4 SLR(R) 389 at [22]. The following extract from Republic Airconditioning (S) Pte Ltd v Shinsung Eng Co Ltd (Singapore Branch) [2012] 2 SLR 601 at [11], which was recently cited in Oversea-Chinese Banking Corp Ltd v Ravichandran s/o Suppiah [2015] SGHC 1 at [23], was also relevant: I......
  • Ong Sze Poh and others v RB Concern Pte Ltd (formerly known as Rupini's Beauty Consultant Pte Ltd) and another
    • Singapore
    • District Court (Singapore)
    • 27 October 2023
    ...I recall the following observations made a decade ago in Republic Airconditioning (S) Pte Ltd v Shinsung Eng Co Ltd (Singapore Branch) [2012] 2 SLR 601 on the need for judges to adopt a robust approach when dealing with applications for summary judgement: 11 … while the summary jurisdiction......
1 firm's commentaries
  • No General Right To Suspend Work For Non-Payment
    • Singapore
    • Mondaq Singapore
    • 7 September 2022
    ...v Zhong Kai Construction Co Pte Ltd [2021] 2 SLR 510 and Republic Airconditioning (S) Pte Ltd v Shinsung Eng Co Ltd (Singapore Branch) [2012] 2 SLR 601, Justice Lee Seiu Kin held that in general, there is no right for a sub-contractor to suspend work for non-payment unless this has been exp......
2 books & journal articles
  • Civil Procedure
    • Singapore
    • Singapore Academy of Law Annual Review No. 2012, December 2012
    • 1 December 2012
    ...of an application for summary judgment were reiterated in Republic Airconditioning (S) Pte Ltd v Shinsung Eng Co Ltd (Singapore Branch)[2012] 2 SLR 601 (‘Republic Airconditioning’). The High Court endorsed the proposition (at [9]): ‘The primary concern of the courts in determining whether s......
  • Building and Construction Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2012, December 2012
    • 1 December 2012
    ...in Singapore. Establishing liability for payment 7.13 In Republic Airconditioning (S) Pte Ltd v Shinsung Eng Co Ltd (Singapore Branch)[2012] 2 SLR 601 (‘Republic Airconditioning (S) Pte Ltd’) the plaintiff was a labour subcontractor employed by the defendant main contractor for the construc......

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