RN & Associates Pte Ltd v TPX Builders Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 07 November 2012
• Date: 07 November 2012
• Docket Number: Originating Summons No 373 of 2012
• Court: High Court (Singapore)

RN & Associates Pte Ltd

Plaintiff

and

TPX Builders Pte Ltd

Defendant

[2012] SGHC 225

Andrew Ang J

Originating Summons No 373 of 2012

High Court

Building and Construction Law—Subcontracts—Claim by subcontractor—Respondent main contractor tendered three supplementary bundles outside of seven-day time limit prescribed by s 15 (1) Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed)—Whether adjudicator's refusal to accept late submission of bundles a breach of natural justice—Section 15 (1) Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed)

Building and Construction Law—Subcontracts—Claim by subcontractor—Subcontractor's payment claim served on contractor six months after maintenance period—Whether defects in service of payment claim deprived adjudicator of jurisdiction under s 12 (2) (a)Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed)—Section 12 (2) (a) Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed)

This was a payment dispute arising out of an agreement between the plaintiff, RN & Associates Pte Ltd (‘RN’), and the defendant, TPX Builders Pte Ltd (‘TPX’), wherein RN subcontracted to TPX addition and alteration works to an existing block of 11-storey flats at Nassim Road (‘the works’). The works were delayed and as a result, RN engaged other subcontractors to take over some of the works under the agreement. The works were completed on 4 June 2011. The maintenance period ended on 17 June 2011 although TPX alleged that there was an oral agreement extending this period by six months.

In May 2010, the parties began discussing final accounts. On 27 May 2010, TPX sent to RN a document which set out an itemised list of charges and the final sum payable. This sum was disputed in a series of discussions which ended when TPX served a payment claim on RN on 31 January 2012 for $996,899.08. RN served its payment response on TPX on 1 February 2012, disputing the payment claim. On 21 February 2012, TPX filed an adjudication application pursuant to s 12 (2) (a)of the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) (‘the SOP Act’).

On 2 March 2012, three days after the adjudication response (‘the Adjudication Response’) was to be filed under s 15 (1) of the SOP Act, RN tendered a supplementary bundle of documents. TPX received the bundle on 5 March 2012 and opposed its inclusion into evidence. RN tendered two further supplementary bundles of documents on 13 March 2012, alleging that the three supplementary bundles (‘the supplementary bundles’) were essential to prove their counterclaim against TPX in the Adjudication, viz,for the sums incurred when RN had to engage other subcontractors to complete the works. The Adjudicator rejected the supplementary bundles and decided in favour of TPX on 2 April 2012.

RN brought this application to set aside the Adjudicator's determination on the basis that the Adjudicator had no jurisdiction because the payment claim was filed out of time and was accordingly invalid. Alternatively, RN claimed that the Adjudication was in breach of natural justice because of the Adjudicator's refusal to accept and consider the supplementary bundles.

Held, dismissing the application:

(1) When dealing with an adjudication under s 12 (2) (a) of the SOPAct, the validity of a payment claim was irrelevant to the Adjudicator's jurisdiction as subject matter jurisdiction arose from a dispute over the payment response. The payment claim was thus moot: at [26] and [34].

(2) RN's failure to challenge TPX's payment claim in its payment response estopped RN from challenging the validity of the payment claim at the setting aside stage. The purpose of prescribing the form which a payment claim should take in s 10 of the SOP Act was to ensure that a main contractor was put on notice of sums it owed to the subcontractor. Where the main contractor was cognisant of the existence of a claim against him and would not suffer prejudice from a subcontractor's delay in claiming payment, allowing the main contractor to challenge the validity of the payment claim at the setting aside stage would permit open-ended adjudication of the payment claim. This was against the purpose of the SOP Act: at [26], [35], [38] and [41].

(3) The validity of a payment claim was not a jurisdictional fact but a question of mixed fact and law which fell within the Adjudicator's jurisdiction. There was a crucial difference between the existence of a payment claim and its validity. The question of existence asked whether the payment claim was, on its face, a claim for progress payments outstanding. If there was no payment claim, then there could be no payment claim dispute to resolve and the jurisdiction of the tribunal was not triggered. The question of validity asked whether the payment claim was in its proper form. Accordingly, the relevant question was not whether there had been a valid payment claim, but whether there had been a payment claim which resulted in a payment claim dispute. To find otherwise would be to elevate the subcontractor's compliance with s 10 of the SOP Act into the source of the Adjudicator's jurisdiction: at [26], [45] to [47] and [52].

(4) Even if the validity of the payment claim did go to jurisdiction, the Adjudicator's decision based on the fact that the Adjudication Response was valid, was not Wednesbury unreasonable and did not deprive him of jurisdiction: at [26], [58] and [59].

(5) The Adjudicator's refusal to consider the supplementary bundles was not a breach of natural justice. The right to have one's case heard was not a right to have considered all material which the parties thought were relevant. The adjudicator might make a decision on what considerations were relevant so long as he considered the documents listed in s 15 (3) of the SOP Act. The supplementary bundles were not documents within s 15 (3). RN had not proven that it had been substantially denied natural justice: at [64], [66] and [74].

(6) The Adjudicator's discretion to exclude the supplementary bundles was properly exercised because (a)the supplementary bundles were submitted outside the statutory time limit of 7 days given in s 15 (1) read with s 16 (2) (b) of the SOP Act due to RN's own default; and (b)TPX had not had, and would not have, the chance to respond to the allegations made in the supplementary bundles and would be unfairly prejudiced by their inclusion: at [67] and [69].

Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223 (refd)

Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 (refd)

Brookhollow Pty Ltd v R&R Consultants Pty Ltd [2006] NSWSC 1 (refd)

Chip Hup Hup Kee Construction Pte Ltd v Ssangyong Engineering & Construction Co Ltd [2008] SGHC 159 (refd)

Chip Hup Hup Kee Construction Pte Ltd v Ssangyong Engineering & Construction Co Ltd [2010] 1 SLR 658 (folld)

Chua Say Eng v Lee Wee Lick Terence [2011] SGHC 109 (refd)

Lloyd v Mc Mahon [1987] AC 625 (refd)

Ng Swee Lang v Sassoon Samuel Bernard [2008] 1 SLR (R) 522; [2008] 1 SLR 522, HC (refd)

Ng Swee Lang v Sassoon Samuel Bernard [2008] 2 SLR (R) 597; [2008] 2 SLR 597, CA (refd)

SEF Construction Pte Ltd v Skoy Connected Pte Ltd [2010] 1 SLR 733 (folld)

Sungdo Engineering & Construction (S) Pte Ltd v Italcor Pte Ltd [2010] 3 SLR 459 (distd)

Trysams Pty Ltd v Club Constructions (NSW) Pty Ltd [2007] NSWSC 941 (folld)

Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) ss 12 (2) (a) , 15 (1) (consd) ;ss 2, 4, 10, 12 (2) , 12 (2) (b) , 13, 13 (1) , 13 (3) , 13 (3) (a) , 13 (3) (b) , 13 (3) (c) , 14, 14 (1) , 15 (2) , 15 (3) , 15 (3) (a) , 16 (2) , 16 (2) (b) , 16 (3) , 17 (1) , 17 (2) , 17 (3) , 17 (4) , 17 (8) , 18, 18 (3) , 30 (2)

Land Titles (Strata) Act (Cap 158, 1999 Rev Ed) s 84 A (1)

Building and Construction Industry Security of Payment Act 1999 (Act 46 of 1999) (NSW) ss 13, 17, 18, 19, 19 (2) , 21 (5) , 22 (1) , 22 (3) (a)

Philip Ling and Ang Hou Fu (Wong Tan & Molly Lim LLC) for the plaintiff

Looi Ming Ming (Eldan Law LLP) for the defendant.

Andrew Ang J

1 This was an application brought by the plaintiff, RN & Associates Pte Ltd (‘RN’), the main contractors on a project to carry out works in relation to proposed additions and alterations to an existing block of 11-storey flats at Nassim Road (‘the Project’), to set aside the adjudication determination made in Adjudication Application No SOP/AA 009 of 2012 dated 2 April 2012 (‘the Adjudication Determination’) in favour of the defendant subcontractor, TPX Builders Pte Ltd (‘TPX’).

2 The matter came before me on 18 July 2012 and 28 August 2012. Afterhearing submissions for both sides, I dismissed the application and now give the reasons for my decision.

Factual background

The contract and works

3 RN was engaged as the main contractor for the Project, known as ‘Nassim Regency’.

4 On 21 July 2009 and after ‘numerous discussions’ between RN and TPX, the latter issued an offer to RN to carry out the works in relation to the Project (‘the Works’) as RN's main subcontractor for $3,271,360. This offer included a schedule of works and, inter alia, the following terms (modified from the Singapore Institute of Architects' Articles and Conditions of Building Contract for Minor Works, which was incorporated by reference):

(a) payment was to be made 30 days from the date of any claim for payment;

(b) a maintenance period of 12 months from the issuance of the completion certificate; and

(c) monthly issue of interim certificates not later than 14 days from the date of receipt of the contractor's application.

5 RN accepted on the same day. Under the contract, the Works were to be completed by 30 September 2009. However, the Works took substantially longer to complete, and the temporary occupation permit (‘TOP’) was only obtained on 4...