Samwoh Asphalt Premix Pte Ltd v Sum Cheong Piling Private Limited and Another

JurisdictionSingapore
CourtCourt of Three Judges (Singapore)
JudgeChao Hick Tin JA
Judgment Date05 December 2001
Neutral Citation[2001] SGCA 79
Citation[2001] SGCA 79
Subject MatterWhether court should intervene and grant injunctive relief,Performance guarantee,Whether beneficiary's conduct in calling for payment unconscionable,Unconscionability,Call on performance guarantee,Contract
Date05 December 2001
Published date19 September 2003
Defendant CounselSuresh Damodara and K Sureshan (Colin Ng & Partners),Andre Maniam and Daniel Chia (Wong Partnership)
Plaintiff CounselSundaresh Menon and Choy Chee Yean (Rajah & Tann)
Docket NumberCivil Appeal 600052190 of

Judgment

GROUNDS OF DECISION

The background facts (ii) CAAS taxiway fillets
(iii) MINDEF taxiway fillets up to 75 m from east of the runway centre line
(iv) Three reinforced concrete box culverts and U-drains including outfall structures
(v) All drainage works west of the runway
(vi) All drainage works across the runway
(vii) All drainage works east of the runway until western edge of taxiway
(viii) Turfing works until western edge of parallel taxiway

(the principal sub-contract).

(ii) CAAS taxiway fillets
(iii) MINDEF taxiway fillets up to 75m from east of the runway centre line

(the subsidiary sub-contract).

4 Under the terms of the subsidiary sub-contract, for the purpose of securing the performance of that sub-contract, Samwoh were required to furnish a performance guarantee in favour of SC Piling for the sum of S$500,000, being about 5% of the subsidiary sub-contract sum. In compliance with this requirement, Samwoh procured ECICS to issue a performance guarantee dated 30 September 1999 (the performance guarantee) in favour of SC Piling 5 Paragraph (2) of the recital of the performance guarantee stated that ECICS agreed to guarantee the due performance of the [subsidiary sub-contract] in the manner set out therein. The performance guarantee was therefore intended to guarantee the due performance by Samwoh of the subsidiary sub-contract, and not the performance of any other obligation of Samwoh to SC Piling. Nor was it a performance guarantee to secure the due performance by Gim Chuan of the principal sub-contract. For the purpose of this appeal, the key provision is Clause 1 which is as follows:

The Guarantor unconditionally and irrevocably undertakes and convenants to pay in full forthwith upon demand in writing any sum or sums that may from time to time be demanded by the Main Contractor up to a maximum aggregate sum of S$500,000-00 (Singapore Dollars Five Hundred Thousand Only) without requiring any proof that the Main Contractor is entitled to such sum or sums under the Contract or that the Nominated Subcontractor has failed to execute the Contract or is otherwise in breach of the Contract. Any sum or sums so demanded shall be paid forthwith by the Guarantor unconditionally, without any deductions whatsoever and notwithstanding the existence of any differences or disputes between the Main Contractor and the Nominated Subcontractor arising under or out of or in connection with the Contractor or the carrying out of work thereunder or as to any amount or amounts payable thereunder and notwithstanding that such differences or disputes have been referred to arbitration or are the subject of proceedings in Court or is in the midst of any other means of dispute resolution.

Wetness problem at site6. In October 2000, the runway was flooded and Samwoh was unable to carry out their works. The runway continued to have excessive water content in the sub-soil. Samwoh raised the problem with SC Piling and Gim Chuan in November, and informed them that their experts were of the opinion that the problem could have been due to two causes: a high water table and inadequate drainage systems at the site Neither SC Piling nor Gim Chuan really accepted that the excessive moisture or water in the subsoil was due to or occasioned by the inadequate drainage. At a site discussion between the representatives of SC Piling, Gim Chuan and Samwoh held on 20 December 2000, SC Pilings representative stated that owing to the wet weather there was apparently a problem of discharge of surface run-off at the site, resulting in stagnation and ponding of water, and suggested to Gim Chuan to provide sufficient temporary site drainage to facilitate discharge of the surface run-off so as to alleviate the wetness problem. Apparently, the problem excessive moisture or water in the sub-soil remained and Samwoh investigated further and raised the problem again with Gim Chuan and SC Piling. However, the problem was not addressed 7. It is Samwohs claim that Gim Chuan were obliged to rectify this problem, which Gim Chuan had failed to do, and that the excessive water content in the sub-soil had rendered it impossible for them to proceed with the pavement works, which they had contracted to carry out. On 7 February 2001, Samwoh by a written notice accepted what they considered was Gim Chuans repudiation of the subsidiary sub-contract and terminated that sub-contract. 8. After the termination of the subsidiary sub-contract, SC Piling and Samwoh entered into negotiations with a view to having a contract made directly between them. While the negotiations were in progress, Samwoh at the request of SC Piling carried out certain works at the site for a few days. However, the negotiations subsequently broke down,...

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2 cases
  • CEX v CEY and another
    • Singapore
    • High Court (Singapore)
    • 18 May 2020
    ...(refd) Ryobi Tactics Pte Ltd v UES Holdings Pte Ltd [2019] 4 SLR 1324 (refd) Samwoh Asphalt Premix Pte Ltd v Sum Cheong Piling Pte Ltd [2001] 3 SLR(R) 716; [2002] 1 SLR 1 (refd) Soon Li Heng Civil Engineering Pte Ltd v Samsung C&T Corp [2019] SGHC 267 (refd) Sunrise Industries (India) Ltd v......
  • Kejuruteraan Bintai Kindenko Sdn Bhd v Nam Fatt Contruction Sdn Bhd, 11-04-2011
    • Malaysia
    • Court of Appeal (Malaysia)
    • 11 April 2011
    ...and distinct ground apart from fraud for seeking injunctive relief (see also: Samwoh Asphalt Premix Pte Ltd v. Sum Cheong Piling Pte Ltd [2002] 1 SLR 1; Ming Tai Holding Pte Ltd v. Sun Pte Ltd [1999] 2 SLR 368; and Shanghai Electric Group Co. Ltd v. PT Merak Energi Indonesia & Anor [2010] 2......
6 books & journal articles
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2002, December 2002
    • 1 December 2002
    ...has been reaffirmed in a number of cases during the year under review: see eg, Samwoh Asphalt Premix Pte Ltd v Sum Cheong Piling Pte Ltd[2002] 1 SLR 1; McConnell Dowell Constructors (Aust) Pty Ltd v Sembcorp Engineers and Constructors Pte Ltd[2002] 1 SLR 199; Seng Hock Heng Contractor Pte L......
  • TWO DECADES OF RESTRAINING UNCONSCIONABLE CALLS ON PERFORMANCE GUARANTEES
    • Singapore
    • Singapore Academy of Law Journal Nbr. 2011, December 2011
    • 1 December 2011
    ...J). 19 [1999] 3 SLR(R) 44 (L P Thean JA). 20 [2000] 1 SLR(R) 117 (Chao Hick Tin JA). 21 [2000] 3 SLR(R) 198 (Chao Hick Tin JA). 22 [2001] 3 SLR(R) 716 (L P Thean JA). 23 [2002] 1 SLR(R) 60 (Woo Bih Li JC). 24 [2003] 4 SLR(R) 73 (Tay Yong Kwang J). 25 [2009] SGHC 7 (Choo Han Teck J). 26 GHL ......
  • INJUNCTING CALLS ON PERFORMANCE BONDS: RECONSTRUCTING UNCONSCIONABILITY
    • Singapore
    • Singapore Academy of Law Journal Nbr. 2003, December 2003
    • 1 December 2003
    ...JA’s reasoning at Eltraco, supra note 26, pp 300-301. 32 Samwoh Asphalt Premix Pte Ltd v Sum Cheong Piling Pte Ltd [2001] 3 SLR 447 (HC); [2002] 1 SLR 1 (CA). The High Court and the Court of Appeal came to diametrically opposite views as to whether there was unconscionability in this case. ......
  • Banking Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2003, December 2003
    • 1 December 2003
    ...Office of HRH Sheikh Sultan bin Khalifa bin Zayed Al Nahyan[2000] 1 SLR 657 and Samwoh Asphalt Premix Pte Ltd v Sum Cheong Piling Pte Ltd[2002] 1 SLR 1 that the unconscionable conduct of a beneficiary of a performance bond in making a demand for payment constitutes a sufficient ground for r......
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