Seng Hock Heng Contractor Pte Ltd v Hup Seng Bee Construction Pte Ltd and Another

CourtHigh Court (Singapore)
JudgeChoo Han Teck JC
Judgment Date17 July 2002
Neutral Citation[2002] SGHC 151
Citation[2002] SGHC 151
Subject MatterFirst defendants calling upon performance bond,Whether to grant injunction,Whether discharge of onus by plaintiffs,Termination of sub-contract,Performance bonds,Application by plaintiffs for injunction against first defendants from receiving payment on bond,Onus of proof on plaintiffs to establish fraud or unconscionable conduct,Banking
Plaintiff CounselIntekhab Khan, Dilip Kumar and Karen Quek (J Koh & Co)
Published date19 September 2003
Defendant CounselChong Kuan Keong and Lawrence Lim (Chong Chia & Lim LLC)
Docket NumberSuit No 484 of 2002
Date17 July 2002

Judgment Cur Adv Vult


1. The first defendant is the main contractor to the Housing and Development Board’s ("HDB") building project at Bukit Batok. The second defendant is an insurance company who is named nominally as a defendant because it had issued a performance bond in favour of the first defendant.

The bond was issued on behalf of the plaintiff who were the main sub-contractor to the first defendant in the HDB project at Bukit Batok. The project involved the building of three blocks of housing flats and surrounding supports such as car parks and playground.

2. The first defendant terminated its sub-contract with the plaintiff on 9 May 2002, and on 10 May 2002 it called upon the performance bond, which was for a sum of $1,295,000. The plaintiff had commenced proceedings against the first defendant for breach of contract, but in the applications before me in SIC 1447 and SIC 1448 of 2002 the plaintiff is seeking an injunction against the second defendant from making payment on the bond, and the first defendant from receiving payment on the bond.

3. The plaintiff’s grounds for seeking an order restraining payment under the performance bond are based on unconscionability. First, it asserts that the first defendant wrongfully imposed liquidated damages on the plaintiff in March 2002. Secondly it assets that the first defendant had exaggerated its claim because only 4% of work remains uncompleted at the time the first defendant terminated its contract with the plaintiff. The plaintiff calculated the value of the 4% to be about $1,000,000 but the first defendant is claiming $3,400,000.

4. Mr. Dilip Kumar and Mr. Intekhab Khan appearing on behalf of the plaintiff submitted that the plaintiff’s conduct is also oppressive because there is about $1,900,000 still in the first defendant’s hands by way of a retention sum and also a sum of $239,000 due to the plaintiff by way of a final progress payment. Counsel referred me to the unreported case of Raymond Construction Pte Ltd v Low Yang Tong (Suit No. 1715 of 1995) for the proposition that the court may take an exaggeration such as that made by the first defendant into account. My attention was also drawn to Sin Kian Contractor Pte Ltd v Lian Kok Hong [1999] 3 SLR 732 for the proposition that even if the court is minded to refuse an injunction it may order part payment only.

5. The principles submitted by counsel for the plaintiff were not challenged by Mr. Chong for the first...

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