Steel Industries Pte Ltd v Deenn Engineering Pte Ltd

JurisdictionSingapore
CourtHigh Court (Singapore)
JudgeJudith Prakash J
Judgment Date06 August 2003
Neutral Citation[2003] SGHC 167
Citation[2003] SGHC 167
Subject MatterCertificates and approvals,Architect issuing interim certificate five years after completion of works,Architect's power to issue and withdraw certificate of payment,Validity of certificate of payment,Terms,Building and Construction Law,Whether waiver of strict compliance covering such circumstances
Defendant CounselRaymond Chan (Chantan LLC)
Plaintiff CounselThio Ying Ying with Cheong Aik Hock (Kelvin Chia Partnership)
Published date03 October 2003
Docket NumberSuit No 1201 of 2002 (Registrar's
Date06 August 2003

Introduction

1 Some years ago, Fort Canning Country Club Investment Ltd (‘the employers’) undertook the redevelopment of an existing building to provide premises for the Fort Canning Country Club (‘the project’). They appointed Deenn Engineering Pte Ltd, the defendants in this action, as the main contractors for the project. The architect of the project was a firm called International Project Consultants.

2 In March 1996, Steel Industries Pte Ltd, the plaintiffs herein, became nominated sub-contractors with responsibility of carrying out the supply, installation, testing and commissioning of kitchen equipment in the project. The sub-contract between the plaintiffs and the defendants incorporated the Singapore Institute of Architects standard form of Conditions of Sub-Contract (‘the SIA Conditions of Sub-Contract’).

3 The project was duly commenced and completed. The main contract works were certified by the architect as being completed on 10 January 1997 whilst the plaintiffs’ sub-contract works were certified as completed on 9 May 1998.

4 In October 2002, the plaintiffs started this action for the sum of $376,302.70 which they asserted was the balance due to them under the architect’s Interim Certificate no. 19. The defendants entered appearance and applied to stay proceedings on the basis that the sub-contract contained an arbitration clause. Shortly thereafter, the plaintiffs filed an application for summary judgment.

5 The plaintiffs’ and the defendants’ applications were heard together in January this year. On 22 January, the plaintiffs’ application was dismissed but the defendants’ application was allowed and the action was stayed pending arbitration. The plaintiffs appealed. I dismissed their appeal and they now wish to take the matter further.

Further facts

6 By the sub-contract, the parties agreed, among other things, to the following terms and conditions:

(1) the nominated sub-contract sum was to be $713,913.90 (excluding GST) and this was subject to final certification by the architect and to adjustments made in relation to the defendants’ right to set off or deduction;

(2) the plaintiffs were to apply for payment by the defendants on a monthly basis and they would be paid within 14 days after the defendants themselves had been paid or had been deemed to be paid by the employers following certification by the architect in accordance with cl 30(1) and (2) and 31 of the Main Contract Conditions (cl 13.1 of the SIA Conditions of Sub-Contract);

(3) any dispute arising between the parties was to be referred to arbitration.

7 The terms of cl 13 of the SIA Conditions of Sub-Contract played a pivotal role in the case and must therefore be set out in full:

13.1 The Sub-Contractor will (unless the Schedule hereto provides to the contrary) be paid within 14 days after payment or deemed payment of the Main Contractor by the Employer following certification by the Architect of the amounts paid or deemed to be paid to the Main Contractor and accordingly due to the Sub-Contractor in all respects in accordance with clauses 30(1) and (2) and 31 of the Main Contract Conditions.

13.2 In so far as the Architect may decide the amounts due to the Sub-Contractor and any matter of defence, set-off or counterclaim as between the parties to this Sub-Contract for the purpose of determining the amounts to be certified for payment by him in the Main Contract pursuant to clause 30(1) of the Main Contract Conditions, or any matters of extension of time and delay under clause 11(2) of this Sub-Contract, such decisions and certificates shall be binding until final judgment or award in any dispute between the parties to this Sub-Contract.

13.3 In the event of any dispute as to whether or not the Contractor has received payment in accordance with the sub-clause (1) hereof, the Architect, upon the request of the Contractor or the Sub-Contractor and after satisfying himself as to the facts, shall certify whether and if so in what amounts and when the Contract has received payment from the Employer in respect of the Sub-Contract Works, or is deemed to have received such payment pursuant to clause 30(2) of the Main Contract Conditions. Such Certification shall be known as a “Certificate of Payment of Main Contractor” and shall be binding as between the Contractor and Sub-Contractor until final judgment or award of any dispute under this Sub-Contract. For the avoidance of doubt, such Certificate shall not itself deal with any matters of set-off or counterclaim as between the Main Contractor and Sub-Contractor, which shall be decided (if at all) in the Interim Certificates for payment under the Main Contract in accordance with the provisions of clause 30(1) of the provisions of the Main Contract.

The purport of this clause therefore was that the plaintiffs did not have an independent claim against the defendants for payment for work done. Instead, they were only entitled to receive money from the defendants after the defendants had themselves been paid in respect of that work by the employers or after the defendants had been deemed to have received the money. The situations in which payment could be deemed to have been made were set out in cl 30(2) of the Main Contract Conditions.

8 According to the plaintiffs’ statement of claim, in the course of the works and thereafter, the architect issued six interim certificates which contained certifications as to amounts due to the plaintiffs. These were as follows:

Date Interim Cert No. Amount (w/o GST) Amount (w/GST)

13.12.1996 14 S$361,504.30 S$372,349.43

29.01.1997 15 S$ 52,800.00 S$ 54,384.00

25.04.1997 16 S$ 47,847.85 S$ 49,283.29

28.07.1997 17 S$ 0.00 S$ 0.00

24.12.1997 18 S$ 0.00 S$ 0.00

10.04.2002 19 S$355,479.39 S$366,143.77

Total = S$817,631.54 S$842,160.49

It would be noted that the 19th Certificate was only issued in April 2002, some four and a half years after the 18th Certificate. Prior to the issue of the 19th certificate, the total amount certified was $476,016.72 (with GST) and, according to the plaintiffs, the defendants had paid them $465,857.79 leaving only some $11,000 outstanding. It should be noted here that the defendants’ own calculations showed that they had paid the plaintiffs only $452,289.11 (inclusive of GST), being the amount that had been paid to them by the employers for the plaintiffs although Interim Certificate no. 17 had certified an amount of $462,152.15 (without GST) as being due to the plaintiffs.

9 In the meantime, the defendants had been at odds with the employers and the architect. The main contract works had been certified by the architect to be completed on 10 January 1997. The defendants had then submitted their final claim of $7,696,389 on 28 July 1997. This final claim included the plaintiffs’ final claim of $350,226 for the kitchen works. Up to June 1998, however, the architect failed to issue the Final Payment Certificate certifying the...

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3 cases
  • Sintal Enterprise Pte Ltd v Multiplex Constructions Pty Ltd
    • Singapore
    • High Court (Singapore)
    • 30 September 2004
    ...Development Co Pte Ltd v Leisure Park (Singapore) Pte Ltd [2000] 1 SLR 622; Steel Industries Pte Ltd v Deenn Engineering Pte Ltd [2003] 3 SLR 377). In the plaintiff’s affidavits, the only complaint (which was untrue) was that the defendant had made a general statement of the loss and damage......
  • Anwar Siraj and Another v Teo Hee Lai Building Construction Pte Ltd
    • Singapore
    • High Court (Singapore)
    • 28 February 2007
    ...of the three cases to be of any assistance to the defendant. 28 Likewise, I find Steel Industries Pte Ltd v Deenn Engineering Pte Ltd [2003] 3 SLR 377 (“the Steel Industries case”) cited by the defendant to be of no help to the defendant’s case. This was cited by the defendant in support of......
  • Anwar Siraj and Another v Teo Hee Lai Building Construction Pte Ltd
    • Singapore
    • High Court (Singapore)
    • 28 February 2007
    ...of the three cases to be of any assistance to the defendant. 28 Likewise, I find Steel Industries Pte Ltd v Deenn Engineering Pte Ltd [2003] 3 SLR 377 (“the Steel Industries case”) cited by the defendant to be of no help to the defendant’s case. This was cited by the defendant in support of......

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