Tiong Seng Contractors (Pte) Ltd v Chuan Lim Construction Pte Ltd

JurisdictionSingapore
CourtHigh Court (Singapore)
JudgeLai Siu Chiu J
Judgment Date31 August 2007
Neutral Citation[2007] SGHC 142
Citation[2007] SGHC 142
Published date07 September 2007
Subject MatterStatutes and regulations,Section 34(1) Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed),Building and Construction Law,Whether Act applicable to final payment claims
Plaintiff CounselAndrew Ang (PK Wong & Associates LLC)
Defendant CounselTai Chean Ming and Tan Joo Seng (Chong Chia & Lim LLC)
Date31 August 2007
Docket NumberOriginating Summons No 711 of 2007

31 August 2007

Judgment reserved.

Lai Siu Chiu J:

Introduction

1 These proceedings raised an important and unprecedented point of law viz. does a final progress claim come under the purview of the Building and Construction Industry Security of Payment Act (Cap 30B 2006 rev. ed) (“the Act”) for purposes of adjudication?

2 In this Originating Summons (“the OS”), the plaintiff Tiong Seng Contractors (Pte) Ltd took the position that the Act does not extend to “final claims” and that the Adjudicator had no jurisdiction to make the determination in Adjudication Application No. SOP AA 08 of 2007 (“the Adjudication”). Accordingly, the plaintiff applied to set aside the Adjudication. The defendant Chuan Lim Construction Pte Ltd on the other hand defended the award (which was in their favour) by asserting that the Act does apply to such “final claims”.

The undisputed facts

3 The salient facts surrounding the present controversy can be briefly summarized. The plaintiff had been appointed as the main contractor for a construction project at Sentosa and had contracted with the defendant to undertake certain earthworks for the project.

4 After earthworks had commenced, the defendant raised claims which included the Final Claim dated 25 January 2007 and Progress Claim No. 10 dated 26 February 2007 respectively.

5 Under the Final Claim, the defendant sought payment of S$481,155.77. In response to this claim, the plaintiff made a preliminary payment of S$210,553.68, based on a preliminary evaluation of the work done at that time, leaving S$270,602.09 unpaid (“the unpaid balance”). The defendant responded by raising Progress Claim No. 10 for the unpaid balance.

6 When further payment was not forthcoming from the plaintiff, the defendant sought an adjudication under the Act based on Progress Claim No. 10. The Singapore Mediation Centre nominated Tay Cher Seng as adjudicator (“the Adjudicator”) and an Adjudication Conference was convened on 16 April 2007.

7 At the Adjudication Conference, the plaintiff submitted inter alia, that Progress Claim No. 10 had been issued after the Final Claim, and could not be relied upon to found a claim under the Act.

8 Notwithstanding the plaintiff’s arguments, the Adjudicator made a finding that the defendant was entitled to receive a sum of S$169,949.94 plus 5% GST of another S$8,497.50 for a total of $178,447.44 (“the Adjudicated sum”). In addition, the Adjudicator determined that the plaintiff should pay 60% of the Adjudicator’s fee (of S$6,300) as well as of the adjudication application fee (of S$525).

9 The plaintiff informed the defendant on 4 May 2007 of its intention to challenge the Adjudication determination. On 8 May 2007, the defendant served on the plaintiff a statutory demand under s 254(2)(a) of the Companies Act (Cap 50 2006 rev. ed.). The plaintiff’s immediate response was to file and serve the OS on the defendant’s solicitors. The plaintiff thereafter applied for directions to make payment of S$182,542.44 to the Accountant-General. The sum comprised the Adjudicated sum plus 60% of the Adjudicator’s fee ($3,780) and application fee ($315).

10 On 16 May 2007, the defendant applied by Summons No. 2144 of 2007/K (‘the application”) to strike out the OS and/or for leave to enforce the Adjudication award because the plaintiff had failed to provide security at the time of filing the OS by paying into court the unpaid portion of the Adjudicated sum as required under O 95 r 3(3) of the Rules of Court (2006 rev. ed.) read with s 27 (3) of the Act. The application was withdrawn (with costs to the defendant) at the adjourned hearing of the OS as by then the plaintiff had rectified its omission by making payment into court of $182,542.44.

Whether a final progress claim comes under the purview of the Act for purposes of adjudication

11 The present controversy is a result of a steady escalation in property prices and burgeoning demand in the construction industry. Before I go further, it would be apposite to set matters in their proper context by tracing the legislative origins and development of the Act to its present form, so that there can be a proper appreciation of the practical purposes sought to be achieved by its enactment as well as by any subsequent amendments thereto.

Legislative origins

12 The Act is a legislative enactment of fairly recent origin, having come into effect on 1 April 2005. The Act was modeled on various statutes in existence in other jurisdictions, such as Australia, UK and New Zealand. Notably, the Act drew inspiration from the New South Wales Building and Construction Industry Security of Payment Act, 1999 (“the NSW Act”), which originally defined “progress payment” as “a payment to which a person is entitled under section 8”.

13 The NSW Act was subsequently amended in November 2003 to include a more specific definition of “progress payment”, which reads as follows:

a payment to which a person is entitled under section 8, and includes (without affecting any such entitlement):

(a) the final payment for construction work carried out (or for related goods and services supplied) under a construction contract, or

(b) a single or one-off payment for carrying out construction work (or for supplying related goods and services) under a construction contract, or

(c) a payment that is based on an event or date (known in the building and construction industry as a ‘milestone payment’)

[emphasis added]

Our current version

14 Notably, our current version of the Act does not capture all the amendments from the NSW Act, but simply defines “progress payment” as:

a payment to which a person is entitled for the carrying out of construction work, or the supply of goods or services, under a contract, and includes -

(a) a single or one-off payment, or

(b) a payment that is based on an event or a date

15 The plaintiff accordingly seized on the specific omission of claims for “final payment” and concluded therefrom that the Act was not intended to extend to claims for final payment. The defendant submitted otherwise on the basis that the broad ranging provisions of the Act do not expressly or impliedly exclude “final claims”.

16 Indeed, the present interpretative controversy has been exacerbated by conflicting views expressed by treatises, the Building and Construction Authority (“the BCA”) and adjudicators in subsequent mediations under the Act as can be seen in the following examples.

(a) Includes adjudication of “final payments”

17 ln AU v AV [2006] SGSOP 9, a construction contract was terminated and a claim was made under the Act, effectively amounting to a claim for...

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12 cases
  • Taisei Corp v Doo Ree Engineering & Trading Pte Ltd
    • Singapore
    • High Court (Singapore)
    • 3 July 2009
    ...of New South Wales interpreting the provisions of the NSW Act: see Tiong Seng Contractors (Pte) Ltd v Chuan Lim Construction Pte Ltd [2007] 4 SLR 364; Chip Hup Hup Kee Construction Pte Ltd v Ssangyong Engineering & Construction Co Ltd [2008] SGHC 159 (“Chip Hup Hup Kee”). This approach has ......
  • Libra Building Construction Pte Ltd v Emergent Engineering Pte Ltd
    • Singapore
    • High Court (Singapore)
    • 27 October 2015
    ...This is not a material difference as it was decided by this court in Tiong Seng Contractors (Pte) Ltd v Chuan Lim Construction Ltd [2007] 4 SLR(R) 364 (“Tiong Seng Contractors”) (at [27]) (approved in Chua Say Eng (at [95])) that a final payment would be regarded as a “progress payment” und......
  • Lee Wee Lick Terence v Chua Say Eng
    • Singapore
    • Court of Three Judges (Singapore)
    • 2 November 2012
    ...Construction (S) Pte Ltd v Italcor Pte Ltd [2010] 3 SLR 459 (distd) Tiong Seng Contractors (Pte) Ltd v Chuan Lim Construction Pte Ltd [2007] 4 SLR (R) 364; [2007] 4 SLR 364 (refd) Building and Construction Industry Security of Payment Act (Cap 30 B, 2006 Rev Ed) ss 2, 5, 6, 10 (consd) ;ss 4......
  • Lee Wee Lick Terence (alias Li Weili Terence) v Chua Say Eng (formerly trading as Weng Fatt Construction Engineering) and another appeal
    • Singapore
    • Court of Three Judges (Singapore)
    • 2 November 2012
    ...is entitled for the carrying out of construction works (see also Tiong Seng Contractors (Pte) Ltd v Chuan Lim Construction Pte Ltd [2007] 4 SLR 364 at [27]). For the above reasons, we dismiss TL’s appeal in CA 44 of 2011 and allow CSE’s appeal in CA 46 of 2011. Each party is to bear their o......
  • Request a trial to view additional results
3 books & journal articles
  • Building and Construction Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2007, December 2007
    • 1 December 2007
    ...AC 728 in determining liability for economic loss. Thirdly in Tiong Seng Contractors (Pte) Ltd v Chuan Lim Construction Pte Ltd[2007] 4 SLR 364, the High Court heard the first case arising from a claim for final payment under the Building and Construction Industry Security of Payment Act (C......
  • Building and Construction Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2008, December 2008
    • 1 December 2008
    ...volume in this series that, following the High Court decision in Tiong Seng Contractors (Pte) Ltd v Chuan Lim Construction Pte Ltd[2007] 4 SLR 364, it was expected that the adjudication regime might be increasingly invoked for final payment claims. This has indeed been borne out by the volu......
  • Case Note: THE FINAL PAYMENT IN A CONSTRUCTION CONTRACT: PRESSURES ON ACCOUNT FINALISATION
    • Singapore
    • Singapore Academy of Law Journal Nbr. 2008, December 2008
    • 1 December 2008
    ...Seng Contractors (Pte) Ltd v Chuan Lim Construction Pte Ltd [2007] 4 SLR 364 The security of payment regime introduced by the Building and Construction Industry Security of Payment Act confers on contractors, consultants and suppliers a right to progress payment. Since its enactment, there ......

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