TT International Ltd v Ho Lee Construction Pte Ltd

CourtHigh Court (Singapore)
JudgeQuentin Loh J
Judgment Date29 March 2017
Neutral Citation[2017] SGHC 62
Citation[2017] SGHC 62
Docket NumberOriginating Summons No 1249 of 2010
Hearing Date01 April 2013,18 March 2015,29 July 2014,25 March 2013,14 April 2016,26 March 2013,13 April 2016,30 July 2014,17 March 2015,16 March 2015,11 April 2013
Plaintiff CounselChan Hock Keng, Ong Pei Chin and Lawrence Foo Xian Yao (WongPartnership LLP)
Defendant CounselEdwin Lee Peng Khoon, Lawrence Tan Shien Loon, Poonaam Bai d/o Ramakrishnan Gnanasekaran and Jasmine Chan Ying Keet (Eldan Law LLP)
Subject MatterBuilding and Construction Law,Standard form contracts,Contract,Waiver,Res judicata,Issue estoppel,Abuse of process
Published date12 April 2017
Quentin Loh J:

The plaintiff, TT International Limited (“the Plaintiff”), filed this Originating Summons (“OS”) for the court to adjudicate upon the proof of debt (“the Proof of Debt”) filed by the defendant, Ho Lee Construction Private Limited (“the Defendant”), in a scheme of arrangement (“the Scheme”) that was finally, after some tortuous twists and turns in these courts, approved by the court.

The main issue in this judgment is whether, on a true construction of this building and construction contract, entered into on the Public Sector Standard Conditions of Contract for Construction Works (“PSSCOC”), the Defendant is entitled to recover for loss of profits on uncompleted work flowing from the Plaintiff’s termination of the Defendant’s employment. Secondary issues relating to, inter alia, issue estoppel, abuse of process, and waiver by estoppel are also raised by the parties.

The parties

The Plaintiff is a company incorporated in Singapore which is listed on the Singapore Stock Exchange.1 Its main business is in trading and distributing consumer electronic products.2 The Plaintiff also owns warehouses and provides warehousing services.3

The Defendant is a company incorporated in Singapore which carries on the business of building and construction.

Background to the dispute

In 2007, the Plaintiff obtained a Warehouse Retail Scheme licence from the Economic Development Board to develop and construct an eight-storey warehouse retail complex, known as the “Big Box”, at Jurong East Street 11 (“the Project”).4

Subsequently, the Plaintiff entered into two contracts with the Defendant in relation to the Project. First, a contract for piling and sewer diversion works.5 Secondly, a contract for the main building works (“the Main Contract”) for the sum of $226,000,000.6 Both contracts incorporated the PSSCOC 2006. The Plaintiff appointed Jurong Consultants Pte Ltd (“Jurong Consultants”) as the Superintending Officer (“the SO”) in respect of works under the Main Contract.7

Sometime in March or April 2008, the Defendant began works under the Main Contract.8

In the second half of 2008, the Plaintiff began to experience financial difficulties due to the global financial crisis.9 Thus, under the Plaintiff’s directions, the SO issued three instructions to the Defendant to suspend works: On 12 September 2008, the SO instructed the Defendant to suspend most of the works for the Project.10 On 2 October 2008, the SO instructed the Defendant to suspend all works except for certain works.11 Finally, on 15 October 2008, the SO instructed the Defendant to suspend all works until further notice”.12 Then, in early November 2008, the Plaintiff froze repayments of all debts due to its creditors except for debts due to its essential trade creditors.13

On 9 December 2008, the Plaintiff sent a Notice of Termination under cl 31.4 of the PSSCOC (“cl 31.4”) to the Defendant, thus terminating the Defendant’s employment under the Main Contract.14

On 29 December 2008, the Defendant submitted a claim to the SO for the sum of $68,139,652.94.15 On 15 January 2009, the SO suspended its services for the Project, on the basis that the Plaintiff had not repaid its debt to the SO, but offered to evaluate the Defendant’s claim dated 29 December 2008 out of goodwill.16 However, the Plaintiff did not immediately direct the SO to evaluate the claim.17 The Plaintiff requested Northcroft Lim Consultants Pte Ltd (“Northcroft”) to assist in evaluating the claim in or around August 2009.18 On 14 August 2009, Northcroft requested the Defendant to submit its claim and thereafter provided an assessment of the claim on 7 September 2009.19

On 29 January 2009, the Plaintiff obtained approval from the High Court (“the HC”) to convene a meeting of its creditors to vote on the Scheme.20 Clause 4.1 of the Scheme provided for eligible creditors to lodge proofs of debts, in respect of their claims against the Plaintiff, with the scheme manager (“the Scheme Manager”).21 Clauses 4.5 to 4.6 of the Scheme set out the procedure for resolving disputed amounts of debts.22 Under cl 4.5, the Scheme Manager would first issue a notice of rejection of proof of debt to the creditor to inform that it had rejected (part of) the latter’s claim. Upon receiving such a notice, a creditor was entitled to request the Plaintiff, under cl 4.6, to start proceedings for the HC to adjudicate the claim.

On 6 October 2009, the Defendant submitted the Proof of Debt for the sum of $84,563,154.14.23 This comprised a claim in the sum of $33,556,433.09 for loss of profits.24

On 15 December 2009, the Scheme Manager notified the Defendant that it had rejected the Defendant’s claim in part (admitting $22,769,729.15), and that the disputed debt amount was $61,793,424.99 (“the Disputed Amount”).25 In response, on 22 December 2009, the Defendant requested the Plaintiff to commence proceedings in the HC for adjudication of the Disputed Amount.26

The Plaintiff subsequently engaged PricewaterhouseCoopers (“PWC”) to perform an independent review and assessment of the proofs of debts filed by creditors. On 12 February 2010, PWC produced a report which stated that there was an absence of supporting documents in respect of, inter alia, the loss of profits claim in the Proof of Debt. PWC opined that, based on the available documents, the rejected amounts were reasonably rejected.27

On 15 March 2010, upon the Plaintiff’s application, the HC sanctioned the Scheme (see Re TT International Ltd [2010] SGHC 177 (“TT International (HC)”). The Defendant and several other scheme creditors appealed against the HC’s decision. On 27 August 2010, the Court of Appeal (“the CA”) allowed the appeals and set aside the HC’s sanction of the Scheme (see The Royal Bank of Scotland NV (formerly known as ABN Amro Bank NV) and others v TT International Ltd and another appeal [2012] 2 SLR 213 (“TT International (CA)”). The CA also directed that a further meeting of the scheme creditors be called to approve the Scheme (see [1] of Annexure I to TT International (CA)).

On 24 September 2010, the further meeting of the scheme creditors was held. The Plaintiff then applied to the CA for sanction of the scheme. On 13 October 2010, the CA sanctioned the scheme subject to some alterations (see [6]–[8] of Annexure II to TT International (CA)). On 26 October 2010, the CA directed that the Defendant’s loss of profits claim should be ascribed an amount of S$9.27 million for the purposes of voting.28

On 12 November 2010, the Defendant requested the Plaintiff to start proceedings in the HC for adjudication of the Disputed Amount.29 Accordingly, the Plaintiff filed this OS on 16 December 2016.

In this OS, the Defendant revised its claim such that the Disputed Amount fell to $53,855,381.00.30 At a number of pre-trial conferences, after discovery, I made suggestions as to how some of the issues could be settled or streamlined. This included for example, categorising the subcontractor’s claims into binding subcontracts already entered into, contingent subcontracts with varying degrees of obligation to proceed to a binding subcontract and those where only indicative prices and terms had been explored, and settling them accordingly. Counsel for both parties should be commended for their very practical and commercial approach to resolving and narrowing the issues between their clients. They managed to settle a number of issues. Subsequently, following mediation on 16 May 2012, the parties reached agreement on several items of claim in relation to the Disputed Amount.31 Consequently, the dispute was narrowed to three items of claim, viz, the Defendant’s claims for: loss of profits (“the Loss of Profits Issue”); damages payable to its subcontractors and suppliers (“the Damages Issue”); and for interest for four progress claims which were adjudicated upon under the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) (“the Interest Issue”).32

On 11 July 2012, the Plaintiff filed a summons, with the Defendant’s consent, for the trial of two preliminary points of law which pertained to the Damages Issue and the Interest Issue respectively.33 I heard the summons on 9 October 2012, and made further suggestions on how agreement could be reached on the Damages Issue. The parties later reached an agreement on the Damages Issue.34

A trial for the Loss of Profits issue began on 25 March 2013. There were two main sub-issues.35 First, whether the Plaintiff was entitled to rely on cl 31.4 to limit or dispose of the Defendant’s claim for loss of profits (“the cl 31.4 Issue”). Secondly, if cl 31.4 was inapplicable, the quantum of damages that the Defendant was entitled to for loss of profits (“the Quantum Issue”). The parties requested that I put the cl 31.4 issue to one side, and deal with the Quantum Issue first. The experts’ evidence was reduced to a joint report on agreed items and items that were not agreed and the reasons therefor. During the course of the expert witness conferencing, it appeared to counsel that their experts had not considered a number of matters and that, on quite a number of items in dispute, their approaches or bases for their conclusions were erroneous.

The parties then agreed to binding adjudication before me on the Quantum Issue, and reserved their right to a decision in the normal manner on the cl 31.4 Issue (after determination of the Quantum Issue). I heard counsel on the respective contentions and submissions on the Quantum Issue. On 14 April 2016, I determined the Quantum Issue by finding that the loss of profits due to the Defendant, on the assumption that cl 31.4 did not apply, was $18,193,000 rounded to the nearest thousand.36

The Plaintiff has now requested for my decision on the cl 31.4 Issue.37

The parties’ cases

The Plaintiff’s case was that cl 31.4(2) exhaustively sets out the sums which a contractor...

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1 books & journal articles
  • Litigation
    • United Kingdom
    • Construction Law. Volume III - Third Edition
    • 13 April 2020
    ...NSWSC 263; Turf Club Auto Emporium Pte Ltd v Yee Boong Hua [2017] SGCA 21 at [85]; TT International Ltd v Ho Lee Construction Private Ltd [2017] SGHC 62 at [81]–[86], per Quentin Loh J; Schweppe v Closier [2017] EWHC 1486 (TCC) at [68]–[79], per Coulson J; Lim Geok Lin Andy v Yap Jin Meng B......

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