Yee Hong Pte Ltd v Tan Chye Hee Andrew (Ho Bee Development Pte Ltd, Third Party)

• Jurisdiction: Singapore
• Judgment Date: 31 August 2005
• Date: 31 August 2005
• Docket Number: Suit No 814 of 2003
• Court: High Court (Singapore)

Yee Hong Pte Ltd

Plaintiff

and

Tan Chye Hee Andrew (Ho Bee Development Pte Ltd, third party)

Defendant

[2005] SGHC 163

Lai Siu Chiu J

Suit No 814 of 2003

High Court

Arbitration–Stay of court proceedings–Court's discretion under Arbitration Act–Whether court having jurisdiction to stay proceedings and order parties to arbitrate where no arbitration agreement between parties existing–Whether court should stay proceedings and order parties to arbitrate where prior related matter between similar parties referred to arbitration–Section 6 (5) Arbitration Act (Cap 10, 2002 Rev Ed)

The plaintiff was the main contractor and the defendant was the architect in a condominium project (“the Project”). The third party, joined to the action by the defendant, was the developer of the Project. The contract entered into between the plaintiff and the third party (“the Main Contract”) and between the defendant and the third party, both contained arbitration clauses. The essence of the plaintiff's claim was that the defendant had breached his duties as the architect of the Project.

The third party brought this appeal against the Assistant Registrar's refusal to allow its application for an order that all further proceedings be stayed and referred to arbitration. The third party pointed out that it did not make sense for the plaintiff's claim against it in an earlier related suit to be referred to arbitration and not the plaintiff's claim against the defendant.

Held, allowing the appeal:

(1) It would be highly unsatisfactory for one dispute to be referred to arbitration and for another to be litigated separately, when both disputes arose out of the same project. Such a state of affairs would not determine the whole dispute among all three parties. This would not be a desirable situation in terms of saving time and costs: at [20] and [27].

(2) Section 6 (5) of the Arbitration Act (Cap 10, 2002 Rev Ed) empowered the Court to order the plaintiff to arbitrate its dispute with the defendant in the absence of an arbitration agreement between them. The defendant was, by third party proceedings, making a claim for an indemnity or contribution through or under the third party. On this basis, and in light of s 6 (5), the defendant was included as a party to the arbitration agreement between the third party and the plaintiff. Additionally, the wording of the arbitration clause was very wide and encompassed claims in contract as well as in tort: at [25] and [26].

(3) Ordering the plaintiff to arbitrate its claim against the defendant was not tantamount to saying that the plaintiff's claim had no merits. It only meant that there was another more suitable forum for the three parties involved to have all their disputes relating to one project determined: at [30].

Hiap Hong & Co Pte Ltd v Hong Huat Development Co (Pte) Ltd [2001] 1 SLR (R) 458; [2001] 2 SLR 458 (folld)

Hong Huat Development Co (Pte) Ltd v Hiap Hong & Company Pte Ltd [2000] SGHC 131 (refd)

Man B&W Diesel S E Asia Pte Ltd v PT Bumi International Tankers [2004] 2 SLR (R) 300; [2004] 2 SLR 300 (refd)

RSP Architects Planners & Engineers v MCST Plan No 1075 [1999] 2 SLR (R) 134; [1999] 2 SLR 449 (distd)

RSP Architects Planners & Engineers v Ocean Front Pte Ltd [1995] 3 SLR (R) 653; [1996] 1 SLR 113 (distd)

Taunton-Collins v Cromie [1964] 1 WLR 633; [1964] 2 All ER 332 (distd)

Arbitration Act (Cap 10, 2002 Rev Ed) s 6 (5) (consd);s 6 (1)

Rules of Court (Cap 322, R 5, 2001 Rev Ed) O 18 r 19 (1) (a), O 18 r 19 (1) (b), O 18 r 19 (1) (c)

Supreme Court of Judicature Act (Cap 322, 1999 Rev Ed) s 34 (1) (c)

Edwin Lee (Rajah & Tann) for the plaintiff

Engelin Teh SC and Thomas Sim (Engelin Teh Practice LLC) for the defendant

Paul Sandosham (Wong Partnership) for the third party.

Lai Siu Chiu J

The facts

1 Ho Bee Development Pte Ltd (“the Third Party”) is the developer of a condominium project known as Southaven II (“the Project”) at Upper Bukit Timah Road. Yee Hong Pte Ltd (“the Plaintiff”) was the main contractor appointed under an agreement dated 18 November 1996 (“the main contract”) while Andrew Tan (“the Defendant”) was the architect appointed by the Third Party for the Project. The Defendant practises under the name and style of Andrew Tan Architects Pte Ltd.

2 The main contract incorporated the Singapore Institute of Architects (“SIA”) Articles and Conditions of Building Contract - Measurement Contract (4th Ed, 1988) which contains an arbitration clause.

3 The commencement date of the main contract was 25 April 1996. The original contract period was 24 months. It was subsequently extended three times by the Defendant so that ultimately the completion date became 27 October 1998. The Defendant certified that the Project was completed on 8 February 1999 and a completion certificate was eventually issued four months later on 14 June 1999 followed by a final certificate on 8 February 2002.

4 Under the main contract, liquidated damages of $22,000 were payable for each day of delay. By a letter dated 28 February 2001 (“the delay certificate”), the defendant certified that there had been 104 days of delay and that the total liquidated damages payable amounted to $2,288,000.

5 The Plaintiff commenced this suit against the Defendant in relation, inter alia, to the delay certificate that the Defendant had issued.

6 The Plaintiff's Statement of Claim alleged, inter alia, that the Defendant breached his duties as the architect for the Project by wrongfully issuing the delay certificate which was backdated to 28 October 1998. The Plaintiff asserted that the Defendant failed to act fairly and impartially in administering the main contract as, at the time he issued the delay certificate, he was aware that there were factors which entitled the Plaintiff to extensions of time. The Defendant had in fact recommended that the Third Party grant extensions of time to the Plaintiff by his letters to the Third Party dated 23 December 1998, 6 January 1999 and 21 May 1999 respectively. However, no extensions of time were granted by the Third Party.

7 The Plaintiff alleged that by withholding extensions of time which the defendant well knew the Plaintiff was entitled to, the Defendant had acted under the influence or interference of the Third Party.

8 As a result of the Defendant's issuance of the delay certificate, a sum of $2,288,000 was withheld by the Third Party from the Plaintiff as liquidated damages, thereby causing loss, damage and expense to the Plaintiff.

9 The Plaintiff further alleged that the...