Teo Hee Lai v Anwar Siraj: Interim Injunction Against Performance Bond Call Due to Unconscionability
In Teo Hee Lai Building Construction Pte Ltd v Anwar Siraj and Another, the High Court of Singapore heard an appeal regarding an interim injunction to restrain the respondents from receiving payment under a performance bond. The appellant, Teo Hee Lai Building Construction Pte Ltd, sought the injunction based on allegations of unconscionability. The High Court allowed the appeal, restoring the interim injunction, finding sufficient evidence of unconscionability on the part of the respondents.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Appeal Allowed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The High Court granted an interim injunction restraining Anwar Siraj from receiving payment under a performance bond due to potential unconscionability.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Teo Hee Lai Building Construction Pte Ltd | Appellant | Corporation | Appeal Allowed | Won | S Thulasidass |
| Anwar Siraj | Respondent | Individual | Appeal Dismissed | Lost | Alvin Chang |
| Khoo Cheng Neo, Norma | Respondent | Individual | Appeal Dismissed | Lost | Alvin Chang |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lee Seiu Kin | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| S Thulasidass | Ling Das & Partners |
| Alvin Chang | Khattar Wong & Partners |
4. Facts
- Appellant contracted to build a house for the Respondents for $1.2 million.
- Appellant procured a performance bond for $120,000 from The Tai Ping Insurance Company Ltd.
- Respondents made a demand to the Insurer for payment under the performance bond.
- Appellant alleged substantial completion of works with only basement painting remaining.
- Appellant claimed the Respondents were holding about $290,000 of the Appellant's monies.
- Appellant alleged denial of opportunity to carry out remedial works during the maintenance period.
- Appellant gave notice of arbitration.
5. Formal Citations
- Teo Hee Lai Building Construction Pte Ltd v Anwar Siraj and Another, DC Suit 4023/2001, RAS 6/2002, [2002] SGHC 139
6. Timeline
| Date | Event |
|---|---|
| Contract signed | |
| Performance bond procured | |
| Appellant asserted substantial completion of works | |
| List of defects forwarded to architect | |
| Handover inspection arranged | |
| Respondents moved in | |
| Appellant proposed dates for inspection of defects | |
| Notice of Arbitration given | |
| Demand made for payment under the performance bond | |
| Writ taken out in this action | |
| Interim injunction granted | |
| Respondents applied to discharge the injunction | |
| Injunction set aside | |
| Appeal heard and allowed, interim injunction restored | |
| Notice of appeal lodged against decision of 31 January 2002 | |
| Grounds of Decision |
7. Legal Issues
- Unconscionability
- Outcome: The court found sufficient evidence of unconscionability to restrain the respondents from making a demand or receiving payment under the performance bond until the matter can be determined in arbitration.
- Category: Substantive
- Sub-Issues:
- Oppressive conduct
- Denial of contractual rights
- Related Cases:
- [1999] 4 SLR 604
- Suit No. 1715 of 1995, 11 July 1996
- Interim Injunction
- Outcome: The court restored the interim injunction, finding that despite some material non-disclosure, the balance of convenience favored maintaining the injunction due to potential unconscionability.
- Category: Procedural
- Sub-Issues:
- Material non-disclosure
- Balance of convenience
- Related Cases:
- [2000] 2 SLR 750
- [2000] 1 SLR 657
8. Remedies Sought
- Injunctive Relief
- Access to property for rectification works
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Construction Law
- Arbitration
- Performance Bonds
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| GHL v Unitrack Building Construction | Court of Appeal | Yes | [1999] 4 SLR 604 | Singapore | Cited for the principle that unconscionability is a ground for granting an injunction against a call on a performance bond. |
| Tay Long Kee Impex Pte Ltd v. Tan Beng Huwah (t/a Sin Kwang Wah) | N/A | Yes | [2000] 2 SLR 750 | Singapore | Cited for the principle that the court retains discretion to continue an injunction despite material non-disclosure. |
| Raymond Construction Pte Ltd v Low Yang Tong & Anor | N/A | Yes | Suit No. 1715 of 1995, 11 July 1996 | Singapore | Cited for elaborating on the concept of unconscionability in relation to performance bonds. |
| Dauphin Offshore Engineering & Trading Pte Ltd v The Private Office of HRH Skeikh Sultan bin Khalifa bin Zayed Al Nahyan | Court of Appeal | Yes | [2000] 1 SLR 657 | Singapore | Cited for the standard of proof required to show unconscionability in interlocutory proceedings. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Performance bond
- Interim injunction
- Unconscionability
- Completion Certificate
- Rectification works
- Maintenance period
- Arbitration
- Defects
- Architect
- Claims consultant
15.2 Keywords
- construction
- performance bond
- injunction
- unconscionability
- arbitration
16. Subjects
- Construction Dispute
- Contract Law
- Arbitration
- Performance Bonds
- Injunctions
17. Areas of Law
- Contract Law
- Construction Law
- Injunctions
- Arbitration Law