Jia Min Building Construction v Ann Lee: Sub-Contract Termination & Payment Dispute

In a dispute before the High Court of Singapore on 25 May 2004, Jia Min Building Construction Pte Ltd sued Ann Lee Pte Ltd over a sub-contract for structural works on a condominium project. Jia Min claimed for outstanding payments, while Ann Lee counterclaimed for costs incurred in completing the works after terminating the sub-contract. The court, presided over by V K Rajah JC, found that Ann Lee was entitled to terminate the sub-contract due to Jia Min's work stoppage and allowed Ann Lee's counterclaim in part, resulting in judgment for Ann Lee.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for the defendant after setting off the plaintiff’s claim.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Sub-contract dispute over termination and payment for structural works. Court found for the defendant, allowing set-off and counterclaim.

1.7 Decision Date

24 May 2004

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Jia Min Building Construction Pte Ltd	Plaintiff	Corporation	Claim Dismissed	Lost	Tan Liam Beng of Drew and Napier LLC Yow Su Joan of Drew and Napier LLC
Ann Lee Pte Ltd	Defendant	Corporation	Judgment for Defendant	Won	Yang Yung Chong of Lee and Lee Joan Sim Su Mei of Lee and Lee

3. Judges

Judge Name	Title	Delivered Judgment
V K Rajah	Judicial Commissioner	Yes

4. Counsels

Counsel Name	Organization
Tan Liam Beng	Drew and Napier LLC
Yow Su Joan	Drew and Napier LLC
Yang Yung Chong	Lee and Lee
Joan Sim Su Mei	Lee and Lee

4. Facts

Defendant was the main contractor for the Hilltop Grove Condominium Development.
Plaintiff was engaged as a sub-contractor for the structural works of the project for $5,860,000.
The sub-contract included a term allowing the defendant to terminate the sub-contract at its discretion.
The sub-contract stated that monthly interim payment shall be made to the plaintiff.
The parties agreed that the defendant would purchase building materials on the plaintiff’s behalf.
The defendant made arrangements for several foreign workers to assist the plaintiffs.
The defendant sent several written complaints to the plaintiff about the shortage of labour executing the works.

5. Formal Citations

Jia Min Building Construction Pte Ltd v Ann Lee Pte Ltd, Suit 1490/2002, [2004] SGHC 107

6. Timeline

Date	Event
1999-01-01	Defendant appointed as main contractor for Hilltop Grove Condominium Development.
1999-10-04	Plaintiff and defendant enter into a sub-contract agreement for structural works.
2000-04-01	Defendant advanced a loan of $25,000 to the plaintiff.
2000-04-01	Defendant sent written complaints to the plaintiff about the shortage of labour executing the works.
2000-08-01	Plaintiff unilaterally stopped paying the wages of the seconded workers.
2000-08-29	Defendant sent a facsimile message to plaintiff regarding slow structural work progress.
2000-09-04	Defendant sent a further facsimile message complaining about the delay.
2000-10-21	Defendant sent a facsimile message expressing deep dissatisfaction over the lackadaisical execution of the works.
2000-10-31	Plaintiff submitted progress claim No 21.
2000-11-15	Plaintiff submitted progress claim No 22.
2000-11-15	Han certified progress payment of $109,934.77.
2000-11-30	Plaintiff submitted progress claim No 23.
2000-12-12	Defendant sent a note to the plaintiff complaining about the progress of the plaintiff’s work.
2000-12-12	Plaintiff submitted progress claim No 24.
2000-12-15	Plaintiff complained that progress payments had stopped since October 2000.
2000-12-16	Plaintiff’s workers ceased all work on the site.
2000-12-18	Defendant wrote to the plaintiff stating that the plaintiff’s workers had ceased all work on the site.
2000-12-19	Defendant terminated the sub-contract.
2000-12-20	Plaintiff responded to the defendant, refuting its right to terminate the sub-contract.
2004-05-25	Judgment reserved.

7. Legal Issues

Variation of Contractual Payment Terms
- Outcome: The court found that the parties had varied the contractual payment terms from monthly to half-monthly payments.
- Category: Substantive
- Sub-Issues:
  - Oral agreement
  - Estoppel
  - Waiver
- Related Cases:
  - [2000] 1 SLR 622
Right to Make Deductions from Progress Payments
- Outcome: The court found that the defendant was entitled to make deductions from progress payments for materials supplied.
- Category: Substantive
- Sub-Issues:
  - Set-off
  - Past practice
  - Implied right of set-off
- Related Cases:
  - [1973] 3 All ER 195
Proper Termination of Sub-Contract
- Outcome: The court found that the defendant was entitled to terminate the sub-contract after the plaintiff had stopped work on 16 December 2000.
- Category: Substantive
- Sub-Issues:
  - Repudiation
  - Work stoppage
  - Causation
  - Affirmation of contract
- Related Cases:
  - (1986) 33 BLR 46
  - [1951] 1 KB 417
Damages for Breach of Contract
- Outcome: The court awarded the defendant half of its final claim amount for damages.
- Category: Substantive
- Sub-Issues:
  - Mitigation of damages
  - Reasonableness of costs
  - Burden of proof
- Related Cases:
  - [1983] 1 WLR 585
  - [2002] 1 WLR 3111
  - [1967] 2 Lloyd’s Rep 509
  - [1932] AC 452
  - [1996] 1 SLR 734
  - [1997] SGHC 344
  - [1971] 1 WLR 1731

8. Remedies Sought

Monetary Damages

9. Cause of Actions

Breach of Contract

10. Practice Areas

Construction Litigation
Commercial Litigation

11. Industries

Construction

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
China Construction (South Pacific) Development Co Pte Ltd v Leisure Park (Singapore) Pte Ltd	High Court	Yes	[2000] 1 SLR 622	Singapore	Cited for the principle that it is inequitable for an employer to revert to strict contractual requirements after a general waiver of those requirements.
Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd	N/A	No	[1973] 3 All ER 195	England and Wales	Cited for the principle that there are no overriding rules or principles covering the contractual relationship between parties in a detailed building contract beyond those which generally apply to the construction of contracts and for the observation that cash flow is the lifeblood of every business.
Lubenham Fidelities and Investments Co Ltd v South Pembrokeshire District Council	N/A	Yes	(1986) 33 BLR 46	England and Wales	Cited for the principle that a contractor has no general right at common law to suspend work unless this is expressly agreed upon, even if payment is wrongly withheld.
Selvanayagam v University of the West Indies	N/A	No	[1983] 1 WLR 585	N/A	Cited as a case that engendered doubts pertaining to the principle on the burden of proof regarding mitigation of loss.
Geest plc v Lansiquot	N/A	Yes	[2002] 1 WLR 3111	N/A	Cited for the principle that the burden of proving that the loss has not been mitigated lies squarely on the party in breach and that notice of such an assertion ought to be pleaded.
Harlow & Jones, Ltd v Panex (International), Ltd	N/A	No	[1967] 2 Lloyd’s Rep 509	N/A	Cited for the principle that the claimant is not bound to nurse the interests of the party in breach.
Banco de Portugal v Waterlow & Sons, Limited	N/A	No	[1932] AC 452	N/A	Cited for the principle that a claimant will not be held disentitled to recover the cost of such measures, merely because the party in breach can suggest that other measures less burdensome to him might have been taken.
China Resources Purchasing Co Ltd v Yue Xiu Enterprises (S) Pte Ltd	High Court	No	[1996] 1 SLR 734	Singapore	Cited for the principle that when a duty to mitigate arises, then the standard of reasonableness to be applied to the decision of the innocent party is not a high one.
Industrial Valve Services Pte Ltd v Crosby Valve Pte Ltd	High Court	No	[1997] SGHC 344	Singapore	Cited for the approach of pragmatic estimation in situations where the court is satisfied that a real and substantial loss has occurred but is somewhat sceptical about the reliability of conflicting figures, in arriving at the precise quantum of loss.
Ashcroft v Curtin	N/A	No	[1971] 1 WLR 1731	N/A	Cited for the approach of pragmatic estimation in situations where the court is satisfied that a real and substantial loss has occurred but is somewhat sceptical about the reliability of conflicting figures, in arriving at the precise quantum of loss.
B Liggett (Liverpool), Limited v Barclays Bank, Limited	N/A	No	[1928] 1 KB 48	N/A	Cited for the general equitable principle under which a person who has in fact paid the debts of another without authority is allowed to take advantage of his payment.
Roberts v The Bury Improvement Commissioners	N/A	No	(1870) LR 5 CP 310	N/A	Cited for the principle that a party cannot sue for a breach of contract occasioned by his own breach of contract.
Canterbury Pipe Lines Ltd v Christchurch Drainage Board	N/A	No	[1979] 2 NZLR 347	New Zealand	Cited for the view that the principle that a party cannot rely on its own wrong is of general application and can be invoked apropos all types of disenabling acts.
Howard v Pickford Tool Co Ld	N/A	No	[1951] 1 KB 417	N/A	Cited for the principle that an unaccepted repudiation is a thing writ in water and of no value to anybody.
Nina’s Bar Bistro Pty Ltd (formerly Mytcoona Pty Ltd) v MBE Corporation (Sydney) Pty Ltd	N/A	No	[1984] 3 NSWLR 613	New South Wales	Cited for the principle that if non-compliance with a contractual obligation is to be deemed to have removed a defaulting party’s subsequent right to terminate the contract, there must be a direct causal nexus between the non-compliance and the failure to complete.

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

Sub-contract
Progress payments
Termination
Repudiation
Set-off
Mitigation of damages
Seconded workers
Structural works
Interim payment
Letter of Award

15.2 Keywords

Construction
Subcontract
Payment
Termination
Singapore
Building
Structural Works

17. Areas of Law

Area Name	Relevance Score
Construction Law	95
Breach of Contract	90
Contract Law	85
Equitable Remedies	75
Estoppel	70
Set-off and Abatement	65
Damages	60
Suspension of Performance	55
Termination	50
Repudiation of contract	45
Mitigation of damage	40
Chinese Drywall	0

16. Subjects

Construction Dispute
Contract Law
Building and Construction Law