Sungdo Engineering v Italcor: Setting Aside Adjudication Order for Lack of Valid Payment Claim
In Sungdo Engineering & Construction (S) Pte Ltd v Italcor Pte Ltd, the Singapore High Court heard an application by Sungdo Engineering to set aside an adjudication order obtained by Italcor Pte Ltd under the Building and Construction Industry Security of Payment Act. Sungdo Engineering argued that Italcor had not served a valid payment claim. The High Court (Lee Seiu Kin J) allowed Sungdo Engineering's application, setting aside the adjudication order and ordering Italcor to pay costs. The court found that the letter relied upon by Italcor did not constitute a valid payment claim under the Act.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Application allowed; Adjudication Order set aside.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The High Court set aside an adjudication order because Italcor Pte Ltd did not serve a valid payment claim under the Building and Construction Industry Security of Payment Act.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Sungdo Engineering & Construction (S) Pte Ltd | Plaintiff | Corporation | Application Allowed | Won | |
| Italcor Pte Ltd | Defendant | Corporation | Adjudication Order Set Aside | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lee Seiu Kin | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| S Magintharan | S Magin & Co |
| James Liew | S Magin & Co |
| Timothy Kho Thong Teck | One Legal LLC |
4. Facts
- Sungdo Engineering was a subcontractor for the construction of a wafer plant.
- Sungdo Engineering contracted with Italcor to provide chilled water piping services for $1.5 million.
- Italcor submitted five progress claims, which Sungdo Engineering paid within 30 days.
- A dispute arose regarding variation works claimed by Italcor.
- Italcor claimed Sungdo Engineering breached the contract and terminated the contract.
- Italcor submitted four further invoices, which Sungdo Engineering did not pay.
- Italcor filed a suit in the High Court claiming payment under the unpaid invoices.
- Italcor allegedly served a Payment Claim on Sungdo Engineering in the form of a letter dated 23 December 2008.
- Sungdo Engineering denied receiving the Payment Claim.
5. Formal Citations
- Sungdo Engineering & Construction (S) Pte Ltd v Italcor Pte Ltd, Originating Summons No 231 of 2009, [2010] SGHC 105
6. Timeline
| Date | Event |
|---|---|
| Contract commenced | |
| First invoice submitted | |
| Second invoice submitted | |
| Third invoice submitted | |
| Fourth invoice submitted | |
| Fifth invoice submitted | |
| Dispute arose between parties | |
| Defendant left work site | |
| Sixth invoice submitted | |
| Seventh invoice submitted | |
| Eighth invoice submitted | |
| Ninth invoice submitted | |
| Defendant's solicitors demanded payment | |
| Plaintiff denied liability to pay invoices | |
| Plaintiff requested explanation for delay | |
| Writ filed in Suit No 529 of 2008 | |
| Plaintiff entered appearance in Suit No 529 of 2008 | |
| Plaintiff filed Defence and Counterclaim | |
| Plaintiff filed further particulars of Defence and Counterclaim | |
| Plaintiff filed amended Defence and Counterclaim | |
| Defendant filed Reply | |
| Defendant filed notice of change of solicitors and amended Statement of Claim | |
| Discovery process commenced | |
| Plaintiff filed affidavit and list of documents | |
| Defendant filed further particulars of amended Statement of Claim | |
| Defendant allegedly served Payment Claim | |
| Defendant lodged adjudication application | |
| Defendant served notice of intention to apply for adjudication | |
| Adjudicator appointed | |
| Plaintiff filed adjudication response | |
| Adjudicator made determination | |
| Plaintiff filed originating summons | |
| Application allowed; Adjudication Order set aside | |
| Decision Date |
7. Legal Issues
- Validity of Payment Claim
- Outcome: The court held that the 2008 Letter did not amount to a payment claim under the Act because the defendant did not communicate its intention that it was a payment claim, and the plaintiff did not treat it as such.
- Category: Substantive
- Sub-Issues:
- Intention to create a payment claim
- Communication of intention to recipient
- Compliance with statutory requirements
- Jurisdiction of the High Court in Judicial Review of Adjudication Orders
- Outcome: The court held that it has the power to quash an Adjudication Order or declare it null and void on grounds of an error of law going to the jurisdiction of the statutory tribunal.
- Category: Jurisdictional
- Sub-Issues:
- Power to quash adjudication orders
- Grounds for judicial review
- Error of law going to jurisdiction
8. Remedies Sought
- Setting Aside of Adjudication Order
- Costs
9. Cause of Actions
- Breach of Contract
- Claim for Payment for Work Done
10. Practice Areas
- Construction Litigation
- Adjudication
- Commercial Litigation
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Brodyn Pty Ltd t/as Time Cost and Quality v Davenport & Anor | New South Wales Court of Appeal | Yes | [2004] NSWCA 394 | New South Wales | Cited regarding the court's power to quash an adjudication order or declare it null and void on grounds of an error of law going to the jurisdiction of the statutory tribunal. |
| Chip Hup Hup Kee Construction Pte Ltd v Ssangyong Engineering & Construction Co Ltd | High Court | No | [2010] 1 SLR 658 | Singapore | Discussed in relation to the jurisdiction of an adjudicator stemming from appointment by an authorised nominating body (ANB) and not from a properly completed and served Payment Claim. The present judgment disagrees with the Chip Hup Hup Kee's holding that jurisdiction is not affected by an invalid Payment Claim or service thereof. |
| SEF Construction Pte Ltd v Skoy Connected Pte Ltd | High Court | No | [2010] 1 SLR 733 | Singapore | Discussed in relation to the court's role in supervising the appointment and conduct of the adjudicator and the validity of the service of a Payment Claim. The present judgment disagrees with SEF Construction's holding that whether or not the document purporting to be a payment claim is actually a payment claim is an issue for the adjudicator and not the court. |
| AM Associates (Singapore) Pte Ltd v Laguna National Golf and Country Club Ltd | High Court | Yes | [2009] SGHC 260 | Singapore | Cited as following SEF Construction on the issue of whether the court could review the adjudicator’s finding that the Payment Claim was valid. |
| Associated Provincial Picture Houses v Wednesday Corporation | N/A | Yes | [1948] 1 KB 223 | N/A | Cited for the principle of unreasonableness in judicial review. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed), s 10 | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed), s 11 | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed), s 12 | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed), s 13 | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed), s 14(3) | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed), s 15(1) | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed), s 15(3) | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed), s 16(3) | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed), s 17(1)(a) | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed), s 18 | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed), s 19 | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed), s 27(5) | Singapore |
| Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed), s 18(2) | Singapore |
| New South Wales Building & Construction Industry Security of Payment Act 1999, s 13 | New South Wales |
| New South Wales Building & Construction Industry Security of Payment Act 1999, s 13(2)(c) | New South Wales |
| New South Wales Building & Construction Industry Security of Payment Act 1999, s 25(4) | New South Wales |
15. Key Terms and Keywords
15.1 Key Terms
- Adjudication Order
- Payment Claim
- Building and Construction Industry Security of Payment Act
- Progress Payment
- Variation Works
- Adjudication Application
- Payment Response
- Construction Contract
- Adjudicator
- Authorised Nominating Body
15.2 Keywords
- Adjudication
- Payment Claim
- Construction
- Security of Payment Act
- Singapore
- High Court
- Construction Dispute
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Building and Construction Industry Security of Payment Act | 90 |
| Adjudication | 80 |
| Construction Law | 75 |
| Contract Law | 60 |
| Arbitration | 50 |
| Civil Procedure | 40 |
16. Subjects
- Construction Adjudication
- Security of Payment
- Civil Procedure
- Contract Law