W Y Steel v Osko: Security of Payment Act Adjudication Dispute

W Y Steel Construction Pte Ltd appealed against the High Court's decision to refuse setting aside an adjudication determination ordering them to pay $1,767,069.80 to Osko Pte Ltd under the Building and Construction Industry Security of Payment Act. W Y Steel also sought a stay of enforcement pending separate proceedings. The Court of Appeal dismissed the appeal, holding that the adjudicator did not err in refusing to consider W Y Steel's late submissions due to their failure to file a timely payment response. The court also denied the stay application, finding insufficient evidence of Osko's financial distress.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal dismissed and stay application denied.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding an adjudication determination under the Building and Construction Industry Security of Payment Act. Appeal dismissed; stay application denied.

1.7 Decision Date

29 April 2013

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
W Y Steel Construction Pte Ltd	Appellant	Corporation	Appeal Dismissed	Lost	Lee Eng Beng of Rajah & Tann LLP Gina Tan of Legal Solutions LLC Kelvin Poon of Rajah & Tann LLP Henry Heng of Legal Solutions LLC Corinne Taylor of Legal Solutions LLC
Osko Pte Ltd	Respondent	Corporation	Appeal Upheld	Won	Alison Jayaram of Chelliah & Kiang Chelliah Ravindran of Chelliah & Kiang

3. Judges

Judge Name	Title	Delivered Judgment
Sundaresh Menon	Chief Justice	Yes
V K Rajah	Justice of the Court of Appeal	No
Quentin Loh	Judge	No

4. Counsels

Counsel Name	Organization
Lee Eng Beng	Rajah & Tann LLP
Gina Tan	Legal Solutions LLC
Kelvin Poon	Rajah & Tann LLP
Henry Heng	Legal Solutions LLC
Corinne Taylor	Legal Solutions LLC
Alison Jayaram	Chelliah & Kiang
Chelliah Ravindran	Chelliah & Kiang

4. Facts

W Y Steel was the main contractor for alteration works at the Singapore Turf Club.
W Y Steel subcontracted part of the work to Osko for $3,752,436.15.
W Y Steel purported to terminate the sub-contract on 12 March 2012.
Osko claimed it continued working until 31 March 2012 and served a payment claim.
W Y Steel failed to file a payment response within the statutory deadline.
Osko filed an adjudication application, and W Y Steel again failed to file a response.
The adjudicator ordered W Y Steel to pay Osko $1,767,069.80.

5. Formal Citations

W Y Steel Construction Pte Ltd v Osko Pte Ltd, Civil Appeal No 108 of 2012, [2013] SGCA 32

6. Timeline

Date	Event
2011-04-12	Contract signed between W Y Steel and Singapore Turf Club.
2012-03-12	W Y Steel purported to terminate the Sub-Contract with Osko.
2012-03-31	Osko served a payment claim on W Y Steel.
2012-04-08	W Y Steel failed to file a payment response by the due date.
2012-04-20	Osko filed Adjudication Application No SOP/AA036 of 2012 against W Y Steel.
2012-04-27	W Y Steel did not file an adjudication response by the due date.
2012-05-02	Adjudication conference held.
2012-05-02	W Y Steel attempted to file submissions with the Singapore Mediation Centre, but these submissions were rejected.
2012-05-07	The Adjudicator issued the Adjudication Determination ordering W Y Steel to pay Osko the Adjudicated Sum plus costs and fees.
2012-05-16	Osko applied under s 27 of the Act for leave to enforce the Adjudication Determination.
2012-05-21	W Y Steel filed OS 484/2012 to set aside the Adjudication Determination and also paid the Adjudicated Sum into court.
2012-08-08	OS 484/2012 was heard by the Judge.
2013-04-30	Court of Appeal dismissed the appeal and stay application.

7. Legal Issues

Interpretation of Section 15(3) of the Building and Construction Industry Security of Payment Act
- Outcome: The court held that section 15(3) precludes an adjudicator from considering reasons for withholding payment not included in a timely payment response, even if no payment response was filed.
- Category: Substantive
- Sub-Issues:
  - Exclusion of reasons for withholding payment not included in payment response
- Related Cases:
  - [2008] SGHC 159
  - [2010] 1 SLR 658
  - [2010] 3 SLR 459
  - [2013] SGHC 56
Stay of Enforcement of Adjudication Determination
- Outcome: The court held that a stay of enforcement may be justified where there is clear evidence of the claimant's insolvency or irrecoverability of the adjudicated sum, but denied the stay in this case.
- Category: Procedural
- Sub-Issues:
  - Financial distress of claimant
  - Irrecoverability of adjudicated sum
- Related Cases:
  - [2004] NSWCA 394
  - [2006] NSWSC 13
  - [2004] NSWSC 344
  - [2001] CLC 927
  - [2001] BLR 416
  - [2005] BLR 374

8. Remedies Sought

Setting aside of Adjudication Determination
Stay of Enforcement of Adjudication Determination

9. Cause of Actions

Statutory Claim under the Building and Construction Industry Security of Payment Act

10. Practice Areas

Construction Litigation
Commercial Litigation
Arbitration

11. Industries

Construction

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
W Y Steel Construction Pte Ltd v Osko Pte Ltd	High Court	Yes	[2012] SGHC 194	Singapore	Affirmed the High Court's decision to refuse setting aside the adjudication determination.
RJT Consulting Engineers Ltd v DM Engineering (Northern Ireland) Ltd	N/A	Yes	[2002] 1 WLR 2344	United Kingdom	Cited for the principle that parties to a construction contract should 'pay now, argue later'.
Dawnays Ltd v F G Minter Ltd and Trollope and Colls Ltd	N/A	Yes	[1971] 1 WLR 1205	United Kingdom	Cited for the rationale for temporary finality in the context of interim certificates of payment.
Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd	House of Lords	Yes	[1974] AC 689	United Kingdom	Cited to qualify the principle in Dawnays Ltd v F G Minter Ltd and Trollope and Colls Ltd.
Macob Civil Engineering Ltd v Morrison Construction Ltd	N/A	Yes	[1999] CLC 739	United Kingdom	Cited for the principle that decisions of adjudicators are binding and are to be complied with until the dispute is finally resolved.
Chip Hup Hup Kee Construction Pte Ltd v Ssangyong Engineering & Construction Co Ltd	High Court	Yes	[2008] SGHC 159	Singapore	Cited for the interpretation of section 15(3) of the Building and Construction Industry Security of Payment Act.
Chip Hup Hup Kee Construction Pte Ltd v Ssangyong Engineering & Construction Co Ltd	High Court	Yes	[2010] 1 SLR 658	Singapore	Cited for approving the reasoning in Chip Hup Hup Kee Construction Pte Ltd v Ssangyong Engineering & Construction Co Ltd [2008] SGHC 159.
Sungdo Engineering & Construction (S) Pte Ltd v Italcor Pte Ltd	High Court	Yes	[2010] 3 SLR 459	Singapore	Cited for the interpretation of section 15(3) of the Building and Construction Industry Security of Payment Act.
Australian Timber Products Pte Ltd v A Pacific Construction & Development Pte Ltd	High Court	Yes	[2013] SGHC 56	Singapore	Cited for the interpretation of section 11(3)(c) of the Building and Construction Industry Security of Payment Act.
Multiplex Constructions Pty Limited v Jan Luikens and Lahey Detailed Joinery Pty Ltd	New South Wales Supreme Court	Yes	[2003] NSWSC 1140	Australia	Cited for the interpretation of section 20(2B) of New South Wales’ Building and Construction Industry Security of Payment Act 1999.
Brodyn Pty Limited t/as Time Cost and Quality v Philip Davenport and Dasein Constructions Pty Limited	New South Wales Court of Appeal	Yes	[2004] NSWCA 394	Australia	Cited for the principle that natural justice is to be afforded to the extent contemplated by the provisions of the legislation.
Pacific General Securities Ltd & Anor v Soliman & Sons Pty Ltd & Ors	New South Wales Supreme Court	Yes	[2006] NSWSC 13	Australia	Cited for the principle that an adjudicator must come to a view as to what is properly payable.
Grosvenor Constructions (NSW) Pty Limited (in administration) v Joseph Musico, Rosemary Musico, Luigi Genua and Rose Genua	New South Wales Supreme Court	Yes	[2004] NSWSC 344	Australia	Cited for the principle that a stay should be granted where there is a certainty that the unsuccessful respondent’s rights will be otherwise rendered nugatory.
Bouygues UK Ltd v Dahl-Jensen UK Ltd	N/A	Yes	[2001] CLC 927	United Kingdom	Cited for the principle that a stay of enforcement may be granted where the successful claimant is in insolvent liquidation.
Rainford House Limited v Cadogan Limited	N/A	Yes	[2001] BLR 416	United Kingdom	Cited for the principle that a stay of enforcement may be granted where the successful claimant is in administrative receivership.
Wimbledon Construction Company 2000 Limited v Derek Vago	N/A	Yes	[2005] BLR 374	United Kingdom	Cited for the principle that evidence of financial difficulties which fall short of actual, objective insolvency will not usually suffice for a stay of enforcement.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 95 r 3(3)

14. Applicable Statutes

Statute Name	Jurisdiction
Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed)	Singapore
Interpretation Act (Cap 1, 2002 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Adjudication Determination
Payment Claim
Payment Response
Adjudication Response
Security of Payment Act
Temporary Finality
Stay of Enforcement

15.2 Keywords

construction
adjudication
security of payment
payment claim
payment response
stay of enforcement

17. Areas of Law

Area Name	Relevance Score
Building and Construction Industry Security of Payment Act	95
Building and Construction Contracts	90
Construction Law	90
Contract Law	60
Civil Procedure	40
Arbitration	30

16. Subjects

Construction Dispute
Adjudication
Security of Payment