Newcon Builders v Sino New Steel: Premature Adjudication Application under SOPA

In Newcon Builders Pte Ltd v Sino New Steel Pte Ltd, the High Court of Singapore addressed a Registrar's Appeal concerning an adjudication determination under the Building and Construction Industry Security of Payment Act. Newcon Builders, the plaintiff, engaged Sino New Steel, the defendant, for structural steel works. A dispute arose over Payment Claim No 14, leading Sino New Steel to file an adjudication application. Newcon Builders challenged the adjudication, arguing it was filed prematurely. The High Court, Quentin Loh J presiding, allowed the appeal, holding that an adjudication application filed during the dispute settlement period is invalid under the Act.

1. Case Overview

1.1 Court

High Court

1.2 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 held that an adjudication application filed during the dispute settlement period is invalid under the Building and Construction Industry Security of Payment Act.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Newcon Builders Pte LtdPlaintiff, RespondentCorporationAppeal AllowedWon
Sino New Steel Pte LtdDefendant, AppellantCorporationAppeal DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Quentin LohJudgeYes

4. Counsels

Counsel NameOrganization
Tang Jin ShengRodyk & Davidson LLP
Lok Vi MingRodyk & Davidson LLP
Lee Sien LiangRodyk & Davidson LLP
JosephRodyk & Davidson LLP
Twang Kern ZernCentral Chambers Law Corporation
Wee QianliangCentral Chambers Law Corporation

4. Facts

  1. Newcon Builders was engaged as main contractor for a construction project.
  2. Newcon Builders entered into a sub-contract with Sino New Steel for structural steel works.
  3. Sino New Steel served Payment Claim No 14 on Newcon Builders.
  4. Newcon Builders sought clarification of the Payment Claim.
  5. Sino New Steel served a notice of intention to apply for adjudication and filed an adjudication application.
  6. Newcon Builders submitted a Statement of Final Account.
  7. The adjudicator issued an adjudication determination in favor of Sino New Steel.
  8. Newcon Builders commenced Originating Summons No 228 of 2015 to set aside the Adjudication Determination.

5. Formal Citations

  1. Newcon Builders Pte Ltd v Sino New Steel Pte Ltd, Originating Summons No 228 of 2015 (Registrar's Appeal No 179 of 2015), [2015] SGHC 226

6. Timeline

DateEvent
Sub-contract works substantially completed
Payment Claim No 14 served by Defendant
Defendant served notice of intention to apply for adjudication
Plaintiff submitted Statement of Final Account
Defendant filed adjudication application
Adjudication Application served on Plaintiff
Adjudicator appointed
Plaintiff filed adjudication response
Adjudication conference began
Adjudication conference concluded
Site inspection conducted by Adjudicator
Adjudication Determination issued
Hearing for Originating Summons No 228 of 2015 commenced
Hearing for Originating Summons No 228 of 2015 concluded
AR's Decision delivered
Parties heard
Judgment reserved

7. Legal Issues

  1. Premature Adjudication Application
    • Outcome: The court held that an adjudication application cannot be made during the dispute settlement period and any such application is invalid.
    • Category: Procedural
    • Sub-Issues:
      • Filing of adjudication application before expiry of dispute settlement period
  2. Incorporation of Main Contract Terms into Sub-contract
    • Outcome: The court held that the terms of the Main Contract in relation to the interim certificate was incorporated into the Sub-contract.
    • Category: Substantive
    • Sub-Issues:
      • Interpretation of incorporation clauses
      • Conflict between main contract and sub-contract terms

8. Remedies Sought

  1. Setting aside of Adjudication Determination

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Construction Litigation
  • Commercial Litigation
  • Arbitration

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Lee Wee Lick Terence (alias Li Weili Terence) v Chua Say Eng (formerly trading as Weng Fatt Construction Engineering) and another appealCourt of AppealYes[2013] 1 SLR 401SingaporeCited for the principle that the court has the power to decide whether the adjudicator was validly appointed and may set aside an adjudication determination on the ground of non-compliance with provisions under the Act.
Taisei Corp v Doo Ree Engineering & Trading Pte LtdHigh CourtYes[2009] SGHC 156SingaporeCited for the holding that a premature adjudication application was ground for setting aside an adjudication determination; disagreed with by the AR.
JRP & Associates Pte Ltd v Kindly Construction & Services Pte LtdHigh CourtYes[2015] 3 SLR 575SingaporeCited regarding the test for non-compliance with the Act.
Citiwall Safety Glass Pte Ltd v Mansource Interior Pte LtdCourt of AppealYes[2015] 1 SLR 797SingaporeCited for the principle that the court does not review the merits of the adjudicator’s decision, and any setting aside must be premised on issues relating to the jurisdiction of the adjudicator, a breach of natural justice or non-compliance with the SOPA.
Quanta Industries Pte Ltd v Strategic Construction Pte LtdHigh CourtYes[2015] 2 SLR 70SingaporeCited as an instance where the High Court has set aside an adjudication determination on the basis that a mandatory condition of the Act had not been complied with.
YTL Construction (S) Pte Ltd v Balanced Engineering & Construction Pte LtdHigh CourtYes[2014] SGHC 142SingaporeCited for setting aside the adjudication determination on the basis that the adjudication application had been lodged out of time.
LH Aluminium Industries Pte Ltd v Newcon Builders Pte LtdHigh CourtYes[2015] 1 SLR 648SingaporeCited as a case where the defendant sought to set aside an adjudication determination on the basis that the adjudication application was lodged prematurely, but the court did not address the question as to whether this was a valid ground for setting aside.
Bouygues (UK) Ltd v Dahl-Jensen (UK) LtdEngland and Wales Court of Appeal (Civil Division)Yes[2000] EWCA Civ 507England and WalesCited for the principle that if the adjudicator has answered the right question in the wrong way, his decision will be binding, but if he has answered the wrong question, his decision will be a nullity.
GIB Automation Pte Ltd v Deluge Fire Protection (SEA) Pte LtdHigh CourtYes[2007] 2 SLR(R) 918SingaporeCited for the principle that a back-to-back provision had to be construed in the light of the factual matrix known to the parties at the time of contracting.
Modern Building Wales Ltd v Limmer & Trinidad Co LtdEngland and Wales Court of Appeal (Civil Division)Yes[1975] 1 WLR 1281England and WalesCited for the principle that the court will adopt an approach where reference is made (even if briefly and inaccurately) to a document which both parties will be aware of and will recognise, and which both parties would normally expect to be included.
Schindler Lifts (Singapore) Pte Ltd v Paya Ubi Industrial Park Pte Ltd and AnotherHigh CourtYes[2004] SGHC 34SingaporeCited as an example of a case where a clause acted as an incorporation clause.
Progressive Builders Pte Ltd v Long Rise Pte LtdHigh CourtYes[2015] SGHC 223SingaporeCited as a case where the court recited facts without controversy that payment certificate was in response to progress claim.
Citywall Safety Glass Pte Ltd v Mansource Interior Pte LtdCourt of AppealYes[2015] SGCA 42SingaporeCited for the strict application of timelines under the SOPA.
Shin Khai Construction Pte Ltd v FL Wong Construction Pte LtdHigh CourtYes[2013] SGHCR 4SingaporeCited for the need for certainty and an unambiguous test under s 13(3)(a) of the Act.
Walter Construction Group Ltd v CPL (Surry Hills) Pty LtdSupreme Court of New South WalesYes[2003] NSWSC 266AustraliaCited as a case that generated concerns that led to the inclusion of the 7-day dispute settlement period in the Singapore adjudication scheme.
CIB Properties Ltd v Birse Construction LtdHigh Court of JusticeYes[2004] EWHC 2365England and WalesCited as an English example of a case where it was alleged that while the claimant appeared to negotiate, it was secretly preparing its adjudication claim.
The Dorchester Hotel Limited v Vivid Interiors LimitedHigh Court of JusticeYes[2009] EWHC 70 (TCC)England and WalesCited as an example of a case where claimants serve payment claims with voluminous documentation on the eve of public holidays or during the holiday season.
Macob Civil Engineering Ltd v Morrison Construction LtdTechnology and Construction CourtYes[1999] BLR 93England and WalesCited for the acknowledgement that the timeline for adjudications is very tight.
Multiplex Constructions Pty Ltd v Luikens and AnorSupreme Court of New South WalesYes[2003] NSWSC 1140AustraliaCited for the principle that reasons for withholding payment of a claim be indicated in the payment schedule with sufficient particularity to enable the claimant to understand, at least in broad outline, what is the issue between it and the respondent.
ABB Holdings Pte Ltd and others v Sher Hock Guan CharlesHigh CourtYes[2009] 4 SLR(R) 111SingaporeCited for the principle that when ascertaining if a document has been incorporated into a contract, what is crucial is the intention of both of the parties to the contract.
R1 International Pte Ltd v Lonstroff AGCourt of AppealYes[2015] 1 SLR 521SingaporeCited for the principle that the law adopts an objective approach towards questions of contractual formation and the incorporation of terms.
Brightside Kilpatrick Engineering Services Ltd v Mitchell Construction (1973) LtdUnknownYes[1975] 2 Lloyd’s Rep 493UnknownCited as a case with similar facts.
Petroleum Oil & Gas Corp of South Africa (Pty) Ltd v FR8 Singapore PTE Ltd (The Eternity)UnknownYes[2009] 1 Lloyd’s Rep 107UnknownCited for the principle that where possible, the court should seek to construe the clauses in a contract in a manner which reconciles potentially conflicting clauses.
Bayoil SA v Seawind Tankers Corporation (The Leonidas)UnknownYes[2001] 1 Lloyd’s Rep 533UnknownCited for the principle that where possible, the court should seek to construe the clauses in a contract in a manner which reconciles potentially conflicting clauses.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Adjudication Application
  • Adjudication Determination
  • Payment Claim
  • Payment Response
  • Dispute Settlement Period
  • Main Contract
  • Sub-contract
  • Interim Certificate
  • Building and Construction Industry Security of Payment Act
  • Statement of Final Account

15.2 Keywords

  • Adjudication
  • Construction
  • Payment
  • SOPA
  • Singapore
  • Building
  • Contract

17. Areas of Law

Area NameRelevance Score
Adjudication90
Building and Construction Contracts90
Construction Law90
Contract Law70
Arbitration30

16. Subjects

  • Construction Dispute
  • Adjudication
  • Contract Law