Thian Sung Construction v International Elements: Security of Payment Act & Factoring
In Thian Sung Construction Pte Ltd v International Elements Pte Ltd, the High Court of Singapore addressed an application to set aside an adjudication determination under the Building and Construction Industry Security of Payment Act. Thian Sung Construction, the plaintiff, argued that International Elements, the defendant, had assigned its right to claim under the Act to United Overseas Bank (UOB) through a factoring agreement. Lee Seiu Kin J dismissed the plaintiff's application, holding that the right to serve a payment claim under the Act is a personal right and cannot be assigned, and ordered that the amount paid into court as security be released to the defendant.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Plaintiff's application dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
High Court case regarding the Building and Construction Industry Security of Payment Act and factoring trade debts. The court dismissed the application.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Thian Sung Construction Pte Ltd | Plaintiff | Corporation | Application dismissed | Lost | Lim Wee Teck |
| International Elements Pte Ltd | Defendant | Corporation | Application dismissed | Won | Raymond Chan |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lee Seiu Kin | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Lim Wee Teck | W T Lim & Partners |
| Raymond Chan | Chan Neo LLP |
4. Facts
- The plaintiff engaged the defendant as a sub-contractor for stone works.
- The defendant obtained credit facilities from UOB through a factoring arrangement.
- The defendant assigned its trade debts to UOB, and the plaintiff was notified.
- The defendant served Progress Claim No 25 on the plaintiff.
- The plaintiff did not make payment for Progress Claim No 25.
- The defendant commenced adjudication proceedings against the plaintiff.
- The trade debts were re-assigned back to the defendant after the payment claim was served.
5. Formal Citations
- Thian Sung Construction Pte Ltd v International Elements Pte Ltd, Originating Summons No 683 of 2015, [2015] SGHC 319
6. Timeline
| Date | Event |
|---|---|
| Letter of award issued to the defendant as the sub-contractor. | |
| Defendant and United Overseas Bank entered into a factoring agreement. | |
| Plaintiff given notice of the assignment of trade debts to UOB. | |
| Defendant served Progress Claim No 25 on the plaintiff. | |
| Defendant commenced adjudication proceedings against the plaintiff. | |
| Trade debts were re-assigned back to the defendant. | |
| Adjudication determination was made in the defendant’s favour. | |
| Plaintiff’s application dismissed. |
7. Legal Issues
- Assignment of rights under the Building and Construction Industry Security of Payment Act
- Outcome: The court held that the right to serve a payment claim under the Act is a personal right and cannot be assigned.
- Category: Substantive
- Sub-Issues:
- Whether the right to serve a payment claim under the Act can be assigned
- Whether the assignment of trade debts includes the assignment of rights under the Act
- Validity of adjudication determination
- Outcome: The court held that the payment claim was validly served by the defendant and the adjudicator had jurisdiction.
- Category: Procedural
- Sub-Issues:
- Whether the payment claim was served by a party entitled to do so
- Whether the adjudicator had jurisdiction to adjudicate the matter
8. Remedies Sought
- Setting aside 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
11. Industries
- Construction
- Banking
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Lee Wee Lick Terence (alias Li Weili Terence) v Chua Say Eng (formerly trading as Weng Fatt Construction Engineering) and another appeal | High Court | Yes | [2013] 1 SLR 401 | Singapore | Cited regarding the court’s supervisory function in relation to breaches of section 10(1) of the Act. |
| Gemini Nominees Pty Ltd v Queensland Property Partners Pty Ltd | Supreme Court of Queensland | Yes | [2008] 1 Qd R 139 | Queensland | Cited regarding a payment claim served by a party not entitled to do so falling outside the Act. |
| Cottage Club Estates, Limited v Woodside Estates Company (Amersham), Limited | Court of King's Bench | Yes | (1928) 2 KB 463 | England and Wales | Cited regarding the assignment of moneys due under a contract to a bank. |
| Shayler v Woolf | English Court of Appeal | Yes | [1946] Ch 320 | England and Wales | Cited as criticism of Cottage Club Estates, Limited v Woodside Estates Company (Amersham), Limited in respect of its finding of an arbitration clause as a personal covenant which was not assignable. |
| Admin Construction Pte Ltd v Vivaldi (S) Pte Ltd | High Court | Yes | [2013] 3 SLR 609 | Singapore | Cited regarding the extinguishment of the right to the progress payment that was the subject of the payment claim. |
| Cant Contracting Pty Ltd v Casella | Supreme Court of Queensland | Yes | [2006] 2 Qd R 13 | Queensland | Cited regarding the claimants having no legal entitlement to the progress payments claimed as the construction contracts were held to be either unenforceable in law or falling outside the statutory scheme. |
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 |
| Civil Law Act (Cap 43, 1999 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Building and Construction Industry Security of Payment Act
- Factoring
- Assignment of trade debts
- Progress payment
- Adjudication determination
- Payment claim
- Construction work
- Progress payment
- Claimant
15.2 Keywords
- Security of Payment Act
- Construction
- Factoring
- Assignment
- Adjudication
16. Subjects
- Construction Dispute
- Security of Payment
- Factoring Agreements
17. Areas of Law
- Building and Construction Industry Security of Payment Act
- Construction Law
- Contract Law
- Civil Procedure
- Factoring