CAA Technologies v Newcon Builders: Sub-Contract Breach & Delay in Construction Project

In [2016] SGHC 246, CAA Technologies Pte Ltd sued Newcon Builders Pte Ltd in the High Court of Singapore, alleging wrongful termination of their sub-contract for the design, production, and delivery of pre-cast concrete hollow core slabs for a medical technology hub project in Jurong. Newcon Builders counterclaimed for damages resulting from CAA Technologies' failure to deliver the slabs as promised, causing delays to the project. Justice Vinodh Coomaraswamy disallowed substantially the whole of CAA's claim and allowed substantially the whole of Newcon's counterclaim, finding that CAA breached both express and implied terms of the contract. CAA has appealed the decision.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Judgment for Defendant in Counterclaim

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

CAA Technologies sues Newcon Builders for wrongful contract termination. Newcon counterclaims for breach due to CAA's delayed slab delivery. Court largely disallows CAA's claim.

1.7 Decision Date

28 November 2016

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
CAA Technologies Pte Ltd	Plaintiff, Defendant in Counterclaim	Corporation	Claim Dismissed	Lost	Lim Bee Li of Optimus Chambers LLC Melissa Kor of Optimus Chambers LLC Irving Choh of Optimus Chambers LLC
Newcon Builders Pte Ltd	Defendant, Plaintiff in Counterclaim	Corporation	Counterclaim Allowed	Won	Tang Jin Sheng of Dentons Rodyk & Davidson LLP Joseph Lee of Dentons Rodyk & Davidson LLP

3. Judges

Judge Name	Title	Delivered Judgment
Vinodh Coomaraswamy	Judge	Yes

4. Counsels

Counsel Name	Organization
Lim Bee Li	Optimus Chambers LLC
Melissa Kor	Optimus Chambers LLC
Irving Choh	Optimus Chambers LLC
Tang Jin Sheng	Dentons Rodyk & Davidson LLP
Joseph Lee	Dentons Rodyk & Davidson LLP

4. Facts

Newcon was the main contractor for a building project in Jurong.
Newcon sub-contracted the design, production, and delivery of structural elements to CAA.
CAA failed to deliver the elements as promised, causing delays.
Newcon revised the delivery schedule to accommodate CAA’s initial failure.
CAA failed to meet even the revised schedule.
Newcon terminated the contract with CAA and engaged a substitute contractor.
CAA treated Newcon’s termination as a breach of contract.

5. Formal Citations

CAA Technologies Pte Ltd v Newcon Builders Pte Ltd, Suit No 1063 of 2013, [2016] SGHC 246

6. Timeline

Date	Event
2012-11-02	Letter of intent signed between Newcon Builders and CAA Technologies.
2012-11-01	Overall main contract period began.
2012-11-17	CAA Technologies countersigned and returned the acknowledgement for the letter of intent.
2012-12-28	Letter of acceptance sent from Newcon to CAA.
2013-01-11	CAA received the letter of acceptance.
2013-01-27	Superstructure works scheduled to start.
2013-01-30	Newcon requested CAA to submit various items before commencing production of slabs.
2013-02-04	Newcon emailed CAA again, repeating the contents of its earlier email.
2013-02-18	Newcon expressed its hope that CAA would sign and return the letter of acceptance by email.
2013-02-22	Newcon noted that CAA had not replied regarding the letter of acceptance, and asked CAA to sign and return it by 25 February 2013.
2013-02-26	CAA carried out its first casting.
2013-03-01	Newcon sent CAA a revised schedule for CAA’s initial delivery of slabs.
2013-03-08	Revised delivery date for area 2a.
2013-03-12	Revised delivery date for area 2b; Newcon emailed CAA recording CAA’s failure to deliver any slabs thus far.
2013-03-13	Newcon instructed CAA to deliver the first slabs.
2013-03-15	Newcon sent another reminder to CAA.
2013-03-16	CAA delivered its first batch of slabs.
2013-03-17	CAA delivered another batch of slabs.
2013-03-18	CAA delivered slabs which matched the specifications for area 2a.
2013-03-19	Meeting between Dr. Chi (CAA), Mr. Cao and Mr. Lin (Newcon).
2013-03-21	Newcon emailed CAA a “Proposed Delivery Schedule for Hollow Core Slab – Medtech Hub project”.
2013-03-22	Meeting between Newcon and CAA.
2013-03-23	Newcon sent CAA an email titled “Letter 027 – Notice of Delay – Slow Progress in Supply of Hollow Core Slab”.
2013-03-25	CAA did not respond to Newcon; Newcon sent to CAA formal written notice of termination.
2013-03-26	CAA sent two letters in reply to Newcon; Newcon responded to CAA’s photographs.
2013-05-16	CAA sent Newcon a letter before action.
2013-06-11	Newcon replied to CAA, rejecting the allegation that it had terminated the parties’ contract without legal basis.
2013-07-18	Newcon wrote to CAA quantifying its loss and damage at $1,554,259.93.
2013-11-21	CAA commenced this action against Newcon.
2014-12-03	Statement of claim (Amendment No. 1) dated.
2014-02-25	CAA collected the I-beams.
2015-04-30	AEIC of Chi Chao-Ton Tony dated.
2015-04-13	Interim final payment certificate issued under the main contract.
2015-05-04	AEIC of Chen Linhui dated.
2015-05-05	AEIC of Cao Wei Min dated; AEIC of Lin Haifeng dated.
2015-05-26	Trial began.
2015-06-02	Trial.
2015-07-14	Defendant’s closing submissions dated; Plaintiff’s closing submissions dated.
2016-04-29	Hearing.
2016-11-29	Judgment Date.

7. Legal Issues

Breach of Contract
- Outcome: The court found that CAA breached both express and implied terms of the contract, constituting a repudiatory breach.
- Category: Substantive
- Sub-Issues:
  - Failure to deliver slabs on time
  - Failure to follow site progress
  - Failure to proceed with due diligence and expedition
Wrongful Termination
- Outcome: The court held that Newcon was justified in terminating the contract due to CAA's repudiatory breach.
- Category: Substantive
Implied Terms
- Outcome: The court found that the contract contained implied terms requiring CAA to proceed with due diligence and expedition, and making time of the essence in relation to that obligation.
- Category: Substantive
- Sub-Issues:
  - Due diligence and expedition
  - Time is of the essence
Acceptance of Contract Terms
- Outcome: The court held that CAA's silence and conduct were not sufficient to constitute acceptance of the letter of acceptance.
- Category: Substantive
- Sub-Issues:
  - Silence as acceptance
  - Objective intention

8. Remedies Sought

Monetary Damages

9. Cause of Actions

Breach of Contract

10. Practice Areas

Construction Law
Commercial Litigation

11. Industries

Construction

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Re Selectmove Ltd	N/A	Yes	[1995] 1 WLR 474	N/A	Cited for the principle that silence in response to an offer does not constitute acceptance.
Midlink Development Pte Ltd v The Stansfield Group Pte Ltd	N/A	Yes	[2004] 4 SLR(R) 258	Singapore	Cited for the principle that it is a question of fact whether the offeree’s response was complete silence and, even if so, whether the effect of the silence, objectively ascertained against the factual background, supports the existence of a contract.
Ng Giap Hon v Westcomb Securities Pte Ltd and others	Court of Appeal	Yes	[2009] 3 SLR(R) 518	Singapore	Cited for the principles on which terms will be implied in fact into a contract.
Chua Choon Cheng and others v Allgreen Properties Ltd and another appeal	Court of Appeal	Yes	[2009] 3 SLR(R) 724	Singapore	Cited for the principles governing implied terms in law.
Jurong Engineering Ltd v Paccan Building Technology Pte Ltd	Court of Appeal	Yes	[1999] 2 SLR(R) 849	Singapore	Cited regarding implied terms in law in construction contracts.
Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appeal	N/A	Yes	[2013] 4 SLR 193	Singapore	Cited for the three-step process for ascertaining whether a contract contains a particular implied term in fact.
The Moorcock	N/A	Yes	(1889) 14 PD 64	N/A	Cited for the business efficacy test for implying a term in fact into a contract.
Shirlaw v Southern Foundries (1926) Limited	N/A	Yes	[1939] 2 KB 206	N/A	Cited for the officious bystander test for implying a term in fact into a contract.
Felthouse v Bindley	N/A	Yes	(1862) 142 ER 1037	N/A	Cited for the contractual rule that silence in response to an offer does not constitute acceptance of that offer because it is equivocal.
Greater London Council v Cleveland Bridge & Engineering Company Ltd	N/A	Yes	(1984) 34 BLR 50	N/A	Considered the status of an implied term obliging a contractor to proceed with due diligence and expedition.
Leander Construction Limited v Mulalley and Company Limited	N/A	Yes	[2011] EWHC 3449 (TCC)	N/A	Considered the status of an implied term obliging a contractor to proceed with due diligence and expedition.
Man Financial (S) Pte Ltd (formerly known as E D & F Man International (S) Pte Ltd) v Wong Bark Chuan David	N/A	Yes	[2008] 1 SLR(R) 663	Singapore	Cited for the principle that whether a term is a condition is to be determined by ascertaining the objective intentions of the parties on the contract’s proper construction in light of all the surrounding circumstances.
Chua Tian Chu and another v Chin Bay Ching and another	High Court	Yes	[2011] SGHC 126	Singapore	Cited regarding the consequence of acts of prevention.
ACES System Development Pte Ltd v Yenty Lily (trading as Access International Services)	N/A	Yes	[2013] 4 SLR 1317	Singapore	Cited regarding a claim for damages in tort for wrongful detention of property.

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

Pre-cast concrete hollow core slabs
Letter of intent
Letter of acceptance
Construction schedule
Superstructure works
Notice of delay
Notice of termination
Due diligence
Expedition
Repudiatory breach

15.2 Keywords

Construction
Contract
Breach
Delay
Sub-contract
Slabs
Termination

17. Areas of Law

Area Name	Relevance Score
Construction Law	95
Building and Construction Contracts	90
Sub-contracts	85
Breach of Contract	80
Contract Law	75
Compensation for delays	70
Implied Terms	65
Damages	50

16. Subjects

Construction Dispute
Contract Law
Sub-Contract
Breach of Contract