AES Façade Pte Ltd v WYSE Pte Ltd: Security of Payment Act & Sub-Contractor Claims
In AES Façade Pte Ltd v WYSE Pte Ltd, the High Court of Singapore heard an application by WYSE Pte Ltd to set aside an order enforcing an adjudication decision in favor of AES Façade Pte Ltd, concerning claims by a sub-contractor under the Building and Construction Industry Security of Payment Act. The court dismissed WYSE's application and refused a stay of execution, ordering the release of funds to AES. The court held that WYSE was not entitled to raise a set-off against the adjudicated amount.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Application dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The High Court dismissed WYSE's application to set aside an order enforcing an adjudication decision in favor of AES, concerning claims by a sub-contractor.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| AES Façade Pte Ltd | Plaintiff | Corporation | Application granted | Won | Ian Marc Rosairo de Vaz, Tay Bing Wei, Chek Xinwei Liana |
| WYSE Pte Ltd | Defendant, Applicant | Corporation | Application dismissed | Lost | Philip Antony Jeyaretnam SC, Melissa Thng Huilin, Amogh Nallan Chakravarti |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tan Siong Thye | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Ian Marc Rosairo de Vaz | WongPartnership LLP |
| Tay Bing Wei | WongPartnership LLP |
| Chek Xinwei Liana | WongPartnership LLP |
| Philip Antony Jeyaretnam SC | Dentons Rodyk & Davidson LLP |
| Melissa Thng Huilin | Dentons Rodyk & Davidson LLP |
| Amogh Nallan Chakravarti | Dentons Rodyk & Davidson LLP |
4. Facts
- WYSE was the main contractor for the construction of a 19-storey commercial building.
- WYSE engaged AES as its subcontractor for the design, supply, installation, testing and commissioning, and maintenance of the façade works.
- The value of the Sub-Contract was $4,965,000.
- The completion date for the main contract as well as the Sub-contract was 12 April 2016.
- WyWy allegedly claimed liquidated damages of $2.05m against WYSE due to delays.
- WYSE attributed about $1.47m of the liquidated damages to AES.
- AES served WYSE with Payment Claim No 20 for the amount of $1,280,179.92.
- WYSE refused to make payment, stating its right to set-off as a reason for withholding the amount claimed.
- The payment response in which WYSE stated its right to set-off as a reason for withholding the amount claimed was filed out of time, on 28 December 2016.
- AES lodged an adjudication application with the Singapore Mediation Centre on 29 December 2016 under the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed).
- On 17 February 2017, the Adjudicator gave an Adjudication Determination in AES’s favour for the amount of $1,077,151.37 inclusive of GST and costs.
- WYSE refused to pay AES the Adjudicated Amount.
- On 28 February 2017, AES took out OS 205 to seek leave of court to enforce the AD as a judgment debt or order of court under s 27(1) of the SOP Act.
- WYSE then applied to this court, in SUM 1227, to set aside ORC 1337.
5. Formal Citations
- AES Façade Pte Ltd v WYSE Pte Ltd, Originating Summons No 205 of 2017(Summons No 1227 of 2017), [2017] SGHC 171
6. Timeline
| Date | Event |
|---|---|
| Letter of Acceptance dated | |
| Completion date for the main contract and the Sub-contract | |
| Payment response filed out of time | |
| AES lodged an adjudication application with the Singapore Mediation Centre | |
| Adjudication Determination given in AES’s favour | |
| AES took out OS 205 to seek leave of court to enforce the AD | |
| SUM 1227 dismissed | |
| Judgment Date |
7. Legal Issues
- Set-off
- Outcome: The court held that WYSE was not entitled to raise a set-off against the adjudicated amount.
- Category: Substantive
- Sub-Issues:
- Failure to serve payment response within the required timeframe
- Stay of Execution
- Outcome: The court refused to grant a stay of execution of ORC 1337 pending the determination of arbitral proceedings.
- Category: Procedural
8. Remedies Sought
- Enforcement of adjudication determination
- Setting aside of ORC 1337
- Stay of execution of ORC 1337
- Monetary damages (liquidated damages)
9. Cause of Actions
- Claim for enforcement of adjudication determination
- Claim for liquidated damages (in arbitration)
10. Practice Areas
- Construction Law
- Commercial Litigation
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| W Y Steel Construction Pte Ltd v Osko Pte Ltd | Court of Appeal | Yes | [2013] 3 SLR 380 | Singapore | Cited for the object and purpose of the Security of Payment Act, which is to provide the construction industry with a low-cost, efficient and quick process for the adjudication of payment disputes. |
| Vinod Kumar Ramgopal Didwania v Hauslab Design & Build Pte Ltd | Court of Appeal | Yes | [2017] 1 SLR 890 | Singapore | Cited to reiterate the concept of temporary finality, which undergirds the adjudication regime in Singapore. |
| RJT Consulting Engineers Ltd v DM Engineering (Northern Ireland) Ltd | N/A | Yes | [2002] 1WLR 2344 | United Kingdom | Cited for the principle that parties to a construction contract should “pay now, argue later”. |
| In re Harmony and Montague Tin and Copper Mining Company | English Court of Appeal | Yes | [1873] 8 Ch App 407 | United Kingdom | Discussed in relation to whether a set-off constitutes payment. |
| Burton (Collector of Taxes) v Mellham Ltd | House of Lords | Yes | [2006] 1 WLR 2820 | United Kingdom | Discussed in relation to whether a taxpayer could set off a sum of advance corporation tax against a sum of mainstream corporation tax due. |
| VHE Construction plc v RBSTB Trust Co Ltd | N/A | Yes | [2000] | United Kingdom | Cited to support the position that to permit a set-off against a sum awarded by an adjudicator would be tantamount to defeating the purpose of the Housing Grants, Construction and Regeneration Act 1996. |
| William Verry Limited v The Mayor and Burgesses of the London Borough of Camden | N/A | Yes | [2006] EWHC 761 (TCC) | United Kingdom | Cited to support the position that any contractual right that might allow a party to avoid the obligation to comply with the adjudicator’s decision must be disallowed. |
| Ferson Contractors Ltd v Levolux AT Ltd | English Court of Appeal | Yes | [2003] EWCA Civ 11 | United Kingdom | Cited to support the position that the contract must be construed so as to give effect to the intention of Parliament rather than to defeat it. |
| Parsons Plastics v Purac Ltd | English Court of Appeal | Yes | [2002] EWCA Civ 559 | United Kingdom | Discussed in relation to whether the respondent was entitled to exercise its contractual right of set-off against the ad hoc adjudicator’s decision. |
| Balfour Beatty v Serco Limited | N/A | Yes | [2004] EWHC 3336 | United Kingdom | Discussed in relation to whether the employer is entitled to set off liquidated and ascertained damages against sums awarded by the adjudicator will depend upon the terms of the contract and the circumstances of the case. |
| JPA Design and Build Limited v Sentosa (UK) Limited | N/A | Yes | [2009] EWHC 2312 (TCC) | United Kingdom | Cited to illustrate that English law allowed two adjudication decisions to be set-off against each other. |
| Thameside Construction Co Ltd v Stevens and another | N/A | Yes | [2013] EWHC 2071 (TCC) | United Kingdom | Cited to illustrate the circumstances in which set-off could operate. |
| Admin Construction Pte Ltd v Vivaldi (S) Pte Ltd | N/A | Yes | [2013] 3 SLR 609 | Singapore | Cited to support the position that a claim dismissed as being either premature or untimely could validly form the subject of a subsequent payment claim and adjudication. |
| Choi Peng Kum and another v Tan Poh Eng Construction Pte Ltd | N/A | Yes | [2014] 1 SLR 1210 | Singapore | Cited to illustrate a clause which, if given the reading the plaintiffs contended for, would be caught by s 36(2)(b), which rendered void “a provision that may reasonably be construed as an attempt to deter a person from taking action under this Act”. |
| Lim Poh Yeoh (alias Aster Lim) v TS Ong Construction Pte Ltd | High Court | Yes | [2017] SGHC 11 | Singapore | Cited to support the position that parties should not be allowed to withhold payment of the adjudicated sum whilst seeking to effectively overturn the adjudication determination at the same time. |
| Hyundai Engineering & Construction Co Ltd v International Elements Pte Ltd | N/A | Yes | [2016] 4 SLR 626 | Singapore | Cited to support the position that the term ‘final determination of those proceedings’ had to be construed in the context of the Act. |
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 |
| Interpretation Act (Cap 1, 2002 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Adjudication Determination
- Payment Claim
- Payment Response
- Set-off
- Liquidated Damages
- Security of Payment Act
- Sub-Contract
- SIA Conditions of Sub-Contract
15.2 Keywords
- construction
- security of payment
- adjudication
- set-off
- subcontractor
- liquidated damages
16. Subjects
- Construction Dispute
- Adjudication
- Contract Law
- Civil Procedure
17. Areas of Law
- Building and Construction Law
- Sub-contracts
- Security of Payment