Strategic Construction v JH Projects: Stay of Winding-Up Pending Cross-Claim Under SOPA
In Strategic Construction Pte Ltd v JH Projects Pte Ltd, the High Court of Singapore addressed an application by JH Projects Pte Ltd to stay winding-up proceedings initiated by Strategic Construction Pte Ltd. The winding-up action arose from a failure to pay an adjudicated amount under the Building and Construction Industry Security of Payment Act (SOPA). JH Projects sought a stay pending the resolution of a separate suit concerning defective works. The court allowed the stay, ordering JH Projects to pay the statutory demand amount into court, finding that JH Projects had demonstrated a genuine cross-claim exceeding the claim amount and that the policy of SOPA did not override the insolvency regime's considerations.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Application for stay of winding-up proceedings allowed.
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Stay of winding-up proceedings allowed pending resolution of a cross-claim. The court considered the relevance of SOPA and the solvency of the defendant.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| STRATEGIC CONSTRUCTION PTE LTD | Plaintiff, Respondent | Corporation | Application for stay of winding-up proceedings allowed | Lost | Andy Chiok |
| JH PROJECTS PTE LTD | Defendant, Applicant | Corporation | Application for stay of winding-up proceedings allowed | Won | Kris Chew Yee Fong |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tan Siong Thye | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Andy Chiok | Michael Khoo & Partners |
| Kris Chew Yee Fong | Zenith Law Corporation |
4. Facts
- Strategic Construction Pte Ltd (SCPL) was the sub-contractor for JH Projects Pte Ltd (JHP) in a construction project.
- SCPL made payment claims under SOPA for work done but JHP failed to pay.
- SCPL obtained an adjudication award for $156,979.24 against JHP.
- SCPL issued a statutory demand for $172,803.07, including the adjudicated sum, interest, and costs.
- SCPL took out Companies Winding Up No 70 of 2017 to wind up JHP.
- JHP filed Suit No 311 of 2017, claiming damages for SCPL's failure to rectify defects in another project.
- JHP applied to stay or restrain Companies Winding Up No 70 of 2017 pending the disposal of Suit No 311 of 2017.
5. Formal Citations
- Strategic Construction Pte Ltd v JH Projects Pte Ltd, Companies Winding Up No 70 of 2017 (Summons No 1659 of 2017), [2017] SGHC 238
6. Timeline
| Date | Event |
|---|---|
| Adjudication award obtained by Strategic Construction Pte Ltd for $156,979.24. | |
| Strategic Construction Pte Ltd granted leave to enforce the adjudication award. | |
| Statutory demand issued by Strategic Construction Pte Ltd for $172,803.07. | |
| Companies Winding Up No 70 of 2017 taken out by Strategic Construction Pte Ltd. | |
| DC Summons No 1164 of 2017 filed by JH Projects Pte Ltd to pay judgment debt in installments. | |
| Suit No 311 of 2017 taken out by JH Projects Pte Ltd claiming loss and damage. | |
| Summons No 1659 of 2017 filed by JH Projects Pte Ltd to stay or restrain Companies Winding Up No 70 of 2017. | |
| Hearing of the application. | |
| Hearing of the application. | |
| Hearing of the application for leave to appeal. | |
| Judgment issued. |
7. Legal Issues
- Stay of Winding-Up Proceedings
- Outcome: The court allowed the stay of winding-up proceedings pending the disposal of a separate suit, finding a genuine cross-claim existed.
- Category: Procedural
- Sub-Issues:
- Genuine cross-claim
- Solvency of the company
- Collateral purpose of winding-up proceedings
- Building and Construction Industry Security of Payment Act (SOPA)
- Outcome: The court held that the policy of SOPA, which aims for expeditious dispute resolution and quick cash flow, does not override the insolvency regime under the Companies Act.
- Category: Substantive
- Sub-Issues:
- Application of SOPA to winding-up proceedings
- Cross-claims under SOPA
- Policy considerations of SOPA
8. Remedies Sought
- Winding-up order
- Stay of winding-up proceedings
9. Cause of Actions
- Winding up
- Breach of contract
10. Practice Areas
- Winding Up
- Construction Litigation
- Security of Payment
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Phang Choo Ong v Gilcom Investment Pte Ltd (LRG Investments Pte Ltd and another, non-parties) | High Court | Yes | [2016] 3 SLR 1156 | Singapore | Cited for factors to consider when granting a stay of winding-up proceedings, specifically the requirement to show credible evidence of solvency. |
| Metalform Asia Pte Ltd v Holland Leedon Pte Ltd | Court of Appeal | Yes | [2007] 2 SLR(R) 268 | Singapore | Cited for the principle that a stay application can be granted if the applicant shows a genuine cross-claim exceeding the claim of the creditor seeking winding up. |
| Denmark Skibstekniske Konsulenter A/S I Likvidation (formerly known as Knud E Hansen A/S) v Ultrapolis 3000 Investments Ltd (formerly known as Ultrapolis 3000 Theme Park Investments Ltd) | High Court | Yes | [2011] 4 SLR 997 | Singapore | Cited for adopting the Metalform test, requiring the applicant to show a likelihood that the winding-up proceedings may fail or that a winding-up order is unlikely. |
| Hua Rong Engineering Pte Ltd v Civil Tech Pte Ltd | High Court | Yes | [2017] SGHC 179 | Singapore | Cited for the principle that cross-claims under the SOPA regime are limited to cross-claims within a single contract. |
| Engineering Construction Pte Ltd v Sanchoon Builders Pte Ltd | High Court | Yes | [2011] 1 SLR 681 | Singapore | Cited for the general principle that a cross-claim under a secondary contract must bear some nexus to the main contract in order for it to be set-off. |
| Pacific Rim Investment Pte Ltd v Lam Seng Tiong and another | Court of Appeal | Yes | [1995] 2 SLR(R) 643 | Singapore | Cited for the general principle that a cross-claim under a secondary contract must bear some nexus to the main contract in order for it to be set-off. |
| The Nanfri | Queen's Bench Division | Yes | [1978] QB 927 | England and Wales | Cited for the general principle that a cross-claim under a secondary contract must bear some nexus to the main contract in order for it to be set-off. |
| Lim Poh Yeoh (alias Aster Lim) v TS Ong Construction Pte Ltd | High Court | Yes | [2017] SGHC 11 | Singapore | Cited for the principle that a stay can be granted where a party is seeking to circumvent the SOPA regime. |
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 |
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Supreme Court of Judicature Act (Cap 322, Rev Ed 2007) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Winding up
- Stay of proceedings
- Cross-claim
- Security of Payment Act
- Adjudication award
- Statutory demand
- Insolvency
- Defective works
- Triable issue
15.2 Keywords
- Winding up
- Stay
- SOPA
- Cross-claim
- Construction
- Insolvency
16. Subjects
- Insolvency
- Construction Law
- Civil Procedure
17. Areas of Law
- Insolvency Law
- Building and Construction Law
- Civil Procedure