Rong Shun Engineering v C.P. Ong Construction: Security of Payment Act Dispute

In Rong Shun Engineering & Construction Pte Ltd v C.P. Ong Construction Pte Ltd, the High Court of Singapore addressed an application and cross-application arising from an adjudication determination under the Building and Construction Industry Security of Payment Act. Rong Shun Engineering, the applicant, sought to enforce a determination requiring C.P. Ong Construction, the respondent, to pay $379,530.80. C.P. Ong Construction applied to set aside the determination, arguing the adjudicator exceeded jurisdiction and breached natural justice. The court set aside the part of the determination dealing with the retention sum claim but upheld the remainder of the determination.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Part of the adjudication determination was set aside; the remainder of the determination continues to carry interim finality for the applicant's interim benefit.

1.3 Case Type

Construction

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The case involves a dispute over an adjudication determination under the Building and Construction Industry Security of Payment Act. The court set aside part of the determination.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Rong Shun Engineering & Construction Pte LtdApplicantCorporationPartial JudgmentPartial
C.P. Ong Construction Pte LtdRespondentCorporationPartial LossPartial

3. Judges

Judge NameTitleDelivered Judgment
Vinodh CoomaraswamyJudgeYes

4. Counsels

Counsel NameOrganization
Daniel KohEldan Law LLP
Poonaam BaiEldan Law LLP
Lorenda LeeEldan Law LLP
Tan Tian LuhChancery Law Corporation
Ngo Wei ShingChancery Law Corporation

4. Facts

  1. Respondent engaged as main contractor for addition and alteration works to 15 car parks.
  2. Applicant submitted quotations for electrical works and fire alarm works.
  3. Applicant commenced work in or about April 2013.
  4. Dispute arose over the applicant’s use of metal conduits with Class 3 protection instead of Class 4.
  5. Applicant submitted 24 progress claims to the respondent.
  6. Respondent paid a total of $409,000 to the applicant against its first ten progress claims.
  7. The determination is dated 1 March 2016 and requires the respondent to pay the applicant the principal sum of $379,530.80.

5. Formal Citations

  1. Rong Shun Engineering & Construction Pte Ltd v C.P. Ong Construction Pte Ltd, Originating Summons No 253 of 2016 (Summons No 1596 of 2016), [2017] SGHC 34

6. Timeline

DateEvent
Applicant submitted quotations for electrical works and fire alarm works.
Housing & Development Board of Singapore engaged the respondent as the main contractor.
Applicant issued two revised quotations.
Respondent to commence work.
Applicant commenced work.
Respondent to finish work on or before this date.
Progress claim 10 dated.
Respondent's last payment to the applicant.
Work was physically completed.
Progress claim 24 dated.
Dispute settlement period expired.
Applicant served notice of intention to apply for adjudication.
Adjudicator rendered his determination.
Hearing date.
Hearing date.
Judgment date.

7. Legal Issues

  1. Jurisdiction of Adjudicator
    • Outcome: The adjudicator exceeded his jurisdiction by adjudicating upon the retention sum claim.
    • Category: Jurisdictional
    • Sub-Issues:
      • Exceeding jurisdiction by adjudicating on claims from multiple contracts
      • Adjudicating on a claim not advanced in the payment claim
  2. Validity of Payment Claim
    • Outcome: A payment claim must arise from only one contract.
    • Category: Substantive
    • Sub-Issues:
      • Whether a payment claim must arise from only one contract
  3. Breach of Natural Justice
    • Outcome: The court found that the natural justice challenge added nothing to the jurisdictional argument.
    • Category: Procedural
    • Sub-Issues:
      • Determining a claim without hearing from the respondent
  4. Severance of Adjudication Determination
    • Outcome: The court has the power to sever that part of the determination as deals with the retention sum claim and to uphold the remainder.
    • Category: Procedural
    • Sub-Issues:
      • Power to sever part of a determination affected by jurisdictional error

8. Remedies Sought

  1. Enforcement of Adjudication Determination
  2. Setting Aside of Adjudication Determination

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Construction Law
  • Commercial Litigation

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
JFC Builders Pte Ltd v LionCity Construction Co Pte LtdHigh CourtYes[2013] 1 SLR 1157SingaporeCited for the principle that failure to raise a jurisdictional ground in an adjudication does not estop a respondent from raising it in court.
Australian Timber Products Pte Ltd v A Pacific Construction & Development Pte LtdHigh CourtYes[2013] 2 SLR 776SingaporeCited for the principle that failure to raise a jurisdictional ground in an adjudication does not estop a respondent from raising it in court.
Libra Building Construction Pte Ltd v Emergent Engineering Pte LtdHigh CourtYes[2016] 1 SLR 481SingaporeCited for the principle that a payment claim can comprise more than one progress payment.
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 of 'pay now, argue later' and the interpretation of the Act.
Rail Corporation of New South Wales v Nebax Constructions Australia Pty LtdSupreme Court of New South WalesNo[2012] NSWSC 6New South WalesCited for the principle that one payment claim should arise from a single contract.
Class Electrical Services Pty Ltd v Go Electrical Pty LtdSupreme Court of New South WalesNo[2013] NSWSC 363New South WalesCited for the principle that one payment claim should arise from a single contract.
Matrix Projects (Qld) Pty Ltd v LuscombeSupreme Court of QueenslandNo[2013] QSC 4QueenslandCited for the principle that one payment claim should arise from a single contract.
UES Holdings Pte Ltd v Grouteam Pte LtdHigh CourtNo[2016] 1 SLR 312SingaporeCited for the principle that the court will determine for itself whether the payment claim was served in accordance with the contract.
Citiwall Safety Glass Pte Ltd v Mansource Interior Pte LtdCourt of AppealYes[2015] 1 SLR 797SingaporeCited for the principle that the power to set aside an adjudication determination is a common law power.
Director of Public Prosecutions v HutchinsonHouse of LordsYes[1990] 2 AC 783EnglandCited for the principle of severance at common law, comprising textual and substantial severability.
Cantillon Limited v Urvasco LimitedHigh CourtYes[2008] BLR 250EnglandCited for principles of severability under the English security of payment scheme.
Chase Oyster Bar Pty Ltd v Hamo Industries Pty LtdNew South Wales Court of AppealYes[2010] NSWCA 190New South WalesCited for the principle that a residual discretion exists not to grant certiorari even in a case of clear jurisdictional error.
Gantley Pty Ltd v Phoenix International Group Pty LtdSupreme Court of VictoriaYes[2010] VSC 106VictoriaCited for the principle that Hutchinson was merely one aspect of a general common law doctrine of severance.
R v Secretary of State for Transport ex parte Greater London CouncilQueen's Bench DivisionYes[1986] QB 556EnglandCited for the principle that the remedies of both declaration and certiorari are available to quash an unlawful and divisible part of an order or decision while upholding the remainder.
Quartzelec Ltd v Honeywell Control Systems LtdHigh Court of JusticeYes[2008] EWHC 3315 (TCC)EnglandCited as one of the English cases that have come after Cantillon and recognised to a certain extent the artificiality inherent in Cantillon principles (c), (d) and (f).
Cleveland Bridge (UK) Ltd v Whessoe-Volker Stevin Joint VentureHigh Court of JusticeYes[2010] EWHC 1076 (TCC)EnglandCited as one of the English cases that have come after Cantillon and recognised to a certain extent the artificiality inherent in Cantillon principles (c), (d) and (f).
Pilon Ltd v Breyer Group plcHigh Court of JusticeYes[2010] BLR 452EnglandCited as one of the English cases that have come after Cantillon and recognised to a certain extent the artificiality inherent in Cantillon principles (c), (d) and (f).
Working Environments Ltd v Greencoat Construction LtdHigh Court of JusticeYes[2012] BLR 309EnglandCited as one of the English cases that have come after Cantillon and recognised to a certain extent the artificiality inherent in Cantillon principles (c), (d) and (f).
Lidl UK GmbH v R G Carter Colchester LtdHigh Court of JusticeYes[2012] EWHC 3188 (TCC)EnglandCited as one of the English cases that have come after Cantillon and recognised to a certain extent the artificiality inherent in Cantillon principles (c), (d) and (f).
Beck Interiors Ltd v UK Flooring Contractors LtdHigh Court of JusticeYes[2012] BLR 417EnglandCited as one of the English cases that have come after Cantillon and recognised to a certain extent the artificiality inherent in Cantillon principles (c), (d) and (f).
Stellite Construction Ltd v Vascroft Contractors LtdHigh Court of JusticeYes[2016] EWHC 792 (TCC)EnglandCited as one of the English cases that have come after Cantillon and recognised to a certain extent the artificiality inherent in Cantillon principles (c), (d) and (f).
Multiplex Constructions Pty Ltd v LuikensSupreme Court of New South WalesNo[2003] NSWSC 1140New South WalesCited for the principle that the court had no power to dissect the adjudicated sum in order to quash the determination in part because arriving at the “adjudicated amount” was a duty imposed on the adjudicator.
Lanskey Constructions Pty Ltd v Noxequin Pty Ltd (in liq)Supreme Court of New South WalesNo[2005] NSWSC 963New South WalesCited for the principle that the court had no power to dissect the adjudicated sum in order to quash the determination in part because arriving at the “adjudicated amount” was a duty imposed on the adjudicator.
Watpac Construction (NSW) Pty Ltd v Austin Corp Pty LtdSupreme Court of New South WalesNo[2010] NSWSC 347New South WalesCited for the principle that if a determination lacks some essential condition then the consequences, of invalidity, follow.
James Trowse Constructions Pty Ltd v ASAP Plasterers Pty Ltd & OrsSupreme Court of QueenslandNo[2011] QSC 145QueenslandCited for the principle that the statutory scheme in Queensland provides for an adjudication decision for one amount only.
BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd & OrsQueensland Court of AppealNo[2013] QCA 394QueenslandCited for the principle that an administrative decision arrived at in jurisdictional error lacks legal foundation and has no legal effect whatsoever unless statute intends to the contrary.
Alliance Contracting Pty Ltd v JamesSupreme Court of Western AustraliaNo[2014] WASC 212Western AustraliaCited for the principle that the adjudication cannot be divided into component steps in its reasoning, and one or more separate steps then impugned by judicial review.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5, 2014 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed)Singapore
Interpretation Act (Cap 1 2002 Rev Ed)Singapore
Arbitration Act (Cap 10, 2002 Rev Ed)Singapore
International Arbitration Act (Cap 143A, 2002 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Adjudication Determination
  • Building and Construction Industry Security of Payment Act
  • Payment Claim
  • Progress Payment
  • Retention Sum
  • Jurisdictional Error
  • Natural Justice
  • Severance
  • Construction Contract

15.2 Keywords

  • construction
  • adjudication
  • security of payment
  • payment claim
  • jurisdiction
  • severance

17. Areas of Law

Area NameRelevance Score
Construction Law90
Building and Construction Contracts85
Sub-contracts75
Contract Law60
Statutes and regulations50
Business Litigation30
Civil Procedure25

16. Subjects

  • Construction Dispute
  • Adjudication
  • Contract Law
  • Civil Procedure