Metropole Pte Ltd v Designshop Pte Ltd: Building & Construction Industry Security of Payment Act Dispute

In Metropole Pte Ltd v Designshop Pte Ltd, the High Court of Singapore dismissed Metropole's application to set aside an adjudication determination in favor of Designshop Pte Ltd. The dispute arose from a payment claim under the Building and Construction Industry Security of Payment Act. Metropole argued that the adjudicator breached the rules of natural justice and acted in excess of his jurisdiction. Justice Vinodh Coomaraswamy rejected Metropole's arguments, finding no material breach of natural justice or jurisdictional error, and ordered Metropole to pay costs.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Application dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Metropole's application to set aside an adjudication determination in favor of Designshop was dismissed. The court found no breach of natural justice or jurisdictional error.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Metropole Pte LtdApplicantCorporationApplication dismissedLost
Designshop Pte LtdRespondentCorporationApplication dismissedWon

3. Judges

Judge NameTitleDelivered Judgment
Vinodh CoomaraswamyJudgeYes

4. Counsels

Counsel NameOrganization
Tan Tian LuhChancery Law Corporation
Tan Xian YingChancery Law Corporation
Samuel ChackoLegis Point LLC
Christopher YeoLegis Point LLC

4. Facts

  1. Metropole engaged Designshop Architects LLP in June 2009 for architectural services.
  2. The contract was based on the Singapore Institute of Architects' standard form.
  3. In January 2012, the partners of the LLP incorporated their practice as Designshop Pte Ltd.
  4. Designshop Pte Ltd took over the ongoing projects, including Metropole's project.
  5. Lim Hong Kian, a partner, left Designshop Pte Ltd in January 2016.
  6. Metropole terminated the contract with Designshop Pte Ltd in February 2016.
  7. Designshop Pte Ltd issued a payment claim for $453,948.43, which Metropole disputed.
  8. An adjudication determination was issued on 1 April 2016, allowing some of Designshop's claims.

5. Formal Citations

  1. Metropole Pte Ltd v Designshop Pte Ltd, Originating Summons No 384 of 2016, [2017] SGHC 45

6. Timeline

DateEvent
Metropole engaged Designshop Architects LLP to provide architectural services.
Designshop Architects LLP incorporated as Designshop Pte Ltd.
Lim Hong Kian left Designshop Pte Ltd.
Designshop Pte Ltd issued a payment claim to Metropole.
Metropole served its payment response to Designshop Pte Ltd.
Designshop Pte Ltd responded to Metropole’s payment response.
Designshop Pte Ltd gave notice to Metropole under s 12(2) of the Building and Construction Industry Security of Payment Act.
Designshop Pte Ltd made its adjudication application.
Metropole lodged its adjudication response.
Adjudication conference took place.
Adjudication determination issued.
Metropole applied to set aside the adjudication determination.
Hearing date.
Judgment date.

7. Legal Issues

  1. Breach of Natural Justice
    • Outcome: The court found a breach of the audi alteram partem rule but held that it was not sufficiently material to cause prejudice to Metropole.
    • Category: Procedural
    • Sub-Issues:
      • Unilateral communication with one party
      • Failure to consider all defences
  2. Jurisdictional Error
    • Outcome: The court found that the adjudicator did not exceed his jurisdiction.
    • Category: Jurisdictional
    • Sub-Issues:
      • Determining claims outside the scope of the Act
      • Failure to independently assess work done
      • Failure to determine existence of contract
  3. Interpretation of Contract Clause
    • Outcome: The court upheld the adjudicator's interpretation of clause 2.3(3) as a clause stipulating conditions for payment, not damages.
    • Category: Substantive

8. Remedies Sought

  1. Setting aside of adjudication determination

9. Cause of Actions

  • Claim for progress payment under the Building and Construction Industry Security of Payment Act

10. Practice Areas

  • Construction Litigation
  • Adjudication
  • Commercial Litigation

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
SEF Construction Pte Ltd v Skoy Connected Pte LtdHigh CourtYes[2010] 1 SLR 733SingaporeCited for the principle that an adjudicator has an express statutory obligation to comply with the rules of natural justice under s 16(3)(c) of the Act.
Re Shankar Alan s/o Anant KulkarniHigh CourtYes[2007] 1 SLR(R) 85SingaporeCited for the test of apparent bias in Singapore law.
Re Singh KalpanathHigh CourtYes[1992] 1 SLR(R) 595SingaporeCited for the principle that private communications between an adjudicator and a party to an adjudication can warrant setting aside the determination on the basis of apparent bias.
Paice and another v MJ Harding (trading as MJ Harding Contractors)English High CourtYes[2015] EWHC 661 (TCC)England and WalesCited regarding waiver of a breach of the rules of natural justice.
Farrelly (M&E) Building Services Ltd v Byrne Brothers (Formwork) LtdEnglish High CourtYes[2013] EWHC 1186 (TCC)England and WalesCited regarding waiver of a breach of the rules of natural justice.
Dean and Dyball Construction Limited v Kenneth Grubb Associates LtdEnglish High CourtYes[2003] EWHC 2465 (TCC)England and WalesCited for the principle that where an adjudicator communicates with just one party, the absent party must be told the substance of what has been said and afforded an opportunity to comment upon it.
AMZ v AXXHigh CourtYes[2016] 1 SLR 549SingaporeCited for the test for prejudice as applied in the context of arbitration.
L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another appealCourt of AppealYes[2013] 1 SLR 125SingaporeCited for the test for prejudice as applied in the context of arbitration.
AM Associates (Singapore) Pte Ltd v Laguna National Golf and Country Club LtdHigh CourtYes[2009] SGHC 260SingaporeCited for the principle that the audi alteram partem rule requires the adjudicator to receive both parties’ submissions and consider them.
W Y Steel Construction Pte Ltd v Osko Pte LtdHigh CourtYes[2013] 3 SLR 380SingaporeCited for the principle that a respondent is entitled to raise patent errors on the face of the material before the adjudicator even if those errors were not raised in the payment response.
Aik Heng Contracts and Services Pte Ltd v Deshin Engineering & Construction Pte LtdHigh CourtYes[2015] SGHC 293SingaporeCited for the principle that not all breaches of natural justice warrant the setting aside of an adjudication determination; there must be a material breach.
JRP & Associates Pte Ltd v Kindly Construction & Services Pte LtdHigh CourtYes[2015] 3 SLR 575SingaporeCited for the principle that despite a prior adjudication, the parties remain entirely free to go on to resolve their disputes with full finality.
Balfour Beatty Construction Ltd v Lambeth Borough CouncilHigh Court of JusticeYes[2002] EWHC 597England and WalesCited in support of the approach that a court hearing an application to set aside an adjudication determination for a breach of the rules of natural justice has less reason to intervene in adjudication than in arbitration.
Brodyn Pty Ltd t/as Time Cost and Quality v Davenport & AnorNew South Wales Court of AppealYes[2004] NSWCA 394AustraliaCited in support of the approach that a court hearing an application to set aside an adjudication determination for a breach of the rules of natural justice has less reason to intervene in adjudication than in arbitration.
Front Row Investment Holdings (Singapore) Pte Ltd v Daimler South East Asia Pte LtdHigh CourtYes[2010] SGHC 80SingaporeCited for the principle that an adjudicator breaches the rules of natural justice if he disregards some of the defences raised without considering the merits thereof or making an effort to understand them.
Lanskey v NoxequinNew South Wales Supreme CourtYes[2005] NSWSC 963AustraliaCited for the principle that the court should look at the face of the documents and the adjudicator’s decision to determine whether the adjudicator has addressed his mind to the merits of the case before him.
Chip Hup Hup Kee Construction Pte Ltd v Ssangyong Engineering & Construction Co LtdHigh CourtYes[2008] SGHC 159SingaporeCited for the principle that an adjudicator is entitled to disregard an additional reason for withholding payment which was not found in the payment response by virtue of the bar in s 15(3) of the Act.
Chip Hup Hup Kee Construction Pte Ltd v Ssangyong Engineering & Construction Co LtdCourt of AppealYes[2010] 1 SLR 658SingaporeCited for the principle that an adjudicator is entitled to disregard an additional reason for withholding payment which was not found in the payment response by virtue of the bar in s 15(3) of the Act.
TMM Division Maritima SA de CV v Pacific Richfield Marine Pte LtdHigh CourtYes[2013] 4 SLR 972SingaporeCited for the principle that the fact that some matters are not found in the adjudication determination does not mean that the adjudicator ignored or wrongly excluded such matters from his consideration.
BLB and another v BLC and othersHigh CourtYes[2013] 4 SLR 1169SingaporeCited for the principle that the fact that some matters are not found in the adjudication determination does not mean that the adjudicator ignored or wrongly excluded such matters from his consideration.
Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte LtdHigh CourtYes[2007] 3 SLR(R) 86SingaporeCited for the principle that only material breaches justify setting aside an adjudication determination.
APV Sdn Bhd v APW Pte LtdSingapore Subordinate CourtsYes[2013] SGSOP 24SingaporeCited for the approach under W Y Steel requires him to examine the documents exhibited in the adjudication application to see if there is any obvious contradiction between the said documents and the payment claim.
SSC Plenty Road v Construction Engineering (Aust) Pty Ltd & AnorSupreme Court of VictoriaYes[2015] VSC 631AustraliaCited for the principle that an adjudicator has a duty to assess the amount of work done and the value thereof.
Krongold Constructions (Aust) Pty Ltd v SR & RS Wales Pty LtdSupreme Court of VictoriaYes[2016] VSC 94AustraliaCited for the principle that an adjudicator has a duty to assess the amount of work done and the value thereof.
Pacific General Securities Ltd v Soliman & Sons Pty LtdNew South Wales Supreme CourtYes[2006] NSWSC 13AustraliaCited for the principle that an adjudicator is entitled to readily find in favor of the claimant on the merits of the claim.
RN & Associates Pte Ltd v TPX Builders Pte LtdHigh CourtYes[2013] 1 SLR 848SingaporeCited for the principle that s 4(1) of the Act requires an adjudicator to determine the existence of a written contract between the parties.
RJT Consulting Engineers Ltd v DM Engineering (Northern Ireland) LtdEngland and Wales Court of Appeal (Civil Division)Yes[2002] EWCA Civ 270England and WalesCited for the principle that to satisfy the requirement of a written contract, all the relevant terms agreed must be recorded in writing.
Northbuild Construction Sunshine Coast Pty Ltd v Beyfield Pty LtdSupreme Court of QueenslandYes[2014] QSC 80AustraliaCited for the principle that an adjudicator must identify the relevant terms of the contract upon which the claim is made.
Laing O’Rourke Australia Construction Pty Ltd v Samsung C & T CorporationSupreme Court of Western AustraliaYes[2015] WASC 237AustraliaCited for the principle that an adjudicator would fail to perform that task, and would misapprehend his statutory function, if he determines the merits of the payment dispute otherwise than by reference to the terms of the construction contract which are before him.
Chatsworth Investments Ltd v Cussins (Contractors) LtdCourt of AppealYes[1969] 1 WLR 1England and WalesCited for the principle that novation can be implied from conduct.
Enterprise Managed Services Ltd v Tony McFadden Utilities LtdHigh Court of JusticeYes[2009] EWHC 3222 (TCC)England and WalesCited for the principle that novation can be implied from conduct.
H & R Johnson Tiles Ltd & Anor v H & R Johnson (M) BhdFederal CourtYes[1998] 4 MLJ 13MalaysiaCited for the principle that novation can be implied from conduct.
Tienrui Design & Construction Pte Ltd v G & Y Trading and Manufacturing Pte LtdHigh CourtYes[2015] 5 SLR 852SingaporeCited for the principle that a party who carries out any construction work or supplies any goods or services under a construction contract is entitled to progress payments.
Qingjian International (South Pacific) Group Development Co Pte Ltd v Capstone Engineering Pte LtdHigh CourtYes[2014] SGHCR 5SingaporeCited for the principle that for the purposes of the Act, the definition of what constitutes a contract in writing is very wide.

13. Applicable Rules

Rule Name
Order 95, Rule 3 of the 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
Building Control Act (Cap 29, 1999 Rev Ed)Singapore
International Arbitration Act (Cap 143A, 2002 Rev Ed)Singapore
Arbitration Act (Cap 10 2002 Rev Ed)Singapore
Contract (Rights of Third Parties) Act (Cap 53B, 2002 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Adjudication determination
  • Payment claim
  • Payment response
  • Construction cost
  • Progress payment
  • Rules of natural justice
  • Jurisdictional error
  • SIA terms
  • Qualified person
  • Contingency sum

15.2 Keywords

  • Adjudication
  • Construction
  • Payment
  • Security of Payment Act
  • Natural Justice
  • Jurisdiction

17. Areas of Law

Area NameRelevance Score
Construction Law90
Building and Construction Contracts85
Adjudication75
Security of Payment70
Administrative Law30
Civil Procedure20

16. Subjects

  • Construction Law
  • Adjudication
  • Contract Law
  • Civil Procedure