Comfort Management v OGSP Engineering: Adjudication, Construction Act & Payment Claims
In Comfort Management Pte Ltd v OGSP Engineering Pte Ltd, the Singapore Court of Appeal addressed the scope of an adjudicator’s role in payment claim disputes under the Building and Construction Industry Security of Payment Act. The court dismissed Comfort Management's appeal, upholding the High Court's decision to enforce the adjudication determination in favor of OGSP Engineering. The court clarified the adjudicator's duty to consider all matters listed in Section 17(3) of the Act and the standard of review for setting aside an adjudication determination.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal dismissed.
1.3 Case Type
Construction
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore Court of Appeal case regarding the scope of an adjudicator's role in payment claim disputes under the Building and Construction Industry Security of Payment Act.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| COMFORT MANAGEMENT PTE LTD | Appellant | Corporation | Appeal dismissed | Lost | |
| OGSP ENGINEERING PTE LTD | Respondent | Corporation | Judgment for Respondent | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Judith Prakash | Judge of Appeal | No |
| Tay Yong Kwang | Judge of Appeal | No |
| Steven Chong | Judge of Appeal | Yes |
4. Counsels
4. Facts
- Comfort engaged OGSP as a sub-contractor for a ventilation and ducting system for $1.25m.
- OGSP issued a payment claim for $890,262.23 for work done between October 2013 and October 2014.
- Comfort did not file a payment response but claimed the invoices had already been paid.
- OGSP served a Notice of Intention to Apply for Adjudication.
- OGSP filed an adjudication application with the Singapore Mediation Centre.
- The adjudicator awarded $890,262.23 to OGSP.
- Comfort applied to set aside the adjudication determination.
5. Formal Citations
- Comfort Management Pte Ltd v OGSP Engineering Pte Ltd, Civil Appeal No 163 of 2017, [2018] SGCA 19
6. Timeline
| Date | Event |
|---|---|
| Comfort engaged OGSP as a sub-contractor. | |
| Work done between October 2013 and October 2014. | |
| Letter enclosing appendices related to Variation Order 2. | |
| OGSP issued a payment claim to Comfort. | |
| Comfort's lawyers sent an email to OGSP regarding the invoices. | |
| OGSP served on Comfort a Notice of Intention to Apply for Adjudication. | |
| OGSP filed an adjudication application with the Singapore Mediation Centre. | |
| The SMC served a copy of the adjudication application on Comfort. | |
| Comfort filed its adjudication response with the SMC (out of time). | |
| The adjudicator issued his adjudication determination. | |
| OGSP applied to the High Court to enforce the adjudication determination. | |
| Court of Appeal heard the parties. | |
| Court of Appeal delivered the grounds of decision. |
7. Legal Issues
- Scope of Adjudicator's Role
- Outcome: The court clarified the adjudicator's duty to consider all matters listed in Section 17(3) of the Act and the standard of review for setting aside an adjudication determination.
- Category: Substantive
- Sub-Issues:
- Duty to consider all matters in Section 17(3)
- Independent duty to assess merits of claim
- Standard of review for setting aside determination
- Patent Error
- Outcome: The court defined patent error as an error that is obvious, manifest or otherwise easily recognisable.
- Category: Substantive
- Sub-Issues:
- Definition of patent error
- Patent error as a reason for setting aside an adjudication determination
8. Remedies Sought
- Setting aside of adjudication determination
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Construction Law
- Commercial Litigation
- Arbitration
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 principle that a respondent can raise patent errors even without filing a payment response. |
| Audi Construction Pte Ltd v Kian Hiap Construction Pte Ltd | Court of Appeal | Yes | [2018] 1 SLR 317 | Singapore | Cited for the principle that a respondent has a duty to speak by filing a payment response. |
| OGSP Engineering Pte Ltd v Comfort Management Pte Ltd | High Court | Yes | [2017] SGHC 247 | Singapore | The High Court decision that was appealed in this case. |
| Kingsford Construction Pte Ltd v A Deli Construction Pte Ltd | High Court | Yes | [2017] SGHC 174 | Singapore | Cited as an example of a patent error where documentary evidence contradicts the claimed amount. |
| Coordinated Construction Co Pty Ltd v J M Hargreaves (NSW) Pty Ltd and Ors | New South Wales Court of Appeal | Yes | [2005] NSWCA 228 | Australia | Discusses the adjudicator's duty to address the merits of a payment claim even if no relevant submission has been put forward by the respondent. |
| Pacific General Securities Ltd & Anor v Soliman & Sons Pty Ltd & Ors | New South Wales Supreme Court | Yes | [2006] NSWSC 13 | Australia | Cited with approval in W Y Steel for the principle that an adjudicator must determine whether the construction work has been carried out and what its value is. |
| Richard Crookes Construction Pty Ltd v CES Projects (Aust) Pty Ltd (No. 2) | New South Wales Supreme Court | Yes | [2016] NSWSC 1229 | Australia | Applies the principle stated in Pacific General Securities Ltd & Anor v Soliman & Sons Pty Ltd & Ors. |
| Asian Pacific Building Corporation Pty Ltd v Aircon Duct Fabrication Pty Ltd & Ors | Victoria Supreme Court | Yes | [2010] VSC 300 | Australia | Follows the principle stated in Pacific General Securities Ltd & Anor v Soliman & Sons Pty Ltd & Ors. |
| McNab Developments (Qld) Pty Ltd v MAK Construction Services Pty Ltd | Queensland Supreme Court | Yes | [2013] QSC 293 | Australia | Follows the principle stated in Pacific General Securities Ltd & Anor v Soliman & Sons Pty Ltd & Ors. |
| Lee Wee Lick Terence (alias Li Weili Terence) v Chua Say Eng (formerly trading as Weng Fatt Construction Engineering) and another appeal | Court of Appeal | Yes | [2013] 1 SLR 401 | Singapore | Discusses the functions of an adjudicator. |
| Civil Tech Pte Ltd v Hua Rong Engineering Pte Ltd | Court of Appeal | Yes | [2018] SGCA 12 | Singapore | Discusses Section 17(3) of the Act. |
| Citiwall Safety Glass Pte Ltd v Mansource Interior Pte Ltd | Court of Appeal | Yes | [2015] 1 SLR 797 | Singapore | Explains that the court does not review the merits of the adjudicator's decision. |
| SEF Construction Pte Ltd v Skoy Connected Pte Ltd | High Court | Yes | [2010] 1 SLR 733 | Singapore | States that the Act does not expressly spell out the grounds on which an applicant can succeed in a setting-aside application. |
| Hauslab Design & Build Pte Ltd v Vinod Kumar Ramgopal Didwania | High Court | Yes | [2017] 3 SLR 103 | Singapore | States that the grounds for setting aside are to be found outside the Act and in the common law. |
| Chip Hup Hup Kee Construction Pte Ltd v Ssangyong Engineering & Construction Co Ltd | High Court | Yes | [2010] 1 SLR 658 | Singapore | Draws the distinction between an adjudicator’s competence to hear and the way in which he exercises his power. |
| Grouteam Pte Ltd v UES Holdings Pte Ltd | Court of Appeal | Yes | [2016] 5 SLR 1011 | Singapore | States that it may not be feasible to apply the same analysis to breaches of provisions which occur during the adjudication and which are not predicated purely on the acts of the parties. |
| Thomson Rubbers (India) Pte Ltd v Tan Ai Hock | High Court | Yes | [2012] 1 SLR 772 | Singapore | States that the prima facie standard is employed in various adjudicative contexts, including the obtaining of summary judgment. |
| WCS Engineering Construction Pte Ltd v Glaziers Engineering Pte Ltd | High Court | Yes | [2018] SGHC 28 | Singapore | States that the Act does not require the adjudicator to find, nor does it require the claimant to “prove”, the facts supporting the claim to be objectively true on a certain standard of “proof”. |
| Ballast plc v The Burrell Company (Construction Management) Ltd | N/A | Yes | [2001] BLR 529 | England | States that if an adjudicator simply makes no attempt to determine the value of certain components of the payment claim, then clearly he would have failed to determine the adjudicated amount in accordance with s 17(2)(a). |
| I-Way Ltd v World Online Telecom UK Ltd | English Court of Appeal | Yes | [2002] EWCA 413 | England | States that a term of a contract which states that the contract can only be varied in writing will not prevent there being an oral variation. |
| MWB Business Exchange Centres Ltd v Rock Advertising Ltd | English Court of Appeal | Yes | [2016] EWCA Civ 553 | England | States that a term of a contract which states that the contract can only be varied in writing will not prevent there being an oral variation. |
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 |
| Building and Construction Industry Security of Payment Act 1999 | New South Wales |
15. Key Terms and Keywords
15.1 Key Terms
- Adjudication
- Payment Claim
- Payment Response
- Adjudication Determination
- Patent Error
- Prima Facie Case
- Duty to Adjudicate
- Construction Work
- Progress Payment
- Variation Order
15.2 Keywords
- Adjudication
- Construction Law
- Payment Claim
- Singapore
- Security of Payment Act
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Construction Law | 90 |
| Adjudication | 80 |
| Contract Law | 70 |
| Statutory Interpretation | 60 |
| Arbitration | 50 |
| Civil Procedure | 30 |
16. Subjects
- Construction Dispute
- Adjudication
- Contract Law
- Civil Procedure