Audi Construction v. Kian Hiap Construction: Security of Payment Act & Validity of Payment Claims
Audi Construction Pte Ltd appealed against the High Court's decision to set aside an adjudication determination (AD) in favor of Audi Construction against Kian Hiap Construction Pte Ltd. The dispute concerned the validity of a payment claim served by Audi Construction under the Building and Construction Industry Security of Payment Act. The Court of Appeal allowed the appeal, finding that the payment claim was validly served. The court also addressed issues of waiver and estoppel in relation to jurisdictional objections.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal Allowed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal regarding the validity of a payment claim under the Building and Construction Industry Security of Payment Act. The court allowed the appeal.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Audi Construction Pte Ltd | Appellant | Corporation | Appeal Allowed | Won | |
| Kian Hiap Construction Pte Ltd | Respondent | Corporation | Appeal Dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | No |
| Tay Yong Kwang | Judge of Appeal | No |
| Steven Chong | Judge of Appeal | Yes |
4. Counsels
4. Facts
- The appellant was engaged as a subcontractor by the respondent for structural works.
- The contract stipulated that payment claims were to be served on the 20th day of each calendar month.
- The 20th of November 2016 fell on a Sunday.
- The appellant served the payment claim on Friday, 18th November 2016, but dated it 20th November 2016.
- The respondent did not reply with a payment response.
- The respondent challenged the validity of the payment claim before the adjudicator, arguing it was not served 'on' the 20th.
- The adjudicator rejected the respondent's argument and issued the adjudication determination in the appellant's favor.
5. Formal Citations
- Audi Construction Pte Ltd v Kian Hiap Construction Pte Ltd, Civil Appeal No 136 of 2017, [2018] SGCA 4
- Audi Construction Pte Ltd v Kian Hiap Construction Pte Ltd, , [2017] SGHC 165
6. Timeline
| Date | Event |
|---|---|
| Building and Construction Industry Security of Payment Act passed | |
| Respondent engaged the appellant as a subcontractor | |
| Appellant served payment claim dated 2016-11-20 | |
| Date of payment claim | |
| Adjudicator issued the adjudication determination in favor of the appellant | |
| Appellant granted leave to enforce the adjudication determination | |
| Respondent applied to the High Court to set aside the adjudication determination and the order granting leave to enforce | |
| High Court heard the respondent’s application | |
| High Court gave judgment for the respondent | |
| Court of Appeal heard and allowed the appeal | |
| Grounds of decision delivered by the Court of Appeal |
7. Legal Issues
- Validity of Service of Payment Claim
- Outcome: The Court of Appeal found that the payment claim was validly served.
- Category: Substantive
- Sub-Issues:
- Compliance with contractual terms for service
- Interpretation of 'on' vs 'by' a specified date
- Waiver and Estoppel
- Outcome: The Court of Appeal found that the respondent was estopped from raising an objection to the payment claim’s invalid service.
- Category: Procedural
- Sub-Issues:
- Failure to file a payment response
- Duty to raise jurisdictional objections
- Unequivocal representation
8. Remedies Sought
- Enforcement of Adjudication Determination
- 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 | Settled many of the interpretive issues on the operation of s 15(3) of the Act. |
| Grouteam Pte Ltd v UES Holdings Pte Ltd | Court of Appeal | Yes | [2016] 5 SLR 1011 | Singapore | Addressed the issue of waiver in the context of the Building and Construction Industry Security of Payment Act. |
| Linkforce Pte Ltd v Kajima Overseas Asia Pte Ltd | High Court | Yes | [2017] SGHC 46 | Singapore | Addressed the issue of waiver or estoppel regarding the contractually stipulated date for service of a payment claim. |
| JFC Builders Pte Ltd v LionCity Construction Co Pte Ltd | High Court | Yes | [2013] 1 SLR 1157 | Singapore | Followed Chua Say Eng in considering that an adjudicator’s role did not extend to reviewing the validity of a payment claim. |
| Admin Construction Pte Ltd v Vivaldi (S) Pte Ltd | High Court | Yes | [2013] 3 SLR 609 | Singapore | Approved the reasoning adopted in JFC Builders and Australian Timber Products on the estoppel issue. |
| YTL Construction (S) Pte Ltd v Balanced Engineering & Construction Pte Ltd | High Court | Yes | [2014] SGHC 142 | Singapore | Approved the reasoning adopted in Admin Construction on the same issue. |
| LH Aluminium Industries Pte Ltd v Newcon Builders Pte Ltd | High Court | Yes | [2015] 1 SLR 648 | Singapore | Approved the reasoning adopted in JFC Builders, Australian Timber Products and Admin Construction on the same issue. |
| Australian Timber Products Pte Ltd v A Pacific Construction & Development Pte Ltd | High Court | Yes | [2013] 2 SLR 776 | Singapore | The court reasoned that no estoppel could arise from a respondent’s failure to object to the validity of a payment claim under s 10(3) of the Act before the adjudicator because the adjudicator was not entitled to decide that objection |
| 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 | The court’s opinion (at [64]) that an adjudicator’s “only functions” are: (a) to decide whether the adjudication application in question is made in accordance with s 13(3)(a), (b) and (c) of the Act (see s 16(2)(a) of the Act); and (b) to determine the adjudication application (see s 17(2) of the Act). |
| Chase Oyster Bar v Hamo Industries | New South Wales Court of Appeal | Yes | [2010] NSWCA 190 | Australia | Addressed whether the notice of an intention to file an adjudication application had been served out of time contrary to s 17(2)(a) of the New South Wales Building and Construction Industry Security of Payment Act 1999. |
| Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appeal | Court of Appeal | Yes | [2013] 4 SLR 193 | Singapore | The court held at [101] that the question whether a term should be implied is to be approached in three steps |
| Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The “Kanchenjunga”) | N/A | Yes | [1990] 1 Lloyd’s Rep 391 | N/A | As Lord Goff of Chieveley observed in Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The “Kanchenjunga”) [1990] 1 Lloyd’s Rep 391 (“The Kanchenjunga”) at 397 col 2, “the expression ‘waiver’ is one which may, in law, bear different meanings” and “[i]n particular, it may refer to a forbearance from exercising a right or to an abandonment of a right”. |
| Chai Cher Watt (trading as Chuang Aik Engineering Works) v SDL Technologies Pte Ltd and another appeal | Court of Appeal | Yes | [2012] 1 SLR 152 | Singapore | On this definition, the only form of waiver that befits that label is waiver by election. This doctrine concerns a situation where a party has a choice between two inconsistent rights. |
| Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd | N/A | Yes | [1971] AC 850 | N/A | Waiver by election is often distinguished from what is sometimes called waiver by estoppel |
| Fook Gee Finance Co Ltd v Liu Cho Chit and another appeal | Court of Appeal | Yes | [1998] 1 SLR(R) 385 | Singapore | Next, it is well established that mere silence or inaction will not normally amount to an unequivocal representation |
| Moorgate Mercantile Co Ltd v Twitchings | N/A | Yes | [1977] AC 890 | N/A | In order that silence or inaction may acquire a positive content it is usually said that there must be a duty to speak or to act in a particular way, owed to the person prejudiced, or to the public or to a class of the public of which he in the event turns out to be one. |
| Greenwood (Pauper) v Martins Bank, Limited | N/A | Yes | [1933] AC 51 | N/A | In Greenwood (Pauper) v Martins Bank, Limited [1933] AC 51 (“Greenwood”), the plaintiff husband deliberately chose not to inform the defendant bank that his wife had been forging cheques which were being drawn on his sole account. |
| Tradax Export SA v Dorada Compania Naviera SA (The “Lutetian”) | N/A | Yes | [1982] 2 Lloyd’s Rep 140 | N/A | In Tradax Export SA v Dorada Compania Naviera SA (The “Lutetian”) [1982] 2 Lloyd’s Rep 140 (“The Lutetian”), the vessel had been off-hire for repairs. When the charterers in good faith paid the wrong amount, the owners withdrew the vessel without warning. |
| Tacplas Property Services Pte Ltd v Lee Peter Michael (administrator of the estate of Lee Ching Miow, deceased) | Court of Appeal | Yes | [2000] 1 SLR(R) 159 | Singapore | In Tacplas Property Services Pte Ltd v Lee Peter Michael (administrator of the estate of Lee Ching Miow, deceased) [2000] 1 SLR(R) 159 (“Tacplas”), the respondent was appointed administrator of an estate. He allowed the appellants to continue incurring costs on the faith of the validity of an agreement between the estate and the appellants to cover costs. |
| T2 Networks Pte Ltd v Nasioncom Sdn Bhd | High Court | Yes | [2008] 2 SLR(R) 1 | Singapore | In T2 Networks Pte Ltd v Nasioncom Sdn Bhd [2008] 2 SLR(R) 1 (“T2 Networks”), the plaintiff did not bill a certain number of minutes it was entitled to for providing international communications services. |
| ING Bank NV v Ros Roca SA | N/A | Yes | [2012] 1 WLR 472 | N/A | In ING Bank NV v Ros Roca SA [2012] 1 WLR 472 (“ING Bank”), the claimant bank was engaged to assist the defendant in its search for an investor who would subscribe for additional capital for its business. |
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 (Cap 30B, 2006 Rev Ed) s 10(2)(a) | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) s 17(3)(c) | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) s 15(3)(a) | Singapore |
| Interpretation Act (Cap 1, 2002 Rev Ed) | Singapore |
| Interpretation Act (Cap 1, 2002 Rev Ed) s 50(c) | Singapore |
| Interpretation Act (Cap 1, 2002 Rev Ed) s 50(b) | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) s 2 | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) s 11 | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) s 16 | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) s 17 | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) s 36 | Singapore |
| Building and Construction Industry Security of Payment Act 1999 (Act 46 of 1999) s 17(2)(a) | New South Wales |
| Building and Construction Industry Security of Payment Act 1999 (Act 46 of 1999) s 22(2) | New South Wales |
15. Key Terms and Keywords
15.1 Key Terms
- Payment Claim
- Payment Response
- Adjudication Determination
- Security of Payment Act
- Waiver
- Estoppel
- Jurisdiction
- Service of Payment Claim
- Mandatory Provision
- Interpretation Act
15.2 Keywords
- Construction
- Payment Claim
- Security of Payment Act
- Singapore
- Contract
- Adjudication
- Waiver
- Estoppel
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Construction Adjudication | 80 |
| Construction Law | 75 |
| Contract Law | 70 |
| Waiver | 60 |
| Breach of Contract | 60 |
| Estoppel | 50 |
| Promissory estoppel | 50 |
| Statutory Interpretation | 40 |
| Arbitration | 30 |
16. Subjects
- Construction Dispute
- Contract Law
- Civil Procedure
- Arbitration