Stargood Construction v Shimizu: SOPA, Adjudication, and Termination of Subcontract

In Stargood Construction Pte Ltd v Shimizu Corporation, the High Court of Singapore addressed an originating summons by Stargood Construction to set aside two adjudication determinations under the Building and Construction Industry Security of Payment Act (SOPA). The court, presided over by Judicial Commissioner Vincent Hoong, allowed Stargood's application, setting aside Adjudication Determination No SOP/AA203/2019 in part and Adjudication Determination No SOP/AA245/2019 in its entirety. The court also granted a declaration that Stargood is entitled to serve a further payment claim on Shimizu for construction work done prior to the termination of Stargood's employment under the subcontract.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Plaintiff's application allowed. Adjudication Determinations AA 203 and AA 245 set aside in part and in entirety, respectively. Declaration granted for plaintiff to serve a further payment claim.

1.3 Case Type

Building and Construction Law

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court judgment regarding the validity of payment claims under SOPA after subcontract termination. Stargood Construction sues Shimizu Corporation.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Shimizu CorporationDefendantCorporationApplication DismissedLost
Stargood Construction Pte LtdPlaintiffCorporationApplication AllowedWon

3. Judges

Judge NameTitleDelivered Judgment
Vincent HoongJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Lee Peng Khoon EdwinEldan Law LLP
Amanda Koh Jia YiEldan Law LLP
Yong Boon OnEldan Law LLP
Lee Shu QingEldan Law LLP
Chong Chi Chuin ChristopherDrew & Napier LLC
Chen ZhihuiDrew & Napier LLC

4. Facts

  1. Stargood Construction was a subcontractor for Shimizu Corporation on a project at 79 Robinson Road.
  2. Shimizu Corporation terminated Stargood Construction's employment under the subcontract.
  3. Stargood Construction served Payment Claim No 12 (PC 12) on Shimizu Corporation after the termination.
  4. Shimizu Corporation did not serve a payment response to PC 12.
  5. Stargood Construction lodged Adjudication Determination No SOP/AA203/2019 (AA 203).
  6. The adjudicator dismissed AA 203, finding PC 12 was improperly served and outside the purview of SOPA.
  7. Stargood Construction served Payment Claim No 13 (PC 13), claiming the same sum as PC 12.
  8. Shimizu Corporation served a payment response to PC 13, with a response amount of “nil”.
  9. Stargood Construction commenced AA 245 after AA 203.
  10. The adjudicator in AA 245 agreed that Stargood Construction was bound by the determination in AA 203 and dismissed AA 245.

5. Formal Citations

  1. Stargood Construction Pte Ltd v Shimizu Corp, Originating Summons 1099 of 2019, [2019] SGHC 261

6. Timeline

DateEvent
Hearing
Judgment reserved
Originating Summons No 1099 of 2019 filed

7. Legal Issues

  1. Validity of Payment Claims after Termination of Subcontract
    • Outcome: The court held that the plaintiff was entitled to serve payment claims for works done prior to the termination of its employment under the Sub-Contract.
    • Category: Substantive
    • Sub-Issues:
      • Accrued entitlement to payment
      • Functus officio of project director
      • Interpretation of SOPA
  2. Functus Officio of Project Director
    • Outcome: The court held that the project director was not functus officio as the defendant only terminated the plaintiff's employment under the Sub-Contract, not the entire Sub-Contract.
    • Category: Substantive
    • Sub-Issues:
      • Termination of employment vs termination of contract
      • Certification of payment claims

8. Remedies Sought

  1. Setting aside of Adjudication Determinations AA 203 and AA 245
  2. Declaration that the plaintiff is entitled to serve a further payment claim

9. Cause of Actions

  • Breach of Contract
  • Application to set aside adjudication determination

10. Practice Areas

  • Construction Litigation
  • Commercial Litigation
  • Arbitration

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Engineering Construction Pte Ltd v Attorney-GeneralHigh CourtYes[1994] 1 SLR(R) 125SingaporeCited regarding the principle of functus officio in the context of payment certification after contract termination.
Far East Square Pte Ltd v Yau Lee Construction (Singapore) Pte LtdCourt of AppealYes[2019] 2 SLR 189SingaporeCited regarding the principle of functus officio in the context of payment certification after contract termination, and distinguished by the court.
LW Infrastructure Pte Ltd v Lim Chin San Contractors Pte LtdHigh CourtYes[2011] 4 SLR 477SingaporeCited for the conceptual distinction between termination of a contract and termination of one’s employment under the contract.
CHL Construction Pte Ltd v Yangguang Group Pte LtdHigh CourtYes[2019] 4 SLR 1382SingaporeCited to support the principle that a contractor can continue to claim for works even after termination of employment.
AU v AVSingaporeYes[2006] SGSOP 9SingaporeCited to support the principle that a contractor can continue to claim for works even after termination of employment.
Tiong Seng Contractors (Pte) Ltd v Chuan Lim Construction Pte LtdHigh CourtYes[2007] 4 SLR(R) 364SingaporeCited to support the principle that a contractor can continue to claim for works even after termination of employment.
Choi Peng Kum and another v Tan Poh Eng Construction Pte LtdHigh CourtYes[2014] 1 SLR 1210SingaporeCited regarding the legislative intent of SOPA to facilitate cash flow in the building and construction industry.
Citiwall Safety Glass Pte Ltd v Mansource Interior Pte LtdHigh CourtYes[2015] 1 SLR 797SingaporeCited regarding grounds to set aside adjudication determinations.
Rong Shun Engineering & Construction Pte Ltd v CP Ong Construction Pte LtdHigh CourtYes[2017] 4 SLR 359SingaporeCited regarding the power to set aside a severable part of an adjudication determination for jurisdictional error.
DNKH Logistics Pte Ltd v Liberty Insurance Pte LtdHigh CourtYes[2019] 4 SLR 1063SingaporeCited regarding the requirements for a declaratory order.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Building and Construction Industry Security of Payment Act
  • Adjudication Determination
  • Payment Claim
  • Payment Response
  • Termination of Employment
  • Functus Officio
  • Subcontract
  • Progress Payment

15.2 Keywords

  • SOPA
  • Building and Construction
  • Adjudication
  • Payment Claim
  • Termination
  • Singapore

17. Areas of Law

Area NameRelevance Score
Building and Construction Industry Security of Payment Act95
Construction Law95
Building and Construction Contracts90
Adjudication85
Adjudication Determinations80
Claims by subcontractor70
Jurisdiction60
Statutory Interpretation50
Contract Law40

16. Subjects

  • Construction Dispute
  • Arbitration
  • Contract Law
  • Building and Construction Industry Security of Payment Act