Chuang Long Engineering v Nan Huat Aluminium: Security of Payment Act & Valuation of Materials

In Chuang Long Engineering Pte Ltd v Nan Huat Aluminium & Glass Pte Ltd, the High Court of Singapore heard an application by Chuang Long Engineering Pte Ltd to set aside an adjudication determination under the Building and Construction Industry Security of Payment Act (SOPA). The adjudicator had determined that Nan Huat Aluminium & Glass Pte Ltd was entitled to payment for uninstalled materials. Chan Seng Onn J dismissed the application, holding that the adjudicator had correctly interpreted section 7(2)(c) of SOPA to include the value of fabricated, but not yet delivered or installed, materials.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Application dismissed.

1.3 Case Type

Building and Construction Law

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

The High Court held that an adjudicator properly interpreted s 7(2)(c) SOPA, allowing valuation of fabricated but undelivered materials. Application dismissed.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Chuang Long Engineering Pte LtdApplicantCorporationApplication dismissedLost
Nan Huat Aluminium & Glass Pte LtdRespondentCorporationAdjudication Determination upheldWon

3. Judges

Judge NameTitleDelivered Judgment
Chan Seng OnnJudgeYes

4. Counsels

Counsel NameOrganization
Zeng HanyiCharacterist LLC
Lim Ker SheonCharacterist LLC
Satinder Pal SinghSelvam LLC

4. Facts

  1. Chuang Long Engineering was the main contractor for a construction project.
  2. Nan Huat Aluminium & Glass was the sub-contractor for the project.
  3. The sub-contract agreement was worth $323,282.50 (excluding GST).
  4. Chuang Long Engineering terminated the contract due to an alleged breach of completion deadlines.
  5. Nan Huat Aluminium & Glass filed a payment claim for $237,421.35 for unpaid works.
  6. The adjudicator determined that $165,683.91 (inclusive of GST) was payable by Chuang Long Engineering to Nan Huat Aluminium & Glass.
  7. The adjudicator included $75,651.00 for uninstalled materials in the valuation.

5. Formal Citations

  1. Chuang Long Engineering Pte Ltd v Nan Huat Aluminium & Glass Pte Ltd, Originating Summons No 1568 of 2018, [2019] SGHC 55

6. Timeline

DateEvent
Contract terminated
Payment claim filed
Payment response served
Adjudication Determination dated
Adjudication Determination amended and re-dated
Hearing date
Judgment reserved

7. Legal Issues

  1. Interpretation of Section 7(2)(c) of SOPA
    • Outcome: The court held that the adjudicator correctly interpreted s 7(2)(c) SOPA to include the value of fabricated, but not yet delivered or installed, materials.
    • Category: Substantive
    • Sub-Issues:
      • Valuation of uninstalled materials
      • Passing of property

8. Remedies Sought

  1. Setting aside of Adjudication Determination
  2. Payment for unpaid works

9. Cause of Actions

  • Breach of Contract
  • Claim for unpaid works

10. Practice Areas

  • Construction Litigation
  • Adjudication

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Hudson’s Building and Engineering ContractsN/AYesHudson’s Building and Engineering Contracts (Nicholas Dennys, Mark Raeside & Robert Clay gen eds) (Sweet and Maxwell, 12th Ed, 2010)N/ACited for the common law position that property in materials passes to the freeholder once incorporated into a building.
Security of Payments and Construction AdjudicationN/AYesChow Kok Fong, Security of Payments and Construction Adjudication (LexisNexis, 2nd Ed, 2013)N/ACited for the interpretation of sections 36(1) and 36(4) of SOPA.

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

15. Key Terms and Keywords

15.1 Key Terms

  • Adjudication Determination
  • Building and Construction Industry Security of Payment Act
  • SOPA
  • Uninstalled materials
  • Valuation
  • Construction contract
  • Payment claim
  • Payment response

15.2 Keywords

  • construction
  • security of payment
  • SOPA
  • adjudication
  • valuation
  • materials

17. Areas of Law

Area NameRelevance Score
Construction Law95
Building and Construction Industry Security of Payment Act90
Adjudication80
Valuation of materials75
Building and Construction Contracts70
Statutory Interpretation60

16. Subjects

  • Construction Dispute
  • Contract Law
  • Security of Payment