CHL Construction v Yangguang Group: SOPA & Contract Termination
In CHL Construction Pte Ltd v Yangguang Group Pte Ltd, the Singapore High Court addressed whether contractual provisions relating to Security of Payment Act (SOPA) timelines survive the termination of a construction contract. The court heard an application by CHL Construction Pte Ltd to set aside an Amended Adjudication Determination. Justice Chan Seng Onn held that the contractual timelines for payment claims under SOPA must be adhered to even after the contract has been terminated and set aside the adjudication determination.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
The Amended Adjudication Determination was set aside.
1.3 Case Type
Construction
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court case concerning the Building and Construction Industry Security of Payment Act (SOPA) and the effect of contract termination on payment claim timelines.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| CHL Construction Pte Ltd | Plaintiff | Corporation | Application allowed | Won | |
| Yangguang Group Pte Ltd | Defendant | Corporation | Determination set aside | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chan Seng Onn | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Ong Li Min Magdalene | WongPartnership LLP |
| Quek Li Ting | WongPartnership LLP |
| Lim Kim Hong | Kim & Co |
4. Facts
- CHL Construction engaged Yangguang Group as a sub-contractor for an "Architectural Wet Trade Works" project for $443,921.87.
- The sub-contractor completed the works on 9 July 2018, and a Certificate of Substantial Completion was received on 10 July 2018.
- The contract was terminated on 20 July 2018.
- On 30 August 2018, the sub-contractor served Progress Claim 10, claiming for works done until 30 August 2018 and for the release of half of the retention monies.
- The main contractor disputed the amount claimed, and the sub-contractor submitted an Adjudication Application on 24 September 2018.
- The Amended Adjudication Determination released on 22 October 2018 determined that $95,704.37 was payable by the main contractor to the sub-contractor.
- Clause 37 of the contract stipulated that the sub-contractor had to withhold its penultimate payment claim until three months after the Certificate of Substantial Completion had been received.
5. Formal Citations
- CHL Construction Pte Ltd v Yangguang Group Pte Ltd, Originating Summons No 1465 of 2018, [2019] SGHC 62
6. Timeline
| Date | Event |
|---|---|
| Sub-Contract signed | |
| Sub-Contractor completed the works | |
| Certificate of Substantial Completion received | |
| Contract terminated | |
| Progress Claim 10 served | |
| Adjudication Application submitted | |
| Chua Shueh Er’s 1st Affidavit | |
| Amended Adjudication Determination released | |
| Hearing | |
| Hearing | |
| Judgment reserved |
7. Legal Issues
- Contravention of section 10(2)(a) of the Building and Construction Industry Security of Payment Act
- Outcome: The court held that PC10 was served too early, in breach of s 10(2)(a) SOPA, and the AD was invalid.
- Category: Substantive
- Related Cases:
- [2016] 5 SLR 1011
- Whether clause 37 is voided by section 36(2) of the Building and Construction Industry Security of Payment Act
- Outcome: The court held that clause 37 is not voided by s 36(2) SOPA.
- Category: Substantive
- Related Cases:
- [2012] QCA 150
8. Remedies Sought
- Setting aside of the Adjudication Determination
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Construction Law
- Commercial Litigation
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Grouteam Pte Ltd v UES Holdings Pte Ltd | High Court | Yes | [2016] 5 SLR 1011 | Singapore | Cited for the principle that breach of a mandatory provision of SOPA renders an adjudication determination invalid. |
| Tienrui Design & Construction Pte Ltd v G & Y Trading and Manufacturing Pte Ltd | High Court | Yes | [2015] 5 SLR 852 | Singapore | Cited to explain the dual-track regime for construction claims under SOPA. |
| AET Pte Ltd v AEU Pte Ltd | Singapore Court of Appeal | Yes | [2010] SCAdjR 771 | Singapore | Cited as a prior decision holding that contractual provisions relating to timelines survive termination for the purposes of claims under SOPA. |
| Taisei Corp v Doo Ree Engineering & Trading Pte Ltd | High Court | Yes | [2009] SGHC 156 | Singapore | Cited as a prior decision holding that contractual provisions relating to timelines survive termination for the purposes of claims under SOPA. |
| John Goss Projects Pty Ltd v Leighton Contractors Pty Ltd | New South Wales Supreme Court | Yes | [2006] 66 NSWLR 707 | Australia | Cited for the principle of balancing competing considerations when determining whether a contractual clause offends s 36(2) SOPA. |
| John Holland Pty Ltd v Coastal Dredging & Construction Pty Limited & Ors | Queensland Court of Appeal | No | [2012] QCA 150 | Australia | Cited to show an example of a clause that was void under Queensland’s equivalent of s 36(2) SOPA. |
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 s 10(2) | Singapore |
| Building and Construction Industry Security of Payment Act s 2 | Singapore |
| Building and Construction Industry Security of Payment Act s 5 | Singapore |
| Building and Construction Industry Security of Payment Act s 36(2) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Building and Construction Industry Security of Payment Act
- SOPA
- Progress Claim
- Payment Claim
- Adjudication Determination
- Certificate of Substantial Completion
- Termination of Contract
- Penultimate Payment Claim
- Retention Monies
15.2 Keywords
- SOPA
- Security of Payment Act
- Construction
- Payment Claim
- Adjudication
- Contract Termination
17. Areas of Law
16. Subjects
- Construction Dispute
- Arbitration
- Contract Law