CFA v CFB: Setting Aside Adjudication Determination for Fraud under Building and Construction Industry Security of Payment Act

In CFA v CFB, the High Court of Singapore heard an application by CFB to set aside an adjudication determination (AD) made pursuant to the Building and Construction Industry Security of Payment Act. CFB pleaded fraud and breach of natural justice. The court, finding evidence of fraud by CFA in claiming payment for materials it could not deliver, granted CFB's application and set aside the AD. The court dismissed CFA's application to enforce the AD.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Application to set aside the adjudication determination granted; application to enforce the adjudication determination dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The High Court set aside an adjudication determination (AD) under the Building and Construction Industry Security of Payment Act due to fraud, specifically CFA's misrepresentation regarding the availability of materials.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
CFAApplicantCorporationApplication to enforce the adjudication determination dismissedLost
CFBRespondentCorporationApplication to set aside the adjudication determination grantedWon

3. Judges

Judge NameTitleDelivered Judgment
Lee Seiu KinJudgeYes

4. Counsels

Counsel NameOrganization
Chong Kuan KeongChong Chia & Lim LLC
Gan Siu Min CherylChong Chia & Lim LLC
Andy YeoChong Chia & Lim LLC
Ernest SiaChong Chia & Lim LLC
Derek TayChong Chia & Lim LLC
Neo Kim Cheng MonicaChan Neo LLP
Oung Hui Wen KarenChan Neo LLP

4. Facts

  1. CFA was subcontracted by CFB to fabricate, deliver, and install window panels for a construction project.
  2. The subcontract called for 864 window panels, but 489 panels remained undelivered.
  3. CFA commenced adjudication proceedings claiming it had completed all supply works and was entitled to payment.
  4. CFB argued that payment was only due upon successful delivery of the window panels.
  5. The adjudicator ruled in CFA's favor, ordering CFB to pay the adjudicated amount.
  6. 169 of the missing panels were in China, not in CFA's warehouse as implied in the adjudication.
  7. CFA had a terminated contract with its Chinese supplier, ABC, and was experiencing difficulty negotiating for the delivery of the panels.

5. Formal Citations

  1. CFA v CFB, Originating Summons No 1448 of 2019(Summons No 6129 of 2019), [2020] SGHC 101

6. Timeline

DateEvent
Subcontract agreement made between CFA and CFB.
CFA served a payment claim to CFB.
Payment response due date.
Adjudication application lodged.
CFA's contract with ABC terminated.
First adjudication conference.
Second adjudication conference.
Adjudication determination recorded.
CFB attempted to pay the adjudicated sum in exchange for the missing panels.
ABC contacted CFB directly to sell the remaining window panels.
Parties appeared before the court.
Hearing date.
Judgment date.

7. Legal Issues

  1. Fraud
    • Outcome: The court found that CFA had committed fraud by claiming payment for materials it was not in a position to deliver, and set aside the adjudication determination.
    • Category: Substantive
    • Sub-Issues:
      • Misrepresentation
      • Non-disclosure of material facts
  2. Breach of Natural Justice
    • Outcome: The court rejected CFB's argument that the adjudicator had breached natural justice by failing to consider certain clauses in the contract.
    • Category: Procedural

8. Remedies Sought

  1. Setting aside of adjudication determination
  2. Enforcement of adjudication determination

9. Cause of Actions

  • Breach of Contract
  • Fraud

10. Practice Areas

  • Construction Law
  • Commercial Litigation

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Lazarus Estates Ltd v BeasleyQueen's BenchYes[1956] 1 QB 702England and WalesCited for the principle that a judgment procured by fraud cannot stand.
Chuang Long Engineering Pte Ltd v Nan Huat Aluminium & Glass Pte LtdHigh CourtYes[2019] 4 SLR 901SingaporeCited for the proposition that contractors may claim payment for fabrication of materials that had not been delivered or affixed to the property as yet, but distinguished because CFA was not in a position to secure delivery of all of the missing panels if called upon to do so.
Citiwall Safety Glass Pte Ltd v Mansource Interior Pte LtdHigh CourtYes[2015] 1 SLR 797SingaporeCited for the principle that it is impermissible to appeal against an unfavourable adjudication determination.
Mansource Interior Pte Ltd v Citiwall Safety Glass Pte LtdHigh CourtYes[2014] 3 SLR 264SingaporeCited for the principle that the court will not allow its processes to be used to facilitate fraud.
OGSP Engineering Pte Ltd v Comfort Management Pte LtdHigh CourtYes[2018] 3 SLR 1031SingaporeCited for the principle that the court will not allow its processes to be used to facilitate fraud.
QC Communications NSW Pty Ltd v CivComm Pty LtdSupreme Court of New South WalesYes[2016] NSWSC 1095AustraliaCited for the test to set aside a judgment on the basis of fraud.
Wentworth v Rogers (No 5)Supreme Court of New South WalesYes(1986) 6 NSWLR 534AustraliaCited for the principle that an application to set aside a judgment on the basis of fraud must be based on facts discovered after the judgment which are material.
Orr v HolmesHigh Court of AustraliaYes[1948] HCA 16AustraliaCited for the principle that it must be reasonably clear that the fresh evidence would have provided an opposite verdict to set aside a judgment on the basis of fraud.

13. Applicable Rules

Rule Name
Order 95, Rule 2 of the Rules of Court (Cap 322, Rule 5)

14. Applicable Statutes

Statute NameJurisdiction
Building and Construction Industry Security of Payment Act (Cap 30B)Singapore
Building and Construction Industry Security of Payment Amendment Act 2018 (No 47 of 2018)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Adjudication determination
  • Building and Construction Industry Security of Payment Act
  • Fraud
  • Missing panels
  • Payment claim
  • Payment response
  • Material fact requirement
  • Opposite verdict requirement

15.2 Keywords

  • adjudication
  • construction
  • fraud
  • security of payment
  • Singapore

17. Areas of Law

Area NameRelevance Score
Construction Law95
Building and Construction Contracts90
Adjudication Determination85
Fraud and Deceit70
Contract Law60

16. Subjects

  • Construction Dispute
  • Adjudication
  • Fraud
  • Contract Law