Min Hawk Pte Ltd v SCB Building Construction Pte Ltd: Interpretation of Payment Terms in Sub-Contract
In a suit before the High Court of Singapore, Min Hawk Pte Ltd (Plaintiff) sued SCB Building Construction Pte Ltd (Defendant) regarding the interpretation of payment terms under a sub-contract agreement. The dispute concerned the second tranche payment of $286,641.56, which the Plaintiff claimed was due by 31 January 2018. The Defendant argued that the payment was conditional upon the full resolution of outstanding issues with Big Box Pte Ltd. The court held that the Plaintiff breached its obligation to review the payment terms and that the second tranche payment was due on 28 May 2018. Judgment was entered for the Plaintiff.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Judgment for Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Dispute over payment terms between contractor and sub-contractor. The court ruled the second tranche payment was due on 28 May 2018.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Min Hawk Pte Ltd | Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| SCB Building Construction Pte Ltd | Defendant | Corporation | Payment ordered | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chan Seng Onn | Judge | Yes |
4. Counsels
4. Facts
- Plaintiff was engaged by the defendant to design, supply and install aluminium and glazing works.
- Parties entered into an agreement concerning payment of an outstanding amount of $486,641.56.
- Payment was to be made in two tranches: $200,000 by 30 September 2017 and $286,641.56 by 31 January 2018.
- Second tranche payment was conditional upon the defendant's full resolution of all outstanding issues with Big Box.
- Defendant requested an extension of the payment date to 30 June 2018, which the plaintiff rejected.
- Defendant had not fully resolved its outstanding issues with Big Box by 31 January 2018.
- Plaintiff issued a letter of demand on 21 May 2018, requiring payment by 28 May 2018.
5. Formal Citations
- Min Hawk Pte Ltd v SCB Building Construction Pte Ltd, Suit No 790 of 2018, [2020] SGHC 13
6. Timeline
| Date | Event |
|---|---|
| Agreement reached between the defendant and Big Box for the resolution of all payment issues relating to the Project. | |
| OCBC issued a letter of demand to Big Box. | |
| Defendant took out a court application under High Court Originating Summons No 947 of 2017 to enforce the terms of the agreement with Big Box. | |
| Parties entered into the Agreement concerning payment of an outstanding amount of $486,641.56 owed by the defendant to the plaintiff. | |
| Court granted the application in terms pursuant to High Court Order of Court 720 of 2017 and Big Box was ordered to pay the defendant the sum of $4,707,688.45. | |
| Defendant enforced the order by way of a winding up application in High Court Companies Winding Up No 72 of 2018. | |
| Plaintiff’s solicitor sent a letter of demand to the defendant for the payment of the second tranche payment amount. | |
| Deadline for payment of second tranche payment as per letter of demand. | |
| Judgment reserved. |
7. Legal Issues
- Interpretation of Payment Terms
- Outcome: The court held that the second tranche payment was due on 28 May 2018.
- Category: Substantive
- Sub-Issues:
- Condition precedent for payment
- Obligation to review payment terms
- Breach of Contract
- Outcome: The court found that the plaintiff breached its obligation to review the terms of the agreement in good faith.
- Category: Substantive
- Sub-Issues:
- Failure to review contract terms in good faith
8. Remedies Sought
- Monetary Damages
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 |
|---|---|---|---|---|---|
| Max Master Holdings Ltd v Taufik Surya Dharma | High Court | Yes | [2016] SGHC 147 | Singapore | Cited for the principle that where a contract does not specify the time for performance, an obligation to perform within a reasonable time is implied by law. |
| Naughty G Pte Ltd v Fortune Marketing Pte Ltd | Singapore Law Reports | Yes | [2018] 5 SLR 1208 | Singapore | Cited for the principle that where a contract does not specify the time for performance, an obligation to perform within a reasonable time is implied by law. |
| Fongson Engineering (S) Pte Ltd v Kensteel Engineering Pte Ltd | High Court | Yes | [2011] SGHC 82 | Singapore | Cited for the principle that in the absence of an extension of time clause in the Agreement, the time to complete the contractual obligation will be set at large and the defendant has to pay the plaintiff within a reasonable time, which is a question of fact |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Pay when paid provisions
- Two-tranche payment agreement
- Full resolution of outstanding issues
- Review of payment terms
- Condition precedent
15.2 Keywords
- construction law
- sub-contract
- payment terms
- breach of contract
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Construction Law | 75 |
| Sub-contracts | 70 |
| Contract Law | 65 |
| Pay when paid provisions | 60 |
| Company Law | 30 |
| Winding Up | 25 |
16. Subjects
- Construction Dispute
- Contract Law