CEQ v CER: Setting Aside Adjudication Determination under Building and Construction Industry Security of Payment Act
In CEQ v CER, the High Court of Singapore heard an application to set aside an adjudication determination made under the Building and Construction Industry Security of Payment Act. The plaintiff, CEQ, sought to set aside the determination in favor of the defendant, CER, concerning payment for works done. The court, presided over by Justice Lee Seiu Kin, dismissed the application, holding that the payment claim for works performed prior to termination was valid and that the adjudicator did not exceed his jurisdiction in considering bond proceeds. The primary legal issues were whether a payment claim for works performed prior to termination of employment amounted to a patent error and whether the adjudicator exceeded his jurisdiction in considering bond proceeds that were not explicitly stated in the payment claim.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Application dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Application to set aside adjudication determination. The court examined the validity of payment claims and the adjudicator's jurisdiction.
1.7 Decision Date
2. Parties and Outcomes
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lee Seiu Kin | Judge | Yes |
4. Counsels
4. Facts
- The plaintiff terminated the defendant's employment as the main contractor.
- The contract incorporated the REDAS Design and Build Conditions of Main Contract.
- The defendant served payment claims after the termination of its employment.
- The adjudicator considered monies received under a call on a performance bond.
- The plaintiff argued that the adjudicator exceeded his jurisdiction.
- The defendant's employment was terminated on 2 March 2017.
5. Formal Citations
- CEQvCER, Originating Summons No 1412 of 2019, [2020] SGHC 70
6. Timeline
| Date | Event |
|---|---|
| Defendant was the main contractor for the Project | |
| Plaintiff terminated the defendant’s employment | |
| Defendant began serving payment claims | |
| Hearing date | |
| Judgment date |
7. Legal Issues
- Validity of Payment Claim After Termination
- Outcome: The court held that payment claims made for work done prior to termination of employment are perfectly valid.
- Category: Substantive
- Sub-Issues:
- Patent error in payment claim
- Accrued statutory entitlement to payment
- Jurisdiction of Adjudicator
- Outcome: The court held that the adjudicator was within his jurisdiction to consider the bond monies.
- Category: Jurisdictional
- Sub-Issues:
- Consideration of bond proceeds
- Inclusion of items in payment claim
8. Remedies Sought
- Setting aside adjudication determination
9. Cause of Actions
- Setting aside adjudication determination
10. Practice Areas
- Construction Litigation
- Commercial Litigation
- Arbitration
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Far East Square Pte Ltd v Yau Lee Construction (Singapore) Pte Ltd | Court of Appeal | Yes | [2019] 2 SLR 189 | Singapore | Discusses the validity of payment claims once an architect under an SIA contract is rendered functus officio. |
| SH Design & Build Pte Ltd v BD Cranetech Pte Ltd | High Court | Yes | [2018] SGHC 133 | Singapore | Discusses the jurisdiction of the adjudicator to consider bond monies. |
| Citiwall Safety Glass Pte Ltd v Mansource Interior Pte Ltd | High Court | Yes | [2014] 1 SLR 797 | Singapore | Cited for the principle that courts will not review the merits of an adjudication determination. |
| Comfort Management Pte Ltd v OGSP Engineering Pte Ltd | High Court | Yes | [2018] 1 SLR 979 | Singapore | Cited for the grounds on which an applicant can succeed in setting aside an adjudication determination. |
| Hauslab Design & Build Pte Ltd v Vinod Kumar Ramgopal Didwania | High Court | Yes | [2017] 3 SLR 103 | Singapore | Cited regarding the court exercising its powers of judicial review over a tribunal established under the Act. |
| Tiong Seng Contractors (Pte) Ltd v Chuan Lim Construction Pte Ltd | High Court | Yes | [2007] 4 SLR(R) 364 | Singapore | Cited for the principle that the Act was designed to protect and facilitate cash flow in the building and construction industry. |
| Stargood Construction Pte Ltd v Shimizu Corp | High Court | Yes | [2019] SGHC 261 | Singapore | Cited for the principle that a contractor who has performed works under a construction contract can continue to claim for such works even after its employment under the contract has been terminated. |
| Choi Peng Kim and another v Tan Poh Eng Construction Pte Ltd | High Court | Yes | [2014] 1 SLR 1210 | Singapore | Cited for the observation that a contractor may have multiple concurrent projects and the liquidity injections from one project may very well go towards satisfying expenses for another. |
| Chin Ivan v HP Construction and Engineering | High Court | Yes | [2015] 3 SLR 124 | Singapore | Cited regarding the architect as the quasi-adjudicator of both the contractor’s right to receive payment for work done as well as the employer’s right to withhold payment on account of any cross-claim. |
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 |
15. Key Terms and Keywords
15.1 Key Terms
- Adjudication determination
- Payment claim
- Performance bond
- Functus officio
- Employer’s representative
- REDAS Form of Contract
- SIA Form of Contract
15.2 Keywords
- Adjudication
- Construction
- Payment Claim
- Security of Payment Act
- Singapore
17. Areas of Law
16. Subjects
- Building and Construction Industry Security of Payment Act
- Construction Dispute
- Adjudication