LJH Construction v. Chan Bee Cheng: Setting Aside Adjudication for Invalid Service, Fraud, and Natural Justice Breach
In LJH Construction & Engineering Co Pte Ltd v Gracie Chan Bee Cheng, the High Court of Singapore addressed an application to set aside an adjudication determination. The court, presided over by Ang Cheng Hock J, set aside the adjudication determination in its entirety, citing invalid service of the payment claim, fraud, and breaches of natural justice. The case involved a construction project dispute between LJH Construction, the contractor, and Gracie Chan Bee Cheng, the property owner. The court also discussed the relationship between the Building and Construction Industry Security of Payment Act 2004 and the Building Control Act 1989.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Adjudication Determination set aside in its entirety.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Adjudication determination set aside due to invalid service of payment claim, fraud, and breaches of natural justice. Relationship between SOPA and BCA discussed.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| LJH Construction & Engineering Co Pte Ltd | Plaintiff | Corporation | Lost | Lost | |
| Gracie Chan Bee Cheng | Defendant | Individual | Won | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Ang Cheng Hock | Judge | Yes |
4. Counsels
4. Facts
- LJH was engaged as the main contractor for a construction project in 2015.
- Mdm Wee made payments directly to LJH's subcontractor, Dong Cheng, in 2016.
- Mdm Wee engaged other contractors, including Yong Chow, to complete the project.
- LJH sent Payment Claim No 21 to Lua Architects with Mdm Wee copied in 2021.
- Mdm Wee failed to issue a payment response within 21 days.
- LJH lodged an adjudication application against Mdm Wee.
- The Adjudicator awarded $694,696.76 (inclusive of GST) to LJH.
5. Formal Citations
- LJH Construction & Engineering Co Pte Ltd v Chan Bee Cheng Gracie, Originating Summons No 784 of 2021 (Summons No 4487 of 2021), [2022] SGHC 230
6. Timeline
| Date | Event |
|---|---|
| Lua Architects accepted LJH's offer to carry out the project on Mdm Wee's behalf. | |
| Work commenced at the site. | |
| LJH confirmed Mdm Wee to make payments directly to Dong Cheng. | |
| Mdm Wee engaged Yong Chow Construction Pte Ltd. | |
| Temporary Occupation Permit issued. | |
| LJH sent Payment Claim No 21 to Lua Architects with Mdm Wee copied. | |
| LJH sent a Notice of Intention to Apply for Adjudication to Mdm Wee. | |
| LJH lodged an adjudication application against Mdm Wee. | |
| Singapore Mediation Centre sent the Adjudication Application to Mdm Wee. | |
| Mdm Wee was informed about the adjudication proceedings. | |
| Adjudication Determination issued in favor of LJH. | |
| LJH filed HC/OS 784/2021 seeking leave to enforce the Adjudication Determination. | |
| Mdm Wee filed summons applying to set aside the Adjudication Determination. | |
| Mdm Wee commenced arbitration proceedings. | |
| Mdm Wee filed HC/SUM 881/2022 for a stay of enforcement. | |
| Judgment reserved. |
7. Legal Issues
- Invalid Service of Payment Claim
- Outcome: The court held that the payment claim was not validly served.
- Category: Procedural
- Related Cases:
- [2013] 1 SLR 401
- [2015] 5 SLR 689
- Fraud
- Outcome: The court found that the adjudication determination was tainted by fraud.
- Category: Substantive
- Related Cases:
- [2020] 2 SLR 1125
- (1989) 14 App Cas 337
- [2016] 3 SLR 51
- Patent Errors
- Outcome: The court found that the adjudicator failed to recognize patent errors.
- Category: Substantive
- Related Cases:
- [2018] 1 SLR 979
- Breach of Natural Justice
- Outcome: The court found that the adjudication determination should be set aside for breach of the rules of natural justice.
- Category: Procedural
- Related Cases:
- [2018] 2 SLR 1311
- [2015] 1 SLR 797
- [2010] 1 SLR 733
- [2013] 1 SLR 125
- [2007] 3 SLR(R) 86
- Unlicensed Builder
- Outcome: The court did not make a conclusive finding on this issue.
- Category: Regulatory
- Relationship between Building Control Act and Security of Payment Act
- Outcome: The court discussed the relationship between the Building Control Act and the Security of Payment Act.
- Category: Substantive
8. Remedies Sought
- Setting aside 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 |
|---|---|---|---|---|---|
| Lee Wee Lick Terence (alias Li Weili Terence) v Chua Say Eng (formerly trading as Weng Fatt Construction Engineering) and another appeal | Court of Appeal | Yes | [2013] 1 SLR 401 | Singapore | Cited for the principle that the appointment of an adjudicator is invalid if there is no valid service of a payment claim. |
| Progressive Builders Pte Ltd v Long Rise Pte Ltd | High Court | Yes | [2015] 5 SLR 689 | Singapore | Cited for the proposition that valid service of a payment claim requires it to be brought to the attention of the addressee. |
| Façade Solution Pte Ltd v Mero Asia Pacific Pte Ltd | Court of Appeal | Yes | [2020] 2 SLR 1125 | Singapore | Cited for the two-step test in determining when an adjudication determination should be set aside on the ground of fraud. |
| Derry v Peek | N/A | Yes | (1989) 14 App Cas 337 | N/A | Cited for the principle that a statement made recklessly without care as to its truth is made fraudulently. |
| Ser Kim Koi v GTMS Construction Pte Ltd | N/A | Yes | [2016] 3 SLR 51 | Singapore | Cited for the principle that a statement made recklessly without care as to its truth is made fraudulently. |
| Comfort Management Pte Ltd v OGSP Engineering Pte Ltd | Court of Appeal | Yes | [2018] 1 SLR 979 | Singapore | Cited for the adjudicator's general and independent duty to adjudicate the payment claim dispute and the definition of patent errors. |
| Hansen Yuncken Pty Ltd v Ian James Ericson Trading as Flea’s Concreting | Queensland Supreme Court | No | [2011] QSC 327 | Australia | Cited as an example of de minimis fraud where the claimant had fraudulently inflated his actual labour costs incurred by adding a profit margin and overhead of 12% to his labour rates. |
| Rong Shun Engineering & Construction Pte Ltd v CP Ong Construction Pte Ltd | N/A | Yes | [2017] 4 SLR 359 | Singapore | Cited for the test for determining the severability of an adjudication determination. |
| Citiwall Safety Glass Pte Ltd v Mansource Interior Pte Ltd | N/A | Yes | [2015] 1 SLR 797 | Singapore | Cited as an example of setting aside adjudication determinations where the adjudicator has acted in breach of his duty to comply with the requirements of natural justice. |
| SEF Construction Pte Ltd v Skoy Connected Pte Ltd | N/A | Yes | [2010] 1 SLR 733 | Singapore | Cited as an example of setting aside adjudication determinations where the adjudicator has acted in breach of his duty to comply with the requirements of natural justice. |
| Bintai Kindenko Pte Ltd v Samsung C&T Corp | N/A | Yes | [2018] 2 SLR 1311 | Singapore | Cited for the two facets to the principles of natural justice: the fair hearing rule and the no bias rule. |
| L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another appeal | N/A | Yes | [2013] 1 SLR 125 | Singapore | Cited for the principle that the prejudice to be demonstrated is conceptually distinct from the fact of the breach. |
| Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd | N/A | Yes | [2007] 3 SLR(R) 86 | Singapore | Cited for the principle that the prejudice to be demonstrated is conceptually distinct from the fact of the breach and the best rule of thumb to adopt is to treat the parties equally and allow them reasonable opportunities to present their cases as well as to respond. |
| Manjit Singh s/o Kirpal Singh and another v Attorney-General | N/A | Yes | [2013] 2 SLR 844 | Singapore | Cited for the principle that an essential feature of natural justice is fairness, which encompasses the right to be heard. |
| Metropole Pte Ltd v Designshop Pte Ltd | N/A | Yes | [2017] 4 SLR 277 | Singapore | Cited for the principle that an adjudicator has a statutory obligation to act impartially and the test for apparent bias. |
| JRP & Associates Pte Ltd v Kindly Construction & Services Pte Ltd | N/A | Yes | [2015] 3 SLR 575 | Singapore | Cited for the principle that where an adjudicator fails to act impartially, an adjudication determination will be set aside by the court. |
| CMC Ravenna Singapore Branch v CGW Construction & Engineering (S) Pte Ltd | N/A | Yes | [2018] 3 SLR 503 | Singapore | Cited for the principle that the court should not review the merits of an adjudicator’s decision. |
| Tan Cheng Bock v Attorney-General | N/A | Yes | [2017] 2 SLR 850 | Singapore | Cited for the purposive approach to statutory interpretation. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Building Control Act 1989 | Singapore |
| Building Control Act 1989 | Singapore |
| Building and Construction Industry Security of Payment Act 2004 | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 10(1)(a) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 11(1) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 12(2) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 12(6) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 13(1) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 14(1) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 15(1) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 15(3)(a) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 16(5)(c) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 16(6)(e) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 17(1)(a) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 17(2) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 17(4) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 27(1) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 27(6)(a) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 27(6)(e) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 27(6)(g) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 27(6)(h) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 27(8)(a) | Singapore |
| Building and Construction Industry Security of Payment Act 2004 Section 37 | Singapore |
| Building Control Act 1989 Section 29B(2)(a) | Singapore |
| Building Control Act 1989 Section 29B(4) | Singapore |
| Interpretation Act 1965 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Adjudication Determination
- Payment Claim
- Building and Construction Industry Security of Payment Act
- Building Control Act
- Natural Justice
- Fraud
- Patent Error
- Service of Documents
- Construction Contract
- Variation Works
- Retention Sum
15.2 Keywords
- adjudication
- construction
- payment claim
- fraud
- natural justice
- building control act
- security of payment act
17. Areas of Law
16. Subjects
- Building and Construction Law
- Dispute Resolution
- Adjudication
- Civil Procedure
- Construction Contracts