LBE Engineering v Double S Construction: Wrongful Termination in Construction Dispute

LBE Engineering Pte Ltd, the defendant, appealed against the District Court's decision that Double S Construction Pte Ltd, the plaintiff, was entitled to stop work and hold LBE Engineering in breach of contract for non-payment. The dispute arose from a construction project for the Jalan Besar Town Council. The High Court allowed the appeal, finding that Double S Construction wrongfully terminated the contract and allowed LBE Engineering's counterclaim for damages.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

LBE Engineering appealed against the decision that Double S Construction was entitled to stop work. The court allowed the appeal, finding Double S Construction wrongfully terminated the contract.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
LBE Engineering Pte LtdAppellant, DefendantCorporationCounterclaim AllowedWon
Double S Construction Pte LtdRespondent, PlaintiffCorporationClaim DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Lee Seiu KinJudge of the High CourtYes

4. Counsels

Counsel NameOrganization
Oh Kim Heoh MimiEthos Law Corporation
Allagarsamy s/o PalaniyappanAllagarsamy & Co

4. Facts

  1. LBE Engineering engaged Double S Construction for construction work for the Jalan Besar Town Council.
  2. The Letter of Award outlined three sets of work for a lump sum of $243,811.
  3. Payment terms required Double S Construction to submit monthly progress claims.
  4. LBE Engineering certified and paid the first three claims.
  5. Disputes arose over the fourth and fifth progress payments.
  6. Double S Construction stopped work due to non-payment.
  7. LBE Engineering engaged another contractor to complete the works.

5. Formal Citations

  1. LBE Engineering Pte Ltd v Double S Construction Pte Ltd, DCA 31 of 2021, [2022] SGHC 92
  2. Jia Min Building Construction Pte Ltd v Ann Lee Pte Ltd, , [2004] SGHC 107
  3. Diamond Glass Enterprise Pte Ltd v Zhong Kai Construction Co Pte Ltd, , [2021] 2 SLR 510
  4. Republic Airconditioning (S) Pte Ltd v Shinsung Eng Co Ltd (Singapore Branch), , [2012] 2 SLR 601
  5. Chan Hong Seng Engrg & Const Pte Ltd v Vatten International Pte Ltd, , [2002] SGHC 124
  6. Far East Square Pte Ltd v Yau Lee Construction (Singapore) Pte Ltd, , [2019] 2 SLR 189
  7. Zhong Kai Construction Co Pte Ltd v Diamond Glass Enterprise Pte Ltd, , [2021] SGHC 277
  8. Double S Construction Pte Ltd v LBE Engineering Pte Ltd, , [2021] SGDC 242

6. Timeline

DateEvent
Building and Construction Industry Security of Payment Act 2004 enacted
Double S Construction submitted first claim for $32,445.00
LBE Engineering certified first claim
Double S Construction filed second claim for $34,592.20
LBE Engineering certified second claim
Double S Construction filed third claim for $20,589.84
Double S Construction filed fourth progress payment for $82,487.10
LBE Engineering certified third claim for a reduced sum of $15,604
Double S Construction filed fifth progress payment for $68,640.67
Double S Construction notified LBE Engineering of intention to stop work
Double S Construction stopped work
Double S Construction sent a final progress claim to LBE Engineering for $90,845.35
District judge allowed the plaintiff’s claim purely on liability
District Court Appeal No 31 of 2021
Appeal allowed as well as the defendant’s counterclaim
Grounds of Decision

7. Legal Issues

  1. Wrongful Termination
    • Outcome: The court held that the plaintiff wrongfully terminated the contract by stopping work.
    • Category: Substantive
    • Sub-Issues:
      • Repudiation of contract
      • Suspension of work
    • Related Cases:
      • [2004] SGHC 107
      • [2021] 2 SLR 510
  2. Non-payment of progress claims
    • Outcome: The court held that non-payment of progress claims did not justify the plaintiff's suspension of work.
    • Category: Substantive
    • Related Cases:
      • [2004] SGHC 107

8. Remedies Sought

  1. Outstanding Payment
  2. Damages for wrongful termination

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Construction Disputes
  • Commercial Litigation

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Jia Min Building Construction Pte Ltd v Ann Lee Pte LtdHigh CourtYes[2004] SGHC 107SingaporeCited for the proposition that a contractor/sub-contractor has no general right at common law to suspend work unless this is expressly agreed upon.
Lubenham Fidelities and Investments Co Ltd v South Pembrokeshire District CouncilN/AYes(1986) 33 BLR 46N/ACited to support the principle that the proper remedy for under-valuation is to request adjustment or take the dispute to arbitration.
Diamond Glass Enterprise Pte Ltd v Zhong Kai Construction Co Pte LtdCourt of AppealYes[2021] 2 SLR 510SingaporeCited to support the principle that not every instance of non-payment amounts to repudiation of contract.
Republic Airconditioning (S) Pte Ltd v Shinsung Eng Co Ltd (Singapore Branch)N/AYes[2012] 2 SLR 601SingaporeCited to show an example where the subcontractor had the right to suspend work for non-payment because the contract provided for such a right.
Chan Hong Seng Engrg & Const Pte Ltd v Vatten International Pte LtdHigh CourtYes[2002] SGHC 124SingaporeCited to support the proposition that a sub-contractor generally has no right to suspend work at common law for non-payment.
Far East Square Pte Ltd v Yau Lee Construction (Singapore) Pte LtdN/AYes[2019] 2 SLR 189SingaporeCited to explain the purpose of SOPA.
Zhong Kai Construction Co Pte Ltd v Diamond Glass Enterprise Pte LtdHigh CourtYes[2021] SGHC 277SingaporeCited to support the principle that there was no persistent course of delays or protracted delays in the payment of a substantial sum that could amount to repudiation of the contract.
Double S Construction Pte Ltd v LBE Engineering Pte LtdDistrict CourtYes[2021] SGDC 242SingaporeReference to the trial at first instance.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Building and Construction Industry Security of Payment Act 2004Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Progress claim
  • Letter of Award
  • Wrongful termination
  • Repudiation
  • Suspension of work
  • SOPA
  • Non-payment

15.2 Keywords

  • construction
  • wrongful termination
  • payment dispute
  • SOPA
  • Singapore

17. Areas of Law

Area NameRelevance Score
Construction Law75
Wrongful Termination of Contract70
Progress Payment Claims65
Breach of Contract60
Contract Law60
Repudiation of contract60
Building and Construction Industry Security of Payment Act 200455
Damages50
Measure of Damages50
Contractual terms40
Performance of Contract30

16. Subjects

  • Construction Law
  • Contract Law
  • Termination