Builders Hub v JP Nelson: SOPA, Termination Clauses & Payment Claims
In Builders Hub Pte Ltd v JP Nelson Equipment Pte Ltd, the High Court of Singapore addressed an application to set aside an adjudication determination regarding a payment claim under the Building and Construction Industry Security of Payment Act (SOPA). The court, presided over by Judicial Commissioner Teh Hwee Hwee, considered whether the termination of a construction contract before the adjudication application affected the claimant's entitlement to payment. The court set aside the Adjudication Determination and remitted it to the learned Adjudicator for his determination on whether clause 30.3 of the REDAS Conditions, which suspends further payments to BH, has any application in this case.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Adjudication Determination set aside and remitted to the Adjudicator.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Builders Hub v JP Nelson addresses the validity of payment claims under SOPA post-contract termination, focusing on termination clauses.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Builders Hub Pte Ltd | Claimant | Corporation | Adjudication Determination set aside and remitted | Remanded | Lee Peng Khoon Edwin, Amanda Koh Jia Yi |
| JP Nelson Equipment Pte Ltd | Defendant | Corporation | Adjudication Determination set aside and remitted | Other | Chuah Chee Kian Christopher, Tan Jia Wei Justin, Huang Zixian |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Teh Hwee Hwee | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Lee Peng Khoon Edwin | Eldan Law LLP |
| Amanda Koh Jia Yi | Eldan Law LLP |
| Chuah Chee Kian Christopher | WongPartnership LLP |
| Tan Jia Wei Justin | WongPartnership LLP |
| Huang Zixian | WongPartnership LLP |
4. Facts
- Builders Hub was awarded a contract by JP Nelson for the construction of a building.
- The contract incorporated the REDAS Design and Build Conditions of Contract.
- A notice was served on Builders Hub regarding liquidated damages and contract completion.
- Builders Hub served Payment Claim 40 on JP Nelson for $2,471,258.29.
- Builders Hub alleged repudiatory breaches of contract by JP Nelson.
- JP Nelson accused Builders Hub of committing acts of repudiation.
- The Adjudicator dismissed the adjudication application due to lack of jurisdiction.
5. Formal Citations
- Builders Hub Pte Ltd v JP Nelson Equipment Pte Ltd, Originating Application No 738 of 2022, [2023] SGHC 120
6. Timeline
| Date | Event |
|---|---|
| Contract awarded to Builders Hub Pte Ltd by JP Nelson Equipment Pte Ltd. | |
| Infield Projects Pte Ltd served notice under Clause 30.2.1 of the REDAS Conditions. | |
| Builders Hub Pte Ltd served Payment Claim 40 on JP Nelson Equipment Pte Ltd. | |
| Builders Hub Pte Ltd sent a letter to JP Nelson Equipment Pte Ltd alleging repudiatory breaches. | |
| JP Nelson Equipment Pte Ltd sent a letter to Builders Hub Pte Ltd rebutting allegations. | |
| Builders Hub Pte Ltd accepted alleged repudiatory breach of contract by JP Nelson Equipment Pte Ltd. | |
| JP Nelson Equipment Pte Ltd purported to terminate Builders Hub Pte Ltd's employment under cl 30.2.2 of the REDAS Conditions. | |
| JP Nelson Equipment Pte Ltd served Payment Response 40. | |
| Builders Hub Pte Ltd made an adjudication application in respect of PC 40. | |
| JP Nelson Equipment Pte Ltd lodged its adjudication response for SOP/AA 164 of 2022. | |
| Adjudication conference held. | |
| Adjudicator released written adjudication determination dismissing SOP/AA 164 of 2022. | |
| Builders Hub filed originating application to set aside the Adjudication Determination. | |
| Hearing date. | |
| Judgment reserved. |
7. Legal Issues
- Jurisdictional Objection
- Outcome: The court held that the Adjudicator's determination was incorrect and remitted the case for further consideration.
- Category: Jurisdictional
- Sub-Issues:
- Termination of contract
- Functus officio of payment certifier
- Termination of Contract
- Outcome: The court found that the basis of termination was material to the case.
- Category: Substantive
- Sub-Issues:
- Repudiation of contract
- Termination under terms of contract
- Entitlement to Progress Payments
- Outcome: The court held that the valid service of a payment claim prior to termination did not automatically give an unqualified entitlement to adjudication after termination.
- Category: Substantive
- Breach of Natural Justice
- Outcome: The court found that the Adjudicator did not breach the rules of natural justice.
- Category: Procedural
8. Remedies Sought
- Setting aside of Adjudication Determination
- Remitting SOP/AA 164 of 2022 to the Adjudicator
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Construction Law
- Commercial Litigation
- Adjudication
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 | Cited for the principle that the SOPA is intended to expedite payment for contractors. |
| Shimizu Corp v Stargood Construction Pte Ltd | Court of Appeal | Yes | [2020] 1 SLR 1338 | Singapore | Cited for the principle that the terms of the contract determine the entitlement to serve payment claims after termination. |
| Orion-One Residential Pte Ltd v Dong Cheng Construction Pte Ltd and another appeal | Court of Appeal | Yes | [2021] 1 SLR 791 | Singapore | Cited for the principle that the starting point of analysis is always the terms of the contract. |
| CEQ v CER | High Court | Yes | [2020] SGHC 70 | Singapore | Cited for observations about the differences between the REDAS Conditions and the SIA Conditions. |
| Choi Peng Kum and another v Tan Poh Eng Construction Pte Ltd | High Court | Yes | [2014] 1 SLR 1210 | Singapore | Cited for the principle that subsequent termination does not negate a contractor's right to apply for adjudication based on a validly served payment claim. |
| Alliance Concrete Singapore Pte Ltd v Comfort Resources Pte Ltd | Court of Appeal | Yes | [2009] 4 SLR(R) 602 | Singapore | Cited for the principle that the actual termination of a contract is always legally dangerous. |
| RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd and another appeal | Court of Appeal | Yes | [2007] 4 SLR(R) 413 | Singapore | Cited for the four situations which entitle the innocent party to elect to treat the contract as discharged as a result of the other party’s breach. |
| Man Financial (S) Pte Ltd v Wong Bark Chuan David | Court of Appeal | Yes | [2008] 1 SLR(R) 663 | Singapore | Cited for summarising the four situations which entitle the innocent party to elect to treat the contract as discharged as a result of the other party’s breach. |
| Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd | English Court of Appeal | Yes | [1962] 2 QB 26 | England and Wales | Cited as the leading English Court of Appeal decision for the Hongkong Fir approach. |
| LW Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd | High Court | Yes | [2011] 4 SLR 477 | Singapore | Cited for the principle that the termination of a contract does not affect rights which have accrued before that termination. |
| 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 does apply even after a contract is terminated. |
| Glaziers Engineering Pte Ltd v WCS Engineering Construction Pte Ltd | Court of Appeal | Yes | [2018] 2 SLR 1311 | Singapore | Cited for the law on the breach of the fair hearing rule. |
| TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd | High Court | Yes | [2013] 4 SLR 972 | Singapore | Cited for a situation where the outcome of a dispute may be surprising to one or more of the parties, but which does not breach the fair hearing rule. |
| Audi Construction Pte Ltd v Kian Hiap Construction Pte Ltd | Court of Appeal | Yes | [2018] 1 SLR 317 | Singapore | Cited for the principle that if a respondent wants to raise a jurisdictional objection before the adjudicator, he must include that objection in the payment response. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Building and Construction Industry Security of Payment Act 2004 | Singapore |
| Building and Construction Industry Security of Payment Act 2004, s 4(2)(c) | Singapore |
| Building and Construction Industry Security of Payment Act 2004, s 5 | Singapore |
| Building and Construction Industry Security of Payment Act 2004, s 11(1) | Singapore |
| Building and Construction Industry Security of Payment Act 2004, s 12(2) | Singapore |
| Building and Construction Industry Security of Payment Act 2004, s 12(3) | Singapore |
| Building and Construction Industry Security of Payment Act 2004, s 13(1) | Singapore |
| Building and Construction Industry Security of Payment Act 2004, s 15(3) | Singapore |
| Building and Construction Industry Security of Payment Act 2004, s 27(6)(g) | Singapore |
| Building and Construction Industry Security of Payment Act 2004, s 27(8)(a) | Singapore |
| Building and Construction Industry Security of Payment Act 2004, s 27(8)(b) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Building and Construction Industry Security of Payment Act
- SOPA
- REDAS Conditions
- Payment Claim
- Payment Response
- Adjudication
- Termination
- Repudiation
- Jurisdictional Objection
- Functus Officio
- Progress Payment
- Termination Costs
15.2 Keywords
- SOPA
- Construction
- Payment Claim
- Adjudication
- Termination
- Singapore
16. Subjects
- Construction Dispute
- Adjudication
- Contract Law
17. Areas of Law
- Building and Construction Law
- Jurisdictional objection
- Standard form contracts
- Termination
- Repudiation of contract
- Building and Construction Industry Security of Payment Act