JP Nelson v Builders Hub: Setting Aside SOPA Adjudication for Fraud and Premature Application

In an originating application before the General Division of the High Court of Singapore, JP Nelson Equipment Pte Ltd sought to set aside an adjudication determination and adjudication review determination under the Building and Construction Industry Security of Payment Act (SOPA) against Builders Hub Pte Ltd. JP Nelson alleged non-compliance with SOPA and fraud. The court, presided over by Lee Seiu Kin J, allowed the application in part based on fraud, reducing the review determination award by $155,160. The court found that Builders Hub had fraudulently submitted documents to induce a downpayment from JP Nelson. The court rejected JP Nelson's argument that the adjudication application was premature.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Application allowed in part

1.3 Case Type

Building and Construction Law

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court partially allows JP Nelson's application to set aside adjudication determination due to Builders Hub's fraud, reducing award by $155,160.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Builders Hub Pte LtdRespondentCorporationReview Adjudicated Amount reducedLost
JP Nelson Equipment Pte LtdApplicantCorporationApplication allowed in partPartial

3. Judges

Judge NameTitleDelivered Judgment
Lee Seiu KinJudge of the High CourtYes

4. Counsels

Counsel NameOrganization
Lee Peng Khoon EdwinEldan Law LLP
Amanda Koh Jia YiEldan Law LLP
Smrithi SadasivamEldan Law LLP
Yap Wei Xuen MendelEldan Law LLP
Chuah Chee Kian ChristopherWongPartnership LLP
Koh Huini ValerieWongPartnership LLP
Chiam YunxinWongPartnership LLP
Tan Jia Wei JustinWongPartnership LLP
Huang ZixianWongPartnership LLP
Lim Qin YongWongPartnership LLP

4. Facts

  1. JP Nelson awarded Builders Hub a contract for a building project on 8 June 2018.
  2. The contract price was $9,942,280 and incorporated the Real Estate Developers’ Association of Singapore Design and Build Conditions of Contract.
  3. On 20 May 2022, Builders Hub served Payment Claim No 37 on JP Nelson for $2,287,156.69.
  4. On 10 June 2022, JP Nelson served its payment response for $329,284.98.
  5. On 24 June 2022, Builders Hub lodged adjudication application SOP/AA 099 of 2022.
  6. On 4 August 2022, the adjudicator determined that JP Nelson was liable to pay Builders Hub $847,381.92.
  7. On 11 August 2022, JP Nelson filed an application for the review of the Adjudication Determination in SOP/ARA 006 of 2022.
  8. On 26 August 2022, JP Nelson terminated Builders Hub’s employment under the Contract.
  9. On 15 November 2022, JP Nelson discovered the alleged fraud committed by Builders Hub involving falsified documents from Cappitech Engineering Pte Ltd.
  10. Builders Hub submitted five allegedly false documents from Cappitech to JP Nelson as proof of payment for air-conditioning equipment.
  11. Cappitech confirmed that it had never issued the four documents to Builders Hub, nor had it received any cheque.
  12. JP Nelson made a downpayment of $155,160 to Builders Hub based on the fraudulent documents.

5. Formal Citations

  1. JP Nelson Equipment Pte Ltd v Builders Hub Pte Ltd, Originating Application No 616 of 2022, [2023] SGHC 186

6. Timeline

DateEvent
Contract awarded to Builders Hub for the Project
Builders Hub served Payment Claim No 37 on JP Nelson
JP Nelson served its payment response on Builders Hub
Builders Hub lodged adjudication application SOP/AA 099 of 2022
JP Nelson paid $329,284.98 to Builders Hub
Adjudicator issued his determination
JP Nelson filed an application for the review of the Adjudication Determination in SOP/ARA 006 of 2022
JP Nelson terminated Builders Hub’s employment under the Contract
Builders Hub terminated the Contract
Review Adjudicator issued his determination
JP Nelson filed the present application in HC/OA 616/2022
Mr. Teong approached Cappitech to ascertain whether Cappitech was prepared to continue supplying air-conditioning systems for the Project
Hearing date
Hearing date
Judgment date

7. Legal Issues

  1. Fraud
    • Outcome: The court found that Builders Hub had fraudulently submitted documents to deceive JP Nelson, and reduced the review determination award by $155,160.
    • Category: Substantive
  2. Timeliness of Adjudication Application
    • Outcome: The court held that Builders Hub did not lodge the Adjudication Application prematurely.
    • Category: Procedural

8. Remedies Sought

  1. Setting aside the Adjudication Review Determination
  2. Setting aside the Adjudication Determination
  3. Repayment of $518,096.94
  4. Costs

9. Cause of Actions

  • Breach of Contract
  • Fraud

10. Practice Areas

  • Construction Law
  • Commercial Litigation
  • Arbitration

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Facade Solution Pte Ltd v Mero Asia Pacific Pte LtdCourt of AppealYes[2020] 2 SLR 1125SingaporeEstablished the two-step test to determine when an adjudication determination should be set aside on the ground of fraud.
Lee Wee Lick Terence (alias Li Weili Terence) v Chua Say Eng (formerly trading as Weng Fatt Construction Engineering) and another appealN/AYes[2013] 1 SLR 401SingaporeThe court should not review the merits of the adjudicator’s decision.
Newcon Builders Pte Ltd v Sino New Steel Pte LtdHigh CourtYes[2015] SGHC 226SingaporeSummarized the timelines for the adjudication process.
Citiwall Safety Glass Pte Ltd v Mansource Interior Pte LtdCourt of AppealYes[2015] 1 SLR 797SingaporeA court in a setting aside application is concerned with issues relating to the jurisdiction of the adjudicator, including non-compliance with the SOPA, and procedural propriety in the adjudication, including whether there was a breach of natural justice.
Lendlease Singapore Pte Ltd v M & S Management & Contracts Services Pte LtdHigh CourtYes[2019] SGHC 139SingaporeConsidered an application to set aside an adjudication determination on the grounds that the adjudication application had been lodged by the defendant out of time, in breach of s 13(3)(a) of the SOPA.
Emergent Engineering Pte Ltd v China Construction Realty Co Pte LtdHigh CourtYes[2022] SGHC 276SingaporeThe respondent had sought to set aside the adjudication determination on the basis that the applicant was not entitled to serve payment claim 25 because the respondent had terminated the sub-contract.
Lazarus Estates Ltd v BeasleyN/AYes[1956] 1 QB 702N/ANo court would allow or assist a person to retain any advantage obtained by fraud since fraud unravels everything.
Rong Shun Engineering & Construction Pte Ltd v CP Ong Construction Pte LtdHigh CourtYes[2017] 4 SLR 359SingaporeRequirements of textual and substantial severability.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Building and Construction Industry Security of Payment Act 2004Singapore
Building and Construction Industry Security of Payment Act 2004 s 27(6)Singapore
Building and Construction Industry Security of Payment Act 2004 s 27(6)(d)Singapore
Building and Construction Industry Security of Payment Act 2004 s 27(6)(h)Singapore
Building and Construction Industry Security of Payment Act 2004 s 10Singapore
Building and Construction Industry Security of Payment Act 2004 s 10(2)Singapore
Building and Construction Industry Security of Payment Act 2004 s 11(1)Singapore
Building and Construction Industry Security of Payment Act 2004 s 11(1)(a)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(5)Singapore
Building and Construction Industry Security of Payment Act 2004 s 12(6)Singapore
Building and Construction Industry Security of Payment Act 2004 s 13(3)(a)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Adjudication Determination
  • Adjudication Review Determination
  • Security of Payment Act
  • Payment Claim
  • Payment Response
  • REDAS Conditions
  • Fraud
  • Cappitech Documents
  • Downpayment
  • Jurisdictional Objection
  • Premature Adjudication Application

15.2 Keywords

  • Construction
  • SOPA
  • Adjudication
  • Fraud
  • Building and Construction Law

17. Areas of Law

Area NameRelevance Score
Fraud and Deceit90
Building and Construction Industry Security of Payment Act85
Construction Law75
Contract Law60
Breach of Contract40
Arbitration30
Estoppel30

16. Subjects

  • Construction Dispute
  • Arbitration
  • Contract Law
  • Fraud