Wan Sern Metal Industries v Hua Tian Engineering: Stay of Adjudication Enforcement
In Wan Sern Metal Industries Pte Ltd v Hua Tian Engineering Pte Ltd, the High Court of Singapore dismissed Wan Sern's appeal against the Assistant Registrar's decision to dismiss their application for a stay of enforcement of an adjudication determination in favor of Hua Tian. The court, presided over by Justice Kwek Mean Luck, found no clear evidence of Hua Tian's insolvency, no likelihood of non-recovery of funds, and no legal basis for a stay based on Wan Sern's potential liquidation. The case concerned a dispute over payment for works done in a property development project, with Hua Tian alleging non-payment by Wan Sern. Wan Sern had commenced arbitration against Hua Tian with the Singapore International Arbitration Centre.
1. Case Overview
1.1 Court
General Division of the High Court of the Republic of Singapore1.2 Outcome
Appeal Dismissed
1.3 Case Type
Building and Construction Law
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The High Court dismissed Wan Sern's appeal for a stay of enforcement of an adjudication determination in favor of Hua Tian, finding no insolvency or risk of non-recovery.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Wan Sern Metal Industries Pte Ltd | Appellant | Corporation | Appeal Dismissed | Lost | |
| Hua Tian Engineering Pte Ltd | Respondent | Corporation | Appeal Dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Kwek Mean Luck | Judge of the High Court | Yes |
4. Counsels
4. Facts
- Wan Sern Metal Industries Pte Ltd (WS) was a sub-contractor.
- Hua Tian Engineering Pte Ltd (HT) was engaged by WS as its sub-contractor.
- HT alleged WS failed to pay for works done.
- HT lodged an Adjudication Application against WS pursuant to s 13 of SOPA.
- The Adjudicator issued an Adjudication Determination (AD) in favor of HT.
- WS commenced arbitration against HT with the Singapore International Arbitration Centre (SIAC).
- WS applied for a stay of the enforcement of the AD pending the disposal of the proceedings in the SIAC.
5. Formal Citations
- Wan Sern Metal Industries Pte Ltd v Hua Tian Engineering Pte Ltd, Originating Application No 312 of 2022 (Registrar’s Appeal No 353 of 2022), [2023] SGHC 46
6. Timeline
| Date | Event |
|---|---|
| Building and Construction Industry Security of Payment Act 2004 enacted | |
| Hua Tian Engineering lodged an Adjudication Application against Wan Sern Metal Industries. | |
| Adjudication Determination issued in favor of Hua Tian Engineering. | |
| Wan Sern Metal Industries commenced arbitration against Hua Tian Engineering with the Singapore International Arbitration Centre. | |
| Hua Tian Engineering filed an originating application seeking leave to enforce the Adjudication Determination. | |
| Assistant Registrar made an order to enforce the Adjudication Determination as an order of court. | |
| Hua Tian Engineering applied for an enforcement order to attach a debt due to Wan Sern Metal Industries from DBS Bank. | |
| Enforcement order issued. | |
| Wan Sern Metal Industries applied for a stay of the enforcement of the Adjudication Determination. | |
| Assistant Registrar dismissed the application for stay. | |
| Appellant’s Written Submissions for HC/RA 353/2022 dated | |
| Respondent’s Written Submissions for HC/RA 353/2022 dated | |
| Hearing date. | |
| Judgment issued. |
7. Legal Issues
- Stay of Enforcement of Adjudication Determination
- Outcome: The court dismissed the appeal, finding no grounds to grant a stay of enforcement.
- Category: Substantive
- Sub-Issues:
- Evidence of insolvency
- Likelihood of recovery of moneys
- Enforcement causing liquidation
- Insolvency
- Outcome: The court found no clear and objective evidence of the successful claimant’s actual present insolvency.
- Category: Substantive
- Sub-Issues:
- Cash flow test
- Balance sheet test
8. Remedies Sought
- Stay of enforcement of adjudication determination
9. Cause of Actions
- Failure to pay for works done
10. Practice Areas
- Construction Law
- Commercial Litigation
- Arbitration
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| W Y Steel Construction Pte Ltd v Osko Pte Ltd | High Court | Yes | [2013] 3 SLR 380 | Singapore | Established the test for stay of enforcement of adjudication determination based on claimant's insolvency or likelihood of non-recovery. |
| CEQ v CER | High Court | Yes | [2020] SGHC 192 | Singapore | Cited for the principle that a stay of enforcement may be justified where there is evidence of the successful claimant's actual present insolvency or the money paid would not be recovered. |
| Sun Electric Power Pte Ltd v RCMA Asia Pte Ltd | Court of Appeal | Yes | [2021] 2 SLR 478 | Singapore | Cited for the cash flow test for insolvency under s 254(2)(c) of the Companies Act. |
| Dongah Geological Engineering Co Ltd v Jungwoo EC Pte Ltd | High Court | Yes | [2021] SGHC 239 | Singapore | Cited as an example where evidence was produced pointing to possible dissipation of assets or potential liquidation of the company. |
| Audi Construction Pte Ltd v Kian Hiap Construction Pte Ltd | Court of Appeal | Yes | [2018] 1 SLR 317 | Singapore | Cited for the aim of SOPA to establish a fast and low cost adjudication system to resolve payment disputes. |
| Strategic Construction Pte Ltd v JH Projects Pte Ltd | High Court | Yes | [2018] 4 SLR 1192 | Singapore | Cited for the principle that businesses with a chance of recovery should not be pushed into a state that makes it difficult for them to recover in winding up applications. |
| Metalform Asia Pte Ltd v Holland Leedon Pte Ltd | High Court | Yes | [2007] 2 SLR(R) 268 | Singapore | Cited in Strategic Construction Pte Ltd v JH Projects Pte Ltd [2018] 4 SLR 1192 at [19] for the principle that businesses with a chance of recovery should not be pushed into a state that makes it difficult for them to recover. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Building and Construction Industry Security of Payment Act 2004 | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Adjudication Determination
- Stay of Enforcement
- Insolvency
- Cash Flow Test
- Building and Construction Industry Security of Payment Act
- Arbitration
- Liquidation
15.2 Keywords
- construction
- adjudication
- insolvency
- stay of enforcement
- SOPA
17. Areas of Law
16. Subjects
- Construction Dispute
- Adjudication
- Insolvency
- Civil Procedure