Diamond Glass v Zhong Kai: Liquidated Damages, Variations & Building Law

The Appellate Division of the High Court of Singapore issued a supplementary judgment for cross-appeals between Diamond Glass Enterprise Pte Ltd (DG) and Zhong Kai Construction Co Pte Ltd (ZK) regarding a subcontract for aluminium cladding works. ZK claimed liquidated damages and replacement costs, while DG counterclaimed for payments under variation orders. The court allowed DG's appeal in part and ZK's appeal in part, addressing issues raised after the initial appeal judgment and determining the costs of the appeals. The court made supplementary orders regarding payments and solicitor's undertaking.

1. Case Overview

1.1 Court

Appellate Division of the High Court

1.2 Outcome

Appeals allowed in part; supplementary orders made regarding costs and payments.

1.3 Case Type

Civil

1.4 Judgment Type

Supplementary Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Supplementary judgment for cross-appeals concerning liquidated damages, variation orders, and costs in a construction subcontract dispute. Appeals allowed in part.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Diamond Glass Enterprise Pte LtdAppellant, Plaintiff in counterclaimCorporationAppeal allowed in partPartial
Zhong Kai Construction Co Pte LtdRespondent, Plaintiff, Defendant in counterclaimCorporationAppeal allowed in partPartial

3. Judges

Judge NameTitleDelivered Judgment
Woo Bih LiJudge of the Appellate DivisionNo
Hoo Sheau PengJudge of the High CourtNo
Quentin LohSenior JudgeYes

4. Counsels

Counsel NameOrganization
Chan Kah Keen MelvinTSMP Law Corporation
Yong Wei Jie TimothyTSMP Law Corporation
Kris Chew Yee FongZenith Law Corporation
Isabel Su HonglingZenith Law Corporation

4. Facts

  1. Zhong Kai Construction Co Pte Ltd engaged Diamond Glass Enterprise Pte Ltd as a subcontractor.
  2. The subcontract involved the supply of materials and aluminium cladding works for a project at Changi Airport.
  3. Zhong Kai claimed liquidated damages from Diamond Glass for delays.
  4. Diamond Glass counterclaimed for payments due under four variation orders.
  5. The Trial Judge allowed Zhong Kai's claims for liquidated damages and replacement works in part.
  6. The Trial Judge allowed Diamond Glass's counterclaim for payment due under one variation order.
  7. Cross-appeals were filed against the Trial Judge's decision.
  8. The court addressed issues raised after the initial appeal judgment regarding remaining sums and calculation errors.

5. Formal Citations

  1. Diamond Glass Enterprise Pte Ltd v Zhong Kai Construction Co Pte Ltd and another appeal, Civil Appeal Nos 125 and 129 of 2021, [2023] SGHC(A) 20

6. Timeline

DateEvent
Letter of Award issued to Diamond Glass Enterprise Pte Ltd for subcontract works.
Diamond Glass Enterprise Pte Ltd abandoned the worksite.
Zhong Kai Construction Co Pte Ltd commenced HC/S 917/2019.
Diamond Glass Enterprise Pte Ltd commenced Adjudication Application No 339 of 2019.
Adjudication Determination No 339 of 2019 issued.
Zhong Kai Construction Co Pte Ltd commenced Suit No 1282 of 2019.
Diamond Glass Enterprise Pte Ltd served a statutory demand on Zhong Kai Construction Co Pte Ltd.
Zhong Kai Construction Co Pte Ltd filed HC/OS 223/2020 to set aside the statutory demand.
HC/S 917/2019 and HC/S 1282/2019 were consolidated.
Stay of HC/CWU 95/2020 granted until determination of consolidated suit.
Court of Appeal granted a stay of HC/CWU 95/2020, conditional on payment into court.
Zhong Kai Construction Co Pte Ltd paid $211,044 into court.
Diamond Glass Enterprise Pte Ltd's closing submissions at trial.
Trial Judge determined S 1282.
Diamond Glass Enterprise Pte Ltd filed HC/SUM 5722/2021 to stay execution proceedings.
Diamond Glass Enterprise Pte Ltd paid $541,000 into court.
Appeals first heard.
Appeal Judgment delivered.
TSMP Law Corporation sent a letter to court querying aspects of the Appeal Judgment.
Zenith Law Corporation sent a letter to court responding to TSMP's letter.
Zenith Law responded to the court’s proposal on the correction of the calculation error.
Court directed TSMP to respond to queries.
TSMP responded to the court’s queries.
Zenith Law requested ancillary costs orders.
Supplementary judgment reserved.

7. Legal Issues

  1. Liquidated Damages
    • Outcome: The court addressed the issue of liquidated damages claimed by Zhong Kai Construction Co Pte Ltd against Diamond Glass Enterprise Pte Ltd.
    • Category: Substantive
  2. Scope of Works
    • Outcome: The court addressed the issue of payments due under variation orders.
    • Category: Substantive
    • Sub-Issues:
      • Variations
  3. Costs
    • Outcome: The court determined the costs of the appeals and made ancillary costs orders.
    • Category: Procedural
  4. Measure of Damages
    • Outcome: The court considered the proper measure of damages for incomplete works, referencing the principle in Mertens v Home Freeholds Co.
    • Category: Substantive
    • Related Cases:
      • [1921] 2 KB 526
  5. Pleadings
    • Outcome: The court emphasized the importance of specific pleadings and particulars in complex construction disputes.
    • Category: Procedural

8. Remedies Sought

  1. Monetary Damages
  2. Reversal of adjudicated amount

9. Cause of Actions

  • Breach of Contract
  • Claims for liquidated damages
  • Claims for payments due under variation orders

10. Practice Areas

  • Construction Law
  • Commercial Litigation
  • Appellate Practice

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Zhong Kai Construction Co Pte Ltd v Diamond Glass Enterprise Pte LtdHigh CourtYes[2021] SGHC 277SingaporeRefers to the Trial Judgment which is the subject of the appeals.
Diamond Glass Enterprise Pte Ltd v Zhong Kai Construction Co Pte Ltd and another appealHigh CourtYes[2022] SGHC(A) 44SingaporeRefers to the Appeal Judgment which this supplementary judgment clarifies.
Mertens v Home Freeholds CoKing's Bench DivisionYes[1921] 2 KB 526England and WalesCited for the principle of measuring damages as the cost of completing the building less the contract price.
Diamond Glass Enterprise Pte Ltd v Zhong Kai Construction Co Pte LtdCourt of AppealYes[2021] 2 SLR 510SingaporeCited for granting a stay of CWU 95, conditional on payment into court.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed)Singapore
Companies Act (Cap 50, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Subcontract
  • Liquidated damages
  • Variation orders
  • Replacement works
  • Rectification works
  • Retention sum
  • Adjudication
  • Statutory demand
  • Security for costs
  • Pleadings
  • Damages

15.2 Keywords

  • construction law
  • liquidated damages
  • variation orders
  • building law
  • Singapore
  • appeal
  • subcontract

17. Areas of Law

Area NameRelevance Score
Construction Law95
Liquidated Damages85
Damages80
Scope of Works75
Variations70
Construction70
Costs60
Contract Law50
Arbitration30

16. Subjects

  • Construction Dispute
  • Contract Law
  • Civil Procedure
  • Appeals