H P Construction v Chin Ivan: Stay of Proceedings for Alleged Fraud in Architect's Certificates
H P Construction & Engineering Pte Ltd (“H P Construction”) sued Chin Ivan in the High Court of Singapore for an outstanding sum certified by the architect under a building contract. Chin Ivan applied for a stay of proceedings under Section 6 of the Arbitration Act, alleging the architect's certificates were procured by fraud. The Assistant Registrar granted the stay, but H P Construction appealed. Edmund Leow JC partially allowed the appeal, granting a stay only for the disputed items, finding a bona fide dispute of fraud related to those items, but not for the remaining certified sums.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Appeal allowed in part.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal regarding stay of proceedings in a construction dispute. The court partially allowed the appeal, granting a stay for disputed items due to potential fraud.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| H P Construction & Engineering Pte Ltd | Plaintiff, Appellant | Corporation | Appeal allowed in part | Partial | |
| Chin Ivan | Defendant, Respondent | Individual | Partial Stay Granted | Partial |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Edmund Leow | Judicial Commissioner | Yes |
4. Counsels
4. Facts
- H P Construction was the main contractor for constructing two detached houses for Chin Ivan.
- The contract incorporated the Singapore Institute of Architects Articles and Conditions of Building Contract.
- The Architect issued two Architect’s Instructions approving variation works, including disputed items related to extended preliminaries.
- H P Construction raised Payment Claim No 32, including $614,375 related to the disputed items.
- The Architect certified the Quantity Surveyor’s interim valuation in Progress Certificate No 32.
- H P Construction raised its final payment claim, which also contained the disputed items.
- The Architect certified the Quantity Surveyor’s valuation in Final Certificate No 33.
- Chin Ivan refused to pay the outstanding certified sum, alleging defective works and a counterclaim.
- H P Construction referred the dispute for adjudication, but the adjudicator dismissed the claims.
- H P Construction brought Suit No 180 of 2014 against Chin Ivan claiming the outstanding certified sum.
- Chin Ivan applied for a stay of proceedings, alleging the certificates were procured by fraud.
- The Architect stated that H P Construction misrepresented that Chin Ivan agreed to the disputed items.
5. Formal Citations
- H P Construction & Engineering Pte Ltd v Chin Ivan, Suit No 180 of 2014(Registrar's Appeal No 124 of 2014), [2014] SGHC 137
6. Timeline
| Date | Event |
|---|---|
| Building contract signed. | |
| Architect issued Architect’s Instructions AI/131/HP/019 and AI/132/HP/019. | |
| Plaintiff raised Payment Claim No 32. | |
| Due date of payment for Progress Certificate No 32. | |
| Plaintiff raised its final payment claim. | |
| Final Certificate No 33 issued. | |
| Plaintiff referred the dispute for adjudication under the SOP Act. | |
| Plaintiff brought Suit No 180 of 2014 against the Defendant. | |
| Defendant applied for a stay of proceedings under s 6 of the Arbitration Act. | |
| Architect issued a letter replying to the Defendant’s queries. | |
| Hearing before the Assistant Registrar. | |
| Plaintiff filed a Notice of Appeal. | |
| Judgment reserved. |
7. Legal Issues
- Stay of Proceedings
- Outcome: The court granted a partial stay of proceedings, allowing the claim to proceed for undisputed amounts but staying the claim for disputed items pending arbitration.
- Category: Procedural
- Fraudulent Misrepresentation
- Outcome: The court found that there was a prima facie case of a bona fide dispute as to whether fraudulent misrepresentations were made to the Architect, affecting the validity of the certificates.
- Category: Substantive
- Validity of Architect's Certificates
- Outcome: The court held that the architect's certificates enjoy temporary finality unless there is fraud, improper pressure, or interference, or an express provision stipulating otherwise.
- Category: Substantive
8. Remedies Sought
- Monetary Damages
- Interest
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Arbitration
- Construction Law
- Building and Construction Law
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Tropicon Contractors Pte Ltd v Lojan Properties Pte Ltd | High Court | Yes | [1989] 1 SLR(R) 591 | Singapore | Cited to explain the intention of clause 31(13) of the SIA Conditions, regarding interim certificates of payment and the contractor's ability to obtain summary judgment in the absence of fraud. |
| Lojan Properties Pte Ltd v Tropicon Contractors Pte Ltd | Court of Appeal | Yes | [1991] 1 SLR(R) 622 | Singapore | Cited to support the principle that an architect’s certificate under the SIA Conditions is invalid if it is not issued in strict compliance with the contract. |
| Aoki Corp v Lippoland (Singapore) Pte Ltd | High Court | Yes | [1995] 1 SLR(R) 314 | Singapore | Cited to emphasize the importance of progress payments to contractors and the purpose of giving interim payment certificates temporary finality to minimize cash flow problems. |
| W Y Steel Construction Pte Ltd v Osko Pte Ltd | Court of Appeal | Yes | [2013] 3 SLR 380 | Singapore | Cited to highlight the importance of cash flow in the construction industry and the philosophy that payments should not be held up by counterclaims. |
| Anwar Siraj and another v Teo Hee Lai Building Construction Pte Ltd | High Court | Yes | [2007] 2 SLR(R) 500 | Singapore | Cited as the key case relied on by the Defendant, where it was held that a stay of proceedings in favor of arbitration would be granted if the defendant could show that there was prima facie a bona fide dispute as to whether there was improper pressure or interference. |
| Multiplex Construction Pty Ltd v Sintal Enterprise Pte Ltd | High Court | Yes | [2005] 2 SLR(R) 530 | Singapore | Cited by the Plaintiff to argue that a higher threshold is required when fraud is alleged vis-à-vis the architect’s certificate, and the applicable test was whether the Defendant had made out an arguable case that the Certificates were procured by fraud in deciding whether to grant a stay. |
| Alwie Handoyo v Tjong Very Sumito and another and another appeal | High Court | Yes | [2013] 4 SLR 308 | Singapore | Cited to support the argument that fraud has serious implications and cogent evidence is required before the court will be satisfied that an allegation of fraud is established. |
| Shanghai Electric Group Co Ltd v PT Merak Energi Indonesia and another | High Court | Yes | [2010] 2 SLR 329 | Singapore | Cited to draw an analogy with the high standard of proof required to obtain injunctions to restrain calls on performance bonds where it must be shown that it is seriously arguable that the beneficiary could not honestly have believed in the validity of its demands. |
| Uni-Navigation Pte Ltd v Wei Loong Shipping Pte Ltd | High Court | Yes | [1992] 3 SLR(R) 595 | Singapore | Cited with approval in both Anwar Siraj and Multiplex Construction, stating that when a defendant makes out a prima facie case of disputes, the courts should not embark on an examination of the validity of the dispute as though it were an application for summary judgment. |
| Samsung Corp v Chinese Chamber Realty Pte Ltd and others | Court of Appeal | Yes | [2004] 1 SLR(R) 382 | Singapore | Cited to note that applications for summary judgment under O 14 of the Rules of Court were often heard together with a stay application, as the issues were interlinked. |
| RB Burden Ltd v Swansea Corporation | Unknown | Yes | [1957] 3 All ER 243 | England and Wales | Cited in Samsung Corp to support the principle that mere assertion of fraud is not sufficient to resist a stay application. |
| Hickman & Co v Roberts | House of Lords | Yes | [1913] AC 229 | United Kingdom | Cited in Samsung Corp to support the principle that mere assertion of fraud is not sufficient to resist a stay application. |
| China Construction (South Pacific) Development Co Pte Ltd v Leisure Park (Singapore) Pte Ltd | High Court | Yes | [1999] 3 SLR(R) 583 | Singapore | Cited to illustrate that non-compliance with contract terms is not always fatal, especially where there is evidence of waiver, in the absence of substantial vitiating factors. |
| Lian Soon Construction Pte Ltd v Guan Qian Realty Pte Ltd | High Court | Yes | [1999] 3 SLR(R) 518 | Singapore | Cited to support the duty of an architect to perform his duty, or exercise his power with reasonable diligence and in accordance with the contract. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Arbitration Act (Cap 10, 2002 Rev Ed) | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Stay of Proceedings
- Arbitration
- Architect's Certificate
- Fraud
- SIA Conditions
- Progress Payment
- Final Payment
- Architect’s Instructions
- Extended Preliminaries
- Temporary Finality
15.2 Keywords
- construction
- arbitration
- stay of proceedings
- fraud
- architect certificate
- SIA Conditions
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Construction Law | 90 |
| Arbitration | 75 |
| Contract Law | 70 |
| Breach of Contract | 60 |
| Fraud and Deceit | 60 |
| Commercial Disputes | 50 |
| Summary Judgement | 40 |
16. Subjects
- Construction Dispute
- Arbitration
- Contract Law
- Civil Procedure